-All Pre-License Questions on 1 Page for easier searching-(Topics & Principle Questions included)-(No Answers, just Questions)

All Pre-License Questions on 1 page for Easier searching

Sales Associate / Broker All Pre-license Questions Topics Class – Questions Only
(Answers to these questions will be given with proper SUBSCRIPTION)

1. Which of the following is NOT a part of confidential information?
A. Client’s business holdings.
B. Minimum a seller will accept for a property.
C. Reason a property is listed on the market.
D. Physical condition of the property.

2. Which of the following is NOT an activity included in the definition of Broker?
A. Sells, exchanges, purchases, rents, or leases real estate.
B. Negotiates the sale, exchange, purchase, rental, or leasing of real estate.
C. Holds a non-public open house.
D. Engages in the business of buying, selling, exchanging, renting, or leasing real estate.

3. Which agency in Illinois has responsibility for licensing schools and instructors?
A. Training and Development Department
B. Division of Real Estate
C. Standards Council
D. Advanced Advisory Council

4. Which agency has oversight responsibilities regarding home inspectors?
A. Illinois Department of Financial and Professional Regulation
B. National Home Inspectors
C. Federal Home Inspectors Board
D. Fair Labor Standards Board

5. What is the purpose of the license laws?
A. To protect the public
B. To protect the licensee
C. To protect the broker
D. To protect mortgage lenders

6. The level of government that focuses on land-use regulations and taxation is the
A. federal.
B. state.
C. county and local.
D. judicial.

7. The concerns of the federal government in regulating real property rights include
A. discrimination.
B. real estate taxes
C. types of ownership.
D. school districts.

8. The primary distinction between the legal concepts of land and real estate is that
A. real estate includes air above the surface and minerals below the surface.
B. real estate is indestructible.
C. land has no defined boundaries.
D. land does not include man-made structures.

9. When may an item attached to a structure be considered personal property rather than real property?
A. When it can be removed without altering the appearance of the property.
B. When it is unnecessary to the physical integrity of the property.
C. When the owner installed it at some time after acquiring the property.
D. When the owner originally intended to remove it before conveying the property.

10. Surface rights include which of the following?
A. Subsurface rights
B. Water rights
C. Mineral rights
D. Air rights

11. What guarantees the right of private ownership of real estate in the United States?
A. Common law
B. Local statutes
C. The Napoleonic Code
D. The Constitution

12. A property abutting a static body of water has ___________ rights.
A. Allodial
B. Alluvial
C. Littoral
D. Riparian

13. Which of these is the best definition for personal property?
A. Any property owned by an individual.
B. Real property that is not attached to real estate.
C. Any property that is not classified as real property.
D. Anything that includes real property.

14. Which government entity is the primary regulator of the real estate business?
A. The federal government
B. The county
C. The state
D. The court system

15. Which of the following is included in the bundle of rights inherent in ownership?
A. To transfer
B. To tax
C. To inherit
D. To move

16. What part of a non-navigable waterway does the owner of an abutting property own?
A. To the low-water mark
B. To the middle of the waterway
C. To the high-water mark
D. None of the water

17. The concept that the state controls all bodies of water is called
A. states’ rights.
B. the principle of anticipation.
C. the doctrine of public utility.
D. the doctrine of prior appropriation.

18. What do we call the conversion of real property to personal property by detaching it from the real estate?
A. Detachment
B. Affixing
C. Severance
D. Disengagement

19. Which is the “best” description of “Land”?
A. Soil, ground and earth, plus any improvements and fixtures attached, mines, minerals and some airspace.
B. Only the surface of the earth that is delineated by boundaries.
C. The surface of the earth except for lakes and streams.
D. Everything above, on, and below the surface of the earth.

20. What are the three unique physical characteristics of land?
A. Fixed, unchangeable, homogeneous.
B. Immobile, indestructible, heterogeneous.
C. Three-dimensional, buildable, marketable.
D. Natural, measurable, inorganic.

21. The most common datum used in the United States is:
A. mean sea level.
B. subsurface mineral level.
C. the bearing.
D. the meander.

22. A parcel of land that lies within an existing platted subdivision will usually have a legal description that is:
A. convoluted.
B. lengthy.
C. concise.
D. protracted.

23. A mismatch in the occupied lines and deed record lines in a land survey could mean that:
A. the owner of the property no longer lives there.
B. the property’s overlap is undiscovered.
C. potential claims of ownership by senior right or adverse possession exist.
D. the federal government owns the rights to the land.

24. Where does a metes and bounds survey begin?
A. At the point of beginning
B. At any monument
C. At any landmark
D. At the terminus

25. Which of the following is NOT one of the three ways to describe property?
A. Metes and bounds
B. Public Land Survey System
C. Recorded plat system
D. Unrecorded plot system

26. Which statement is INCORRECT regarding a recorded plat system?
A. A plat map shows the location and boundaries of individual parcels.
B. It uses a series of landmarks and monuments that are numerically categorized.
C. A block is a contiguous group of lots.
D. Lots and blocks are assigned numbers or letters.

27. Landmarks and monuments are used to establish all of the following, EXCEPT:
A. the boundaries of property.
B. the existence of unrecorded deeds.
C. the location of a property’s corners.
D. the point at which the boundary changes direction.

28. A large rock or an old tree is an example of a(n):
A. improvement.
B. landmark.
C. legal description.
D. boundary line.

29. When using a Public Land Survey System, a township is divided into sections, which is a square mile and contains:
A. 540 acres.
B. 640 acres.
C. 740 acres.
D. 840 acres.

30. All of the following legal descriptions of real property, EXCEPT:
A. a metes and bounds system
B. the public land survey system
C. the recorded plat system
D. the renowned plat system

31. Which of the following is the oldest method to describe land?
A. Metes and bounds system
B. Public land survey system
C. Recorded plat
D. Global positioning system

32. What system describes property by identifying registered lot and then block on a recorded subdivision plat or survey?
A. Metes and bounds
B. Public Land Survey System
C. Recorded plat system
D. Registered lot and block system

33. What type of legal description contains the direction of the boundary lines states in degrees, minutes, and seconds?
A. The computer-assisted surveying system
B. The Public Land Survey System
C. The recorded plat system
D. Metes and bounds

34. Which of the following statements is TRUE regarding a street address?
A. A street address is a formal reference.
B. A street address is sufficient for a legal description.
C. A street address tells you how to find a property.
D. A street address provides you with the boundaries of the property.

35. What is the measurement of a tract of land with its boundaries, contents, and location relative to other property?
A. Calculus
B. Survey
C. Land speculation
D. Relationship analysis

36. A legal description should be written in such a way that any person in the future would be able to understand the __________, with reasonable certainty.
A. description and determine the property location
B. price
C. value
D. sales comparables

37. The legal description that uses the principal meridians and base lines is called the:
A. metes and bounds system.
B. the public land survey system
C. the recorded plat system
D. the GPS survey system

38. What type of legal description uses grids to determine the location of a specific tract of land?
A. Recorded map
B. Metes and bounds
C. Lot and block
D. Public Land Survey System

39. During a survey and description of the improvements, surveyors determine the location of all the following, EXCEPT:
A. fences.
B. driveways.
C. natural features, such as streams and ponds.
D. comparable improvements.

40. After the actual survey is performed, a __________ is completed, which is a drawing that shows the location and dimensions of the property.
A. survey sketch
B. mining graph
C. boundary chart
D. gap and gore

41. In a metes and bounds system, bounds refer to:
A. measurements in length.
B. measurements in feet.
C. depth.
D. direction.

42. Which of the following is not one of the fundamental reasons for requiring a land description and survey in a real estate transaction?
A. Existence of the property
B. Relationship of the property to adjoining properties
C. Loan options for financing real property
D. Relationship of occupied to recorded lines

43. Which of the following is a fundamental reason for requiring a land description and survey in a real estate transaction?
A. All of the choices apply
B. Relationship of the property to adjoining properties
C. Existence of the property
D. Relationship of occupied lines to recorded lines

44. A block is a contiguous group of lots bound by:
A. man-made features.
B. natural resources.
C. minerals.
D. chemicals.

45. A __________ is described by its location, relative to the intersection of the baseline and meridian.
A. township
B. plat
C. condominium
D. meridian

46. Which of the following information is not shown on an improvement description and survey?
A. Building location
B. Building size
C. Number of tenants in a building
D. Building dimensions

47. There are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation, property A is said to be which of the following in relation to property B?
A. Subservient estate
B. Servient estate
C. Senior tenant
D. Dominant tenement

48. In a cooperative, unit owners/members own
A. stock.
B. real property.
C. a promissory note.
D. the holding company.

49. When a single individual or entity owns a fee or life estate in a real property, the type of ownership is
A. tenancy in severalty.
B. tenancy by the entireties.
C. absolute fee simple.
D. legal fee simple.

50. How is a conventional life estate created?
A. It happens automatically when title transfers, unless a fee simple is specifically claimed.
B. A fee simple owner grants the life estate to a life tenant.
C. It is created by judicial action.
D. It is created by a statutory period of adverse possession.

51. The “four unities” required to create a joint tenancy include which of the following conditions?
A. Parties must acquire respective interests at the same time.
B. Parties must be legally married at the time of acquiring interest.
C. Parties must be family members.
D. Parties must have joint financial resources.

52. What distinguishes a lien from other types of encumbrance?
A. It involves a monetary claim against the value of the property.
B. It lowers the value of a property.
C. It is created voluntarily by the property owner.
D. It attaches to the property rather than to the owner of the property.

53. A certain property has the following lien recorded against it: a mortgage lien dating from three years ago; a mechanic’s lien dating from two years ago; a real estate tax lien for the current year; and a second mortgage lien dating from the current year. In case of a foreclosure, which of these liens will be paid first?
A. First mortgage lien
B. Mechanic’s lien
C. Real estate tax lien
D. Second mortgage lien

54. Three people have identical rights but unequal shares in a property, share an indivisible interest, and may sell or transfer their interest without consent of the others. This type of ownership is
A. joint tenancy.
B. equal ownership.
C. tenancy in common.
D. estate in severalty.

55. A tenant has refused to vacate an apartment after his lease expires. This is called
A. an estate In escrow.
B. a tenancy at sufferance.
C. an estate in trust.
D. an estate at forbearance.

56. An encumbrance ___________.
A. is a legal estate.
B. reduces the tax burden of the property owner.
C. expands the interest of a freehold estate.
D. limits a freehold interest.

57. Which of the following statements regarding month-to-month leases is FALSE?
A. They are also called periodic tenancies.
B. They may exist without any written agreement.
C. They have a definite ending date.
D. They can be terminated with proper notice.

58. Who are the essential parties involved when real estate is placed into a trust?
A. Owner, trustor and lawyer
B. Owner, trustor and trustee
C. Trustee, title company, and beneficiary
D. Trustor, trustee, and beneficiary

59. An affirmative easement gives the benefited party
A. the right to possess a defined portion of another’s real property.
B. the right to prevent the owner of a real property from using it in a defined way.
C. the right to a defined use of a portion of another’s real property.
D. the right to receive a portion of any income generated by another’s real property.

60. The distinguishing features of a condominium estate are
A. ownership of a share in an association that owns one’s apartment.
B. tenancy in common interest in airspace and common areas of the property.
C. fee simple ownership of the airspace in a unit and an undivided share of the entire property’s common areas.
D. fee simple ownership of a pro rata share of the entire property.

61. The highest form of ownership interest one can acquire in real estate is the
A. dower and curtesy.
B. conventional life estate.
C. estate for years.
D. fee simple estate.

62. Jim knowingly acquired a property with a lien attached. What happens to the lien?
A. The property incurs a second lien.
B. The original owner must remove the lien prior to taking possession.
C. The lien is abolished.
D. The lien continues to be against Jim’s property.

63. When an interest-holder lacks the right of ownership, what kind of interest is it that he or she has?
A. A trust
B. An encumbrance
C. An entailment
D. A tenancy

64. Which of the following is a feature of a testamentary trust?
A. It takes effect only when the trustor dies.
B. It only applies to real property.
C. It is activated at the time of signing.
D. It is created in probate.

65. A property owner who is selling her land wants to control how it is used in the future. She might accomplish her aim by means of
A. an injunction.
B. a deed restriction.
C. an easement.
D. a land trust.

66. What distinguishes a freehold estate from a leasehold estate?
A. A freehold includes the right to dispose or use.
B. The duration of the owner’s rights cannot be determined in a freehold.
C. A freehold cannot be defeasible.
D. A leasehold is subject to government restrictions.

67. Upon the death of the life tenant, a life estate passes to
A. the original owner or other named person.
B. the owner’s heirs.
C. the state.
D. the owner’s spouse.

68. An interest in real estate is best defined as ownership of
A. the full bundle of rights to real property.
B. an estate.
C. one or more of the bundle of rights to real property.
D. the right to possession and use of real property.

69. Which of the following describes a situation in which an easement might be created against the wishes of the property owner?
A. The property has been continuously used as a prescriptive easement with the knowledge but not the permission of the owner for a period of time.
B. The owner of an adjoining property asks the property owner for an easement, is refused, and then uses the property anyway without the knowledge of the owner.
C. The owner of an adjoining property decides he needs to widen his driveway by sharing his neighbor’s driveway and sues in court to create an easement by necessity.
D. The owner of an adjoining property grants an easement to a third party that includes an easement on the first property.

70. A tenancy at will ____.
A. has a definite expiration date.
B. is also called an estate at sufferance.
C. survives the death of the lessor or lessee.
D. remains in effect as long as lease conditions are met.

71. The only required clause in a deed of conveyance is one that
A. states restrictions and limitations to the estate being conveyed.
B. names the parties, describes the property, and indicates a consideration.
C. states that the grantor has done nothing to impair title to the property being conveyed.
D. states the parties and the type of estate being conveyed.

72. A hermit lives secretly in a cave on a large property. After twenty years, the hermit makes a claim of ownership. This claim will most likely be
A. upheld through adverse possession.
B. upheld because of the long time of the possession.
C. declined because possession was secretive.
D. declined because the hermit’s cave cannot be considered an improvement.

73. Of the principal forms of title evidence in Illinois, the one that provides the best evidence is
A. a title certificate.
B. a title insurance policy.
C. a Torrens certificate.
D. an attorney’s opinion of abstract.

74. Uncle Jake wrote his will out on a notepad. This type of will is called
A. holographic.
B. normal.
C. abstract.
D. virtual.

75. Constructive notice of ownership of a parcel of real estate is primarily demonstrated through
A. direct inspection to see who is in possession.
B. title insurance.
C. title records.
D. a construction permit.

76. A deed is not valid unless it is
A. written on a standard form.
B. accompanied by a consideration.
C. signed by an attorney.
D. filed with the county recorder.

77. Which of the following best describes the concept of “legal title” to real estate?”
A. Ownership of the bundle of rights to real estate.
B. The right of a buyer or lender to obtain ownership.
C. Possession of a deed.
D. Absolute proof of ownership of real estate.

78. A person claims ownership of a parcel of real estate to a prospective buyer, stating that she has lived on the property for five years and nobody has ever bothered her. The claimant also shows the buyer a copy of the deed. The legal basis of this claim is referred to as
A. prescriptive notice.
B. constructive notice.
C. hostile notice.
D. actual notice.

79. The type of deed that gives the highest assurances of good title is the
A. general warranty deed.
B. bargain and sale deed.
C. special warranty deed.
D. guardian’s deed.

80. Which authority regulates involuntary title transfers?
A. Federal law
B. State law
C. Common law
D. Probate law

81. A break in the chain of title to a property results in
A. a cloud on title.
B. a title plant.
C. a lien of indeterminate ownership.
D. a duplicate title.

82. A lender forecloses on a property. The type of deed that will convey ownership after a public auction is reconfirmed by the court is a
A. master deed.
B. partition deed.
C. tax deed.
D. sheriff’s deed.

83. An owner transfers title to a property to a buyer in exchange for a consideration. This is an example of
A. voluntary alienation.
B. escheat.
C. hypothecation.
D. estoppel.

84. For a deed to convey title, it is necessary for the deed to be
A. on a standard form.
B. certified by the grantor.
C. accepted by the grantee.
D. signed by the grantee.

85. The amount of the transfer tax is based on
A. the tax levy.
B. the tax base.
C. the actual sales price of the property conveyed. *Note, in Illinois the tax can be reduced if a buyer has assumed the seller’s mortgage “subject to.”
D. the tax needs of the local jurisdiction.

86. Title records do all of the following EXCEPT:
A. establish lien priority.
B. reveal condition of title.
C. give public notice of ownership.
D. transfer ownership.

87. Aunt Molly, who had no legal heirs, died without leaving a will. What will happen to her estate?
A. It will be sold at a public auction.
B. It will be apportioned among the owners of adjacent properties.
C. It will escheat to the state or county after all claims have been settled.
D. It will be donated to charity.

88. Which document contains a summary of the title search?
A. Opinion Abstract
B. Title Certificate
C. Title Insurance Rider
D. Binder Title

89. A central goal of public land use planning is to
A. balance individual property rights with the community’s welfare.
B. develop an accord between property owners and tenants.
C. impede development by for-profit developers and construction contractors.
D. subordinate private interests to the public good.

90. Who is responsible for insuring that a buyer receives the Protect Your Family From Lead pamphlet?
A. HUD
B. Agents for buyers and sellers
C. The buyer
D. The seller

91. Counties and municipalities have the legal right to control land use due to
A. the doctrine of appropriation.
B. delegation of authority by state-level enabling acts.
C. consensus of the local community through referendum.
D. custom and tradition.

92. Which of the following statements about federal and state environmental laws is TRUE?
A. Private property owners have no responsibility for compliance with them.
B. They only apply to publicly owned property.
C. Regional land use plans may treat them as optional.
D. They must be incorporated into local land use plans.

93. When was lead first banned in the manufacture of paint used in residential properties?
A. 1978
B. 1986
C. 1992
D. 1996

94. Which environmental legislation created the requirement for environmental impact surveys on large development projects?
A. The National Environmental Policy Act
B. The Clean Air Amendment
C. The Clean Water Act
D. The Superfund Act

95. If a municipality exerts its power of eminent domain against a certain property owner, what happens?
A. The owner must pay higher property taxes or give up the property.
B. The owner must cede an easement without receiving any compensation.
C. The municipality annexes the property.
D. The owner must sell the property or grant an easement to the municipality for just compensation.

96. Dioxins, mercury, and Methyl Tertiary Butyl Ether (MTBE) are examples of
A. benign chemicals.
B. air pollutants.
C. soil and water pollutants.
D. naturally occurring substances.

97. A property is exempt from lead disclosure requirements if
A. it has been certified by an inspector.
B. it is a rental property.
C. it has no separate bedrooms.
D. it is occupied by fewer than five people.

98. The authority that allows governments to control land use is called
A. eminent domain.
B. due process.
C. police power.
D. annexation.

99. If a property owner demonstrates a need, a zoning board may grant a
A. variance.
B. conditional use permit
C. nonconforming use.
D. grandfathered use.

100. Unlike a deed restriction, a declaration restriction
A. does not attach to the property.
B. cannot be extinguished by a quitclaim deed.
C. cannot be enforced by court injunction.
D. is a public, rather than private, land use control.

101. Licensees are required to disclose to a buyer that
A. a previous occupant suffered from AIDS.
B. the seller is a sexual predator.
C. a murder was committed in a neighboring house.
D. the licensee knows of a latent structural defect.

102. When a property is taken by eminent domain, what right does the owner have?
A. To be paid the appraised market value.
B. To receive “just compensation.”
C. To remain in residence until the property is redeveloped.
D. To impose deed restrictions on the property.

103. A buyer may terminate a purchase contract without liability within ____ business days if a disclosure report indicating a material defect is received after a binding real estate contract has been entered into by all parties:
A. one
B. two
C. three
D. five

104. Which of the following is NOT a regulated environmental condition?
A. Electromagnetic fields
B. Cell phone radiation
C. Airport traffic noise
D. Construction in earthquake zones

105. The Illinois Residential Real Property Disclosure Act requires a seller to give a buyer a written property condition disclosure
A. before the buyer signs an offer to purchase.
B. at the time the buyer first views the property.
C. before accepting the buyer’s offer to purchase.
D. at any time before closing.

106. With regard to environmental issues, which of the following is TRUE?
A. Licensees must demonstrate expert knowledge of a property’s physical conditions.
B. Licensees must disclose potential hazards if known.
C. Licensees have no liability for environmental violations.
D. Licensees are under no obligation to be aware of environmental issues.

107. Which of the following can terminate a private deed restriction?
A. A quitclaim deed
B. A quiet title suit
C. A title transfer
D. A reconveyance deed

108. The Illinois Residential Disclosure Act requires that material defects related to which of the following must be disclosed by the seller EXCEPT
A. asbestos.
B. mold.
C. methamphetamine production.
D. mice.

109. Which of the following describes a person who is not represented by a licensee but is receiving clerical acts from the licensee?
A. Shareholder
B. Salesperson
C. Customer
D. Broker

110. What is commonly referred to as “the Act” in Illinois real estate is actually:
A. The Real Estate License Act of 1983
B. The Real Estate License Act of 2000, as amended 12/31/2009
C. The IDFPR Act of 2000
D. The Real Estate Council Act of 1998

111. Which of the following statements is true regarding compensation?
A. The sponsoring broker is the only one allowed to compensate his/her licensee.
B. Compensation must be disclosed to clients.
C. Compensation must always go from the seller or the buyer through the sponsoring broker to the licensee.
D. All of the above are true regarding compensation.

112. Annie is a licensee. Which of the following entities can she receive referrals from and pay a referral fee?
A. Local banks
B. National home inspection companies
C. Attorneys
D. None of the above

113. The name of a case wherein it was determined that a real estate licensee can only fill in the blanks in a form provided by legal counsel is ______.
A. Smith vs. Johnson
B. Chicago Bar Association vs. Quinlan & Tyson, Inc.
C. Hulse vs. Criger
D. Link vs. Jones

114. What type of agency exists when the agent can perform any and all actions that may be legally delegated to an agency representative?
A. Universal Agency
B. General Agency
C. Special Agency
D. Principle Agency

115. Seller Joe Needy lists his home for $40,000 and the listing agent tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $38,000 and the seller accepts. In this situation:
A. The broker was unethical, but because no one was hurt it is not improper.
B. The broker violated the agency relationship.
C. The broker’s action was proper in obtaining a quick offer.
D. Any broker is authorized to encourage bidders.

116. In which of the following cases might confidential information be disclosed?
A. If required by the law.
B. Upon closing a brokerage.
C. Under NO circumstance.
D. Two years after the closing.

117. What is the type of agency created, when a licensee holds a stake in the transaction?
A. Agency of limited liability
B. Agency coupled with an interest
C. Freehold agency
D. Agency of contract

118. When is a licensee required to disclose third party sources of compensation to client?
A. The licensee is not required to disclose third party compensation.
B. Disclosure is required if based on brokerage office policy.
C. Disclosure is required if monies come from out of state sources.
D. As soon as known, third party compensation must be disclosed.

119. A written or oral agreement between a sponsoring broker and a consumer for licensed activities to be provided to a consumer in return for compensation or the right to receive compensation from another is called a:
A. Listing agreement
B. License by reciprocity agreement
C. Dual agency agreement
D. Brokerage agreement

120. Which of the following forms of commission agreements is not recommended due to potential ethical issues?
A. Commission is the excess of the sale price over an agreed-upon (net) price
B. Flat fee
C. Hourly rate
D. Percentage of the transaction amount

121. Referral fees and bonuses for licensees are known as:
A. Compensation
B. Percentages
C. Commission
D. Finder fees

122. The person who is being represented by a licensee is known as the:
A. Customer
B. Client
C. Agent
D. Fiduciary

123. What is the result when a licensee produces a ready, willing and able buyer, but the seller refused to complete the transaction?
A. The buyer is required to pay the commission.
B. The agency is required to pay the commission.
C. The licensee’s firm may be entitled to the commission.
D. The commission becomes null and void.

124. According to the Act, legal proceedings, against a license for a violation of the Act, must commence no later than ___________ years from the occurrence.
A. 2
B. 3
C. 5
D. 6

125. Seller Joe has told his agent Sam that if he sells his house within three weeks, he will give Sam a $500 bonus. What are the acceptable means by which Sam can be paid the bonus?
A. The bonus can be given to Sam directly.
B. The bonus is to be put into an escrow account, then given to Sam.
C. The bonus is to be given to Sam’s sponsoring broker and then passed on to Sam
D. Neither Sam nor the brokerage is allowed a bonus.

126. Agency is governed by ___________ law and ____________ law.
A. Common and Statutory
B. Basic and Civil
C. Statutory and Civil
D. Administrative and Secondary

127. The relationship between the licensee and a principal, during which the licensee is authorized to represent the principal in certain transactions, is known as:
A. Dual agency
B. Agency
C. Time-share agreement
D. Principality

128. Which of the following statements are correct?
A. A written document is needed to create agency.
B. A power of attorney is required to establish a special agent.
C. Compensation creates agency.
D. Compensation does not create agency.

129. When does the first substantive contact take place?
A. A buyer contacts a broker through the Internet.
B. A seller calls a broker to schedule a listing appointment.
C. A potential buyer shows up at an open house.
D. A potential buyer or seller begins to discuss his or her needs.

130a. What is the best course of action in dealing with questions regarding the level of crime in a neighborhood?
A. Respond in vague terms.
B. Dismiss any questions.
C. Refer your client to public records.
D. Explain that no information exist in this area.

130. What do we call an agent who represents only one party in a real estate transaction?
A. Exclusive agent
B. Single agent
C. Subagent
D. Broker agent

131. Who should receive an agency disclosure?
A. Only sellers
B. Only buyers
C. Only licensees
D. All clients and customers

132. Licensee Paul is bound to inform his client of all facts that might affect the client’s interests — both what Paul knows and what he “should have known.” Which of these situations would not be something Paul “should know?”
A. There is a crack in the basement wall.
B. The air conditioner does not work.
C. The owner of the property is HIV positive.
D. The casement windows have broken seals.

133. A property seller signs a listing agreement with a licensee. What is this an example of?
A. General agency
B. Universal agency
C. No agency
D. Express agency

134. Which laws holds harmless a licensee to discover latent defects?
A. Still v. Minor 1987
B. State of Illinois v. Paragon, et al
C. Stubby v. Flag, 2000
D. Munjal v. Baird & Warner, Inc. et al.

135. Agency most nearly means:
A. One who is the source of another’s authority
B. One who represents and acts for another
C. One who has conferred authority to another
D. One who has been paid a commission by another

136. Which of the following statements would be defined as “puffing?”
A. The taxes are stated at $1,678 per year.
B. The property has the best view in the subdivision.
C. The lot is 220′ x 340′.
D. The house has 4 baths.

137. Colleen plans to be a dual agent in a real estate transaction. At what point, if any, should she receive her clients’ permission to act as a dual agent.
A. Colleen must disclose her intention to be a dual agent, and have written permission of both clients before acting as a dual agent.
B. Colleen must disclose her agency status at the time any written agreement and/or written authorization is obtained.
C. Colleen does not have to disclose her agency status.
D. When Colleen’s broker directs the disclosure.

138. All of the following is considered confidential information EXCEPT:
A. The sellers are selling because they are getting a divorce.
B. The buyer will pay more than what’s being offered.
C. The seller will take less than the current offer.
D. The buyer has four children.

139. Which of the following can a dual agent disclose?
A. The lowest price the seller will accept.
B. The motivating factors for any person buying, selling or leasing the property.
C. Material or latent defects.
D. The terms of any prior offers or counter offers made by any party.

140. Is it permissible, as a buyer representative, to dispense advice to your purchaser client?
A. No. A buyer representative should only dispense assistance, not advice.
B. Yes. A buyer representative should be able to dispense advice on all areas, including inspections, technical issues, etc.
C. Yes. A buyer representative should advise the client on matters of which he/she has knowledge. It is important to advise the client to obtain expert advice on areas in which the licensee is not an expert.
D. No. A buyer representative should remain neutral and simply aid in the transaction.

141. Seller Jim provides a buyer with a forged home warranty. This is a form of
A. Active fraud
B. Passive fraud
C. Active negligent
D. Passive misrepresentation

142. Which of the following types of agency is not allowed in Illinois?
A. Dual agency
B. Buyer’s agency
C. Designated agency
D. Undisclosed dual agency

143. When should a seller agency disclosure take place?
A. At the time of the first substantive dialogue
B. Upon first face to face meeting
C. Before writing up an offer
D. After the offer is written but before closing

144. Broker Jim signs a listing agreement with seller, Grace, and a buyer agency agreement with buyer, Pat. Broker Jim shows buyer Pat the property owned by seller Grace. Both Grace and Pat signed written disclosure statements agreeing to this arrangement. What is this relationship called?
A. Subagency
B. Dual agency
C. Exclusive agency
D. Single agency

145. Broker Dan is representing Mandy as a buyer’s agent. He wants to show Mandy one of his listed properties. Which statement is true?
A. There is no reason why Dan should not show Mandy the property.
B. Dan must disclose to the seller that he is also representing the buyer.
C. Dan needs to get the informed, written consent of both Mandy and the seller to act as a dual agent.
D. Dan must notify the Department of State that he wants to represent both parties in the transaction.

146. The situation that allows the broker to appoint more than one agent for the client within the same firm, is called:
A. Designated agency
B. Dual agent
C. Sponsoring licensee
D. Sponsoring broker

147. What is the standard for agency representation in Illinois?
A. Basic agency
B. Disclosed agency
C. Contractual agency
D. Designated agency

148. What actions can the principal take to abolish the agency?
A. The principal can stop payment of funds.
B. The principal cannot terminate the agency.
C. The principal can defer payments to an escrow account.
D. The principal can reassign the rights to another stakeholder.

149. When a licensee leaves a brokerage, what becomes of the agency coupled with an interest agreement?
A. It is transferred.
B. It terminates.
C. It remains in force.
D. It is sent to escrow.

150. How long is an agency coupled with an interest enforced?
A. No longer than 2 years
B. Until the interest ends
C. Upon the death of the licensee
D. Upon the death of the principal

151. Which of the following actions terminate terms of the agency?
A. Death
B. Expiration
C. Incapacity
D. Bankruptcy

152. In Illinois, which statement is correct regarding agency coupled with an interest?
A. Agency coupled with an interest is allowed.
B. This form of agency is allowed only when no principal is assigned.
C. This type of agency requires approval by the brokerage.
D. A designated agent must be assigned to the transaction.

153. When a licensee represents a seller, what type of relationship is established?
A. Shareholder
B. Consumer
C. Client
D. Customer

154. With whom do licensees typically have a working relationship?
A. client, customer, consumer
B. MLS, seller, commissioner
C. stakeholder, stockholder, shareholder
D. husband, wife, child

155. Who may be liable when a buyer client’s interests are not protected?
A. The listing agent
B. The seller
C. The buyer’s agent
D. The principal

156. Agency relationships impose fiduciary duties on both
A. Consumer and Seller
B. Licensee and Consumer
C. Customer and Client
D. Client and Licensee

157. When a licensee works with an unrepresented seller by showing a buyer client the seller’s property, what type of working relationship is established with the seller, after proper written notice to the seller?
A. Consumer
B. Customer
C. Guest Client
D. Client

158. Seller Jane is currently under contract with Broker Jill. Jane meets Broker Fred at a baseball game and they discuss real estate market trends. Jane calls Fred the following week to seek new representation. What action can Fred take?
A. Fred must get permission from Jane’s broker before speaking with her.
B. Fred can cancel Jane’s current listing.
C. Fred must end the conversation and wait until Jane is no longer under contract.
D. Fred can discuss the terms of a future agency representation with Jane.

159. Fiduciary duty is primarily based on ______________.
A. Trust
B. Shared Interest
C. Commission
D. Due Diligence

160. Al Dobbs, a licensee, has been hired by the seller who signed a listing agreement without permission to act as a dual agent. What is true regarding this situation when a buyer is shown the property by Al Dobbs as a clerical act?
A. The seller is the customer and the buyer is the client.
B. The buyer is the customer and the seller is the client.
C. Both the seller and buyer are clients.
D. Both the seller and buyer are customers.

161. When a licensee responds to an inquiry from a person seeking general information, what type of working relationship is established?
A. Client
B. Customer
C. Consumer
D. Guest Customer

162. A licensee has lost a portion of the earnest money. Which fiduciary duty has the licensee violated?
A. Care
B. Loyalty
C. Disclosure
D. Accounting

163. Seller Jim has asked Agent Fred to hold an open house. Agent Fred agreed to schedule an open house but has not followed through. This is a failure of which fiduciary duty?
A. Loyalty
B. Obedience
C. Care
D. Disclosure

164.When does a dual agency arrangement become “official?”
A. When the seller signs the listing agreement.
B. When the seller checks “yes” in the dual representation paragraph of the listing agreement.
C. When the licensee gets written confirmation from both the seller and the buyer in the transaction.
D. When the buyer submits an offer to purchase.

165. Which fiduciary duty requires the agent to safeguard the earnest money check?
A. Confidentiality
B. Accounting
C. Loyalty
D. Care

166. Care, Obedience and Disclosure are fiduciary duties of ______.
A. Servitude
B. Action
C. Standards
D. Customer Relations

167. Agent Kim lost the keys to her Client’s house and always left the back door unlocked. Agent Kim failed in her __________ responsibility.
A. Care
B. Oversight
C. Loyalty
D. Obedience

168. When must the licensee give the seller an agency disclosure?
A. When the licensee sets up the listing appointment.
B. Before the seller shares confidential information or signs the listing agreement.
C. After the listing agreement is in place.
D. Before an offer is made on the seller’s property.

169. Brokers should provide statutory services
A. to cooperating brokers.
B. to the broker.
C. only to customers.
D. only to clients.

170. In what situations can a Broker share confidential information regarding a client, after the client’s listing expires.
A. When the broker signs on a new client
B. When the client gives written permission
C. The Broker can share any and all information after a listing expires.
D. When a customer asks.

171. Confidentiality ends _______.
A. with the written permission of the client.
B. when a contract closes.
C. after two years from the close date.
D. when the broker retires the files.

172. Which fiduciary duty requires the agent to collect information about the customer for the client?
A. Confidentiality
B. Accounting
C. Loyalty
D. Obedience

173. In Illinois, the Residential Real Property Disclosure Act requires that when a residential seller signs the listing agreement, he or she must prepare a disclosure document completed by any of the following except the
A. licensee.
B. seller.
C. seller’s attorney.
D. seller’s power of attorney.

174. Which of these transfers of residential real property are exempt from the Illinois Property Disclosure Act?
A. Jim sold his home to one of his fraternity brothers.
B. Builder Frank sold a newly-constructed home that has never been occupied.
C. Seller Sally exchanged her Illinois home with a buyer from New Jersey.
D. Seller Gary was selling his condominium unit.

175. Based on the Real Estate License Act of 2000 the licensee must disclose any material facts about the physical condition of the property OR the transaction about which the licensee has
A. appurtenant knowledge.
B. actual knowledge.
C. subjacent knowledge.
D. extra-territorial knowledge.

176. What MUST be printed on or included with the Property Disclosure Report?
A. A copy of the actual Disclosure Act
B. A copy of the inspection report
C. An affidavit signed by the managing broker who has the listing
D. The seller’s contact information including phone number and email address

177. Which statement is FALSE?
A. Seller Pete is not liable for any error, inaccuracy, or omission of any information delivered in the property condition report if he did not have actual knowledge of the problem.
B. Seller Amanda is not liable for any error, inaccuracy, or omission of any information delivered in the property condition report if she thought the problem had already been corrected.
C. The Property Disclosure Act obligates the seller to make a specific investigation or inquiry in an effort to complete the disclosure statement.
D. Seller Greg will be liable for any undisclosed material defects of which he had actual knowledge.

178. What information was added to the report in 2010?
A. Mold
B. Asbestos
C. Lead-based paint
D. Meth production

179. To which of these transfers of residential real property does the Property Disclosure Act apply?
A. Transfers between spouses resulting from a judgment of dissolution of marriage or legal separation
B. Transfers from a mortgagor to a mortgagee by deed in lieu of foreclosure or consent judgment
C. Transfer by sale, exchange, or assignment of beneficial interest
D. Transfers by a trustee in bankruptcy

180. What happens if a seller lists a defect on the disclosure report?
A. The home must sell as is.
B. The seller must repair it before the home transfers.
C. The buyer is required to have an inspector verify the problem.
D. The buyer could take that information into account when structuring an offer.

181. How long does a person have to initiate an action for a violation of the Property Disclosure Act?
A. 6 months
B. One year
C. Two years
D. Five years

182. Under the Illinois Property Disclosure Act, who is exempt from disclosure?
A. Beneficiary of a trust
B. Contract purchaser or lessee of a ground lease
C. Owner
D. Any person who has never occupied, nor managed, the property

183. Fraud is practiced _________.
A. accidentally.
B. deliberately.
C. by mistake.
D. for a reason.

184. The Deceptive Trade Practices Act (DPTA) can come to bear on a real estate licensee when
A. an agent lies to get someone to put in a contract on a property.
B. a broker advertises a property on the internet.
C. an agent holds an open house for another agent.
D. an agent gives a client a list of home inspectors to choose from.

185. Based on the Illinois Real Estate License Act the licensee must disclose any material facts about the physical condition of the property OR the transaction about which the licensee has
A. appurtenant knowledge.
B. actual knowledge.
C. subjacent knowledge.
D. extra-territorial knowledge.

186. Broker Bob is showing a property that may be considered a stigmatized property. If in doubt Broker Bob should
A. Disclose whatever the seller advises.
B. Not show the property under any circumstance.
C. Seek legal counsel regarding the disclosure of the stigmatized property.
D. Contact the local HUD office for advice.

187. Information about a property that has a significant bearing on a buyers decision to purchase that property is a
A. Defect
B. Latent fact
C. Latent misalignment
D. Material fact

188. Agents need to remember, “stigmatized” conditions are not material and
A. are undiscoverable.
B. therefore must be disclosed.
C. are deemed latent ambiguities.
D. are not required to be disclosed.

189. According to various sections of the Administrative Code, if Broker Bob is showing property that was the site of an act that had no effect on the physical condition of the property or its environment Broker Bob
A. Is required to disclose the act.
B. Is not required to disclose the act.
C. Disclose whatever the seller advises.
D. Should complete and deliver a Residential Real Property Disclosure Form to the buyer.

190. A property may have hidden defects undiscoverable by ordinary inspection that jeopardizes structural integrity or an occupant’s safety, these items are defined as
A. Latent defects
B. Material defects
C. Stigmatized defects
D. Latent misalignment

191. Negligent misrepresentation is practiced
A. on purpose.
B. deliberately.
C. accidentally.
D. intentionally.

192. The Deceptive Trade Practices Act (DPTA) exists to protect whom?
A. The managing broker
B. The public
C. The Real Estate Commission
D. The broker

193. When a licensee does a comparison of the prices of similar properties that have recently sold, similar properties currently on the market, and properties that have not sold in anticipation of getting a listing she is
A. Preparing a comparative market analysis (CMA).
B. Preparing a potential sales price analysis (SPA).
C. Preparing a comparative analysis module (CAM).
D. Preparing a formal appraisal.

194. Which of these environmental hazards is specifically addressed in the Residential Real Property Disclosure Report?
A. Carbon monoxide
B. Mold
C. Urea Formaldehyde
D. Illegal methamphetamine manufacturing

195. In which of these places is asbestos not likely to be found?
A. Roofing
B. Drywall
C. Textured paint
D. Vinyl floor tiles

196. Which environmental hazard is specifically mentioned on the Residential Real Property Disclosure?
A. Underground storage tanks
B. Methamphetamine production
C. Radon
D. Groundwater contamination

197. Which of these statements is FALSE regarding what a licensee should do to prepare for a listing meeting?
A. Drive through the neighborhood and check out listed homes that are currently up for sale.
B. Check recent real estate activities by accessing the local multiple listing service database and public records.
C. Have an appraisal done of the property.
D. Become familiar with the neighborhood.

198. For which geological hazard would disclosure to a potential buyer be mostly ineffective?
A. Landslide
B. Flood
C. Earthquake
D. Subsidence

199. Broker Sandra accepted a listing for a home. A week later the owner told her that he was not willing to sell to an African-American person or family. Which of the following is true?
A. Sandra should abide by the owner’s wishes.
B. She should restrict her advertising to venues that cater to the African-American community.
C. Sandra should explain to the owner that the request is in violation of Fair Housing law and she cannot abide by it.
D. She should have the owner document the request in writing and file it with the listing agreement.

200. Which of the following would a potential seller be least interested in knowing at the time of the listing presentation?
A. A licensee’s qualifications
B. How much profit the sellers could get from the sale
C. The services offered by the licensee’s firm
D. The charitable organizations the firm supports

201. Which piece of information about a property would be the least helpful for a licensee to collect?
A. Company that writes the homeowner’s policy
B. Zoning information
C. Neighborhood amenities
D. Improvements to the property

202. Which statement is FALSE?
A. Mold often grows where it can’t be seen.
B. Radon is an odorless, colorless gas.
C. Underground storage tanks pose no hazard to residential areas.
D. Urea formaldehyde foam insulation is no longer used.

203. What is an important legal characteristic of an option to buy agreement?
A. The potential buyer is obligated to buy the property once the option agreement is completed.
B. The seller must perform if the buyer exercises the option, but the buyer is under no obligation to do so.
C. The contract can be executed at no cost to the buyer.
D. It is a bilateral agreement.

204. Technically a property can be listed at any price, however deliberately misleading a client as to the market value of the property to guarantee a listing is an ethical violation. This practice is commonly referred to as
A. Blockbusting
B. “Buying” a listing
C. Over listing
D. Price-fixing

205. Oftentimes people confuse market value with
A. Selling price
B. Listing price
C. Cost
D. Assessed value

206. The best description for a CMA is ______.
A. An appraisal
B. A comparative mortgage analysis used by lenders
C. An analysis of the sales prices of similar homes, so the seller can decide how much to ask for the property
D. A cooperative marketing approach used by multiple listing services

207. What type of financing exists when a seller defers receipt of some or all of the purchase price of the property over a specified period of time?
A. Sale leaseback
B. Installment land contract
C. Option to buy
D. Purchase money loan

208. What is the most common reason a property fails to sell?
A. Overpricing
B. Lack of advertising
C. In need of repair
D. Not enough prospective buyers

209. A comparative market analysis is an attempt to
A. Find things in the home a seller needs to repair.
B. Establish a home’s fair market value.
C. Discover why some homes haven’t sold.
D. Convince a seller to list with you.

210. Which of these would be a form an agent could use to show a seller what he or she will net on the sale of the property?
A. Statement of Closing Costs
B. Comparative Market Analysis
C. Sale Price Disclosure
D. Estimate of Seller Proceeds

211. Which of the following is a good example of a unilateral contract?
A. A listing agreement
B. A personal services agreement
C. A sale contract
D. An option to buy

212. The highest price a buyer is willing to pay and the lowest price the seller will accept for a property is known as what?
A. Selling price
B. Cost
C. Market value
D. Exchange value

213. Short sales are not intended to allow property owners to walk away from their financial obligation based on arbitrary reasons. Lenders require sellers to show proof of hardship, which include all of the following, except
A. a chronic history of seeking and exceeding higher credit limits.
B. job loss / unexpected unemployment.
C. loss of second income.
D. divorce.

214. As part of the short sale consulting process, the licensee should discuss the following with the sellers
A. the tax issues involved if the sale includes “boot”.
B. the use of hardship situations that lenders have accepted even if the licensee’s seller has not suffered such a hardship.
C. hiding liquid assets before contacting the lender.
D. any portion of the loan that is “forgiven” may be considered income and must be reported for tax purposes.

215. An important characteristic of a distressed property, caused by a divorce, compared to a ‘conventional’ property is that
A. the seller generally has a limited time to sell.
B. the seller’s hardship does not qualify for a short sale.
C. the seller has excessive equity despite depressed prices.
D. the distressed property can quickly become stigmatized.

216. The seller’s main concern in arranging for the sale of a distressed property is
A. who will hold the buyer’s earnest money deposit.
B. what the lender intends to do about the shortage.
C. what will happen to her credit score.
D. how to report the sale to the IRS.

217. One characteristic of a short sale transaction is that _____.
A. the sellers do not have to claim hardship to have a justifiable basis for a short sale transaction.
B. lenders are not permitted to consider the seller’s non-real estate assets.
C. lenders may not allow a short sale if they discover other assets the seller concealed.
D. lenders will not consider a short sale if the loan payments are current.

218. Before advertising a property as “distressed,” an agent should
A. increase the listing price to allow for the lower price that will be paid for the distressed property.
B. obtain the seller’s permission.
C. make every effort to remedy the circumstances that have put financial pressure on the property.
D. examine the foreclosure documents for conditions that might allow the property to be sold without the “distressed” designation.

219. Property that is undergoing a reduction in market price due to the pressures of a threatened foreclosure, divorce, estate settlement, drastic economic changes, and/or deteriorating physical condition is called
A. stigmatized property.
B. distressed property.
C. underground property.
D. redlined property.

220. A licensee might suggest some optional strategies a seller might consider rather than a short sale. These strategies would include all of the following, except
A. reinstatement of the mortgage.
B. loan modification.
C. wraparound mortgage.
D. deed-in-lieu of foreclosure.

221. Which of the following is exempted from the lender’s scrutiny in considering a short sale?
A. The seller’s tax returns
B. The seller’s IRA account
C. The sellers other real estate properties
D. None of the foregoing are exempt

222. The final step in the short sale transaction is _______.
A. the lender releases the lien.
B. the buyer delivers the funds.
C. the lender executes the deed to the buyer.
D. the seller delivers the deed.

223. Home warranties are:
A. illegal in Illinois.
B. a good selling point.
C. required by HUD homes.
D. required for VA financing.

224. When starting a listing, what question is the most important?
A. “What commission are you expecting to pay?”
B. “What is your listing price?”
C. “Are you currently listed with another brokerage?”
D. “How long do you want to list the property?”

225. Which of the following would not appear as an “interior feature” on the listing?
A. Floor coverings
B. Roof Type
C. Number of Bathrooms
D. Heating System

226. In what section of the listing agreement would you find property exemptions?
A. Additional Terms and Property Information
B. Dual Representation
C. Seller’s Information
D. General Provisions

227. In what section of the listing agreement would you find reference to fair housing?
A. Personal Property
B. General Provisions
C. Home Warranties
D. Possession

228. In what section of the listing agreement does the seller provide his responsibilities?
A. Minimum Services
B. Possession
C. Seller Obligations
D. Representation

229. Which of the following might be a “red flag” when taking a listing?
A. Damp Basement
B. New Roof
C. Swimming Pool
D. Security Cameras

230. Which of the following information would you not collect for a listing?
A. Listing Price
B. Owner’s Name
C. Spouse’s Maiden Name
D. Street Number

231. Which of the following statements violates antitrust laws?
A. Our agency charges a rate of 4.5%.
B. Commission rate is not set.
C. Each agency has its own commission rate.
D. Standard commission is 4.5%.

232. Commencement date can best be described as ____.
A. the date when the brokerage files the agreement.
B. the date when the property is shown in the MLS listings.
C. the date when the listing agreement is approved by the mortgage lender.
D. the date when the listing agreement was signed.

233. Buyer Jake took possession of a house on March 12, 2010. Buyer Jake needs to file a case based on a disclosure violation. When must he file?
A. Within 2 years of occupancy.
B. Within 2 years of recording conveyance.
C. On or before April 2014
D. On or before March 12, 2011.

234. Based on the Illinois License Act, the licensee must disclose any material facts about the physical condition of the property OR the transaction about which the licensee has
A. Appurtenant knowledge
B. Actual knowledge
C. Subjacent knowledge
D. Extra-territorial knowledge

235. Radon gas can be traced back to _____________.
A. lead-based building products.
B. uranium.
C. treated lumber
D. asbestos-based building products.

236. To comply with the Illinois Radon Awareness Act the seller is required to fill out the Illinois Disclosure of Information on Radon Hazards form by initialing, explaining, and providing all of the following items, except
A. all available records and reports pertaining to elevated radon concentrations within the dwelling.
B. documentation that all prior elevated radon concentrations have been mitigated or remediated.
C. the plan for the seller to conduct radon testing and mitigation activities prior to entering into a contract with purchasers.
D. acknowledgement that elevated radon concentrations are known to be present within the dwelling.

237. Licensee Mike knows that the property located at 15 S. Elm is stigmatized due a violent death that occurred at the address five years ago. Mike does not disclose this information to out-of-town buyers. What act has Mike violated?
A. Residential Death Report Act
B. None
C. Illinois Disclosure Act
D. Section 35 Act

238. In Illinois, the Residential Real Property Disclosure Act requires that when a seller signs the listing agreement, he or she must also prepare a property condition disclosure document completed by any of the following except the
A. Licensee
B. Seller
C. Seller’s attorney
D. Seller’s power of attorney

239. Under law, when the seller has knowledge of high radon gas levels, what must the seller provide to the buyer?
A. The Federal Disclosure of Information on Radon Hazard form
B. The HUD Disclosure of Information on Radon Hazard form
C. The Illinois Disclosure of Information on Radon Hazard form
D. The National Disclosure of Information on Radon Hazard form

240. Which of the following is FALSE regarding the toxic effects of lead-based paint?
A. Can be absorbed through the skin
B. Can be ingested
C. Can be inhaled
D. Can alter brain growth

241. Real estate agents who take listings of homes must have their sellers fill out a disclosure form about their knowledge or lack of knowledge about the presence of lead-based paint in the home if the home was
A. constructed using EIFS.
B. built prior to 1988.
C. deemed a stigmatized property by ECOA.
D. built prior to 1978.

242. What rights does a buyer have, if a seller fails to provide a disclosure document prior to the transfer of the property?
A. Buyer has the right to sue the seller.
B. Buyer has the right to terminate the contract.
C. Buyer has the right to reduce the contract sell price.
D. Buyer has the right to file a case in the Court of Appeals.

243. Which of these items is not important to include on your weekly activity report?
A. Buyer’s comments about the property.
B. Agent comments about the property
C. Number of phone calls requesting property information.
D. Number of hits on the company website

244. No-shows for a scheduled appointment can happen. How should an agent handle no-shows?
A. The agent should make note of the no-show in the weekly activity report.
B. The agent should prepare her client during the listing presentation for no-shows.
C. The agent should have a no-show agent reschedule.
D. The agent should report no shows to the MLS board.

235. When should a licensee schedule an office tour?
A. If the listing does not sell within 30 days.
B. Prior to taking a listing.
C. Soon after the listing is taken.
D. During a public open house

236. Which of these is not a helpful homeowner tip?
A. Display lots of family photos to impress potential buyers.
B. Declutter the garage and basement.
C. Bake muffins or cinnamon rolls to create a “homey” feel.
D. Make sure all light bulbs and lamps are working and are bright.

237. What is the best strategy to take when a listing is about to expire?
A. Let the listing expire.
B. Have your managing broker call the seller to discuss an extension.
C. Schedule a meeting with the seller a few weeks before the listing expires and review options.
D. Relist the property with MLS for two additional weeks.

238. What is a good technique to make a home appear homey?
A. Bake some brownies just before the showing.
B. Close all blinds and curtains.
C. Organize storage spaces.
D. Place more furniture in the space.

239. If someone shows up at the sellers’ door unexpectedly to see the home, the sellers should _________.
A. Tell them to call your office.
B. Invite them in and show them around.
C. Take their names and call your office.
D. Show them the outside of the property.

240. Which of the following is a good property showing tip?
A. Remove all area rugs
B. Allow pets to interact with the clients
C. Lock-off storage areas
D. Remove clutter

241. Which of the following actions by an agent would most probably upset the sellers?
A. Conducting an agent open house
B. Sending a weekly activity report
C. Sharing all visitor comments two weeks before the listing ends
D. Placing a classified ad in the weekend paper

242. All of these activities are appropriate to do within the first few days of obtaining a listing except which?
A. Give the sellers a copy of some homeowner tips.
B. Discuss modifying the listing price.
C. Explain your marketing plan to the sellers.
D. Have the broker send a “thank you for listing” letter to the sellers.

243. Which of the following is a good suggestion for keeping track of listings that have been shown to a client?
A. Print off an MLS listing.
B. Ask the client to keep a binder of all listings.
C. Maintain a file on each client and record all properties shown.
D. Leave a business card at each property shown.

244. What type of agency is standard in Illinois?
A. Single
B. Designated
C. Dual
D. General

245. Who must approve a dual agency representation?
A. MLS Board
B. All parties in the transaction.
C. Company Shareholders
D. Dual Agency Commission

246. The acronym COD stands for:
A. Care, Obedience, Disclosure
B. Compliance, Order, Distance
C. Compliance, Obey, Discover
D. Connect, Order, Displace

247. Which skill must the licensee use the most to ensure that his or her client receives the best care?
A. Insight
B. Judgment
C. Accounting
D. Listening

248. What are the two categories of duties?
A. Advanced and Passive
B. Accounting and Protection
C. Action and Protection
D. Active and Passive

249. When does a seller first become aware of the possibility of a dual agency?
A. At the time that the listing agreement is signed.
B. When the seller get the first written offer.
C. Two weeks after signing a listing agreement.
D. At the time of closing.

250. Which is the only duty that continues beyond the agency relationship, unless a client gives a licensee permission to share the information with others?
A. Support
B. Care
C. Confidentiality
D. Obedience

251. Which of the following best defines dual agency?
A. Representing the seller in a transaction.
B. Representing a buyer in a transaction.
C. Representing neither the buyer or seller in a transaction.
D. Representing both the buyer and seller in a transaction.

252. How might a licensee hide the true identity of his or her client on a sales offer?
A. Insert the person’s initials only in the buyer’s line.
B. Insert “TBA” on the buyer’s line.
C. Leave the buyer’s line blank.
D. Insert “and/or assigns” in the buyer’s line.

253. The reason licensees like buyer agency so much is:
A. It’s more money for the broker
B. The buyer will be loyal to the buyer’s agent
C. The licensee offered it
D. Buyers can work with more than one agent

254. What type of contract is a Buyer’s Agreement?
A. Due Diligence
B. Employment
C. Partnership
D. Work Order

255. The best reason for the buyer to have representation is:
A. The seller has representation.
B. The listing agent is on the seller’s side.
C. The licensee offered it.
D. The buyer’s agent can provide a strong negotiating position.

256. After the termination of a Buyer’s Agreement, when might a licensee’s firm still earn a commission?
A. If the buyer purchases a property that is listed in the MLS.
B. If the buyer purchases a FSBO property.
C. If the buyer purchases a property that was shown by the licensee during the term of the agreement.
D. If the buyer purchases a property that is listed with the licensee.

257. Under an exclusive buyer brokerage agreement, the buyer may have to pay the buyer agent’s commission
A. When the seller and listing broker will not
B. When the buyer makes a full price offer
C. When the buyer makes an offer
D. Before finding a home

258. When the buyer checks “yes” to dual agency on a Buyer Representation agreement, what does the buyer actually agree to?
A. By checking “yes” to this paragraph, the buyer is only acknowledging that the possibility of dual agency exists.
B. By checking “yes” to this paragraph, the buyer agrees to dual agency.
C. By checking “yes” to this paragraph, the seller agrees to dual agency.
D. By checking “yes” to this paragraph, the buyer agrees to dual agency only if shown company listings.

259. Getting paid by the buyer before showing him homes is an example of
A. A bonus
B. A crime
C. A retainer fee
D. A transaction fee

260. What are the three types of Buyer’s Agreements?
A. Exclusive purchase, Exclusive seller, Closed buyer agency.
B. Limited Exclusive buyer, Exclusive dual agency buyer, Open ended buyer agency.
C. Exclusive buyer, Exclusive agency buyer, Open buyer agency.
D. Exclusive closed buyer, Exclusive open agency buyer, Restrictive buyer agency.

261. It is important that you take the time to go over each of the provisions of the buyer representation agreement especially the ___.
A. indemnification of agent provision.
B. services provision.
C. HUD provision
D. compensation provision.

262. Which provision in the buyer’s agreement deals with the limits to the professional duties and abilities of the licensee?
A. Disclaimer
B. Buyer’s Duties
C. Minimum Services
D. RESPA Compliance

263. What two pieces of information are most helpful to know when working with buyers?
A. Hobbies and Life Style Interests
B. Family Relations and Education Levels
C. Occupation and Retirement Plans
D. Motivation and Urgency

264. When selecting a property, what is the most desirable outcome?
A. Matching likes and dislikes
B. Meeting wants and needs
C. Meeting wants
D. Providing different options.

265. When meeting a buyer, what should you deal with first?
A. Their emotional needs.
B. Their financial needs
C. Their long-terms needs
D. Their practical needs

266. You should change the buyer’s wants and needs based on what?
A. Buyer feedback
B. The neighborhood
C. Licensee’s perception
D. Market trends

267. What is fortunate about working with upsizers?
A. They know what they want.
B. They can be shown all types of properties.
C. They are in a hurry to move.
D. They are willing to accept less than expected.

268. What is the key to working with relocation buyers?
A. Selecting quality appointments
B. Focus on fixer-uppers.
C. Selecting properties that increase in value quickly.
D. Minimize disruption

269. Which type of buyer will most likely have the highest fear factor?
A. Relocation buyers
B. Investor buyers
C. First-time buyers
D. Downsizing buyers

270. What drives downsizers?
A. Extra Space
B. Convenience
C. Speed
D. Quick decisions

271. To be successful with investor buyers, what must a licensee do?
A. Show a wide range of properties.
B. Be ready to close a deal quickly.
C. Determine exactly what the buyer wants
D. Determine the buyers net worth.

272. What is the reaction when a buyer is faced with too many options?
A. They make quick decision.
B. They limit their options.
C. They welcome the challenge.
D. They become paralyzed.

273. The evaluation process used to determine the borrower’s ability to repay a loan and estimating the value of the property being used as collateral is called ______.
A. Subrogation.
B. Assessment.
C. Underwriting.
D. Reconciliation.

274. How do lenders determine the value of a property?
A. Lenders use standard HUD reports.
B. Lenders rely on MLS reports.
C. Lenders rely on current listing prices.
D. Lenders rely on appraisal reports.

275. What is the single most important document used to determine loan worthiness?
A. Job History
B. Credit History
C. Income Records
D. Capital Assets

276. Bob and Linda Todd are buyers with $60,000 of stable income and unknown credit scores. Using a 28% front end loan qualifying ratio and assuming about 20% of that amount would be for taxes and insurance, how much of a monthly payment (principal and interest) could the Todd’s qualify for?
A. $1,120.00
B. $1,400.00
C. $1,680.00
D. Cannot be determined.

277. What term is used to denote everything that a person owes?
A. Credit History
B. Passive Capital
C. Liabilities
D. Arrears Payments

278. How will you know if the letter regarding a buyer’s loan capacity is a prequalification letter or a preapproval letter?
A. The letter heading will state either Pre-approval or Pre-qualified.
B. If the letter states that the loan approval is subject to “verification of the buyers’ income and credit information” it is a prequalification letter.
C. If the letter states that the loan approval is subject to “verification of the buyers’ income and credit information,” it is pre-approval letter.
D. Lenders do not issue pre-qualification letters.

279. Buyers can find out how much of a loan they can qualify for by:
A. Pre-qualification, a formal process that can be performed by a real estate agent or by a lender.
B. Pre-approval, a formal process that only a lender can perform.
C. Pre-qualification, an informal process that can only be performed by a HUD lender or mortgage banker.
D. Pre-approval, an informal process that a real estate agent or lender can perform.

280. Which type of loan requires that debt-ratio guidelines must not exceed 41 percent?
A. Urban Renewal loans
B. Conventional loans
C. FHA loans
D. PMI loans

281. Which type of status is viewed as a stronger buying position?
A. A buyer who has many charge accounts.
B. A buyer who has a good rent history.
C. A buyer who has been pre-qualified.
D. A buyer who holds a pre-approval letter.

282. Which two tools are used to determine a buyer’s ability to pay the loan?
A. Income ratio and Debt ratio
B. Income Statement and Expense Vouchers
C. Credit card interest and Outstanding loans
D. Loan-to-value assets and Liquid assets
283. What technique helps you uncover what property features are most important to clients?.
A. Encourage an offer
B. Invite comparisons
C. Downplay property features
D. Ask to list their present property.

284. Joe Broker takes a prospective buyer into a home. Joe turns on the lights to add warmth, walks the buyer through the house, leaves a business card, then locks up and leaves the premises. What steps did Joe miss?
A. He did everything right.
B. He should call the seller before leaving.
C. He should not have turned on the lights.
D. Forgot to knock upon entering and turn off the lights.

285. What is the key to a successful showing?
A. Pre-qualifying the buyer
B. Staging the house
C. Organization
D. Selecting the route

286. A buyer calls your office to inquire about a property he saw advertised. He sounds knowledgeable about this listing. Where is it that he likely found out the property information?
A. On the Internet
B. In a classified ad
C. From the For Sale sign
D. From a direct mail flier

287. What technique is used to elicit “yes” responses from a client?
A. Tie-association
B. Question-Tie
C. Tie-down
D. Tie-up

288. How do you stay in control of a call?
A. Providing facts
B. By asking questions
C. Taking notes
D. Describe the capability of local school districts

289. What is the primary purpose of the first meeting with prospective buyers?
A. To find out what type of buyers they are
B. To find out what kind of home they are interested in
C. To pre-qualify them
D. To show them your five best listings

290. If a prospective buyer calls about a listing, what is the most important thing a broker should do?
A. Discuss the attributes of the property
B. Prequalify the buyer
C. Set an appointment to show it
D. Ask lots of questions

291. Which of the following is not necessary for a presentation package?
A. Property information sheet
B. Photos
C. Home Warranty Application
D. Map

292. All of these questions could help you determine a prospect’s capacity to make a purchase except which one?
A. How much do you have in your savings account?
B. How soon are you planning to buy?
C. Where do you and your spouse work?
D. Do you need the equity from your current home for the new home purchase?

293. Broker Dave represents Buyer Mary. Mary wants to make an offer on a house that is 25% lower than the asking price. Dave writes the offer but is too embarrassed to submit it. Instead, Dave terminates the relationship with Mary. Has Dave acted properly?
A. No, Dave should have submitted the offer.
B. Yes, since Dave is not obligated to submit an offer he thinks is too low.
C. No, Dave cannot terminate the relationship with Mary.
D. Yes, since Dave was acting in good faith.

294. Broker Carol’s buyer wants to submit an offer that Carol believes is too low. What should Carol say to the buyer?
A. Show the buyer comparables and indicate that the seller’s price is in line with similar properties.
B. Back off and let the buyer make the decision.
C. Suggest that the buyer sleep on it, and make an appointment for the next day to write up the offer.
D. Tell the buyer another offer is coming in and he/she had better act quickly.

295. Mary makes an offer to purchase a duplex from Sam. They agree on a price and both parties execute the contract. Mary learns that Sam is only selling half of the duplex. Mary wants to terminate the contract. What is the result?
A. Mary is out of luck; the contract is valid.
B. The contract is voidable due to mutual mistake.
C. The contract is void for lack of consideration.
D. Sam is in default for misrepresentation.

296. Broker Will represents a young couple who is preparing an offer on a home. Through pre-approval, Will knows the couple can only afford to pay $100,000. The couple insists on offering $120,000. What should Will do?
A. Go to the listing agent and ask if the sales price can be dropped to $100,000.
B. Do nothing; it isn’t Will’s business.
C. Encourage the couple to offer only what they can afford.
D. Suggest that the couple pay more in earnest money.

297. What can Broker Kevin do to create urgency in a buyer?
A. Encourage the buyer not to use an attorney; it takes too much time.
B. Point out how long houses in the area stay on the market and discuss how many showings there have been.
C. Set up a showing at a time that overlaps another showing so the buyer will know there is demand for the house.
D. Kevin cannot do anything; it is out of his hands.

298. Broker Bob has a buyer who has seen a property twice and seems ready to make an offer. However, he is objecting because the roof is 12 years old. What should Bob do?
A. Suggest that the buyer look at a different house.
B. Point out that the roof is not leaking despite its age.
C. Ask the buyer if the buyer would like to make an offer taking the roof age into account.
D. Not waste any more time on this house. The buyer will never make an offer.

299. If a buyer has given the broker a signal that the buyer is ready to make an offer, what should the broker do to get the buyer to make the offer?
A. Proceed as if the buyer has decided to make an offer.
B. Back off and let the buyer make the decision.
C. Suggest that the buyer sleep on it, and make an appointment for the next day to write up the offer.
D. Tell the buyer another offer is coming in and the buyer had better act quickly.

300. In which of the following instances should a broker suggest that a buyer should consult an attorney?
A. If the buyers are requesting unusual provisions not covered by the standard contract
B. If the buyer and seller cannot agree
C. If there is a dispute over the earnest money
D. If the buyer breaches the contract

301. Broker Sally has a buyer who seems to like a property but is concerned because the kitchen is out of date. What should Sally do?
A. Suggest that the buyer look at a different house.
B. Suggest that the buyer include an allowance for updating in the offer.
C. Offer to reduce the commission to help defray the cost of a new kitchen.
D. Not waste any more time on this house. The buyer will never make an offer.

302. A buyer wants to take the offer to an attorney to review it. Broker Tim knows that another offer will be coming in at about the same time. What should Tim do?
A. Tell the buyer about the other offer and urge the buyer to skip the attorney.
B. Encourage the buyer to get the attorney to review it quickly.
C. Tell the buyer to submit the offer first and then take a copy to the attorney to review.
D. Bob cannot do anything; it is out of his hands.

303. When does an Assumption Fee apply?
A. When the seller pays off the entire loan
B. When the buyer assumes the seller’s existing loan.
C. When the buyer assumes two loans.
D. When the lender drafts a PMI loan.

304. Which of the following charges does the seller usually pay?
A. Commission Fees
B. Lender Fees
C. Inspections
D. PMI

305. Which of the following charges does the buyer usually pay?
A. Existing liens
B. Survey fees
C. Broker’s Commission
D. Lender Fees

306. Which document is used to show the amount of taxable consideration that was used to determine the transfer taxes?
A. Taxable Income Tax Form
B. Real Estate Transfer Declaration
C. Form 2133 IRS
D. Deed Order Tax Declaration

307. What is a fee charged to secure a specific interest rate?
A. Lender’s Rebate Fee
B. Take Fee
C. Recording Fee
D. Loan Lock Fee

308. A falsified Real Estate Transfer Declaration is a ___________.
A. Class A misdemeanor
B. Class B misdemeanor
C. Class C misdemeanor
D. Class B-1 misdemeanor

309. What document is a detailed accounting of the transaction that is prepared before closing?
A. RESPA Statement
B. Trust Account
C. Settlement Statement
D. Deed

310. What tax is imposed on any deed or instrument which conveys interest in real property?
A. Impound Tax
B. Property Exchange Tax
C. Render Tax
D. Real estate transfer tax

311. Which of the following deeds are exempt from transfer tax?
A. Partitions
B. Residential
C. Land valued at $37,800 or less.
D. Chattled Deeds

312. If a general home inspection showed a possible crack in a foundation, what should the buyer do?
A. Request the general inspector to provide an opinion as to risk.
B. Contact a foundation repair company to repair the crack.
C. Ask a structural engineer to inspect and give an opinion.
D. Contact an attorney.

313. After the contract has been executed, the buyer needs to change the closing date. What should the broker do?
A. Have the buyer ask his attorney to prepare an amendment requesting the change.
B. Rewrite the entire sales contract.
C. The broker must have an attorney prepare an addendum.
D. The broker may use a form called the Agreement to Amend/Extend Contract.

314. Who is responsible for keeping track of all the dates listed in the contract?
A. The closing agent
B. The lender
C. The broker
D. The title agent

315. During the walk-through, the buyer sees that the seller did not do a proper cleaning of the house. What is the best way of handling this?
A. The buyer and his attorney should confer on how to handle the problem cleaning without delaying the closing. OR At the closing, the buyer could ask for a credit from the seller for the cost of the cleaning.
B. The closing should be delayed until the cleaning is completed.
C. The broker should hire a cleaning crew and take it out of the commission.
D. The broker should prepare the Agreement to Amend/Extend Contract to change the purchase price.

316. Bob Broker is representing a buyer and is assisting with the closing. He tells the buyer that Eagle Inspections will get the inspection done quickly and thoroughly. Has Bob acted properly?
A. No, because he recommended a specific company.
B. Yes, he was exercising diligence in representing his client.
C. No, because the broker should never make recommendations.
D. Yes, because he knew Eagle was the best.

317. If a property is located in a flood zone and the property owner does not obtain flood insurance, what are the consequences?
A. The property cannot be sold if the new buyer does not obtain flood insurance.
B. The homeowner’s insurance will cover the cost of damage related to flooding up to 80% of the cost.
C. A lender would not make a loan on the property.
D. The property owner can be sued by the lender.

318. Buyer Jim’s loan is turned down the week before closing. What happens now?
A. The sales contract automatically terminates.
B. The seller needs to reduce the purchase price.
C. The contract will get an automatic 30-day extension.
D. The buyer could ask for an extension to allow Jim to find another lender.

319. During the inspection period under a contract, the buyer discovered that there was a title defect that needed to be rectified. The parties are uncertain about the amount of time it will take to correct the problem. What should they do?
A. Amend the contract to extend the closing date to whatever date the title problem is solved.
B. Amend the contract to extend the time to a time certain to correct the problem.
C. Allow the contract to expire and rewrite it when the problem is solved.
D. Close and escrow funds to cover the cost of correcting the problem.

320. What does the coinsurance clause do?
A. Requires both the husband and the wife to be named as the insured.
B. Requires the lender to be named as an additional insured.
C. Requires the homeowner to have property insurance equal to 80% of the home’s replacement value.
D. Requires any loss to be settled for actual cash value.

321. Since each home has an “insurance record” of its own, licensees should advise buyers to obtain a CLUE Report and:
A. Have the property assessed by an CLUE insurance investigator.
B. Not assume the sellers insurance, but purchase new insurance to avoid the CLUE issue.
C. Make their offer subject to receiving and approving a copy of the seller’s CLUE report.
D. Only purchase HO insurance from a CLUE certified insurance agent.

322. Managing Broker Jane owns a recreational vehicle that contains real estate records. She’d like to have her RV licensed as her principal place of business. What does the law say about this type of action?
A. The RV can be used as a principal place of business office.
B. The RV is not considered an office under Illinois Law.
C. The RV is not an office, until a phone line can be installed.
D. The RV can be used as a part-time office and licensed as a branch office.

323. A credit hour must include classroom instruction in coursework of a minimum of:
A. 35 minutes
B. 40 minutes
C. 50 minutes
D. 55 minutes

324. Individuals renewing or obtaining a managing broker’s license must complete a broker-management course of how many CE credit hours?
A. 4
B. 6
C. 9
D. 12

325. When does a real estate advertising business need to hold a real estate license?
A. If and when the business engages in the practice of real estate brokerage.
B. When the company has over 80% of real estate related advertisement business.
C. If the company is operating solely as an advertising firm for real estate licensees.
D. If and when any employee holds a real estate licensee.

326. What are the three licensee designations in Illinois?
A. Salesperson, Agent, Licensee
B. Agent, Subagent, Broker
C. Agent, Representative, Lessor
D. Broker, Managing Broker, Residential Leasing Agent

327. Broker licensees are exempt from continuing education requirements if they serve in the United States armed forces, serve as an elected state or federal official, or ____________________.
A. serve as an appointed member of federal government.
B. serve as a full-time employee on a MLS board.
C. serve as a full-time employee of the Department.
D. serve as an appointed member of state government.

328. Who is responsible to demonstrate evidence of CE compliance?
A. Each renewal applicant
B. IDFPR
C. Managing Broker
D. MLS Boards

329. Within how many days does a change in managing brokers need to be reported to the IDFPR?
A. 10
B. 15
C. 20
D. 30

330. What action can a licensee take if a client refuses to approve a dual agency relationship?
A. A licensee may with liability withdraw from representing a client.
B. A licensee may withdraw the listing.
C. A licensee may without liability withdraw from representing a client who has not consented to a disclosed dual agency.
D. A licensee may without liability withdraw from representing a client who has not consented to a disclosed dual agency, but the client must pay a referral fee.

331. When is a licensee banned from acting as a dual agent in a transaction?
A. A licensee is prohibited from serving as a dual agent if he or she has a personal relationship with the seller.
B. A licensee is prohibited from serving as a dual agent if he or she has a personal relationship with the buyer.
C. A licensee is prohibited from serving as a dual agent if he or she has knowledge of latent defects.
D. A licensee is prohibited from serving as a dual agent if he or she has an ownership interest in the property.

332. Which of the following statements best describes a contemporaneous offer?
A. Two or more offers being written at the same time on the same property from the same designated agent.
B. Two or more offers being written at different times on the same property from the same designated agent.
C. Two or more offers being written at the same time on different properties.
D. Two or more offers being written at different times on different properties from the same designated agent.

333. In what situation is undisclosed dual agency acceptable?
A. When the seller client agrees
B. When two or more contemporaneous offers are made
C. When the broker approves
D. Never

334. When is a licensee required to disclose interest?
A. When the licensee has more than two partners.
B. When the licensee closes the transaction.
C. When the licensee holds more than 5% owner interest.
D. When the licensee holds more than 1% owner interest.

335. Licensee Jim has a deal with home inspector Jake. For every client referral, Jim earns $25. When does Jim’s action become unlawful?
A. Jim’s action is legal, regardless of a disclosure
B. Jim’s action is legal if he is not working as a dual agent.
C. When Jim fails to inform all parties in writing.
D. When Jim fails to record income with the MLS board.

336. Which of the following entities are exempt from holding a license?
A. General circulation newspapers
B. Rental Finding Service
C. Real estate firm
D. Companies offering properties for exchange.

337. Which of the following is a true statement?
A. Agents selling real estate less than 10 hours a week do not need to be licensed.
B. Agents selling real estate less than 45 hours a month do not need to be licensed.
C. State and federal employees performing official duties do not need to be licensed.
D. Auctioneers selling property do not need to be licensed.

338. Any business which finds, attempts to find, or offers to find, for any person who pays or is obligated to pay a fee or other valuable consideration, a unit of rental real estate or a lessee to occupy a unit of rental real estate, not owned or leased by the business is known as:
A. A brokerage
B. A sponsoring brokerage
C. A rental finding service
D. A rental location specialist

339. Which of the following would NOT require a real estate license?
A. A person who deals in options
B. An attorney representing a client
C. One who sells or leases at an auction
D. A person who negotiates to help someone else buy or sell real estate

340. Which of the following is true regarding licensure?
A. Part-time Realtors must be licensed.
B. Full-time Realtors must be licensed.
C. Anyone offering to negotiate the sale of real estate must be licensed.
D. All of the above are true.

341. Who does NOT need a real estate license under Illinois law?
A. Someone supervising the collection of rent (or offering to do so) for the use of real estate.
B. Someone advertising or representing herself as working to buy, sell, exchange, rent or lease real estate.
C. Someone who negotiates or agrees to negotiate the sale, exchange, purchase, rental or lease of real estate.
D. An attorney acting under a power-of-attorney to deal with property from the owner.

342. Janice performs only activities related to the leasing of residential property, and she requires a license. Which of the following titles applies to Janice?
A. Agent
B. Broker
C. Salesperson
D. Residential Leasing Agent or just Leasing Agent

343. In which of the following situations, when performing duties for compensation, must a person or corporation have a real estate license?
A. Only when the person or corporation advertises or represents herself as working to buy, sell, rent, exchange or lease real estate.
B. Only when the person or corporation opens real estate to the public, for the purpose of marketing.
C. Only when selling or leasing, or offering to sell or lease real estate at an auction.
D. All of the above situations require a person or corporation to have a real estate license.

344. Which of the following organizations would initiate the investigation of anyone regulated by Illinois’ license act?
A. Real Estate Administration and Disciplinary Board of IDFPR
B. Council of the IDFPR
C. Illinois Environmental Protection Agency
D. Illinois Human Rights Act Committee

345. A licensee who violates license law the first time is guilty of which of the following?
A. A first-time offender is guilty of a Class A Felony.
B. A first-time offender is guilty of a Class B Felony.
C. A first-time offender is guilty of a Class A Misdemeanor.
D. A first-time offender is guilty of a Class C Felony.

346. Who can file a complaint with the IDFPR?
A. Only IDFPR Board Members
B. HUD approved clients
C. Pre-approved licensees
D. Anyone

347. Lawrence practiced real estate without a license and was caught for the second time . For his offense, Lawrence can be charged with a _________________________.
A. Class C felony
B. Class 4 felony
C. Class A misdemeanor
D. Class B felony

348. Carol’s legal action must start within how many years after she became aware of the acts that led to legal action to obtain recovery from the fund?
A. Carol’s legal action must begin within 2 years.
B. Carol’s legal action must begin within 3 years.
C. Carol’s legal action must begin within 4 years.
D. Carol’s legal action must begin within 5 years..

349. How many days from receipt of a peer review does the Department have to respond?
A. 20 days
B. 60 days
C. 30 days
D. 45 days

350. Ads not stating the broker’s name, not stating that the advertiser is licensed, or those with only a phone number, P.O. box, or street address are known as:
A. blank ads
B. blind ads
C. general ads
D. generic ads

351. Which of the following is a fund established from real estate license revenues to cover claims of “wronged” parties who have suffered monetary damages due to a real estate licensee?
A. Real Estate Administration Fund
B. Real Estate Revenue Fund
C. Real Estate Support Fund
D. Real Estate Recovery Fund

352. Which Fair Housing Law added handicap individuals to the list of protected classes?
A. Jones v. Mayer
B. Title VIII of the Civil Rights Act of 1968
C. Housing and Community Development Act
D. Fair Housing Amendments Act of 1988

353. Records show that Banker Fred has increased the interest rate on all loans to Native Americans by an additional 3%. Has Banker Fred violated any laws?
A. Yes, this would be viewed as discriminatory.
B. No, loan terms can be established independently of discrimination laws.
C. No, if the loan terms are not advertised.
D. Yes, this is a violation of usury laws.

354. What practice helps move low-income persons into previously-owned higher income owner properties?
A. Layer Down
B. Filtering Down
C. Flatten Down
D. Roll Down

355. Which governmental agency files suits in ADA cases?
A. Dept. of Justice
B. Dept. of Housing
C. Dept. of Revenue
D. Dept. of Government Operations

356. Mortgage providers and Federal Loan programs base their loans on Debt to income ratios as determined by their own
A. Housing Affordability Ratios
B. evidence of debt payment
C. credit affordability history
D. trending payment evidence

357. A person filing the complaint may be entitled to __________.
A. $10,000
B. 50% of punitive damages
C. Actual damages
D. A monthly payment from the General Revenue Fund.

358. What is the limit for HUD to start a discrimination investigation?
A. 90 days
B. 30 days
C. 1 year
D. 120 days

359. A broker only shows homes in certain neighborhoods based on matching existing residents with similar potential buyers. This broker is guilty of what prohibited activity?
A. Redlining
B. Blockbusting
C. Steering
D. Misrepresentation

360. If a person believes he or she has been discriminated against, how long does he or she have to file a HUD complaint?
A. 30 days
B. 90 days
C. 1 year
D. 2 years

361. What is a good policy regarding a seller who refuses to accept an offer from a potential buyer that is in a specific protected class?
A. Do not advertise and hold open houses on this property.
B. Do not allow the brokerage’s licensees to show the property.
C. Document the discrimination
D. Terminate the listing.

362. Which of these classes are protected by the Fair Housing Laws of Illinois?
A. Middle Income Renters
B. Criminal Record Holders
C. Military Status
D. Employment Status

363. Seller Jim tells his listing licensee that regardless of the offer, he will not sell to any Asian families. How does this impact the listing agent?
A. The licensee is still required to take the listing.
B. The licensee could be held liable if he or she knowing goes along with the request.
C. The licensee must note the request on MLS listing only.
D. The licensee must inform all agents regarding the request.

364. A broker induces an owner to sell by telling him that Hispanics are moving into the neighborhood. This broker is guilty of what prohibited activity?
A. Redlining
B. Blockbusting
C. Steering
D. Misrepresentation

365. Is any city in Illinois allowed to pass an occupancy law regarding number of tenants per apartment?
A. No, if the housing units were built prior to 1997.
B. No, unless the housing units are under Title 8.
C. Yes, if the requirement is judged as reasonable.
D. Yes, provided the city’s population is over 10,000.

366. Which is a TRUE statement about the Americans with Disabilities Act?
A. The act applies to AIDS victims.
B. The act applies to all structures built in the last 50 years.
C. Shopping centers are exempt if built after March 13, 1991.
D. An apartment manager might be required to widen all doorways to 60 inches.

367. Which Fair Housing Law added sex to the list of protected classes?
A. Jones v. Mayer
B. Title VIII of the Civil Rights Act of 1968
C. Housing and Community Development Act
D. Fair Housing Amendments Act

368. The following is evidence of guilt of a Fair Housing Violation
A. Having violated the act previously
B. Failure to display the Fair Housing poster as required by law
C. A charge that you advertised a property with location of schools nearby
D. Asking a buyer to prove they are over a certain age

369. Which of the following classes are not protected by federal law?
A. Military status
B. Sex
C. Color
D. Handicap

370. When must a model home comply with ADA guidelines?
A. If the home is price more than $250,000.
B. If the subdivision has more than 20 lots.
C. If the home is more than 2,000 sq. ft.
D. If the home also has a sales office area.

371. Which of these phrases would not be considered discriminatory if used in advertising?
A. White family home
B. Christian home
C. Couples only
D. Wheelchair ramps

372. Which document is required by RESPA to detail the costs that the buyer and seller will pay at closing?
A. Summary of Accounts
B. Estimate Monthly Payments
C. HUD-1
D. Closing Disclosure

373. Which of the following is exempt from RESPA?
A. Condominium purchase
B. Federally-insured loan
C. Loan involving a second mortgage
D. All cash sale

374. What is the title of the booklet that lenders must give to every person at the time of application for a loan?
A. “Your loan, your home”
B. “Your home loan toolkit”
C. “Your mortgage home loan”
D. “Protect your investment”

375. During a loan interview, a lender always asks borrowers what church they attend. What law, if any, does this action violate?
A. RESPA
B. FDIC
C. ECOA
D. No laws are broken.

376. Which statement is true about accepting referral fees?
A. It is common business practice.
B. It could be a law violation.
C. It is forbidden under all circumstances.
D. It is permissible in amounts under $50.

377. What is the purpose of RESPA?
A. The Act is designed so title companies can compare service fees.
B. That home buyers understand their purchase contract.
C. That home buyers receive the correct figures pertaining to their closing costs.
D. The Act is designed so lenders can compare companies’ mortgage fees.

378. To which of the following transactions does RESPA NOT apply?
A. Seller-financed loans
B. Residential property
C. First or second mortgage loans
D. A loan that is insured by a federal agency

379. Regulation Z applies to which of these situations?
A. $35,000 farm loan
B. $50,000 restaurant loan
C. $75,000 condominium loan
D. $85,000 warehouse loan

380. One broker says to another “I’ll take the east side of town and your company can take the west side.” What is this an example of?
A. Market allocation
B. Tie-in arrangement
C. Group boycott
D. Price fixing

381. Two brokers working for the same firm meet over coffee and decide to charge the same set commission rate to all of their sellers. Is this an illegal action?
A. No. Antitrust laws do not apply to commission rates or MLS fees.
B. Yes. A broker’s commission must be related to the costs involved in each transaction.
C. No. The brokers do not represent competing firms.
D. Yes. It’s a violation of antitrust laws.

382. Matt Bower is a developer. Will Jones is a builder. Matt agrees to sell Will a lot, but he conditions the sale by insisting that Will agree to list the property with him after the home is built. What is this called?
A. Market allocation
B. Price fixing
C. Coercion
D. Tie-in arrangement

383. All of the members of one board of REALTORS agree that they will not show the properties of the members of another board of REALTORS. What is this an example of?
A. Price fixing
B. Tie-in arrangement
C. Group boycott
D. Market allocation

384. If a group of area brokers have a meeting to set commission rates, what does this violate?
A. Fair Housing Act
B. Sherman Antitrust Act
C. Civil Rights Act of 1968
D. Jones v. Mayer

385. Which of these is not a violation of antitrust laws?
A. Boycott
B. Price fixing
C. Redlining
D. Market allocation

386. Ads should be written _______.
A. from the perspective of all the protected classes
B. from the perspective of targeting specific classes.
C. from the perspective of maintaining the culture of the neighborhood.
D. from the perspective of maintaining familial status in neighborhood.

387. Section 1450.145 defines a “Page” as what?
A. Each page containing over 300 words
B. A landing page
C. Each html document
D. Mircrosite

388. What is defined as the copying or extracting of existing listing information or keywords from a website, digital platform, or any form of social media of another licensee and using or altering that material and posting or displaying it for the benefit of the general public on another digital platform, form of social media, or in front of firewall on another website, without written or electronic permission and disclosure from the original listing licensee?
A. Scraping
B. Copywriting
C. Spam
D. Virus

389. Internet ads, on a licensee’s home page, must contain
A. hours of business, owner’s name, agent’s addresses.
B. types of agency offered, phone number, email address
C. MLS association, types of real estate services offered, contact numbers.
D. licensee’s name, sponsoring broker’s name, company name/address, geographic location.

390. Advertising a property that is subject to an exclusive listing agreement with a sponsoring broker other than the licensee’s own without the permission of and identifying that listing broker is an example of:
A. Fair Housing violation
B. A Sherman Antitrust violation
C. Deceptive and misleading advertising
D. An Illinois Human Rights Act violation

391. Which of the following statements are illegal in real estate ads?
A. Property has a mother-in-law annex.
B. Apartment is a four-story walk-up.
C. No smokers and No pets.
D. Those of the Catholic faith only accepted.

392. Which of the following is true regarding blind ads?
A. Licensees may not utilize blind ads unless they own the advertised property.
B. Licensees may not use blind ads regardless of who owns the property.
C. A blind ad is an ad that excludes the licensees name.
D. Blind ads placed by licensees are permitted if they do not discriminate.

393. Which of the following real estate ads would not be acceptable?
A. Property sits on a corner lot with 3 bedrooms, new master bath and large family room.
B. Great location for empty nesters, close to park and hospitals.
C. Cozy 2 bedroom cottage in quiet neighborhood.
D. Home is located in gated community with security entrance.

394. Licensee Judy takes a weekly ad out in the South Side Journal. Judy does not place ads in any of the other neighborhood newspapers. What might be said about Judy’s advertisement practices?
A. Judy is targeting her market area.
B. A city-wide ad would be more cost-effective.
C. Ads in only one local paper may appear to be discriminatory.
D. Judy is marketing to potential buyers who fit the profile of those already established homeowners and not practicing discrimination.

395. At times, the women’s shelter at St. Mary’s Catholic Church has rental units open to the public. Are they allowed to advertise for female renters only?
A. Yes, gender based ads for shared living housing is acceptable.
B. Yes, provided all renters are Catholic.
C. No, ads cannot target specific gender types.
D. Religious-type institutions do not have to comply with fair housing laws.

396. Which of the following is a rule of the federal Do-Not-Call List?
A. Every state must have its own list.
B. Only telemarketers are bound by this law.
C. Consumers must update their information on the registry at least every two years.
D. The law prohibits unsolicited phone calls to any consumer telephone number listed on the registry.

397. A managing broker may be protected from their broker’s violation of the Do Not Call Act if he or she has implemented
A. Training on Do not Call procedures
B. A written policy on Do not call procedures
C. Provided a policy manual for the office
D. Both a and b

398. Which of the following groups are exempt from the Telephone Consumer Protection Act?
A. All new phone users after March 2008
B. Hospitals
C. Tax-exempt nonprofits
D. Out of state lottery businesses

399. Which agency handles junk fax complaints?
A. FCC
B. FTC
C. AIG
D. FSLIC

400. Agent Jim wants to send out an email to all the local real estate agents to inform them about an open house he is holding. What must he do to be in compliance with the CAN-SPAM Act?
A. Jim must give the agents a way to opt out of any future email messages.
B. He must be sure to include the entire mailing address of the home he is hosting.
C. Jim must be sure his name and phone number are prominently displayed in the email.
D. He cannot give any indication of the listing price of the home in the email.

401. Which statement about the Junk Fax Prevention Act is TRUE?
A. Licensees must check the national registry before sending a fax.
B. Licensees can only send faxes to existing clients.
C. This act applies only to managing brokers, not their employees.
D. Licensees are exempt from this act when sending open house notices.

402. Of the following market conditions or trends, which is NOT important as an influence on market value?
A. Number of properties on the market.
B. Trends in average time on the market.
C. Number of competing agents in the market area.
D. Trends in sale prices in different price ranges.

403. A phase that is NOT part of the usual real estate market cycle is
A. oversupply.
B. undersupply.
C. supply-demand equilibrium.
D. price-demand independence.

404. Real estate value in general is:
A. The present monetary worth of benefits arising from the ownership of real estate.
B. The past monetary worth of benefits arising from the ownership of real estate.
C. The future monetary worth of benefits arising from the ownership of real estate.
D. Its cost value.

405. One reason real estate agents need to understand influences on market value is so they can
A. perform proper appraisals.
B. obtain the highest market value possible for their listings.
C. foresee how current conditions may affect their transactions.
D. inform buyers that they will have to pay market price.

406. How readily or easily title or rights to real estate can be transferred affects the property’s:
A. Reconciliation value.
B. Transferability value.
C. Anticipation value.
D. Utility value.

407. Highest and best use of a property is that use which _________.
A. is physically and financially feasible, legal, and the most productive.
B. is legal, feasible, and deemed the most appropriate by zoning authorities.
C. conforms to other properties in the area.
D. entails the largest building that zoning ordinances will allow developers to erect.

408. Which of the following situations illustrates the principle of contribution?
A. A homebuyer makes a down payment of 20% instead of the 10% the lender requires.
B. A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000.
C. The appraised value of a house goes up by $20,000 over a two-year period because of the prices recently paid for other houses in the neighborhood.
D. Because of a decline in mortgage interest rates, a homeowner in a certain market is able to list her house at a higher price.

409. A property owner buys an adjacent parcel and combines it with the original parcel to create a property with a higher value than the total of the two separate property values. The operative principle of value in this situation is called:
A. Highest and best use.
B. Assemblage.
C. Progression.
D. Subdivision.

410. The concept of market value is best described as
A. the price a buyer will pay for a property, assuming other similar properties are within the same price range.
B. the price an informed, unhurried seller will charge for a property, assuming a reasonable period of exposure with other competing properties.
C. the price a buyer and seller agree upon for a property assuming stable interest rates, appreciation rates, and prices of other similar properties.
D. the price that a willing, informed, and unpressured seller and buyer agree upon for a property, assuming a cash price and the property’s reasonable exposure to the market.

411. What a property actually sells for is its:
A. Market value.
B. Appraised value.
C. Market price.
D. Book value.

412. A person paid $150,000 for a house with the intention of renting it out for $1,000 per month. The economic principle that led the person to pay this price based on the property’s ability to generate this future income is known as:
A. Anticipation.
B. Substitution.
C. Supply and demand.
D. Utility.

413. Which of the following is a local market influence on market value?
A. Inflation.
B. Municipal infrastructure.
C. Money supply.
D. Federal tax laws.

414. As a rule, the fewer the total number of adjustments, the smaller the adjustment amounts, and the less the total adjustment amount:
A. the less reliable the comparable.
B. the more reliable the comparable.
C. the less reliable the subject.
D. the more reliable the subject.

415. One of the principal factors for adjustment in a CMA or sales comparison appraisal is
A. location of mortgage lender.
B. current residence of buyer.
C. number of occupants.
D. time of sale.

416. The main limitation of using a pending sale for a comparable is that
A. the final sales price is not known.
B. there is no date of sale.
C. the selling price is too close to the present to allow for adjustment.
D. a pending sale is not competitive with active listings.

417. If a comparable is better than the subject in some characteristic,
A. an amount is deducted from the sale price of the comparable.
B. no adjustment is necessary.
C. an amount is added to the sale price of the comparable.
D. all of the comparables must be adjusted accordingly.

418. Because the sale prices of the comparables are known, while the value and price of the subject are not, adjustments:
A. should always be exaggerated.
B. can be made only to the comparables’ prices, not to the subject’s.
C. can be made only to the subject’s prices, not to the comparables’.
D. always reduce the subject’s value.

419. As a comparable, an expired listing can be a useful indicator of
A. a listing period that was too short.
B. a listing price that was too high for the market.
C. a seller who was inflexible.
D. a property that was not as good as its competitors.

420. All the following qualities are required in a good comparable for an appraisal EXCEPT
A. resemblance to the subject in utility and design.
B. locational identity to the subject.
C. sale in an arm’s-length transaction.
D. recent sale.

421. If a comparable sold for $200,000 but lacks a garage valued at $10,000, while the subject has one, the adjusted value of the comparable is
A. $190,000.00
B. $200,000.00
C. $210,000.00
D. not relevant.

422. In a deed of trust transaction, which of the following occurs?
A. The beneficiary conveys title to a trustee in exchange for loan funds.
B. The trustee conveys title to a beneficiary in exchange for loan funds.
C. The trustor conveys title to a trustee in exchange for loan funds from the beneficiary.
D. The trustee conveys title to a trustor in exchange for loan funds from the beneficiary.

423. The document that commits a mortgage loan borrower to repay the loan is the
A. deed.
B. promissory note.
C. mortgagor’s lien.
D. hypothecary.

424. A lender lends money to a homeowner and takes legal title to the property as collateral during the payoff period. They are in a
A. title-theory state.
B. lien-theory state.
C. state allowing land trusts.
D. state where hypothecation is illegal.

425. Which of the following best expresses the mechanics of a mortgage loan transaction?
A. The borrower gives the lender a note and a mortgage in exchange for loan funds.
B. The lender gives the borrower a mortgage and receives a note in exchange for loan funds.
C. The borrower receives a note in exchange for a mortgage from the lender.
D. The lender gives the borrower a note, loan funds and a mortgage.

426. The primary mortgage market includes all of the following EXCEPT
A. commercial banks.
B. insurance companies.
C. Fannie Mae.
D. credit unions.

427. A homeowner borrows money from a lender and gives the lender a mortgage on the property as collateral for the loan. The homeowner retains title to the property. This is an example of
A. intermediation.
B. forfeiture.
C. hypothecation.
D. subordination.

428. Wesley wants to sells his house to Maria. Maria would like to assume Wesley’s mortgage loan. Wesley’s lender demands full and immediate repayment of the loan if Wesley completes the sale. The lender can make this demand if the mortgage contains a
A. defeasance clause.
B. release clause.
C. due-on-sale clause.
D. redemption clause.

429. If the loan term, loan amount, and interest rate of a loan are known, it is possible to calculate the
A. periodic payment.
B. loan points.
C. discount rate.
D. down payment.

430. What is a “satisfaction piece?”
A. The final payment that repays a loan.
B. The part of a mortgage that describes repayment terms.
C. A document executed by a lender as evidence that a loan has been repaid in full.
D. A downpayment or other payment that constitutes a legal consideration.

431. Because of a borrower’s default on payments, a mortgage lender calls the entire balance due and payable immediately. The clause in the mortgage document that allows the lender to do this is the
A. alienation clause.
B. acceleration clause.
C. defeasance clause.
D. prepayment clause.

432. Ginnie Mae operates by
A. purchasing mortgages from conventional lenders.
B. guaranteeing to lenders that monthly payments on mortgage loans will be made.
C. issuing conventional mortgage loans.
D. selling insurance to the FHA.

433. Freddie Mac issues securities known as
A. Guaranteed Mortgage Certificates.
B. Standard Lease-ups.
C. Multi-issuer Pool Shares.
D. Insured Mortgage Indexes

434. When financial institutions use funds from depositors to make mortgage loans, the process is called
A. interference.
B. syndication.
C. intermediation.
D. disintermediation.

435. A lender who charges a rate of interest in excess of legal limits is guilty of
A. redlining.
B. usury.
C. profit-taking.
D. mortgage fraud.

436. A lender is charging three points on a $100,000 loan. How much does this amount to for the borrower?
A. $3.00
B. $30.00
C. $300.00
D. $3,000.00

437. The feature of an adjustable rate loan that prevents the monthly payment during an adjustment period from varying up or down by more than a set amount is the
A. periodic cap.
B. aggregate cap.
C. payment cap.
D. negative amortization cap.

438. What is the function of the index in an adjustable rate mortgage loan?
A. It is an amount added to the initial rate of the loan to increase the yield.
B. It is the starting point for calculating the interest rate for the loan.
C. It determines how much the interest rate of the loan may be adjusted periodically.
D. It is the underlying rate of return the lender plans to receive over the loan term.

439. Buyer Jane has a loan which requires her to pay $588.00 per month for 20 years. At the end of the loan period, Jane has to make a final payment of $27, 580. What type of mortgage does Jane hold?
A. Straight Line Mortgage
B. Final Cap Mortgage
C. Balloon Mortgage
D. Adjustable Rate Mortgage

440. Lenders use private mortgage insurance to
A. bring their loans into compliance with FHA requirements.
B. avoid charging origination fees.
C. increase their rate of return on a loan.
D. minimize their risk when accepting a loan with a low downpayment.

441. Norm is buying a furnished condo in Chicago. Which type of mortgage is specifically designed for property and contents?
A. All Inclusive Mortgage
B. Package Mortgage
C. Short Sale Mortgage
D. Wrapped Mortgage

442. If a borrower in a VA-guaranteed loan defaults,
A. The VA takes over the property and makes payments to the lender on behalf of the borrower.
B. The VA reimburses the lender, up to the guaranteed amount, for losses not covered by foreclosure proceeds.
C. The lender takes the property and also receives the amount guaranteed by the VA.
D. The VA must pay off the loan balance.

443. Owner Sam has a $75,000 mortgage on his home. Sam sells his home to Bill for $100,000. Bill pays $7,000 down and borrows $93,000 on a new mortgage. This mortgage includes the existing $75,000 mortgage because the new lender will make the payments on the old mortgage. This is an example of a what kind of loan?
A. Buydown
B. Straight Line
C. Wraparound
D. Blanket

444. A permanent long-term mortgage loan that is not government-backed is a
A. personal loan.
B. conventional loan.
C. primary loan.
D. commercial loan.

445. The basic FHA-insured loan program is provided for loans on
A. all residential properties.
B. all properties that are valued at under $1,000,000.
C. 1-4-family residential properties.
D. all properties that have been refused as collateral by conventional lenders.

446. To be eligible for an FHA-insured loan, a property must be
A. no more than ten years old.
B. built by FHA-approved contractors.
C. under 2500 square feet in living area.
D. appraised by an FHA-approved appraiser.

447. Which of the following is a feature of a fully-amortized loan?
A. It has the same payment amount every month.
B. It has a different payment amount every month.
C. At the end of the loan term, there is a remaining balance to be paid off.
D. A fixed amount of each monthly payment goes to the principal.

448. Interest rates on FHA loans are
A. set for each of 80 regions throughout the country.
B. determined by the prime rate plus a premium.
C. negotiated by lender and borrower.
D. set by statute and indexed to inflation.

449. Why are interest rates generally higher on second loans than on first loans?
A. Lenders know that the borrower is desperate for cash.
B. Second loans are not insurable.
C. Second loans are riskier because they are not paid off until first loans are paid in case of default.
D. There is less demand for second loans.

450. Which of the following best describes a reverse annuity mortgage?
A. The monthly payments on a loan decrease over the loan term, leaving a balance to be paid off at the end of the term.
B. A homeowner borrows an amount equal to the equity in her home, invests it, and pays part of the interest earned each month to the lender.
C. A homeowner’s equity is pledged as collateral for a loan paid out over time. The loan is repaid when the house is sold.
D. A homeowner buys an annuity and uses the interest from the annuity to pay off a mortgage loan.

451. Which of the following statements about contracts for deed in Illinois is TRUE?
A. They cannot have a term longer than 5 years.
B. If the buyer defaults at any point, the seller can cancel the contract, evict the tenant, and retain the property plus all payments.
C. If the buyer has a 20 percent equity in the property, the seller must convey title.
D. The seller cannot repossess the property without a judicial foreclosure if a defaulting buyer has 20 percent equity and the contract term is longer than five years.

452. The Equal Credit Opportunity Act protects against discrimination in all of the following areas EXCEPT
A. physical handicap.
B. religion.
C. age.
D. color.

453. The lender’s process of determining a borrower’s ability to repay a loan and evaluating a property is known as
A. disqualification
B. underwriting
C. credit evaluation
D. screening

454. If a lender’s loan-to-value ratio is 90%, how much will the lender lend on a house valued at $200,000?
A. $10,000
B. $20,000
C. $180,000
D. $190,000

455. Larry and Sandy have a combined monthly income of $5,000. Using the FHA and VA debt ratio of 41%, how much monthly housing and debt obligation can they qualify for?
A. $847
B. $1,220
C. $2,050
D. $2,950

456. Which of the following best expresses the income ratio used by lenders to assess a loan applicant’s borrowing capacity?
A. Monthly gross income divided by monthly housing expenses.
B. Monthly housing expenses divided by monthly gross income.
C. Monthly housing expenses divided by monthly debt obligations.
D. Monthly debt obligations divided by monthly net income.

457. What is a “lock-in” loan commitment?
A. A lender’s time-sensitive agreement to lend a specific amount at a specific interest rate for a specific term.
B. A borrower’s agreement to borrow from a particular lender at a fixed rate of interest.
C. A seller’s agreement to carry some or all of the financing necessary for a buyer to purchase the seller’s property.
D. A loan that is guaranteed to be assumable throughout the term of the loan.

458. Mortgage loan applicants must meet underwriting standards for income, debt, cash, and
A. net worth.
B. age.
C. education.
D. place of origin.

459. A lender may deny a loan application and retain the application fee if
A. the applicant fails to qualify for the loan for any reason.
B. the application package is incomplete.
C. the application form contains fraudulent information.
D. the loan being applied for is not guaranteed by Fannie Mae.

460. ECOA prohibits all of the following underwriting practices EXCEPT
A. disregarding income from part-time work.
B. refusing a loan because of the location of the collateral property.
C. asking applicants how long they have worked at their present job.
D. asking whether an applicant plans to have children.

461. RESPA requires that a lender, within three days of receiving the loan application, must give a borrower
A. a HUD Uniform Settlement Statement.
B. an itemized bill for all settlement costs.
C. a Loan Estimate form. OR a good faith estimate of settlement costs.
D. a copy of the full text of the law.

462. If an individual is seeking a federally-related loan to finance a residential property located in a designated flood-hazard zone, federal law requires
A. the seller to purchase flood hazard insurance in the buyer’s name.
B. the borrower to purchase flood hazard insurance.
C. the Army Corps of Engineers to survey the property.
D. the Department of Housing and Urban Development to offer flood hazard insurance at a discount.

463. When does the initiation of a loan application process occur?
A. When a prospective borrower first meets with a loan officer or mortgage broker.
B. When a loan officer or mortgage broker gives an application form to an applicant.
C. When a loan applicant completes a loan application form.
D. When a lender receives a completed loan application package from an applicant.

464. Regulation Z disclosure requirements apply to which of the following loans?
A. All loans, secured and unsecured
B. Agricultural and commercial loans over $25,000.
C. All loans secured by real property.
D. All loans secured by a residence.

465. What is typically deposited into a mortgage loan escrow account?
A. Out-of-pocket money to be paid by the buyer at closing
B. Money held for certain future payments, such as insurance and taxes
C. Money required to pay for broker compensation.
D. Money for loan service fees

466. What does it mean when a loan applicant signs the Confirm Receipt section on page 3 of the Loan Estimate?
A. It means that the borrower has accepted the mortgage loan.
B. It means that the borrower has decided to refuse the loan terms.
C. It means that the borrower has 5 business days to accept or reject the loan terms.
D. It means that the borrower has received a copy of the form.

467. On what document would a consumer find information regarding a good-faith estimate of credit costs and transaction terms for a property loan mortgage?
A. Loan Estimate
B. HUD-2
C. Cost Estimate
D. Loan Projection Estimate

468. According to RESPA, a business day is a
A. the same as a calendar day.
B. work day that exceeds 8 hours.
C. day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions.
D. work day that exceeds 6 hours.

469. On a mortgage Loan Estimate, how are loan amounts and interest rates that might be changed after the closing indicated?
A. Check marks
B. Fill in the blanks
C. Yes or no statements
D. Plus or minus marks

470. A mortgage Loan Estimate must be delivered within
A. three business days of loan application.
B. four business days of loan application.
C. five business days of loan application.
D. two days of loan application.

471. Which of the following mortgage loan items would NOT typically fall under origination charges?
A. Title Insurance
B. Underwriting Fee
C. Application Fee
D. Points

472. The administration aspect of a loan from the time the proceeds are dispersed until the loan is paid off is called
A. loan condition.
B. loan rate.
C. loan servicing.
D. loan loading.

473. What does a demand feature mean in a mortgage loan?
A. A demand feature would not allow the lender to require early repayment.
B. A demand feature would allow the lender to require early repayment.
C. A demand feature would allow the borrower to make an early repayment with a penalty.
D. A demand feature would allow the borrower to shorten the life of the loan by making double monthly payments.

474. Which of the following statements best describes the term “consummation” as defined under Regulation Z?
A. The time that a consumer becomes contractually obligated on a credit transaction
B. The window of time that a consumer has to a accept or reject a credit transaction
C. The amount of time that a mortgage loan is viable
D. Three business days prior to acceptance of the loan

475. What type of information is found in the Loan Calculations section on page 5 of the Closing Disclosure?
A. Assumption information regarding whether or not the lender will allow a loan assumption on a future sale or transfer
B. Late payment information regarding what late fee the lender will charge
C. Partial payments information regarding whether or not the lender would accept partial payments on the loan
D. The total amount of all payments on the loan, the dollar amount of the finance charges over the life of the loan, the amount financed, the annual percentage rate (APR), and the total interest percentage (TIP)

476. In what type of foreclosure does a lender give a borrower a notice of default in a form prescribed by the state?
A. Judicial foreclosure
B. Strict foreclosure
C. Standard foreclosure
D. Non-judicial foreclosure

477. Which of the following statements best defines Equitable Right of Redemption?
A. The legal right of a borrower to seek a reduction in payments on a property mortgage
B. The legal right of a borrower to redeem property between the time of default and the foreclosure sale.
C. The legal right of a borrower to seek a statutory right of reinstatement.
D. The legal right of a borrower to appeal a deficiency judgment within 7 months of notice.

478. Ronald defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Ronald’s house sold for $29,000 and the unpaid balance of his loan is $40,000. What must the lender do to recover the $11,000 Ronald still owes?
A. Sue for damages.
B. Sue for specific performance.
C. Seek a deficiency judgment.
D. Seek a lis pendens.

479. Which statement about a deed in lieu of foreclosure is TRUE?
A. It gives the borrower an opportunity to change the loan terms.
B. It is a deed to the lender in exchange for a reduction in the loan payoff.
C. It avoids public notice of the foreclosure.
D. It is always accepted by the lender since it reduces the costs of foreclosure.

480. One way that a Chapter 13 bankruptcy differs from a Chapter 7 bankruptcy is that it
A. results in a discharge of all obligations.
B. includes a plan for repayment.
C. prevents creditors from attempting to collect on debts.
D. does not apply to installment debt.

481. The first step in a judicial foreclosure is:
A. acceleration of the loan.
B. filing a suit.
C. obtaining a lis pendens.
D. obtaining a writ of execution.

482. What action must the lender take when a notice of reinstatement occurs?
A. The lender must declare a moratorium on mortgage payments.
B. The lender must pay all fees and renegotiate the mortgage.
C. The lender must dismiss the suit and continue the mortgage.
D. The lender must dismiss the lien and continue the suit.

483. In what type of foreclosure is the lender required to file suit asking a court to order the borrower to pay the mortgage debt by a certain date or the lender will automatically gain full title to the property?
A. Standard
B. Judicial
C. Strict
D. Non-judicial

484. Illinois has enacted legislation “opting out” of any federal bankruptcy exemptions. As a result,
A. Illinois bankruptcy filers may file “in state only” for any exempt property allowed by federal or state
B. Illinois bankruptcy filers may file a federal bankruptcy and a state bankruptcy request
C. Illinois bankruptcy filers are only permitted to exempt property using state laws
D. No exemptions are allowed

485. If a bankruptcy proceeding begins before a foreclosure proceeding, __________.
A. the foreclosure proceeding cancels the bankruptcy.
B. the foreclosure proceeding is stayed until completion of the bankruptcy process.
C. the bankruptcy proceeding is suspended until the foreclosure process is completed.
D. the two processes are combined into one.

486. Which of the following statements best defines Statutory Right of Redemption?
A. The right of a defaulted property owner to recover damages after the sale.
B. The right of a lender to recover expenses after the sale from the defaulted property owner.
C. The right of a defaulted property owner to recover the property after the sale.
D. The right of a defaulted property owner to recover and remove personal property after the sale.

487. Which of the following statements about foreclosure in Illinois is TRUE?
A. All types of foreclosure are allowed.
B. Foreclosure is not allowed if there is a deed of trust.
C. Mortgage foreclosures require a court proceeding.
D. Illinois is a non-judicial foreclosure state.

488. Loans designed for persons with blemished credit histories and that carry a higher rate of interest than prime loans to compensate for increased credit risk are called
A. subprime loans or sub-prime loans
B. secondary mortgage market loans
C. predatory loans
D. conventional loans

489. A buyer borrows $20,000 from his mother to make a downpayment. This loan must be repaid within five years, but the buyer tells the mortgage lender it is a gift. Has any fraud been committed?
A. Yes, there is a “silent mortgage.”
B. Yes, it is loan fraud.
C. Yes, it is a cash-back scheme.
D. No, as long as the mortgage loan is senior.

490. What is the practice of “loan flipping?”
A. Misinforming a loan applicant about the origination costs of competing loan venders.
B. Inducing a borrower to refinance a mortgage loan repeatedly with no benefit to the borrower.
C. Issuing a negatively-amortized loan to an ignorant consumer.
D. Convincing a loan applicant to take a subprime loan when the applicant is actually qualified for a prime loan.

491. The essence of mortgage fraud is _________.
A. charging loan applicants for services that are not performed.
B. misstating, misrepresenting, or omitting information that is relied on in an mortgage loan underwriting decision.
C. convincing consumers to use particular lenders and loan service providers.
D. giving false information about closing costs to loan applicants.

492. Which of the following is NOT considered a predatory lending practice?
A. Charging low origination fees to encourage loan applications.
B. Adding unnecessary charges and products to the loan amount.
C. Issuing an unaffordable loan based solely on the applicant’s assets.
D. Failing to provide RESPA documents.

493. Which of the following would NOT be found in a consumer’s credit report?
A. Information about bankruptcies and foreclosures.
B. Social Security Number.
C. Mortgage payment history.
D. Annual income. OR Credit score.

494. The median FICO score in the United States is reportedly
A. 550
B. 672
C. 723
D. 799

495. The factors on which credit scores are based include all of the following EXCEPT ________.
A. number of family members who have credit cards.
B. length of credit history.
C. number of recent inquiries.
D. unused available credit.

496. Which of the following best describes the credit score?
A. A numerical ranking of the amount of credit a borrower can qualify for.
B. A statistical prediction of the likelihood that a borrower will default on a loan.
C. The percentage of previously borrowed funds that an applicant has repaid.
D. The total amount of debt a borrower is carrying divided by the borrower’s annual salary times the number of effective working years left to the borrower.

497. Under the Fair and Accurate Credit Transactions Act, if a consumer asks one of the national credit bureaus to investigate an alleged error in her credit report, the bureau must:
A. give the consumer access to her full credit history.
B. check the consumer’s credit history at the other national credit bureaus.
C. notify all users of the consumer’s credit report that there is a dispute.
D. investigate, correct, and notify the other bureaus of any error within thirty days.

498. Seller Jim wants to walk away with $175,000 in his pocket after the sale. Jim agrees to a net listing. The property sells for $212,000. How much money is Jim entitled to?
A. $175,000
B. 212,000
C. $212,000 minus 5% commission.
D. 175,000 minus a 5% commission.

499. Which of these statements is true?
A. Once a listing agreement is signed by all parties it cannot be changed.
B. The seller can change the listing agreement whenever he or she wants.
C. A listing agreement can be modified, but only if all parties agree in writing.
D. A listing agreement can change by the mutual verbal agreement of all parties.

500. Which of these listing agreements is considered a unilateral contract?
A. Open
B. Exclusive Agency
C. Net
D. Exclusive Sale and Listing

501. When must a seller receive a copy of the listing agreement?
A. When an offer is accepted.
B. When the first offer is presented.
C. At the time of closing
D. At the time of signing.

502. What type of listing allows the distribution of the listings to all other brokers?
A. Shared Listing
B. Open Listing
C. Multiple Listing
D. Dual Listing

503. Which of these sources would not be a way to determine who holds title to a property?
A. Seller’s Deed
B. Title Company
C. County Tax Office
D. MLS Data Bank

504. Net listings are _______________________
A. Illegal in Illinois
B. Encouraged
C. Viewed as unprofessional
D. Subject to excise taxes
.
505. When a seller signs a listing agreement, who are the actual contract parties?
A. Seller and Licensee
B. Seller and MLS Association
C. Broker and Licensee
D. Seller and Managing Broker

506. Which type of listing provides the most incentive for a broker to market a property?
A. Exclusive Agency
B. Open
C. Net
D. Exclusive Right to Sell

507. Which type of listing is least attractive to a broker?
A. Exclusive right to sell
B. Open
C. Exclusive agency
D. MLS listing

508. What task takes up the majority of a property manager’s time?
A. Evaluating tax incentives
B. Physically managing the property
C. Evaluating utility services
D. Allocating shares of stock for the units

509. What is a property manager’s first responsibility to the owner?
A. Get liability insurance.
B. Prosecute delinquent tenants.
C. Realize maximum profit.
D. Cure functional obsolescence.

510. Which of these functions is not performed by a property manager?
A. Renting property
B. Leasing property
C. Keeping costs within budget
D. Preparing the property deed

511. Which of these usually contributes to the property manager’s fee?
A. Rebates from suppliers
B. Percentage of rental income
C. A percentage of fees paid to outside workers
D. Capital improvement fund

512. Which of the following would not be found in a management agreement?
A. Tenant credit histories
B. Property description
C. Extent of authority
D. Management fee information

513. Which of the following groups is not a professional property management trade organization?
A. National Property Management Association
B. Commercial Land Council
C. Urban Land Institute
D. International Council of Shopping Centers

514. What does the management agreement create?
A. Designated agency
B. Sole proprietorship
C. General agency
D. Power of attorney

515. Which of the following would be considered as corrective maintenance?
A. Replace a defective water heater
B. Painting wood trim
C. Adding additional parking spaces.
D. Replacing furnace filters

516. What is a budget that includes income and expenses for ongoing operations?
A. Capital reserve
B. Operating
C. Fixed
D. Stabilized

517. Which IREM designation is reserved for individuals who meet a certain level of education and experience?
A. CPM
B. ARM
C. CPR
D. AMO

518. A letter of intent is basically _______________________.
A. an agreement to agree.
B. designed for long term leases.
C. prepared by the seller’s account.
D. designed for short term rentals.

519. A contract in which the party or parties have not completed all acts under the contract is known as:
A. bilateral
B. unilateral
C. executory
D. executed

520. Which of the following factors must be present for a contract to be valid?
A. Recorded
B. Involuntary
C. Placed in the public record
D. Mutual agreement

521. An oral or written contract in which the parties state the contract’s terms and communicate their intentions in words is known as:
A. An implied contract
B. An express contract
C. Legally void
D. Voluntary

522. What is a breach of contract?
A. A termination of the contract by the mutual consent of the parties.
B. Financial damage suffered by a party because another party has nullified a contract provision.
C. A lawsuit to force a party to discharge the contract.
D. The failure of a party to perform according to the terms of the contract.

523. An implied contract may be deemed to exist if:
A. The parties do not disavow an express contract that has expired.
B. The parties act as if there is a contract.
C. An offering party does not receive written notice that the offer has been rejected.
D. The parties promise to perform their part of the agreement if the other party performs.

524. A contract to commit an illegal act is:
A. Legal
B. Void
C. Okay, if there are two witnesses
D. Okay if it is written and contains the signatures of two witnesses

525. Those people who are of legal age and sound mind are considered:
A. Legally competent parties
B. Legally enforceable parties
C. Legally considerate parties
D. Legally viable parties

526. A promise by one party to act or perform in a specified manner provided the other party acts or performs in the manner requested is known as:
A. An offer
B. A contract
C. Good consideration
D. Valuable consideration

527. The necessary condition of mutual consent may be found lacking in a contract if:
A. The two parties did not discuss every possible interpretation of the contract’s provisions.
B. The offer which was accepted is vague.
C. One party did not have the legal authority to sign the contract.
D. The agreement is unwritten

528. According to contract law, every valid contract is also:
A. void.
B. enforceable.
C. enforceable or unenforceable.
D. voidable.

529. What is an important legal feature of a contract?
A. It is not voidable.
B. It must use precise wording in a document.
C. It represents a “meeting of the minds.”
D. It can be created only by an attorney.

530. James a property manager must maintain all security deposits in an escrow account for the duration of the lease, unless the _______.
A. Tenant indicates to James that he/she waives the requirement.
B. James the broker has less than five property management lease contracts.
C. Lease is for less than three years.
D. Tenant waives this requirement in writing. If such a waiver is included in the lease, it must be in bold print.

531. Agent Tom works at the Cliffside an office of ABC Realty. The sponsoring broker at the main office for ABC Realty maintains an escrow account for all offices of ABC Realty. Tom has been very busy writing offers and has little time to drive to the main office so he has decided to open an escrow account at the office. Tom’s action is ________.
A. Not allowed, no sponsored licensee may maintain his or her own escrow accounts.
B. Allowed as a sponsored licensee as long as the sponsoring broker approves the opening of Tom’s escrow account.
C. Allowed, with the consent of all parties to the transaction and his sponsoring broker.
D. Allowed because the escrow rules do not cover this point.

532. Which of the following statements are TRUE regarding earnest money?
A. Must be in the form of cash or a check.
B. Earnest money is required with all contract offers
C. Personal property can be offered as an earnest deposit.
D. Earnest money is also known as evidence trust account money.

533. If any dispute between the parties arises regarding the deposited escrow money, the sponsoring broker should _________.
A. Always refund the money to the first party who formally request the return of the funds.
B. Split the monies in thirds, one third to the buyers, one third to the sellers, and one third to the sponsoring broker.
C. Place the monies in an escrow account titled “Contested Escrow Funds Fiduciary Account” (CEFFA) which must be non-interest bearing.
D. Not release the money without a written release from both parties or both parties’ duly authorized agents (power of attorney or attorney at law).

534. Bob the sponsoring broker who accepts earnest money and maintains the bookkeeping system must reconcile each escrow account that he maintains within:
A. Ten days after he receives the monthly bank statement.
B. Ten days after he receives the transactions closing statement.
C. Thirty days after he receives the monthly bank statement.
D. Thirty days after he receives the brokerage portion of the total commission.

535. All licensees should IMMEDIATELY give earnest money checks to their sponsoring broker who MUST deposit said earnest money by
A. The third day following the contract acceptance.
B. The next business day after contract acceptance.
C. Within seventy four hours from the time the offer is delivered.
D. The third day following the final counteroffer.

536. A sponsoring broker must keep all escrow records for ________.
A. 3 years.
B. 5 years.
C. 7 years.
D. 10 years.

537. According to the Illinois Real Estate License Act of 2000, sponsoring brokers who are responsible for earnest money deposits for property sales (and security deposits for leases)
A. Must be bonded with the Illinois Sponsoring Brokers Insurance Trust.
B. Must maintain a separate business account in any type of financial institution for depositing these monies.
C. Must open special trust (or escrow) accounts in which to deposit the funds they have been given.
D. Must deposit these monies in a brokerage operations account with special accounting procedures to segregate brokerage monies from escrow monies.

538. What is the legal requirement regarding the number of escrow accounts that can be opened?
A. There is no legal limit.
B. One per transaction.
C. No more than 5 per quarter.
D. One per office licensee.

539. How much time is allowed to produce escrow records when a request is made by the Illinois Division of Professional Regulations?
A. 2 weeks
B. 2 business days
C. 36 hours
D. 24 hours

540. When a broker makes a change to an escrow account, what action must be taken?
A. Broker must inform the county Clerk of the change.
B. Broker must tell all pending transaction holders of the change.
C. Broker must submit the change to the Real Estate Division of IDFPR.
D. Broker must inform all office licensees of the change.

541. When must a escrow account be interest bearing?
A. By default, all escrow accounts are interest bearing.
B. When all parties make the request.
C. When the escrow account is held in an FDIC backed bank.
D. All amounts under $2,000 must be deposited in an escrow account.

542. Buyer Jim put down a deposit in the form of a boat title worth $5,000. The boat is owned by Jim’s parents. The transaction was not completed, who should the boat title be returned to?
A. Jim
B. Jim’s Parents
C. The Title Company
D. The agency that holds the escrow account.

543. John a sponsoring broker may transfer escrow monies needed for a particular closing to that transaction’s closing agent up to:
A. Thirty (30) business days prior to the scheduled closing date.
B. Two (2) business days prior to the scheduled closing date.
C. Seven (7) business days prior to the scheduled closing date.
D. Whenever it is practical for John to transfer the escrow moneys.

544. Broker John received three earnest money checks on Friday. The upcoming Monday is a holiday. When is Broker John required to make an escrow deposit?
A. Within 5 business days.
B. When Broker John has received at least 5 escrow deposits.
C. Tuesday
D. By the close of business on Friday.

545. What is the value in doing another CMA when an offer is presented?
A. A new CMA can provide a realistic interpretation of the offer.
B. A new CMA is not useful when an offer is being made.
C. A new CMA can give the buyers a way out of the offer.
D. A new CMA is required for a loan application.

546. Which of these statements about purchase offers is true?
A. The offer must be in writing, but the acceptance can be oral.
B. The offer can be oral, but the acceptance must include all of the terms in writing.
C. Both the offer and the acceptance must be in writing to be binding
D. Neither offer nor acceptance must be in writing, but the deed for title transfer must be in writing.

547. When you believe an offer is both fair and reasonable but it does not meet the sellers’ asking price, you should _____.
A. Make no recommendations and let the sellers decide on their own.
B. Recommend a counteroffer back to list price.
C. Work toward acceptance.
D. Recommend that the seller delay response to make the buyer nervous and then submit a counteroffer.

548. Which of the following is not an option a seller might take once an offer has been presented?
A. Accept the offer exactly as it is written
B. Reject the offer totally
C. Reject the offer and submit a counteroffer
D. Rewrite the offer.

549. When you receive an offer on a listing for less than asking price, which of these would be the least effective course of action to take?
A. Study the other terms of the offer so you can maximize the offer’s benefits and minimize the lower price.
B. Set up a face-to-face meeting with the sellers as soon as possible.
C. Prepare additional documentation to take to the presentation.
D. Give the sellers the price over the phone so they can think about it before you meet with them.

550. When preparing for a presentation, how many copies of the offer should you make?
A. Make three copies for your brokerage.
B. Make only one copy for your personal records.
C. Make a copy for each seller.
D. Make a copy for the buyer’s agent.

551. When reviewing an offer, what is the purpose of providing buyer information?
A. To avoid violation of fair housing laws.
B. To raise the seller’s comfort level.
C. To determine if a counteroffer is required.
D. To help explain a “buyer’s” market.

552. Most sellers object to offers based on
A. Closing issues
B. Offering price
C. Financing issues
D. Contingencies

553. Which of these is not a good thing to do when writing a counteroffer?
A. Fill out a separate, numbered counteroffer form.
B. Promptly provide counter offer to the other party.
C. Date and attach supporting documents.
D. Exert pressure on the sellers for changes you think are important.

554. What is the impact of making a counteroffer?
A. A counteroffer represents a rejection of an offer.
B. A counteroffer by a seller to a buyer turns the seller from offeror to offeree.
C. A counteroffer can give the sellers a way out.
D. If the buyer rejects the first counteroffer, the seller can accept the buyers’ original offer.

555. What document is required when a settlement service provider involved in a RESPA-covered transaction refers the consumer to a provider with whom the referring party has an ownership or other beneficial interest?
A. An Affiliated Financial Business Arrangement Disclosure (AFB)
B. An Affiliated Business Provider Disclosure
C. An Affiliated Business Ownership Disclosure
D. An Affiliated Business Arrangement (AfBA) Disclosure

556. What document must be completed by a creditor if a mortgage loan is assigned to another loan service?
A. Servicing Transfer Statement
B. Service Agreement
C. Agreement of Service
D. Transfer of Loan Balance Agreement

557. Which of the following statements best define a closing statement?
A. A document that describes the ownership and sales activity of the transferred property.
B. A document that details the title search results.
C. A document detailing fees, commissions, insurance, and prorated charges necessary for the transfer of ownership to take place.
D. A document detailing federal transfer fees and expenses.

558. RESPA rules do not apply to:
A. VA loans
B. Seller-financed loans.
C. HUD administered loans
D. Equable assumption loans
E. null

559. Equal item amounts on the closing statement that appear as a credit to one party and a debit to the other party is most likely a ______________________.
A. Fee charged by the closing agent.
B. Prorated Item
C. Debit to the seller
D. Debit to the buyer

560. Which document itemizes the estimated taxes, insurance premiums, and other charges anticipated to be paid from the Escrow Account during the first twelve months of the loan?
A. Initial Escrow Statement
B. Escrow Debit Statement
C. List of Accounts
D. Itemized Escrow Accounts Payable

561. This occurs when the buyer takes a second mortgage out with the seller and the transaction is not reported.
A. Circle Mortgage
B. Rebate Mortgage
C. Silent Mortgage
D. Quick Mortgage

562. Which party is responsible for expenses that will be paid in arrears?
A. The seller
B. The lender
C. The closing agent
D. The licensee

563. What type of closing consists of all parties in the transaction meeting at one time?
A. Face-to-Face
B. Open
C. Closed
D. Single

564. Jim’s brother Al, gives Jim $5,000 as a down payment on a property. Jim tells the lender that the down payment was a gift. We latter find that the $ 5,000 was a loan. What legal violations might be pending?
A. If Jim can repay the “gift’ than there is not violation
B. The lender can sue the closing agent for errors and omissions.
C. There is no recourse after 2 years from the close date.
D. This is a case of mortgage fraud.

565. Jill pays $2,450 per month on an apartment. No other expenses are paid by Jill. What type of lease does Jill hold?
A. Gross Lease
B. Net Lease
C. Progressive Lease
D. Not Net Lease

566. Business owner Jill, leases a store front. Her lease amount is based on the wholesale price index. What type of lease does Jill have?
A. Proprietary Lease
B. Bracket Lease
C. Index Lease
D. Step Lease

567. Which of these items is not included in a lease agreement?
A. Terms
B. Demising clause
C. Description of premises
D. Alienation clause

568. Grant moves into his new office space while he awaits the completion of the negotiations of the lease terms. During this interim period, Grant makes monthly rent payments and the owner accepts them. How would Grant’s lease at this time be classified?
A. Estate for years
B. Estate from period to period
C. Estate at will
D. Estate at sufferance

569. Which of the following summarizes the general terms of a ground lease?
A. The landlord sells the ground to another, then leases it back.
B. A tenant buys the landlord’s ground, then leases the improvements.
C. The landlord leases the ground floor of the building to a commercial tenant.
D. The tenant leases the ground from the landlord.

570. This occurs when a tenant remains on the property without the owner’s consent after lease termination.
A. Estate at Sufferance
B. Estate at Will
C. Estate at Possession
D. Estate in Default

571. What kind of lease contains a recapture clause?
A. Percentage
B. Net
C. Index
D. Graduated

572. Who may file for a constructive eviction?
A. The Landlord
B. The Courts
C. The Tenant
D. The Tenant’s Neighbors.

573. A type of lease when the tenant pays for the taxes, insurance, maintenance and repairs is called what?
A. Simple Lease
B. Triple Net Lease
C. Quad Lease
D. Expense Lease

574. What method is used to remove a tenant who is in default in paying rent?
A. Foreclosure
B. Condemnation
C. Lock out
D. Suit for eviction

575. Which kind of lease increases at specified intervals?
A. Graduated
B. Gross
C. Percentage
D. Net

576. Which kind of lease has no time limit?
A. Estate for years
B. Estate at will
C. Estate from period to period
D. Estate at sufferance

577. A tenant living in cooperative owned housing, would hold what type of lease?
A. Index Lease
B. Branch Lease
C. Shared Lease
D. Proprietary Lease

578. What is one important difference between a sublease and a lease assignment?
A. In a sublease, responsibility for the original lease is transferred completely to the landlord.
B. In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.
C. A sublease does not convey any of the leasehold interest.
D. A sublease conveys the entire leasehold interest.

579. When a tenant agrees to pay taxes and maintenance, the tenant has what kind of lease?
A. Gross
B. Periodic
C. Net
D. Graduated

580. In an IRS audit, which of the following situations would cause the IRS to think that a contractor might really be an employee?
A. The license attends sales meetings.
B. The licensee gets a commission.
C. The licensee takes unpaid sick days.
D. The licensee receives an hourly wage.

581. Which of these guidelines is not part of the IRS safe harbor test?
A. Income must be based on sales input.
B. There must be a written contract in place.
C. The contractor must be licensed as a real estate salesperson or broker.
D. Contractors must have access to workers compensation benefits.

582. What can a broker require of his independent contractors?
A. They must work at the office.
B. They must receive a salary.
C. They must attend weekly sales meetings.
D. They must sign a written agreement.

583. If a licensee joins a company as an independent contractor, which of these will he probably have to pay for on his own?
A. Contract Forms
B. For Sale signs
C. Listing Ads
D. Health insurance

584. Who established “safe harbor rules?”
A. IRS
B. MLS
C. IDFS
D. HUD

585. Which of these statements about an independent contractor is true?
A. He or she gets a regular salary with bonuses.
B. He or she is reimbursed for all business expenses.
C. He or she is paid commission on all sales.
D. He or she will get three weeks of paid vacation every year.

586. Which of the following must a broker legally provide to an employee?
A. Pension plan
B. Unemployment insurance
C. Health insurance
D. Sales commission

587. Which of the following must be included in an employment or independent contractor agreement?
A. Duty Assignment and Compensation
B. Management Structure and Benefits
C. Health Insurance and Expense Reporting
D. Travel Expenses and Sick Leave Policy

588. In this type of program, an agent may start out at a lower percentage rate and then graduate to higher rate as his or her production increases.
A. Advancement payment plan
B. Step plan
C. Graduated payment plan
D. Progressive plan

589. For an independent contractor, how is the issue of withholding tax dealt with by the managing broker?
A. Managing Broker withholds tax monies
B. Managing Broker pays all withholding tax monies
C. Managing Broker does not withhold tax monies
D. Managing Broker escrows all withholding tax monies

590. When doing a comparative market analysis, an agent looks at all but which of the following factors?
A. Prices of properties currently on the market.
B. Prices of sold properties.
C. Properties that were listed but did not sell.
D. Recently renovated properties.

591. A comparative market analysis is an attempt to do what?
A. Find things in the home a seller needs to repair.
B. Identify an estimate of a property’s value based on comparables.
C. Convince a seller to list with you.
D. Discover why some homes haven’t sold.

592. Which data should have the most impact on what a subject property is realistically worth in the current market?
A. Currently active properties.
B. Recently-sold properties.
C. Pending sales.
D. Expired listings.

593. The cost approach would be most reliable for which of these properties?
A. Renovated historic home
B. Apartment building
C. County court house
D. New shopping mall

594. A property sold for $185,000 and is producing an annual net operating income of $16,650. What is the capitalization rate?
A. 7%
B. 8%
C. 9%
D. 11%

595. Tim and Sue have the smallest home in a sought-after neighborhood. The value of their home is increased because of the higher value of the other homes in the neighborhood. This is an example of what principle?
A. Regression
B. Substitution
C. Anticipation
D. Progression

596. The cost at today’s prices of producing a similar or equivalent structure is known as what?
A. Real cost.
B. Replacement cost.
C. Reproduction cost.
D. Restructure cost.

597. Which of the following problems would be an example of incurable depreciation?
A. Outmoded bathroom
B. Termite damage
C. Non-air conditioned office complex
D. Outdated boiler

598. What the market recognizes as “the change in value an improvement makes to a property” is called what?
A. Competition
B. Contribution
C. Change
D. Conformity

599. The sales comparison approach is based on what principle of value?
A. Anticipation
B. Competition
C. Substitution
D. Highest and best use

600. Eric and Sarah had a new home built for $275,000. Most of the homes in their neighborhood do not have the amenities and upgrades Eric and Sarah chose to put in their home. Eric and Sarah’s home will probably be affected by which principle?
A. Progression.
B. Substitution.
C. Change.
D. Regression.

601. The actual price of a property is known as what?
A. Cost
B. Exchange value
C. Market price
D. Use value

602. Which of these statements is not true?
A. Asking price is a good indicator of selling price.
B. Data on homes that have sold is more reliable if it is recent.
C. Most often a property fails to sell because of overpricing.
D. Actual sale price of similar homes has an impact on what a home is worth in the current market.

603. The highest amount a buyer is willing to pay and the lowest amount a seller will accept for a property is known as what?
A. Price
B. Cost
C. Market value
D. Exchange value

604. When analyzing the data collected for a comparative market analysis, which of the following statements is most likely false?
A. Data on homes that sold more than six months ago is less reliable.
B. Homes with listing prices that are too high take longer to sell.
C. Asking price is a good indicator of selling price.
D. Research properties should match the subject property’s characteristics as closely as possible.

605. When doing research to recommend a reasonable listing price for a home, the most critical part of the research deals with analyzing which of these figures?
A. Asking prices for current homes.
B. Listing prices of homes that sold.
C. Listing prices of homes that expired unsold.
D. Selling prices of recently sold homes.

606. Which of the following would not be found in a comparative market analysis?
A. Currently listed homes
B. Recently sold homes
C. Recently remodeled homes
D. Similar expired listings that didn’t sell

607. Which of the following is not a condition for highest and best use?
A. Minimally productive
B. Financially feasible
C. Physically possible
D. Legally permissible

608. A credit score is also called a ______ score.
A. RESPA
B. FICO
C. FICA
D. CSI

609. Randy Renter is earning $2000 per month. The apartment he wants to rent costs $800 per month. Should you rent it to him?
A. No, he does not earn enough
B. Yes, he earns enough
C. No, unless there are mitigating factors
D. Yes because he has no children

610. To whom should a property manager not rent?
A. friends
B. family
C. romantic interests
D. all of the above

611. In an Illinois property management relationship, there must be a written property management agreement between:
A. The property manager and the tenant.
B. The property owner and the tenant.
C. The property owner and his partners.
D. The property owner and the broker.

612. The number one responsibility of the property manager is to:
A. Make money for the owner.
B. Manage the maintenance of the property.
C. Strive for the highest return on the property consistent with the owners’ instructions.
D. Obey the property owner no matter what

613. What information should you obtain from people who are self-employed?
A. tax returns for the last two years
B. an audited statement
C. an unemployment history
D. a guaranty

614. What is the best way to obtain information about a prospective tenant’s employment history?
A. Contact the unemployment commission
B. Run a credit check
C. Ask for references
D. Check with the human resources department of a previous employer

615. The property management agreement creates a contractual agreement between:
A. The property owner and the broker.
B. The property owner and his partners.
C. The property owner and the tenant.
D. The property manager and the tenant.

616. Peter Property Manager has screened an applicant, who is clearly Middle Eastern. Peter decides to reject the applicant when he sees the applicant has moved three times in three years. Has Peter acted properly?
A. No, if the applicant has explained the moves to Peter’s satisfaction and there is no other basis to reject him
B. No, he must approve the applicant
C. Yes, he can reject the applicant for any reason
D. Yes, the applicant is clearly unstable

616. If a prospective tenant is rejected due to a bad credit report, the Fair Credit Reporting Act requires that ______.
A. the landlord justifies his rejection in writing to the prospective tenant and the prospective tenant’s employer.
B. the landlord notify the prospective tenant of the bad report and the name of the reporting service.
C. the prospective tenant disclose reasons for the poor rating to the landlord.
D. the landlord file a report with the credit agency.

617. The escrow account maintained by the property manager must be in a non-interest-bearing account
A. without exception.
B. unless the property is residential with 15 or more units.
C. unless the property is residential with 25 or more units or local ordinance requires payment of interest.
D. unless the property is industrial.

618. In a situation in which a property owner inserts a condition in the lease that ends the lease if a child under 18 is ever in the family living in the property, which of the following statements is most accurate?
A. The lease would be valid as is.
B. The lease would be invalid.
C. That clause of the lease would be void.
D. That clause of the lease would be enforceable.

619. According to the Illinois Human Rights Act, “elderly” is defined as anyone over:
A. 35 years old
B. 40 years old
C. 55 years old
D. 62 years old

620. Which of the following would NOT be considered a “place of public accommodation?”
A. Restaurants
B. Hotels
C. Religious organizations
D. Doctors’ offices

621. All security deposits held by a broker must be maintained, intact, in an escrow account other than the property management accounts:
A. Without exception.
B. Unless the owners have agreed otherwise in writing.
C. Unless the broker has decided otherwise with good cause.
D. Unless it’s in the city of Chicago, where the regulations do not require this type of escrow account.

622. Security deposits must be deposited in the escrow account:
A. Within 6 hours after the lease is signed
B. Within 24 hours after the lease is signed
C. By the next business day after a lease is signed
D. By the end of the third business day after the lease is signed.

623. All of the following are ways in which written eviction notices can be served to the tenant, but one. Which of the following is NOT one of these ways?
A. Personal service on the tenant.
B. Personal service on someone at the tenant’s home, who is more than 10 years old.
C. Personal service on someone at the tenant’s home, who is more than 13 years old.
D. Mailing to the tenant by certified or registered mail, with a return receipt from the tenant.

624. The Federal Fair Housing Act prohibits discrimination for all of the following reasons except:
A. Race or color
B. Sexual orientation
C. Familial status
D. Handicap

625. Rental properties may allow discrimination based on sex in the event of:
A. A question of sexual orientation
B. A transgendered individual.
C. Roommates who share a common bathroom or bedroom.
D. Roommates who share ONLY a common bedroom.

626. Which of the following is permissible as part of a property advertisement under HUD’s Fair Housing guidelines?
A. “No children or pets”
B. “Large master bedroom with bath”
C. “Wonderful ethnic neighborhood”
D. “Great family home”

627. Which of the following parties is NOT covered under the Illinois Human Rights Act?
A. A 38-year-old woman who uses a seeing eye dog.
B. A 43-year-old man who has been convicted of dealing illegal drugs.
C. A 27-year-old homosexual man who is an alcoholic.
D. A 43-year-old unmarried woman who is an Army reservist.

628. Which of the following is NOT permissible as part of an advertisement about an apartment for rent?
A. “Great apartment complex with on-site chapel”
B. “Kosher meals available”
C. “Non-smoking building”
D. “Maximum two children”

629. Illinois law generally requires what prior to an eviction?
A. Written notice
B. Oral notice
C. That the police are called to escort the person from his home.
D. That a professional moving company be called to empty the tenant’s apartment of his belongings after 30 days of unpaid rent.

630. A broker must establish and maintain a separate account for the deposit of current rents and money received from the owner or on the owner’s behalf for payment of expenses related to property management. This account is called the:
A. Earnest money account
B. Residential easing agent account
C. Broker’s escrow account
D. Property management escrow account

631. The percentage 10.0% converted to a decimal is:
A. 0.1
B. 1
C. 0.01
D. 0.001

632. If the annual interest is $100 on a 3-year, straight interest-only note, and the interest rate on the note is 5% per year, what is the amount of the loan?
A. $2,000
B. $10,000
C. $12,000
D. $15,000

633. Sales agent Sally needs to convert square feet to square yards. How should she make the calculation?
A. Divide the number of square feet by 9.
B. Divide the number of feet by 3.
C. Multiply the number of square feet by 144.
D. Multiply the number of square yards by 9.

634. What is the charge for the use of money?
A. Principal
B. Interest
C. Proration
D. Rate

635. Tom owns a 1,200 square foot, rectangular shaped ranch house that just barely fits on his 50 foot wide lot. If the house is 30 feet wide, what is the length of the house?
A. 40 feet
B. 24 feet
C. 45 feet
D. 35 feet

636. When adding numbers with decimals:
A. line up the decimals vertically.
B. line up the decimals horizontally.
C. line up the decimals diagonally.
D. line up the decimals obliquely.

637. Which of the following items is not typically prorated?
A. Security deposits
B. Interest on assumed loans
C. Property taxes
D. Fire and hazard insurance

638. Tom signed a note for $3,000, which is to be paid off in 12 months. He owes the $3,000 plus 9% interest when the note is due. An investor buys the note at a 20% discount. What is the amount paid by the investor?
A. $2400
B. $600
C. $1,400
D. $3,000

639. Which of the following measurement equivalents is incorrect?
A. 1 acre is equivalent to 43,560 feet.
B. 1 board foot is equivalent to 144 cubic inches.
C. 1 mile is equivalent to 5,280 feet.
D. 1 square yard is equivalent to 9 square feet.

640. A duplex brings in $900 per month per unit and has $6,000 in annual expenses. What should an investor who wants a 10% return pay for the duplex?
A. $216,000
B. $156,000
C. $108,000
D. $48,000

641. Betty made a 20% profit on a residential lot she sold for $30,000. What did she pay for the property?
A. $25,000
B. $20,000
C. $26,000
D. $27,000

642. Of the following numbers, which is the smallest?
A. 0.1667
B. 0.667
C. 1/8
D. 16 2/3%

643. What does the acronym “PITI” stand for?
A. Principal, interest, taxes, and insurance
B. Principal, income, taxes, and insurance
C. Profit, interest, title, and insurance.
D. Prepayment, interest, title, and insurance

644. A builder owns ½ acre of land with a front footage of 80 feet along the street. What is the depth of the land?
A. 136.125 feet
B. 272.25 feet
C. 544.5 feet
D. 1,089 feet

645. If Donna borrowed $5,000 for one year and paid $150 interest, what was her interest rate?
A. 1%
B. 2%
C. 3%
D. 4%

646. Sam paid $500,000 for a five-unit apartment building. The gross income is $1,000 per month per unit, with annual expenses of $15,000 annually. What was the capitalization rate for this investment?
A. 9%
B. 10%
C. 11%
D. 12%

extras:
647. Which of the following is a safety device likely to be found in a bathroom or garage?

A. Ground fault circuit interrupter
B. Heat pump
C. Mansard
D. Footing
648. One regulation-based reason for becoming knowledgeable about house styles is that an agent must
A. be able to identify good houses.
B. be accurate in advertising listings.
C. develop a specialty in certain types.
D. know what home construction costs.
649. Which of the following best describes a Prairie-style house?
A. Two-story classical portico with columns, hip roof.
B. Wood-framed, clapboard-sided, with turrets and verandas.
C. Strong horizontal emphasis, low and heavy appearance. Note: Frank Lloyd Wright built prairie-style homes with brick.
D. One story, gable roof, built on a slab.
650. The most common method of framing a house since 1945 is
A. balloon frame.
B. post and beam.
C. half-timber.
D. platform or western framing.
651. Concerning the measurement of square footage in houses, which of the following statements is TRUE?
A. State law prescribes how the measurements must be made.
B. Only a licensed or certified appraiser can measure a house.
C. There are no official state standards for measurement.
D. Agents who make their own measurements cannot be challenged on their accuracy.
652. Which of the following describes a person who is not represented, but is receiving ministerial acts?
A. Shareholder
B. Salesperson
C. Customer
D. Broker
653. Acts that a licensee may perform for a consumer, which are informative or clerical in nature and do not rise to the level of active representation on behalf of a consumer are known as:
A. Supervision
B. Ministerial acts
C. Acts of non-licensure
D. Fiduciary acts
654. Which of the following acts can non-licensed staff legally perform?
A. Responding to telephone inquiries quoting from published information.
B. Negotiating contracts.
C. Hosting open houses for the public.
D. Explaining listing agreements.
655. An act that is informative in nature, but does not rise to the level of representation, is known as:

A. A non-material act
B. A fiduciary act
C. A ministerial act
D. A nominal act
656. What action should a licensee take when providing ministerial acts for a consumer?
A. Give a disclosure of non-agency.
B. Provide a ministerial acts agreement.
C. Perform all acts prior to a purchase offer.
D. Document all action in a non-disclosure case file.
657. Which of the following is true regarding ministerial acts performed by the seller’s licensee for the buyer?
A. Performing such ministerial acts is a violation of the broker’s brokerage engagement with the seller.
B. Performing such ministerial acts for the buyer forms a brokerage engagement with the buyer.
C. Performing such ministerial acts for the buyer cannot be construed to form a brokerage engagement with the buyer.
D. It is not permissible for a broker engaged by a seller to show alternative properties to prospective buyers.
658. What action should a non-licensed staff member take when a caller asks about listing commission rates?
A. Respond to the question.
B. Provide the information from a scripted response card.
C. Explain that commission rates are negotiable.
D. Refer the caller to a licensee.
659. Which of the following best describes discretionary acts?
A. Acts that follow a set of written directions.
B. Acts that require decision making and judgment.
C. Acts that deal with administrative aspects of the brokerage
D. Acts that deal with enforcement of real estate laws.
660. Agent Bob frequently sends a part-time licensee along on each home inspection. Is that allowed?
A. Yes, provided the inspection company clears it with the home office
B. Yes
C. No
D. Yes, provided Agent Bob holds a security bond on the part-time employee
661. In what situations can non-licensed staff legally perform discretionary acts?

A. Under the supervision of the licensee
B. Under the supervision of the broker
C. Never
D. Always
662. Al Dobbs, a licensee, has been hired by the seller who signed a listing agreement. What is true regarding this situation when a buyer is shown the property by Al Dobbs under Ministerial Acts?

A. The seller is the customer and the buyer is the client.
B. The buyer is the customer and the seller is the client.
C. Both the seller and buyer are clients.
D. Both the seller and buyer are customers.
663. A competitive market analysis is an attempt to

A. Find things in the home a seller needs to repair.
B. Establish a home’s fair market value.
C. Discover why some homes haven’t sold.
D. Convince a seller to list with you.
664. Based on the Illinois License Act the licensee must disclose any material facts about the physical condition of the property OR the transaction about which the licensee has
A. Appurtenant knowledge
B. Actual knowledge
C. Subjacent knowledge
D. Extra-territorial knowledge
665. Bob and Linda Todd are buyers with $60,000 of stable income. Using the typical conventional loan qualifying percentage and assuming about 20% of that amount would be for taxes and insurance, how much of a monthly payment (principal and interest) could the Todd’s qualify for?
A. $1,120.00
B. $1,400.00
C. $1,680.00
D. Cannot be determined.
666. Broker Will represents a young couple who is preparing an offer on a home. Through preapproval, Will knows the couple can only afford to pay $100,000. The couple insists on offering $120,000. What should Will do?
A. Go to the listing agent and ask if the sales price can be dropped to $100,000.
B. Do nothing; it isn’t Will’s business.
C. Encourage the couple to offer only what they can afford.
D. Suggest that the couple pay more in earnest money.
667. Using or altering existing listing information or keywords that are copied from one Internet site and posted or displayed for the benefit of the general public in front of a firewall at another site, without written or electronic authorization and disclosure of ownership is known as:
A. Scraping
B. Copywriting
C. Spam
D. Virus
668. At times, the woman’s shelter at St. Mary’s Catholic Church has rental units open to the public. Are they allowed to advertise for female renters only?
A. Yes, gender based ads for shared living housing is acceptable.
B. Yes, provided all renters are Catholic.
C. No, ads cannot target specific gender types.
D. Religious-type institutions do not have to comply with fair housing laws.
669. Agent Jim wants to send out an e-mail to all the local real estate agents to inform them about an open house he is holding. What must he do to be in compliance with the CAN-SPAM Act?

A. Jim must give the agents a way to opt out of any future e-mail messages.
B. He must be sure to include the entire mailing address of the home he is hosting.
C. Jim must be sure his name and phone number are prominently displayed in the e-mail.
D. He cannot give any indication of the listing price of the home in the e-mail. FINAL
670. When collecting property information for a CMA, a licensee should focus on
A. the condition of the subject property and surrounding properties.
B. the builder’s original plans.
C. the chain of title of the property.
D. what the seller originally paid for the property.
671. To complete the sales comparison approach, the appraiser
A. averages the adjustments.
B. weighs the comparables.
C. discards all comparables having a lower value.
D. identifies the subject’s value as that of the nearest comparable.
672. A significant difference between an appraisal and a broker’s opinion of value is
A. the appraiser tends to use only one or two of the approaches to value.
B. the broker is a disinterested party.
C. the broker is subject to government regulation in generating the opinion.
D. the appraiser uses less current market data.
673. Who decides the final listing price of a property?
A. The listing agent.
B. The appraiser.
C. The seller.
D. The buyer.
674. Appraisals are performed by
A. any licensed real estate professional.
B. licensed professional appraisers.
C. competitive market analysts.
D. state-appointed tax officials.
675. Which of the following best describes the outcome of a CMA?
A. An opinion of market value.
B. A listing price that is the average of the prices of comparable sales.
C. A range of listing prices based on adjusted comparable values.
D. A market value.
676. The three approaches to value employed by appraisers are the sales comparison approach, the income approach, and the
A. construction approach.
B. measurement approach.
C. adjustment approach.
D. cost approach.
677. What is meant by “amenities” in a property description?
A. The good will of neighbors.
B. Special features that distinguish the property.
C. Property fixtures.
D. Improvements.
678. Appraisals make all of the following assumptions EXCEPT
A. payment is made in cash or a cash equivalent.
B. buyer and seller are unrelated.
C. buyer and seller are uninformed consumers.
D. the property is exposed on the market for a reasonable time.
679. Which of the following statements provides the best definition of appraisal?
A. It is a professional appraiser’s opinion of the value of a property as of a specific date.
B. It is a professional appraiser’s estimate of market price.
C. It is an estimate of value offered by a knowledgeable real estate professional.
D. It is a broker’s opinion of value, based on comparison with recent comparable sales and current listings in the multiple listing.
680. How does an appraiser using the cost approach estimate the value of the land?
A. By applying the sales comparison approach to comparable land sales.
B. By applying a building-to-land ratio to the estimated property value.
C. By applying a standard figure for vacant land in the area.
D. By applying an appreciation factor to the original sale price of the land.
681. An appraisal that seeks the cost of constructing, at current prices, a “precise duplicate” of the subject improvements is seeking the
A. replacement cost.
B. unit cost.
C. reproduction cost.
D. cost index.
682. The cost of constructing a similar structure at current prices and using current materials and methods is called
A. reproduction cost.
B. replacement cost.
C. book value.
D. depreciated value.
683. Which of the following methods of estimating cost adds together estimates of individual cost components such as material and labor?
A. Unit Comparison Method.
B. Unit-in Place Method.
C. Quantity Survey Method.
D. Index Method.
684. The loss of value due to adverse changes in the surroundings of the subject property is considered to be
A. an incurable loss.
B. a curable loss.
C. a functional design feature that is sometimes curable.
D. a value contribution factor that cannot be accounted for in an appraisal.
685. Which of the following statements best describes the cost approach to appraisal?
A. Apply a depreciation factor to the reported actual cost of acquiring and improving the subject property.
B. Estimate the cost of building the improvements on the subject property.
C. Estimate the land value and add to this the actual cost of the improvements adjusted for competitive differences with similar properties.
D. Add the estimated land value and cost of improvements and subtract the accrued depreciation of the improvements.
686. One weakness of the cost approach for appraising market value is that
A. builders may not pay market value for materials or labor.
B. market value is not always the same as what the property cost to construct.
C. comparables used may not have similar quality of construction.
D. new properties have inestimable costs and rates of depreciation.
687. One of the strengths of the cost approach is that it
A. takes into account the amount of money required to develop a similar property.
B. reveals the owner’s return on money invested in the cost of development.
C. is very accurate for a property with new improvements that represent the highest and best use.
D. results in an actual price in dollars instead of an estimated value.
688. A property is being appraised by the cost approach. The appraiser estimates that the land is worth $10,000 and the replacement cost of the improvements is $75,000. Total depreciation from all causes is $7,000. What is the indicated value of the property?
A. $68,000.00
B. $92,000.00
C. $82,000.00
D. $78,000.00
689. The cost approach is used for ___________ properties, which cannot be valued by other methods because of lack of comparable sales or income data.
A. multi-use
B. special-purpose
C. rental
D. old
690. The principle underlying straight-line depreciation from physical deterioration is that
A. eventually, a property loses all of its value.
B. a property loses a portion of its value each year because of economic obsolescence.
C. a property loses the same increment of value each year over the economic life of the property.
D. the value lost to depreciation is incurable.
691. Which of the following statements best describes the income capitalization approach?
A. Apply a desired rate of return to the price paid for an income property.
B. Divide the income a property generates or might generate by a capitalization rate.
C. Estimate the amount of income a property must generate to return the capital amount invested in it.
D. Estimate the rate of return a property owner receives from income generated by the property.
692. A strength of the income capitalization approach is that it
A. uses a rate of return that is required for all potential purchasers in a market.
B. yields an accurate projection of investment income.
C. uses a method that is also used by investors to determine how much they should pay for an investment property.
D. can be used with any type of property in any market.
693. A weakness of the income approach is that it
A. is difficult to determine an appropriate capitalization rate.
B. cannot be used with the other approaches to value.
C. depends on published income and expense figures.
D. yields a result that is unrelated to market value.
694. Potential gross income minus an allowance for vacancy and credit losses equals
A. net operating income.
B. effective gross income.
C. gross income.
D. total operating expenses.
695. A property is being appraised using the income capitalization approach. Annually, it has an estimated gross income of $30,000, vacancy and credit losses of $1,500, and operating expenses of $10,000. Using a capitalization rate of nine percent, what is the indicated value (to the nearest $1,000)?
A. $206,000.00
B. $167,000.00
C. $222,000.00
D. $180,000.00
696. The capitalization rate represents
A. the amount of capital an investor will invest in a property.
B. the discounted price of an investment property.
C. the cost of borrowing money to acquire a property.
D. an investor’s desired rate of return on capital invested in a property.
697. A property is estimated to produce a net operating income of $1,000,000. Which of the following capitalization rates would produce the greatest estimated value for the property?
A. 5%
B. 6%
C. 7%
D. 8%
698. An income property recently sold for $200,000, and the net operating income was $21,000. What was the capitalization rate for this property?
A. 12.50%
B. 9.50%
C. 10%
D. 10.50%
699. Effective gross income minus total operating expenses equals
A. net gross income.
B. net loss.
C. net operating income.
D. debt service.
700. Why is the income capitalization method generally considered less effective than other methods for appraising single-family residences?
A. Single-family residences generate no income.
B. There is often little market data to use in setting rents and cap rates for the analysis.
C. Fixed and variable operating expenses cannot be distinguished.
D. Owners and investors are generally the same people.
701. The income capitalization approach, or income approach, is most effectively used for appraising
A. special-purpose properties.
B. income or rental properties.
C. owner-occupied single family residential properties.
D. rural properties.
702. When must a seller receive a copy of the listing contract?
A. At the time of signing.
B. At the time of closing
C. When the first offer is presented
D. When an offer is accepted.
703. What is the purpose of license laws?
704. The level of government that focuses on land-use regulations and taxation is the:
705. Of the principal forms of title evidence in Illinois, the one that provides the best evidence is:
706. A break in the chain of title to a property results in:
707. With regard to environmental issues:
708. The Illinois Residential Disclosure Act requires that material defects related to which of the following must be disclosed by the seller:
709. What can terminate a private deed restriction?
710. What best describes discretionary acts?
711. What action terminates terms of the agency?
712. Fiduciary duty is primarily based on:
713. Care, Obedience and Disclosure are fiduciary duties of:
714. How might a licensee hide the true identify of his or her client on a sales offer?
715. What charges does the buyer usually pay?
716. What deeds are exempt from transfer tax?
717. What charges does the seller usually pay?
718. What best describes the cost approach to appraisal?
719. The cost approach is used for:
720. What best describes the income capitalization approach?
721. A listing agreement can be modified, but only if:
722. What is an important difference between a sublease and a lease?
723. What is a good safety strategy to follow?
724. Which of the following best defines risk?
A. A loss
B. The chance of experiencing a loss
C. Recklessness
D. Responsibility for damages
725. Which of the following is considered a variable expense?
A. Real estate taxes
B. Utilities
C. Advertising
D. Insurance
726. Another name for a program of routine maintenance is
727. How many days notice does a landlord have to give to evict a tenancy-at-will?

Sales Associate / Broker Prelicense Topics Class – Questions Only for Practice Final exam example
(Answers to these questions will be given with proper SUBSCRIPTION)
1 What does PITI stand for?
A. Principal (P), Interest (I), Income Taxes (T), and Insurance (I).
B. Principal (P), Interest (I), Property Taxes (T), and Insurance (I).
C. Primary (P), Interest (I), Tariffs (T), and Insurance (I).
D. Principal (P), Income (I), Property Taxes (T), and Insurance (I).

2 A property is secured by a mortgage that does not contain a “power of sale” clause. To foreclose, the lien holder will have to:
A. obtain a deed in lieu of foreclosure.
B. obtain a writ to extinguish the lien.
C. file a foreclosure suit.
D. file a deficiency suit.

3 A person’s payment history comprises approximately __% of his or her FICO score.
A. 35
B. 30
C. 10
D. 15

4 Which Fair Housing Law added sex to the list of protected classes?
A. Housing and Community Development Act
B. Fair Housing Amendments Act
C. Housing and Neighborhood Development Act of 1974
D. Title VIII of the Civil Rights Act of 1968

5 When a seller signs a listing agreement, who are the actual contract parties?
A. Seller and Licensee
B. Seller and MLS Association
C. Seller and Managing Broker
D. Licensee and Cooperating Broker

6 What is the best response to questions regarding neighborhood safety?
A. Refer the client to law enforcement records.
B. Explain that you feel safe in the neighborhood.
C. Explain that no records are kept on neighborhood crime.
D. Respond with specific facts.

7 Which statement is true about a comparative market analysis (CMA)?
A. A CMA is the same as an appraisal.
B. It can help a seller decide what to ask for the property.
C. An agent is obligated to complete a CMA on each listing he or she takes.
D. It is not a valid way to arrive at market value.

8 Under Illinois law, what must the residential seller do with respect to radon?
A. Provide the buyer with mitigation options
B. Provide the buyer with the Illinois Disclosure of Information on Radon Hazard form.
C. Provide the buyer with the HUD Disclosure of Information on Radon Hazard form.
D. Remove the property from the market until the situation is corrected.

9 A house is being appraised using the sales comparison approach. The house has three bedrooms, two bathrooms, and a patio. The appraiser selects a comparable house that has three bedrooms, 2.5 bathrooms, and no patio. The comparable house just sold for $200,000. A half-bath is valued at $10,000, and a patio at $2,000. Assuming all else is equal, what is the adjusted value of the comparable?
A. $188,000
B. $192,000
C. $208,000
D. $190,000

10 Why is a buyer’s agency agreement good for the licensee?
A. It’s less money for the broker.
B. The licensee’s hard work is rewarded with buyer loyalty.
C. Buyers can work with more than one agent.
D. Sellers can choose an exclusive agent.

11 A seller was willing to sell her property, but only if she would net $150,100 from the sale after paying a 5% commission. What would be the selling price of the property to net $150,100?
A. $158,000
B. $156,000
C. $155,000
D. $160,000

12 Getting paid by the buyer before showing a property is an example of:
A. A bonus
B. A retainer fee
C. Referral fee
D. A transaction fee

13 Which legal description makes use of principal meridians and base lines?
A. Metes and bounds
B. The recorded plat system
C. The Public Land Survey System
D. The computer-assisted surveying system

14 Which of the following information would you not collect for a listing?
A. Listing Price
B. Owner’s Name
C. Bank account numbers
D. Street Number

15 What information was added to the Property Condition Disclosure Report in 2010?
A. Radon
B. Meth lab
C. Lead-based paint
D. Termites

16 How might a licensee hide the true identity of his or her client on a sales offer?
A. Insert “and/or assigns” in the buyer’s line.
B. Insert “NA” on the buyer’s line.
C. Complete an open sales offer.
D. Leave blank the buyer’s line.

17 Which of these items is important to include on your weekly listing activity report?
A. Your advertising budget
B. Agent comments about the property
C. An updated price reduction strategy
D. Number of competing property listings you obtained

18 Which of the following is considered a fixed operating expense?
A. Utilities.
B. Cleaning expenses.
C. Insurance premiums.
D. Management fees.

19 The Illinois Supreme Court decision in the Chicago Bar Association, et al., vs. Quinlan and Tyson, Inc. case prohibits which of the following parties from preparing formal closing statements?
A. Real estate licensees unless that licensee is also an attorney.
B. The buyer’s lender.
C. The lender’s agent (typically this is a title insurance company).
D. The seller’s lawyer.

20 What is the customary form of agency representation in Illinois?
A. Disclosed agency
B. Basic agency
C. Designated agency
D. Agency at large

21 A builder owns ½ acre of land with a front footage of 80 feet along the street. What is the depth of the land?
A. 136.125 feet
B. 272.25 feet
C. 544.5 feet
D. 1,089 feet

22 What is the main purpose of a mortgage Loan Estimate form?
A. To provide the lender with a standard to measure loan offers.
B. To provide a means for the federal government to control lending rates
C. To provide a means for borrowers to comparison shop more effectively for competing loan offers
D. To detect fraudulent loan practices
23 If an owner of real property dies without leaving a will and with no legal heirs, what will generally happen to the property?
A. It will transfer to the decedent’s executor.
B. It will become a public easement.
C. It will be divided among adjoining property owners.
D. It will revert to the state or county by escheat.
24 Which of the following is not a national estate trade organization?
A. NAR
B. NRA
C. NAREB
D. NAHREP
25 Which organization has the authority to investigate anyone regulated by Illinois’ license act?
A. Illinois Realtor Board
B. Council of the IDFPR
C. Real Estate Administration and Disciplinary Board of IDFPR
D. IFRC
26 Which of the following is a difference between an appraisal and a CMA?
A. The CMA does not consider current listings.
B. The appraisal must follow professional appraisal standards.
C. The appraisal does not consider comparable properties.
D. The CMA is impartial, while the appraisal allows for bias.
27 What is the reaction when a buyer is faced with too many options?
A. They become paralyzed
B. They make quick decisions.
C. They make bad decisions.
D. They welcome the challenge.
28 A property manager is charged with protecting the principal’s asset. Which of his required duties would that be?
A. Honesty
B. Reasonable care and skill
C. Confidentiality
D. Loyalty
29 What term is used to denote everything that a person owes?
A. Due Bills
B. Arrears Payments
C. Accounts Payable
D. Liabilities
30 or 125 Which of the following would not be found in a management agreement?
A. Tax abatements
B. Property description
C. Extent of authority
D. Management fee information

31 RESPA applies to all of the following EXCEPT which?
A. Primary residence purchase
B. Cash Sale
C. Loan invoicing a first mortgage
D. Federally-insured loan
32 What is the required downpayment for a VA-guaranteed loan?
A. None.
B. 3% of the first $25,000, %5 of the remainder.
C. Depends on the loan amount.
D. Depends on the Certificate of Eligibility.
33 The property manager is responsible for giving the owner a copy an executed agreement ____.
A. At the time the owner’s signature is obtained.
B. Within one business day of execution
C. Within 3 business days following execution.
D. Within a reasonable time
34 Which of these situations is not a typical reason to renegotiate a sales contract?
A. Seller needs to change the closing date.
B. Buyer loses financing.
C. Seller changes jobs.
D. Appraisal comes in low.
35 A letter of intent is also called what?
A. Declaration of purchase
B. List of questions
C. Term sheet
D. Statement of facts
36 If a municipality has declared a moratorium on new construction and demand is increasing, what would be the likely effect on real estate prices?
A. Prices would level off
B. Prices would rise.
C. Prices would fall.
D. Prices would continue to follow the trend that preceded the moratorium.
37 Which duty requires the agent to get the client the best transaction possible?
A. Care
B. Obedience
C. Disclosure
D. Confidentiality
38 If any dispute between the parties arises regarding the deposited escrow, money what action should the sponsoring broker take?
A. Always refund the money to the first party who formally request the return of the funds.
B. Split the monies in thirds, one third to the buyers, one third to the buyers, one third to the sponsoring broker.
C. Place the monies in an escrow account titled “Contested Escrow Funds Fiduciary Account” (CEFFA) which must be non-interest bearing.
D. Not release the money without a written release from both parties or both parties’ duly authorized agents (power of attorney or attorney at law).
39 The appraisal approach that is used in making a Comparative Market Analysis is ____.
A. The income capitalization approach.
B. The sales comparison approach.
C. The cost approach.
D. The summation approach.
40 What accounting tools are used to determine a buyer’s ability to pay off a loan?
A. Income Statement and Expense Vouchers
B. Credit car interest and Outstanding loans
C. Income to Payment ratio
D. Income ratio and Dept ratio

41 Beginning after the 2013 renewal, individuals renewing or obtaining a managing broker’s license must complete how many CE credit hours, in addition to the Broker Management Course?
A. 3
B. 6
C. 9
D. 12
42 ____________ includes but is not limited to referral fees, commission, and bonuses.
A. Rebates
B. Compensation
C. Flat fees
D. Finder fees
43 Errors and Omissions insurance ________.
A. is required by law.
B. must be registered with the State of Illinois.
C. is not recommended.
D. is a form of liability insurance.
44 Which of the following charges does the buyer usually pay?
A. Utility Tax
B. Existing liens
C. Broker’s commission
D. Lender fees
45 Which of these defects is specifically addressed in the Residential Real Property Disclosure Report?
A. Mold
B. Urea Formaldehyde
C. Illegal drug manufacturing
D. Carbon monoxide
46 Regulation Z applies to which of these situations?
A. $85,000 condominium loan
B. $250,000 restaurant loan
C. $485,000 shopping mall loan
D. $96,000 inventory & supply loan
47 Information about a property that has a significant bearing on a buyer’s decision to purchase that property is called what?
A. Latent fact.
B. Material fact.
C. Latent misalignment.
D. Defect.
48 John is doing a CMA for his potential sellers. He has collected the data on the seller’s property and collected data on a number of comparables. Now he’s ready to make his price adjustments. Which statement is true?
A. If a comparable has a feature that the subject property lacks, he will add the value of that feature to the subject property.
B. If a comparable lacks a feature the subject property has, he will subtract the value of that feature from the comparable.
C. He should eliminate any comparable for which he would need to make more than two adjustments.
D. If a comparable lacks a feature the subject property has, he will add the value of that feature to the comparable.

49 One of the strengths of the sales comparison approach is that it:
A. takes into account the subject property’s investment value.
B. reveals the profit margin of the builder or developer of the subject property.
C. discovers the underlying value of the subject property apart from the influence of competing properties.
D. takes into account the subject property’s specific amenities in relation to competing properties.
50 What is the purpose of the license laws?
A. To protect investors
B. To protect the public
C. To protect agents
D. To protect mortgage lenders
51 Which of the following would be considered as preventive maintenance?
A. Replacing a furnace
B. Adding additional parking spaces
C. Painting wood trim
D. Replacing a defective water heater
52 In what section of the listing agreement would you find property tax exemptions?
A. Provisions
B. Dual Representation
C. Additional Terms and Property Information
D. General Provisions
53 The owners of income property, who are real estate licensees, are not required to use their sponsoring broker’s escrow account for their tenants’ security deposits:
A. Unless the owner has a salesperson license.
B. If they are the sole owner of the property.
C. Unless the property is located in the city limits of Chicago.
D. Unless property owner has his primary residence within the city of Chicago.

54 –
55 Broker Jack accepted a listing for a home. A week later the owner told him that he was not willing to sell to an Asian person or family. Which of the following is TRUE?
A. Jack should explain to the owner that the request is in violation of Fair Housing Law and cannot abide by it.
B. He should have the owner document the request in writing and file it with the listing agreement.
C. Jack should abide by the owner’s wishes.
D. He should restrict his advertising to venues that do not cater to Asian community.
56 What is the relationship called when a principal allows a licensee to represent him or her?
A. Dual agency
B. Special appointment
C. Time-share agreement
D. Agency
57 If a tenant occupies a leased property without the consent of the landlord after a lease expires, the type of estate that results is called ____.
A. an estate at sufferance.
B. a holdover estate.
C. an adverse leasehold
D. a hostile leasehold.
58 According to the Illinois Human Rights Act, religious organizations may limit those renting or buying to those persons of the same religion:
A. under no circumstances
B. only if the religious membership is not restricted based on race, color or national origin
C. only if the membership is approved by the Act
D. without limitation
59 “Real estate” includes such things as:
A. fences, sidewalks, and piers on a parcel of land.
B. mobile homes temporarily parked on a parcel of land.
C. timber that has been cut and is lying on a parcel of land.
D. business equipment an owner or tenant has placed on a parcel of land.
60 Don a sales associate for ABC Reality is on 50/50 commission split with his broker. Don was the listing agent for a property and earned $2,500 for the transaction. If the commission rate was 5% and ABC Realty earned one half of the commission, what was the sales price of the property?
A. $200,000
B. $75,000
C. $10,000
D. $166,700
61 Which association is designed to support minority real estate professionals, the members are known as Realtists?
A. NARFP
B. NAREB
C. NAR
D. IRC
62 A MLS Board sets the commission rate for all members. What does this violate?
A. Clayton Trust Act
B. Fair Housing Act
C. Civil Rights Act of 1968
D. Sherman Antitrust
63 What is the difference between market value and market price, if any?
A. They are the same.
B. Market value is an estimate; market price is the price at which property is offered.
C. Market value is an average price derived from comparable sales; market price is a price based on a cost of creating the property.
D. Market value is what might be expected, market price is the actual sold price.
64 Dave inherited an acre of land with a depth of 165 feet that went down to the seasonal creek. What is the width of the land?
A. 264 feet
B. 260 feet
C. 156 feet
D. 275 feet

65 of 126 Which agency has responsibility for licensing real estate training schools?
A. Department of Licensing
B. Division of School Oversight
C. Standards Section of the Division of Real Estate
D. Department of financial and Professional Regulation
66 All parties in real estate transaction have a right to know:
A. Whom the Agent represents.
B. The source of the down payment.
C. The reason for the property sale.
D. Who is Buying the property.
67 Which of the following comparables is probably the best indicator of market value for the subject of a CMA?
A. One that has sold but has not yet closed.
B. One that sold in the three months before the CMA.
C. One that is currently listed.
D. One that was taken off the market after three months.
68 What is a voluntary agreement between legally competent parties, and supported by legal consideration, to perform or refrain from performing some legal act?
A. Brokerage agreement
B. Listing
C. Contract
D. Redemption
69 Which of the following acts can be performed by an unlicensed assistant:
A. Setting appointments for property viewing
B. Showing properties to buyers
C. Conducting an open house for buyers
D. Negotiating compensation issues
70 If a property is being sold that is in poor condition, the buyer may be asked to do what?
A. Pay a higher price
B. Waive his rights to sue
C. Skip the home inspection
D. Ignore the survey
71 The acronym COD stands for?
A. Connect, Order, Displace
B. Care, Obedience, Disclosure
C. Compliance, Obey, Discover
D. Conditional, Order, Disclose
72 Why would a property owner file a quiet title suit?
A. To force the grantor to defend the title against a third party claim.
B. To terminate a co-ownership estate when one co-owner is unwilling.
C. To keep the owner’s name out of the records.
D. To have an encumbrance removed if the lienholder cannot prove its validity.
73 Betty made a 20% profit on a residential lot she sold for $30,000. What did she pay for the property?
A. $25,000
B. $20,000
C. $26,000
D. $27,000
74 What kind of a contract exists when a promise is exchanged for a promise?
A. Executed
B. Bilateral
C. Unilateral
D. Option
75 In a strict foreclosure, ____.
A. a lender takes title to the liened property directly.
B. a lender receives the proceeds from the forced sale of the liened property.
C. the defaulting owner does not have the opportunity to prevent the foreclosure by paying the amounts owned.
D. a foreclosure suit is optional.

76 The income approach to value is based on the economic principles of:
A. anticipation and contribution.
B. anticipation and substitution.
C. assemblage and plottage.
D. highest and best use and substitution.

77 Which of the following transaction is covered by RESPA?
A. A seller takes back a purchase-money mortgage.
B. The VA guarantees a first-mortgage loan on a duplex apartment house.
C. An FDIC-insured lender finances the purchases of a 6-unit apartment building.
D. A home is purchased under an installment contract.
78 Seller Jane is offering an $800 bonus to any agent who sells her home within three weeks. How would an agent be paid the bonus?
A. Seller Jane is not allowed to pay a bonus.
B. The bonus must go to the agent’s sponsoring broker and then be passed on to the agent.
C. The bonus can be given directly to the licensee.
D. The bonus money must be put into Seller Jane’s escrow account, prior to release to the licensee.
79 A creditor is generally required to provide a Loan Estimate within:
A. two business days of the receipt of the consumer’s loan application.
B. three business days of the receipt of the consumer’s loan application.
C. four business days of the receipt of the consumer’s loan application.
D. five days of the receipt of the consumer’s loan application.
80 To comply with Illinois Radon Awareness Act the seller is required to fill out the Illinois Disclosure of Information on Radon Hazards form by initialing, explaining, and providing which of the following?
A. All available records and reports pertaining to elevated radon concentrations within the dwelling.
B. A metering device to determine radon concentrations.
C. An estimate of costs to mitigate the radon gas.
D. The plan for the seller to conduct radon testing and mitigation activities prior to entering into a contract with purchasers.
81 A buyer wants to take the offer to an attorney to review it. What should Broker Bob do?
A. Tell the buyer the contract is a standard form, and it’s a waste of money to take it to the attorney.
B. Encourage the buyer to get the attorney to review it quickly.
C. Tell the buyer to submit the offer first and then take a copy to the attorney to review.
D. Bob should not say anything.
82 Ed wants to build a small 800 square foot cabin on a lot that is 80 feet deep. If the building sideyard setbacks are 20 feet and the cabin is 20 feet wide, what is the square footage of the lot?
A. 4,800 square feet
B. 3,600 square feet
C. 2,000 square feet
D. 1,600 square feet
83 What is the secondary mortgage market?
A. A group of financial institutions that lend money to people who are refused by primary lenders.
B. A group of public and private institutions that lend money to banks to enable them to issue mortgage loans.
C. A group of loan warehousing agencies that buy mortgage loans from originators and package them for resale to investors.
D. A group of government-sponsored agencies that buy mortgage-backed securities from the primary market.
84 What is the purpose of risk management?
A. Accepting risk.
B. Adding to the level of risk.
C. Reducing the level of risk.
D. Seeking risk to increase expenses.
85 Any license who violates any of the provisions regarding escrow accounts may be judged to have endangered the public interest and may be subject to ___.
A. License revocation.
B. A temporary license suspension.
C. A fine of not more than $5,000 per violation.
D. A fine and possible imprisonment for felonious commingling.
86 If Donna borrowed $5,000 for one year and paid $150 interest, what was her interest rate?
A. 1%
B. 2%
C. 3%
D. 4%
87 Which statement about the Junk Fax Prevention Act is FALSE?
A. Licensees must provide an opt-out provision.
B. Licensees can only send faxes to existing clients.
C. This act applies only to managing brokers, not their employees.
D. Licensees must stop faxes upon request.
88 In practice, property management compensation is established by ______.
A. The client
B. The property management company
C. The size of the property to be managed
D. None of the above
89 What technique is used to elicit “yes” responses from a client?
A. Stay quiet as you go through the property.
B. Keep up a running commentary – for example, this is the living room.
C. Point out all of the faults in the property.
D. Encourage comparisons with other properties they have seen.
90 If a landlord rejects a prospective tenant based on a and credit report, according to the Fair Credit Reporting Act, the prospective tenant:
A. may require the landlord to obtain a second report.
B. may dispute the report and receive a free report from the credit-reporting agency.
C. may require the landlord to submit all of his reasons for rejection in writing.
D. may appeal the landlord’s decision with the FCRA Board.
91 A lease that continues from month to month is known as a/an:
A. Tenancy by the month
B. Estate from period to period
C. Lease at will
D. Lease at sufferance
92 Under the Equal Credit Opportunity Act, a lender, or a real estate agent who assists a seller in qualifying a potential buyer, may not:
A. tell a rejected loan applicant the reasons for the rejection.
B. ask the buyer/borrower about his/her religion or national origin.
C. ask the buyer/borrower to explain gasps in his/her employment history.
D. use a credit report if the loan applicant disputes any information in the report.
93 Which duty an agent has to his/her client never stops?
A. Obedience
B. Disclosure
C. Confidentiality
D. Loyalty
94 The cost approach attempts to estimate either the property’s:
A. replacement or reproduction cost.
B. land or acreage cost.
C. building or annex cost.
D. rehabilitation or remodeling cost.
95 A property owner acquired a property by means of a deed that included a deed restriction against building any kind of unattached office/art studio in a separate structure. What can the owner do to overcome the restriction?
A. Apply to the Zoning Board of Appeals is for a special permit.
B. Have the necessary parties execute a quitclaim deed.
C. Sue in court to have the deed declared invalid.
D. Obtain written permission to violate the restriction from the original grantor.
96 Any contracts for the sale of the land must be in writing to be enforcement in court, according to which law?
A. Statute of Frauds
B. Illinois Human Rights Act
C. Illinois Fair Housing Act
D. The Federal Fair Housing Act
97 In which of these places is asbestos not likely to be found?
A. Oil furnace
B. Vinyl floor tiles
C. Home built in 1935
D. Sheet rock or Sheetrock
98 Which of the following statements about the RESPA/TRID Loan Estimate is TRUE?
A. The settlement agent presents the Loan Estimate to the seller and buyer at closing.
B. It is an estimate of settlement charges that are expected to be expected to be significantly higher at closing.
C. It must be provided to the borrower no later than 48 hours before closing
D. It must reflect the actual charges that occur at settlement, with a few exceptions.
99 Which of the following is true of a joint tenancy?
A. The tenants can determine the size of the share owned by each tenant.
B. The size of the tenant’s shares is determined by the amount of equity each has invested in the property.
C. The tenants have an equal and indivisible ownership interest.
D. There can be no more than two co-owners, and each has a fifty percent interest.
100 Licensees may be disciplined under Illinois real estate license law for many actions. Under this law, the IDFPR has the authority to:
A. Impose civil penalty fines within its disciplinary guidelines
B. Impose criminal fines within its disciplinary guidelines
C. Impose jail time violations
D. Investigate activity and turn all violations over to the state attorney
101 Sam paid $500,000 for a five-unit apartment building. The gross income is $1,000 per month per unit, with annual expenses of $15,000 annually. What was the capitalization rate for this investment?
A. 9%
B. 10%
C. 11%
D. 12%
102 Sandra, a real estate sales associate, found a buyer for a $200,000 house. The seller agreed too pay a 6% commission to the listing broker, half of which will be paid to Sandra’s broker. Sandra is on a 50-50 split with her broker. What is the amount of her commission?
A. $3,000
B. $6,000
C. $12,000
D. $4,000
103 Which of the following is not a leasehold estate?
A. Estate at sufferance
B. Estate at will
C. Life estate
D. Estate for Years.
104 A person just seeking information from a real estate licensee is referred to as a(n):
A. Client
B. Customer
C. Agency
D. Consumer
105 Which of these items, would not contribute to the property manager’s fee?
A. Renewed leases
B. Percentage of rental income
C. Base fee
D. Reduction in tax load
106 Someone who possesses all ownership interests in real property owns:
A. equitable title to the real property.
B. legal title to the real property.
C. equitable and legal title to the real property.
D. statutory title to the real property.
107 Which of the following situations illustrates the principles of contribution?
A. A homebuyer makes a down payment of 20% instead of the 10% the lender requires.
B. A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000.
C. The appraised value of a house goes up by $20,000 over a two-year period because of the prices recently paid for other houses in the neighborhood.
D. Because of a decline in mortgage interest rates, a homeowner in a certain market is able to list her house at a higher price.
108 On the day prior to closing, the buyer does a walk-through and sees that the seller took a chandelier that was supposed to remain. What should the buyer’s broker do?
A. The broker should take the price of a new chandelier out of his commission.
B. The broker should try to put the closing on hold until the chandelier can be recovered.
C. Advise the buyer to speak with his/her attorney about a financial adjustment, at the closing, for the cost of the chandelier.
D. The contract should be terminated.
109 TRID mortgage loan rules apply to what type of real estate transactions?
A. Any closed end-loan secured by real property, but not including unimproved property
B. Only single-family real property
C. Any closed end-loan secured by real property, including unimproved property
D. Any closed end-loan of less than $375,000 and secured by real property
110 The document that provides evidence that a certain property is pledged as collateral for a loan is the ___.
A. trust deed or mortgage.
B. promissory note.
C. loan commitment.
D. collateral acknowledgment.
111 How long from receipt of a peer review does the Department have to respond?
A. 20 days
B. 30 days
C. 3 months
D. 2 months
112 Which tax is imposed on any deed or instrument which conveys interest in property?
A. Order Tax
B. Real Estate Transfer Tax
C. Render Tax
D. Settlement Tax
113 A duplex brings in $900 per month per unit and has $6,000 in annual expenses. What should an investor who wants a 10% return pay for the duplex?
A. $216,000
B. $156,000
C. $108,000
D. $48,000
114 Which legal ruling determined that a licensee is only allowed to fill in the blanks on a contract form?
A. Chicago Bar Association vs. Quinlan & Tyson, Inc.
B. Bales vs. Bates
C. Hulse vs. Criger
D. Link vs. Jones
115 Which Fair Housing Law added handicapped individuals to the list of protected classes?
A. Jones v. Mayer
B. Title VII of the Civil Rights Act of 1968
C. Mayer v Wade
D. Fair Housing Amendments Act of 1988
116 The economic concept that says a buyer will pay no more for one property than he would have to pay for an equally desirable and available property is ___.
A. anticipation.
B. highest and best use.
C. progression.
D. substitution.
117 When does the seller receive a copy of the listing agreement?
A. When the first offer is presented.
B. At the time of closing
C. Within two weeks of signing.
D. At the time of signing.
118 Which of the following statements would be called “puffing”?
A. The house has 6 rooms.
B. The house has quality written all over it.
C. The house has backs up to a public park.
D. The house has 2,350 sq. feet in living space.
119 An important characteristic of a “distressed” property compared to a “conventional” property is that:
A. The seller has excessive equity despite depressed prices.
B. The seller’s hardship does not qualify for a short sale.
C. The seller is usually trying to avoid a bank foreclosure.
D. The distressed property can quickly become stigmatized.
120 On a Closing Disclosure, what section would indicate if the lender would or would not accept partial payments on the loan?
A. Schedule of Payments
B. Advance Payments
C. Full Payment Options
D. Partial Payment Section
121 What is the purpose of the license laws?
A. To protect the consumer
B. To protect the broker
C. To protect the administrative staff
D. To protect mortgage lenders
122 When the buyer checks “yes” to dual agency on a Buyer Representation agreement, what does the buyer actually agree to?
A. The buyer agrees to dual agency.
B. The buyer agrees dual agency certain conditions.
C. The buyer is only acknowledging that the possibility of dual agency exists.
D. The buyer agrees to the possibility of additional compensation to the broker.
123 What type of financing allows the seller to retain legal title and the buyer to acquire equitable title?
A. Lease purchase
B. Installment land contract
C. Option to buy
D. Bridge loan
124 A policy manual is a reflection of the _________.
A. sponsoring broker’s mission statement
B. licensee’s business plan
C. licensee’s plan of action
D. sponsoring broker’s short-term goals
125 Which government agency files suits in ADA cases?
A. Dept. of Housing
B. Dept. of Justice
C. Dept. of Revenue
D. Dept. of Fair Housing

126 In the Public Land Survey System, a section contains how many acres?
A. 1,280 acres
B. 640 acres
C. 320 acres
D. 80 acres

127 A person filing a complaint may be entitled to:
A. Actual damages
B. Eighty percent of punitive damages
C. A payment from the General Revenue Fund.
D. $12,000

128 The difference between what a borrower has to pay to purchase a property and the amount a lender will lend on the property is the _____.
A. loan-to-value ratio.
B. lender’s profit margin.
C. buyer’s down payment.
D. origination fee.

129 Even though it is attached to a structure, an item may be considered personal property rather than real property if _______.
A. the owner originally intended to remove it after a period of time.
B. it can be removed without altering the appearance of the structure.
C. the owner installed it at some time after acquiring the real property.
D. it is unnecessary to the physical integrity of the structure.

130 In a transaction, the person who is being represented by a licensee is called what?
A. Customer
B. Agent Consumer
C. Consumer
D. Client

131 The steps in the income capitalization approach are:
A. estimate gross income, multiply times the gross income multiplier.
B. estimate effective income, subtract tax, apply a capitalization rate.
C. estimate net operating income, then apply a capitalization rate to it.
D. estimate potential income, apply a capitalization rate to it.

132 Diane paid $600,000 for a six-unit apartment building. The gross income is $900 per month per unit, with annual expenses of $16,800 annually. What was the capitalization rate for this investment?
A. 8%
B. 10.8%
C. 11%
D. 4.6%

133 Seller Jake provides a licensee with a bogus Property Condition Disclosure report. This is a form of what?
A. Active fraud
B. Passive fraud
C. Negligent Reporting
D. Subrogation

134 Which of these statements about an independent contractor is true?
A. He or she gets regular hourly pay.
B. He or she is reimbursed for all business expenses.
C. He or she is reimbursed for all travel expenses.
D. He or she is paid a commission.

135 To whom does a deed in lieu of foreclosure offer advantages?
A. The borrower only.
B. The lender only.
C. Neither the borrower nor the lender.
D. Both the borrower and the lender.

136 Which statement about subleases and lease assignments is correct?
A. In an assignment, responsibility and liability for the original lease is transferred completely to the assignee.
B. In an assignment, the assignee becomes primarily liable for the lease and rent; the original tenant remains secondarily liable.
C. A sublease does not convey any of the leasehold interest.
D. A sublease conveys the entire leasehold interest.

137 Which of these statements about purchase contracts is TRUE?
A. Both the offer and the acceptance must be in writing.
B. The offer can be oral, but the acceptance must include all of the seller’s terms in writing.
C. All offers must be approved by the licensee.
D. Neither offer nor acceptance must be in writing, but the deed for title transfer must be in writing.

138 Which of these statements about counteroffers is TRUE?
A. A counteroffer can only be prepared by the seller.
B. If the buyer rejects the first counteroffer, the seller can accept the buyers’ original offer.
C. A counteroffer can give the buyers a way out.
D. Only two counteroffers can be made per transaction.

139 A property that conformed with zoning ordinances when it was developed but does not conform to new ordinances is said to be _________.
A. a special exception.
B. a variance.
C. a legal nonconforming use.
D. an anomaly.

140 What does the term “mixed-use property” mean?
A. A subdivision with common areas for all residents.
B. Combination of residential and commercial use in a single building.
C. An apartment complex attached to a city park.
D. An industrial park in a farming community.

141 If questioned by a party about the property being occupied by a person with AIDS, licensees should state:
A. Only the facts they know through investigation of the property.
B. Facts disclosed from the seller.
C. That they know a person with aids occupied the property, but cannot disclose the person identity.
D. That they are prohibited by law from answering.

142 What type of agency allows the broker to appoint a specific licensee to work with a client?
A. Special agency
B. Dual agency
C. Sponsoring licensee
D. Designated agency

142 Which of the following groups are exempt from the Telephone Consumer Protection Act?
A. All new phone users after March 2008
B. Hospitals
C. A company responding to a consumer’s inquiry OR Tax-exempt non-profits
D. Out of state lottery businesses

143 Who pays the independent contractor’s withholding tax?
A. Managing Broker
B. Managing Broker and the Contractor share the cost.
C. The Independent Contractor
D. The Brokerage Firm

144 A mortgage Loan Estimate must be __________.
A. in writing and contain the information prescribed by the TRID rule.
B. in writing and contain the information prescribed by HUD.
C. sent to the applicant within 3 weeks of a written loan request.
D. copied and sent to a local HUD office within 3 business days of acceptance.

145 The loss of value in an improvement over time is referred to as:
A. deterioration.
B. obsolescence.
C. depreciation.
D. deflation.

146 When a licensee represents a person, what type of relationship is established?
A. Associate
B. Client
C. Consumer
D. Customer

147 Don a sales associate for ABC Realty is on a 50/50 commission split with his broker. Don was the listing agent for a property and earned $2,500 for the transaction. If the commission rate was 5% and ABC Realty earned one half of the commission, what was the sales price of the property?
A. $200,000
B. $75,000
C. $10,000
D. $166,700

148 What does a comparative market analysis attempt to do?
A. Convince a seller to list with you.
B. Find things in the home a seller needs to repair.
C. Establish a home’s fair market value.
D. Discover why some homes haven’t sold.

149 A property owner acquired a property by means of a deed that included a deed restriction against building any kind of unattached structures on the property. The owner now wants to build a small office/art studio in a separate structure. What can the owner do to overcome the restriction?
A. Apply to the Zoning Board of Appeals for a special permit.
B. Have the necessary parties execute a quitclaim deed.
C. Sue in court to have the deed declared invalid.
D. Obtain written permission to violate the restriction from the original grantor.

150 Which of the following is true of easements in general?
A. They involve the property that contains the easement and a non-owning party.
B. They apply to a whole property, not to any specific portion of the property.
C. They cannot be assigned or transferred.
D. They may require a specific use, but cannot prohibit one.

151 The basic intent of zoning ordinances is to:
A. establish the basis for public ownership of land for the common good.
B. establish subdivision rules and regulations.
C. specify usage for every parcel within the zoning authority’s jurisdiction.
D. restrict development in unincorporated areas.

152 Real estate agents must be able to convert measurements. Of the following, which conversion is INCORRECT?
A. Convert feet to inches: multiply the number of feet by 12
B. Convert inches to feet: divide the number of inches by 12
C. Convert feet to yards: divide the number of feet by 9
D. Convert yards to feet: multiply the number of yards by 3

153 When two adjacent pieces of property are joined together, the value of the one larger parcel may be greater than the value of the two separately. Which principle of value is this?
A. Progression.
B. Highest and best use.
C. Assemblage.
D. Contribution.

154 Which does NOT represent a way to describe real property?
A. A metes and bounds system
B. The Public Land Survey System
C. The unrecorded plat system
D. The recorded plat system

155 Broker licensees are exempt from continuing education requirements if they serve in the United States armed forces, serve as an elected state or federal official, or ____________________.
A. serve as an appointed member of federal government.
B. serve as a full-time employee of IDFPR.
C. serve as an appointed member of state government.
D. serve as an elected official at the local county or city level.

156 If a property has riparian rights, the owner has the right to _________.
A. pollute the water for a legitimate business purpose.
B. build a dam.
C. require downstream property owners to pay a fee for use of the water.
D. use the water in a way that does not infringe on another’s riparian rights.

157 What steps can a broker take when the buyer raises an objection about the color of a house?
A. Suggest that the buyer look at a different house.
B. Suggest that the buyer make an offer reflecting the cost of a new paint job.
C. Tell the buyer to make a full price offer and add an allowance for the paint job.
D. Not waste any more time on this house. The buyer will never make an offer

158 If any dispute between the parties arises regarding the deposited escrow money, what action should the sponsoring broker take?
A. Always refund the money to the first party who formally request the return of the funds.
B. Split the monies in thirds, one third to the buyers, one third to the sellers, and one third to the sponsoring broker.
C. Place the monies in an escrow account titled “Contested Escrow Funds Fiduciary Account” (CEFFA) which must be non-interest bearing.
D. Not release the money without a written release from both parties or both parties’ duly authorized agents (power of attorney or attorney at law).

159 The usual first step in the short sale transaction is
A. The lender releases the lien.
B. The seller signs the listing agreement.
C. The buyer makes an offer.
D. The seller gets an inspection.

160 A contract in which both parties promise to do something is known as what kind of contract?
A. Executory
B. Unilateral
C. Bilateral
D. Executed

161 All of the following are prorated, EXCEPT:
A. interest on a new loan.
B. property taxes.
C. interest on assumed loans.
D. rents.

162 In the case of a month-to-month tenancy, the landlord may terminate it at any time by giving how much notice?
A. No notice is necessary with month-to-month tenancy.
B. 7 days
C. 30 days
D. 45 days

163 A legal description is necessary because it:
A. is used for mail and package delivery.
B. is used for social gatherings and interaction.
C. is used to determine the property’s location.
D. is required for voter registration.

164 Two brokers working for the same firm decide to specialize in commercial properties and charge a flat-fee commission rate. Is this an illegal action?
A. Yes. It’s a violation of antitrust laws.
B. No. Antitrust does not apply to listing agreements.
C. Yes. A broker’s commission must be related to the costs involved in each transaction.
D. No. The brokers do not represent competing firms.

165 A loan applicant has an annual gross income of $36,000. How much will a lender allow the applicant to pay for monthly housing expense to qualify for a loan if the lender uses an income ratio of 28%?
A. $2,160
B. $840
C. $1,008
D. $720

166 Ted paid $480,000 for a duplex with a 10% capitalization rate. If both units in the duplex rented for the same amount, what is the net operating income (NOI) for the property?
A. $48,000
B. $36,000
C. $24,000
D. $4,000

167 The broker is required to keep:
A. A list of available properties
B. Confidential information about his client
C. A file on sex offenders
D. A picture of his agents

168 Seller Jane listed a problem on her property disclosure report. What happens now?
A. The buyer is required to have an inspector verify the problem.
B. The home must sell as is.
C. The buyer could ask for a price break because of the problem.
D. Jane must repair it before the home transfers.

169 If net income on a property is $20,000 and the cap rate is 5%, the value of the property using the income capitalization method is:
A. $100,000
B. $400,000
C. $1,000,000
D. $4,000,000

170 Home inspectors in Illinois:
A. must be registered with the Illinois Attorney General’s Office.
B. must be licensed by the Illinois Department of Financial and Professional Regulation.
C. are not licensed or registered.
D. must be licensed with the Illinois Secretary of State.

171 How do you stay in control of a call from a prospect?
A. Asking questions
B. Taking notes
C. Explaining broker’s services
D. Providing facts

172 Which of the following is an example of “shotgunning?”
A. Without mentioning it in the contract or settlement statement, a borrower agrees to give the seller cash at closing for some repairs
B. A listing agent agrees to raise the asking price of a property during negotiations.
C. A borrower conceals some debts to qualify for a larger loan than the lender’s debt-to-income ratio would allow.
D. A borrower obtains several mortgages on the same property for a total greater than the property’s value.

173 James, a sponsoring broker/property manager, must maintain all security deposits in an escrow account for the duration of the lease, unless the _________.
A. Tenant indicates to James that he/she waives the requirement.
B. James the sponsoring broker has less than five property management lease contracts.
C. Lease is for less than three years.
D. Tenant waives this requirement in writing. If such a waiver is included in the lease, it must be in bold print.

174 Jim’s property is undergoing a reduction in market price due to the pressures of a threatened foreclosure. His property is known as:
A. Redlined property.
B. Distressed property.
C. Underground property.
D. Stigmatized property.

175 Which of the following is true of an amortizing loan?
A. The amount of annual interest paid is the same for every year of the loan term.
B. Part of each periodic payment is applied to repayment of the loan balance in advance and part is applied to payment of interest in arrears.
C. Except for any points that may be paid, the interest on the loan balance is usually paid in advance.
D. The interest rate is reduced each year to maintain equal payments even though the outstanding loan balance is smaller.

176 To calculate the periodic payment of a loan, it is necessary to know the loan amount, interest rate and
A. the loan term.
B. loan points.
C. discount rate.
D. down payment.

177 Which of the following statements best defines the practice of fraud?
A. Overstating perceptions
B. Exaggerating the benefits
C. Intentional misrepresentation
D. Unintentional omission

178 What does the term “as is” in real estate mean?
A. The buyer cannot have a home inspection.
B. The seller does not have to tell about the leaky roof.
C. The seller can be silent about the condition of the property.
D. The seller will make no repairs.

179 Radon gas can be traced back to:
A. lead-based building products.
B. decaying radium.
C. plastic lumber products.
D. groundwater pollutants.

180 The process of making a fair distribution of expenses, through settlement, at the close of the sale is called:
A. proration.
B. principal.
C. amortization.
D. conversion.

181 A contract in which all parties have completed all acts under the contract is known as what?
A. Bilateral
B. Unilateral
C. Executory
D. Executed

182 What should you do if you feel the offer is not in the seller’s best interest?
A. Reject the offer.
B. Have the buyer’s agent submit the offer to the seller.
C. Tell the sellers how you feel and what you think about the offer.
D. Don’t submit the offer.

183 A recorded plat system contains all of the following, EXCEPT:
A. a plat map that shows the location and boundaries of individual parcels.
B. a series of landmarks and monuments that are numerically categorized.
C. a contiguous group of lots, which is called a block.
D. lots and blocks with assigned numbers or letters.

Sales Associate / Broker All Pre-license Questions for Applied RE Principles Interactive Class – Questions Only
(Answers to these questions will be given with proper SUBSCRIPTION)

1) Under what circumstances can the broker share confidential information of his/her client after the listing expires?
A. With the client’s written permission.
B. When representing another party
C. When a customer asks
D. Under any circumstances, once the listing expire

2) Disclosures to potential buyers that are required by the listing broker include which of the following?
A. Stigmatized property
B. Seller’s reason for moving
C. Agency status
D. Seller’s minimum price

3) A listing which allows the owner to sell the property himself without being liable for a commission, but which appoints only one broker to act as his sole agent is what kind of listing?
A. Net listing
B. Open listing
C. Exclusive agency listing
D. Exclusive right to sell listing

4) Which type of listing provides the most incentive for a broker to market a property?
A. Exclusive agency listing
B. Open listing
C. Net listing
D. Exclusive right to sell listing

5) If the sponsoring broker wishes to disclose sex offenders in the area, ghosts, murders, suicides, etc., he or she should consult with _______________ for advice on how to do so.
A. An accountant
B. A psychic
C. A member of law enforcement
D. An attorney

6) The Illinois Carbon Monoxide Alarm Detector Act
A. recommends that all residences of one to four units have alarms.
B. requires residences to have an alarm.
C. requires residences to have an alarm within 15 feet of every sleeping room.
D. requires sellers to test for carbon monoxide.

7) All exclusive listings must be ________________ to be enforceable in court.
A. In writing
B. Notarized
C. Reviewed by an attorney
D. Confirmed verbally

8) Listings must have a specific termination date (no automatic extension clause) or provide the client with a right to terminate annually by giving no more than ________ days prior written notice.
A. 10
B. 30
C. 20
D. 40

9) A _________________ is one of the documents that should be included in the seller packet.
A. Insurance application
B. Prequalification statement
C. Seller’s net sheet
D. Preapproval letter

10) What type of listing gives the broker the greatest assurance that he or she will receive compensation for his or her marketing efforts?
A. Net
B. Exclusive right to sell
C. Open
D. Exclusive right to buy

11) Licensees should know what information cannot be disclosed?
A. Closing details
B. Material facts
C. Information regarding the health of the occupants
D. Marketing strategy

12) Who should complete the Real Property Disclosure Report?
A. A home inspector
B. The seller
C. The seller’s agent
D. The buyer’s agent

13) What should you bring with you to a listing appointment to ensure that you have the necessary documents for use when working with the seller?
A. Briefcase
B. Hot spot
C. Broker in charge
D. Seller packet

14) What rights does a buyer have, if a seller fails to provide a property disclosure document prior to the transfer of the property?
A. Buyer has the right to file a case in the Court of Appeals
B. Buyer has the right to reduce the contract sale price.
C. Buyer has the right to terminate the contract
D. Buyer has the right to sue the seller.

15) All listings must contain a _________________ prohibiting the seller or the broker from showing any bias against the protected classes.
A. Non-discrimination clause
B. Unity clause
C. Equality clause
D. Sustainability clause

16) A property that is accurately priced is likely to
A. have an appraisal problem.
B. help to sell the competition.
C. lose some of the seller’s equity.
D. sell in a reasonable amount of time with no appraisal problem.

17) The listing agent should prepare the seller for
A. low offers.
B. last-minute showings.
C. the office tour.
D. All answers are correct

18) What are the two most common changes to an original listing agreement?
A. Closing date and financing
B. Inspections and repairs
C. Price changes and listing period extensions
D. Value and amendments

19) The broker protection clause is no longer effective
A. if the list price was too high.
B. if there were multiple offers.
C. if the listing agent has other properties listed.
D. if the property is relisted.

20) Which of the following is a feature of an open listing?
A. If the seller sells the property without the aid of a broker, no commission is due.
B. If the seller sells the property without the aid of a broker, the commission is still due.
C. If the seller sells the property without the aid of a broker, the commission is half the amount if sold by the broker.
D. If the seller sells the property without the aid of a broker, the commission is put in escrow.

21) When must a seller client first become aware of the possibility of dual agency?
A. At the time the listing agreement is signed
B. When the seller receives the first offer
C. Within 24 hours of accepting the listing agreement.
D. Prior to closing.

22) An open listing is a ______________ contract, authorizing a broker to serve as the agent for the sale of property.
A. A non-reductive
B. An exclusive
C. A reductive
D. A non-exclusive

23) What action can a licensee take if a client refuses to consent to a dual agency relationship?
A. A licensee may with liability withdraw from representing a client.
B. A licensee may without liability withdraw from representing a client who has not consented to a disclosed dual agency
C. A licensee might sue the seller for actual damages.
D. A licensee may without liability withdraw from representing a client who has not consented to a disclosed dual agency, but the client must pay a referral fee.

24) What should a seller do if potential buyers show up at the door wanting to see the property?
A. Tell them they can view the property only if they are prepared to make an offer
B. Invite them in and show them around
C. Take their name and call the listing agent
D. Ask them to wait an hour for the listing agent to get there

25) Although a property can be listed at any price, deliberately misleading a client as to the market value of the property to guarantee a listing is an ethical violation. This practice is commonly referred to as
A. over listing.
B. buying a listing
C. excessive listing
D. price fixing.

26) If a general home inspection showed a possible crack in a foundation, what should the seller do?
A. Request the general inspector to provide an opinion as to risk.
B. Contact a foundation repair company to repair the crack.
C. Ask a structural engineer to inspect and give an opinion.
D. Contact an attorney.

27) When meeting with a seller, what is one of the first questions the agent should ask?
A. What is the price you want for your property?
B. How much commission are you expecting to pay?
C. Do you currently have an exclusive listing with another broker?
D. How long do you want to list your property?

28) Where should the sellers be advised to be during showings?
A. They should stay in the home
B. They should wait in their car
C. They should greet people at the front door
D. They should leave the property

29) Which is a factor that can affect the value of a property?
A. What the seller is paying for their next home
B. What the seller paid for improvements
C. Physical features and condition of property
D. What the seller paid for the property

30) A copy of the CMA should not be given to the seller until
A. the home has been appraised.
B. there is an offer.
C. the property is listed.
D. the property closes.

31) The seller lists his home for $400,000 and the listing agent tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $39,000 and the seller accepts. In this situation,
A. any broker is authorized to encourage bidders.
B. the broker’s action was proper in obtaining a quick offer.
C. the broker violated the agency relationship.
D. the broker was unethical, but did not do anything illegal.

32) Which of the following would be a good option for the seller if a potential buyer door knocks asking the seller about the property?
A. Answer their questions and show them the property
B. Call the office and schedule an appointment
C. Take their name/s and call the listing agent
D. Ask the door knocker to call the listing agent

33) The listing agents should be prepared to _______________ at the listing presentation.
A. Have a potential buyer
B. Make a toast
C. Present gifts
D. Take measurements

34) Which disclosure is required on HUD properties?
A. Radon
B. Mold
C. Lead-based paint
D. Asbestos

35) Deliberately misleading a seller regarding the value of a property to obtain a listing is referred to as
A. buying a listing.
B. over listing.
C. net listing.
D. price fixing.

36) A home warranty can benefit
A. the buyer.
B. the seller.
C. the broker.
D. All answers are correct

37) How can a listing agent help the sellers have less anxiety when considering an offer?
A. By having them price the home significantly below the estimated value
B. By discussing contingencies that could be included in the offer
C. Telling them to accept the first offer they get
D. Reducing the commission

38) Once a property is listed, the property will be toured by licensees who have buyers that may be interested in the property, and that those licensees will not be spending a lot of time looking at the property during the tour. This is known as
A. a group viewing.
B. an office tour.
C. a bus showing.
D. an agent party.

39) Which of the following can a listing agent disclose?
A. The lowest price the seller will accept
B. The motivating factors of the seller
C. Material or latent defects
D. The terms of any previous offers or counter offers made or received by the seller

40) Which two disclosures are required for most residential properties of one to four units?
A. Mold and radon disclosures
B. Residential Real Property Disclosure and mold disclosure
C. Residential Real Property Disclosure and radon disclosure
D. Lead-based paint disclosure and radon disclosure

41) What is the listing agent’s goal?
A. To make sure the buyer’s pay the lowest price the seller is willing to accept
B. Sell the property for the best obtainable price, in the shortest time, with the least inconvenience to the seller
C. To get the most commission possible
D. To do as little work as possible while making the most money

42) If a buyer wants information regarding crime in the area, the agent should
A. provide that information.
B. refuse to provide information.
C. suggest the buyer refer to websites that provide that information.
D. recommend the buyer contact the local police or sheriff’s office for that information.

43) “Stigmatized” conditions are not material and
A. are not required to be disclosed.
B. must be disclosed.
C. must be disclosed by the licensee when asked.
D. are latent defects.

44) Since each home has an “insurance record” of its own, licensees should advise buyers to obtain a CLUE Report and
A. have the property assessed by a CLUE insurance investigator.
B. not assume the sellers’ insurance, but purchase new insurance to avoid the CLUE issue.
C. make their offer subject to receiving and approving a copy of the seller’s CLUE report.
D. purchase insurance only from a CLUE certified insurance agent.

45) Which of the following statements best describes a contemporaneous offer?
A. Two or more offers being written at the same time on the same property from the same designated agent
B. Two or more offers being written at different times on the same property from the same designated agent
C. Two or more offers being written at the same time for different properties.
D. Two or more offers being written at different times on different properties by the same designated agent.

46) Which type of buyer will most likely have the highest fear factor?
A. Relocation buyers
B. Investment buyers
C. First-time buyers
D. Down-sizing buyers

47) Is it permissible, as a buyer representative, to dispense advice to your purchaser client?
A. No. A buyer’s agent should provide assistance, not advice.
B. Yes. The buyer’s agent should dispense advice as needed on inspections and technical issues.
C. Yes. The buyer’s agent should advise the client on matters of which he/she has knowledge, and advise the client to obtain expert advice in areas in which the licensee is not an expert.
D. No. A buyer’s representative should remain neutral and simply service the transaction.

48) What technique helps you uncover what property features are most important to clients?
A. Encourage an offer
B. Invite comparisons
C. Downplay property features
D. Ask to list their present property

49) How long does a buyer have in which to initiate an action for a violation of the Residential Real Property Disclosure Act?
A. Six months
B. One year
C. Five years
D. Two years

50) In which of the following instances should a broker suggest that a buyer should consult an attorney?
A. If the buyer is requesting unusual provisions not covered in the standard contract.
B. If the buyer and seller cannot agree
C. If there is a dispute over price.
D. If the buyer wants personal property included in the sale.

51) During the walk-through, the buyer sees that the seller did not do a proper cleaning of the house. What is the best way of handling this?
A. At closing, the buyer could ask for a credit from the seller to cover the cost of cleaning.
B. The closing should be delayed until the cleaning is completed.
C. The broker should hire a cleaning crew and take it out of the commission.
D. The broker should prepare the agreement to amend the contract to cover the cost of cleaning.

52) What MUST be printed on or included with the Property Disclosure Report?
A. A copy of the Disclosure Act
B. A copy of the inspection report
C. An affidavit signed by the managing broker who has the listing
D. The seller’s contact information including phone number and email address

53) After the contract has been executed, the buyer needs to change the closing date. What should the broker do?
A. Use an amendment that has been approved by an attorney, or have the buyer ask his/her attorney to prepare an amendment requesting the change.
B. Rewrite the entire sales contract.
C. Prepare the addendum.
D. Have the buyer write an amendment.

54) When a broker is showing property that was the site of an act that had no effect on the physical condition of the property or its environment, the broker
A. is required to disclose the act.
B. is required to disclose only if asked.
C. is not required to disclose the act.
D. may not disclose the act under any circumstances.

55) How might a buyer’s agent hide the true identity of his or her client on an offer to purchase?
A. Insert the buyer’s initials on the buyer’s line.
B. Leave the buyer’s line blank.
C. Insert “TBA” on the buyer’s line.
D. Insert “and/or assigns” in the buyer’s line.

56) How will the buyer’s agent know if the letter regarding a buyer’s loan capacity is a prequalification letter or a preapproval letter?
A. The preapproval letter will state “preapproval” in bold type.
B. If the letter states that the loan approval is subject to “verification of buyer’s income and credit information,” it is a prequalifying letter.
C. If the letter states that the loan is subject to “verification of buyer’s income and credit information,” it is a preapproval letter.
D. Lenders no longer issue prequalifying letters.

57) A buyer took possession of a house on March 12. If he needs to file a suit based on a property disclosure violation, it must be filed
A. within 2 years of closing.
B. on or before December 31 of the year of closing.
C. prior to March 12 of the following year.
D. within 5 years of closing.

58) If a licensee is aware that a suicide occurred on the property within the past 12 months and fails to disclose the fact, what act has been violated?
A. Illinois Stigmatized Property Act
B. Illinois License Act
C. Illinois Real Property Disclosure Act
D. The licensee has not violated a law

59) Which of the following statements is true regarding the Residential Real Property Disclosure?
A. It is required for all new construction.
B. If the seller fails to provide the disclosure prior to the conveyance, the buyer has the right to terminate the contract.
C. The listing agent should assist the seller in completing the form.
D. If the report indicates a material defect and is received after the buyer’s acceptance of the contract, the buyer has five days in which to rescind the contract and have the earnest money returned.

60) In which of these situations is a licensee acting as a dual agent?
A. The licensee brings a buyer to see a friend’s house that is for sale.
B. The licensee’s client purchases a house the licensee listed for sale.
C. The licensee gives a flyer to a potential buyer at an open house for the licensee’s listing.
D. The licensee’s client purchases the house of a licensee’s friend.

61) When should agency disclosure take place?
A. No later than entering into an agency agreement.
B. Upon the first face-to-face meeting.
C. Before writing an offer
D. After the offer is written but before closing

62) When is undisclosed dual agency acceptable?
A. When the buyer client agrees
B. When two or more contemporaneous offers are made
C. When the buyer’s offer is greater than the listing price
D. Never. Undisclosed dual agency is a license law violation.

63) The primary advantage of using designated agency is that
A. it does not require any disclosures.
B. there are less regulations to follow so there is a smaller chance of violations.
C. the agent will earn a higher commission.
D. both buyer and seller will receive fuller, more personal representation by their designated agent.

64) A buyer is unaware of a leaking basement and proceeds to make an offer. Should the seller’s agent have told the buyer about the defect?
A. No. Caveat emptor would apply in this case.
B. No. The broker is the agent of the seller and should not mention the problem unless asked.
C. Yes. Any known defects should have been disclosed to the buyer.
D. Yes. The listing broker owes the buyer a fiduciary relationship.

65) The situation that allows the broker to appoint one or more agents for the client within the same firm, is called
A. designated agency.
B. dual agency.
C. appointed agency.
D. brokerage agency.

66) What type of agency is the assumed representation in the state of Illinois?
A. Net agency
B. Designated agency
C. Excess agency
D. Open agency

67) Obedience of the agent to the principal means what?
A. The agent may disobey those instructions in good faith if the agent feels it is necessary.
B. The agent must follow all instructions of the seller.
C. The agent must follow instructions of the seller regardless of personal feelings about them, as long as they do not violate laws.
D. The agent must follow directions in the listing agreement.

68) _________________ means a contractual relationship between a sponsoring broker and a client under Section 15-50 of this Act in which one or more licensees associated with or employed by the broker are designated as agent of the client.
A. Aggregate agency
B. Deliberate agency
C. Contractual agency
D. Designated agency

69) A designated agent is a person who is authorized by the ________________ to act as the agent of a specific principal in a transaction.
A. Firm’s attorney
B. Real estate commission
C. Managing broker
D. MLS

70) The three duties of action are
A. negotiation, selling, and marketing.
B. care, obedience, and disclosure.
C. accounting, filing, and reasoning.
D. protection, care, and strategy.

71) Broker Dan is representing Mandy as a buyer’s agent. He wants to show Mandy one of his listed properties. Which statement is true?
A. There is no reason why Dan should not show Mandy the property.
B. Dan must disclose to the seller that he also representing the buyer.
C. Dan must get the informed, written consent of both Mandy and the seller.
D. Dan cannot show Mandy his own listing.

72) When must the licensee give the seller an agency disclosure?
A. When the licensee sets up the listing appointment
B. Before the seller shares confidential information or signs the listing agreement
C. After the listing agreement is signed.
D. Before an offer is made on the seller’s property.

73) Which of the following can a dual agent disclose?
A. Lowest price the seller will accept
B. Motivating factors of either party
C. Material or latent defects
D. The terms of any prior offers or counter-offers made by either party

74) Philip is acting as an exclusive agent of David. He
A. can agree to a change in price without David’s approval.
B. may share his commission with a licensed attorney.
C. must inform David of all offers.
D. Can make a profit in addition to his commission.

75) Which of these duties is NOT owed to clients?
A. Loyalty
B. Confidentially
C. Courtesy
D. Care

76) Broker Carol ‘s buyer wants to submit a low offer. Carol should
A. suggest the buyer think about it and contact the buyer later for a decision.
B. leave the decision to the buyer.
C. show the buyer a CMA with comparable properties.
D. tell the buyer she’s wasting her time by making a low offer.

77) Which of the following is a true statement regarding property that is sold “as is”?
A. The buyer cannot request any inspections.
B. The buyer can have no contingencies in the offer.
C. The buyer is not required to be preapproved.
D. The buyer can include a request for inspections.

78) A buyer’s agent who has an exclusive buyer agency agreement must do all the following EXCEPT
A. assist the buyer in negotiating offers and counter-offers.
B. share the buyer’s maximum buying power.
C. answer the client’s questions relating to the offers, counteroffers, notices, and contingencies.
D. accept delivery of and present to the buyer offers and counteroffers.

79) Is a dual agent permitted to prepare a CMA for the buyer to assist him/her in deciding on an offer?
A. Yes. The agent should help the buyer determine an offer price.
B. No.
C. Only with permission of the seller.
D. Yes, if the agent does not include a suggested offer price.

80) A buyer made a $247,500 offer on a house. The seller changed the price to $249,000 and initialed the change. Upon delivering the contract back to the buyer, the original offer is
A. a bilateral contract.
B. an implied contract.
C. terminated.
D. a unilateral contact.

81) When presenting an offer, the buyer’s agent should
A. display the earnest money check.
B. disclose that he/she represents the buyer.
C. remain in control.
D. All answers are correct

82) The buyer wants to submit an offer that her broker feels is too low and may cause the buyer to lose the property. What should the broker do?
A. Show the buyer comparables that have a list or sale price similar to the seller’s.
B. Back off and let the buyer make the decision.
C. Suggest that the buyer think it over and make an appointment to write the offer later.
D. Tell the buyer another offer is coming in and he/she had better act quickly.

83) When negotiating, the listing agent should
A. be defensive on behalf of the seller.
B. make sure the buyer makes all the concessions.
C. stay in control and keep a cooperative attitude.
D. ask if the buyer has been prequalified.

84) Why do brokers need to provide written acceptance of offers and counter-offers as soon as possible?
A. The buyers could get buyer’s remorse.
B. The seller could receive another offer and withdraw a counter-offer.
C. License law requires it.
D. All answers are correct

85) What portion of the sales contract can be negotiated?
A. Only the sale price
B. Only the closing date
C. Any part
D. None

86) What may a dual agent do during negotiations?
A. Advise the buyer as to whether to accept a counter-offer.
B. Advise the seller as to whether to accept an offer.
C. Negotiate on behalf of the seller.
D. Remain neutral. A dual agent cannot negotiate on behalf of either party.

87) A broker has a buyer client who wants to buy a property but is concerned because the kitchen is out of date. What should the broker do?
A. Suggest that the buyer look at different houses.
B. Suggest the buyer make an offer taking into consideration the needed updates.
C. Offer to reduce the commission to help cover the cost of the update.
D. Not waste any more time on the property.

88) When the seller counters the buyer’s offer, the buyer’s offer is then
A. a bilateral offer.
B. terminated.
C. a unilateral offer.
D. an implied offer.

89) When a buyer’s agent presents the buyer’s offer, he/she should
A. disclose that he/she works for the buyer.
B. give other buyers a chance to write offers by delaying the presentation.
C. create an adversarial relationship to make sure the seller and seller’s agent know who is in control.
D. share the buyer’s motivation for moving.

90) When countering the closing date, which of the following is NOT a consideration?
A. Type of loan the buyer is obtaining
B. The broker’s vacation dates
C. Whether the property is distressed
D. Avoidance of weekends and holidays

91) A _____________ is a form of rejection that encourages the other party to keep negotiating.
A. Preapproval letter
B. Counter-offer
C. Prequalification letter
D. Contract

92) If the listing agent has been told there will be another offer coming but the buyer’s agent is not yet writing the offer, she or he may want to state,
A. “There are no other offers.”
B. “I know for a fact that there is another offer coming.”
C. “I have reason to believe another offer is forthcoming.”
D. “I cannot confirm nor deny the existence of any offers at this this time.”

93) If a buyer’s agent is aware of other offers, it is imperative that he/she
A. encourages the buyer to make their best offer.
B. writes and presents the buyer’s offer as soon as possible.
C. has the buyer preapproved prior to the offer presentation.
D. All answers are correct

94) Which of the following is a good risk management tool when the listing agent has an offer in a multiple offer situation?
A. Have the other buyers’ agents present as the seller makes a decision.
B. Have the sponsoring broker or a licensee appointed by the sponsoring broker to be present during the presentation.
C. Present the listing agent’s offer last.
D. Ensure that the seller accepts the highest offer.

95) __________________ offers shall be offers to purchase or lease on behalf of 2 or more clients represented by the same designated agent for the same real estate parcel or unit that the designated agent knows or has reason to know will be taken under consideration by the owners or owners’ representative at the same time.
A. Auspicious
B. Duplicitous
C. Illegitimate
D. Contemporaneous

96) The form for disclosing of contemporaneous offers gives the buyers the option of continuing to work with their buyer’s agent or
A. adding an escalator clause.
B. being referred to another agent.
C. terminating the listing.
D. rescinding their offer.

97) The purpose of the notice of contemporaneous offers is to
A. make buyers’ agents aware when more than one offer is being presented on a property.
B. permit the listing agent to advise buyers’ agents of multiple offers.
C. inform buyers if their agent is writing an offer for two or more buyers on the same property at the same time.
D. inform sellers that more than one offer will be presented.

98) If more than one offer was countered, the seller could end up
A. having to pay double the commission.
B. having to forfeit any proceeds.
C. selling his home to more than one buyer.
D. making twice as much money.

99) A buyer’s agent who is writing multiple offers on the same property at the same time must use
A. a carbon copy contract form.
B. a neutral arbitrator to work on the negotiation.
C. a disclosure of contemporaneous offers.
D. an attorney to present the offers.

100) The seller can accept or counter how many offers?
A. Three
B. Two
C. Unlimited
D. One

101) In a multiple offer situation, the seller’s options include
A. rejecting all offers.
B. countering no more than two offers.
C. countering all offers.
D. rejecting offers based on the seller’s nationality.

102) The listing broker should disclose the existence of multiple offers
A. any time multiple offers exist.
B. if asked by a buyer’s agent.
C. never.
D. with permission of the seller.

103) Who is responsible for an unlicensed assistant’s actions?
A. The designated managing broker
B. The office manager
C. The MLS
D. The brokerage’s attorney

104) The employment or independent contractor agreement between a broker and the sponsored licensees must include
A. meeting schedules, client lists, termination procedures, and leave policies.
B. sales thresholds, insurance requirements, and commission rates.
C. duties, supervision, compensation, duration, and termination.
D. hourly rate, vacation days, and benefits.

105) An unlicensed assistant may respond to questions by
A. providing an opinion.
B. sharing any available knowledge.
C. quoting directly from published information.
D. pleading the fourth.

106) An unlicensed assistant may
A. answer the telephone, take messages and forward calls to a licensee.
B. host open houses.
C. show property.
D. negotiate or agree to a commission.

107) IRS Form ___________ provides specific information regarding employees and independent contractors.
A. 1040
B. 1779
C. 1978
D. 8649

108) An unlicensed assistant should be
A. an independent contractor of the hiring broker.
B. a statutory non-employee.
C. an employee.
D. an independent contractor of the sponsoring broker.

109) Sponsoring brokers must have what type of employment or independent contractor agreement with all sponsored licensees?
A. Terminable
B. Notarized
C. Verbal
D. Written

110) Which of the following statements is true regarding personal assistants?
A. A licensee may pay his/her licensed assistant directly.
B. Unlicensed assistants are usually independent contractors.
C. “Personal Assistant” is a type of license issued by the Division.
D. Licensed personal assistants must have an employment or independent contractor agreement with the sponsoring broker.

111) An unlicensed assistant may
A. host an open house that is open to the public.
B. negotiate real estate contracts.
C. place “for sale” signs in a yard.
D. show property.

112) It is very difficult for an unlicensed assistant to be an independent contractor because of
A. healthcare requirements.
B. the needs of a brokerage.
C. the hours required.
D. IRS reporting requirements.

113) The License Act requires that personal assistants are trained
A. Only if they interact with members of the public
B. whether licensed or unlicensed.
C. Only if they are licensed
D. Only if they are unlicensed

114) An unlicensed assistant may NOT
A. interpret information on listings.
B. write ads for review by the licensee.
C. gather feedback on showings.
D. schedule appointments for the licensee to show listed properties.

115) If the licensee hires and pays an unlicensed assistant, who should pay the assistant’s expenses, taxes, workers’ compensation, and benefits?
A. The licensee’s clients
B. The assistant
C. The licensee
D. The sponsoring broker

116) Sponsoring brokers should have _________ addressing the use of personal assistants.
A. Prohibitions
B. No rules
C. An office policy

117) Broker bob is hiring an assistant. Which is true?
A. The assistant needs to be licensed.
B. Only unlicensed people can be assistants.
C. The assistant needs to be trained.
D. It is illegal for brokers to hire assistants.

118) An unlicensed assistant may perform what task?
A. Interpret information regarding listings
B. Host home show booths
C. Place signs on property
D. Interpret a contract

119) The designated managing broker is responsible for
A. training of licensees only.
B. training and supervision of licensees and unlicensed assistants.
C. supervision of licensees only.
D. training and supervision of licensees only.

120) ___________________ is a licensed or unlicensed person who has been hired for the purpose of aiding a sponsored licensee in the performance of the sponsored licensee’s job.
A. A career coach
B. An office manager
C. A personal assistant
D. A real estate agent

121) An unlicensed assistant can host a broker tour of property
A. with written permission from the seller.
B. only with the permission of the sponsoring broker.
C. at any time.
D. if members of the public do not attend the tour.

122) The best description of a CMA is
A. an appraisal.
B. a comparative mortgage assessment.
C. an analysis of the sale prices of similar homes, so the seller can decide on a list price.
D. a cooperative marketing approach used by multiple listing services.

123) Ideally, comparable sales should be as recent as the past
A. 3 months.
B. 9 months.
C. one year.
D. 18 months.

124) The purpose of a comparative market analysis is to
A. determine what repairs the seller needs to make.
B. estimate a home’s fair market value.
C. convince the seller to list with the licensee.
D. determine why the property hasn’t sold.

125) The purpose of the _________ is to assist the seller in pricing the property accurately.
A. FHA
B. Marketing plan
C. CMA
D. Inspection

126) What is the first step in preparing a CMA?
A. Compare the seller’s property to the comparables
B. Collect and analyze information about the seller’s property.
C. Estimate a reasonable and realistic selling
D. Choose comparable properties in the area

127) Which is a fundamental function of a listing agent?
A. Home staging
B. Performing appraisals and inspections
C. Representing buyers
D. Helping a seller set a listing price based on an estimate of a probable selling price

128) When a licensee does a comparison of the prices of similar properties that have recently sold, similar properties currently on the market, and properties that have not sold in anticipation of getting a listing, she is
A. preparing a CMA.
B. preparing a CAM (comparative analysis module).
C. preparing an appraisal.
D. preparing an ESP (estimate of sale price).

129) The main limitation for using a pending sale for a comparable is
A. there is no date of sale.
B. the selling price is too close to the present to allow for adjustment.
C. the final sale price is not known.
D. a pending sale is not competitive with active listings.

130) The most common reason that properties do not sell is
A. a listing period that was too short.
B. an inflexible seller.
C. a listing price that was too high for the market.
D. a property that needed updating.

131) Deliberately misleading a client as to the market value of the property is considered
A. an occasional necessity.
B. appropriate only for unlicensed assistants.
C. unprofessional conduct.
D. part of an unbiased appraisal.

132) The comparative market analysis is based on a ________________ approach.
A. Value
B. Traditional appraisal
C. Cost
D. Income to sales

133) Because the sale prices of the comparables are known, and the value and price of the subject are not, adjustments
A. should always be exaggerated.
B. can be made only to the subject’s price, not to the comparables.
C. always reduce the subject’s value.
D. can be made only to the comparable’s prices, not to the subject’s.

134) If the property is priced too low,
A. licensee could be accused of trade violations.
B. some of the seller’s equity in the home is lost.
C. the prices of other houses in the neighborhood will go up.
D. there may not be any buyers.

135) One of the principal factors for adjustment in a CMA or appraisal is
A. time of the sale.
B. what the owner paid for the property.
C. what the owner paid for improvements.
D. financing options.

136) A charge that would most likely be prorated between the buyer and seller is
A. title insurance.
B. attorney’s fees.
C. real estate taxes.
D. broker’s commission.

137) Statutory month variation, which is sometimes used in Illinois, takes the annual charge divided by ________ months to obtain monthly amount.
A. 3
B. 6
C. 48
D. 12

138) The transfer tax is paid
A. within 30 days after filing the deed.
B. by certified check to the recorder’s office.
C. by cashier’s check at closing.
D. before recording the deed by purchasing tax stamps from the recorder.

139) If the buyer purchased personal property from the seller, how would this amount be treated at closing?
A. Due from the buyer and due to the seller
B. Due from the seller and due to the buyer
C. Due from the seller
D. Due to the buyer

140) What method uses the actual number of days are used in each month, and the year has 365 days?
A. Banker’s
B. Statutory
C. Actual days
D. Variable days

141) A closing on a 20-unit apartment complex took place on June 15th. The seller collected the rentals for the month from all the tenants. How would the rent proration be handled at settlement?
A. Paid to the seller
B. Due from the seller
C. Paid to the buyer and due from the seller
D. Due from the buyer and paid to the seller

142) Rent of $1,200 was collected for April and the closing is April 10. How is the rent handled at closing?
A. $400 is due to the seller from the buyer
B. $800 is due to the buyer from the seller
C. $400 is due to the buyer from the seller
D. $800 is due to the seller from the buyer

143) In computing the state transfer tax
A. the value of any conveyed personal property is added to the sales price.
B. the amount of an assumed loan is added to the sales price.
C. the sales price is not adjusted for the value of any personal property or assumed loan amount.
D. the amount of any conveyed personal property or assumed loan is subtracted from the sales price.

144) In Illinois, the day of closing belongs to __________.
A. The title company
B. The seller
C. The buyer
D. The lender

145) What tax is imposed when an owner conveys interest in property?
A. Excise tax
B. Render tax
C. Real estate transfer tax
D. Settlement tax

146) The buyer’s closing costs include the
A. existing mortgage payoff.
B. transfer taxes.
C. title insurance.
D. credit report.

147) What is NOT an expense associated with the buyer/borrower’s loan?
A. Appraisal
B. Credit report
C. Earnest money
D. Lender’s title insurance policy

148) The amount of the combined state and county transfer tax is
A. $.50 per $500 (or any part of $500) of taxable consideration.
B. $.75 per $500 (or any part of $500) of taxable consideration.
C. $1.00 per $500 (or any part of $500) of taxable consideration.
D. $1.50 per $500 (or any part of $500) of taxable consideration.

149) The seller’s closing costs include the
A. interest through day of closing.
B. appraisal.
C. credit report.
D. first year’s property insurance premium.

150) The sale price is entered to the net sheets as a credit to ____________.
A. Both parties
B. The lender
C. The buyer
D. The seller

151) ___________ items are items charged to one party and received by the other.
A. Personal property
B. Sold
C. Prorated
D. Shared

152) Who pays the state and county transfer tax?
A. Buyer
B. Seller
C. Evenly divided between the buyer and seller
D. Negotiated between the buyer and seller

153) In computing the net to seller estimate
A. the closing expenses are subtracted from the purchase price.
B. the closing expenses are reduced by the existing mortgage payoff.
C. the closing expenses are added to the purchase price.
D. the closing expenses are increased by the amount of the new loan.

154) When can tenants be denied the right to have a service dog?
A. If the dog is over 50 pounds
B. Never
C. When there is a “no pet” policy
D. When someone in the building is allergic to pets

155) _______________ is inducing owners to sell by indicating that a particular protected class is moving into the area.
A. Pushing
B. Redlining
C. Blockbusting
D. Steering

156) Licensees must remember that there are three situations in which there are no exemptions to fair housing law: 1) based on race; 2) in advertising; and 3)
A. if finances are involved.
B. if the housing is considered section 8
C. if a broker is involved.
D. if an unlicensed assistant is involved.

157) A broker attempts to induce a seller to sell by telling him that Hispanics are moving into the neighborhood. The broker is guilty of
A. steering.
B. redlining.
C. blockbusting.
D. fraud.

158) Real estate offices must comply with what requirements?
A. FMLA
B. OLA
C. ADA
D. RSPL

159) As _________________ licensees have ethical as well as legal obligations to ensure that the only limit for buyers is their financial ability to purchase a property.
A. “Masters of realty”
B. “Protectors of property”
C. “Keepers of the land”
D. “Agents of appreciation”

160) Where can you obtain informational brochures regarding the ADA?
A. The Civil Rights Division of the U.S. Department of Justice
B. The Housing Division of the U.S. Treasury Department
C. The Humanity Division of the U.S. Housing Department
D. The Equality Division of the U.S. State Department

161) If a broker shows properties in neighborhoods based on matching buyers with existing owners, he/she is guilty of
A. blockbusting.
B. redlining.
C. steering.
D. channeling.

162) “Great builder’s model home, maintenance free exterior and in-ground sprinkler system. Located on Oak Grove Avenue, one block west of Immaculate Conception Church.” Which terms are considered violations in this ad?
A. Maintenance-free exterior
B. In-ground sprinkler system
C. Immaculate Conception Church
D. None

163) Under Title III of this Act, discrimination in commercial properties is prohibited. To which Act does this apply?
A. Fair Housing Act
B. American with Disabilities Act
C. Illinois Human Rights Act
D. Civil Rights Act

164) _______________ is guiding homebuyers to a particular area or away from a particular area. It does not matter whether the reason is to maintain a neighborhood as is, or to accomplish integration in an area.
A. Pushing
B. Redlining
C. Blockbusting
D. Steering

165) “Lovely home with finished basement and beautiful view of the river. Established neighborhood. New roof, furnace, and air conditioner.” Which terms are considered violations in this ad?
A. Established neighborhood
B. Beautiful view
C. Lovely home
D. None

166) Disabled tenants must be permitted to make certain alterations to rental properties, at whose expense?
A. The property manager’s
B. The owner’s
C. The ADA’s
D. The tenant’s

167) What type advertising is defined as advertising that indicates a preference, limitation or discrimination based on race, color, religion, handicap, sex, familial status or national origin?
A. Allowable
B. Discriminatory
C. Acceptable
D. Questionable

168) The first priority of the ADA is the ________________ standard that includes installing ramps, widening entrances and providing accessible parking spaces.
A. Get to the door
B. Order of appropriation
C. Get going
D. Moving on

169) The Illinois Human Rights Act, added which protected classes?
A. Financial qualification, personality, military status, health, ancestry, sexual orientation or preference, arrest record, and age
B. Marital status, order of protection, military status, military discharge, ancestry, sex or sexual orientation, arrest record, and age
C. Relationship status, order of appearance, military status, military awards, ancestry, sex or sexual orientation, and age
D. Marital status, secondary education, military status, age of children, disease status, sexual orientation or preference, and age

170) When must a model home comply with ADA guidelines?
A. When the subdivision is larger than 25 homes
B. If the home is not a condo or cooperative
C. If the subdivision is larger than 50 homes.
D. If the model also has a sales office area.

171) Which act is a federal law designed to eliminate discrimination against individuals with disabilities by mandating equal access to jobs, public accommodations, government services, public transportation, and telecommunications?
A. FHA
B. TRID
C. ADA
D. RESPA

172) The seven federally protected classes are
A. familial status, employment, gender, age, color, religion, and national origin.
B. familial status, race, education, disability, financial means, religion, and size.
C. familial status, race, gender, class, color, tax bracket, and scientific beliefs.
D. familial status, race, gender, disability, color, religion, and national origin.

173) When can a licensee provide legal advice?
A. If they are working with a client
B. In the presence of their sponsoring broker
C. Never
D. If they are working with a customer

174) When a contract is failing, who should be contacted?
A. The president of the local real estate association
B. The sponsoring broker
C. The office administrator
D. A representative from the real estate commission

175) ______________ is critical when there is a breach of contract.
A. Accounting
B. Confidentiality
C. Patience
D. Documentation

176) Upon termination of the contract and obtaining a release signed by all the parties pertaining to the release of the earnest money, when must the sponsoring broker disburse the funds?
A. No later than 3 business days after termination
B. No later than 48 hours after termination
C. No later than 30 days of termination
D. No later than the next business day after termination

177) A breach of contract gives ______________ the right to take legal action.
A. The sponsoring broker
B. The damaged party
C. All parties
D. The MLS

178) What issues are beyond the control of the licensees?
A. Financing issues
B. Title issues
C. Inspection issues
D. Appraisal issues

179) If failure of the buyer to obtain financing is the issue, the buyer’s agent
A. tell the buyer to hire a new agent.
B. require that the listing agent reduce the commission fee.
C. will want to determine if the buyer has an option of financing with a different type of loan and different lender.
D. sue the buyer for breach of contract.

180) Breach of contract refers to
A. completion of the contract.
B. failure to perform according to the terms of the contract.
C. a contingency in the contract.
D. a title deficiency.

181) If one of the parties is refusing to close, the parties should be advised to consult their attorney. The party that is refusing to close is most likely placing himself or herself in a position of _____________.
A. Negotiation
B. Objectivity
C. Fraud
D. Liability

182) When earnest money is returned, it must be returned to
A. the Commission.
B. the listing agent.
C. the party in the transaction.
D. the person who wrote the check.

183) If a contract fails due to a problem that arises as the result of an inspection, the buyer’s agent
A. must ensure that appropriate paperwork is delivered to the seller.
B. should tell the buyer to terminate the deal.
C. has an obligation to personally correct the issue.
D. must provide all parties with three estimates for correcting the issue.

184) If there is a minor cloud on the title, such as a name change that needs clarification, it can be cleared up easily with ______________.
A. A quit claim deed
B. A quiet title action
C. A title sanitation
D. A title review

185) If one of the parties to an accepted sales contract refuses to close, the licensees should
A. advise the party that he/she must close as contracted.
B. create an addendum for both parties to sign
C. advise the parties that they may want to contact an attorney to protect their interests.
D. advise the party of the legal consequences of breaching the contract.

186) The buyer and seller could not come to an agreement regarding necessary repairs that were discovered during the inspection. They decided to terminate the contract. What does Broker Joe need before he can release the earnest money funds?
A. A signed affidavit from all parties
B. Approval from the institution where the funds are held
C. A release signed by all the parties
D. A verbal commitment from all parties

187) Buyer Jim put down a deposit in the form of a boat title worth $5,000. The boat is owned by Jim’s parents. The transaction was not completed. To whom should the boat title be returned?
A. Jim
B. Jim’s Parents
C. The Title Company
D. The agency that holds the escrow account.

188) The sponsoring broker’s master escrow account log is a list of escrow account numbers and __________________.
A. License numbers
B. Client names
C. The bank routing numbers
D. The bank locations

189) Upon receipt of the monthly reconciliation statement from the bank holding the escrow account, the sponsoring broker has ______ days in which to reconcile the statement with the journal and ledgers.
A. 3
B. 10
C. 7
D. 5

190) Earnest money is provided
A. only when there are contingencies in the contract.
B. if a buyer attends an open house
C. when there is a negotiation.
D. when the offer to purchase real estate is made.

191) The sponsoring broker who accepts earnest money and maintains the bookkeeping system must reconcile each escrow account that he maintains within
A. ten days after he receives the monthly bank statement.
B. ten days after he receives the transactions closing statement.
C. thirty days after he receives the monthly bank statement.
D. thirty days after he receives the brokerage portion of the total commission.

192) A broker’s trust account can be interest bearing
A. at any time.
B. only if required by law or if the parties direct it to be, in writing, and determine which of the parties is to receive the interest.
C. if it is stated in the office policy manual.
D. if the interest is shared with all of the sponsored licensees.

193) The broker’s ______________ indicates receipts and disbursement for each transaction.
A. Hard drive
B. Ledger
C. File system
D. Diary

194) Part of ________________ is knowing where the earnest money check is at all times and knowing when it should be deposited.
A. Loyalty
B. Obedience
C. Accounting
D. Confidentiality

195) If any dispute between the parties arises regarding the deposited escrow money, the sponsoring broker should
A. always refund the money to the first party who formally requests the return of the funds.
B. split the monies into thirds, one third to the buyers, one third to the sellers, and one third to the sponsoring broker.
C. place the monies in an escrow account titled “Contested Escrow Funds Fiduciary Account” (CEFFA) which must be non-interest bearing.
D. not release the money without a written release from both parties or both parties’ duly authorized agents (power of attorney or attorney at law).

196) Licensees must immediately give earnest money checks to their sponsoring broker who must deposit it
A. within 72 hours of contract acceptance.
B. the next business day after contract acceptance.
C. within 3 business days after contract acceptance.
D. within 3 calendar days after contract acceptance.

197) The duty to protect the client is known as _____________.
A. Ethics
B. Accounting
C. Redundancy
D. Concern

198) Records of escrow account transactions must be kept on file for _________ years.
A. 2
B. 3
C. 5
D. 7

199) Physical or virtual offices have __________________ to deliver funds to the principal office if the office does not have an escrow account.
A. 24 hours
B. One month
C. Three days before the transaction
D. Until the end of the next business day following the transaction

200) The broker’s trust account and its records are subject to inspection at any time by ________________.
A. A bank manager
B. The Department
C. Mystery shoppers
D. NAR

201) The Rules define _______________ as “all moneys, promissory notes or any other type or manner of legal tender or financial consideration deposited with any person for the mutual benefit of the parties to the transaction.”
A. Earnest money
B. Trust funds
C. Interest
D. Revenue

202) Each sponsoring broker who maintains an escrow account must keep records of all earnest money transactions and notify the ____________ of the name of the federally insured institution where the money is deposited.
A. IDFPR
B. FTC
C. FAA
D. USTD

203) The amount of the earnest money deposit is usually based on
A. the broker’s set policy.
B. the requirements of the seller.
C. the value of the property.
D. the buyer’s finances.

204) Who must provide a receipt to the payor of any cash constituting escrow funds and must retain a physical or electronic copy of the receipt?
A. The attorney
B. The title company
C. The sponsoring broker
D. The bank

205) An effective example of the sellers’ changed financial circumstances would be
A. a voluntary change from full to part-time employment.
B. unexpected or unusual medical bills.
C. over-extended credit card use.
D. having a job that has seasonal layoffs.

206) Before advertising a property as “distressed,” an agent should
A. increase the listing price to allow for the lower price that will be paid for the distressed property.
B. obtain the seller’s permission.
C. make every effort to remedy the circumstances that have financial pressure on the property owner.
D. examine the foreclosure documents for conditions that might allow the property to be sold within the “distressed” designation.

207) One characteristic of a short sale transaction is that
A. the sellers do not have to claim hardship to have a justifiable basis for a short sale transaction.
B. lenders are not permitted to consider the seller’s non-real estate assets.
C. lenders may not allow a short sale if they discover other assets the seller has concealed.
D. lenders will not consider a short sale if the loan payments are current.

208) Short sales are not intended to allow property owners to walk away from their financial obligation based on arbitrary reasons. Lenders require sellers to show proof of hardship, which include all of the following, except
A. loss of second income.
B. job loss or unexpected medical bills
C. a chronic history of seeking and exceeding higher credit limits.
D. divorce.

209) Which statement about the “cash for keys” program is TRUE?
A. Lenders pay borrowers to vacate a property without damaging it.
B. This program applies to homes in danger of foreclosure.
C. A homeowner can re-negotiate the cash payment after the offer from the lender has been accepted.
D. Cash payments vary, but are never more than $3,000.

210) Foreclosures are
A. not property.
B. legal proceedings.
C. illegal in some states.
D. a way for banks to increase their profits.

211) A _____________ is the sale of a secured real property that produces less money than what is owed to the lender.
A. Short sale
B. Fire sale
C. Foreclosure
D. FSBO sale

212) Listing at a high price initially
A. is a good strategy.
B. will allow the seller to negotiate.
C. is something that a short sales seller cannot afford to do.
D. should always be done.

213) _______________ is a legal process by which a defaulting borrower is deprived of his or her interest in the property.
A. Lien selling
B. Foreclosure
C. Short selling
D. Deed transfer

214) The bank instituted the foreclosure process on Bill’s home and informed him that they would pay a set amount of cash in exchange for the keys to the property. This is an example of what?
A. Bankruptcy
B. Short sale
C. Foreclosure
D. Cash for keys

215) An advantage to the lender with the cash for keys program is that it
A. means the bank makes more money on the sale.
B. generates more interest in the property
C. can prevent damage to the house.
D. gives the owner time to find a new place to live.

216) In a short sale the licensee represents
A. the lender.
B. the seller.
C. both the lender and the seller.
D. neither the lender nor the seller.

217) When the foreclosure process is complete and a property is sold, who keeps the proceeds?
A. The lender
B. The owner
C. The listing agent
D. The state

218) In a short sale, the lender releases the mortgage so that the property can be
A. sold at auction.
B. sold free and clear.
C. transferred to REO status.
D. claimed as a tax deduction.

219) When competition survives, who benefits?
A. The government
B. Corporations
C. No one
D. Consumers

220) Broker A and Broker B decide that Broker A will take all the listings on the west side of town and broker B will take all the listings on the east side of town. Is this acceptable?
A. Yes. This is a smart business decision for both brokers.
B. Yes. This permits both brokers to be more efficient.
C. Yes, if the arrangement is disclosed to consumers.
D. No. This is an anti-trust violation referred to as market or customer allocation.

221) _______________ is a division of markets by location or price by competing brokerage companies.
A. Steering
B. Redlining
C. Customer allocation
D. Market collusion

222) Which is an agreement to sell one product or service only if the purchaser agrees to purchase another product or service?
A. A tying agreement
B. A pact
C. A bipartisan agreement
D. A collaborative agreement

223) What drives businesses to provide better services or products and to cut prices?
A. Embargos
B. Trade laws
C. Competition
D. Ethics

224) If a licensee is present when a discussion is commenced that is a violation of anti-trust laws, which statement should the licensee make?
A. “I’m sorry, but I have to leave.”
B. “I want everyone here to know that I am leaving and will not participate in this conversation.”
C. “For personal reasons, I can no longer be present.”
D. The licensee should leave without saying anything.

225) __________________ occurs when two or more brokerage companies decide together to refrain from doing business with a competitor or service provider, or agree together to treat that entity less favorably.
A. Group boycotting
B. Market allocation
C. Price fixing
D. Competition

226) Anti-trust laws are designed to protect ___________________.
A. Real estate agents
B. Investors
C. Competition
D. Financial institutions

227) “If both our companies refuse to advertise in the Dispatch, the paper will have to reduce its rates.” This is an example of
A. a legally acceptable statement.
B. blockbusting or panic pedaling.
C. steering.
D. market or customer allocation.

228) Which of the following statements violates antitrust laws?
A. “I think you’ll find that we offer excellent service for the fee we charge.”
B. “Our company charges 6%.”
C. “Commission rates are negotiable between the broker and seller.”
D. “The standard commission rate in our area is 5%.”

229) “If you list your home with our company, you are required to purchase a home warranty through ABC Home Warranty Company.” This is an example of
A. redlining.
B. a rider.
C. a tying arrangement.
D. a statement that does not violate anti-trust laws.

230) “Let’s not do business with ABC Realty because their commission rates are too low” is an example of
A. price-fixing.
B. a tying arrangement.
C. boycotting.
D. steering.

231) Violations of the Sherman Anti-Trust Act can include prison terms of up to _______ years and maximum fines of $100 million for corporations and $1 million for individuals.
A. 5
B. 10
C. 25
D. 50

232) What can a broker do to make sure sponsored licensees are familiar with anti-trade laws?
A. Require that licensees take annual continuing education course on anti-trade regulations
B. Mandate weekly tests on anti-trade laws
C. Nothing, it is not the broker’s responsibility to educate licensees
D. Review them at sales meetings
233) A developer agrees to sell a builder a lot, but conditions the sale by insisting that the builder list the property with him after the home is built. What is this called?
A. Market allocation
B. Price fixing
C. Coercion
D. Tie-in arrangement.

234) _____________ violations require no further inquiry into the actual effect of the practice or the intention of those who engaged in the practice.
A. Banner
B. Redaction
C. Faux pas
D. Per se

235) If all the members of a Board of REALTORS agree that they will not show properties of the members of another Board of REALTORS, this would be an example of
A. group boycotting.
B. price fixing.
C. coercion.
D. market allocation.

236) _______________ occurs when two or more brokerages set commission rates, commission splits with other companies, or commission splits with affiliated licensees.
A. Market allocation
B. Price fixing
C. Tie-ins
D. Boycotting

237) The commission rate a firm charges should be based
A. deals with builders.
B. agreements with other brokerage companies.
C. on the cost of the services provided and value of those services to the consumer.
D. suggestions from other brokerage companies.

238) The Illinois Radon Awareness Act requires sellers to provide buyers with a pamphlet entitled _____________________________.
A. Radon – the Invisible Killer
B. Radon Testing Guidelines for Real Estate Transactions
C. Radon and Your Family – What You Need to Know
D. The Dangers of Radon

239) Who provides guidelines for the removal of mold?
A. EPA
B. FHA
C. HUD
D. FCC

240) In Illinois, mold disclosure forms are available through __________________.
A. Local EPA offices
B. REALTOR associations
C. Homeowners associations
D. Local hardware stores

241) When was lead first banned in the manufacture of paint used in residential properties?
A. 1978
B. 1986
C. 1992
D. 1996

242) The use of lead in paint was banned in what year?
A. 1928
B. 1978
C. 2001
D. 1999

243) Which would be exempt from the radon disclosure requirement?
A. Units that are on the third floor
B. Units at ground level
C. Homes built prior to 1996
D. New construction

244) The sale of all HUD properties must
A. include a clean air disclosure.
B. have a perc certification
C. be tested for radon.
D. include a mold disclosure.

245) Mold growth can occur because of _____________ in a basement.
A. Low humidity
B. High temperatures
C. Water
D. Low temperatures

246) The seller is not required to test for lead but must allow the buyer ________ for lead inspection.
A. 1 week
B. 1 month
C. 24 hours
D. 10 days

247) Additional information on mold is provided in the __________________.
A. Illinois REALTOR association
B. Illinois Department of Public Health
C. US Department of Justice
D. US Secretary of State

248) A property is exempt from lead disclosure requirements if
A. it has been certified by an inspector.
B. it is a rental property.
C. it has no separate bedrooms.
D. it is occupied by fewer than five people

249) Inspections are included in sales contracts as _______________.
Options
Contingencies
Amendments
Addenda

250) If a home was built before 1978, the licensee must give lessees a copy of the EPA-HUD-US Consumer Product Safety Commission booklet titled _____________________.
A. The Lead Abatement Plan for Housing
B. Building Guidelines for Homes with Lead Paint
C. How Lead Can Harm Your Family
D. Protect Your Family from Lead in Your Home

251) Which of the following is an exemption to the radon disclosure requirement?
A. For sale by owner property
B. Units on the third floor or higher above ground level
C. New construction
D. Condominiums

252) When can a home inspector advise a client as to whether the client should or should not engage in a transaction?
A. If the issue is electrical
B. If the issue could cost over $1,000 for repair
C. Never
D. If there is an issue with the roof

253) Once the contingency is met, removal of the contingency should be accomplished ______________.
A. In a notarized document
B. Over the phone
C. In writing
D. In person

254) A buyer who is purchasing land on which to build that is not on a city or county sewer system would need to have a ______________.
A. Radon test
B. Lead test
C. Perc test
D. Mold test

255) A perc test is for the purpose of
A. determining the air flow in the home.
B. determining the moisture level in the home.
C. determining if high levels of radon exist.
D. determining the absorption rate of soil.

Sales Associate / Broker Prelicense Applied RE Principles Interactive Class – Final Example-Questions Only
(Answers to these questions will be given with proper SUBSCRIPTION)

1) Home inspections may be performed by
A. structural engineers.
B. licensed real estate home inspectors.
C. builders.
D. licensees.

2) If the buyer’s agent is representing his or her parent, sibling, other close relative or close friend, why shouldn’t the broker be a dual agent?
A. It is a violation of the Robinson–Patman Act.
B. It is never recommended to work with family and friends.
C. It will be difficult for an agent to be neutral in these situations.
D. It is an example of nepotism.

3) Even when a property is sold “as is,” buyers may request an inspection
A. because the buyer wants to ensure that there are no hidden surprises.
B. because the buyer should have the seller correct any problems that are found.
C. because the inspection report may be required to get final approval for a mortgage.
D. because it can help with the appraisal.

4) A ____________ clause is the period of time the buyer has after the seller receives another offer to either remove the “subject to sale” contingency, or terminate the contract.
A. Plan B
B. Rejection
C. Kick-out
D. Back-out

5) “Kimberly Apartments – Two-bedroom apartments for rent. Children welcome, no more than 2 per apartment. Wheelchair ramp. Covered parking.” Which terms are considered violations in this ad?
A. Covered parking
B. Two-bedroom
C. Wheelchair ramp
D. Children welcome, no more than 2 per apartment

6) Who may withdraw funds from the trust account?
A. Anyone
B. The office administrator
C. Sponsored licensees
D. The sponsoring broker

7) In Illinois, who prepares the Closing Disclosure form?
A. The seller
B. The buyer
C. The lender
D. The licensee

8) A broker may share confidential information of his/her client after the listing expires
A. with the client’s written permission.
B. when representing another party.
C. when a customer asks.
D. under any circumstances, once the listing expires.

9) The three major types of listings are open, exclusive right to sell, and
A. closed net.
B. inclusive agency.
C. exclusive right to buy.
D. exclusive agency.

10) In an exclusive buyer agency agreement, if the broker does not collect the commission from the listing broker or the owner, who will owe the commission?
A. The buyer’s agent
B. No one
C. The MLS
D. The buyer

11) A prorated expense at closing is
A. an amount received by both the buyer and seller
B. a different amount charged to one party and received by the other party
C. the same amount charged to one party and received by the other party.
D. an amount from both the buyer and seller

12) Nancy is asked by a buyer to take a promissory note as an earnest deposit. What should she do?
A. Ask her broker for help.
B. Tell the buyer she cannot accept non-cash items as earnest money.
C. Inform the seller of the earnest deposit situation and state the terms clearly in the purchase offer.
D. Persuade the buyer to make a cash deposit.

13) A listing agent has been hired by the seller who signed a listing agreement. What is true regarding this situation when a buyer is shown the property by the listing agent without being a dual agent?
A. The seller is the customer and the buyer is the client
B. The buyer is the customer and the seller is the client
C. Both the seller and buyer are clients
D. Both the seller and buyer are customers

14) A dual agent may disclose
A. the maximum price a buyer is willing to pay.
B. the lowest price the seller will accept.
C. motivating factors of the two parties.
D. material facts about the property.

15) If foreclosure proceedings have begun, how should the seller be notified?
A. Over the phone
B. In writing
C. The seller does not need to be notified
D. In person

16) Taxes paid in arrears appear on the TRID Closing Disclosure Form as Adjustments for Items Unpaid by ___________.
A. Agent
B. Seller
C. Lender
D. Buyer

17) For a short sale to be accepted by the lender, a number of documents must be on file. These documents are commonly known as ___________.
A. The binder
B. The materials
C. The deck
D. The packet

18) If any change is made to the escrow account, the sponsoring broker must notify ____________ with ten days.
A. All clients
B. The FCC
C. The Division
D. NAR

19) The Act defines “minimum services” required for
A. all listings.
B. all MLS listings.
C. all open listings.
D. all exclusive listings.

20) The sellers should be aware that the buyers will be conducting a _________________ within a day or two of closing.
A. Neighborhood poll
B. Final walk-through inspection
C. Price comparison
D. Deed transfer

21) An open listing is often considered to be what type of contract?
A. Terminable
B. Mutual
C. Unilateral
D. Bilateral

22) Which of the following is a good property showing tip?
A. Remove all area rugs.
B. Allow pets to interact with the buyers.
C. Lock up storage areas.
D. Remove clutter.

23) Under most exclusive buyer brokerage agreements, the buyer may have to pay the buyer agent’s commission
A. if the seller or listing broker will not.
B. if the buyer makes a full-price offer.
C. any time the buyer has an accepted offer.
D. prior to the buyer’s agent locating a property.

24) A _____________________ is a good risk management tool to affect non-discrimination, and it assists the licensee in obtaining answers needed to serve the buyer’s needs.
A. Buyer insurance policy
B. Standardized buyer questionnaire
C. Risk assessment
D. Seller’s packet

25) How is the seller’s loan interest computed?
A. For the day of closing
B. For a full month
C. From closing to the end of the month
D. From the first of the month through the day of closing

26) If the buyer agency agreement is for four months, how long is the agent is obligated to work with the buyer?
A. The full four months even after the transaction closes
B. Four months, or until a transaction closes, whichever is earlier
C. As long as necessary
D. Until the buyer makes an offer

27) In a CMA, ______________ properties have limited value because the sale price is still unknown.
A. Pending
B. Sold
C. Expired
D. FSBO

28) When is a licensee prohibited from acting as a dual agent in a transaction?
A. A licensee is prohibited from serving as a dual agent if he or she is a friend of the seller.
B. A licensee is prohibited from serving as a dual agent if he or she is a friend with the buyer.
C. A licensee is prohibited from serving as a dual agent if he or she has knowledge of latent defects.
D. A licensee is prohibited from serving as a dual agent if he or she has an ownership interest in the property.

29) Which Illinois act includes the following protected classes: marital status, order of protection, military status, military discharge, ancestry, sexual orientation or preference, and age?
A. Illinois Human Rights Act
B. Illinois Equality Act
C. Illinois Anti-discrimination Act
D. Illinois Fair Tenancy Act

30) Which offers is a listing agent is required to present?
A. Only all cash offers
B. Only those that are above the listing price
C. All offers
D. Only those that are equal to the listing price

31) Some brokers charge the buyer a fee prior to the buyer viewing properties. This fee is a
A. retainer fee.
B. bonus.
C. transaction fee.
D. referral fee.

32) The best reason for the buyer to have representation is
A. The seller has representation.
B. The listing agent is on the seller’s side.
C. The licensee offered it.
D. The buyer’s agent can provide a strong negotiating position.

33) Illinois counties impose an additional tax of $.25 per $500 or portion thereof of taxable consideration, making the combined total transfer tax __________ or portion thereof.
A. $1.50 per $500
B. $.50 per $1,000
C. $.75 per $500
D. $.20 per $500

34) A minority buyer asked to see homes in a certain price range, and the agent limited the showings to areas where other minorities live. This is an example of
A. blockbusting.
B. steering.
C. redlining.
D. directing.

35) Information about a property that has a significant bearing on a buyer’s decision to purchase that property is referred to as a
A. latent fact.
B. material fact.
C. statutory face.
D. defect.

36) Rent is prorated for the current month and is due from __________ at Closing on the TRID Closing Disclosure Form for the portion of the month the buyer will own the property.
A. The agent
B. The title company
C. The seller
D. The tenant

37) The 1996 lead-based paint regulation requires sellers or lessors of almost all residential properties built before _________ to disclose known lead-based paint hazards and provide any relevant records available.
A. 1905
B. 1996
C. 1978
D. 1987

38) The day before closing, the buyer did the final walk-through and found that the seller had taken the dining room chandelier that was to remain. What should the buyer’s broker do?
A. Pay for the price of the chandelier out of his commission.
B. The broker should hold up closing until the chandelier is recovered.
C. Ask the buyer to speak with his attorney about a financial adjustment at the closing.
D. Terminate the contract.

39) A buyer made an offer on a property and included $5,000 earnest money. A few hours later, she decided that she did not want the property and wanted the money back. How can she accomplish this?
A. Obtain a court injunction.
B. Stop payment on the check.
C. She can’t get the money back until closing.
D. Withdraw the offer before the seller accepts it.

40) Which of the following activities is NOT a “Non-Agency” act?
A. Showing houses to buyers
B. Attending an open house to answer questions about the property
C. Accompanying an appraiser on a visit to a property
D. Setting appointments for property viewings

41) A ______________ is a sale in which the title has transferred, but the selling price is not enough to pay all the liens and costs of sale.
A. Short sale
B. Fire sale
C. Foreclosure sale
D. Deed sale

42) Federal fair housing laws do NOT include which of the following protected classes?
A. Age and marital status
B. Family status and race
C. Sex and disability
D. Religion and national origin

43) Who should determine the listing price?
A. The MLS
B. The seller
C. The listing agent
D. The buyer’s agent

44) Which of the following is a true statement?
A. All listing agreements must include a definite expiration date.
B. All listings must include an automatic renewal clauses.
C. All listings must expire within six months.
D. All listings must contain a broker protection clause.

45) If the buyer assumes the seller’s loan, the buyer will make the payment
A. at the end of the month following closing.
B. at the end of the first of the week following closing.
C. at closing.
D. on the first of the month following closing.

46) Which statement is true regarding the seller’s disclosure of property condition form?
A. The agent should assist the seller in completing the form if requested.
B. Completion of the disclosure form is required by law.
C. The agent can coach the seller on how to complete the form.
D. Disclosure is optional but recommended.

47) Sponsoring brokers are prohibited from mixing their own funds with funds in special accounts. This is known as _____________.
A. Blending
B. Conversion
C. Commingling
D. Combining

48) Records of escrow account transactions must be kept on file for _____ years at managing broker’s place of business.
A. 2
B. 3
C. 4
D. 5

49) Four months after buyer Gail bought a home, the roof leaked during a storm. When the home was listed, seller Gary told broker Jim that the roof leaked, but they had agreed not to tell any prospective buyers. Jim’s defense is this – the buyer did not ask about the roof. Under these circumstances, what can Gail do?
A. Gail can sue Jim for non-disclosure of a material fact.
B. Gail cannot sue Jim because he represented only Gary.
C. Gail can sue Gary only.
D. Gail has no recourse since the leaking roof should have been discovered by her inspection company.

50) If a buyer’s agency agreement provides for the agent to get a commission regardless of whether the buyer buys a for sale by owner or listed property, it is
A. an exclusive agency buyer agency agreement
B. an exclusive buyer agency agreement.
C. an open buyer agency agreement.
D. a non-exclusive buyer agency agreement.

51) A mold disclosure is required for which of the following properties?
A. Residential properties with one to four units
B. HUD properties
C. All residential properties
D. All residential properties except for-sale-by-owner properties.

52) If Buyer Jim’s parents wrote the earnest money check for Jim to write an offer, and Jim cannot obtain financing, to whom is the earnest money check returned?
A. Jim
B. Jim’s Parents
C. The Title Company
D. The agency that holds the escrow account.

53) If the buyer is borrowing more than ________, the lender will require PMI insurance, which will add to closing costs and monthly payment.
A. 30%
B. 80%
C. 50%
D. 75%

54) What can a seller do to alleviate some of the buyers’ worries over potential problems after closing?
A. Let them spend a night in the home after they make an offer
B. Give them an allowance to buy new furniture
C. Include a home warranty
D. Tell them how much they like living in the home

55) Anyone in IL who performs lead abatement without a license is guilty of
A. a license law violation.
B. a felony.
C. no violation.
D. a Class A misdemeanor.

56) John’s lender agreed to accept a payoff less than the principal balance of John’s mortgage so that John could sell his home for the actual market value. What was this called?
A. Deed in lieu of foreclosure
B. Foreclosure
C. Short sale
D. Loan modification

57) When starting a listing presentation, what is one of the first questions that should be asked?
A. “What commission are you expecting to pay?”
B. “What is your listing price?”
C. “Are you currently listed with another brokerage?”
D. “How long do you want to list the property?”

58) The state and county transfer taxes are paid by ______________.
A. The lender
B. The seller
C. The buyer
D. The title company

59) A broker recently listed a four-plex occupied by the owner that has 2-bedroom units. Which of these ads would be a legal ad?
A. “Adults only”
B. “No more than 2 children”
C. “Wheelchair accessible”
D. “Retirees only”

60) The statutory method of prorating is best described as
A. annual charge divided by 355 days.
B. annual charge divided by 12 months.
C. annual charge divided by 12 months, and month of closing divided by actual days in the month.
D. annual charge divided by 360 days.

61) Which type of status is viewed as a stronger buying position?
A. A buyer who has many charge accounts
B. A buyer with a good rental history
C. A buyer who has been prequalified
D. A buyer who has been preapproved

62) According to the Illinois Real Estate License Act of 2000, sponsoring brokers who are responsible for earnest money deposits for property sales (and security deposits for leases)
A. must be bonded with the Illinois Sponsoring Brokers Insurance Trust.
B. must maintain a separate business account in any type of financial institution for depositing these monies.
C. must open special trust (or escrow) accounts in which to deposit the funds they have been given.
D. must deposit these monies in a brokerage operations account with special accounting procedures to segregate brokerage monies from escrow monies.

63) Who benefits from a deed in lieu of foreclosure?
A. The borrower
B. The lender
C. Both the borrower and the lender
D. The buyer

64) If escrow money is deemed abandoned, it is transferred to the ______________ to be handled as unclaimed property.
A. IREC
B. Office of the State Treasurer
C. Federal Trade Bank
D. FHA

65) The state’s portion of the transfer tax is ___________.
A. $.75 per $7,500
B. $.50 per $1,000
C. $.50 per $500
D. $.20 per $500

66) _________________ is equal to the sale price minus the value of any conveyed personal property and any mortgage amount that survives the conveyance.
A. Taxable consideration
B. Appraisal tax
C. Capital gains tax
D. Taxable itemization

67) Does the MLS determine the rates that member brokers can charge for their services?
A. No, individual brokers make those decisions.
B. Yes, the MLS sets the rates for services.
C. Yes the MLS, in partnership with the brokers, sets the rates.
D. No, the MLS only sets how member brokerages will share commissions with cooperating brokers.

68) If escrow records are lost, stolen or destroyed, the broker must report the loss to the Division’s ________________ within 48 hours.
A. Fraud division
B. Enforcement division
C. Recuperation department
D. Discipline committee

69) A non-refundable retainer fee belongs to the __________________.
A. The office petty cash fund
B. Seller
C. Sponsoring broker
D. Buyer

70) If serious problems are found during an inspection, what should a listing agent do?
A. Advise the sellers to cover up the problem as best they can
B. Advise the sellers to contact an expert
C. Advise the sellers to fix the problem on their own
D. Advise the sellers to reduce the price

71) Most one- to four-unit residential properties in IL require which disclosure(s)?
A. Mold and radon disclosures
B. Residential Real Property Disclosure and mold disclosure
C. Residential Real Property Disclosure and radon disclosure
D. Lead-based paint disclosure and radon disclosure

72) The most widely used agreement is the _____________ listing agreement.
A. Exclusive Agency
B. Net
C. Exclusive right to sell
D. Open

73) Disclosure of agency should occur
A. no later than entering into an agency agreement.
B. upon the first face-to-face meeting.
C. before writing an offer
D. after the offer is written but before closing

74) When working with a short sale property, what should the licensee do first?
A. List the property at a discounted price
B. Suggest that the owner sign up for financial counseling
C. Find out exactly how much is owed on the property
D. Run a credit check on the owner

75) Two brokers working for the same company meet over coffee and decide to charge the same set commission rate on all listings. Is this illegal?
A. Yes. It’s a violation of anti-trust laws.
B. No. the brokers do not represent competing companies.
C. Yes. A broker’s commission must be related to the cost of each transaction.
D. No. Anti-trust laws do not apply to commission rates.

— —0ceshop0 principles—5.3.23—
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 claim or any claim that’s difficult for the consumer to evaluate
339) What’s it called when a licensee tries to induce sales by predicting a decline in market value?
a. Assertive bargaining
b. False advertising
c. Harassment
d. Panic selling
340) Which of these is an example of puffery?
a. Kari’s ad boasts that the property is “just blocks from the proposed metro light rail station.”
b. Katherine’s ad for her newly renovated home states, “New from the studs up.” Her carpenter might tell you a different story.
c. Kevin’s MLS remarks note that the condo has the city’s “most beautiful twilight view of downtown and the bay.”
d. Kim notes that the property “overlooks a serene, peaceful green space.” It’s next to a cemetery.
341) Which of these is a TRUE statement regarding truth in advertising violation penalties?
a. A cease-and-desist order from the Federal Trade Commission related to deceptive advertising becomes effective 30 days after issuance.
b. The Federal Trade Commission determines the severity of the penalty based on the severity of the violation.
c. The Federal Trade Commission typically imposes jail time for truth in advertising violations.
d. The severity of the civil penalty for violating truth in advertising laws is based on the number of consumers affected by the deceptive ad.
342) Lot and Block Realty received a cease-and-desist order from the FTC due to misleading ads the firm was running. When does the order become effective?
a. 30 days after issuance
b. 90 days after issuance and for 120 days total
c. Immediately upon issuance
d. Retroactive from the first date of the prohibited activity
343) Krening Realty has been found guilty of running deceptive ads. Which of these statements about the potential penalty is NOT true?
a. If Krening violates the cease-and-desist order, the firm may face penalties of more than $50,000 per violation.
b. Krening may be required to run corrective advertising.
c. Krening’s broker may face jail time.
d. The firm may face civil penalties ranging from the thousands to millions of dollars, depending on the infraction.
344) Which option is of the most concern to licensees and advertising when it comes to the Federal Trade Commission?
a. Excessive advertising costs
b. Location of ads
c. Misleading ads
d. Paper waste
345) Which of the following is required on any first-point-of-contact advertising?
a. License number
b. Personal contact information
c. Personal photo
d. Sales volume
346) What does the Federal Trade Commission regulate?
a. Advertising
b. Commission disbursements
c. Federal real estate transactions
d. Listing trades
347) Gregory has been bombarded with emails from a local real estate licensee. He keeps opting out of these emails, but they just keep coming. What federal law is the licensee possibly violating?
a. Anti-Spam Act of 2000
b. CAN-SPAM Act of 2003
c. Do Not Spam Act of 2003
d. Junk Email Prevention Act of 2005
348) Where is required information included on your website?
a. On a page marked required information only
b. On every page
c. On the contact page only
d. On the home page only
349) Which organization would you call to file a deceptive ad complaint?
a. The Better Business Bureau
b. The Department of Justice
c. The Federal Bureau of Investigation
d. The local police department
350) Nicholas is a new licensee in an area where there are a lot of condominiums and dwellings geared toward tourism and seasonal residents. He tries to drum up business by sending faxes to dozens of condo complexes. Which federal act might he be violating?
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
351) Which federal act makes phone solicitation to numbers on the Do Not Call Registry illegal unless a prior relationship or permission exists?
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
352) Which federal act 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
353) Ken, a licensee, has published an ad claiming that he can sell homes for 25% more than any of his competitors. The Federal Trade Commission determined this to be a deceptive ad. What might the FTC require Ken to do as a penalty for his deception?
a. Discontinue publishing any ads for one full year.
b. Live up to the claims in his ad within the next six months or go to prison.
c. Pay each client 25% of the sale price for every house he sells.
d. Take out new ads correcting the misinformation in his original ad.

354)
355) Which of the following is an example of deceptive advertising?
a. Including the broker’s name in an advertisement
b. Including the listing price in an advertisement
c. Intentionally misidentifying a property’s square footage
d. Promptly removing an ad after a transaction closes
356) Your seller client has listed a beautiful piece of land on the water. You know this property would be a great investment if it were subdivided and developed, but you don’t mention the potential investment value to the seller because you want the property for yourself. You also don’t market it or present any offers. After several months, you buy the property at a deep discount. What does this make you guilty of?
a. Active misstatement
b. Negligent misrepresentation
c. Passive fraud
d. Puffing
357) Evan has his home and cell number on the Do Not Call Registry. He received an unwanted solicitation call from a new real estate licensee in the city. He told the licensee his number is on the Do Not Call Registry and that he does not wish to do business with the licensee. A few days later, he got another unwanted call from the licensee. What federal act is the licensee possibly violating?
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
358) What’s it called when you contact the public with unsolicited offers via a multitude of types of communication and in high frequency, even with buyer permission?
a. Fraud
b. Harassment
c. Misrepresentation
d. Panic selling

359) Which of these scenarios is basically the same as fraud?
a. Frank noted that his listing is in a city-approved urban renewal district.
b. Jeannie’s ad read “all new fixtures,” when most of the fixtures were just cleaned up and re-installed.
c. Margo’s listing read, “This is the most beautiful home you’ll find in this price range!”
d. Terrance’s ad mistakenly noted a property’s square footage as 2,575 instead of 2,775.
360) The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______.
a. Letters of apology to all affected consumers
b. New ads to correct previous misinformation
c. Notification to consumers about deceptive ad claims
d. Specific disclosures to consumers
361)
362) Aside from your name, what else must be included on every page of your website, according to the DRE’s rules?
a. City and state where the brokerage is located and jurisdiction
b. License number and responsible broker’s identity
c. Personal contact number
d. Personal photo
363) Under what circumstances may you withhold a listing from the MLS?
a. If it’s a hot market
b. If the seller gives written permission
c. If you believe you can find a buyer soon
d. If you intend to purchase the property yourself
364) Which of the following is a true statement about the MLS and sellers?
a. For most sellers, listing on the MLS is not cost effective.
b. It’s rare for sellers to decline advertising their property on the MLS.
c. Most sellers dislike advertising their property on an MLS.
d. Sellers are required to list their properties on the MLS if they’re working with a real estate licensee.
365) You’re posting a listing on the MLS. Which of the following are you allowed to do according to most MLS guidelines?
a. Post the listing without a photo
b. Self-promote
c. State that a property is “one block” from downtown, if it is
d. Withhold the listing for two weeks prior to posting it on the MLS
366) What does MLS stand for?
a. Market listing service
b. Maximum listing service
c. Membership listing service
d. Multiple listing service
367) Which of the following is acceptable to include in an MLS listing?
a. Children home alone from 2 to 4 p.m. No calls during that time.
b. House includes an alarm system.
c. Owner works the night shift.
d. Valuable artwork located throughout.
368) Licensee Jared states in an MLS record that his listing is in one neighborhood, when it’s actually a few miles away. Why is this a potential violation?
a. It’s not an MLS violation.
b. Licensees are supposed to use the map rather than rely on written neighborhood information.
c. Neighborhood information is not appropriate to include.
d. This is most likely fraud or misrepresentation.
369) Among other things, what should a listing in the MLS always include?
a. A relatively vague description, so people want to come and see the details
b. At least one photo
c. The seller’s bottom-line sales price
d. The seller’s contact information
370) Which should be included in an MLS policy for your firm?
a. An ad that can be tailored to each listing agent promoting her services
b. A policy to promote all listings in-house for two weeks prior to posting on the MLS
c. Tips on how long to delay posting price changes to see if other offers may come in
d. When and if listing data should be submitted to you for approval
371) Your client, Brenda, doesn’t want to be on the MLS because of privacy concerns. You tell her that one advantage to the MLS for her is ______.
a. It makes a private sale easier
b. No one will see the list price on the MLS
c. The MLS makes it easier to sell her property quickly
d. You won’t have to work as hard
372) Which of the following is a recommended way for listing brokers to use the MLS?
a. To advertise their listings
b. To enhance their reputations
c. To promote themselves and their firms
d. To steal their competitor’s listings
373) Which of the following statements is true about the MLS?
a. Expired and withdrawn listings may not be included on the MLS.
b. It’s free to members of the National Association of REALTORS®.
c. Listing fees vary by listing price.
d. Self-promotion isn’t allowed.
374) What is the MLS?
a. A database of real estate information
b. A list of buyers and their contact information
c. A server that records incoming data in a mirror image
d. Photo editing software for real estate licensees

375) Which of the following actions would be an MLS violation?
a. Emphasizing that the property is adjacent to the public library
b. Hiring a professional photographer to make a run-down property look as good as possible
c. Lowering the price after getting the seller’s permission to do so
d. Publishing the broker’s website and email address in the public remarks
376) The MLS offers several advantages to sellers. What’s one of these advantages?
a. Increased market exposure
b. Increased privacy
c. Increased security
d. Lower brokerage fees
377) Which of these photos would be a potential MLS violation?
a. A view 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. The recently updated bathrooms and kitchen
378) Which of the following is true about MLS usage?
a. An MLS listing is private.
b. Membership is free for brokers.
c. MLS has zero liability concerns.
d. Terms of cooperation and compensation, if any, must be listed.

379) What advantages does an MLS provide to a broker?
a. An easy way to find buyers
b. Contains information from all over the world
c. Greater access to listings
d. Self-promotion

380) Which of the following is true about the security of your clients’ information?
a. Client data can be compromised if the brokerage’s computer system is compromised.
b. Data security is one-size-fits-all.
c. Poor record retention ensures data security.
d. There is nothing a licensee can do to safeguard client data.
381) Which of the following is true about online rental scams?
a. Once they occur, there is nothing you can do.
b. They are a legitimate way to make extra money from your listings.
c. They are also known as “phishing.”
d. You can reduce the risk by monitoring Internet activity on your listings.
382) Haley has just discovered that one of her listings has been used in an online rental scam. What can she do?
a. Contact the FBI and ask for it to be removed.
b. Contact the rental site where the property is advertised and ask for it to be removed.
c. Create a Google alert to remove it.
d. Create an “if this, then that” recipe to remove it.
383) How does data encryption protect your and your clients’ personal information?
a. It allows regular updates to processes without your approval.
b. It ensures that you do not access unsecure sites.
c. It prevents hackers from accessing your computer.
d. It turns information into indecipherable code.
384) What’s the term for the online rental scams that con artists create by stealing information about properties from online real estate listings?
a. Partitioning
b. Scraping
c. Scrounging
d. Slicing
385) When information is stolen from online real estate listings, what is it known as?
a. Partitioning
b. Scraping
c. Scrounging
d. Slicing
386) Stealing listing photos and information and using them to fraudulently rent out a property is known as what?
a. A Groupon
b. An online rental scam
c. A recipe
d. Phishing
387) Why should you avoid describing a property as “secluded” when marketing through a social network?
a. Everyone defines secluded differently, so it isn’t specific enough.
b. Most homebuyers are interested in being part of a community.
c. Property descriptions should focus more on the home, not its surroundings.
d. Thieves may see this as an opportunity to enter the house unseen.
388) As a security precaution, which of the following is something you should do?
a. Limit the amount of personal information you post.
b. Post addresses to open houses on social media sites.
c. Post photos of yourself with expensive jewelry or belongings.
d. Post that you’re alone at an open house.
389) Everything in your office is potentially at risk from thieves and other criminals. Because of this, what should you never do?
a. Invite clients to the office.
b. Leave clients unattended in the office.
c. Lock your computer.
d. Use a computer.
390) If online security is a concern, which of the following websites would be the safest?
a. http://amazon.com
b. https://www.google.com
c. http://www.facebook.com
d. http://www.msnbc.com
391) What’s the purpose of a firewall?
a. It backs up your files to an external hard drive.
b. It encrypts your email.
c. It prevents hackers from infecting your system with viruses, worms, and malware.
d. It stores logins and passwords.
392) UETA supports the use of electronic documents and leaves the decision whether to use an electronic medium for agreements up to the _______.
a. Broker
b. Customers
c. Parties
d. Seller client
393) What’s the biggest security issue with using social networking sites to market your listings?
a. Criminals may use social networking sites to identify properties that are vacant or have high-end possessions.
b. It may not be effective since you’re casting a wide net rather than targeting potential buyers.
c. People may misinterpret your listing information and hold you responsible for their misunderstanding.
d. People you don’t know will have your name and contact information.
394) Which of the following describes the process of making a copy of a website for the purpose of obtaining money or data from unsuspecting users?
a. Backing up files to an external hard drive
b. Cloning
c. Encrypting your email
d. Storing logins and passwords
395) Which of the following statements is true about advertising rules and technology-based media?
a. Advertising rules apply online, just as they do in other media.
b. Licensees shouldn’t advertise online.
c. Only brokers can advertise online.
d. Only certain types of properties can be advertised online.
396) What are the three areas of technology where licensees are most exposed to litigation risks?
a. Presentation software, emails, and word processing software
b. The MLS, emails, and voicemails
c. Websites, emails, and spreadsheets
d. Websites, social networking, and emails
397) Which of the following should be avoided because it can attract thieves?
a. Giving referrals
b. Posting friend requests
c. Posting photos of your clients’ expensive belongings
d. Turning off location information
398) Technology poses risks for everyone, but real estate licensees need to be especially careful. Which of the following is true about risks related to computer systems?
a. Client data can be exposed when a brokerage’s computer system is compromised.
b. Client data can’t easily be compromised through a brokerage computer.
c. Laptops that aren’t attached to the brokerage server are not at any risk.
d. Licensees can do little to reduce risks related to brokerage computer systems.
399) Social media sites are great for marketing, but which of the following would you want to avoid accepting from people you don’t know?
a. Compliments
b. Flowers
c. Friend requests
d. Referrals
400) When a website has an S in the “http” portion of the URL, such as: “https://www.google.com,” what does it mean?
a. It is a phishing website.
b. It is a secure website.
c. It is a single sign on website.
d. It uses more than one “http.”
401) What can brokerages do to ensure licensees use technology properly?
a. Forbid new technology from being used for marketing and communication.
b. Have a solid policies and procedures manual in place.
c. Review all communications sent between licensees and consumers.
d. Track internet and phone usage.
402) In online rental scams, con artists fraudulently rent out a property they don’t own and collect the funds. Where do they get the information about the property?
a. A fence
b. Google alerts
c. Online real estate listings
d. Property owners
403) The Uniform Electronic Transaction Act (UETA) makes it legal and binding for contracts to be ______.
a. Completed verbally
b. Filed without signatures
c. Signed electronically
d. Written by a broker
404) What’s a password vault?
a. A security tool that stores logins and passwords
b. Malware hackers use to steal passwords
c. Software that encrypts your email
d. Software that prevents hackers from infecting your system with viruses, worms, and malware
405) What should brokerages do with regard to using social networking sites to market real estate?
a. Allow verbiage, but no pictures, in social network marketing.
b. Ban their use until real estate-specific social networking is created.
c. Create policies and procedures that address proper social networking use.
d. Discourage sal
406)
407) What’s required in order for a homeowner to receive a $7,000 exemption on property tax?
a. The property may not be secured by a mortgage lien.
b. The property owner may not own other real property in the state.
c. The property owner must be a veteran.
d. The property owner must reside in the home.
408) A tax lien remains in effect until the tax debt is ____________ by either being paid or the property being sold.
a. Assumed
b. Forgiven
c. Satisfied
d. Sold
409)
410) A tax ____ is a legal claim to property as a means of satisfying a delinquent property tax debt.
a. Assessment
b. Bill
c. Lien
d. Valuation
411) ______ taxes are a reliable source of income for the state because they are difficult to conceal, their value tends to remain relatively steady, and people tend to pay them.
a. Alcohol
b. Income
c. Property
d. Sales
412) Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax?
a. $336,000
b. $387,000
c. $420,000
d. $432,000
413) Prop 13 allows a property’s base value to increase by a maximum of ______ % annually, as an inflation factor.
a. 2
b. 3
c. 5
d. 8
414) A property can’t be redeemed after the last day before it’s ______ to satisfy the debt.
a. devalued
b. given to the government
c. seized
d. sold
415)
416) You’ve assisted the Juarez family with the purchase of a beautiful home in an established neighborhood. The sellers had owned the home since 1980. What’s true about the amount of property tax the Juarezes will pay for their new home?
a. It will be reassessed because of the transfer, and the Juarezes will be taxed at 1% of the home’s current market value.
b. It will be reassessed because of the transfer, and the Juarezes will be taxed no more than 2% of the home’s current market value.
c. It will be the same as the tax the seller paid annually, according to Proposition 13 limits.
d. It will no longer be covered under Proposition 13 property tax limits due to the transfer, so the Juarezes may be assessed as much as 35% of the home’s current market value.
417)
418) If a property is owned by a charitable organization, a hospital, or a ________, it’s not taxable.
a. Church
b. Farmer
c. Fraternal organization
d. Labor union
419) Under the Morgan Bill, taxpayers were given a means to resolve questions and file __________.
a. appeals
b. complaints
c. construction permits
d. taxes
420)
421) When property taxes go unpaid, a ___________ is placed against the property.
a. Hold
b. Lien
c. Lock
d. Note
422)
423) The Morgan Bill provided taxpayers access to explanations of their _______.
a. debts
b. property lines
c. responsibilities
d. rights
424) A county courthouse is exempt from property taxes because it is ______-owned.
a. Government
b. Previously
c. Privately
d. Publicly
425)
426) If a lien is released because the tax debt has been satisfied prior to further action being taken, the property owner will receive a certificate of _____________.
a. Achievement
b. Disposition
c. Redemption
d. Transfer
427) _______ values can change significantly from year to year, which is the reason for so many assessment and reassessment rules.
a. loan
b. neighborhood
c. property
d. tax
428) Tax ______ are a means of getting the property owner to pay their delinquent tax debt.
a. Attorneys
b. Laws
c. Liens
d. Statements

429)
430) The Morgan Bill provided taxpayers access to explanations of their _______.
a. debts
b. property lines
c. responsibilities
d. rights
431) A county courthouse is exempt from property taxes because it is ______-owned.
a. Government
b. Previously
c. Privately
d. Publicly
432)
433) Tax ______ are a means of getting the property owner to pay their delinquent tax debt.
a. Attorneys
b. Laws
c. Liens
d. Statements
434) Sellers of single to four-family dwellings must disclose _________.
a. average utilities
b. Mello-Roos
c. pet damage
d. unpaid taxes
435)
436) Mello-Roos was enacted in 1982 to provide for non-specific _____________ improvements.
a. General
b. Power
c. Sewer
d. Street
437) Which statute was enacted in 1885 and had provisions for the addition of sewers and finishing of street surfaces?
a. Mello-Roos
b. Street Improvement Act
c. The Improvement Bond Act
d. Vrooman Street Act
438) What’s NOT true about the Mello-Roos Community Facilities Act?
a. A Community Facilities District must be designated.
b. It allows communities to fund general improvements.
c. It uses a voter-approved bond to fund services and facilities for the community.
d. Property owners pay this assessment as a separate ad valorem tax.
439) This statute allows a public agency to issue bonds for the improvement of subdivision street surfaces.
a. Mello-Roos
b. Street Improvement Act of 1911
c. The Improvement Bond Act of 1915
d. Vrooman Street Act
440) Which of these acts can issue bonds that carry up to 6% interest?
a. Mello-Roos
b. Street Improvement Act of 1911
c. The Improvement Bond Act of 1915
d. Vrooman Street Act
441) To whom should you refer your clients for specific advice about income taxes?
a. Church leaders
b. County attorney
c. Managing broker
d. Tax professional
442) Select the statement that accurately depicts property ownership income tax implications.
a. During the ownership stage, both investors and homeowners may be able to deduct mortgage interest paid.
b. First-time home buyers can deduct closing costs paid.
c. Homeowners can deduct depreciation during the ownership stage; investors can’t.
d. When homeowners sell their property, they’ll need to calculate the depreciable basis on the property.
443) Capital gains fall into which stage of the property ownership life cycle?
a. Acquisition
b. Capital gains are not part of the property ownership life cycle.
c. Ownership
d. Reversion
444) You’re working with a couple who are in the market for their first home. They’re full of questions, and today they’re asking about how homeownership will affect their tax burden. Of course, you answer by providing information that’s within the scope of your license. Which of these taxes would you mention to your clients as relevant to homeownership?
a. Capital gains credit for purchase of a property priced below market value
b. Deduction of most closing costs on income tax for the year of purchase
c. First-time homebuyer income tax credit based on purchase price of property
d. Possible income tax deductions for prepaid interest on a loan
445)
446) Each year, investors are permitted to ______ a specific amount for tax purposes.
a. Add
b. Deduct
c. Depreciate
d. Subtract
447) Your seller client has accepted an offer on his home, and you’re on your way to closing! Which of these is NOT a tax aspect that you’ll explain to your client (in basic terms) related to the transfer of property?
a. “If you make a profit on the sale of this property, you’ll have to pay a capital gains tax when you file your income taxes.”
b. “Property taxes are prorated so you’ll only pay for the time you owned the property.”
c. “When you’re buying your next home, the transfer will trigger a reassessment for property tax purposes.”
d. “Your title will reveal any tax liens, so the title company will review it to ensure that isn’t an encumbrance.”
448) To depreciate real property, the business owner must own the property and use it for ______ or income-producing activity.
a. A rental
b. A residence
c. Business
d. Charitable works
449) When you’re representing a client in a real estate transaction, what’s your responsibility regarding tax advice?
a. You must be able to advise your clients on the best way to minimize their tax liability related to a purchase or sale.
b. You must not address tax aspects of a transaction in any way, since this would be working outside your area of expertise.
c. You’re obligated to answer all questions the clients have regarding property taxes and general tax advice.
d. You should tell clients the typical ways that taxes will apply and encourage them to seek advice from a tax professional.
450) The income from property taxes benefits the _______________ by paying for emergency services, education, and roads.
a. Community
b. Elderly
c. Local budget
d. State government
451) Property is no longer ______ after the taxpayer has retired the property from service.
a. Appreciable
b. Depreciable
c. Taxable
d. Useful
452) A _______ home is a pre-fabricated structure built away from the site where it will be placed as a home.
a. micro
b. mobile
c. non-traditional
d. retirement
453) Who will be responsible for paying use tax if a boat is purchased from a seller who doesn’t hold a seller’s permit?
a. The Board of Equalization
b. The buyer
c. There is no use tax on boat sales
d. The seller
454) A mobile home attached to a foundation is considered an _____________ to the real property.
a. Addition
b. Asset
c. Attachment
d. Improvement
455)
456) When is the Documentary Transfer Tax collected?
a. 30 days after closing
b. As soon as the documents are filed
c. At closing
d. On the first tax bill after the property has been sold
457) Use tax is owed to the state for the ____ of personal property
a. purchase
b. rent
c. sale
d. use
458) Mobile home taxes are calculated based on the value of the __________.
a. land it sits on
b. mobile home community
c. neighborhood
d. structure
459) The documentary transfer tax is _____ cents for every $500.
a. 25
b. 48
c. 55
d. 65
460) Sometimes, the __________ of the property can have the burden of being responsible for paying sales tax.
a. Broker
b. Buyer
c. Licensee
d. Seller
461) Once a mobile home is attached to a foundation, it is _______________ into real property.
a. Grandfathered
b. Leveled
c. Transformed
d. Written
462) If a seller removes a building from the land prior to sale of the property, the seller may be responsible for paying _______ on that building
a. closing costs
b. interest
c. rent
d. sales tax
463) Sales tax is paid to the state by retailers even if their ________ didn’t pay sales tax.
a. accountant
b. customers
c. neighbor
d. parents
464) Mobile homes are subject to _________ tax after they are sold.
a. property
b. sales
c. temporary
d. use
465)
466)
467) Use tax applies for merchandise that will be used, consumed, ____________, or given away.
a. Broken down for parts
b. Destroyed
c. Re-sold
d. Stored
468) Two large local brokerage firms agreed to lower their commission rates to the same amount—approximately 1% less than any other firm in town. After extensive marketing of their new lower rate, these two firms began to see a big increase in the number of listings they received, costing their competitors substantial amounts of money. What about this situation makes it a per se antitrust violation?
a. The agreement between the two firms
b. The dollar amount the competitors lost
c. The marketing efforts the two firms used
d. The size of the two brokerage firms
469) What’s an antitrust violation’s central element?
a. Conspiracy
b. Fraud
c. Greed
d. Profit
470) Which of these is a central element of an antitrust violation?
a. A contract
b. Customer relationships
c. High stakes
d. Interstate dealings
471) Two real estate firms in one small town, Vineyard Realty and Homestead Homes, agreed 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
472) Which act created an agency to investigate antitrust practices?
473) Attorney General Act
474) Clayton Act
475) Federal Trade Commission Act
476) Sherman Antitrust Act
477) Five competing brokerage firms in the same area agreed to cooperate in setting a standard commission rate for the area. This makes them guilty of a per se antitrust violation. What is a per se antitrust violation?
a. Boycotting
b. Collusion among the parties
c. No intent needs to be proven
d. Price fixing
478)
479) Which agency prohibits unfair acts, practices, or methods of competition, and enforces federal antitrust and consumer protection laws nationally?
a. Attorney general’s office
b. Consumer Reports
c. Federal Trade Commission
d. National Bar Association

480) Which of these has examples of antitrust violations common to real estate?
a. Fraud, concealment, and misrepresentation
b. Profiteering, racketeering, and domineering
c. Puffery, hyperbole, and exaggeration
d. Tie-in arrangements, market allocation agreements, and group boycotting
481) Which of these statements most accurately represents existing federal antitrust legislation?
a. The Clayton Act supports the Sherman Antitrust Act’s purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly.
b. The Federal Trade Commission Act established the Sherman and Clayton acts to prevent collusive activities that limit competition.
c. The Federal Trade Commission Act prevents one large firm from acquiring another similar firm that would result in a restraint of trade.
d. The Sherman Antitrust Act was passed to supplement the Clayton Act in an effort to prevent mergers that create monopolies.
482) Which of the following is true of developing a market niche based on any legal category (e.g., farming or prospecting a specific area)?
a. It’s an example of a tie-in arrangement and is an antitrust violation.
b. It’s an example of group boycotting and is an antitrust violation.
c. It’s an example of market allocation and is an antitrust violation.
d. It’s permissible.
483) Business is booming for Johnstone Realty, a new brokerage firm in town. The other firms in the area are unhappy about the cooperating split Johnstone offers, and they all agree to not show Johnstone’s listings to their buyer clients. What is this an example of?
a. Blockbusting
b. Group boycotting
c. Market allocation
d. Steering
484) Acme Realty offers flat fee, menu-based services. Berringer Realty and Hawthorne Real Estate Group decide to not show any of Acme’s listings and to prohibit showings from Acme buyers to drive Acme out of business. What is this an example of?
a. A tie-in arrangement
b. Group boycotting
c. Market allocation
d. Price fixing
485) Which of the following is true of a brokerage having a pricing policy for its associated licensees?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of market allocation and an antitrust violation.
c. It’s an example of price fixing and an antitrust violation.
d. It’s permissible.
486) Which of the following is an example of illegal market allocation?
a. Acme Realty and Hawthorne Realty Group agree to divide the city in half, each working its own half.
b. Acme Realty and Hawthorne Realty Group each discuss with their licensees where the most lucrative deals can be found.
c. Acme Realty and Hawthorne Realty Group each try to win the million-dollar listings.
d. Acme Realty maps out a plan to dominate the eastern part of the city.
487) Where can an agent report an antitrust violation?
a. Citizens Complaint Center of the DOJ’s Antitrust Division
b. The Department of Housing and Urban Development
c. The Department of State
d. The Federal Bureau of Investigation
488) Which of the following is true of refusing to buy services from a vendor because of shoddy business practices or pricing?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of group boycotting and an antitrust violation.
c. It’s an example of price fixing and an antitrust violation.
d. It’s permissible.
489) Which type of antitrust violation occurs when real estate firms agree to divide their market so they don’t compete with one another?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangements
490) According to the U.S. Department of Justice, which type of antitrust violation is an agreement between competitors to eliminate discounts to all customers or certain types of customers?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
491) Americo Realty and Heart of the Home Real Estate both charge the same commission rates. For this to be price fixing, what must occur?
a. An agreement between competing firms to standardize commission rates
b. An agreement between individual licensees in a single firm to fix commission rates
c. An offer of a cooperating brokerage commission
d. A public announcement of commission rates charged
492) Which of the following is true about discussing or implying a standard commission for the industry?
a. It’s an example of a tie-in arrangement and is an antitrust violation.
b. It’s an example of market allocation and is an antitrust violation.
c. It’s an example of price fixing and is an antitrust violation.
d. It’s permissible.
493) In addition to fines, individuals who violate antitrust laws may face imprisonment for up to what length of time?
a. 10 years
b. 30 days
c. One year
d. Two years
494) Which of the following statements could indicate a price fixing violation?
a. “I base my price on my services.”
b. “My price is non-negotiable.”
c. “This is the price my brokerage requires me to charge.”
d. “This is the standard price for a full-service listing.”
495) Deb, a licensee, is unhappy with the marketing materials a local company produced. While having coffee with Irving, a licensee with another firm, she tells him about her troubles and recommends he not do business with this company. Irving agrees and even volunteers to spread the word among his colleagues. What’s this an example of?
a. A tie-in arrangement
b. Group boycotting
c. Market allocation
d. Price fixing
496) When working with a developer who’s purchasing undeveloped land for a new subdivision, ABC Realty stipulates in the contract that in order to purchase the undeveloped land, the developer must purchase grading services from Bulldozers-R-Us. Which antitrust violation is this?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
497) Which of the following is true of agreeing with a competitor to segment the market between you?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of group boycotting and an antitrust violation.
c. It’s an example of market allocation and an antitrust violation.
d. It’s permissible.
498) Which of the following is true about tie-in arrangements?
a. They involve market allocation.
b. They involve price fixing.
c. They’re an antitrust violation.
d. They’re a type of mortgage fraud.
499) Which typociation meeting when, in a small group breakout, her group begins discussing how to deal with the new kid in town: a real estate firm that ervice?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
500) A consumer is moving to a new area and uses social media to try to line up a real estate professional to help him find a new home. He asks how much he’ll need to pay his licensee. One firm he contacts tells him that all licensees in the area charge at least 2%. What antitrust violation does this imply?
a. A tie-in arrangement
b. Group boycotting
c. Market allocation
d. Price fixing
501) Which of the following is an example of an illegal tie-in arrangement?
a. ABC Realty requires that all buyers who work with their company be qualified by ABC Mortgage company, an affiliated business.
b. MNQ Realty offers the services of an affiliated business, with full disclosure of its business relationship.
c. TUV Realty offers a variety of financing providers to potential clients.
d. XYZ Realty requires all buyers who work with their company to obtain financing through XYZ Mortgage company.
502) Marcy is found guilty of price fixing. It’s safe to assume that she must have done what?
a. Agreed with a competitor to charge a specific amount
b. Charged a fixed commission price her broker asked her to use
c. Charged a separate co-op fee for different brokerages
d. Deviated from the standard commission rate
503) In certain cases, antitrust violators may be subject to court-ordered supervision. How long can this supervision last?
a. 10 years
b. One month
c. One week
d. One year
504) Which of the following is the best example of a tie-in arrangement?
a. A business offers add-on services for its best customers.
b. A business requires its clients to also purchase service.
c. Competing businesses agree to similar pricing strategies.
d. Competing companies agree to not do business with a third.
505) Which of the following is true of discussing the business model of competitor A with competitor B in order to determine a joint course of action against competitor A?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of group boycotting and an antitrust violation.
c. It’s an example of price fixing and an antitrust violation.
d. It’s permissible
506) A new real estate professional is getting to know licensees at his new firm, Tremont Homes. One licensee tells him there’s an unwritten agreement with a neighboring firm that Tremont serves the mid-town area, and everyone who has prospective clients in that area refer their leads to Tremont. What’s this an example of?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangements
507) Three brokers meet and agree that all of their listing contracts will have one-year terms. Of which type of antitrust violation is this an example?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
508) Question 3
509)
510) Licensee Audrey was convicted of an antitrust violation. What is the maximum prison sentence she can serve?
a. 10 years
b. Five years
c. No prison time
d. Two years
511) An agent is trying to build up business for a friend’s mortgage company. She offers to charge a lower commission rate to clients who use her friend’s mortgage company for their financing. What’s this an example of?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
512) Penalties for antitrust violation may include ______.
a. Additional education requirements
b. Community service
c. Fines and/or prison sentences
d. Fines only
513) According to the Department of Justice, an agreement between competitors to establish or adhere to uniform price discounts is a type of which antitrust violation?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
514) A couple of licensees you know from different firms are tired of competing with one another for the same listings. You overhear them saying, “You take the north side of town and I’ll take the south, so we aren’t stepping on each other’s toes.” You stop their conversation to tell them they’re committing an antitrust violation. Which one is it?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangementsble.
515) Which of the following is an example of price fixing?
a. A brokerage requires all licensees to offer a fair cooperative brokerage fee.
b. Three brokerages agree to purchase office supplies together to obtain a bulk discount.
c. Twelve brokerages discuss compensation of associated independent contractor licensees.
d. Two brokerages determine a standard commission rate.
516) What’s market allocation?
a. Agreeing with a competing firm on how to split a market
b. Deciding to own the market with aggressive marketing strategies
c. Deciding which clients you will work with, and which you won’t
d. Partnering with a branch office to dominate a market
517) Four brokerage firms operate in the same small city as Jackson’s firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not?
a. No. The similarities between commission rates may be suspect, but the similarity between commission splits doesn’t matter.
b. Not necessarily. The fact that the firms’ commission rates and splits are similar doesn’t necessarily mean they agreed to fix those values.
c. Yes. The fact that the firm’s commission rates and splits are so similar is a restraint of trade.
d. Yes. The firms’ internal commission splits can be the same, but they can’t all charge the same commission rate.
518) As part of its penalty for violating antitrust law, Homes4Cheap, Inc. has been ordered to undergo court-ordered supervision. How long can this supervision last?
a. 10 years
b. One month
c. One week
d. One year
519) Which of these situations represents an illegal tie-in arrangement?
a. Grayson tells his seller client, Geneva, that he’ll reduce the listing commission if Geneva uses MBS Title Services to close her transaction.
b. Martha gives her buyer clients a list of home inspectors and encourages them to call several who are both on and not on the list to find one who meets their needs.
c. Monica agrees to rebate a portion of the commission earned when her buyer client buys a house if the client also lists her current home with Monica.
d. Trina tells her buyer, Martin, that she won’t perform any brokerage services for him unless he signs an agency agreement.
520) Which of the following statements could indicate a price fixing violation?
a. “My contract length is non-negotiable.”
b. “My listing agreements are generally 90-day contracts.”
c. “The MLS requires us to have at least 90-day listings.”
d. “With today’s market conditions, we could expect the house to take two months to sell. Let’s set a term of four months for our listing contract.”
521) Any agreement between competing firms that restricts trade or discourages competition is a violation of antitrust law. An agreement between competitors to do which of the following is also an antitrust violation?
a. Increase choices for consumers
b. Increase the number of competitors in the field
c. Join a professional association
d. Restrict choices for consumers
522) Unhappy with some of the fees a local mortgage company charges her clients, Renee decides to not do business with that company and convinces buyer brokers who show her listings to not do business with this company, either. What is this an example of?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement

523) Rachel is subject to court-ordered supervision due to an antitrust violation. This oversight may continue for as long as ______.
a. 10 years
b. Five years
c. She remains in the state where the violation occurred
d. She’s lice
524) Which of the following is true of the practice of basing the length of a listing term on how long it takes in your market to sell similar properties?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of market allocation and an antitrust violation.
c. It’s an example of price fixing and an antitrust violation.
d. It’s permissible

525) Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement

526) Which type of antitrust violation occurs when the providing of one service is made dependent on the customer or client obtaining another recommended service?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
527) Shakira is attending an association meeting when, in a small group breakout, her group begins discussing how to deal with the new kid in town: a real estate firm that charges a flat $500 to list properties, then lets the sellers fend for themselves. Why should Shakira leave the discussion?
a. She needs to get to work developing this model for herself.
b. The group seems bent on creating a tie-in arrangement.
c. This conversation seems to be turning into a discussion of market allocation.
d. This conversation sounds like it might become an antitrust violation.
528) Avoiding antitrust violations is critical. Which one of the following actions will help you avoid price fixing allegations?
a. Consult with competitors to determine competitive pricing.
b. Engage in discussions about fees with agents from other companies.
c. Establish fees independently or as a company.
d. Promote “industry rates” in conversations with consumers.
529) Jarvis, a designated broker, discusses antitrust scenarios at staff meetings and makes certain his firm makes independent decisions about co-op fees. This is a great way for Jarvis to do what?
a. Avoid antitrust violations
b. Eliminate the competition
c. Get in trouble with the DOJ
d. Inadvertently violate antitrust law
530) A Department of Justice deputy district attorney general said that the National Association of REALTORS®’ action of obstructing Internet-based brokers who offered alternative services and lower costs to consumers had this result, making it an antitrust violation.
a. Increased competition
b. Increased consumer fees
c. Reduced competition
d. Reduced consumer fees
531) One of the actions that landed the Consolidated Multiple Listing service of South Carolina in court was that it gave Columbia brokers the ability to exclude rivals from outside of Columbia. What type of antitrust violation does this exemplify?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
532) In the 1950 case involving the District of Columbia’s Washington Board of REALTORS® in which the National Association of REALTORS® became involved, the board required that brokers should maintain the standard rates of commission adopted by the board, and no business should be solicited at lower rates. No member may charge less than this rate when involved in the sale, exchange, lease, or management of real property in the District of Columbia. What were the parties guilty of?
a. Fair housing law
b. Group boycotting
c. License law
d. Price fixing
533) The 1970 case against Prince George’s County Board of REALTORS® found that the board was suggesting commission rates and publishing schedules of commission rates. What type of antitrust violation was this?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
534) The MLS in your area prohibits limited service agents from listing properties for sale. This is ______.
a. An antitrust violation
b. A risk management technique to prevent antitrust violations
c. Common to all MLS systems
d. Fine as long as it prohibits all discount agents
535) The Kentucky Real Estate Commission’s action of prohibiting brokers from offering rebates and other inducements to consumers was deemed to be this type of violation, in which guilt is established in light of existing circumstances.
a. Fair housing
b. Per se
c. Rule of reason
d. Tying
536) Avoiding antitrust violations is critical. Which one of the following actions will help you avoid price fixing allegations?
a. Consult with competitors to determine competitive pricing.
b. Engage in discussions about fees with agents from other companies.
c. Establish fees independently or as a company.
d. Promote “industry rates” in conversations with consumers.
537) One of the actions that landed the Consolidated Multiple Listing service of South Carolina in court was that it gave Columbia brokers the ability to exclude rivals from outside of Columbia. What type of antitrust violation does this exemplify?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
538) One of the actions that landed the Consolidated Multiple Listing service of South Carolina in court was prohibiting members from offering home sellers the opportunity to avoid paying a broker’s commission if the seller located a buyer on their own. What type of antitrust violation does this exemplify?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
539) The 1970 case against Prince George’s County Board of REALTORS® involved a consent decree. What is this?
a. A compromise where the party agrees to stop certain illegal actions without admitting guilt
b. A decision issued by the court ordering the defendant to stop performing certain illegal actions
c. A guilty plea
d. An innocent plea
540) The 1970 case against Prince George’s County Board of REALTORS® found that the board was refusing to work with members who didn’t follow certain suggestions. What is this an example of?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
541) The 1950 case involving the District of Columbia’s Washington Board of Realtors and the National Association of REALTORS® determined that real estate boards that set schedules of fixed or mandatory real estate commissions or fees violated this law.
a. Fair housing laws
b. Licensing laws
c. The Federal Trade Commission Act
d. The Sherman Antitrust Act
542) The 1950 case involving the District of Columbia’s Washington Board of REALTORS® and the National Association of REALTORS® determined that “trade” involves which transactions?
a. Both interstate and intrastate
b. Interstate only
c. Intrastate only
d. Only transactions outside Washington, D.C.
543) Which of the following is true about for sale signs?
a. They must be located at least 20 feet away from the mailbox.
b. They must be visible from the sidewalk.
c. They must be visible from the street.
d. They require the seller’s written permission to post.
544) Identifying properties being sold by owners and persuading them to list with a licensee describes the ______ approach to finding listings.
a. Cold calling
b. Expired listings
c. Farming
d. Owner sales
545) When finding listings, which statement describes the owner sales approach?
a. Choosing a neighborhood and concentrating real estate activities there
b. Contacting homeowners whose listing contracts have ended without a sale
c. Contacting prospective clients through previous clients, co-workers, networks, etc.
d. Identifying properties being sold by owners and persuading them to list with a licensee
546) What is an open listing agreement?
a. One in which anyone can find the buyer, but the listing agent still gets paid
b. One in which only the person who finds the buyer gets paid
c. One in which the price is negotiable within a specified range
d. One in which there’s no end date
547) Why should sellers remove family photos and other personal items prior to showings?
a. Because family photos are old fashioned.
b. So that buyers can picture their own items in the home.
c. So that no one steals important photos.
d. To protect themselves from visitors with criminal intent.
548) You receive a full-price offer within one day for a new listing. Your seller is concerned the home was under priced. How should you respond?
a. Advise the seller to reject the offer and hold out for something better if that’s how he feels.
b. Ask the buyer to justify her offer in writing, explaining why she was so quick to buy.
c. Make sure your seller is informed. Review the information that shows the home was accurately priced.
d. Tell the seller it is what it is and it’s too late now to change things.
549) When finding listings, which statement describes the expired listings approach?
a. Choosing a neighborhood and concentrating real estate activities there
b. Contacting homeowners whose listing contracts have ended without a sale
c. Contacting prospective clients through previous clients, co-workers, networks, etc.
d. Identifying properties being sold by owners and persuading them to list with a licensee
550) Which of the following actions should be taken when holding an open house?
a. Limit advertising.
b. Only be present to open and close the house.
c. Schedule the open house for a day and time when the owner can be present.
d. Schedule the open house soon after the property hits the market.
551) When using the farming approach, affinity is a key factor when identifying a neighborhood. Which statement best describes affinity?
a. An area that is not currently farmed by another licensee
b. An area that the licensee likes
c. An area with a fair amount of listings—not too many, not too few
d. An area with a variety or home styles, sizes, features, price points, amenities, buyers, etc.
552) Bernie represented Oscar in the sale of Oscar’s home. They signed an exclusive right-to sell-listing agreement. If Oscar were able to find his own buyer, would he owe Bernie a commission?
a. No, because he found his own buyer.
b. No, because Oscar retained his exclusive right to sell.
c. Yes, because “exclusive right to sell” means Bernie gets paid no matter who finds the buyer.
d. Yes, because Oscar is not a real estate licensee.
553) What’s the purpose of advising sellers to remove personal effects from their homes prior to showings?
a. To give the impression that they need money so that buyers will make their offers higher
b. To increase the likelihood that they’ll be out of the house by the time the transaction closes
c. To make it easier for prospective buyers to visualize themselves in the home
d. To remove objects that may be tempting to thieves
554) You have a seller who is refusing a very good offer on a property that’s been on the market for a while. How can you help your client?
a. Give up and move on to the next client. Sometimes clients are impossible to work with.
b. Tell the client it’s his house and his choice, but you think he should accept.
c. Try and help the seller see the big picture and the value of an offer on the table.
d. Try to work with the buyer to get a much higher offer, since this might make the client happier.
555) When finding listings, which statement describes the cold call approach?
a. Contacting homeowners to determine whether they or anyone they know is interested in selling
b. Contacting homeowners whose listing contracts have ended without a sale
c. Contacting prospective clients through previous clients, co-workers, networks, etc.
d. Identifying properties being sold by owners and persuading them to list with a licensee
556) Camille is working with a seller who has asked her to lower her commission rate. What’s the best way for her to explain why she won’t do it?
a. Explain that her broker won’t allow her to change the rate.
b. Explain that her fee is based on the services she provides.
c. Explain that her rate is in line with the industry standard.
d. Explain that her rate is the standard rate for the area market.
557) Which of the following best describes a net listing?
a. The seller and agent agree to split the profit from the proceeds of the sale.
b. The seller reserves the right to sell the property and not have to pay a commission.
c. The seller specifies a desired price for the property and agrees to pay the broker any amount received that’s more than that price.
d. The seller works with many agents, and only the agent who procures the buyer is owed a commission.
558) Seller Jeremiah has no cash on hand, but the buyers have outlined some repairs they want made in order to close on the purchase. Which of the following is his best option if he wants this transaction to close?
a. Do the repairs himself, even if he’s not qualified.
b. Offer a seller credit to cover the cost of the repairs.
c. Reduce the sales price by twice the amount estimated for the repairs.
d. Tell the buyers he can’t make the repairs and hope they’ll agree to buy the house anyway.
559) Which items should sellers put into storage to help de-personalize their home?
a. Expensive artwork
b. Prescription medications
c. Refrigerator magnets and children’s artwork
d. Window coverings
560) Contacting homeowners whose listing contracts have ended without a sale describes the ______ approach to finding listings.
a. Expired listings
b. Farming
c. Owner sales
d. Referral
561) Matt’s sellers have a valuable artwork collection displayed in their home that perfectly showcases various rooms. What advice should Matt provide to his sellers when preparing to sell the home?
a. Install a video camera system to be sure the artwork isn’t stolen.
b. Leave the artwork on display.
c. Note in the contract that the artwork isn’t part of the personal property that will stay with the property.
d. Remove the artwork and replace with suitable, less-expensive pieces as necessary.
562) James, a seller, signed a listing agreement that allowed him to contract with multiple agents but only pay a commission to the agent who located a buyer. This type of listing agreement is called ______.
a. Exclusive agency
b. Exclusive right to sell
c. Open
d. Seller’s choice
563) Ariana’s seller clients have photos of the entire family on display in the grand stairway of their home. Ariana advises her clients to remove the photos. Which step in the preparation phase is Ariana addressing?
a. Accessorize
b. Declutter
c. De-personalize
d. Repair
564) Tiffany just obtained a list of all of the homeowners in an area. She checks the numbers to make sure they’re not on the Do Not Call Registry, then starts making calls to see if they or anyone they know is interested in selling their home. What method is this?
a. Cold calling
b. Farming
c. Owner sales
d. Referral
565) Your seller client pushes back when you share that your commission rate is 7%. He thinks that’s way too much. Which of the following is the best response?
a. “I base my commission on my services. These are the services I will provide for you. Which would you like to forego?”
b. “If you’re already disagreeing with my methods, it’s clear that we’re not a good fit. I’ll be happy to refer you to one of my colleagues.”
c. “With all due respect, I’m the real estate expert. As such, my rate is non-negotiable.”
d. “You’re right. I’ll adjust the commission rate.”
566) Your seller client is very attached to her home and has not agreed with any price ranges you’ve presented. She insists on pricing the home at 15% above the current market, claiming the home has a certain air about it that is priceless (but 15% higher is a start). How should you advise this seller?
a. Advise your client she wait until the market comes up to meet her expectations to sell.
b. Be honest and realistic about expectations, but do as the seller wishes regarding the price.
c. Be kind but firm. Advise the seller that the home’s value is dictated by the market, not her perception.
d. Tell her if she can’t be realistic, she needs to find a new agent because you’re done arguing.
567) Which of the following is a common issue licensees can expect from sellers?
a. Donating the property to charity
b. Haggling over commission
c. Insisting on putting the listing into the MLS personally
d. Tiered bonuses
568) You’re representing a seller. Which of the following is one of your duties?
a. Assisting the seller with hiding defects, such as water intrusion and mold
b. Getting the seller an acceptable price and terms
c. Making sure the seller profits on the sale of the property
d. Purchasing the property in the event that it does not sell
569) Emily received Gerty’s name from a previous client whose home she sold. This is an example of ______.
a. A referral
b. Branching
c. Cold calling
d. Farming
570) Contacting homeowners to determine whether they or anyone they know is interested in selling describes the ______ approach to finding listings.
a. Cold calling
b. Farming
c. Owner sales
d. Referral
571) Contacting prospective clients through previous clients, co-workers, and networks describes the ______ approach to finding listings.
a. Branching
b. Cold calling
c. Farming
d. Referral
572) Which of the following scenarios best describes a net listing?
a. Carmel is selling her condo for $280,000 and is offering 6% commission to the listing broker.
b. Jason is listing his duplex for $400,000 but reserves the right to find his own buyer and not have to pay a listing commission.
c. Maeve wants to get at least $350,000 when she sells her property and tells her listing agent, Stan, that he can keep anything above that amount.
d. Ralph is selling his townhome for $225,000 and is paying a brokerage fee of $25,000.
573) When working with a seller, you signed a listing agreement that ensured you’d receive a commission, provided the property sold during the listing term. What type of listing agreement did you sign?
a. Exclusive agency
b. Exclusive right to collect commission
c. Exclusive right to sell
d. Net listing
574) Tamara has identified a neighborhood where she’ll concentrate her real estate activities. She starts by sending postcards to all residents, then walks door to door to introduce herself. Over time, she sends more communications, participates in neighborhood events, and eventually becomes the “go to” real estate professional for the neighborhood. What approach has she used?
a. Branching
b. Cold calling
c. Farming
d. Owner sales
575) Janice wanted to sell her townhome, and her neighbor was considering buying it. She wanted to put it on the market while she waited to find out if her neighbor was going to buy. In order to receive the best possible representation but avoid paying a commission if her neighbor buys the property, which type of listing agreement would best suit Janice’s needs?
a. Exclusive agency
b. Exclusive right to sell
c. Net
d. Open
576) When using the farming approach to find listings, what factors are important when identifying an area?
a. Average home price, population density, turnover
b. Diversity, affinity, amenities
c. Turnover, affinity, diversity
d. Turnover, density, affordability
577) Choosing a neighborhood and concentrating real estate activities there is an example of the ______ approach to finding listings.
a. Branching
b. Cold calling
c. Farming
d. Owner sales
578) Which of the following is true about net listings?
a. The listing agent is guaranteed at least some commission.
b. They don’t include compensation for the buyer’s agent.
c. They often involve a conflict of interest.
d. They’re legal in all 50 states.
579) Jane is working with her first seller client. She’s excited to begin marketing the property and to hold an open house. Which of the following is something she should do?
a. Limit advertising.
b. Only be present to open and close the house.
c. Schedule the open house for a day and time when the owner can be present.
d. Schedule the open house soon after the property listing hits the market.
580) What’s the best way for a licensee to prevent the potential issue with sellers of believing that a property has sold too quickly or took too long to sell?
a. Advise the seller to file a complaint with the local association of REALTORS® if they’re unhappy with the service received
b. Educate sellers about why a list price has been recommended, and the effect of current market conditions on the length of time a property takes to sell.
c. Explain that real estate is a complicated game with many factors affecting the length of time a property takes to sell.
d. Keep a record of the number of hours spent on marketing each property, and show that to the seller.
581) What’s the best way to explain to sellers why you won’t lower your commission rate?
a. “My broker won’t allow me to lower my rate.”
b. “My fee is based on the services I provide.”
c. “This is the industry standard.”
d. “This is the standard rate for this market.”
582) Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers?
a. Broadcast clause
b. Marketing clause
c. Multiple listing clause
d. Provisionary clause
583) Michael scours the local newspaper, looking for homes for sale without real estate professional representation. This isn’t because he wants to buy the house, but because he wants to represent the seller. What approach is this?
a. Cold calling
b. Expired listings
c. Farming
d. Owner sales
584) Which of the following is true about lockboxes?
a. They must be hidden from plain sight.
b. They must be visible from the sidewalk.
c. They must be visible from the street.
d. They require a seller’s written permission to post.
585) When finding listings, which statement describes the referral approach?
a. Choosing a neighborhood and concentrating real estate activities there
b. Contacting homeowners whose listing contracts has ended without a sale
c. Contacting prospective clients through previous clients, co-workers, networks, etc.
d. Identifying properties being sold by owners and persuading them to list with a licensee
586) Mardee represented condo owner Carol, and they signed an exclusive agency listing agreement. If Carol found her own buyer, would she owe Mardee a commission?
a. No, because Carol is not a real estate licensee.
b. No, because Carol procured the buyer.
c. Yes, because they have an exclusive agency listing agreement.
d. Yes, but she only owes the listing commission.
587) Which of the following describes how a real estate licensee should advise a client to prepare a property for the market?
a. Mask, hide, and paint over
b. Purchase new furniture and artwork
c. Put expensive artwork and figures on display
d. Repair, declutter, and de-personalize
588) De-personalizing a home allows buyers to _______.
a. Identify furniture they want to purchase from the sellers
b. Imagine themselves in the home
c. Move in more quickly
d. Spot the high-value items
589) What strategy can a licensee use when a seller client is presented with reasonable offers, but refuses to budge on price or terms?
a. Advise prospective buyers that their offers won’t be considered unless they meet the seller’s stiff requirements.
b. Help the seller remember the goal of a closed transaction.
c. Stop presenting offers received until the seller agrees to consider negotiating.
d. Threaten to cancel the listing agreement.
590) Why should you know when the seller can vacate the property?
a. If a buyer wants to close before the seller can vacate, the seller may need to rent it back from the buyer.
b. You’ll need to know when you can have the property staged.
c. You’ll want the house empty for showings.
d. You’ll want to schedule the closing during the seller’s occupancy.
591) Martin has a new listing. He wants to post a for sale sign in his seller’s yard. What must he obtain before doing so?
a. A flier box
b. A permit
c. A separate phone number
d. The seller’s written permission
592) Gary is preparing to place a lockbox on the property that his brokerage has recently listed. Which of the following is true?
a. He must get the seller’s permission to place the lockbox.
b. Lockboxes aren’t a good idea.
c. The lockbox can’t remain on the property for longer than 60 days.
d. The lockbox must be visible from the street.
593) Anya, a real estate licensee, asks her sellers why they want to sell their property. Is this an appropriate question?
a. No, because it’s none of her business—she’s there to sell a house, no matter the reason.
b. No, because she is breaching her duty of confidentiality.
c. Yes, because she needs to include this information in the property’s marketing materials.
d. Yes, because she needs to know their motivations to do her job properly.
594) Which of the following factors should be considered when determining an acceptable sales price?
a. Seller’s loan payoff amount
b. What personal property will be left in the property
c. What type of financing the seller will accept from the buyer
d. When the seller can vacate the property
595) Why should you have a conversation about financing for the property with the seller before you sign the listing agreement?
a. Financing information must be documented on the listing agreement.
b. It’s important to understand the financing that sellers will have available when they purchase their next property.
c. Some sellers can’t accept, or won’t qualify to accept, certain types of financing—such as FHA or VA loans—so you should know that up front.
d. You should only worry about financing if you’re a dual agent also representing a buyer.
596) When using the farming approach, turnover is a key factor when identifying a neighborhood. Which statement best describes turnover?
a. An area that is not currently farmed by another licensee
b. An area that the licensee likes
c. An area with a fair amount of listings—not too many, not too few
d. An area with a variety of home styles, sizes, features, price points, amenities, buyers, etc.
597) A buyer has assembled quite a list of repairs he’d like the seller to make. 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
598) In a hot market, when all other sellers are listing at or above market rate, what pricing strategy will likely induce a bidding war?
a. Pricing far above market value
b. Pricing in line with comparable properties
c. Pricing just above market value
d. Pricing just below market value
599) Which of the following is an example of an escalator offer?
a. Buyer offers $650,000. Seller accepts.
b. Buyer offers $650,000. Seller counters at $675,000. Buyer accepts.
c. Buyer offers $650,000. Seller counters at $675,000. Buyer counters back at $665,000.
d. Buyer offers $650,000 with clause that buyer will beat all competing offers by $3,000 up to $675,000.
600) Dan just listed a property two days ago and already has offers pouring in. It’s a hot market and properties are moving quickly. Which of these options is the best strategy?
a. Have buyers submit their “highest and best” offers and then help his seller decide which offer is most appealing.
b. Leave it on the market for a few more days to allow time for even more offers to come in.
c. Reject all offers and put the home back on the market for a higher price.
d. Submit only prime offers to his seller client.
601) Which of the following is a legitimate reason to counter an offer?
a. A $50 curtain
b. A cracked tile
c. A free-standing fire pit
d. Price
602) What happens to an initial offer from the buyer after a seller counters?
a. It becomes the back-up offer.
b. It’s accepted by the seller until the buyer accepts the counter.
c. It’s no longer in play.
d. Sellers cannot counter a buyer’s initial offer.
603) Norm has a listing. He can’t post it to the MLS and he can’t advertise it to the broad public. He can talk to colleagues at his brokerage firm about it, but it’s going to take a lot of work to sell this property without having all of his marketing tools at his disposal. What type of listing does he likely have?
a. Net listing
b. Office exclusive
c. Open listing
d. Secret listing
604) In what type of market is pricing a home below market value an especially good strategy, as buyers are scarce and unlikely to consider at or above-market homes?
a. Cold market
b. Hot market
c. Neutral market
d. Warm market
605) A buyer, hoping to beat out all other offers, included a clause in the offer that reads, “Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance.” What type of offer is this?
a. Bad
b. Dynamic
c. Elevator
d. Escalator
606) A listing that’s not posted on the MLS and is kept off-market is commonly known as a(n) ______.
a. Exclusive agency listing
b. Open listing
c. Pocket listing
d. Secret listing
607) In what type of market are buyers typically in a power position?
a. Cold
b. Dynamic
c. Hot
d. Static
608) How do agents commonly market an office exclusive?
a. Inform colleagues at their firm about the listing
b. Market the listing on the MLS
c. Place ads in local newspapers
d. Place advertisements on social media
609) What is a pocket listing?
a. A listing in which the buyer and seller are represented by the same real estate licensee
b. A listing only advertised on the MLS
c. A listing widely advertised through the MLS, social media, and other means
d. An off-market listing, not posted on the MLS
610) Which of the following are common with cold markets?
a. Bidding wars
b. Multiple offers
c. No or low offers
d. Offer terms unfavorable to buyers
611) A buyer is reluctant to ask for repairs and risks the seller accepting a different offer. In what type of market is this concern most valid?
a. Cold
b. Dynamic
c. Hot
d. Static
612) Seller repairs, lengthy closing dates, and seller-paid closing costs are terms buyers may ask for in a ____________ market.
a. Cold
b. Dynamic
c. Hot
d. Static
613) Whoa—this market is hot, hot, HOT! You’ve had five offers come in since you listed your seller client’s home yesterday. Of the options listed, which is the best strategy?
a. Accept a middle-of-the-road offer, but on the condition that no home inspection repairs will be performed.
b. Have all buyers submit their “highest and best” offer, then help the seller decide which offer is most appealing.
c. Leave it on the market for another three days to allow time for even more offers to come in.
d. Reject the offers and put the home back on the market for the amount of the highest offer.
614) If a seller asks a buyer to waive the inspection contingency, how could the transaction process transpire and still protect the buyer?
a. Buyer has inspection, buyer makes offer, seller accepts offer
b. Buyer makes offer, inspection performed, seller accepts offer
c. Buyer makes offer, seller accepts offer, closing occurs, inspection performed
d. Buyer makes offer, seller accepts offer, inspection performed
615) In a neutral market, what pricing strategy may generate interest in the property, possibly prompting multiple offers?
a. Pricing above market value
b. Pricing at market value
c. Pricing below market value
d. Pricing in line with comparable properties
616) Waiving inspection, waiving appraisal, and offering the seller possession after closing are all terms buyers may offer a seller to make their offer more appealing in a _________ market.
a. Cold
b. Dynamic
c. Hot
d. Static
617) Which of these offers would be the most appealing to a seller?
a. A full-price offer waiving inspection, conventional financing with 20% down, closing in 45 days
b. An all-cash offer $15,000 below list price and closing in two weeks
c. An offer $10,000 over list price, contingent upon appraisal and inspection, conventional financing with 20% down, closing in 30 days
d. The best offer is the one a seller determines is best for his unique needs and motivations.
618) What’s an effective pricing strategy when listing a home in a cold market?
a. Price the home above market value.
b. Price the home above market value and decrease the price after a month if it doesn’t sell.
c. Price the home at exact market value.
d. Price the home below market value.
619) Which party tends to benefit in a hot market?
a. Buyer
b. Client
c. Customer
d. Seller
620) Which party tends to benefit in a cold market?
a. Buyer
b. Client
c. Customer
d. Seller
621) Kurt is pricing a home for a client in a cold market. It’s a great property, and he knows it would sell for above market value if the market were better. All things considered, what’s the best pricing strategy for the home?
a. Price the home above market value.
b. Price the home above market value and decrease the price after a month if it doesn’t sell.
c. Price the home at its exact market value.
d. Price the home below market value.
622) In what type of market are sellers typically in a power position?
a. Cold
b. Dynamic
c. Hot
d. Static
623) In a hot market, what pricing strategy may incite bidding wars?
a. Pricing at or just below market value
b. Pricing far above market value
c. Pricing in line with comparable properties
d. Pricing just above market value
624) Which of the following is a danger of office exclusives?
a. Higher commission rates
b. Increased market exposure
c. Lower listing prices
d. Reduced market exposure
625) What should an agent do if a seller client requests an office exclusive?
a. Advertise the listing on the MLS
b. Fully inform the seller about the dangers of reduced market exposure
c. Negotiate a higher commission, as there is a greater burden on the agent to find a buyer
d. Prepare advertising for social media and local newspapers
626) When a seller counters the buyers’ original offer, what options do buyers have?
a. They can accept, counter, or reject the offer.
b. They can accept the offer and counter back.
c. They can only accept or reject the counter-offer.
d. They can only accept the counter-offer.
627) Which of these standard forms is used to document an agreement between a seller and a listing broker to cease marketing a property?
a. Cancellation of Listing
b. Modification of Terms
c. Seller Instruction to Exclude from the MLS
d. Termination of Buyer Agency
628) Which of the following requires that contracts transferring ownership of real property be in writing to be enforceable?
a. Code of ethics
b. Fair Housing Act
c. Statute of frauds
d. Statute of limitations
629) Which of these statements accurately describes the purpose of a Buyer Non-agency Agreement?
a. Establishes a non-exclusive listing agreement between a seller and a broker.
b. Establishes an open listing agreement between a seller and a broker.
c. Protects the listing broker from implied agency by notifying the buyer that the listing broker is not the buyer’s agent.
d. Protects the listing broker from implied agency by notifying the seller that the listing broker is not the seller’s agent.
630) If two parties enter into a contractual agreement with each other to perform an illegal act, which of the following statements is true of the contract?
a. It is voidable, because Jesse is not mentally competent to sign a contract.
b. It is voidable, because Jesse probably signed it under duress.
c. It is voidable, because the consideration, as a percentage rather than a dollar amount, is not clearly stated.
d. It is void because it is not for a lawful purpose.
631) Consent is not present when _______.
a. The contract is for an unlawful purpose
b. The contract is not in writing
c. The contract is signed by a minor
d. The contract is signed under duress or undue influence
632) If a minor enters into a contract with an adult, which of the following is true?
a. The adult may legally hold the minor to the contract, but the minor cannot legally hold the adult to the contract.
b. The contract is valid, and both the minor and the adult may legally hold the other party to the contract.
c. The contract is void, and neither the minor nor the adult may legally hold the other party to the contract.
d. The minor may legally hold the adult to the contract, but the adult cannot legally hold the minor to the contract.
633) Which of the following individuals would be a competent party to a contract?
a. Byron, a 17-year-old MENSA member
b. Claudia, a 37-year-old in-patient receiving treatment for schizophrenia
c. Graciella, a 28-year-old unemployed parolee
d. Norman, a 40-year-old heroin addict
634) Which of the following is an essential element of a valid real estate contract?
a. Duress
b. Legal purpose
c. Misrepresentation
d. Mutual mistake

635) Which of these descriptions matches the purpose of a Modification of Terms form?
a. Used to modify the terms of a listing agreement, such as price and expiration date
b. Used to modify the terms of a sales offer, such as price and contingencies
c. Used to modify the terms of broker compensation for a purchase agreement
d. Used to prepare a counter-offer to the terms in a sales contract
636) Which element of a valid contract is established by getting the signatures of all parties?
a. Competent parties
b. Consideration
c. Lawful objective
d. Offer and acceptance
637)
638) What does the REO stand for in “C.A.R. REO advisory listing form”?
a. Ransom E. Olds
b. Real estate owned
c. REO Speedwagon
d. Rome State Airport
639) Amy is working with seller clients who have suggested they would like the property to go to another African-American family. Which section of the listing agreement would help Amy convey why she cannot market the property this way?
a. Anti-discrimination disclosure
b. Equal housing opportunity
c. Fair housing rules
d. Illegal practices
640) Who may unilaterally cancel a listing agreement?
a. No one
b. The broker
c. The listing agent
d. The seller
641) You have a seller client who hasn’t had any offers and wants to extend the listing period. Which C.A.R. form would come in handy now?
a. Additional Agent Acknowledgement (AAA)
b. Expiration Date Extension (EDE)
c. Modification of Terms (MT)
d. Notice to Buyer to Perform (NBP)
642) Carter, a licensee, never posts his clients’ property on the MLS. This gives him the opportunity to find the buyer himself, potentially doubling his commission. What disadvantage might apply to Carter’s clients?
a. Their properties may be over-exposed.
b. Their properties may not sell for top dollar.
c. They may receive too many offers if Carters’ network is too wide.
d. They will pay more commission overall.
643) What does the successor and/or assigns section of the Residential Listing Agreement state?
a. It prohibits the licensee from assigning the listing agreement to the licensee’s broker.
b. It prohibits the seller from assigning the listing agreement to another licensee.
c. It prohibits the seller from assigning the listing agreement to anyone else.
d. It states that the listing agreement is binding on the seller’s heirs.
644) In the listing agreement, how is the responsibility for marketing and showing the property described?
a. Both seller and broker are responsible.
b. The listing agreement does not account for responsibility in this area.
c. The responsibility lies solely with the listing agent and brokerage.
d. The seller is solely responsible.
645) Caryn is a listing agent for Bret and has just provided him with an offer on his property. Bret informs Caryn that the home is in foreclosure. What do we know about this situation?
a. Bret is within his rights to withhold this information.
b. Bret should have disclosed this to Caryn per the listing agreement.
c. Caryn cannot disclose this situation to the buyer.
d. This situation is not covered by the listing agreement.
646) Andy has decided to drop the price on his townhome. His listing agreement states the list price as $650,000. How can he account for the price drop?
a. Ask his agent to change it on the MLS
b. Complete a Modification of Terms form before changing it on the MLS
c. He cannot change it, but may accept a lower offer
d. Once the listing term expires, he may relist it at the new price
647)
648) What does the SSIA stand for in C.A.R. Form SSIA?
a. Shoe Service Institute of America
b. Short sale ill advised
c. Short sale information and advisory
d. Short sale inspection advisory
649) Which of these statements best describes one of the purposes of including a section about the entire agreement in the Residential Listing Agreement?
a. Both parties are required to read the entire agreement.
b. Each term must be valid, or the entire agreement will be voided.
c. Every term in the listing agreement must be initialed to be valid.
d. Everything the parties are contracting to is in the listing agreement.
650) Which of these is a likely reason for a listing agent to use a Modification of Terms form?
a. A buyer has made an offer below list price and the seller is willing to take that offer.
b. The seller wants to move up the expiration date because the property sold right away.
c. The seller wants to raise the list price after receiving no offers.
d. The seller wishes to lower the list price to encourage more offers.
651) One of Amy’s clients has a property that received eight offers before the deadline. Assuming Amy received no special instructions on presenting offers, how many of the offers must she present to the seller?
a. As many of the offers that were at list price or higher
b. Eight
c. None
d. The top three
652) Which of the following situations entitles Gary to commission with a 30-day protection clause?
a. Buyers viewed the property 15 days after the listing expired and made an offer that was accepted.
b. Buyers who viewed the property while it was listed with Gary made an accepted offer 10 days after the listing expired.
c. Gary told his overseas cousin about the property, and his cousin returned to the U.S. 35 days after the listing expired to make an offer.
d. The seller told a group of colleagues about the house 20 days after the listing expired, and one eventually came to see the house, which led to a contract.
653) Jeremy signed a listing agreement with a broker, Ralph. Jeremy was then run over by a cement truck and died. What happens to his agreement with Ralph?
a. It becomes void.
b. It continues and is binding on Jeremy’s heirs.
c. It gets assigned to Jeremy’s attorney.
d. It is terminated.
654)
655) Which of these statements about seller initials on listing agreements is true?
a. Seller initials must be notarized to be enforceable.
b. Sellers only need to initial those pages that contain handwritten insertions.
c. Sellers should initial each page to indicate their understanding of the terms on that page.
d. Sellers should not initial listing agreements; that is the role of the broker.
656) Which of these statements accurately describes what a seller is agreeing to in the seller representations portion of a listing agreement?
a. Sellers must disclose all material facts about the property.
b. Sellers must disclose financial issues that may affect the sale, such as delinquency in payments, bankruptcy, or receipt of a notice of default.
c. Sellers must own the property with a clear title.
d. Sellers will represent the brokerage and need to behave with professionalism.
657) Marty, a licensee, has a listing agreement with Becca, the seller. Whenever anyone tries to show Becca’s property, Becca says it’s not convenient. What is true about this situation?
a. Becca is in violation of the listing agreement.
b. Becca is within her rights, but isn’t being very fair to Marty.
c. Marty must terminate the listing agreement.
d. Marty will have to procure the buyer.
658) Which of the following distressed property types is covered by the Residential Listing Agreement?
a. Chapter 114
b. REO
c. Short sale
d. Short sale and REO
659) Why is it so necessary to obtain signatures on a listing agreement?
a. Any real estate contract must be in writing to be enforceable.
b. Every blank needs to be filled in on a form contract.
c. Signatures are required to list the property on the MLS.
d. Your broker may be fined for approving a listing agreement that is not signed.
660) Which of the following is a true statement regarding a licensee’s role in preparing a real estate contract?
a. A licensee has legal authority to draft any real estate contract or addendum.
b. A licensee may not alter an existing form.
c. A licensee must use standardized language when writing an addendum.
d. A licensee’s role is limited to filling in the blanks.
661) Amy is explaining the broker and seller’s duties section of a listing agreement to a new client. Which of these would be an accurate statement to make?
a. The extent of the broker’s duties depends on the type of listing agreement.
b. The seller agrees to set a list price that’s within the range recommended by the broker.
c. The seller and broker will take turns showing the property to potential buyers.
d. The seller and the broker agree to exercise reasonable effort and cooperation in the sale of the property.
662)
663) Which of these agreements needs to be signed before all of the others?
a. Agency disclosure
b. Keysafe/lockbox authorization
c. Listing agreement
d. Seller’s instructions to the broker
664) Which of the following statements accurately describes the information needed to complete the property to be acquired section of a buyer representation agreement?
a. The characteristics of the property the buyers would like to purchase, such as price range.
b. The legal description for the property the buyer has made an offer to purchase.
c. The loan amount for which the buyer is pre-approved.
d. The neighborhoods the buyer would like to exclude from the search based on ethnic make-up.
665) A buyer representation agreement that states the buyer will only work with one agent is ______ buyer representation agreement.
a. An enforceable
b. An exclusive
c. An illegal
d. A non-exclusive
666) One of the buyer representation forms published by C.A.R. is the BRNN. What do the two Ns stand for?
a. Non-exclusive, non-binding
b. Non-exclusive, not for compensation
c. Non-inclusive, not for compensation
d. Not for pay, not for fools
667) One of the buyer representation agreements published by C.A.R. is the BRNE. What does the ‘NE’ stand for?
a. Nebraska
b. No errors
c. Non-exclusive
d. Non-exempt
668) Which type of a buyer representation agreement allows a buyer to enter into agreements with multiple brokers and pay only the broker who found the property that was ultimately purchased by the buyer?
a. Exclusive listing agreement
b. Non-exclusive buyer representation agreement
c. Non-exclusive, not for compensation buyer representation agreement
d. Open listing agreement
669) The two advisories listed in the other terms and conditions section of a C.A.R. buyer representation agreement are the buyer’s inspection advisory and the _______________________.
a. Market condition advisory
b. REO advisory
c. Statewide broker’s advisory
d. Statewide buyer and seller advisory
670) Imagine you’re preparing an exclusive buyer representation agreement with a client and need to explain the options available for agency relationship. Which of these is accurate?
a. Because our brokerage lists properties as well as assists buyers, dual agency is required.
b. If we find a property you like that is listed by my broker, I may need to act as a dual agent.
c. Under an exclusive agency agreement, I will never represent anyone but you.
d. With the exclusive agency agreement, you are my exclusive client, but I may not be your exclusive broker.
671) When explaining the buyer representation agreement to a client, you will mention which advisories found in the other terms and conditions section?
a. The agency advisory and the statewide buyer and seller advisory
b. The agency disclosure and buyer’s inspection advisory
c. The buyer’s inspection advisory and the keysafe/lockbox advisory
d. The buyer’s inspection advisory and the statewide buyer and seller advisory
672) Which of these real estate contracts would not include a section on broker compensation?
a. Exclusive listing agreement
b. Non-exclusive buyer representation agreement
c. Non-exclusive, not for compensation buyer representation agreement
d. Open listing agreement
673) Which type of buyer representation agreement published by C.A.R. does not include a broker compensation section?
a. BRE
b. BRNBC
c. BRNE
d. BRNN
674) Which of the following is true regarding the BRNN?
a. It informs the consumer of the benefits of dual agency.
b. It requires the buyer to compensate the licensee in the event the licensee procures a property for the buyer.
c. It safeguards the licensee from claims of undisclosed dual agency.
d. It safeguards the licensee’s compensation.
675) What makes a non-exclusive buyer representation agreement different from an exclusive buyer representation agreement?
a. An exclusive agreement is used when the buyer has already made an offer on a single property.
b. A non-exclusive agreement allows the broker to present a listing to multiple buyers.
c. A non-exclusive agreement allows the buyer to work with other brokers, any one of whom may end up representing the buyer in the transaction.
d. A non-exclusive agreement is used when the buyer is willing to consider the purchase of multiple properties.
676) When working with flippers, it is recommended you have systems in place that ______.
a. Alert you when your client is talking to another agent
b. Allow you to make offers quickly
c. Make temporary, surface improvements to properties so they show better
d. Prevent others from viewing properties your client is interested in
677) What link did researchers find between education and residential stability?
a. Children are less likely to be held accountable for their actions
b. Children are more likely to go on to earn a PhD
c. Children are more likely to have access to excellent schools
d. Children are more likely to stay in school and perform well
678) Real estate is a ______, unlike stocks or bonds.
a. Buy-and-hold investment
b. Novice-friendly investment
c. Tangible asset class
d. Tax-free holding
679) Involvement in community organizations is most strongly tied to:
a. High economic level
b. Home ownership
c. Long-term residents
d. Low economic level
680) What factor is a primary concern to the fix-and-flip investor?
a. Finding quality renters
b. Generating long-term positive cash flow
c. Obtaining top dollar when selling
d. Selling quickly for fair market value
681) What will be of the highest concern to a fix-and-flip investor once the property is rehabbed?
a. Getting publicity for the remodel
b. Holding multiple open houses to meet new prospective buyers
c. Holding out for the highest sales price
d. Making a profit quickly to start a new project
682) If you have a client who wants stability, security, and comfort in a real estate purchase, what types of property will you target in your search?
a. Fixer-upper
b. Income-producing
c. Retail/commercial
d. Single-family residential
683) The U.S. Department of Housing and Urban Development cites discrimination and ______ as two barriers to a stronger level of minority homeownership.
a. A cultural bias toward renting
b. An insufficient supply of affordable housing
c. Lack of interest in owning a home
d. Small popul
684) Investor Maisy found a great deal on a property. Instead of closing on it herself, Maisy is going to “assign” it to another investor for a fee. What type of investor is Maisy?
a. Buy and hold
b. Con artist
c. Fix and flipper
d. Wholesaler
685) One reason that minority groups tend to be homeowners less frequently than white Americans is due to a ______.
a. Lower birth rate
b. Lower interest in homeownership
c. Older median age
d. Younger median age
686) What type of investor frequently “assigns” deals to other investors, rather than buying properties himself?
a. Commercial investor
b. Fix and flipper
c. Foreign investor
d. Wholesaler
687) Which of the following is a top priority for a buy-and-hold investor?
a. Positive cash flow
b. Quick turnaround
c. Steep discounts on property
d. Very motivated sellers
688) Which type of investor will find a property in disrepair, make the required repairs, then sell the property for a profit?
a. Appreciator
b. Buy and hold
c. Flipper
d. Wholesaler
689) Your client explains that she wants to purchase a property using funds from the refinance of her current property. What type of client is this?
a. Investor
b. Risk-averse
c. Trade-down buyer
d. Trade-up buyer
690) Low-income and minority buyers face a number of obstacles to homeownership, including:
a. An insufficient supply of affordable housing
b. Competition from foreign investors for affordable housing
c. Immigration status
d. Long-term rental leases
691) Lana is a client who is seeking to purchase some investment property. What does this tell you about her transaction?
a. Security and comfort are important elements of her purchase.
b. She’ll most likely use a conventional or government-backed mortgage.
c. She’ll want cash flow or a high rate of return.
d. She’s looking for a property that will appeal to her emotions.
692) Obtaining a home loan is not the simplest process. Immigrants from some countries may find it particularly difficult because ______.
a. Credit tends to be easier and simpler to obtain in their home countries
b. Lack of English language skills make the homebuying process hard to follow
c. The concept of a mortgage does not exist in their country
d. Their savings can be tied up in foreign investments
693) Which type of investor finds a deeply discounted property, closes on the property transaction, and then immediately sells it to another investor?
a. Buy-and-hold investor
b. Buy-and-sell investor
c. Fix-and-flip investor
d. Wholesaler
694) You’ve helped an investor client with several purchases over the last few years. You’re beginning to wonder if you’ll actually get the chance to list one of her properties, but she is happy to rent them out. What type of investor is she?
a. She is likely a buy-and-hold investor.
b. She is likely a fix-and-flipper.
c. She is likely a monopolizer.
d. She is likely a wholesaler investor.
695) Home owners tend to be ______________ than their renting counterparts.
a. Healthier
b. Less politically active
c. More politically active
d. More religious
696) Aside from cash flow, appreciation, and earning passive income, what is another reason someone may want to legally invest in real estate?
a. For depreciation
b. For liquidity
c. To hedge against inflation
d. To launder money
697) Communities with a high rate of home ownership and long-term renters are likely to ______.
a. Have a higher crime rate, except for violent crimes and homicide
b. Have a higher crime rate, including violent crimes and homicide
c. Have a lower crime rate, except for violent crimes and homicide
d. Have a lower crime rate, including violent crimes and homicide
698) Which type of investor would be interested in a “fixer” property?
a. Buy and hold
b. Deep pocket
c. Flipper
d. Wholesaler
699) Blain is a wholesale investor. Which of the following strategies will interest him most?
a. Getting top dollar for the property, even if it takes several weeks
b. Improving the property and then reselling immediately at market price
c. Marketing the property to a specific investor type
d. Reselling the property without putting any time, money, or energy into cleaning it up
700) The buy-and-hold investor enjoys appreciation potential, tax write-offs, and ______.
a. Current income
b. Flipping
c. Foreign market bumps
d. Quick profit
701) How do current homeownership rates compare to the rates in 2004?
a. Declined
b. Plummeted to less than 60% of the 2004 rate
c. Slightly higher
d. Stayed flat
702) Statistically, black and Hispanic applicants for conventional home loans are more likely to be denied than white applicants because ______.
a. They apply for a larger loan
b. They are more likely to make mistakes on the credit application
c. They do not speak English as well
d. They tend to make significantly less money per year
703) What are two ways in which an investor’s approach to strategy might be categorized?
a. High dollar and low dollar
b. Primary and secondary
c. Property type and investment strategy
d. Successful and unsuccessful
704) What will a fix-and-flip investor want to do after a renovation?
a. Buy additional properties for deep discounts and sell them at wholesale.
b. Get top dollar for the property, even if it takes several months.
c. Market the property to a specific investor type.
d. Resell immediately at market price.
705) Investors seek to __________ funds to gain maximum return from their investment.
a. Leverage borrowed
b. Leverage saved
c. Reinvest
d. Use tax-exempt
706) What makes real estate an appealing investment for some people?
a. Ability to control aspects of the investment
b. Extremely low risk
c. No capital requirements for investment
d. Quick return
707) What is a major advantage of real estate investment over other types of investment?
a. Ability to leverage
b. Aesthetics
c. Availability
d. Familiarity
708) Which type of investor markets to renters rather than buyers?
a. Buy-and-hold
b. Deep pocket
c. Fix-and-flip
d. Wholesale
709) What is the purchase agreement phrase that wholesalers rely on for their investment strategy?
a. “Ad valorem”
b. “Deal or no deal”
c. “Or assigns”
d. “Quit claim”
710) Real estate investing may be done individually, in partnerships, or through what other means?
a. Corporations
b. Credit reports
c. Credit unions
d. E&O insurance
711) Which of the following is a benefit of home ownership, according to research studies?
a. Community stability
b. Fully integrated neighborhoods
c. Greater amounts of open space
d. Increased economic opportunity
712) What’s considered a critical source of home financing in minority communities?
a. Government-backed loans
b. Kickstarter campaigns
c. Private loans
d. Savings
713) After the renovation, what will a fix-and-flip investor want to do next?
a. Buy additional properties for deep discounts and sell them at wholesale.
b. Get top dollar for the property, even if it takes several months.
c. Market the property to a specific investor type.
d. Resell immediately at market price.
714) Your client explains that she wants to purchase a property using funds from the refinance of her current property. What type of client is this?
a. Investor
b. Risk-averse
c. Trade-down buyer
d. Trade-up buyer
715) An investor you know rarely sells any of his investment properties. Instead, he maintains the property while enjoying property appreciation and rental income. What’s this strategy known as?
a. Buy and hold
b. Fix and flip
c. Profit scheme
d. Wholesale
716) The IRS requires foreign property owners to withhold _____ of the gross purchase price when they sell real property they own in the U.S.
a. 12.5%
b. 15%
c. 22%
d. 5%
717) What advantage does the 1031 tax-deferred exchange offer?
a. It allows investors to avoid ever paying taxes from gains realized on their investments.
b. It allows investors to defer capital gains taxes when selling a property, provided they buy another property.
c. It offsets capital gains for homeowners who have lived in the home for at least two years.
d. It provides a tax shelter for non-real estate investments.
718) Rob purchased a property five years ago for $200,000. He put down $50,000 and financed $150,000. Today, the property is valued at $250,000. What is this an example of?
a. Depreciation
b. Equity buildup
c. Pyramiding
d. Rate of return
719) John wants to do a 1031 tax exchange with a property he just sold. How many calendar days does he have to identify a new property for the exchange?
a. 180
b. 30
c. 45
d. 60
720) What is an agent’s role in locating properties for an investor?
a. It is up to the client to find the properties; the agent just gets involved once the property has been identified
b. Leave no stone unturned
c. Search the MLS daily
d. Wait for instructions from the client and act accordingly
721) The use of one investment to finance another is called _______.
a. Blockbusting
b. Churning
c. Equity build-up
d. Pyramiding
722) “Complete remodel that’s move-in ready!” is a phrase you’d most likely use when marketing a property for a ______ investor.
a. Buy-and-hold
b. Deep pocket
c. Fix-and-flip
d. Wholesale
723) Who is the withholding agent under Foreign Investment in Real Property Tax Act?
a. The buyer
b. The buyer’s lender
c. The seller
d. The seller’s real estate broker
724) Which of these is a recommended source for a real estate professional to use when looking for opportunities for an investor client?
a. Construction trade associations
b. Home inspection trade associations
c. Personal injury attorneys
d. Sheriff’s sales
725)
726) What is the capital gains exclusion amount?
a. $125,000 for single taxpayers, $250,000 for married couples filing jointly
b. $250,000 for single taxpayers, $500,000 for married couples filing jointly
c. $25,000 for single taxpayers, $50,000 for married couples filing jointly
d. $50,000 for single taxpayers, $100,000 for married couples filing jointly
727) Which of these is a recommended place for a real estate professional to search for properties when working with an investor client?
a. Door-to-door in low-income neighborhoods
b. Handyman companies
c. Home decorator conventions
d. “Subject to court approval” listings in the MLS
728) After the renovation, what will a fix-and-flip investor want to do next?
a. Buy additional properties for deep discounts and sell them at wholesale.
b. Get top dollar for the property, even if it takes several months.
c. Market the property to a specific investor type.
d. Resell immediately at market price.
729) Why might an investor offer to purchase a property as-is, waiving the inspection and the appraisal as part of their negotiating strategy?
a. Naivety
b. The investor intends to live there
c. The property is in poor condition
d. To soften the blow of a low-ball offer
730) Your client is making an offer on a property, but the offer is substantially lower than asking price. The seller is a family with four small children. What might you do to help increase the chances of having the low offer accepted?
a. Allow the family to remain in the home rent-free for a month.
b. Compliment the children a lot to the parents.
c. Offer to act as a buyer agent for the family.
d. Offer to babysit so the parents can take an evening off.
731) Why would you ask investors about their experience?
a. As an icebreaker for more serious questions
b. To decide if they really need your help or not
c. To get a feel for how successful they may be at investing
d. To see if you will learn anything from them
732) Olivia purchased a property five years ago for $200,000. She put down $50,000 and financed $150,000. Today, the property is valued at $250,000. She’d like to purchase another property, so she refinanced her current property and used the equity to purchase a new property. Of what is this an example?
a. Depreciation
b. Equity build-up
c. Pyramiding
d. Rate of return
733) Why would you ask an investor how many offers she plans to submit?
a. To find out how much money she has.
b. To find out if you will be asked to write a few, dozens, or hundreds of offers.
c. To help the investor clarify her goals.
d. To impress her with your business acumen.
734) How should you tailor your marketing strategies for investment properties?
a. By property type and investment type
b. By visibility of property
c. On commission to be realized
d. On sales price
735) You’ve just met a potential new investor client. You ask about investment goals, partnerships, and service requirements. Why?
a. To build rapport
b. To demonstrate your expertise
c. To let the investor know you want business
d. To qualify the investor
736) Blain is a wholesale investor. Which of the following strategies will interest him most?
a. Getting top dollar for the property, even if it takes several weeks
b. Improving the property and then reselling immediately at market price
c. Marketing the property to a specific investor type
d. Reselling the property without putting any time, money, or energy into cleaning it up
737) What’s the name of the tax program that requires a withholding of a portion of the gross purchase price when foreign owners of real estate in the U.S. sell that property?
a. Foreign Investment in Real Estate Property Tax Act (FIRPTA)
b. Foreign Investor Real Estate Investment Tax (FIRE-IT)
c. Foreign Real Estate Tax Withholding Act (FRETWA)
d. Tax Withholding for Foreign Holding Act (TWFHA)
738) Why would a licensee working with an investor want to foster a relationship with a title company?
a. To get leads on available properties
b. To get referrals to other investors
c. To get the client better deals on settlement costs
d. To get the client better deals on title insurance
739) Your investor client has made a low offer on a property, but so far there’s been no response. She doesn’t want to offer on another property yet because she doesn’t have enough cash on hand to purchase two properties at the same time. What’s the best way to avoid this situation in the future?
a. Ask your client to offer something closer to the list price.
b. Avoid getting too hopeful about each offer.
c. Explain to sellers that they can always rent back from the buyer.
d. Set an expiration date for the offer.
740) Why might a licensee working with an investor attend tax, foreclosure and builder auctions?
a. For the free lunches
b. To get leads on properties
c. To get referrals
d. To meet other licensees
741) Which type of investor would be interested in a “fixer” property?
a. Buy and hold
b. Deep pocket
c. Flipper
d. Wholesaler
742) Why would you ask an investor, “Who’s on your team?”
a. To determine if the investor has a support team prepared and is ready to buy
b. To determine if there will be a RESPA violation if you work with this person
c. To see if the investor knows anyone you know
d. To see if you and the investor support the same sports team
743) Agent Jim is trying to determine the type of services his new investor client may want from him. Which of the following questions would help Jim get a big picture of the types of services his client is going to need?
a. “Have you purchased residential or commercial properties?”
b. “Have you worked with a real estate agent before?”
c. “What’s your end goal?”
d. “Who’s on your team?”
744) The increase a property’s value beyond what the investor originally invested as a down payment is called _______.
a. Equity buildup
b. Pyramiding
c. Rate of return
d. Satisfaction of mortgage
745) How might you convince a seller to accept your buyer client’s low offer?
a. Make veiled threats.
b. Pay cash.
c. Play hardball.
d. Spend time pointing out the property’s flaws to the seller.
746) To whom would a 1031 tax exchange usually appeal?
a. Investors
b. Retailers
c. Traditional homebuyers
d. Wholesalers
747) Which of the following is a good source for leads on discounted investment properties?
a. Criminal attorneys
b. Divorce attorneys
c. Game wardens
d. Home inspectors
748) Which of the following is a recommended negotiation strategy with sellers when you’re making a low offer on behalf of a client?
a. Asking the seller to make all necessary repairs
b. Offering to close quickly
c. Playing hardball with the seller
d. Telling the seller that your buyer has big plans for the property
749) When marketing a commercial space to investors, what information will they likely be most interested in?
a. Cash flow analysis and projections
b. Estimate for rehabbing the property
c. Recent upgrades to the structure
d. Whether they can sell immediately
750) Shania is looking for opportunities to assist her investor client. She looks at FSBO sites on the Internet, checks her feed for foreclosures and REO properties, and calls a colleague who specializes in bankruptcy sales. Who else could she connect with to find suitable opportunities for her client?
a. Criminal attorneys
b. Home decorators
c. House painters
d. Probate attorneys
751) Which five countries had the highest percentage of buyers in 2020-2021?
a. Canada, Mexico, China, India, and the United Kingdom
b. France, Germany, Spain, Switzerland, and Sweden
c. Pakistan, Belgium, Cambodia, Poland, and Korea
d. Russia, Japan, South Africa, Iran, and Syria
752) Morgan is a single taxpayer and real estate investor. She buys homes for cheap, fixes them up while living in them, and sells them for a profit. How much can she exclude if she realizes a gain from the sale of her current property (assuming she meets all the criteria to exclude the gain)?
a. $25,000
b. $250,000
c. $50,000
d. $500,000
753) Which of the following would make the “Choose Your Neighbor” flyer an allowable strategy for finding prospective buyers?
a. As part of a comprehensive marketing strategy that doesn’t limit or restrict potential buyers
b. For property located in a gated community
c. For rural properties greater than 20 acres
d. With seller consent
754) Ana lives in a condo complex in which her children are not allowed to play outside after dark, with or without their parents. According to the Fair Employment and Housing Act (FEHA), which type of discrimination is this?
a. This is considered discrimination based on familial status.
b. This is considered discrimination based on national origin.
c. This is considered discrimination based on racial status.
d. This is not discrimination, but is a rule that owners and tenants must obey.
755) Which of the following is an example of discrimination under the Fair Employment and Housing Act (FEHA)?
a. A landlord refuses to rent to a couple that have been on the waiting list for four months, because when they were called and given notice of their approval, the tenants refused to pay the security deposit.
b. A landlord refuses to rent to a tenant who has poor credit and unstable employment history.
c. An owner refuses to sell a house to an unmarried couple on the basis of his religious beliefs that having a sexual relationship outside of marriage is sinful.
d. An owner refuses to sell a house to a same-sex couple that offered less than the asking price.
756) Are immigrants to the United States covered under federal fair housing laws?
a. No, never
b. Yes, if they have a green card
c. Yes, if they have a work or student visa
d. Yes, regardless of immigration or resident status
757) What makes a “Choose Your Neighbor” marketing letter potentially discriminatory?
a. It limits the availability of the property for sale to those who are “pre-approved” by neighbors.
b. It prevents illiterate neighbors from participating in selection of buyers.
c. The letters don’t allow neighbors to agree on the actual buyer.
d. There’s no requirement for the number of neighbors who receive the letter.
758) Based on Article 10 in the NAR Code of Ethics, the NAR appears to take what stand on discriminatory practices by its members?
a. Article 10 does not address discrimination.
b. Discrimination is not prohibited, but it is not recommended.
c. Members must not discriminate based on the federally protected classes and several others.
d. Members must not discriminate based on the federally protected classes only.
759) When real estate licensee Brian discovered that real estate licensee Arnold was using a “Choose Your Neighbor” letter to market a property without also listing the property in the MLS, in the local paper, or even putting a for sale sign in the yard, what charge could he bring against Arnold to the National Association of REALTORS®?
a. A charge of agreeing to discriminate by limiting access to the property
b. A charge of misrepresenting the property for sale
c. A charge of not fulfilling his fiduciary duties to his client by not conducting a complete marketing plan
d. A charge of unfair practice because his mother did not get one of the “Choose Your Neighbor” letters
760) REALTOR® Arnold was instructed by his client Sebastian to find a buyer who would “fit into the neighborhood.” What is Arnold’s responsibility in this situation?
a. Arnold must comply with his client’s instruction, regardless of his own feelings on the subject.
b. Arnold must conduct his usual advertising strategies and find covert methods for selecting buyers that meet his client’s desired profile.
c. Arnold must explain to his client the responsibilities for fair treatment that they both have under fair housing laws.
d. Arnold must explain to Sebastian that he cannot continue to work as his agent under the circumstances.
761) Which of the following strategies would help to make a “Choose Your Neighbor” marketing letter non-discriminatory in its effect?
a. Ensuring that the letter was given to neighbors on both sides of the street
b. Giving the letter to at least 20 neighbors
c. Listing the property on the MLS
d. Providing the letter in multiple languages for non-English speakers
762) A tenant of an apartment complex has a degenerative joint disease. The landlord refused her reasonable request for an accessible parking space and an extra key for her live-in caregiver. Which of the following is true?
a. The landlord does not have to do anything for the tenant.
b. The landlord may charge the tenant for better parking and for the extra key.
c. The landlord must only provide ramp access at the buildings entrance and has not discriminated.
d. The landlord must provide reasonable accommodations and has discriminated based on a disability.
763) Michael, an agent, is representing Felicity, a seller. Felicity tells Michael that she does not want to sell to anyone who is Hispanic. Which of the following describes Michael’s responsibilities?
a. Michael is allowed to prepare an advertisement which states, “Home for sale, $140,000. No Hispanics.”
b. Michael is allowed to tell any prospective buyers and their agents that Felicity will not sell to Hispanics.
c. Michael may follow Felicity’s instructions and show the house to anyone except Hispanics.
d. Michael may inform Felicity of fair housing laws.
764) A complete marketing campaign that includes the use of ‘Choose Your Neighbor’ letters in conjunction with an MLS listing, for sale signs, and advertisements in several newspapers is _______.
a. Effective
b. Illegal
c. Overkill
d. Unethical
765) Joe and John, a same-sex married couple, are working with Andy, a real estate professional, and are looking for a new home. Joe and John find a property they like and decide they want to make an offer. Which of the following is Andy’s responsibility in this situation?
a. Andy must ask the homeowner if they will sell to a same-sex couple who is married and living an alternative lifestyle.
b. Andy must explain the law to Joe and John, and the association must meet to decide if they will be allowed to live in the property.
c. Andy must follow the same rules, regulations, and ethical behaviors he would with any other clients, and promote the best interest of his client.
d. Andy must read the rules and regulations within the contingency period for Joe and John, and ensure the association will allow same-sex married couples as residents.
766) If you are charged with violating Article 10 of the NAR Code of Ethics, what’s the best defense you can provide for yourself?
a. Adequate justification for why it was appropriate to discriminate against a protected class in that particular situation
b. Character witnesses from within your firm
c. Character witnesses from your pool of previous clients
d. Clear records that prove you treat all clients the same, regardless of protected class
767) Which of the following is a violation of the Fair Employment and Housing Act (FEHA)?
a. A Hispanic applicant for a one-bedroom apartment was denied based on his low credit scores.
b. A Hispanic applicant for a one-bedroom apartment was denied based on the fact the tenant has a pet dog, which would be a violation of the no-pets policy.
c. A Hispanic applicant for a one-bedroom apartment was denied on the basis of his race.
d. A Hispanic applicant for a one-bedroom apartment was denied on the basis of the tenant having bad references from previous living arrangements.
768) Jim is an agent representing a buyer, Rashon. Rashon is African-American and wants to purchase a property in a neighborhood where his children will play only with children of his race. Which of the following is Jim’s responsibility?
a. Jim should not show properties based on race. If Rashon requests to be shown properties only in specific areas, then Jim can abide by those requests without commenting on the ethnic composition of the neighborhoods.
b. Jim should only show Rashon properties in predominantly African-American areas.
c. Jim should research the race, religion, and sexual orientation make-ups of each neighborhood he plans to show Rashon.
d. Jim should show Rashon properties in all areas and comment on the ethnic makeup of each neighborhood.
769) Article 10 of the NAR Code of Ethics states that REALTORS® ______.
a. May deny services to anyone at anytime
b. May not deny equal professional services to anyone buying or selling a home
c. May not deny equal professional services to anyone for reasons related to specific NAR protected classes
d. May not deny equal professional services to people belonging to a federal Fair Housing Act protected class
770) Under Article 10 of the National Association of REALTORS® Code of Ethics, equal professional service should be given to all clients and customers, irrespective of race, color, religion, sex, disability, _______, or national origin.
a. Familial status
b. Genetic makeup
c. Sexual orientation
d. Veteran status
771) Under what circumstances could a landlord legally refuse to rent to someone based on their national origin?
a. If the applicant does not speak English well
b. If the applicant is from a Muslim country
c. If the applicant is in the country illegally
d. Never
772) Fair housing laws give homeseekers a legal right to which of the following?
a. Access to a “rent to own” program for properties when they can’t pay the required down payments
b. Complaint process for rejected home offers, even if the offer is significantly below list price
c. Credit to purchase the home of their choice, regardless of ability to repay
d. No discriminatory limitations on communities or locations of housing
773) If a real estate professional discovers that another real estate professional is engaging in discriminatory marketing practices, what action should he or she take?
a. Make a complaint to the Department of Justice
b. Make a complaint to the National Association of REALTORS® or to the Department of Housing and Urban Development
c. Make a complaint with the county commissioner
d. Make a complaint with the local police

774) If a tenant who is an illegal immigrant files a complaint with HUD, how will HUD respond to the complaint?
a. HUD does not ask for or investigate immigration status, and will respond to the complaint by investigating the alleged discrimination.
b. HUD will deny the complaint based on the complainant’s immigration status.
c. HUD will investigate the complaint, but charges immigrants a fee for doing so.
d. HUD will refer the complainant to the U. S. Immigration and Customs Enforcement agency.
775) Which of the following is the best reason to support diversity in a real estate office?
a. It creates a challenging workplace.
b. It’s hard to find employees.
c. It’s politically correct.
d. It’s the best way to provide service to a broad array of clients.
776) The Asian Real Estate Association of America (AREAA) membership “includes housing and real estate professionals of all cultural backgrounds and is open to those who support the mission of ______.”
a. Advocating for public policy that serves all America
b. Educating real estate professionals who serve minority home buyers and sellers
c. Increasing sustainable home ownership in the Asian community
d. Promoting democracy in housing for African-Americans
777) The ______ is a purpose-driven organization propelled by a passionate combination of entrepreneurial spirit, cultural heritage, and the advocacy of its members.
a. Asian Real Estate Association of America (AREAA)
b. Minority Real Estate Professionals of America (MREPA)
c. National Association of Hispanic Real Estate Professionals (NAHREP)
d. National Association of Real Estate Brokers (NAREB)
778) Josefina is a new licensee starting at a brokerage where she is the only Hispanic and the only person who speaks both Spanish and English. How does this make her an asset to the brokerage?
a. She can shadow more experienced agents and help them with their work.
b. She can work with Spanish speaking clients more easily than other licensees can.
c. She is new and can be molded to the ways of the brokerage.
d. She will bring in clients from her extended family and social connections.
779) How might a company help its non-English-speaking agents from another country succeed in its U. S. offices?
a. By forcing them to speak English
b. By giving them an Anglo boss
c. By giving them bonuses for excellent work
d. By providing English as a second language (ESL) classes and tutors
780) What organization’s mission is to promote democracy in housing?
a. Asian Real Estate Association of America (AREAA)
b. Minority Real Estate Professionals of America (MREPA)
c. National Association of Hispanic Real Estate Professionals (NAHREP)
d. National Association of Real Estate Brokers (NAREB)
781) A buyer who discovers after closing that a seller wasn’t honest about the property condition on the required disclosures can ______.
a. Cancel the agreement and locate another property
b. File a claim with the state commission
c. Get a refund of the earnest money
d. Sue the seller
782) Marilyn is reviewing the inspection report with her buyer clients. Which of the following issues in the report should Marilyn flag as most significant?
a. Broken dishwasher
b. Lack of deadbolts
c. Non-working sump pump
d. Presence of mold
783) Most often, what’s the first course of action for disputed home warranty claims?
a. Arbitration
b. Condemnation
c. Litigation
d. Mediation
784) Ray purchased a new home and soon discovered an issue with one of the windows. He filed a claim with the warranty provider, but it was denied. After mediation, the issue still remains unresolved. What is the most common next step?
a. Arbitration
b. A second round of mediation
c. Condemnation
d. Litigation
785) Amira’s seller Tom just received the news that his buyers are walking away from the sale. They weren’t willing to proceed after they saw the inspection report. Neither Amira nor Tom has requested a copy of the report. What’s the most likely reason for that?
a. Amira doesn’t trust this particular inspection company.
b. If they see the report, they’ll be required to disclose any adverse findings.
c. They are unwilling to pay for the report as the buyer requires.
d. Tom wants to pay for his own inspector so that he can question the inspector.
786) Which of the following statements would you use to educate your seller about the responsibility to disclose?
a. “If you know about a problem with the property, don’t tell me about it because I will be obliged to disclose it to the buyer.”
b. “You and I have a legal obligation to disclose all of the information we know about this property that might be meaningful to a buyer.”
c. “You do not need to disclose anything about the property unless the buyer asks a direct question.”
d. “You should not hide any material information that you know about, but you need not disclose information without cause.”
787) John and Amy purchased a builder’s home warranty when they bought their home. They have found structural damage that could be a detriment to their home. On average, how many years does a home warranty cover structural damage?
a. 10 years
b. Five years
c. One year
d. Three years
788) When a buyer finances a newly built home with a Federal Housing Administration loan, what does the FHA require the builder to do?
a. Create a fund equaling 20% of the home’s cost set aside to cover construction defects for the next 10 years
b. Provide a builder-backed home warranty
c. Provide the buyer with a 30% discount on materials and labor for home repairs
d. Purchase a third-party home warranty to protect the buyer
789) Your buyer clients are excited because the property they made an offer on provides a home warranty. What should you tell them?
a. Check the coverage at the time of purchase.
b. Check the coverage if an appliance breaks.
c. It protects brokers too.
d. They’re getting a great deal.
790) Jared is your client who is selling his four-bedroom home. When you ask him if he is aware of any physical defects with the property, he states that the property is “in fine shape.” Yet you’ve noticed several issues with rotted doorsills, crumbling masonry, and a suspicious moisture stain on the ceiling. If Jared won’t come clean about issues of property condition, what should you do?
a. Decline the listing
b. Find ways to hide the issues that you noticed so that potential buyers won’t see them
c. Have Jared sign a waiver so that you cannot be held liable for issues he does not disclose
d. Have the buyer sign a waiver so that you cannot be held liable for issues he does not disclose
791) What is the primary reason for a listing agent to educate the seller about the obligation to disclose material facts?
a. It helps the seller see the agent as a professional
b. So that the agent cannot be held liable if the seller is dishonest
c. So the agent’s reputation with any cooperating broker is protected
d. To protect both the seller and the agent from liability
792) Roy purchased a newly constructed home with a warranty that covers major structural defects for 10 years, and systems (HVAC, electrical, plumbing) for three years. After living in the home a few months, Roy notices the following defects and submits them all. Which one will likely be covered by the warranty?
a. A baseboard with paint drips
b. A light fixture that doesn’t match other light fixtures in the home
c. A split ceiling joist in the basement
d. A tear in the carpet
793) When selling real estate, the seller has a responsibility to disclose all material facts about the property, even those he __________.
a. Believes may happen in the future
b. Couldn’t possibly be aware of
c. Doesn’t know about
d. Should know about
794)
795)
796)
797) Darren and Natalie are first-time buyers who have decided to purchase a newly built townhouse. Their agent, Jenner, tells them that the builder must provide a one-year home warranty. Which of the following conditions is most likely true?
a. Darren and Natalie are getting a USDA rural development loan.
b. Darren and Natalie are using an FHA-insured loan.
c. Darren and Natalie are using conventional financing.
d. Darren and Natalie made an all-cash offer.
798) Homebuyer Nancy has made an offer to purchase a house and has plans to schedule a home inspection. How can her agent assist her in relation to the home inspection?
a. Negotiate a kickback from the home inspector.
b. Pay for the home inspection.
c. Require the buyer to use the agent’s favorite home inspector.
d. Review the inspection report with her and discuss options.
799) Shane’s buyers learned during the inspection that there was water damage around the fireplace and that the chimney needed new flashing and to be repointed. To whom must Shane disclose that information?
a. Any party to the transaction
b. Only the listing agent
c. Only the sellers
d. Only the sellers and the lender
800) Why is a home inspection recommended?
a. It gives the buyer a snapshot in time of the home’s condition.
b. It helps the buyer identify cosmetic changes that must be made.
c. It’s free to the buyer.
d. It’s required by law for most residential transactions.
801) Donald and Martina decided to purchase a newly built home, and their agent, Ed, recommended that they get a professional home inspection done. The couple tells Ed that they thought inspections were only for older homes. How should Ed respond to that?
a. Ed needs to inform his clients that home inspections are most important for newer properties.
b. Ed should let them know that lenders for new construction loans require inspections.
c. Ed should remind them that every dwelling, no matter the age or size, should have a home inspection.
d. Ed should tell him that he doesn’t trust the builder.
802) When a buyer is represented by a licensee, who is responsible for following up on issues identified in the inspection report to ensure that they are addressed?
a. The buyers
b. The buyer’s agent
c. The listing agent
d. The sellers
803) The benefits of a home warranty for buyers are clear. Why might sellers want to offer a home warranty to buyers?
a. To allow the buyer the option to customize features of the home.
b. To allow the buyer to customize certain items.
c. To keep from having to buy new appliances before putting the home on the market.
d. To protect themselves from any claims after closing.
804) Your buyer clients Sylvie and Daryl reviewed their inspection report and decided that they would address small repairs themselves, but they want the seller to have regrading done to direct water away from the house. What is your responsibility at this point?
a. You must identify three potential contractors from whom the sellers can select.
b. You need to communicate to the listing agent that the buyers are requesting regrading.
c. You need to send the report to the sellers and ask them what they’d be willing to fix.
d. You should help the buyers gather tools and materials for the small repairs.
805) In the Easton v. Strassburger case, the seller had taken measures to stabilize the soil as a result of previous landslides. What did the court determine was the seller’s responsibility to the buyer as a result?
a. To complete the repair and remediation process prior to the sale
b. To disclose to the buyer that there were existing issues with soil movement, and the related repairs that had been made
c. To offer to pay half of the cost to complete the soil stabilization efforts
d. To purchase a home warranty for the buyer in case the soil continued to cause issues
806) Leslie is a listing agent for a well-maintained two-story home that her client, Jerry, is selling. She has performed her visual inspection of the property, noted a few small issues, and made sure that Jerry understands his obligations for disclosure. What else does Leslie need to do to complete her responsibilities for disclosure?
a. Ask Jerry to repair the issues that she found
b. Ask Jerry to verbally disclose material defects to potential buyers
c. Show the issues that she noted to a home inspector, if the buyer uses one
d. Use the proper disclosure forms
807) Diana is selling her condominium. She has a responsibility to ________to the buyer.
a. Disclose all material facts about the property
b. Explain why she is selling
c. Introduce her neighbors
d. Show her condo in its best light
808) You’ve listed a 1918 Craftsman with some significant foundation issues—so significant that the buyers walked away after the inspection. They provided you and your sellers with a copy of the inspection report, which also points out some wiring concerns. At today’s open house, a prospective buyer asks to see a copy of any inspections done on the property. What should your response be?
a. You should ask the buyers who walked away whether you can provide a copy.
b. You should disclose any adverse material facts, but you don’t have to provide the report.
c. You should provide an inspection report, but only if specifically asked.
d. You should provide an inspection report to all prospects, along with seller disclosures.
809) In Easton v. Strassburger, what caused the court to rule that the seller and seller’s broker were negligent?
a. The broker acted in an undisclosed dual capacity.
b. The property was misrepresented as being larger than it actually was.
c. The seller charged the buyer illegal fees.
d. The seller had knowledge of a defect that was not disclosed to the buyer.
810) In the Easton v. Strassburger case, the seller’s agent noticed some uneven flooring on the property. What did the court determine was his responsibility in that situation?
a. To decline the listing, citing seller fraud
b. To have the seller fix the issue
c. To inspect and disclose the issue
d. To request that his broker fix the issue
811) You’re conducting your visual inspection of your client’s property and come across a room painted in psychedelic colors. Should you note this as an adverse material defect for disclosure to potential buyers?
a. No, this is not an adverse material defect.
b. Yes, a room that requires repainting is a physical defect with the property.
c. Yes, this must be disclosed to buyers, who will probably not want to live with those colors.
d. You should wait and see if you can find buyers who look as if they might like that kind of thing, then decide.
812) When you perform a required visual inspection of a property, what will you be looking for?
a. Clues to possible physical defects, such as moisture stains, uneven floors, or cracks in the walls
b. Design and remodeling ideas
c. Evidence of proper house cleaning
d. Opportunities to improve the way the home is staged for showings uyers gather tools and materials for the small repairs.
813) Insurance claims might not appear on a CLUE report for a property if the claims were made more than ______ years ago.
a. 10
b. Four
c. Nine
d. Seven
814) After closing, a buyer discovers the seller wasn’t honest about the property condition on the state’s required disclosures. What can the buyer do?
a. Ask for a refund of his earnest money.
b. Sue the seller for fraud or breach of contract.
c. Terminate the contract.
d. The buyer has no options after closing.
815) When a real estate professional is representing a seller in a residential transaction, when should the property disclosures be made available?
a. As soon as practicable before accepting an offer
b. Prior to advertising the property for sale
c. Prior to placing the listing in the MLS
d. Within seven days of the transfer of title
816)
817) Marla’s excited about closing on a cute lakefront cottage. But when she reads the report from the home inspection, she learns that the chimney leaks and that there is water damage in several places. This wasn’t on any of the seller’s disclosures. Which of these is the best option for Marla?
a. Complete the purchase and plan to spend a lot of money trying to make her cottage leakproof.
b. Complete the purchase, then sue the seller for fraud.
c. Find a lawyer and file a class action suit against the chimney mason.
d. Terminate the agreement and ask for a refund of her earnest money.
818) Your buyer clients Josie and Terry made an offer that was accepted on a cute bungalow in a city neighborhood. They just received the inspection report and were delighted to see only minor condition issues. They’d like the sellers to replace two windows that have broken seals. In response, the sellers asked for a copy of the inspection report. What must you do?
a. You can copy the pages related to the windows and provide those.
b. You can only provide a copy if you get permission from Terry and Josie.
c. You must request permission from the inspector, who holds the copyright.
d. You’re required to provide a copy of the report to the sellers.
819) Home inspector Murray is explaining to first-time buyers what he looks for during a home inspection. What is his primary goal?
a. Document health and safety issues that may affect both the cost and enjoyment of the home.
b. Estimate how much cosmetic upgrades may cost the buyers.
c. Verify lot lines and acreage calculations.
d. Verify the presence of any easements or encroachment on the property.
820) Yolanda purchased a house from the Griffins 10 months ago. Shortly after she moved in, the city began work on building a middle school on the empty lot right across the street. She feels that the city’s plans must have been known to the Griffins and should have been disclosed, and she really doesn’t want to live across the street from a school. Is it too late for her to take legal action against the Griffins?
a. No, Yolanda can take legal action against the buyers at any time while she still owns the property.
b. No, Yolanda can take legal action at any time within two years after taking possession of the property.
c. Yes, the buyer can only take legal action within six months of taking possession of the property.
d. Yes, Yolanda should have canceled the contract within three days of receiving seller disclosures.

821) When you represent a seller in a residential transaction, you will complete a ______________ as part of the disclosure process.
a. Crime statistics report
b. Local schools search
c. Title search
d. Visual inspection of the property
822) A seller’s agent has ______ to disclose material facts about a residential property to the buyer.
a. An affirmative duty
b. No clear legal duty
c. No responsibility
d. To follow the seller’s direction
823) Lamar closes on his new home next week. It’s a 37-year-old split level, so his agent asked if he’s interested in purchasing a home warranty. “Why would I need a warranty?” he wondered. “Didn’t the home inspection identify all of the issues?” What’s the agent’s best response to Lamar’s question?
a. A home warranty will cover all problems that come up in the future.
b. A home warranty will cover things like appliances and major systems.
c. Buying a home warranty almost guarantees you won’t have any issues!
d. If you purchase a home warranty and something breaks, you can sue the seller.

824) Seth is a licensee working for a buyer, Britney. Britney wants to make sure the seller accepts her offer on a charming Cape Cod, so she tells Seth she wants to make a full-price, non-contingent offer right away. How should Seth respond?
a. “I highly recommend a home inspection contingency with your offer to protect yourself in the event there are major defects with the house.”
b. “Since you love this house, this is the best way to make sure you get it. Let’s write up the offer and send it over right now.”
c. “Your offer may be more attractive if we come in at $5,000 over the list price.”
d. “Your offer would be more attractive if it were all cash.”
825) Home inspector Maura was walking Thad through a property inspection. The frame house, on a slab foundation, had mulch piled up about 18 inches next to the house. Why was Maura noting this as a concern?
a. Mulch is a flammable substance.
b. Mulch isn’t a sustainable material.
c. Mulch next to wood siding may lead to wood rot.
d. That amount of mulch might kill the plants it’s meant to protect.
826) Bill is joining his inspector Hank for an inspection of the property he hopes to purchase. Hank notices that the dirt on the exterior of the home slopes toward the house. He explains that it should slope away from the home. When it doesn’t, what problem might this create?
a. Basement leaks
b. Chimney issues
c. Contamination of the home’s water source
d. Mosquito breeding
827) Which of the following statements about the duty to disclose adverse material facts is true?
a. Licensees are required to disclose only those material facts of which they have actual knowledge.
b. Licensees don’t have to communicate adverse material facts if a property is being sold with any kind of “as-is” or “where-is” clause.
c. Licensees must disclose adverse material facts either before or after closing.
d. Licensees owe this duty to their clients only.
828) If you see sawdust and can’t explain its presence, it’s probably a sawdust-like material called frass created by which pest?
a. Carpenter ants
b. Fire ants
c. Fireflies
d. Slugs
829) How can you determine lot size, easements, and encroachments of a property? Select the answer that would provide the most comprehensive search.
a. Check the county recorder’s office and local building board.
b. Research the deed and title history, check maps at the county recorder’s office, and review land surveys.
c. Review subdivision maps, pace off the property, and check tax records.
d. Search the property’s deed and title history, ask the neighbors, and pace off the property.
830) Which of the following can indicate an electrical problem?
a. A broken light bulb
b. A burned or discolored outlet
c. An outlet that only works when the switch is turned on
d. A switch that’s cool to the touch
831) Marshall is a home inspector who is walking the lot of the property he’s inspecting with a survey in hand. Which of the following will he note as an encroachment on the inspection report?
a. A path providing neighborhood access to a pond cuts through part of the subject property.
b. The apple tree on the adjacent property drops apples onto the subject property.
c. The city seized the neighboring property to be used in a street widening project.
d. The neighbor installed a basketball hoop next to his driveway, six inches over the property line.
832) Charles just learned that the master bath addition on the home he purchased was built without obtaining permits. It’s actually situated too close to the lot line. What might Charles have to do to his master bath?
a. Get his neighbor’s permission for the proximity to the lot line.
b. Pay an exorbitant zoning fee.
c. Since it’s a bathroom and not a bedroom, he won’t have to mitigate.
d. Take the addition down.
833) Why should buyers ask sellers of older homes whether they’ve replaced the wiring system?
a. Because out-of-date electrical wiring can cause a wide a variety of problems.
b. Because the buyer will be required to update the wiring if it’s more than 10 years old.
c. Because the seller will be required to update the wiring if it’s more than 10 years old.
d. Buyers shouldn’t ask about the wiring.
834) Which one of the following could be an indication of a foundation problem?
a. Crack in a basement wall
b. Doors that open and close easily
c. Lack of moisture in the basement
d. Windows that open and close properly
835) 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
836) Greg and Neha are interested in buying a ranch-style home in a suburban family neighborhood. The sellers have only lived there for 19 months, so they have no information about the addition that was put on 20 or 30 years ago. Why does it matter whether the owners at the time got permits to do the addition?
a. If the addition WAS NOT permitted, it may need to be inspected to ensure it meets code and perhaps even be taken down.
b. If the addition WAS NOT permitted, the lender will require additional title insurance.
c. If the addition WAS permitted, then the owners can use it as a rental suite.
d. If the addition WAS permitted, the sellers can raise the listing price.
837) Which of these could be signs of flood damage?
a. Hot and cold rooms in the house
b. Misaligned doors
c. Soft or uneven floors
d. Windows that won’t open
838) Your home inspector Mason found some discoloration in the attic and near the windows on the second floor. Why does he think this may be a concern?
a. Dark stains in the attic could mean plumbing problems.
b. It could be a sign of fire damage.
c. It means that the homeowners haven’t insulated well.
d. It’s indicative of insect activity.
839) Which one of the following is a common chimney or fireplace problem?
a. Creosote
b. Damage around the fascia
c. Holes in the soffit
d. None of these
840) Your buyers step outside to view the backyard of a property they’re touring, but then they can’t get the back door closed again. You recognize that this could be a symptom of ____, and realize that if they are interested in this property, they will want to discuss this issue with a home inspector.
a. A foundation problem
b. An HVAC problem
c. Constant freezing and thawing
d. Poor general maintenance on the home
841) Which one of the following scenarios describes an adverse condition that would need to be disclosed?
a. A hailstorm damaged some shingles last year.
b. The county offers a homestead exemption.
c. The furnace is three years old.
d. The school across the street is adding full-day kindergarten next year.
842) The seller disclosure indicates that the central air conditioning unit is 26 years old. Why might this worry Margot’s buyers?
a. Central air conditioning isn’t a sustainable technology.
b. Older units are bigger and more unsightly.
c. The unit may need to be replaced.
d. They were hoping for window air conditioning.
843) Which one of these items around the fireplace could be a clue that there is a problem?
a. Ash and soot in the firebox
b. Cracked or sloping firebox or hearth
c. Hole in the soffit
d. Missing mantle
844) Seth is a licensee representing seller Dora. Which of these items is Seth required to disclose to prospective buyers about the property?
a. Dora doesn’t use the back door because the steps leading to the yard are rotted.
b. Dora keeps sunflowers planted in the back yard because the local birds can eat the seeds.
c. The neighborhood kids like to ride their bikes in Dora’s driveway.
d. The pink geraniums in the window boxes are fake.
845) Regarding information that licensees must disclose, what does the pneumonic MAAP stand for?
a. Mandated, Ambiguous, Actual, Prohibited
b. Material, Adverse, Actual, Physical
c. Misrepresentation, Attainable, Affiliated, Performance
d. Mobile, Artificial, Absolute, Protected
846) Assuming licensee Shannon has actual knowledge of all of the following property issues, which of these issues should she disclose to prospective buyers?
a. The nearby school system is one of the worst in the area.
b. The neighbors like to throw a lot of parties.
c. The tree in the front yard is at least 50 years old.
d. The upstairs bathroom has a leaky toilet.
847) ______ around pipes, vents, or other protrusions is a prime spot for roof damage or water leaks.
a. Fascia
b. Flashing
c. Gutters
d. Soffit
848) Wendell just listed Barb’s home. Barb told him that there weren’t any easements on the property, and Wendell hasn’t seen a copy of the survey. What is Wendell’s responsibility relative to the disclosure of any easements?
a. He only needs to disclose easements if they’re known.
b. He should commission a survey if an existing one can’t be found.
c. He should do a title search to confirm any easements.
d. He should require his seller to do online research in the county records database.
849) Inconsistent temperatures from room to room is a common indication of a problem with what system or home feature?
a. Electrical
b. Foundation
c. Heating and cooling
d. Roofing
850) Three days ago, there was a severe thunderstorm in Shirley’s town. Today, there’s still a large puddle of water on her property, but it doesn’t appear the neighboring properties have any puddles. This could indicate a(n) ______ problem.
a. Drainage
b. Easement
c. Encroachment
d. Foundation
851) Why would a buyer want 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. The buyer may need this information to provide evidence for litigation.
d. The buyer will have to remove these before the property can be re-sold.
852) Justin decided to build a privacy fence around his yard. He thought the fence was along the property line, but it turns out he built it one foot inside his neighbor’s property. What will an inspector document as existing on the neighboring property?
a. Easement
b. Eminent domain
c. Encroachment
d. Necessity
853) What information about a property is the licensee required to disclose to potential buyers?
a. Any known or assumed information about a property
b. Any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property
c. Only information that the seller wants the licensee to share with prospective buyers
d. Only information that would make the property sell more quickly
854) Which of the following scenarios describes information that a licensee must disclose?
a. The licensee heard a rumor that the city may buy houses on the street next year to build a freeway ramp.
b. The licensee learned that the property had a tax reassessment last year.
c. There are community-wide rumors that the property in question is haunted.
d. The seller didn’t disclose any leaks, but the licensee sees moisture on the basement floor.
855) Basement wall cracks and leaks can be indicators of ______ problems.
a. Chimney/fireplace
b. Foundation
c. Roof
d. Window
856) Which of the following can indicate issues with heating and cooling?
a. A furnace or air conditioning unit that does not kick on when the temperature is adjusted
b. Consistent temperatures throughout the home
c. Moisture in the basement
d. Windows that won’t open or close
857) Which of the following could be a sign of a plumbing problem?
a. Copper pipes
b. Cracks in the basement wall
c. Low water pressure
d. Rotting around the soffit
858) Which type of pest may make mud tubes—tunnels that run along the walls—or shed tiny wings?
a. Carpenter ants
b. Fire ants
c. Powder post beetles
d. Termites
859) What does the MAAP method help licensees determine?
a. What their gross commission will be
b. When to report another licensee for an ethics violation
c. Whether a fair housing violation has occurred
d. Which property facts they need to disclose
860) Which of the following is an example of an easement?
a. A path providing neighborhood access to a pond cuts through part of Hillary’s property.
b. Michael installed a basketball hoop 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 Don’s property when no heirs could be located following his death.
861) Discoloration along walls and sagging or uneven floors can be signs of ______.
a. Electrical issues
b. Fire damage
c. Flood damage
d. Wind damage
862) A sloping hearth is a common ______ issue.
a. Chimney/fireplace
b. Foundation
c. Roof
d. Window
863) Missing, cracked, or displaced roof shingles can indicate ______ damage.
a. Electrical
b. Fire
c. Water
d. Wind
864) You’re showing a house when you notice piles of what looks like sawdust outside near the basement windows. This may be evidence of which pest?
a. Carpenter ants
b. Fire ants
c. Ladybugs
d. Powder post beetles

865) Paul and Blake are touring an open house when they notice that the glass on the sliding patio door is very foggy. Is this a concern, and if so, why?
866) No, this is not a concern, as it only indicates poor cleaning habits.
867) No, this is not a concern as it’s common in cold climates.
868) Yes, this could be a sign of fire damage.
869) Yes, this is a sign of a leaky seal which reduces efficiency.
870) Foggy windows indicate broken seals on dual pane windows, which allow moisture to build up between the panes. This reduces efficiency, which means energy bills may go up.
871) Question 2
872) Janine, a professional home inspector, notices a lot of small holes burrowed into a home’s attic beams. This could indicate the presence of which pest?
873) Fire ants
874) Slugs
875) Wood-boring beetles
876) Wood wasps
877) Buyer Peter is eager to make an offer on the two-story home you just showed him, but you’re concerned about the back bedroom, since it looks like a relatively recent addition. When Peter asks you why it’s an issue, how do you respond?
a. It doesn’t fit aesthetically with the rest of the house.
b. The extra bedroom is inconsistent with the rest of the neighborhood, reducing its value.
c. You’re certain it’s not built to code, so Peter shouldn’t make an offer on the property.
d. You recommend that Peter check on the permits for it, so that he doesn’t buy the house and then have to correct or even remove the addition because it wasn’t built to code.
878) Why are galvanized pipes a problem in older homes?
a. They are not a problem.
b. They are out of date and can lead to a variety of electrical problems.
c. They can rust and cause leaks and low water pressure.
d. They indicate the heating and cooling system(s) are outdated.
879) While showing your buyers through a home, you flipped on the light in the powder room and were concerned because the light switch felt warm. Why is this a concern?
a. Warm light switches might mean the house doesn’t cool well.
b. Warm light switches might mean the house doesn’t heat well.
c. Warm light switches might mean there is an electrical problem.
d. Warm light switches might mean there is a structural problem.
880) Water buildup, ice damming, and a fascia damaged by moisture are common ______ issues.
a. Chimney
b. Foundation
c. Roof
d. Window
881) Which one of the following could indicate a problem with the chimney flue or ventilation?
a. Damage around the fascia
b. Doors that won’t open
c. Drafts near the fireplace
d. Holes in the soffit
882) Mike relocated for work and learned that the region in which he planned to buy a home had many old underground mines. In fact, Mike might even need to purchase mine subsidence insurance. What might a home inspector flag for Mike if there are any concerns about undermining?
a. A sinkhole on the property
b. Lack of birds and other wildlife
c. Stagnant pond water
d. Trees and shrubs that don’t seem to grow
883) Which of the following statements about material facts is true?
a. All material facts are related to physical conditions.
b. All parties considering a property would regard each material fact in the same way.
c. A material fact may have more or less effect on a buyer based on the buyer’s needs and values.
d. Material facts are only those that can be easily seen or discovered.
884) Which one of the following is a common problem with roof shingles?
a. Clean fascia
b. Discoloration or curling
c. Soffit without holes
d. Water buildup and ice damming
885) What can water damage on a ceiling or wall indicate?
a. Air flow issues
b. Electrical issues
c. Foundation issues
d. Plumbing issues
886) Why is it important for buyers to ask when a chimney or fireplace was last inspected?
a. It could reveal important information about the unit’s maintenance and functionality.
b. It’s not important for buyers to ask this.
c. The buyer will then know if they need to have the chimney cleaned soon after they purchase the property.
d. This gives the buyer an idea of when it may need to be replaced.
887) What did the NAR survey results indicate about selling property that carried a stigma of being haunted?
a. Most buyers would consider a haunted house if the price were slashed by more than 50%.
b. Most buyers would expect to pay more than market value for a haunted house
c. Ninety percent of buyers would walk away from a purchase if told that the house could be haunted
d. Over half of potential buyers would consider buying a haunted house
888) Frank’s youngest daughter recently died of AIDS. He and his wife are selling the home where she lived her last few weeks, and where she died. Which of the following is true?
a. The death must be disclosed to potential buyers because it happened fewer than three years ago.
b. The death must not be disclosed, even if asked directly, because it was caused by AIDS.
c. The death on the property must be disclosed, but the cause of death cannot be disclosed unless a buyer asks directly.
d. The death on the property should be disclosed, as should the cause of death, as this creates a stigmatized property.
889) Brenda is working with the seller of a property that is a little run down, but has lots of potential. The seller is a widow who has decided to move. Her husband died in the home seven months ago of natural causes. Does Brenda need to advise her client that this fact should be disclosed?
a. No, because it happened more than six months ago
b. No, Brenda should tell her client not to tell prospective buyers about the death, even if asked
c. Yes, a death on a property must always be disclosed, no matter when or how it happened
d. Yes, because it happened fewer than three years ago
890) A property on the market was the site of a double murder. The surviving owner moved out and put the home up for sale. The event happened more than one year ago. How does this affect the property?
a. The murders are confidential information, and the listing agent should not discuss the event with potential buyers.
b. The murders make the property famous and the listing price should be set slightly over market value.
c. The murders may create a stigma on the property, and must be disclosed.
d. The murders need not be disclosed because they happened more than one year ago; they should not have any effect on the sale of the property.
891) Stacy is selling her home in a nice neighborhood. She no longer wants to live there because a gruesome murder occurred next door. Would Stacy need to disclose that this is why she is selling?
a. No, but she should disclose that the neighbors were the victims of a violent crime.
b. No, she is not required to disclose a death that didn’t occur on her property.
c. Yes, murder must always be disclosed, even if it’s not on the property itself.
d. Yes, the murder next door stigmatizes her property and she must disclose.
892) Which of the following is true about a Mello-Roos tax?
a. It appears on a homeowner’s utility bill.
b. It usually applies for no more than three years.
c. Payment is voluntary.
d. The assessment may be $25 to $300 per month.
893) When selling a property within one mile of _________, sellers must include relevant disclosures.
a. A bar or liquor store
b. A former military training ground
c. A meth lab
d. A red light district
894) Why is it considered a good idea to disclose the facts regarding a stigmatized property?
a. Because it will increase the value
b. To avoid liability if a buyer finds out later and considers it a problem
c. To develop buyer interest in the property
d. To develop your reputation as an agent who can move challenged properties

895) A Mello-Roos district is ____________.
a. A defined area subject to a special tax that is used to develop or support infrastructure for the community
b. A defined community subject to special restrictions on property taxes
c. An area subject to homeowners association fees
d. A term for a subdivision built in the 1980s
896) Which of the following events would stigmatize a property?
a. Former residence of a celebrity
b. Located near a former hazardous waste facility
c. More than three sales within the last year
d. Site of a notorious murder
897) A _____________ is a defined area subject to a special tax that is used to develop or support infrastructure for the area.
a. Community-Funded Mello-Roos Area
b. Mello-Roos Community Facilities District
c. Mello-Roos Community Tax Area
d. Mello-Roos Infrastructure Funding Area
898) Tom is acting as the listing agent for a property that has had a bit of a troubled past. Neighbors tell him gleefully that it’s famous for being haunted. He feels that buyers don’t need to know this, since he doesn’t believe in ghosts. Which of the following is true?
a. Although Tom is not required to disclose this, he should do so if asked directly.
b. Tom is not required to disclose the rumor that the house is haunted unless he experiences a “haunting” himself.
c. Tom should disclose the possibility that the home is haunted.
d. Tom should not disclose the “haunting,” but should warn potential buyers of the possibility that the neighbors may be crazy.
899) When Lori and Nick sold their home, they were required to inform potential buyers that the property was part of a Mello-Roos district. Why?
a. New homeowners must know to comply with Mello-Roos rules regarding house color and landscaping.
b. The new owners would be required to hold membership in a club in order to live in the community.
c. The new owners would be subject to a property tax that is not readily discoverable.
d. The stigma attached to a Mello-Roos neighborhood requires disclosure.
900) The Notice of Airport disclosure is required because _____________.
a. Buyers may want to rent an airplane hangar if the airport is nearby
b. Many commuters appreciate living near an airport
c. Noise and vibrations from airplanes can be disturbing to those living under or near the flight paths
d. The airport may need to expand in the future, requiring homes to be demolished
901) Jan and Ken are purchasing a home on the edge of a suburban development. They chose the area because it was very near a more rural area, so they found it funny when the seller provided a _____________, as if they would not have already noticed the cows in a nearby pasture.
a. Notice of Airport in Vicinity
b. Notice of Hazardous Gas
c. Notice of Mining Operation
d. Notice of Right to Farm
902) You have listed a property for Jim and Alice, a couple who loves DIY projects. Does the TDS provide a place for sellers such as these to disclose non-permitted work they have done on the property?
a. No, but their agent should note it on the AVID form.
b. No, there is no requirement that unpermitted work be disclosed
c. Yes, but they will need to use the TDS Supplementary Disclosures form.
d. Yes, they can record such issues in the seller’s information section of the TDS
903) Sellers Matt and Kyle are fed up with their obnoxious neighbor, who insists on doing home construction work with power tools late at night, and having loud arguments with his family during the day. Does the TDS require them to disclose this type of nuisance?
a. No, but this issue can be added as a Supplemental Disclosure
b. No, there is no requirement that nuisance neighbors be disclosed
c. Yes, but only if a complaint has been made to the police so that an official report can be attached
d. Yes, they can record such issues in the seller’s information section of the TDS
904) Della wants to help her seller client properly meet her obligations for disclosure, so she asks the client to complete the ______________ prior to filling out the TDS.
a. Agent Visual Inspection Disclosure
b. Property Condition Review
c. Seller Property Questionnaire
d. Seller Visual Inspection Disclosure
905) Material facts that are required for disclosure can be captured on the _______ in addition to, but not as a substitute for, the Transfer Disclosure Statement.
a. Property Condition Review
b. Seller Property Questionnaire
c. Seller Visual Inspection Disclosure
d. Supplemental Transfer Disclosure Form
906) What is the name of the standard form that allows sellers of residential property to provide buyers with disclosures required by statute?
a. The Agent Visual Inspection Disclosure
b. The Real Estate Transfer Disclosure Statement
c. The Required Property Disclosure Form
d. The Seller Property Questionnaire
907) Transactions involving which of the following properties require a Real Estate Transfer Disclosure Statement?
a. Five-unit apartment building
b. Hospital
c. Manufactured home
d. Retail store
908) During your visual inspection of a property that you are listing for sale, you notice some termite damage on two of the doorsills. How should you report this issue?
a. Call the buyer’s agent and describe it.
b. Document the issue on the AVID form and attach it to the TDS.
c. Notify the home inspector, should the buyer employ one.
d. On the Termite and Pest Disclosure form provided by C.A.R.
909)
910) One of the listing agent’s primary responsibilities regarding the TDS is to ___________.
a. Complete the seller information section
b. Educate buyers of their option to waive receipt of the TDS
c. Ensure that buyers do not see it prior to closing
d. Ensure that the form is completed thoroughly by the proper parties and that all issues are fully disclosed
911) Your client, a seller in a residential transaction, is completing the seller’s information sections of the TDS. He has marked some “yes” responses in Section C, and needs to explain the issues, but complains to you that there is not enough space on the form. What do you tell your client?
a. Attach additional sheets to the form
b. Don’t bother with that, because it’s not required
c. Provide the client with the TDS – Expanded version of the form
d. Write smaller and abbreviate
912) Dylan is working as a buyer’s licensee for Sophia. When Sophia wonders about the condition of the HVAC system in the older home she is considering, what is the best advice Dylan can give her?
a. If she is concerned about it, she should not offer for an older property.
b. It is probably in fine shape.
c. It probably does need to be replaced.
d. The seller is required to disclose any known issues with systems such as the HVAC.
913) Which party or parties in a residential transaction must sign the Real Estate Transfer Disclosure Statement?
a. Buyer and buyer’s agent
b. Seller and buyer
c. Seller and seller’s agent
d. Seller, buyer, seller’s agent, buyer’s agent
914) Della has a new listing for a duplex. To fulfill her obligations as the seller’s agent, she performs her diligent and reasonably competent inspection of the property, using the _________ to record her observations.
a. Agent Visual Inspection Disclosure
b. Property Condition Review
c. Seller Property Questionnaire
d. Seller Visual Inspection Disclosure
915) One of the listing agent’s main responsibilities regarding the TDS is to ______________.
a. Complete the seller’s information section
b. Educate buyers of their option to waive receipt of the TDS
c. Educate the seller regarding the legal responsibility to complete it properly
d. Ensure that buyers do not see it prior to closing
916) When Tara is working with a client to sell his mountain cabin, she asks the client to complete the Seller Property Questionnaire and the TDS. The seller says, “But we haven’t received any offers yet.” What can Tara tell him about the timing required for providing the TDS?
a. The TDS is required to be submitted when the property is listed.
b. The TDS is required to complete the agency agreement, and must be completed as soon as possible.
c. The TDS must be available to prospective buyers at least 10 days prior to the acceptance of any offer.
d. The TDS should be submitted as soon as is practicable.
917) Your clients have made an offer to purchase on a beautiful home that is in a perfect location for their family. The offer is accepted. A week later, the seller’s agent finally provides the TDS and other required disclosures. To everyone’s dismay, the disclosures show that there are some serious issues that were not apparent in your visual inspection. What can your buyers do?
a. Buyers have seven days after delivery of the TDS to rescind the purchase agreement.
b. Buyers have three days after delivery of the TDS to rescind the purchase agreement.
c. They can back out of the contract, but will have to give up their earnest money.
d. They must continue with the purchase, but they can sue the seller for breach of contract.
918) Licensee Carla has been representing sellers Marie and Harvey for three months, and they’ve finally accepted an offer on their home. The buyers’ agent contacts Carla the next day and asks for the Natural Hazards Disclosure statement. Carla is sure she already gave the buyers this form, along with other disclosures, the first time she showed the property to them. She can give them a new copy now, but why does this matter?
a. Carla could get reprimanded by the DRE for her failure to provide the disclosure in the proper timeframe.
b. Carla’s oversight in providing her client with the utmost skill and care could cost her the commission on the sale.
c. The buyers have a right to rescind the offer without penalty if the disclosure is received after their offer is made rather than before.
d. The information on the NHD is only good for 30 days, so the seller will have to pay to have a new NHD created by the disclosure company.
919) The Residential Earthquake Hazards Report must be provided to prospective buyers in residential transactions involving homes built before __________.
a. 1900
b. 1945
c. 1960
d. 1978
920) The booklet Residential Environmental Hazards: A Guide for Homeowners, Buyers, Landlords, and Tenants provides information about which of these hazards?
a. Hazards to the environment created by typical household products
b. Natural hazards that can have a negative effect on property condition
c. Potential health risks of a variety of environmental hazards
d. The erosive effects of weather on home-building materials
921) Many supplementary statutory disclosures will be included in the ____________ when provided by a third-party company.
a. Agent Visual Inspection Disclosure
b. Natural Hazards Disclosure statement
c. Real Estate Transfer Disclosure Statement
d. Seller Property Questionnaire
922) Data regarding Mello-Roos fees disclosed to a prospective buyer should include the amount of the fees as well as _______.
a. Requirements for waiving the fee
b. The assessment’s purpose
c. The history of the Mello-Roos district
d. The text of the Mello-Roos Community Facilities Act
923) You’re explaining the use of the Natural Hazard Disclosure statement to your seller client. You describe the natural hazard zones it covers. Which of these is NOT one of the natural hazard zones included in the disclosure?
a. Flood hazard zone
b. High fire hazard area
c. Seismic hazard zone
d. Severe weather area
924) Ted is selling his home near a golf course. His agent provides a prospective buyer with the booklet Residential Environmental Hazards: A Guide for Homeowners, Buyers, Landlords, and Tenants. Ted happens to know that pesticides used on the golf course can sometimes drift into his open windows if the wind is right, causing his whole family to have trouble breathing. Does he need to disclose this?
a. No, but Ted should have a word with the managers of the golf course
b. No, providing the booklet absolves him of a responsibility to disclose specific hazards
c. No, this issue is not a problem if the windows are closed
d. Yes, Ted and his agent need to disclose specific environmental hazards
925) The Natural Hazard Disclosure statement is used for _____________.
a. All residential transactions, regardless of type of transfer
b. Residential transactions in rural areas only
c. Residential transactions that also require the TDS
d. Residential transactions that do not use the TDS
926) Which of these statements about the Natural Hazard Disclosure is NOT true?
a. Buyers of residential properties must receive the NHD statement no later than seven days after offer acceptance.
b. Sellers can pay a natural hazard disclosure company to provide the completed disclosure.
c. Sellers may complete the form themselves using publicly available information.
d. The disclosures regarding location of the property within any of six natural hazard zones are required only for residential properties of one to four units.
927) Sellers, landlords, and real estate agents are required to include a ______ in the contract or lease if the real estate was built prior to 1978.
a. Denial of responsibility for lead-based hazards
b. Lead abatement discount
c. Lead warning statement
d. Notice of local lead renovators
928) Where is the Residential Earthquake Hazards Report found?
a. In the Homeowner’s Guide to Earthquake Safety
b. In the Natural Hazards Disclosure Statement
c. In the Real Estate Transfer Disclosure Form
d. In the Residential Environmental Hazards booklet
929) Jerry is purchasing a condo in a Mello-Roos district. As his agent, where can you advise him to look for information about Mello-Roos taxes assessed on the property?
a. In the AVID
b. In the MRD
c. In the NHD
d. In the TDS
930) How many days are sellers required to give buyers to conduct a risk assessment for lead-based paint or lead-based paint hazards?
a. 10
b. 21
c. 30
d. Three
931) A seller may obtain required disclosure information about Mello-Roos fees from _____________.
a. A title search
b. The assessing agency
c. The loan provider
d. The property tax statement
932) The EPA-approved pamphlet, “Protect Your Family From Lead in Your Home,” provides buyers and renters with ______.
a. A list of health centers that can treat the effects of lead toxicity
b. A list of homes that have been confirmed as containing lead-based paint
c. Information about identifying and controlling lead-based paint hazards
d. Information about the presence of lead in heating and cooling systems
933) Federal law requires disclosures about what potential hazard in residential properties built prior to 1978?
a. Arsenic
b. Asbestos
c. Lead
d. Radiation

934) What’s true about the Natural Hazard Disclosure statement?
a. Buyers must receive the NHD within seven days after offer acceptance, but it can be provided to prospective buyers at the first opportunity.
b. It’s not required unless the buyer requests it.
c. It’s required only if the property is located in one of six natural hazard zones.
d. Sellers must provide the NHD to the buyer at least three days before closing unless the buyer waives the right to the disclosure.
935)
936) The appraisal finally came in and it’s lower than the sales price the parties have contracted; an appraisal contingency was in place, but the lender failed to meet the appraisal deadline. What happens now?
a. The buyer’s earnest money is at risk.
b. The buyer will be sued for default.
c. The seller can sue for breach of contract.
d. The seller must reduce the sales price to the appraised value.
937) Which of these statements about inclusions and exclusions is true?
a. Buyers may use this section to specify which items they want the seller to upgrade.
b. Exclusions that are not listed in the MLS cannot be excluded in the sales contract.
c. Sellers may use this section to indicate personal property that is included in the sale.
d. Televisions that are fixed to the wall are typically considered to be real property.
938) You’re helping prepare a sales contract for buyer clients. When is it acceptable for you to provide your clients with legal advice?
a. Never
b. When explaining how to take title
c. When the clients ask directly
d. When your broker is unavailable (as long as you verify the information afterward)
939) Which of these scenarios could lead to a breach of contract lawsuit over the sale of a tenant-occupied property?
a. The buyer agrees that the tenant will remain in possession, then gives 90 days’ notice to a month-to-month tenant after closing.
b. The rent in the existing lease agreement does not cover the cost of the buyer’s new mortgage payment.
c. The seller agrees that the premises will be vacated by closing, then never gives the tenant notice.
d. The seller indicates that the tenant will remain in possession, and the tenant does remain.
940) Alexandra is helping her clients, the Kents, fill out the Offer section of a purchase agreement. What amount will they put in this space?
a. The difference between the down payment and loan amounts
b. The Kents’ purchase offer
c. The seller’s listing price
d. The seller’s listing price minus the down payment and loan amounts
941) Daisy is a buyer who made an offer for an older house on three acres. Daisy reviewed the seller disclosures and ordered a professional home inspection. Based on the results of the inspection, which showed a number of latent defects that made Daisy uncomfortable, she decided to exercise her contractual right to cancel the agreement. What’s NOT true about this situation?
a. Daisy is entitled to receive her earnest money back as long as she’s formally canceled the purchase agreement within the time period specified in the contract contingency.
b. Daisy is obligated to give the seller a copy of the inspection report at no cost.
c. If Daisy hadn’t decided to cancel the agreement, she could have exercised her contractual right to request the seller make repairs to the property based on the inspection reports.
d. The seller is obligated to repair the defects identified in the inspection report before accepting any other offer.
942) Don and Becky realized too late that the contract they signed for the sale of their home didn’t include any language about a rent-back if the home they’re building isn’t ready in time. What can their listing agent do?
a. Create a contract addendum with the required language.
b. Create a contract amendment with the required language.
c. Create a counter-offer to present to the buyers.
d. Terminate the contract on Becky and Don’s behalf.
943) Marco is anxious to buy a home and is willing to waive the inspection contingency. Do you still need to provide him with a Buyer’s Inspection Advisory?
a. No, because the form is only used for short sales.
b. No, because to do so would constitute disobeying your client’s wishes.
c. Yes, because Marco should still be advised of the reasons inspections are needed.
d. Yes, because the Buyer’s Inspection Advisory is a prerequisite for waiving the inspection contingency.
944) In the Inclusions and Exclusions section of the sample purchase agreement you reviewed, the parties can indicate additional items that seller will leave, as well as ________________________.
a. Items for which the buyer must pay a premium.
b. Items the seller will lease to the buyer.
c. Items the seller will remove that would normally stay.
d. Items the seller will upgrade prior to closing.
945) Marco needs to sell his property before he can afford to buy new property. What addendum must be included with his offer on a house?
a. Back-up contingency
b. Funds Pending contingency
c. Sale of Buyer’s Property contingency
d. Short Sale addendum
946) In the sample sales contract you reviewed, the cost of title insurance was allocated to the buyer or the seller in which subsection?
a. Escrow and Title
b. Government Requirements and Retrofit
c. Inspections, Reports, and Certificates
d. Other Costs
947) How soon after closing must buyers take possession of the property?
a. On the day of closing
b. The timing is not stipulated
c. Within 30 days, unless otherwise specified
d. Within three days after closing
948) What’s the purpose of a sales contract?
a. To document the agreement between a buyer and seller in a real estate sales transaction
b. To notify the public that an offer has been made on a specific property
c. To serve as an agreement between the seller and the licensee that the seller intends to sell the house
d. To verify that the seller has the legal right to sell the property
949) You’re a new licensee who’s thrilled to be working with five different buyer clients. Under what circumstances is it appropriate for you to determine the earnest money amount for your clients?
a. If the buyer is a first-time buyer
b. If the buyer is buying a second home
c. If the buyer seems confused
d. In none of these circumstances
950) Shannon doesn’t understand why her agent wants her to add a contingency to her purchase offer. Her agent, Scott, explains that the property is in a transitional neighborhood, and it might be overpriced. What type of contingency is Scott recommending?
a. Appraisal
b. Financing
c. Home sale
d. Inspection
951) While explaining the property condition section, Amy tells her client that the seller can’t tear down walls before closing because the agreement is to sell the property ________________________.
a. At current value
b. In its current condition
c. With material defects
d. Without improvements
952) You’re working with a buyer who wants the seller to pay the costs to install smoke alarms, which are required by law. In the sample sales contract you reviewed, which of these subsections would be used to identify that request for the seller?
a. Escrow and Title
b. Government Requirements and Retrofit
c. Inspections, Reports, and Certificates
d. Other Costs
953) Annie helped her client Richard complete the ______, which documents Richard’s purchase offer to the seller for the property he is interested in buying.
a. Buyer representation agreement
b. Listing agreement
c. Promissory note
d. Purchase agreement
954) Other names for the __________________ are offer to purchase, sales agreement, contract of purchase and sale, purchase agreement, and earnest money agreement.
955) Other names for the ______ are offer to purchase, sales agreement, contract of purchase and sale, purchase agreement, and earnest money agreement.
a. Agency agreement
b. Brokerage relationship disclosure form
c. Promissory note
d. Sales contract
956) Which section of the sample purchase agreement you reviewed lists required agency disclosures?
a. Agency section
b. Finance Terms section
c. Offer section
d. Purchase Price section
957) Calli is a buyer who just learned that the price she offered on a house was $10,000 more than it actually appraised for. Calli doesn’t want to pay more than the house is worth, and the seller won’t budge on price. What is Calli’s best option?
a. She can back out due to the appraisal contingency.
b. She can reduce the amount of her down payment by $10,000.
c. She can take out a second loan for $10,000.
d. She can terminate, but she will lose her earnest money.
958) Offer to purchase, sales agreement, contract of purchase and sale, and purchase agreement are other names for which of the following?
a. Buyer representation agreement
b. Listing agreement
c. Promissory note
d. Sales contract
959) Which of these statements about closing and possession is true?
a. Buyers and sellers may agree to transfer possession prior to closing, at closing, or after closing.
b. It is unlawful for a seller to transfer property to the buyer prior to closing.
c. Sellers must transfer possession to buyers at the same time as closing.
d. Tenants must be evicted prior to transfer of possession.
960) Which section of the sample purchase agreement you reviewed explains how and when the balance of the buyer’s down payment is to be made?
a. Finance Terms section
b. Financing section
c. Purchase Price section
d. Settlement section

961) Which of these disclosure requirements is a real requirement found in the C.A.R. Residential Purchase Agreement?
a. Buyers may waive the right to statutory and lead disclosures.
b. Sellers must disclose if the property is located in a very high fire hazard zone or state fire responsibility area.
c. Sellers must provide the buyer with information about registered sex offenders in the area.
d. Sellers of property with HOA fees must provide records of fee payments.
962) In the buyer’s investigation of property section of the sample sales contract you reviewed, the ___________ is obligated to cover the cost of any damages caused by inspection.
a. Broker
b. Buyer
c. Home inspector
d. Seller
963) Which one of the following statements is true about a sales contract that’s been signed by both parties, and both parties have been notified of its acceptance?
a. It can also be called the consumer notice.
b. It consists of two pages: a brief description of the agreement and a signature page.
c. It’s a legally binding contract.
d. It’s the document buyers and their agents use to enter into a business relationship.
964) Lena’s buyer client Mindy is making an offer on Joe’s house. Which party decides how much earnest money to offer?
a. Joe
b. Joe’s agent
c. Lena
d. Mindy
965) What is a contingency?
a. A condition
b. A deadline
c. A promise
d. A warranty
966) Which of these subsections found in the allocation of costs section identifies who will pay for a natural hazard zone disclosure report?
a. Escrow and Title
b. Government Requirements and Retrofit
c. Inspections, Reports, and Certificates
d. Other Costs
967)
968) Which one of the following is used to document a buyer’s offer to a seller?
a. Listing agreement
b. MLS listing
c. Promissory note
d. Sales contract
969) Kirby, a buyer, offers to allow the seller to remain for three days after closing. How might this be accounted for in the sample purchase agreement you reviewed?
a. In a separate rental agreement
b. In the Inclusions and Exclusions section
c. In the Possession section
d. In the Sale and Leaseback section
970) In the sample purchase agreement you reviewed, where is allocation of transfer fees communicated?
a. Escrow and Title
b. Government Requirements and Retrofit
c. Inspections, Reports, and Certificates
d. Other Costs
971) Which of the following is synonymous with a sales contract?
a. MLS listing
b. Mortgage
c. Offer to purchase
d. Promissory note
972) Amy is about to complete her very first sales contract. What should she do to prepare?
a. Grab waters for herself and her clients.
b. Have a drink. It’s time to celebrate!
c. Nothing. The sales contract will write itself.
d. Review the contract and make sure she understands what each section means.
973) Which of these buyer and seller advisories is so unusual that it would need to be written into most residential purchase agreements as an “other” term?
a. Buyer’s Inspection advisory
b. Haunted House advisory
c. REO advisory
d. Short Sale advisory
974) By agreeing to the property condition section of the purchase agreement you reviewed, the seller is agreeing to sell the property in its current condition and remove _______________________.
a. Debris and personal property
b. Fixtures
c. Improvements
d. Material defects
975) In what section of the sample purchase agreement you reviewed does the buyer agree to pay for damages caused by the buyer’s home inspector?
a. Buyer’s Investigation of Property
b. Damages Not Waived
c. Seller Damage Contingency
d. Seller’s Notice to Buyer
976) Whose responsibility is it to understand the ins and outs of the sales contracts?
a. Brokers
b. Buyer agents
c. Real estate professionals and their clients
d. Seller agents
977) According to the property condition section of the sample purchase agreement provided, the property is being sold _________, or in its current condition, unless the parties agree otherwise in writing.
a. As-is
b. By default
c. Under warranty
d. With material defects
978) What type of agreement accounts for commission to be paid and includes the seller’s permission for marketing the property?
a. The buyer’s agency agreement
b. The listing agreement
c. The sales agreement
d. The seller’s agency agreement
979) Your seller, Steven, has agreed to make certain repairs. Besides performing the repairs, what else must he do?
a. Post a bond for $1,000 with escrow to cover any defective workmanship
b. Provide a warranty for the repairs completed
c. Provide the buyer with copies of invoices and receipts
d. Use a contractor specified by the buyer
980) Your client, Mindy, had to put another $15,000 down on a house she’s buying because it didn’t appraise at the sales price and the seller won’t budge. Mindy is furious and blames you. Is she right?
a. No, because agents are not responsible for anything
b. No, because you’re not responsible for setting the sale price
c. Yes, and while it’s not nice of Mindy, this was your responsibility
d. Yes, but only if you provided comparables
981) In the purchase agreement, a party who has legal power of attorney to sign on behalf of another entity is referred to as a __________________.
a. Broker
b. Buyer’s agent
c. Representative agent
d. Representative party
982) A buyer put $10,000 down on a $400,000 purchase price, then defaulted. If the seller obtains maximum liquidated damages, how much will the seller collect?
a. $10,000
b. $12,000
c. $15,000
d. $5,000
983) Wanda is a buyer and waited until the last day of her inspection period to try to schedule an inspector. She then had to ask for an extension of the inspection period, which the seller signed. On what part of the sales contract you reviewed did Wanda fail to deliver?
a. As long as the addendum is signed, she did nothing wrong
b. The inspection period section
c. The liquidated damages section
d. The requirement to not unduly delay
984) Whose written and signed instructions does escrow follow?
a. The listing agent
b. The seller
c. The seller and buyer together
d. The selling agent
985) Which of these statements accurately describes the standard terms for proration of property taxes and other items found in the sample purchase agreement you reviewed?
a. Payments on Mello-Roos are the only property tax item that is exempt from proration.
b. Property taxes and other items are prorated up until closing, and the buyer is responsible for the prorated costs that remain.
c. Supplemental tax bills received by the buyer after transfer of title and possession shall be billed directly to the seller.
d. The seller is obligated to prepay all property taxes in full prior to close of escrow.
986) Your client, Lisa, is buying a home on behalf of her parents, who had been in an assisted care facility but, due to a juicing regimen, have sprung back admirably and are moving to Florida. Lisa is in charge of her parent’s trust and has authority to sign on their behalf. What box must you indicate on the sales contract?
a. “Absentee buyers”
b. “Buyer is signing in a representative capacity”
c. “Health rebound facilitates purchase”
d. “Trust estate”
987) The mediation provision found in the sample purchase agreement you reviewed applies _________________.
a. If both parties initial the section
b. To all parties, even if the provision is not initialed
c. To foreclosures and unlawful detainer actions
d. To the seller only
988) According to the sample purchase agreement you reviewed, a notice to perform may be issued by either party no sooner than two days __________________________.
a. After the applicable deadline
b. After verbal notice
c. Before closing
d. Before the applicable deadline
989) Who retains the right to cancel if the buyer doesn’t respond to a notice to buyer to perform?
a. Both buyer and seller
b. Escrow
c. The buyer
d. The seller
990) If a buyer defaults on the purchase of a $300,000 single dwelling residential property after paying a $40,000 deposit, what is the maximum amount of liquidated damages that may be awarded to the seller?
a. $10,000
b. $12,000
c. $1,500
d. $9,000
991) The ______ is a neutral third party that assembles and processes all of the pieces of a real estate transaction, records the transaction, and disburses and distributes funds according to the parties’ instructions.
a. Escrow holder
b. Personal assistant
c. Transaction agent
d. Transaction broker
992) In the Effect of Cancellation on Deposits subsection of the sample purchase agreement you reviewed, the parties agree that if they exercise their right to cancel the agreement, they will _____________________.
a. Attend mediation to resolve disbursement of escrow funds
b. Forfeit funds held in escrow to the other party
c. Pay $1,000 each to escrow
d. Sign a mutual agreement to release funds from escrow
993) In a friendly phone call, Herbert, a seller, told Max, the buyer, that he would leave behind the swing set in the back yard. Herbert took the swing set with him when he left. What do we know about this situation?
a. Herbert is in breach of contract.
b. Herbert must compensate Max for the cost of the swing set.
c. Herbert must return the swing set
d. The offer is not part of their contract.
994) The _____________ section of the purchase agreement is not for the buyer to fill out. It is where the seller indicates whether the offer is accepted or countered.
a. Acceptance of Offer
b. Accepted or Countered
c. Expiration of Offer
d. Terms and Conditions
995) According to the scope of duty section in the sample purchase agreement you reviewed, it is outside the broker’s scope of duty to _____________________.
a. Compare market values
b. Consult on the price to offer
c. Decide what price to offer
d. Provide a price opinion on a property
996) You’re getting ready to write up an offer for your client, Bill. Before you complete the deadline for seller’s response, what might be a good way to make sure it doesn’t expire before the seller has a chance to sign it?
a. Call the seller’s agent to find out if the client will be in town to sign it.
b. Write it for plenty of time, such as a month or longer.
c. Write “offer does not expire” in the expiration section.
d. Write two offers: one that expires in two days and one that expires in a week, and send them both to the listing agent.
997) Within how many days following the acceptance must escrow receive a copy of the purchase agreement, according to Section 20 of the sample sales contract you reviewed?
a. One
b. Seven
c. Three
d. Two
998) Julie accepts an offer at 2 p.m. on Wednesday, August 5, and is relieved when the buyer produces verification of the funds for down payment and closing, on the final day of the three days allowed after acceptance. The buyer produced verification of funds on ___________________.
a. Friday, August 7
b. Monday, August 10
c. Saturday, August 8
d. Tuesday, August 11
999) Which of the following statements is true about the amount of liquidated damages a seller may collect?
a. It equals 3% of the sales price plus the earnest money.
b. It is capped at 3% of earnest money.
c. It maxes out at 3% of sales price, but may not exceed the earnest money deposited.
d. It may not exceed 3% of the sales price unless the property is valued at or above $1 million.
1000) Which of these sellers’ actions meets the standard terms for final verification of property condition and repairs found in the sample purchase agreement you reviewed? In other words, which seller is following the standard terms of the contract?
a. The seller forgets to repair holes in the wall and places a plant in front of them before the buyer arrives for final verification of property.
b. The seller hires a contractor to repair holes in the wall and informs the buyer that the contractor never provided a receipt.
c. The seller hires a contractor to repair holes in the wall starting the day the buyer is scheduled to verify final condition.
d. The seller repairs holes in the walls and documents that they were completed six days before close.
1001) Marcus puts his initials at the bottom of the Acceptance of Offer section on a purchase agreement and declares it is time to celebrate. Assuming he put his initials on a C.A.R. residential purchase agreement, what did he just do?
a. Confirmed receipt of a buyer’s offer to purchase his property
b. Confirmed receipt of a seller’s acceptance of his offer to buy a house
c. Countered a buyer’s offer to buy his property
d. Rejected a buyer’s offer to purchase his property
1002) Who is responsible for the payment of property taxes after closing?
a. Escrow
b. The buyer
c. The seller
d. The seller and buyer share the responsibility for any property taxes that are billed after closing.
1003) The Time Periods section of the sample purchase agreement you reviewed gives the buyer a deadline for removing the ___________________.
a. Funds from escrow
b. Inspection contingency
c. Notice to perform
d. Title insurance
1004) Charles, an on-record representative for Breck in Breck’s purchase of a house, initials a page on the sales contract. Those initials have the same effect as if _____________.
a. It had been a signature
b. They were Breck’s initials
c. They were notarized
d. They were recorded with the county clerk
1005) Certain expenses of home ownership will be prorated at closing, with the seller paying up through the closing date, and the buyer responsible for ______.
a. All items that are now liens
b. Expenses incurred after close of escrow
c. Sending future supplemental tax bills to the seller
d. The full amount of property taxes from date of offer
1006) In the event of a dispute between the parties, what does the sample sales contract you reviewed have to say about mediation and arbitration?
a. The parties agree to arbitrate, and failing that, to mediate.
b. The parties agree to mediate any disputes and relinquish their right to arbitrate.
c. The parties agree to mediate first, then, failing that, to arbitrate or go to court.
d. The parties agree to submit to binding mediation, rather than going to court.
1007) A buyer defaults on the purchase of an $800,000 single dwelling residential property after paying a $160,000 deposit. What is the maximum amount of liquidated damages that may be awarded to the seller?
a. $24,000
b. $4,800
c. $48,000
d. $80,000
1008) If an offer is accepted at 2 p.m. on Tuesday, August 4, when, according to the sales contract, does a deadline that falls “five days after acceptance” occur?
a. 11:59 p.m., August 10
b. 11:59 p.m., August 11
c. 2 p.m., August 11
d. 2 p.m., August 9
1009) Which of these statements best summarizes the purpose of the Final Verification of Condition section of the sample purchase agreement you reviewed?
a. This section provides a deadline for removal of the final condition contingency.
b. This section provides joint instructions to a neutral third party, who will verify condition of the property.
c. This section states that the buyer has the right to verify the property is being sold in the agreed-upon condition within a specified time period.
d. This section states that the seller has the right to notify the buyer when they are ready for final verification of condition.
1010) If seller repairs are required in a transaction, by when must they be completed?
a. Any time prior to closing, unless agreed otherwise
b. Prior to final verification of condition
c. Prior to settlement
d. Up until 10 days post closing, unless agreed otherwise
1011) You’re working on a deal and escrow did not close. When will you receive commission owed to you?
a. As mutually agreed between the client and broker
b. At the date originally specified for closing
c. Never; if escrow doesn’t close, the agent earns nothing
d. Within 10 days of the original closing date
1012) Jake was afraid there would be competing offers, so he put a very short turn-around time on the expiration of his offer. What will happen if his deadline to respond passes?
a. As long as the seller accepts, it doesn’t matter when the acceptance occurs, provided Jake acknowledges the acceptance.
b. As long as the seller accepts within 48 hours after the deadline and Jake acknowledges the acceptance, the offer can be kept alive.
c. The offer will be null and void.
d. The seller will have to fill out an “additional signature addendum” if accepting past the deadline.
1013) If Barney were awarded $6,000 as the maximum amount of liquidated damages allowed on a residential property after the buyer breached the contract, what was the purchase price?
a. $200,000
b. $400,000
c. $50,000
d. $600,000
1014) Amy’s seller client has received a written notice to perform the delivery of required disclosures. Which of the following can you safely assume is true?
a. It has been two days since the seller was given verbal notice that the deadline passed.
b. The buyer is creating an excuse to back out of the sale.
c. There are fewer than two days remaining to meet the originally agreed-upon deadline.
d. The seller has breached the contract of sale.
1015) Your buyer gave the seller a notice to perform. According to the sample purchase agreement you reviewed, how many days does the seller have to respond?
a. One day
b. Seven days
c. Three days
d. Two days
1016) Which of the following statements about the seller’s acceptance of the buyer’s offer is true?
a. If the seller does not accept the buyer’s offer by the date and time specified in the purchase agreement, the offer is null and void.
b. If the seller does not provide acceptance by the date and time specified in the contract, the offer is assumed to be accepted.
c. Once the seller accepts the buyer’s offer, no changes can be made to the contract.
d. The seller can verbally accept the offer.
1017) If a buyer must deliver notice to the seller no earlier than two days prior to Monday, August 5, when may the notice be delivered?
a. Friday, August 2
b. Saturday, August 3
c. Thursday, August 1
d. Wednesday, July 31
1018) If you know the seller will be out of town when your buyer client wishes to make an offer, you can extend the deadline to accept in the _______________ of Offer section.
a. Deadline
b. Expiration
c. Extension
d. Rescission
1019) According to the sample purchase agreement you reviewed, what must the buyer or seller do before cancelling a sales contract for failure of the other party to close escrow?
a. File an affidavit with the county clerk
b. Have a notarized copy of the sales contract entered into the public record
c. Provide a demand to close escrow
d. Provide a notice to perform
1020) What is the purpose of the preliminary title report?
a. Documents the title’s legal description to be used in the contract
b. Identifies all title issues that cloud the title
c. Offers to issue a title insurance policy
d. Serves as a promise from the seller to the buyer that the property title is clear
1021) Which of the following buildings requires disclosure of an airport in the vicinity?
a. An apartment building
b. A retail facility
c. A warehouse distribution center
d. Personal property mobile homes
1022) The buyer in a transaction has requested a particular closing agent in her offer. What kind of provision would this be considered?
a. Additional provision
b. Contingency
c. Possession
d. Purchase price and earnest money
1023) To which of the following properties does an agency disclosure form apply?
a. A five-plex
b. A five-plex and a four-plex
c. A four-plex
d. An office building
1024) 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
1025) Contingencies normally include the responsible party’s name, the deadline for the contingency removal, and ______.
a. The actions required for removal
b. The date the contingency was added
c. The reason the contingency was added
d. Three reasons the contingency is required
1026) Your brokerage firm uses pre-printed sales contract forms, but your seller, Marcus, wants to add some language about staying in the house and renting from the buyer for a month after closing. What should you use to add this information?
a. Addendum
b. Amendment
c. Annotation
d. Appendix
1027) Buyer Daphne and seller Kurt signed a sales contract with a definite closing date of May 15. Daphne then learned that she needed to move the closing date to June 15. What document should she use to make this change?
a. Addendum
b. Amendment
c. Annotation
d. Appendix
1028) What is the purpose of the C.A.R. Sales Disclosure Chart?
a. It provides examples of case studies in disclosure law.
b. It’s a checklist for items you must complete when presenting an agency disclosure form to your clients
c. It’s a reference guide for disclosure law.
d. It’s a template for creating your own disclosure forms.
1029) Camille, a buyer, wants to change the price already agreed to in a sales contract. What document should she use?
a. Addendum
b. Amendment
c. Bill of sale
d. New contract
1030) Which of the following agreement terms is typically a standard part of the sales contract?
a. Buyer’s option to purchase a home warranty
b. Selection of a closing agent
c. Specific closing instructions
d. Transfer of warranty on built-in appliances and HVAC systems
1031) If you’re working with a seller client who’s agreed to pay for the cost of a home warranty during negotiations, do you need to add an additional provision to the sales contract?
a. No, because purchase of a home warranty is always part of the sales contract.
b. No, because the cost of a home warranty is irrelevant to the sale.
c. Yes, because home warranties are never included in the sales contract.
d. Yes, unless it’s already included in the contract.
1032) The sales contract between buyer Milton and seller Tom has been signed. Whose responsibility is it to keep track of all of the buyer contingency deadlines?
a. Milton and his agent
b. Milton and Tom
c. Tom
d. Tom and Tom’s agent
1033) When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to the contract requesting that an attorney review the contract. What is Dashiell looking at?
a. Addendum
b. Amendment
c. Annotation
d. Appendix
1034) The appraisal on Jean’s property came in at $22,000 less than the agreed-upon sales price, so the buyer, Thomas, wants to renegotiate the terms. If they can come up with a new price that is satisfactory to both parties, what will they use to document this?
a. Addendum
b. Amendment
c. Annotation
d. Appendix
1035) Licensee Gwen and her buyer client Marcus are writing up an offer on Clayton’s property. Gwen will need to use an additional provision in the offer. Which of the following reasons for using an additional provision apply?
a. Clayton is selling the property as is with no repairs.
b. Marcus is afraid that the property won’t appraise.
c. Marcus is requesting that all mechanical system and appliance warranties transfer to him.
d. Marcus is using a VA loan to purchase the property.
1036) Glynnis is ready to close on her new house, but her agent told her that they have to wait for the homeowner to fix the electrical box as agreed. What clause in her contract allowed her to request the repair?
a. Appraisal contingency
b. Financing contingency
c. Home sale contingency
d. Inspection contingency
1037)
1038) Which of the following statements about the number of contingencies in a sales contract is true?
a. Every sales contract should contain a minimum of three contingencies.
b. The inclusion of numerous contingencies makes it less likely that the buyer’s offer will be accepted.
c. The more contingencies, the better from the seller’s perspective.
d. The number of contingencies is directly related to the cost of the home. The higher the asking price, the greater number of contingencies.
1039)
1040) Kermit has a single-family home. April has a five-plex. Will the same disclosure forms apply?
a. No, because a five-plex is a commercial, non-residential property
b. No; the agency disclosure form does not apply to the five-plex
c. Yes, because disclosure forms are uniform among property types
d. Yes, because they are both residences
1041) Sanjeev leases a house from Clara, and the lease has an option contract attached that permits Sanjeev to buy the house if he chooses to exercise the option within three years. How large does the option fee need to be in order to be legally binding?
a. 10% of the purchase price
b. 1% of the purchase price
c. Any amount agreed to by the parties
d. At least $1,000
1042) ______ is an offer to purchase a specific piece of real estate that does not obligate the offeror to buy it.
a. A buyer agency contract
b. A listing contract
c. An option contract
d. A sales contract
1043) Ezra’s lease on his condo includes an option to purchase. He told his landlord, Sherm, that he’s ready to purchase the condo, and they’ve negotiated a purchase price and closing date. What kind of contract is this?
a. Bilateral
b. Executed
c. Unilateral
d. Voidable
1044) What is an option?
a. A bilateral agreement
b. An offer to purchase a property, and an acceptance
c. An offer to sell a property, and a willing buyer
d. A unilateral contract
1045) Rose, represented by Sandy, and Tina, represented by Julie, entered into a sales contract for Rose to purchase Tina’s home. Rose intended to ask Tina to repair the water heater, but the inspection deadline came and went. Now Rose has to buy the property as-is. Whose responsibility was is it to keep track of all buyer contingency deadlines?
a. Julie
b. Rose
c. Rose and Sandy
d. Sandy and Julie
1046) Prior to the end of the option period, Dwayne withdraws his offer to sell his property to Melissa. Dwayne is in breach of contract. Melissa still wants the property and will sue for ______.
a. Criminal intent
b. Fraud
c. Monetary damages
d. Specific performance
1047) If there are two parties to an option contract, how many parties have the right to exercise the option?
a. None; it automatically comes into play at the end of the option period
b. One
c. Three: the optioner, the optionee, and the referee
d. Two
1048) Which one of the following elements does a valid option contract contain?
a. A list of the optionee’s financing options
b. An opt-out option for the optionor should the optionor be offered a better deal during the option period
c. A statement by the optionee of why the optionee wants to purchase the land
d. The sales price of the property or the way in which the price will be determined
1049) Andrew and Roberta have signed an agreement that gives Andrew the right to buy Roberta’s condo for $200,000, if he chooses to do so, up until April 2, 2018. What is this agreement called?
a. A bilateral contract
b. A lease
c. An option
d. A purchase and sale agreement
1050) Armand and Cécile recently purchased property from Eggbert. An option contract for the land was sold with the property. A few days after buying the land, Armand and Cécile receive a call from Juliette, the optionee on the option contract. Juliette wants to exercise her option and purchase the property. Which statement about this situation is true?
a. Armand and Cécile are bound to the terms of the option contract and must sell the property to Juliette.
b. Armand and Cécile had no right to purchase the property in the first place because it was under option.
c. Armand and Cécile may legally terminate the contract.
d. Eggbert is still the optionor of the contract and is now in breach of contract.
1051) Gloria has an option to purchase the cottage she leases from her landlord. She can exercise the option within the next two years. To gain that right, Gloria paid the landlord $5,000. This is called ______.
a. A deposit
b. A down payment
c. An option fee
d. Earnest money
1052) Margo is the potential buyer of the property in an option contract. Margo is the ______.
a. Optee
b. Opter
c. Optionee
d. Optionor
1053) Grant owns a property that’s subject to an option contract. Grant is the ______.
a. Optee
b. Opter
c. Optionee
d. Optionor

1054) Which of these statements accurately describes the purpose of a real estate option agreement?
a. Creates the option to buy a property in the future, within a specific time frame and at a particular price
b. Obligates the buyer to enter into a purchase agreement by a specific date
c. Provides a lessee, or renter, with the option to purchase the rented property at any time during the tenancy
d. Used by an investor to open a stock options account with an investment broker
1055) The C.A.R. Option Agreement form is designed to be used as an amendment to which two types of contracts?
a. Amendments and addenda
b. Disclosures and settlement statements
c. Environmental assessments and surveys
d. Leases and purchase agreements
1056) Cynthia loves her apartment and would like to have the option to buy it once her lease is up. Who is the best person to help Cynthia prepare a lease option?
a. A real estate attorney
b. A real estate investor
c. A real estate licensee
d. Her landlord
1057) Hernando, a real estate attorney, is preparing an option contract for his client, Wilma. Hernando asks Wilma what she and the seller have agreed upon for the option period. Wilma said the seller was leaving that up to her, and she wanted to get Hernando’s opinion. What should Hernando put into the contract for the option period?
a. “Indefinite”
b. “N/A”
c. “Negotiable”
d. “Six months”
1058) Which one of the following statements about the option period for a valid option contract is true?
a. If the contract doesn’t state the length of the option period, a court will require the optionor to make the option period for a “reasonable time.”
b. The contract doesn’t have to specify a specific length of time for the option period.
c. The optionee must purchase the property within the option period stated in the contract.
d. The optionor may sell the property to someone else during the option period.
1059) Who can enforce an option contract?
a. Either the optionor or the optionee
b. Only the court
c. Only the optionee
d. Only the optionor
1060) Wallace is beside himself. He spent the last five months raising enough money to purchase the property that he has an option on, and now, a month before the end of his option period, the seller refuses to sell him the property. The seller’s actions are ______.
a. A breach of contract
b. Justified because the option period is nearly at an end
c. Not very nice, but legal
d. Within his rights as the owner of the property
1061) To comply with the statute of frauds, an option contract must be ______.
a. In writing and signed by the optionee
b. In writing and signed by the optionor
c. In writing and witnessed by an attorney
d. On file at the local courthouse
1062) Chevy is an optionee. What’s his sole responsibility?
a. Exercise the option.
b. Make an offer.
c. Make monthly payments.
d. Pay the option fee.
1063) With an option contract, which of the following constitutes a breach of contract?
a. The optionee enters into a sales contract on another property with a different seller.
b. The optionee opts not to purchase the property.
c. The optionor sells a different piece of property to a different optionee.
d. The optionor sells the property without the option contract to someone other than the optionee.
1064) Why does the closing agent review the purchase contract?
a. To check for contract errors
b. To ensure that all contract signatures are in place
c. To ensure that both parties are protected by clauses in the contract
d. To gather closing-related information agreed to in the contract
1065) Who grants title to the property being sold and receives payment?
a. Attorney
b. Broker
c. Buyer
d. Seller
1066) At closing, who pays for and receives clear title for the property being purchased?
a. Attorney
b. Broker
c. Buyer
d. Seller
1067)
1068) Which option is defined as a neutral third party holding a thing of value on behalf of one party to a transaction for the benefit of the other party?
a. De facto instructions
b. Escrow
c. Interpleader
d. Principal
1069) Who usually represents the lender at a closing?
a. Broker for the buyer
b. Broker for the seller
c. Lender’s attorney
d. Title insurance representative
1070) When does the seller’s broker receive commission?
a. After signing the representation agreement
b. After the buyer puts an offer down on a property
c. At or just after the closing
d. At the final walk-through of a property
1071) At the closing table, who examines all documents for buyers and represents their best interests?
a. Buyer’s attorney
b. Escrow agent
c. Lender’s attorney
d. Title insurance representative
1072) Karen and Vince have provided Ginger with their clear, unambiguous instructions for the sale and transfer of real property. What is another term for this?
a. Creating escrow
b. Real estate contract
c. Sales contract
d. Unilateral agreement
1073) How are closings typically conducted?
a. In person or through escrow
b. Over Skype
c. Over the phone
d. Via email correspondence
1074) Prior to signing the closing documents, what should the parties have already done?
a. Assured themselves that the conditions and contingencies of the purchase agreement have been met.
b. Moved locations.
c. Paid the balance of the purchase price to the seller.
d. Paid the title representative for the closing.
1075) Which option is defined as “the written conditions for delivery of the instruments of an escrow from one party to another”?
a. Escrow
b. Escrow instructions
c. Interpleader
d. Principals
1076) When are the mortgage loan commitment and title insurance contract signed?
a. At the closing
b. The day after closing on the property to ensure proper transfer of title
c. The day prior to closing
d. Weeks prior to closing
1077)
1078) Who closes on the cooperative brokerage agreement?
a. The agents for the buyer and seller
b. The buyer and the title insurance representative
c. The lender’s attorney and the seller’s agent brokerage
d. The seller and the seller’s agent
1079) Who delivers the evidence of a clear title at the closing?
a. Buyer
b. Lender’s attorney
c. Licensee representing the buyer
d. Title insurance representative
1080) When does the buyer’s agent, attorney, or lender contact the buyer to tell them the exact amount to bring to closing?
a. After receiving title
b. At the closing
c. The day of signing, or just prior to it
d. The week prior to closing
1081) What’s true about an escrow closing?
a. All settlement services are handled by a closing agent.
b. All settlement services are handled by the listing agent.
c. The buyer and seller must be present.
d. The buyer’s and the seller’s attorneys must be present.
1082)
1083) Which statement is true regarding how a face-to-face closing is conducted?
a. All parties are present and physically meet to sign and exchange documents.
b. It’s conducted by an escrow agent, and only one party is present at a time.
c. It’s conducted by a neutral third party who holds the funds, and the buyer and seller don’t meet.
d. The seller signs her documents separately from the buyer, and the closing is conducted by an escrow agent.
1084) Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare?
a. She’ll prepare a seller net sheet to disclose the seller’s net profit on the sale.
b. Working with the lender, she’ll prepare the Loan Estimate, which details the costs the buyer and seller will pay at closing.
c. Working with the lender, she’ll prepare the settlement statement, which details the costs the buyer and seller will have at closing.
d. Working with the title company attorney, she’ll prepare the preliminary title commitment.
1085) You’re working with a new buyer, Caleb, who is nervous about the earnest money you’ve placed in escrow on his behalf. What can you tell Caleb to reassure him?
a. Escrow can’t disburse the money without your signature
b. Escrow is bonded
c. Escrow is FDIC insured.
d. My company will cover any losses
1086) Which type of contract allows a buyer to legally possess the property after all of the terms and conditions have been met?
a. Compensation agreement
b. Listing agreement
c. Mortgage loan commitment
d. Sale agreement
1087) Which of the following actions occurs prior to closing?
a. A number of contracts are signed by the parties in attendance at the closing, such as the sale agreement, the mortgage loan commitment, and the title insurance contract.
b. The buyer obtains a binder for insurance coverage on the new home.
c. The buyer’s check is given to the seller.
d. The seller is paid the balance of the purchase price.
1088) When is the seller paid the full amount of the purchase price for the property?
a. After acceptance of the down payment or earnest money offer
b. At the closing
c. The day after transferring title to the buyer
d. The day prior to the closing
1089) Mark is offering to purchase Sarah’s house. They agree, and open an escrow account together. Mark and Sarah would be considered what to the escrow?
a. Bilaterals
b. Escrow agent/holder
c. Interpleaders
d. Principals
1090) Which type of closing is conducted with a neutral third party holding the funds, and the buyer and seller may never meet?
a. Escrow closing
b. Face-to-face closing
c. Internet closing
d. No-show closing
1091) Who at the closing table examines all documents for buyers or sellers and represents their best interests?
a. Buyer’s or seller’s attorney
b. Escrow agent
c. Lender’s attorney
d. Title insurance representative
1092) In a face-to-face closing, who meets with whom?
a. Buyer and seller meet with one another
b. Buyer meets with buyer’s agent and lender only
c. Buyer meets with buyer’s agent only
d. Closing agent meets with one party or the other
1093) Who closes on the mortgage loan commitment at closing?
a. The buyer and the lender’s attorney
b. The buyer and the seller
c. The buyer and the title insurance rep
d. The lender’s attorney and the broker for the buyer
1094) Which individual is responsible for ordering, preparing, and reviewing closing-related documents, such as the title policy and settlement statement?
a. The broker
b. The buyer
c. The closing agent
d. The seller
1095) Which term is defined as an escrow agent’s imperative to remain a neutral third party to any transaction?
a. Impartiality
b. Interpleader
c. Limited agency
d. Material facts
1096) How may escrow be terminated?
a. Through default by the buyer
b. Through default by the buyer or failure of the seller to meet a condition
c. Through written instructions by the listing agent
d. Through written instructions signed by the parties
1097) What type of relationship does an escrow agent have with the parties to a transaction?
a. Impartial
b. Interpleader
c. Material
d. Universal agency
1098) To whom may an escrow agent provide advice?
a. A buyer and seller in the transaction, equally
b. A buyer in the transaction
c. A seller in the transaction
d. Neither a buyer nor a seller in the transaction
1099) What is an interpleader action?
a. A case between family members who are dividing property
b. A legal action to settle an escrow dispute in court
c. A property purchase plead to the courts for a ruling
d. Introduction of a neutral third party to negotiate a transaction
1100) Jackie, a buyer, phoned Al, her escrow agent, about her transaction. He provided her some much-needed advice about contractual terms. Is this allowed?
a. No, because escrow agents must remain neutral
b. No, because escrow agents work for sellers
c. Only if Jackie is not represented by a real estate agent
d. Yes; this is part of an escrow agent’s role
1101) Shelly is an escrow agent in a transaction in which Bill is buying Jose’s property. Who does Shelly represent?
a. Bill and Jose
b. Bill only
c. Jose only
d. Neither Bill nor Jose
1102)
1103) As which type of property ownership has a buyer vested his title if he is the only owner of the property?
a. Community property
b. Estate in severalty
c. Joint tenancy
d. Tenancy in common
1104) Which term is defined as a legal action used to force a resolution to a dispute between escrow principals through the court?
a. Impartiality
b. Interpleader
c. Limited agency
d. Material facts
1105) Which individual has a limited agency relationship with both a buyer and seller in a real estate transaction?
a. Cooperating broker (buyer’s agent)
b. Escrow agent
c. Lender’s attorney
d. Listing/seller’s agent
1106) What may an escrow agent disclose to outside parties to a transaction as a limited agent to both parties to a transaction?
a. Nothing
b. The closing date of the escrow
c. The conditions of the escrow
d. The purchase price of the property
1107) How may a buyer’s title be vested through escrow?
a. As a cash reconciliation
b. As an estate in severalty or co-ownership
c. As an interpleader
d. As an officiate of the state
1108) Which term is defined as any new or detrimental information that would impact a principal’s decision to go through with the transaction?
a. Impartiality
b. Interpleader
c. Limited agency
d. Material fact
1109)
1110) Which of the following is a responsibility of an escrow agent?
a. Disbursement of funds, according to the seller’s wishes
b. Disbursement of instruments of title, according to the buyer’s wishes
c. Proper recordkeeping
d. Provide the parties with sound legal advice
1111) At the start of the escrow process, the escrow agent delivers the ______ from the title insurance company to the buyer for review.
a. Deed
b. Escrow instructions
c. Preliminary report
d. Title insurance policy
1112) Sasha accepted an offer on her duplex. The purchase price will be enough to cover the principal remaining on her existing mortgage, plus make her a tidy profit. Which individual is responsible for contacting Sasha’s lender to establish the payoff amount for her loan?
a. Sasha
b. Sasha’s attorney
c. Sasha’s real estate agent
d. The escrow agent
1113) Chance is the buyer’s agent on a transaction that has just closed. How will he typically be paid?
a. At closing, by cashier’s check from the buyer
b. At closing, by cashier’s check from the seller
c. By the buyer directly, or, if there is a cooperative compensation in place, by the seller directly
d. His brokerage will receive a commission check from the escrow agent; his broker will compensate Chance according to the terms of their agreement
1114) What’s one of the things a licensee must do in order to prepare a client for closing?
a. Explain who will be at the closing and what to expect.
b. Perform a home inspection.
c. Provide an abstract of title.
d. Provide the Loan Estimate.
1115) What should be done if a buyer notes any issues during the final walk-through before closing?
a. Contact the seller’s agent immediately to resolve the issue before closing.
b. Handle the issue on closing day.
c. Note these issues in the closing statement and move on.
d. Wait until after the closing to bring up any issues found in the final walk-through with the seller directly.
1116) Which type of insurance must a buyer obtain if a mortgage is involved?
a. Auto insurance
b. Homeowners fire and hazard insurance
c. Life and casualty insurance
d. Medical insurance
1117) Whose responsibility is it to review the preliminary title report?
a. The buyer and the buyer’s agent
b. The lender
c. The title insurance representative
d. The transaction coordinator for the lender
1118) Who is responsible for requesting a loan payoff statement before closing?
a. The buyer
b. The lender
c. The seller
d. The title insurance representative
1119) Who reviews the loan estimate?
a. The buyer
b. The lender
c. The seller
d. The title insurance rep
1120) Which option is an item on the buyer’s checklist to do before closing on a home?
a. Complete loan application
b. Give an affidavit of title to the title insurance company
c. Make all requested repairs to the property
d. Request a loan payoff statement
1121) How will the buyer or seller know where and when the closing is being held?
a. Their agents will inform them of the date once it’s set.
b. The lender will inform them according to MDIA rules and regulations.
c. The seller will set the time and date and is responsible for notifying all parties.
d. The title insurance company will inform them of a date once the title search is complete.
1122) How do licensees obtain their commission?
a. By providing the affidavit of title at the closing
b. By providing the escrow or closing agent with a broker statement that shows how much each broker should receive
c. By receiving a check directly from their client
d. By recording the deed in the public records
1123) How is the broker’s commission usually paid out?
a. All brokers are paid through the joint fund held by the buyer’s lender representative.
b. Each agent is paid separately with their own commission statement at the time of the closing from their clients directly.
c. Each participating brokerage is cut a check according to escrow instructions. Each agent is then paid through their brokerage.
d. The buyer’s agent is the only party involved who gets a commission check.
1124) Who is responsible for obtaining a home inspection?
a. The buyer
b. The lender
c. The seller
d. The title insurance company
1125) Who does a pre-closing final walk-through of a property?
a. The buyer and the buyer’s agent
b. The lender
c. The seller and the seller’s agent
d. The title insurance representative
1126) Who is responsible for reviewing the Closing Disclosure before closing?
a. The buyer and the lender’s attorney
b. The buyer and the seller
c. The buyer only
d. The seller only
1127) Who’s responsible for verifying that a client knows what documentation to bring to closing?
a. The client
b. The lender
c. The licensee who’s representing the client
d. The title insurance representative
1128) What’s part of the licensee’s role in the closing process?
a. Nothing
b. Paying the closing fees
c. Preparing clients for closing
d. Preparing the closing documents
1129) Who is responsible for obtaining evidence of title and title insurance?
a. The buyer
b. The lender
c. The seller
d. Title insurance representative
1130) Who’s generally responsible for ordering and reviewing a survey of the property?
a. The buyer
b. The lender
c. The seller
d. The title insurance representative
1131) When the property is financed, who is named as an additional insured entity on the homeowner’s insurance policy?
a. Buyer’s agent
b. Buyer’s attorney
c. Lender
d. Title insurance company
1132) Prior to the closing, one final inspection should take place. What is this inspection generally called?
a. Loan commitment
b. Secondary home inspection
c. Title commitment
d. Walk-through
1133) Who is responsible making all home repairs and meeting other terms of the sales agreement regarding the home?
a. The broker for the buyer
b. The buyer
c. The lender’s attorney
d. The seller
1134) Who is responsible for paying for homeowners insurance?
a. The buyer
b. The lender
c. The seller
d. The title insurance representative
1135) Who is responsible for obtaining an appraisal?
a. The buyer
b. The buyer’s agent
c. The lender’s attorney
d. The seller
1136) Who is responsible for providing the title insurance company with an affidavit of title?
a. The buyer
b. The lender
c. The seller
d. The title insurance rep
1137) Which type of manager lives on site?
a. Individual building manager
b. Individual property manager
c. Owner
d. Resident manager
1138) The Costa-Hawkins Rental Housing Act allows owners to raise the rent when a tenant moves out, even in areas subject to local ordinances. This is known as:
a. Exemptions
b. Market correction
c. Rent control
d. Vacancy decontrol
1139) To be an effective property manager, a licensee must be familiar with a variety of ______.
a. Agency disclosures
b. Employment contracts
c. Independent contractor agreements
d. Lease agreements
1140)
1141) Professional organizations, such as the ______________________, provide education and networking opportunities for members.
a. Accredited Management Organization
b. Certified Property Manager
c. Certified Residential Management Company
d. Institute of Real Estate Management
1142) Which of the following professional certifications for property managers applies to an individual?
a. Accredited Management Organization
b. Certified Property Manager
c. Certified Residential Management Company
d. Institute of Real Estate Management
1143) To check the creditworthiness of a prospective tenant, the lease application typically requests ______.
a. A credit score
b. A resume
c. Educational background
d. Permission to run a credit report
1144)
1145) Which of the following rental properties may be subject to local rent control ordinances?
a. Condo
b. Multi-unit building
c. New construction
d. Single-family home
1146) Under the Costa-Hawkins Rental Act, rental units built after 1995 are __________________ local rent control ordinances.
a. Allowed to be regulated by
b. Exempt from
c. Subject to
d. The primary focus of
1147) The property manager, hired by the owner to oversee daily operations of rental property, is responsible ___________________
a. To both the owner and the tenants
b. To the local rent control board
c. To the owner only
d. To the tenants only
1148) ______ managers live in and manage apartment buildings.
a. Community
b. Concierge
c. House
d. Resident
1149)
1150)
1151) A property manager has just met with Lena, who is interested in renting a vacant unit. What’s the best way for the property manager to determine how reliable Lena will be with rent?
a. Ask Lena what her credit score is.
b. Decide that because Lena was on time and professionally dressed, she will be good for her rent.
c. Get permission in writing from Lena to run a credit report.
d. Wait and see if the check for her security deposit is good.
1152) Which of the following professional certifications for property managers applies to a firm?
a. Accredited Management Organization
b. Certified Property Managers
c. Certified Support Specialist
d. Master Property Manager
1153) Investing in capital improvements to a property is one way to stall _______.
a. Cash flow
b. Competition
c. Obsolescence
d. Vacancy
1154) As part of preparing a marketing plan for a landlord client, property manager Michelle has gathered information from numerous sources. Which of the following is likely to be most useful to her as she determines whether rent in the building she manages is in line with the competition?
a. Complete rent roll from the building she manages
b. GIS data showing access points to bike lanes and public transportation
c. List of all maintenance and repairs completed in the building for the last 18 months
d. Results from millennial marketing survey showing advertising media preferences
1155) Reporting on local economic and other trends and activities will help you and the property owner plan and set goals. Which of the following trends would have the most negative impact on your property’s vacancy rates?
a. A local university is opening a branch campus in your neighborhood.
b. Mortgage interest rates have risen drastically.
c. One of your closest competitors has just finished a complete renovation of its property.
d. Two major area employers are hiring.
1156) What kind of budget serves two primary purposes: to help property managers maximize profitability and to avoid unforeseen major expenses?
a. Cash reserve
b. Expense
c. Operating
d. Stabilized
1157) The property management proposal includes information such as ______.
a. Details about the property manager’s personal interests and hobbies
b. Details about the property manager’s qualifications
c. Personal information about the property manager’s family
d. The benefits and bonuses the owner will give the property manager in return for services rendered
1158) The owner’s covenants section of the property management agreement between manager Fred Baines and owner Lilian James contains three key pieces of information. First, Fred is named as the person responsible for managing the building. Secondly, Lillian is identified as the property’s legal owner. What’s the third key piece of information?
a. That Fred is indemnified from any illegal acts of the tenants
b. The duration of the contract and its start and end dates
c. The fact that the owner is not facing foreclosure
d. The fee that Lillian will pay Fred for his property management services
1159) To calculate anticipated annual rent for a property, a property manager should take into account two primary factors, which are ______.
a. The market average rental rate and the number of tenants
b. The number of units and the market average rental rate
c. The owner’s net income goal and the operating expenses
d. The per-unit rate and the occupancy/vacancy situation
1160) The role of a property manager is to support the objectives and goals of the _______.
a. Lessee
b. Property owner
c. Tenant
d. Tenant association
1161) The financial reports you’ve prepared over the past several months indicate a gradual increase in the number and cost of maintenance calls. What does this most likely indicate to your owner?
a. Current tenants are being too hard on the property.
b. Maintenance staff salaries are too high.
c. More staff is needed to field maintenance requests.
d. Preventive maintenance tasks may need to be increased.
1162) When Saundra Neill signed a property management agreement with Henderson Properties, Inc., she made sure the agreement stated explicitly that Henderson owned each property she would be managing. In which section of the agreement would she find this verification?
a. Description of duties
b. Insurance provision
c. Owner’s covenants
d. Signature of the parties
1163) Property manager Dawson was reviewing a property management agreement and was happy to learn that he would be indemnified for any losses due to tenant negligence. Where is this likely found in the property management agreement?
a. Description of duties
b. Insurance provision
c. Owner’s covenants
d. Signature of the parties
1164) What section of the property management agreement states that the owner actually owns the property, and it’s not facing foreclosure?
a. Compensation
b. Description of duties
c. Owner’s covenants
d. Signature of the parties
1165) What legally binding document should give details about the reports a property manager will provide for a property owner?
a. Employee policies and procedures manual
b. Lease agreements
c. Property management agreement
d. Property management proposal
1166) In property management, what’s the legal and binding contract that spells out the duties for both the property manager and property owner?
a. Power of attorney
b. Property management agreement
c. Property management proposal
d. Service contract
1167) Which of the following information in a report would NOT help your owner assess whether your rental rates are competitive?
a. The number of occupants in each of your units
b. The number of unit applications accepted in the past six months
c. The number of vacancies in the property
d. The vacancy rate of your property compared to a similar, nearby property
1168) Randa is trying to lower the vacancy rates for the commercial property she manages because her revenue targets will increase by 8% over the next year. What type of budget contains this revenue detail?
a. Capital reserve
b. Operating budget
c. Stabilized
d. Variable
1169) The property management ______ cements the relationship between the property manager and the owner.
i. Addendum
b. Agreement
c. Lease
d. Waiver
1170) What relationship is established by the property management agreement between the property manager and the owner?
a. The agency relationship
b. The landlord-tenant relationship
c. The owner relationship
d. The service relationship
1171) Why might a property owner ask you to prepare a report showing the trend in rental delinquency rates?
a. To assess the adequacy of tenant income screening processes
b. To assess your ability to manage tenant relations
c. To determine if rental rates are too high compared to your competitors’ rates
d. To forecast the amount of effort that will be required to collect the late rents
1172) To develop a marketing plan for the property owner, the property manager should ______.
a. Compare the competition to the rates, condition, amenities, and location of the owner’s property
b. Ignore the property’s vacancy rate
c. Rely on the owner to do all of the market research
d. Take an existing marketing plan from an old property and modify it slightly
1173) Who are the parties to a property management agreement?
a. Brokerage and tenant
b. Owner and property manager
c. Owner and tenant
d. Property manager and tenant
1174) A property owner wants to know whether or not he should expect to invest capital funds into major repairs for the property. What part of the property management plan should he refer to for this information?
a. Analysis of alternatives
b. Competitive analysis
c. Market analysis
d. Property analysis
1175) As a property manager for several residential landlords, Tomas must provide critical reports to each of the property owners for whom he works. Which of the following information points needs to be updated and issued monthly?
a. Fair market value of each property
b. Income and expenses for each property
c. Number of vacation days taken by property employees
d. The number of days a tenant is late when paying rent
1176) Which type of analysis performed by a property manager includes a look at the properties within the market area that will be competing for tenants?
a. Analysis of alternatives
b. Competitive analysis
c. Market analysis
d. Property analysis
1177) Harrison owns a shopping center that had significant retail client turnover in the past couple of years. He’s asked the property manager, Prasad, to revamp the marketing plan to try to eliminate turnover. Prasad completed the market analysis; what step should he undertake next?
a. Build an advertising campaign.
b. Create a marketing message.
c. Ensure that rents are appropriate.
d. Identify appropriate retail targets.
1178) Like other agreements, the property management agreement details the terms of “employment” between the ______ and the ______.
a. Landlord; tenant
b. Owner; tenant
c. Property manager; owner
d. Tenant; property manager
1179) Forecasting the income and expenses that we can reasonably expect to bring in and pay out over a short term results in a budget that’s every property manager’s dream. That budget is ______.
a. A capital reserve
b. An expense
c. Historical
d. Stabilized
1180) Which type of analysis performed by a property manager is similar to a highest and best use analysis that an appraiser would use?
a. Analysis of alternatives
b. Competitive analysis
c. Market analysis
d. Property analysis
1181) The property manager’s primary responsibility to an owner is to ______.
a. Achieve the highest possible return on the owner’s investment
b. Achieve the lowest possible vacancy rate
c. Provide all required reports
d. Supervise maintenance and repair tasks
1182) Which of the following would property managers be expected to personally do as part of their assigned duties?
a. Budget preparation and oversight
b. Employee supervision
c. Overnight care of tenant pets
d. Property maintenance
1183) The section of a property management plan that is likely to include demographic information about potential tenants is the _______ analysis.
a. Competitive
b. Demographic
c. Market
d. Property
1184) Which of the following belongs in a property management plan?
a. Disclosures
b. Property condition
c. Property tax
d. Utility analysis
1185) Which type of analysis that a property manager performs includes a discussion of the property’s current condition and recommendations to stall or reverse obsolescence?
a. Analysis of alternatives
b. Competitive analysis
c. Market analysis
d. Property analysis
1186) Julian is glad that the property owner at the townhouse community he manages established a substantial capital reserve budget for unexpected expenses, like the new roofs needed after a hail storm. What are these types of expenses called?
a. Fixed
b. Operating
c. Stable
d. Variable
1187) All the following reports may be your responsibility as a property manager EXCEPT ______.
a. Monthly and annual financial reports
b. Neighborhood sales
c. Tenant rolls
d. Vacancy report
1188) A property manager has just started working for a new property owner who owns a small apartment building. The property manager learns that construction of a large apartment complex has been approved one block away from his client’s apartment building. What type of analysis would include this information?
a. Analysis of alternatives
b. Competitive analysis
c. Market analysis
d. Property analysis
1189) Which type of analysis that a property manager performs includes a review of the demographic, geographic, and governmental environment in which the property is located?
a. Analysis of alternatives
b. Competitive analysis
c. Market analysis
d. Property analysis
1190) The list of reports that a property manager would provide to the owner would likely include which of the following?
a. Age and occupation of all tenants
b. Credit scores for all tenants
c. Interior photos of the property
d. Rental contracts, including expiration dates
1191) The owner’s covenants and an insurance provision are included in which of the following documents?
a. Listing agreement
b. Property management agreement
c. Property management proposal
d. Property management waiver
1192) The property management agreement cements what relationship between the property manager and the owner?
a. The agency relationship
b. The landlord-tenant relationship
c. The owner relationship
d. The service relationship
1193) The owner of an apartment building with four units charges $1,000/month for each unit. What is the gross potential rental income for one year?
a. $24,000
b. $3,000
c. $36,000
d. $48,000
1194) What is the ROI for this scenario? An investor pays $80,000 cash toward the purchase price, finances the rest, and has a cash flow of $11,000 after repairs and debt services.
a. 107.3%
b. 13.75%
c. $69,000
d. 7.3%
1195) The owner of a duplex charges $2,000 per month for each unit. Over the last 12 months, one half of the property was vacant for six months. What was the owner’s effective gross income for this 12-month period?
a. $24,000
b. $3,000
c. $36,000
d. $48,000
1196) ROI = ______ / initial cash investment
a. Cash flow
b. Effective operating income
c. Gross operating income
d. Principal payment and interest
1197) An investor is thinking about buying a $200,000 commercial property. She has $100,000 saved up for a down payment and wants to finance the remaining $100,000. Annual cash flow is projected to be $13,000. What is the potential return on investment?
a. $113,000
b. 13%
c. 26%
d. 87%
1198) Net operating income ‒ ______ = cash flow
a. Debt services
b. Mortgage rate
c. Operating expenses
d. Vacancies and credit loss
1199) Coin-operated laundry equipment, vending machines, and late fees are all examples of ______.
a. Miscellaneous income
b. Operating income
c. Property income
d. Side income
1200) What do you divide cash flow by to determine the return on investment?
a. Debt service
b. Initial cash investment
c. Mortgage balance
d. Principal payment and interest
1201) Gross potential rental income ‒ ______ = effective gross income
a. Expense reimbursements
b. Late rent
c. Net operating income
d. Vacancies and credit loss
1202) If a cash investment of $100,000 results in a 25% ROI, what was the amount of cash flow?
a. 125%
b. $25,000
c. $50,000
d. $75,000
1203) Income from a vending machine on a rental property is an example of what?
a. Miscellaneous income
b. Operating income
c. Property income
d. Side income
1204) A property has a gross effective income of $50,000 and costs $60,000 to maintain. What is the net operating income for this property?
a. -$10,000
b. $10,000
c. $50,000
d. $60,000
1205) A property has a gross effective income of $500,000 and costs $50,000 to maintain. What is the net operating income for this property?
a. 10%
b. $400,000
c. $450,000
d. $50,000
1206) This is the value a buyer and a seller agree upon.
a. Assessed value
b. Investment value
c. List price
d. Market value
1207) The amount of money that remains after debt service is subtracted from net operating income equals what?
a. Bottom line
b. Cash flow
c. Effective gross income
d. Net gross income
1208) A potential investor has inherited $250,000 and wants to use that as a down payment on an investment property. What additional information do you need to calculate ROI for each potential investment?
a. Initial cash investment
b. Mortgage rate
c. Principal payment and interest
d. Projected cash flow
1209) Costs associated with running and maintaining a property are called ______.
a. Landlord expenses
b. Operating expenses
c. Profit loss
d. Property expenses
1210) Property expense reimbursements are paid to the ______.
a. Landlord
b. Property manager
c. Property owner
d. Tenant
1211) The list price is the price for which the ________ has agreed to sell a property.
a. Broker
b. Buyer
c. Owner
d. Property manager
1212) Actual gross potential income is offset by ______.
a. Capital improvements
b. Cash flow
c. Operating expenses
d. Vacancy and credit loss
1213) Which of these has a negative impact on the property owner’s cash flow?
a. Debt service
b. Expense reimbursements
c. Gross reimbursements
d. Miscellaneous income
1214) An investor is thinking about buying a $500,000 house to use as a rental property. She has $100,000 saved up for a down payment and will mortgage the remaining $400,000. The annual cash flow is projected to be $25,000. What is the potential return on investment?
a. 25%
b. $25,000
c. 4%
d. 5%

1215) Applying a capitalization rate to the net operating income is one way to determine the ___________ value.
a. Assessed
b. Depreciated
c. Investment
d. Market
1216) Effective gross income ‒ ______ = net operating income
a. Debt services
b. Mortgage payments
c. Operating expenses
d. Vacancies and credit loss
1217) When this value is negative, it is a sign that the investment property cannot bring in enough money to cover its costs to maintain.
a. Mortgage rate
b. Net operating income
c. Operating expenses
d. Vacancies and credit loss
1218) A property manager has accounted for all sources of income on a rental property and needs one more piece of information to determine the effective gross income. What information is needed?
a. Expense reimbursements
b. Net operating income
c. Operating expenses
d. Vacancies and credit loss
1219) This is the value used by government tax assessment offices.
a. Assessed value
b. Investment value
c. List price
d. Market value
1220) The ______ affects a property’s income tax basis.
a. Assessed value
b. Depreciated value
c. Investment value
d. Market value
1221) This term refers to the amount of income that remains after miscellaneous expenses and expense reimbursements are added to gross potential rental income, then vacancies and credit loss are subtracted.
a. Cash flow
b. Effective gross income
c. Net operating income
d. Operating expenses
1222) Calculating the return on investment can be a part of determining a property’s ______.
a. Assessed value
b. Investment value
c. List price
d. Market value
1223) Which of these has a positive impact on the property owner’s cash flow?
a. Debt service
b. Expense reimbursements
c. Operating expenses
d. Vacancy
1224) A new commercial property owner plans to charge $1,000/month for each unit. There are six units. What is the gross potential rental income for one year?
a. $36,000
b. $48,000
c. $50,000
d. $72,000
1225) Should the broker end up in litigation, any trust funds not safely tucked away in a trust account could be ______.
a. Disbursed
b. Eliminated
c. Frozen
d. Reallocated
1226) A good way to remember what qualifies as non-trust funds is to ask whether or not the funds have been ______ to you to secure a real estate transaction.
a. Bequeathed
b. Entrusted
c. Loaned
d. Signed over
1227) The funds placed in trust accounts are insured by the ______.
a. AARP
b. FDIC
c. NAIC
d. WNBA
1228) Frances collected an earnest money check from her client, but didn’t have an opportunity to deliver it to the escrow agent before close of business on Friday. For safekeeping, she deposited it into her personal checking account over the weekend and wrote the escrow agent a new check on Monday morning. Which of these statements is true?
a. Frances is guilty of commingling.
b. Frances is guilty of commingling and conversion.
c. Frances is guilty of conversion.
d. Frances is guilty of fraud.
1229) Moneys given for purchase deposits are ______.
a. Commission
b. Non-trust funds
c. Revenue
d. Trust funds
1230) Do non-trust funds need to be deposited into trust accounts?
a. It varies from broker to broker.
b. No, that would be commingling.
c. They may but don’t have to be.
d. Yes, so the funds have FDIC coverage.
1231) Which of these is an example of conversion of funds?
a. Marcus converted a CD to cash and deposited it in the firm’s operating account.
b. Monica used funds from the firm’s trust account to pay her firm’s rent.
c. Soo Min transferred funds from her firm’s trust account to the closing company’s trust account in time for settlement.
d. Tristan deposited a client’s earnest money check into the firm’s operating account.
1232) What do the commissioner’s regulations and the Business and Professions Code have to say about trust fund account handling?
a. Any interest earned must be turned over to the client
b. If kept in a general business account, they must be labeled “trust fund”
c. Nothing; this is a matter for the state’s attorney general
d. They must be kept in a neutral escrow or trust fund account
1233) What are the requirements for trust funds?
a. They may be placed in a neutral escrow account or a firm’s general account that is interest bearing, with the interest paid to the client.
b. They must be placed in a trust fund bank account or a neutral escrow account.
c. They must be placed in either a neutral escrow account or a firm’s general business account.
d. They must be placed in either a trust fund bank account or a firm’s general business account.
1234) What are trust funds?
a. Commission money the licensee has earned
b. Money belonging to others held for a specific purpose in the course of a real estate transaction
c. Money given as a gift to the broker
d. Rent received from a broker-owned property
1235) Should a client incur financial hardship because of the misuse of trust funds, the broker could be held ______.
a. Blameless
b. In contempt
c. Liable
d. Uninsurable
1236) General business funds should never be deposited into ______ unless the amount of money is nominal and is being used to pay administrative fees.
a. An interest-bearing account
b. A non-interest-bearing account
c. A state account
d. A trust fund account
1237) FDIC insurance covers every owner of funds deposited into a trust account, up to __________each.
a. $150,000
b. $25,000
c. $250,000
d. $400,000
1238) Jerry, a licensee, received a commission check. Where should he deposit those funds?
a. In his own private account
b. In the broker’s business account
c. In the firm’s neutral escrow account
d. In the trust account
1239) Holding non-trust funds doesn’t create ______ responsibility to other parties unless the non-trust funds are commingled with trust funds.
a. Actuarial
b. Fiduciary
c. Legal
d. Moral
1240) Depositing trust funds into a trust account provides protection for those funds should the broker or licensee be faced with ______.
a. Accidents, death, or litigation
b. Only a debilitating accident
c. Only death
d. Only litigation
1241) Once handed over, trust funds belong to the ______ until the transaction for which they were designated has been completed, or they’re disbursed according to the agreement between the parties.
a. Bank
b. Broker
c. Licensee
d. Party who submitted them
1242) Non-trust funds, as long as they’re not commingled with trust funds, are not bound by _______.
a. Banking regulations
b. International trade rules
c. Real estate laws
d. State laws
1243) Which of the following is the most severe potential consequence of failing to comply with regulations for the handling of trust funds?
a. Liability for damages to the client
b. License revocation
c. License revocation and financial liability for damages incurred by the client
d. License suspension
1244) If trust funds aren’t placed in a trust fund bank account, where should they go instead?
a. To an escrow account
b. To the broker’s business bank account
c. To the licensee’s personal bank account
d. To the petty cash box in the broker’s office
1245) Even the most honest broker can make a mistake from time to time. Keeping trust funds in ___________ diminishes the possibility of accidental misuse of trust funds.
a. Personal accounts
b. Private brokerage accounts
c. Swiss bank accounts
d. Trust accounts
1246) Your broker has received an earnest money check from you for a transaction. Where should this check be deposited?
a. In an interest-bearing account
b. In a trust fund account or neutral escrow
c. In the firm’s general business account, with a ledger entry for the client’s name, labeled “trust fund”
d. In the firm’s safe or safety deposit box until closing
1247) ______ is an example of non-trust funds.
a. A check given as earnest money on a purchase contract
b. A personal note thanking a licensee for her assistance
c. A security deposit given to a property manager
d. Rent received from a broker or licensee-owned property
1248) What is commingling?
a. A blend of different types of non-trust funds
b. A social gathering
c. Combining different types of trust funds
d. Mixing personal and trust funds
1249) Trust funds have better protection when deposited into trust accounts because they are ______.
a. In an interest-bearing account
b. Insured by the banking industry
c. Insured by the depositor’s private insurance
d. Protected from seizure
1250) Randy, a broker, regularly places his client’s trust funds in the firm’s general business account, noting “trust fund” on the ledger. What is the problem with this approach?
a. They must be placed in an interest-bearing account.
b. They must be placed in a trust fund bank account or neutral escrow.
c. They must go into a separate general business account.
d. They should not be marked “trust fund.”
1251) Which of the following is the most severe potential consequence of failing to comply with regulations for the handling of trust funds?
a. Liability for damages to the client
b. License revocation
c. License revocation and financial liability for damages incurred by the client
d. License suspension
1252) Even the most honest broker can make a mistake from time to time. Keeping trust funds in ___________ diminishes the possibility of accidental misuse of trust funds.
a. Personal accounts
b. Private brokerage accounts
c. Swiss bank accounts
d. Trust accounts
1253) Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier’s issue?
a. Xavier is guilty of commingling and conversion.
b. Xavier is guilty of commingling only.
c. Xavier is guilty of conversion only.
d. Xavier is guilty of theft.
1254) Should a client incur financial hardship because of the misuse of trust funds, the broker could be held ______.
a. Blameless
b. In contempt
c. Liable
d. Uninsurable
1255) Do non-trust funds need to be deposited into trust accounts?
a. It varies from broker to broker.
b. No, that would be commingling.
c. They may but don’t have to be.
d. Yes, so the funds have FDIC coverage.
1256) Which of the following are considered trust funds?
a. Cash, checks, and other items of value
b. Cash only
c. Checks and cash only
d. General operating funds only
1257) BRE form 4522 must be used in conjunction with which other BRE form?
a. 4523
b. 4524
c. 4525
d. 4526
1258)
1259) One of the most important parts of a broker’s job is keeping track of trust funds received and disbursed. This requires accurate __________ be maintained at all times.
a. Filing cabinets
b. Office hours
c. Records
d. Staffing
1260) Who in a brokerage is ultimately responsible for reconciling trust fund account records?
a. The broker
b. The firm’s attorney
c. The firm’s CPA
d. The office administrator
1261) Keeping precise records gives the broker the means to provide ______reports to clients.
a. Accurate
b. Annual
c. Billing
d. Sales
1262) Broker Betsy is recording her receipt of funds from a client. She’ll hold these funds until the vendor she hires to paint her client’s house sends her an invoice. Where does she record the deposit?
a. In the brokerage checking account register
b. In the client beneficiary account journal
c. In the trust account deposit ledger
d. In the trust account journal and the client’s beneficiary ledger
1263) A broker is required to keep a __________ to keep track of all beneficiary accounts.
a. Beneficiary ledger
b. Checkbook
c. General accounting book
d. Rent roll
1264) BRE Form 4523 is used to keep a separate record for every ___________________.
a. Cash or check
b. Deposit or withdrawal
c. Disbursement or cancelled check
d. Transaction or beneficiary
1265)
1266)
1267) Trust fund account records must be kept in line with general accounting principles and must include, at minimum, _______.
a. A beneficiary ledger
b. A beneficiary ledger and journal
c. A cash ledger
d. A cash ledger, a journal, and a beneficiary ledger
1268) Does the BRE require the use of columnar records?
a. It varies from broker to broker
b. It varies from county to county
c. No
d. Yes
1269) When a brokerage has a large number of transactions, accurate records help the broker remember how much ________ is held for each client.
a. Insurance
b. Interest
c. Money
d. Regard
1270) Either __________ recorded or computer-generated records are acceptable, under Commissioner’s regulations.
a. Automatically
b. Erroneously
c. Manually
d. Tape
1271)
1272) Marsha is a broker and uses columnar records for her trust accounts. She uses BRE form 4523 to keep track of each beneficiary or transaction. What other form is she required to use in conjunction with 4523?
a. 4522
b. 4523
c. 4524
d. 4525
1273) Which type of accounting record shows a chronological record of all the deposits to and disbursements from the trust account?
a. Broker’s ledger
b. Cash journal
c. Time ledger
d. Trust account journal
1274) Brokers must keep a __________ to record transaction details as they occur.
a. Checkbook
b. Credit ledger
c. Debit ledger
d. Journal
1275) What is the purpose of BRE form 4522?
a. To record all non-trust fund activity
b. To record all transactions or account beneficiaries
c. To record all trust funds received and paid out
d. To record personal income
1276) Marsha’s brokerage is due for an audit from BRE. She doesn’t worry, though, because she has _____________.
a. Accurate records
b. A smart accountant
c. Audit insurance
d. Friends at BRE
1277)
1278) The suggested form for tracking incoming and outgoing trust funds from a trust fund bank account is BRE form _______.
a. 4522
b. 4523
c. 4524
d. 4533
1279) The purpose of ______ is to balance the trust account and ensure that all funds deposited or disbursed are properly recorded.
a. Bank statement review
b. Escrow closing
c. General accounting principle
d. Trust fund reconciliation
1280) How often should accounting records for trust fund accounts be reconciled?
a. Annually
b. Monthly
c. Periodically
d. Weekly
1281)
1282)
1283)
1284)
1285)
1286)
1287) Section 10148 of the ______ states that all records related to real estate transactions should be kept for a period of three years.
a. Business and Professions Code
b. Commissioner’s Regulations
c. IRS Tax Code
d. National Association of REALTORS® handbook
1288)
1289)
1290) Where trust funds are involved, ___________ is required.
a. Commingling
b. Conversion
c. Documentation
d. Earned interest
1291)
1292) How often are audits conducted on brokerage firm trust account records?
a. At least annually
b. Monthly
c. Quarterly
d. Routinely
1293) Who’s responsible for paying appraisal and credit report fees?
a. The buyer
b. The lender
c. The seller
d. The title company
1294) The seller net sheet is _______ of closing costs.
a. A bank-prepared estimate
b. A final accounting
c. A legally binding estimate
d. An estimate
1295) Who’s responsible for paying for recording documents to clear all defects from the title?
a. The buyer
b. The lender
c. The seller
d. The title company
1296) What can listing agents prepare for their clients to give them unofficial estimates of all closing costs?
a. Brokerage escrow estimate
b. Good Faith Estimate
c. Loan Estimate
d. Seller net sheet
1297) On the closing statement, what’s the term for an amount that shows up in the party’s favor?
a. Balance
b. Credit
c. Debit
d. Mortgage
1298) What does RESPA stand for?
a. Real Estate Seller Prohibition Act
b. Real Estate Settlement Procedures Act
c. Real Estate Society Protection Act
d. Real Estate Standard Protection Act
1299) According to RESPA, what must the lender give to the borrower at either the time of loan application or within three days following application?
a. Closing Disclosure
b. Freddie Mac borrower disclosure
c. Loan Estimate
d. TIL statement
1300) Which two items will appear on a closing disclosure?
a. Credits and debits
b. Repair invoices and seller credits
c. Seller net and buyer net
d. Title liens and buyer inspection items
1301) Who’s responsible for any tax reserves required to pay property taxes?
a. The buyer
b. The closing agent
c. The lender
d. The seller
1302) According to RESPA, what must the lender give to the borrower in the days immediately prior to settlement?
a. Closing Disclosure
b. Freddie Mac borrower disclosure
c. Loan Estimate
d. TIL Statement
1303) Which act ensures a buyer in a residential transaction that’s financed by a federally related mortgage loan has knowledge of all settlement costs?
a. Civil Settlements Act
b. Dodd-Frank Act
c. RELA
d. RESPA
1304) Seller Martin is looking at his Closing Disclosure. Which one of the following items is he likely to see?
a. Debits
b. Listing price
c. Seller net amount
d. Title liens
1305) ESPA prohibits kickbacks between which parties?
a. Construction contractors
b. Fellow agents
c. Referral parties
d. Settlement service providers
1306) Which document is signed and agreed to at closing and reconciles what the final financial obligations are for both the buyer and seller?
a. Affidavit of title
b. Closing disclosure
c. Sales agreement
d. Title insurance policy
1307) When the buyer and seller both have costs to pay, which form shows who pays what?
a. Closing statement
b. Home inspection report
c. Loan Estimate
d. Purchase contract
1308) Which act prohibits the payment of kickbacks from settlement service providers?
a. MDIA
b. RELA
c. RESPA
d. SEQRA
1309) Which of the following is provided at the time of a buyer’s offer and shows what the seller’s proceeds will be if the seller accepts the offer?
a. Closing Disclosure
b. Credit
c. Debit
d. Seller net sheet
1310) Which document provides an estimate of the costs a buyer is likely to pay at settlement before the closing?
a. Abstract of title
b. Closing Estimate
c. Loan Estimate
d. Sales agreement
1311) What’s the term for a charge that either party has to pay at closing?
a. Balance
b. Credit
c. Debit
d. Mortgage
1312) Who usually pays the broker commission?
a. The buyer
b. The lender
c. The seller
d. The title company
1313) Which type of federally related lending transaction is covered under RESPA?
a. Foreclosure
b. Industrial property loans
c. Mortgages and home equity credit lines
d. Retail property loans
1314)
1315) Why do lenders require a borrower to establish and maintain a reserve fund?
a. To cover the closing costs and pay the broker’s commission
b. To make money off of the buyer’s money for a year
c. To pay any property taxes in case the borrower misses a payment
d. To pay for any miscellaneous charges accrued during the loan application and approval process
1316) Which of the following is a way in which property taxes could impact your clients?
a. A sale in the area may prompt a reassessment, impacting new buyers.
b. Neighbors may be jealous about favorable tax rates.
c. Tax abatements could harm buyers financially.
d. Tax refunds are not possible if property tax deductions are taken.
1317) Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax?
a. $336,000
b. $387,000
c. $420,000
d. $432,000
1318) Does the sale of land that includes a permanent structure require notification of the Internal Revenue Service through Form 1099-S?
a. No
b. Only if the structure is commercial
c. Only if the structure is residential
d. Yes
1319) What must be reported to the Internal Revenue Service on Form 1099-S after a real estate closing?
a. Record of title transfer at the county clerk’s office
b. Sale price of the property and the date of closing
c. The date of the home inspection
d. The loan approval disclosure statement
1320) What steps can the real estate professional take to assist buyers with property taxes?
a. Calculate the tax ramifications of property tax deductions.
b. Disclose to buyers that a sale may prompt a reassessment.
c. Offer low-interest loans.
d. Tell buyers that property taxes aren’t important.
1321) On a closing statement, ______ goes in the seller’s credit column and the buyer’s debit column.
a. Loan fees
b. Prepaids
c. Taxes
d. Utility costs
1322) Who generally takes responsibility for reporting required information on Form 1099-S after a real estate closing?
a. The buyer’s agent
b. The closing agent
c. The seller
d. The seller’s agent
1323) 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.
1324) How are mortgage interest, taxes, insurance, and other similar expenses prorated?
a. The buyer typically pays the costs on the day of closing.
b. These are usually prorated based on a 360-day statutory year (30 days × 12 months).
c. These cannot be prorated. They must be prepaid.
d. The seller typically pays the costs on the day of closing.
1325) Which one of the following characteristics makes property taxes a reliable target for taxation?
a. They don’t hold their value.
b. They have a high compliance rate.
c. They have high collection costs.
d. They’re easy to conceal.
1326) Property taxes generate approximately ______ of local government revenue.
a. Half
b. One quarter
c. One tenth
d. One third
1327) Who’s responsible for disclosing the property taxes to the buyer?
a. The lender
b. The licensee
c. The seller
d. The title insurance company
1328) What’s a typical prepaid item that goes 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
1329) What information is provided to the IRS on Form 1099-S after a real estate closing?
a. Address or legal description of the property
b. Seller’s closing costs
c. Social Security numbers of all buyers, sellers, and their agents
d. The loan approval disclosure statement
1330) How are accrued real estate taxes that have been assessed but not yet due handled in a real estate transaction?
a. The assessment amount is split evenly between the buyer and seller and is paid on the day of closing.
b. The buyer is responsible for all taxes accrued in the year of purchase, and will pay the tax bill when due.
c. The tax bill will be prorated to the day of closing.
d. Typically, the seller pays the full assessed tax for the year on the day of closing.
1331) Nonny is purchasing a rental property where the tenants pay month-to-month rent. Which of the following is the most likely way for the rent to be prorated?
a. Nonny will begin to receive prorated rents starting on the first of the month following the closing date.
b. Nonny will receive all rents collected as of the first of the month in which the closing is held, even if closing is on the last day of that month.
c. Nonny will receive full rents for tenants whose leases expire within one month of the closing date, and prorated rents as of the day of closing for other tenants.
d. Nonny will receive prorated rents beginning the day of closing.
1332) What should a real estate professional do regarding property taxes?
a. Advise clients when it’s time to protest an assessment.
b. Attend all property tax review board hearings.
c. Check the title report for property tax liens.
d. Offer zero-interest loans to homeowners who are delinquent on property taxes.
1333) Which of the following is a typical accrued adjustment?
a. Heating oil in the tank
b. Prepaid taxes
c. Unpaid real estate taxes
d. Utilities billed and paid in advance
1334) The income from what reliable source benefits the entire community by funding essential services and public works?
a. Fundraisers
b. Private donations
c. Property taxes
d. Special assessments
1335) According to custom, who pays the costs on the day of closing for property taxes, utilities, etc.?
a. The buyer
b. The buyer and seller split these costs.
c. The seller
d. Typically, the broker pays the costs on the day of closing.
1336) Corrine is selling her home in a short sale transaction. What’s her likely situation?
a. She got a promotion.
b. She has a balloon payment coming up that she can’t pay.
c. She took a second job.
d. She was married.
1337) Which of these statements about the homeowner’s right of redemption is true?
a. Homeowner right of redemption applies to foreclosures, short sales, and REOs.
b. Only foreclosures are subject to homeowner’s redemption rights.
c. Right of redemption timelines are longer for foreclosures than they are for short sales.
d. Rights of redemption window with REOs may have expired.
1338) Which of the following is a possible title issue with a real estate-owned transaction?
a. Evictions of existing tenants
b. Foreclosure process delays
c. Internal audit delays
d. Unpaid liens against the title
1339) Which of these lenders would be least likely to approve a short sale?
a. Conventional lenders
b. Credit unions
c. First loan lenders
d. Junior lenders
1340) Which option is a sale that occurs through an administrator or executor of a will with court supervision?
a. Foreclosure
b. Probate
c. REO
d. Short sale
1341) What’s it called when the market value of a property that’s for sale is less than what’s owed on the mortgage by the seller?
a. Foreclosure
b. Granted release sale
c. REO
d. Short sale
1342) While any distressed property can have title transfer issues, why is an REO less likely to be subject to unpaid tax liens?
a. Buyers who purchase REO properties are required to include back property taxes in their purchase.
b. County and local governments are required to abate unpaid property taxes on REOs.
c. Lenders have already forced homeowners to pay unpaid property taxes during the foreclosure process.
d. Lenders want REO properties to sell quickly, so they’re likely to have resolved unpaid tax lien issues.
1343) What course of action should you take when a client is presented with an and/or assigns contract?
a. Advise your client to seek legal advice
b. Immediately accept the offer
c. Inform your supervising broker
d. Reject the offer without presenting it to your client
1344) A lender initiated a(n) ______ action against a borrower to recover money owed on the mortgage.
a. Bankruptcy
b. Eviction
c. Foreclosure
d. Lien
1345) Kristin has been unable to make her mortgage payments. Her property went to auction but the lender didn’t accept the high bid. What stage of the foreclosure process is this property now in?
a. Eviction
b. Foreclosure
c. Pre-foreclosure
d. Real estate-owned
1346) You’re working with buyers who are interested in trying to get a bargain in the form of a foreclosure. What should you tell them?
a. Buyers should take special care to ensure that any title issues are addressed.
b. Foreclosures are likely to have irreparable title issues.
c. Foreclosures have no more title issues than standard sale properties.
d. Title insurance firms won’t issue policies on foreclosures.
1347) What action could temporarily stop a foreclosure?
a. The borrower abandons the property.
b. The borrower declares bankruptcy.
c. The borrower remains on the property.
d. The borrower uses his right of redemption. he offer without presenting it to your client
1348) Who has final authority to approve a probate sale?
a. The broker
b. The buyer
c. The court
d. The seller
1349) Why might a buyer get a great deal on a real estate-owned property?
a. Federal regulations require that REOs be sold below market value.
b. Lenders and their shareholders don’t like to keep properties on their books longer than necessary.
c. There are no agent commissions to pay for REO transactions.
d. There are special government financing programs for purchasing REOs.
1350) Why is a foreclosure more likely to have title issues than a non-foreclosure?
a. Borrowers who are in foreclosure are permitted to acquire unrecorded liens.
b. Borrowers who can’t afford loan payments may have taken out other loans against the property.
c. Lenders are permitted to place secondary liens on property that’s entering the foreclosure process.
d. Lenders don’t take appropriate precautions to maintain clear title.
1351) A lender initiated a foreclosure action against a borrower. What purpose is this action intended to serve?
a. Demonstrate to the court that it’s following due process.
b. Provide a paper trail by which to sue the borrower.
c. Punish the borrower for failure to pay what’s owed.
d. Sell the property to recover monies owed.
1352) What type of contract allows the individual acting as buyer to assign the contract and terms of the sale to a third party, usually for a profit?
a. And/or assigns
b. Discharged
c. Reformation
d. Rescission
1353) Anika is short selling her home. This means ______.
a. It’s off season, and a buyer’s market
b. She’s selling it as a For Sale by Owner
c. The sale will happen quickly
d. The sale won’t bring in enough to pay off her loan
1354) Why do short sales usually occur?
a. Inventory is low.
b. The market is hot.
c. The owner needs a quick sale.
d. The seller is experiencing financial hardship.
1355) Carly’s closing on an REO property was suddenly delayed due to an internal audit. What does this mean?
a. Carly’s lender decided to further audit her loan application materials.
b. The banking association is auditing the lender’s foreclosure files.
c. The federal government is auditing the lender’s foreclosure process.
d. The lender has requested a title audit to ensure that the foreclosure was properly handled.
1356) When a lender sells a property at auction due to the borrower’s default on the mortgage, it’s called a ______.
a. Foreclosure
b. Granted release sale
c. REO
d. Short sale
1357) What does an REO on a lender’s assets mean?
a. The lender has agreements with real estate listing agents.
b. The lender owns real estate after a foreclosure sale.
c. The lender prepares property management agreements.
d. The lender received proceeds from a foreclosure sale.
1358) Farquhar bought a house at a foreclosure auction. A few weeks later, he was notified that he couldn’t take possession of or title to the property. What likely happened?
a. The lender received another offer higher than the one Farquhar made at the auction.
b. The lender revised the previous owners’ loan and permitted them to remain in the property.
c. The other lien holders protested the auction sale, so the lender retained the property.
d. The previous owners redeemed the property by paying all mortgage payments and fees.
1359) Under what circumstances may the executor of an estate sell a property that belongs to the estate?
a. If a creditor’s demand letter has been received
b. Never
c. Only if the offer is a fair market value
d. Only with court approval
1360) Doug is selling his home by a short sale. What likely happened recently in Doug’s life?
a. He declared bankruptcy.
b. He got married.
c. He lost his job.
d. He was foreclosed upon.
1361) Which one of these is a potential title issue with a foreclosure?
a. Clouds on title
b. Delays due to internal title audit
c. Homeowner’s right of equitable redemption
d. Lengthy closing process
1362) Which of these is a reason for a foreclosure?
a. The bank desires ownership of the home.
b. The borrower defaults on the mortgage loan.
c. The borrower pays too much on the mortgage loan.
d. The property being sold is near a golf course.
1363) What’s a typical reason that a seller might opt for a short sale?
a. Desire to move to a house down the street
b. Job loss or other financial problems
c. New job in another part of the country
d. Raise at work
1364) What’s one reason that buyers might need additional cash at closing for a short sale?
a. Interest rates are higher for short sale transactions.
b. Mortgage origination fees are higher for short sale transactions.
c. Short sales don’t clear liens from the title, so buyers may have to pay debts at closing.
d. Short sales include a commission premium for the listing agent.
1365) Quad City National Bank has several REO properties on its books. Why does the bank own these properties?
a. Quad City is in the process of foreclosing on these homes.
b. The bank purchased the properties as investments.
c. The bank purchased these properties from owners who were in foreclosure.
d. The properties went through the foreclosure process and didn’t sell at auction.
1366) Melissa hasn’t paid her mortgage in months. What action can the lender take to recover monies owed?
a. Bankruptcy
b. Condemnation
c. Foreclosure
d. Short sale

1367) What is the risk of accepting a contract with an and/or assigns clause?
a. The brokerage fee may double
b. The buyer may back out if another buyer can’t be found
c. The buyer may sell to a minority
d. The new buyer might pay more money
1368) Which of these actions would cause a property to become an REO?
a. A rental property was deemed not up to code, and was sold to a developer.
b. The bank doesn’t get an acceptable bid at a foreclosure sale and takes ownership of the property.
c. The lender stops waiting for payments and forces the sale of the property.
d. Under duress, the borrower short sells the property.
1369) Brandy is going to purchase a strip mall. She is trying to determine exactly how much to borrow for this purchase. She understands that the more she borrows, the greater her risk. What type of risk is she evaluating?
a. Business risk
b. Capital risk
c. Dynamic risk
d. Financial risk
1370) Amy owns a salon and spa. She’s leasing a prime piece of real estate in which she’s installing salon chairs, counters, massage tables, spray tan vestibules, washers, and dryers. What are these items considered?
a. Extravagant
b. Real property
c. Trade fixtures
d. Unnecessary
1371) In terms of investment, liquidity means an investment ______.
a. Can easily be converted to cash
b. Can’t be sold
c. Is a cash cow
d. Will experience ebbs and flows in value
1372) Joaquim analyzed a potential opportunity and determined that if he invested $250,000 in the commercial property, he’d likely see a return of 12% on this investment. After several years, Joaquim is seeing a measly 2% return. What type of risk did he fall victim to?
a. Business risk
b. Capital risk
c. Financial risk
d. Leverage risk
1373) The use of one investment to finance another is called _______.
a. Blockbusting
b. Churning
c. Equity build-up
d. Pyramiding
1374) What is dynamic risk?
a. An insurable business risk that includes insuring for accident liability, fire, theft, and vandalism
b. An uninsurable business risk resulting from economic, tax, and market changes
c. The risk that an investor cannot secure financing at an affordable rate
d. The risk that is directly related to leverage
1375) What’s the amount of money you have now called?
a. An investment
b. Future value
c. Present value
d. Principal
1376) The idea that $100 gains or loses value over time is called what?
a. Deflation
b. Inflation
c. Stagflation
d. Time value of money
1377) What type of real estate investment must distribute 95% of its income to beneficiaries?
a. Real estate investment trust
b. Real estate mortgage investment conduit
c. Real estate syndicate
d. Real estate trust
1378) The risk that the required return on investor capital will not be met is called ______ risk.
a. Business
b. Capital
c. Financial
d. Leverage
1379) Joanie sees herself as a mover and shaker, a leader, someone who jumps in and gets things done. She likes to be involved and in charge. When she decides to start investing in real estate, which of these choices is she most likely to select as her investment vehicle?
a. A multi-family residential income property
b. A real estate investment trust
c. A real estate mortgage investment conduit
d. A real estate syndicate membership
1380) Economic, tax, and market changes are types of _______ risk.
a. Capital
b. Dynamic
c. Environmental
d. Static
1381) The risk that an investor cannot secure financing at an affordable rate is called ______ risk.
a. Business
b. Capital
c. Financial
d. Leverage
1382) Which of the following is the best example of investment leverage?
a. Buying multiple properties at once
b. Buying properties on a systematic basis
c. Financing most of an investment and putting very little cash in
d. Paying all cash for an investment to avoid interest payments
1383) What are the two types of real estate investment trusts?
a. Debit and credit
b. Mortgage and equity
c. Mortgage and lease
d. Residential and commercial
1384) A group of investors bought property and developed a movie production studio. After a few years in business, the state passed regulations limiting the amount of tax incentives it would offer film studios shooting movies in the state. This move caused several companies to move their shooting to other states, jeopardizing the investors’ ability to earn the return they were expecting. What type of risk is this?
a. Capital
b. Dynamic
c. Environmental
d. Static
1385) Inga recently came into some money and is thinking of getting into real estate investments, but she doesn’t have a lot of experience with either real estate or investment strategies. Which of these properties would be her best bet?
a. A 100-unit apartment complex near where she lives
b. A neighborhood strip mall
c. An office building downtown with space for three tenants
d. Single-family residential as a rental property
1386) David owns a commercial building. He’d like to raise some capital for another project, so he sells the property to Gabby (an investor), then leases the space from Gabby. What type of arrangement is this?
a. Ground lease
b. Percentage lease
c. Sale leaseback
d. Subordinate lease
1387) The risk that is directly related to leverage is called ______ risk.
a. Business
b. Capital
c. Financial
d. Leverage
1388) What is capital risk?
a. The risk that an investor cannot secure financing at an affordable rate
b. The risk that is directly related to leverage
c. The risk that the property has a bad location
d. The risk that the required return on investor capital will not be met
1389) What is static risk?
a. An insurable business risk that includes insuring for accident liability, fire, theft, and vandalism
b. An uninsurable business risk resulting from economic, tax, and market changes
c. The risk that an investor cannot secure financing at an affordable rate
d. The risk that is directly related to leverage
1390) Bridget has an investment portfolio that includes an equity REIT. Which of these is most likely to be part of the REIT’s investment?
a. Mortgages secured by commercial properties
b. Mortgages secured by residential properties
c. Retail shopping centers
d. Undeveloped land parcels
1391) What type of lease gives the lender the power to evict tenants when a building owner doesn’t make the mortgage payments?
a. Ground lease
b. Percentage lease
c. Sale leaseback
d. Subordinate lease
1392) Which type of business risk is uninsurable?
a. Capital
b. Dynamic
c. Financial
d. Static
1393) The idea that money gains or loses value over time describes which concept?
a. Inflation
b. Interest
c. Time is money
d. Time value of money
1394) What’s another term for a trade fixture?
a. Appliance
b. Chattel
c. Corporeal
d. Dowry
1395) What type of real estate investment may meet the definition of being a security and must adhere to the rules and regulations of the Securities and Exchange Commission?
a. Real estate investment trust
b. Real estate mortgage investment conduit
c. Real estate syndicate
d. Real estate trust
1396) What is business risk?
a. The risk that an investor cannot secure financing at an affordable rate
b. The risk that is directly related to leverage
c. The risk that the property has a bad location
d. The risk that the required return on investor capital will not be met
1397) Accident liability, fire, theft, and vandalism are types of _______ risk.
a. Capital
b. Dynamic
c. Environmental
d. Static
1398) Which type of business risk is insurable?
a. Capital
b. Dynamic
c. Financial
d. Static
1399) Jason is planning to invest in a new commercial development. He’d like to invest $400,000 and secure another $100,000 through financing. After shopping around, Jason could not find financing at an affordable rate. Of what type of risk is Jason the victim?
a. Business risk
b. Capital risk
c. Financial risk
d. Leverage risk
1400) Which of these is a dynamic risk?
a. An accident involving a company delivery driver
b. Fire damaging the building
c. Market change
d. Theft of business equipment
1401) Dynamic and static risk are considered ________ risks.
a. Business
b. Capital
c. Financial
d. Insurance
1402) One advantage residential properties have for investors over commercial properties is that residential properties _______.
a. Are larger properties
b. Are relatively liquid
c. Are relatively rare, so tenants compete for available units
d. Require a larger down payment, so there is less to finance
1403) What is financial risk?
a. The risk that an investor cannot secure financing at an affordable rate
b. The risk that is directly related to leverage
c. The risk that the property has a bad location
d. The risk that the required return on investor capital will not be met
1404) What phrase describes the amount that today’s dollars grows to over time?
a. An investment
b. Future value
c. Present value
d. Principal
1405) Which of these should tenants keep in mind regarding trade fixtures?
a. Installation and removal should not cause damage to the property.
b. The tenant bears no responsibility for removing trade fixtures.
c. The tenant bears no responsibility when installing trade fixtures.
d. They become property of the landlord once installed.
1406) Brandon recently purchased an old warehouse building. This building will serve as a hub for local deliveries of fruits and vegetables within the state. During its first week in operation, one of the delivery drivers was involved in an accident that spilled coconuts all over the road and shut down the interstate for hours. What type of risk is this?
a. Capital
b. Dynamic
c. Environmental
d. Static
1407) What is the best definition for “the time value of money”?
a. It’s not wise to sell your time for money.
b. Money gains or loses value over time.
c. Money increases in value over time.
d. Time is money.
1408) What type of real estate investment is similar to collateralized mortgage obligations (CMOs)?
a. Real estate investment trust
b. Real estate mortgage investment conduit
c. Real estate syndicate
d. Real estate trust
1409) Which of these is generally a commercial property manager’s responsibility, but not a residential property manager’s responsibility?
a. Collecting rent
b. Evicting tenants
c. Negotiating leases
d. Overseeing maintenance
1410) Which of the following statements is true of financing a commercial property purchase?
a. A commercial property cannot be financed with a residential loan.
b. Commercial mortgages are easier to obtain than residential loans.
c. Commercial mortgages cannot be obtained through banks or credit unions.
d. Commercial mortgages have longer payback periods than residential mortgages.
1411) Stacy owns a strip mall with four units. She requires each tenant to sign one of these, which gives the lender the power to evict the tenant in the event Stacy does not make her mortgage payments.
a. Ground lease
b. Percentage lease
c. Sale leaseback
d. Subordinate lease
1412) What does a mortgage real estate investment trust invest in?
a. Lease contracts
b. Personal property
c. Real estate debt
d. Real estate property
1413) Which of these is a static risk?
a. A decline in economic conditions in the area
b. Change in tax code
c. Fire damaging the building
d. Market change
1414) A steel plant is an example of which commercial property category?
a. Leisure
b. Manufacturing
c. Retail
d. Sporting
1415) Which of the following best describes a mixed-use property?
a. A book store with a coffee shop in it
b. A building with commercial below and residential above
c. A halfway house
d. One that melds classic design with modern design
1416) Which of the following is one of the primary reasons that developers like to invest in unimproved land?
a. It looks good to top investors to have a portfolio of unimproved land.
b. It’s easier to build on a blank canvas than it is to retrofit existing infrastructure.
c. It’s profitable immediately.
d. Structures are already erected on the land, limiting the development that needs to be done.
1417) Which of these is NOT considered a residential property?
a. A condominium unit
b. A hotel with fewer than 20 rooms
c. A single-family home used for rental income
d. A triplex
1418) Which of the following belongs in the commercial category referred to as retail?
a. A gift shop in a shopping center
b. A hotel
c. A manufacturing plant
d. A warehouse
1419) Which of the following is an example of a residential property?
a. Condo
b. Hotel
c. Motel
d. Office building
1420) Blane owns a barbershop. He polls his customers and learns that they tend to come from less than a mile away. That’s probably because Blane’s store is in which type of location?
a. Factory outlet mall
b. Neighborhood center
c. Regional shopping center
d. Strip mall
1421) Which of the following describes a high-rise building?
a. 10-15 stories tall
b. 40 or more stories tall
c. Always equipped with elevators
d. Multi-family residential
1422) A duplex is what type of property?
a. Commercial
b. Leisure
c. Residential
d. Single-family residential
1423) Greg tries hard to reduce his carbon footprint, so he doesn’t own a car. He’s able to do all his shopping at stores on the same street where he lives, and takes a convenient train to his office for work. What type of community does Greg likely live in?
a. Gated single-family
b. Mixed-use with transit-oriented design
c. Multiple-zoned with transit restrictions
d. Neighborhood strip mall
1424) Congratulations! The crowd funding worked. Now you can start manufacturing your own line of yoga clothing. But first, you need a location to do all of that sewing. Which building would you select?
a. Heavy industrial
b. Light manufacturing
c. Residential
d. Retail outlet
1425) Why are residential properties popular with investors?
a. Because they’re rare, and therefore valuable.
b. They need somewhere to live.
c. They’re always in demand.
d. They require no down payment.
1426) What is meant by unimproved land, which investors call “dead money”?
a. A brownfield
b. A property in need of repair
c. A property that is vacant with no buildings
d. A property with a building that has not been remodeled
1427) Which of the following is a benefit of unimproved land?
a. All of the plumbing and electrical are already there.
b. Existing structures are usually ready to be torn down.
c. Existing structures usually don’t require improvement.
d. If land is scarce, it can be valuable.
1428) Sharilyn’s business and adjacent businesses are arranged in a neat row. Customers enjoy the open-air walkways when they visit her business and others. In which commercial space is Sharilyn’s business likely located?
a. Office building
b. Office park
c. Regional shopping center
d. Strip mall
1429) Anthony lives in a two-story apartment building. What type of building is this?
a. Commercial
b. Freehold
c. Low-rise
d. Retail
1430) In which commercial category are raw materials converted into useful objects?
a. Healthcare
b. Leisure
c. Manufacturing
d. Retail
1431) How many floors could a mid-rise office building have?
a. 15
b. Eight
c. Eleven
d. Three
1432) Augustine wants to move to a different area of town. He doesn’t have a car; he prefers to walk or take public transportation everywhere. He’s looking for housing near the subway. Communities designed and developed around access to public transportation are known as what?
a. DOT
b. FOD
c. NOD
d. TOD
1433) Are hotels and motels considered residential properties?
a. No, hotels and motels are considered commercial properties.
b. No, hotels and motels are considered retail property types.
c. Yes, they are always considered residential property types.
d. Yes, when there are residential units within the hotel or motel.

1434) Which of the following is an example of a leisure property?
a. Factory outlet
b. Motel
c. Retail store
d. Shopping mall
1435) If you’re staying at a motel, what’s one advantage you have over your friend, who’s staying at a hotel?
a. Closer to parking
b. More amenities
c. Nothing
d. Rooms open to interior of the building
1436) What is the definition of “before-tax cash flow”?
a. Cash flow after property taxes are considered.
b. Cash flow before property taxes are considered.
c. Cash flow before taking income taxes into account.
d. Cash flow taking income taxes into account.
1437) 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
1438) Gary, your investor client, has an annual net income of $50,000. His annual debt service is $12,500. What is his debt coverage ratio?
a. .004
b. 0.25
c. 1.4
d. 4.0
1439) What “quick and dirty” investment formula seeks to achieve a percentage of gross monthly rental income as compared to purchase price?
a. 2%
b. 5%
c. 50%
d. 70%
1440) 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.
1441) 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.
1442) 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
1443) 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
1444) 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)
1445) 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
1446) Income that a property could bring in if it were leased at full capacity is ______.
a. An operating statement
b. Effective gross income
c. Net operating income
d. Potential gross income
1447) 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
1448) What does “cash-on-cash return” mean?
a. A comparison of before-tax cash flow to cash invested
b. Making money hand over fist
c. Net income after taxes are deducted
d. Trading international currency
1449) Your client, Gabriel, has invested in a rental property. He looks at his property’s operating statement, tweaks the numbers based on his knowledge of the market, and re-works the statement. Gabriel has created ______.
a. A debt service statement
b. A gross income statement
c. An operating income statement
d. A pro-forma statement
1450) Which of the following do investors like to avoid?
a. High tax liabilities
b. Long-term appreciation
c. Positive cash flow
d. Tax write-offs
1451) 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) n she’ll use for trade show setups
1452) 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
1453) A property is generating $100,000 in income and has expenses of $25,000. The investor pays $3,000 toward mortgage principal each year and $32,000 toward interest, plus another $4,000 in income taxes. What is the before-tax cash flow?
a. $36,000
b. $40,000
c. $45,000
d. $50,000
1454) 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
1455) Why is 2.5 a better debt service ratio than 1.8?
a. A debt coverage ration of less than two indicates negative cash flow.
b. A debt service ratio of 1.8 indicates that there is only enough income available to pay 80% of the annual mortgage payments
c. Lenders won’t consider debt coverage rations of less than 2.0.
d. The higher the debt service ratio, the more income the investor will have to cover the debt, and therefore, the less risk.
1456) A comparison of before-tax cash flow to cash invested is known as ______.
a. After-tax cash flow
b. Cash-on-cash return
c. Income rate value
d. Return on investment
1457) 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
1458) “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
1459) To arrive at annual debt service cost, divide ______ by the debt coverage ratio.
a. Annual NOI
b. Loan factor
c. Maximum equity
d. Maximum loan
1460) What does “after tax cash flow” mean?
a. Cash flow after considering income taxes
b. Tax basis after deductions are applied
c. Tax refund
d. Tax windfall
1461) 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
1462) 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. and physical deterioration
1463) What does the quick and dirty 70% formula mean to investors?
a. That 70% of renters will leave in the first two years
b. That 70% of their income will go toward expenses
c. The purchase price shouldn’t be more than 70% of the repaired value
d. They must receive 70% return on their investment
1464) “Income received before expenses are deducted” is the definition of ______.
a. Effective gross income
b. Gross income
c. Net income
d. Taxes
1465) Which of the following are the dimensions required for a handicap-accessible parking space?
a. 12 feet wide by 12 feet long
b. 12 feet wide by 18 feet long
c. Nine feet wide by 12 feet long
d. Nine feet wide by 18 feet long
1466) Which of the following are the dimensions required for a van-accessible parking space?
a. 12 feet wide by 12 feet long
b. 12 feet wide by 18 feet long
c. Nine feet wide by 12 feet long
d. Nine feet wide by 18 feet long
1467) When considering the rentable square footage of a building, what’s known as the “loss factor”?
a. Bathrooms and hallways
b. Stairwells and lobbies
c. The difference between usable square footage and rentable square footage
d. Vacant units
1468) 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.
1469) Who is responsible for ensuring accessibility requirements for a commercial property are met?
a. Property inspectors only
b. Property managers only
c. Property owners and property managers
d. Property owners only
1470) When modifying commercial buildings to meet accessibility requirements, owners should focus their attention on these four areas: ______, access to goods and services, access to restrooms, and any other necessary measures, such as access to public amenities.
a. Installing more restrooms
b. Moving all of their operations to the first floor
c. Posting detailed floor plans by elevators and stairways
d. Providing an accessible approach and entrance
1471) Which of the following acts requires commercial buildings to be accessible to disabled individuals, such as those who use wheelchairs?
a. Americans with Disabilities Act
b. Fair Housing Act
c. Housing and Economic Recovery Act
d. Real Estate Settlement Procedures Act
1472) What is meant by “usable” square footage?
a. The area occupied by the tenant
b. The building’s area that is used by the greatest number of people
c. The carpetable area
d. The tenant’s area plus halls, bathrooms and other common areas
1473) When modifying commercial buildings to meet accessibility requirements, owners should focus their attention on these four areas: accessible approach and entrance, access to goods and services, ______, and any other necessary measures, such as access to public amenities.
a. Access to restrooms
b. Carpeted halls and stairways
c. Improved acoustics
d. Sufficient cooling and heating
1474) A parking structure has 1,510 total parking spaces. How many of these spaces must be accessible?
a. 20
b. 22
c. 25
d. 30
1475) An area 60 inches wide and located adjacent to accessible parking spaces is called a(n) ________.
a. Access aisle
b. Clearance
c. Hallway
d. Ramp
1476) Per accessibility requirements, what is a doorway’s minimum width?
a. 32 inches
b. 36 inches
c. 42 inches
d. 48 inches
1477) A parking structure has 150 total spaces. How many of these spaces must be accessible?
a. Five
b. Four
c. Seven
d. Six
1478) What is the minimum width of ramps on accessible routes?
a. 32 inches
b. 36 inches
c. 42 inches
d. 48 inches
1479) What is the minimum width of hallways on accessible routes?
a. 32 inches
b. 36 inches
c. 42 inches
d. 48 inches
1480) A parking lot has 35 total spaces. How many of these spaces must be accessible?
a. Four
b. One
c. Three
d. Two
1481) Parking facilities must have accessible parking. Depending on the number of accessible spaces, some of these must be van-accessible. How many van-accessible spaces are required?
a. One in every eight parking spaces
b. One in every four parking spaces
c. One in every six parking spaces
d. One in every two parking spaces
1482) At least how many routes in a new commercial building must be accessible?
a. All routes
b. One
c. Two
d. Zero
1483) A parking structure has 350 total spaces. How many of these spaces must be accessible?
a. 10
b. Eight
c. Four
d. Two
1484) A parking lot has 20 total spaces. How many of these spaces must be accessible?
a. Four
b. One
c. Three
d. Two
1485) Virginia is finally living her dream—she bought a coffeehouse in a charming college town. After she closed on it, her attorney sat down with her to discuss various business licensing and legal requirements she’ll have to meet. Virginia was surprised to learn that her five-table establishment is affected by the Americans with Disabilities Act. What must be true about the coffeehouse?
a. It includes at least 400 square feet of public space.
b. It’s a commercial enterprise that’s open to the public.
c. It sits in a city center.
d. It was built after 1978.
1486) A parking lot has 550 total spaces. How many of these spaces must be accessible?
a. 10
b. 11
c. 20
d. Nine
1487) What is the minimum size that the International Symbol of Accessibility (ISA) logo painted on the accessible spot must be?
a. 12 inches by 12 inches
b. 24 inches by 24 inches
c. 36 inches by 36 inches
d. 48 inches by 48 inches

1488) Accessible parking spaces must have an access aisle. What is the minimum width of this aisle?
a. 36 inches
b. 42 inches
c. 48 inches
d. 60 inches

1489) Which type of facility may require a higher number of accessible spaces than other commercial spaces?
a. Apartment complex
b. Physical therapy facility
c. Shopping mall
d. Sports arena
1490) The NAR Code of Ethics includes which protected classes in its definition of discriminatory behavior?
a. National origin and religion only
b. Race and color only
c. Race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity
d. Sex, age, and marital status only
1491) Landon is the listing agent for Maury’s property. Maury is moving out of state for a new job, so the house will be vacant for some time, depending on how long it takes to sell. Maury is pretty adamant about not having a sign in his yard, especially after he moves. Landon follows Maury’s wishes, but a month after Maury moved, there hasn’t been any movement on the property. Landon places a sign in the yard, hoping it will drum up some interest. Is this okay?
a. No, Landon shouldn’t place a sign on Maury’s property without Maury’s written permission.
b. No, Maury’s neighbors might tattle.
c. Yes, as the listing agent, Landon has the right to place a sign on the properties he has listed.
d. Yes, since Maury has moved, Landon can make decisions related to the property.
1492) According to the NAR Code of Ethics, which statement most accurately describes a licensee’s responsibility related to written offers on a listing?
a. A licensee is only required to present formal written offers that are equal to or more than the listing price.
b. A licensee is only required to present formal written offers within a certain range of the listing price of the property.
c. All formal written offers the licensee receives must be presented to the owner unless the owner has accepted a previous offer.
d. All formal written offers the licensee receives must be presented to the owner until closing or execution of a lease unless the client waives this obligation in writing.
1493) What is the difference between ethics and the law?
a. Ethics are about personal values, and the law is just about the rules. Both are legally enforceable.
b. Ethics are personal values and the law is society’s values, but they are both legally enforceable.
c. Laws are legally enforceable. Ethics aren’t legally enforceable until they become law.
d. There is no difference.
1494) Nancy just hired her sister, real estate licensee Grace, to list her property. Jason schedules a showing for his client, who’s interested in Nancy’s property. What needs to take place?
a. Grace doesn’t need to do anything special, since she doesn’t own the property.
b. Grace must terminate her contract with Nancy, since she can’t represent a family member.
c. Grace needs to disclose in writing to Jason and his client that the property is owned by a family member.
d. Grace needs to keep the fact that the property is owned by her sister confidential.
1495) What actions can licensees take related to signs?
a. They can only place signs on property they own.
b. They can place signs on an owner’s property with the owner’s written consent.
c. They can place signs on properties for which they are the listing agent, with or without the owner’s permission.
d. They can’t place signs anywhere.
1496) What types of laws does the corporations code contain?
a. It does not contain laws
b. Laws related to real property contracts, such as contract of sale or land installment contracts
c. Laws related to theft and other crimes
d. Laws related to the sale of securities
1497) Charles, a real estate professional, has just finished touring a property he’d like to list for sale. When talking with the owner about the property and comparing it to other properties recently sold in the area, he tells the owner he appraises the property at a value of $350,000. What, if anything, did Charles do wrong?
a. He inspected the property.
b. He offered an opinion about the value of the property.
c. He referred to his opinion on the value of the property as an appraisal.
d. He talked to the owner without having a listing agreement in place.
1498) According to Article 7 of the NAR Code of Ethics, which of these statements is most accurate when accepting compensation from parties to a transaction?
a. A licensee shall not accept compensation directly from more than one party to a transaction.
b. A licensee shall not accept compensation from anyone regardless of consent.
c. A licensee shall not accept compensation from more than one party to a transaction without consent from the client.
d. A licensee shall not accept compensation from more than one party to a transaction without the full knowledge and consent of all parties.
1499) What must a licensee do regarding property the licensee holds directly or indirectly if it becomes the subject of a real estate transaction?
a. Disclose the interest to all parties to the transaction.
b. Offer cooperating broker compensation.
c. Offer the property for sale within the firm before offering it to the general public.
d. Reduce the commission by half.
1500) What is a code of ethics?
a. Guidelines for conduct
b. Laws that licensees must abide by
c. Rules used by law enforcement officers
d. Something licensees don’t need to worry about unless they join the NAR
1501) What types of laws does the civil code contain?
a. It does not contain laws
b. Laws related to real property contracts, such as contract of sale or land installment contracts
c. Laws related to theft and other crimes
d. Laws related to the sale of securities
1502) Ideally, what guides real estate licensees’ behavior?
a. Ethics and compensation
b. Laws and compensation
c. Laws and ethics
d. Motives and ethics
1503) What must a licensee do when preparing a CMA for a consumer?
a. Have an appraiser sign off on the price before it’s presented.
b. Hire a home inspector to physically inspect the property.
c. Hire an appraiser to value the property.
d. Make a statement that the opinion isn’t an appraisal.
1504) Jasmine is in the market for a new property for her, her partner, and their young child. Tanner is Jasmine’s agent and has shown her several properties. Even though several properties meet the criteria his client is seeking, Tanner has intentionally weeded out properties close to the local college campus, because he doesn’t think the location would be suitable for a family with young children. What, if anything, has Tanner done wrong?
a. Tanner has discriminated against Jasmine using familial status as a reason for not showing her properties.
b. Tanner hasn’t involved Jasmine’s partner in the search process.
c. Tanner hasn’t received upfront payment for his services.
d. Tanner is acting within his expertise as Jasmine’s agent.
1505) Brandon is the listing agent for Jane’s property. After a couple of weeks on the market, two formal written offers come through. One is for well below the listing price, and another is a bit closer, but still under the list price. What should Brandon do with the offers?
a. Present both offers to Jane.
b. Present the higher offer to Jane, but not the lower offer.
c. Present the lower offer to Jane, but not the higher offer.
d. Respond to the buying agents and tell them to submit new offers closer to the listing price.
1506) Samantha is a real estate licensee. She’s showing her client a property. The client asks about some spots on the ceiling and wonders if they’re an indication of a roof leak. What should Samantha do?
a. Climb on the roof and perform an inspection.
b. Hire a home inspector to physically inspect the property.
c. Suggest that her client contact a roofing expert to make a determination.
d. Tell her client that the spots indicate a roof leak.
1507) In which of these situations does the licensee have a disclosable ownership interest in the property?
a. Carson represents both the buyer and the seller in a transactions.
b. Kennedy is representing his LLC in the purchase of a commercial building.
c. Rebecca is listing her neighbor’s vacation home.
d. Roger is listing a property that he sold to the current owner eight years ago.
1508) Ricky is working for Matt, a buyer client, who is interested in a property at which the listing agent offers compensation to cooperating agents. The listing agent has offered Ricky or any cooperating agent additional compensation if the transaction closes within 40 days. Is this ethical?
a. No, it’s never ethical for a licensee to accept compensation from more than one party.
b. Yes, but only if all of the involved parties have full knowledge and provide consent.
c. Yes, but only if the Matt has full knowledge of the compensation arrangement and provides consent.
d. Yes, licensees can receive compensation from multiple parties in the transaction.
1509) Which of the following actions is against the NAR Code of Ethics?
a. Including the brokerage name and main phone number, in addition to a licensee’s own name and phone number on an advertisement
b. Making a reasonable effort to ensure all parties to a written agreement have a copy of the agreement
c. Preparing a written agreement that accurately states a purchase price
d. Preparing a written agreement that falsely states a purchase price
1510) What types of laws does the penal code contain?
a. It does not contain laws
b. Laws related to real property contracts, such as contract of sale or land installment contracts
c. Laws related to theft and other crimes
d. Laws related to the sale of securities
1511) According to the NAR Code of Ethics, what responsibility do licensees have related to material facts?
a. Accept all client statements concerning the property as material fact.
b. Make a reasonable effort to ascertain all material facts concerning each property for which an agency is accepted.
c. Make extraordinary efforts to ascertain all material facts concerning each property for which an agency is accepted.
d. They don’t have any responsibilities related to material facts.
1512) Daniel has several properties listed around town. He receives a call from a prospective buyer who is very interested in one of the properties and wants to schedule a showing. What should Daniel do?
a. Assume the buyer understands that Daniel is the seller’s agent.
b. Disclose his agency relationship with the seller to the prospective buyer.
c. Refer any questions about the property to the seller.
d. Schedule the showing.
1513) Regarding documentation, which of the following actions can help a licensee avoid being accused of unauthorized practice of law?
a. Disclosing in writing to all parties in a transaction that the licensee isn’t a licensed attorney, so there’s no licensee liability
b. Having a designated broker review and notarize all completed contracts
c. Having a designated broker write all contracts from scratch to make them specific to each transaction
d. Using approved fill-in-the-blank forms
1514) Darcy and her buyer client Josh are reviewing Josh’s offer before they submit it to the seller. Which one of these actions may Darcy take without potentially crossing into the unauthorized practice of law?
a. Draft her own offer form.
b. Strike through any paragraphs Josh doesn’t like, even the ones required by federal or state law.
c. Tell Josh that hiring an attorney to review the contract would be a waste of money since Darcy is perfectly qualified to explain the legal ramifications of the contract terms.
d. Use standard, approved language in contingencies, addenda, and additional provision areas.
1515) While working with a buyer client, the licensee filled in the blanks on the purchase agreement, drafted an early occupancy addendum, and assured his buyer that she was “fully protected” and would get her earnest money back if the sale didn’t close. He encouraged her to hire an attorney to review the contract and addendum, and then invoiced her for a nominal $15 fee to prepare transaction documents. Which of the following tasks was the licensee legally permitted to do?
a. Charge a fee for preparing legal documents
b. Draft the early occupancy addendum
c. Fill in the contract blanks
d. Interpret the contract provisions regarding the buyer’s full protection and getting her earnest money returned
1516) What’s an agent’s responsibility related to home inspections?
a. To encourage buyers to waive an inspection
b. To hire an inspector for the buyers
c. To perform them
d. To recommend a buyer have a professional inspection performed
1517) What is a licensee’s responsibility related to the paperwork in a real estate transaction?
a. Make sure all parties have copies of the paperwork and that it’s retained for the statutory period.
b. Make three copies of all documents.
c. Secure paperwork in the broker’s vehicle.
d. Shred documents once the transaction is complete.
1518) When must an agent disclose an agency relationship to an unrepresented transaction party?
a. At closing
b. At first substantive contact
c. Relationships don’t need to be disclosed
d. When asked about the relationship
1519) Which of the following is considered unauthorized practice of law?
a. Explaining a clause in a contract to a client
b. Interpreting the legal consequences of a client’s actions
c. Using existing forms an attorney has reviewed
d. Using standard language for addenda
1520) In addition to serving as the listing agent for several clients, your own house is also on the market. You receive a call from another licensee who wants to show her buyer client your house. What must you immediately disclose to the buyer’s agent and buyer?
a. The house may have been an orphanage 80 years ago.
b. You’d sell for far lower than the current asking price.
c. You own the property.
d. Your housemate had swine flu last month.
1521) You’re walking through a property with a new seller client. The seller tells you that the property is serviced by the public sewer system, but when walking up the drive you noticed the access hatch for a septic system. What should you do?
a. Believe the homeowner when he says the property is on public sewer, because he’d know best.
b. Hire a private investigator to look into it.
c. Inquire about the homeowner’s claim to ensure the property really is on public sewer.
d. Terminate the listing, as the homeowner is obviously not being truthful.
1522) Chester is moving on up! He and his wife are ready to sell their condo and purchase a new place. Chester is a real estate licensee and will list the property himself. What must Chester disclose to prospective buyers?
a. Chester doesn’t need to disclose anything to buyers.
b. He owns the property.
c. The sellers are eager to sell.
d. The sellers will not accept any offers below $300,000.
1523) Real estate licensee William is preparing a sale agreement that will include an unusual circumstance. What’s his best course of action?
a. Consult an attorney.
b. Create his own forms.
c. Use an existing form and write an addendum that covers the unusual circumstance.
d. Use existing forms but modify the language to address the unusual circumstance.
1524) A property is listed as having four bedrooms and two-and-a-half bathrooms. However, when showing your buyer clients the property, you only count three bedrooms. As their agent, what should you do as part of your due diligence?
a. Call the police.
b. Demand the homeowner build another bedroom.
c. Ignore the discrepancy.
d. Investigate this discrepancy.
1525) Unauthorized practice of law and acting outside the scope of one’s expertise are similar issues. Which of the following circumstances specifically relates to the unauthorized practice of law?
a. Predicting a specific tax increase or decrease
b. Predicting the return on investment for a rental property
c. Recommending specific investments
d. Writing contract addenda or additional provisions that cover unfamiliar circumstances
1526) Susan is a real estate licensee. Her mother is moving to a facility for active seniors and has asked Susan to sell her home. What information does Susan need to disclose to prospective buyers?
a. She is related to the seller (her mother).
b. Susan doesn’t need to disclose any of these things.
c. Susan’s father passed away in the house.
d. The seller is moving to a senior living facility.
1527) Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is this okay?
a. No, because he’s not an attorney, he shouldn’t prepare contracts.
b. No, he should have his client complete any forms.
c. Yes, licensees can use standard forms provided by the brokerage or approved by an attorney.
d. Yes, real estate licensees may draft contracts and fill in blanks on existing contracts.
1528) Bethenney is Jason’s agent. Jason made an offer on a property and wrote an earnest money check, which he gave to Bethenney. What should Bethenney do with the check?
a. Cash the check and give half to her broker.
b. Follow brokerage procedure for handling monies entrusted to agents by clients.
c. Give it back to Jason to deposit in his bank.
d. Go on a shopping spree.
1529) Nicholas is working with a buyer client who wants a special clause added to his purchase contract. How should Nicholas handle this?
a. Ask the client to draft the clause, then insert it into the contract.
b. Draft the clause himself and have the client run it by his attorney.
c. Instruct the client to hire an attorney to draft the clause.
d. Tell the client that he doesn’t need that particular contract clause.
1530) Which of the following actions concerning tenant rights should real estate licensees take?
a. Advise landlords on their legal rights and responsibilities to tenants under the law.
b. Advise tenants on their legal rights and responsibilities under the law.
c. Ignore tenants’ legal rights.
d. Learn and understand tenants’ legal rights.
1531) Which of these actions is allowed and helps the licensee to avoid illegally practicing law?
a. Advising a landlord client of his legal rights and responsibilities
b. Charging a $10 scrivener’s fee for preparing transaction documents
c. Filling in blanks on an association-approved purchase contract
d. Striking provisions in a contract that don’t apply to a transaction
1532) A buyer client is preparing an offer on a property. He wants to make sure his offer stands out above all others and is accepted, so he discusses waiving the inspection contingency. What should the agent do?
a. Encourage the buyer to get an inspection, and if he still wants to waive it, put it in writing that you advised against waiving the inspection and have him sign.
b. Follow the buyer’s wishes without question.
c. Ignore the buyer’s request to waive the inspection.
d. Personally perform an inspection.
1533) Which of the following actions is representative of an agent’s due diligence and ethical behavior?
a. A buyer client wants to waive an inspection. The agent follows the request without question.
b. An agent deposits a buyer client’s earnest money check into her personal bank account.
c. An agent notices a discrepancy between what the homeowner says and what the property shows, so he ignores it.
d. An agent notices a discrepancy between what the homeowner says and what the property shows, so he investigates.
1534) Which of the following statements 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 either act or not act, if that fact were known.
1535) 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
1536) 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.
1537) 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.
1538) Erica describes the condo she’s listed as being “the best unit in the building.” What’s this an example of?
a. Intentional fraud
b. Lying
c. Positive misrepresentation
d. Puffery
1539) Kennedy lists Heather’s home. He noticed evidence of termites, and asked Heather about it. She said a pest control company solved the problem. What can Kennedy do to reduce the risk of misrepresentation?
a. Ask for the pest control company report from Heather.
b. Defer questions to Heather.
c. List it the property as free of pests.
d. She has done everything she needs to do.
1540) 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 person making the false statement knew it was false.
1541) You’re the listing agent on a property, and you have a potential buyer who can’t see the property until next week. A buyer’s agent shows the property to another prospective buyer, who makes an offer. Which action best demonstrates good faith to your seller client?
a. Hold on to the offer until after your buyer sees the property.
b. Present the offer to the seller and tell him you have another potential buyer who wants to see the property next week.
c. Present the offer to the seller right away and don’t mention the other potential buyer.
d. Tell the buyer’s agent that the sellers aren’t reviewing offers until next week.
1542) One element of misrepresentation is when ______.
a. No one relied on the false statement
b. The false statement caused harm to the person who relied upon it
c. The false statement did not cause harm to the person who relied upon it
d. The person relying on the false information knew it to be false
1543) Edna is a listing agent on a property and has received two offers: one at list price and one slightly below. The offer that’s slightly below list price is from a buyer Edna’s cousin represents. What should Edna do?
a. Edna should only present the offer from her cousin’s client so her client isn’t tempted to take the higher offer.
b. Edna should present all offers, discuss the facts of each, and disclose that her cousin represents one of the buyers.
c. Edna should present both offers but encourage her seller to consider the higher one.
d. Edna should present both offers but encourage her seller to consider the lower one.
1544) You make a listing presentation to a client, then learn she’s meeting with a few more licensees before deciding which licensee gets her listing. You know these competitors. Which action best demonstrates good faith?
a. You contact the other licensees to try to convince them not to work with the seller.
b. You tell the seller all of the dirt you have on the other licensees.
c. You tell the seller you hope she’ll decide to work with you.
d. You walk away from the listing.

1545) Which of these describes self-dealing?
a. A licensee lists her own property and informs all parties that she’s licensed.
b. A licensee sells a property but forgets some of the paperwork.
c. A licensee sells a property with the understanding that she will make all pertinent decisions on her client’s behalf.
d. A licensee sells her own property without informing all parties that she’s licensed.
1546) Isabelle just took on a new listing, in which the owner is selling because a new freeway is being built right behind the house. The owner is concerned about the noise and other activity the freeway will bring, but doesn’t want prospective buyers to know this. Which action best demonstrates good faith in this scenario?
a. Isabelle decides not to take the listing, since the property will be impossible to sell.
b. Isabelle takes the listing and, per her client’s instructions, doesn’t tell prospective buyers about the planned road construction.
c. Isabelle takes the listing, tells the seller she won’t discuss the new freeway, then discloses this fact to prospective buyers, since it’s material to the property.
d. Isabelle tells the owner that this is a material fact related to the property that must be disclosed to prospective buyers, or Isabelle will not take the listing.

1547) While showing a property to your buyer client, you notice that new carpet was recently installed in the basement, and new paneling has been tacked to the walls. You know this is often something sellers do when they want to cover up evidence of water damage. You are ethically obligated to ______.
a. Point this out to your buyer client, and suggest she have an inspector look into this if she’s interested in the property
b. Point this out to your buyer; inform her that the sellers are clearly hiding water damage, and tell your client that if the sellers are lying about this you cannot guess what else they’re lying about
c. Report the sellers’ agent to the local board and file an ethics complaint
d. Report the sellers to the local board and file an ethics complaint against them
1548) Which of the following isn’t an element of intentional misrepresentation?
a. When it includes a false action or statement.
b. When it’s a key piece to the purchase of a property.
c. When it’s committed against a buyer by an agent.
d. When it’s witnessed or validated by multiple people.
1549) Which of these 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 he or she known the fact.
1550) Monica is acting as a listing agent for her friend, Brian. She and Brian met when they both began attending a support group for those living with HIV. Which of the following best represents an action Monica should take?
a. Monica cannot tell others about Brian’s HIV status.
b. Monica should not be the listing agent for her friend.
c. Monica should purchase Brian’s property.
d. Monica should tell all prospective buyers that the seller has HIV.

1551) Which of the following is NOT a characteristic of intentional misrepresentation?
a. The fact that the person who falsely represented the material fact was aware of its falsity
b. The false statement or representation of a material fact
c. The person who falsely represented the material fact did it innocently
d. The person who relied on the false information is harmed

1552) Broker Joseph tells his clients that the property they’re interested in purchasing is zoned as residential, even though he knows it’s zoned as commercial. This violation is an example of ______.
a. Contractual interference
b. Failing to disclose an agency relationship
c. Misrepresenting or omitting
d. Performing services that qualify as practice of law

1553) Which of the following is an element of positive misrepresentation?
a. The false statement caused harm to the person who relied upon it.
b. The false statement was not relied upon.
c. The person making the false statement didn’t know it was false.
d. The person relying on the false information believes it to be false.
1554) Lenny is the listing agent for a property built in 1901. Old homes are very desirable in this area, and Lenny is expecting a fair amount of interest and multiple offers at the planned open house. Which action best demonstrates good faith to his seller client in this scenario?
a. Lenny presents all formal written offers as they come in, discussing the merits and drawbacks of each, but ultimately lets the owner decide what action to take.
b. Lenny presents only the best offer to the owner.
c. Lenny reviews the offers that have come in and presents the top candidates to the owner.
d. Lenny waits a week after the open house before presenting offers to let as many offers come in as possible.

–00CeshopPractice00FINAL1

1) Net operating income ‒ debt services = ______
a. Cash flow
b. Effective operating income
c. Operating expenses
d. Vacancies and credit loss

2) 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

3) Which of these is the better debt service ratio?
a. 1.3
b. 1.8
c. 2.25
d. .25

4) As a licensee representing investor clients, your marketing strategy should be determined by ______.

a. Anticipated commission
b. Demographics
c. Long-term profits
d. Property type and the client’s investment strategy

5) Which IRS forms are independent contractors and employees required to complete?
a. Independent contractors fill out W-4s, and employees fill out W-2s.
b. Independent contractors fill out W-4s, and employees fill out W-9s.
c. Independent contractors fill out W-9s, and employees fill out W-2s.
d. Independent contractors fill out W-9s, and employees fill out W-4s.

6) Recording a document makes it a matter of ______.
a. Closing
b. Conveyance
c. Fact
d. Public record

7) 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

8)
9) You haven’t been paid your commission on a transaction that closed nine months ago. The commission was paid to your broker, but you haven’t received your compensation. What remedy is available?
a. Nothing, the statute of limitations has passed
b. Take the broker to court over non-payment of your commission
c. Take the buyer to court over non-payment of your commission
d. Take the seller to court over non-payment of your commission

10) What is a real estate investment trust (REIT)?
a. A company that owns, and usually operates, income-producing real estate
b. An entity used to pool mortgage loans and issue mortgage-backed securities
c. An organization that manages income-producing real estate properties
d. An organization with many investors who jointly participate in a real estate investment

11) Bert is an investor who doesn’t actually buy properties. Rather, he finds deals and “assigns” them to others for a fee. Bert is obviously ______.
a. A flipper
b. A foreign investor
c. A wholesaler
d. Operating illegally

12) A ______ is a worker who’s classified by the common understanding of the profession. An example would be a food server.
a. Common law employee
b. Independent contractor
c. Statutory employee
d. Statutory non-employee

13) 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

14) What should you do if your buyer client, Steve, says he doesn’t want to have a professional inspection?
a. Ask Steve to sign a waiver
b. Hire an inspector yourself
c. Perform the inspection yourself
d. Refuse to work with Steve

15) A set of guidelines for the ethical conduct of real estate licensees is called a ______.
a. Code of ethics
b. Contract
c. Option
d. Rule book

16) Danielle is a new licensee. She is also newly engaged with a two carat diamond ring and diamond tennis bracelet she can’t wait to show off to clients. Her sponsoring broker, Tom, has provided her with a list of things she should avoid in social media postings. The list includes wearing expensive jewelry in photos she posts of herself on social media. Why is that?
a. It could make her a target for criminals.
b. It portrays the firm’s clients in a poor light.
c. It will be bad publicity.
d. It will make the other salespeople angry.

17) During the closing, whose job is it to deliver the title commitment after ensuring the title is marketable and without defect?
a. The lender’s attorney
b. The seller
c. The seller’s agent
d. The title company representative

18) Which photograph of a home for sale should not be published for public viewing?
a. An exterior photo showcasing the pool and outdoor kitchen/bar area
b. A photo of the billiards room that reveals the owner’s collection of antique guns
c. A photo of the master bathroom that also shows the photographer’s arm reflected in the mirror
d. A wide-angle photo of the renovated kitchen that makes the area look larger than it really is

19) Why is it so important to be able to properly identify trust funds?
a. In order to earn interest while they are deposited.
b. So they don’t get lost.
c. So you know what you’re talking about at meetings.
d. They must be handled differently than non-trust funds.

20) Which of the following best defines a stigmatized property?
a. A home that has specific architectural elements
b. A home that is smaller than what is typical in a neighborhood
c. A property in a run-down neighborhood
d. A property that has been psychologically rather than physically impacted by an event

21)
22) Gross potential rental income ‒ vacancies and credit loss = ______
a. Effective gross income
b. Expense reimbursements
c. Late rent
d. Net operating income

23) How does the income from property taxes benefit the community?
a. It’s used to build high-end housing.
b. It’s used to build new shopping malls.
c. It’s used to determine property tax increases.
d. It’s used to fund essential services and public works.

24) Which of the following describes how a property manager would calculate anticipated annual rental income for a budget?
a. Take the average market rental rate, multiply by the number of units, and subtract operating expenses.
b. Take the owner’s income goals and subtract operating expenses.
c. Take the per-unit rate, and multiply by the number units, then by the number of occupied months in the year, taking into account the previous year’s occupancy/vacancy rates.
d. Take the previous year’s income and add 10% for appreciation.

25) Who is responsible for ordering an appraisal, completing the loan application, ordering a home inspection, and obtaining homeowners insurance before closing?
a. The buyer
b. The lender
c. The seller
d. The title insurance company

26) The _____________ section of the purchase agreement you reviewed is not for the buyer to fill out. It is where the seller indicates whether the offer is accepted or countered.
a. Acceptance of Offer
b. Accepted or Countered
c. Expiration of Offer
d. Terms and Conditions

27)
28) The Philberts just bought a home for its market value of $340,000. How will Proposition 13 affect their property taxes?

a. Their property tax is limited to 1% of the property’s value as of February 28, 1975.
b. The property’s value as of the date of sale becomes the base value, and they’ll pay a maximum of 1% of that value as property tax. The property’s assessed value can’t go up more than 2% each year thereafter, until they sell or improve it.
c. They’ll pay no more than 1% of the property’s market value each year as property tax.
d. They’ll pay property tax of one percent of the property’s market value the first year, and that tax will increase by 2% each year thereafter until they sell or improve the property.

29) What minority group is expected to significantly improve homeownership rates in the next decade?
a. Asian
b. Black
c. Hispanic
d. Native American

30) Which form is used to report a real estate transaction to the Internal Revenue Service?
a. Form 1099-S
b. Inspection Report
c. Settlement Statement
d. Uniform Settlement Statement HUD-Form 1

31) _______ includes a review of the demographic, geographic, and governmental environment in which a rental property is located.
a. A competitive analysis
b. A market analysis
c. An analysis of alternatives
d. A property analysis

32) “Safety first” means that it becomes second nature to consider the ______ before doing anything—even marketing yourself.
a. Benefits
b. Commission check
c. Economy
d. Risks

33) What type of client should you ask about experience, strategies, and their team?
a. Home buyer
b. Home seller
c. Investor
d. Time-share purchaser

34) What information can potential criminals use to find you or know when you are home?
a. Your list of contacts
b. Your location information
c. Your privacy tools
d. Your profile photo

35) When you create fictitious scenarios of danger and determine strategies to get out, talk your way out, or fight back for each one, you are ________.
a. Being silly
b. Imagining things that will never happen
c. Practicing strategies for getting to safety
d. Wasting your valuable time

36) Cash flow / initial cash investment = ______
a. Effective operating income
b. Profit
c. Return on cash flow
d. Return on investment

37) In order to protect your personal safety, which of the following should you avoid posting on social media?
a. Photos of a home’s selling features.
b. Photos that are professional and understated.
c. You are alone at an open house.
d. You have a great listing.

38) The portion of the property management plan that discusses the property’s current condition and recommendations to stall or reverse obsolescence is called the _______.
a. Analysis of alternatives
b. Competitive analysis
c. Market analysis
d. Property analysis

39) For safety reasons, you should not allow strangers to see ______.
a. Your Agent of the Month award
b. Your car keys
c. Your cell phone
d. Your family photos

40) It is a bad idea to include information about your loved ones and pets in your personal marketing because it is a safety risk to ______.
a. Your business associates
b. Your community
c. Your loved ones
d. Your reputation

41) Which term is used for the individual who conducts the closing?
a. Buyer’s agent
b. Closing agent
c. Lender’s attorney
d. Seller’s agent

42) Which of the following is true about personal safety in the office?
a. Clients/customers should not be left unsupervised in the office.
b. It’s okay to leave client paperwork out in the open.
c. It’s okay to share personal information about your family.
d. You should proudly display photos of your family.

43) When showing a home, which of the following is something you should do?
a. Carry a fully charged cell phone.
b. Enter the room first.
c. Wear high-heeled shoes.
d. Wear uncomfortable clothing.

44)
45) Which of the following is a good example of how to identify your clients?
a. Asking them their name
b. Asking them their name and address
c. Having them complete a survey about their housing needs
d. Taking a copy of their driver’s license

46)
47) Property owners must account for the costs of maintaining and running a property, which are called ______.
a. Landlord expenses
b. Operating expenses
c. Profit loss
d. Property expenses

48) When a buyer and a seller agree upon a price, they are determining the ______________.
a. Assessed value
b. Investment value
c. List price
d. Market value

49) Performing an Internet search on your name can help you to do what?
a. Be the most popular person in your peer group
b. Protect your reputation
c. Ruin your reputation
d. See what others are posting about themselves

50) Why is it so important to be able to identify non-trust funds?
a. For the purpose of avoiding commingling of trust and non-trust funds as well as not violating established legal procedures and standards
b. Only to make your boss happy
c. So your clients will believe you know what you are talking about
d. To avoid violating FDIC rules regarding trust funds

51) The price an owner offers to sell a property for is called the __________.
a. Depreciated value
b. List price
c. Market price
d. Property value

52) Investors are generally interested in the _________________.
a. Assessed value
b. Investment value
c. List price
d. Market value

53) Under what circumstances would a residential transaction require the seller to provide a prospective buyer with a Residential Earthquake Hazards Report?
a. All residential transactions require this disclosure
b. If the home were built prior to 1960
c. If the property is located within an earthquake hazard zone
d. When there is also disclosure of unpermitted construction on the property

54) Which of the following real estate transactions requires use of the Real Estate Transfer Disclosure Statement?
a. 20-unit apartment building
b. Foreclosure transfer
c. Industrial property
d. Single-family residence

55) Which of these situations do licensees commonly encounter when working with sellers?
a. Sellers who are eager to reduce the price of their home when the market dictates
b. Sellers who are unwilling to recognize the market value of their home
c. Sellers who believe they’ll get better service by paying a higher commission
d. Sellers who refuse to negotiate with buyers

56) When must two licensees, each representing different parties in a transaction, have a dual agency disclosure signed?
a. Never
b. When both licensees are related
c. When both licensees work for the same broker
d. When the parties to the transaction are related

57) Who should take responsibility for completing the seller’s information section of the Real Estate Transfer Disclosure Statement?
a. Home inspector
b. Seller
c. Seller and seller’s agent
d. Seller’s attorney

58) When it comes to investment risk, usually the ______ the risk, the greater the potential return.
a. Greater
b. Lower
c. More liquid
d. Safer

59) In the Offer section of the sample purchase agreement, the amount the buyer is offering is referred to as the ______________________.
a. List price
b. Offer
c. Purchase price
d. Sales price

60) Which option defines a probate sale?
a. Occurs after the owner defaults on a loan
b. Occurs utilizing an administrator or executor of a will with court supervision
c. Occurs when a homeowner seeks only what is owed on their mortgage and enough to cover closing costs
d. Occurs when the property is bank-owned

61) If you’re not using columnar records, what are the minimum requirements for recordkeeping related to trust funds?
a. Bank statement, cash ledger, interest statement
b. Beneficiary ledger, profit and loss statement, journal
c. Copies of deposit slips, journal, bank statement
d. Journal, cash ledger, beneficiary ledger

62) Residential property that is owner-occupied qualifies for an exemption of how much?
a. $10,000
b. 100% of the base value, since it is rare for owners to occupy their owned property
c. $500
d. $7,000

63) Of the following, which duty may an escrow agent perform?
a. Ask the courts to resolve a dispute between the parties
b. Audit the buyer’s financial statements
c. Disburse funds, according to the seller’s wishes
d. Provide legal advice to the parties

64) A property has an annual before-tax cash flow of $100,000 and income taxes of $12,000. The investor has $2 million invested in this property. What is the investor’s cash-on-cash return?
a. 12%
b. 18%
c. 25%
d. 5%

65) Amy is explaining the “broker and seller’s duties” section of a listing agreement to a new client. Which of these would be an accurate statement to make?
a. The broker and seller each have a duty to disclose material facts
b. The extent of the broker’s duties depends on the type of listing agreement.
c. The seller and broker will take turns showing the property to potential buyers.
d. The seller and the broker agree to exercise reasonable effort and cooperation in the sale of the property.

66) Vacancy decontrol means that when a tenant moves out, the owner may ______.
a. Apply for an exemption from rent control
b. Convert the unit to a condo
c. Not raise the rent
d. Raise the rent to the market rate

67) How does home ownership contribute to stronger communities?
a. Home owners do not move frequently.
b. Home owners have more wealth.
c. Home owners have steady jobs.
d. Home owners spend more money.

68) When marketing a property for an investor, your marketing strategy will largely depend on property type and ______.
a. Amenities
b. Investment strategy
c. Neighborhood
d. Value

69) –00cceshopp00final2—

70) Chance and Lucky have an option agreement between them in which no consideration is provided. Is this enforceable?
a. No
b. Only for option periods of less than six months in length
c. Only if the sales price is clearly stated
d. Yes, as long as the option is executed by the required deadline
71) A buyer defaults on the purchase of a $500,000 single dwelling residential property after putting down a $25,000 deposit. What is the maximum amount of liquidated damages that may be awarded to the seller?
a. $15,000
b. $2,500
c. $25,000
d. $3,000

72) You’re working with a real estate investor. Why might you ask the following question: What’s your end goal?
a. Financing for investors can be problematic for a number of reasons.
b. It will help you determine an investor’s readiness to buy if the investor already has general contractors, lenders, property managers, accountants, etc. lined up.
c. The best investors are often those who have the most business skills.
d. This helps you determine the kind of properties and deals they may be interested in and the type of services they may want from you.

73) You’re working with an investor who wants you to find properties in disrepair so he can quickly make repairs and sell the property for a profit. This is ______.
a. A buy-and-hold strategy
b. A legal flipping strategy
c. An illegal flipping strategy
d. A wholesaler strategy
74)
75) What’s the definition of a closing in its simplest form?
a. The buyer makes an offer on the property.
b. The buyer receives title to the property, and the seller receives consideration for it.
c. The lender approves the loan application.
d. The seller signs a contract to hire a broker.
76) Why would parties use an escrow company to assist in a transfer of real property?
a. It protects each party’s interests.
b. It’s free.
c. It’s required by law.
d. It’s required by the lender.
77) The inspection turned up some repair issues that the seller is unwilling to make, and the buyer is unwilling to take on. The buyer wants to cancel. What portion of the sample purchase agreement you reviewed gives the buyer this right?
a. The Agency section
b. The Inspection Contingency section
c. The List Price section
d. The Offer section
78)
79) Household income, race, and ______ are the primary predictors of homeownership.
a. Age
b. Education
c. Family size
d. Location
80) XYZ Realty was fined after being found guilty of violating antitrust law. Which of these activities performed by the firm is the likely violation?
a. Developing a market niche in rural properties
b. Refusing to buy services from a vendor because of shoddy business practices
c. Requiring a consumer to use a specific mortgage company
d. Requiring all buyers who work with its company to be pre-qualified
81) Which type of buyer tends to rely on knowledge from previous homebuying experiences, and is often looking for a better location or a home with more space?
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
82) Which of the following statements is true of real estate commissions and fees?
a. Both commissions and fees are set by law.
b. Neither commissions nor fees are set by law.
c. Only commission rates are set by law. Fees are not.
d. Only fees are set by law. Commission rates are not.
83) Roberta is an investor who likes to invest for appreciation potential and tax write-offs. What’s her investment strategy?
a. Buy and hold
b. Fix and flip
c. Lease option
d. Wholesale
84) Which of the following would federal fair housing laws prohibit?
a. A 49-year-old, single woman 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
85) By what yardstick does the property manager set rental rates in order to yield a good return for the property owner?
a. Highest rate
b. Highest rate the market will bear
c. Lowest rate
d. State mandated rate
86) What is a real estate mortgage investment conduit (REMIC)?
a. A company that owns, and usually operates, income-producing real estate
b. An entity used to pool mortgage loans and issue mortgage-backed securities
c. An organization that manages income-producing real estate properties.
d. An organization with many investors who jointly participate in a real estate investment
87) Who has an obligation to record on the TDS material facts discovered as part of a required visual inspection?
a. Both seller’s agent and buyer’s agent
b. Buyer’s agent
c. Home inspector
d. Seller’s agent
88) What is self dealing?
a. Having undisclosed personal interest in a transaction
b. Insinuating your interest into a contract
c. Profiting from the purchase of a property
d. Profiting from the sale of a property
89) Alexander just listed his first condo. Last week, he helped a client close on a duplex, and the week before that, he sold a nice ranch to a retired couple. Of the six primary categories of real estate, what type of properties does Alexander handle?
a. Industrial
b. Leisure
c. Residential
d. Retail
90) What would you likely find on a rent roll?
a. A list of all of the current tenants and how much trouble they are
b. A list of current tenants, when their leases are up, and how much each tenant is paying for rent
c. The credit score of each tenant and when their lease is up
d. The type of unit and the tenant’s credit score
91) Why is it important for the licensee to be able to distinguish between trust funds and non-trust funds?
a. Because they must be handled differently
b. In case the client asks the licensee to explain
c. To be able to claim the appropriate expenses on taxes
d. To stay in compliance with banking regulations
92) At a business meeting attended by the heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. Of what is this an example?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangements
93)
94) When a business that held a seller’s permit is being sold, who may be held responsible for any outstanding use tax at the time of sale?
a. The broker
b. The buyer
c. The licensee
d. The seller
95) If you want to capitalize on the time value of money concept, you should ______.
a. Hire an accountant
b. Invest money where it will earn interest
c. Put your money in a safe deposit box
d. Shelter your money from taxes by not investing it
96) Something that can cause a snag at the closing itself is ____________.
a. The buyer neglects to bring a cashier’s check
b. The inspection turns up an issue
c. The property does not appraise
d. The seller forgets the keys
97) Your buyer clients have 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)
98) What does an and/or assigns clause allow a buyer to do?
a. Assign a new purchase price to the property at a later date, pending an inspection
b. Assign a new real estate broker, in spite of an existing agency agreement
c. Assign an unknown third party to take over the terms of the sales contract
d. Attach or assign additional addenda
99) Let’s say you have an investor with an NOI of $40,000 and a debt service of $30,000. What is your investor’s debt service ratio?
a. $10,000
b. 1.25
c. 1.33
d. .25
100) Under what circumstances would undisclosed dual agency be appropriate?
a. Never
b. When acting as a subagent
c. When representing the buyer
d. When representing the seller and assisting a first-time home buyer
101)
102) Investor Shawn likes to get properties for far below asking price. What might he offer the seller to sweeten the deal?
a. A blueprint of plans to develop the property
b. A hardship letter
c. A quick close
d. A trade-up
103)
104) Jarod, your investor client, offers to purchase a property as-is, and even though you cautioned him against it, he’s also waived the inspection. Why would he do this?
a. He intends to live there
b. He’s a naive investor
c. He’s making a low-ball offer
d. The property is in poor condition
105) What is the simplest disposition of an outstanding property tax obligation?
a. To get a waiver for the debt
b. To ignore the debt and hope it gets forgotten
c. To make arrangements to pay the debt
d. To sell the property
106)
107) Which of these sentences accurately describes the purpose of the Exclusive Residential Listing Agreement?
a. Defines the broker’s and buyer’s duties, and the terms of the listing.
b. Establishes an agency relationship between a broker, seller, and a buyer.
c. Specifies the net amount of income a seller will earn from the sale of a property.
d. Spells out the broker’s and seller’s duties, and the terms of the listing.
108) Which of these statements best describes one of the purposes of including a section about the “entire agreement” in the residential listing agreement?
a. Both parties are required to read the entire agreement.
b. Each term must be valid, or the entire agreement will be voided.
c. Every term in the listing agreement must be initialed to be valid.
d. Everything the parties are contracting to is in the listing agreement.
109) Maria received a call from an unrepresented buyer regarding her new listing. At what point must she have the buyer sign an agency disclosure?
a. Before answering any of the buyer’s questions
b. Before closing
c. Before entering into an agency relationship with the buyer
d. Before speaking with the buyer
110) Carolyn represents John in the sale of his home. Which listing agreement clause would authorize and obligate her to distribute the listing to other brokers?
a. Broadcast clause
b. Broker extension clause
c. Marketability clause
d. Multiple listing service (MLS) clause
111) One quick and dirty investment formula figures that operating expenses are generally ______ percent of rental income.
a. 10
b. 12
c. 25
d. 50
112) May a buyer’s agent change the cooperative agent fee in an offer to a seller?
a. No, because agents may not make changes to contracts—this would be practicing law without a license.
b. No, because that would be interfering with the contract between the seller and listing agent.
c. Yes, because commission rates are always negotiable.
d. Yes, because this is a non-material item to the contract.
113) Barb deposited her client’s down payment funds into her broker’s business account, intending to remove it the next day and deposit it into the client’s trust account. This is an example of ______.
a. Bookkeeping
b. Commingling
c. Conversion
d. Positive stewardship
114) How should the parties to a contract meet their timing obligations?
a. They should ask for extensions whenever possible.
b. They should not unduly delay so that closing occurs on schedule.
c. They should wait until just before the deadline to complete the required action.
d. They should work rapidly and try to close early if possible, even if it means missing a few steps.
115) Rachel has met a prospective investor client, Jill. She asks Jill, “Who’s on your team?” Why might she ask that question?
a. Financing for investors can be problematic for a number of reasons.
b. It will help her determine Jill’s readiness to buy.
c. She wants to make sure the investor isn’t already working with another licensee.
d. The best investors are often those who have the most business skills.
116) The buyer has backed out of the transaction and the seller instructs escrow to disburse earnest money to the seller. Under what circumstances may escrow do this?
a. If both parties agree in writing
b. If the buyer is foreign
c. If the listing agent provides an Affidavit of Disbursement
d. If the seller provides this request in writing
117) You represent a seller who has provided advance consent to dual agency. A buyer you show the property to decides to write an offer, and asks you to write the offer. You say, “Fine, but in order to do that, you will need to sign permission for dual agency. Here is the form. Sign here.” The buyer signs, and you proceed. Did you miss any steps?
a. No, buyer signatures are sufficient if you have advance consent from the seller.
b. No, you have not missed any steps.
c. Yes, you must explain what dual agency means to the buyer before the buyer signs.
d. Yes, you must obtain broker’s permission.
118) Norris is marketing a commercial space to investors. He’ll want to provide this information, especially ______.
a. Cash flow analysis and projections
b. Estimate for rehabbing the property
c. Former list price vs. sale price
d. Recent upgrades
119) Which type of development centers around proximity to public transportation?
a. Eco-Green
b. Increased-density
c. Multi-family housing
d. Transit-oriented community
120) Who can obtain a copy of a CLUE report for a given property?
a. The buyer
b. The lender
c. The listing agent
d. The property owner
121) What is pyramiding?
a. Leasing a property to multiple tenants at the same time
b. The increase in value of the property beyond what the investor originally invested as a down payment
c. The purchase of multiple properties to increase an investor’s overall holdings
d. The use of one investment to finance another
122) What type of arrangement is it when a building owner sells the building then leases the space from that buyer?
a. Ground lease
b. Percentage lease
c. Sale leaseback
d. Subordinate lease
123) When prospecting and soliciting for new business, licensees should be familiar with which 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
124) What is the primary reason for reconciling accounting records?
a. To be able to answer questions about the brokerage firm’s financial health
b. To keep things in order in case of an audit, and to be able to answer specific questions about transactions or beneficiaries.
c. To make sure beneficiaries are submitting all monies per contract provisions
d. To send the reconciliation statement to the commission in order to avoid an audit
125) What is a benefit assessment?
a. An all-purpose general special assessment
b. An assessment that benefits a special population, such as the homeless
c. A special assessment used for improvements in emergency services, lighting, transit, and flood control
d. A special assessment used for improvements to county landfill sites
126) Chastity specializes in working with investors. Why might she attend a tax foreclosure auctions?
a. To get property leads
b. To increase her hourly billings
c. To meet other licensees
d. To network

–Random-part2-practice—
1) Erica presented an offer to her seller client, and after a bit of negotiating with the buyer and buyer’s agent, the offer was accepted. Which one of these activities will Erica be taking care of at this point in the sales process?
2) The duty of honesty to your customer trumps your duty of confidentiality to your client.
3) Your buyer clients Jen and Tony 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?
4) The maximum annual tax on real property Proposition 13 sets is capped at 1% of the property’s market value each year.
5) A property’s base value can increase by as much as 2% each year under Proposition 13.
6) An addition, such as a garage, will result in a change in the base year for the entire property.
7) It’s possible for a property to have two different base value years.
8) Prohibits monopolies and actions that cause an unreasonable restraint of trade
9) They’re guilty, so what do we need to prove? It’s all a matter of per se. What does per se mean?
10) How is procuring cause related to a protection clause?
11) What’s an REO property?
12) What should you make sure your clients understand about the scope of the preliminary title report?
13) Protects the buyer’s earnest money in the event the buyer is unable to obtain financing.
14) If the property does not appraise at or more than the sales price, the buyer can terminate.
15) The buyer has made the offer to purchase based on the buyer’s current property selling.
16) With an appraisal contingency, the buyer can use the fact that the property hasn’t appraised to terminate and receive a refund of the earnest money.
17) Sellers are often reluctant to accept offers contingent on the sale of another property, and when they do, they usually reserve the right to market and show the property to other buyers.
18) In an offer that’s contingent on the sale of the buyer’s current home, even if their home doesn’t sell by the agreed-upon deadline, the buyer has the option to remove the contingency and proceed with the sale.

19) Can you define an option contract?
20) At what point does an option contract become binding for both parties?
21) Who can enforce an option contract—the optionee or the optionor?
22) The option agreement is designed to be used with a purchase agreement or a lease agreement.
23) What document should detail the typical reports a property manager needs to provide for a property owner?
24) Which of these refers to the agreed-upon price between a buyer and a seller?
25) The maximum amount of income a property can generate from all sources when fully occupied and when rents are fully collected
26) Income received when tenants pay for some or all of the property’s operating expenses
27) Actual gross potential income is offset by this, which occurs when units are not rented or tenants do not pay their full obligation
28) What information is a property owner likely to gather from the effective gross income?
29) The Business and Professions Code requires that transactional records be kept for how long?
30) Janice wants to sell her townhome, and her neighbor is considering purchasing it from her. While she’s waiting to find out if her neighbor is serious, she wants to market it and receive the best representation possible. What type of listing agreement will save Janice the cost of a commission if her neighbor does ultimately decide to buy Janice’s townhome?
31) A good question to ask an investor to determine the type of services they may want from you is:
32) Sometimes, the __________ of the property can have the burden of being responsible for paying sales tax.
33) It’s the licensee’s responsibility to know how and when taxes and real estate ___________.
34) An agent stating that property is “guaranteed to increase in value over the next five years” is an example of ___________.
35) Also included in Prop 13 is a maximum ______ % annual inflation factor, based on the Consumer Price Index (CPI).
36) Just because several brokerages have the same commission rates, it doesn’t mean a price fixing violation is occurring. What must exist for a violation to occur?
37) What responsibilities do licensees have regarding contingencies in a real estate transaction?
38) Although an independent contractor, this worker is defined as an employee by statute for certain employment tax purposes. An example would be a food delivery driver who is paid on commission.
39) Having information about clients you’re meeting allows them to be identified and tracked down in case something goes wrong. This is why you should do what?
40) When might an additional provision be needed in an agreement of sale?
41) In an option contract, prior to the optionee exercising the option to buy, which parties are bound to carry out their contractual obligations?
42) When is the mortgage loan commitment or title insurance contract signed?
43) Which of the following actions occurs prior to a closing?
44) Whose responsibility is it to determine instructions?
45) How do you find the Return on Investment (ROI) ?
46)
47) What is a convertible mortgage?
48) What does an equity Real Estate Investment Trust invest in?
49) What is basis?
50) Which of the following is an unauthorized practice of law?
51) Which of the following types of training/course might be one that the Missouri Real Estate Commission would consider for a core course requirement to fulfill the CE requirements for real estate licensees?
52) How often must a Maryland licensee check the license status of a general contractor if recommending the service provider to a potential buyer?
53) During a residential transaction, when must an Illinois seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?
54) n accordance with the Illinois Real Estate License Act, sponsoring brokers must keep copies of all disclosures on file for ____________________.
55) 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?
56) Which of the following is one benefit to business owners for leasing instead of buying real estate for their business?
57) Damien was representing a commercial property owner. Which one of the following duties can the owner expect Damien to perform on the property owner’s behalf?
58) Farm families financing the purchase of properties in rural areas may be able to obtain financing through this government agency if they meet certain criteria, such as income requirements.
59) what’s one benefit of a rural development loan?
60) What entity services rural development loans?
61) what attracts borrowers to adjustable rate mortgages?
62) Manuel is selling his home to Selena. He has an existing loan that he’ll continue to make payments on, and he’s extending credit to Selena for the balance of the purchase price. She will make monthly payments to him. What type of financing are the parties using in this transaction?
63) After switching careers, Alice just graduated from culinary school and is looking to purchase a house. Until she gets her feet wet with her new job, she knows the cost of living with her mortgage is going to be tight. Which mortgage might help her manage her expenses each month?
64) 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?
65) Walt and Ginger were informed by their landlord that their option to purchase the bungalow they’re renting has just been terminated. Which of the following things that can occur is likely to terminate an option to purchase?
66) Margaret isn’t ready to buy Jill’s property, but she pays Jill a fee that guarantees she’ll be notified if another buyer appears. If another buyer does make an offer, Margaret has the opportunity to purchase at the price and terms of the offer. Margaret has a(n) ______ on Jill’s property.
67) Edna leased her house to Joan with a right of first refusal. Edna’s cousin, who knows that she needs liquid assets, just offered her $250,000 for the house. What does Joan have to do if she wants to buy the house?
68) the ueta makes it legal and binding for contracts to be
69) Both parties have to sign the agreement in order to demonstrate that ________.
70) 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?
71) Your neighbor hires a middle school student to mow his lawn every two weeks. He draws up a written contract in which he clearly outlines the student’s mowing responsibilities and the payment the student will receive in return. Which of the following is true in this situation?
72) Which clause in a contract states that one or more parties won’t be held liable if there are losses or expenses related to the contract?
73) Sylvia, who’s 15 years old, and her neighbor Marge, who’s 24, agree that Sylvia will babysit Marge’s toddler for the summer for $10 an hour. What type of contract is this?
74) 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 ______.
75) What happens to the company license if the qualifying broker dies or becomes incapacitated?
76) Julie is working with buyer clients and has prepared an estimated closing statement. Which of the following statements is true?
77) Buyer Susie’s a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property?
78) Which of these is a recommended strategy for a real estate professional who wants to avoid being asked to violate fair housing laws?
79) Renae moved to the U.S. from Nigeria and became a citizen. Which act specifically provides Renae with the right to buy, sell, convey, inherit, and possess property?
80) Ramon and Bill are victims of fair housing discrimination. Which of the following must have occurred if their landlord violated specific terms of the Fair Housing Act?
81) Cambridge Apartments provides an open parking lot for its residents. There is adequate parking, and all spaces are available on a “first-come, first-served” basis. Alton has MS and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?
82) Which statement related to reasonable accommodation for an assistance animal is true?
83) What must occur to effect a transfer of title?
84) A real estate licensee must conduct marketing campaigns in a way that ______.
85) The property management _______ provides detailed information about the rental property, such as market analysis, competitive analysis, and property analysis.
86) Rick is representing Jules, a seller, who wants to know if he has to disclose his leaking roof to buyers. Rick says yes, since the problem constitutes _______.
87) The purpose of the Truth in Lending Act (TILA) is to ______.
88) Adella received money for her down payment in the form of a tax credit on her federal tax return. This tax credit is known as a __________________________.
89) Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.
90) Deed restrictions imposed by a developer who wants to maintain specific standards in a subdivision under development are often called _______.
91) Personal property includes which of the following?
92) Ron’s company leased a building so that they could build an escape room experience. After operating for two years, their attendance (and thus their profits) started to drop significantly, so they decided it was time to close the location. When they started taking down the installation, they realized that some of the structures they built will damage the walls if they try to remove them. Which of these is true about these trade fixtures?
93) Agent Terry meets a potential seller, Cate, who’s unhappy with her agent. “Break your contract with your agent,” Terry says, “and I’ll work hard for you.” Less than a week after Cate breaks with her agent and signs with Terry, he puts her house on the MLS and puts a for sale sign on her property with her permission. The two of them arrange an open house. Did Terry break any rules?
94) Jerrold reviews the floor plan of the Knoxville 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?
95) Patty is writing an online ad for several condos she’s selling. “More than 3,000 square feet!” she writes. She’s pretty sure that this is the average size of the condos. She included her brokerage firm and her license status on the advertisement, as well. How did Patty do?
96) What information does the Loan Estimate NOT provide to buyers under required disclosures law?
97) Sam’s kids talked him into putting up the basketball hoop that their grandparents got them for Christmas. On a quiet Saturday afternoon, Sam is busy nailing the backboard to the front of their garage facing the street when one of the officers of the homeowners association walks by. “I’m so sorry,” she says, “but you’ll have to take that down. Basketball hoops in direct view of the street are prohibited.” What is in place in Sam’s subdivision that would prohibit this?
98) Which department typically decides which development projects require a permit or approval?
99) What classification of water rights includes the two smaller sub-classifications of navigable and non-navigable waterways?
100) Bonnie is calculating the square footage of a listing. The upper level of the home is 450 square feet. The main floor is 1,200 square feet, including an unfinished laundry area that’s 225 square feet. The 1,200-square-foot basement is finished. Bonnie’s MLS system disregards below-grade square footage. What square footage will Bonnie mention in her MLS listing and marketing materials?
101) Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Is this contract valid?
102) Steve is preparing a market analysis for the Joneses and has selected three comparable properties. What’s the maximum number of adjustments Steve should make to the Joneses’ property?
103) Which statement regarding fee simple defeasible estates is true?
104) Which of these is an example of antitrust violations common to real estate?
105) In marketing her new listing, Alice asks the photographer to “touch-up” the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true?
106) Trinity has applied for a home equity line of credit to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure?
107) Trina is a licensee at Midtown Homes. Which of these factors indicates that she’s classified as an employee?
108) Jordan works as a property manager for several residential property owners. When she receives security deposits from tenants, how long does she have to deposit them into an escrow account?
109) 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?
110) How are fines assessed for violations of the CAN-SPAM Act?
111) When is a cease and desist order effective?
112) In contract law, undue influence differs from duress in that duress includes ______.
113) Nellie and Victor own a suburban ranch home and fell behind on paying their property taxes when Victor lost his job last year. Victor is working again, but they still haven’t saved enough to pay their back taxes. They’re worried that the county may begin foreclosure proceedings. What type of lien is this?
114) Why did the implementation of TRID impact closing dates?
115) 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?
116) What’s the relationship between TILA, RESPA, and TRID?
117) Sandra and Dwight are neighbors who share a common driveway, but the driveway is on Dwight’s property. What kind of ownership rights does Dwight have of the driveway?
118) Which of the following is most likely to have an extremely negative effect on the time and cost of a development project?
119) Agency may be legally terminated in which of the following ways?
120) Chris is in the process of purchasing a property with 20 acres of farmland in a rural area of the state. Assuming his income meets the criteria of the program, what type of loan may Chris find the most desirable?
121) Monica received a promotion at work that requires her to relocate. Because of the timing of her promotion, she’ll need to buy a new house in her new city before her current one is sold. So, she won’t have any equity from her current home to make a down payment on the new house. What loan option would allow her to make the purchase before selling the old house?
122) The Amarals are purchasing the house of their dreams and have plans to stay in it for at least the next three decades while they pay back their conventional 30-year loan. Their primary focus, over the life of the loan, is to reduce their payments as much as possible. What is something that could help them achieve this?
123) How might the lengthy purchase process for a short sale or foreclosure impact a buyer’s financing?
124) How many parties does a deed of trust involve?
125) Philip owns land in a state where growing marijuana is illegal. He wants to set up a small marijuana growing operation and export to states where marijuana has been legalized. He asks his attorney about the possibility. “No,” his attorney explains. “It’s not possible. Although you own the property outright, the right of ______ only allows you to manage the property in ways that are legal in this jurisdiction.
126) Which one of the following could be a clue that a property was formerly a waste disposal site?
127) What’s another term for deed in lieu of foreclosure?
128) A License holder may have more than one claim against hom. However, payments made from the Real Estate Education, Research, and Recovery Fund on behalf of the license holder must not exceed what amount?
129) Amy plans to open a brokerage. What might make her select a franchise?
130) What’s one of the main differences between a traditional mortgage loan and an interim loan?
131) Which section of the Exclusive Buyer Brokerage Agreement allows for an addendum to cover any special situations not outlines in the agreement?
132) Jeremy has just finished completing his loan application and has gathered supporting documentation needed to determine whether the application will be approved. Which of these titles best describe who Jeremy is?
133) A contract in which only one party is bound is __________________.
134) Bernie works for Quckwell Lending and accesses several lenders to find a loan product that works best for his clients. What is Bernie?
135) Which title search method only goes back as far as when the last title search performed, and assumes the last search was done accurately, legally, and that any issues were resolved?
136) Which of these would be considered a special circumstance that may require prior approval from a third party before a listing agreement can go into effect?
137) What is the assessed value of a property with a fair market value of $249,500?
138) Rhonda is interested in putting money toward a timeshare estate, which would allow her to use a condominium for two weeks each year. Timeshare estates _____________.
139) What doe each component of the 80/10/10 ratio represent in a split-or piggyback-loan?
140) As a(n) ___________ property manager, you spend most of your time on maintenance, landscaping, security issues, and enforcing HOA regulations.
141) When is transfer tax payable?
142) As a licensee, what should you do as soon as it’s known that closing will be delayed?
143) What does the claims for loss statement in a title policy say?
144) How can lapsed homeowners insurance lead to default of the mortgage loan?
145) Kristin wants to buy her listing. What must she do to be on the up and up?
146) What type of zoning is used to separate one type of property of another use?
147) Which of the following options describes a method by which licensee can determine an appropriate listing price range?
148) Rachel and Nick are selling their home. Before the property is sold, a title search is conducted to determine if there are any _________________.
149) Fiona signed an agreement to either buy or not buy Nick’s vacant lost for $310,000 by a specific date. What’s the agreement called?
150) A complaint was filed against Bard, a licensee. A hearing was help, and GREC issued a/an _______________________, which resulted in a small fine and the requirement for Barb to take some additional education.
151) What actions are taken to account for the release of gases produced by decomposing trash in a decommissioned landfill?
152) What’s a computerized loan origination system?
153) When assessing a contract, the assignor ensure that __________ is not prohibited in the purchase contract.
154) Marcy listed her property with Jennings Homes in March. The market is slow, and Marcy’s property isn’t in great condition, though she’s sure she can get top dollar for it because of its location. Her agent encourages her to either reduce the price or fix the property up, but she refuses. Both Marcy and her agent are frustrated. What’s the best options for both of them?
155) Milton, a broker, agrees to sell his sister’s house. She needs to receive at least $200,000 and offers Milton a deal: If he sells the house for $205,000, he can keep anything over $205,000. So he lists the house at $220,000-he wants to make some money, too. If it sells at this price, he gets $15,000. What type of agreement is this?
156) What’s a listing agent’s primary duty to a seller?
157) Monica, who’s selling her home to Ethan, promises in writing to have a licensed professional repair the home’s leaky roof. After closing, Ethan discovers that the roof was poorly patched by the homeowner and leaks whenever it rains heavily. Under the statute of limitations, of Ethan wishes to sue Monica, he must do so within _____ of the contract breach.
158) Which type of estate is a life estate?
159) What occurs when a landlord has a tenant removed from the premise through a suit for possession?
160) Stanley is having second thoughts about taking her 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 they contract will stand up in court. What type of contract does Stanley have?
161) What’s the difference between an exclusive right-to-sell and exclusive agency agreement?
162) What’s the legal process used to determine a will’s validity and to ensure that the will accurately reflects the deceased person’s wishes?
163) When Polly the puppy escaped her fenced-in yard, her owner, Jane, posted a reward for her safe return. What type of contract was Jane creating?
164) One of the risks of buying a condominium is that _________________.
165) Which of the following agencies is responsible for regulating the Equal Credit Opportunity Act?
166) Whose responsibility is it to notify GREC of a licensee’s transfer?
167) Cecil is a licensee who wants to purchase a home listed by the brokerage where he;s affiliated. What must he do?
168) Jillian has a loan-to-value ratio of 90/10. This means __________.
169) What effect will a property utility have on the value if it’s currently uninhabitable?
170) What’s the Mortgage Electronic Registration Systems, Inc (MERS)?
171) Which of the following is the probable sales price of a property if the property were sold under normal market conditions?
172) What’s a lease?
173) What is the purpose of a lender’s title policy?
174) You make an investment with other real estate investors. Because of the profit-oriented nature, and the fact that the profit depends solely on the management effort of others, this is likely what?
175) A VA Loan…..
176) _________________ occurs when the parties meet all terms of the contract
177) For what reason do borrowers commonly seek the assistance of individual private lenders?
178) ______________________ are artificial attachments to land that include items such as fencing, buildings, and walkways
179) Which of the following best describe what Ginnie Mae does in the secondary mortgage market?
180) How long can a broker wait after non-payment of a commission to record a lien against a commercial property?
181) SRT Mortgage has a borrower who has fallen behind on her mortgage. Rather than go through a foreclosure, the borrower is attempting to sell the property. An offer come in for less than the borrower’s loan balance and closing costs, but for more than what the lender feels it’d get at a foreclosure sale, so it approves the purchase. What is this an example of?
182) What are the rights and privilege’s granted with a fee simple estate commonly called?
183) When evaluating the income listen on a loan application, what will the lender consider?
184) Which of the following options can a real estate licensee provide?
185) Bianca wants to buy a cooperative, but she’s unsure that she can afford it. With a cooperative, her share of mortgage interest and real estate taxes will be
186) If a property owner owns more than 10 units, security deposits must be kept
187) What is one reason that carbon monoxide could be called a sneaky toxin?
188) Local real estate developments, such as a new subdivision, will likely impact ______ the most.
189) A duplex produces a monthly gross rental income of $1,800. The GRM an appraiser extracts from the local market is 125. Calculate the property’s estimated value.
190) Real estate, plus all of the interest, benefits, and rights included in ownership, is also known as ______.
191) What’s typically used to prove there are no encroachments on the property?
192) When people are treated differently because they have an accent, were born in another country, or are married to someone from a specific part of the world, this falls under discrimination based on ______.
193) Real property rights include ______.
194) What does the income approach to value rely on when valuing single-family and two- to four-unit properties?
195) A wet environment with little air circulation can ______.
196) An ______ is an addition to an existing sales contract and can be added without changing other terms already agreed upon in the contract.
197) Agatha has helped her client, Rufus, complete the ______, which documents Rufus’s purchase offer to the seller for the property he is interested in buying.
198) Amy has entered into a specialty contract (also known as a contract under seal) with another party. In Maryland, if Amy discovers that there has been a contract breach, how long does she have to sue the other party?
199) Which of the following provides everything a lender wants to know to value the property as collateral for a loan?
200) Jenny and her friend, Kali, go out to lunch. Afterward, they pay the bill. Their agreement to pay for the food they were served is what type of contract?
201) For income-producing properties, how is rent prorated at closing?
202) Janine wants to meet with her potential buyer clients face-to-face in her office. What’s her reason for doing this?
203) Which term refers to a permitted deviation from land use for a purpose that, under the current zoning restrictions, is prohibited and causes the property owner unnecessary hardship?
204) What’s the term used in real estate to describe when personal property is attached to real property, thereby making it a fixture?
205) Which of the following will appear on the closing statement?
206) Down the Road Brokerage has an in-house transaction situation and has appointed one of its licensees to represent the buyer client and one to represent the seller client. The two licensees are acting as what type of agents?
207) Archie signs a contract to buy Pam’s home. The deal eventually closes, but Pam fails to hand over the home’s keys to Archie. A week passes, and Archie files a lawsuit in an attempt to force Pam to give him the keys. This is an example of ________.
208) A licensee stating, “This is a dream home with the best views in town,” is an example of ______.
209) Federal and state fair housing laws prohibit activities that are ___________________.
210) What happens when a married couple who own a property as tenants by the entirety divorce?
211) The mishandling of escrow funds can result in _____________________.
212) Five siblings enter into a contract to buy a vacation property. The siblings get into a dispute, resulting in two of them backing out of the deal. This leads to a termination of the original contract. Three of the siblings then enter into a new contract to buy the property. This is an example of ________.
213) Manny has a client who wants to purchase a commercial building. Manny doesn’t have any experience negotiating commercial purchases. Which action should Manny take to demonstrate his good faith and most ethical behavior toward his client?
214) Which of the following is true about market allocation?
215) A buyer representation agreement is similar to which document used when representing a seller?
216) What’s a promissory note?
217) Which agency enforces fair housing laws?
218) Which of these items go in the seller’s credit column and the buyer’s debit column?
219) When must the consent for dual agency be reaffirmed by the parties to the transaction?
220) Which of the following is true about depreciation schedules?
221) Regardless of whether a seller elects to complete the property condition disclosure or disclaimer, what must the seller disclose?
222) What’s the amount a lender charges for the use of its money?
223) Joe and Emma Parsons begin informally working with their neighbor, Kyle, 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.
224) What type of listing agreement offers the most protection to the broker?
225) Can a seller withdraw a listing before the broker spends time and money?

226) The seller cannot cancel a listing with a broker once the broker has…..
227) In addition to showing the property, locating a buyer/tenant, communicating terms, promoting features and terms, and assisting in negotiations, what other responsibility does a listing agent have once the listing agreement has been signed?
228) The listing agent must ________________________ of items in the listing agreement
229) If a listing agent fails to verify that the parties who have signed the listing agreement are the actual persons who hold the title to the property, he/she may increase……
230) Who enforces the National Do Not Call Registry?
231) Are brokerage companies required to have a Do Not Call policy (even if they do not engage in cold calling)
232) How often must a brokerage company update their Do Not Call list?
233) What is the penalty for calling someone on the Do Not Call Registry?
234) Which of the following would NOT terminate a listing?
235) When a property is sold by a licensee other than the listing broker, who would the seller pay the commission to in an exclusive right to sell listing?
236) The difference between an exclusive agency and an exclusive right to sell listing is
237) What is the primary purpose of a listing agreement?
238) What is the key job of the agent?
239) Which of the following is not in violation of the CAN-SPAM Act?
240) How frequently must companies access and update the Do-Not-Call Registry?
241) The CAN-SPAM Act is federal regulation governing
242) Which of the following are the marketing responsibilities of the seller?
243) An arrangement in which brokers pool their listings and all commissions are then divided between the listing broker and the selling broker is called what?
244) What is an “extender clause”?
245) Which of the following is a feature of an open listing?
246) The failure to perform provisions of a contract without a legal excuse is known as what?
247) An agency could be terminated by all EXCEPT which of these circumstances?

248) How long does a buyer have to cancel a contract if they decide not to complete the purchase of a timeshare?
249) Where is a complaint against a licensee filed?
250) Which of the following is a difference between a limited service agent and an independent contractor?
251) Two designated agents, Mitch and Mickey, represent the buyer and seller in a single transaction, respectively. What else do you know about the agency situation?
252) What type of agency exists when a buyer’s agent is also the listing agent for the same property?
253) Rick, a builder, is using two properties as collateral for a loan. This is an example of a(n) ______ loan.
254) A duplex produces a month gross rental income of $1,800. The GRM an appraiser extracts from the local market is 125. Calculate the property’s estimated value.
255) Fiona and her husband, Ed, have just entered 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.
256) Under which type of buyer agency agreement does a buyer receive the most representation from a single agent?
257) Which of these items go into the seller’s credit column and the buyers debit column?
258) Which of the following financing types involved the sale of personal property with the real property?
259) Gertie and Frank both have alzheimer’s disease. They fall in love in a disabled home and get married by signing a marriage certificate. This is an example of a _________ contract.
260) 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?
261) With which type of commercial lease does the tenant pay some or all expenses?
262) What type of listing agreement will offer most service by their listing agent and still give them this option?
263) In which of the following situations can an agent represent a customer in a real estate purchase?
264) The cost approach to finding an appraised value measures _________.
265) The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attatched natural objects is called ________.
266) Ownership is a right in the bundle of rights. Which of the following is considered a from of ownership?
267) Which of these may be covered by a builder-backed home warranty?
268) Jay’s new loan to purchase a property includes the sellers existing mortgage. This type of loan is called a _______ loan.
269) Lacey is preparing a sales contract 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 who determines the earnest money amount?
270) Cracks, holes, or rotten areas on a soffit are common _________ issues.
271) The Equal Credit Opportunity Act (ECOA) is also known as ________.
272) What’s a land contract?
273) Which of the following is true about VA loans?
274) Kris has made an offer on Lincolin’s townhome. However, she’s offered no earnest money. If lincoln accepts her offer, is it binding?
275) 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 __________.
276) The landlord generally pays taxes, maintenance, and insurance with which type of lease?
277) For an antitrust violation to occur, which element must be present?
278) Substitution of an original party to a contract with a new party, or substitution of an original contract with a new contract.
279) What is the ratio of annual before-tax cash flow to the amount of cash a consumer has invested called?
280) If there are questions regarding the exact property description, which of the following is recommended?
281) 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?
282) Which of the following is true regarding an appraiser’s three approaches to value?
283) Kat is an investor and uses an FHA loan to purchase a duplex. She never occupies the property but instead rents it out. This is ______.
284) Which of the following is a contract between a seller and a buyer to transfer title to real property?
285) Which municipal agency grants special use permits?
286) How is general property tax calculated?
287) Tax assessors determine property values for each property within the assessor’s taxing unit. Which of the following is a taxing unit?
288) Your investor client has asked you to place a low-ball offer on his behalf. How might you convince a seller to accept?
289) Compared to working without a buyer agency agreement, a buyer who works under a buyer agency ____________.
a. Receives a higher level of service
290) Which of these is a written description of a blueprint?
291) Investors come in all shapes and sizes. Some may only be looking for someone to find them deals. Others may want someone to show properties and submit offers. What question should you ask to determine what type of investor you’re working with?
292) 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 lower than the agreed-upon sales price. Now what?
293) Let’s say you have an investor with an NOI (net operating income) of $40,000 and a debt service of $30,000. What is your investor’s debt service ratio?
294) Why is a building’s “envelope” an important consideration in energy efficiency?
295) Regulating and protecting places and objects that have special character, historical, and aesthetic interest, is the responsibility of which municipal agency?
296) If the builder or owner of a new condominium building wants to change the price of all of the units, or all the two-bedroom units, what must the builder/owner do?
297) Which of the following is not an encumbrance, but a temporary right to enter the land or use property belonging to another for a specific purpose?
298) Which of the following is a written outline of the sales transaction often referred to as an offer to purchase or a purchase offer?
299) Energy efficient windows, weather stripping and ___________ are areas homeowners should consider when trying to eliminate heat loss/gain.
300) Doris needs to renew her real estate license for the first time, and she’s already completed 20.5 hours of continuing education. How many additional hours of CE does she need to complete?
301) DOS Regulation 175.23 requires brokers to maintain ______ for a period of ______, including the amount of commission paid for each transaction.
302) The duty of confidentiality survives agency unless the former client is found guilty of fraud or ______.
303) 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?
304) Which of the following is a percentage of market value and is the amount of property value to which the tax rate is applied?
305) 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?
306) Which document allows a prospective buyer the right to reserve a specific unit, which may or may not be under construction?
307) What is one drawback of sub-agency from a listing broker’s standpoint?
308) Ralph is a borrower obtaining an FHA loan from Happy Bank to finance his mortgage. Who is the mortgagor in this scenario?
309) PITI stands for principal, interest, taxes, and _____.
310) Which approach to value used by appraisers relies on the sales price of comparable properties to help determine the adjusted market price?

311) Some sensitive individuals can end up in the hospital because of chemicals used in carpet and other manufacturing materials used in remodeling or new construction. What’s the cause of this danger?
312) New licensee Cara wants to avoid accidentally engaging in unauthorized practice of law when she’s helping clients fill in contracts. What’s the best way for her to do this?
313) Which of the following is a true statement about cooperatives?
314) A ______ is the component of a septic system that is generally made of gravel or sand and naturally filters wastewater.
315) Janice is a listing agent assisting the Chens with the sale of their home. What is one of Janice’s duties?
316) Which of the following statements is true regarding federal fair housing law?
317) Real estate licensees currently enjoy the unique privilege of retaining their independent contractor status for IRS purposes, despite the fact that ____________.
318) For a taxpayer wanting to use a Small Claims Assessment Review (SCAR), which of the following is true?
319) Maury, a landlord, has decided to sell Elm Street Apartments. As you know, sale of the property does not affect the lease of the tenant. What are Maury’s legal obligations to the current tenants?
320) For which of the following properties is the cost approach most likely to be used?
321) Which of the following is a potential drawback to a real property exchange?
322) What generally happens when a tenant moves out of a rent-controlled apartment?
323) Chris used the VA guaranteed loan program to purchase a home five years ago. He now wants to sell that house and buy a new one. Is Chris allowed to use the VA loan program a second time?
324) If an agency policy indicates that licensees will have traditional buyer or seller agency relationships with their clients, the agency relationship is with ________.
325) What does a firewall do?
326) As an insurer’s condition for issuing an errors and omissions policy, what should brokers be prepared to do?
327) Dean is an experienced licensee whose career has focused on such things as mineral, oil, gas, and water rights, and hunting and gaming licenses. Based on this, you can deduce that Dean’s real estate niche is in which of the following?
328) Adam has been showing condos to his childhood friend Steve, even though Steve hasn’t signed an agency agreement. Unbeknownst to Adam, Steve contacted the listing agent for a condo he liked and told him he wanted to submit an offer. The listing agent wrote it up, the seller accepted the offer, and Steve became the proud owner of a new condo. Is Adam owed a commission?
329) Agent Magda’s new clients are clutter bugs. Before she photographs their home, Magda should:
330) The purpose of the employee and independent contractor agreements is to _________________.
331) The sellers in a transaction ask to have an extra week after the scheduled closing date to stay in the home. How is this handled on TAR form RF 401 Purchase and Sale Agreement?
332) The listing broker’s compensation can be either a percentage of the sales price, or what?
333) ______ occurs when the parties can’t legally or practically do what they’ve agreed upon due to circumstances beyond their control.
334) Investors call investing in this type of property “dead money.”
335) Risk is an inherent part of real estate activities. this is why________ is recommended for all licensees
336) 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 ______.”
337) An _____ ____ may be for any amount agreed to by the parties.
338) Complaint forms submitted to TREC must be filled out completely and include supporting documentation. What will happen next?
339) The legal concept of parens patriae gives which state position the authority to sue on behalf of citizens?
340) In counties governed by the Uniform Residential Landlord and Tenant Act (URLTA), which of the four types of lease termination would result in the landlord needing a court order to take action against the tenant?
341) What would make a ‘Choose Your Neighbor’ letter an allowable form of advertising a property for sale?
342) How do license laws promote professional competence?
343) Why must a seller disclose the presence of an underground storage tank?
344) All of the following would impact list price EXCEPT ________.
345) 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?
346) What’s the purpose of the buyer pre-qualification letter?
347) Where can a licensee report an antitrust violation?
348) Wayne is a licensee and would like to update his advertising. What must he be sure to include on any advertising?
349) Before you sign an exclusive right to sell agreement with a seller, what must you do?
350) Alice has signed a back-up contract with Harry, the seller. Upon what does their agreement depend?
351) Using the term REALTOR® when not authorized to do so is an example of ________.
352) Which document provides details about the costs of the transaction and is provided to borrowers no fewer than three days prior to closing?
353) Kelsey and Jerrod have a housing ratio of 30% and a total debt obligation of 41%. Their credit score is 640. Do they meet the underwriting requirements for an FHA loan?
354) Bart is an independent contractor. That means that his managing broker, Lee, has the right to ______.
355) The risk identification process for a brokerage firm involves identifying what?
356) Often, errors and omissions insurance providers will require a brokerage to have ______.
357) Brian has just finished completing his loan application and has gathered supporting documentation needed to determine whether the application will be approved. Which of these parties best describes who Brian is?
358) For which of the following acts might a broker be subject to disciplinary action?
359) On Thursday, Angie decided to accept Harry’s counteroffer for the purchase of his house. She signed the counteroffer and placed it in the mail. On Friday, Harry decided that he had asked too low a price for the house, so he faxed Angie stating that the counteroffer was withdrawn. On Saturday, Harry received Angie’s acceptance in the mail. Under the mailbox rule, which of the following is true?
360) All of these are typical tasks that an unlicensed real estate assistant may do, except:
361) Which of these factors would tend to lower overall property values most in a single-family residential neighborhood?
362) One of the legal obligations of a seller’s agent is providing a copy of the seller’s transfer disclosure statement to:
363)
364) Which of the following actions by a broker would be illegal under the federal Fair Housing Act?
365) Once a listing agreement has been signed:
366) A buyer makes and signs a written offer. The seller writes in one small change to the offer and signs it. This document is known as:
367) To successfully sue a seller for a commission owed, a broker who worked under a nonexclusive listing must be able to prove that she was:
368) An apartment rental application contains a question about marital status. This question is:
369) A seller has accepted another offer, but your client doesn’t want to give up. Even now, she can submit an offer to the seller, called a:
370) When an agent is preparing a competitive market analysis, the adjusted sales price of a comparable property:
371) The buyer receives the transfer disclosure statement in the mail. How many days does she have in which to rescind the purchase agreement?
372) Which of these is a fundamental difference between the natural hazard disclosure statement and the real property transfer disclosure statement?
373) A buyer submitted an offer with a deposit on a property on June 1. The offer included the condition that it must be accepted within 48 hours. The sellers were out of town, however, and could not be contacted until June 6. At that point, the sellers eagerly signed and returned the purchase agreement; but now the buyer says he does not want the property any longer and is demanding the return of his deposit. A court would rule that:
374) A listing agreement with a property description that is not a complete legal description:
375) Most listing contracts authorize a broker to:
376) Which of the following methods of advertising is legal?
377) An agent is preparing a CMA and evaluating possible comparable sales. Which of the following characteristics would most likely make a property unsuitable for use as a comparable?
378) What is the minimum time limit for employment in an exclusive listing agreement?
379) The buyer’s offer states that the deposit check will be held by the broker uncashed until the seller has accepted the offer. The broker may comply with these instructions:
380) A real estate agent who is acting as a buyer’s agent:
381) Which kind of listing agreement requires the seller to pay a commission to her broker if the property is sold, unless the seller sells the property herself?
382) A real estate salesperson is often approached by home buyers of a particular race. His usual practice is to show them homes in neighborhoods where most of the residents are the same race as the buyers. He avoids showing these buyers properties in integrated areas. This is called:
383) Broker Ray is closely acquainted with the Subdivision Heights neighborhood in his town. Over the years, Ray has made it a practice to contact homeowners in person and also to send them quarterly mailings. This method of finding listings is known as:
384) A homeowner preparing his home for sale should do all of the following, except:
385)
386) In order to be enforceable, an exclusive listing must be signed by:
387) A broker, in dealing with the public, may not:
388) If a seller uses an open listing, she may employ several brokers:
389) A prospective buyer has submitted an offer to Broker Randolph that meets the asking price. As Randolph is on his way out of the office to present the offer to the seller, one of Randolph’s salespersons brings in another offer on the same property that is for $5,000 less. Randolph should:
390) Which of the following is equivalent to value in exchange?
391) Two types of value that are often contrasted are subjective value and:
392) A licensee acting as a finder (or middleman) won’t owe agency duties to either party, as long as:
393) Which of the following would be considered a design deficiency in newer, high-end construction?
394) Which of these is not a way in which an agency can be created?
395) Two properties, each worth $50,000, are combined into one larger parcel that has a value of $120,000. This increase in value is called:
396) A salesperson shows his broker an offer for one of his listings that has a good faith deposit in the form of a promissory note. The broker should tell the salesperson that:
397) An agency relationship is best created through:
398) Before making a listing presentation, an agent should:
399) The seller’s agent is most likely to be liable for damages to a buyer if she:
400) The best indication of a property’s value comes from:
401) According to the Americans With Disabilities Act:
402) After several months of trying to sell a property, the seller’s agent decided to purchase it herself. She must:
403) When does an offer to purchase become a binding contract?
404) A seller’s agent intends to give part of his commission to the buyer. The agent:
405) A listing broker presents his client with a full-price offer from a ready, willing, and able buyer. The seller refuses the offer and tells the broker it’s because the buyer is black. The buyer makes an offer on another property. Which of these steps could the broker take?
406) When performing a competitive market analysis, agents typically make numerous adjustments to the comparables’ prices. This is because:
407) Young buyers with limited funds are typically:
408) Agent Mary notices that a competitor’s listing is about to expire. She should:
409) Two brokers in a small community felt that another local broker was unethical and dishonest. They agreed not to send him any referral business, and they encouraged other area brokers to follow their lead. They could be accused of:
410) Which of the following can be affected by conditions of sale?
411) Your buyer client, Percy, needs to obtain financing to buy his dream house. What’s his first step?
412) A sloping hearth is a common _____ issue.
413) In what type of market is pricing a home below market value an especially good strategy?
414) In a real estate transaction in which you represent the seller, your duty to other parties is ______________________.
415) The Costa-Hawkins Rental Housing Act…
416) Shawna is reviewing Brian’s loan application. She needs to verify the assets he’s claimed, specifically his bank account balances. Which form should she have him complete?
417) Real property ownership may offer significant tax advantages. Which one of the following is a potential advantage?
418) What’s the primary difference between reproduction cost and replacement cost?
419) When a lender charges a borrower more than the highest allowable interest rate, it is called
420) How many days do purchasers have from the date they signed a contract to notify the seller their intent to cancel the contract?
421) Which of the following statements may be true of self-employed individuals seeking to obtain a home loan?
422) In the event a broker-in-charge becomes medically incapacitated or dies, an associated licensee may be permitted to act as the broker-in-charge for up to?
423) Katherine purchased a home in South Carolina for $415,000. What’s the county portion of the deed recording fee for this transaction?
424) Glenda is engaged as a seller’s agent. Gary, the seller, hasn’t consented to dual agency. A prospective buyer would like Glenda’s assistance in drafting an offer to present to Gary. Can Glenda do this?
425) Is there ever a situations where it is legal to receive compensation?
426) Who is the person in charge of carrying out the terms of the trust
427) The trustee is the person in charge of carrying out the terms of the trust
428) Certain properties are exempt from fair housing law requirements. Which of the following properties is NOT exempt?
429) When a property owner intentionally transfers property to another party, it’s called voluntary alienation.
430) When operating under a power of attorney concerning the transfer of real property, who may sign as the grantor?
431) What’s another term for voluntary conveyance?
432) In a real estate transaction, whom may a licensee represent?
433) Which entity has the authority to represent the state and citizens of the state in antitrust cases?
434) Percy and Maxwell have formed a team within their real estate brokerage firm. They’ve been tossing around some different names to use. Which of these would be permitted?
435) Which of the following describes commingling?
436) For a deed to be valid, which two elements are required?
437) Shelley is selling her condo in the city and moving to a house in the suburbs. Her agent gave her a list of things she must do to prepare for the sale, including completing the residential property disclosure statement. When should this statement be provided to buyers?
438) You’re working with a couple who state they definitely must sell at a price of $275,000. They’re more concerned about getting that price than the amount of commission they’ll pay, and they say you can keep any amount the sale brings in that’s more than $275,000. What type of listing is this?
439) The enforcement of antitrust laws, investigation into possible violations, and subsequent prosecution of violations are handled by the __________.
440) The lender, the loan applicant, and the _______ all complete parts of the request for verification of deposit form.
441) There are many versions of property management agreements, although all management agreements should include _______.
442) The purpose of the ______ is to promote fairness and transparency for mortgages and other financial products and services through education, enforcement, and research.
443) Which of the following, based on the abstract of title, is used to create the title commitment before title insurance is issued?
444) Which type of appraisals may only be done by certified general appraisers?
445) What type of agreement opens the door to possible dual agency situations, since it creates an agency relationship between a buyer and all affiliates of a brokerage?
446) Which of the following is true regarding the definition of agency?
447) Jared, a seller, has found his own buyer and wants to terminate his exclusive right-to-sell listing agreement with Sue, his listing broker. Can he do so without penalty?
448) Kristin has been unable to make her mortgage payments. Her property went to auction, but the lender didn’t accept the high bid. What stage of the foreclosure process is this property now in?
449) Which of the following is the most common type of buyer representation agreement?
450) You’ve just signed a listing with a new seller client. What’s true about electronic delivery of written notice or contract forms to your seller?
451) Your buyers love the 1891 Victorian they have under contract, but they want to get both the water and the paint tested as soon as possible. What are they testing for in both water and paint?
452) Which of these is a NOT a reason why agency disclosure is mandated?
453) After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held?
454) What’s the relationship between the Loan Estimate and the Closing Disclosure?
455) Which of the following is a legitimate and legal way that an exclusive right-to-sell listing agreement may terminate without the seller owing a commission?
456) Which group ensures that community growth is controlled and orderly?
457) Derrick was thrilled to find out that the land he purchased includes several small caves. He’s been spelunking for about three years and looks forward to exploring the caves on weekends. Which real property right allows him to do so?
458) When assigning a contract, what should the assignor ensure is permitted in the purchase contract?
459) Remembering the acronym PITI can help borrowers recall what makes up their __________
460) Which type of buyer tends to look for a home with less space, with a similar or better. quality of living?
461) Stan wants Vince to list his house. What does Stan need to do to have Vince represent him in all marketing and negotiation tasks?
462) In a deed, this person is referred to as “the party of the second part.”
463) A VA loan __________.
464) What’s used to calculate the housing debt-to-income ratio and total-debt-to-income ratio?
465) Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages Joann to break her existing agency agreement and sign with him instead. This violation is an example of ____________.
466) 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 _____________.
467) A seller would like to be represented by you, and only you. What type of agency do you recommend?
468) Sherman owes $225,000 on his home. It’s currently worth $240,000. How much equity does Sherman have in his home?
469) Roger just discovered that his loan includes a hidden balloon payment, so now he must ___________.
470) If the monthly property tax rate is $74.15 and the closing is on April 30, what will the seller owe at closing? Assume a statutory calendar and that the seller hasn’t made any payments. Round to the nearest cent.
471) Which document given before closing provides an estimate of the costs a buyer is likely to pay at a settlement?
472) The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ____________.
473) You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ___________
474) What is the definition of an appraisal?
475) Jasmine has signed a lease that details what she can and can’t do on the property. If she wants to refer back to her lease, where would she look for this information?
476) Mary Lou owns property in a rural part of the state. She was recently approached by a representative of a company that would like to drill for oil on a piece of her property. What type of lease is the representative likely discussing with Mary Lou?
477) Which of the following property managers must have a license?
478) Your clients, Charles and Jane Bingley, are first time homebuyers who don’t have a 20% down payment. What would be the best thing for you to tell them?
479) A period of stagnation in real estate when no one is buying and no one is selling is known as ______________.
480) Your assistant, Brady, often answers clients questions about offers and negotiation. What do we know about Brady?
481) What are the two categories of comparison when evaluating comparable to a subject property in the market comparison approach?
482) A home sells for $225,000. Per the listing agreement, the total commission is 7% of the sales price. After half of that goes to the buyer’s agent’s managing broker Devin, the other half of it goes to Sheila, the buyer’s agent. But the seller’s agent, Kiko, also has an agreement with her brokerage for a 70/30 split, with the “70” going to her. How much is Kiko’s commission?
483) Which clause is used in a security instrument to protect the original note holder if the security instrument is sold and the borrower subsequently defaults?
484) Which of the following options describes a method by which a licensee can determine an appropriate listing price rage?
485) What’s the purpose of the Intestate Land Sales Full Disclosure Act?
486) When preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client?
487) A(n) __________ is a set of guidelines for ethical conduct
488) Barney defaulted on his mortgage, and his lender is preparing to foreclose. Which type of foreclosure is typically used when a mortgage is used as the security instrument?
489) Homeowners can take several actions related to pest infestations, but which of the following actions should bereft to licensed pest management professionals?
490) Lease types, space planning, area design, and building layout are especially important for a property manager who’s working with a __________.
491) What important seller responsibility is documented in the listing agreement?
492) What regulations or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?
493) What type of agency agreement creates a relationship between a buyer and a single licensee rather than between a buyer and a brokerage?
494) With which approach to value doe the appraiser analyze a property’s ability to earn future income?
495) Which of the following careers in real estate requires extensive experience in real estate investment and sales?
496) 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 what sort of problem?
497) Which statement best describes the method used to reconcile the value found for a property from the tree appraisal approaches?
498) Loans available through the Farm Service Agency have which of the following characteristics?
499) Which federal lending act was introduced to combat lending discrimination in law-and moderate-income neighborhoods?
500) Marvin purchase 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?
501) How is the Supreme Court case of Brown vs. Board of Education significant in the way fair housing laws are implemented today?
502) 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.
503) What’s the deprecation schedule for a residential income-producing property?
504) The _______ isn’t used in states that were part of the original 13 colonies, or in Texas, West Virginia, and Kentucky.
505) Marco is anxious to buy a home and is willing to waive the appraisal contingency. Do you still need to provide him with a Buyer’s Inspection Advisory?
506) What, according to RESPA, must the lender give to the borrower disclosing whether or not they intend to transfer the loan to another lender?
507) At which point in the process does scheduling a photographer take place?
508) Mello-Roos was enacted in 1982 to provide for non-specific _____________ improvements.
509) Why should a buyer ask the type and age of heating and cooling systems?
510) Matt’s sellers have a very valuable collection of artwork displayed in their home. It perfectly showcases various rooms in the home. What advice should Matt provide to his sellers when preparing to sell the home?
511) Which of the following is a common chimney or fireplace problem?
512) Real estate is a _____________, unlike stocks or bonds.
513) Net operating income ‒ ______________ = cash flow
514) This generation was born between the mid 1920s and mid 1940s. Only 55% of those in this generation financed their purchase, which is a far cry from today’s actions.
515) Gross potential rental income ‒ ______________ = effective gross income
516) Which of the following statements about the signed sales contract is true?
517) What’s it called when a property is owned by the bank after failing to receive an acceptable bid at foreclosure?
518) Net operating income can be found in the _____________ statement that the property manager puts together for the property owner.
519) Three categories exist for this classification of a worker, who is defined in statute under tax law as an independent contractor and not an employee: direct seller, licensed real estate agent, and a certain companion sitter. This worker’s status is ________.
520) A complaint was filed against Barb, a licensee. A hearing was held, and GREC issued a/an __________, which resulted in a small fine and the requirement for Barb to take some additional education.
521) Which of the following is the property of the broker even if secured by the licensee, as provided for in the independent contractor agreement?
522) Which of the following best describes what Ginnie Mae does in the secondary mortgage market?
523) Gia is acting as a seller agent. Which of these is a duty she must perform?
524) A home sells for $225,000. Per the listing agreement, the agent is paid 7% of the sales price, with half of that amount paid to the buyer’s agent. The seller’s agent also has an agreement with her brokerage for a 70/30 split. How much is the agent’s commission?
525) In a condominium building, what pays for the exterior maintenance, insurance and payroll for building personnel, and interior maintenance, trash pick-up, landscaping and snow removal, and building insurance?
526) What does each component of the 80/10/10 ratio represent in a split—or piggyback—loan?
527) Who’s responsible for testing private wells for water safety?
528) The exemption to the Fair Housing Act that would normally apply is moot when a real estate agent represents _______.
529) Brenda and Joe have 20% cash to put down toward the purchase of their home, and they have great credit. What might be their best option for getting a traditional mortgage loan?
530) If you engage in commingling, what have you done?
531) A buyer is purchasing a property with a fair market value of $94,675, which has an assessed value of $37,870. If the mill rate is 30, what will the buyer likely pay annually in taxes?
532) Which of these would likely be covered by a builder’s home warranty?
533) Sally prefers the predictability of a mortgage payment that doesn’t change during the repayment. Which type of loan offers this feature?
534) Ed Smith is a sole proprietor using the trade name “Ed Knows Real Estate.” Under what name may Ed legally conduct business?
535) What are the loans the Federal Home Loan Bank makes to member banks called?
536) Jemma’s name, address, and license status appear on all forms of advertising, whether she is making the advertisement herself or not. Why would her information appear on advertisements, even when she didn’t specifically place the ad?
537) Bambi is buying a property as in a land sales contract. Due to her financial interest in the property, she retains equitable title, while the seller retains _______.
538) Which of the following is true of retainer fees?
539) What’s Fannie Mae’s mission?
540) A property that’s been converted to natural gas may actually have which issue?
541) The Uniform Vendor and Purchaser Risk Act specifies the rights and duties that apply when a property is _________________.
542) Jenny and Sam are engaged to be married. Any real estate either owns at the time of marriage will remain that person’s property in severalty, while any property attained after the wedding belongs to both of them equally. This describes what type of ownership?
543) What is an acceleration clause in a mortgage?
544) When using the market comparison approach, the comparable property’s relationship to the subject property is a process known as __________.
545) Maria, a qualifying broker, established a new trust account at her firm. By law, within how many days does she have to notify the commission that she established a new trust account?
546) When reviewing her mortgage documents, Reva learns that should she miss scheduled payments, fail to pay property taxes, or allow the property to fall into disrepair, she may be in ______.
547) Rachel and Nick are selling their home. Before the property is sold, a title search is conducted to determine if there are any ______.
548) 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 ______.
549) What’s the broadest estate a person can have in real estate?
550) When is a title search conducted?
551) If you work for a property management company that manages property for more than one owner, what must you have in order to collect rent and perform other real estate functions?
552) What is a tax levy?
553) For safety reasons, you should not allow strangers to see_____________.
554) What are the two primary differences between the security deed and the deed of trust?
555) What type of taxation does a limited liability company enjoy?
556) A contract in which only one party is bound is ______.
557) How can lapsed homeowner’s insurance lead to default of the mortgage loan?
558) 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 percent to help Simone out. Who is Elisa’s client?
559) Raul has his broker’s license and has been appointed by the governor to serve as a GREC member. Which of the following criteria made him eligible to be a broker member of the commission?
560) _________ 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.
561) In addition to being properly executed (signed), what’s another requirement for recording a document?
562) Edwin has been a successful real estate professional for many years. After starting off listing residential and commercial properties, Edwin now lists properties that involve light and heavy manufacturing, warehousing, and distribution. Of the six categories of real estate, what types of properties does Edwin handle?
563) A buyer’s offer calls you with a great offer for your seller client. What is the best next step?
564) The ECOA Valuations Rule requires disclosure of valuation data to the buyers who pay for the appraisal. Which of the following is included in the new rule?
565) Which of the following is a non-ownership interest in land by someone other than the owner that gives that person the right to access or use the property?
566) What is the purpose of the agency disclosure?
567) What went into effect in 2009 as an addendum to carbon monoxide regulations?
568) Which of the following is true about easements appurtenant?
569) When assessing taxes, the percentage of market value (or full market value) is called
570) Your builder client, Jeffrey, is building a subdivision. HUD require his walkways to be built ___________.
571) When may informed consent for dual agency be obtained?
572) Which of the following is the term used for the authorization for how tax funds are spent and collected?
573) Phil, who is a wholesaler, is ready to sell a property. What will his sales strategy be?
574) Which agency upholds federal, state and local public health laws, regulating drinking water safety, septic system approval and certain waste water treatment approval?
575) A lease with option to buy is a good home buying solution for some buyers. Which of these statements about a lease with option to buy is FALSE?
576) What does liability insurance cover?
577) If step one for the borrower is a pre-qualification letter and step two is applying for the loan, what’s step three?
578) When a borrower first obtains a mortgage, which portion of PITI receives most of the mortgage payment?
579) Which of the following describes a claim or charge against a property by someone other than the property’s owner?
580) To have a clear idea of what you want to achieve in a transaction, what should you focus on?
581) To compute the tax rate, each taxing authority takes the total funds required for the upcoming fiscal year and ____________________.
582) CCIM, SIOR, CPM, BOMA and ISCS are accreditation programs for licensees who represent ______ investors.
583) ______ conveys the emotional content of words. Angry, disrespectful, or inappropriate words directed at you may be indicators of a threat.
584) Mary Jane owns a building in which electrical service is supplied to the entire building through a utility-owned meter, and the cost of the service is shared among the building’s tenants. What type of system does she have?
585) What’s the intent of the expense stop in a lease escalation clause?
586) Which of the following is the first wooden member of the structure from the ground up that is used as the nailing surface for the floor system?
587) Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages Joann to break her existing agency agreement and sign with him instead. This violation is an example of ______.
588) Under what circumstances is the seller obligated to pay the listing agent a commission if the agent is working under an exclusive agency agreement?
589) Which individual takes a look at a potential borrower’s application and verifies things like their employment and financial information, then analyzes their credit report as well as the appraisal report on the property?
590) When a buyer purchases a cooperative unit to live in, what types of shares are owned?
591) The components that make up a borrower’s mortgage payment can best be remembered using which acronym?
592) Which of the following is paid in cash (or check) up-front by the buyer?

593) Who should ensure that all deadlines are met, all contingencies are cleared, and all paperwork is fully executed and delivered before closing?
594) This homeowners policy, commonly known as rental insurance, provides coverage to tenants for the loss of personal property.
595) The sponsor of a condominium project must submit the offering plan to the Attorney General for approval. The sponsor also appoints the board of mangers as well as the managing agent for the condominium owners. At what point must the sponsor relinquish control of the board of managers?

(ANSWERS will be revealed with proper subscription)
CA Principles Questions
Ca Principles Real Estate › FINAL TEST 1 (50-example questions)
Tip: to find a certain word or key term, press at the same time, the buttons:
( Ctrl and F ) on Windows computers
(Command and F ) on Mac computer
to bring up the in-page search box
1 of 50 – Brian and Leslie have made an offer on Rudy and Judith’s home. The first offer was rejected by the sellers. Brian and Leslie made another offer; Rudy and Judith rejected that offer. Never quitters, Brian and Leslie decided to try one last time and present their last and best offer. Rudy and Judith decide the prospective buyers are close, and make a counteroffer. What’s the situation after a counteroffer is made by the sellers?
2 of 50 – Ross, a newly licensed residential real estate appraiser, is on his way to appraise his very first piece of property. He is nervous on the way to the property and is going through the appraisal process in his head. Please help Ross put the appraisal steps in order.
3 of 50 –
4 of 50 – Which of the following is exempt from the Natural Hazards Disclosure?
5 of 50 –
6 of 50 – Lillian is buying Julia’s home in Malibu. Julia, after selling her home to Lillian, is buying Anne Marie’s condo in San Francisco. In these transactions, who is the grantor and who is the grantee?
7 of 50 – Chip is a veteran who fought in Desert Storm. He has just retired from the military. He has been told he qualifies for a property tax exemption based on his military service during wartime. Which exemption applies to Chip?
8 of 50 – This step of the general plan, sometimes known as the master plan, should encompass all aspects of the projected growth, including the social, economic, and physical features. Due to this step, while considered long-range, the plan must allow for short-range flexibility. Which step is described?
9 of 50 – Marcus wants to have the deed to his new home recorded to protect his ownership rights. In order to record the deed, it must be notarized. Marcus must go before a notary public and verify the signing of the deed. The notary then signs the deed. The verification of Marcus’ signature in the signing of the deed is known as:
10 of 50 –
11 of 50 –
12 of 50 – Brett lost his job last year. He has only been able to find temporary work and fell behind on his mortgage. His home is currently in foreclosure. He is confused as to what will happen and how the debts are paid. What is the order of payments in foreclosure?
13 of 50 – When an appraiser assumes that no one is being forced to sell at a reduced price because of an impending divorce or similar situation; and that both buyer and seller are well-informed customers, he is more than likely hired to determine:
14 of 50 –
15 of 50 – Which of the following statements referring to general taxes is true?
16 of 50 – In early common law, transfers of land were only made when:
17 of 50 – Calvin is buying his first home. He has been saving and saving for years. The home he is buying has a price of $300,000 and Calvin has a down payment of $75,000. Calvin’s loan is considered:
18 of 50 – Bob leased an apartment for three years from the Steiners. He was never late on his rent in those three years, kept the apartment immaculate, and never caused a moment of trouble. He has recently purchased his first home and moved out of the apartment. As expected, Bob gave the Steiners sixty days’ notice he would be moving and left the apartment in perfect condition. It has been 45 days since he moved out and he’s been watching for his security deposit refund to purchase a new sofa. When should he expect his security deposit refunded?
19 of 50 – Thad and Pierre made an appointment to view a condo for lease advertised in the newspaper. Thad phoned the landlord and set up a viewing for two hours later in the day. The couple thought the condo was perfect and informed the landlord they wanted to start the application process to lease the condo. The landlord then explained the condo had just been leased. The next Sunday in the classifieds, the condo was again advertised for lease. A friend of the couple phoned the landlord, pretending to be interested in the property. When asked if it had been leased, the landlord replied “No”. What is going on in this situation?
20 of 50 –
21 of 50 – Shakeel and Shaheen have sold their home, made an offer on Derek and Kamisha’s home, and the offer was accepted. All the details of the sale have been worked out, agreed upon and signatures obtained. Now, Shakeel and Shaheen must obtain a loan for the property. What is the best term to describe their position in the transaction’s timeline?
22 of 50 –
23 of 50 – Which form of payment is most common for a property manager?
24 of 50 – What is the mill rate of .017?
25 of 50 – Zoning ordinances have changed in the area adjacent to a residential neighborhood. The residents are incensed a retail shopping area is being developed one block from their subdivision. They are concerned about the traffic, noise, and what this will do to their property values. The new zoning ordinances must ensure:
26 of 50 – The Western Acres neighborhood is a highly desirable area in which homes very seldom go on the market. The Western Acres properties placed on the market sell very quickly and usually for or above asking price. Which principal of real estate applies to the homes in Western Acres?
27 of 50 – A developer wants to build a sprawling two-story office complex. The developer’s and architect’s vision is something low, modern, and new. They are planning the complex in an urban area of town, replacing ten blocks of old high-rise buildings. Unfortunately, the zoning commission’s vision does not coincide with either the developer’s or the architect’s. Which type of zoning regulation applies?
28 of 50 – In a general warranty deed, the implied promise: “If there is a defect, I promise to take care of any problems” is referred to as:
29 of 50 –
30 of 50 – Which of the following is not a goal of a real estate appraiser?
31 of 50 – Janice has given her broker an earnest money deposit check with written instructions to hold the check until the seller has accepted her offer. Her broker follows instructions and informs the seller, through a telephone conversation with the seller’s agent after the initial offer was presented, the buyer’s check is being held awaiting offer acceptance. Did Janice’s broker handle this situation correctly?
32 of 50 – Timothy has been hired by the estate of Tyler Wilbanks, who is recently deceased. Timothy has Power of Attorney and will be handling all the real estate affairs of the deceased estate. Which type of agent is Timothy?
33 of 50 – Drew is leasing his apartment from Reggie. The lease is for one year and they have agreed on all areas of the contract. The lease is in written form, and Reggie is the only party that has signed. Without Drew’s signature, is the lease now invalid?
34 of 50 – Ted and Lisa are selling their home and have signed a listing agreement. Client or customer? Steven visits Ted and Lisa’s open house, and he is interested in purchasing their home. What happens next? Is Steven a client or customer?
35 of 50 – Katie and Rich own a rental home they have put up FSBO. They’ve noticed the same woman has accompanied several potential buyers viewing the home. Katie and Rich discover she is a broker that has been “showing” the home on the sly without their permission. Instead of fighting this aggressive salesperson, the couple just go along. In which manner was agency created?
36 of 50 – In order to equalize business in their area, ABC Realty and RMH Realty have an unwritten agreement. They have agreed to split up their area with ABC taking everything north of the highway and RMH everything south. Under this agreement, the real estate agents licensed to each respective brokerage will not be competing and all will profit. Is this a violation? If it is a violation, what is it called and what is it violating?
37 of 50 –
38 of 50 – What is the major difference between an Estate for Years and an Estate from Period to Period?
39 of 50 – Which of the following is not a requirement for an FHA loan?
40 of 50 – Wallace and Melissa live in a small rural community of just over 15,000. They want to purchase a home and start a small home-based business. At the current time, they have a very limited income and need their own home. Where is the best place for Wallace and Melissa to turn for a home loan?
41 of 50 –
42 of 50 – Jack is leasing a home from Justin for a year. He has decided to lease until he gets a good feel for the area and knows where he wants to buy. In this relationship, who has the reversionary right and who has the possessory right ?
43 of 50 – Lois is selling her needlework shop to Simon. Simon is also purchasing the name of the business from Lois, all of the fixtures, and the inventory. Lois is essentially handing over the entire business, from top to bottom, to Simon, who is planning continuing what she had started. What are the essential elements of this business opportunity sale?
44 of 50 – Karen and Jay need a larger home. They have two large dogs and a baby on the way. One day in the real estate section, they see their dream home. The couple view the home that very day, make an offer and it’s accepted. There’s only one problem: They haven’t even put their home on the market. Which type of loan gives Karen and Jay their best option of paying two mortgages until their current home sells?
45 of 50 – Adeeb has listed his condo with Maria’s broker and she is his listing agent. The listing agreement is signed and the day to begin showing his property is nearing. Adeeb decides the day before the open house to raise his asking price by $20,000. Maria disagrees with the decision but goes along with Adeeb’s wishes. How must Maria take care of this contractual change in price?
46 of 50 – A Point of Beginning refers to:
47 of 50 – Shivaram and Kiran are buying a home in a new subdivision. Due to all of the subdivisions in the area, a new elementary school is being built. Additionally, a new area park is planned. Shivaram and Kiran have been informed the taxes on their new home are substantially higher than their previous property. Why?
48 of 50 – Tamara and her children live in a subdivision with a tennis court and swimming pool. Her children are thrilled to be able to use these wonderful amenities. Who actually owns the tennis court and swimming pool? Tamara and her children reside in which type of common interest development?
49 of 50 – Derek’s new office is undergoing a minor renovation and he cannot conduct business in the location for approximately six months. He decided to lease a temporary office in Samantha’s building from June 1 to December 30. Which type of lease has Derek signed?
50 of 50 – What are the parts of a mortgage loan? What purpose does each part serve?
Ca Principles Real Estate › FINAL TEST 2 (50-example questions)
1 of 50 An undeveloped acre of land sits in the middle of a secluded rural community. How many separate owners could this acre have?
2 of 50
3 of 50 Ensuring consumers are fully informed of all finance changes and aware of the true annual interest rate are requirements of which regulation?
4 of 50
5 of 50 Due to the subdividing of lots on the lake, Jim’s property is surrounded on three sides by Louise’s property. The only other boundary is the lake. Jim can only get to his home by driving up Andrea’s driveway and behind her lake home to get to his own. How was the easement in this situation created?
6 of 50 Which are the four elements required for a valid contract?
7 of 50 Tracy and Darnell are buying a home. They have a 15% down payment and have qualified for a thirty year fixed conventional rate mortgage. Will Tracy and Darnell have to pay PMI?
8 of 50 Agent Green is faced with an ethical dilemma. He was present when two brokers were having an unethical discussion that could be considered collusion. He doesn’t know if he should act as if it never happened, or report the incident to his broker. What steps should he employ when making this decision?
9 of 50 When is a real estate licensee considered a creditor?
10 of 50 Appraiser Jones appraises one-to-four unit residential properties, and non-residential properties with a transaction value up to $250,000. What is this appraiser’s level? How many hours of appraiser education were completed?
11 of 50 Molly, a successful real estate salesperson, took some time off to stay at home with her first child. Days turned into weeks, weeks into months, months into years, until Molly’s child was starting school. She decided she needed to head back to her profession and pick up where she left off. During her at-home time, Molly hadn’t kept up with any CE requirements, nor had she renewed her license after its expiration almost three years earlier. Can Molly simply pick up where she left off?
12 of 50 Which of the following listing agreements is illegal in most states?
13 of 50 The Statute of Limitations is:
14 of 50 XYZ Corporation is interested in a piece of land for development. They are selling off a bit of company stock to buy the property without any debt. Is XYZ’s sale of stock considered a form of financing?
15 of 50 Kim, Chris, and Beth are all partners in a cosmetics firm. Kim is leaving the partnership and wants to sell her shares of the business, including the property owned by the partnership, to Chris and Beth. The three partners own the property with the right of survivorship should one or more of them die. The remaining partners are not interested in buying Kim’s interests. Kim has been unable to find a buyer for her share of the partnership. She has now resorted to asking the court to either sell her shares or sell the entire property. What form of concurrent ownership applies?
16 of 50
17 of 50 Georgina sat for the examination about two weeks ago. She believes she passed with flying colors and checks her mail immediately upon arrival home for her results. Today, they arrived and, as she opened the envelope, she saw her test score. Did Georgina pass or fail?
18 of 50 Which of following are not considered trust funds?
19 of 50 Agent Sims needs one more new home sale this month to receive a bonus. She has one more that could possibly close and help her meet the goal. However, today she was informed the financing fell through for the buyer. Agent Sims has a lender friend that owes her a favor. She calls the lender, offers the friend one-quarter of her bonus if he will finance the buyers who were turned down. Which penal code section addresses this crime?
20 of 50 John and Thom are purchasing their dream home. Due to the expiration of escrow instructions, the escrow has been terminated. Have they lost the contract on the house of their dreams?
21 of 50 Dan has recently been transferred to San Diego, and only has a month to find a home, sell his condo, pack, move, close, and get to work. His agent shows him the Walsh home and it’s perfect. He offers the asking price, along with all the kitchen appliances and window treatments to remain with the property. The Walsh’s accept his offer exactly as it is written. Which contract term applies to this situation?
22 of 50 Which of the following is not a prohibited escrow-related activity?
23 of 50 Agent Peters has qualified buyers to purchase a new home. Now he needs to qualify the property they wish to buy. He understands the human qualification process. Can you help Agent Peters with steps to qualify the property?
24 of 50 Agent Simpson tells residents of a neighborhood that minorities are moving into the neighborhood, and property values are sure to plummet. Simpson goes on to say, “resale values will suffer, the neighborhood will deteriorate, and if they don’t sell their homes now, they will lose money.” What form of illegal discrimination is Agent Simpson practicing?
25 of 50
26 of 50
27 of 50
28 of 50 Ken has just passed his licensing examination. However, he has been notified the DRE will not issue a full-term license. Ken is behind on child support payments and therefore has not complied with a court order to provide these payments. Will Ken ever be able to obtain his license?
29 of 50 Which act is known as the original fair housing statute?
30 of 50 Along a non-navigable stream, does an owner own the land, the water, both, neither? What is this right?
31 of 50 Which of the following liens is both general, involuntary, and statutory? Which lien is specific, voluntary, and equitable?
32 of 50 When an owner dies without a will or heirs, what happens to the property and why?
33 of 50 Mr. Manning has owned a restaurant for forty years. He is in the process of selling his business to a group of investors who plan on revamping the restaurant and turning it into a destination. In the negotiation of the sale, Mr. Manning has stipulated he is willing to accept their offer on two conditions: There may never be any alcohol served on the property and there can never be dancing of any kind. Mr. Manning is insistent on these conditions due to his religious beliefs. If either of these activities ever takes place, Mr. Manning would have the right to take back the property. Which type of estate applies?
34 of 50 In studying for her real estate license, Elise is reading about police power. She is confused and doesn’t understand why law enforcement would have any role in real estate sales, transactions, and regulations. What does the term “police power” refer to in real estate?
35 of 50 Patrice and Cornell are completing a sales contract with Mary, their agent. The sales contract used at Mary’s brokerage is preprinted. Mary, as a senior agent, has the authority to waive one of the brokerage’s fees. The fee is explained and preprinted on the contract. Mary simply crosses it out, writes “waived,” and both parties initial. Which overrules the other? The preprinted or handwritten portions of the contract?
36 of 50
37 of 50 Judy is the listing agent for the Brandts’ home. In the inspection of their home, she discovers a few issues of concern. The basement is very damp and smells of mildew. Judy noticed what appeared to be mold on the interior walls of the lower level. She also saw what she believed to be their main line overflowing in the utility area of the basement. State the case that is responsible for broker’s conducting a diligent inspection of properties they are listing or selling.
38 of 50 Which is not a form of syndication?
39 of 50 Ben and Amanda are interested in a vacant, undeveloped lot. They are going to continue to live in their current home, pay off the lot’s loan, and then build a new home on the lot. Before closing on the purchase of the lot, they discover the zoning regulations permit nightclubs to be built in the immediate area. They specifically asked the broker about this issue and were told there was no reason to worry. What are Ben and Amanda’s options, if any?
40 of 50 Broker Burns is negotiating a first trust deed loan for buyers. The buyers have signed a contract for a fifteen-year loan. What is the maximum commission for Broker Burns?
41 of 50 Ramon did not pass his licensing examination. He didn’t think it was a possibility to fail and doesn’t know what to do to re-take the test. Ramon is not even sure he is allowed to take the examination a second time. What are Ramon’s options?
42 of 50
43 of 50 Which of the following is not an exemption to the federal fair housing laws concerning age and family status?
44 of 50 What are the types of legal life estates?
45 of 50
46 of 50 Which of the following is not a fourfold unity?
47 of 50 Which of the following statements concerning real and personal property is true?
48 of 50 Caroline has been paying her mortgage steadily for fifteen years. She has just received a notice from her lender that the loan due date is approaching and she will owe a lump sum of $11,257 to pay off her mortgage loan. Which type of promissory note has Caroline NOT been paying?
49 of 50
50 of 50
Ca Principles Real Estate › FINAL TEST 3 (100-example questions)
(correct answers are after each question)
—–
Tip: to find a certain word or key term, press at the same time, the buttons:
( Ctrl and F ) on Windows computers
(Command and F ) on Mac computer to bring up the in-page search box
1 out 100
Sacramento artist S.C. Heet has transferred a portion of her property, via a grant deed, to Cameron Dulle. However, this deed did not set forth in writing the two primary warranties Cameron should have on the property: first, that S. C. has not already transferred the title to another person; and, second, that the estate is free of any encumbrances, other than what has been disclosed to the grantor. Which of the following is true of this situation?
2 out of 100
The regulations regarding both advertising and doing real estate business over the Internet have been set forth in:
3 OUT OF 100
Any false or misleading advertising, whether on the Internet or via any other medium, can result in which of the following type of penalties?
4 OUT OF 100
5 OUT OF 100
6 OUT OF 100
Two years after Elicia Jolie moves into her first home, a cozy two-bedroom near Lake Tahoe, she decides to buy all new kitchen appliances. Her brother, Jake Jolie, is the owner of JJ’s Appliances and More, and he gets her some great deals on beautiful stainless-steel floor models. The appliances themselves are free-standing and movable, with the exception of the built-in microwave over her new stove. She has new cabinets built around the appliances to accent the new look. When it comes time for Elicia to move, which of the following will be considered her personal property, which she may move with her?
7 OUT OF 100
Under WHICH of the following circumstances could a homeowner take his microwave with him when he moves?
8 OUT OF 100
Examinees and twin brothers George and Grover Gripenstein would argue over the color of the sky on a sunny day. Surprisingly, they’ve both chosen to pursue a career in real estate and have completed their respective pre-license educational requirements. They decide to study for the exam together, but this causes more disagreements. Their current argument is over the characteristics of land. Which of the following is correct?
9 OUT OF 100
10 OUT OF 100
11 OUT OF 100
Which of the following is NOT a type of water rights?
12 OUT OF 100
Captain Canguro’s father was a teetotaler to the nth degree; so Canguro was not surprised when his father said he would sell Canguro one of the three properties he owned, provided that Canguro followed the condition set forth in the contract, stating that “no alcohol can be served on the premises at any time.” Canguro agreed with this provision and the sale was made. Which of the following statements is most accurate regarding this situation?
13 OUT OF 100
14 OUT OF 100
15 OUT OF 100
16 OUT OF 100
When Jim, Jill, and Jeri take ownership to a Bakersfield home, they hold their ownership concurrently. Jim has the greatest proportion, with 45%, while Jill holds 30% and Jeri the last 25%. They each have the right to individually possess, will, or sell their interest. This is known as:
17 OUT OF 100
When two or more people have identical interests in the whole property, with the same rights of possession and the right of survivorship this form of ownership is considered:
18 OUT OF 100
The legal process of making an instrument or legal document an official part of the records of a county, once it has been acknowledged, there by giving constructive notice of the exsistence and content of these instruments to the public, is known as:
19 out of 100
20 OUT OF 100
21 out of 100
22 OUT OF 100
23 OUT OF 100
Long Beach salesperson Eric Janey is providing sellers Julie and Zach Roberts with the necessary disclosures they must be given upon the sale of real property. Which of the following is NOT a disclosure that is given upon the sale of real property?
24 OUT OF 100
Co-authors and sisters, Mary and Perry Corrigan, have just written their fourth bestseller, even though Mary lives on the East Coast, while Perry resides in Calistoga. When the home next door to Perry is sold, Perry buys it and then gift deeds it to her sister so that they can live side-by-side for the several months of the year they spend writing together. In this situation, what consideration is necessary for this deed to be considered valid and legal?
25 OUT OF 100
26 OUT OF 100
Which of the following are not really deeds?
27 OUT OF 100
28 OUT OF 100
29 OUT OF 100
Escrow cannot be terminated in which of the following ways?
30 OUT OF 100
When grantor, Emilie Richards, delivers the deed to the Cloverdale property to the grantee, Jane Curless, she drives it over to Curless’s current residence, where they read through the grant together. There is a condition included in the grant, but it is straightforward and agreeable to both. This type of delivery is known as:
31 out of 100
Kathy Bates has just moved into a condominium complex of 60 units. The complex has a swimming pool, and a management company takes care of the upkeep of the outside of the property. The monthly cost for pool maintenance, grass cutting, tree trimming, private street maintenance, and the newly-updated clubhouse is currently $400.00 a month. Each year, the cost of such services increases, as do the costs for necessary repairs as the buildings get older. This year, new roofs are in order for all of the buildings. The condominium association, which is made up of the owners of the property, decides that, in order to cover the increase in costs, and to replace the roofs on the property, they must pass a(n):
32 OUT OF 100
33 OUT OF 100
The type of estate that has a definite beginning and ending date is known as what?
34 OUT OF 100
The right of the state to enact and enforce laws for the order, safety, health, morals, and general welfare of the public is known as:
35 OUT OF 100
36 OUT OF 100
When potential customers, Grace and Leo Adams sit down with real estate broker, Sam Slama, they tell him they’ve just begun interviewing brokers before they sign with one to help them buy their first home. He assures them he understands, and that he will answer their questions to the best of his abilities. When they ask what his commission rate is, he responds, “It’s seven percent, just like all the other guys in town, as you’ll find. We all charge the same; so it makes for a fair deal for our wonderful customers.” Leo thinks the guy sounds great, but Grace is a bit suspicious of his uber-charm. Which of the following is true of this situation?
37 OUT OF 100
38 OUT OF 100
39 OUT OF 100
40 OUT OF 100
41 OUT OF 100
42 OUT OF 100
Each of the following actions, except for one, is considered subversion. Which of these answers is not a form of subversion?
43 OUT OF 100
44 OUT OF 100
Which of the following is not considered one of the five economic characteristics of land?
45 OUT OF 100
Which of these private properties might be exempt from the governmental use of Eminent Domain?
46 OUT OF 100
47 OUT OF 100
Which of the following statements is NOT applicable to the Transfer Disclosure Statement, set forth under Civil Code Section 1102.3?
48 OUT OF 100
After receiving the seller’s transfer disclosure statement, buyer Clark Rivers is not satisfied that ALL has been revealed. He’s heard rumors that a previous tenant died of AIDS inside the very home he would like to buy. Clark demands to know if this is true, since it was not mentioned on the disclosure statement. Which of the following is the appropriate legal response the broker must give to Clark’s query?
49 OUT OF 100
50 OUT OF 100
When Chloe Armstrong pays off the 30-year conventional loan on her Oceanside home in less than 20 years, she is thrilled. However, she is not nearly as happy when she reads the fine print on the contract, which permits her lender to charge her EXTRA interest just for paying off the loan early. This is known as:
51 OUT OF 100
On Kyle Thomason’s $400,000.00 loan, the lender charges a 2-point service charge. In this situation, how much will Kyle have to pay for this service charge at closing, and how would such a charge appear on the statement?
52 OUT OF 100
Ollie and Molly Overton have just taken out a 30-year straight term loan on their new “starter home” in Bellflower. This means that:
53 OUT OF 100
When new college graduate Sami Hensen goes to visit her Great-Aunt Gertrude, she is surprised when the older relative tells her she is soon leaving on a cruise with friends. Sami cannot imagine how her great-aunt can afford such luxury, while living in a nice house in a peaceful neighborhood, and wonders if her aunt’s mental capacities are failing her. At her gentle inquiry about the costs, her Great-Aunt Gertrude laughs away her concern, telling her that she has been receiving monthly checks out of the equity she has in the home. Now Sami really thinks her old aunt is off her rocker! If Great-Aunt Gertrude is correct, which of the following statements is true of this situation?
54 out of 100
Newlyweds Andrew and Kimmie Briggs enjoy sparring over the details of life. They squabble good-naturedly over a game of Scrabble, the pronunciation of French words, and now, over the type of home loan they’re getting on their first home. They know it’s FHA, but neither is sure WHAT the FHA has to do with the loan. An FHA loan means:
55 OUT OF 100
56 out of 100
A full summary of all consecutive grants, conveyances, wills, records, and judicial proceedings affecting title to a specific parcel of real estate, together with a statement of all recorded liens and encumbrances affecting the property and their present status, but NOT including encroachments and forgeries, is known as a(n):
57 OUT OF 100
58 OUT OF 100
59 OUT OF 100
60 OUT OF 100
Credit union president Bill Bradley has just refused a loan for 25-year-old LaDawna Kingston, an African-American woman and, in his opinion, the very definition of a “religious zealot.” Bill refused the loan based on her credit rating and lack of job stability. When LaDawna learns of his refusal, she tells him she’s calling an attorney, because she’s been discriminated against. Which of the following statements is true in this situation?
61 OUT OF 100
Real estate syndication is accomplished through three phases. Which of the following answers correctly names these steps in their proper chronological order?
62 OUT OF 100
The type of company that sells securities specializing in real estate ventures, and requires a minimum of 100 investors, is known as:
63 OUT OF 100
64 OUT OF 100
One appraisal principle of value is based on the concept that the more a property or its components are in harmony with the surrounding properties or components, the greater the contributory value. In other words, the more the properties are alike, the more they retain value. This is known as:
65 OUT OF 100
Which of the following is a type of functional obsolescence?
66 OUT OF 100
For income-generating properties, a value based on the present value of the rights to future income is called the:
67 OUT OF 100
One way to figure out taxes is through the use of a mill. Which of the following is the dollar value of a mill?
68 OUT OF 100
69 OUT OF 100
Appraiser Louis finds a property located in the same neighborhood as the appraised property, and wants to use it as a comparable sale. The comparable has more bedrooms than the subject, one less bath, and one less garage. The appraiser will have to subtract the extra bedrooms from the comparable, add a bathroom to the comparable, and add a garage to make the properties equal. What type of approach to value has Louis utilized?
70 OUT OF 100
A law used to finance public services, such as waste treatment plants, parks, and schools, in newly developed areas, can result in extra-high taxes, in addition to the normal property taxes, and MUST be made known to any buyer before a purchase takes place. This law is:
71 OUT OF 100
72 OUT OF 100
73 OUT OF 100
The law that regulates the division of 2 or more lots for the purpose of selling, leasing, or financing said lots, either at that time or in the future, is the:
74 OUT OF 100
The law used by cities and counties for street improvements, in which a typical example would be that the local government hires a contractor to improve streets, and then each owner along that street is liable for paying a pro rata share of that cost, is known as:
75 OUT OF 100
Under which of the following is a subdivision defined as “a division of land into 5 or more lots for the purpose of selling, leasing, or financing, whether now or in the future”?
76 OUT OF 100
Which of the following is NOT considered one of the basic types of Common Interest Developments?
77 OUT OF 100
78 OUT OF 100
79 OUT OF 100
80 OUT OF 100
81 OUT OF 100
82 OUT OF 100
83 OUT OF 100
Modesto broker Killian Johnson has just received a money deposit and the related instructions from the buyer, Luis Alverez. Which of the following does NOT describe how Killian should handle this deposit?
84 OUT OF 100
A house sold for $265,000.00, and the total commission received by the broker was $22,525.00. What was the rate of commission?
85 OUT OF 100
86 OUT OF 100
Palo Alto buyer Mitch deposited $2,250.00 with the listing broker as earnest money. How is this earnest money going to be recorded on Mitch’s closing statement?
87 OUT OF 100
A land project is a speculative subdivision development of 50 or more vacant lots that are located:
88 OUT OF 100
89 OUT OF 100
90 OUT OF 100
Under Article 7 on “hard money loans” (cash) of $30,000.00 and over for first trust deed loans, and $20,000.00 and over for junior deeds of trust, except where the new usury laws apply, the loan broker’s commission maximum is:
91 OUT OF 100
The legal phrase that describes the right to recover money or other personal property through a judicial proceeding, including the right to recover something under a contract, such as money owed on a note, as well as the right to recover damages for a tort or private wrong, is known as:
92 OUT OF 100
Which of the following statements is NOT accurate regarding Cal-Vet loans?
93 OUT OF 100
The Federal Reserve needs to tighten the economy. Which of the following actions would NOT act to achieve this purpose?
94 OUT OF 100
95 OUT OF 100
96 OUT OF 100
97 OUT OF 100
The main purpose of the Truth in Lending Law is:
98 OUT OF 100
When Christopher cuts down a tree in his backyard and sells it as firewood, the firewood then becomes personal property. This process is known as:
99 OUT OF 100
100 OUT OF 100
–Final 1–

1) The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ______.
2) Jarvis is a builder. The building codes that apply to Jarvis’s work were established at what level (or levels) of government?
3) What’s needed to protect a property buyer from financial loss if a real estate title has defects?
4) How is a standard subdivision defined?
5) Which term represents the transfer of property to another through means of eminent domain, foreclosure, or adverse possession?
6) What is the difference between a pre-qualification letter and a pre-approval letter?
7) Who typically performs a CMA or BPO?
8) Who –
9) What are municipal fees as they relate to property development?
10) What’s the name of the required clause in a deed that “grants” or “conveys”?
11) With this type of commercial lease, the tenant typically pays the taxes, insurance, and maintenance expenses.
12) 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?
13) How do predatory lenders take advantage of consumers?
14) Which agency enforces federal fair housing laws?
15) Jake is unhappy that his lease was extended automatically. What lease provision should Jake review closely to ensure it is enforceable?
16) Which of the following is true about VA loans?
17) 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?
18) Which of the following statements is true about zoning?
19) What is one reason that carbon monoxide could be called a “sneaky” toxin?
20) What is inverse condemnation?
21) You demonstrate the fiduciary duty of accounting by ____________.
22) For how long is a tentative map’s approval good before an extension must be requested?
23) Which of the following provides everything a lender needs to know in order to value the property used as collateral for a loan?
24) Emblements are considered to be ______.
25) What’s income received before any operating expenses are deducted?
26) What must happen if two or more people own a piece of property and one wants to sell?
27) Which mortgage market comprises lending institutions that lend directly to the consumer?
28) Who typically prepares a CMA or a BPO?
29) Which term refers to the ordinances/regulations that protect the community and control property development within subdivisions?
30) Which of the following best describes market price?
31) Which of these statements is correct when it comes to interpreting contracts?
32) What’s a certified opinion or estimate of value of a particular property as of a particular date?
33) Which of these statements about the enforceability of leases is true?
34) An ______ minor is considered to be a legally competent party who is able to enter into a contract.
35) The amount of money that a seller will make on a transaction after closing expenses and brokerage fees are paid is called ______.
36) What’s the amount a lender charges a borrower for using the lender’s money?
37) Which of the following must be disclosed in a subdivision’s public report, according to the Subdivided Lands Law?
38) What’s the best definition of a cooperating agent?
39) 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?
40) 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?
41) What’s used to calculate the housing debt-to-income ratio and total debt-to-income ratio?
42) The Consumer Credit Protection Act, which includes the Truth in Lending Act, is often referred to as _________________.
43) Which –
44) Which one of the following terms refers to a tract of land divided into lots or plots and used for building purposes?
45) Which term describes the act of transferring possession of the rental property from the landlord to the tenant?
46) Complete this formula: Net to seller = ______ x (100% – commission rate)
47) 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?
48) Easements are a type of encumbrance that can affect a property. Which of the following is true about easements?
49) What’s a real estate licensee’s responsibility regarding radon?
50) What is the instrument called that’s generally used to convey property?
51) What does a chain of title document establish?
52) What is eminent domain?
53) What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach?
54) Net to seller equals the ______ multiplied by the percent to seller.
55) An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?
56) Which one of these describes a deed?
57) Which of the following is used to protect the buyer from title defects after closing?
58) What does PITI stand for?
59) What’s a brownfield?
60) Who generally writes a broker’s price opinion?
61) The business under which real estate activities are performed is called ______.
62) What is the type of possession in which a tenant stays after the right to possess has terminated?
63) Who is responsible for supervising and retaining the licenses of the salespersons they employ?
64) Property ownership for an indeterminable length of time is an example of what form of estate?
65) Where can you find out what’s not covered by a title insurance policy?
66) How long is a public report valid before it must be renewed?
67) What are three methods of handling purchasers’ deposit money that are acceptable under current law?
68) What is the purpose of a deed?
69) In order to assist your clients with environmental issues, what must you do?
70) 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?
71) What exactly is a deed?
72) Which fiduciary duty goes beyond closing?
73) Jerome, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.
74) 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.
75) What is the term used for the ability to pay off liens against a property up until a foreclosure sale is held?
76) Ca-
77) 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?
78) The ease with which the property can be conveyed to another describes which factor that influences value?
79) Which term describes the action taken to force a sale of real property encumbered by a lien?
80) 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?
81) In what type of lease does the landlord pay taxes, maintenance, and insurance?
82) What happens when the terms of a lease require the tenant to waive a non-waivable right?
83) One of a seller’s agent’s duties is to ______.
84) A(n) ______ is an example of a limited agent.
85) What is a judicial foreclosure?
86) What is a capitalization rate?
87) When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach.
88) You’re representing Janice in the purchase of a home. Under which of the following instances would it be unacceptable to disclose confidential information?
89) The seller said he never received the buyers’ earnest money deposit. How can the buyers prove they deposited earnest money on time?
90) Every foundation in direct contact with the ground should have which two features?
91) 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?
92) Personal interest most often conflicts with what fiduciary duty?
93) Pedro –
94) Which of these is a colorless, odorless, radioactive gas that is released when uranium decays?
95) What’s the purpose of zoning?
96) First-time homebuyers can access an additional amount up to $________ of their Roth IRA accounts over and above withdrawals equal to their contributions.
97) 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?
98) The Unruh Civil Rights Act requires: “Full and equal accommodations, advantages, facilities, privileges or services in ___ business establishments.”
99) Which of the following is an example of a metes and bounds description?
100) What effect will a property’s utility have on the value if it’s currently uninhabitable?
–part2 final—

101) What’s a feasibility study?
102) James is obtaining an 80/20 loan. What does 80/20 signify?
103) Co-ownership without inheritance rights is what kind of real property ownership?
104) 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?
105) 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 ______.
106) What responsibility do licensees have regarding household lead hazards?
107) Which –
108) Which term is used to describe a correction to a contract that contains a mistake?
109) ______ may only be used to help determine an appropriate list price for a property or to help a buyer determine fair market value.
110) Which of the following is an example of a voluntary lien?
111) Which of the following activities requires licensure beyond a real estate salesperson or broker license?
112) Which of these is a horizontal wood-framing member used in floor and ceiling framing?
113) 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?
114) Which of the following is an example of single agency?
115) Gross rent multiplier (GRM) and gross income multiplier (GIM) are used to ______.
116) What actions must you take to renew a real estate license that has been expired for two years?
117) Kim and Kip are a married couple who own community property. What happens when they divorce?
118) What’s a finder?
119) To determine the net operating income of a property, subtract the total operating expenses from the ______.
120) What are the four external forces that may affect value?
121) After a general plan is developed and the planning commission makes its recommendation, what is the next step in the adoption process?
122) When a real estate salesperson or broker license is issued, how long is it valid?
123) What hazardous material might be found in vinyl flooring, insulation, and roof shingles of older homes?
124) 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?
125) 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 ______.
126) What will a typical condominium legal description reference?
127) 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 ______.
128) In which of the following situations would an agent be representing a customer in a real estate purchase?
129) The requirement that a portion of the purchase money mortgage be repaid when each lot is sold is called ____________.
130) In which type of lease does the tenant pay some or all expenses separately?
131) What practice did the Fair Housing Act of 1968 attempt to eliminate?
132) The requirement of a developer to use their own funds as down payment on a project is called ______________.
133) What does the rectangular survey system use as the basis for legal descriptions?
134) Before a blueprint and building specifications will receive a building permit, which party must stamp the blueprint?
135) In the conveyance of real property after death, what takes precedent over any terms specified in the deceased person’s will?
136) 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.
137) If you take gross income and deduct operating expenses, what do you get?
138) A landlord who wishes to enter an occupied rental unit for a legal reason may need to provide reasonable ______.
139) What’s the National Flood Insurance Program?
140) 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?
141) Which of the following statements is true regarding assignments and subleasing?
142) Which of the following best describes a property’s assessed value?
143) Supply and demand determine the competitive environment. Which of the following is a true statement?
144) Supply and demand determine competition within a market. Which of the following is a true statement?
145) Which of these statements about landlord liability is true?
146) Which type of lease escalation ties lease payments to a market indicator?
147) Why is debt reduction recommended when preparing to obtain financing?
148) Tenants in the military who are facing eviction may be eligible for a stay of eviction if they meet which of these criteria?
149) 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 ______.
150) What is a survey?
151) Which type of deed offers the strongest and broadest form of guarantee and protection of title to the grantee?
152) Jillian has a loan-to-value ratio of 90/100. This means __________.
153) 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.
154) Ca-
155) What happens when a married or otherwise legally joined couple who owns a property as tenancy by the entirety dissolves their union?
156) If a tenant replaces a kitchen faucet, can the tenant take the new faucet when vacating?
157) Which of these is a written description of a blueprint?
158) What type of tenant uses a percentage lease most often?
159) What –
160) 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 ______.
161) How many feet are in three yards?
162) What duties does a buyer agent have to the seller?
163) With which type of commercial lease does the tenant pay some or all of the expenses?
164) What is a non-judicial foreclosure?
165) Which lien can be filed after other liens but still take priority over them?
166) Which –
167) What’s the definition of a “proportionate share” escalation clause in a lease agreement?
168) Which –
169) 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?
170) What’s the primary purpose of bulk zoning?
171) 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?
172) Which of the following is true about the DFEH authority in the event of a complaint against a licensee?
Extra random (started with cali principles-6/23) —
(ANSWERS will be revealed with proper subscription)
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) Licensees must always be paid by their brokers, unless ________.
87) 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?
88) Wayne conveys a property to Robbie until Robbie’s death, when the property is conveyed to Tiffany. What is this scenario an example of?
89) Which type of mortgage has a payment that adjusts (usually upward) based on a predetermined schedule and amount?
90) What occurs when one or both parties don’t meet all terms of the contract?
91) 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?
92) 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.
93) 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 ________.
94) 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?
95) An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?
96) 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?
97) ______ is the legal concept of property ownership.
98) Burt is an unrepresented buyer of Sima’s home. Sima’s listing agent is Aubrey. Who’s the client in this transaction?
99) 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?
100) A(n) ________ is a set of guidelines for ethical conduct.
101) 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?
102) Which of the following is an example of a limited agent?
103) Who’s responsible for conducting the closing meeting?
104) What’s a brownfield?
105) Which of the following actions does the secondary mortgage market commonly take?
106) What is the legal effect on the purchase agreement if an attached contingency is rejected or not met?
107) What type of agency exists because of the actions and behavior of the parties?
108) As part of the license application, prospective appraisers must submit ________.
109) 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?
110) A subdivision that includes space for offices, shopping centers, movie theaters, and apartment buildings is an example of a _________________.
111) Shawn specializes in the sale of retail stores and shopping centers. What types of properties are these?
112) Which of the following items go into the seller’s credit column and the buyer’s debit column?
113) Which of the following are addressed by the Subdivided Land Act?
114) Which term refers to the ordinances/regulations that protect the community and control property development within subdivisions?
115) Which of the following statements about restrictive covenants is true?
116) Donna rents an apartment in a building that’s being converted to condominiums. By law, the owner of the building must give Donna ________.
117) 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?
118) Which option best defines voluntary alienation?
119) In how many states is undisclosed dual agency legal?
120) What is a lifetime cap, as it relates to an adjustable rate mortgage?
121) Which document is provided to borrowers no fewer than three days prior to closing and provides details about the costs of the transaction?
122) What is typically used to prove there are no encroachments on the property?
123) Which of the following is a right included with real property?
124) Sue, the seller, and Carl, the buyer, are preparing to close on their transaction. Who is responsible for reviewing the settlement statement before closing?
125) How do predatory lenders take advantage of consumers?
126) 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.
127) Only brokers may do which of the following?
128) Which essential element of a deed contains the words, “does hereby bargain, grant, deed, and convey?”
129) What does procuring cause refer to?
130) If Elizabeth is a property manager, she is acting as what of type of agent?
131) Which of these describes a deed?
132) What happens to a joint tenant’s share of property when the joint tenant dies?
133) Which of the following statements about covenants is true?
134) Which of the following opinions can a real estate licensee provide?
135) A dwelling is in untenantable if it substantially lacks
136) Transfer of all of a tenant’s rights under a lease is
137) 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?
138) 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) _____________
139) 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.
140) A security deposit on furnished residential property can be no more than?
141) 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?
142) The owner of 417 Main, an office building, receives a guaranteed monthly income from her tenants and pays no expenses. She has
143) Which of these landlords had filed an unlawful detainer suit?
144) A landlord has a right of entry
145) 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?
146) Jose, who is 16, entered into a contract to sell a condo he owned. Because Jose is a minor, ______.
147) Which of these is a system that many states use to determine lien priority?
148) What’s the definition of a land contract?
149) Where is a complaint against a licensee filed?
150) Which of the following is true about condominium ownership?
151) What’s a subordination agreement?
152) Which act gives companies the right to sue a competitor for making deceptive ad claims?
153) What’s a benchmark?
154) 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?
155) What type of ground lease allows a tenant to buy out the lease?
156) Lenders will require which type of fund for taxes and insurance?
157) 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?
158) A broker’s price opinion is generally written by ______.
159) In states without full disclosure requirements, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
160) A good way for real estate licensees to prevent problems at the closing is to ____________.
161) Whose responsibility is it to keep track of all buyer contingency deadlines and ensure they’re not missed?
162) 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?
163) Assigning a lower-density use zone to an area that previously allowed higher density and that may reduce property values is known as ______.
164) Mortgage lenders will ___________
165) The location of wetlands and springs at a development site is part of ______.
166) Which loan type is a fixed-rate mortgage where the monthly payments increase over time, according to a set schedule?
167) What’s a foreclosure?
168) _______ can be defined as everything that’s not real property.
169) Which of the following items must be included in the security instrument used for a real estate transaction?
170) Which of the following statements best describes a mortgage broker?
171) 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.
172) At what point in a residential transaction must a seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?
173) Which of the following is a residential dwelling with attached walls, where the owner also typically owns the land on which the home sits?
174) A ______ is the expected rate of return on an investment.
175) 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?
176) _______ are artificial attachments to land that include items such as fencing, buildings, and walkways.
177) Violators of the Sherman Antitrust Act may be subject to fines. For what amount may corporations and individuals be liable?
178) 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?
179) Loyalty doesn’t survive agency termination, because you may end up representing the opposite side in a future transaction. But confidentiality and accounting survive agency termination.
180) When licensee Linda asks potential seller clients about their reasons for selling, what’s her purpose?
181) In the conveyance of real property after death, what trumps any terms specified in the deceased person’s will?
182) Which agency duties survive termination of an agreement?
183) With regard to contingencies, what responsibility does licensee Wanda have when representing buyers?
184) With which approach to value does the appraiser analyze a property’s ability to earn future income?
185) Which federal lending act was introduced to combat lending discrimination in low- and moderate-income neighborhoods?
186) How large is an acre?
187) Federal fair housing laws prohibit ______.
188) In a life estate, all of the following apply during the term except ______.
189) Zoning regulations must be aligned with an area’s ______.
190) The courts use three primary tests to determine whether something is personal property or real property. What are the names of the three tests?
191) Why is it important for a buyer to know if an underground storage tank is present on a property?
192) Tim, a new buyer client, is pre-approved for a mortgage loan of as much as $250,000. This information can help to _______.
193) It’s not a good idea to post photos of your clients’ expensive belongings. Why is that?
194) 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 ______.
195) Which document provides an estimate of the costs a buyer is likely to pay at settlement?
196) 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?
197) What’s the purpose of a short sale?
198) 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.
199) The Lanham Act gives companies the right to ______.
200) d. +Sue competitors that are using deceptive claims in ads
201) 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 ______.
202) 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?
203) 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?
204) Which of the following best describes what an appraisal is?
205) Which of these is a recommended best practice after any discussion between a licensee and a client or other party involved in a transaction?
206) How do licensees use the funnel?
207) The funnel is a useful way to determine how your lead generation activities result in a calculated amount of income.
208) Your clients, the Meltons, found their dream home, which they will be financing with ABC Lending. What should they include with their offer?
209) In which of the following situations is it legal to receive compensation?
210) Dominic’s seller clients want him to lower his commission rate. What’s the best way for him to reply?
211) Whose consent and agreement are required to conduct a short sale?
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?
213) Which of these photo descriptions may be a potential MLS violation?
214) The ______ provides buyers with an approximation of the costs they’re likely to pay at settlement.
215) Which of the following activities occurs before closing?
216) The buyer will need to obtain an insurance binder prior to closing, while the other activities listed here occur during closing.
217) _________ occurs when the parties meet all terms of the contract.
218) Under what circumstances may a seller legally terminate an exclusive right-to-sell listing agreement before its listing term has passed?
219) When an ______ is added to a sales contract, it changes the original terms of the contract.
220) For a deed to be valid, which two elements are required?
221) Agreeing to a specific price, price range, or minimum or maximum charges among competing firms is an example of which type of antitrust violation?
222) 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?
223) What’s the difference between an exclusive right-to-sell and an exclusive agency agreement?
224) 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 ______________________.
225) Jamilynn violated antitrust law by engaging in price fixing. Which of these actions did she most likely perform?
226) What are the three most common forms of legal descriptions?
227) What type of loan may be used if the buyer is obtaining seller financing?
228) Nina signed an exclusive buyer agency agreement with Ken, her client. Ken buys a property from another agent. What might happen?
229) 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?
230) 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?
231) If a buyer you represent waives the inspection, what should you do?
232) b. +Get the waiver in writing
233) Blake recently negotiated a net lease for space in an office building he owns. Under a net lease, the tenant pays ________.
234) With a net lease, the tenant pays a portion of the property operating expenses, typically the utilities.
235) Which laws does the Office of Fair Housing and Equal Opportunity uphold?
236) What was the estimated cost of improvements?
237) Which of the following measurement systems is mostly used in states that were part of the original 13 colonies?
238) 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?
239) Which of the following is a true statement about options and option fees?
240) 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?
241) ______ 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.
242) Jay’s new loan to purchase a property includes the seller’s existing mortgage. What type of loan is this?
243) What are PCBs?
244) Which term is used to define a search of public records going back at least 60 years to establish a property’s title history?
245) Which of the following describes the appropriate capital gains exclusion for a taxpayer’s primary residence?
246) When is a transfer tax payable?
247) A buyer can submit the earnest money deposit in the form of __________.
248) Licensees’ ethical duties to the public include not naming false consideration, _________________________, and completing paperwork accurately.
249) The cost approach to finding an appraised value measures ______.
250) 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?
251) What is the highest penalty an unlicensed individual practicing real estate may be fined for more than two offenses?
252) Which of the following is an example of a development cost?
253) Which of the following items is something a lender is prohibited from doing if the lender wants to write qualified mortgages?
254) The question, “What’s the purpose of this appraisal?” can be answered by which step of the appraisal process?
255) A valid deed must contain all of the essential elements, and ______.
256) 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?
257) How do discrimination testers work?
258) The VA guarantees _____ of the home loan amount.
259) Investors in commercial real estate often give up _________ when they purchase a new property.
260) A limited liability company combines some advantages of
261) There are many versions of property management agreements, although all management agreements should include
262) Soundproofing and decorative material, shingles and siding made before 1970 contain what hazardous material?
263) The listing agreement is a legally binding contract between __________________.
264) Rick, a builder, is getting a loan in which two properties are used for collateral. This is an example of a _______ loan.
265) Which one of the following is a buyer required to disclose in the Purchaser’s Representations section of the Regional Sales Contract?
266) What is a land contract?
267) What must occur to effect a transfer of title?
268) It’s very important that a buyer obtain a/an _________that shows that he has obtained homeowners fire and hazard insurance.
269) What is the depreciation schedule for a residential income-producing property?
270) Radon has natural origins and is a colorless, odorless, radioactive gas that’s released when ___________ decays.
271) A buyer can submit the earnest money deposit in the form of a check or __________
272) How many approaches do appraisers use when estimating a property’s value?
273) What regulation or regulatory authority identifies sites that have hazardous substances, and requires clean-up by the responsible parties?
274) What is a gaseous compound used in refrigeration cleaning solvents, Styrofoam, and aerosol propellants?
275) The definition, “The earth’s surface extending downward to the center and upward to infinity and including permanently attached natural objects,” describes ____________.
276) When possible, comparable sales from ______ should be used.
277) In relation to appraisals, what is a “federally related transaction”?
278) Which type of REIT receives most of its revenue from rental of its properties?
279) The income approach to appraisal is based on which value principle?
280) Ownership in a planned unit development consists of ______.
281) Land, plus all things permanently attached to it naturally or artificially, is ______.
282) 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 ______.
283) Archie wants to buy Claire’s membership share in a cooperative. Assuming he has submitted his application, which of the following statements is true?
284) Which of the following establishes requirements for property appraisals in order to protect home buyers who use a conventional loan?
285) A property is uninhabitable in its current state. What effect will its utility have on the value?
286) 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?
287) If an adjustment is needed for sales or financing concessions, when should an appraiser make this adjustment?
288) Which part of the cost approach equation is considered the most difficult part to estimate accurately?
289) Where in the Uniform Residential Appraisal Report would you find the number of total rooms, bedrooms, and bathrooms?
290) Property that is free-standing and not attached to real estate is called ______.
291) Which of the following is the presentation of the appraiser’s solution to the appraisal problem for a commercial property?
292) Real estate, plus all of the interests, benefits, and rights included in ownership, is also known as ______.
293) Which approach to finding value would licensed appraiser Christina probably weigh most heavily when appraising a three-unit rental property?
294) 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?
295) You’re touring your new seller clients’ property. While you visually assess the property and measure rooms, what else should you do?
296) Why should a listing agent include a seller net sheet with a comparative market analysis?
297) Which of the following will an appraiser do first when using the sales comparison approach?
298) What type of information might an appraiser find at the local chamber of commerce?
299) 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?
300) 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?
301) When the building value is known, but the land value is unknown, the ______ technique can be used.
302) What’s the name for a capitalization method which converts a single year’s expected income into a market value?
303) A capitalization rate takes an investment’s ability to produce income and converts it into ______.
304) Which factor that influences value addresses the ease with which the property can be conveyed to another?
305) What type of capitalization helps to determine the expected return on investment the property is capable of producing in a single year?
306) The income approach to value relies on _______ when valuing single-family and two- to four-unit properties.
307) What’s an appraisal?
308) Real property rights include the right ______.
309) 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?
310) Who is responsible for developing the Uniform Standards of Professional Appraisal Practice (USPAP) that licensed appraisers must follow?
311) 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?
312) 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 ______.
313) Which of the following will an appraiser use to determine potential gross income for an income property appraisal?
314) ____________ 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.
315) What’s the purpose of a home inspection?
316) Rick, a builder, is using two properties as collateral for a loan. This is an example of a (n) ________ loan.
317) An acre is equal to _________.
318) Niko has decided to move somewhere else when his lease ends on April 30. This would be considered termination through _________.
319) Which liens take priority over other liens?
320) Real property ownership has significant tax advantages. Which of the following is an advantage?
321) If licensees are asked to discriminate, what must they do?
322) What is self-dealing?
323) Why was the Civil Rights Act of 1866 monumental among fair housing and anti-discrimination laws?
324) The ________ protects consumers from unwanted email solicitations.
325) Given all of the laws prohibiting discrimination in housing, why does it still occur?
326) How does the income from property taxes benefit the community?
327) Which of the following is a benefit of the MLS from a broker’s standpoint?
328) Jamal is a real estate licensee. What’s his responsibility regarding household lead hazards?
329) What’s the depreciation schedule for a residential income-producing property?
330) Which of these items should real estate professionals help first-time buyers with recent credit issues understand?
331) 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.
332) With local land use, the stress placed on the community’s infrastructure is an example of __________.
333) What protects the buyer before the sale and can reimburse the buyer after the sale if a title issue arises?
334) If Mega Corporation owns real property, chances are it owns it in _________.
335) What instruments are commonly used to secure the purchase of real property?
336) Jimmy always has a face-to-face meeting before he works with any buyer. What might be a good reason for this?
337) What’s a survey?
338) _________ pay earnest money to solidify their commitment to completing a real estate transaction.
339) A defect on a title that can be monetary or physical is called an _______.
340) Sampson is acting as a buyer agent. What duties does he owe the seller in the transaction?
341) When does the sales contract become a legally binding document?
342) What’s a licensee’s responsibility regarding household lead hazards?
343) What’s the purpose of testing with regards to fair housing?
344) Local real estate developments, such as a new subdivision, will likely impact _______ the most.
345) When banks have lots of funds available for lending, what tends to happen to interest rates?
346) If Rina wants to pay off her mortgage early, what might she consider before doing so?
347) 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?
348) Edgar’s in the process of selling his home as a short sale. What’s a short sale?
349) 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?
350) If a rectangular building were 40 feet by 20 feet, the area would be _________.
351) ________ may be found in paint in homes built before 1978.
352) Real estate, plus all of the interest, benefits, and rights included in ownership is also known as ________.
353) Which entity ensures that contractors perform their work according to code by inspecting their job sites?
354) How do you decide whom you represent in a transaction?
355) Which mortgage market is comprised of lending institutions that lend directly to the consumer?
356) What happens when a married couple who owns a property as tenants by the entirety divorce?
357) In caveat emptor states, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
358) Who is responsible for ordering an appraisal, completing the loan application, ordering a home inspection, and obtaining homeowners insurance before closing?
359) Which type of antitrust violation involves two or more businesses conspiring against another business?
360) What instrument is generally used to convey property?
361) As a security precaution, when posting on social media, what should you do?
362) When a buyer hands over an earnest money check to you as the buyer’s agent, what’s your responsibility?
363) When assigning a contract, the assignor should also check to be sure that language regarding ________ is part of the purchase contract.
364) In full seller disclosure states, whose responsibility is it to notify the seller of the seller’s duty to disclose all known material defects?
365) 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?
366) 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?
367) 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.
368) Was Keira’s discussion with the couple within the scope of her expertise?

369) 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.

370) 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.
371) Which of the following statements about the fiduciary duty of confidentiality is true?
372) Which of the following is an example of the duty of loyalty?
373) Which of the following statements best describes a listing that terminates by performance?
374) Which act prevents the fraudulent sale of property sight unseen through the regulation of land sales across state lines?
375) The statute of frauds states that if a contract transferring ownership of real property is not in writing it is __________.
376) What is the key difference between assignment and novation of a contract?
377) 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?
378) How long after a notice of cessation or completion is filed can a contractor file a mechanics lien?
379) 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?
380) What is the six-month rule for homestead exemptions?
381) Kris made an offer on Lincoln’s townhouse. However, Kris offered no earnest money. If Lincoln accepted her offer, would it be binding?
382) Which type of lien affects real and personal property?
383) What law governs the rules and regulations that tenants and landlords must adhere to in counties with 75,000 residents or more?
384) Which document is used to protect the buyer from title defects after closing?
385) In a typical real estate transaction, who is the seller?
386) 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.
387) Which scam, as described by the FBI, involves an appraiser working secretly with a borrower and providing a fraudulent appraisal report to the lender?
388) Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?
389) Your assistant, Brady, often answers client questions about offers and negotiation. What do we know about Brady?
390) 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 ______.
391) 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?
392) Which of the following is true about title to a property?
393) The price for which an owner offers to sell a property is called the ______.
394) Per the TAR Purchase and Sale Agreement, when does the sales contract become a binding agreement?
395) In real estate contracts, which are required: legal descriptions or street addresses?
396) If a licensee is serving as a facilitator, rather than representing a buyer or seller, this must be disclosed to whom?
397) A consumer has just sued TREC for its role as an administering authority of license law. What will the likely outcome be?
398) 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?
399) 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?
400) Which of these is an example of illegal market allocation?
401) A month-to-month lease agreement is considered to be this type of leasehold estate, in which the total duration is unknown.
402) What may be found in paint in homes built before 1978?
403) 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?
404) Per the EPA, what must be conducted before a project may be approved for development?
405) What’s the purpose of the Interstate Land Sales Full Disclosure Act?
406) As required by the statute of frauds, every deed must have which of the following?
407) Which of the following is an adverse material fact?
408) What must a license applicant demonstrate to minimize the chance of license denial?
409) Errors and omissions insurance covers _______ who are sued by consumers for inadvertent mistakes in a real estate transaction.
410) 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?
411) In what type of market might an agent ask the multiple buyers who have submitted offers to submit their highest and best?
412) Which choice correctly identifies the seven protected classes according to the Fair Housing Act?
413) 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?
414) Which one of the following statements regarding depreciation schedules is true?
415) Which entity guarantees loans?
416) 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?
417) When finding listings, which statement describes the farming approach?
418) 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?
419) Historically, what do property values tend to do over long periods of time?
420) Which type of estate conveys possession and control, but not title?
421) 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 _________.
422) 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?
423) What’s a covenant between a lessor and lessee?
424) ______ is when the buyer and seller settle all terms of their agreement.
425) What type of real estate market occurs when both supply and demand are low?
426) Once signed, the listing agreement is a legally binding contract between _______.
427) Proposed zoning ordinances must undergo tests to determine their validity. These tests include which of the following?
428) Which type of buyer tends to know little about the homebuying process and has limited funds?
429) In a deed, this person is referred to as “the party of the first part.”
430) When preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client?
431) Loans available through the Farm Service Agency have which of the following characteristics?
432) Which type of property manager works mostly with real estate developers and investors?
433) How can a licensee earn commission from a seller who has not listed the property through an agent?
434) The owner-manager relationship is based on the property manager performing particular duties. This would include ______.
435) What would the monthly rate be if annual taxes are $890? Round to the nearest cent.
436) Before closing, who is generally responsible for obtaining an appraisal, completing the loan application, ordering a home inspection, and securing homeowner’s insurance?
437) Co-ownership with inheritance rights is what kind of real property ownership?
438) To what properties does the Tennessee Residential Property Disclosure Act apply?
439) Jorge is a dual agent. He owes his clients all of the following fiduciary duties except ______.
440) The Title and Conveyance paragraph of the TAR Purchase and Sale Agreement stipulates that the seller is conveying the property to the buyer with ________________.
441) An affiliate broker may perform brokerage duties under what circumstances?
442) What is a primary factor a lender reviews when determining if a borrower is a good credit risk?
443) Under which of the following conditions is it unacceptable to disclose confidential information?
444) What type of real estate market occurs when supply is high and demand is low?
445) 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 _________.
446) Kevin, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.
447) 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?
448) Which of the following is a violation of federal fair housing law?
449) 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?
450) 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.
451) Which of these pieces of legislation work together to prevent discriminatory lending practices?
452) Which of the following scenarios is an example of group boycotting?
453) Caveat emptor means ________.
454) Michael doesn’t have a real estate license, but he helps his friend, Nancy, sell her home. What can Michael legally receive as compensation?
455) Which type of real estate license requires successful completion of a 90-hour course and passing the licensing exam before a license is issued?
456) 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?
457) How many approaches to value do appraisers generally use?
458) 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 ______.
459) When a developer selling timeshare units receives earnest money deposits or down payments, what is the developer required to do with that money?
460) Which type of events are generally on a title insurance policy’s schedule of exceptions?
461) 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?
462) Who is responsible for testing private wells for water safety?
463) Which of these statements about cooperating with other licensees is true?
464) Who is responsible for testing community wells?
a. +The local health department
465) The ______makes it illegal to send unsolicited commercial solicitations via fax without the recipient’s permission or an established relationship.
466) What is a general lien?
467) Under standard lease provisions, a demising clause would contain ______.
468) A requirement for legal competence
469) Which of the following statements describes laws and ethics?
470) How many hours of continuing education must first-year salespersons take?
471) Activities that restrain trade and reduce competition and choices for consumers are considered to be what kind of violations?
472) When prospecting and soliciting for new business, licensees should be familiar with what federal acts?
473) Real property ownership may have significant tax advantages. Which of the following is a potential advantage?
474) 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?
475) What’s an MLS?
476) Carson is purchasing a $600,000 property by obtaining an 80/20 loan. How much is Carson financing?
477) Why does HUD test for housing discrimination?
478) Which of the following options describes a method by which a licensee can determine an appropriate listing price range?
479) The secondary market is comprised of _________________________.
480) Which of these is NOT a form of ownership for real estate?
481) What is the purpose of the Common Interest Communities Law?
482) What are two types of evictions?
483) Federal and state fair housing laws are designed to _______:
484) If you’re in a caveat emptor state, which statement about property condition disclosures is true?
485) In caveat emptor states, while sellers can’t lie outright or actively conceal a problem—and must honestly answer prospective buyers’ questions when asked—they aren’t obligated to point out the home’s flaws or defects to buyers.
486) What can a wet environment with little air circulation do?
487) When does the purchase agreement become a legally binding contract?
488) 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.
489) A broker’s price opinion is generally written by whom?
490) 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?
491) Which document spells out for buyers all settlement costs in a federally related residential real estate transaction?
492) Google and “if this, then that” alerts can assist you with which of the following?
493) The number of properties available describes this factor that influences value.
494) Which of these items should real estate professionals help first-time buyers and buyers who have experienced recent credit issues to understand?
495) 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?
496) Which of these situations would result in the earnest money being disbursed to the seller?
497) 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?
498) 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?
499) Cracks, holes, or rotten areas on a soffit are common ______ issues.
500) A licensee says, “This is a dream home with the best views in town.” This is an example of _______.
501) 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?
502) Which of the following best describes the fiduciary duty of confidentiality?
503) ______ 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.
504) Cultivated crops are considered personal property even though they’re part of the soil, and they’re known as _______.
505) Which statement best describes a trade fixture?
506) 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 ______.
507) What types of monies received from income-producing properties should be deposited into an escrow account?
508) Which option best describes a delivery and acceptance of a deed as required?
509) What’s the purpose of a POA’s restrictive covenants?
510) What is the term used to describe submerged land below the mean water mark?
511) In which of these situations does the disclosure for unrepresented parties need to be provided?
512) 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 ______.
513) Which term describes the process of real property becoming personal property by detaching it from the land?
514) What’s the purpose of testing with regard to fair housing?
515) 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?
516) 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?
517) Which statement about lead-related health problems is true?
518) 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?
519) Using the capitalization formula, what is the value if the net operating income is $20,000 and the rate of capitalization is 10%?
520) 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?
521) A quitclaim deed does which of these?
522) 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?
523) 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?
524) When a licensee is working with a property located near a Superfund site, what does that mean?
525) Which of these situations represents the illegal practice of redlining?
526) 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?

527) Property managers owe fiduciary duties to their clients (the landlord) and the community as a whole, not to individual residents.
528) In which of these situations would the property most likely be conveyed with a trustee’s deed?
529) states that use a deed of trust as security for a mortgage, the trustee conveys foreclosed property with a trustee’s deed.
530) 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?
531) 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?
532) 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?
533) 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?
534) Loans above 80% don’t conform to Fannie Mae/Freddie Mac guidelines, so a lender may require PMI to offset the risk.
535) 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?
536) 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.
537) 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?
538) In pricing a property, what might expired listings tell the real estate professional?
539) How are principal meridians and baselines used in the rectangular government survey system?
540) 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?
541) 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.
542) 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.
543) 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?
544) 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.
545) 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?
546) What title guarantees will Jody have if her property is deeded to her after a foreclosure?
547) Which of these statements about statutory duties and fiduciary duties is true?
548) 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?
549) Which of these examples describes a prepayment penalty?
550) An abandoned or otherwise unused commercial or industrial site with suspected contaminants is known as what?
551) 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?
552) County or state laws likely wouldn’t address homeowners’ ability to lease an owned piece of property, but HOA regulations might.
553) What’s the primary difference between an ordinary and a pur autre vie life estate?
554) 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?
555) 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?
556) 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?
557) Pay phones aren’t required, nor are accessible cash registers. But ramps for wheelchair access to the store are key!
558) 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”?
559) 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?
560) 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?
561) 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?
562) Which of these areas would be included in the livable area calculation?
563) 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?
564) 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?
565) 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?
566) These taxes have already been paid, so they are a prepaid item. They’ll appear as a buyer debit and seller credit at closing.
567) If there’s no state or local building code to cover a specific situation, what code must the builder abide by?
568) 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?
569) A brokerage firm that hires licensees as employees instead of as independent contractors must ______.
570) Stu is buying Freddie’s property. What must occur for the transfer of title to take place?
571) What’s the penalty for violating federal do not call rules?
572) Which of the following is an example of commingling?
573) 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?
574) 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?
575) 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?
576) The right of disposition includes the right to determine how, when, and if the property is to be sold or transferred to another owner.
577) Which of the following would be a description used for real property and a fixture?
578) 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?
579) 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?
580) 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?
581) Why are lenders required to provide the Loan Estimate and Closing Disclosure forms to loan applicants and borrowers?
582) 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?
583) What factors directly affect an adjustable rate mortgage?
584) 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?
585) 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.
586) 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?
587) 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?
588) 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?
589) 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?
590) 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.
591) 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?
592) 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?
593) Sandra brings to closing the total amount of her down payment and closing costs ($7,000), less the earnest money provided when the contract was signed ($3,000), or $4,000.
594) 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?
595) 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?
596) 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?
597) Related to the legal test of a fixture, in the acronym MARIA, what do the two As stand for?
598) 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?
599) Which statement best describes an adjustable rate mortgage?
600) 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?
601) Which task is NOT the responsibility of an escrow officer?
602) Which of these is NOT a likely features of a bridge loan?
603) Following all of the client’s lawful instructions describes which fiduciary duty?
604) 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?
605) 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?
606) 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?
607) 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?
608) 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?
609) 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?
610) 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?
611) Chip could turn down the listing or refer the listing to a more experienced agent. If he wants to work the listing for his friend, he should disclose his lack of experience to the client and ask permission to partner with an ag expert at his firm.
612) Tiers in the rectangular government survey system are formed by ______.
613) SARA is an amendment to which environmental act?
614) 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?
615) Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?
616) 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?
617) 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.
618) 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?
619) 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?
620) 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.
621) The best way to start comparative market analysis data collection is to use properties that sold when?
622) Why is proof of ownership required when transferring real property?
623) 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?
624) At what point must a listing agent disclose material facts to all parties involved in the transaction?
625) 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?
626) Most often, what’s the first course of action for disputed home warranty claims?
627) Gabe’s home has an assessed value of $172,000, and his tax rate is .55%. What are the annual taxes?
628) 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.
629) Which of the following is an acceptable ad based on Regulation Z?
630) 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?
631) 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 ________.
632) Since the parcel isn’t currently zoned, zoning should be established in alignment with an area’s comprehensive plan.
633) Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn’t fully understand. Belinda should ______.
634) Which act sets guidelines for public and common use areas at housing developments?
635) 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?
636) Sebastien should exclude the unfinished bonus room and the garage and add the remaining area (850 + (1,450 – 500) + 900).
637) 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?
638) 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?
639) Kelly is closing on the house she’s purchasing on Wednesday. Which of these statements is true?
640) 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?
641) Any delegation of a licensee’s agency-related tasks must be made in writing, and must be approved by the principal.
642) 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”?
643) If a community isn’t growing in an orderly fashion, which local land use group is likely at fault?
644) Tracy is looking in the MLS and sees a listing marked “REO.” Which of these statements regarding REOs is correct?
645) Failed foreclosure sales and deed in lieu of foreclosure actions result in lenders taking title to properties they previously had mortgage loans on. These properties are called real estate owned, or REOs.
646) 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?
647) What’s a good policy that a buyer’s agent should employ regarding contingencies?
648) 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?
649) 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?
650) Tristan’s offer has been signed by all parties and delivered back to the seller. This means that ______ has occurred.
a. +Binding acceptance
651) Compared to conventional loans, what are typical characteristics of construction loans?
652) An __ contract or agreement is one that exists based not on words, but on the parties’ actions or behaviors.
653) __ 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.
654) The Equal Credit Opportunity Act is designed to prevent discrimination in ______.
655) __ 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.
656) __ 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).
657) When a loan is recasted, what does it essentially become?
658) 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?
659) What is a clear zone?
660) When it comes to advertising in real estate, a __ is an established zone created to prevent safety hazards and unsightly advertising.
661) ______ is a leasehold estate of definite duration that terminates automatically and is inheritable.
662) 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 ______.
663) What is a capital gain?
664) For an investor, purchase price plus closing expenses is known as ___________________.
665) 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?
666) 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.
667) 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.
668) 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.
669) 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 ______.
670) 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 ______.
671) 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?
672) A __ lease is usually for a large open space that may have few amenities.
673) 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.
674) A __ is a legal proceeding that asks the court to remove any claims, or “clouds,” against the title so that it can be conveyed.
675) 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?
676) __ does impact property values and may be perceived as infringing on personal rights; therefore, public opinion is sought before zoning changes are made.
677) 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 ______________.
678) Edgar is in the process of selling his home in a short sale. What’s a short sale?
679) ______ is allowed to perform appraisals on any type of real estate.
680) 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?
681) Which type of property management situation requires a license?
682) According to the Telephone Consumer Protection Act guidelines, who or which entity may call a person listed on the Do Not Call Registry?
683) With an interest-only payment plan, ______.
684) Which term involving trespassing is used when someone other than the owner claims title to real property?
685) Which of the following is true about pocket listings?
686) 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?
687) A landlord locks a tenant out and requires the tenant to pay past-due rent before regaining access to the unit. This is considered ______.
688) Which activity requires a license?
689) 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 ______.
690) How do you decide which party you represent in a transaction?
691) What is a margin, as it relates to an adjustable rate mortgage?
692) 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 ______.
693) In order to be enforceable, what does the statute of frauds require a real estate contract to be?
694) What is usury?
695) 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?
696) What brokerage activities can Austin perform if his license is inactive?
697) Seller Darlene wants to know when she’ll be paid the full amount of the purchase price for her property. What should you say?
698) 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?
699) Cheryl wants new carpeting for her rectangular living room. Her living room is 18 feet by 12 feet. How much carpeting does she need?
700) What’s alienation with regard to real estate?
701) 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?
702) Carlos, a property manager at Your Best Bet Property Management Company, manages multiple properties for their owners. Which of the following statements is true?
703) 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?
704) 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?
705) 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?
706) The appraiser applies a capitalization rate to an income comparison of similar properties with which of the four methods used to measure depreciation?
707) 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?
708) 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.
709) 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?
710) What’s the purpose of a brief adjudicative hearing?
711) What is the purpose of an operating budget?
712) 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?
713) During the closing, whose job is it to deliver the title commitment after ensuring the title is marketable and without defect?
714) Isabella is thinking about buying a one-bedroom residence in a cooperative. A residence in a cooperative, unlike a condominium, is considered ______.
715) What is the term for paying off a loan over time?
716) 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?
717) 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?
718) Which of these is an example of a lot and block description?
719) 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?
720) What’s a vendee’s lien?
721) The Consumer Financial Protection Bureau ______.
722) The government’s power to take private land for public use is called ______.
723) 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?
724) Dual agent Barbara Park can only disclose Seller Carrie’s reason for moving if:
725) Which term is used when someone claims someone else’s property by using it for an extended period of time?
726) Which of the following is a residential dwelling with shared walls where the owner also typically owns the land on which the home sits?
727) The ______ provides administration and enforcement of federal fair housing laws.
728) 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?
729) Which liens take priority over all other liens?
730) What form should be provided to borrowers no fewer than three days prior to closing?
731) Which of the following statements about agents and the duty of obedience is true?
732) What does REO stand for?
733) What does the rectangular government survey system use as the basis for legal descriptions?
734) 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?
735) 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?
736) Mario doesn’t want to include a religious preference in his listing ad, so which of the following phrases should he use?
737) Homeowners can take several actions related to pest infestations, but which of the following actions should be left to licensed pest management professionals?
738) Which of these transactions would require the Missouri licensee to provide written disclosure of his or her interest?
739) Which of the following is true about an attorney’s opinion of title?
740) What’s designed to protect buyers from financial loss if the title to the property they buy has defects?
741) 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 __________________.
742) Which of these may be covered by a builder-backed home warranty?
743) 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?
744) 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 ________.
745) With which type of government power can a lien be placed on a property, giving the government a claim to the property?
746) 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?
747) 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?
748) The tax associated with property taxes is relatively stable and a high revenue generator because ______.
749) A fee a lender charges for processing a loan is called _______.
750) 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?
751) What type of emails are prohibited by the CAN-SPAM Act?
752) Clara signs a net lease for office space. Under a net lease, she’ll be responsible for ________.
753) 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?
754) Which of the following equals one furlong?
755) Which of the following is considered an act of discrimination under federal fair housing laws?
756) Compared to working without a buyer agency agreement, a buyer who works under a buyer agency ?
757) 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.
758) What is the purpose of the Consent for Dual Agency form?
759) What types of leases must be recorded?
760) Which of these is an example of a rectangular survey system description?
761) Jorge is a dual agent in a single-license dual agency situation. He owes his clients all of the following fiduciary duties EXCEPT ___________.
762) 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?
763) 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?
764) Soundproofing and decorative material, shingles, and siding may contain what hazardous material?
765) Jay’s new loan to purchase a property includes the seller’s existing mortgage. This type of loan is called a ______ loan.
766) What is one drawback of a real property transfer?
767) When assigning a contract, the assignor should ensure that ______ is not prohibited in the purchase contract.
768) 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:
769) Which of the following occurs when a property owner dies without having a will in place, and no heirs or creditors can be found?
770) To effect a transfer of title by deed, _________________ must occur.
771) When operating under a power of attorney concerning the transfer of real property, who may sign in place of the principal?
772) 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 _________________.
773) Single agency is _______.
774) Which of the following closing activities occurs on the day of closing?
775) In relation to appraisals, what’s a “federally related transaction”?
776) First-time homebuyers can access up to $________ of their Roth IRA accounts, penalty-free, under certain conditions.
777) Which of the following is the best definition of a covenant between a lessor and lessee?
778) Which of the following is a material fact that must be disclosed to prospective buyers?
779) The National Fair Housing Alliance believes in promoting the message that __________ neighborhoods are stronger neighborhoods.
780) Which of the following can indicate drainage problems?
781) Which of the following are landlords required by law to ensure?
782) A deed must be ______________ before it can be recorded.
783) What type of agency exists because a written or oral agreement is in place?
784) 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?
785) Which of the following terms best describes real property?
786) 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.
787) What is the definition of a testator?
788) You are meeting with prospective clients in person for the first time. What are you required by law to explain to them?
789) Which of the following is true?
790) 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?
791) What might the financial implications be if a buyer needed to use individual retirement account funds toward a down payment?
792) 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?
793) 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?
794) At what point in a residential transaction must a seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?
795) Which portion of a mortgage payment is the financial institution’s charge for the use of its money?
796) 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?
797) Which ownership type involves one person owning the property?
798) Which of the following is designed to protect buyers from financial loss if the title to the property they buy has defects?
799) 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 _______.
800) You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ______.
801) REEB automatically suspended the licensee’s real estate license when the board found the licensee guilty of which of these offenses?
802) Which one of the following elements of a deed signify the grantor’s intention to transfer title to the grantee?
803) The transfer tax rate is $0.37 per $100. A property that sold for $300,000 would have a ______ transfer tax.
804) How does discrimination still occur, even though it’s illegal?
805) As a property manager, Darby expects to _______.
806) Which type of estate conveys all rights of ownership?
807) Alexandra is perusing her closing statement, particularly those amounts that are a benefit to her. What’s the term for these items?
808) 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?
809) Which stage of the property ownership life cycle can be affected by income tax issues?
810) How can an agent offer dual agency legally?
811) Which type of contract involves an exchange of consideration between two parties?
812) A clause that allows the parties to agree that they won’t litigate if there are any contract disputes is a/n _________.
813) 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?
814) What is the definition of a tax lien?
815) What figure results when you subtract the buyer credits from the buyer debits on the closing statement?
816) Roger just discovered that his loan includes a hidden balloon payment, so now he must ________.
817) Mario does not want to include a religious preference in his listing ad, so he decides to use which of the following phrases?
818) Juniper is buying a newly constructed home with a fireplace and garage. A _______ is required, per state laws.
819) 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?
820) 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 _______.
821) Fred wants to make sure that his home is radon free. He wants to check all likely access points, including which of the following?
822) 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?
823) Which of the following is an example of a deed restriction?
824) A property manager is authorized to perform all of the duties related to the property on whose behalf?
825) 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?
826) What’s the area of a rectangular building that’s 40 feet by 20 feet?
827) 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 _______.
828) 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?
829) 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?
830) 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?
831) Which of the following is something the seller is required to disclose to a buyer in a transaction?
832) Which of the following is a duty that licensees owe to ALL parties in a transaction?
833) Which of the following is a reason that wetlands are protected?
834) What’s an encumbrance?
835) 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?
836) Vanessa has just returned $200 to a former tenant whose security deposit was $800. What else, if anything, must she do?
837) In terms of encumbrances, what’s a license?
838) 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?
839) 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?
840) Ella, a listing agent, accidentally discriminated on the basis of familial status by using which statement in her advertisement?
841) Which of these is a requirement when licensees present a party’s written proposal to their client?
842) Which of these statements regarding the purpose of real estate governance is the most accurate?
843) Lease types, space planning, area design, and building layout are especially important for a property manager who’s working with a ______.
844) What responsibilities does a real estate professional have regarding property taxes?
845) Licensees conduct CMAs to determine ______.
846) 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?
847) 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?
848) Determine which of the following statements is TRUE when an as-is clause is used.
849) What do buyers provide to the seller as an indication that they are serious and intend to go through with the purchase?
850) To avoid discriminating against those with disabilities in her advertisements, June, a listing agent, should use which of the following phrases?
851) Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
852) Where is an appropriate place for a broker to place client trust funds?
853) 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.
854) 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?
855) The potential for health hazards related to ______ must be disclosed when selling or renting homes built before 1978.
856) Which law requires the EPA to establish air quality standards?
857) In which type of contract does only one of the parties offer consideration?
858) Which of the following is a private agreement that impacts the use of the land?
859) John is a qualified third party conducting a standard review of a property. John is conducting a(n) ______.
860) 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?
861) 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?
862) 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?
863) Wanda wants to use some copyrighted material on her website. The law _______.
864) Which of the following describes a timeshare?
865) When can real estate agents give legal advice to a buyer about backing out of a contract?
866) Raj wants to protect some of the equity in his home in case of bankruptcy or foreclosure. He should file a(n) _____.
867) A claim of misrepresentation can stand up in court if it includes ________ elements.
868) 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.
869) 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?
870) Levinia is preparing a sales contract for her clients Rose and Lily. When is it acceptable for her to offer them legal advice?
871) What’s the term for paying off a loan over time?
872) 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?
873) What’s true of a contract amendment once it’s signed by both parties to the transaction?
874) What term is used to describe the illegal use of escrow funds, such as earnest money?
875) 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?
876) When preparing a property for showing, which of the following is true?
877) Sam the appraiser is most likely to use the cost approach for which of the following properties?
878) Why might a buyer want to assume a loan?
879) 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?
880) Which of the following responsibilities does the commercial property manager have that the residential property manager doesn’t have?
881) Which mortgage market is made up of lending institutions that lend directly to the consumer?
882) Which IRS forms are independent contractors and employees required to complete?
883) 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?
884) 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.
885) As supply increases, price ______.
886) Which of these statements about licensee cooperation is true?
887) Which term describes a contract in which the parties have met all agreement terms?
888) Which type of REIT receives most of its revenue from rental of their properties?
889) Government tax assessment offices determine the _________________ by comparing similar properties in a geographic area.
890) 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?
891) The process the government uses to take someone’s property is called __________.
892) The designated broker for Jennifer’s firm left the firm without warning. Can Jennifer and her fellow licensees continue to provide brokerage services?
893) 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 ________.
894) Archie wants to buy Claire’s membership share in a cooperative. Which of the following statements is true?
895) 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 ______.
896) Which of the following statements about the duties that seller and buyer clients owe to their agents is true?
897) 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?
898) What must you disclose to be in full compliance with an agent’s fiduciary duty to disclose?
899) 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.”
900) When preparing the sales contract, when is it acceptable for a licensee to offer legal advice to the client?
901) Which option is a right guaranteed under the Privacy Act of 1974?
902) 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?
903) What’s the purpose of police power?
904) 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?
905) Place the stages of the loan approval process in the correct order.
906) What’s the term for a contract for which one or more terms have yet to be completed?
907) The DOL director received a complaint against broker Carl Savage and has decided to investigate. What’s the next step in the process?
908) 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?
909) What’s a legal description?
910) 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?
911) Which of the following is an example of the duty of obedience?
912) 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 ______.
913) According to the Federal Communications Commission, who or which entity may call a person listed on the national Do Not Call Registry?
914) Why would a retail tenant be willing to sign a lease in which a percentage of sales proceeds are paid to the landlord?
915) What type of agency exists when a buyer’s broker is the listing agent for the same property?
916) Which term refers to a tract of land divided into lots or plots and used for building purposes?
917) How are independent contractors compensated and their income reported?
918) Which of the following statements is true about a licensee’s duties to a landlord the licensee represents?
919) A property owner’s right to access ponds, lakes, oceans, and other closed bodies of water bordering the owner’s land is called ______ rights.
920) 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?
921) 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?
922) 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 ______.
923) The installment land contract is what type of financing?
924) A real estate licensee can provide which of the following opinions?
925) The secondary mortgage market is comprised of _________________________.
926) Which document is provided to borrowers no fewer than three days prior to closing and provides disclosures about the costs of the transaction?
927) Which document given before closing provides an estimate of the costs a buyer is likely to pay at settlement?
928) 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?
929) How much notice must a tenant give if they want to terminate their lease?
930) 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?
931) 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?
932) How does the building department ensure that a builder who has obtained a permit builds according to code?
933) When must informed consent for dual agency be obtained?
934) When a local planning board is reviewing density, it would consider ______.
935) What regulation or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?
936) 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?
937) Which of the following is an example of positive misrepresentation?
938) What type of violation are you committing when you fail to include a material fact or make false or misleading advertising statements?
939) 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?
940) 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?
941) Which formula calculates net to seller?
942) Which of the following terms best describes an item that is both a fixture and real property?
943) 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?
944) A negotiable instrument must contain an order to pay or a ________.
945) Offers become binding contracts when they’re ______.
946) Cari is preparing an operating budget, and it shows a net loss. What should she do?
947) What is tortious interference?
948) Which of the following statements is true regarding conventional loans?
949) 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?
950) What pricing strategy could work well in any market, primarily by generating buyer interest?
951) Why is it important for a company to revisit its objectives periodically?
952) 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.
953) A ____________________ is a worker who’s classified by the common understanding of the profession. An example would be a food server.
954) Georgette is meeting with her buyer clients to fill out the purchase and sale agreement. Which of the following must be true?
955) You’re writing an offer for your buyer client in a cold market. What would be a good negotiation strategy?
956) What’s it called when a real estate company establishes policies and procedures designed to keep confidential information secure, particularly regarding in-house transactions?
957) 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.
958) When evaluating the income listed on a loan application, what will the lender consider?
959) 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?
960) What determines how frequently an interest rate adjusts in an adjustable rate mortgage?
961) Which of the following is an example of what would be included in a mission statement?
962) You’ve just accepted a new listing. Why would you want to view the details of past listings for this property?
963) 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.
964) 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?
965) When preparing a purchase agreement, when is it appropriate for a licensee to offer legal advice to the client?
966) What’s the best way to describe your sphere of influence?
967) 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?
968) Which of these is the best definition of a property’s market value?
969) Which entity guarantees government loans?
970) Of the benefits of seller agency, which is the most important to convey to a seller?
971) When you interview with a broker, which of the following goals should your questions help you confirm?
972) 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?
973) What’s a residential marketing plan?
974) Jan is a listing agent assisting the Chesters with the sale of their home. What is one of Jan’s duties?
975) 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?
976) 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?
977) What is the purpose of the seller net sheet?
978) 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?
979) Which of the following statements about using real estate assistants is true?
980) Minimizing risk in part means avoiding public networks, unsecure sites, and ______ sites.
981) Which of the following is the best piece of advice you would give to a licensee for avoiding legal concerns over any contract?
982) If you’re alone at an open house, what should you never post online?
983) 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?
984) Matt is representing the Tyler family in the sale of their house. What should he tell them about the property disclosure form?
985) What are vacancy rates, new building permits, inventory rates, and sales volume?
986) 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?
987) Jose, a listing agent wants to write an ad for his new listing. Which of the following phrases is acceptable under fair housing guidelines?
988) 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?
989) To meet legal and ethical standards, all transactional records that you keep should be complete and ________.
990) 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?
991) 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.
992) Which of the following options describes a method by which a person with a real estate license can determine an appropriate listing price range?
993) 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?
994) 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?
995) Camille makes it a point to check the MLS for seller clients’ properties’ former MLS listings. What information will she find there?
996) Can Jeremy, a licensee, receive a referral fee for sending his buyer client to Ajax Title?
997) Marcus is representing a seller client. Which of the following is a true statement?
998) 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?
999) What’s the purpose of the loan application?
1000) Because of the lack of control over the individual by the employing party, which of the following persons is not classified as an employee?
1001) From a seller’s perspective, what’s one reason to use the MLS to promote a property?
1002) 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?
1003) 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?
1004) Why is it important to try to view the world from your client’s perspective?
1005) While reviewing her purchase contract, Jeanette’s client asked, “What does this inspection contingency do?” How should Jeanette frame her response?

1006) 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?
1007) The formula for net to seller is sales price x (100% – _______).
1008) Besides building seller rapport, what’s a key purpose of touring a subject property?
1009) 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?
1010) 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?
1011) Which term means a calculated percentage used to determine who owes how much of a given expense over a certain period of time?
1012) 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?
1013) In accordance with RESPA prohibitions, rebates may only be offered by licensees to transaction parties, if _____.
1014) Lorena is getting ready to post information about her new listing on social media. Which of the following should she do?
1015) One type of seller financing is a(n) ______.
1016) 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?
1017) Which of the following is a legitimate business deduction for income tax purposes for a real estate licensee?
1018) Which of the following statements applies to both employees and independent contractors?
1019) What’s the acronym for the legislation that eliminates illegal referral fees among settlement service providers?
1020) If an appraisal contingency is in place, what happens when a property appraises lower than the agreed-upon sales price?
1021) What measurement indicates how many properties are selling in a given area?
1022) 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?
1023) Where are the top two places you should spend your marketing dollars?
1024) When does express agency exist?
1025) The Real Estate Settlement Procedures Act is a consumer protection statute that ______.
1026) What’s a cooperating broker?
1027) 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?
1028) Although open houses don’t usually result in the sale of the home, they’re still important. Why?
1029) How does a budget compare to a forecast?
1030) What is another name for a land contract?
1031) Which of the following is a map of a proposed subdivision development that must be approved by the planning commission, before development may begin?
1032) What’s the most common way that buyers’ brokers protect their compensation?
1033) Who’s ultimately responsible for determining the role a licensee is expected to play in any transaction?
1034) Why do licensees help buyers estimate closing costs?
1035) A $400,000 property depreciated in value by 2%. What’s its new value?
1036) To determine the indicated market value of a subject property, which of the following data would be correct to use?
1037) Which buyer negotiation strategy is unlikely to work in a hot market?
1038) It’s not a good idea to post photos of your clients’ expensive belongings. Why is that?
1039) As supply increases, what happens to price?
1040) Denise is a real estate licensee performing a market analysis. She uses the rule of three, which means that she selects three comparables that ______.
1041) What’s your responsibility regarding contingencies when representing a buyer?
1042) Which one of the following best describes the fiduciary duty of confidentiality?
1043) Which of the following are common with hot markets?
1044) 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?
1045) What does the Rule of Three say about comparables when preparing a CMA?
1046) As demand increases, what happens to price?
1047) 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?
1048) How does the seller agency relationship benefit the seller?
1049) What is closing?
1050) 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?
1051) 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?
1052) 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?
1053) Jillian just received a trio from a title company. It contains a property profile, deed, and ______.
1054) If a seller receives a full-price offer, which of the following is a true statement?
1055) 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?
1056) After adjusting sales prices of comparables for a market analysis, which comparable carries the most weight in determining a list price range?
1057) Kathy is preparing a market analysis for her clients, the Winstons. Why might she include a seller net sheet?
1058) The Nguyens must get top dollar. Competitive properties are priced at $250,000 and $255,000. What’s a good pricing strategy?
1059) The _______ orders the title search in an escrow closing.
1060) What’s the purpose of the buyer pre-qualification letter?
1061) Mona is a licensee who strives to be professional in all of her actions, so how does she keep her business account?
1062) Which of the following is a true statement regarding short sales?
1063) 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?
1064) What is the purpose of a pre-closing checklist?
1065) 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?
1066) 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
1067) 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?
1068) 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?
1069) 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?
1070) 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?
1071) 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?
1072) An example of confidential information is ______.
1073) Which of the following best describes the purpose of the Truth in Lending Act?
1074) Adam owes $125,000 on his home. It’s currently worth $340,000. How much equity does Adam have in his home?
1075) As a security precaution when posting information for a listing, which of the following should you do?
1076) One reality of real estate is that you’ll often need to ______ in order to make a sale.
1077) In the income capitalization approach to appraisal, NOI is found by ______.
1078) What is a reason a homeowner may seek a short sale?
1079) 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?
1080) Why is it important to include active comparable listings in a market analysis?
1081) What, when signed by all parties to a sales contract, changes the original terms of the contract ?
1082) After the open house has ended, it’s best to _______.
1083) 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?
1084) Two types of prorations are _______.
1085) Bart is an independent contractor. Which of these does his managing broker have the right to do?
1086) 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?
1087) When interest rates are lowered, real estate purchases become more ______ for buyers.
1088) When looking for a broker with whom to affiliate, an important consideration is to find out if the broker is ___________ .
1089) Under which of the following circumstances might you be advised to refuse to write a listing contract with sellers?
1090) 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?
1091) What is usually the first place serious buyers look for homes for sale?
1092) Risks to computer systems can be reduced by avoiding public networks, ______ sites, and suspicious sites.
1093) Which of the following is an action that real estate licensees may take without practicing law illegally?
1094) The multiple listing service is a go-to resource for data when researching a subject property. What information will you find there?
1095) 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 ______.
1096) A listing agent’s primary duty to a seller is to ______.
1097) What does a credit score tell a lender?
1098) Which of these is a factor in calculating a consumer’s credit score?
1099) Ginger, a licensee, tours a home that’s packed with clutter. She should ______.
1100) Real property ownersip has significant tax advantages. Which of the following is an advantage?
1101) Ways to minimize computer risks include avoiding public networks, unsecure sites, and ______ sites.
1102) Which of the following describes a sale subject to a mortgage?
1103) Homes built before 1978 may have what environmental hazard in their paint?
1104) Why would a buyer want to know whether any additions or alterations were made to a property?
1105) 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 ______.
1106) What is one drawback of sub-agency from a seller’s standpoint?
1107) In a real estate transaction, who may a licensee represent?
1108) Members of the Real Estate Commission serve _________-year terms.
1109) If a consumer wants to file a deceptive ad complaint, which entity should be contacted?
1110) Species habitat, beauty, erosion control, and pollution treatment are all reasons why wetlands are ___________.
1111) Kerry is a real estate licensee who has committed an ethical violation. Which of the following is a true statement about her potential penalties?
1112) 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?
1113) If a licensee is convicted of a controlled substance offense, what can the Real Estate Commission do?
1114) A buyer asked Clifton why she would benefit from signing an agency agreement with him. Clifton answered: ______
1115) 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 ______.
1116) What type of agency relationship exists if an agent from ABC Realty represents a buyer and the seller is affiliated with Net Realty?
1117) Article 3 of the Code of Ethics requires NAR brokers to cooperate except
1118) Which term describes the addition of alluvion land to a property through the natural process of accretion?
1119) Which of the following are examples of Single Agency?
1120) Under what name must sole proprietors conduct business?
1121) 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?
1122) The lender, the loan applicant, and the _____________ all complete part of the request forms for verification of deposit forms.
1123) April is having a limited coverage searched performed on her condo. When is a limited coverage search used?
1124) Which Law does the Office of Fair Housing and Equal Opportunity Uphold?
1125) 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 ____________.”
1126) Ownership is a right in the bundle of rights. Which of the following is considered a form of ownership?
1127) Which of the following financing types involves the sale of personal property with the real property?
1128) In a transfer of ownership in real property, who conveys the title?
1129) At what level or levels does antitrust oversight exist?
1130) 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?
1131) 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 __________.
1132) What’s a subordination agreement?
1133) Which of the following describes the appropriate capital gain exclusion for a taxpayer’s primary residence?
Ca “Real Estate Practice” Questions with correct answers
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Ca: Real Estate Practice – Sample of Final Course Exam with answers
1- The amount that a seller takes away from a sale is termed:
2- Which of the following best describes prospecting?
3- A property manager can refuse to rent to applicant Mike for any of the following reasons except which?
4. Which law extended discrimination to include handicap and familial status?
5. Sharon and Steve have just taken a second mortgage on their home. Which is a true statement?
6-
7- In the initial meetings with the prospects, the agent should do all of the following except which?
8- When considering making a loan to a borrower, which of the following factors would probably exert the least amount of influence on the lender?
9-
10- Which of the following prospecting techniques do you have to use carefully because it has tended to upset people in recent years?
11- Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice’s home, what kind of agreement is this?
12- The second installment of property taxes comes due on:
13- Seller Jim tells his agent Branda that he does not want his home marketed to families with children. Brenda refuses. Which statement is true?
14- Value includes which of the following aspects?
15- Karen and Al obtained a 30-year fixed-rate, fully amortized loan when they purchased their home. Which statement is true?
16- Dave and Nadine have decided that they want to become property investors. What is most likely their main motivation for investing?
17- The general law of agency applies to
18- In a transaction that involves the purchase of a business, what document functions in the same way as the deed in a personal real estate transaction?
19- Which of the following is not an advantage of hosting an open house?
20- Which of the following would not be an essential component when researching the purchase of an apartment building?
21- Which form of advertising is considered the most cost-effective method for selling a home?
22- Jane sold her personal home for $148,000. Two months later she purchased and moved into a new home that cost $145,000. The adjusted cost basis of the first home was $140,000. For purposes of federal income tax, which statement is true?
23- Jonestown Community Bank refuses to lend money to potential homeowners trying to purchase property in the predominantly Asian neighborhood on the west end of town. This practice is:
24- When talking to his investment clients, Broker Adam often to tax shelters. This term typically refers to
25- According to the law governing mortgage loan brokers, what is the maximum commission Broker Claire can charge for securing a $50,000 first mortgage for a period of 2 years?
26- Which is true about listings?
27- Mr. and Mrs. Haley are purchasing beachfront property in an upscale development. The home comes equipped with all furnishings. The Haleys want to get a mortgage that will cover the purchase price plus all the furnishings. What kind of mortgage are they looking for?
28- Abby applies for a federally-related loan to purchase a home. The lender must furnish a copy of the CFPB booklet to Abby no later than the third business day from which date?
29- Which of the following is not a good direct mail technique?
30- Being prepared to handle incoming phone calls means all of the following except which?
31- Patrick has a written independent contractor agreement with his broker Tami. Last year, about 25% of his income came from sales commissions. The other 75% came from an hourly wage paid by Tami. For income tax purposes, the IRS would probably classify Patrick as:
32- Broker Alice has a listing agreement with Jack. If Broker Tom procures a buyer for Jack, Tom will get the commission and Alice will not. What kind of listing agreement does Alice have with Jack?
33- Which statement is true about a loan that has a negative amortization?
34- Sarah is an employee and Ken is an independent contractor at Kerns Realty. Which of the following statements is true?
35- Who benefits from Private Mortgage Insurance?
36- Broker Eric secures a loan for buyer Paul. The fees that Eric charges Paul for making the loan could be any but which of the following amounts?
37- When dealing with the sale of a business, which is not a true statement?
38- When using the straight-line method of depreciation, each year of economic age is given a rate that
39- When doing a competitive market analysis, an agent looks at all but which of the following factors?
40- Which of the following phrases should Salesperson Brenda avoid when writing an advertisement for one of her listings?
41- Agricultural land includes all of the following EXCEPT which?
42- Alice is planning her career and setting her goals. Which of the following would be considered an intermediate goal?
43- The Equal Credit Opportunity Act (ECOA) requires lenders to:
44- Jim owns a gift shop in a commercial building. He pays rent for occupancy, plus maintenance and operating expenses. What kind of lease does Jim have?
45- Kirk wants to get an FHA loan. Which of the following is Kirk himself not likely to do during the application process?
46- A life insurance company would most likely invest in all but which of the following properties?
47- Which of the following duties is not a permitted activity for an unlicensed personal assistant?
48- The public report that a developer must provide when offering subdivided lands for sale is provided by which agency?
49- Agent Dan tells his buyers that the seller will leave the washer and dryer if the buyers make an offer now. What kind of closing technique is Jim using?
50- Harry has some buyers that he believes are ready to make an offer. He says to them, “Would you prefer to take possession on September 1 or October 1?” What kind of closing technique is Harry using?
51- Which statement is true about a homeowner’s exemption?
52- Which statement is true about a listing contract?
53- Greg sold an apartment building he owned for 20 years. He paid $100,000 for it, and made $300,000 worth of improvements. His depreciation was $2,500 per year. He sold the building for $1,000,000 and paid $60,000 in commission to the broker. What is Greg’s capital gain on the apartment?
54- Jim and Jane are buying a home for $120,000. They have $20,000 for a down payment and assumed the seller’s mortgage of $75,000. Jim and Jane financed the remaining $25,000 through the seller. What kind of a mortgage do they have?
55- Greg is approved for a Cal-Vet loan. Who will pay the points?
56- Which is not a true statement about the Agency Disclosure?
57- Under federal income tax law, the “basis” for a personal residence is which of the following:
58- Mortgage lenders are prohibited from discriminating in giving credit to prospective borrowers based on race, color, religion, national origin, sex, marital status, age or dependency on public assistance under which law or regulation?
59- Which of the following is a seller’s request that an agent cannot honor?
60- Seller Tom has an agreement with Broker Bill, Broker Jim and Broker Joe. Whoever brings the buyer will get the commission. What kind of agreement is this?
61- Bill and Sue secured a mortgage loan that is tied to an index which fluctuates over the life of the loan. What kind of loan do they have?
62- When agent Hal shows a home he should never:
63- Jenny’s home appraised for $550,000. Her asking price was $560,000 and the property sold for $575,000. What will the new owners pay in property taxes?
64- Which of the following is not a form of personal advertising?
65- Which of the following items is usually not prorated at closing?
66- When doing a listing presentation which of the following items would you not describe to the owners as being a benefit of listing with an agent?
67- Hannah is a real estate assistant. Her broker has asked her to be available for tasks in the field rather than in the office. What would we call Hannah?
68- Greg and Joyce have an adjustable rate mortgage on their home. What is the key feature of this type of loan?
69- According to ECOA, lenders cannot discriminate against potential borrowers on the basis of all but which of the following?
70- Which of these items would be a credit to the buyer on the settlement statement?
71- When agent Jane meets with her sellers to offer suggestions, she most likely would not give them:
72- According to RESPA, a buyer or seller cannot legally be charged at closing for which of the following items?
73- Which of these is not a buying signal?
74- Which statement is not true about an agency relationship?
75- All but which of the following is NOT an AIDA feature?
76- Mark believes he has been discriminated against during his home search. How long does he have to file a complaint with the Department of Housing and Urban Development?
77- Which of the following Internet pages might not be of particular interest to buyers?
78- Nancy bought her home last year for $425,000. Her property taxes would be assessed at:
79- Tom and Mary want to purchase their first home. Which of the following would be the least likely place for them to obtain a loan?
80- Which of the following is an example of commingling?
81- Jake has decided to specialize in working with clients who purchase schools. What property type will he be dealing with?
82- What is the minimum period of time over which the owner of an apartment building can depreciate the improvements?
83- Matt is computing the adjusted cost basis of his apartment building for income tax purposes. Which of the following items can Matt not add to the original cost when doing the computation?
84- Four years ago, Sam purchased a vacant lot for $10,000. He just sold it for $13,000. During the time Sam owned the property he paid $350 per year in taxes, $150 per year on maintenance like grass cutting and $90 per year on miscellaneous expenses. How much did Sam gain or lose on the sale?
85- Which paragraph of the purchase agreement states that the balance of the purchase price will be deposited into escrow prior to closing?
86- Which of the following is not considered a benefit of investing in real estate?
87- What information can you gather from the newspaper to help develop a Prospecting Plan?
88- Sally and Dan must pay 2 points on their new $65,000 loan. What will they have to pay at closing for the points?
89- Who selects the escrow company?
90- Marsha has been keeping track of the effectiveness of her advertising campaigns. She is probably using all but which of the following tools?
91- This paragraph of the purchase agreements informs the seller of the buyer’s right to inspect the property and can cancel or request maintenance based on findings.
92- Which of the following situations is not exempt from the seller disclosure requirement?
93- Jim has created a nice property flier for the James’ home. Jim should not use this flier as a:
94- Seller’s agent Pam was unaware of the fact that the heating system of a home she had listed was defective. She sold the property and several months later the buyer sued Pam for not disclosing the problem. Which statement is true ?
95- Who is liable for the withholding on the sale of a property owned by a foreigner?
96- Which statement is not true about a listing contract?
97- Buyer Randy makes an offer to purchase one of Broker Tom’s listings on June 15. Randy gives Tom an earnest money check for $1,000 and asks Tom to hold it until June 30, regardless of the date the seller accepts the offer. What should Tom do?
98- Grant moves into his new office space while he awaits the completion of the negotiations of the lease terms. During this interim period, grant makes monthly rent payments and the owner accepts them. How would Grant’s lease at this time be classified?
99- All exclusive listing agreements must have
100- What does the Real Estate Disclosure Law refer to?
101- Which type of loan typically carries the most loan points?
102- What is the minimum period of time over which the owner of a commercial building can depreciate the improvements?
103- Kirk and Sandy obtained a wraparound mortgage. Which of these statements is true about the wraparound mortgage?
104- Lorna and Hal have obtained a growing equity mortgage for their new home. What does that mean?
105- Agent Alice has received an offer that she believes is not in the sellers’ best interest. What should Alice do?
106- If broker Tim advertises a property for sale that he doesn’t intend to sell so that he can attract potential buyers, Tim is practicing:
–00CeshopPractice00FINAL1
1) Net operating income ‒ debt services = ______
2) What responsibilities does a real estate professional have regarding property taxes?
3) Which of these is the better debt service ratio?
4) As a licensee representing investor clients, your marketing strategy should be determined by ______.
5) Which IRS forms are independent contractors and employees required to complete?
6) Recording a document makes it a matter of ______.
7) Whose responsibility is it to keep track of all buyer contingency deadlines and ensure they’re not missed?
8) Ca –
9) You haven’t been paid your commission on a transaction that closed nine months ago. The commission was paid to your broker, but you haven’t received your compensation. What remedy is available?
10) What is a real estate investment trust (REIT)?
11) Bert is an investor who doesn’t actually buy properties. Rather, he finds deals and “assigns” them to others for a fee. Bert is obviously ______.
12) A ______ is a worker who’s classified by the common understanding of the profession. An example would be a food server.
13) 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?
14) What should you do if your buyer client, Steve, says he doesn’t want to have a professional inspection?
15) A set of guidelines for the ethical conduct of real estate licensees is called a ______.
16) Danielle is a new licensee. She is also newly engaged with a two carat diamond ring and diamond tennis bracelet she can’t wait to show off to clients. Her sponsoring broker, Tom, has provided her with a list of things she should avoid in social media postings. The list includes wearing expensive jewelry in photos she posts of herself on social media. Why is that?
17) During the closing, whose job is it to deliver the title commitment after ensuring the title is marketable and without defect?
18) Which photograph of a home for sale should not be published for public viewing?
19) Why is it so important to be able to properly identify trust funds?
20) Which of the following best defines a stigmatized property?
21) Advance –
22) Gross potential rental income ‒ vacancies and credit loss = ______
23) How does the income from property taxes benefit the community?
24) Which of the following describes how a property manager would calculate anticipated annual rental income for a budget?
25) Who is responsible for ordering an appraisal, completing the loan application, ordering a home inspection, and obtaining homeowners insurance before closing?
26) The _____________ section of the purchase agreement you reviewed is not for the buyer to fill out. It is where the seller indicates whether the offer is accepted or countered.
27) Who –
28) The Philberts just bought a home for its market value of $340,000. How will Proposition 13 affect their property taxes?
29) What minority group is expected to significantly improve homeownership rates in the next decade?
30) Which form is used to report a real estate transaction to the Internal Revenue Service?
31) _______ includes a review of the demographic, geographic, and governmental environment in which a rental property is located.
32) “Safety first” means that it becomes second nature to consider the ______ before doing anything—even marketing yourself.
33) What type of client should you ask about experience, strategies, and their team?
34) What information can potential criminals use to find you or know when you are home?
35) When you create fictitious scenarios of danger and determine strategies to get out, talk your way out, or fight back for each one, you are ________.
36) Cash flow / initial cash investment = ______
37) In order to protect your personal safety, which of the following should you avoid posting on social media?
38) The portion of the property management plan that discusses the property’s current condition and recommendations to stall or reverse obsolescence is called the _______.
39) For safety reasons, you should not allow strangers to see ______.
40) It is a bad idea to include information about your loved ones and pets in your personal marketing because it is a safety risk to ______.
41) Which term is used for the individual who conducts the closing?
42) Which of the following is true about personal safety in the office?
43) When showing a home, which of the following is something you should do?
44) When –
45) Which of the following is a good example of how to identify your clients?
46) How can mobile applications assist you with personal safety?
47) Property owners must account for the costs of maintaining and running a property, which are called ______.
48) When a buyer and a seller agree upon a price, they are determining the ______________.
49) Performing an Internet search on your name can help you to do what?
50) Why is it so important to be able to identify non-trust funds?
51) The price an owner offers to sell a property for is called the __________.
52) Investors are generally interested in the _________________.
53) Under what circumstances would a residential transaction require the seller to provide a prospective buyer with a Residential Earthquake Hazards Report?
54) Which of the following real estate transactions requires use of the Real Estate Transfer Disclosure Statement?
55) Which of these situations do licensees commonly encounter when working with sellers?
56) When must two licensees, each representing different parties in a transaction, have a dual agency disclosure signed?
57) Who should take responsibility for completing the seller’s information section of the Real Estate Transfer Disclosure Statement?
58) When it comes to investment risk, usually the ______ the risk, the greater the potential return.
59) In the Offer section of the sample purchase agreement, the amount the buyer is offering is referred to as the ______________________.
60) Which option defines a probate sale?
61) If you’re not using columnar records, what are the minimum requirements for recordkeeping related to trust funds?
62) Residential property that is owner-occupied qualifies for an exemption of how much?
63) Of the following, which duty may an escrow agent perform?
64) A property has an annual before-tax cash flow of $100,000 and income taxes of $12,000. The investor has $2 million invested in this property. What is the investor’s cash-on-cash return?
65) Amy is explaining the “broker and seller’s duties” section of a listing agreement to a new client. Which of these would be an accurate statement to make?
66) Vacancy decontrol means that when a tenant moves out, the owner may ______.
67) How does home ownership contribute to stronger communities?
68) When marketing a property for an investor, your marketing strategy will largely depend on property type and ______.

(ANSWERS will be revealed with proper subscription)
69) –00cceshopp00final2—
70) Chance and Lucky have an option agreement between them in which no consideration is provided. Is this enforceable?
71) A buyer defaults on the purchase of a $500,000 single dwelling residential property after putting down a $25,000 deposit. What is the maximum amount of liquidated damages that may be awarded to the seller?
72) You’re working with a real estate investor. Why might you ask the following question: What’s your end goal?
73) You’re working with an investor who wants you to find properties in disrepair so he can quickly make repairs and sell the property for a profit. This is ______.
74) Ca –
75) What’s the definition of a closing in its simplest form?
76) Why would parties use an escrow company to assist in a transfer of real property?
77) The inspection turned up some repair issues that the seller is unwilling to make, and the buyer is unwilling to take on. The buyer wants to cancel. What portion of the sample purchase agreement you reviewed gives the buyer this right?
78) Which –
79) Household income, race, and ______ are the primary predictors of homeownership.
80) XYZ Realty was fined after being found guilty of violating antitrust law. Which of these activities performed by the firm is the likely violation?
81) Which type of buyer tends to rely on knowledge from previous homebuying experiences, and is often looking for a better location or a home with more space?
82) Which of the following statements is true of real estate commissions and fees?
83) Roberta is an investor who likes to invest for appreciation potential and tax write-offs. What’s her investment strategy?
84) Which of the following would federal fair housing laws prohibit?
85) By what yardstick does the property manager set rental rates in order to yield a good return for the property owner?
86) What is a real estate mortgage investment conduit (REMIC)?
87) Who has an obligation to record on the TDS material facts discovered as part of a required visual inspection?
88) What is self dealing?
89) Alexander just listed his first condo. Last week, he helped a client close on a duplex, and the week before that, he sold a nice ranch to a retired couple. Of the six primary categories of real estate, what type of properties does Alexander handle?
90) What would you likely find on a rent roll?
91) Why is it important for the licensee to be able to distinguish between trust funds and non-trust funds?
92) At a business meeting attended by the heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. Of what is this an example?
93) Ca-
94) When a business that held a seller’s permit is being sold, who may be held responsible for any outstanding use tax at the time of sale?
95) If you want to capitalize on the time value of money concept, you should ______.
96) Something that can cause a snag at the closing itself is ____________.
97) Your buyer clients have found their dream home, which they will be financing with ABC Lending. What should they include with their offer?
98) What does an and/or assigns clause allow a buyer to do?
99) Let’s say you have an investor with an NOI of $40,000 and a debt service of $30,000. What is your investor’s debt service ratio?
100) Under what circumstances would undisclosed dual agency be appropriate?
101) Ca –
102) Investor Shawn likes to get properties for far below asking price. What might he offer the seller to sweeten the deal?
103) Which of the following statements is true regarding the booklet Residential Environmental Hazards: A Guide for Homeowners, Buyers, Landlords, and Tenants?
104) Jarod, your investor client, offers to purchase a property as-is, and even though you cautioned him against it, he’s also waived the inspection. Why would he do this?
105) What is the simplest disposition of an outstanding property tax obligation?
106) What’s –
107) Which of these sentences accurately describes the purpose of the Exclusive Residential Listing Agreement?
108) Which of these statements best describes one of the purposes of including a section about the “entire agreement” in the residential listing agreement?
109) Maria received a call from an unrepresented buyer regarding her new listing. At what point must she have the buyer sign an agency disclosure?
110) Carolyn represents John in the sale of his home. Which listing agreement clause would authorize and obligate her to distribute the listing to other brokers?
111) One quick and dirty investment formula figures that operating expenses are generally ______ percent of rental income.
112) May a buyer’s agent change the cooperative agent fee in an offer to a seller?
113) Barb deposited her client’s down payment funds into her broker’s business account, intending to remove it the next day and deposit it into the client’s trust account. This is an example of ______.
114) How should the parties to a contract meet their timing obligations?
115) Rachel has met a prospective investor client, Jill. She asks Jill, “Who’s on your team?” Why might she ask that question?
116) The buyer has backed out of the transaction and the seller instructs escrow to disburse earnest money to the seller. Under what circumstances may escrow do this?
117) You represent a seller who has provided advance consent to dual agency. A buyer you show the property to decides to write an offer, and asks you to write the offer. You say, “Fine, but in order to do that, you will need to sign permission for dual agency. Here is the form. Sign here.” The buyer signs, and you proceed. Did you miss any steps?
118) Norris is marketing a commercial space to investors. He’ll want to provide this information, especially ______.
119) Which type of development centers around proximity to public transportation?
120) Who can obtain a copy of a CLUE report for a given property?
121) What is pyramiding?
122) What type of arrangement is it when a building owner sells the building then leases the space from that buyer?
123) When prospecting and soliciting for new business, licensees should be familiar with which federal acts?
124) What is the primary reason for reconciling accounting records?
125) What is a benefit assessment?
126) Chastity specializes in working with investors. Why might she attend a tax foreclosure auctions?

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–Random-part2-practice—
1) Erica presented an offer to her seller client, and after a bit of negotiating with the buyer and buyer’s agent, the offer was accepted. Which one of these activities will Erica be taking care of at this point in the sales process?
2) The duty of honesty to your customer trumps your duty of confidentiality to your client.
3) Your buyer clients Jen and Tony 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?
4) The maximum annual tax on real property Proposition 13 sets is capped at 1% of the property’s market value each year.
5) A property’s base value can increase by as much as 2% each year under Proposition 13.
6) An addition, such as a garage, will result in a change in the base year for the entire property.
7) It’s possible for a property to have two different base value years.
8) Prohibits monopolies and actions that cause an unreasonable restraint of trade
9) They’re guilty, so what do we need to prove? It’s all a matter of per se. What does per se mean?
10) How is procuring cause related to a protection clause?
11) What’s an REO property?
12) What should you make sure your clients understand about the scope of the preliminary title report?
13) Protects the buyer’s earnest money in the event the buyer is unable to obtain financing.
14) If the property does not appraise at or more than the sales price, the buyer can terminate.
15) The buyer has made the offer to purchase based on the buyer’s current property selling.
16) With an appraisal contingency, the buyer can use the fact that the property hasn’t appraised to terminate and receive a refund of the earnest money.
17) Sellers are often reluctant to accept offers contingent on the sale of another property, and when they do, they usually reserve the right to market and show the property to other buyers.
18) In an offer that’s contingent on the sale of the buyer’s current home, even if their home doesn’t sell by the agreed-upon deadline, the buyer has the option to remove the contingency and proceed with the sale.
19) Can you define an option contract?
20) At what point does an option contract become binding for both parties?
21) Who can enforce an option contract—the optionee or the optionor?
22) The option agreement is designed to be used with a purchase agreement or a lease agreement.
23) What document should detail the typical reports a property manager needs to provide for a property owner?
24) Which of these refers to the agreed-upon price between a buyer and a seller?
25) The maximum amount of income a property can generate from all sources when fully occupied and when rents are fully collected
26) Income received when tenants pay for some or all of the property’s operating expenses
27) Actual gross potential income is offset by this, which occurs when units are not rented or tenants do not pay their full obligation
28) What information is a property owner likely to gather from the effective gross income?
29) The Business and Professions Code requires that transactional records be kept for how long?
30) Janice wants to sell her townhome, and her neighbor is considering purchasing it from her. While she’s waiting to find out if her neighbor is serious, she wants to market it and receive the best representation possible. What type of listing agreement will save Janice the cost of a commission if her neighbor does ultimately decide to buy Janice’s townhome?
31) A good question to ask an investor to determine the type of services they may want from you is:
32) Sometimes, the __________ of the property can have the burden of being responsible for paying sales tax.
33) It’s the licensee’s responsibility to know how and when taxes and real estate ___________.
34) An agent stating that property is “guaranteed to increase in value over the next five years” is an example of ___________.
35) Also included in Prop 13 is a maximum ______ % annual inflation factor, based on the Consumer Price Index (CPI).
36) Just because several brokerages have the same commission rates, it doesn’t mean a price fixing violation is occurring. What must exist for a violation to occur?
37) What responsibilities do licensees have regarding contingencies in a real estate transaction?
38) Although an independent contractor, this worker is defined as an employee by statute for certain employment tax purposes. An example would be a food delivery driver who is paid on commission.
39) Having information about clients you’re meeting allows them to be identified and tracked down in case something goes wrong. This is why you should do what?
40) When might an additional provision be needed in an agreement of sale?
41) In an option contract, prior to the optionee exercising the option to buy, which parties are bound to carry out their contractual obligations?
42) When is the mortgage loan commitment or title insurance contract signed?
43) Which of the following actions occurs prior to a closing?
44) Whose responsibility is it to determine instructions?
45) How do you find the Return on Investment (ROI) ?
46) According –
47) What is a convertible mortgage?
48) What does an equity Real Estate Investment Trust invest in?
49) What is basis?
50) Which of the following is an unauthorized practice of law?
51) Which of the following types of training/course might be one that the Missouri Real Estate Commission would consider for a core course requirement to fulfill the CE requirements for real estate licensees?
52) How often must a Maryland licensee check the license status of a general contractor if recommending the service provider to a potential buyer?
53) During a residential transaction, when must an Illinois seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?
54) n accordance with the Illinois Real Estate License Act, sponsoring brokers must keep copies of all disclosures on file for ____________________.
55) 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?
56) Which of the following is one benefit to business owners for leasing instead of buying real estate for their business?
57) Damien was representing a commercial property owner. Which one of the following duties can the owner expect Damien to perform on the property owner’s behalf?
58) Farm families financing the purchase of properties in rural areas may be able to obtain financing through this government agency if they meet certain criteria, such as income requirements.
59) what’s one benefit of a rural development loan?
60) What entity services rural development loans?
61) what attracts borrowers to adjustable rate mortgages?
62) Manuel is selling his home to Selena. He has an existing loan that he’ll continue to make payments on, and he’s extending credit to Selena for the balance of the purchase price. She will make monthly payments to him. What type of financing are the parties using in this transaction?
63) After switching careers, Alice just graduated from culinary school and is looking to purchase a house. Until she gets her feet wet with her new job, she knows the cost of living with her mortgage is going to be tight. Which mortgage might help her manage her expenses each month?
64) 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?
65) Walt and Ginger were informed by their landlord that their option to purchase the bungalow they’re renting has just been terminated. Which of the following things that can occur is likely to terminate an option to purchase?
66) Margaret isn’t ready to buy Jill’s property, but she pays Jill a fee that guarantees she’ll be notified if another buyer appears. If another buyer does make an offer, Margaret has the opportunity to purchase at the price and terms of the offer. Margaret has a(n) ______ on Jill’s property.
67) Edna leased her house to Joan with a right of first refusal. Edna’s cousin, who knows that she needs liquid assets, just offered her $250,000 for the house. What does Joan have to do if she wants to buy the house?
68) the ueta makes it legal and binding for contracts to be
69) Both parties have to sign the agreement in order to demonstrate that ________.
70) 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?
71) Your neighbor hires a middle school student to mow his lawn every two weeks. He draws up a written contract in which he clearly outlines the student’s mowing responsibilities and the payment the student will receive in return. Which of the following is true in this situation?
72) Which clause in a contract states that one or more parties won’t be held liable if there are losses or expenses related to the contract?
73) Sylvia, who’s 15 years old, and her neighbor Marge, who’s 24, agree that Sylvia will babysit Marge’s toddler for the summer for $10 an hour. What type of contract is this?
74) 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 ______.
75) What happens to the company license if the qualifying broker dies or becomes incapacitated?
76) Julie is working with buyer clients and has prepared an estimated closing statement. Which of the following statements is true?
77) Buyer Susie’s a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property?
78) Which of these is a recommended strategy for a real estate professional who wants to avoid being asked to violate fair housing laws?
79) Renae moved to the U.S. from Nigeria and became a citizen. Which act specifically provides Renae with the right to buy, sell, convey, inherit, and possess property?
80) Ramon and Bill are victims of fair housing discrimination. Which of the following must have occurred if their landlord violated specific terms of the Fair Housing Act?
81) Cambridge Apartments provides an open parking lot for its residents. There is adequate parking, and all spaces are available on a “first-come, first-served” basis. Alton has MS and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?
82) Which statement related to reasonable accommodation for an assistance animal is true?
83) What must occur to effect a transfer of title?
84) A real estate licensee must conduct marketing campaigns in a way that ______.
85) The property management _______ provides detailed information about the rental property, such as market analysis, competitive analysis, and property analysis.
86) Rick is representing Jules, a seller, who wants to know if he has to disclose his leaking roof to buyers. Rick says yes, since the problem constitutes _______.
87) The purpose of the Truth in Lending Act (TILA) is to ______.
88) Adella received money for her down payment in the form of a tax credit on her federal tax return. This tax credit is known as a __________________________.
89) Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.
90) Deed restrictions imposed by a developer who wants to maintain specific standards in a subdivision under development are often called _______.
91) Personal property includes which of the following?
92) Ron’s company leased a building so that they could build an escape room experience. After operating for two years, their attendance (and thus their profits) started to drop significantly, so they decided it was time to close the location. When they started taking down the installation, they realized that some of the structures they built will damage the walls if they try to remove them. Which of these is true about these trade fixtures?
93) Agent Terry meets a potential seller, Cate, who’s unhappy with her agent. “Break your contract with your agent,” Terry says, “and I’ll work hard for you.” Less than a week after Cate breaks with her agent and signs with Terry, he puts her house on the MLS and puts a for sale sign on her property with her permission. The two of them arrange an open house. Did Terry break any rules?
94) Jerrold reviews the floor plan of the Knoxville 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?
95) Patty is writing an online ad for several condos she’s selling. “More than 3,000 square feet!” she writes. She’s pretty sure that this is the average size of the condos. She included her brokerage firm and her license status on the advertisement, as well. How did Patty do?
96) What information does the Loan Estimate NOT provide to buyers under required disclosures law?
97) Sam’s kids talked him into putting up the basketball hoop that their grandparents got them for Christmas. On a quiet Saturday afternoon, Sam is busy nailing the backboard to the front of their garage facing the street when one of the officers of the homeowners association walks by. “I’m so sorry,” she says, “but you’ll have to take that down. Basketball hoops in direct view of the street are prohibited.” What is in place in Sam’s subdivision that would prohibit this?
98) Which department typically decides which development projects require a permit or approval?
99) What classification of water rights includes the two smaller sub-classifications of navigable and non-navigable waterways?
100) Bonnie is calculating the square footage of a listing. The upper level of the home is 450 square feet. The main floor is 1,200 square feet, including an unfinished laundry area that’s 225 square feet. The 1,200-square-foot basement is finished. Bonnie’s MLS system disregards below-grade square footage. What square footage will Bonnie mention in her MLS listing and marketing materials?
101) Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Is this contract valid?
102) Steve is preparing a market analysis for the Joneses and has selected three comparable properties. What’s the maximum number of adjustments Steve should make to the Joneses’ property?
103) Which statement regarding fee simple defeasible estates is true?
104) Which of these is an example of antitrust violations common to real estate?
105) In marketing her new listing, Alice asks the photographer to “touch-up” the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true?
106) Trinity has applied for a home equity line of credit to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure?
107) Trina is a licensee at Midtown Homes. Which of these factors indicates that she’s classified as an employee?
108) Jordan works as a property manager for several residential property owners. When she receives security deposits from tenants, how long does she have to deposit them into an escrow account?
109) 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?
110) How are fines assessed for violations of the CAN-SPAM Act?
111) When is a cease and desist order effective?
112) In contract law, undue influence differs from duress in that duress includes ______.
113) Nellie and Victor own a suburban ranch home and fell behind on paying their property taxes when Victor lost his job last year. Victor is working again, but they still haven’t saved enough to pay their back taxes. They’re worried that the county may begin foreclosure proceedings. What type of lien is this?
114) Why did the implementation of TRID impact closing dates?
115) 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?
116) What’s the relationship between TILA, RESPA, and TRID?
117) Sandra and Dwight are neighbors who share a common driveway, but the driveway is on Dwight’s property. What kind of ownership rights does Dwight have of the driveway?
118) Which of the following is most likely to have an extremely negative effect on the time and cost of a development project?
119) Agency may be legally terminated in which of the following ways?
120) Chris is in the process of purchasing a property with 20 acres of farmland in a rural area of the state. Assuming his income meets the criteria of the program, what type of loan may Chris find the most desirable?
121) Monica received a promotion at work that requires her to relocate. Because of the timing of her promotion, she’ll need to buy a new house in her new city before her current one is sold. So, she won’t have any equity from her current home to make a down payment on the new house. What loan option would allow her to make the purchase before selling the old house?
122) The Amarals are purchasing the house of their dreams and have plans to stay in it for at least the next three decades while they pay back their conventional 30-year loan. Their primary focus, over the life of the loan, is to reduce their payments as much as possible. What is something that could help them achieve this?
123) How might the lengthy purchase process for a short sale or foreclosure impact a buyer’s financing?
124) How many parties does a deed of trust involve?
125) Philip owns land in a state where growing marijuana is illegal. He wants to set up a small marijuana growing operation and export to states where marijuana has been legalized. He asks his attorney about the possibility. “No,” his attorney explains. “It’s not possible. Although you own the property outright, the right of ______ only allows you to manage the property in ways that are legal in this jurisdiction.
126) Which one of the following could be a clue that a property was formerly a waste disposal site?
127) What’s another term for deed in lieu of foreclosure?
128) A License holder may have more than one claim against hom. However, payments made from the Real Estate Education, Research, and Recovery Fund on behalf of the license holder must not exceed what amount?
129) Amy plans to open a brokerage. What might make her select a franchise?
130) What’s one of the main differences between a traditional mortgage loan and an interim loan?
131) Which section of the Exclusive Buyer Brokerage Agreement allows for an addendum to cover any special situations not outlines in the agreement?
132) Jeremy has just finished completing his loan application and has gathered supporting documentation needed to determine whether the application will be approved. Which of these titles best describe who Jeremy is?
133) A contract in which only one party is bound is __________________.
134) Bernie works for Quckwell Lending and accesses several lenders to find a loan product that works best for his clients. What is Bernie?
135) Which title search method only goes back as far as when the last title search performed, and assumes the last search was done accurately, legally, and that any issues were resolved?
136) Which of these would be considered a special circumstance that may require prior approval from a third party before a listing agreement can go into effect?
137) What is the assessed value of a property with a fair market value of $249,500?
138) Rhonda is interested in putting money toward a timeshare estate, which would allow her to use a condominium for two weeks each year. Timeshare estates _____________.
139) What doe each component of the 80/10/10 ratio represent in a split-or piggyback-loan?
140) As a(n) ___________ property manager, you spend most of your time on maintenance, landscaping, security issues, and enforcing HOA regulations.
141) When is transfer tax payable?
142) As a licensee, what should you do as soon as it’s known that closing will be delayed?
143) What does the claims for loss statement in a title policy say?
144) How can lapsed homeowners insurance lead to default of the mortgage loan?
145) Kristin wants to buy her listing. What must she do to be on the up and up?
146) What type of zoning is used to separate one type of property of another use?
147) Which of the following options describes a method by which licensee can determine an appropriate listing price range?
148) Rachel and Nick are selling their home. Before the property is sold, a title search is conducted to determine if there are any _________________.
149) Fiona signed an agreement to either buy or not buy Nick’s vacant lost for $310,000 by a specific date. What’s the agreement called?
150) A complaint was filed against Bard, a licensee. A hearing was help, and GREC issued a/an _______________________, which resulted in a small fine and the requirement for Barb to take some additional education.
151) What actions are taken to account for the release of gases produced by decomposing trash in a decommissioned landfill?
152) What’s a computerized loan origination system?
153) When assessing a contract, the assignor ensure that __________ is not prohibited in the purchase contract.
154) Marcy listed her property with Jennings Homes in March. The market is slow, and Marcy’s property isn’t in great condition, though she’s sure she can get top dollar for it because of its location. Her agent encourages her to either reduce the price or fix the property up, but she refuses. Both Marcy and her agent are frustrated. What’s the best options for both of them?
155) Milton, a broker, agrees to sell his sister’s house. She needs to receive at least $200,000 and offers Milton a deal: If he sells the house for $205,000, he can keep anything over $205,000. So he lists the house at $220,000-he wants to make some money, too. If it sells at this price, he gets $15,000. What type of agreement is this?
156) What’s a listing agent’s primary duty to a seller?
157) Monica, who’s selling her home to Ethan, promises in writing to have a licensed professional repair the home’s leaky roof. After closing, Ethan discovers that the roof was poorly patched by the homeowner and leaks whenever it rains heavily. Under the statute of limitations, of Ethan wishes to sue Monica, he must do so within _____ of the contract breach.
158) Which type of estate is a life estate?
159) What occurs when a landlord has a tenant removed from the premise through a suit for possession?
160) Stanley is having second thoughts about taking her 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 they contract will stand up in court. What type of contract does Stanley have?
161) What’s the difference between an exclusive right-to-sell and exclusive agency agreement?
162) What’s the legal process used to determine a will’s validity and to ensure that the will accurately reflects the deceased person’s wishes?
163) When Polly the puppy escaped her fenced-in yard, her owner, Jane, posted a reward for her safe return. What type of contract was Jane creating?
164) One of the risks of buying a condominium is that _________________.
165) Which of the following agencies is responsible for regulating the Equal Credit Opportunity Act?
166) Whose responsibility is it to notify GREC of a licensee’s transfer?
167) Cecil is a licensee who wants to purchase a home listed by the brokerage where he;s affiliated. What must he do?
168) Jillian has a loan-to-value ratio of 90/10. This means __________.
169) What effect will a property utility have on the value if it’s currently uninhabitable?
170) What’s the Mortgage Electronic Registration Systems, Inc (MERS)?
171) Which of the following is the probable sales price of a property if the property were sold under normal market conditions?
172) What’s a lease?
173) What is the purpose of a lender’s title policy?
174) You make an investment with other real estate investors. Because of the profit-oriented nature, and the fact that the profit depends solely on the management effort of others, this is likely what?
175) A VA Loan…..
176) _________________ occurs when the parties meet all terms of the contract
177) For what reason do borrowers commonly seek the assistance of individual private lenders?
178) ______________________ are artificial attachments to land that include items such as fencing, buildings, and walkways
179) Which of the following best describe what Ginnie Mae does in the secondary mortgage market?
180) How long can a broker wait after non-payment of a commission to record a lien against a commercial property?
181) SRT Mortgage has a borrower who has fallen behind on her mortgage. Rather than go through a foreclosure, the borrower is attempting to sell the property. An offer come in for less than the borrower’s loan balance and closing costs, but for more than what the lender feels it’d get at a foreclosure sale, so it approves the purchase. What is this an example of?
182) What are the rights and privilege’s granted with a fee simple estate commonly called?
183) When evaluating the income listen on a loan application, what will the lender consider?
184) Which of the following options can a real estate licensee provide?
185) Bianca wants to buy a cooperative, but she’s unsure that she can afford it. With a cooperative, her share of mortgage interest and real estate taxes will be
186) If a property owner owns more than 10 units, security deposits must be kept
187) What is one reason that carbon monoxide could be called a sneaky toxin?
188) Local real estate developments, such as a new subdivision, will likely impact ______ the most.
189) A duplex produces a monthly gross rental income of $1,800. The GRM an appraiser extracts from the local market is 125. Calculate the property’s estimated value.
190) Real estate, plus all of the interest, benefits, and rights included in ownership, is also known as ______.
191) What’s typically used to prove there are no encroachments on the property?
192) When people are treated differently because they have an accent, were born in another country, or are married to someone from a specific part of the world, this falls under discrimination based on ______.
193) Real property rights include ______.
194) What does the income approach to value rely on when valuing single-family and two- to four-unit properties?
195) A wet environment with little air circulation can ______.
196) An ______ is an addition to an existing sales contract and can be added without changing other terms already agreed upon in the contract.
197) Agatha has helped her client, Rufus, complete the ______, which documents Rufus’s purchase offer to the seller for the property he is interested in buying.
198) Amy has entered into a specialty contract (also known as a contract under seal) with another party. In Maryland, if Amy discovers that there has been a contract breach, how long does she have to sue the other party?
199) Which of the following provides everything a lender wants to know to value the property as collateral for a loan?
200) Jenny and her friend, Kali, go out to lunch. Afterward, they pay the bill. Their agreement to pay for the food they were served is what type of contract?
201) For income-producing properties, how is rent prorated at closing?
202) Janine wants to meet with her potential buyer clients face-to-face in her office. What’s her reason for doing this?
203) Which term refers to a permitted deviation from land use for a purpose that, under the current zoning restrictions, is prohibited and causes the property owner unnecessary hardship?
204) What’s the term used in real estate to describe when personal property is attached to real property, thereby making it a fixture?
205) Which of the following will appear on the closing statement?
206) Down the Road Brokerage has an in-house transaction situation and has appointed one of its licensees to represent the buyer client and one to represent the seller client. The two licensees are acting as what type of agents?
207) Archie signs a contract to buy Pam’s home. The deal eventually closes, but Pam fails to hand over the home’s keys to Archie. A week passes, and Archie files a lawsuit in an attempt to force Pam to give him the keys. This is an example of ________.
208) A licensee stating, “This is a dream home with the best views in town,” is an example of ______.
209) Federal and state fair housing laws prohibit activities that are ___________________.
210) What happens when a married couple who own a property as tenants by the entirety divorce?
211) The mishandling of escrow funds can result in _____________________.
212) Five siblings enter into a contract to buy a vacation property. The siblings get into a dispute, resulting in two of them backing out of the deal. This leads to a termination of the original contract. Three of the siblings then enter into a new contract to buy the property. This is an example of ________.
213) Manny has a client who wants to purchase a commercial building. Manny doesn’t have any experience negotiating commercial purchases. Which action should Manny take to demonstrate his good faith and most ethical behavior toward his client?
214) Which of the following is true about market allocation?
215) A buyer representation agreement is similar to which document used when representing a seller?
216) What’s a promissory note?
217) Which agency enforces fair housing laws?
218) Which of these items go in the seller’s credit column and the buyer’s debit column?
219) When must the consent for dual agency be reaffirmed by the parties to the transaction?
220) Which of the following is true about depreciation schedules?
221) Regardless of whether a seller elects to complete the property condition disclosure or disclaimer, what must the seller disclose?
222) What’s the amount a lender charges for the use of its money?
223) Joe and Emma Parsons begin informally working with their neighbor, Kyle, 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.
224) What type of listing agreement offers the most protection to the broker?
225) Can a seller withdraw a listing before the broker spends time and money?
226) The seller cannot cancel a listing with a broker once the broker has…..
227) In addition to showing the property, locating a buyer/tenant, communicating terms, promoting features and terms, and assisting in negotiations, what other responsibility does a listing agent have once the listing agreement has been signed?
228) The listing agent must ________________________ of items in the listing agreement
229) If a listing agent fails to verify that the parties who have signed the listing agreement are the actual persons who hold the title to the property, he/she may increase……
230) Who enforces the National Do Not Call Registry?
231) Are brokerage companies required to have a Do Not Call policy (even if they do not engage in cold calling)
232) How often must a brokerage company update their Do Not Call list?
233) What is the penalty for calling someone on the Do Not Call Registry?
234) Which of the following would NOT terminate a listing?
235) When a property is sold by a licensee other than the listing broker, who would the seller pay the commission to in an exclusive right to sell listing?
236) The difference between an exclusive agency and an exclusive right to sell listing is
237) What is the primary purpose of a listing agreement?
238) What is the key job of the agent?
239) Which of the following is not in violation of the CAN-SPAM Act?
240) How frequently must companies access and update the Do-Not-Call Registry?
241) The CAN-SPAM Act is federal regulation governing
242) Which of the following are the marketing responsibilities of the seller?
243) An arrangement in which brokers pool their listings and all commissions are then divided between the listing broker and the selling broker is called what?
244) What is an “extender clause”?
245) Which of the following is a feature of an open listing?
246) The failure to perform provisions of a contract without a legal excuse is known as what?
247) An agency could be terminated by all EXCEPT which of these circumstances?

248) How long does a buyer have to cancel a contract if they decide not to complete the purchase of a timeshare?
249) Where is a complaint against a licensee filed?
250) Which of the following is a difference between a limited service agent and an independent contractor?
251) Two designated agents, Mitch and Mickey, represent the buyer and seller in a single transaction, respectively. What else do you know about the agency situation?
252) What type of agency exists when a buyer’s agent is also the listing agent for the same property?
253) Rick, a builder, is using two properties as collateral for a loan. This is an example of a(n) ______ loan.
254) A duplex produces a month gross rental income of $1,800. The GRM an appraiser extracts from the local market is 125. Calculate the property’s estimated value.
255) Fiona and her husband, Ed, have just entered 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.
256) Under which type of buyer agency agreement does a buyer receive the most representation from a single agent?
257) Which of these items go into the seller’s credit column and the buyers debit column?
258) Which of the following financing types involved the sale of personal property with the real property?
259) Gertie and Frank both have alzheimer’s disease. They fall in love in a disabled home and get married by signing a marriage certificate. This is an example of a _________ contract.
260) 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?
261) With which type of commercial lease does the tenant pay some or all expenses?
262) What type of listing agreement will offer most service by their listing agent and still give them this option?
263) In which of the following situations can an agent represent a customer in a real estate purchase?
264) The cost approach to finding an appraised value measures _________.
265) The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attatched natural objects is called ________.
266) Ownership is a right in the bundle of rights. Which of the following is considered a from of ownership?
267) Which of these may be covered by a builder-backed home warranty?
268) Jay’s new loan to purchase a property includes the sellers existing mortgage. This type of loan is called a _______ loan.
269) Lacey is preparing a sales contract 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 who determines the earnest money amount?
270) Cracks, holes, or rotten areas on a soffit are common _________ issues.
271) The Equal Credit Opportunity Act (ECOA) is also known as ________.
272) What’s a land contract?
273) Which of the following is true about VA loans?
274) Kris has made an offer on Lincolin’s townhome. However, she’s offered no earnest money. If lincoln accepts her offer, is it binding?
275) 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 __________.
276) The landlord generally pays taxes, maintenance, and insurance with which type of lease?
277) For an antitrust violation to occur, which element must be present?
278) Substitution of an original party to a contract with a new party, or substitution of an original contract with a new contract.
279) What is the ratio of annual before-tax cash flow to the amount of cash a consumer has invested called?
280) If there are questions regarding the exact property description, which of the following is recommended?
281) 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?
282) Which of the following is true regarding an appraiser’s three approaches to value?
283) Kat is an investor and uses an FHA loan to purchase a duplex. She never occupies the property but instead rents it out. This is ______.
284) Which of the following is a contract between a seller and a buyer to transfer title to real property?
285) Which municipal agency grants special use permits?
286) How is general property tax calculated?
287) Tax assessors determine property values for each property within the assessor’s taxing unit. Which of the following is a taxing unit?
288) Your investor client has asked you to place a low-ball offer on his behalf. How might you convince a seller to accept?
289) Compared to working without a buyer agency agreement, a buyer who works under a buyer agency ____________.
290) Which of these is a written description of a blueprint?
291) Investors come in all shapes and sizes. Some may only be looking for someone to find them deals. Others may want someone to show properties and submit offers. What question should you ask to determine what type of investor you’re working with?
292) 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 lower than the agreed-upon sales price. Now what?
293) Let’s say you have an investor with an NOI (net operating income) of $40,000 and a debt service of $30,000. What is your investor’s debt service ratio?
294) Why is a building’s “envelope” an important consideration in energy efficiency?
295) Regulating and protecting places and objects that have special character, historical, and aesthetic interest, is the responsibility of which municipal agency?
296) If the builder or owner of a new condominium building wants to change the price of all of the units, or all the two-bedroom units, what must the builder/owner do?
297) Which of the following is not an encumbrance, but a temporary right to enter the land or use property belonging to another for a specific purpose?
298) Which of the following is a written outline of the sales transaction often referred to as an offer to purchase or a purchase offer?
299) Energy efficient windows, weather stripping and ___________ are areas homeowners should consider when trying to eliminate heat loss/gain.
300) Doris needs to renew her real estate license for the first time, and she’s already completed 20.5 hours of continuing education. How many additional hours of CE does she need to complete?
301) DOS Regulation 175.23 requires brokers to maintain ______ for a period of ______, including the amount of commission paid for each transaction.
302) The duty of confidentiality survives agency unless the former client is found guilty of fraud or ______.
303) 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?
304) Which of the following is a percentage of market value and is the amount of property value to which the tax rate is applied?
305) 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?
306) Which document allows a prospective buyer the right to reserve a specific unit, which may or may not be under construction?
307) What is one drawback of sub-agency from a listing broker’s standpoint?
308) Ralph is a borrower obtaining an FHA loan from Happy Bank to finance his mortgage. Who is the mortgagor in this scenario?
309) PITI stands for principal, interest, taxes, and _____.
310) Which approach to value used by appraisers relies on the sales price of comparable properties to help determine the adjusted market price?
311) Some sensitive individuals can end up in the hospital because of chemicals used in carpet and other manufacturing materials used in remodeling or new construction. What’s the cause of this danger?
312) New licensee Cara wants to avoid accidentally engaging in unauthorized practice of law when she’s helping clients fill in contracts. What’s the best way for her to do this?
313) Which of the following is a true statement about cooperatives?
314) A ______ is the component of a septic system that is generally made of gravel or sand and naturally filters wastewater.
315) Janice is a listing agent assisting the Chens with the sale of their home. What is one of Janice’s duties?
316) Which of the following statements is true regarding federal fair housing law?
317) Real estate licensees currently enjoy the unique privilege of retaining their independent contractor status for IRS purposes, despite the fact that ____________.
318) For a taxpayer wanting to use a Small Claims Assessment Review (SCAR), which of the following is true?
319) Maury, a landlord, has decided to sell Elm Street Apartments. As you know, sale of the property does not affect the lease of the tenant. What are Maury’s legal obligations to the current tenants?
320) For which of the following properties is the cost approach most likely to be used?
321) Which of the following is a potential drawback to a real property exchange?
322) What generally happens when a tenant moves out of a rent-controlled apartment?
323) Chris used the VA guaranteed loan program to purchase a home five years ago. He now wants to sell that house and buy a new one. Is Chris allowed to use the VA loan program a second time?
324) If an agency policy indicates that licensees will have traditional buyer or seller agency relationships with their clients, the agency relationship is with ________.
325) What does a firewall do?
326) As an insurer’s condition for issuing an errors and omissions policy, what should brokers be prepared to do?
327) Dean is an experienced licensee whose career has focused on such things as mineral, oil, gas, and water rights, and hunting and gaming licenses. Based on this, you can deduce that Dean’s real estate niche is in which of the following?
328) Adam has been showing condos to his childhood friend Steve, even though Steve hasn’t signed an agency agreement. Unbeknownst to Adam, Steve contacted the listing agent for a condo he liked and told him he wanted to submit an offer. The listing agent wrote it up, the seller accepted the offer, and Steve became the proud owner of a new condo. Is Adam owed a commission?
329) Agent Magda’s new clients are clutter bugs. Before she photographs their home, Magda should:
330) The purpose of the employee and independent contractor agreements is to _________________.
331) The sellers in a transaction ask to have an extra week after the scheduled closing date to stay in the home. How is this handled on TAR form RF 401 Purchase and Sale Agreement?
332) The listing broker’s compensation can be either a percentage of the sales price, or what?
333) ______ occurs when the parties can’t legally or practically do what they’ve agreed upon due to circumstances beyond their control.
334) Investors call investing in this type of property “dead money.”
335) Risk is an inherent part of real estate activities. this is why________ is recommended for all licensees
336) 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 ______.”
337) An _____ ____ may be for any amount agreed to by the parties.
338) Complaint forms submitted to TREC must be filled out completely and include supporting documentation. What will happen next?
339) The legal concept of parens patriae gives which state position the authority to sue on behalf of citizens?
340) In counties governed by the Uniform Residential Landlord and Tenant Act (URLTA), which of the four types of lease termination would result in the landlord needing a court order to take action against the tenant?
341) What would make a ‘Choose Your Neighbor’ letter an allowable form of advertising a property for sale?
342) How do license laws promote professional competence?
343) Why must a seller disclose the presence of an underground storage tank?
344) All of the following would impact list price EXCEPT ________.
345) 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?
346) What’s the purpose of the buyer pre-qualification letter?
347) Where can a licensee report an antitrust violation?
348) Wayne is a licensee and would like to update his advertising. What must he be sure to include on any advertising?
349) Before you sign an exclusive right to sell agreement with a seller, what must you do?
350) Alice has signed a back-up contract with Harry, the seller. Upon what does their agreement depend?
351) Using the term REALTOR® when not authorized to do so is an example of ________.
352) Which document provides details about the costs of the transaction and is provided to borrowers no fewer than three days prior to closing?
353) Kelsey and Jerrod have a housing ratio of 30% and a total debt obligation of 41%. Their credit score is 640. Do they meet the underwriting requirements for an FHA loan?
354) Bart is an independent contractor. That means that his managing broker, Lee, has the right to ______.
355) The risk identification process for a brokerage firm involves identifying what?
356) Often, errors and omissions insurance providers will require a brokerage to have ______.
357) Brian has just finished completing his loan application and has gathered supporting documentation needed to determine whether the application will be approved. Which of these parties best describes who Brian is?
358) For which of the following acts might a broker be subject to disciplinary action?
359) On Thursday, Angie decided to accept Harry’s counteroffer for the purchase of his house. She signed the counteroffer and placed it in the mail. On Friday, Harry decided that he had asked too low a price for the house, so he faxed Angie stating that the counteroffer was withdrawn. On Saturday, Harry received Angie’s acceptance in the mail. Under the mailbox rule, which of the following is true?
360) All of these are typical tasks that an unlicensed real estate assistant may do, except:
361) Which of these factors would tend to lower overall property values most in a single-family residential neighborhood?
362) One of the legal obligations of a seller’s agent is providing a copy of the seller’s transfer disclosure statement to:
363) Which –
364) Which of the following actions by a broker would be illegal under the federal Fair Housing Act?
365) Once a listing agreement has been signed:
366) A buyer makes and signs a written offer. The seller writes in one small change to the offer and signs it. This document is known as:
367) To successfully sue a seller for a commission owed, a broker who worked under a nonexclusive listing must be able to prove that she was:
368) An apartment rental application contains a question about marital status. This question is:
369) A seller has accepted another offer, but your client doesn’t want to give up. Even now, she can submit an offer to the seller, called a:
370) When an agent is preparing a competitive market analysis, the adjusted sales price of a comparable property:
371) The buyer receives the transfer disclosure statement in the mail. How many days does she have in which to rescind the purchase agreement?
372) Which of these is a fundamental difference between the natural hazard disclosure statement and the real property transfer disclosure statement?
373) A buyer submitted an offer with a deposit on a property on June 1. The offer included the condition that it must be accepted within 48 hours. The sellers were out of town, however, and could not be contacted until June 6. At that point, the sellers eagerly signed and returned the purchase agreement; but now the buyer says he does not want the property any longer and is demanding the return of his deposit. A court would rule that:
374) A listing agreement with a property description that is not a complete legal description:
375) Most listing contracts authorize a broker to:
376) Which of the following methods of advertising is legal?
377) An agent is preparing a CMA and evaluating possible comparable sales. Which of the following characteristics would most likely make a property unsuitable for use as a comparable?
378) What is the minimum time limit for employment in an exclusive listing agreement?
379) The buyer’s offer states that the deposit check will be held by the broker uncashed until the seller has accepted the offer. The broker may comply with these instructions:
380) A real estate agent who is acting as a buyer’s agent:
381) Which kind of listing agreement requires the seller to pay a commission to her broker if the property is sold, unless the seller sells the property herself?
382) A real estate salesperson is often approached by home buyers of a particular race. His usual practice is to show them homes in neighborhoods where most of the residents are the same race as the buyers. He avoids showing these buyers properties in integrated areas. This is called:
383) Broker Ray is closely acquainted with the Subdivision Heights neighborhood in his town. Over the years, Ray has made it a practice to contact homeowners in person and also to send them quarterly mailings. This method of finding listings is known as:
384) A homeowner preparing his home for sale should do all of the following, except:
385) Which –
386) In order to be enforceable, an exclusive listing must be signed by:
387) A broker, in dealing with the public, may not:
388) If a seller uses an open listing, she may employ several brokers:
389) A prospective buyer has submitted an offer to Broker Randolph that meets the asking price. As Randolph is on his way out of the office to present the offer to the seller, one of Randolph’s salespersons brings in another offer on the same property that is for $5,000 less. Randolph should:
390) Which of the following is equivalent to value in exchange?
391) Two types of value that are often contrasted are subjective value and:
392) A licensee acting as a finder (or middleman) won’t owe agency duties to either party, as long as:
393) Which of the following would be considered a design deficiency in newer, high-end construction?
394) Which of these is not a way in which an agency can be created?
395) Two properties, each worth $50,000, are combined into one larger parcel that has a value of $120,000. This increase in value is called:
396) A salesperson shows his broker an offer for one of his listings that has a good faith deposit in the form of a promissory note. The broker should tell the salesperson that:
397) An agency relationship is best created through:
398) Before making a listing presentation, an agent should:
399) The seller’s agent is most likely to be liable for damages to a buyer if she:
400) The best indication of a property’s value comes from:
401) According to the Americans With Disabilities Act:
402) After several months of trying to sell a property, the seller’s agent decided to purchase it herself. She must:
403) When does an offer to purchase become a binding contract?
404) A seller’s agent intends to give part of his commission to the buyer. The agent:
405) A listing broker presents his client with a full-price offer from a ready, willing, and able buyer. The seller refuses the offer and tells the broker it’s because the buyer is black. The buyer makes an offer on another property. Which of these steps could the broker take?
406) When performing a competitive market analysis, agents typically make numerous adjustments to the comparables’ prices. This is because:
407) Young buyers with limited funds are typically:
408) Agent Mary notices that a competitor’s listing is about to expire. She should:
409) Two brokers in a small community felt that another local broker was unethical and dishonest. They agreed not to send him any referral business, and they encouraged other area brokers to follow their lead. They could be accused of:
410) Which of the following can be affected by conditions of sale?
411) Your buyer client, Percy, needs to obtain financing to buy his dream house. What’s his first step?
412) A sloping hearth is a common _____ issue.
413) In what type of market is pricing a home below market value an especially good strategy?
414) In a real estate transaction in which you represent the seller, your duty to other parties is ______________________.
415) The Costa-Hawkins Rental Housing Act…
416) Shawna is reviewing Brian’s loan application. She needs to verify the assets he’s claimed, specifically his bank account balances. Which form should she have him complete?
417) Real property ownership may offer significant tax advantages. Which one of the following is a potential advantage?
418) What’s the primary difference between reproduction cost and replacement cost?
419) When a lender charges a borrower more than the highest allowable interest rate, it is called
420) How many days do purchasers have from the date they signed a contract to notify the seller their intent to cancel the contract?
421) Which of the following statements may be true of self-employed individuals seeking to obtain a home loan?
422) In the event a broker-in-charge becomes medically incapacitated or dies, an associated licensee may be permitted to act as the broker-in-charge for up to?
423) Katherine purchased a home in South Carolina for $415,000. What’s the county portion of the deed recording fee for this transaction?
424) Glenda is engaged as a seller’s agent. Gary, the seller, hasn’t consented to dual agency. A prospective buyer would like Glenda’s assistance in drafting an offer to present to Gary. Can Glenda do this?
425) Is there ever a situations where it is legal to receive compensation?
426) Who is the person in charge of carrying out the terms of the trust
427) The trustee is the person in charge of carrying out the terms of the trust
428) Certain properties are exempt from fair housing law requirements. Which of the following properties is NOT exempt?
429) When a property owner intentionally transfers property to another party, it’s called voluntary alienation.
430) When operating under a power of attorney concerning the transfer of real property, who may sign as the grantor?
431) What’s another term for voluntary conveyance?
432) In a real estate transaction, whom may a licensee represent?
433) Which entity has the authority to represent the state and citizens of the state in antitrust cases?
434) Percy and Maxwell have formed a team within their real estate brokerage firm. They’ve been tossing around some different names to use. Which of these would be permitted?
435) Which of the following describes commingling?
436) For a deed to be valid, which two elements are required?
437) Shelley is selling her condo in the city and moving to a house in the suburbs. Her agent gave her a list of things she must do to prepare for the sale, including completing the residential property disclosure statement. When should this statement be provided to buyers?
438) You’re working with a couple who state they definitely must sell at a price of $275,000. They’re more concerned about getting that price than the amount of commission they’ll pay, and they say you can keep any amount the sale brings in that’s more than $275,000. What type of listing is this?
439) The enforcement of antitrust laws, investigation into possible violations, and subsequent prosecution of violations are handled by the __________.
440) The lender, the loan applicant, and the _______ all complete parts of the request for verification of deposit form.
441) There are many versions of property management agreements, although all management agreements should include _______.
442) The purpose of the ______ is to promote fairness and transparency for mortgages and other financial products and services through education, enforcement, and research.
443) Which of the following, based on the abstract of title, is used to create the title commitment before title insurance is issued?
444) Which type of appraisals may only be done by certified general appraisers?
445) What type of agreement opens the door to possible dual agency situations, since it creates an agency relationship between a buyer and all affiliates of a brokerage?
446) Which of the following is true regarding the definition of agency?
447) Jared, a seller, has found his own buyer and wants to terminate his exclusive right-to-sell listing agreement with Sue, his listing broker. Can he do so without penalty?
448) Kristin has been unable to make her mortgage payments. Her property went to auction, but the lender didn’t accept the high bid. What stage of the foreclosure process is this property now in?
449) Which of the following is the most common type of buyer representation agreement?
450) You’ve just signed a listing with a new seller client. What’s true about electronic delivery of written notice or contract forms to your seller?
451) Your buyers love the 1891 Victorian they have under contract, but they want to get both the water and the paint tested as soon as possible. What are they testing for in both water and paint?
452) Which of these is a NOT a reason why agency disclosure is mandated?
453) After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held?
454) What’s the relationship between the Loan Estimate and the Closing Disclosure?
455) Which of the following is a legitimate and legal way that an exclusive right-to-sell listing agreement may terminate without the seller owing a commission?
456) Which group ensures that community growth is controlled and orderly?
457) Derrick was thrilled to find out that the land he purchased includes several small caves. He’s been spelunking for about three years and looks forward to exploring the caves on weekends. Which real property right allows him to do so?
458) When assigning a contract, what should the assignor ensure is permitted in the purchase contract?
459) Remembering the acronym PITI can help borrowers recall what makes up their __________
460) Which type of buyer tends to look for a home with less space, with a similar or better. quality of living?
461) Stan wants Vince to list his house. What does Stan need to do to have Vince represent him in all marketing and negotiation tasks?
462) In a deed, this person is referred to as “the party of the second part.”
463) A VA loan __________.
464) What’s used to calculate the housing debt-to-income ratio and total-debt-to-income ratio?
465) Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages Joann to break her existing agency agreement and sign with him instead. This violation is an example of ____________.
466) 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 _____________.
467) A seller would like to be represented by you, and only you. What type of agency do you recommend?
468) Sherman owes $225,000 on his home. It’s currently worth $240,000. How much equity does Sherman have in his home?
469) Roger just discovered that his loan includes a hidden balloon payment, so now he must ___________.
470) If the monthly property tax rate is $74.15 and the closing is on April 30, what will the seller owe at closing? Assume a statutory calendar and that the seller hasn’t made any payments. Round to the nearest cent.
471) Which document given before closing provides an estimate of the costs a buyer is likely to pay at a settlement?
472) The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ____________.
473) You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ___________
474) What is the definition of an appraisal?
475) Jasmine has signed a lease that details what she can and can’t do on the property. If she wants to refer back to her lease, where would she look for this information?
476) Mary Lou owns property in a rural part of the state. She was recently approached by a representative of a company that would like to drill for oil on a piece of her property. What type of lease is the representative likely discussing with Mary Lou?
477) Which of the following property managers must have a license?
478) Your clients, Charles and Jane Bingley, are first time homebuyers who don’t have a 20% down payment. What would be the best thing for you to tell them?
479) A period of stagnation in real estate when no one is buying and no one is selling is known as ______________.
480) Your assistant, Brady, often answers clients questions about offers and negotiation. What do we know about Brady?
481) What are the two categories of comparison when evaluating comparable to a subject property in the market comparison approach?
482) A home sells for $225,000. Per the listing agreement, the total commission is 7% of the sales price. After half of that goes to the buyer’s agent’s managing broker Devin, the other half of it goes to Sheila, the buyer’s agent. But the seller’s agent, Kiko, also has an agreement with her brokerage for a 70/30 split, with the “70” going to her. How much is Kiko’s commission?
483) Which clause is used in a security instrument to protect the original note holder if the security instrument is sold and the borrower subsequently defaults?
484) Which of the following options describes a method by which a licensee can determine an appropriate listing price rage?
485) What’s the purpose of the Intestate Land Sales Full Disclosure Act?
486) When preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client?
487) A(n) __________ is a set of guidelines for ethical conduct
488) Barney defaulted on his mortgage, and his lender is preparing to foreclose. Which type of foreclosure is typically used when a mortgage is used as the security instrument?
489) Homeowners can take several actions related to pest infestations, but which of the following actions should bereft to licensed pest management professionals?
490) Lease types, space planning, area design, and building layout are especially important for a property manager who’s working with a __________.
491) What important seller responsibility is documented in the listing agreement?
492) What regulations or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?
493) What type of agency agreement creates a relationship between a buyer and a single licensee rather than between a buyer and a brokerage?
494) With which approach to value doe the appraiser analyze a property’s ability to earn future income?
495) Which of the following careers in real estate requires extensive experience in real estate investment and sales?
496) 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 what sort of problem?
497) Which statement best describes the method used to reconcile the value found for a property from the tree appraisal approaches?
498) Loans available through the Farm Service Agency have which of the following characteristics?
499) Which federal lending act was introduced to combat lending discrimination in law-and moderate-income neighborhoods?
500) Marvin purchase 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?
501) How is the Supreme Court case of Brown vs. Board of Education significant in the way fair housing laws are implemented today?
502) 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.
503) What’s the deprecation schedule for a residential income-producing property?
504) The _______ isn’t used in states that were part of the original 13 colonies, or in Texas, West Virginia, and Kentucky.
505) Marco is anxious to buy a home and is willing to waive the appraisal contingency. Do you still need to provide him with a Buyer’s Inspection Advisory?
506) What, according to RESPA, must the lender give to the borrower disclosing whether or not they intend to transfer the loan to another lender?
507) At which point in the process does scheduling a photographer take place?
508) Mello-Roos was enacted in 1982 to provide for non-specific _____________ improvements.
509) Why should a buyer ask the type and age of heating and cooling systems?
510) Matt’s sellers have a very valuable collection of artwork displayed in their home. It perfectly showcases various rooms in the home. What advice should Matt provide to his sellers when preparing to sell the home?
511) Which of the following is a common chimney or fireplace problem?
512) Real estate is a _____________, unlike stocks or bonds.
513) Net operating income ‒ ______________ = cash flow
514) This generation was born between the mid 1920s and mid 1940s. Only 55% of those in this generation financed their purchase, which is a far cry from today’s actions.
515) Gross potential rental income ‒ ______________ = effective gross income
516) Which of the following statements about the signed sales contract is true?
517) What’s it called when a property is owned by the bank after failing to receive an acceptable bid at foreclosure?
518) Net operating income can be found in the _____________ statement that the property manager puts together for the property owner.
519) Three categories exist for this classification of a worker, who is defined in statute under tax law as an independent contractor and not an employee: direct seller, licensed real estate agent, and a certain companion sitter. This worker’s status is ________.
520) A complaint was filed against Barb, a licensee. A hearing was held, and GREC issued a/an __________, which resulted in a small fine and the requirement for Barb to take some additional education.
521) Which of the following is the property of the broker even if secured by the licensee, as provided for in the independent contractor agreement?
522) Which of the following best describes what Ginnie Mae does in the secondary mortgage market?
523) Gia is acting as a seller agent. Which of these is a duty she must perform?
524) A home sells for $225,000. Per the listing agreement, the agent is paid 7% of the sales price, with half of that amount paid to the buyer’s agent. The seller’s agent also has an agreement with her brokerage for a 70/30 split. How much is the agent’s commission?
525) In a condominium building, what pays for the exterior maintenance, insurance and payroll for building personnel, and interior maintenance, trash pick-up, landscaping and snow removal, and building insurance?
526) What does each component of the 80/10/10 ratio represent in a split—or piggyback—loan?
527) Who’s responsible for testing private wells for water safety?
528) The exemption to the Fair Housing Act that would normally apply is moot when a real estate agent represents _______.
529) Brenda and Joe have 20% cash to put down toward the purchase of their home, and they have great credit. What might be their best option for getting a traditional mortgage loan?
530) If you engage in commingling, what have you done?
531) A buyer is purchasing a property with a fair market value of $94,675, which has an assessed value of $37,870. If the mill rate is 30, what will the buyer likely pay annually in taxes?
532) Which of these would likely be covered by a builder’s home warranty?
533) Sally prefers the predictability of a mortgage payment that doesn’t change during the repayment. Which type of loan offers this feature?
534) Ed Smith is a sole proprietor using the trade name “Ed Knows Real Estate.” Under what name may Ed legally conduct business?
535) What are the loans the Federal Home Loan Bank makes to member banks called?
536) Jemma’s name, address, and license status appear on all forms of advertising, whether she is making the advertisement herself or not. Why would her information appear on advertisements, even when she didn’t specifically place the ad?
537) Bambi is buying a property as in a land sales contract. Due to her financial interest in the property, she retains equitable title, while the seller retains _______.
538) Which of the following is true of retainer fees?
539) What’s Fannie Mae’s mission?
540) A property that’s been converted to natural gas may actually have which issue?
541) The Uniform Vendor and Purchaser Risk Act specifies the rights and duties that apply when a property is _________________.
542) Jenny and Sam are engaged to be married. Any real estate either owns at the time of marriage will remain that person’s property in severalty, while any property attained after the wedding belongs to both of them equally. This describes what type of ownership?
543) What is an acceleration clause in a mortgage?
544) When using the market comparison approach, the comparable property’s relationship to the subject property is a process known as __________.
545) Maria, a qualifying broker, established a new trust account at her firm. By law, within how many days does she have to notify the commission that she established a new trust account?
546) When reviewing her mortgage documents, Reva learns that should she miss scheduled payments, fail to pay property taxes, or allow the property to fall into disrepair, she may be in ______.
547) Rachel and Nick are selling their home. Before the property is sold, a title search is conducted to determine if there are any ______.
548) 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 ______.
549) What’s the broadest estate a person can have in real estate?
550) When is a title search conducted?
551) If you work for a property management company that manages property for more than one owner, what must you have in order to collect rent and perform other real estate functions?
552) What is a tax levy?
553) For safety reasons, you should not allow strangers to see_____________.
554) What are the two primary differences between the security deed and the deed of trust?
555) What type of taxation does a limited liability company enjoy?
556) A contract in which only one party is bound is ______.
557) How can lapsed homeowner’s insurance lead to default of the mortgage loan?
558) 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 percent to help Simone out. Who is Elisa’s client?
559) Raul has his broker’s license and has been appointed by the governor to serve as a GREC member. Which of the following criteria made him eligible to be a broker member of the commission?
560) _________ 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.
561) In addition to being properly executed (signed), what’s another requirement for recording a document?
562) Edwin has been a successful real estate professional for many years. After starting off listing residential and commercial properties, Edwin now lists properties that involve light and heavy manufacturing, warehousing, and distribution. Of the six categories of real estate, what types of properties does Edwin handle?
563) A buyer’s offer calls you with a great offer for your seller client. What is the best next step?
564) The ECOA Valuations Rule requires disclosure of valuation data to the buyers who pay for the appraisal. Which of the following is included in the new rule?
565) Which of the following is a non-ownership interest in land by someone other than the owner that gives that person the right to access or use the property?
566) What is the purpose of the agency disclosure?
567) What went into effect in 2009 as an addendum to carbon monoxide regulations?
568) Which of the following is true about easements appurtenant?
569) When assessing taxes, the percentage of market value (or full market value) is called
570) Your builder client, Jeffrey, is building a subdivision. HUD require his walkways to be built ___________.
571) When may informed consent for dual agency be obtained?
572) Which of the following is the term used for the authorization for how tax funds are spent and collected?
573) Phil, who is a wholesaler, is ready to sell a property. What will his sales strategy be?
574) Which agency upholds federal, state and local public health laws, regulating drinking water safety, septic system approval and certain waste water treatment approval?
575) A lease with option to buy is a good home buying solution for some buyers. Which of these statements about a lease with option to buy is FALSE?
576) What does liability insurance cover?
577) If step one for the borrower is a pre-qualification letter and step two is applying for the loan, what’s step three?
578) When a borrower first obtains a mortgage, which portion of PITI receives most of the mortgage payment?
579) Which of the following describes a claim or charge against a property by someone other than the property’s owner?
580) To have a clear idea of what you want to achieve in a transaction, what should you focus on?
581) To compute the tax rate, each taxing authority takes the total funds required for the upcoming fiscal year and ____________________.
582) CCIM, SIOR, CPM, BOMA and ISCS are accreditation programs for licensees who represent ______ investors.
583) ______ conveys the emotional content of words. Angry, disrespectful, or inappropriate words directed at you may be indicators of a threat.
584) Mary Jane owns a building in which electrical service is supplied to the entire building through a utility-owned meter, and the cost of the service is shared among the building’s tenants. What type of system does she have?
585) What’s the intent of the expense stop in a lease escalation clause?
586) Which of the following is the first wooden member of the structure from the ground up that is used as the nailing surface for the floor system?
587) Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages Joann to break her existing agency agreement and sign with him instead. This violation is an example of ______.
588) Under what circumstances is the seller obligated to pay the listing agent a commission if the agent is working under an exclusive agency agreement?
589) Which individual takes a look at a potential borrower’s application and verifies things like their employment and financial information, then analyzes their credit report as well as the appraisal report on the property?
590) When a buyer purchases a cooperative unit to live in, what types of shares are owned?
591) The components that make up a borrower’s mortgage payment can best be remembered using which acronym?
592) Which of the following is paid in cash (or check) up-front by the buyer?
593) Who should ensure that all deadlines are met, all contingencies are cleared, and all paperwork is fully executed and delivered before closing?
594) This homeowners policy, commonly known as rental insurance, provides coverage to tenants for the loss of personal property.
595) The sponsor of a condominium project must submit the offering plan to the Attorney General for approval. The sponsor also appoints the board of mangers as well as the managing agent for the condominium owners. At what point must the sponsor relinquish control of the board of managers?
Ca“Legal Aspects of Real Estate

Ca: Real Estate “Legal Aspects” – Sample of Final Course Exam with answers

(ANSWERS will be revealed with proper subscription)

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1 of 100 What accurately locates and identifies boundaries of a subject parcel to a degree acceptable by courts of law in the state where the property is located?
2 of 100 According to a CAR Residential Purchase Agreement, how long does a buyer have to complete inspections and approve all material provided by the seller in relation to the property, if not specified?
3 of 100 The Uniform Commercial Code does all of the following EXCEPT:
4 of 100 When a seller lists his or her home with a licensee and the property does not go under contract or if the client does not agree to extend the time of the listing, then the listing will:
5 of 100 What is an additional clause in a sales contract where the seller warrants that there are no undisclosed building codes or zoning violations?
6 of 100 Which part of a Loan Disclosure states what late fee the lender will charge?
7 of 100 The law enforces promises through the use of
8 of 100 What advertising phrase would be considered discriminatory based on handicap?
9 of 100 Which section in a CAR Residential Purchase Agreement shows who will pay the county transfer fees, private transfer fee, city transfer fee, and home warranty?
10 of 100 The collection of Roman law contributed the model for which type of law?
11 of 100 It is important for a licensee or a broker to remove ambiguity when a seller’s unclear decision could be discriminatory by forcing the seller to
12 of 100 What lease provision would outline the condition of the property at the time a lease is executed?
13 of 100 What Act requires that lenders keep all credit information confidential?
14 of 100 In contract law, what term means someone has broken his or her word?
15 of 100 What term describes a person, company , or entity that assigns its right to another?
16 of 100 What informs buyers and prospective tenants of registered sex offender database that can be searched to identify if any sex offenders are near property?
17 of 100 In creating a joint tenancy, there are four unities. Which of the following is NOT one of the four?
18 of 100 Effective October 2015, the two forms that are the primary closing information documents for most real estate transactions are the Loan Estimate and
19 of 100 Which section, in a CAR Counteroffer, states that a binding agreement is created when a copy of a signed acceptance is personally received by the maker of the counteroffer or the person’s authorized agent?
20 of 100 What describes when a buyer files a claim in situations where the seller has not delivered the title after all other terms of the contract have been satisfied?
21 of 100 What is known as water beneath the surface that runs in recognizable underground streams or collects in porous ground layers called aquifers?
22 of 100 If the interest-holder enjoys the right of possession of land, the party is considered to have
23 of 100 Who is generally responsible for ensuring that the Closure Disclosure is delivered to the buyer no later than three business days before consummation?
24 of 100 What type of variance permits an application to vary one or more of the dimensional or physical requirements of the acceptable zoning law, code or ordinance in connection with some proposed construction?
25 of 100 What type of an estate is one that continues for a definite fixed period of the time?
26 of 100 What do California homeowners receive to protect equity when a court forces the sale of the house to pay for a judgement?
27 of 100 If a deed is to be recorded, California requires that it be recorded in the office of the county clerk
28 of 100 In a CAR Residential Purchase Agreement, who is responsible for repairing and damages that occur as a result of inspections?
29 of 100 If a person dies with no heirs and no one qualified to receive e property, what power will state use to claim the property?
30 of 100 Which fiduciary duty requires an agent to place the client’s interests above those of all others, including his or her own?
31 of 100 What term describes the borrower in a mortgage?
32 of 100 What term describes a legal procedure of removing a tenant from a property because there is a breach of the lease or rental agreement?
33 of 100 What describes conditions that must be met in order for a contract to be enforceable?
34 of 100 What Act requires financial institution to maintain and disclose data about home purchases, home purchase pre-approvals, home improvement and refinance applications involving 1 to 4 unit multifamily dwellings?
35 of 100 How many years must a candidate serve as a real estate broker, actively engaged in the real estate business in order to be appointed as Commissioner?
36 of 100 What term describes the sudden decrease of land by flowing water or waves often caused by hurricanes and other storms?
37 of 100 When a person first meets a person, that person is called a
38 of 100 What are unsecured claims that take the place alongside the borrower’s other depts?
39 of 100 What provides legal, public, and constructive knowledge to everyone about the ownership of a property?
40 of 100 The discovery step of civil cases is where
41 of 100 If a broker is also an escrow agent in a transaction, he or she must put aside any agency relationships with the parties involved and become a
42 of 100 What is a legal instrument for the volunteer transfer of real and personal property after the owner’s death?
43 of 100 All of the following Bill of Rights protection are related to property rights EXCEPT
44 of 100 What type of residential survey, also called a drive-by survey, is designed to show the location of the house and other large structures on the property?
45 of 100 All of the following lien types are exempt from the homestead law EXCEPT
46 of 100 When a salesperson says or does something that creates agency such as giving advice to a customer, giving an opinion to a customer, or negotiating on a customer’s behalf the license has
47 of 100 What are all parties required to use, to fulfill contingency requirements, under California law?
48 of 100 California requires that deaths that occurred within the past three years be disclosed unless an occupant of the property dies with, or as a result of,
49 of 100 Within how many days of providing labor, materials, or services must preliminary notice be given when filing a mechanic’s lien?
50 of 100 If a person believes he or she has been discriminated against, within what period of time of the alleged act must a compliant be filed with HUD?
51 of 100 Joe has a lease that specifies rent and other requirements, but it does not have an expiration date or renewal cycle. What kind of leasehold estate is it?
52 of 100 The U.S. Constitution gives Congress implied power, which is the ability to
53 of 100 What term describes a temporary suspension of the development of a property?
54 of 100 The standard measure of loss of bargain damages, for a total breach, would encompass the difference between the agreed contract price and the market value of the property on the date of
55 of 100 What type of deed is tailored to the requirements of specific parties, properties, and purposes?
56 of 100 Civil law is different from criminal law in all of the following area EXCEPT
57 of 100 When a spouse dies, how does community property get divided?
58 of 100 What type of contract contains vague terms that can be interrupted and understood in more than one way?
59 of 100 What is a legally enforceable contract where an agent or owner of a property gives the exclusive right of possession for a specific amount of time in exchange for money?
60 of 100 What is Real Estate Investment Trust (REIT)?
61 of 100 What clause describes the type of estate being conveyed and reaffirms the extent of ownership that the grantor is transferring?
62 of 100 What have lenders established to protect borrowers from unlimited increases in the interest rate?
63 of 100 A licensee can provide actual factual knowledge to a customer but does not provide
64 of 100 Which of the following in NOT a specified federal court?
65 of 100 What type of property is abstract, having no physical existence in itself, other than as evidence of one’s ownership interest?
66 of 100 Who can file a discriminatory complaint?
67 of 100 What can a plaintiff file essentially telling potential buyers that the property is subject to a judgement of a pending lawsuit by putting a cloud on the title?
68 of 100 Any last minute changes to a contract that are done by hand should be initialed by
69 of 100 Who is charged with the responsibility of making sure that the owners do not use their property in a way that will harm the public?
70 of 100 What rules should you follow to decrease the possibility of lawsuits?
71 of 100 In partnership, a general partner
72 of 100 The purpose of restrictive covenents is to preserve and protect the quality of land in subdivisions and maximize
73 of 100 What is something an escrow agent should never do?
74 of 100 Arbitration is an out of court settlement procedure where
75 of 100 What describes when some expense paid at closing are divided proportionally between the buyer and the seller?
76 of 100 What type of mortgage is one that includes all the personal property and appliances that are installed on the property?
77 of 100 A buyer Representation Agreement is bilateral because it defines the obligations and responsibilities of
78 of 100 In what type of listing does an owner set a minimum amount that he or she wants to receive from the sale of the property and let the broker have a commission any amount above set minimum?
79 of 100 Which part of a Closing Disclosure details the total amount of all the payment on the loan, the dollar amount of the finance charges over the life of the loan, the amount financed, the APR and the TIP?
80 of 100 The agency relationship between the buyer, seller and broker(s) must be confirmed in writing in either the C.A.R. Standard Form AC-6 or
81 of 100 If a seller declines to show a property to a minority he or she can be sued for violating
82 of 100 Who sets the amount of rate of real estate commissions?
83 of 100 Federal law requires that information, regarding lead-based paint, be given to a buyer or tenant on home built prior to
84 of 100 What system, also called the recorded plat method, is used to describe properties in residential, commercial, and industrial subdivisions?
85 of 100 What term, in the California Civil Code addressing mobile home residency, describes the right of a homeowner to use the site within a mobile home park?
86 of 100 How much of a property exemption is a totally disabled war veteran, making over $40,000 annually and living in California , entitled to?
87 of 100 In a real estate transaction, who is the decision maker on all things?
88 of 100 What is not one of the 4 choices a buyer can make when a counteroffer is given back to him or her?
89 of 100 California courts have held that if a lease is written, then it must be signed by the
90 of 100 What is pur autre vie life estate?
91 of 100 What is a second step in a civil case in district court?
92 of 100 What is a type of company that sells securities specializing in real estate ventures, and requires a minimum of 100 investors?
93 of 100 Where must a declaration of homestead be filed?
94 of 100 What term describes the unlawful misappropriation and use of a client’s funds by a licensee?
95 of 100 What describes minerals that are deemed real property, such as gold and silver, until they are removed from the earth and become personal property?
96 of 100 Which provision in a CAR Residential Listing Agreement states that the property is offered in compliance with federal, state, and local anti-discrimination laws?
97 of 100 Which section of a CAR Residential Purchase Agreement is a provision divided into 3 sections: mediation, arbitration of disputes, and additional terms?
98 of 100 The salesperson should always think the first offer the buyer makes should be his or her
99 of 100 What describes plants or crops that are considered personal property since human intervention is necessary for planting and harvesting?
100 of 100 What type of zoning is density determined for an entire area, rather than on a lot by lot basis?
(ANSWERS will be revealed with proper subscription)
–00CeshopFinance00FINAL1
1) What are the loans the Federal Home Loan Bank makes to member banks called?
2) After reviewing the final page of the Closing Disclosure, Gloria is concerned that she’s being charged excessive points and fees. Page five provides her options for making a credit-related complaint to the ______.
3) When figuring income taxes, licensees should figure the amount they are required to pay based on gross income minus ______.
4) Mutual savings banks are concentrated mostly in the ______ U.S.
5) What feature is a key benefit of the VA guaranteed loan for veterans?
6) Which of the following is a legitimate business deduction for income tax purposes for a real estate licensee?
7) Clark is selling his home to Myrna. Clark will retain the title to the property until Myrna has paid the loan in full. What type of financing is used in this transaction?
8) What is hypothecation?
9) Who’s required to sign a promissory note?
10) Brenda and Joe have 20% cash to put down toward the purchase of their home, and they have great credit. What might be their best option for getting a traditional mortgage loan?
11) A buyer defaulted on the mortgage and the lender is preparing to foreclose. Which type of foreclosure is typically used when a mortgage is used as the security instrument?
12) Regarding active real estate investments, which statement is true?
13) Which factor that influences value addresses the ease with which the property can be conveyed to another?
14) Jay’s new loan to purchase a property includes the seller’s existing mortgage. What type of loan is this?
15) SRT Mortgage has a borrower who has fallen behind on her mortgage. Rather than go through a foreclosure, the borrower is attempting to sell the property. An offer came in for less than the borrower’s loan balance and closing costs, but for more than what the lender feels it’d get at a foreclosure sale, so it approves the purchase. What is this an example of?
16) The borrower’s closing costs and down payment have changed from the Loan Estimate, and the seller’s credit has increased. Which section on page three of the Closing Disclosure can help borrowers identify information that has changed from the Loan Estimate?
17) With an interest-only payment plan, ______.
18) The lender, the loan applicant, and the ______ all complete parts of the request for verification of employment form.
19) Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
20) What effect do high interest rates have on borrowing?
21) Which type of title search method only goes back as far as when the last title search was performed and assumes the last search was done accurately, legally, and that any issues were resolved?
22) Which entity sets conforming loan limits?
23) Which factor that influences value focuses on the number of properties available?
24) With which approach to value does the appraiser analyze a property’s ability to earn future income?
25) Which of the following types of loans issued in California may be protected from a deficiency judgment?
26) What does the cost approach to finding an appraised value measure?
27) The Kimballs and their lender have agreed to a loan modification. How is the loan modification documented?
28) Which of the following statements is true regarding conventional loans?
29) Which of the following describes the Federal Reserve’s open-market operations?
30) What’s the purpose of the loan application?
31) Ruby is selling her home. The buyer, who’s not a veteran, would like to assume Ruby’s VA loan. Is this allowed?
32) What’s the acronym for the legislation that eliminates illegal referral fees among settlement service providers?
33) Which type of loan provides short-term financing for the purpose of developing improvements on vacant land or on land that has improvements, but will soon have more?
34) Eliza wanted her financial affairs kept private after her death. How could she best do this?
35) Which of the following would disqualify someone from obtaining an MLO endorsement?
36) The total amount that’s treated as home acquisition debt for tax purposes has to be less than ______ for married couples filing jointly.
37) Why is it common for lenders to sell mortgages on the secondary market?
38) What’s the purpose of a short sale?
39) The Loan Estimate allows consumers to compare loans using both the APR and the _______.
40) Which type of property takes 27.5 years to completely depreciate?
41) Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
42) A defect on a title that can be monetary or physical is called an ______.
43) An investment strategy that focuses on looking for smaller multi-family properties, fixing them up, and renting them out describes which of the following?
44) Which of the following is used to protect the buyer from title defects after closing?
45) What is the ability to pay off liens against a property until a foreclosure sale is held?
46) If a property’s value decreases over time, it has experienced ______.
47) Bambi is buying a property on an installment sales contract. Due to her financial interest in the property, she retains equitable title. What does the seller retain?
48) How does the Federal Housing Administration help prospective homeowners?
49) Which of the following outcomes is most likely if the Fed decreases reserve requirements?
50) Cash flow in a personal finance system requires personal savings goals to be funded from the personal checking account rather than the business checking account. Why?
51) Which of the following is indicative of the limited partnership method of real estate investment?
52) What type of loan may be used if the buyer is obtaining seller financing?
53) Jack and Edith purchase a home using a loan from their bank. Their mortgage creates a(n) ______ lien on the property they’ve purchased.
54) Which of the following items is something a lender is prohibited from doing if the lender wants to write qualified mortgages?
55) A buyer is 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?
56) For whose estate would a living trust be most beneficial?
57) What’s NOT true about a California real estate licensee who obtains an MLO endorsement?
58) Which one of the following statements is true about the FHA Energy Efficient Mortgage program?
59) Which approach to value used by appraisers relies on the sales price of comparable properties to help determine the adjusted market price?
60) Sharon, a new real estate licensee, is tracking all of her spending for one month. What’s the likely purpose of this exercise?
61) 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 ______.
62) As a new licensee, it’s easy to make an inadvertent mistake when representing a client. What type of insurance would cover you if this happened?
63) 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?
64) According to the IRS, a foreclosure is viewed as a ______.
65) Which of the following are phases of the real estate cycle?
66) When evaluating the income listed on a loan application, what will the lender consider?
67) The “first in time” rule of liens refers to lien priority according to ______.
68) Kirk is buying a home using an FHA loan. Which of the following would meet the FHA requirements for Kirk’s down payment?
69) Which of the following did the Dodd-Frank Act accomplish?
70) Ruth and Paul live in a rural area where emergency services, health care, and even neighbors take time and travel to access. They know their house could use some renovation to make it safer for their kids. What government program offers loans and grants to assist people like Ruth and Paul?
71) Which of these items is required for a promissory note to be a valid instrument?
72) 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?
73) Which business structure is the simplest to form, yet involves the most liability?
74) The purpose of the ______ is to promote fairness and transparency for mortgages and other financial products and services through education, enforcement, and research.
75) What’s another term for voluntary conveyance back to the lender?
76) Can Jeremy, a licensee, receive a referral fee for sending his buyer client to Ajax Title?
77) Sheila is selling her 15-acre property. She’s willing to carry back the loan for the buyer, Persephone, and she asks her real estate agent, Nick, to arrange the financing deal. Under what California law must Nick, the arranger of credit, provide disclosures about the financing?
78) A $300,000 property depreciated in value by 3%. What’s its new value?
79) Very few foreign lenders provide loans for real estate purchases in the U.S. Countries that had banks that issued real estate loans were ______, Taiwan, and the U.K.
80) Which type of agreement is used for large commercial real estate projects?
81) Which of the following items must be included in the security instrument used for a real estate transaction?
82) The ______ balances the powers of federal agencies by requiring them to follow specific processes and procedures, such as providing for public participation in rulemaking.
83) The ______ were enacted to address the effects of the subprime mortgage crisis, spur economic activity, and increase accountability in government spending.
84) How common is judicial foreclosure?
85) Matt is a loan officer with Kentucky State Bank and has an MLO endorsement. Which act governs his MLO-related activities?
86) The Real Estate Settlement Procedures Act is a consumer protection statute that ______.
87) Shawna is reviewing Brian’s loan application. She needs to verify the assets he’s claimed, specifically his bank account balances. Which form should she have him complete?
88) Which statement is true about a purchase money mortgage?
89) Which of the following is the primary goal for a consumer when reviewing a Loan Estimate?
90) Which of these is the better debt service ratio?
91) Which of the following conditions contributed to the 2007 financial crisis?
92) Which law places certain requirements on an individual who works for a borrower, for compensation to stop or delay a foreclosure sale?
93) The California ______ requires mortgage loan originators to give clients a specific disclosure statement and includes restrictions on how much they can charge for their loan origination or loan brokering services.
94) Arthur does not have an MLO endorsement. Legally, which of these actions can he perform?
95) 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?
96) What does a lender use a credit score to determine?
97) In a hypothecation scenario, the borrower owns the property and has possession rights. What does the lender have?
98) What California legislation prohibits arbitrary discrimination by businesses that offer services to the public?
99) Which U.S. Department of Veterans Affairs program allows a veteran to refinance a conventional loan to a VA loan?
100) Which secondary market institution seeks to provide credit to rural communities?
101) (ANSWERS will be revealed with proper subscription)
102) –00CeshopFinance00FINAL2
103) What is HUD’s stated mission?
104) A property is uninhabitable in its current state. What effect will its utility have on the value?
105) The components that make up a borrower’s mortgage payment can best be remembered using which acronym?
106) Which of these is an example of usury?
107) Which of these is considered an MLO activity?
108) What is a judicial foreclosure?
109) Bank failures and the loss of depositors’ funds occurred during the Great Depression. This led to the creation of which agency?
110) Who typically performs a CMA or BPO?
111) A buyer with a $250,000 loan has a monthly principal and interest payment of $2,042.71. If $1,145.83 is interest, what is the new principal balance after the first payment is applied?
112) 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?
113) Which of the following best describes a property’s assessed value?
114) Which of the following factors affect an adjustable rate mortgage?
115) Which of the following is a likely effect when the discount window is open?
116) Which of the following best describes the purpose of the Truth in Lending Act?
117) Which type of loan is a temporary loan often used by buyers who have not yet closed on their prior property?
118) Which act prohibits lenders from continuing foreclosure proceedings if a borrower has an application for a loan modification or other alternative pending?
119) Why is it important to identify the values that are important to you when you’re developing a plan for your personal finances?
120) What real estate investment strategy involves an investor purchasing many properties and reselling them immediately for a small profit?
121) Why don’t mortgage brokers service loans beyond placement?
122) Which of the following statements is true about the FHA Section 251 ARM?
123) Which of these is a function of the U.S. Treasury?
124) Chris used the VA guaranteed loan program to purchase a home five years ago. He now wants to sell that house and buy a new one. Is Chris allowed to use the VA loan program a second time?
125) What does the FHLB do?
126) What is a lifetime cap, as it relates to an adjustable rate mortgage?
127) Which of these is a factor in calculating a consumer’s credit score?
128) A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the monthly payment is interest?
129) What type of lien against a property will be paid first in the event of a foreclosure?
130) Which of the following items are ongoing business expenses that a licensee should expect to pay?
131) The FHA 203(b) loan is a mortgage option for homebuyers who ______.
132) Which of the following best describes what Ginnie Mae does in the secondary mortgage market?
133) Which of these describes an implicit goal of a personal financial plan?
134) Which of the following is a good description of a home equity loan?
135) Which type of business structure shelters personal assets in the event of a lawsuit against the business owner?
136) Brenda is developing her personal financial plan. One of the first things she does is to identify her personal values, which she then connects to her budget. Why?
137) Kelsey and Jerrod have a housing ratio of 30% and a total debt obligation of 41%. Their credit score is 640. Do they meet the underwriting requirements for an FHA loan?
138) Which of the following government-sponsored enterprises purchases loans from agricultural lenders and sells financial instruments backed by these loans?
139) 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?
140) Why would some national lenders have state-level compliance issues?
141) Which of the following financing types involves the sale of personal property with the real property?
142) Which type of loan is made from the equity in the home?
143) When you start your personal finance system, you’ll take these steps: identify current expenses, estimate income, set financial goals, ______, and set up accounts.
144) Which of these is a recommended method for a licensee to estimate ongoing business expenses?
145) The lender is required to provide the consumer with a Loan Estimate form within what time period of application for a loan?
146) 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?
147) In California, what type of foreclosure process is used if the lender seeks to pursue a deficiency judgment?
148) With a no down payment VA loan, the mortgage can’t be more than the amount of the ______.
149) What is an initial cap, as it relates to an adjustable rate mortgage?
150) Which of the following statements is true about start-up costs for a licensee?
151) As a licensee, when might you seek out the help of a certified public accountant?
152) Cash flow in a good personal financial plan requires money allocated to personal financial goals to be distributed in which way?
153) Which statement is true about a package mortgage?
154) Which of the following best describes a residential mortgage loan as it relates to the MLO endorsement?
155) What does the income approach to value rely on when valuing single-family and two- to four-unit properties?
156) What’s one of the main differences between a traditional mortgage loan and an interim loan?
157) Which entity guarantees government loans?
158) Brad and Chrissie decided to make some improvements to their house, so they went to the lender they used for their first mortgage and got a home equity loan. The new loan agreement includes a cross-default clause. What does that mean?
— Extra random (FinanceClass part3) —
1) Annual MIP can be removed from an FHA loan by _____.
2) What’s an example of an inquiry a consumer initiated that may appear on a credit score?
3) What is one of the qualifying standards for a VA-guaranteed loan?
4) A buyer is purchasing a ppt for $500k. His down pymnt of $50k and is financing the rest. What’s the amount of the loan origination fee if the lender charges one-and-a-half points?
5) The fewer ppts on the market, the greater the scarcity. What’s the effect on prices?
6) A loan with borrow options that can be long term with periodic adjustments or short term with more frequent adjustments to the rate is a(n) ___ mortgage.
7) What describes a Housing Choice Vouchers?
8) Lucy is a mortgage banker. Her business is regulated by ____.
9) A loan made from a homeowner’s equity where funds are drawn over time and the bank gains corresponding ppt ownership is called a ______.
10) Which entity generally acts in the secondary market?
11) Your clients, the Nguyens, have signed a contract for deed to purchase a ppt. What rights do the Nguyens receive?
12) What’s true about buydowns with a VA loan?
13) In ’08, as a response to the ’07 financial crisis, the Federal Housing Finance Agency began acting as conservator over which institutions?
14) What’s a reason a seller might consider selling his ppt through an installment plan instead of a traditional sale?
15) What falls under the definition of ‘dwelling’ according to Senate Bill 36?
16) What does the lump sum payment at the end of an interest-only mortgage loan consist of?
17) Brenda’s go-to financial expert has no fiduciary responsibility to her. This is because she’s working with a(n) ____.
18) During which phase of the RE cycle does a RE professional have the most impact?
19) How many hours of continuing edu must a RE licensee complete each year to renew their MLO endorsement?
20) Which entity buys loans primarily through thrifts?
21) Rather than be foreclosed on, Jarod turned his deed over to his bank. This is called a _____.
22) Elijah has identified his personal values, estimated his income, and analyzed his current expenses. With this info, he’s ready to ______.
23) Carla is a licensee who uses a personal financial system that recommends that all of her commission checks be deposited into her ____ account.
24) Payment history, age of accounts, credit usage, types of accounts, and ___________ are factors considered in calculating a credit score.
25) Lic Lynn has several accounts set up as part of her personal financial plan to help her manage cash flow. She’s allocated 10% of each commission check to business expenses, 15% to taxes, 8% to her retirement fund, 12% to various savings goals, and the rest goes to her living expenses. When she received a check, how does she direct the funds?
26) You’re estimating your annual income and find that the average sale price of a home in the area you’ll be working is $300,000. You determine your expected commission is 2% and you plan to make six transactions in the year. Assume there is no broker’s split. What will your estimated income for the year be?
27) When obtaining a mortgage to purchase a home, the borrower uses the ppt as ______.
28) What describes the federal funds rate?
29) What must a prudent lender do with the info received on a loan app?
30) What is the current value of a ppt that was purchased two years ago for $260k, assuming an appreciation rate of 2%?
31) The ____ was a response to the practice of redlining and was enacted in 1977.
32) PMI may be required on conventional loans where the loan-to-value ratio is in excess of ___%
33) The funding fee on a VA loan is waived when ____.
34) The doc that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ____.
35) Your client, Shelby, a veteran using a VA loan to finance his purchase, just learned that the CRV came in lower than the sales price. But no problem: Shelby’s bro is willing to loan him the difference. If the loan is approved ____.
36) What best describes the state of the market during the over-supply phase of the real estate cycle?
37) Who needs to obtain a mort loan originator endorsement and register with the Nationwide Mortgage Licensing System and Registry?
38) What would most likely be found in the “potentially negative items” section of a credit report?
39) What is the secondary mortgage market made up of?
40) Millie and Jerry are purchasing a home using their VA loan benefit. The sale price on the home they buy is $320k, with 100% financing. Assuming that Jerry has a typical level of entitlement, how much of their loan does the VA guarantee?
41) What is the economic impact of mortgage loan payments?
42) A ppt valued at $1 mill is returning a net income of $85,000. What’s its cap rate?
43) Which type of RE investment trust derives its income from the rent or sale of ppt and interest dividends?
44) Lydia put the minimum 3.5% down on her $210k home. She’ll have to pay a MIP. What type of loan does Lydia have?
45) In which phase of the RE market cycle would you expect to see ppt under valued and a large supply of homes on the market?
46) Danny and Wendy recently relocated to California. They are buying a 3 bed home in an estab neighborhood where they look forward to raising a family. Their RE agent, Brunhilda, thinks that their income, which is on the low side, and the ppt could make them eligible for ___, which would offer reduced, fixed interest rates on a loan.
47) Kristoff got a bit behind on his mort and missed several pymnts. He and his lender devised a schedule that gives Kristoff an opportunity to make up those delinquent pymnts. What is this an example of?
48) In order to analyze your spending habits, you should track ___.
49) The amount of the ___ a veteran must pay depends on factors, such as military status, down pymnt amnt, and whether the veteran’s entitlement is being used for the first time or a subsequent time.
50) The amount of the ___ a veteran must pay depends on factors, such as military status, down payment, and whether the veteran’s entitlement is being used for the first time or a subsequent time.
51) Analyzing spending habits allows you to evaluate the impact of a purchase in terms of ____.
52) Cheyenne is selling the family farm on an installment contract. What is one advantage of selling the farm this way?
53) A buyer is purchasing a pt for $400k. his lender’s loan-to-value ratio is 80%. How much is the buyer financing?
54) Several actions take place on the secondary mort market. What is a common activity?
55) A calculation that looks at all recurring (or installment) debt – such as monthly mort, car, credit, and loan pymnts – as a percentage of the borrower’s monthly gross income, is called ____.
56) When does the mort insurance requirement requirement end for a borrower with a VA loan?
57) Bobby is completing a residential loan app. On the app, he lists his liabilities. What are liabilities?
58) What type of loans issued in CA may be protected from a deficiency judgement?
59) ____ is a legal action that liquidates or restructures debt. It can have a long-lasting negative impact on the borrower’s ability to obtain financing.
60) Tyler is a developer who renovates a long-abandoned warehouse in a low-income neighborhood into a community center, complete with space for after-school programs, a daycare, and a gym. Tyler is able to complete the reno with a loan funded by a local bank. Which act req financial institutions to make credit available for this type of development?
61) An increase in ppt value is ____.
62) What is a potential concern of a buyer who’s entering into a contact for deed with a seller?
63) Which RE finance instrument includes the promise to repay and the security instrument within the same document?
64) What are ppt taxes in a mort pymnt?
65) An ARM usually offers an initial interest rate that’s ___ a fixed rate mortgage for a period of time.
66) Tina is purchasing a home that appraised for $10k more than the sales price. On which figure will the lender base the loan-to-value ratio?
67) Wendy has been approved for her first mort. The lender advertised a 4.6% interest rate. She’s nervous about the terms and fees. What info is the lender required to provide?
68) Stacey’s lengthy military service makes her uniquely eligible for a(n) ____.
69) Cassie is helping her buyer client, Gus. As they discuss preparations for closing, she cautions Gus, “make sure you review the Closing Disclosure as soon as you receive it and ____”
70) The Farm-Credit System is _____.
71) Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine’s transaction covered by the RESPA
72) What’s the purpose of CA’s Covered Loan Law?
73) In which phase of the RE market would you expect to see unemployment increasing, prices falling, and foreclosures on the rise?
74) For which of these properties would gross rent multiplier be calculated?
75) Because of the Mortgage Disclosure Improvement Act, the only advance fee that a creditor can charge to a consumer before providing required loan disclosures is ___.
76) Because of the Secure and Fair Enforcement for Mortgage Licensing Act, borrowers can determine if mortgage loan originator is ___.
77) The ___ account is a recommended component of a personal financial plan that should be started as early as possible and contributed to throughout your working life.
78) The two most common insolvency methods put in place when a bank fails are the purchase and assumption method and the ___ method.
79) The planned transfer of money from your business checking account to your personal checking account to your savings accounts is called ____.
80) Closing costs are itemized on page two of the Closing Disclosure and all amount are ___.
81) A borrower who has received a certificate of eligibility will qualify for a VA loan ____.
82) A borrower sued a foreclosure consultant for violating the Mortgage Foreclosure Consultant Law. The borrower may receive actual damages, legal fees, and in severe cases ____.
83) Which doc is used to estab the path and proof of ownership?
84) Your client has a VA loan and wants to refinance to a lower rate. What’s the simplest option?
85) What best describes the CA short sale addendum?
86) When you develop your financial plan, you should start by ____.
87) Your business is booming, and you’d really like someone else to maintain your financial records. The best person for this role is ___.
88) In calculating a PITI mort payment, the annual taxes and insurance are divided by ___, and added to the monthly principal and interest payment to make up the total monthly payment.
89) If the annual taxes on a ppt are $1,000, how much is paid monthly?
90) With this type of loan, personal ppt is included with the real ppt in the sale. It’s commonly seen in commercial real estate, but you may also see this in the sale of furnished condos
91) The lender, the employer, and the ___ all complete parts of the request for verification of employment form.
92) What is a potential ramification for the seller if a short sale is completed?
93) A homeowner is behind on his mortgage. He’s decided to try to sell the ppt and is working with his lender to do so. He owes $315k on his loan balance and closing closts. He has an offer for $300k, which the lender approves. What is this an example of?
94) Melanie is a buyer who has agreed to purchase Stan’s ppt using a contract for deed. Who holds legal title to the ppr during the term of the loan?
95) One alternative to foreclosure is a voluntary conveyance of ___.
96) There are a lot more sellers than buyers in the current market. How will this demand influence value?
97) Because of the funding fee required for a VA loan, a borrower with no down payment funds saved should ____.
98) Craig’s loan is secured by a mortgage. Who holds legal title when this security instrument is used?
99) What is it called when the borrower and lender work together to restructure work together to restructure the terms of a home loan?
100) Which type of real estate investment trust involves both residential and commercial ppts?
101) Which of these are essential elements of personal financial responsibility?
102) By stabilizing and improving the mortgage market, the FHA helped to build ____.
103) Albert wants to sell his house to his cousin, who’s willing to assume the loan. What clause in Albert’s mortgage requires him to obtain the lender’s permission to do this?
104) The annual MIP is recalculated each year using ___.
105) Describe an equity real estate investment trust?
106) Which of the following is a difference between mortgage brokers and mortgage bankers?
107) The lender, the loan applicant, and the _______ all complete parts of the request for verification of deposit form.
108) Which of the following statements best describes a mortgage broker?
109) What are reserve requirements?
110) Which type of lien is a specific lien?
111) How many approaches to value do appraisers generally use?
112) Which clause is used in a security instrument to protect the original note holder if the security instrument is sold and the borrower subsequently defaults?
113) Why do lenders care so much about property condition?
114) 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?
115) What is liquidity?
116) On a VA loan, the funding fee ______.
117) What U.S. Department of Veterans Affairs program assists Native Americans in financing the purchase, construction, or improvement of homes on federal trust land?
118) What are mortgage-backed securities?
119) Kylie has a small farm where she grows vegetables and sells her produce to restaurants. She want to expand it, and needs a loan to purchase some additional acreage. What makes it unlikely that most lenders will want to offer Kylie the loan that she needs?
120) On the borrower’s Closing Disclosure, the interest rate _______.
121) What are debentures?
122) ______ is directly influenced by construction of new homes, conversion of existing properties to residences, and construction costs.
123) The Federal Housing Administration helps prospective homeowners by ______.
124) In what phase of the real estate cycle do foreclosures rise and home prices fall?
125) What information does Schedule B-2 of a title commitment provide?
126) Which of the following made mortgages attractive investments?
127) “Private companies created by the U.S. Congress to make borrowing easier and more cost effective” describes ______.
128) Which of these factors is NOT used to define money?
129) A good personal financial system requires ______ reviews of performance so that you can modify it as needed.
130) Juanita invests in mortgage-backed securities. What is the likely impact on her as an investor when mortgage interest rates rise?
131) The Federal Housing Administration, Government National Mortgage Association, and the Office of Fair Housing and Equal Opportunity all operate under ______.
132) What is a periodic cap, as it relates to an adjustable rate mortgage?
133) Which of the following statements is true about the FHA annual mortgage insurance premium?
134) What is a qualified mortgage?
135) What does Section 8 of RESPA prohibit?
136) M&R Lending has borrowers who are in default. Those borrowers have listed their house for sale and must obtain M&R’s approval before they can accept any offers. What is this an example of?
137) When does recaptured depreciation apply?
138) Which type of business structure is the simplest for an independent contractor licensee to start?
139) Beatriz is employed by Regional Bank & Trust. When working with mortgage clients, she discusses a range of products Regional Bank & Trust offers. What is Beatriz?
140) Paul uses a personal finance system that allocates a percentage of income to his monthly expenses and his savings goals. If his total monthly expenses equal $3,000 and his income one month is only $2,000, how much will he put toward a savings goal to which he’s allocated 2%?
141) Which of these jobs does the Bureau of Engraving and Printing do?
142) How are real estate investment trusts sold?
143) What program does the U.S. Department of Veterans Affairs offer to assist Native Americans in financing the purchase, construction, or improvement of homes on federal trust land?
144) Which of the following practices would be considered predatory lending?
145) What’s a certified opinion or estimate of value of a particular property as of a particular date?
146) Assisting in the purchase of repossessed homes, ensuring that all clients receive fair and equitable treatment, and recommending FHA financing to a client are all ways that a licensee makes use of ______.
147) Christopher has questions about information shown on the Loan Estimate he received from his lender. What should he do?
148) The SAFE Act is intended to help consumers select which professionals, knowing that they are honest and competent?
149) Rachel is a real estate licensee. At what point should she begin funding her tax savings account to pay her quarterly estimated tax?
150) What’s another term for voluntary conveyance?
151) Why do life insurance companies use participation financing for larger projects?
152) When you start your personal finance system, you’ll take these steps: identify current expenses, estimate income, set financial goals, ______, and set up accounts.
153) Barry, a contractor, is performing work involving an FHA 203(k) loan. When will he get paid for his work?
154) Which of these jobs does the U.S. Mint do?
155) Mindy is reviewing Becky’s loan application. She needs to verify the work and salary information. Which form should Mindy have Becky complete?
156) What instrument is used to record the conversion to an ARM from a fixed rate of interest?
157) Some foreign lenders provide loans for real estate purchases in the U.S., but not many! Countries that had banks that issued real estate loans were Canada, Taiwan, and ______.
158) 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?
159) Manny is obtaining a home loan. He goes to his local bank and talks with Deborah, who discusses the lending products the bank offers. What is Deborah?
160) Which of these activities has a far-reaching effect on the country’s overall economy and is the largest indicator of the country’s economic health?
161) Adrian purchased a house for $220,000, financing $200,000 using a 30-year conventional mortgage at 4% interest. His monthly principal and interest payment is $955. The annual property taxes are $1,400, and the combined annual insurance premium is $900. What’s Adrian’s PITI payment each month?
162) What federal executive-level agency works to implement goals that ensure affordable housing, protect consumers, and build inclusive communities in the U.S.?
163) Completing a residential loan application requires providing information about the borrower, the loan being applied for, and the ________.
164) On a VA loan, the ______ helps the lender determine if the value of the property makes it suitable for use as collateral on the loan.
165) Melvina has a Home Equity Conversion Mortgage. She feels secure because she knows that ______.
166) 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. What type of loan is this?
167) Planning, construction, buying/selling, and moving are four of the five new-home construction phases or activities that impact the economy. What’s the fifth?
168) Seller concessions on a VA loan ______.
169) The primary FHA loan program used to purchase a one- to four-family home is ______ of the National Housing Act.
170) What is HUD’s stated mission?
171) Which of these is a requirement for a property purchased using the VA guaranteed loan program?
172) The amount of the funding fee for a VA loan is calculated as ______.
173) Which are phases of the real estate cycle?
174) The U.S. Department of Veterans Affairs offers special programs, which can be used to adapt housing to accommodate the disability, to veterans or military members with permanent and total service-connected disabilities. What are these programs?
175) What’s the most likely reason borrowers would choose a private loan company?
176) Which entity guarantees loans?
177) What’s Fannie Mae’s mission?
178) The FHA sets limits on how much of a loan it will insure based on the ______.
179) With a no down payment VA loan, the mortgage can’t be more than the amount of the ______.
180) Dylan is in default on her mortgage. She decides to hand over the deed to her property rather than face foreclosure proceedings. This is an example of ______.
181) Bernie works for Quickwell Lending and accesses several lenders to find a loan product that works best for his clients. What is Bernie?
182) According to the PMI Act of 1998, at what percentage of equity position does personal mortgage insurance cancel for homeowners?
183) The Bakers are selling their home, and they’ve picked the perfect time. The market isn’t saturated with a lot of properties for sale, but there are many buyers looking to make a purchase. What type of market is this?
184) What entity oversees Fannie Mae and Freddie Mac, and regulates the Federal Home Loan Bank?
185) Which term describes the action taken to force a sale of real property encumbered by a lien?
186) Shelly received Brian’s loan application and provided him with a loan estimate. Who does Shelly most likely represent?
187) Which clause in a mortgage or deed of trust describes the borrower actions that constitute default and allow the lender to make the debt immediately due and payable?
188) Which of the following best explains the alternative foreclosure types, such as foreclosure by writ of entry?
189) ______ is directly influenced by factors such as employment levels and wages, interest rates, population changes, confidence in the market, and availability of loans.
190) How are real estate investment trusts sold?
191) Traditionally, what represents supply and demand in the real estate market?
192) Why might a lender request a property survey in addition to a title search?
193) What’s true about the funding fee on a VA loan?
194) In accordance with RESPA prohibitions, rebates may only be offered by licensees to transaction parties, if _____.
195) Which of the following helps to protect the appraisal process from outside undue influence?
196) Which of the following statements is true about the practice of seeking deficiency judgments?
197) What makes credit unions so competitive with large commercial banks?
198) What is the term used to describe a lien, encroachment, or other issue on a title?
199) Why might a buyer want to assume a loan?
200) 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?
201) What might happen if borrowers miss scheduled mortgage payments, fail to pay property taxes, or allow the property to fall into disrepair?
202) Which of the following statements about the secondary mortgage market is true?
203) What’s the purpose of a suit to quiet title?
204) Which of these actions represent a common interaction between the primary and secondary mortgage markets?
205) The purpose of the Truth in Lending Act (TILA) is to ______.
206) The question, “What’s the purpose of this appraisal?” can be answered by which step of the appraisal process?
207) Why don’t mortgage brokers service loans beyond placement?
208) The veteran’s certificate of eligibility describes ______.
209) The Kimballs have missed two mortgage payments and are working with their lender to modify their loan. What is the goal of a loan modification?
210) Which of the following is an example of a voluntary lien?
211) One of the ways that the FHA has stabilized and improved the mortgage market is through the introduction of ______.
212) Which institution was created by Congress as the Federal Home Loan Mortgage Corporation (FHLMC) in 1970?
213) Which of the following is a possible result of a community growing too little or not at all?
214) Which of the following statements best describes a mortgage banker?
215) For which of the following properties is the cost approach most likely to be used?
216) What is typically used to prove there are no encroachments on the property?
217) What type of agency exists because of the actions and behavior of the parties?
218) The Consumer Credit Protection Credit Act, which includes the Truth in Lending Act, is also known as _________________.
219) Patty is buying a three-bedroom mountain home. After applying for a loan, she received the Loan Estimate at least _______ business days before closing.
220) John wants to do a 1031 tax exchange with a property he just sold. How many days does he have to identify a new property for the exchange?
221) Juaquin is an appraiser. What purpose do Juaquin and other appraisers serve?
222) Conforming loan limits vary based on location and ______.
223) Which of the following is NOT part of the assumptions section of the Loan Estimate?
224) When consumers make a small down payment, borrow the remaining amount of the purchase price from a lender, and reap the rewards off of hte full investment value, they are demonstrating what concept?
225) What is the purpose of the request for verification of employment?
226) The Federal Housing Administration funds its mortgage insurance program ______.
227) With a straight mortgage, what type of payments are made up until the end of the loan term?
228) Melanie is a buyer who has agreed to purchase Stan’s property using a contract for deed. Who holds legal title to the property during the term of the loan?
229) Interest-only loans are a form of ______ buyer financing.
230) It’s possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ______ years apart.
231) Bindy received a loan based on the amount of equity she had in her house. She used this lump sum to fund her daughter’s college education. What type of loan did she get?
232) Which of the following best describes the state of the market during the recession phase of the real estate cycle?
233) The energy efficient mortgage program insured by the FHA requires an energy consultant to provide the lender with a report listing recommended modifications for energy efficiency, an estimate of the cost for each recommendation, and ______.
234) The FHA Energy Efficient Mortgage allows modifications such as solar panels as long as ______.
235) When the Torrens system is used to perform a title search, who acts as title guarantor in case a claim is filed?
236) Veterans who wish to use the Native American Direct Loan must ______ and their tribe must have a valid agreement with the VA to offer the program.
237) Jeremiah is preparing to begin the homebuying process. Which of these is an action he should take?
238) _______ are part of the loan-approval process and are responsible for completing a loan application and supplying supporting documentation.
239) Joe decided to borrow funds from his retirement account to fund the down payment on his new house. It’s now two years later and he lost his job. What is true about his pension plan?
240) Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud?
241) What information does Schedule B-1 of a title commitment provide?
242) Kara is a lender who is working with prospective buyer, Stan. What does Kara ask Sam to provide to show his work history and earning information?
243) Borrowers must list their assets when completing a residential loan application. What are assets?
244) Sam has a mortgage that has a static interest rate, but monthly payments that increase over time according to a set schedule. What type of mortgage does Sam have?
245) The Federal Housing Administration’s qualifying standards for a mortgage loan ______, but the mortgage insurance the FHA provides balances the risk for the lender.
246) Which of the following best describes the state of the market during the over supply phase of the real estate cycle?
247) The ______ tells the lender how much entitlement the veteran has available under the VA loan program.
248) Which party to the loan approval process is responsible for completing a loan application and supplying supporting documentation?
249) Which of the following describes amortized debt?
250) Which of the following is the best example of the economic principal of leveraging, as it applies to a real estate transaction?
251) Which of the following represents a potential concern when borrowing funds from a pension or retirement plan?
252) The characteristics of value include which of the following?
253) A mortgage banker gets paid through fees from ______ and servicing loans.
254) What is the formula for calculating the total housing ratio? / The formula for the total debt ratio is:
255) Maria is a borrower reviewing her Closing Disclosure. She notices a section under “Other Costs” with a number of fees that were not shown on her Loan Estimate, such as the commissions to the real estate brokers and the home inspection fee. Should Maria contact her lender about this issue?
256) Which of the following statements about the Torrens system is true?
257) What information does Schedule A of a title commitment provide?
258) Monty retired 10 years ago and would like to see the world, but his retirement account won’t support his desire to travel. Monty heard of a loan that would allow him to take advantage of the equity in his home by getting monthly payments from the bank by using his house as collateral. What is this type of loan called?
259) Which range of credit scores do most consumers fall into?
260) Which of the following contributed to the 2007 financial crisis?
261) Veterans who use the VA’s Specially Adapted Housing grant must ______.
262) Margo, a mother of three, is in the largest percentage of consumers with a score of _______. Margot’s tried unsuccessfully to get approved for loans, but she was issued a credit card that included many extra fees and required deposits.
263) Brandon’s home has been foreclosed on. He had an outstanding loan balance of $145,000, which he owed to his lender, XYZ Lending. There’s also a lien against the property recorded in 2014 for an unpaid student loan of $25,000, and a HELOC established in 2012 of $30,000, of which he’d used $10,000. If his foreclosure nets $150,000, how much will each creditor be paid?
264) Mike has had some financial problems and is considering borrowing from his retirement plan. Which of the following is a true statement?
265) Which of the following outcomes is most likely if the Fed increases reserve requirements?
266) Borrowers with which credit rating are considered subprime?
267) When Brenda applied to have her FHA loan refinanced under the Streamline Refinance program, one requirement of the loan was that ______.
268) The Martins are buying their first house and are a little nervous about whether they’ll be able to afford payments long term. Page four of their Closing Disclosure is of particular interest to them because it lists specific disclosures, such as escrow account information, with the purpose of ______.
269) Fannie Mae, Freddie Mac, and the Federal Home Loan Bank are examples of ______.
270) Which type of lien affects real and personal property?
271) 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?
272) Easements are a type of encumbrance that can affect a property. Which of the following is true about easements?
273) Eleanor is in the market for a home loan. She feels confident knowing that South Carolina’s _______ will protect her from predatory lending practices.
274) For income-producing properties, how is rent prorated at closing?
275) Co-ownership without inheritance rights is what kind of real property ownership?
276) Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?
277) 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?
278) Of the following, who typically prepares the closing statement?
279) How can an investor roll over any gain realized in an investment property into another property and defer paying capital gains taxes?
280) 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?
281) The Real Estate Offer Rejection Form has been required by law in South Carolina since ________.
282) Who generally writes a broker’s price opinion?
283) In states without full disclosure requirements, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
284) Your assistant, Brady, often answers client questions about offers and negotiation. What do we know about Brady?
285) Which document should be provided to borrowers no fewer than three days prior to closing?
286) What’s the best definition of a cooperating agent?
287) Which of the following is not a benefit of living in a PUD?
288) Which of these is an example of voluntary alienation?
289) With local land use, the stress placed on the community’s infrastructure is an example of ______.
290) 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?
291) Which of the following documents will show the buyer and seller which costs to pay at closing?
292) 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 is required to make the contract valid.
293) What’s a foreclosure?
294) What is the type of possession in which a tenant stays after the right to possess has terminated?
295) Darryl is an unlicensed personal assistant to Yvonne, a licensee. Yvonne is careful to direct his activities so he doesn’t do anything that would require a license. Why is she so careful about this?
296) Which of the following activities occurs before the closing meeting?
297) How do you decide which party you represent in a transaction?
298) Wayne conveys a property to Robbie until Robbie’s death, when the property is conveyed to Tiffany. What is this scenario an example of?
299) An appraiser is most likely to use the cost approach for which of the following properties?
300) Which document do property managers and the owners they represent sign to formalize the relationship?
301) This document is filed with a condominium building’s master deed and details such items as ownership meetings and common elements’ maintenance log.
302) 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 ______.
303) You are calculating prorations. Which of the following items go into the seller’s credit column and the buyer’s debit column?
304) 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.
305) Dual agent Barbara Park can only disclose Seller Carrie’s reason for moving if:
306) Cracks, holes, or rotten areas on a soffit are common ______ issues.
307) Frieda is practicing dual agency, and neither party seems to mind, even though she didn’t obtain informed consent. Is this legal?
308) If Mega Corporation owns real property, chances are it owns it in ______.
309) Cultivated crops are considered personal property even though they’re part of the soil, and they’re known as _______.
310) If Johnson Marketing’s capital gain on the sale of its business was $479,000, capital improvements were $227,000, and the adjusted basis in the property was $976,000, what was the sales price?
311) What is the purpose of a deed?
312) The Knolls are purchasing a property and are concerned about the title, so they want to have a title search performed. Who can perform a title search?
313) Benefits to an auction buyer or seller ______.
314) Which of the following auction properties would most likely be considered by a developer who wants to jump in and start building right away?
315) Licensee Grant is representing both the seller and the buyer in a transaction. What is the term for this type of agency?
316) ____________ have no restrictions on the types of real property they’re qualified to appraise.
317) 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?
318) Which of the following is the most thorough presentation of the appraiser’s solution to the appraisal problem?
319) Amperage is the amount of electricity flowing through a wire, and ______ is the amount of electrical pressure upon the wire.
320) Why are industrial lofts and warehouses often converted for residential or commercial uses?
321) Which of these best describes an appraiser’s typical work environment?
322) Species habitat, beauty, erosion control, and pollution treatment are all reasons that wetlands are ______.
323) Marissa, a buyer, asks you what she can do to prepare to buy. What should you tell her?
324) Under the Kentucky Property Management Agreement, how many days’ notice does an owner have to give an agent or broker regarding the contract’s early termination?
325) If an endangered species or wetlands exist on a site, which of the following is true?
326) A ___________ is qualified to appraise any one- to four-unit residential property, regardless of value or complexity, but isn’t qualified to appraise subdivisions.
327) Trent is at a(n) ______ auction, meaning that there’s a confidential minimum amount that will be accepted as the winning bid.
328) What’s a rehabilitation loan?
329) Which of the following statements about KREC’s one-time showing agreements is true?
330) What is a company checklist?
331) Denise is a real estate licensee performing a market analysis. She uses the Rule of Three. This means she selects three comparables _______.
332) Which type of depreciation is a loss in value due to defects in a structure’s design?
333) You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ________.
334) The cost approach to finding an appraised value measures _______.
335) In the conveyance of real property after death, what trumps any terms specified in the deceased person’s will?
336) If there’s an overall change in market value, what type of adjustment can an appraiser use to show the overall effect of the change?
337) Suppose Aimee wants to plan ahead and take the same number of credit hours a year to meet her 48 hours of required post-licensing education during KREC’s stipulated time period for PLE. How many hours of PLE would she need to complete each year?
338) Investors looking at property in a depressed neighborhood may be anticipating the _________ phase of a real estate cycle.
339) Price levels, vacancy rates, new building permits, inventory rates, and sales volume are all _______.
340) How many anchor stores does a regional shopping center normally have?
341) 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 ______.
342) What effect will a property’s utility have on the value if it’s currently uninhabitable?
343) Remembering the acronym PITI can help borrowers recall what makes up their ______.
344) Which of the following is a common problem with a foreclosure property purchase?
345) Careful handling of all funds is crucial to the success of a brokerage firm. Of special importance, however, is handling of ______.
346) The ______ model is used to value raw, vacant land when the highest and best use development divided into residential parcels.
347) 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 ________.
348) Why do appraisers gather and analyze information about a subject property’s neighborhood?
349) Legal permissibility, physical possibility, financial feasibility, and ______ are all considerations when determining highest and best use.
350) Why is poor weather or lackluster marketing a detriment to a seller on auction day?
351) The purpose of the Uniform Electronic Transaction Act (UETA) is to ____________.
352) 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. You could be sued for ______.
353) Which of the following describes a legal description?
354) Annabelle loves convenience, especially when it comes to shopping. She wants to invest in a commercial property that’s about 72,000 square feet and offers a hair salon, a few small restaurants, and a dry cleaner for the people who live in the area. What type of retail space is Annabelle considering?
355) When a lender charges a borrower more than the highest allowable interest rate, it is called ______.
356) Your buyers have done all the research possible on a property and are excited that they have the winning bid on auction day. They then discover that they don’t really get the property. What’s the most likely reason?
357) What must you do to assist your clients with environmental issues?
358) What type of agency exists when a buyer’s broker is the listing agent for the same property?
359) Which type of exclusive brokerage agreement in Kentucky provides the highest service to a seller client and the most protection for the broker’s commission?
360) A residential income property has 10 units. Each apartment rents for $1,000 per month and has two bedrooms, a bathroom, a living room, and a kitchen. What’s the scheduled rent for this property on an annual per room basis?
361) An appraiser is performing an income-based appraisal on a commercial property. Which of these items would be shown as a fixed expense on the appraiser’s reconstructed operating statement?
362) In full seller disclosure states, whose responsibility is it to notify the seller of the seller’s duty to disclose all known material defects?
363) HVAC is an acronym for what?
364) Why does the sales comparison approach rely upon data from arm’s length sales?
365) Rick is obtaining a loan for a commercial property. What can he expect from the loan process?
366) Which of the following terms refers to the increase or decrease in land value that occurs when several parcels are combined into one large plot?
367) Which approach might an appraiser weigh more heavily while reconciling the appraisal value of a vacant lot?
368) Which of the following formulas is used with the index method to find the reproduction cost?
369) In a 1031 exchange, there are rules governed by Section 1031 of the Internal Revenue Code. The rules include _______________.
370) Which best describes a purchase money mortgage?
371) Britney is selling her bungalow on an installment contract. The buyer made payments dutifully for five years, but has not made any payments for more than a year. Which of the following is true?
372) Another term for a valuation is ______.
373) When using an amortization chart, you use the interest rate and the loan term to arrive at a number, such as 5.17808. Now what do you do?
374) The final page of the Closing Disclosure provides loan calculations that tell the consumer ______.
375) What’s TRID?
376) Monty retired 10 years ago and would like to see the world, but his retirement account won’t support his desire to travel. Monty heard of a loan that would allow him to take advantage of the equity in his home by getting monthly payments from the bank with his house as collateral. What is this type of loan called?
377) Which government entity oversees open market operations?
378) What percentage of homes in the U.S. are owner-occupied?
379) Qualified mortgage requirements are set by the ______.
380) John wants to do a 1031 tax exchange. He just sold his property. How many days does he have to identify a new property?
381) Which type of mortgage is seller financing in which the buyer gives a mortgage to the seller toward the purchase price, and which buyers use as down payment financing?
382) The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral is called ______.
383) Robin has great credit and was able to secure a loan for her oceanside 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?
384) What is the benefit Ginny Mae investors have over other MBSs?
385) Loans create ________ for banks and other financiers.
386) A refinance is a ______.
387) The ______ clause allows the borrower to prepay principal on the loan at any time without penalty.
388) In which phase of the real estate market cycle would you expect to see property under valued and a large supply of homes on the market?
389) When a lender has a lien on a property, what rights does the lender hold?
390) The Mortgage Disclosure Improvement Act gives applicants a _________ to review and approve the Loan Estimate and Closing Disclosure form.
391) With this common loan type, the home is used as collateral and the loan creates a second mortgage if the first mortgage hasn’t been paid off.
392) Veterans using the ______ program aren’t required to submit a COE, get a new appraisal, or verify income.
393) Ted is in foreclosure but has some equity in his property. An investor suggests that Ted enter into a sales contract with him for a substantially higher price than the investor would actually be paying. The investor pockets the cash and allow the house to be foreclosed on. What sort of scheme is this?
394) Interest rates that are more than _____ over the current market rate are considered predatory lending.
395) Secured corporate bonds use ________ as collateral.
396) Which of the following is a true statement about deducting interest on mortgages taken out in tax years 2018 to 2025?
397) According to the National Association of REALTORS®, the majority of foreign investors in U.S. real estate are ______.
398) Under which section will you find any credits provided by the seller?
399) The section on the Loan Estimate called “Services You Cannot Shop For” includes fees for ______.
400) Which of the following is a true statement about the “hardest hit fund”?
401) Which of the following is an example of leveraging in a real estate transaction?
402) How do you determine debt coverage ratio?
403) Annual MIP can be removed from an FHA loan by ______.
404) Jody is concerned about the ______ that doesn’t allow her to start her gardening greenhouse because it sits next to a nature conservancy.
405) Rich wants to add a room to his house, so he takes out a home equity loan. This creates a/an __________ lien.
406) Kendra is purchasing a home and is ready to find a lender who will give her terms that she can afford. She has done her homework and knows that she can use ______ to compare loans and find the one that will best meet her needs.
407) Sylvia is a single mother living in a small town surrounded by ranch and farm land. She would like to buy a house there, but her income as a hair stylist makes it hard for her to qualify for a conventional loan. What government program might provide her with a direct loan to purchase a home?
408) Which of the following is an example of an inquiry initiated by a creditor that may appear on a credit report?
409) In addition to itemizing what are the borrower-paid closing costs, the prepaids section includes the __________ for each item.
410) Federal Housing Finance Agency established percentage targets and ___________ for loans made to low- to moderate-income borrowers.
411) Most adjustable rate mortgages have a feature that allows borrowers to _________ to a fixed-rate during a specific period of the mortgage.
412) What’s another name for the Homeowners Protection Act?
413) Which of these is a true statement about when a promissory note is sold?
414) An industrial development bond is a variety of _____ bond.
415) It’s possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ____ years apart.
416) The Federal Housing Administration’s loan program ______.
417) Which of these items did the FHA implement to stabilize and improve the mortgage market?
418) The ______ was enacted in 2010 to create stricter regulation of the financial services industry.
419) What did the National Association of REALTORS® say about foreign investment in U.S. real estate?
420) You may see a ________ named as a land contract, real estate contract, contract for sale, agreement for deed, or as articles of agreement.
421) Which of the following could be different from the amount on Loan Estimate that was initially received and can impact the monthly payment?
422) The housing ratio is the borrower’s monthly housing obligation as a percentage of ______ income.
423) Jackie is 10 days late on her loan payment. Will her lender place her loan in default?
424) The FHA offers a program for loan insurance on adjustable rate mortgages under ______ of the National Housing Act.
425) Robbie’s lender notifies him of an impending foreclosure, and is told that his property will be sold at public auction. After the auction occurs, Robbie receives a notice of eviction for which the lender had to petition a court. What does this describe?
426) What factors affect an adjustable rate mortgage?
427) What’s one reason a borrower would choose a split-or piggyback-loan option?
428) Which of these acts has special provisions for borrowers who are victims of overcharging?
429) Millie and Jerry are purchasing a home using their VA loan benefit. The sale price on the home they buy is $320,000, with 100% financing. Assuming that Jerry has a typical level of entitlement, how much of their loan does the VA guarantee?
430) The ______ sets requirements for mortgage loan originators.
431) Qualified mortgages require debt-to-income ratios of no more than ______.
432) Brenda’s go-to financial expert has no fiduciary responsibility to her. This is because she’s working with a(n) ______.
433) The Farm Credit System funds are acquired from __________.
434) The three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and ________.
435) Nick and Nora are purchasing their first home. Like most homebuyers, they obtain a mortgage loan, using the property as ______.
436) Glenn is purchasing a home for $400,000. The property appraised at $415,000, and Glenn is financing $300,000. What’s the loan-to-value ratio?
437) Emily has great credit and was able to secure a loan for her oceanside dream home. Her 30-year, fixed-rate loan is for an amount that’s above conventional loan limits. What type of loan does Emily have?
438) Danica and Rae purchased a home using a conventional fixed-rate loan that was 90% of the purchase price, since they could only afford a 10% down payment. Their monthly payment will include ______, but only for a portion of the loan term.
439) Acme Bank, a primary lender, sells its loans on the secondary market, so it makes sure that all its loans meet ______ requirements.
440) Chuck is selling his property to Kyle. Chuck has agreed to finance the transaction for Kyle, who will make payments to Chuck while Chuck retains the legal title to the property. What’s this an example of?
441) Lydia put the minimum 3.5% down on her $210,000 home. She’ll have to pay a mortgage insurance premium (MIP). What type of loan does Lydia have?
442) The VA-guaranteed loan uses _____ to pay for the costs of the program.
443) Krista is obtaining a loan to buy a home. Her loan agreement consists of one document called a note and one called a deed of trust. What is the role of the note?
444) When Stacy’s clients ask her if she can recommend a mortgage broker, she promptly gives them the name of the best mortgage broker she knows, Gary Jones. Later, she always receives a check from Gary as payment for the referral. Would this be legal or illegal under the Real Estate Settlement Procedures Act (RESPA)?
445) The purpose of the Truth in Lending Act (TILA) is to _______.
446) Scott is a California real estate licensee with an MLO endorsement. Arthur, his assistant, does not have an MLO endorsement but he does have a real estate license. Which of these activities must Scott perform?
447) 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?
448) Lizzy rents an apartment in a building that’s being converted to condominiums. By law, the owner of the building must give Lizzy ________.
449) Which of the following provides everything a lender needs to know in order to value the property used as collateral for a loan?
450) Which of the following license holders in Pennsylvania is exempt from fulfilling the continuing education requirements as part of the license renewal process?
451) The lender will require flood insurance if the home is ______.
452) 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?
453) 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 of value is this?
454) What piece of regulation or regulatory authority requires all levels of government to perform an environmental assessment any time any action is taken that may impact the environment?
455) The State Real Estate Commission holds regular meetings and at least one public meeting a year in Pittsburgh, Philadelphia, and ______.
456) When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach.
457) Thanks to this act, sites containing hazardous substances are identified, and responsible parties must clean them up.
458) Broker Hal enters into a listing agreement with seller Jane. Jane insists that the agreement state that only native-born U.S. citizens be allowed to buy the home. For what reason will this agreement be considered void?
459) Disclosing which of the following facts would be considered a fair housing violation?
460) Which of the following is a prohibited activity under Pennsylvania law?
461) What’s a covenant between a lessor and lessee?
462) In real estate contracts, which are required: legal descriptions or street addresses?
463) Which of the following is one of your duties as a listing agent?
464) 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?
465) A Pennsylvania licensee who acts in the buyer’s best interest and makes a continuous good-faith effort to find a property until the buyer enters into a purchase contract is a ______.
466) Which of these trusts is created according to the terms of the will of a deceased person?
467) 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?
468) Which of these is an example of a lot and block description?
469) Which of the following best describes the concept of appreciation?
470) How large is an acre?
471) Which of these items should real estate professionals help first-time buyers and buyers who have experienced recent credit issues to understand?
472) A period of stagnation in real estate when no one is buying and no one is selling is known as _____________________.
473) What’s the purpose of the Interstate Land Sales Full Disclosure Act?
474) Which type of Real Estate Investment Trusts derives a portion of its income from interest dividends?
475) Hugh works as a loan officer at a bank. Because of the SAFE Act, he must be registered with the
476) Which transaction must comply with Appraiser Independence Requirements?
477) A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the monthly payment is interest?
478) Which statement is true regarding government loans?
479) Under the ______________ , every mortgage loan originator must be fully licensed and carry a mortgage surety bond.
480) To be eligible for an ___________________ ,an applicant must have participated in farm or ranch management for at least three years.
481) A homeowner has been paying her mortgage for several years and has built up equity. She decides to take out a home equity line of credit because she needs some cash. This credit will create A
482) Which of the following describes a Treasury note?
483) The _________________ clause allows the borrower to prepay principal on the loan at any time without penalty.
484) Which of the following describes a Treasury bill?
485) Financing for a real estate transaction can use a note with a ___________________ or a note with a deed of trust.
486) Real estate professionals keep a multitude of other professionals busy during the buying and selling process. Which of these professionals or entities are most active outside of the buying and selling process?
487) Carmen purchased a single-family residence in Monterey County for $480,000 using an FHA loan. At the same time, Yancy made an offer on a single-family residence not far away in Fresno County for $300,000, and was told he could not use an FHA loan for the purchase. Why?
488) The ______ was created in response to the practice of redlining.
489) What’s the most common indicator of illegal property flipping?
490) Which of the following items would be included in the M2 money measure?
491) Mortgage revenue bonds are a variety of what other type of bond?
492) Rather than face foreclosure, Tony decides to cut his losses. He voluntarily conveys his property to his lender. What type of foreclosure alternative is this?
493) Conventional loans that are outside Fannie Mae or Freddie Mac guidelines are said to be ______.
494) Maggie has a neighbor, Jim, who’s facing foreclosure. She likes Jim and wants to help him out, so they agree to do a subject to purchase. What does this mean?
495) Farmer Mac is a program that ____________ for agricultural property loans, rural utility loans, and certain loans guaranteed by the U. S. Department of Agriculture.

496) Life insurance companies sometimes like to insure their investment in commercial projects by insisting on an equity position. This is known as ___________ financing.
497) Completing a residential loan application requires providing information about the borrower, the property being purchased, and the ________.
498) Hugh works as a loan officer at a bank. Because of the _____________, the must be registered with the Nationwide Mortgage Licensing System.
499) Financing for a real estate transaction can use a note with a _________ or a note with a deed of trust.
500) What is a government-sponsored enterprise (GSE)?
501) Under the “Projected Payments” section of the Loan Estimate, the consumer can review ______.
502) Who is the intended consumer group for the Streamlined Modification Program (SMP)?
503) In the event of a client lawsuit against an independent contractor operating under an LLC, typically, only ______ are at risk.
504) Mary Francis is on her way home from work and stops at the grocery store. The business account she opened recently gave her an ATM card to go with it. Should she use the card to buy groceries?
505) Which of the following is the most liquid money measure?
506) Which entity sets the criteria for the conforming loan limits?
507) Which of these features is shared by the mortgage and the deed of trust?

508) In a residential real estate sale involving a federally related loan, who’s required to provide Real Estate Settlement Procedures Act disclosures to the consumer?
509) The rate at which a bank can obtain an overnight loan from another bank without providing collateral is called ______.
510) One common predatory lending practice is to charge fees for unnecessary or ____________ loan products or services.
511) Janice is planning to borrow money from her retirement savings. Which of the following is a true statement about her situation?
512) Kathy decided to borrow funds from her retirement account to fund the down payment on her new house. Which of the following is true about this loan?
513) What did a 2019 National Association of REALTORS® study say about foreign investment in U.S. real estate?
514) You are preparing a competitive market analysis on a vacant lot that you hope to list for sale. Which of the following approaches to value will be used in the development of the estimated value?
515) The period over which a property may be profitably utilized is called its:
516) Wear and tear to the load bearing members of a building would be classified as:
517) While the economy is experiencing inflation, interest rates:
518) A broker secured a buyer for his client and the seller accepted. Under which type of listing could a broker not receive a commission?
519) Mr. Seller signs an open listing on his home with five different brokers. In this case:
520) A parcel of vacant land is listed for $100,000, requiring 20% down with the seller
to carry back the balance. The broker brings in a full-price cash offer, but the owner
refuses. The broker is entitled to:
521) Under a lease, the leasehold interest lies in the:
522) Which of the following requires real estate listings to be in writing?
523) All of the following listings require that the broker be the “procuring cause” of the
sale if he/she is to be entitled to a commission, EXCEPT:
524) Payment history, age of accounts, credit usage rate, inquiries, and _______ are factors considered in calculating a credit score.
525) A RAM is a type of equity financing. What does RAM stand for?
526) Kobi, an appraiser, is appraising a single-family home used for a rental. If he wants to use the income approach, he will likely use ______.
527) Veterans using the ______ program aren’t required to submit a COE, get a new appraisal, or verify income.