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 enforci