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Real Estate

Real Estate

by Jdawg2967, Dec. 2005

Subjects: estate real

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	When demand decreases and supply remains the same a. prices tend to rise. b. prices tend to fall. c. prices are not affected. d. the market becomes stagnant	b. prices tend to fall.
	A licensed real estate professional acting as a point of contact between two or more people in negotiating the sale, rental or purchase of a property is known as a(n) a. sales affiliate. b. broker. c. property manager. d. appraiser.	b. broker
	. Which of the following would NOT affect supply? a. Population b. Construction costs c. Government controls d. The labor force	A. population
	Which of the following is NOT a category of the uses of real property? a. Residential b. Developmental c. Agricultural d. Industrial	b. developmental
	Which of the following would NOT affect demand a. Population b. Demographics c. Wage levels d. Fiscal policy	d. Fiscal policy
	Which of the following does NOT affect how quickly the forces of supply and demand work? a. Degree of standardization of the product b. Mobility of the product c. Degree of standardization of the product’s price d. Mobility of the parties to the transaction	d. Mobility of the parties to the transaction
	The point at which supply and demand are balanced is known as a. highest and best use. b. balance. c. conformity. d. equilibrium.	d. equilibrium.
	When the supply of a commodity decreases a. prices tend to rise. b. prices tend to drop. c. demand tends to rise. d. demand tends to drop	a. prices tend to rise.
	. A broker responsible for maintaining a client’s property while maximizing income return is a. a rental agent. b. a building maintenance specialist. c. a property manager. d. an investment counselor	c. a property manager.
	. The study and description of the people in a community is called a. population. b. demographics. c. family lifestyles. d. households.	b. demographics.
	. The phrase “bundle of legal rights” is properly included in a. the definition of real property. b. a legal description. c. real estate transactions. d. leases for less than one year.	a. the definition of real property.
	. Which of the following is NOT included in one’s right to control their property? a. The right to invite people on the property for a political fundraiser b. The right to exclude the utilities’ meter reader c. The right to erect “no trespassing” signs d. The right to enjoy pride of ownership	b. The right to exclude the utilities’ meter reader
	According to law, a trade fixture is a. a fixture. b. an easement. c. personalty. d. a license.	c. personalty.
	K is interested in a house that fits most of her needs, but it is located in a busy area where she is not sure where she wants to live. Her concern about the property’s location is called a. physical deterioration. b. area preference. c. permanence of investment. d. immobility.	b. area preference.
	Which of the following is considered to be personal property? a. Wood-burning fireplace b. Awnings c. Bathtubs d. Patio furniture	d. Patio furniture
	Which of the following is NOT meant by the word “improvement”? a. Streets b. A sanitary sewer system c. Trade fixtures d. The foundation	c. Trade fixtures
	Real property can become personal property by a. severance. b. purchase. c. hypothecation. d. attachment.	a. severance.
	Which of the following is NOT a physical characteristics of land ? a. Indestructibility b. Uniqueness c. Immobility d. Scarcity	d. Scarcity
	A broker showed an owner-occupied property that had window screens, venetian blinds and a wall bed. The broker secured a buyer whose offer was accepted by the owner, and the transaction was placed in escrow. Before the close of escrow, the seller may remove a. all of the identified items as they are trade fixtures. b. only the venetian blinds as personal property. c. only the wall bed because it is real property. d. none of the identified items.	d. none of the identified items.
	Land is considered to be a. indestructible. b. a wasting asset. c. immune to the forces of supply and demand. d. subordinate to real property rights	a. indestructible.
	A rancher owns a parcel of land on which oil was discovered. If the rancher has not previously conveyed the oil rights, who owns the oil? a. The rancher b. The tenant to whom the property has been leased c. The state government d. The federal government	a. The rancher
	Certain items on the premises that are installed by the tenant and are related to the tenant’s business are called a. fixtures. b. emblements. c. trade fixtures. d. easements.	c. trade fixtures.
	Which of the following is NOT described as personal property ? a. Chattels b. Trade fixtures c. Emblements d. Fixtures	d. Fixtures
	Fixtures are a. real property. b. chattels. c. removable by a tenant before the expiration of the lease. d. removable by a tenant after the expiration of the lease.	a. real property.
	After the construction of a building over a railroad right-of-way, the trains can a. operate as usual. b. no longer use the tracks under the building. c. use the tracks under the building only if they cause no problem for the building’s occupants. d. use the tracks under the building as long as they first obtain the building owner’s permission.	a. operate as usual.
	Which of the following is NOT an economic characteristic of land ? a. Scarcity b. Permanence of investment c. Uniqueness d. Area preference	c. Uniqueness
	Generally, personal property can be distinguished from real property by its a. greater variety. b. mobility. c. price. d. multiplicity of use.	b. mobility.
	An important characteristic of land is that it may be modified or improved at any given time. Depending on its type, an improvement may increase the value of real estate greatly. Which one of the following would NOT be considered to be an improvement ? a. Sewers b. Crops c. Buildings d. Roads	b. Crops
	T leases store space to K for a restaurant, and K installs his ovens, booths, counters and other equipment. When do these items become real property? a. When they are installed b. When K defaults on his rental payments c. When the lease takes effect d. When the lease expires	d. When the lease expires
	The geographic location of any parcel of land a. can be changed as some substances are removable from the land. b. can never be changed. c. can be changed because the topography can be changed. d. can be changed only under certain legal circumstances.	b. can never be changed.
	Legally, the term improvements when referring to real estate would include a. shrubbery. b. trees. c. sidewalks. d. lawns.	c. sidewalks.
	Which of the following is NOT a test of determining a fixture? a. Intent of the parties b. Size of the item c. Method of attachment of the item d. Adaptation of the item to the real estate	b. Size of the item
	The owner of a house wants to fence the yard for her dog. When the fence is erected, the fencing materials are converted to real estate by a. severance. b. annexation. c. immobility. d. indestructibility	b. annexation.
	The physical characteristics of land include which of the following? a. Uniqueness b. Scarcity c. Permanence of investment d. Adaptation	a. Uniqueness
	The rights of ownership of real property do NOT include the right of a. disposition. b. exclusivity. c. control. d. compatibility.	d. compatibility.
	Which of the following is considered to have the greatest impact on the value of a property? a. Area preference b. Permanence of investment c. Scarcity d. Uniqueness	a. Area preference
	The foremost consideration in the purchase of a home is its affordability. What is the second? a. Construction specifications b. The age of the improvements c. The location of the property d. The landscaping and exterior	c. The location of the property
	The real cost of owning a home includes certain costs or expenses that many people overlook. Which of the following is NOT such a cost/expense? a. The income lost on cash invested in the home b. The interest paid on borrowed capital c. Maintenance and repair expenses d. Personal property taxes	d. Personal property taxes
	M listed her real estate for sale at $100,000. If her cost was 80 percent of the listing price, what will her percentage of profit be if her real estate is sold for the listing price? a. 10 percent b. 15 percent c. 20 percent d. 25 percent	d. 25 percent
	Most homeowner’s insurance policies contain which of the following clauses? a. A property improvement clause b. A coinsurance clause c. A co-ownership clause d. A property devaluation clause	b. A coinsurance clause
	The value that an owner has in the property that exceeds the amount of the mortgage debt is called a. equality. b. escrow. c. surplus. d. equity.	d. equity.
	One of the expenses the homeowner may NOT deduct when preparing his annual income tax return is a. real estate taxes. b. mortgage interest on a first home. c. mortgage interest on a second home. d. mortgage interest on a third home	d. mortgage interest on a third home
	In the event that a homeowner’s insurance policy provides coverage for less than 80 percent of the full replacement cost of the dwelling, then the loss of the residence will be settled for a. the market value of the property less the land value. b. the lowest repaid bid. c. either the actual cash value or the prorated repair cost. d. the total replacement cost.	c. either the actual cash value or the prorated repair cost.
	The Ls sold their vacation home for $88,000. If they made a profit of 10 percent, what was the original cost of the property? a. $61,000 b. $79,000 c. $79,200 d. $80,000	d. $80,000
	One factor that would NOT affect the desirability of the location of a residence would be a. retirement prospects. b. employment opportunities. c. social services. d. cultural advantages.	a. retirement prospects.
	The selling price of a property is $96,000. This can be financed if t he buyer can put 10 percent down and pay a loan origination fee of 1.5 percent. How much cash must the buyer produce to complete this transaction? a. $10,080 b. $10,896 c. $11,040 d. $11,084	b. $10,896
	Federal income tax law excludes gain realized on the sale of a primary residence for singles and couples. The amount of the exclusion is (single/couple): a. $100,000/$200,000 b. $125,000/$250,000 c. $250,000/$500,000 d. $300,000/$600,000	c. $250,000/$500,000
	Which of the following is NOT covered in a basic homeowner’s policy? Damage caused by a. fire and lightening. b. vandalism. c. windstorm and hail. d. flooding waters.	d. flooding waters.
	Federal income tax regulations allow a homeowner to reduce his or her taxable income by amounts paid for a. repairs and maintenance. b. hazard insurance premiums. c. real estate taxes. d. principal and interest	c. real estate taxes.
	A longer mortgage loan term will a. decrease the number of loans being made. b. result in lower monthly mortgage payments. c. prevent many individuals from owning homes. d. cause interest rates to increase	b. result in lower monthly mortgage payments.
	. The buyer of a $125,000 home has paid $2,000 as earnest money and has a loan commitment for 70 percent of the purchase price. The balance of the cash the buyer needs to complete the transaction is a. $3,500. b. $35,500. c. $37,000. d. $37,500	b. $35,500.
	A homeowner who wishes coverage greater than that provided by a basic insurance policy may choose a broad-form policy for coverage of which of the following additional perils? a. Flood or earthquake b. War of nuclear explosion c. Falling objects d. Volcanic eruption	c. Falling objects
	Mr. and Mrs. H have been living in their condominium at the shore for the past 4 years and leasing the house that they bought 25 years ago to a tenant. When they sell their house, how much of the capital gain will be taxable? a. 0 percent b. 40 percent c. 50 percent d. 100 percent if it is less than $500,000	d. 100 percent if it is less than $500,000
	The federal tax provisions allowing for the exclusion of a certain level of capital gain from taxation applies if the home is a. single family. b. condominium. c. part of a pud. d. any of the above.	d. any of the above.
	The real estate broker’s responsibility to keep the principal informed of all of the facts that could affect a transaction is the duty of a. care. b. disclosure. c. obedience. d. accounting.	b. disclosure.
	Which of the following would be considered to be a dual agency? a. The broker acting for both the buyer and the seller in the same transaction b. Brokers cooperating with each other c. The broker representing different principals d. The broker listing and selling the same property	a. The broker acting for both the buyer and the seller in the same transaction
	The relationship of a broker to his or her client is that of a(n) a. trustee. b. subagent. c. fiduciary. d. attorney in fact.	c. fiduciary.
	A real estate broker acting as the agent of the seller a. is obligated to render faithful service to the principal. b. can disclose the seller’s minimum price. c. should present to the seller only the highest offer for the property. d. can accept an offer on behalf of the seller.	a. is obligated to render faithful service to the principal.
	Statements by a real estate licensee exaggerating the benefits of a property are called a. polishing. b. puffing. c. prospecting. d. marketing.	b. puffing.
	A broker is permitted to represent both the seller and the buyer in the same transaction when a. the principals are not aware of such action. b. the broker is a subagent rather than the agent of the seller. c. commissions are collected from both parties. d. both parties have been informed and agree to the dual representation.	d. both parties have been informed and agree to the dual representation.
	Which of the following would NOT be considered fraudulent practice? a. Deceitful or dishonest practices. b. Exaggerated statements about the property. c. Omitted statements of material fact. d. Misstatements about the property	b. Exaggerated statements about the property.
	As an agent for the seller, a real estate broker can a. guarantee a prospective buyer that the seller will accept an offer at the listed price and terms. b. solicit an offer to purchase the property from a prospective buyer. c. advise a prospective buyer of the best manner of taking title to the property. d. change the terms of the listing contract on behalf of the seller.	b. solicit an offer to purchase the property from a prospective buyer.
	A seller has listed her home with a broker for $90,000, and the broker tells a prospective buyer to submit a low offer because the seller is desperate to sell. The buyer offers $85,000 and the seller accepts it. In this situation, a. the broker has violated his agency relationship with the seller. b. the broker was unethical, but the seller did get to sell her property. c. the broker acted properly to obtain a quick offer on the property. d. any broker is authorized to encourage such bids for the property	a. the broker has violated his agency relationship with the seller.
	When Broker H was told by his principal not to advertise her property in the XYZ newspaper, which was out of the area, Broker H complied because he a. had never advertised in the XYZ newspaper anyway. b. must obey the lawful instructions of his principal. c. was NOT intending to advertise the property at all. d. is allowed to advertise only in local newspapers.	b. must obey the lawful instructions of his principal.
	. It is the duty of an agent to disclose to the principal every step taken in the transaction of the principal’s business. This is because the a. commission can be adjusted up or down according to the agent’s efforts. b. agent has fiduciary obligations to the principal. c. terms of the listing contract require the agent to do so. d. terms of the purchase contract require the agent to do so.	b. agent has fiduciary obligations to the principal.
	Upon discovering a latent defect in the property, the licensee should discuss the problem with the seller and then a. notify the seller that the defect must be repaired. b. arrange for the repairs himself or herself. c. inform any prospective buyers of the defect. d. contact the city building inspector about the defect	c. inform any prospective buyers of the defect.
	A landowner subdivides his acreage and offers the lots for sale. Broker E tells the landowner that she can sell the lots. After Broker E sells some of the lots, the landowner refuses to pay her a commission. Broker E can a. report the landowner to the real estate licensing authorities. b. file a lien against the landowner’s remaining lots. c. sue the landowner for breach of contract. d. do nothing.	d. do nothing.
	A salesperson who is employed by a broker told a prospective buyer that the house she was looking at is “the best house in the area.” Because of this statement a. the salesperson was guilty of fraud. b. the broker was guilty of fraud because the employing broker is responsible for the actions of the salesperson. c. the salesperson was guilty of puffing. d. the salesperson would be guilty of fraud only if the buyer purchased the house.	c. the salesperson was guilty of puffing.
	Which of the following best defines the “law of agency?” a. The selling of another’s property by an authorized agency b. The rules of law that apply to the responsibilities of a person who acts for another c. The principles that govern one’s conduct in business d. The rules and regulations of the state’s licensing agency	b. The rules of law that apply to the responsibilities of a person who acts for another
	. A broker who is the agent of the buyer should do which of the following? a. Disclose to the seller that the buyer is a minority person b. Disclose to the seller the maximum price the buyer is willing to pay c. Present to the seller only offers that are acceptable d. Advise the buyer if the listing price of the seller’s house is unrealistic	d. Advise the buyer if the listing price of the seller’s house is unrealistic
	A salesperson sells a buyer a property listed by another brokerage firm in the MLS. The salesperson has been working with the buyer for many months but does not have an agency contract with the buyer. This salesperson has fiduciary obligations to a. the seller. b. the buyer. c. no one. d. the public.	a. the seller.
	A buyer who is shown properties listed for rent by a broker is the broker’s a. client. b. principal. c. customer. d. fiduciary.	c. customer.
	Mr. M’s house has been listed for sale for more than one year and he is very anxious to move into a retirement condominium. A salesperson, who is a subagent of the seller, tells a prospective buyer to make a low offer because the salesperson is sure that the seller will accept it. Regarding the salesperson’s conduct, which of the following would NOT be true? a. the salesperson acted appropriately to get the seller’s property sold. b. the salesperson violated the fiduciary to the seller. c. the salesperson’s conduct could indicate that she is working for the buyer. d. the salesperson should not assume that an anxious seller will accept a lower offer	a. the salesperson acted appropriately to get the seller’s property sold.
	A salesperson who represents the seller is showing a house to a prospective buyer. The salesperson knows that the house has a wet basement. Which of the following is true? a. Withholding the information protects the confidence of the seller. b. Disclosing the information could create a fiduciary with the buyer. c. Withholding the information prevents the buyer from making an informed decision. d. Disclosing the information violates the fiduciary to the seller.	c. Withholding the information prevents the buyer from making an informed decision.
	Which of the following would NOT need to be licensed when acting for another person in the sale or lease of real estate? a. One who is personally representing a dealer in real-estate b. Anyone acting under a power of attorney c. A relative of the party d. A next-door neighbor	b. Anyone acting under a power of attorney
	A broker cannot legally collect commissions from both the seller and the buyer without a. notifying both parties of this fact verbally after the sale has closed. b. notifying both parties of this fact in writing after the sale has closed. c. having exclusive listing agreements signed by both the seller and the buyer. d. having the prior knowledge and written consent of both the seller and the buyer.	d. having the prior knowledge and written consent of both the seller and the buyer.
	Broker W, in the course of selling a home to N, told her that the foundation was “solid as a rock” when he knew for a fact that it was slowly sinking into the landfill on which it was built. Which of the following is he NOT likely to be subjected to? a. Having his real estate license revoked b. Being sued criminally for restitution c. Being sued civilly for damages d. Being sued criminally for fraud	d. Being sued criminally for fraud
	The amount of commission due to a salesperson is determined by a. state law. b. the local real estate board. c. mutual agreement. d. court decree.	c. mutual agreement.
	. Broker J was accused of violating antitrust laws. She was probably accused of a. not having an equal housing opportunity sign in her office window. b. undisclosed dual agencies. c. allocation of customers or price fixing. d. dealing in unlicensed exchange services.	c. allocation of customers or price fixing.
	A real estate broker was responsible for a chain of events that resulted in the sale of one of his client’s properties. This is referred to as a a. pro forma. b. procuring cause. c. private offering. d. proffered offer.	b. procuring cause.
	A salesperson may advertise a property for sale only if he or she a. personally listed the property. b. uses the employing broker’s name in the advertisement. c. personally pays for the advertisement. d. is a member of the local real estate board.	b. uses the employing broker’s name in the advertisement.
	A parcel of vacant land 80 feet wide and 200 feet deep was sold for $200 per front foot. How much money would a salesperson receive for her 60 percent share in the 10 percent commission? a. $640 b. $960 c. $1,600 d. $2,400	b. $960
	A real estate salesperson who is an independent contractor receives a. a monthly salary or hourly wage. b. company-provided health insurance. c. company-provided automobile. d. negotiated commissions on transactions.	d. negotiated commissions on transactions.
	In a typical agency relationship between the broker and the client, the broker’s commission is determined by a. state law. b. the local real estate board. c. mutual agreement. d. minimums based on the property type	c. mutual agreement.
	Salesperson N finally concluded some extremely difficult negotiations that resulted in the sale of a listed parcel of property. For all of her extra efforts, she can legally demand a performance bonus from a. the seller. b. the buyer. c. her broker. d. no one.	d. no one.
	W is a salesperson working for Broker V. W sells a $150,000 home. The listed commission is 6.5 percent of the selling price. Out of this amount, 5% is payable to the referral network that referred the buyer, 35 percent goes to the listing broker, and 60 percent belongs to the cooperating broker. Broker V and W agreed that W would receive 55 percent of any commission that he generated for the office. For this transaction, W is entitled to receive a. $2,632.50 b. $3,217.50 c. $3,412.50 d. $5,850.00	b. $3,217.50
	Which of the following is NOT required of a broker in order for that broker to collect a commission on the sale of a property? That he or she a. had a valid real estate broker’s license. b. was a procuring cause. c. was employed to perform certain activities. d. belonged to a real estate board.	d. belonged to a real estate board.
	A broker lists a property for sale at $100,000 with a 5 percent commission and he later obtains a verbal offer to purchase the property from a prospective buyer. The seller indicates to the broker that the offer would be acceptable if it were submitted in writing. Before it can be put in writing, the buyer backs out and revokes the verbal offer. In this situation, the broker would be entitled to a. a commission of $5,000. b. only a partial commission. c. no commission. d. the normal rate of commission	c. no commission.
	Which of the following is NOT prohibited under the antitrust laws? a. Property management companies standardizing management fees b. Brokers allocating markets based on the value of homes c. Real estate companies agreeing NOT to cooperate with a broker because of the fees that broker charges d. A broker deciding whether to join a MLS	d. A broker deciding whether to join a MLS
	A broker’s salesperson lists a unit for sale in a condominium building. The salesperson in this transaction a. has a direct contractual relationship with the owners of the unit. b. acts on behalf of the broker. c. acts on behalf of the condominium association. d. must find a buyer for the unit to obtain a share of the commission	b. acts on behalf of the broker.
	There is a spectacular house that a salesperson from Firm A has been trying for several weeks to list for sale. The owners have been interviewing salespeople from different firms. They tell A’s salesperson that Firm B will charge 2% less commission for selling the house. What should A’s salesperson say to the owner to get the listing? a. Salespeople will not show Firm B’s listings because of their commission fees. b. Most brokers in the area charge a standard rate of commission, including Firm A. c. Firm B cannot provide good services because they charge less. d. Firm A provides excellent services to market their sellers’ properties.	d. Firm A provides excellent services to market their sellers’ properties.
	A licensed salesperson may receive compensation or commission from a. only the employing broker. b. from the principal. c. from any broker. d. from a landlord.	a. only the employing broker.
	The listing and selling brokers agree to split a 7% commission fifty-fifty on a $96,900 sale. The listing broker gives the listing salesperson 30% of his commission and the selling broker gives the selling salesperson 35% of his commission. How much does the selling salesperson earn from the sale? a. $1,139.78 b. $1,174.78 c. $971.95 d. $1,187.03	d. $1,187.03
	Unless some other written agreement has been made, the broker will usually receive the sales commission when a. the purchaser takes possession of the property. b. the seller lists the property with the broker. c. the transaction is closed. d. an offer is procured from a ready, willing and able buyer.	c. the transaction is closed.
	Which of the following is NOT a reason a listing agreement may be terminated ? a. Sale of the property b. Death of the salesperson c. Agreement of the parties d. Destruction of the premises	b. Death of the salesperson
	By executing a listing agreement with a seller, a real estate broker has become a. a procuring cause. b. obligated to open a special trust account. c. an agent of the seller. d. responsible for sharing commissions.	c. an agent of the seller.
	The provision in a listing agreement that gives additional authority to the broker and obligates the broker to distribute the listing to other brokers is a(n) a. joint listing clause. b. multiple listing clause. c. net listing clause. d. open listing clause.	b. multiple listing clause.
	A building sold for $157,000. The broker charged a 6 percent commission and divided it as follows: 10 percent to the salesperson who took the listing; one-half of the balance to the salesperson who made the sale; and the remainder to the broker. What was the listing salesperson’s commission? a. $239 b. $942 c. $1,570 d. $4,239	b. $942
	Broker W took a listing on a property and shortly thereafter discovered that her client had been previously declared incompetent by the court. The listing now is a. binding as the broker was acting in good faith. b. still valid. c. the basis for commission if the broker produces a buyer. d. void.	d. void.
	The type of listing agreement that provides for the payment of a commission to the broker even though the owner makes the sale without the aid of the broker is called a(n) a. exclusive-right-to-sell listing. b. open listing. c. exclusive-agency listing. d. option listing.	a. exclusive-right-to-sell listing.
	A property owner lists his property for sale with a broker. During the negotiations, the owner told the broker that the owner wanted $138,000 for the property, and anything above that amount the broker could keep as his commission. The listing with this type of provisions is known as the a. gross listing. b. net listing. c. open listing. d. non-exclusive listing.	b. net listing.
	Under which of the following listing agreements can the owner of listed property sell the property on his or her own without having to pay the listing broker a commission? a. Exclusive-right-to-sell listing b. Exclusive-agency listing c. Open listing d. Both b and c	d. Both b and c
	A property owner signed a 90-day listing agreement with a broker. The owner was killed in an accident before the listing expired. Now the listing is a. binding on the owner’s spouse for the remainder of the 90 days. b. still in effect as the owner’s intention was clearly defined. c. binding only if the broker can produce offers to purchase the property. d. terminated automatically upon the death of the principal.	d. terminated automatically upon the death of the principal.
	A listing contract in which the broker’s commission is contingent on the broker being able to produce a buyer before the property is sold by the owner or another broker is called a(n) a. open listing. b. net listing. c. exclusive-right-to-sell listing. d. exclusive-agency listing.	a. open listing.
	A broker who represents a seller under an exclusive listing receives two offers for the property at the same time, one from one of his salespeople and one from a salesperson of a cooperating broker. What should the broker do? a. Submit the offer from his salesperson first b. Submit the offer from the other salesperson first c. Submit the higher offer first d. Submit both offers at the same time	d. Submit both offers at the same time
	Which of the following is NOT a typical provision of a listing agreement? a. The price the seller is asking for the property b. The date the broker will schedule an open house c. The commission rate to be paid to the listing broker d. The responsibilities of the broker	b. The date the broker will schedule an open house
	The type of listing agreement that provides the least protection for the listing broker is the a. exclusive-right-to-sell listing. b. exclusive-agency listing. c. open listing. d. net listing.	c. open listing.
	If a seller needs to net $50,000 after the sale, how much must the real estate sell for if the selling costs include a 7% commission and $1,200 in other expenses? a. $54,700.00 b. $54,963.44 c. $55,053.76 d. $55,633.25	c. $55,053.76
	A seller refused to pay a commission to the broker even though there was a valid listing agreement and the broker procured a buyer for the property. What can the broker do? a. Sue the seller in court for the commission b. File a lien on the seller’s property for the amount of the commission c. Obtain an injunction to stop the transaction until the commission is paid d. Collect the commission from the buyer	a. Sue the seller in court for the commission
	Under an exclusive agency listing, the listing broker would NOT be entitled to a commission if a. the broker sells the property herself. b. the property is sold through another broker. c. the property is sold through the multiple-listing service. d. the seller sells the property to a neighbor across the street who has her property listed with another broker.	d. the seller sells the property to a neighbor across the street who has her property listed with another broker.
	Which of the following is NOT a type of listing contract? a. Open listing. b. Exclusive agency. c. Exclusive right-to-sell. d. MLS contract.	d. MLS contract.
	Which of the following is NOT a reason that a listing agreement may be terminated ? a. By mutual agreement b. By operation of law c. Because the seller can’t find another house to buy d. Because of impossibility of performance	c. Because the seller can’t find another house to buy
	The seller wants to net $65,000 on the sale of his house after paying the broker a fee of 6%. How much must the gross selling price be? a. $69,149 b. $68,093 c. $67,035 d. $66,091	a. $69,149
	The broker enters into a listing agreement with a seller in which the seller will receive $12,000 from the sale of a lot and the broker will receive any sale proceeds over this amount. This type of listing is a(n) a. gross listing. b. legal and ethical way to ensure that the broker is compensated. c. exclusive agency. d. net listing.	d. net listing.
	In some states the following type of listing is prohibited: a. Exclusive-right-to-sell b. Net listing c. Buyer Agency Agreement d. Open Listing	b. Net listing
	An owner who is interested in selling his house is usually concerned about how much money he can get when it sells. A competitive market analysis may help the seller determine a realistic listing price. Which of the following is true? a. A competitive market analysis is the same as an appraisal. b. A broker, not a salesperson, is permitted to prepare a competitive market analysis. c. A competitive market analysis is prepared by a certified real estate appraiser. d. A competitive market analysis contains a compilation of other similar properties that have sold.	d. A competitive market analysis contains a compilation of other similar properties that have sold.
	Two different brokerage companies claimed they were entitled to a commission from the sale of a property that was listed by one of the firms under an open listing agreement. The broker who is entitled to the commission is the one who a. listed the property. b. advertised the property. c. obtained the first offer. d. was the procuring cause of the sale.	d. was the procuring cause of the sale.
	Broker P listed the Ks’ property for sale under an exclusive-right-to-sell agreement. Today, one of P’s salespeople, T, obtained an offer to purchase the property along with a certified check for 5 percent of the purchase price as earnest money.What should T do with the earnest money check? a. Give it to the Ks. b. Hold it until the closing. c. Deposit the money in his trust account. d. Give the money to P for deposit in his trust account.	d. Give the money to P for deposit in his trust account
	An employment contract between a buyer and a broker would NOT be called a. an exclusive buyer agency agreement. b. an exclusive agency buyer agency agreement. c. an open buyer agency agreement. d. a net buyer agency agreement	d. a net buyer agency agreement
	Before signing a buyer agency agreement a licensee would NOT a. explain forms of agency available. b. obtain financial information from the buyer. c. inform the buyer of the charges or compensation for services. d. describe specific services to be provided.	b. obtain financial information from the buyer.
	An owner lists her property for sale with a broker. Another broker, however, finds a buyer for the house. The listing broker did not receive a commission from the sale. The type of listing contract between the owner and the broker could have been a(n) a. exclusive right-to-sell. b. exclusive agency. c. open listing. d. multiple listing.	c. open listing
	Under an exclusive (agency) buyer agency agreement the real estate broker would NOT be entitled to a commission a. if the broker sells the buyer a listing from another firm. b. if the property is a FISBO. c. if the buyer finds a suitable property without the broker. d. if the buyer cancels the agreement of sale.	c. if the buyer finds a suitable property without the broker.
	The salesperson received $2,800 commission on her 35% share of the total commission on the sale of a property that sold for $160,000. What was the commission rate? a. 10% b. 5% c.7% d. 4.5%	b. 5%
	A broker hires sales associates with an agreement to split the commission between the broker - 45%, the listing salesperson - 30%, and the selling salesperson. If the broker’s share is $2,430, the property sold for $90,000, and the listing salesperson’s share was $1,620, what was the selling sales associate’s share? a. $2,700 b. $1,800 c. $1,350 d. $1,295	c. $1,350
	A statutory right that a family has in its residence is called a. entirety. b. survivorship. c. curtesy. d. homestead.	d. homestead.
	A person who has complete control over a parcel of real estate is said to own a a. leasehold estate. b. fee simple estate. c. life estate. d. defeasible fee estate	b. fee simple estate.
	A portion of W’s building was inadvertently built on G’s land. This is called an a. accretion. b. avulsion. c. encroachment. d. easement.	c. encroachment.
	Many states determine the order of water rights according to which users of the water hold a recorded beneficial use permit. This allocation of water rights is determined by a. accretion. b. riparian theory. c. littoral theory. d. the doctrine of prior appropriation.	d. the doctrine of prior appropriation
	The purchase of a ticket for a professional sporting event gives the bearer a. an easement right to park his car. b. a license to enter and claim a seat for the duration of the game. c. an easement in gross interest in the professional sporting team. d. a license to sell goods and beverages at the sporting event.	b. a license to enter and claim a seat for the duration of the game.
	Which of the following has an indefinite duration? a. Freehold estate b. Less-than-freehold estate c. Estate for years d. License	a. Freehold estate
	If the owner of the dominant tenement becomes the owner of the servient tenement and merges the two properties, a. the easement becomes dormant. b. the easement is unaffected. c. the easement is terminated. d. the properties retain their former status.	c. the easement is terminated.
	A decedent left a will giving his neighbor the right to use a well on the decedent’s land as long as the neighbor was alive. The neighbor’s interest in the property is properly called a(n) a. license. b. easement in gross. c. easement appurtenant. d. life estate.	b. easement in gross.
	Homeowner G acquired the ownership of land that was deposited by a river running through her property by a. reliction. b. succession. c. avulsion. d. accretion.	d. accretion.
	A life estate conveys to the life tenant a. a leasehold for life. b. a reversionary interest. c. a legal life estate. d. ownership for life.	d. ownership for life.
	J owned the fee simple title to a vacant lot adjacent to a hospital and was persuaded to make a gift of the lot. She had her attorney prepare a deed that conveyed the ownership of the lot to the hospital “So long as it is used for medical purposes.” After the completion of the gift, the hospital will own a a. life estate. b. tenancy for years. c. fee simple determinable. d. periodic tenancy.	c. fee simple determinable
	The rights of the owner of property located along the banks of a river are called a. littoral rights. b. prior appropriation rights. c. riparian rights. d. hereditaments.	c. riparian rights.
	The local utility company dug up F’s garden to install a natural gas line. The company claimed it had a valid easement and proved it by the county records. F claimed the easement was not valid because he did not know about it. The easement a. was valid even though the owner did not know about it. b. was an appurtenant easement owned by the utility company. c. was not valid because it had not been used during the entire time that F owned property. d. was not valid because F was not informed of its existence when he purchased the property.	a. was valid even though the owner did not know about it.
	Which of the following is NOT an ownership right to real estate? a. Buildings located on the property. b. Air space above the property. c. Easements running with the land. d. Navigable rivers running through the property.	d. Navigable rivers running through the property.
	J and S are next-door neighbors. S tells J that he can store his camper in her yard for a few weeks until she needs the space. S did not charge J rent for the use of her yard. S has given J a(n) a. easement appurtenant. b. easement by necessity. c. estate in land. d. license.	d. license.
	Your neighbors use your driveway to reach their garage on their property. Your attorney explains that the ownership of the neighbors’ real estate includes an easement appurtenant giving them the driveway right. Your property is the a. leasehold interest. b. dominant tenement. c. servient tenement. d. license property.	c. servient tenement.
	Creditors suing a homeowner who has obtained a homestead exemption as provided by state law a. can have the court sell the residence and apply the full proceeds of the sale to the outstanding debts. b. have no right to sell the debtor’s residence. c. may request a court-ordered sale and have the proceeds in excess of the statutory exemption and exempted liens applied to the debts. d. can force the debtor to sell the residence in order to pay the outstanding debts in full.	c. may request a court-ordered sale and have the proceeds in excess of the statutory exemption and exempted liens applied to the debts.
	Q owned two acres of land. He sold one acre to F and reserved for himself an appurtenant easement over F’s land for ingress and egress. F’s land a. is the dominant tenement. b. is the servient tenement. c. can be cleared of the easement when Q sells the withheld acre to a third party. d. is subject to an easement in gross.	b. is the servient tenement.
	G owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. She wishes to subdivide the parcel into salable lots, but she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. Which of the following types of access rights would provide the greatest protection for a prospective purchaser? a. An easement in gross b. An appurtenant easement c. An easement by necessity d. A license	b. An appurtenant easement
	A homestead exemption protects against judgments a. of unsecured creditors. b. that result from unpaid taxes. c. that result from foreclosure of a mortgage. d. that result from the costs of improvements.	a. of unsecured creditors.
	The major intent of zoning regulations is to a. demonstrate the police power of the state. b. ensure the health, safety and welfare of the community. c. set limits on the amount and kinds of businesses in a given area. d. protect residential neighborhoods from encroachment by business and industry.	b. ensure the health, safety and welfare of the community.
	The owner of a secluded area adjacent to the Atlantic Ocean noticed that people from town walked along the shore in front of this property. The owner learned that the local citizens had been walking along this beach for years. The owner went to court to try to stop people from walking along the water’s edge in front of his property. The owner is likely to be a. unsuccessful because the local citizens have been doing this for years and thus have an easement. b. unsuccessful because the owner’s property extends only to the high-water mark and the public can use the land beyond this point. c. successful because the owner’s property extends to the middle of the water bed. d. successful because the owner can control access to his own property.	b. unsuccessful because the owner’s property extends only to the high-water mark and the public can use the land beyond this point.
	A deed conveys ownership to the grantee so as long as the existing building is not torn down. What type of estate did this deed create? a. A life estate b. A nondestructible estate c. A fee simple estate d. A determinable fee estate	d. A determinable fee estate
	Which of the following best describes a legal life estate? a. A homestead estate b. An estate conveyed by one party to a second party for the life of the second party c. An estate created by a will d. An estate conveyed to a second party subject to a condition	a. A homestead estate
	For land to be taken by the government under its right of eminent domain, which of the following must apply? a. The taking must be for a public purpose. b. There must be a statutory dedication. c. This must be an adverse action. d. There must be constructive notice.	a. The taking must be for a public purpose.
	H conveys a life estate to her grandson and stipulates that upon her death the estate will pass to her son-in-law. The son-in-law has a(n) a. estate in reversion. b. estate in remainder. c. estate for years. d. legal life estate.	b. estate in remainder.
	L conveys the ownership of his house to his mother and stipulates that upon her death he will recapture the ownership. The interest L has in the ownership is a a. remainder estate. b. curtesy estate. c. legal life estate. d. reversion estate	d. reversion estate
	The process by which the government can take ownership of a building that has deteriorated, with bricks falling on a public sidewalk, is a. escheat. b. eminent domain. c. condemnation. d. doctrine of public protection.	c. condemnation.
	Mrs. D conveys the ownership of her apartment building to a nursing home, anticipating that the rental income will help pay for her father’s care there. When her father dies, Mrs. D will recapture the ownership of the apartment building. This is an example of a a. remainder life estate. b. legal life estate. c. life estate pur autre vie. d. leasehold estate.	c. life estate pur autre vie.
	The developer grants to the gas company the right to install transmission lines. This right is called a(n) a. license. b. easement in gross. c. easement by prescription. d. conditional use permit.	b. easement in gross.
	A lot is encumbered by a sewer easement that runs where the foundation of a building would be. How will this affect the owner who wants to build a house? a. It will have no effect because the sewer line is deeper than the foundation would be. b. The house must be constructed to avoid the easement. c. The municipality must move the sewer line prior to construction. d. Any easement through the buildable part of the lot will prevent construction.	b. The house must be constructed to avoid the easement.
	A person wants to ensure that the ownership of real property can be willed to her children. Which of the following forms of ownership would the person want? a. A conventional life estate b. A fee estate c. A joint tenancy d. A license	b. A fee estate
	The owner divides a parcel into two lots, one of which is surrounded by other lots and has no street access. Which of the following is true? a. The municipality must construct a street to create access. b. The owner must create an easement by condemnation to provide access. c. An easement by prescription should be granted. d. An easement by necessity should be created for the land-locked parcel.	d. An easement by necessity should be created for the land-locked parcel.
	A person who acquired ownership that can be inherited, with the provision that the land must always be used for recreational purposes, has which of the following? a. A fee simple estate b. A conditional fee estate c. A restricted estate d. An estate that cannot be sold	b. A conditional fee estate
	The power by which government can acquire ownership of private land for public use is a. escheat. b. eminent domain. c. condemnation. d. doctrine of public acquisition.	b. eminent domain.
	A father conveyed the family home to his daughter by will as a pur autre vie estate for the life of her mother. If the daughter should die before the mother who holds the property? a. The mother b. The remaindermen c. The daughter’s estate d. The father’s other children	c. The daughter’s estate
	S and N bought a store building and took title as joint tenants. N died testate. S now owns the store: a. as a joint tenant with rights of survivorship. b. in severalty. c. as a tenant in common with N’s heirs. d. in trust.	b. in severalty.
	F has the legal right to occupy and use a certain residential structure. Which of the following does NOT describe F’s interest ? a. Fee simple b. Remainder c. Leasehold d. Life estate	b. Remainder
	Which of the following would be considered community property? a. A gift of property to the wife during the marriage b. Income earned by one spouse during the marriage c. Property inherited by the husband during the marriage d. Income earned by either party prior to the marriage	b. Income earned by one spouse during the marriage
	A trust is a legal arrangement whereby the title to property is held for the benefit of a third party by a(n) a. beneficiary. b. trustor. c. trustee. d. attorney in fact.	c. trustee.
	E lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan covering the entire property. Like the other residents, E owns stock in the corporation and has a lease to his apartment. This type of ownership is called a: a. condominium. b. planned unit development. c. time-share. d. cooperative.	d. cooperative.
	V and N are co-owners of a fee simple interest in a small office building. N dies intestate and leaves no estate to be distributed to his heirs. V is neither related to N nor a creditor of N. Which of the following would explain why V acquired the interest of N? a. Adverse possession b. Reversionary rights c. Joint tenancy d. Foreclosure	c. Joint tenancy
	An ownership interest that is based on annual occupancy intervals is the a. leasehold. b. time-share. c. condominium. d. cooperative.	b. time-share.
	J, M, and H are joint tenants owning a parcel of land. H conveys his interest to his long-time friend W. After the conveyance, J and M a. become tenants in common. b. continue to be joint tenants with H. c. become joint tenants with W. d. remain joint tenants owning a two-thirds interest.	d. remain joint tenants owning a two-thirds interest.
	K and U owned a combination apartment building with a small bar and grill on the premises. They shared their profits and losses on their venture equally, but they did not own the business under any written partnership agreement. One day, U died of a heart attack. If, after U’s death, K continued to own the same undivided interest in the real estate as he did before U’s death and no more, then: a. they were joint tenants. b. they were tenants in common. c. they were stockholders in their own corporation. d. U died intestate.	b. they were tenants in common.
	Which of the following does NOT have equal rights of possession? a. Tenancy in common b. Tenancy at will c. Tenancy by the entirety d. Joint tenancy	b. Tenancy at will
	In a gift of a parcel of real estate, one of the two owners was given an undivided 60 percent interest and the other received an undivided 40 percent interest. The two owners hold their interests as a. cooperative owners. b. joint tenants. c. community property owners. d. tenants in common.	d. tenants in common.
	In a community property state, separate property is owned a. solely by either spouse before the marriage or acquired by gift or inheritance by either spouse during the marriage. b. by one spouse before the marriage and jointly with the other spouse during the marriage. c. one-half by each living spouse during the marriage and then passes entirely to the survivor. d. jointly by one spouse and his or her deceased spouse’s descendants	a. solely by either spouse before the marriage or acquired by gift or inheritance by either spouse during the marriage.
	Under the community laws of the state in which they live, which of the following does NOT apply to the Ds ? a. Each also owns separate property. b. They may not convey community property without the other’s consent. c. Each also owns community property with others. d. They may not encumber community property without the other’s consent.	c. Each also owns community property with others.
	To create a joint tenancy relationship in the ownership of real estate, there must be unities of a. grantees, ownership, claim of right, and possession. b. title, interest, encumbrance, and survivorship. c. possession, time, interest, and title. d. ownership, possession, heirs, and title.	c. possession, time, interest, and title.
	A person who owns one unit in a multi-unit structure together with a specified undivided interest in the common elements would own a a. cooperative. b. share in a real estate investment trust. c. condominium. d. time-share interest.	c. condominium.
	Separate property owned by a married person in a community property state must be a. incorporated into the community property. b. kept totally separate from the community property. c. designed so that it eventually becomes community property. d. established prior to, not during, the marriage.	b. kept totally separate from the community property.
	A joint tenancy with right of survivorship may be created a. automatically if the property is distributed to the surviving children. b. by presumption if another form of ownership is not described. c. by deed or will. d. when a deed is signed by both spouses.	c. by deed or will.
	The owner of a condominium unit learns that a neighbor has failed to pay his real estate taxes. If this neighbor does not pay the taxes a. a lien can be filed against the condominium, including all of the units. b. a lien can be filed against the neighbor’s unit and his percentage of the common elements. c. a lien can be filed only against the common areas of the condominium. d. the taxing authority can order the condominium to be dissolved	b. a lien can be filed against the neighbor’s unit and his percentage of the common elements.
	A property held as tenancy by the entirety requires which of the following? a. The cotenants must be husband and wife. b. The property in question must be Torrens property. c. Upon the death of a cotenant, the decedent’s interest passes to his or her heirs. d. In the event of a dispute the property must be partitioned.	a. The cotenants must be husband and wife.
	In a community property state a. the property that a person accumulated prior to marriage is called separate property. b. the property that a person received as a gift during marriage is known as community property. c. all property owned by a married person is called community property. d. the property paid for by the earnings of one spouse during the marriage is knows as separate property.	a. the property that a person accumulated prior to marriage is called
	Which of the following is NOT an element of a joint tenancy with right of survivorship ? a. It is created only when four unities are present. b. It cannot be created by operation of law. c. Each joint tenant may pass on his or her interest to the heirs. d. The land may be the subject of a suit to partition.	c. Each joint tenant may pass on his or her interest to the heirs.
	Which of the following is a false statement about a condominium? a. A declaration must be filed before any units may be sold. b. Each unit owner has a fractional undivided interest in the common elements. c. Each owner receives a separate real estate tax statement. d. Each owner has a proprietary lease with the association for his or her own unit.	d. Each owner has a proprietary lease with the association for his or her own unit.
	Because Mr. and Mrs. J no longer need their large house, they decide to sell the house and move into a cooperative apartment building. In a cooperative they will a. become stockholders in a corporation. b. own their individual apartment. c. own the common elements. d. receive a 20 year lease to their apartment.	a. become stockholders in a corporation.
	The severalty owner of a parcel of land sells it to a buyer. The buyer insists that the owner’s wife join in signing the deed. The purpose of obtaining the wife’s signature is to a. terminate any rights the wife may have in the property. b. defeat any curtsey rights. c. provide evidence that the owner is married. d. subordinate the wife’s interests to the buyer.	a. terminate any rights the wife may have in the property.
	Under the condominium form of ownership, the owner’s interest in the unit would normally be a. a life estate. b. a fee simple estate. c. a reversionary estate. d. a proprietary leasehold.	b. a fee simple estate.
	A and B are joint tenants. B sells his interest to C. What is the relationship of A and C? a. They are joint tenants. b. They are tenants in common. c. There is no relationship because B cannot sell to C. d. A owns a 2/3 interest and C owns a 1/3 interest.	b. They are tenants in common.
	Tenancy with survivorship means a. the tenancy interest may be inherited. b. the tenancy interest may be held by the remaining tenants upon death. c. the tenant’s heirs are survivors. d. this is not a legal tenancy.	b. the tenancy interest may be held by the remaining tenants upon death.
	Acquisition of real estate by a group that includes one or more sponsors (promoters) and several investors is called a a. subdivision. b. time share. c. syndication. d. group investment.	c. syndication.
	A person purchases a fee simple estate and has an undivided interest in common elements. What does this person own? a. A tenancy in common b. A cooperative c. A condominium d. A tenancy by the entireties	c. A condominium
	Which of the following is true about condominium ownership? a. It cannot be mortgaged. b. The corporation pays the real estate taxes. c. The ownership cannot be willed. d. The limited common elements cannot be sold separately.	d. The limited common elements cannot be sold separately.
	The owner of a condominium is responsible for paying a monthly maintenance fee. If the owner fails to make this payment, which of the following is true? a. The owner is evicted. b. The debt is collected from other owners. c. The debt is liened against the unit. d. The debt is added to the mortgage payment.	c. The debt is liened against the unit.
	How does a cooperative obtain the funds necessary to cover on-going operating expenses and mortgage payments? a. Charge rent. b. Sell common elements. c. Assess shareholders. d. Charge special assessments	c. Assess shareholders.
	A trust that is established after the death of the owner is called a a. trust by will. b. testamentary trust. c. beneficial trust. d. living trust.	b. testamentary trust.
	In a land trust which of the following is NOT a correct statement? a. The beneficial interest can be transferred by assignment. b. The beneficiary is usually the trustor. c. Public records list all the beneficiaries. d. The property can be pledged as security for a loan without recording a mortgage.	c. Public records list all the beneficiaries.
	In a limited partnership a. the number of investors is limited to 10. b. all the partners participate in running the business. c. the general partners run the business. d. investors can participate with a small amount of capital with a minimum risk.	c. the general partners run the business.
	. In defining a corporation as a legal entity, which statement is NOT true? a. Stockholders have a direct ownership interest in the real estate. b. It is managed by the Board of directors. c. It continues to exist until formally dissolved. d. Profits are taxed on two levels: as corporation profit and as dividends top stockholders.	a. Stockholders have a direct ownership interest in the real estate.
	The difference between time-share use and a time-share estate is a. the amount of time sold to the buyer. b. one limits use to certain months, the other provides a rotation system for use. c. time-share use sells only right of occupancy, not a fee-simple estate. d. no difference except in terminology.	c. time-share use sells only right of occupancy, not a fee-simple estate.
	How many acres are in a lot that is ¼ of a mile wide by ¼ of a mile long? a. 10 b. 120 c. 40 d. 80	c. 40
	The numbering of sections in a township begins in the section in the a. northeast corner and then runs easterly. b. northwest corner and then runs easterly. c. northeast corner and then runs westerly. d. northwest corner and then runs westerly	a. northeast corner and then runs easterly.
	The following legal description contains how many acres: the South ½ of the SE ¼ of the NW ¼ of the NE ¼ of Section 7? a. 2.5 b. 5 c. 10 d. 20	b. 5
	A township contains a. 6 square miles. b. 640 acres. c. 23,040 square feet. d. 36 sections.	d. 36 sections.
	Strips of land six miles wide that run north and south are called a. tiers. b. ranges. c. latitudes. d. longitudes.	b. ranges.
	A metes and bounds legal description a. can be made only in areas excluded from the rectangular survey system. b. is not acceptable in court in most jurisdictions. c. must commence and finish at the same identifiable point. d. is used to complete areas omitted from recorded subdivision plats.	c. must commence and finish at the same identifiable point.
	How many lots, each measuring 72.5 feet wide by 100 feet deep, could be made from a two-acre parcel of land? a. 6 b. 7 c. 12 d. 14	c. 12
	A parcel of land described as “the NW ¼ of the SW ¼ of Section 6, T4N, R8W of the Third Principal Meridian” was sold for $875 per acre. The listing broker will receive a 5 percent commission on the total sales price. How much will the broker receive? a. $1,750 b. $5,040 c. $14,000 d. $15,040	a. $1,750
	The section of land reserved for school purposes in the rectangular survey system is section a. 12. b. 16. c. 20. d. 36.	b. 16.
	The system of legal description that defines a parcel of land by its perimeter is the a. geodetic survey. b. rectangular survey. c. lot and block system. d. metes and bounds system.	d. metes and bounds system.
	A metes and bounds legal description must a. cover an area larger than 10 acres. b. be used in areas not covered by the rectangular survey system. c. commence and finish at the same identifiable point. d. always use north as the basis for directions.	c. commence and finish at the same identifiable point.
	The primary survey line running east and west in the rectangular survey system is the a. township line. b. base line. c. range line. d. principal meridian.	b. base line.
	Which of the following parcels of land is the smallest? a. Two sections b. Five percent of a section c. Two square miles d. 1,280 acres	b. Five percent of a section
	“Beginning at the SE corner of the NE ¼ of the section, then due west 5,280 feet more or less to the SW corner of the NW ¼, the north along the west line of the section 2,640 feet more or less to the NW corner of said NW ¼, then in a straight line to the point of beginning.” How many acres does this parcel contain? a. 80 acres b. 160 acres c. 240 acres d. 320 acres	b. 160 acres
	A section a. is one mile square. b. contains 460 acres. c. has a perimeter of 5,280 square feet. d. can be numbered from 1 through 50.	a. is one mile square.
	A lot with a depth of 80 feet and an area of 4,800 square feet was sold for $350 per front foot. What was the total sales price? a. $21,000 b. $28,000 c. $31,800 d. $35,000	a. $21,000
	The primary survey line running north and south in the rectangular survey system is the a. township line. b. base line. c. range line. d. principal meridian.	d. principal meridian.
	A recorded subdivision plat is used in the a. geodetic survey system. b. rectangular survey system. c. lot and block system. d. metes and bounds system.	c. lot and block system.
	In parts of the country where there are many lakes and rivers, the rectangular survey system designations will often include a. hyphenated sections. b. meander-line sections. c. mean water-line sections. d. fractional sections.	d. fractional sections.
	The rectangular survey system section contains a. 36 townships. b. 160 government lots. c. 160 acres. d. 640 acres.	d. 640 acres.
	The method of describing land by degrees, feet and monuments is known as the a. angular system. b. metes and bounds system. c. rectangular survey system. d. lots and blocks system.	b. metes and bounds system.
	How many acres are in a description reading, “The NW ¼ of the SE ¼ and the S ½ of the SW ¼ of the NE ¼ of Section 4”? a. 40 acres b. 50 acres c. 60 acres d. 80 acres	c. 60 acres
	Which of the following is the best way to ensure that there are no encroachments and verify the boundaries of a parcel of land? a. Write a legal description b. Get a spot survey c. Find the monuments d. Verify the benchmarks	b. Get a spot survey
	A farmer owned Section #17 and sold the south one half. He then fenced in the northern one half. How many linear feet of fencing did he use if he had two 6 foot wide gates? a. 27,720 b. 15,828 c. 18,530 d. 14,250	b. 15,828
	The owner has a large parcel of land surveyed into lots and streets and files a subdivision plat. Each lot can be legally described by use of which of the following? a. Street address b. Government survey c. Metes and bounds d. Lots and blocks	d. Lots and blocks
	How many linear feet of fence are needed along 1.5 miles of roadway? a. 7,920 b. 8,250 c. 13,430 e. 16,450	a. 7,920 1.5 x 5,280 = 7,920 Ft
	When properly recorded in the county where the real estate of the defendant is located, a judgment becomes a(n) a. voluntary lien. b. involuntary lien. c. specific lien. d. equitable lien.	b. involuntary lien.
	When a company furnishes materials for the construction of a house and is subsequently not paid, it may file a(n) a. deficiency judgment. b. lis pendens. c. estoppel certificate. d. mechanic’s lien.	d. mechanic’s lien.
	Which of the following liens does NOT need to be recorded to be valid? a. Mortgage lien b. Real estate tax lien c. Judgment lien d. Mechanic’s lien	b. Real estate tax lien
	When a lien against a parcel of real estate may result from a lawsuit currently before the court, one examining the public records would look for a. the chain of title. b. a lis pendens. c. a suit to quiet title. d. a judgment lien.	b. a lis pendens.
	A mechanic’s lien would be properly classified as a(n) a. equitable lien. b. voluntary lien. c. general lien. d. statutory lien.	d. statutory lien.
	The current market value of a property is $35,000. For tax purposes, it is assessed at 40 percent of market value. The tax rate of $4 per $100 of assessed value. What is the amount of the tax due? a. $560 b. $625 c. $705 d. $740	a. $560
	Under which of the following types of liens can both the real property and the personal property of the debtor be sold to pay the debt? a. Real estate tax lien b. Mechanic’s lien c. Judgment lien d. Assessment lien	c. Judgment lien
	Which of the following is a voluntary lien? a. Mortgage lien b. Estate tax lien c. Real estate tax lien d. Judgment lien	a. Mortgage lien
	Mechanic’s liens are based on a. federal law. b. state law. c. common law. d. case law.	b. state law.
	A court orders real estate to be sold to satisfy an unpaid lien in an action known as a(n) a. encumbrance. b. attachment. c. seizure. d. foreclosure.	d. foreclosure.
	A mechanic’s lien can be filed against an owner’s real estate by a(n) a. real estate salesperson claiming part of the broker’s commission. b. lumber company furnishing materials ordered by the property owner. c. real estate broker claiming a commission under a rejected offer. d. individual who obtained a judgment against the property owner.	b. lumber company furnishing materials ordered by the property owner.
	The current market value of a property is $255,000 and it is assessed at 35 percent of its current market value with an equalization factor of 1.25. What is the amount of real estate tax due if the tax rate is $3.50 per $100 of assessed value? a. $2,756.25 b. $3,445.31 c. $3,904.69 d. $4,880.26	c. $3,904.69
	Judgment liens are a. specific liens. b. voluntary liens. c. statutory liens. d. equitable liens.	d. equitable liens.
	A property owner contracted to have a swimming pool installed on her property. When the pool was completed, she refused to pay for the improvement, and the contractor filed a lien for nonpayment. This lien was most likely a a. general lien. b. special lien. c. specific lien. d. voluntary lien.	c. specific lien.
	G has defaulted in the payment of several of his debts, and the court has ordered his property sold to satisfy them. A title search revealed several outstanding liens against the property. Which of the following liens has first priority? a. The outstanding first mortgage lien dated and recorded one year ago b. The current year’s real estate tax lien c. The judgment lien rendered and recorded last month d. The mechanic’s lien for work started two months before the mortgage was recorded	b. The current year’s real estate tax lien
	After real estate has been sold by the state or county to satisfy a delinquent tax lien, the defaulted owner usually has a right to a. have the sale canceled by paying the back taxes and penalties. b. pay his or her creditors directly and have their liens removed. c. redeem the property within the time specified by law. d. record a notice of non-responsibility for the unpaid taxes.	c. redeem the property within the time specified by law.
	Normally, the priority of general liens is determined by a. the order in which they are filed or recorded. b. the order in which the cause of action arose. c. the size of the claim. d. the court.	a. the order in which they are filed or recorded.
	Which of the following is NOT a specific lien? a. Real estate taxes b. Judgments c. Mortgages d. Mechanic’s liens	b. Judgments
	Which of the following is a lien on real estate? a. An easement b. A recorded mortgage c. An encroachment d. A restrictive covenant	b. A recorded mortgage
	When establishing priorities for liens a. a mechanic’s lien is always first in priority. b. the date on which the lien was recorded determines priority. c. the date on which the debt was incurred determines priority. d. a broker’s lien is automatically first in priority.	b. the date on which the lien was recorded determines priority.
	The current value of a property is $40,000. The property is assessed at 40% of its current value, with an equalization factor of 1.5 applied to the assessed value. If the tax rate is $4 per $100 of assessed value, what is the amount of tax due on the property? a. $640 b. $960 c. $1,600 d. $2,400	b. $960 40,000 x 40% = $16,000 $16,000 x 1.5 = $24,000 $24,000 x 4% = $960
	What is the difference between a general and a specific lien? a. A general lien cannot be enforced in court, while a specific lien can be enforced. b. A specific lien is held by one person, while a general lien is held by at least two persons. c. A general lien covers all of the debtor’s property, while a specific lien is covers only a certain piece of real property. d. A specific lien covers real estate, while a general lien covers personal property.	c. A general lien covers all of the debtor’s property, while a specific lien is covers only a certain piece of real property.
	If the market value of a property is $84,500 and the assessment ratio is 35%, what are the monthly taxes if the tax rate is 30 mills? a. $887.25 b. $942.50 c. $73.94 d. $87.72	c. $73.94 $84,500 x 35% = $29,575 ($29,575 x 0.030) / 12 = $73.94
	Taxes levied on a property owner to pay to install sidewalks or sewers are called a. ad valorem taxes. b. general property taxes. c. special excise taxes. d. special assessments.	d. special assessments.
	Debts that are incurred by an individual and become liens against the real property owned by that person are a. general liens. b. specific liens. c. fiduciary encumbrances. d. special assessments.	b. specific liens.
	The real estate taxes are $1200 a year. If the assessment rate is 20% and the tax rate is 120 mills, what is the current value of the property? a. $120,000 b. $80,000 c. $250,000 d. $50,000	d. $50,000 ($1,200 / 0.120) / 20% = $50,000
	The monthly taxes on a property are $200. If the tax rate is $4 per $100 of assessed value, what is the assessed value? a. $12,000 b. $90,000 c. $60,000 f. $240,000	c. $60,000 $200 x 12 = $2,400 $2,400 / 4% = $60,000
	A void contract is one that is a. not in writing. b. not legally enforceable. c. rescindable by agreement. d. voidable by only one of the parties.	b. not legally enforceable.
	The legal proceeding or legal action brought by either the buyer or the seller under a purchase contract to enforce the terms of the contract is known as a. an injunction. b. a lis pendens. c. an attachment. d. specific performance.	d. specific performance.
	The essential elements of a contract include all of the following EXCEPT a. offer and acceptance. b. notarized signatures. c. competent parties. d. consideration.	b. notarized signatures.
	If, upon the receipt of an offer to purchase his property under certain conditions, the seller makes a counteroffer, the prospective buyer is a. bound by his original offer. b. bound to accept the counteroffer. c. bound by whichever offer is lower. d. relieved of his original offer	d. relieved of his original offer
	The amount of earnest money deposit is determined by a. the real estate licensing statutes. b. an agreement between the parties. c. the broker’s office policy on such matters. d. the acceptable minimum of 5 percent of the purchase price.	b. an agreement between the parties.
	If the buyer defaulted some time ago on a written contract to purchase a seller’s real estate, the seller can still sue for damages if he is not prohibited from doing so by the a. statute of frauds. b. law of agency. c. statute of limitations. d. broker-attorney accord.	c. statute of limitations.
	A written real estate contract is assumed to be the complete agreement of the parties because of the a. statute of frauds. b. parol evidence rule. c. statute of limitations. d. rule of contracts.	b. parol evidence rule.
	Which of the following gives the best evidence of the buyer’s intention to carry out the terms of the real estate purchase contract? a. The “subject to” clause b. The agreement to seek mortgage financing c. The earnest money deposit d. The provision that “time is of the essence”	c. The earnest money deposit
	The term “rescind” means a. change. b. cancel. c. substitute. d. subordinate.	b. cancel.
	Which one of the following is NOT essential to the formation of a contract? a. Offer b. Acceptance c. Consideration d. Performance	d. Performance
	An option a. requires the optionee to complete the purchase. b. gives the optionee an easement on the property. c. keeps the offer open for a specified time. d. makes the seller liable for a commission.	c. keeps the offer open for a specified time
	When a prospective buyer makes a written purchase offer that the seller accepts, then the a. buyer may take possession of the real estate. b. seller grants the buyer ownership rights. c. buyer receives legal title to the property. d. buyer receives equitable title to the property.	d. buyer receives equitable title to the property.
	H agrees to purchase V’s real estate for $230,000, and deposits $6,900 earnest money with Broker L. However, V is unable to clear the title to the property, and H demands the return of his earnest money as provided in the purchase contract. Broker L should a. deduct his commission and return the balance to H. b. deduct his commission and give the balance to V. c. return the entire amount to H. d. give the entire amount to V to dispose of as he decides.	c. return the entire amount to H.
	Every real estate contract must have a(n) a. grantor and a grantee. b. offer and acceptance. c. acknowledgment by a notary. d. legal description.	b. offer and acceptance.
	A bilateral contract is one in which a. only one of the parties is obligated to act. b. the promise of one party is given in exchange for the promise of the other party. c. something is to be done by one party only. d. a restriction is placed in the contract by one party to limit the performance by the other.	b. the promise of one party is given in exchange for the promise of the other party.
	A buyer makes an earnest money deposit of $1,500 on a $15,000 property and then withdraws her offer before the seller can accept it. The broker is responsible for disposing of the earnest money by a. turning it over to the seller. b. deducting the commission and giving the balance to the seller. c. returning it to the buyer. d. depositing it in his or her trust account.	c. returning it to the buyer.
	. Broker K arrives to present a purchase offer to D, an invalid, and finds her son and his wife also present. In the presence of Broker K, both individuals persistently urge D to accept the offer, even though it is much lower than the price she has been asking for her home. If D accepts the offer, she may later claim that a. Broker K should not have brought her such a low offer for her property. b. she was under undue duress from her son and daughter-in-law, and therefore, the contract is voidable. c. Broker K defrauded her by allowing her son and his wife to see the purchase offer he brought to her. d. her consumer protection rights have been usurped by her son and daughter-in-law.	b. she was under undue duress from her son and daughter-in-law, and therefore, the contract is voidable.
	The law that requires real estate contracts to be in writing to be enforceable is the a. law of descent and distribution. b. statute of frauds. c. parole evidence rule. d. statute of limitations.	b. statute of frauds.
	If an owner takes his property off the market for a definite period of time in exchange for some consideration, but he grants the right to purchase the property within that period for a stated price, this is called a(n) a. option. b. contract of sale. c. right of first refusal. d. installment agreement.	a. option.
	Which of the following best describes earnest money? a. The consideration for the sale of the property b. The money put up by the buyer at the time the offer is made c. The commission to be paid to the broker d. The money to be used for paying for some of the closing costs	b. The money put up by the buyer at the time the offer is made
	A breach of contract is a refusal or a failure to comply with the terms of the contract. If the seller breaches the purchase contract, the buyer may do all of the following EXCEPT a. sue the seller for specific performance. b. rescind the contract and recover the earnest money. c. sue the seller for damages. d. sue the broker for nonperformance	d. sue the broker for nonperformance
	To assign a contract for the sale of real estate means to a. record the contract with the county recorder’s office. b. permit another broker to act as agent for the principal. c. transfer ones rights under the contract. d. allow the seller and the buyer to exchange positions	c. transfer ones rights under the contract.
	When a valid purchase contract is signed by the seller and the buyer, a. the seller retains reversionary rights. b. the buyer receives equitable title. c. the seller transfers legal title. d. the buyer forfeits possessory rights.	b. the buyer receives equitable title.
	If a broker deposits the buyer’s earnest money in a trust account, at what time is the seller entitled to receive it? a. When the offer is presented to the seller b. At the time of settlement c. After the settlement d. When the seller accepts the offer made by the buyer	b. At the time of settlement
	An offeree has the right to a. reject an offer. b. revoke an offer. c. rescind an offer. d. release an offer.	a. reject an offer.
	Which of the following best describes a contract that is voidable? a. The contract has no legal effect. b. The contract is oral. c. The contract may be valid. d. The contract has not been signed.	c. The contract may be valid.
	Two salespeople working for the same broker obtained offers on a property listed with their firm. The first offer was obtained early in the day. A second offer for a higher purchase price was obtained later in the afternoon. The broker presented the first offer to the seller that evening. The broker did not inform the seller about the second offer so that the seller could make a decision about the first offer. Which of the following is true? a. The broker’s actions are permissible provided the commission is split between the two salespeople. b. After the first offer was received the broker should have told the salespeople that no additional offers would be accepted until the seller decided on the offer. c. The broker has no authority to withhold any offers from the seller. d. The broker was smart to protect the seller from getting into a negotiating battle over two offers.	c. The broker has no authority to withhold any offers from the seller.
	A broker has an exclusive right-to-sell listing on a building. The owner is out of town when the broker gets an offer from a buyer to purchase the building providing the seller agrees to take a purchase money mortgage. The buyer must have a commitment from the seller before the seller is scheduled to return to the city. Under these circumstances the a. broker may enter into a binding agreement on behalf of the seller. b. broker may collect a commission even if the transaction falls through because of the seller’s absence from the city. c. the buyer is obligated to keep the offer open until the seller returns. d. the broker must obtain the signature of the seller to effect a contract.	d. the broker must obtain the signature of the seller to effect a contract.
	A broker took a listing and later discovered that the client was previously declared legally incompetent. The listing is now a. binding because the broker was acting as the owner’s agent in good faith. b. of no value to the broker because it is now void. c. the basis for the recovery of a commission if the broker produces a buyer. d. renegotiable.	b. of no value to the broker because it is now void.
	On Monday the seller offers to sell his vacant lot to the buyer for $12,000. On Tuesday, the buyer counter offers to buy for $10,500. On Friday the buyer withdraws the counteroffer and accepts the original offer of $12,000. Under these conditions a. there is a valid agreement because the buyer accepted the seller’s offer exactly as it was made. b. there is not a valid agreement because the buyer’s counteroffer was a rejection of the seller’s offer and, once it was rejected, it cannot be accepted later. c. there is a valid agreement because the buyer accepted before the seller advised the buyer that the offer is withdrawn. d. there is not a valid agreement because the seller’s offer was not accepted within 72 hours.	b. there is not a valid agreement because the buyer’s counteroffer was a rejection of the seller’s offer and, once it was rejected, it cannot be accepted later.
	In a option to purchase real estate, the optionee a. must purchase the property, but may do so at any time within the option period. b. has no obligation to purchase the property. c. is limited to a refund of the option consideration if the option is exercised. d. is the prospective seller of the property.	b. has no obligation to purchase the property.
	The broker receives an earnest money deposit with a written offer to purchase that includes a ten-day acceptance clause. On the fifth day, before the offer is accepted, the buyer notifies the broker that she is withdrawing the offer and demands the return of the earnest money deposit. In this situation a. the buyer cannot withdraw the offer because it must be held open for the full 10 days. b. the buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money. c. the seller and the broker have the right to each retain ½ of the deposit. d. the broker declares the deposit forfeited and retains it for his services.	b. the buyer has the right to revoke the offer at any time until it is
	At the time a buyer was negotiating the purchase of a lot on which to build a new home, the seller represented that the soil is firm enough to support the construction of a building when, in fact, the seller knew it is not. This contract is a. void. b. voidable by the buyer because of fraud. c. voidable by the seller because of the mistake. d. voidable by neither party because no harm was done yet.	b. voidable by the buyer because of fraud.
	. After the buyer and seller have signed a sales contract, the seller changes his mind and defaults. The buyer sues the seller to force him to go through with the contract. This is known as a suit for a. specific performance. b. damages. c. rescission. d. forfeiture.	a. specific performance.
	The concept that requires that an injured party to bring an action within a specific period of time after the injury is a. a variance. b. the statute of limitations. c. the statute of fraud. d. a waiver.	b. the statute of limitations.
	. A person must accept an offer to enter into a contract before a. the payment of any money. b. the death of the offeror. c. the close of the 10th business day following the offer. d. a similar offer is made to a third party.	b. the death of the offeror.
	A contract agreed to under duress is a. voidable. b. breached. c. discharged. d. void.	a. voidable.
	A real estate sales contract becomes valid or in effect when it has been signed by a. only the buyer. b. the buyer and seller. c. only the seller. d. the broker and the buyer.	b. the buyer and seller.
	Which of the following would NOT terminate an offer? a. Revocation of the offer before acceptance. b. Death of the offeror before acceptance. c. A counteroffer by the offeree. d. An offer from a third party.	d. An offer from a third party.
	The title to real estate passes when a valid deed is a. signed and recorded. b. delivered and accepted. c. filed and microfilmed. d. executed and mailed.	b. delivered and accepted.
	The primary purpose of a deed is to a. prove ownership. b. transfer title rights. c. give constructive notice. d. prevent adverse possession	b. transfer title rights.
	A special warranty deed differs from a general warranty deed in that the grantor's covenant in the special warranty deed a. applies only to a definite limited time. b. covers the time back to the original title. c. is implied and is not written in full. d. protects all subsequent owners of the property.	a. applies only to a definite limited time.
	The law that requires transfers of real property ownership to be in writing is the a. parol evidence rule. b. statute of limitations. c. rule of civil procedure. d. statute of frauds.	d. statute of frauds.
	A third party holds title to property on behalf of someone else through the use of a a. devise. b. quitclaim deed. c. bequest. d. trust deed.	d. trust deed.
	In a real estate transaction, any transfer taxes that are due are usually the responsibility of the a. buyer. b. seller. c. escrow agent. d. licensee.	b. seller.
	Title to real estate that is inherited from a person who died intestate is referred to as a a. legacy. b. bequest. c. devise. d. demise.	c. devise.
	Which of the following documents is signed by the owner of the real estate? a. A gift deed b. A trustee's deed c. A reconveyance deed d. A tax deed	a. A gift deed
	Which of the following deeds contains no expressed or implied warranties? a. A bargain and sale deed b. A quitclaim deed c. A warranty deed d. A grant deed	b. A quitclaim deed
	Which of the following is NOT required for a deed to be valid? a. Date b. Legal description c. Name of the grantee d. Signature of the grantee	d. Signature of the grantee
	The reversion of real estate to the state because of its lack of heirs or other persons legally entitled to own the property is called a. eminent domain. b. escheat. c. attachment. d. estoppel.	b. escheat.
	What is the purpose of the acknowledgment by a notary public on a deed? a. To make the deed eligible for recording b. To assure that the title is valid c. To show the genuineness of the grantor's signature d. To prove that the property has not been encumbered	c. To show the genuineness of the grantor's signature
	P owns a one-quarter undivided interest in a parcel of land, and he wants his interest transferred to his sister E. As a general rule, which of the following actions will transfer P's undivided interest out of his name? a. The redemption from a foreclosure sale b. The making and the signing of a will c. The delivery of the deed during the owner's lifetime d. The acceptance by signature of an offer to purchase	c. The delivery of the deed during the owner's lifetime
	A valid will devises the decedent's real estate after the payment of all debts, claims, inheritance taxes and expenses through the a. administrator of the estate. b. law of testate succession. c. granting clause established in the will. d. court action known as probate.	d. court action known as probate.
	When the grantor does not wish to convey certain property rights, he or she a. must note the exceptions in a separate document. b. may not do so, as the deed conveys the entire premises. c. may note the exceptions in the deed of conveyance. d. must convey the entire premises and have the grantee reconvey the rights to be retained by the grantor.	c. may note the exceptions in the deed of conveyance.
	F bought acreage in a distant county, never went to see it, and did not use it, although he regularly paid the real estate taxes on it. L moved his mobile home onto F's property, drilled a well for water, and lived there for many years. L may have become the owner of the acreage if he has complied with the state laws regarding a. intestate succession. b. adverse possession. c. the statute of frauds. d. the statute of limitations	b. adverse possession.
	In which of the following situations would a quitclaim deed be the most appropriate type of deed to use? a. To convey a marketable title b. To release a nominal real estate interest c. To remove a cloud on title d. To warrant that a title is valid	c. To remove a cloud on title
	The condemnation of private property for public use is exercised under the government right of a. taxation. b. escheat. c. manifest destiny. d. eminent domain.	d. eminent domain.
	. A trespasser built a log cabin in a national park and occupied the structure for over 15 years. That person will never be able to claim the property under adverse possession statutes because a. the possession was not "notorious." b. the possession was not "hostile." c. the property was not privately owned. d. the property was not properly fenced	c. the property was not privately owned.
	Grantee is to a deed as devisee is to a a. trust. b. will. c. estate. d. leasehold.	b. will.
	Which of the following is NOT true about adverse possession? a. The person taking possession of the property must do so without its owner's consent. b. Occupancy of the property must be continuous over a specified period of time. c. The person taking possession must compensate the owner at the end of the possessory period. d. The person taking possession may become the owner of the property.	c. The person taking possession must compensate the owner at the end of the possessory period.
	Which of the following would NOT transfer property upon the owner’s death? a. By devise b. By dedication c. By descent d. By escheat	b. By dedication
	A deed must be signed by the a. grantor. b. grantee. c. grantor and grantee. d. grantee and two witnesses.	a. grantor.
	Normally a deed will be considered valid even if a. it is signed by an attorney-in-fact rather than the seller. b. the grantor is not a legal entity. c. the grantor is a minor. d. the grantor did not deliver the deed.	a. it is signed by an attorney-in-fact rather than the seller.
	In order for a deed to be valid a. the grantor must be legally competent. b. the signature of the grantor must be witnessed. c. the deed must be recorded. d. the grantee must sign the deed.	a. the grantor must be legally competent.
	The seller conveyed a quitclaim deed to the buyer. Upon receipt of the deed, the buyer may be certain that a. the seller owned the property. b. there are no encumbrances against the property. c. the buyer now owns the property subject to certain claims of the seller. d. all of the seller's interests in the property belong to the buyer.	d. all of the seller's interests in the property belong to the buyer.
	The type of deed in which the grantor defends the title back to its beginning is a a. trustee's deed. b. quitclaim deed. c. special warranty deed. d. general warranty deed.	d. general warranty deed.
	Which of the following is true regarding a special warranty deed? a. The grantor is making additional warranties beyond those given in a warranty deed. b. The grantor retains an interest in the ownership. c. The grantor is warranting that no encumbrances exist against the property. d. The grantor's warranties are limited to the time the grantor owned the property.	d. The grantor's warranties are limited to the time the grantor owned the property.
	Two people own a building as joint tenants with right of survivorship. One of the tenants dies intestate. The other tenant now owns the building a. as a joint tenant with right of survivorship. b. in severalty. c. in absolute ownership under the law of descent. d. subject to the terms of the deceased's will.	b. in severalty.
	A single person owned a parcel of land. Subsequent to the owner's death the probate court determined the distribution of the land in accordance with the state's statutes. This person a. died testate. b. died intestate. c. was the devisee. d. was the grantee.	b. died intestate.
	Which of the following is an involuntary alienation of property? a. Quitclaim b. Inheritance c. Eminent domain d. Gift	c. Eminent domain
	The type of deed in which the granting clause states "remise, release, alienate and convey" is a a. special warranty deed. b. bargain and sale deed. c. quitclaim deed. d. sheriff's deed.	a. special warranty deed.
	. A grantor does not wish to be responsible for defects in the title that arise from previous owners but will guarantee the title for the time the grantor has the ownership. What type of deed would the grantor convey? a. Bargain and sale deed b. Quitclaim deed c. Reconveyance deed d. Special Warranty deed	d. Special Warranty deed
	Which of the following is an example of involuntary alienation? a. Selling a property to pay off debts b. Giving a piece of land to the zoo c. Having a piece of land sold for delinquent taxes d. Letting another person plant crops on an unused portion of a piece of land	c. Having a piece of land sold for delinquent taxes
	The clause in the deed that conveys the rights and privileges of ownership is called the a. habendum clause. b. appurtenance clause. c. granting clause. d. acknowledgment.	c. granting clause.
	Which of the following deeds can be executed without subjecting the grantor to legal warranties? a. Quitclaim b. Bargain and sale c. Trust d. Trustee's deed	a. Quitclaim
	The deed that "grants and releases" and implies that the grantor has title is a a. special warranty deed. b. bargain and sale deed. c. quitclaim deed. d. trust deed.	b. bargain and sale deed.
	. The deed states that the grantor is conveying all rights and interests of the grantor to have and to hold by the grantee. This is the a. acknowledgment clause. b. restriction clause. c. covenant of seizen. d. habendum clause.	d. habendum clause.
	What will happen to the real estate if the deceased owner did not write a will and has no heirs? a. The ownership will pass by devise. b. The ownership will escheat. c. The courts will seize the ownership. d. The ownership will revert to the previous owner.	b. The ownership will escheat.
	Under the terms of a trust established by a will, the trustee is required to sell the real estate the trust holds. The deed that will be delivered at settlement is a a. deed of release. b. warranty deed. c. trustee's deed. d. trustor's deed.	c. trustee's deed.
	Which of the following is acceptable as the evidence of marketable title? a. A trust deed b. A warranty deed c. A title insurance policy d. An affidavit	c. A title insurance policy
	When a claim is settled by a title insurance company, the company acquires all rights and claims of the insured against any other person who is responsible for the loss. This is known as a. caveat emptor. b. surety bonding. c. subordination. d. subrogation.	d. subrogation.
	Which of the following would be used to clear a defect from the title records? a. A lis pendens b. An estoppel certificate c. A suit to quiet title d. A writ of attachment	c. A suit to quiet title
	The part of the title insurance policy that sets forth all of the encumbrances and defects that will NOT be insured against is called the a. schedule of defects. b. citation clause. c. non-exclusionary clause. d. schedule of exceptions.	d. schedule of exceptions.
	An abstract of title does NOT provide evidence of title unless it is accompanied by a a. copy of the title insurance policy. b. letter of insurance coverage. c. letter of warranty. d. legal opinion of title.	d. legal opinion of title.
	A bill of sale is used to transfer the ownership of a. real property. b. fixtures. c. personal property. d. appurtenances.	c. personal property
	When U purchased her home, the title insurance policy she received did NOT include which of following ? a. A list of outstanding mortgage loans against the property b. A record of all of the previous owners of the property c. A report of the existing tax liens against the property	b. A record of all of the previous owners of the property
	A written summary of the history of all conveyances and legal proceedings affecting a specific parcel of real estate is called a(n) a. affidavit of title. b. certificate of title. c. abstract of title. d. title insurance policy	c. abstract of title.
	When the preliminary title report reveals the existence of an easement on the property, it indicates that the easement is a(n) a. lien. b. encumbrance. c. encroachment. d. tenement.	b. encumbrance.
	The recorded history of matters that affect the title to a specific parcel of real property is called a a. chain of title. b. certificate of title. c. title insurance policy. d. abstract of title.	d. abstract of title.
	. Generally, if some defect is found in the title to real property, the effect on a sales contract is that a. the contract is immediately void. b. a new contract must be written. c. the buyer has a reasonable time to find another property. d. the seller has a reasonable time to correct the defect.	d. the seller has a reasonable time to correct the defect.
	. Which of the following would NOT be considered evidence of marketable title? a. An abstract of title with a legal opinion b. A title commitment or title insurance policy c. A certificate of title by a real estate broker d. A. certificate of title by a real estate attorney	c. A certificate of title by a real estate broker
	The recordation of a warranty deed a. guarantees ownership. b. protects the interests of the grantee. c. prevents claims of parties in possession. d. provides defense against adverse possession	b. protects the interests of the grantee.
	Documents affecting real estate are recorded or filed with the county in which the property is located to a. satisfy the legal requirements for recording. b. give constructive notice of the real estate interest. c. comply with the terms of the statute of frauds. d. prove the execution of the document.	b. give constructive notice of the real estate interest.
	Which one of the following would NOT be acceptable as evidence of marketable title? a. A Torrens certificate b. A title insurance policy c. An abstract and legal opinion d. A property owner's warranty deed	d. A property owner's warranty deed
	Under the Torrens system, a. title passes when the registrar approves the grantor's deed for registration. b. the Torrens official performs exactly the same functions as the recorder of deeds. c. the original deed is mailed to the buyer after it has been registered. d. the registration of a title can be canceled by the owner at any time.	a. title passes when the registrar approves the grantor's deed for registration.
	The best assurance of good title that a real estate purchaser can obtain is a a. valid warranty deed signed by the seller. b. valid quitclaim deed signed by the seller. c. policy of title insurance. d. certificate of title.	c. policy of title insurance.
	A document that protects against hidden risks such as forgeries and loss due to defects in the title, subject to specific exceptions, is call a(n) a. chain of title. b. abstract of title. c. certificate of title. d. title insurance policy.	d. title insurance policy.
	The body of law that covers such topics as security agreements, financing statements, and bulk transfers is the a. American Land Title Association. b. Uniform Commercial Code. c. Parol Evidence Rule. d. Statute of Limitations	b. Uniform Commercial Code.
	The recording of a deed a. is all that is required to transfer the title to real estate. b. gives constructive notice of the ownership of real property. c. insures the interest in a parcel of real estate. d. warrants the title to real property.	b. gives constructive notice of the ownership of real property.
	A buyer took delivery of the deed to his new house but forgot to record the deed. Under these circumstances a. the transfer of the property from the seller is ineffective. b. the buyer's interest is not fully protected against third parties. c. the deed is invalid after 90 days. d. the deed in invalid after 6 months.	b. the buyer's interest is not fully protected against third parties.
	The mortgagee purchases a title insurance policy on the property a buyer is pledging as security for the mortgage loan. Which of the following is true? a. The policy is issued for the benefit of the buyer. b. The policy guarantees that the buyer's equity will be protected. c. The amount of coverage is commensurate with the loan amount. d. The amount of coverage increases as the borrower's equity increases	c. The amount of coverage is commensurate with the loan amount.
	Which of the following is an example of proof of ownership? a. An abstract of title b. A deed c. Title insurance d. A title search	c. Title insurance
	A defect or a cloud on the title may be cured by a. obtaining quitclaim deeds from all interested parties. b. bringing an action to register title. c. paying cash for the property at closing. d. obtaining title insurance.	a. obtaining quitclaim deeds from all interested parties.
	Which of the following is NOT true regarding public records? a. They give notice of encumbrances. b. They establish priority of liens. c. They guarantee marketable title. d. They provide constructive notice about interests in the property.	c. They guarantee marketable title.
	The primary reason a buyer obtains title insurance is a. because the mortgage lender requires it. b. to ensure that the buyer has marketable title. c. to ensure that the abstractor has prepared a complete summary of title. d. to pay future liens that may be filed.	b. to ensure that the buyer has marketable title.
	A sales contract requires the seller to deliver marketable title. Which of the following is true? a. The delivery of a general warranty deed will provide this assurance. b. A search of the public records will prove that the title is marketable. c. The seller will pay all liens that are pending. d. All encumbrances will be removed by the seller.	c. The seller will pay all liens that are pending.
	. An outstanding claim or encumbrance which, if valid, would impair an owner’s title is a a. color of title. b. cloud on the title. c. quiet title. d. subrogation.	b. cloud on the title.
	Quieting a title refers to a. a title insurance company's search of the title. b. a mortgagor relinquishing title after foreclosure. c. the deposit of a title with an escrow agent. d. the removal of a cloud on the title by court action.	d. the removal of a cloud on the title by court action.
	Under an installment contract, the title to the property is held by the a. vendor. b. vendee. c. trustor. d. trustee.	a. vendor.
	Charging more interest than is legally allowed is known as a. escheat. b. usury. c. a deficiency. d. an estoppel.	b. usury.
	A mortgagor is the one who a. gives the mortgage. b. holds the mortgage. c. provides the mortgage funds. d. forecloses on the mortgage.	a. gives the mortgage.
	A promissory note a. may not be executed in connection with a real estate loan. b. is an agreement to perform or not to perform certain acts. c. is the primary evidence of a debt. d. is a guarantee by a government agency	c. is the primary evidence of a debt.
	A land contract provides for the a. sale of unimproved land only. b. sale of real property under an option agreement. c. conveyance of legal title at a future date. d. immediate transfer of reversionary rights.	c. conveyance of legal title at a future date.
	The finance fee charged by the lender to make the loan is a(n) a. prepayment penalty. b. advance interest payment. c. loan origination fee. d. prepayment of mortgage insurance.	c. loan origination fee.
	If the amount realized at a sheriff's sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to a. the mortgagor. b. the mortgagee. c. the sheriff's office. d. the county.	a. the mortgagor.
	. L has just made the final payment on her home mortgage to her lender. There will still be a lien on her property until the lender records a(n) a. satisfaction of mortgage. b. reconveyance of mortgage. c. alienation of mortgage. d. reversion of mortgage.	a. satisfaction of mortgage.
	. An existing mortgage loan can have its lien priority lowered through the use of a a. hypothecation agreement. b. satisfaction of mortgage. c. subordination agreement. d. reconveyance of mortgage	a. hypothecation agreement.
	The right a mortgagor has to regain the property by paying the debt after a foreclosure sale is called a. acceleration. b. redemption. c. reversion. d. recapture	b. redemption.
	The clause in a trust deed or mortgage that permits the lender to declare the entire unpaid balance immediately due an payable upon default is the a. judgment clause. b. escalator clause. c. forfeiture clause. d. acceleration clause	d. acceleration clause
	A building was sold for $115,000. Earnest money in the amount of $15,000 was deposit in escrow, and the buyer obtained a new loan for the balance of the purchase price. The lender charged two discount points on the loan. What was the total amount of cash used by the buyer for this purchase? a. $2,300 b. $15,000 c. $17,000	c. $17,000 ($115,000 - $15,000) x 2% = $2,000 $15,000 + $2,000 = $17,000
	When a mortgage loan has been paid in full, it is important for the borrower to be sure that a. the paid note is placed in a safe deposit box. b. he or she obtains a deed of partial reconveyance. c. the paid mortgage is returned to the lender. d. a satisfaction of mortgage is recorded.	d. a satisfaction of mortgage is recorded.
	. In what way does a deed of trust differs from a mortgage ? i a. In the number of parties involved in the loan b. In the obligation of the borrower to repay the funds c. In the redemption rights allowed after foreclosure d. In the time period permitted to cure a default	a. In the number of parties involved in the loan
	. A person who assumes an existing mortgage loan is a. not personally liable for the repayment of the debt. b. not in danger of losing the property by default. c. personally responsible for paying the principal balance. d. generally released from liability, but not always.	c. personally responsible for paying the principal balance.
	. The interest in a property held by the owner in excess of any liens against it is called a. hypothecation. b. subordination. c. leverage. d. equity.	d. equity.
	The mortgagee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure sale, however, the house sold for only $29,000. The unpaid balance of the loan at the time of the sale was $40,000. What must the lender do to recover the $11,000 the borrower still owes? a. Sue for damages b. Sue for specific performance c. Seek a judgment by default d. Seek a deficiency judgment	d. Seek a deficiency judgment
	The clause in a mortgage instrument that would prevent the assumption of the mortgage by a new purchaser is a a. due on sale clause. b. power of sale clause. c. defeasance clause. d. certificate of sale clause	a. due on sale clause.
	The defeasance clause in a mortgage requires the mortgagee to execute a(n) a. assignment of mortgage. b. satisfaction of mortgage. c. subordination agreement. d. partial release agreement	b. satisfaction of mortgage.
	. The seller agrees to sell the house to the buyer for $100,000. The buyer was unable to qualify for a mortgage loan for this amount so the seller and buyer enter into a contract for deed. The interest the buyer has in the property under a contract for deed is a. legal title. b. equitable title. c. joint title. d. mortgagee in possession.	b. equitable title.
	. A "friendly foreclosure" enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by a(n) a. deed in lieu of foreclosure. b. reconveyance deed. c. assumption. d. escrow deed.	a. deed in lieu of foreclosure.
	Mortgage lenders want assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower to a. obtain title insurance. b. sign a note. c. pay into an impound account. d. submit paid tax receipts.	c. pay into an impound account.
	The pledging of property as security for payment of a loan is a. disintermediation. b. equity. c. hypothecation. d. subordination.	c. hypothecation.
	When real estate is sold under an installment land contract and the buyer takes possession of the property, the legal title a. is subject to a purchase money mortgage. b. must be transferred to a land trust. c. is kept by the seller until the purchase price is paid according to the contract. d. is transferred to the buyer	c. is kept by the seller until the purchase price is paid according to the contract.
	Which of the following is true about an installment contract (land contract)? a. The buyer is given possession. b. The seller delivers a deed to the buyer. c. The buyer obtains a mortgage loan. d. The seller delivers legal title to the buyer	a. The buyer is given possession.
	If a buyer obtains a $50,000 mortgage with 4 points, how much will the lender charge at closing? a. $6,000 b. $200 c. $2,000 d. $40,000	c. $2,000 $50,000 x 4% = $2,000
	In absence of an agreement to the contrary, the mortgage having priority will be the one a. for the highest amount. b. which was recorded first. c. which was the first mortgage. d. that is a construction loan.	b. which was recorded first.
	The purpose of a mortgage is to a. provide security for the loan. b. convey title of the property to the lender. c. restrict the borrower's use of the property. d. create a lien on the property.	a. provide security for the loan.
	If a property sold at a mortgage foreclosure does not sell for an amount sufficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for a. a default judgment. b. a deficiency judgment. c. liquidated damages. d. punitive damages.	b. a deficiency judgment.
	. K has just purchased his first home with a fixed-rate loan. The interest he will pay over the life of the loan is a. simple interest. b. compound interest. c. prepaid interest. d. discounted interest.	a. simple interest
	The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the a. amortization ratio. b. loan-to-value ratio. c. debt-to-equity ratio. d. capital-use ratio.	b. loan-to-value ratio.
	The purpose of the Real Estate Settlement Procedures Act (RESPA) is to a. see that buyers do not borrow more money than they can repay. b. make real estate brokers more responsive to the needs of buyers. c. help sellers know how much money is required to purchase the property. d. see that buyers and sellers know all of their settlement costs.	d. see that buyers and sellers know all of their settlement costs.
	If the quarterly interest at 10-1/2 percent is $3,150, the principal amount of the loan is a. $30,000. b. $60,000. c. $90,000. d. $120,000.	d. $120,000.
	Fannie Mae a. makes FHA loans. b. buys FHA loans. c. services FHA loans. d. insures FHA loans	b. buys FHA loans
	The grantor becomes the lessee and the grantee becomes the lessor under which of the following financing arrangements? a. Partial sale b. Wraparound mortgage c. Sale and leaseback d. Assumption of mortgage	c. Sale and leaseback
	Which of the following pairs of terms is considered synonymous? a. Interim financing and construction loan b. Construction loan and pass-through loan c. Pass-through loan and take-out loan d. Take-out loan and construction loan	a. Interim financing and construction loan
	The type of real estate loan that allows the lender to increase the outstanding balance of a loan up to the original sum in the note while advancing additional funds is the a. wraparound mortgage. b. open-end mortgage. c. growing-equity mortgage. d. graduated-payment mortgage.	b. open-end mortgage.
	Which of the following statements is true? a. The priority of a mortgage is determined by the date on which it was executed. b. A mortgage document contains no covenants or promises on the part of the borrower. c. A deed of trust is typically conveyed by the trustor to the beneficiary. d. A buyer does not have to be a veteran to assume a VA loan. 10. Which of the following loans to individuals is NOT affected by the Truth in Lending Law implemented by Regulation Z, that sets forth certain requirements regarding real estate loans? a. Household use b. Business use c. Room additions d. Swimming pools 11. An FHA-insured mortgage loan would be obtained from which of the following? a. The Federal Housing Administration b. The Department of Housing and Urban Development c. Any qualified lending institution d. Any qualified insuring institution 12. Fannie Mae, Ginnie Mae, and Freddie Mac have in common the purpose of a. originating residential mortgage loans. b. purchasing existing mortgage loans. c. insuring residential mortgage loans. d. guaranteeing existing mortgage loans. 13. A mortgage broker generally offers which of the following services? a. Handling the escrow procedures b. Bringing the borrower and the lender together c. Providing credit qualification and evaluation reports d. Granting real estate loans using investor funds 14. An eligible veteran made a purchase offer of $80,000 on a home he wants to finance with a VA-guaranteed loan. Four weeks after the offer was accepted, a certificate of reasonable value (CRV) for $77,000 was issued for the property. In this situation, the veteran could NOT do which of the following ? a. Withdraw from the transaction without penalty. b. Purchase the property with a $3,000 cash down payment. c. Negotiate with the seller to reduce the price $3,000. d. Borrow the $3,000 for the cash down payment. 15. A borrower obtained a $7,000 second mortgage loan for 5 years at 6 percent interest per annum. Monthly payments were $50. The final payment included the remaining outstanding principal balance. What type of loan is this? a. A fully amortized loan b. A straight loan c. A partially amortized loan d. An accelerated loan	c. A partially amortized loan
	The discount points charged on a VA guaranteed mortgage loan could NOT be paid by which of the following? a. The buyer b. The seller c. The buyer and seller d. The mortgage loan	d. The mortgage loan
	The principal distinction between the primary mortgage market and the secondary mortgage market is in the a. insuring versus the guaranteeing of mortgage loans. b. origination versus the purchase of mortgage loans. c. use of mortgages versus the use of deeds of trust. d. use of discount points versus the use of origination fees.	b. origination versus the purchase of mortgage loans.
	A real estate loan payable in periodic installments that are sufficient to pay the principal in full during the term of the loan is called a(n) a. conventional loan. b. straight loan. c. participation loan. d. amortized loan.	d. amortized loan.
	. An extension of credit from a seller to the buyer to allow the buyer to complete the transaction is called a a. growing equity mortgage. b. purchase money mortgage. c. package mortgage. d. blanket mortgage.	b. purchase money mortgage.
	When compared with a 30-year payment period, taking out a loan with a 20-year payment period would NOT result in a. faster amortization. b. higher monthly payments. c. quicker equity buildup. d. greater impound amounts.	d. greater impound amounts.
	If the interest rate on an FHA-insured mortgage loan is 11-1/2 percent and the monthly payment is $1,412, the principal sum would be a. $12,278. b. $147,339. c. $162,383. d. $194,561.	b. $147,339.
	PMI is the acronym for Private Mortgage Insurance often used by borrowers whose LTV (loan-to-value) ratio is less than 20%. Lenders must cease charging PMI when the LTV is a. 22 %. b. 27%. c. 29%. d. 35%.	a. 22 %
	From which of the following would a borrower most likely obtain a residential real estate mortgage loan? a. An insurance company b. A pension fund c. A commercial bank d. A savings and loan association	d. A savings and loan association
	Regulation Z applies to a. business loans. b. real estate sales agreements. c. commercial loans under $10,000. d. personal credit transactions under $25,000.	d. personal credit transactions under $25,000.
	FNMA's activities do NOT include a. buying and selling FHA and VA mortgages. b. buying and selling conventional mortgages. c. buying and selling mortgages at full face value. d. buying and selling mortgages at discounted values.	c. buying and selling mortgages at full face value.
	As an entity operating in the secondary mortgage market, the Federal Home Loan Mortgage Corporation was established to assist the a. Federal Housing Administration. b. Federal National Mortgage Association. c. federal savings and loans. d. federal banks.	c. federal savings and loans.
	A graduated payment loan is one in which a. mortgage payments decrease. b. mortgage payments balloon in 5 years. c. mortgage payments increase. d. the interest rate on the loan adjusts annually.	c. mortgage payments increase.
	. If the amount of a loan is $13,500 and the interest rate is 7 1/2% what is the amount of the semiannual interest payment? a. $596.55 b. $506.25 c. $602.62 d. $457.14	b. $506.25
	The type of mortgage loan that uses both real and personal property as security is a a. blanket mortgage. b. package mortgage. c. purchase money mortgage. d. wraparound mortgage.	b. package mortgage.
	The supply of mortgage money for single-family homes is regulated by the Federal Reserve System through which of the following? a. Reserve requirements and discount rates b. Federal National Mortgage Association c. Federal Housing Administration d. Resolution Trust Corporation	a. Reserve requirements and discount rates
	Which of the following normally purchases mortgages in the secondary mortgage market? a. Mortgage bankers b. Ginnie Mae c. Federal Housing Administration d. Veterans Administration	b. Ginnie Mae
	If a house sold for $80,000 and the buyer obtained a loan for $72,000, how much money would the buyer pay if the lender charged 3 points? a. $2400 b. $2328 c. $2160 d. $240	c. $2160
	A mortgage loan requires monthly payments of $175.75 for 20 years and a final payment of $5,095. This type of a mortgage loan is a(n) a. wraparound mortgage. b. accelerated mortgage. c. balloon mortgage. d. variable mortgage.	c. balloon mortgage.
	In a sale-and-leaseback arrangement the a. seller retains legal title to the real estate. b. buyer becomes the lessee. c. broker will not earn a commission. d. buyer becomes the lessor.	d. buyer becomes the lessor.
	Last month's loan payment included $412.50 interest on a $60,000 loan balance. What is the annual rate of interest? a. 7 1/2 percent b. 7 3/4 percent c. 8 1/4 percent d. 8 1/2 percent	c. 8 1/4 percent
	Mrs. D has owned her house for over 50 years. It has fallen into disrepair but, because she lives on a fixed income, she does not have the money to make the needed repairs. She has a considerable amount of equity in the house. What type of loan best suits her needs? a. A home equity loan b. A reverse annuity mortgage c. A blanket loan d. An open-ended loan	b. A reverse annuity mortgage
	The type of loan that will most likely have the lowest loan-to-value ratio is a a. VA loan. b. FHA loan. c. PMI loan. d. conventional loan.	d. conventional loan.
	A lender may protect its interest in a mortgage loan by obtaining additional security from a. private mortgage insurance. b. title insurance. c. the borrower's note. d. impound accounts.	a. private mortgage insurance.
	A lender will take certain factors into consideration when deciding whether to grant a borrower a mortgage loan. One of the following is NOT a legitimate factor. a. The marital status of the borrower b. The creditworthiness of the borrower c. The amount of the borrower's income d. The ability of the borrower to make the payments	a. The marital status of the borrower
	One of the ways lenders increase their revenue is by servicing loans. Which of the following is NOT an activity of servicing loans ? a. Collecting payments b. Paying real estate taxes from escrow accounts c. Renegotiating interest rates d. Sending overdue notices	c. Renegotiating interest rates
	A developer had a mortgage loan on his entire housing development. When he sold a lot to a buyer, he was able to deliver title to that lot free of the mortgage lien by obtaining a partial release. What type of loan did the developer have? a. Blanket mortgage b. Purchase money mortgage c. Package mortgage d. Open-end mortgage	a. Blanket mortgage
	The T's apartment lease has expired, but their landlord has indicated to them that they may remain on the premises until a sale of the building is closed. The Ts will be charged their normal monthly rental during this period. The tenancy held by the Ts is called a(n) a. year to year holdover. b. estate for term. c. estate at sufferance. d. estate at will.	d. estate at will.
	Generally, an oral lease for five years is a. illegal. b. unenforceable. c. a short-term lease. d. renewable only in writing.	b. unenforceable.
	An office rents for $450 per month and measures 12 feet by 20 feet. The advertised annual rent per square foot would be a. $1.875. b. $4.50. c. $18.75. d. $22.50	d. $22.50 12 x 20 = 240 Sq Ft ($450 / 240) x 12 = $22.50
	Rent would best be defined as a. the contractual consideration to a third party. b. the consideration for the use of real property. c. all monies paid by the lessor to the lessee. d. the total amount owed under the terms of a lease	b. the consideration for the use of real property.
	Which of the following tenancies does NOT involve a lessor-lessee? a. Tenancy at will b. Tenancy in common. c. Tenancy from month to month. d. Tenancy from year to year.	b. Tenancy in common.
	The tenant leases a heated apartment, but the landlord fails to provide heat because of a defective central heating plant. The tenant vacates the premises and refuses to pay any rent. This is an example of a. abandonment. b. actual eviction. c. constructive eviction. d. lessor negligence.	c. constructive eviction.
	A lease would be terminated by which of the following? a. The sale of the leased premises b. The death of the tenant c. The abandonment of the leased premises by the tenant d. The expiration of the term of the lease	d. The expiration of the term of the lease
	. For a written lease to be valid, it must contain a. the signatures of both the lessor and the lessee. b. a statement of the specific length of time. c. a statement of the retention of the reversionary interest by the lessor. d. a complete legal description of the premises	a. the signatures of both the lessor and the lessee.
	The authority to carry out the eviction of a delinquent tenant from rented property is held by the a. court. b. landlord. c. sheriff. d. property owner.	c. sheriff.
	Which of the following would NOT acquire title to real property ? a. The grantee b. The devisee c. The vendee d. The lessee	d. The lessee
	. A tenant's lease has expired, but the tenant has not vacated the premises or negotiated a renewal lease, and the landlord has declared that he does not want the tenant to remain in the building. This type of occupancy is referred to as an estate a. for years. b. from year to year. c. at will. d. at sufferance.	d. at sufferance.
	. D leases a barber shop from K. The lease does not specifically indicate who is responsible for making repairs to the premises. The expense of making such repairs is generally a. paid by the lessor. b. paid by the lessee. c. shared by the lessor and the lessee. d. paid by the lessee who will be reimbursed by the lessor.	b. paid by the lessee.
	When a tenant sublets all or any part of the premises rented under a written lease, a. the tenant assigns all right title, and interest in the rented property to the new lessee. b. the sublessee becomes primarily responsible to the landlord for the payment of rent and maintenance of the property. c. the original lease is automatically canceled and the sublessee takes possession of the property on a month to month basis. d. the original lease is unaffected unless it contains a provision that prohibits such subletting.	d. the original lease is unaffected unless it contains a provision that prohibits such subletting.
	A lessee who pays some or all of the lessor's property expenses has a a. gross lease. b. net lease. c. percentage lease. d. sublease.	b. net lease.
	The principal difference between an estate for years and an estate from year to year is that a. an estate for years is a life estate. b. an estate for years cannot be terminated. c. an estate from year to year must be in writing. d. an estate from year to year has no expiration date.	d. an estate from year to year has no expiration date.
	. The covenant implied in a lease that ensures that the tenant will not be evicted by someone claiming ownership of the property prior to that of the lessor is the covenant a. of seizin. b. of quiet enjoyment. c. of warranty forever.	b. of quiet enjoyment.
	. A tenant has an estate for years. According to the written one-year lease, the tenancy will expire on May 1st. For the landlord to obtain possession as of that date, he must give the tenant a. 30 days' notice. b. 60 day's notice. c. no notice. d. notice as of April 15th.	c. no notice.
	The owner of real estate who leases it to another is called the a. vendor. b. lessor. c. grantor. d. trustor.	b. lessor.
	A lease that will terminate within one year of its inception a. is invalid. b. violates the provisions of the statute of frauds. c. must be in writing. d. can be verbal.	d. can be verbal.
	When a tenant holds possession of a landlord's property without a definite lease term but with the consent of the landlord, this is called a. tenancy in common. b. tenancy at sufferance. c. tenancy at will. d. trespass.	c. tenancy at will.
	Which of the following is the best definition of actual eviction? a. The right of a landlord to use the rental premises b. The enforcement of a court order to remove a lessor c. The landlord's reversionary right in the rental premises d. The enforcement of a court order to remove a lessee	d. The enforcement of a court order to remove a lessee
	. In the event that it is necessary for a landlord to remove a tenant from the premises, he or she does it by a. refunding any rents paid. b. refunding any security or other deposits paid. c. filing an eviction suit. d. using the minimum amount of physical force necessary.	c. filing an eviction suit.
	. If a leased building collapsed and the tenant was forced to move out, this could be called a. constructive eviction. b. effective eviction. c. actual eviction. d. detainer.	a. constructive eviction.
	Under a tenancy for years a. the term of the lease must be for at least one year. b. no notice is required to terminate the lease. c. a 30-day notice is required to terminate the lease. d. the lessee has a freehold estate.	b. no notice is required to terminate the lease.
	Under a gross lease, the lessee may be requested to pay a. maintenance. b. real estate taxes. c. insurance. d. a percent of sales.	d. a percent of sales.
	. A lessee is in possession of property under a tenancy at will. Which of the following is true? a. The lessee has not received the consent of the landlord to possess the property. b. The tenancy will terminate if the lessee dies. c. The tenancy was created by the death of the lessor. d. The tenancy has a definite termination date.	b. The tenancy will terminate if the lessee dies.
	. A tenant's lease does not terminate for five more years. The premises, however, have become too small to accommodate the tenant's growing business. Another business owner is interested in leasing the premises from the tenant for 3 years. Which of the following would the parties use for the tenant to lease the space to the business owner? a. An assignment b. A novation c. A sublease d. A tenancy at sufferance	c. A sublease
	A young couple with a toddler and an infant want to lease an apartment in a complex that is occupied primarily by adults. The rental agent shows the couple apartments only on the first floor. Which of the following is true? a. The rental agent is protecting the other adults from the disruption of the children. b. The rental agent should charge a higher security deposit for this family. c. The rental agent should have suggested that the couple look elsewhere. d. The rental agent should have inquired about the couple's preference for apartments.	d. The rental agent should have inquired about the couple's preference for apartments.
	The landlord's lease prohibits tenants from altering the property in any way. A young woman who uses a wheelchair cannot maneuver over the doorstep into the apartment by herself. Nor can she use the bathroom facilities in her wheelchair. Which of the following is true? a. The landlord is responsible for making all apartments accessible to people with disabilities. b. The tenant cannot remedy these conditions because of the terms of the lease. c. The landlord should not have rented this apartment to the tenant. d. The tenant is entitled to make the necessary alterations.	d. The tenant is entitled to make the necessary alterations.
	A tenant is leasing a house until he has saved enough money for the down payment to perform on the sales contract. What type of an arrangement is this? a. Lease with an option b. Lease purchase agreement c. Periodic tenancy d. Purchase money mortgage	b. Lease purchase agreement
	A lease agreement is signed by a lessee who is 17 years of age. Which of the following is true? a. A 17 year old person cannot sign a lease. b. The lease agreement is voidable. c. The lease agreement is valid provided the security deposit is increased. d. The lease agreement is void.	b. The lease agreement is voidable.
	An individual rents an apartment for one year. The landlord sells the building during the one-year lease term. What effect does the sale have on the lease? a. The sale does not affect the lease. b. The lease is automatically terminated. c. The new landlord will decide whether to honor the existing lease. d. The lease is terminated after 60 days notice from the new owner.	a. The sale does not affect the lease.
	The purpose of a security deposit is to a. provide additional revenue for the landlord. b. repair damage to the property caused by the tenant. c. pay for the last month's rent. d. ensure that the lease is valid.	b. repair damage to the property caused by the tenant.
	The lessor and lessee have agreed to a lease term of 5 years. How could the lessor ensure that the rental income during the term is reflective of the market conditions? a. Negotiate a new lease each year. b. Collect an additional security deposit each year. c. Negotiate an index lease. d. Negotiate a gross lease.	c. Negotiate an index lease.
	A management agreement is to a property manager like a(n) a. listing agreement is to a broker. b. lease is to a tenant. c. deed is to a buyer. d. assignment.	a. listing agreement is to a broker.
	A real estate broker acting as an owner's property manager a. must not profit from private contracts at the expense of the owner. b. may manage the client's property to his or her own a dvantage. c. need not maintain complete and accurate trust account records. d. can personally collect the interest earned on trust account funds.	a. must not profit from private contracts at the expense
	Adaptations of property specifications to suit tenant requirements are a. tax-exempt improvements. b. tenant improvements. c. prohibited by most non-residential leases. d. generally not a good idea.	b. tenant improvements.
	A high vacancy rate may be caused by any of the following EXCEPT a. inept management. b. poor location. c. excessive rent. d. strong amenities.	d. strong amenities.
	In determining rental amounts, a property manager considers the economic principle of a. marginal contribution. b. supply and demand. c. conformity. d. balance.	b. supply and demand.
	Which of the following is NOT an important function of a property manager ? a. Supervising the maintenance of the property b. Protecting the physical integrity of the property c. Meeting the functional requirements of the tenants d. Preparing the owner's income tax returns	d. Preparing the owner's income tax returns
	When dealing with risk, the options of a property manager include all of the following EXCEPT a. avoid it. b. retain it. c. ignore it. d. transfer it.	c. ignore it.
	The property manager's chief concern should be that a. the property is seldom vacant because it is consistently rented at the lowest possible rents. b. the property is managed to achieve the highest rate of return possible for the owner's investment. c. the property manager's time is maximized in his or her management of the property. d. the property exhibits the proper amount of the owner's pride of ownership.	b. the property is managed to achieve the highest rate of return possible for the owner's investment.
	The type of maintenance that is most often overlooked is a. corrective maintenance. b. repairs. c. routine maintenance. d. preventative maintenance	d. preventative maintenance
	A property manager's primary obligation is to a. the tenants. b. the owner. c. the banker. d. government authorities	b. the owner.
	Which of the following should be NOT be a consideration in selecting a tenant for the property? a. Size of the available space relative to the tenant's requirements b. Tenant's ability to make the rental payments c. Compatibility of the tenant's business with those of other tenants d. Ethnic background of the tenant and his or her employees	d. Ethnic background of the tenant and his or her employees
	A property management firm CANNOT receive its income from a. a fixed fee. b. a percentage of the net rentals collected. c. a fixed fee with a percentage on new rentals. d. a percentage of purchases made from suppliers	d. a percentage of purchases made from suppliers
	The manager of a commercial building has many responsibilities in connection with the operation and maintenance of the structure. The manager would normally be considered the a. agent of the lessor of the building. b. lessee of the building. c. lessor and the lessee. d. resident manager.	a. agent of the lessor of the building.
	The successful property manager does NOT a. screen the tenants' ability to pay. b. study rental rates in the area. c. consider the type of business the tenant has. d. appease the tenants by repairing their equipment.	d. appease the tenants by repairing their equipment.
	Despite the complexity of the laws that affect today's properties, a property manager does NOT need to be familiar with a. environmental hazards. b. accessible construction. c. nondiscriminatory practices. d. investment securities laws.	d. investment securities laws.
	The duties of a property manager generally do NOT include a. renting space to tenants. b. preparing a budget. c. developing a management plan. d. repairing a tenant's fixture.	d. repairing a tenant's fixture.
	The income approach to value would be most important in the appraisal of a(n) a. condominium. b. office building. c. single-family residence. d. vacant residential lot.	b. office building.
	. In an old retail building, which of the following would most likely be a cause of incurable functional obsolescence? a. Deficient and inadequate lighting b. Closely-spaced internal support columns c. An unattractive store front d. A decrease in the area's population	b. Closely-spaced internal support columns
	Which of the following is NOT a characteristics of value? a. Scarcity b. Transferability c. Obsolescence d. Utility	c. Obsolescence
	The expression "more buildings are torn down than fall down" refers to a. curable physical deterioration. b. incurable physical deterioration. c. the enforcement of building codes. d. functional and external depreciation.	d. functional and external depreciation.
	An appraiser is responsible for a. finding value. b. computing value. c. determining value. d. estimating value.	d. estimating value.
	The term depreciation refers to the a. value of real estate after the expiration of its useful life. b. loss of value in real estate from any cause. c. costs incurred to renovate or modernize a building. d. capitalized value of lost rental income.	b. loss of value in real estate from any cause.
	. When appraising real estate, the first consideration of the appraiser should be the a. asking price of the property. b. highest and best use of the property. c. original cost of the property. d. selling prices of similar properties.	b. highest and best use of the property.
	Which of the following would be classified as external depreciation? a. A leaking roof that needs to be completely replaced b. Poorly-maintained properties in the neighborhood c. A poorly-designed floor plan that could be modified d. Convenient access to schools and recreational facilities	b. Poorly-maintained properties in the neighborhood
	It is necessary to calculate a dollar value for depreciation when using which of the following? a. The sales comparison approach to value b. The cost approach to value c. The income approach to value d. Gross rent multipliers	b. The cost approach to value
	. The income approach, as used by an appraiser, makes use of which of the following? a. Equalization b. Depreciation c. Appreciation d. Capitalization	d. Capitalization
	In the valuation of a large apartment complex, the most weight would be given to which of the following approaches to value? a. The cost approach b. The income approach c. The sales comparison approach d. All approaches equally weighted	b. The income approach
	In the cost approach to value, the appraiser makes use of a. the owner's original cost of the building. b. the estimated replacement cost of the building. c. the sales prices of similar buildings in the area. d. the assessed value of the building.	b. the estimated replacement cost of the building.
	. The sales comparison approach to value would be most important when estimating the value of a(n) a. existing residence. b. apartment building. c. retail location. d. new residence.	a. existing residence
	In the income approach, the appraiser makes use of a. reproduction cost. b. capitalization rate. c. depreciation schedules. d. replacement cost.	b. capitalization rate.
	An appraiser who is using the sales comparison approach to value would NOT use which of the following similar homes as a comparable properties? One that was a. sold over six months ago. b. sold recently but is located in another similar neighborhood. c. sold by the owners who were undergoing a foreclosure. d. sold recently but is located on a much larger lot.	c. sold by the owners who were undergoing
	Using which of the following would require the value of the land to be calculated separately from the value of the improvements? a. The income approach b. The cost approach c. The sales comparison approach d. The gross rent multiplier	b. The cost approach
	Reconciliation is best described as a. selecting the highest value given by the three approaches to value. b. comparing comparable properties and identifying their amenities. c. determining the final value by selecting one value from those given. d. analyzing the results obtained from the three approaches to value	d. analyzing the results obtained from the three approaches to value
	A building is valued at $215,000 and contains 4 apartments that rent for $470 each per month. The owner estimates that the net operating income is 65 percent of the gross rental receipts. What is the capitalization rate? a. 3.7 percent b. 7.0 percent c. 10.5 percent d. 14.2 percent	b. 7.0 percent
	The steps in the appraisal process do NOT include a. gathering specific data on the subject property. b. gathering general data for the area of the subject property. c. considering the seller's estimate of the property's value. d. applying the three approaches to value to the collected data.	c. considering the seller's estimate of the property's value.
	The gross rent multiplier is used as a guideline for estimating value based on a. the ratio of the gross rents to the net rents after expenses. b. the proportion of rents due to the actual rents collected. c. the capitalization of the annual gross rental income. d. the relationship of the sales prices to the rental income.	d. the relationship of the sales prices to the rental income.
	. Defined as a loss in value from any cause, depreciation is generally divided into three categories. The loss of value due to the normal wear and tear on a property is called a. external depreciation. b. physical depreciation. c. functional obsolescence. d. economic deterioration.	b. physical depreciation.
	. To find the value of a property using the income approach to value, if the net operating income and the capitalization rate were known, the appraiser would a. multiply the net operating income by the capitalization rate. b. multiply the effective gross income by the capitalization rate. c. divide the net operating income by the capitalization rate. d. divide the capitalization rate by the net operating income.	c. divide the net operating income by the capitalization rate.
	. An appraiser has been employed to estimate the market value of a parcel of vacant land. The resulting appraisal report would NOT include reference to a. the highest and best use of the parcel. b. the listed price of the parcel. c. the most probable price the parcel will bring. d. the physical dimensions of the parcel.	b. the listed price of the parcel.
	When appraising a commercial property, the appraiser is most concerned with the a. accrued depreciation on the property. b. income generated by the property. c. sales prices of comparable properties. d. total debt service on the property.	b. income generated by the property.
	. In the appraisal of an office building, which of the following would be classified as external depreciation? a. Termite damage to the structural components of the building b. A poor architectural design resulting in a cluttered floor plan c. An inadequate number of elevators and antiquated restroom facilities d. A law requiring the building to be retrofitted with fire sprinklers.	d. A law requiring the building to be retrofitted with fire sprinklers.
	The period of time over which an improvement to the property will contribute to its value is known as its a. amortized life. b. chronological life. c. actual life. d. economic life.	d. economic life.
	. Which of the following would be considered specific data? a. The dimensions of the subject property b. The employment opportunities in the area c. The sales data for comparable properties d. The gross rent multipliers for the area	a. The dimensions of the subject property
	When estimating the value of property using the cost approach, all of the following would be considered by the appraiser EXCEPT the a. loss of value due to uncollected delinquent rent. b. estimated loss attributable to an outdated heating system. c. quality of materials and workmanship in the original structure. d. excessive amount of traffic noise outside the property	a. loss of value due to uncollected delinquent rent.
	The market price of real estate is generally the same as a. the sales price. b. the market value. c. the highest and best use. d. the assessed value.	a. the sales price.
	Reconciliation is an appraisal term used to describe a. the appraiser's determination of a property's highest value. b. an average of real estate values for properties similar to the subject property. c. the appraiser's analysis and comparison of the results of each appraisal approach. d. the method used to determine the most appropriate capitalization rate for a property.	c. the appraiser's analysis and comparison of the results of each appraisal approach.
	An appraiser has been hired to prepare an appraisal on a property that includes an elegant old mansion that is now used as an insurance company office. Which approach to value would the appraiser rely on most? a. Income approach b. Gross rent multiplier approach c. Sales comparison approach d. Replacement cost approach	a. Income approach
	A house with outmoded plumbing is suffering from a. functional obsolescence. b. curable physical deterioration. c. incurable physical deterioration. d. external depreciation.	a. functional obsolescence.
	A 4 bedroom house with 1 bathroom for today's standards would be considered to be a. physically obsolete. b. functionally obsolete. c. economically obsolete. d. diminished.	b. functionally obsolete
	In the cost approach an appraiser uses which of the following? a. Sales prices of similar properties b. The owner's original cost of construction c. An estimate of the building's replacement cost d. The property's depreciated value as used for income tax purposes	c. An estimate of the building's replacement cost
	The purpose of an appraisal is to a. estimate the value of a property. b. set the market price of a property. c. determine the projected income of a property. d. set the amount of consideration the seller should accept from a purchaser.	a. estimate the value of a property.
	. In the income approach, which of the following is NOT considered when calculating the net operating income? a. Real estate taxes b. Management fees c. Debt service d. Utilities	c. Debt service
	Zoning ordinances normally define specific uses for land that are permitted within a municipality. Which of the following is NOT a designated use in the ordinances? a. Industrial b. Commercial c. Residential d. Rental	d. Rental
	The purpose of building permits is to a. generate revenue for the municipality. b. control the activities of building inspectors. c. ensure compliance with building codes. d. prevent encroachments.	c. ensure compliance with building codes.
	When planning a subdivision, the developer should determine the kinds of land uses to be involved and the amounts of land to be allocated to each use by considering a. which are the most profitable types of buildings to construct. b. his or her concepts for what is considered as an ideal development. c. the application of the economic principle of highest and best use. d. the customs of the area and what other developers have already done.	c. the application of the economic principle of highest and best use.
	Deed restrictions are NOT created by which of the following? a. Deed b. Statute c. Written agreement d. General plan of a subdivision	b. Statute
	A subdivider or developer who fails to comply with the requirements of the Interstate Land Sales Full Disclosure Act may be a. subject to criminal penalties of fines and imprisonment. b. ordered to cease and desist work on the project. c. sanctioned and blacklisted by lenders in the area. d. unable to secure FHA-insured and VA-guaranteed loans.	a. subject to criminal penalties of fines and imprisonment.
	. In a new subdivision, streets, curbs, and sidewalks are usually required by the a. municipality. b. property owners. c. developer. d. state.	a. municipality.
	The purchaser of a property in a planned unit development will usually NOT receive a. an interest in the unit owners' association. b. a proprietary lease for the unit to be occupied. c. the title to the land on which the unit is built. d. a share in the control of the commonly-owned elements.	b. a proprietary lease for the unit to be occupied.
	In a new subdivision, streets, curbs, and sidewalks are usually provided by the a. municipality. b. property owners. c. developer. d. state.	c. developer.
	. According to the Interstate Land Sales Full Disclosure Act, if the property report is NOT given to the prospective purchaser at least three days before the contract is signed, a. the purchaser may revoke the contract, at his or her option, up to midnight of the seventh calendar day following the signing of the contract. b. the purchaser may revoke the contract up to two years following the signing of the contract. c. the subdivider or developer must see that the purchaser receives the report within two years of the signing of the contract. d. the subdivider or developer must see that the property report is delivered to the purchaser before any construction is started on the property.	b. the purchaser may revoke the contract up to two years following the signing of the contract.
	P is in the business of buying large tracts of land and then re-selling them to consumers in small tracts. He is in the business as a a. developer. b. real estate broker. c. engineer. d. subdivider.	d. subdivider.
	A subdivision was developed, and one of the deed restrictions covering all of the properties in the subdivision set aside the back six feet of each parcel as a combination green belt area and bicycle path. Homeowner U plans to convert the back one-half of her yard into an organic garden. Her neighbors can a. do nothing because individual homeowners have no authority in this matter. b. go to court in an attempt to obtain injunctive relief. c. force homeowner U to sell her property. d. share in the profits from U's garden.	b. go to court in an attempt to obtain injunctive relief.
	Q is in the business of buying tracts of land, constructing buildings and making other improvements on them, and then selling them to the general public. She is in the business as a a. developer. b. real estate broker. c. engineer. d. subdivider.	a. developer.
	Restrictive covenants than run with the land a. are no longer effective when the title is transferred. b. apply only until the developer has conveyed the title. c. can be removed by a court of competent jurisdiction. d. apply to and bind all successive owners of the property.	d. apply to and bind all successive owners of the property.
	The primary intent of zoning ordinances is to a. ensure the health, safety, and welfare of the community. b. demonstrate the police power of the state. c. limit the amount and types of businesses in a given area. d. protect residential neighborhoods from commercial encroachment.	a. ensure the health, safety, and welfare of the community.
	The condemnation of private property for public use is made possible by the right of a. police power. b. escheat. c. eminent domain. d. confiscation.	c. eminent domain.
	For the past 30 years, the Ls have operated a neighborhood grocery store. Last week the city council passed a zoning ordinance that prohibits packaged food sales in the area where the Ls' grocery store is located. The store is now an example of a(n) a. illegal enterprise. b. nonconforming use. c. violation of the zoning laws. d. variance of the zoning laws.	b. nonconforming use.
	Deed restrictions CANNOT legally restrict a. sizes and types of structures to be built. b. potential future uses of the properties. c. future owners and occupants of the properties. d. exterior finish and decoration of the structures.	c. future owners and occupants of the properties.
	Which of the following best describes the purpose of a building permit? a. The method for overriding or substantiating deed restrictions b. The municipal control over the volume of construction c. The evidence of compliance with municipal regulations d. The method of regulating the area and size of buildings	c. The evidence of compliance with municipal regulations
	A residential developer's deed restrictions would NOT include a. easements in gross for the installation of public utilities. b. an agreement NOT to sell without the consent of the neighbors. c. the minimum square-footage for any home to be built in the subdivision. d. a reference to the use of community facilities by residents only	b. an agreement NOT to sell without the consent of the neighbors.
	. A development company owned property that the city wanted so that it could extend the r unways at the municipal airport. If the company refuses to negotiate with the city, then the city may acquire the property by a. escheat. b. accretion. c. confiscation. d. eminent domain.	d. eminent domain.
	A tire company has a manufacturing plant located in an area that has just been rezoned for residential use. The company is allowed to continue operating the plant under the new zoning classification. However, the tire company a. may not construct another plant in the neighborhood without first applying for a zoning variance. b. may not construct another plant in the neighborhood under any circumstances. c. may construct another plant if it obtains the consent of the residents then living in the neighborhood. d. may construct another plant without the residents' consent as long as the homeowners' association approves it.	b. may not construct another plant in the neighborhood under any circumstances.
	. If the buyer of a vacant lot builds a house that violates the restrictions in his or her deed, the buyer may a. forfeit the title to the property. b. be sued and required to alter the structure to conform with the restrictions. c. be sued and required to pay damages to the other residents in the neighborhood. d. do so without any fear of reprisal by the residents in the area.	b. be sued and required to alter the structure to conform with the restrictions.
	Which of the following is NOT an example of police power? a. Zoning ordinances b. Building codes c. Restrictive covenants d. City planning requirements	c. Restrictive covenants
	Before the government can exercise its right of eminent domain, the use of the property must be a. a public use for which the property owner will be fairly compensated. b. established for the health, safety, and welfare of the government. c. a local use that will benefit the residents in the immediate area. d. established as a fee simple determinable estate for a particular use.	a. a public use for which the property owner will be fairly compensated.
	Legislation designed to convert residential zoning into conservation or recreational purposes a. is usually supported by all of the residents of a given area so that the majority rules. b. may be found by the courts to be a "taking" without the payment of just compensation to the property owner. c. generally is supported by special interest groups whose power might be greater than that of the courts. d. may be found to be an excessive use of police power by the courts and therefore ruled as unconstitutional.	b. may be found by the courts to be a "taking" without the payment of just compensation to the property owner.
	A conveyance that includes a condition controlling or limiting the use of the property conveyed is an example of a. the need for competent legal advice. b. a deed restriction. c. the need for a zoning appeal. d. a zoning variance.	b. a deed restriction.
	. In a widely-publicized dispute, H refused to sell his land to the local school district. He believed that the price the school district offered him for the land was not sufficient consideration. If the school district were to pursue the matter in court, what legal proceeding would it institute to force H to sell his land to them? a. Escheat b. Foreclosure c. Probate d. Condemnation	d. Condemnation
	Control by local ordinances does NOT regulate a. the height of buildings in an area. b. the density of population. c. the use of the property. d. the price of the property.	d. the price of the property.
	Deed restrictions are a means by which a. local zoning laws are enforced. b. the planning commission controls developers. c. municipalities enforce building restrictions. d. grantors control the future use of the ownership.	d. grantors control the future use of the ownership.
	The owner constructed a building that is 7 stories high. Several years later the municipality changed the zoning ordinance, prohibiting buildings that exceed 6 stories in height. Which of the following is true regarding the existing 7 story building? a. It is a nonconforming use. b. The building must be demolished. c. It is a conditional use. d. The owner must obtain a variance.	a. It is a nonconforming use.
	Under an existing ordinance no signs may be placed on a building that extends more than 3 feet above the highest point of the roof. An owner wants to erect a 9 foot high revolving sign on the roof of his store. In order to legally do this, the owner must get a a. deed to the air rights. b. variance. c. nonconforming use permit. d. court order.	b. variance.
	What cost would NOT be included as part of the development costs of a lot ? a. Curbs and gutters b. The purchase price of the land c. Site grading d. Sanitary sewer installation	b. The purchase price of the land
	The purpose of bulk zoning is to a. ensure that certain kinds of uses are incorporated into developments. b. specify certain types of architecture for new buildings. c. control density and avoid overcrowding. d. set overall development goals for the community.	c. control density and avoid overcrowding.
	. A municipality establishes development goals through its a. subdivision regulations. b. restrictive covenants. c. environmental regulations. d. comprehensive plan.	d. comprehensive plan.
	Which of the following is a variance? a. An exception to a zoning ordinance b. A court order prohibiting certain activities c. A reversion of ownership d. A nullification of an easement	a. An exception to a zoning ordinance
	The construction of a family room, additional bedroom and extra bath has been completed on the owner's home. Before the addition can be used, which of the following is true? a. The municipality must issue a building permit. b. The bath must be inspected by the plumbing inspector. c. The municipality must issue an occupancy permit. d. The municipality must issue a conditional-use permit.	c. The municipality must issue an occupancy permit.
	The Civil Rights Act of 1866 prohibits discrimination in housing based on a. race. b. religion. c. sex. d. handicap.	a. race.
	The agency responsible for the enforcement of the Fair Housing Act is the a. Department of Justice. b. Federal Housing Administration. c. Department of Housing and Urban Development. d. Department of Veteran Affairs.	c. Department of Housing and Urban Development.
	. It is illegal for a lending institution to refuse to make a residential real estate loan in a particular area only because of the a. questionable economic situation of the applicant. b. physical location of the property. c. applicant not being of legal age. d. deteriorated condition of the premises.	b. physical location of the property.
	. A discrimination suit may be filed in federal court by a. the aggrieved person because of racial discrimination. b. the Department of Housing and Urban Development. c. the state or county nondiscrimination officer. d. the Federal Housing Administration.	a. the aggrieved person because of racial
	The federal Fair Housing Act does NOT prohibit a. blockbusting. b. discriminatory advertising. c. redlining. d. discriminating on the basis of marital status.	d. discriminating on the basis of marital status.
	In order to file a complaint of discrimination, the complainant must a. be able to prove that discrimination occurred. b. suspect that discrimination occurred. c. be able to prove that the discrimination was intentional. d. be able to produce witnesses to the discrimination	b. suspect that discrimination occurred.
	The Fair Housing Act of 1968 is contained in a. Title VIII of the Civil Rights Act of 1968. b. the Civil Rights Act of 1866. c. the Civil Rights Act of 1964. d. Executive Order No. 11063.	a. Title VIII of the Civil Rights Act of 1968.
	A prospective homebuyer who is black inquires about the availability of a home in a predominately white residential neighborhood. What should the broker say to this prospect? a. "You wouldn't want to live in this area because the neighbors are trying to protect the integrity of the area." b. "I'd be happy to show you homes in other areas where black people are welcome." c. "The residents here have expressed a desire to keep the area homogeneous with no minorities." d. "I'll be pleased to show you any houses that you're interested in."	d. "I'll be pleased to show you any houses that you're interested in."
	Real estate brokers are NOT required to a. take affirmative marketing action in advertising. b. take affirmative marketing action in canvassing. c. show all of the properties they have listed. d. prominently display the equal housing opportunity poster.	c. show all of the properties they have listed.
	. Protection from threats or acts of violence against those who assist and encourage open housing rights is found in the a. Civil Rights Act of 1866. b. Civil Rights Act of 1964. c. Fair Housing Act of 1968. d. Fair Housing Amendments Act of 1988.	c. Fair Housing Act of 1968.
	The provisions of the Fair Housing Act apply a. in all states. b. only in those states that have ratified the act. c. only in those states that do not have substantially equivalent laws. d. only in those states that do not have specific state fair housing laws.	a. in all states.
	The practice of channeling families with children away from other buildings into an apartment building where other families with children reside is a. most practical. b. blockbusting. c. redlining. d. steering.	d. steering.
	. Actions that are made illegal by federal and state fair housing laws do NOT include a. offering advantageous loan terms to encourage the re-segregation of a residential area. b. refusing to show certain residential property to non-English-speaking individuals. c. channeling members of a certain minority group into an area already predominately occupied by members of that minority. d. refusing to show certain residential property to people who are not financially qualified to purchase it.	d. refusing to show certain residential property to people who are not financially qualified to purchase it.
	The refusal of a lending institution to make a residential real estate loan strictly because of the racial or ethnic composition of the neighborhood is called a. blockbusting. b. redlining. c. steering. d. panic peddling.	b. redlining.
	Discrimination based on familial status was prohibited with the passage of the a. Civil Rights Act of 1866. b. Civil Rights Act of 1964. c. Fair Housing Act of 1968. d. Fair Housing Amendments Act of 1988.	d. Fair Housing Amendments Act of 1988.
	Discrimination on the basis of any of the following could be construed as violations of fair housing laws EXCEPT for discrimination based on a. ethnic considerations. b. sexual considerations. c. economic considerations. d. religious considerations.	c. economic considerations.
	There are exceptions to some of the fair housing laws for all of the following criteria EXCEPT a. retirement communities. b. private clubs. c. religious organizations. d. racial considerations.	d. racial considerations.
	Steering is a. leading prospective homeowners to or away from certain neighborhoods. b. refusing to make loans on properties located in certain areas. c. a requirement for the broker to join MLS. d. a practice of standardizing commission rates.	a. leading prospective homeowners to or away from certain
	Under the federal Fair Housing Act it is illegal to discriminate because a. a person has a history of dangerous behavior. b. of a person's marital status. c. a person has AIDS. d. a person has been convicted of distributing a controlled substance.	c. a person has AIDS.
	. A house for sale was advertised: "Fine executive home in an exclusive neighborhood, suitable for an older couple; near St. Mary's Church." All of the following are true EXCEPT a. This is descriptive of the property for sale and a good ad. b. An exclusive neighborhood could be interpreted to mean that minorities are not welcome. c. It appears that families with children are not welcome. d. The neighborhood could appear to be undesirable for people who do not follow the same religion as St. Mary's Church.	a. This is descriptive of the property for sale and a good ad.
	. A broker employs several salespeople, one of whom is a minority. The broker tells this salesperson to work only with minority buyers and solicit listings in only predominately minority neighborhoods. Which of the following is true? a. The broker is entitled to direct the activities of this salesperson. b. The fair housing laws do not apply to the broker's practices. c. The salesperson's rights have been violated by the broker. d. The salesperson should be satisfied with the broker's policy.	c. The salesperson's rights have been violated by the broker.
	The restrictive covenant in a condominium complex prohibits pets. A prospective buyer with a physical disability relies on an animal to assist him. Which of the following is true? a. The condominium has the right to establish this private restriction if it chooses. b. This restriction is unenforceable only if the animal is used to assist people with visual impairments. c. This restriction is unenforceable when any person with a disability uses an animal for assistance. d. The condominium can waive the enforcement of the covenant only if there are suitable accommodations in the complex for an animal.	c. This restriction is unenforceable when any person with a disability uses an animal for assistance.
	The Americans with Disabilities Act requires that a. all real estate is free of barriers to people with disabilities. b. all employers adopt nondiscriminatory employment practices. c. reasonable accommodations be provided to people with disabilities. d. the existing premises must be remodeled regardless of the cost involved.	c. reasonable accommodations be provided to people with disabilities.
	Which of the following is illegal? a. Refusing to lend money to a minority person who has poor credit b. Refusing to allow families with children to live in a housing development intended exclusively for people over 62 c. Refusing to hire an otherwise qualified person because he cares for his wife who has a disability d. Refusing to rent to a person who has been convicted of distributing cocaine	c. Refusing to hire an otherwise qualified person because he cares for his wife who has a disability
	Which of the following would be considered to be legal? a. Charging a family with children a higher security deposit than is charged to adults b. Requiring a person with a disability to establish an escrow account for the costs to restore a property after it has been modified c. Picturing only white people in a brochure as the "happy residents" in a housing development d. Refusing to sell a house to a person who has a history of mental illness	b. Requiring a person with a disability to establish an escrow account for the costs to restore a property after it has been modified
	When a salesperson represents that minorities are moving into the area to get homeowners to sell their properties, this activity is a. panic selling. b. steering. c. discriminatory advertising. d. legal as long as it is true.	a. panic selling
	A method of sealing off disintegrating asbestos is called a. capping. b. encapsulation. c. containment. d. contamination closure.	b. encapsulation.
	Capping” is the method of a. piling waste into a hill at surface level and covering with clay. b. compacting waste and sealing In a container. c. laying soil over the top of a landfill, and planting vegetation. d. burying waste and covering with soil.	c. laying soil over the top of a landfill, and planting vegetation.
	Which of the following is NOT true about asbestos? a. It was commonly used as insulation. b. Removal can cause further contamination of a building. c. HUD requires all asbestos-containing materials to be removed from residential buildings. d. It is most dangerous when airborne.	c. HUD requires all asbestos-containing materials to be removed from residential buildings.
	The most common source of lead poisoning found in residential property is a. in asbestos. b. in the basement. c. caused by appliances. d. in alkyd oil-based paint.	d. in alkyd oil-based paint.
	UFFI is found in a lead-based paints. b. insulation foam. c. appliances in the home d. electromagnetic fields	b. insulation foam.
	In regulations regarding lead- based paints HUD requires that a. homeowners test for presence. b. paint must be removed from surfaces before selling. c. known paint hazards must be disclosed. d. only licensed contractors may deal with removal.	c. known paint hazards must be disclosed.
	Radon is a. only found in the eastern United States. b. easy to detect because of its odor. c. a known human carcinogen. d. not found in older homes.	c. a known human carcinogen.
	Which of the following is NOT true about radon? a. It is colorless and odorless and tasteless. b. Radon levels will vary depending on weather conditions. c. Levels can be reduced by installing ventilation system. d. Modern home construction reduces the potential for radon gas accumulation.	d. Modern home construction reduces the potential for radon gas accumulation
	Carbon monoxide is not a. easy to detect. b. a result of incomplete combustion. c. quickly absorbed in the body. d. a natural result of combustion.	a. easy to detect.
	Contamination by underground storage tanks is a. found only in petroleum stations. b. regulated by the EPA. c. only caused by tanks currently in use. d. easily detected and eliminated.	b. regulated by the EPA.
	Electromagnetic fields a. cause serious health problems. b. are produced by appliances. c. are suspected of causing cancer and other health problems. d. are a major public concern.	a. cause serious health problems.
	Which of the following is NOT true about underground water contamination? a. It is not a major problem in the United States. b. Any contamination can threaten the supply of pure, clean water for private wells and public water systems. c. Protective state and federal laws concerning water supply have been enacted. d. Real Estate licensees need to be aware of potential contamination sources.	d. Real Estate licensees need to be aware of potential contamination sources.
	Included in the regulations of the Superfund which was established to cleanup uncontrolled hazardous-waste sites are a. exemptions to responsibility for neighboring properties. b. release of liability of owner is not responsible for contamination. c. no provisions for recovery reimbursement for cleanup costs. d. provisions for retraction liability.	d. provisions for retraction liability.
	N agrees to purchase G's property for $85,500. N deposits the purchase price with V, and G deposits a warranty deed for the property with V. V is instructed to record the deed in N's favor when G shows good title to the property. V is also instructed to pay the purchase price, less some agreed prorations, to G when N has received the deed. This transaction is called a. provisional sale b. escrow c. installment sale d. option	b. escrow
	. At the closing, F's attorney informed him that he would be giving credit to T, the buyer, for certain accrued items. These items represent a. bills related to the real estate that have already been paid by the seller. b. bills related to the real estate that have not been paid as of the time of the closing. c. all of the seller's outstanding bills. d. all of the buyer's outstanding bills	b. bills related to the real estate that have not been paid
	The Real Estate Settlement Procedures Act (RESPA) applies to the activities of a. licensed real estate brokers when selling commercial and office buildings. b. licensed securities salespeople when selling limited partnership interests. c. lenders financing the purchase of a borrower's residence. d. Fannie Mae and Freddie Mac when purchasing residential mortgages.	c. lenders financing the purchase of a borrower's residence.
	The details of a sales transaction are always governed by a. the wishes of the seller as expressed orally. b. the wishes of the buyer as expressed orally. c. the escrow instructions that both the seller and the buyer sign. d. the terms of the properly executed purchase contract.	d. the terms of the properly executed purchase contract.
	At the closing, the real estate broker's commission generally appears as a a. credit to the seller. b. debit to the seller. c. credit to the buyer. d. debit to the buyer.	b. debit to the seller.
	The condition of the seller's title is generally determined from a a. title commitment or title insurance policy. b. physical inspection of the property by the buyer. c. closing statement prepared by an escrow agent. d. escrow report prepared by an attorney.	a. title commitment or title insurance policy.
	The Real Estate Settlement Procedures Act (RESPA) provides that a. all real estate purchasers must receive their closing statements. b. real estate advertisements must include the annual percentage rate, including all charges. c. the borrower must be given an estimate of the closing costs before the time of the closing. d. real estate syndicates must comply with the disclosure of "blue sky" laws.	c. the borrower must be given an estimate of the closing costs before the time of the closing
	The accrued interest on an assumed mortgage loan is entered on the closing statement as a a. credit to the seller and a debit to the buyer. b. debit to the seller and a credit to the buyer. c. credit to both the seller and the buyer. d. debit to both the seller and the buyer.	b. debit to the seller and a credit to the buyer.
	As provided in a valid purchase contract, the real estate transaction must be closed. This does NOT mean that a. the seller must clear the title so that the condition of the title complies with the terms of the contract. b. the purchaser must pay the balance of the purchase price to the seller. c. the broker must attend the closing to receive any commission. d. the seller must deliver the deed to the purchaser.	c. the broker must attend the closing to receive any commission.
	The process by which expenses are handled at the settlement of a real estate transaction so that both the buyer and the seller pay their respective portions of the debts is called a. assessment. b. proration. c. balancing. d. reconciliation.	b. proration.
	Which of the following items is NOT usually prorated between the buyer and seller at closing? a. Recording charges b. Real estate taxes c. Rents d. Utility bills	a. Recording charges
	The Real Estate Settlement Procedures Act (RESPA) may apply to a loan assumption if the a. terms of the assumed loan are modified by the lender. b. lender charges less than $50 for the assumption. c. buyer must be qualified by the lender for the assumption to occur. d. seller does NOT want to be liable for the loan in the future.	a. terms of the assumed loan are modified by the lender.
	The principal balance on an assumed mortgage loan is entered on the closing statement as a a. credit to the seller and a debit to the buyer. b. debit to the seller and a credit to the buyer. c. credit to both the seller and the buyer. d. debit to both the seller and the buyer.	b. debit to the seller and a credit to the buyer.
	The Real Estate Settlement Procedures Act (RESPA) is a regulation of the a. state government. b. federal government. c. Department of Housing and Urban Development. d. Department of Veteran Affairs.	b. federal government.
	The closing statement involves the debits and credits to the parties in the transaction. A debit is a(n) a. refund. b. expense. c. adjustment for an expense paid outside of closing. d. proration.	b. expense.
	The Real Estate Settlement Procedures Act requires a. that the closing of a transaction be held within 90 days of the date of the sales contract. b. that disclosure be made of all closing costs prior to the closing. c. the lender to disclose the annual percentage rate the borrower will be paying. e. that lenders follow certain advertising procedures when advertising credit.	b. that disclosure be made of all closing costs prior to the closing.
	All of the following are required by the Real Estate Settlement Procedures Act EXCEPT a. lenders must provide borrowers with a good faith estimate of closing cost b. a uniform settlement form must be used at loan closings. c. the borrower may cancel the loan transaction within 5 days after settlement. d. no kickbacks may be paid to any party in connection with a loan transaction.	c. the borrower may cancel the loan transaction within 5 days after settlement.
	An example of a kickback that is prohibited by RESPA is a. a fee paid by Broker A to Broker B for referring a buyer to Broker A. b. a share of the commission paid by Broker A to her salesperson c. a fee paid by a surveyor to a broker for a lead on a property to be surveyed d. a flower arrangement that a salesperson sends to the buyer as a house warming gift.	c. a fee paid by a surveyor to a broker for a lead on a property to be surveyed
	Services offered by computerized loan origination (CLO) systems are permitted under RESPA as long as certain conditions are met. These conditions do NOT include a. the broker may charge whatever fee the broker determines is fair for the service. b. the borrower must pay whatever fees are charged for the service. c. the mortgage broker may pay a referral fee for the mortgage loan. d. the broker is required to disclosed the existence of other loan products that are NOT part of the CLO.	a. the broker may charge whatever fee the broker determines is fair for the service.
	. In a closing statement, an accrued item is a(n) a. item paid in advance. b. item that is unpaid but is due. c. prepaid expense. d. proration.	b. item that is unpaid but is due.
	. Real estate firms are often affiliated with title insurance companies or mortgage brokers. These business arrangements are permitted by RESPA as long as a. consumers are unaware of these arrangements. b. consumer are required to use the services of the affiliated companies. c. the companies pay referral fees between them. d. the companies make a written disclosure of their relationship with one another.	d. the companies make a written disclosure of their relationship with one another.

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