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50 Cards in this Set

  • Front
  • Back

When demand for a commodity decreases and supply remains the same,



A) price tends to rise


B) price tends to fall


C) price is not affected


D) the market becomes stagnant

B) price tends 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

All of the following would affect supply EXCEPT



A) population


B) construction costs


C) governmental controls


D) labor force

A) population

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

All of the following are included in the right to control ones property EXCEPT the right to



A) sell the property to a neighbor


B) exclude the utilities meter reader


C) erect no trespassing signs


D) enjoy profits from its ownership

B) exclude the utilities meter reader

According to law, a trade fixture is usually treated as



A) a fixture


B) an easement


C) personalty


D) a license

C) personalty

A potential buyer is interested in a house that fits most of her needs, but it is located in a busy area where she is not sure 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 personal property?



A) Wood-burning fireplace


B) Awnings


C) Bathtubs


D) Patio furniture

D) Patio Furniture

All of the following are properly described by the word improvement EXCEPT



A) streets


B) a sanitary sewer system


C) trade fixtures


D) the foundation of a building

C) trade fixtures

Real property can become personal property by



A) severance


B) purchase


C) hypothecation


D) scarcity

A) severance

All of the following are physical characteristics of land EXCEPT



A) indestructibility


B) uniqueness


C) immobility


D) scarcity

D) scarcity

A licensee showed an owner-occupied property that had window screens, custom venetian blinds, and a wall bed to a buyer who's offer was then accepted by the owner.


Before the close of escrow, the seller may remove



A) all of the identified items because 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) subject to personal property rights

A) indestructible

Efforts to increase home ownership include all of the following EXCEPT

A) requiring lower down payments
B) offering adjustable rate mortgages
C) penalizing first-time homebuyers for using funds from IRAs
D) lowering closing costs for first-time homebuyers
C) penalizing first-time homebuyers for using funds from IRAs

The real cost of owning a home includes certain costs/expenses that many people overlook. Which of the following is NOT such a cost/expense of home ownership?



A) Income lost on cash invested in the home


B) Interest paid on borrowed capital


C) Maintenance and repair expenses


D) Personal property taxes

D) Personal property taxes

Most homeowners insurance policies contain which of the following clauses?

A) Property improvement clause
B) Coinsurance clause
C) Co-ownership clause
D) Property devaluation clause
B) Coinsurance clause
That portion of the value of an owners property that exceeds the amount of their mortgage debt is called

A) equality
B) escrow
C) surplus
D) equity
D) equity

Homeowners may deduct all of the following expenses when preparing their income tax return EXCEPT



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


Federal income tax law excludes gain realized on the sale of a primary residence for individuals filing separately and for couples filing jointly. The amount of this exclusion is (separately/jointly)



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

Damage from which of the following is not covered in a basic home owners' policy?



A) Fire and lightning


B) Explosion


C) Windstorm and hail


D) Flood

D) Flood

A licensees responsibility to keep the principal informed of all 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 dual agency?



A) A licensees acting for both the buyer and the seller in a transaction


B) Two brokerage companies cooperating with each other


C) A licensee's representing more than one principal


D) A licensee's listing and selling the same property

A) A licensee's acting for both the buyer and the seller in the same transaction

The relationship of a licensee to his/her client is that of a(n)



A) trustee


B) subagent


C) fiduciary


D) attorney-in-fact

C) fiduciary

A real estate licensee acting as the agent of the seller



A) must promote and safeguard the sellers best interests


B) can disclose the sellers 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) must promote and safeguard the sellers best interests

In designated agency, all of the following apply EXCEPT the



A) licensee could be a dual agent


B) same licensee may represent the buyer and the seller at the same time


C) licensee can choose an agent i n the office to represent the seller


D) licensee may appoint an agent to negotiate for the buyer

B) same licensee may represent both the buyer and the seller at the same time

A licensee is permitted to represent both the buyer and the seller in the same transaction when



A) the principals are not aware of such action


B) the licensee 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 be considered lawful practice in real estate brokerage?



A) Deceitful or dishonest practices


B) Exaggerated statements about the property


C) Omitted statements about material fact


D) Misstatements about the property

B) Exaggerated statements about the property

As an agent for the seller, a real estate agent can

A) guarantee a prospective buyer that the seller will accept an offer at the listed price and terms
B) solicite an offer to purchase the property from a prospective buyer
C) advise a prospective buyer as to the best manner of taking title to the property
D) change the terms of the listing contract on behalf of the seller
B) solicite an offer to purchase the property from a prospective buyer

A seller has listed her home for $190,000. The listing licensee tells a prospective buyer to submit a low offer because the seller is desperate to sell. The buyer offers $180,000 and the seller accepts it. In this situation,



A) the licensee has violated his agency relationship with the seller


B) the licensee was unethical, but the seller did get to sell her property


C) the licensee acted properly to obtain a quick offer on the property


D) any licensee is authorized to encourage such bids for the property

A) the licensee has violated his agency relationship with the seller

When a principal told her licensee not to advertise her property in a certain newspaper that was out of the area, the licensee complied because he



A) had never advertised in that newspaper anyway


B) must obey the lawful instructions of his principal


C) wasn't intending to advertise the property at all


D) in allowed to advertise only in local newspapers

B) must obey the lawful instructions of his principal

The amount of commission that is paid to a salesperson is determined by



A) state law


B) the local real estate board


C) mutual agreement with his/her broker


D) mutual agreement with the client

C) mutual agreement with his/her broker

A licensee was accused of violating antitrust laws. Of the following, she was MOST likely accused of

A) not having an equal opportunity housing sign in her window
B) undisclosed dual agencies
C) price fixing
D) dealing in unlicensed exchange services
C) price fixing

A real estate licensee was responsible for a chain of events that resulted in the sale of his client's properties. This is referred to as



A) pro forma


B) procuring cause


C) private offering


D) proffered offer

B) procuring cause

A real estate licensee, classified by the IRS as an independent contractor, recieves



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 relationship between broker and client, the brokers 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

A licensee finally concluded some extremely difficult negotiations that resulted in the sale of a listed parcel of land. For all of her extra efforts, she can legally receive a performance bonus from



A) the seller


B) the buyer


C) no one


D) her broker

D) her broker

A salesperson working for broker "A" sells a $150,000 home listed with another brokerage. The listing commission is 6.5% of the selling price. Of this amount, 5% is payable to the referral network that referred the buyer, 35% goes to the listing broker, and 60% belongs to the cooperating broker. Broker "A" and the salesperson agreed that she would receive 55%of any commission that she generated for their office. For this transaction, she is entitled to recieve



A) $2,632.50


B) $3,217.50


C) $3,412.50


D) $5,850.00

B) $3,217.50

All of the following are required of a broker when seeking to collect a commission for brokering the sale of a property EXCEPT



A) having a valid real estate brokers license


B) having been the procuring cause in the transaction or having an exclusive-right-to-sell agreement


C) having had a contract of employment - an agency representation agreement


D) complying with a set commission rate set by a trade organization

D) complying with a set commission rate set by a trade organization

A broker lists a property for sale at $100,000 with a 5% commission, and later he obtains an oral offer from a prospective buyer to purchase the property. 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 oral 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

All of the following are prohibited under the antitrust laws EXCEPT



A) competing property management companies agreeing to standardized management fees


B) competing 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 setting a company commission schedule

D) a broker setting a company commission schedule

All of the following reasons are valid reasons for terminating a listing agreement EXCEPT



A) sale of the property


B) death of the salesperson


C) agreement of the parties


D) destruction of the premesis

B) death of the salesperson

By executing a listing agreement with a seller, a real estate agent licensee becomes



A) a procuring cause


B) obligated to open a special trust account


C) the agent of the seller


D) responsible for sharing commissions

C) the agent of the seller

The provision on 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

Last month a broker took a listing on a property. She now learns that her client has been declared incompetent by the court. Her 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 the buyer


D) terminated

D) terminated

The type of listing agreement that provides payment of a commission to the broker even though the owner makes the sale without the broker's aid is called an



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 licensee. During the listing negotiations, he tells the licensee that he wants $138,000 for the property and anything above that amount the licensee can keep as commission. A listing with this type of provision is known as a(n)



A) gross listing


B) net listing


C) open listing


D) non-exclusive listing

B) net listing

Under which listing agreement can owners of a listed property sell the property on their own without having to pay the listing licensee 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 licensee.The owner was killed in an accident before the listing expired. Now the listing is



A) binding on the owners spouse for the remainder of the 90 days


B) still in effect as the owners intention was clearly defined


C) binding only if the licensee can produce offers to purchase the property


D) terminated automatically because of the death of the principal

D) terminated automatically because of the death of the principal

A listing contract in which payment of the commission is contingent on the licensee's being able to produce a buyer before the property is sold by the owner or another licensee is called an



A) open listing


B) net listing


C) exclusive-right-to-sell listing


D) exclusive-agency listing

A) open listing

All of the following are typically found in a listing agreement EXCEPT



A) price the seller is asking for the property


B) date the licensee will schedule an open house
C) commission rate to be paid to the listing broker
D) responsibilities of the broker

B) date the licensee will schedule an open house