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Real estate practice exam 1
A title was recorded for a parcel of real property vested in the name of Johan Wilson, a property only in the name of Johan Roberts, a married woman. The discrepancy in the grantor's name is: - A defect which may cause a cloud on the title. Which contract would be the most difficult for a buyer to obtain financing? - Land Contract When a broker runs an advertisement, the broker must disclose: - Name of the Broker Following in-house sales are true, except: - The listing broker can act as a buyer's agent only The Federal Housing Administration (FHA) was created primarily: - To provide insurance for home loans made by approved lender Which of the following loans on a home would probably be made without requiring a down payment from the borrow? - VA Loan A person who wishes to purchase a home using a Cal-Vet program would send his application to: - Department of Veterans Affairs The item that would appear on the debit side of a buyer's closing statement would be: - Purchase Price When dealing with the public, a broker may not: - Remain silent concerning material facts about a property known only by himself Which of the following is the reason that a real estate agent must keep his principal informed of material facts concerning a pending real estate transaction? - When the agent is fiduciary
A buyer relied upon the fraudulent statement of the seller's agent and was damaged. The seller was unaware of the agent's false statement, and he tried to enforce the agreement. The buyer: - Could sue the seller for fraud, Could sue the seller's agent for fraud, Has sufficient grounds for rescission (All The Above) Lenders know that the lower the loan-to-value ratio, the higher the: - Equity An offer to purchase a real estate could be terminated in all of the following ways, except: - Failure to communicate notice of revocation before the other party has communicated his acceptance In which of the following contract will apply if one of the parties agrees not to revoke an offer for a certain period of time: - An option For Federal Income Tax purpose, the capital expenditures for improvements are: - Added to the cost basis of the property and depreciated A property sold for $150,000 in a county which had established a documentary transfer tax rate of $. for each $500. Of the purchase price of $150,000, only $125,000 was subjected to tax. Which of the following is nearest to the tax amount that would have to be paid? - $ $125,000/500= 250 $.55 x 250= $137. Leland uses an 8% capitalization rate for a 40-unit apartment building that generates $174,000 net income. Which of the following is the most appropriate value of his property? - $174,000 / .08 = $2, 175, A broker is negotiating a 25-year commercial lease at a straight annual rental of $30,000. The broker is to receive a compensation for negotiating this lease as follows: 7% of the annual rental for the first year, 5% of the annual rental for the next four years, 3% of the annual rental for each of the next fifteen
Walker hired a construction company to install a swimming pool on their residential premises. in the event of the construction company was unpaid and it was necessary for them to file a lien for the payment of construction, the encumbrance created would be: - A specific lien If no notice of non completion is recorded on an improvement project, anyone can record a mechanics lien within; - 90 days When comparing condominiums and rented apartments, which of the following is true? - the person who occupies each unit would have an estate in real property In order to operate a competitive, yet profitable business, a real estate broker needs to be concerned with "desk cost." What nearly represents the correct way to calculate the desk cost - Divide the total operating expenses of the firm, including salaries, rest, insurance, etc., by the number of salesperson. Local government laws for the regulation and control of land-use include: - building codes, zoning ordinances, and subdivision ordinances Broker Hudson had a house listed for sale for nine months without selling it. He knows that the building needs major structural repairs, and he has listed at 10% above its fair market value. H runs an advertisement in a newspaper that says,"Three bedrooms and Victorian style. You won't believe the price! Move right in. Hudson-xxx-xxxx." this advertisement is bad because: - It's deceptive and misleading since Hudson knows that the property needs major repairs. A high price, high quality home surrounded by lower price, lower quality properties will suffer loss in value due to: - Regression What is an acceptable response for the agent to the seller who has indicated their home is not to be shown to sales of prospects who are members of the ethnic minority group? - I cannot accept the listing for your property because of prohibited discrimination What is the most nearly true statement concerning the activities of mortgage companies? - They prefer negotiating loans which are salable in the secondary market The mortgage insurance on FHA loan: - protects the lender in the event of default
A real estate salesman went into a neighborhood to obtain listings of residential property. He made a presentation that the property value would be reduced by a decline in the quality of schools, and an increase in the crime rate because of the entry of minority groups into the neighborhood. His action was
- a disciplinary action The purpose of the Truth-in-lending act is to: - Assure a meaningful disclosure of credit terms Half a mile by half a mile represents how many acres? - 160 acres George Carson is selling time-shares in his Wildacre subdivision. He mailed advertisements to 10, people offering them the chance to win a prize, but did not reveal that the person must visit Wildacre and listen to a sales presentation in order to be eligible. All of the prize winners became owners of Wildacre. Is there anything wrong with this situation: - yes; anyone offering prizes or gifts must reveal and requirements such as an attendance of a sales presentation The appraisal of an income-producing property is made with an as go "given date" to indicate: - The market conditions influencing the value of the property at that point in time Morrison receives a net income of $675 per month at an annual return rate of 7 1/2%. Morrison's investment amounted to - $8,100/ 7 1/2%= $108, What is the least correct about in-house sales - Brokers cannot sell their own in-house listings The hardest and yet the most important part in the market data method of appraising is: - Adjusting for the differences between the comparable properties and the subject property Harrison and David, single people, owned a parcel of real property as joint tenants. Harrison encumbered his interest for $10,000 and borrowing the amount to pay medical bills without the acknowledgment or consent from David. Shortly thereafter, Harrison died with the debt still unpaid. What would happen to the property - David would own all of the property free and clear of the encumbrance
if a broker is an agent for a seller, he owes to the buyer: - a duty of fair and honest dealing if two parties want to create an enforceable broker-prince relationship concerning a right, title, or interest in real property, the most essential element to do so would be: - a written employment contract What is the rights of ownership in real property do individuals normally not have? - eminent domain rights if a real estate licensee misrepresents a property to a buyer while he is acting as an agent, he may be subject himself to: - disciplinary action by the licensing authority, civil action, and criminal action Broker hays took a 90-day exclusive agency listing to sell a property that was owned by wilson. After 30 days, Hays had not sold the property, so Wilson listed the property with several brokers using open listings. two weeks later, one of the brokers who had an open listing on the property completed a sale to new owner. In this situation, Wilson most likely: - liable for payment of commission to Hays as well as to the selling broker a broker obtained a 6% listing commission fee on a selling price of $108,000. The seller incurred additional closing costs of $1,450. Based on the preceding information, the sellers total cost of sale would amount to: - $108,00 * 6%= $6,480+$1,450=$7, when depreciation is taken on real property: - the basis is reduced Under the subdivision Map Act, the subdivision reports must be filed with the: - city or country where the land is located a voidable contract remains binding upon the parties until the contract is: - Rescinded What is the legal method that city uses to implement its general plan? - zoning if roof slopes on all four sides, it is called a - hip roof
An appraiser's narrative appraisal report of a single-family residence probably would contain no reference to: - Type of financing available what is the notice that could be important filing of a mechanics lien? - notice of non-responsibility, notice of cessation, and notice of completion If a real estate licensee was trying to persuade people to list or to sell their property by telling them that members of another ethnic group were moving into their neighborhood and it would be their advantages to list or to sell. This would be an example of all of: - legitimate conduct What is the most difficult for the mortgage lender to evaluate? - The degree of risk Interest rates on trust deed loans are primarily determined by: - Demand for supply of money The word "Time is of the essence" can be found in: - Real estate purchase contract and receipt for deposit When an air conditioning unit has a higher energy efficiency ratio (EER), it means that: - the unit is more efficient Carter bought 10 acres of vacant land for $20,000 per acres; making a cash down payment of $20, and executing a straight note and a blanket deed of trust for the balance. as a part of the note, the leader agreed that when carter makes an additional payment of $20,000 on the principal, the trustee would issue a partial reconveyancefor one acre. the percentage of his equity in the encumbered property: - has increase A contractor was building a new home. Before completion, he received several offers to rent the property. just right before the completion, the city announced that it was taking 10 feet off the front of the property to widen the street to facilitate the traffic. Thereafter, offers to rent were for approximately 10% less. This would be an example of which type of depreciation: - Economic obsolescence
An agency relationship may be terminated by: - Completion When title is transferred, the guarantee in the deed may have the title insured by a: - title insurance policy what is the best way to create an agency relationship: - by written agreement When an owner refyuses to pay the broker an earned commission, the broker may properly seek relief by: - court action the maximum commission a broker may charge for the sale of residential property is: - Determined by the broker's contract with his principal Broker's Andrew and benson, both have an opening listing on a property. Broker Andrew showed the property to a prospective buyer and carried an negotiations, but the buy decided not to buy. Two weeks later, Broker Benson contracted the same buyer and arranged a sale of the property The seller would be obligated to pay a commission as arranged a sale of property. The seller would be obligated to pay a commission of: - full amount to Benson only Under which of the following listings, a commission must be paid by owner even though he sells entirely through his own efforts: - Exclusive right to sell listening A brokers ads in a local newspaper says that if a buyer or seller will bring this ads to his office and either list or buy a property through him, he will give that person $50. what will happen - the broker can give that person $50 to the buyer and seller The basis of the market data approach appraisal is found in: - Principle of substitution A joint tenant can dispose an interest held in real property by: - will Each owner in a tenancy in common: - has the right in possession of all the properties
A trust deed can have a provision that allows future loans on the property to have priority. this would be called - a subordination clause what is the best definition of a ballon payment? - The require payment of the entire balance due A Chicano prospective purchaser asks to be shown homes but does not specify that he wants to e homes located in a neighborhood where there are no Chicanos. How should a licensee decided what properties to show him? - The licensee may select homes for showing as he would for any other prospect The decline of mortgage interest rates would occur when: - the mortgage money supply increases if the owner of a property thinks that his property has been over-assessed by the country assessor, he would contract the: - assessment appeals board Lee made an offer to purchase wilsons property, as part of the offer, lee agreed to take title "subject to" an existing VA loan which Wilson obtained when they purchased the property in approximate amount of $39,000. If Wilson sells to Lee under these conditions, which of the following is true concerning liability for loss suffered by the government after a foreclosure on the VA loan? - Wilson will be primarily liable
