Real Estate Transactions and Appraisal: A Comprehensive Overview, Exams of Real Estate Management

Download Real Estate Transactions and Appraisal: A Comprehensive Overview and more Exams Real Estate Management in PDF only on Docsity! General Real Estate Exam Questions with 100% Correct Answers. 1) In reviewing the deed to a listed property, a licensee noted a number of limitations regarding its use. These limitations are commonly known as: A) Codicils B) Constraints C) Building codes D) Restrictive covenants - Correct answer D.) restrictive convenants 2) According to the Federal Fair Housing Act as amended in 1988, which of the following circumstances is considered a handicapping condition? A) Being economically disadvantaged B) Having a mental impairment that substantially limits a major life activity C) Lacking the ability to qualify for a federally insured mortgage D) Using a controlled substance illegally for a prolonged period of time - Correct answer B.) Having a mental impairment that substantially limits a major life activity 3) Which of the following documents is usually prepared when a real estate buyer also purchases a seller's riding lawn mower? A) An option B) A wraparound loan C) A conditional sales contract D) A bill of sale - Correct answer D.) bill of sale The real estate developer wants to donate the roads and the sewer treatment plant and the water tank to the city after the project is completed. This is called: A) Accretion B) Dedication C) Assignment D) Condemnation - Correct answer B) dedication 5) With the exception of court-ordered sales, the amount of earnest money to be deposited by a prospective buyer is determined by the: A) State real property law B) Agreement between the seller and the buyer C) Local real estate association D) Listing broker - Correct answer B) agreement between the seller and the buyer 6) What method of depreciation must be used on properties purchased after 1979 A) Double declining balance B) Sum of the years C) Straight Line D) Accelerated - Correct answer C) Straight line 7) Regarding asbestos in the house, the seller: A) Is required to disclose if he knows of asbestos in the house B) Must remove all asbestos before he closes on the house C) Must perform tests on the house to determine if there is asbestos D) Is liable for all future costs to remove the asbestos after closing - Correct answer A) Is required to disclose if he knows of asbestos in the house 8) The income approach to appraising is MOST important in determining the value of a(n): A) Vacant residential lot B) Office building C) Single-family home D) Cooperative apartment - Correct answer B) Office building 9) Which of the following entities is an example of encroachment? A) An access road that runs across a property from a public road to another property B) A storage building that extends over the boundary line between the property of the building's owner and an adjacent property C) Timber that has been cut down on the property by a tenant for use as firewood D) A right-of-way for electric and telephone lines that goes across the property - Correct answer B) A storage building that extends over the boundary line between the property of the building's owner and an adjacent property D) Forcible detainer - Correct answer C) Specific performance 19) Which of the following refers to an appraisers designation by the appraisers society A) Member Appraisal Institute (MAI) B) VA Certified Appraiser C) FHA Certified Appraiser D) Single Family Certified Appraiser (SFCA) - Correct answer A) Member Appraisal Institute (MAI) 20) What professional group would follow USPAP A) Surveyors B) Accountants C) Home Inspectors D) Appraisers - Correct answer D) Appraisers 21) When a buyer assumes the loan and purchases a property subject to a seller's existing mortgage, which of the following statements is CORRECT? A) The seller's credit will not be affected by foreclosure on the property B) The seller is released from liability of the loan C) Any mortgage loan obtained by the buyer to complete the purchase will be a first mortgage loan D) The seller's obligations under the existing mortgage remain unchanged - Correct answer D. the sellers obligations under the existing mortgage remain unchanged Transferring title "subject to" the existing mortgagees position on the existing mortgage. any new financing will be subordinate to the existing mortgage. 22) Which of the following types of legal descriptions identifies a property by outlining its boundaries in terms of a series of directions and distances from a specific point of beginning? A) Rectangular B) Lot and block C) Metes and bounds D) Geodetic - Correct answer C) Metes and bounds 23.) A licensee preparing a competitive market analysis (CMA) has information on a comparable property that is similar in all respects to the subject property except that, while the subject property is ten years old and has two baths, the comparable property is five years old and has one bath. In this case, the licensee should adjust the: A. sale price of the comparable property down for the age and up for the number of baths B. sale price of the comparable property, up for the age and down for the number of baths C. value of the subject property, up for the age and up for the number of baths D. value of the subject property, up for the age and down for the number of baths - Correct answer A.) sale price of the comparable property down for the age and up for the number of baths 24) Which of the following clauses in a conventional mortgage instrument entitles the lender to accelerate the loan if the loan is assumed? A) Prepayment B) Right to sell C) Due-on-sale D) Variable interest rate - Correct answer C) Due-on-sale 25) The term "holdover tenant" refers to a lessee who takes which of the following actions? A) Remains in possession of a leasehold beyond expiration of the lease B) Exercises an option to renew a lease C) Subleases to another tenant D) Uses the premises illegally - Correct answer A) Remains in possession of a leasehold beyond expiration of the lease 26) If two lots, each 75 feet wide by 105 feet long, cost $30,000 in total, what is their APPROXIMATE cost per square foot? A) $1 B) $2 C) $3 D) $4 - Correct answer D) $4 27) When homeowners itemize deductions in computing their annual taxable income, they may deduct: A) Payments of principal on the home mortgage B) Interest paid on the home mortgage C) Depreciation of the home D) Cost of repairs - Correct answer B) Interest paid on the home mortgage 28) The Housing and Urban Development (HUD) settlement statement includes which of the following information? A) The buyers' and sellers' closing costs B) The sellers' closing cost only C) The total interest and principal to be paid by the buyers only D) The closing costs that are tax deductible - Correct answer A) The buyers' and sellers' closing costs 29) In order for a property manager to determine net operating income on a property, which of the following fees is subtracted from the effective gross income? A) Debt service B) Advances to owners C) Operating expenses D) Income tax - Correct answer C) Operating expenses 30) According to the Federal Fair Housing Act as amended in 1988, which of the following individuals is permitted to reside in housing with a familial status exemption? A) A fifty-year-old employed nurse B) A fifty-three-year-old retired construction worker C) A fifty-four-year-old retired teacher D) A sixty-three-year-old employed postal worker - Correct answer D) A sixty-three-year-old employed postal worker 31) A management agreement between an owner and an agent states that the management fee will be 7% of the first $200,000 of the annual gross collected rent and 8% of the collected rent that exceeds that amount. If last year's gross rent collection totaled $222,500, the management fee was: A) $15,800 B) $16,688 C) $17,575 D) $17,800 - Correct answer A.) 15,800 32) In a real estate closing, the buyer generally pays for the: A) Release of the mortgage B) Recording of a new mortgage C) Preparation of the deed D) Sales commission - Correct answer B) Recording of a new mortgage 42) The owners of a house sign a listing agreement and later tell the salesperson that the garage roof leaks. If they tell the salesperson not to reveal the roof's condition to any prospective buyers, the salesperson MUST: A) Abide by the owners' request B) Advise the sellers that they must disclose the condition of the roof to prospective buyers C) Advise only those prospective buyers who ask about the roof's condition D) Refer all prospective buyers who have questions about the roof's condition to the sellers - Correct answer B) Advise the sellers that they must disclose the condition of the roof to prospective buyers 43) A CORRECT statement about the Federal National Mortgage Association (FNMA) is that it: A) Purchases certain mortgages originated by lending institutions B) Insures mortgages through insurance fees paid by borrowers C) Provides guarantees to lenders on certain mortgages D) Is the nation's central bank, designed to provide economic stability - Correct answer A) Purchases certain mortgages originated by lending institutions 44) When private property is abandoned, the state may acquire title to that property under the right of: A) Escheat B) Eminent domain C) Police power D) Taxation - Correct answer A) Escheat 45) Which of the following clauses will put the priority of an existing mortgage or deed of trust below that of a mortgage recorded later? A) An exculpatory clause B) A prepayment clause C) An assumption clause D) A subordination clause - Correct answer D) A subordination clause 46) The sale of which of the following would be considered the sale of a security? A) Single-family rental homes B) Luxury condominiums in a high-rise building C) Vacant lots at a resort area D)Townhouses in a rental pool - Correct answer D) Townhouses in a rental pool 47) If buyers purchased a home for $142,500 and secured a loan for 100 percent of the purchase price, which of the following types of loans did they [MOST] likely obtain? A) VA-guaranteed B) FHA-insured C) Conventional D) Wraparound - Correct answer A) VA-guaranteed 48) Title insurance on a property is $174.90. The fee for the title search is $75, the cost of preparing papers is $15, and other miscellaneous fees amount to $6.10. If the seller pays 60% of the total charge and the buyer pays the balance, to the nearest dollar, how much MORE will the seller pay than the buyer? A) $49 B) $53 C) $54 D) $56 - Correct answer C) $54 49) Which of the following credit terms may be included in an advertisement for real estate without further disclosure? A) FHA financing available B) "5 years to repay" C) "$5,000 down payment" D) "$300 monthly payment" - Correct answer A) FHA financing available 50) The continued use of a property that was lawful at the time the use began but now is in violation of a zoning regulation is an example of : A) A variance B) Spot-zoning C) Nonconforming use D) Exclusionary zoning - Correct answer B) Spot-zoning 51) If a lessee pays a fixed amount of rent plus all expenses, the lease is known as a: A) Graduated lease B) Net lease C) Gross lease D) Percentage lease - Correct answer B) Net lease 52) C and P bought a house as tenants in common. If C dies, which of the following statements about ownership of the house is CORRECT? A) It automatically becomes tenancy in severalty B) It is divided, with P retaining P's original interest and the balance going to C's estate C) P holds fee simple ownership in C's share of the property D) P holds life estate ownership in C's share of the property - Correct answer B) It is divided, with P retaining P's original interest and the balance going to C's estate 53) The final decision in establishing the listing price is made by the: A) Salesperson B) Broker C) Appraiser D) Owner - Correct answer D) Owner 54) A veteran is entitled to which of the following benefits upon repayment of the full loan balance of a VA mortgage? A) Restoration of a loan benefits for future use B) Refund of any discount points paid by the previous seller C) Refund of the origination fee or points D) Partial refund of all interest paid on the loan - Correct answer A) Restoration of a loan benefits for future use 55) A visually-impaired person with a Seeing Eye dog makes application for rental of an apartment that has a vigorously enforced "no pets" policy in the building. According to the Federal Fair Housing Act as amended in 1988, the owner may: A) Refuse to rent to the applicant as a result of the policy B) Require the person to house the dog outside of the apartment C) Require the person to restore any damage to the apartment that results from the dog D) Increase the customary security deposit - Correct answer C) Require the person to restore any damage to the apartment that results from the dog 56) A minority couple asks a broker to show them a listed house. What is the broker guilty of if the broker suggests that they look at houses in areas with larger minority populations than that of the listed house? 67) A property has an appraised value of $50,000. A loan is granted on the property for 75% of its appraised value. The loan is spread over 25 years at an interest rate of 3/4% per month. If the amount paid toward the principal is to remain constant throughout the life of the loan, what is the FIRST monthly payment? A) $125 B) $281 C) $406 D) $500 - Correct answer C) $406 68) The direct sales comparison (market data) approach would be MOST appropriate for establishing the value of a: A) 5-year-old single-family house B) 10-unit apartment building C) 25-year-old church D) Retail commercial property - Correct answer A) 5-year-old single-family house 69) A lease that provides periodic increases of rent at regular intervals is called a: A) Graduated lease B) Percentage lease C) Yearly lease D) Long-term lease - Correct answer A) Graduated lease 70) A CORRECT statement about the owners of a condominium unit and the owners of a cooperative apartment is that they both: A) Receive an annual real estate tax bill B) Must pay assessments C) Own shares of stock D) Own real property - Correct answer B) Must pay assessments 71) Which of the following terms BEST describes personal property that, by its attachment to real property, is regarded as real estate? A) Emblements B) Personalty C) Fixtures D) Appliances - Correct answer C) Fixtures 72) The price at which a willing and informed buyer would buy and a willing and informed seller would sell is called the: A) Assessed value B) Book value C) Income approach to value D) Market value - Correct answer D) Market value 73) The difference between the value of a property and the total amount of liens against it is known as: A) A down payment B) Equity C) Actual cash value D) Collateral - Correct answer B) Equity 74) A salesperson who prepares a written listing agreement with a seller is helping to create a contractual relationship between the: A) Salesperson and the seller B) Salesperson and the buyer C) Salesperson and the listing broker D) Salesperson's broker and the seller - Correct answer D) Salesperson's broker and the seller 75) Which of the following statements about the income approach to value is CORRECT? A) It determines an investment property's value based on its return B) It is used more frequently than the direct sales comparison (market value) approach to set loan-to-value ratios C) It is the most accurate method of appraising single-family houses D) It produces the highest estimate of value possible - Correct answer A) It determines an investment property's value based on its return 76) Which of the following statements about the law of agency is CORRECT? A) It refers specifically to insurance B) It establishes a fiduciary relationship C) It does not require a high degree of loyalty and fidelity from an agent D) There is no employment relationship - Correct answer B) It establishes a fiduciary relationship 77) The potential gross monthly rent on an apartment building is $5,380. In July, operating expenses were $3,500. A tenant whose monthly rent is $625 failed to pay rent in July. If the property manager's commission is 6% of the rental income, the manager's fee for July was: A) $113 B) $210 C) $285 D) $323 - Correct answer C) $285 78) Broker V is employed by the T's to sell their house. The M's submit an offer to purchase the T's house and tell V that they will pay more than the offer price if the T's request it. In this situation, V is: A) Not obligated to convey the information to the T's because to do so would violate V's relationship with the M's B) Not obligated to convey the information to the T's because the M's are not bound by this verbal representation C) Obligated to withdraw from the transaction because of conflicting obligations to both parties D) Obligated to convey the information to the T's - Correct answer A) Not obligated to convey the information to the T's because to do so would violate V's relationship with the M's 79) Several brokers from different companies get together and one of the brokers states that a competing broker is not charging enough commission. The other brokers in the meeting should: A) Not show the lower commission listings B) Vote to reduce their fees to compete with the other brokers C) Agree on a new commission structure D) Leave the meeting immediately and not discuss commission rate - Correct answer C) Agree on a new commission structure 80) A lender is required under the Truth-in-Lending Act (Regulation Z) to furnish an applicant for a real estate loan with a copy of a(n): A) Amortization schedule B) Disclosure statement C) Deed D) Financial statement - Correct answer B) Disclosure statement