National Real Estate Exam Practice Questions With accurate answers, Graded A. 2022/2023

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National Real Estate Exam Practice Questions With accurate answers, Graded A. 2022/2023 A property owner has decided to do some landscaping work on his yard. He has planted a tree surrounded by som... e flowering shrubs. The tree and shrubs are an example of... - ✔✔improvements A property owner has a waterfront lot on a stream. He has the right to use the water from the stream. What is this right called? - ✔✔riparian A tenant is aware that his lease will expire at the end of the month. He has begun to disassemble his display cabinets and shelves. Which of the following statements about this is true - ✔✔the tenant can take these as they are trade fixtures A seller is attending the closing on his property. The title company has discovered an unsatisfied M&M lien on the property. Which of the following is the most likely reason for the lien? - ✔✔plumbing work that was completed but never paid for A listing agent went to inspect a seller's property hoping to list it for sale. The seller told the listing agent that his neighbor's satellite dish trespasses on his property. This is an example of... - ✔✔encroachment A father gives his son a life estate on a property. The son leases the property. The tenant dies. What happens to the property? - ✔✔it goes back to the son until he dies A man leaves his second wife a life estate in their home after which the property goes to his children from his first marriage. The children... - ✔✔are remaindermen Which of the following statements about an easement is true? - ✔✔an easement is a benefit to the dominant property owner P, Q and R are joint tenants. P wants to sell the property, but Q and R do not. What can P do? - ✔✔file a suit for partition A, B and C are joint tenants. C dies. B sells his share to D. What type of ownership do A and D have? - ✔✔tenants in common Under what right can the government change property use from commercial to residential only? - ✔✔police power Ownership of the common areas of condominiums is most likely to be: - ✔✔tenancy in common What should a buyer do to ensure that his is getting the best title to real property? - ✔✔get a general warranty deed Which covenant in a deed guarantees that the owners will not suffer or be disturbed by any claims on the property? - ✔✔the covenant of quiet enjoyment Excess money at a foreclosure sale goes to... - ✔✔the borrower After defaulting on a real estate loan, a borrower is able to pay off the loan prior to the foreclosure sale. This is called: - ✔✔right of redemption The required distance between buildings and a federally protected endangered species wetlands is an example of... - ✔✔a buffer zone A couple purchased a condominium. The complex has an exercise room for all residents. The couple does not use the exercise room and does not want to pay the monthly fee for the use of the facility. What can they do to avoid this fee? - ✔✔they must pay the fee as they have a tenancy in common interest in all common areas Which of the following is personal property? - ✔✔a lease A landlord leased space in his new retail property to an inexperienced business person. Based on location and the type of business, the landlord believes it will be a great success. What type of lease can he enter into with the tenant that will allow the landlord to benefit from the tenant's success? - ✔✔a percentage lease A buyer has purchased a property and after closing the seller will continue to occupy the property. This is an example of... - ✔✔sale and leaseback Your client will be able to qualify for a property they wish to purchase in about 6 months, after they had an opportunity to reduce their consumer debt. They have found a property that they would like to purchase now. What type of agreement can they enter into with a seller that will allow them to occupy the property now and purchase it within the 6 months? - ✔✔lease with an option to buy Tenants have signed a 3 year lease on a property. In the second year the owner dies and his heirs inherit the property. They give the tenants notice to vacate. What is true? - ✔✔the tenants can stay until the end of the lease A developer decides to build a commercial property in the middle of a residential subdivision. What is required? - ✔✔a variance A zoning ordinance would affect which of the following? - ✔✔the concentration of housing in a residential area If a person dies without a will, who receives their estate? - ✔✔spouse and children What are the requirements/ criteria for real estate to have values? - ✔✔demand, utility, scarcity, transferability What principle of value defines the most important factor for appraisal? - ✔✔highest and best use What approach would an appraiser most likely use to value a residential rent house in neighborhood where a majority of the homes are leased? - ✔✔income approach A licensed broker is advertising that he will perform a free appraisal if you contact him for a listing appointment. He is not in violation of the law... - ✔✔if he is a licensed appraiser Which of the following is NOT an example of functional obsolescence? - ✔✔deferred maintenance According to the Statute of Frauds, which of the following leases must be in writing? - ✔✔a lease for more than one year Your client is an investor who would like to have the right to purchase a commercial tract for $5 million for the next 6 months. What type of contract should he enter into with the seller? - ✔✔an option contract A signed sales contract that has not yet gone to closing is... - ✔✔executory When does an offer become a contract? - ✔✔When the offeree gives the offeror notice of the acceptance Which of the following statements is true about the duties of an agent according to the common law of agency? - ✔✔an agent must treat both clients and customers with honesty and fairness A property manager is hired and signs a management agreement with the owner. At this time, the property manager is... - ✔✔a general agent A buyer and seller have negotiated a contract on the seller's property with a closing set for June 14th, time is of the essence. On June 12th the listing agent calls the buyer's agent and tells him the seller will be unable to close on the 14th. The seller can close on the 16th. At this time, what is true? - ✔✔the contract is voidable by the buyer A licensee is representing a seller in a commercial transaction. The property is under contract and all contingencies have been met. The listing agent learns the State Department of Transportation has authorized the construction of an exit ramp to the interstate right behind the commercial property. The exit ramp will greatly increase the value of the seller's property. What should the agent do? - ✔✔tell the seller and encourage the seller to complete the negotiated sale A listing agent is showing his listing to a buyer customer and notices a problem with the exterior of the property that he missed when he listed the property. What should he do? - ✔✔point it out to the buyer as it is a material fact A buyer's agent has accidentally forwarded confidential information about his buyer's financial background to the listing agent. What is true? - ✔✔the buyer's agent is guilty of negligence and the listing agent must disclose the information to the seller What is the difference between replacement cost and market value? - ✔✔depreciation Economic life is defined as - ✔✔years of depriciation An unlicensed assistant gets a call from a listing owner with questions about a contract- what should the assistant do? - ✔✔take the information to the listing broker An underage college student signs a lease, then discloses his age to the landlord. What is true? - ✔✔the contract is voidable at the minor's option A seller comes into the office to sign a contract. The seller is stumbling and smells of alcohol. How do you proceed? - ✔✔tell the seller to leave and return another time A high rise condominium property is advertised as having the "Most beautiful view of the city". This ad is best described as - ✔✔puffing Which of the following facts about listed property must be disclosed - ✔✔death due to structural defects A lead paint disclosure is required for all properties built before - ✔✔1978 Which of the following statements about lead is NOT true? - ✔✔the property owner must remediate the presence of lead CERCLA is under the administration of: - ✔✔EPA Which of the following used in 1978 is both extremely hazardous and friable? - ✔✔asbestos Which of the following properties would be the least desirable neighborhood? - ✔✔brownfields A seller must keep a copy of the lead paint disclosure he provided to the buyer for - ✔✔3 years It has been found that mold can develop due to - ✔✔air tight windows and doors found in newer construction General liability insurance will - ✔✔protect a company's assets if someone is injured on company property A condo owner's policy will most likely cover the owner if - ✔✔a guest slips in the kitchen A condo complex has liability complex has liability insurance. This is least likely to cover - ✔✔a units owner's carpet damaged by a broken water pipe Accurate record keeping is the responsibility of all the brokers. If a broker's computers are stolen what steps could have been taken to protect records? - ✔✔offsite or cloud storage A license holder has just attended a training seminar about technology in real estate and is excited about using social media with her clients. Which of the following statements about social media in real estate is NOT true? - ✔✔an agent with permission to advertise a property on social media does not have to worry about protecting confidential information about the client A sales agent is showing a property. He trips in the house causes major damage to property of the owner. What type of insurance will cover this accident? - ✔✔liability insurance Prior to its amendments, the Civil Rights Act of 1968 prohibited discrimination based on... - ✔✔national origin An agent working with immigrant buyers must be careful - ✔✔not to steer the buyers to a neighborhood based on the language they speak An agent is accused of discrimination. What will HUD do... - ✔✔try mediation followed by a lawsuit if mediation fails A mobility impaired tenant has leased an apartment in a complex with unassigned parking. He has requested an assigned reserved space near to his unit. What is true? - ✔✔the landlord must provide an assigned reserved space for the tenant near to the tenant's unit An investor has 15 rent houses. He has hired an agent to lease the houses. Which of the following actions by the agent would NOT be in violation of fair housing laws. - ✔✔refusing to show the houses to anyone over 75 years old Which of the following would NOT be an operating expense included in the property manager's operating budget - ✔✔mortgage payments Which of the following would be most likely to hire a property manager? - ✔✔an association A broker is running short of funds to meet this month's monthly operating expenses. He places a client's earnest money deposit in his business account and uses it to pay is rent. After his next closing, he replaces the client's deposit in his trust account. The broker... - ✔✔is guilty of conversion Which of the following is NOT an example of due diligence in a sales contract? - ✔✔a broker completes a CMA for a buyer client prior to the buyer making an offer A sales agent just obtained a listing. The seller told the agent that she needs to sell the property because she is going through a divorce. What must the salesperson do - ✔✔obtain the signatures of all owners on the listing agreement Wetlands typically contain which of the following? - ✔✔navigable waters What is the max amount of time allowed for a victim to file a Fair Housing complaint? - ✔✔24 months A property manager notices that the building stucco needs repair. He notifies the landlord and recommends a contractor. The landlord uses the contractor who does not do a good job. The new stucco leaks and mold grows. The tenant becomes ill from the mold. Who is responsible? - ✔✔the landlord An apartment building owner has renovated and modified several units to be handicapped accessible. Can he advertise this accommodation? - ✔✔Yes When did the second amendment of the Federal Fair Housing Act go into effect? - ✔✔March 12, 1989 What is the purpose of a property management trust account? - ✔✔to hold tenant security deposits Regulation Z applies to: - ✔✔ALL REAL ESTATE credit transactions except for commercial loans. For non-real estate transactions, it covers up to $25,000. The main purpose of Regulation Z is - ✔✔to notify borrowers of the true cost of credit What is a requirement of the CFPB - ✔✔Lenders must provide borrowers with the LE form at the time of or within 3 business days of application Which of the following closings would be covered by RESPA (1-4 residential family housing) - ✔✔a condominium When does the buyer under contract for deed get title to the property? - ✔✔when the final loan payment is made What is another name for Contract for Deed - ✔✔installment contract What department of the government oversees the FHA insurance program? - ✔✔HUD A buyer is aware that the interest rates should go down over the nest few months. What type of loan should he get to enable him to buy now and take advantage of declining rates in the future? - ✔✔ARM Which of the following is unlikely to have a negative impact on seller's credit score? - ✔✔a straight assumption In rental properties, increased demand can be the result of - ✔✔high mortgage interest rates Which of the following would not be eligible for a VA loan - ✔✔a parent or sibling of a veteran What is required of a loan servicer before foreclosing on a VA loan - ✔✔the VA must be notified before the foreclosure Who must be notified to take money out of the trust account in a real estate transaction? - ✔✔both buyer and seller How is earnest money recorded on the closing disclosure a. debit to the seller b. debit to the buyer c. credit to the seller d. credit to the buyer - ✔✔Credit to the buyer What type of mortgage loan would allow the property owner to borrow additional funds at future dates - ✔✔an HELOC A seller has received $225,000 for the sale of his home. This represents a 20% profit. What did he pay for the house when he purchased it? - ✔✔$187,500 A seller wants to net $185,000 on the sale of his property. He must pay a loan balance of $180,530 and closing costs at $10,000. The commission to the listing broker will be 6%. What is the lowest price the property can sell for to accomplish this? - ✔✔$399,500 If an appraiser uses the cost approach to determine the value of a two story building 128 x 97 at $120/sq. ft, with $10,000 in depreciation and a $27,500 lot, what is the value of the property? - ✔✔$2,997,340 Mark purchased a home for $150,000 He had an 80% LTV. He has paid off $42,000 of his purchase mortgage. He is selling the house for $179,000. How much equity does he have? - ✔✔$101,000 Maria is planning to buy a house for $200,000. The lender has indicated that he will charge 3 points plus an origination point. Maria is considering the difference between an 80% LTV and a 75% LTV. How much will she save on points if she chooses the 75% LTV? - ✔✔$400 An office space is 24 feet long and 27 feet wide with 9-ft ceilings. The owner wants to carpet the office. How many square yards of carpet does he need? - ✔✔72 A property is listed for $399,500. It sells for $396,000. The negotiated commission is 6% and will be split evenly between the selling broker and the listing broker. The selling broker pays his sales associates 60% of the broker's commission. How much does the selling broker earn? - ✔✔$4,752 A developer has 2,178,000 sq.ft of property. He sells 80% of it for $5,000 an acre. What is the total sale price? - ✔✔$200,000 An office building has a potential gross rent of $20,000.per month. It has a vacancy rate of 15%. Yearly expenses for the property toatl $115,000. If the owner is earning a 10% rate of return, what is the value of the building? - ✔✔$890,000 What monthly income will your buyers need to qualify for a $200,000 loan at 6% for 30 years if lenders are qualifying at 28%? (The loan factors is $6.00). Monthly taxes and insurance will be $900. - ✔✔$7,500 A seller is closing on the sale of his home on April 23rd. The property taxes have not been paid for this year. The annual tax bill is $2,008. Using a 360-day year, how much will the seller owe for taxes at closing? - ✔✔$630 An owner sold his house for $250,000 with a $50,000 take back. (A take back is seller financing. The seller receives a note for this amount at closing and will collect this amount over the agreed-upon term of the loan). He paid off his loan of $138,500 and ha paid a 5% commission. He had closing costs of $10,000. How much did the seller net at closing? - ✔✔$39,000 John is purchasing a lot 125 feet wide and 127 feet deep for $5.65 a square foot plus $15 a front foot. (A front foot refers to frontage and is the width of the lot.) How much will he pay for the lot? - ✔✔$91,568.75 A sale is closing on June 15th and the annual property tax bill has not been paid. The house is assessed at $350,000 and the tax rate is $2.50 per $100. Using a 360-day year, how much will the seller owe for the taxes at closing (to the nearest dollar) and how will this be shown on the CD? - ✔✔$4010 debit the seller/ credit the buyer The fact that an individual must go to the land described which of the physical characteristics of land? - ✔✔Immobility John and Mary are co-owners of a property. John has 60% interest in the property and Mary has a 40% interest. What type of freehold estate do they have? - ✔✔Tenancy in common A property is surveyed to determine a legal description. The surveyor works from a point of beginning, and measures terminal points and angles. What method of land description is he using? - ✔✔Metes and bounds Mary and John are married with grown children. Both are intestate. If John dies and Mary becomes the owner of their home, what type of ownership did they have? - ✔✔Tenancy by the entirety The local government needs your land to build a new high school. They have the right to take your land for the public good. This is called - ✔✔The right of eminent domain [Show More]

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