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REAL ESTATE NATIONAL EXAM POST TEST QUESTIONS
WITH 100% CORRECT ANSWERS
"Question #1 of 80 Question ID: 1425578 When does title transfer? A) When the grantor delivers a valid deed to the grantee B) When both the grantor and the grantee have signed a valid deed C) When the grantee accepts a valid deed from the grantor D)
When the grantor executes a valid deed to the grantee - CORRECT ANSWER C)
When the grantee accepts a valid deed from the grantor" "Question #2 of 80 Question ID: 1425563 All of these are characteristics of land EXCEPT A) land is movable. B) land is considered real property. C) land does not depreciate. D)
land is (theoretically) indestructible. - CORRECT ANSWER A)
land is movable." "Question #3 of 80 Question ID: 1425566 A buyer purchased a home subject to an easement in gross over the west 10 feet of the property. The easement was for public utilities. Who owns the property subject to this particular easement? A) The city B) The public utilities company C) The buyer and the public utilities company together D)
The buyer - CORRECT ANSWER D)
The buyer" "Question #4 of 80 Question ID: 1425611 A homeowner promised to pay $50 if a local wood expert restored the homeowner's teak patio furniture. The expert arrived and restored the teak patio furniture competently. This is an example of which of these? A) A unilateral contract B) A voidable contract C) A bilateral contract D)
An implied contract - CORRECT ANSWER A)
A unilateral contract" "Question #5 of 80 Question ID: 1425594 A seller's agent would be obligated to share with an unrepresented customer that A) all information the customer shares with the agent will also become knowledge of the agent's principal. B) the seller is getting a divorce and is very motivated. C) the property is overpriced and the buyer should offer less than the listing price. D)
the property was the site of an accidental death two years ago. - CORRECT ANSWER A)
all information the customer shares with the agent will also become knowledge of the agent's principal." "Question #6 of 80 Question ID: 1425596 An investor hired a property manager with a real estate license to manage an apartment building, and the two parties entered into a written property management agreement. The property manager advised the rental property owner about several needed repairs to the residential apartment units. The property manager also found and signed several tenants. Finally, the property manager compared the rents charged at the investor's property with several other nearby apartment buildings. This type of agency is called what? A) Implied agency
Inflating the likely sales price of a property in order to obtain the listing and expecting to convince the seller to lower the price later B) Refusing a listing because the seller's desired sales price significantly exceeds the broker's estimate of market value C) Declining to reveal the seller's motivation and desired time frame for selling the property to a buyer's agent D) Informing unrepresented buyers who come to an open house that they should be aware of agency
issues before discussing their confidential financial qualifications - CORRECT ANSWER A)
Inflating the likely sales price of a property in order to obtain the listing and expecting to convince the seller to lower the price later" "Question #10 of 80 Question ID: 1425582 To widen a busy two-lane highway, a state must exercise its power of eminent domain to acquire privately owned real estate for all of these EXCEPT A) a property that recently went through a foreclosure. B) a property subject to local property taxes. C) a property that had permanently escheated to the state. D)
a property that is owned by a government official. - CORRECT ANSWER C)
a property that had permanently escheated to the state." "Question #11 of 80 Question ID: 1425608 A seller decides NOT to sell a property despite of having an executory contract with a buyer. The buyer's remedy is to A) amend the contract and change the terms to get the buyer's earnest money returned. B) sue for liquidated damages to recover the earnest money and force the seller to sell. C) file criminal charges to void the agreement. D)
sue the seller for specific performance to force compliance with the agreement. - CORRECT
ANSWER D)
sue the seller for specific performance to force compliance with the agreement."
"Question #12 of 80 Question ID: 1425633 In the government (rectangular) survey system legal description method, a township is divided into 36 sections. Which of these is the formula for calculating the area of one section of a township? A) 5,280 × 5,280 = B) 1,320 × 1,320 = C) 8,640 × 8,640 = D)
2,640 × 2,640 = - CORRECT ANSWER A)
5,280 × 5,280 =
A mile is 5,280 feet. To calculate the area of a square mile, multiply 5,280 (height) × 5,280 (width). Reference: Real Estate Calculations > Measurement" "Question #13 of 80 Question ID: 1425603 Which of the following advertisements for the sale of real estate is legal when the agent is an owner of the property? A) A commercial office building, list price 3 million, fully leased B) A single-family residence, list price $1 million, convenient location C) Agricultural property, list price $2 million, great crop land D)
Apartment building, list price $2.5 million, owner agent - CORRECT ANSWER D)
Apartment building, list price $2.5 million, owner agent" "Question #14 of 80 Question ID: 1425574 Jordan purchased a parcel of real estate from Anne and Terry, who owned the property as tenants in common. When Jordan takes title to the real estate at closing, what form of ownership will Jordan have of the real estate? A) Jordan is the sole owner and has an estate in severalty ownership of property. B) Jordan has a concurrent ownership of the real estate. C)
LE within three days of loan application; CD at least three days before closing - CORRECT
ANSWER D)
LE within three days of loan application; CD at least three days before closing" "Question #18 of 80 Question ID: 1425585 A single-family residence was built in 1965 and the owner wishes to sell the property. Which of the following is TRUE regarding laws regulating lead-based paints? A) Since the home was built before 1978, the seller must have a lead inspection done before signing a purchase agreement. B) Lead-based paints are not considered a material fact and therefore not required to be disclosed. C) The seller must abate all lead in the home before listing the property. D)
The prospective purchaser has a 10-day right to have the property inspected for lead. -
CORRECT ANSWER D)
The prospective purchaser has a 10-day right to have the property inspected for lead." "Question #19 of 80 Question ID: 1425592 A real estate broker and owner of a duplex entered into an exclusive-right-to-sell listing agreement for a term of six months. Shortly after the property was listed, the broker found a buyer, the seller signed the purchase agreement, and the transaction closed within two months of entering into the listing agreement. What is the status of the listing agreement after closing? A) Continues until the expiration of the six-month term B) Executed C) Executory D)
Ended upon seller paying the listing broker's commission - CORRECT ANSWER B)
Executed" "Question #20 of 80 Question ID: 1425613 A single-family residence was listed for sale. A buyer entered into a purchase contract with a seller, contingent on the ability to build a treehouse in the backyard. Upon further investigation, the buyer discovered the community association's CC&Rs prohibited backyard and front yard treehouses. The buyer
A)
can exit the sales contract provided there is mutual rescission. B) can exit the sales contract and get the deposit back. C) cannot exit a valid and binding legal agreement with the seller. D)
cannot exit the sales contract because this is a frivolous contingency. - CORRECT ANSWER B)
can exit the sales contract and get the deposit back." "Question #21 of 80 Question ID: 1425597 An investor owned a large corporate office building that rented offices out primarily to health care professionals. The investor hired a real estate broker to serve as the property manager. Which of these lists shows the fiduciary duties owed by the rental property owner to the property manager? A) No fiduciary duties are owed B) Obedience, loyalty, disclosure, compensation, accounting, reasonable skill and care C) Honesty, fair dealing, loyalty, compensation, accounting, reasonable skill and care D)
Obedience, loyalty, disclosure, confidentiality, accounting, reasonable skill and care - CORRECT
ANSWER A)
No fiduciary duties are owed" "Question #22 of 80 Question ID: 1425607 Consideration is an essential element of a contract. The element of consideration must be satisfied at the time the parties enter into a contract. How is this accomplished with a real estate purchase and sales contract? A) The buyer promises to pay the seller the purchase price. B) The buyer pays the seller a good-faith deposit. C) The buyer pays the seller the purchase price. D)
The buyer pays the seller an earnest money deposit. - CORRECT ANSWER A)
The buyer promises to pay the seller the purchase price."
the seller through the listing broker who is paying the agent. D)
the buyer who employed the agent. - CORRECT ANSWER D)
the buyer who employed the agent." "Question #26 of 80 Question ID: 1425609 During contractual negotiations, Party A threatened Party B with violence if Party B did not sign a written lease. Party B signed the written lease agreement. Assuming the contract was properly written and signed, what is the status of the lease? A) Valid, because the contract was properly written and signed B) Void, because Party A threatened Party B with violence C) Voidable, because Party A threatened Party B with violence D)
Voidable, because Party A used force against Party B - CORRECT ANSWER C)
Voidable, because Party A threatened Party B with violence" "Question #27 of 80 Question ID: 1425593 A salesperson/broker-associate is employed by Broker Realty, Inc. A prospective buyer has signed a buyer representation agreement the with salesperson/broker-associate. Two weeks after signing the buyer representation agreement, the salesperson/broker-associate dies. What is the status of the buyer representation agreement as result of the salesperson/broker-associate's death? A) The contract belongs to heirs of the associate licensee B) Terminated C) The matter will need to be litigated in either a court of law or in an arbitration tribunal D)
Unchanged - CORRECT ANSWER D)
Unchanged" "Question #28 of 80 Question ID: 1425632 A borrower is in default on his home loan and has offered to give the lender a deed in lieu of foreclosure. The lender declined the borrower's offer. This is MOST likely because A) the lender would not get possession or title upon transfer.
B)
it will take more time and cost more than foreclosing on the property. C) the loan to value is too high. D)
there are junior or secondary liens. - CORRECT ANSWER D)
there are junior or secondary liens." "Question #29 of 80 Question ID: 1425625 This is a three-party instrument used to pledge property as security for repayment on real estate financing without giving up possession. The impact on title is limited to the lifetime of the loan. Despite the impact on title, the third party has no right to enter the property. This is A) a seller carryback purchase money mortgage financing. B) a mortgage financing. C) a deed of trust financing. D)
a contract for deed financing. - CORRECT ANSWER C)
a deed of trust financing." "Question #30 of 80 Question ID: 1425568 Which of these methods of legal description is the BEST for describing an irregularly shaped parcel of real estate? A) Lot and block B) Lot and tract C) Metes and bounds D)
Government survey - CORRECT ANSWER C)
Metes and bounds" Question #31 of 80 Question ID: 1425562 Which statement is TRUE? A) The general warranty deed from the seller to the buyer guarantees good title. B)
replica of the improvements. The appraiser used the ____ approach and estimated the cost to build the building new with the ______ method. A) cost; reproduction cost B) cost; replacement cost C) sales comparison; reproduction cost D)
market data; replacement cost - CORRECT ANSWER A)
cost; reproduction cost" "Question #35 of 80 Question ID: 1425579 The title company for the buyer recorded the warranty deed for a recent purchase. This recording has the legal effect of A) providing constructive notice. B) guaranteeing marketable title. C) passing title to the grantee. D)
giving actual notice. - CORRECT ANSWER A)
providing constructive notice." "Question #36 of 80 Question ID: 1425586 A city discovered that one bedroom of a three-bedroom, two-bathroom home had been built without the appropriate permits. The additional bedroom had been built over 20 years ago. Upon discovery of the unpermitted bedroom, the city A) exercised its power of eminent domain to tell the owner to demolish the bedroom. B) exercised its police power and told the owner to demolish the bedroom or bring it up to code. C) did nothing because the statute of limitations had run. D)
exercised its power of escheat and told the owner the bedroom was grandfathered in. -
CORRECT ANSWER B)
exercised its police power and told the owner to demolish the bedroom or bring it up to code."
"Question #37 of 80 Question ID: 1425626 A seller and licensee are completing the listing agreement, and discussing the financing terms the seller is willing to consider. The licensee realizes the seller's current loan not assumable. Which clause in the seller's current mortgage did the licensee read? A) Acceleration clause B) Prepayment clause C) Defeasance clause D)
Due-on-sale clause - CORRECT ANSWER D)
Due-on-sale clause" "Question #38 of 80 Question ID: 1425639 An apartment building has 15 units, and each unit rents for $1,100 a month. There are onsite laundry facilities, an onsite business center, and storage units that generate $700 a month in additional income. The apartment building has a 5% vacancy rate. What is the effective gross income (EGI) from this income-generating property? A) $96, B) $196, C) $296, D)
$150,080 - CORRECT ANSWER B)
The calculation is 15 units × $1,100 monthly rent = $16,500 × 12 = $198,000 (annual rent). $700 (laundry/business center/storage units) × 12 = $8,400. $198,000 + $8,400 = $206,400. $206,400 - $10,320 [5% vacancy ($206,400 × 5% = $10,320)] = $196,080 (EGI). This is the formula for calculating EGI: Gross potential rent + other income = ____ - vacancies/collection losses = effective gross income. Reference: Real Estate Calculations > Property Valuation" "Question #39 of 80 Question ID: 1425569 Which of these does NOT provide enough information to calculate the area of the parcel? A)
"Question #42 of 80 Question ID: 1425587 A listing broker discovered that the seller's roof leaked. The broker disclosed this material defect to the seller, the prospective buyer, and the buyer's agent. The listing broker fulfilled the fiduciary duty of disclosure to A) the seller. B) the buyer. C) the buyer's agent. D)
all of these parties. - CORRECT ANSWER A)
the seller." "Question #43 of 80 Question ID: 1425628 A seller sold a parcel of vacant land to a buyer, and title transferred at the closing. The property was sold for and was appraised at $1 million. The buyer borrowed $800,000 from a lender to purchase the property and made a down payment of $200,000. What is the loan to value (LTV) ratio on the loan? A) 0% LTV B) 100% LTV C) 20% LTV D)
80% LTV - CORRECT ANSWER D)
80% LTV"
"Question #44 of 80 Question ID: 1425619 Two single-family residences are for sale on the opposite sides of the street. Both are well-kept ranch-style tract homes, were built around the same time, and have approximately the same type of amenities. There is an unbroken chain of title for the property located on the north side of the street. There is a break in the chain of title for the property on the south side of the street. Which element of value would be impacted by this? A) Demand B) Utility
C)
Transferability D)
Supply - CORRECT ANSWER C)
Transferability" "Question #45 of 80 Question ID: 1425635 An investor purchased a commercial office building for $1.5 million. The land was valued at $375,000 and the improvements at $1,125,000. The investor made a down payment of $300, and financed the purchase with a $1,200,000 mortgage from ABC Lending. Following the purchase, the investor took a depreciation allowance on the investment. What was the depreciation allowance based upon? A) $1,500, B) $1,200, C) $375, D)
$1,125,000 - CORRECT ANSWER D)
"Question #46 of 80 Question ID: 1425600 Which of these is NOT a protected group under federal Fair Housing Act? A) Convicted drug dealers B) Buddhists C) AIDS patients D)
Hispanics - CORRECT ANSWER A)
Convicted drug dealers" "Question #47 of 80 Question ID: 1425612 In what type of contract are the parties both contractually obligated from the time of contracting? A) A bilateral contract B)
responsible for the day of the close. How will the property tax proration be entered on the closing statement? A) Credit seller $2,500; debit lender $2, B) Debit lender $2,500; credit buyer $2, C) Credit seller $2,500; debit buyer $2, D)
Debit seller $2,500; credit buyer $2,500 - CORRECT ANSWER C)
Credit seller $2,500; debit buyer $2,500" "Question #51 of 80 Question ID: 1425604 A real estate brokerage firm had written employment agreements with each salesperson/broker- associate of the firm. As part of the written employment agreement, the brokerage firm informed the salespersons/broker-associates that the brokerage firm would not withhold taxes or provide other benefits to the salespersons/broker-associates. Even though these individuals are deemed to be independent contractors, which of the following is TRUE? A) Salespersons/broker-associates are required to purchase errors and omissions insurances to protect the broker. B) Salespersons/broker-associates do not have to conform to office policies. C) Salespersons/broker-associates are subject to supervision by the firm's broker. D)
The broker can assign work hours to salespersons/broker-associates. - CORRECT ANSWER
C)
Salespersons/broker-associates are subject to supervision by the firm's broker." "Question #52 of 80 Question ID: 1425584 A retail store in a residential neighborhood is MOST likely an example of A) a zoning variance. B) nonconforming use. C) a special commercial permit. D)
special use. - CORRECT ANSWER B)
nonconforming use."
"Question #53 of 80 Question ID: 1425590 The seller is renovating the family room but still wants the property shown. On some days, the work creates fumes, so the seller instructs the listing broker to make sure that anyone showing the property speaks with the seller first. The listing broker includes the following statement in the property information: "Call before showing." A buyer's broker calls to schedule a showing and leaves a message on the seller's phone. Upon arriving at the property, the buyer is overcome with fumes from the project. Is the listing broker liable? A) Yes, because the listing broker did not exercise reasonable care B) No, because the buyer's broker should have followed the showing instructions C) Yes, because the buyer's broker did not call the listing broker D)
No, because the listing broker followed the seller's directions - CORRECT ANSWER A)
Yes, because the listing broker did not exercise reasonable care" "Question #54 of 80 Question ID: 1425589 A seller enters into an open listing agreement with multiple brokers, promising to pay the agreed- upon commission to the broker who finds a buyer ready, willing, and able to purchase. The seller must honor the promise if A) the listing brokers promise to exercise due diligence, and the seller finds the buyer. B) no buyer is found. C) a listing broker performs. D)
the seller finds a buyer. - CORRECT ANSWER C)
a listing broker performs." "Question #55 of 80 Question ID: 1425602 A real estate broker advertised a commission rebate to any buyer or seller using the brokerage firm before the end of the calendar year. This type of advertising is A) legally prohibited by federal law. B) permitted by federal law with proper disclosures. C)
