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REAL ESTATE NEWEST FINAL EXAM 2025 QUESTIONS
WITH DETAILED, VERIFIED ANSWERS (100% CORRECT)
ALREADY GRADED A+
"A handicapped person moved into an apartment and at his own expense lowered the light switches, lowered the kitchen cabinets, installed handrails, and widened the doorways. At the expiration of the lease, which of the following would the tenant LEAST LIKELY have to return to its original condition? a. Light switches b. Kitchen cabinets c. Handrails
d. Doorways - CORRECT ANSWER doorways"
"Which of the following must be disclosed when an agent is showing a house? a. Mortgage balance b. The asking price of other homes in the neighborhood c. That the property is in a flood plain zone
d. Original cost of the property - CORRECT ANSWER That the property is in a flood plain
zone" "Which of the following is an example of an emblement? a. A stand of walnut trees b. A field of corn c. An apple orchard
d. A vineyard - CORRECT ANSWER a field of corn"
"A buyer's agent is usually considered to be in what relationship to the seller? a. Client b. Customer c. Agency
d. Subagency - CORRECT ANSWER customer"
"Which of the following is a physical characteristic of real estate? a. Mobility b. Scarcity c. Uniqueness
d. Transferability - CORRECT ANSWER Uniqueness"
"Which of the following normally purchases mortgages in the secondary mortgage market? a. Mortgage banking companies, savings, and
loans, commercial banks, and mutual savings banks. b. Fannie Mae, Ginnie Mae, and Freddie Mac c. Federal Housing Administration
d. Department of V eterans Affairs - CORRECT ANSWER Fannie Mae, Ginnie Mae, and
Freddie Mac" "A seller wants to net $65,000 on his house after paying the broker's fee of 6 percent. What will the gross selling price be? a. $69, b. $68, c. $67,
d. $66,091 - CORRECT ANSWER $69,149"
"The value of a piece of land a. is the present worth of future benefits. b. includes a measure of past expenditures. c. is what a buyer pays for the property.
d. is the same as the sales price. - CORRECT ANSWER is the present worth of future benefits."
"Wilma is buying a condominium in a new sub-division and obtaining financing from a local savings and loan association. Which of the following BEST describes Wilma? a. Vendor b. Mortgagee c. Grantor
d. Mortgagor - CORRECT ANSWER Mortgagor"
"All of the following terminate an offer EXCEPT a. revocation of the offer before acceptance. b. death of the offeror before acceptance. c. a counteroffer by the offeree.
d. an offer from a third party. - CORRECT ANSWER an offer from a third party."
"Ellen is purchasing a house under a contract for deed. Until the contract is paid, Ellen has a. legal title to premises b. no interest in the property c. a legal life estate in the premises.
d. equitable title in the premises. - CORRECT ANSWER equitable title in the premises."
c. seek a judgment by default
d. seek a deficiency judgement - CORRECT ANSWER seek a deficiency judgement"
"All of the following are exemptions to the federal Fair Housing Act of 1968 EXCEPT the a. sale of a single-family home where the listing broker does not advertise the property. b. rental of a unit in an owner-occupied, three family dwelling where no advertisement is placed in the paper. c. restriction of noncommercial lodgings by a private club to members of that club. d. property is a state or local housing program
designed specifically for the elderly. - CORRECT ANSWER sale of a single-family home where
the listing broker does not advertise the property." "Garage door remote controls are considered to be a. personal property because they are movable b. personal property because they are not attacked c. real property because sale contracts stipulate that they will be transferred. d. real property because of the adaptation to the
real estate. - CORRECT ANSWER real property because of the adaptation to the real estate."
"A, B and C are co-owners of property. When C dies testate, A and B are the devises to her one-half interest in the property. How do they own the property? a. Joint tenancy b. Tenancy in common c. Severally
d. Partnership tenancy - CORRECT ANSWER Joint tenancy"
"Which of the following is an example of a free-hold inheritable estate? a. Life estate b. Dower estate c. Estate at will
d. Fee simple defeasible estate - CORRECT ANSWER Fee simple defeasible estate"
"Tom and Sally moved into a condominium that boasted of many common facilities, including tennis courts, club house, work out room, and a putting green. Under a typical condominium arrangement, these common elements are owned by a. an association of homeowners in the condominium b. a corporation in which Frances and the owners of the other units own stock.
c. the couple and the owners of the other units in the form of an undivided interest.
d. the couple and the owners of the other units in the form of divided interests. - CORRECT
ANSWER the couple and the owners of the other units in the form of an undivided interest."
"In a graduated-payment loan a. mortgage payments decrease b. mortgage payments balloon in five years. c. mortgage payments increase for a period of time and then level out.
d. the interest rate on the loan adjusts annually - CORRECT ANSWER mortgage payments
increase for a period of time and then level out." "Jack feels that he has been the victim of an unfair discriminatory practice by a local broker. His complaint must be filed with HUD within a. 3 months of alleged discrimination b. 6 months of alleged discrimination c. 9 months of alleged discrimination
d. 12 months of alleged discrimination - CORRECT ANSWER 6 months of alleged
discrimination" "A mortgage using both real and personal property as security is a a. blanket mortgage b. package mortgage c. dual mortgage
d. chattel mortgage - CORRECT ANSWER package mortgage"
"Tammy home is appraised at $75,000, she obtains a mortgage for $50,000 with two points, how much will she be charged by the lender at closing for the points? a. $1, b. $ c. $1,
d. $150 - CORRECT ANSWER $1,000"
"All of the following are tests for determining a fixture EXCEPT a. intent of the parties. b. size of the item. c. method of attachment of the item. d. adaptation of the item to the particular real
estate. - CORRECT ANSWER size of the item."
"When real estate is sold under an installment land contract, possession us usually given to the buyer. The vendee's interest in the property is
d. Dudley is liable for breach of contract if he fails to perform, and the fact that the job is more
difficult than Dudley had expected is irrelevant. - CORRECT ANSWER Dudley is liable for
breach of contract if he fails to perform, and the fact that the job is more difficult than Dudley had expected is irrelevant." "Allen offers to sell Naomi certain undeveloped land in the country and represents to her that a new freeway will run right by the land, even though Allen knows that the plans for the new freeway have been dropped. Naomi, relying on the representation, purchases the land from Allen. Under these circumstances. a. Allen can be forced to proceed with the sale even though there was fraud. b. the contract is voidable at the option of Allen. c. the misrepresentation automatically voids the contract d. Naomi must purchase the property and cannot
sue Allen for fraud. - CORRECT ANSWER Allen can be forced to proceed with the sale even
though there was fraud." "If the market value of a house is $84,500, the assessment ratio is 35 percent, and the tax rate is 30 mills, what are the monthly taxes? a. $887. b. $942. c. $73.
d. $87.72 - CORRECT ANSWER $73.94"
"Richard seeks relief from zoning regulations on the ground of nonconforming use. Effective arguments to the zoning authorities would include all of the following EXCEPT that a. the nonconforming use existed prior to the passing of the zoning ordinance. b. he would earn more by using the property for the purposes that don not conform with the zoning ordinance c. the nonconforming use didn't harm the public health, safety, and welfare
d. conforming to the zoning ordinance would create an undue hardship - CORRECT ANSWER
he would earn more by using the property for the purposes that don not conform with the zoning ordinance" "Buying real property "subject to the mortgage" is: a. a type of conditional loan. b. a mortgage bought by FNMA and sold to GNMA. c. the taking of title to property by grantee with no personal responsibility for paying the mortgage loan.
d. the right to foreclose without going to court. - CORRECT ANSWER the taking of title to
property by grantee with no personal responsibility for paying the mortgage loan." "In preparing the mortgage document, it should be noted that: a. the seller assumes no financial risk. b. the title is conveyed immediately to the buyer. c. the seller is the lender.
d. mortgage is required. - CORRECT ANSWER mortgage is required."
"A buyer purchased a furnished fee simple home. He is assuming the existing mortgage. The settlement company will have drawn up all the following with exception of the: a. bill of sale. b. note and mortgage. c. assumption agreement.
d. warranty deed. - CORRECT ANSWER note and mortgage."
"Which of the following parties to a real estate sales transaction would have the MOST exposure to liability? a. Grantor of quitclaim deed b. Grantor of a loan assumption c. Grantee taking subject to the loan
d. Grantor selling subject to the loan - CORRECT ANSWER Grantor selling subject to the loan"
"C is purchasing a home by way of a VA loan. The closing statement reveals a payment of $1,200 in discount points. How would this payment appear on the closing statement? a. A reduction in the proceeds due seller b. An addition of the principal due from buyer c. A reduction in the buyer's down payment
d. An addition to the proceeds due seller - CORRECT ANSWER An addition of the principal
due from buyer" "he Federal National Mortgage Association can do all of the following EXCEPT: a. purchase conventional loans. b. self mortgages to institutions. c. buy FHA-V A loans.
d. originate federal loans. - CORRECT ANSWER originate federal loans."
"land contract (installment contract of agreement of sale) and a purchase-money mortgage are similar in that: a. the seller assumes no financial risk. b. the title is conveyed immediately to the buyer. c. the seller is the lender.
d. a mortgage is required. - CORRECT ANSWER the seller is the lender."
d. The bargain and sale deed is unlawful. - CORRECT ANSWER The quitclaim deed gives the
least protection to the grantee." "H executes a deed of his farm to S. H keeps the deed in his safe deposit box. Upon his death, the box is opened, and attached to the deed is a note to give the deed to S. Who has title to the farm? a. S b. H' s heirs c. The state
d. S' s heirs - CORRECT ANSWER H' s heirs"
"Which of the following is covered by he covenant against encumbrances in a general warranty deed? a. Undisclosed subsurface water pipe easement b. Restrictive zoning ordinance c. Rights of adverse possessor
d. Mining and water claims - CORRECT ANSWER Undisclosed subsurface water pipe
easement" "The clause that defines or limits the quantity of the estate being conveyed is the: a. partition clause. b. revocation clause. c. habendum clause.
d. reversion clause. - CORRECT ANSWER habendum clause."
"To be a valid lien against a parcel of real estate a deed of trust must be signed by: i. Trustee ii. Trustor iii. Beneficiary a. Only i. b. Only ii. i. and ii.
ii. and iii. - CORRECT ANSWER Only ii."
"A deed of trust loan must include a power of sale clause to be foreclosed by a. Advertising the sale b. Law suit c. Judicial procedure
d. the FHA - CORRECT ANSWER Advertising the sale"
"Money for tax and insurance payments that accompanies principal and interest could be placed in any of the following accounts EXCEPT
a. suspense funds account b. trust account c. reserve account
d. escrow account - CORRECT ANSWER suspense funds account"
"A primary mortgage lender is one who a. lends to FNMA, FHLMC and GNMA. b. pools, insures, guarantees and sells first mortgage loans. c. makes loans to mortgagors. d. buys only for first mortgages and deeds of
trust. - CORRECT ANSWER makes loans to mortgagors."
"Among the first steps an appraiser takes when evaluating a property is to determine: a. the highest and best use. b. reconcile the results. c. estimate the improved property value.
d. estimate the land value. - CORRECT ANSWER the highest and best use."
"Under the provisions of the Real Estate Settlement Procedures Act, certain disclosures are required from the a. seller in a residential real estate transaction. b. buyer in a residential real estate transaction. c. lender in a residential real estate transaction.
d. closer in a residential real estate transaction. - CORRECT ANSWER lender in a residential
real estate transaction." "For parcel of real estate to have value, it must have a. utility. b. scarcity. c. transferability.
d. All the above. - CORRECT ANSWER All the above."
"If a landlord breaches the lease and the unit is uninhabitable, what action can the tenant take? a. Suit for possession b. Constructive eviction c. Tenancy at sufferance
d. Covenant of quiet possession - CORRECT ANSWER Constructive eviction"
"What is the interest the grantee when real estate is conveyed only for as long as specified conditions are met? a. Defeasible fee
"Broker Allen enters into a listing agreement with seller Bennett wherein Bennett will receive $12,000 from the sale of a vacant lot and Allen will receive any sale proceeds over and above that amount. The type of listing agreement into which Allen and Bennett entered is a. called a gross listing. b. a highly popular method of listing property in most states. c. called an exclusive agency
d. called a net listing - CORRECT ANSWER called a net listing"
"If the annual net income form certain commercial property is $22,000 and the capitalization rate is 8 percent, what is the value of the property using the income approach? a. $275, b. $176, c. $200,
d. $183,000 - CORRECT ANSWER $275,000"
"A real estate sales contract becomes valid or in effect when it has been signed by which of the following? a. Buyer b. Buyer and seller c. Seller
d. Broker and seller - CORRECT ANSWER Buyer"
"All of the following situations are in violation of the federal Fair Housing Act of 1968 EXCEPT the a. refusal of property manager Joe Kelley to rent an apartment to a Catholic couple who are otherwise qualified. b. general policy of the Locust Loan Company, which avoids granting home improvement loans to individuals "changing" neighborhoods. c. intentional neglect of a broker Harvey Hall to show a black family any property listings of homes in all-white neighborhoods.
d. insistence of Agnes Taylor, a widow, on renting her spare bedroom only to another women. -
CORRECT ANSWER insistence of Agnes Taylor, a widow, on renting her spare bedroom only
to another women." "A licensed salesperson is authorized by law to a. sign a closing statement b. collect a commission directly from a principal for performing assigned duties. c. advertise listed property under his or her own
name. d. act under the supervision of a real estate
broker. - CORRECT ANSWER ..."
"If either party to a real estate sales contract defaults, usually the other party can a. bring an action of adverse possession. b. declare the sale canceled and has no legal recourse. c. serve notice of redemption.
d. sue for specific performance. - CORRECT ANSWER sue for specific performance."
"In estimating the value of commercial property, what is the appraiser's most important consideration? a. Reproduction cost b. Net income c. Gross rent multiplier
d. Gross income - CORRECT ANSWER Net income"
"All the following are example of a specific lien EXCEPT a. real estate taxes. b. an IRS lien. c. a mortgage.
d. a mechanic' s lien. - CORRECT ANSWER an IRS lien."
"Which of the following types of ownership are characterized by the right of survivorship? a. Joint tenancy and tenancy in common b. Joint tenancy and tenancy by the entireties c. Joint tenancy and severalty
d. Joint tenancy and condominium tenancy - CORRECT ANSWER Joint tenancy and tenancy
by the entireties" "The type of ownership that blends severalty and tenancy in common ownership is a a. periodic tenancy. b. condominium. c. cooperative.
d. life estate. - CORRECT ANSWER condominium"
"If K grants a life estate to L based on the life of M, and L dies before M, what is the status of the life estate? a. It belongs to K in fee simple absolute ownership. b. It belongs to K remainderman. c. It belongs to M and the heirs of M.
b. technical expertise in the area of asbestos, which is present in so many buildings. c. taken a class on how to identify asbestos,because it is present in so many buildings. d. a basic knowledge of hazardous substances and be aware of environmental issues in a real
estate transaction - CORRECT ANSWER a basic knowledge of hazardous substances and be
aware of environmental issues in a real estate transaction" "The primary objectives of a property manager are to a. generate the highest net operating income of the property while maintaining preserving the owner's investment. b. secure tenants by offering the lowest possible rents that the budget allows. c. negotiate contracts with service providers that give the manager the most advantageous kickbacks.
d. cut expenses in any way necessary to generate a profit for the owner. - CORRECT ANSWER
generate the highest net operating income of the property while maintaining preserving the owner's investment." "A lease with a definite beginning, a definite ending, and no notice is required to terminate the lease is a (n) a. estate for years. b. periodic tenancy. c. estate at will
d. estate at sufferance - CORRECT ANSWER estate at will"
"A tenant entered into a three-year lease that was an estate for years agreement. On the termination of the lease agreement, the tenant remained in possession of the property. Which of the following is true? a. I the landlord accepted payment for another month, the original lease automatically renewed for another term. b. The landlord could evict the tenant or treat the holdover tenant as a periodic tenancy. c. The tenant had the right to remain in the property because the landlord did not give proper notice. d. The tenant had the right to remain in property because the landlord does not have it rented to
anyone anyway. - CORRECT ANSWER The landlord could evict the tenant or treat the
holdover tenant as a periodic tenancy." "Which of the following is NOT a requirement for a valid lease? a. Offer and acceptance b. Description of the leased premises c. Capacity to contract
d. An option agreement - CORRECT ANSWER An option agreement"
"A property leases for $700 per month, plus 4 percent of all gross sales of more than $350,000. How much were the gross sales if the rent paid for the year was $14,975? a. $414, b. $164, c. $356,
d. $514,375 - CORRECT ANSWER $514,375"
"A homeowner purchased a first principal place of residence for $69,000. In the next five years, she made $10,000 worth of improvements. The property sold for $109,000 and 6 percent commission was paid. Which of the following is true regarding the capital gains? a. The adjusted basis is $102,460. b. The capital gain is $23,460. c. The capital gain is $33,460.
d. The adjusted basis is $89,000. - CORRECT ANSWER The capital gain is $23,460."
"Which of the following is true regarding the refinancing of property? a. A title search is conducted, the property is appraised, and the borrower must requalify for the loan. b. The general rule of thumb is that a property should be refinanced when there is a 1 percent interest differential., c. If the borrowers have divorced, only one party's income will still be considered because only one name is now on the deed. d. If the borrowers have divorced, both parties income will be considered because both names are
on the deed. - CORRECT ANSWER A title search is conducted, the property is appraised, and
the borrower must requalify for the loan." "What is the priority of the following liens? a. IRS liens, then property taxes b. IRS liens, then special assessments c. First mortgage, property taxes
d. Property taxes, then first mortgage - CORRECT ANSWER Property taxes, then first
mortgage" "A borrower purchased mortgagee's title insurance on a property. After the final payment was made on the mortgage, a title defect was found. The borrower may have recourse through the a. previous owner if a general warranty deed was transferred at the closing. b. previous owner if a quitclaim deed was transferred at the closing. c. title insurance company because a title insurance policy was secured when the property was purchased. d. title insurance company even though a mortgagee's title insurance was secured when the
property was purchased. - CORRECT ANSWER previous owner if a general warranty deed
was transferred at the closing."
c. Cost
d. Market data - CORRECT ANSWER Income"
"In appraising a residential property, the appraiser would make a a. positive adjustment to the subject property if the subject property had an amenity the comparable did not. b. negative adjustment to the subject property if the subject property had an amenity the comparable did not. c. positive adjustment to the comparable property if the subject property had an amenity the comparable did not. d. negative adjustment to the comparable property if the comparable property did not have an
amenity the subject property had. - CORRECT ANSWER positive adjustment to the subject
property if the subject property had an amenity the comparable did not." "Which of the following terms is associated with real estate property taxes? a. Caveat emptor b. Caveat venditor c. Annuit coeptis
d. Ad valorem - CORRECT ANSWER Ad valorem"
"A lender charged $4,000 in discount points on a $100,000 loan. How many discount points were charged? a. 1 b. 10 c. 4
d. 40 - CORRECT ANSWER 4"
"A borrower negotiated a 90 percent loan and the lender is charging two points. If his offer of $190,000 is accepted, what is the minimum cash he will need to close? a. $22, b. $19, c. $25,
d. $22,240 - CORRECT ANSWER $22,420"
"Buyer and seller agree to the purchase of a house for $200,000 in which the buyer will make a $30,000 down payment and the seller will take back a ten-year purchase money mortgage for the balance. There is nothing in the contract to indicate that time is of the essence. The sales contract will be valid for which of the following? a. Closing date b. Interest rate c. Signatures on the contract
d. Term of loan - CORRECT ANSWER Interest rate"
"A binder given by a buyer in a real estate transaction: a. must be monetary. b. may be withdrawn by the buyer anytime before the seller signs his or her acceptance. c. draws interest in favor of the broker.
d. must exceed 5 percent of sales price. - CORRECT ANSWER may be withdrawn by the buyer
anytime before the seller signs his or her acceptance." "Which of the following is true under contract of sale in which the date of occupancy is later than the settlement date? a. The buyer does not acquire legal title upon settlement. b. The contract should provide whether the seller is to pay any rent. c. The buyer cannot obtain hazard insurance. d. The seller is the legal owner until occupancy is
ended. - CORRECT ANSWER The contract should provide whether the seller is to pay any
rent." "If a lessee defaults on a lease and abandons the property in good condition,for which of the following could the lessee be held liable? a. Balance of the rent plus forfeiture of the security deposit b. Balance of the rent plus the cost to find a new tenant. c. Decrease in the market value of the property
d. Balances of the rent - CORRECT ANSWER Balance of the rent plus the cost to find a new
tenant." "If the title will pass a third party upon the death of the life tenant, what was the third party's interest in the property? a. Remainder interest b. Reversionary interest c. Conditional interest
d. Redemption interest - CORRECT ANSWER Remainder interest"
"Under a percentage lease, the lessee pays $400 per month plus 2.75 percent of gross sales. Last month's gross sales were $198,210. How much is the rent? a. $5,450. b. $5,850. c. $5,540.
d. $5,580.78 - CORRECT ANSWER $5,850.78"
"Which one of the following is true when the seller takes back a mortgage from the buyer as part payment for sale? a. The seller is entitled to possession of the
