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UPDATED REAL ESTATE FINAL EXAM QUESTIONS WITH
100% VERIFIED AND CORRECT ANSWERS
"Arizona property taxes are based on: a. Prorate share b. Assessed value c. Front footage
d. Transfer value - CORRECT ANSWER b. Assessed value"
"Fred's father grants him an estate in land, which is limited to the length of Fred's lifetime. What type of interest does Fred's father retain in the land? a. A fee simple estate b. A life estate c. Pour autre vie
d. A reversionary interest - CORRECT ANSWER b. A life estate"
"Bob sells his property to Carl. Carl makes a down payment of $15,000. Bob carries back a note for the balance. On the closing statement, the carryback note would be shown as: a. A debit to the buyer b. A debit to the buyer and a credit to the seller c. A credit to the seller and a debit to the buyer
d. A debit to the seller - CORRECT ANSWER d. A debit to the seller"
"In the use of a trust deed, which of the following MAY serve as a trustee? a. The trustor b. The beneficiary c. A member of the Arizona State Bar
d. A broker involved in the transaction - CORRECT ANSWER c. A member of the Arizona State
Bar" "In Arizona, which of the following legal descriptions measures the smallest unit of property? a. Government check b. Lot and block c. Monument survey
d. Government survey - CORRECT ANSWER b. Lot and block"
"In Arizona, the property tax assessment rate applied to owner occupied residential property is: a. 10% b. 12% c. 14%
d. 16% - CORRECT ANSWER a. 10%"
"Any person who passes the examination for broker or salesperson, MUST activate their license within how many months after the examination date to avoid retaking the examination? a. 12 b. 9 c. 6
d. 3 - CORRECT ANSWER a. 12"
""Puffing" relates to exaggerations not made as representations of fact. That is: a. Discouraged by the Arizona Department of Real Estate. b. A violation of the Arizona Revised Statutes. c. Illegal
d. Prohibited - CORRECT ANSWER a. Discouraged by the Arizona Department of Real Estate."
"Lydia Goodheart has made a written offer to purchase Bud Perkins' home. The offer states that Perkins has five days in which to accept it. The day after Goodheart made the offer and prior to Perkins' acceptance, she informs the broker that she wants to withdraw the offer. The broker should tell Goodheart that: a. That the offer is irrevocable and she must wait four more days. b. Only her death would revoke the offer prior c. She may not resubmit the offer once the five-day period has expired
d. She can withdraw the offer and demand the return of her earnest money - CORRECT
ANSWER d. She can withdraw the offer and demand the return of her earnest money"
"Kickbacks to the lender from service providers are prohibited by: a. RESPA b. Truth in Lending Act c. Equal Credit Opportunity Act
d. FHA - CORRECT ANSWER a. RESPA"
"Recording does NOT give:
c. The normal rate of commission would apply
d. The Real Estate Commissioner would determine the rate to be applied - CORRECT
ANSWER a. The broker would not be entitled to a commission"
"An eligible veteran made a purchase offer of $130,000 on a home he wants to finance with a VA- guaranteed loan. Four weeks after the offer was accepted, a certificate of reasonable value (CRV) for $127,000 was issued for the property. In this situation, the veteran could not do which of the following? a. Withdraw from the transaction without penalty b. Purchase the property with a $3,000 cash down payment c. Negotiate with the seller to reduce the price by $3,
d. Borrow the $3,000 for the cash down payment - CORRECT ANSWER d. Borrow the $3,
for the cash down payment" "It is discovered after a sale that the parcel is 20 percent smaller than the owner represented it to be. The broker, who passed on the information to the buyer is: a. Not liable as long as he only repeated seller data b. Not liable if the buyer actually saw what he was getting c. Not liable if the misrepresentation was unintentional
d. Liable if he knew or should have known of the difference - CORRECT ANSWER d. Liable if
he knew or should have known of the difference" "If more than one offer on a property is received, the listing broker MUST present: a. The first offer b. The last offer c. The best offer
d. All offers - CORRECT ANSWER d. All offers"
"In a real estate transaction, both the seller's agent and the buyer's agent are legally required to put whose interest first? a. Their own prospect's b. The buyers' c. The seller's
d. Their principal's - CORRECT ANSWER d. Their principal's"
"Homeowner's Association fees are levied:
a. Monthly b. Quarterly c. Semi-annually
d. Annually - CORRECT ANSWER d. Annually"
"In Arizona, prior to obtaining a Public Report, a subdivider may accept only: a. A ground lease b. A building contract c. A lot reservation
d. A purchase contract - CORRECT ANSWER c. A lot reservation"
"The only thing a subdivider can sell before receiving the commissioner's Public Report is: a. An undivided interest b. An estate of inheritance c. A lot reservation
d. An option contract - CORRECT ANSWER c. A lot reservation"
"Which of the following is a requirement for a valid agency relationship? a. Written agreement b. Compensation c. Mutual consent
d. Brokerage license - CORRECT ANSWER c. Mutual consent"
"What is it called if property passes back to the state? a. Succession b. Escheat c. Will
d. Bequeath - CORRECT ANSWER b. Escheat"
"Which of the following agreements is required to be in writing? a. Commission agreements between brokers b. Leases for one year c. Listing agreements
d. Month to month rental agreements - CORRECT ANSWER c. Listing agreements"
a. Time of execution b. Time of recording c. Time of delivery
d. Time of acknowledgement - CORRECT ANSWER b. Time of recording"
"The maintenance and repair costs for the common area expenses of a condominium are allocated to unit owners and monthly assessments are paid after the assessments are established by the Homeowners Association Board of Directors based on the: a. Monthly bills b. Quarterly bills c. Annual budgets
d. Quarterly budgets - CORRECT ANSWER c. Annual budgets"
"The rules under which Arizona real estate licensees operate are prescribed by the: a. Real estate commissioner b. State legislature c. Governor
d. Real estate advisory - CORRECT ANSWER a. Real estate commissioner"
"Which of the following is NOT true regarding a property management trust account? a. Multiple properties can be in one trust account b. A salesperson can be a signator on the trust account c. A salesperson signator may sign checks for paying miscellaneous maintenance fee d. An unlicensed employee of a property management firm may not sign checks on the property
management trust account - CORRECT ANSWER d. An unlicensed employee of a property
management firm may not sign checks on the property management trust account" "Which of the following is TRUE as to quitclaim deeds? a. They convey after acquired title b. They convey a warranty of merchantability c. They are often used in lieu of title insurance
d. They can convey a partial interest - CORRECT ANSWER d. They can convey a partial
interest" "The mortgage MOST commonly uses: a. Compound interest b. Simple interest
c. Discounted interest
d. Prepaid interest - CORRECT ANSWER b. Simple interest"
"Under Arizona law, the trust deed conveys the power of sale to the: a. Trustor b. Trustee c. Beneficiary
d. Grantee - CORRECT ANSWER b. Trustee"
"The person making an acknowledgement on a deed is BEST described as the: a. Grantor b. Grantee c. Broker
d. Notary public - CORRECT ANSWER a. Grantor"
"The maximum amount of money that can be paid for any one license from the Recovery Fund is: a. $30, b. $20, c. $90,
d. $40,000 - CORRECT ANSWER c. $90,000"
"The portion of a deed that indicates what the grantee will "have and hold" is called: a. An estoppel clause b. The fee simple clause c. The defeasance clause
d. An habendum clause - CORRECT ANSWER d. An habendum clause"
"The priority of mortgages in relation in each other is based on which of the following? a. Time of execution b. Time of recording c. Time of delivery
d. Time of acknowledgement - CORRECT ANSWER b. Time of recording"
"What requires that all listings be in writing? a. The Arizona Constitution b. The Statute of Limitations
"The full cash value of a property is $90,000. It is assessed at 10% of the F.C.V. for tax purposes. The tax rate is $10.95 per $100 of assessed valuation. What is the simi-annual tax payments? a. $492. b. $985. c. $550.
d. $476.50 - CORRECT ANSWER a. $492.75"
"When a claim is settled by the Title Insurance Company, the Company acquires all rights and claims of the insured against any other person who is responsible for the loss. This is called: a. Escrow b. Surety c. Subrogation
d. Subordination - CORRECT ANSWER c. Subrogation"
"Which of the following is not part of the Landlord/Tenant Act? a. Security deposits regulations b. Regulation of property management agreements. c. Notices for eviction.
d. Notice period for condominium conversions. - CORRECT ANSWER b. Regulation of
property management agreements." "What is the distance in miles from the principal meridian that describes Range 4 West? a. 12 to 18 b. 18 to 24 c. 24 to 30
d. 30 to 36 - CORRECT ANSWER b. 18 to 24"
"The borrower's rights after a mortgage foreclosure are referred to as rights of: a. Forfeiture b. Reinstatement c. Foreclosure
d. Redemption - CORRECT ANSWER d. Redemption"
"The real estate recovery fund will be refunded if on June 30 the fund balance falls below: a. $30, b. $100,
c. $300,
d. $600,000 - CORRECT ANSWER d. $600,000"
"When one is advised to add a tennis court to an apartment complex, this is determined by the appraisal principle of: a. Regression b. Progression c. Contribution
d. Economic Life - CORRECT ANSWER c. Contribution"
"The right to use water that is adjacent to the land is referred to as: a. Surface water rights b. Avulsion c. Riparian
d. Reliction - CORRECT ANSWER c. Riparian"
"The legal capacity of a person entering into a real estate contract is affected by: a. Age b. Sobriety c. Both A and B
d. Neither A or B - CORRECT ANSWER c. Both A and B"
"Which of the following elements is necessary in order for a mortgage to be considered valid? a. Recordation of the note b. Competent parties c. An alienation clause
d. A federally regulated lender - CORRECT ANSWER c. An alienation clause"
"There are two classifications of water law in Arizona. They are: a. Flowing and stagnant b. Non-navigable and navigable c. Ground and surface
d. Percolated and underground rivers - CORRECT ANSWER c. Ground and surface"
"When a salesperson with a brokers license is employed by a designated broker, the salesperson may use which of the following designations:
"A buyer assumed a seller's 11%, $80,000 first deed of trust on the settlement date of June 13. The seller made the monthly payment of June 1 with interest in arrears. Which of the following is a CORRECT settlement entry for the interest? a. $439.92 seller's credit b. $293.28 buyer's debit c. $439.92 seller's debit
d. $293.28 seller's debit - CORRECT ANSWER d. $293.28 seller's debit"
"A subdivider hires a broker to sell his property. When the broker is out of town, the subdivider shows the property, quotes prices and takes deposits. The subdivider's actions: a. Were entirely proper b. Can be compensated by the broker c. Could make him subject to disciplinary action by the department of real estate
d. Place the broker in jeopardy, since he is acting as an unlicensed salesperson - CORRECT
ANSWER a. Were entirely proper"
"A real estate licensee is usually presumed to be the agent of the: a. Party paying the commission b. Party with whom a written contract has been signed c. Owner of the property
d. Buyer - CORRECT ANSWER b. Party with whom a written contract has been signed"
"A licensee may do all of the following except: a. Sell in any area of the state b. Act in all business matters for the broker c. Find buyers
d. Be named on the broker trust account - CORRECT ANSWER b. Act in all business matters
for the broker" "A salesperson receives cash instead of a check as earnest money deposit. He should: a. Put it into a trust account b. Keep it for the commission c. Give it to the seller
d. Give it to the broker - CORRECT ANSWER d. Give it to the broker"
"A release clause provides for the release of:
a. Brokers from liability b. Parcels of land from blanket mortgages or trust deeds c. Leases
d. Listing agreements - CORRECT ANSWER b. Parcels of land from blanket mortgages or
trust deeds" "All of the following are correct regarding an executory real estate purchase contract when one party is in bankruptcy proceedings, EXCEPT: a. The Trustee may deliver title if in the Trustee s sole opinion it is in the best business interest toʼ complete the transfer. b. The Trustee for the buyer may reject the agreement. c. The Trustee for a seller may not be able to deliver marketable title. d. Permission from the Bankruptcy Court is required for the Trustee to sell an asset of the
Bankrupt estate. - CORRECT ANSWER ?*
a. The Trustee may deliver title if in the Trustee s sole opinion it is in the best business interest toʼ complete the transfer." "A mortgage assumption on a settlement statement would appear as a: a. Credit to the seller b. Balance factor c. Debit to the buyer
d. Credit to the buyer - CORRECT ANSWER d. Credit to the buyer"
"A broker offers to prepare documents for a real estate transaction at a fee of $350. Which of the following is true? a. He cannot charge for this service b. He may charge for this service of both parties agree c. He may charge for this service if it is considered an escrow fee
d. He may charge for this service if the fee is negotiable - CORRECT ANSWER a. He cannot
charge for this service" "A real estate purchase transaction closes on February 15. The buyer does not record the deed until April 24. A judgment for $12,000 against the grantor is filed and recorded on April 21. The judgment: a. Is a lien against the property b. Is invalid relative to the subject property c. Constitutes a judgment inchoate
"A buyer who desires to reduce the contract interest rate on the thirty year promissory note from 8 3/8 percent to 8 percent per annum would pay: a. 2 points b. 3 points c. 4 points
d. 5 points - CORRECT ANSWER b. 3 points"
"A developer desires to offer for sale thirty time-share intervals in a resort property. Prior to offering such interests in the resort, the developer MUST obtain: a. Ownership free of encumbrances b. A public report issued by the Real Estate Commissioner c. Approval from the State Corporation Commission-Securities Division
d. Time share zoning - CORRECT ANSWER b. A public report issued by the Real Estate
Commissioner" "A plat is: a. A document used to record a subdivision of land b. A diagram used to show where and how buildings are to be constructed c. A process used to obtain zoning variances
d. A surveying instrument used to identify property borders - CORRECT ANSWER b. A
diagram used to show where and how buildings are to be constructed" "A property manager owes his fiduciary relationship to: a. The owners b. The tenants c. Both the owners and the tenants
d. The homeowner's association - CORRECT ANSWER a. The owners"
"A buyer of real property: a. Is always considered a customer. b. Is always considered a client c. May be a customer or a client
d. Normally has a fiduciary relationship with the real estate salesperson - CORRECT
ANSWER c. May be a customer or a client"
"A licensed salesperson referred a buyer to an out of state broker who agreed to pay a commission for the referral. The licensed salesperson would be paid by: a. The buyer b. His broker c. The out of state broker
d. Would not be paid since he is not licensed in the state - CORRECT ANSWER b. His broker"
"A listing contract completed and signed by a salesperson is reviewed by the broker and: a. Must be initialed by the broker as approved within 5 days after being written b. Must be initialed by the broker as approved within 10 calendar days after being written c. Must be initialed by the broker as approved within 10 business days after being written
d. Does not require broker approval - CORRECT ANSWER c. Must be initialed by the broker
as approved within 10 business days after being written" "A tenant calls the property owner several times asking that a leaking roof be repaired. If the property owner refuses to fix it of there is unreasonable delay, the tenant may move out on the legal grounds of: a. Constructive eviction b. Inverse condemnation c. Hypothecation
d. Non-conforming use - CORRECT ANSWER a. Constructive eviction"
"When more than one offer is received on a subject property, the listing agent shall: a. present all offers to the seller including verbal offers b. present all written offers c. present all offers in the order they were received
d. present the written offers only in the order they were received. - CORRECT ANSWER *?
a. present all offers to the seller including verbal offers" "A mortgage lender agrees to lend 80% of the purchaser price for four points. If the purchase price of the property is $165,000, how much will the lender receive for the discount? a. $3, b. $6, c. $5,
d. $8,250 - CORRECT ANSWER c. $5,280"
"A legal procedure or action brought about by one party to a contract to enforce the terms of the contract against the other party is: a. Lis Pendens b. Specific Performance c. Punitive Damages
d. Exemplary Damages - CORRECT ANSWER b. Specific Performance"
"All of the following are TRUE regarding an Unrepresented Seller Compensation Agreement, EXCEPT: a. The parties to the agreement are the Seller and Buyer b. The agreement has a beginning and expiration date. c. The compensation terms are included
d. The agreement states that the Broker is acting solely as the Buyer s Agentʼ - CORRECT
ANSWER a. The parties to the agreement are the Seller and Buyer"
"After initial assessments have been made by the homeowners association, they shall be made at least: a. Quarterly based on cost required b. Annually based on last month's cost required c. Annually based on an annual budget
d. Annually based on the builder developer's projections - CORRECT ANSWER c. Annually
based on an annual budget" "A broker prepares documents for a real estate transaction and charges a document preparation fee of $75. The charging of such a fee is: a. Acceptable if the parties to the transaction agree b. Prohibited by the Arizona real estate code c. Prohibited by Ariticle 26 of the Arizona Constitution
d. Acceptable if it is called an escrow fee - CORRECT ANSWER c. Prohibited by Ariticle 26 of
the Arizona Constitution" "A property is sold for $100000 with 5% being paid with the offer as a good faith deposit and then 20 days later an additional $10,000. How much does the buyer pay at closing? a. $10, b. $15, c. $80,
d. $85,000 - CORRECT ANSWER d. $85,000"
"A listing that is never advertised or entered into a multiple listing system is known as a: a. Pocket Listing b. Coming Soon Listing c. Open Listing
d. Net Listing - CORRECT ANSWER a. Pocket Listing"
"A broker brought a qualified buyer to the seller. However, at the close of escrow, the seller refused to pay the commission. The earnest money being held in the broker's trust account is the exact amount of the commission. What should the broker do? a. Keep one-half of the earnest money, and give the balance to the seller. b. Keep the entire amount in lieu of commission c. Turn the earnest money over to the seller and sue the seller for the commission
d. Put the earnest money into escrow and wait for the court to decide. - CORRECT ANSWER c.
Turn the earnest money over to the seller and sue the seller for the commission" "A provision in an executory contract that prohibits a debtor-inpossession from rejecting the contract pursuant to the Bankruptcy Code is: a. Unenforceable b. Illegal c. Voidable
d. Enforceable - CORRECT ANSWER *?
a. Unenforceable" "A seller accepts an offer that is accompanied by an earnest money check. How should the broker handle the check? a. Hold it until the buyer's loan is approved b. Hold it until the day of closing c. Deposit it in the escrow account
d. Deposit it in the operating account - CORRECT ANSWER c. Deposit it in the escrow
account" "A management agreement between an owner and a broker states that the management fee will be 7% of the first $200,000 of the annual gross rents collected and 8% of the rents collected that exceed that amount. If last year's gross rents collected totaled $222,500, how much was the management fee? a. $15,
