Real Estate National Exam Practice Test

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Falk had a property for sale for $129,000. Murphy made an offer of $123,000. Falk made a counteroffer of $127,000. Which of the following statements is NOT true regarding this situation?

Falk's counteroffer terminated the first offer

The counteroffer would be binding on Murphy (correct)

With the second offer, Murphy would become the offeree

The original offer, Murphy was the offeror

A 16-year-old bought a piece of property. The seller found out that he was a minor and wanted to void the deal. Could he do so?

Yes, because the buyer is not of legal age

Yes, because the buyer did not inform the seller of his correct age

No, only the buyer could void the contract (correct)

No, because both buyer and seller must agree

A seller had his home listed with a broker. During the listing period, the seller found his own buyer and refused to pay the broker's commission. The broker then sued the seller and won. What type of listing did the broker most likely have?

Exclusive right to sell (correct)

Exclusive agency

Net listing

Open listing

Which best describes the sale price for a property in an option agreement?

The buyer is guaranteed a fixed price when the option is signed Signup and view all the answers

A broker described the boundaries of a property to a prospective buyer without informing her that the boundaries described were not exact. After purchasing the property, the buyer extended a fence within the described boundaries. A neighbor then brought an injunction against the new owner because the fence extended beyond the actual property boundaries. Can the broker be accountable for misrepresentation?

Yes. The broker knew the boundaries she cited could be false. Signup and view all the answers

All the following would be considered evidence of marketable title except a(n)

certificate of title by a real estate broker Signup and view all the answers

A promissory note

is the primary evidence of a loan Signup and view all the answers

A house built in 1920 had a garage that measured 12' x 18'. If today an acceptable garage is 16' x 20', this property suffers from

functional obsolescence Signup and view all the answers

A broker produces a supposedly ready, willing and able buyer. At closing, the seller is unable to provide marketable title to the property and the buyer cannot come up with the financing to purchase the home. Is the broker due a commission?

No. The buyer was not ready, willing and able. Signup and view all the answers

Which of the following permits the mortgagor to obtain additional funds at the later date without writing a new mortgage?

Open-end mortgage Signup and view all the answers

What is the difference between a variance and nonconforming use?

a variance applies to construction occurring after zoning codes have been determined; a nonconforming use applies to construction that occurred before zoning codes were determined Signup and view all the answers

In the appraisal process looking at shopping centers, the social fiber of the community and distances from schools is called.

Neighborhood analysis Signup and view all the answers

A person rents a lakeside cabin to a young couple. Every day the lessor comes back to the beach area that he leased, and sells popcorn and hot dogs to people from the public beach nearby. Can the sun-tanners break the lease?

Yes. He destroyed their peaceable possession, warranting a constructive eviction. Signup and view all the answers

A person bought a house and wanted to bring a pet cougar to keep in the backyard. Which would most likely prevent this?

Zoning ordinances Signup and view all the answers

If a tenant stays over without the landlord's permission, this is called

estate at sufferance Signup and view all the answers

An owner's equity in property represents

the difference between the property's market value and the amount owed on it by the owner Signup and view all the answers

Jones, Smith and Rogers own a property as tenants in common. Jones wants to sell the property, but Smith and Rogers do not want to sell. What would be the most likely thing for Jones to do?

Jones would file a suit to partition to force the sale of the property Signup and view all the answers

ABC Inc. was organized with five stockholders. How would ABC Inc take title to the property?

severalty Signup and view all the answers

A general lien affects the owner's

both real and personal property of the owner Signup and view all the answers

When a seller chooses to place a property on the multiple listing service (MLS)

the owner and broker benefit Signup and view all the answers

After closing on a property, the buyer discovered there was an encroachment on the property. What could the buyer do?

sue for damages Signup and view all the answers

All the following elements have an effect on real estate value except

title insurance Signup and view all the answers

A borrower has a loan where she pays interest only during the loan period and pays off the principal balance at the end with a balloon payment. This type of loan is

straight term loan Signup and view all the answers

Which of the following is an example of functional obsolescence in a commercial building?

small windows and cramped office space Signup and view all the answers

How is interest calculated in mortgage payments?

simple Signup and view all the answers

The purpose of the Truth in Lending Law (Regulation Z) is for all reasons except

to help individual consumers apply for commercial business loans Signup and view all the answers

Which of the following valuation approaches would be used on a 20-unit apartment building?

income Signup and view all the answers

An agent pre-qualified as a prospect to determine financial ability prior to showing the prospect property. When should the agent disclose her status as a licensee?

oral disclosure prior to obtaining financial information Signup and view all the answers

Which of the following is always true about liens?

a judgment lien affects all the debtor's property Signup and view all the answers

A blanket mortgage usually contains which of the following clauses?

Release Signup and view all the answers

Which is not a purchaser of home mortgage loans in the secondary market?

FmHA Signup and view all the answers

A salesperson sold a property. In the sales contract, the buyer agreed to pay the commission involved. From whom should the salesperson collect the commission?

broker Signup and view all the answers

Which is a form of riparian rights?

customized property by a river Signup and view all the answers

An appraiser is hired to estimate the market value of an office building. In performing this task, the appraiser would be concerned with all of the following except

principal and interest payments on outstanding loans Signup and view all the answers

An increase in the availability of money would lead to which effect?

Interest rates would drop Signup and view all the answers

An agent had a listing contract with a seller for $55,000. The agent then showed the home to a buyer who could go up to the $55,000 price. The agent should

tell the buyer to offer what he wants to offer Signup and view all the answers

Which of the following statements best describes the effect of mineral rights when the land is sold?

they pass to the grantee unless specifically noted Signup and view all the answers

What is an example of ostensible agency

The principal showed by his actions that he accepted the agent's actions Signup and view all the answers

All the following clauses could be included in some mortgage loans except

subrogation Signup and view all the answers

The Truth in Lending law (Regulation Z) provides consumers with protection by

requiring disclosure of finance charges and annual percentage rates Signup and view all the answers