Real Estate Exam PDF

## Real Estate Exam **4. Which of the following is not an acceptable evidence of an owner’s title?** a. A recorded deed b. An abstract of title and attorney’s opinion c. A title policy d. A certificate of title **2. In terms of real estate investment, what is another term for depreciation?** a...

## Real Estate Exam **4. Which of the following is not an acceptable evidence of an owner’s title?** a. A recorded deed b. An abstract of title and attorney’s opinion c. A title policy d. A certificate of title **2. In terms of real estate investment, what is another term for depreciation?** a. Leverage b. Cost recovery c. Liquidity d. Intrinsic value **3. Which of these is an example of a physical characteristic of land?** a. Nonhomogeneity b. Scarcity c. Improvements d. Situs **4. Why are deeds, liens and other claims recorded?** a. To give actual notice. b. To give direct notice. c. To give constructive notice d. To give nominal notice. **5. What amount may the Commission charge for a criminal record search?** a. $25 b. $30 c. $50 d. $100 **6. The Alabama Real Estate Commission consists of how many members?** a. 5 b. 7 c. 9 d. 10 **7. A developer added sewer lines, utilities and built streets. What are these called?** a. Fixtures b. Annexations c. Improvements d. Real property **8. What littoral rights до owners enjoy?** a. Unrestricted use of available waters, but they own the land adjacent to the water only up to the average high-water mark. b. Unrestricted right to use the water, and the owner of land that borders a non-navigable waterway, owns the land under the water to the exact center of the waterway. c. Restricted use of available waters. d. The right to use any water, with the exception of limited domestic use. **9. Which of these is an example of an economic characteristic of land?** a. Indestructibility b. Immobility c. Area preference d. Uniqueness **10. An item of personal property can become real property by what method?** a. Accretion b. Erosion c. Severance d. Annexation **11. What is the current licensing period?** a. January 1st to December 31st, b. October 1st through September 30th, c. August 31st through September 30th d. October 1st of each even year number year through September 30th of the next even numbered year. **12. What amount is charged when there is a personal address change?** a. $0 b. $25 c. $40 d. $50 **13. What is the fee for a temporary broker?** a. $25 b. $50. c. $100 d. $150 **14. Which of these would be covered in a standard title policy?** a. Defects discoverable b. Unrecorded liens c. Forged documents d. Easements and restrictive **15. The sales associate’s agreement with the broker was a 40/60 split with the broker keeping 40% of the commission. The seller was charged 5.5%. How much did the sales associates receive if the associate listed and sold a house for $279,500?** a. $6,149.00 b. $7,686.25 c. $9,223.50 d. $15,372.50 **16. Which of these must exist for an appurtenant easement to exist?** a. Landlocked property that requires passage to the street. b. Two adjacent parcels with one owner. c. Long-timed unauthorized usage. d. Two adjacent parcels with different owners. **17. The broker may still be entitled to a commission in which of these situations where a pending property sale did NOT close?** a. The buyer wanted to add the kitchen appliances to the sale, but the seller refused. b. The buyer decided not to buy the property. c. The seller decided not to sell. d. Financing fell through. **18. How many continuation education hours must be met in order for a license to be renewed?** a. 6 b. 9 c. 15 d. 18 **19. Each applicant for renewal of an active license is responsible for completing approved education course work by what date?** a. By August 31st, b. By September 30th c. By October 1st. d. By September 30th of the final year. **20. Why have real estate license laws been put into effect?** a. To protect licensees from lawsuits. b. To protect the public and establish a стандарт of competence. c. To prevent licensees from engaging in profit making activities. d. To establish maximum levels of competency and a moral marketplace. **21. A pizza parlor leases space in a small shopping center and bolts a large iron oven to the floor. When the pizza parlor goes out of business. Who do the oven belongs to?** a. The tenant, but the tenant must pay additional rent for them. b. The owner of the shopping center. c. The owner, but the owner must reimburse the tenant. d. The tenant, but the tenant must repair the bolted holes in the floor. **22. A farmer has posted a number of “No Trespassing” and “No Hunting” signs on the property. Which “stick” in the bundle of rights gives the farmer this authority?** a. Exclusion b. Enjoyment c. Control d. Disposition **23. Agreement of the parties, relationship of the parties and the intention in placing item on the land are the legal tests for what ?** a. Determining whether an item is a chattel or personal property. b. Determining whether an item is a fixture. c. Determining whether an item is land or real estate. d. Determining whether an item is real property. **24. How many continuing education hours are required in order for a license to be renewed in an inactive status?** a. 0 b. 6 c. 9 d. 15 **25. In real estate, what is always the role of a sales associate?** a. An independent contractor b. An employee of a licensed broker. c. A licensee who performs real estate activities on behalf of a broker. d. A combination of office manager, marketer, and organizer with fundamental understanding of the real estate industry, who may not be licensed. **26. A broker does not permit his sales associates to charge less than 8% commission in any transaction. After reading a newspaper article about this broker’s policy, the broker at another’ firm decides to also adopt the 8% minimum. Based on these facts, which of these statements is TRUE?** a. The first broker’s policy is price-fixing. b. Although the first broker’s policy was legal, the second’s broker’s adoption of the minimum commission may constitute an antitrust violation if both brokers are in the same real estate market. c. Both brokers engaged in illegal price-fixing. d. Neither broker has committed an antitrust violation. **27. Which of the following is NOT a violation of federal antitrust laws?** a. Group boycott b. Allocation of markets c. Commission split d. Tie-in-agreement **28. What is an article owned by a tenant that is attached to a rented space or building and is used in conducting a business?** a. A fixture b. Real Property c. A trade fixture d. An appliance **29. How does a landlord acquire trade fixtures owned by a tenant?** a. By accession b. By accretion c. By avulsion d. By annexation **30. How many CE hours are required to activate a license from an inactive status?** a. 9 b. 15 c. 18 d. 30 **31. What amount is due at the time of application for the research fee?** a. $15 b. $25 c. $30 d. $45 **32. When the supply of a certain commodity decreases while demand remains the same, what happens to the price?** a. The price will remain the same. b. The price increases. c. The price decreases. d. The price stabilizes. **33. When supply and demand are roughly balanced, what happens to the price?** a. Price is inflated. b Price is deflated. c. Price is stable. d. Price is raised. **34. A real estate broker had a listing agreement with a seller that specified a 6% commission. The broker showed the home to a prospective buyer. The next day, the buyer called the seller directly and offered to buy the house for 5% less than the asking price. The seller agreed to the price and informed the broker in writing that no further brokerage services would be required. The sale went to closing six weeks later. Based on theses facts, which of these statements are TRUE?** a. While the broker was the procuring cause of the sale, the seller properly canceled the contract; without a valid employment agreement in force at the time of closing, the broker is not entitled to a commission. b. The broker is entitled to a partial commission, and the buyer is obligated to pay it. c. Under the facts as stated, the broker is not the procuring cause of the sale but is still entitled to a commission. d. The broker was the procuring cause of the sale and is entitled to the full 6% commission. **35. Of the following, which is NOT a requirement for independent contractor status by the Internal Revenue Service?** a. A current real estate license b. Specific hours stated in a written agreement c. A written agreement that specifies that the individual will not be treated as an employee for tax purposes d. A substantial portion of the individual’s income is based on sales production rather than hours worked **36. A qualified buyer makes a written offer on a property on March 8th by completing and signing a sales agreement. Later that day, the seller accepts and signs the agreement, keeping one copy. The seller’s broker gives a copy of the signed agreement to the buyer on March 9th. The seller’s deed is delivered on May 3rd. The deed is recorded on May 7th, and the buyer takes possession on May 15th. When is the broker’s commission payable if this is a usual transaction?** a. March 8th b. March 9th c. May 3rd d. May 7th **37. A property owner conveyed a one-acre parcel of land to a preschool. The deed provided that the property was to be used only as a playground; the former owner reserved a right of reentry. What kind of estate has been granted?** a. Leasehold b. Fee simple subject to a condition subsequent c. Fee simple absolute d. Homestead **38. What power is the government exercising when it acquires privately owned real estate through a condemnation suit?** a. The power of escheat. b. The power of revert. c. The power of eminent domain. d. The power of defeasance. **39. When a licensee is found guilty, the Alabama Real Estate Commission can do all of the following EXCEPT** a. revoke or suspend all the licenses of the licensee b. give a written reprimand c. impose a fine of not less than $100 or more than $2,500 d. require the licensee to take continuing education of the charged found guilty of the charges. **40. How does the Alabama Real Estate Commission notify the licensee and the qualifying broker of a complaint?** a. Alabama Real Estate Commission notifies the licensee and the qualifying broker of complaints by calling each individually. b. Alabama Real Estate Commission notifies everyone via email of all complaints. c. Alabama Real Estate Commission notifies the licensee and the qualifying broker in writing of complaints. d. Alabama Real Estate Commission notifies the licensee and the qualified broker by email requesting a phone call to discuss a complaint that has been rendered before investigation. **41. What is the amount for an appeal bond?** a. $100 b. $150 c. $200 d. $250 **42. Which of the following is NOT a way for a broker to charge for services?** a. A standard community rate b. A flat fee c. A hourly rate d. A commission based on a percentage of the sales price **43. What is the correct term for an agreement to sell one product only if the buyer purchases another as well?** a. A fee for service b. A tie-in аgreement c. A buydown provision d. An allocation of customers **44. A seller had agreed to pay the listing broker a 5% commission on property that was sold for $325,000. The listing broker offered a listing 40/60 selling split to any cooperating broker who sold the property. How much did the seller have to pay in commission fees?** a. $9,100 b. $11,375 c. $13,650 d. $16,250 **45. In a real estate sales transaction, who is the agent’s principal?** a. The seller b. The buyer c. The person who pays the commission d. Whoever hired the agent **46. What is a key element of an agent’s fiduciary responsibility of disclosure?** a. To report the status of аll funds received from or on behalf of the principal. b. To avoid conflicts of interest. c. To obey the principal’s instructions in accordance with the contract d. To reveal relevant information or material facts. **47. A broker listed a seller’s home for $425,000 with a 4% commission, plus $3,000 for advertising costs. The buyer offered $380,000. and after several counteroffers finally agreed to $400,000. What was the total cost to the seller?** a. $16,000 b. $18,000 c. $19,000 d. $20,000 **48. A broker represents a seller but is currently working with a buyer to find a home. Assuming that no statue has replaced the traditional common law of agency, which of these correctly identifies the parties in this relationship?** a. The broker is the buyer's agent; the seller is the broker's client. b. The buyer is the broker's client; the seller is the broker's principal. c. The seller is the broker's customer; the buyer is the broker's client. d. The broker is the seller's agent; the buyer is the broker's customer. **49. A broker has an agency agreement to represent the seller of a house. The agreement’s expiration date is June 10th. On May 5th, the house is struck by lightning and burns to the ground. The seller overwhelmed by grief, dies. Based on these facts, which of these is TRUE?** a. The agency agreement is terminated by the fire, although the seller's death also would have done so. b. The agency agreement was not terminated until the seller's death. c. If the house had not been destroyed by the fire, the seller's death would not have terminated the agreement; the broker would become the broker for the seller's estate. d. Only the mutual agreement of the parties can terminate a valid agency agreement before its expiration date. **50. What type of agent is hired to represent the seller, market the property and solicit offers to purchase?** a. A general agent b. A special agent c. A facilitator d. A Non-agent **51. A buyer is willing to pay $1,500 per acre for the SE1⁄4 of the SE1⁄4 of the SE1⁄4 of Section 11. How much will the buyer pay for the land?** a. $9,000 b. $15,000 c. $24,000 d. $30,000 **52. How many acres are contained in a parcel described as follows: The NE1⁄4 of the NW1⁄4; the N1⁄2 of the NW1⁄4, NE1⁄4 of the Section 10?** a. 40 acres b. 60 acres c. 70 acres d. 74 acres **53. What is the clause that explains the extent of ownership that is being conveyed?** a. The seisin clause b. The granting clause c. The habendum clause d. The exceptions and reservations clause **54. How many hours of risk management are required each renewal period?** a. 3 b. 6 c. 9 d. 15 **55. Which of these is a guarantee that the grantor has the right to convey the property?** a. Covenant against encumbrances b. Covenant of seisin c. Covenant of further assurance d. Covenant of quiet enjoyment **56. What kind of insurance policy protects the interests of a mortgagor?** a. A leasehold policy b. A lender’s policy c. A certificate of sale policy d. An owner’s policy **57. A homeowner listed the home for sale with a broker. When the owner sold the home without the broker’s assistance, no one was owed a commission. Based on the facts, what type of listing did the broker and the owner most likely sign?** a. An exclusive-right-to-sell listing b. A net listing c. A multiple listing d. An open listing **58. What kind of listing agreement is illegal in many states because of the potential for conflict of interest between a broker’s fiduciary responsibility to the seller and the broker’s profit?** a. Open listings b. Net listings c. Exclusive right-to-sell listings d. Exclusive agency listings **59. A seller accepted all the terms that the buyer offered, making only one small change in the amount of the earnest money, at the moment, what agreement has been established?** a. An acceptance b. A counteroffer c. A offer d. An executed contract **60. A real estate broker announces to the firm’s sales associates that the top-selling sales associate each quarter will receive a $1,000 bonus. What kind of contract is this ?** a. An implied bilateral contract b. An express unilateral contract c. An implied unilateral contract d. An express bilateral contract **61. A buyer makes an offer on a house, and the seller accepts in writing. What is the current status of this relationship?** a. The buyer and seller do not have a valid contract until the seller delivers title at closing. b. The buyer and seller have an express, bilateral executed contract c. The buyer and seller have an express, bilateral executory contract. d. The buyer and seller have an implied unilateral executory contract. **62. What best describes a contract entered into by a person who is under the age of contractual capacity?** a. An unenforceable contract b. A voided contract c. A voidable contract d. A valid contract **63. How many years comprises a commissioner’s term?** a. 1 year b. 3 years c. 5 years d. 10 years **64. A commissioner can serve how many terms?** a. No more than 1 year term b. No more than 2 consecutive terms c. No more than 3 consecutive terms d. No more than 5 consecutive terms **65. A buyer and a seller enter into a sales contract for the sale of a house. The seller backs out of the deal at the last minute, and the buyer suffers a financial loss of $1,500 as a result and must rent a home in which to live. Unless the contract provides otherwise, which of following is NOT a legal actions that would likely to succeed?** a. The buyer may sue the seller for specific performance, forcing the sale of the home to the buyer. b. The buyer may sue the seller for damages to recover the $1,500 loss. c. The seller is not liable because the buyer should not have incurred the $1,500 cost before the sale. d. The buyer may sue for the rent paid. **66. A buyer makes an offer to buy a seller’s house. Pursuant to this offer, the buyer is obligated to perform only if the buyer is first able to sell a condominium. What is this example of?** a. A mortgage contingency b. An option contingency c. A time-is-of-the-essence contingency d. A property sale contingency **67. In the case the buyer decides not to buy for no legal reason, what may happen with the earnest money?** a. The contract may provide that the earnest money is there as actual damages. b. The contract may provide that the earnest money is there as nominal damages. c. The contract may provide that the earnest money is there as punitive damages. d. The contract may provide that the earnest money is there as liquidated damages. **68. When the supply is up and the demand is down, what do prices tend to do?** a. Prices tend to increase. b. Prices tend to decrease. c. Prices tend to remain the same. d. Prices tend to go up and down. **69. What is the life estate of a wife in the real estate of her deceased husband?** a. A curtesy b. A dower c. A homestead d. A life estate **70. What is the life estate of a husband in the real estate of his deceased wife?** a. A curtesy b. A dower c. A homestead d. A life estate **71. Which of these cannot take the title as a joint tenant with the right of survivorship?** a. Spouses b. Two friends who are business partners c. Two relatives who share a house d. A corporation **72. Four sisters bought a beauty shop together, and the deed listed only each of their names. What form of ownership are they presumed to have taken?** a. Tenancy by the entireties b. Joint tenancy with right of survivorship c. Tenancy in common d. In severalty **73. When do commissioners’ appointments expire?** a. On August 31st of the final year. b. On September 30th of the final year term. c. On October 1 of the final year. d. On December 31st of the final year. **74. Which of the following is NOT required to have a real estate license?** a. Individuals selling real estate for a fee b. Individuals leasing real estate for a fee c. Individuals selling cemetery lots for a fee d. Individuals who auctions properties for a fee **75. What remaining balance amount in the Recovery Fund will require each active licensee to pay a fee of $30?** a. Less than $500,000 b. Less than $600,000 c. Less than $700,000 d. Less than $1,000,000 **76. The Alabama Real Estate Commission may transfer funds one time from the Recovery Fund to the University of Alabama Real Estate Research and Education Center. The amount remaining afterwards in the Recovery Fund may not be below what amount?** a. $500,000 b. $600,000 c. $750,000 d. $1,000,000 **77. A seller conveys property to a buyer by a written document that contains five covenants protecting the buyer’s title. What is the seller’s role in this transaction?** a. Grantee b. Grantor c. Devisor d. Devisee **78. What document transfers interest in a parcel of real estate?** a. A title b. A deed c. An attachment d. A mortgage **79. Which of the following is NOT necessary for a valid deed?** a. Recital of consideration b. Words of conveyance c. The grantee’s signature d. Delivery **80. What type of deed provides the greatest protection to the buyer?** a. A general warranty deed b. A bargain and sale deed c. A special warranty deed d. A quitclaim deed **81. What type of deed provides the least protection of any deed?** a. A general warranty deed b. A bargain an sell deed c. A special warranty deed d. A quitclaim deed **82. Five years ago, a lien was recorded against a parcel of property by a construction company. The property is in county A, but the lien was recorded in county B. Now, a former partner of the construction company, who knew that a lien had been filed, is trying to buy the property. A title search in county A disclosed no liens against the property. Which of these is true?** a. The former partner has constructive notice of the lien but not actual notice, because of the mistake in recording. b. The former partner has actual notice of the lien but not constructive notice, because of the mistake in recording. c. The former partner has both actual and constructive notice. d. The former partner has no notice of the lien. **83. A student has 1 year to begin and finish the required 60-hours course. After completing the course, the student has how long to take and pass the licensing exam?** a. 90 days b. 3 months c. 6 months d. 1 year **84. If a 30-hours post license course is not completed in the first 6 months of issuance of a temporary license, what happens next?** a. The license is lapsed. b. The license is placed on inactive status. c. The license is revoked. d. All of the above **85. What amount is charged for a sales associate to change their business address?** a. 0 b. 15 c. $25 d. $30 **86. What is the meaning of RECAD?** a. Real Estate Consumer Agency Disclosure Act b. Real Estate Client Agency Disclosure Act c. REALTORS Everywhere Can Accomplish Daily d. Real Estate Customer Agency Do Act **87. What must the brokerage company provide to every licensee that shares the type of brokerage services offered by their company?** a. Agency disclosure office policy b. Employee application c. Independent contractor form d. Health insurance **88. What title is given to a licensee who assists 1 or more parties in a real estate transaction without being an agent or fiduciary or advocate for the interest of that party to a transaction?** a. Single agent b. Transaction broker c. Dual agent d. Sub-agent **89. Should the AREC pay from the Recovery Fund any amount against a license, they may do all the following EXCEPT** a. terminate all licenses of the licensee b. refuse to license a new license to the former licensee until they have repaid in full c. charge the licensee 12% interest in addition to the amount paid out d. be required to forgive the debt if the licensee file bankruptcy **90. How much is a salesperson’s license fee per year?** a. $85 b. $95 c. $170 d. $190 **91. How much is a broker’s license fee per year?** a. $85 b. $95 c. $170 d. $190 **92. How much is a company’s license fee per year?** a. $85 b. $95 c. $170 d. $190 **93. Which township section is directly south of Section 12?** a. Section 1 b. Section 6 c. Section 11 d. Section 13 **94. The homestead exemption in a state is $20,000. Four years ago, a buyer purchased a home for $185,000 and then experienced hard times. At a court-ordered sale, the property is purchased for $160,000. If the homeowner has an outstanding mortgage balance of $140,000, tax lien of $3,500 and credit card debts amounting to $24,360, how much is protected by the homestead exemption?** a. $16,500 b. $18,000 c. $18,500 d. $20,000 **95. Under state law, one-half of an intestate decedent’s property goes to the decedent’s spouse, one-fourth is divided equally among the decedent’s children, and one-fourth goes to the state. If there is no spouse, the children divide three-fourths equally. A citizen of this state dies intestate, survived by a spouse whom he was separated from and five adult children. If the estate is $865,500, how much will each child receive under state law ?** a. 0 b. $43,275 c. $86,5552 d. $129,832.50 **96. A tenant farmer built a chicken coop and a tool shed. Who does the buildings belong too?** a. The tenant b. The owner of the real estate c. The owner, but the owner must reimburse the tenant d. The tenant, but the tenant must pay additional rent for them. **97. A patient died in a nursing home. The deceased left no heirs and had not written a will. What happens to the deceased’s $250,000 estate?** a. It escheats to the state or county. b. The nursing home gets to keep it. c. It will be split between the nursing home and the county. d. It can be paid over to the deceased’s church. **98. Which of these is defined as a claim, charge, or liability that attaches to real estate?** a. Lien b. Easement c. Encumbrance d. Deed Restriction **99. Which of the following is NOT required for a joint tenancy?** a. Unity of title b. Unity of intent c. Unity of time d. Unity of possession **100. If a licensee fails to received a renewal form, by what date should the licensee notify the Commission?** a. By August 1st of the renewal year b. By August 10th of the renewal year c. By August 15th of the renewal year d. By September 1st of the renewal year