SALESPERSONS' FUNDAMENTAL OF REAL ESTATE (V2)

Exam ANSWER KEY

1. C (110.16) / 26. D (123.4-8) / 51. A (101.37) / 76. A (130.24)
2. B (102.24) / 27. B (146.17) / 52. B (106.11, 107.38) / 77. A (118.12)
3. A (120.6) / 28. A (143.2) / 53. B (147.8) / 78. A (104.36)
4. B (145.14) / 29. B (103.3) / 54. B (E04.15) / 79. C (911.4)
5. C (118.54) / 30. A (130.13) / 55. B (840.8) / 80. C (K92.55)
6. C (107.2) / 31. B (138.46) / 56. A (123.8) / 81. A (291.16)
7. A (108.24) / 32. B (431.14) / 57. C (230.8) / 82. C (K95.43)
8. B (147.3) / 33. C (104.2) / 58. A (128.4) / 83. C (155.13)
9. B (106.35) / 34. B (127.31) / 59. B (124.57) / 84. D (157.2)
10. D (101.28) / 35. D (138.26) / 60. D (110.1) / 85. A (131.44)
11. D (124.26-27) / 36. A (411.7) / 61. B (136.42) / 86. B (161.54)
12. C (146.54) / 37. C (307.04) / 62. A (106.47) / 87. A (291.7)
13. B (112.7) / 38. D (118.18) / 63. B (113.10) / 88. D (154.4)
14. D (860.5-13) / 39. B (E16.20) / 64. D (106.2) / 89. B (153.7)
15. A (191.8) / 40. C (119.340 / 65. A (126.22) / 90. C (153.14)
16. B (108.10) / 41. C (484.4-7) / 66. B (126.41) / 91. D (K98.21-22)
17. D (442.2-3) / 42. B (143.31) / 67. A (123.4-17) / 92. C (159.52)
18. D (131.20) / 43. B (309.49) / 68. A (145.34) / 93. B (K102.19)
19. D (911.4) / 44. D (102.2) / 69. A (122.2) / 94. B (158.15)
20. A (111.15) / 45. B (434.4-6) / 70. B (107.51) / 95. A (161.7)
21. B (112.3) / 46. C (837.12) / 71. C (136.7) / 96. A (K101.22)
22. C (123.57) / 47. B (126.29) / 72. C (124.9) / 97. B (K100.8)
23. C (102.20-24) / 48. D (E01.34) / 73. D (837.38) / 98. D (157.15, 162.3)
24. D (431.7-9) / 49. D (131.25) / 74. A (113.23) / 99. C (158.8)
25. C (863.3-7, 24-25) / 50. D (840.240 / 75. D (106.8) / 100. C (K103.24)

Salespersons' Fundamentals of Real Estate Exam

SALESPERSONS' FUNDAMENTAL OF REAL ESTATE (V2)

Exam

1.  Dawn is the tenant under a 1-year lease on an apartment. Which of the following statements is true?

  1. Dawn is the lessor.

B.  Dawn holds an estate at will.

C.  The lease is a tenancy for years.

D.  Dawn's interest in the property is a freehold estate.

2.  If, upon receipt of an offer to purchase, the offeree makes a counteroffer, the original offeror is:

A.  bound by the terms of her original offer

B.  relieved of her original offer

C.  bound by the terms of the counteroffer

D.  relieved of her original offer only if she accepts the counteroffer

3.  The method for legal description of property which refers to a subdivision map is the:

  1. recorded plat
  2. street address

C.  metes and bounds

  1. government rectangular survey

4.  The amount that is actually paid for a property is its:

A.  market value

B.  market price

C.  actual cash value

  1. acquisition value
  2. The priority of a mortgage lien is determined by the:
  3. date of the mortgage loan application
  4. date the loan was disbursed
  5. date the lien was recorded in the public records
  6. amount of the mortgage loan
  1. One important factor for determining whether an item is personal property or a fixture is the:
  2. age of the item
  3. cost of the item
  4. method of attachment
  5. person who purchased and installed the item
  6. Hernandez grants an estate in land to Wilson with the stipulation that ownership reverts to Hernandez on Wilson's death. In this situation, Wilson owns a(n):
  7. life estate
  8. fee simple estate
  9. qualified fee estate
  10. estate less than freehold
  11. The income approach to pricing is LEAST suited to the pricing of:
  12. office buildings
  13. single-family dwellings
  14. apartment buildings
  15. shopping centers
  16. The government's right to take private land for the public good, upon the payment of just compensation, is called:
  17. police power
  18. eminent domain
  19. attachment
  20. escheat
  21. A contract in which only one party promises to give up something is a(n):
  22. void contract
  23. voidable contract
  24. bilateral contract
  25. unilateral contract
  26. In order to claim title to real property by adverse possession, the claimant must prove all of the following EXCEPT:
  27. his possession was exclusive
  28. his possession was continuous
  29. his possession was open and notorious
  30. he had the owner's permission to occupy the property
  1. All of the following types of depreciation originate from within the property EXCEPT:
  2. curable physical deterioration
  3. incurable physical deterioration
  4. economic obsolescence
  5. functional obsolescence
  6. An easement which requires both a dominant and servient estate is a(n):
  7. easement in gross
  8. easement appurtenant
  9. commercial easement
  10. license
  11. A broker received a 5% commission, which amounted to $7,500, for selling a property. What was the sales price?
  12. $75,000
  13. $100,000
  14. $125,000
  15. $150,000
  16. Constructive eviction results:
  17. from actions of the lessor
  18. from actions of the lessee
  19. in actual eviction
  20. in the loss of the security deposit by the tenant
  21. The least restricted form of property ownership is a(n):
  22. life estate
  23. fee simple estate
  24. qualified fee estate
  25. estate less than freehold
  26. The major function of the secondary mortgage market is to:
  27. insure loans
  28. regulate interest rates
  29. loan money to lenders
  30. buy loans from lenders
  31. Dual agency exists when a broker:
  32. represents only buyers
  33. sells his own property
  34. represents the same principal in two different transactions
  35. represents two principals in the same transaction
  36. The Fair Housing Amendments Act of 1988 extended anti-discrimination coverage to:
  37. women
  38. the elderly
  39. religious groups
  40. individuals with handicaps and families with children
  41. The form of concurrent ownership that requires the four unities of possession, interest, time, and title is:
  42. joint tenancy
  43. tenancy in common
  44. tenancy in severalty
  45. community property
  46. The right to use or enjoy the property of another is called a(n):
  47. lien
  48. easement
  49. encroachment
  50. option
  51. The type of deed which can be used to convey any interest in real property but contains neither expressed warranty nor implied warranty as to title is a:
  52. grant deed
  53. warranty deed
  54. quitclaim deed
  55. bargain and sale deed
  56. In reaching an agreement through the process of offer and acceptance, the seller of the subject property:
  57. is always the offeror
  58. is always the offeree
  59. can be either the offeror or the offeree
  60. is neither the offeror nor the offeree
  61. A square parcel of land measures 6 miles on each side. It could be described as:
  62. 6 square miles
  63. 12 square miles
  64. 36 miles square
  65. 36 square miles
  66. Due to external economic factors, a property loses $12,000 in annual net income. At a capitalization rate of 10%, how much value has the property lost?
  67. $1,200
  68. $10,000
  69. $120,000
  70. $144,000
  71. The act of transferring ownership with a deed is called a(n):
  72. escheat
  73. legacy
  74. bequest
  75. grant
  76. Which approach to pricing could be used in pricing an elementary school building, which the county decided to sell after closing the school?
  77. the income approach
  78. the cost approach
  79. the market data approach
  80. the gross rent multiplier
  81. The Truth-in-Lending Act requires the lender to disclose to the borrower:
  82. the costs of credit
  83. the financial status of the seller
  84. any defects in the subject property
  85. the appraised value of the subject property
  86. The process of transferring interest in an executory contract to another person is referred to as:
  87. breach
  88. assignment
  89. assumption
  90. consideration
  91. A listing agreement usually establishes a(n):
  92. special agency
  93. general agency
  94. universal agency
  95. accidental agency
  96. A loan under which the interest rate changes according to an agreed upon index is a(n):
  97. blanket loan
  98. adjustable rate loan
  99. graduated payment loan
  100. purchase money loan
  101. One acre equals:
  102. 36 feet x 36 feet
  103. 209 feet x 209 feet
  104. 640 feet x 640 feet
  105. 1 mile x 1 mile
  106. Carla gave David an option to purchase her property within 30 days for a consideration of $500. Under the terms of this agreement:
  107. Carla is the optionee
  108. David is the optionor
  109. David can require Carla to sell the property
  110. Carla can require David to purchase the property
  111. Official permission to utilize property in a manner not consistent with existing zoning laws is known as:
  112. spot zoning
  113. a zoning variance
  114. non-conforming use
  115. building codes
  116. Payments on items of personal property, such as kitchen appliances, are a part of the monthly payments under a:
  117. term loan
  118. budget loan
  119. blanket loan
  120. package loan
  121. The Fair Housing Act of 1968 prohibits discrimination in housing based on all of the following EXCEPT:
  122. age
  123. race
  124. religion
  125. national origin
  126. Which of the following statements about FHA loans is true?
  127. Alienation clauses are required on all FHA loans.
  128. The interest rate on an FHA loan is set by the FHA.
  129. A mortgage insurance premium (MIP) is charged on all FHA loans.
  130. The down payment on an FHA loan is usually higher than on a conventional loan.
  131. A homeowner failed to pay the plumber who installed a new bathroom in her home. The plumber may secure a(n):
  132. ad valorem tax lien
  133. special assessment lien
  134. mortgage lien
  135. mechanic's lien
  1. When is a public accommodation obligated to remove a barrier that limits access to the public accommodation by individuals with disabilities?
  2. only if an individual with a disability requests it
  3. only if doing is readily achievable
  4. always
  5. never
  6. In a cooperative, title to the land, buildings, and all other improvements is held by:
  7. the developer
  8. the unit occupants
  9. a not-for-profit corporation
  10. the community association manager
  11. Kim sold her house for $270,000, which is 20% more than what she paid for it. What did she pay for the house?
  12. $54,000
  13. $216,000
  14. $225,000
  15. $337,500
  16. The primary purpose of the Real Estate Settlement Procedures Act (RESPA) is to:
  17. regulate the cost of settlement services
  18. inform buyers about settlement services
  19. prevent discrimination in settlement services
  20. regulate real estate advertising related to credit costs
  21. Prepayment penalties on VA loans are:
  22. required by law
  23. prohibited by law
  24. optional
  25. included but not enforced
  26. Which of the following is NOT an essential element of a valid contract?
  27. legally competent parties
  28. legality of objective
  29. consideration
  30. assignment
  1. Which of the following items is the owner of a personal residence permitted to deduct from her income when calculating her income taxes?
  2. depreciation
  3. mortgage interest
  4. home improvements
  5. homeowner's insurance
  6. The legal procedure whereby real property used to secure a debt is sold in order to satisfy the debt after the borrower defaults is called:
  7. estoppel
  8. reversion
  9. foreclosure
  10. condemnation
  11. A clause in a lease that allows the landlord to increase the rent based on an economic index is called an:
  12. escape clause
  13. escalator clause
  14. alienation clause
  15. acceleration clause
  16. Which of the following conditions is considered a disability under the Americans with Disabilities Act?
  17. mental retardation
  18. HIV disease
  19. diabetes
  20. all of the above
  21. The amount of commission earned by a broker is:
  22. limited to a maximum set by state law
  23. always a percentage of the sales price
  24. set collectively by all brokers in the area
  25. determined by negotiation between the broker and his client
  26. At closing, title insurance that protects the borrower is:
  27. required by law
  28. prohibited by law
  29. usually required by the lender
  30. available at the borrower's option
  31. A contract for which some or all of the requirements have not yet been completed is a(n):
  32. executory contract
  33. executed contract
  34. unilateral contract
  35. implied contract
  36. Which of the following items is MOST likely to be considered personal property?
  37. a stream
  38. a tractor
  39. a pasture
  40. a fence around a field
  41. The income approach to valuation makes use of a process called:
  42. projection
  43. capitalization
  44. depreciation
  45. reconciliation
  46. Asbestos is:
  47. an ingredient in some paints
  48. a material used for its fire retardant qualities
  49. a gas emitted by a variety of household products
  50. a toxic gas that enters a building from the ground
  51. On conventional loans without private mortgage insurance, the loan-to-value ratio is usually limited to:
  52. 75%
  53. 80%
  54. 90%
  55. 95%
  56. Franco uses a deed to transfer title to his niece. In this situation, Franco is the:
  57. grantor
  58. grantee
  59. mortgagor
  60. mortgagee
  61. The practice of inducing a person to sell her home by representing that an impending loss in value will occur as a result of integration is:
  62. steering
  63. redlining
  64. blockbusting
  65. neighborhood shifting
  66. The two categories of taxes on real estate property are ad valorem taxes and:
  67. special assessment taxes
  68. property taxes
  69. income taxes
  70. sales taxes
  71. The sudden and rapid washing away of land by the action of water is called:
  72. alluvion
  73. avulsion
  74. dereliction
  75. erosion
  76. All of the following are leasehold estates EXCEPT:
  77. an estate at will
  78. an estate for years
  79. a periodic estate
  80. a qualified fee estate
  81. The borrower under a note secured by a mortgage is the:
  82. trustor
  83. mortgagor
  84. mortgagee
  85. beneficiary
  86. Title to real property owned by a decedent who died without heirs and without a will passes to the state under the process of:
  87. escheat
  88. reversion
  89. diversion
  90. subversion
  91. An easement created when a parcel of property has no access to a street is called a(n):
  92. easement by prescription
  93. easement by necessity
  94. easement in gross
  95. personal easement
  96. An owner's rights in property include the right:
  97. of disposal
  98. of use and enjoyment
  99. to exclude others from enjoying the property
  100. all of the above
  101. For which of the following types of real property is a rental tenant MOST LIKELY to have a percentage lease?
  102. a shopping mall
  103. an industrial park
  104. a medical office building
  105. a commercial office building
  106. Which of the following is NOT a method for legal description of property?
  107. recorded plat
  108. street address
  109. metes and bounds
  110. government rectangular survey
  111. All of the following elements are essential to a valid deed EXCEPT:
  112. the date
  113. the signature of the grantor
  114. a description of the property
  115. words of conveyance
  116. When the availability (supply) of property to be purchased decreases relative to demand, which of the following is true?

I. Prices tend to go up.
II. Prices tend to go down.
III. A buyer's market is created.