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Wisconsin Real Estate Salesperson Prelicense

Exam E w/key

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Modern Real Estate Wisconsin

Final Exam E

INSTRUCTIONS: Choose the best answer for each question. Fill in the bubble sheet for each answer. The bubble sheet is at the end.

  1. In Wisconsin, cities of the first, second, and third class may enact zoningordinances that control
  2. only the area located within the city limits.
  3. areas located within 5 miles of the city limits, if the surrounding town permits the zoning.
  4. areas located within 3 miles of the city limits.
  5. areas located within 1 1/2 miles of the city limits.
  1. Which of the following is NOT true about underground water contamination?
  2. It is a minor problem in the United States.
  3. Any contamination of underground water can threaten the supply of pure,clean water from private wells and from public water systems.
  4. Protective state and federal laws concerning water supply have beenenacted.
  5. Real estate licensees need to be aware of potential contaminationsources.
  1. Cash flow is a term that refers to the
  2. amount of money flowing into and out of a property.
  3. bookkeeping function that accounts for the cash each day.
  4. taxes, operating expenses, and loan payments on the property.
  5. total amount of income left after all expenses have been paid.
  1. Certain items installed on a premises by tenants and related to their business are called
  2. fixtures.
  3. emblements.
  4. trade fixtures.
  5. easements.
  1. A broker lists a property for sale at $100,000 with a 5 percent commission, and he later obtains an oral offer from a prospective buyer to purchase the property.The seller indicates to the broker that the offer would be acceptable if it were submitted in writing. Before it can be put in writing, the buyer backs out and revokes the oral offer. In this situation, the broker would be entitled to
  2. a commission of $5,000.
  3. only a partial commission.
  4. no commission.
  5. the normal rate of commission.
  1. Generally, if some defect in the title to real property is found by the preliminarytitle search, the effect on a sales contract is that
  2. the contract is immediately void.
  3. a new contract must be written.
  4. the buyer has a reasonable time to find another property.
  5. the seller has a reasonable time to correct the defect.
  1. CERCLA regulations for administration of the Superfund, which helps pay forcleanup of uncontrolled hazardous waste sites,
  2. exempt from responsibility sites that contaminate neighboring properties.
  3. release from liability owners of contaminated property who did notactually cause the contamination.
  4. make no provision for recovering Superfund expenses incurred in cleanupoperations.
  5. impose strict, joint and several, and retroactive liability on potentiallyresponsible parties.
  1. During the marriage, the husband purchases the home where he and his wife live in his own name. In Wisconsin, the husband
  2. is presumed the sole owner and may sell the property without the wife signing the deed.
  3. and wife each own one-half of the property and both must sign the deed to sell the home.
  4. and wife each own one-half of the property, but the husband alone may sign the deed to sell the home.
  5. has violated the law, and must give the wife a quit claim deed for one-half of the home within 30 days of the purchase.
  1. A rancher owns a parcel of land on which oil is discovered. If the rancher has not previously conveyed the oil rights, who owns the oil?
  2. The rancher
  3. The tenant to whom the property has been leased
  4. The state government
  5. The federal government
  1. Which of the following is NOT prohibited under the antitrust laws?
  2. Competing property management companies’ agreeing to standardizedmanagement fees
  3. Competing brokers’ allocating markets based on the value of homes
  4. Real estate companies’ agreeing NOT to cooperate with a broker because of the fees that broker charges
  5. A broker’s deciding whether to join a multiple listing service
  1. The primary survey line running east and west in the rectangular survey system is the
  2. township line.
  3. base line.
  4. range line.
  5. principal meridian.
  1. A valid will devises a decedent's real estate after payment of all debts, claims, inheritance taxes, and expenses through the
  2. administrator of the estate.
  3. law of testate succession.
  4. granting clause established in the will.
  5. court action known as probate.
  1. A residential landlord is subject to the Residential Rental Practices of the Wisconsin Department of Agriculture, Trade, and Consumer Protection (ATCP Chapter 134). After the termination of the lease, how and when must the landlord notify the tenant of any portion of the security deposit being withheld?
  2. The landlord must orally inform the tenant within 21 days of the termination of the rental agreement.
  3. The landlord must orally inform the tenant within 21 days of the date the landlord reasonably determined the actual damages.
  4. The landlord must inform the tenant, in writing, within 21 days of the termination of the rental agreement or of the date the landlord reasonably discovered the tenant had abandoned the premises.
  5. There is no set time limit; it is to be determined by a judge in a small claims action on a case-by-case basis.
  1. A subdivision was developed, and one of the deed restrictions covering allof the properties in the subdivision set aside the back six feet of eachparcel as a combination green belt area and bicycle path. HomeownerSylvia plans to convert the back one-half of her yard, including this setasidespace, into an organic garden. Her neighbor, Horace, can
  2. do nothing because individual homeowners have no authority in this matter.
  3. go to court in an attempt to obtain injunctive relief.
  4. force Sylvia to sell her property.
  5. share in the profits from Sylvia’s garden.
  1. Which of the following items is NOT usually prorated between the buyer and seller at closing?
  2. Recording charges
  3. Real estate taxes
  4. Rents
  5. Utility bills
  1. Purchasing a property using leverage, refinancing it after it has appreciated, and using the cash from the refinancing to purchase additional property is one form of
  2. plottage.
  3. pyramiding.
  4. consolidation.
  5. contribution.
  1. Which of the following is NOT treated as personal property?
  2. Chattels
  3. Trade fixtures
  4. Emblements
  5. Fixtures
  1. In receiving a gift of a parcel of real estate, one of the two new owners was given an undivided 60 percent interest and the other received an undivided 40 percent. They now hold their interests as
  2. cooperative owners.
  3. joint tenants.
  4. community property owners.
  5. tenants in common.
  1. A Wisconsin real estate salesperson, employed by a broker, may lawfully collect compensation from
  2. either a buyer or a seller.
  3. her or his employing broker only.
  4. any party to the transaction or the party's representative.
  5. a licensed real estate broker only
  1. The reversion of real estate to the state because of the lack of heirs or otherpersons legally entitled to own the property is called
  2. eminent domain.
  3. escheat.
  4. attachment.
  5. estoppel.
  1. The sales comparison approach to value would be most important when estimating the value of a(n)
  2. existing residence.
  3. apartment building.
  4. retail location.
  5. new residence.
  1. Contamination from underground storage tanks is
  2. found only in petroleum stations.
  3. addressed by EPA regulations.
  4. only caused by tanks currently in use.
  5. easily detected and eliminated.
  1. A parcel of vacant land has an assessed valuation of $274,550. If the assessment is 85 percent of market value, what is the market value?
  2. $315,732
  3. $320,000
  4. $323,000
  5. $1,830,333
  1. Fixtures are
  2. treated as real property.
  3. considered to be chattels.
  4. removable by a tenant before the expiration of the lease.
  5. d. removable by a tenant after the expiration of the lease.
  1. A licensed salesperson may hold a concurrent license with more than one Wisconsin broker under which of the following circumstances?
  2. Under no circumstances
  3. With the permission of his or her sales manager
  4. With the written consent of the brokers being represented
  5. With the written permission of the Department of Regulation and Licensing
  1. When Homeowner Harry’s sold his residence recently, he found that he had more than $20,000 in equity. This equity did NOT come from
  2. the use of an interest-only mortgage payment plan.
  3. the principal portion of his PITI monthly mortgage payments.
  4. increases in market value of his house due to appreciation and inflation.
  5. his down payment.
  1. It is the duty of an agent to disclose to the principal every material step taken in the transaction of the principal's business. This is because the
  2. commission can be adjusted up or down according to the agent's efforts.
  3. agent has fiduciary obligations to the principal.
  4. terms of the listing contract require the agent to do so.
  5. terms of the purchase contract require the agent to do so.
  1. A salesperson who is employed by a broker told a prospective buyer that the house she was looking at is "the best house in the area." Because of this statement,
  2. the salesperson was guilty of fraud.
  3. the broker was guilty of fraud because the employing broker is responsiblefor the actions of the salesperson.
  4. the salesperson was practicing puffing.
  5. the salesperson would be guilty of fraud only if the buyer purchased the house.
  1. The water rights of an owner of property located along the banks of a river are called
  2. littoral rights.
  3. prior appropriation rights.
  4. riparian rights.
  5. hereditaments.
  1. Pierre owns a one-quarter undivided interest in a parcel of land, and he wants his interest transferred to his sister Estelle. As a general rule, which of thefollowing actions will transfer Pierre's undivided interest out of his name?
  2. Redemption from foreclosure sale
  3. Making and signing a will
  4. Delivery of a deed during the owner's lifetime
  5. Signed acceptance of offer to purchase
  1. In Wisconsin, the real estate license law is administered by the
  2. Equal Rights Division of the Wisconsin Department of Workforce Development.
  3. Department of Regulation and Licensing.
  4. Wisconsin realtors® Association.
  5. Department of Housing and Urban Development.
  1. Fannie Mae, Ginnie Mae, and Freddie Mac all
  2. originate residential mortgage loans.
  3. purchase existing mortgage loans.
  4. insure residential mortgage loans.
  5. guarantee existing mortgage loans.
  1. A lessee who pays some or all of the lessor's property expenses has a
  2. gross lease.
  3. net lease.
  4. percentage lease.
  5. sublease.
  1. The manager of a commercial building has many responsibilities in connection with the operation and maintenance of the structure. The manager would normally be considered the agent of
  2. the building’s owner.
  3. the building’s tenants.
  4. both the owner and the tenants.
  5. neither the owner nor the tenants.
  1. In the valuation of a large apartment complex, the most weight would be given to which of the following approaches to value?
  2. The cost approach
  3. The income approach
  4. The sales comparison approach
  5. All approaches equally weighted
  1. The refusal of a lending institution to make a residential real estate loan strictly because of the racial or ethnic composition of the neighborhood is called
  2. blockbusting.
  3. redlining.
  4. steering.
  5. panic peddling.
  1. The principal balance on an assumed mortgage loan is entered on the closing statement as a
  2. credit to the seller and a debit to the buyer.
  3. debit to the seller and a credit to the buyer.
  4. credit to both the seller and the buyer.
  5. debit to both the seller and the buyer.
  1. When considering an investment in real estate, the prospective investor should consider all of the following EXCEPT the
  2. anticipated appreciation of the property.
  3. possible effects of inflation on the property.
  4. assessed valuation of the property.
  5. intrinsic value of the property.
  1. A farmer in Wisconsin wants to develop 40 acres of farmland into 39 home building sites of equal size for immediate sale to the public. The farmland is located 17 miles from the nearest city or village. In order to do so, the fanner
  2. must have the land subdivided according to the standards set forth in the Wisconsin statutes.
  3. must obtain a certified survey for each building site.
  4. needs no permission from anyone because the land is located in a town so far from a municipal corporation (city or village).
  5. must devote at least one acre for a public park.
  1. Upon discovering a latent defect in a property, the Broker Alice should discuss the problem with seller Juan and then
  2. tell him that the defect must be repaired.
  3. arrange for the repairs herself.
  4. inform any prospective buyers of the defect.
  5. contact the city building inspector about the defect.
  1. Landowner Shelley subdivides her acreage and offers the lots for sale. Broker Ernie tells her that he can sell the lots. After Ernie sells some of the lots, the landowner refuses to pay him a commission. The broker can
  2. report the landowner to the real estate licensing authorities.
  3. file a lien against the landowner's remaining lots.
  4. sue the landowner for breach of contract.
  5. do nothing.
  1. The type of listing agreement that provides the least protection for the listing broker is the
  2. exclusive-right-to-sell listing.
  3. exclusive-agency listing.
  4. open listing.
  5. net listing.
  1. With regard to duties owed to a party in a real estate transaction, Wisconsin law imposes
  2. more duties owed to the client than to the customer.
  3. more duties owed to the customer than the client.
  4. the same duties to both the customer and the client.
  5. no common law duties to either the client or the customer.
  1. Which of the following parcels of land is the smallest?
  2. 2 sections
  3. 5 percent of a township
  4. 2 square miles
  5. 1,280 acres
  1. An option
  2. requires the optionee to complete the purchase.
  3. gives the optionee an easement on the property.
  4. binds the optionor for a specified time.
  5. makes the seller liable for a commission.
  1. After the buyer and seller have signed a sales contract, the seller changes his mind and defaults. The buyer sues the seller to force him to go through with the contract. This is known as a suit for
  2. specific performance.
  3. damages.
  4. rescission.
  5. forfeiture.
  1. Every real estate contract must have a(n)
  2. grantor and a grantee.
  3. offer and acceptance.
  4. acknowledgment by a notary.
  5. legal description.
  1. A building was sold for $115,000. Earnest money in the amount of $15,000 was deposited in escrow, and the buyer obtained a new loan for the balance of the purchase price. The lender charged 2 discount points on the loan. What was the total amount of cash used by the buyer for this purchase?
  2. $2,300
  3. $15,000
  4. $17,000
  5. $17,300
  1. A tenant's lease has expired, but the tenant has not vacated the premises ornegotiated a renewal lease. The landlord has declared that the tenant is not to remain in the building. This situation is an example of
  2. an estate for years.
  3. an estate from year to year.
  4. tenancy at will.
  5. tenancy at sufferance.
  1. In Wisconsin, from a strictly legal standpoint, real property taxes become a lien on the property as of the
  2. first day of the year,
  3. 30th day from the due date.
  4. date of assessment.
  5. date a foreclosure suit is filed and recorded
  1. In the income approach, the appraiser makes use of
  2. reproduction cost.
  3. capitalization rate.
  4. depreciation schedules.
  5. replacement cost.
  1. The practice of channeling families with children away from other buildings into an apartment building where other families with children reside is
  2. most practical.
  3. blockbusting.
  4. redlining.
  5. unlawful discrimination.
  1. Electromagnetic fields
  2. have been proven to cause serious health problems in humans andanimals.
  3. are produced only by large electrical appliances.
  4. from high power transmission lines are suspected of causing cancer andother health problems.
  5. are a major national public health concern.
  1. RESPA (The Real Estate Settlement Procedures Act) is a federal statuteadministered by the
  2. Federal Trade Commission.
  3. Department of Housing and Urban Development.
  4. Office of the U. S. Attorney General.
  5. Department of Veteran Affairs.
  1. Federal income tax regulations allow homeowners to reduce their taxable income by amounts paid for
  2. repairs and maintenance.
  3. hazard insurance premiums.
  4. real estate taxes.
  5. principal and interest.
  1. A broker cannot legally collect commissions from both the seller and the buyer without
  2. notifying both parties of this fact orally after the sale has closed.
  3. notifying both parties of this fact in writing after the sale has closed.
  4. having exclusive listing agreements signed by both the seller and thebuyer.
  5. having the prior knowledge and written consent of both the seller and thebuyer.
  1. In Wisconsin, brokers and salespeople may
  2. sign the offer to purchase on behalf of his or her principal if the party asks the broker or salesperson to do so.
  3. fill in blanks on preprinted form contracts approved by the Department of Regulation and Licensing.
  4. add additional contractual language to a preprinted offer to purchase if the licensee feels it is beneficial to both parties.
  5. explain the legal significance of specific preprinted contract clauses to a buyer or seller after the offer has been accepted.
  1. Janeen held fee simple title to a vacant lot adjacent to MercyHospital.