BARNEY FLETCHER REAL ESTATE STUDY
GUIDE 2026 REAL ESTATE FINANCE AND
VALUATION QUESTIONS AND ANSWERS
◉ How can a broker best demonstrate his compliance with Fair
Housing laws?
Answer: - Display the Equal Housing Opportunity Poster in the office
and all places of business
- Document all transactions with all clients or customers
- By showing all prospective buyers all property for which they are
financially qualified
◉ If a person is alleged to have violated the Civil Rights Act of 1866,
the complainant would file suit in which of the following?
Answer: Federal Court
◉ If a seller deposits the deed with an escrow agent but the seller
dies before it is delivered to the purchaser, the transfer of title
becomes effective on the date the deed was deposited into escrow
due to the:
Answer: The doctrine of relation-back
,◉ Which of the following statements BEST illustrates the difference
between puffing and misrepresentation?
a. Puffing is illegal whereas misrepresentation is legal
b. Puffing is a misdemeanor violation whereas misrepresentation is
a felony violation
c. Puffing is an exaggeration, not concealing material facts;
misrepresentation is unjustly harming a person by concealing
material facts
d. Puffing is unjustly harming a person by concealing material facts;
misrepresentation is an exaggeration
Answer: Puffing is an exaggeration, not concealing material facts;
misrepresentation is unjustly harming a person by concealing
material facts
◉ A large city lost a big industry to another city. Large job losses
were incurred as a result of losing the big industry. House prices in
the area would most likely:
Answer: Be decreased
People go where jobs go. A loss in jobs would lead to a decrease in
the demand for housing which would lead to a decrease in value as
well
,◉ An owner builds a beautiful brick colonial house on a lot located
in a neighborhood of only very contemporary, single level, mostly
glass homes. The owner puts his newly constructed house on the
market and is unable to sell it. This is an example of the appraisal
principle of:
Answer: Conformity
Conformity states that if all houses in an area are alike the values
will be somewhat similar. Regardless of how beautiful or costly the
house is people do not like to be different.
◉ In determining total square footage of a dwelling, the appraiser
would consider:
Answer: Outside dimensions
◉ In the capitalization approach, the appraiser considers all of the
following EXCEPT:
a. Price of the property.
b. Rate of return on the investment.
c. Rate of return of the investment.
d. The estimated future income.
Answer: Price of the property
, The capitalization approach uses a capitalization rate (cap rate)
which reflects both the rate of return ON and the return OF the
investment. The estimated future net income of the property is
divided by the cap rate to give an estimate of the present value of the
property
◉ The property being appraised has 4 bedrooms. The comparables
in the area have only 3 bedrooms. Using the Market Data approach,
how does the appraiser arrive at an estimate of value for the subject
property?
Answer: Add the value of a bedroom to the selling price of the
comparables
◉ A clause in a mortgage to prevent a buyer from assuming an
existing loan is called the:
Answer: Alienation clause
The alienation clause is also referred to as the "due on sale" clause. It
means that if you sell the property, the entire loan balance is DUE. If
interest rates are going up, lenders do not want anyone to assume a
loan at the lower rate.
◉ A loan with constant payments, where increasing amounts are
credited to the principal and decreasing amounts are charged for
interest, is called:
GUIDE 2026 REAL ESTATE FINANCE AND
VALUATION QUESTIONS AND ANSWERS
◉ How can a broker best demonstrate his compliance with Fair
Housing laws?
Answer: - Display the Equal Housing Opportunity Poster in the office
and all places of business
- Document all transactions with all clients or customers
- By showing all prospective buyers all property for which they are
financially qualified
◉ If a person is alleged to have violated the Civil Rights Act of 1866,
the complainant would file suit in which of the following?
Answer: Federal Court
◉ If a seller deposits the deed with an escrow agent but the seller
dies before it is delivered to the purchaser, the transfer of title
becomes effective on the date the deed was deposited into escrow
due to the:
Answer: The doctrine of relation-back
,◉ Which of the following statements BEST illustrates the difference
between puffing and misrepresentation?
a. Puffing is illegal whereas misrepresentation is legal
b. Puffing is a misdemeanor violation whereas misrepresentation is
a felony violation
c. Puffing is an exaggeration, not concealing material facts;
misrepresentation is unjustly harming a person by concealing
material facts
d. Puffing is unjustly harming a person by concealing material facts;
misrepresentation is an exaggeration
Answer: Puffing is an exaggeration, not concealing material facts;
misrepresentation is unjustly harming a person by concealing
material facts
◉ A large city lost a big industry to another city. Large job losses
were incurred as a result of losing the big industry. House prices in
the area would most likely:
Answer: Be decreased
People go where jobs go. A loss in jobs would lead to a decrease in
the demand for housing which would lead to a decrease in value as
well
,◉ An owner builds a beautiful brick colonial house on a lot located
in a neighborhood of only very contemporary, single level, mostly
glass homes. The owner puts his newly constructed house on the
market and is unable to sell it. This is an example of the appraisal
principle of:
Answer: Conformity
Conformity states that if all houses in an area are alike the values
will be somewhat similar. Regardless of how beautiful or costly the
house is people do not like to be different.
◉ In determining total square footage of a dwelling, the appraiser
would consider:
Answer: Outside dimensions
◉ In the capitalization approach, the appraiser considers all of the
following EXCEPT:
a. Price of the property.
b. Rate of return on the investment.
c. Rate of return of the investment.
d. The estimated future income.
Answer: Price of the property
, The capitalization approach uses a capitalization rate (cap rate)
which reflects both the rate of return ON and the return OF the
investment. The estimated future net income of the property is
divided by the cap rate to give an estimate of the present value of the
property
◉ The property being appraised has 4 bedrooms. The comparables
in the area have only 3 bedrooms. Using the Market Data approach,
how does the appraiser arrive at an estimate of value for the subject
property?
Answer: Add the value of a bedroom to the selling price of the
comparables
◉ A clause in a mortgage to prevent a buyer from assuming an
existing loan is called the:
Answer: Alienation clause
The alienation clause is also referred to as the "due on sale" clause. It
means that if you sell the property, the entire loan balance is DUE. If
interest rates are going up, lenders do not want anyone to assume a
loan at the lower rate.
◉ A loan with constant payments, where increasing amounts are
credited to the principal and decreasing amounts are charged for
interest, is called:
