Real Estate Practice Exam 1 Latest Updated

A title was recorded for a parcel of real property vested in the name of Johan Wilson, a property only in the name of Johan Roberts, a married woman. The discrepancy in the grantor's name is: - Answer A defect which may cause a cloud on the title. Which contract would be the most difficult for a buyer to obtain financing? - Answer Land Contract When a broker runs an advertisement, the broker must disclose: - Answer Name of the Broker Following in-house sales are true, except: - Answer The listing broker can act as a buyer's agent only The Federal Housing Administration (FHA) was created primarily: - Answer To provide insurance for home loans made by approved lender Which of the following loans on a home would probably be made without requiring a down payment from the borrow? - Answer VA Loan A person who wishes to purchase a home using a Cal-Vet program would send his application to: - Answer Department of Veterans Affairs The item that would appear on the debit side of a buyer's closing statement would be: - Answer Purchase Price When dealing with the public, a broker may not: - Answer Remain silent concerning material facts about a property known only by himself Which of the following is the reason that a real estate agent must keep his principal informed of material facts concerning a pending real estate transaction? - Answer When the agent is fiduciary A buyer relied upon the fraudulent statement of the seller's agent and was damaged. The seller was unaware of the agent's false statement, and he tried to enforce the agreement. The buyer: - Answer Could sue the seller for fraud, Could sue the seller's agent for fraud, Has sufficient grounds for rescission (All The Above) Lenders know that the lower the loan-to-value ratio, the higher the: - Answer Equity An offer to purchase a real estate could be terminated in all of the following ways, except: - Answer Failure to communicate notice of revocation before the other party has communicated his acceptance In which of the following contract will apply if one of the parties agrees not to revoke an offer for a certain period of time: - Answer An option For Federal Income Tax purpose, the capital expenditures for improvements are: - Answer Added to the cost basis of the property and depreciated A property sold for $150,000 in a county which had established a documentary transfer tax rate of $.55 for each $500. Of the purchase price of $150,000, only $125,000 was subjected to tax. Which of the following is nearest to the tax amount that would have to be paid? - Answer $138 $125,000/500= 250 $.55 x 250= $137.5 Leland uses an 8% capitalization rate for a 40-unit apartment building that generates $174,000 net income. Which of the following is the most appropriate value of his property? - Answer $174,000 / .08 = $2, 175,000 A broker is negotiating a 25-year commercial lease at a straight annual rental of $30,000. The broker is to receive a compensation for negotiating this lease as follows: 7% of the annual rental for the first year, 5% of the annual rental for the next four years, 3% of the annual rental for each of the next fifteen years; and 1% of the annual rental for every year thereafter during the term of the lease. By the end of the 19th year, the broker will have received a total commission of most nearly: - Answer $20,700 $30,000 x 7% = $2,100 x 1 = $ 2,100 $30,000 x 5% = $1,500 x 4 = $ 6,000 $30,000 x 3% = $ 900 x 14 =$12,600 TOTAL $20,700 A salesman was to receive a 45% share of a 6% gross commission. He received $8,100. The property was sold for: - Answer $18,000 /6% = $300,000 Two brokers agreed to split a 4 1/2 % commission on a 50-50 basis on the sale of a property for $162,500. The listing salesperson agreed to a 50-50 split with his employing broker. What would be the commission amount for the listing salesperson? - Answer $3,656.25 x 50% = $1,828.13 Buyer Parker paid $4.40per square foot to purchase a 20,000 square foot lot. If the parcel is in rectangular shape and 200 feet deep, the approximate cost per front foot would be: - Answer $88,000/100= $880 A deed: - Answer does not have to be recoded to transfer title which deed contains no warranties and expressed or implied - Answer quitclaim deed An easement could be created for what length of time: - Answer perpetual, for years, and a lifetime land that is subject to an easement is said to be: - Answer encumbered The provision of the subdivision map acts is enforced by the: - Answer Planning commission