Real Estate Questions and Answers Rated A+

Real Estate Questions and Answers Rated A+ Many states determine the order of water rights according to which users of the water hold a recorded beneficial use permit. This allocation of water rights is determined by: A. accretion B. riparian theory C. littoral theory D. the doctrine of prior appropriation Answer: D. All terms relate to water rights, with "riparian" - the right to use water adjacent to one's property - being the most common in sections of the U.S. where water is abundant. However, in the states where water is more scarce, a form of "prior appropriation" applies. Also known as "first in time is first in right," it grants water rights to divert a specific amount of water from a specific source to irrigate a specific piece of property. Those rights are then assigned a priority based on when the right was first used or applied for. In periods of peak demand, they give those whose claim is the oldest the right to get their water first. A real estate licensee has a buyer agency agreement. What is the seller in this situation? A. a customer B. a client C. a fiduciary D. an agent Answer: A. There's an important distinction between client and customer. Unless there is a specific agreement to the contrary, licensees represent only one side in a transaction. In this case, it's the buyer who is the client and it's the licensee's obligation to negotiate a deal that's in that person's best interests, not the one that's "fairest" to both parties The fastest way to calculate one month's interest on a real estate loan with an interest rate of 7.2% interest per annul is to multiply the principal balance by: A. 0.006 B. 0.6 C. 7.2% and divide by 12 D. 12 and divide by 7.2% Answer: A. By dividing the 7.2% rate by 12 first, you can find one month's interest by multiplying the loan amount by .006; 7.2% divided by 12 = .006, rate for one month. An optionor and an optionee make a contract for an option on a commercial piece of property. If the optionee decides to exercise his option, when must he perform? A. He must exercise his option within 6 months under state law B. He must exercise his option under the terms of the option contract C. He must exercise his option when the optionor demands it D. He can exercise his option whenever he wants Answer: B. Options are generally concerned with only two things: time and price. Whatever the parties agree to in those regards defines the terms of the option and the obligations of the parties. The right to control one's property includes all of the following EXCEPT: A. the right to invite people on the property for a political fund-raiser B. the right to exclude the utilities meter reader C. the right to erect "no trespassing" signs D. the right to enjoy pride of ownership Answer: B. This right to enter and work on a property is granted to utility companies (water, sewer, gas and electric) as well as telephone and cable companies. Essentially, if a company provides a service and owns the equipment (e.g., phone and cable lines), they are usually granted an easement. Mr. Brown, licensed broker, took an offer from Mr. Green on land for $6,000 with the following terms: $2,000 down and purchase money trust deed and note for the balance, payable $70 per month including interest at 7.2%. If the offer was accepted by the seller, what is the balance of the loan after the first 3 months payment? A. $3,186 B. $3,467 C. $3,861