General Content Practice Questions for
Pearson Vue
A 16 year old named Dustin signs a contract to lease a car. Because of his age, this contract is:
- ANS -voidable
\A commercial property generates $56,000 of net operating income, and the appraiser
determines that the cap rate of comparable properties is 10%. What value does the appraiser
give this property using the cap rate method? - ANS -$560,000
\A facilitator/intermediary/transaction broker is: - ANS -Neither an advocate nor agent of either
party.
\A hazardous substance that may leak from older electrical equipment is called: - ANS -PCB
\A large 5000 square foot home is built on the same road as other similar properties. Which
principle explains the benefits of this placement of the home? - ANS -Conformity
\A lender refuses to lend money for properties located in the Red Brook neighborhood because
too many immigrants from the Middle East live there. This is an example of an illegal practice
called: - ANS -Redlining
\A life estate interest describes: - ANS -future ownership.
\A metes and bounds description of real property relies on: - ANS -a point of beginning,
measurement of distances, and directions on a compass.
\A mortgage document states that if the borrower defaults, the lender has the option of declaring
all the principal still owed payable immediately. This is called a(n): - ANS -Acceleration clause.
\A mortgage document states that if the owner sells the property, the lender may demand
immediate payment of the entire loan balance ("due on sale"). This is called a(n): - ANS
-Alienation clause.
\A mortgage is what type of lien on a property? - ANS -specific and voluntary
\A municipality wants to build a public parking garage on Leila's land. Which of the following
statements about the municipality is True? - ANS -It may take Leila's property under eminent
domain and must pay fair market value to do so.
\A naturally occurring gas that can enter houses through cracks in a foundation is called: - ANS
-Radon
\A real estate broker places an ad that says "Great buy in this neighborhood! You only need 3
percent down!" According to TILA trigger rule, the ad must also include: - ANS -. APR and terms
of repayment (number, amount, due date).
\A rectangular lot has 150 feet of road frontage. The lot is sold for $6.00 per square foot. If the
purchase price was $180,000, how deep is the lot? - ANS -$180,000 divided by $6.00 per
square foot = 30,000 square feet.
If one side of the rectangle is 150 feet, the other side is 200 feet. (150 x 200 = 30,000)
\A valid contract for the purchase of real estate must include a(n): - ANS -Description of the
property
, \According to the Americans with Disabilities Act, elevators are NOT required for either new or
existing structures which are places of public accommodation if: - ANS -The structure has fewer
than 3 stories or fewer than 3000 square feet per story.
\After an offer is accepted, but before the transaction has closed, the licensee representing the
seller discovers an infestation of carpenter ants under the back porch of the property. Whom
should the licensee inform of this discovery? - ANS -Both the seller and buyer
\All of the following are real property EXCEPT: - ANS -the portable basketball hoop in the
driveway
\An environmental issue related to high humidity and trapped moisture is: - ANS -Mold
\Andrea bought a property with a 20% down payment for a 30 year loan at 7% interest. If her
first month's interest was $787.50, what was the amount of her loan? (Note that you may use
the formula I=PRT for simple interest as you are using the first month of the loan -- no
amortization in this question!) - ANS -Step 1: Rearrange the formula to solve for P. P=I/RT
Step 2: Calculate a year's interest 787.50 x 12 = 9450
Step 3: Convert 7% to a decimal .07
Step 4: You are given the interest payment for the first month of the loan, so time = 1.
Step 5: P=I/RT=9450/(.07 x 1)=135,000.
\Fee simple ownership describes: - ANS -current ownership.
\For a mortgage to be securitized on the secondary market, the loan must: - ANS -Conform to
uniform underwriting standards.
\Gerald, a licensee with Sunshine Realty, is offered a $5000 bonus by the seller if he sells a
particular listing before the last day of the year. The transaction closes on December 28. Which
of the following statements is true? - ANS -The $5000 bonus is paid to Sunshine Realty.
\If "time is of the essence" is stated in the offer to purchase real estate, the offer is automatically
canceled if acceptance is not communicate: - ANS -within the time period specified in the
contract.
\In a lien theory state, the borrower retains title and gives the lender a: - ANS -Lien on the
property.
\In a title theory state, the borrower gets title to the property: - ANS -When the note is paid in
full.
\In reference to a valid contract, a competent party is someone who: - ANS -has mental and
legal capacity to enter into a contract.
\In which of these forms may a parent and child own property together? - ANS -As joint tenants
or tenants in common
\Index, margin and cap are terms related to what type of mortgage? - ANS -ARM
\Jill owns a house at 82 Willow Road. She has young children and wants to build a fence around
an area of the backyard. Once it is built the fence becomes part of the real property through: -
ANS -annexation
\Lawrence gets behind in his mortgage payments and the lender forecloses on his property. The
property is in a state where Lawrence has the right to regain the property within a certain period
of time. What is the name of this right? - ANS -redemption
\Licensee Robert lists a property for a 6% commission. The property sells for $192,000. The
listing agency splits the commission 50/50 with the selling agency. Per his agreement with his
agency, Robert is entitled to 66% of the commission earned by his agency. How much does
Pearson Vue
A 16 year old named Dustin signs a contract to lease a car. Because of his age, this contract is:
- ANS -voidable
\A commercial property generates $56,000 of net operating income, and the appraiser
determines that the cap rate of comparable properties is 10%. What value does the appraiser
give this property using the cap rate method? - ANS -$560,000
\A facilitator/intermediary/transaction broker is: - ANS -Neither an advocate nor agent of either
party.
\A hazardous substance that may leak from older electrical equipment is called: - ANS -PCB
\A large 5000 square foot home is built on the same road as other similar properties. Which
principle explains the benefits of this placement of the home? - ANS -Conformity
\A lender refuses to lend money for properties located in the Red Brook neighborhood because
too many immigrants from the Middle East live there. This is an example of an illegal practice
called: - ANS -Redlining
\A life estate interest describes: - ANS -future ownership.
\A metes and bounds description of real property relies on: - ANS -a point of beginning,
measurement of distances, and directions on a compass.
\A mortgage document states that if the borrower defaults, the lender has the option of declaring
all the principal still owed payable immediately. This is called a(n): - ANS -Acceleration clause.
\A mortgage document states that if the owner sells the property, the lender may demand
immediate payment of the entire loan balance ("due on sale"). This is called a(n): - ANS
-Alienation clause.
\A mortgage is what type of lien on a property? - ANS -specific and voluntary
\A municipality wants to build a public parking garage on Leila's land. Which of the following
statements about the municipality is True? - ANS -It may take Leila's property under eminent
domain and must pay fair market value to do so.
\A naturally occurring gas that can enter houses through cracks in a foundation is called: - ANS
-Radon
\A real estate broker places an ad that says "Great buy in this neighborhood! You only need 3
percent down!" According to TILA trigger rule, the ad must also include: - ANS -. APR and terms
of repayment (number, amount, due date).
\A rectangular lot has 150 feet of road frontage. The lot is sold for $6.00 per square foot. If the
purchase price was $180,000, how deep is the lot? - ANS -$180,000 divided by $6.00 per
square foot = 30,000 square feet.
If one side of the rectangle is 150 feet, the other side is 200 feet. (150 x 200 = 30,000)
\A valid contract for the purchase of real estate must include a(n): - ANS -Description of the
property
, \According to the Americans with Disabilities Act, elevators are NOT required for either new or
existing structures which are places of public accommodation if: - ANS -The structure has fewer
than 3 stories or fewer than 3000 square feet per story.
\After an offer is accepted, but before the transaction has closed, the licensee representing the
seller discovers an infestation of carpenter ants under the back porch of the property. Whom
should the licensee inform of this discovery? - ANS -Both the seller and buyer
\All of the following are real property EXCEPT: - ANS -the portable basketball hoop in the
driveway
\An environmental issue related to high humidity and trapped moisture is: - ANS -Mold
\Andrea bought a property with a 20% down payment for a 30 year loan at 7% interest. If her
first month's interest was $787.50, what was the amount of her loan? (Note that you may use
the formula I=PRT for simple interest as you are using the first month of the loan -- no
amortization in this question!) - ANS -Step 1: Rearrange the formula to solve for P. P=I/RT
Step 2: Calculate a year's interest 787.50 x 12 = 9450
Step 3: Convert 7% to a decimal .07
Step 4: You are given the interest payment for the first month of the loan, so time = 1.
Step 5: P=I/RT=9450/(.07 x 1)=135,000.
\Fee simple ownership describes: - ANS -current ownership.
\For a mortgage to be securitized on the secondary market, the loan must: - ANS -Conform to
uniform underwriting standards.
\Gerald, a licensee with Sunshine Realty, is offered a $5000 bonus by the seller if he sells a
particular listing before the last day of the year. The transaction closes on December 28. Which
of the following statements is true? - ANS -The $5000 bonus is paid to Sunshine Realty.
\If "time is of the essence" is stated in the offer to purchase real estate, the offer is automatically
canceled if acceptance is not communicate: - ANS -within the time period specified in the
contract.
\In a lien theory state, the borrower retains title and gives the lender a: - ANS -Lien on the
property.
\In a title theory state, the borrower gets title to the property: - ANS -When the note is paid in
full.
\In reference to a valid contract, a competent party is someone who: - ANS -has mental and
legal capacity to enter into a contract.
\In which of these forms may a parent and child own property together? - ANS -As joint tenants
or tenants in common
\Index, margin and cap are terms related to what type of mortgage? - ANS -ARM
\Jill owns a house at 82 Willow Road. She has young children and wants to build a fence around
an area of the backyard. Once it is built the fence becomes part of the real property through: -
ANS -annexation
\Lawrence gets behind in his mortgage payments and the lender forecloses on his property. The
property is in a state where Lawrence has the right to regain the property within a certain period
of time. What is the name of this right? - ANS -redemption
\Licensee Robert lists a property for a 6% commission. The property sells for $192,000. The
listing agency splits the commission 50/50 with the selling agency. Per his agreement with his
agency, Robert is entitled to 66% of the commission earned by his agency. How much does
