FINAL EXAM REAL ESTATE QUESTIONS WITH 100% CORRECT ANSWERS

FINAL EXAM REAL ESTATE QUESTIONS WITH 100% CORRECT ANSWERS "A property owner wants to put 240,000 in the bank after selling a property and accounting for all expenses. A broker finds a buyer and sells the property for 280,000. Closing costs come to 10,000 and not including the broker's commission. According to agreement, the remainder of the amount over 240,000 goes to the broker as commission. The listing agreement is probably an - CORRECT ANSWER exclusive agency agreement Incorrect - See contracts (correct possibly net listing)" "If a purchaser signs a contract under duress, it is generally - CORRECT ANSWER voidable by the buyer" "Albert is a home-builder and seeks financing from his local bank to fund his houses so he can sell them to a customer in the near future. What type of financing did Albert receive? - CORRECT ANSWER Construction Loan" "This loan type is characterized by equal monthly payments credited first to interest due. Then, the remainder of the payment is applied to the loan balance. - CORRECT ANSWER Amortized Loan" "Albert has a mortgage on his home. The clause in Albert's mortgage which calls the entire balance of his mortgage immediately due if his home is sold is called - CORRECT ANSWER The alienation clause" "Which of the following is not included in the concept of eminent domain? - CORRECT ANSWER Just compensation at fair market value" "A homeowner wants to enclose a patio, however the roof line of the enclosed patio would violate the building code prescribing the minimum distance for a roof from the property line. What should the homeowner apply for? - CORRECT ANSWER A variance" "A seller and a broker signed a contract to market a house. After 63 days on the market the seller called the broker to say, thanks but the seller had found a buyer. What kind of listing is this? - CORRECT ANSWER Open listing Incorrect" "An agent fails to discover crumbling tiles on the basement ceiling beneath a bathroom. The agent sells the property, and the buyer later sues the agent for not discovering and disclosing a clearly visible and obvious problem. In this case, the agent - CORRECT ANSWER has an exposure to negligent misrepresentation" "The seller has prepared a Property Condition Disclosure Statement the realtor notices a foundation crack which the seller did not disclose. What should the realtor do? - CORRECT ANSWER Disclose the foundation crack" "At the direction of a seller-client, an agent tells a pregnant working woman that the property is not in a good neighborhood for a single woman, particularly if she regularly works late hours. The neighborhood has an increasing crime rate, and people are moving out. What has this agent done wrong? - CORRECT ANSWER Committed negligent misrepresentation Incorrect - Practice of Real estate (Correct possibly engaged in steering)" "The largest estate on can hold is a - CORRECT ANSWER fee simple estate" "Over time, a parcel of land lost access to a county road. The land owner had to obtain access to the road by court action. This is an example of - CORRECT ANSWER easement by necessity" "A miner openly lives and prospects a on 20,000-acre ranch. After twenty years, the owner notices the miner and kicks him off the property. The miner makes a claim of ownership to the property. This claim will likely be - CORRECT ANSWER declined since the owner was not aware of possession Incorrect - See transferring and recording title to real estate screen 6 of 8 Property ownership" "The house of your friend that cost $185,000 has appreciated 12% over time. With a balance of $150,000, what is the equity in the house? - CORRECT ANSWER 57,200" "How many square feet are in the SE 1/4 of SW 1/4 of Sec 22 T11N, R2W - CORRECT ANSWER 3,484,800 Incorrect - Real estate calculations (possibly correct 1,742,400)" "Who is responsible for the accuracy of the Residential Property Condition Disclosure Statement? - CORRECT ANSWER The seller" "Any real estate broker who charges and collects any fees in advance of the services provided by the broker shall provide a detailed accounting of expenditures to the person such services are performed for within - CORRECT ANSWER 10 days after the time specified to perform such services or upon written request from person for whom services are performed for, but no longer than on year from date of contract for such services" "Which statement is true regarding a "failed" PSI exam - CORRECT ANSWER One hour to review the exam" "What must an associate include in all advertising? - CORRECT ANSWER associate's Broker's name" "The revolving fund shall be audited by the state auditor and inspector - CORRECT ANSWER annual" "Which of the following is NOT a reliable source to describe the square footage of Oklahoma real estate? - CORRECT ANSWER Owners Notarized Affidavit" "Earl is a real estate broker and has recently bought a new home and his personal residence address has now changed. Earl - CORRECT ANSWER must notify the Commission office within 10 days" "The Oklahoma Real estate commission shall pay into the Oklahoma General Revenue Fund of the State Treasurer every year - CORRECT ANSWER 10% of the licensee fees collected during the fiscal year" "The MLS Property Details said "As Is" The listing broker, who once owned the house, neglected to tell anyone about the old well that he had covered over 7 years earlier. The new owner's dog fell through and drowned. Did the Realtor do anything wrong according to the Code and Rules? - CORRECT ANSWER Yes. The Agent is probably guilty of Substantial Misrepresentation" "No more than two members shall be appointed from - CORRECT ANSWER the same congressional district" "Confirmation of brokerage services agreement terms - CORRECT ANSWER must be provided in a separate provision or document that is either incorporated into or attached to the contract to purchase, lease, option, or exchange real estate." "Under the Oklahoma Brokerage Relationship Act, a person who is a seller, buyer, landlord, or tenant or a person who is involved in an option or exchange is called a - CORRECT ANSWER party" "Under what condition can confidential information be released? - CORRECT ANSWER The party gives consent to the disclosure in writing" "How does the Brokerage Relationship Act define a firm? - CORRECT ANSWER A sole proprietor, corporation, association or partnership" "A provisional sales associate is - CORRECT ANSWER allowed to enter into an agreement in the name of the real estate broker." "What action, if any, must a broker take if he or she is involved in a transaction but did not prepare the contract to purchase document? - CORRECT ANSWER The broker must still document that he or she has complied with the disclosure requirements" "If a broker intends to provide fewer brokerage services than those required to complete a transaction, the broker must provide a - CORRECT ANSWER written disclosure to the party for whom the broker is providing brokerage services" "Which of the following items could serve as a lien by the landlord against a tenant who has refused to pay rent? - CORRECT ANSWER television" "The landlord needs to perform a semi-annual inspection. How much notice of entry must the landlord provide the tenant? - CORRECT ANSWER 48 hours Incorrect - See property management (possibly 1 day)" "When does a security deposit revert to the landlord in consideration if the former tenant has not made a written demand? - CORRECT ANSWER 6 months after tenancy termination" "The landlord needs to serve the tenant with a notice to terminate the tenancy. To whom shall notice be served? - CORRECT ANSWER It must be served on the tenant to be enforceable Incorrect - See Property Management (possibly any family member over age 12)" "John and Megan rented a home and they are behind on their rent, when may the landlord bring an action for recovery? - CORRECT ANSWER after 45 days incorrect - See property management" "Legal title ALWAYS passes from the seller to the buyer - CORRECT ANSWER when the deed is delivered and accepted" "Both the abstract and opinion method of assuring title and title insurance - CORRECT ANSWER inform or protect the buyer against defects of record" "When must a lender use form (H-25) Closing Disclosure? - CORRECT ANSWER When the loan is insured or guaranteed by a federal agency" "Which of the following must sign the deed? - CORRECT ANSWER grantor" "Title insurance with extended coverage generally covers - CORRECT ANSWER all of the above Incorrect - See transferring and recording title ALTA , Transfer title" "If a person dies with legal heirs and has left no valid will, what happens to real property owned by that person? - CORRECT ANSWER it is probated and passes to the heirs by laws of descent" "A special warranty deed is a conveyance instrument which - CORRECT ANSWER limits any warranties made to those defects which arose during the time the grantor owned the property being conveyed" "Which of the following is true of a homestead? - CORRECT ANSWER A homestead is any privately owned single family residence Incorrect - Interests and Estates Screen 4 of 8 (cannot be conveyed by one spouse)" "What transfers real property? - CORRECT ANSWER deed" "Albert bought a piece of property from Brian. The title of the property was transferred when the deed was - CORRECT ANSWER delivered and accepted" "Which of the following is NOT a requirement for a valid conveyance of real property? - CORRECT ANSWER Habendum clause Incorrect - Transferring and recording title screen 4 of 8" "A sale transaction on rental property closes on December 16. The landlord received the December rent of 713 on Dec. 1. Assuming the closing day is the buyer's and that the 365 day method is used for prorating, which of the following entries would appear on the settlement statement? - CORRECT ANSWER Debit to seller 345 Incorrect - See transfer title ( I get 365.5 but credit to the seller)" "Which of the following items are paid in arrears - CORRECT ANSWER insurance and interest incorrect - see transfer title" "When construction cost is based on current prices that would not be an exact duplicate of the subject property defines - CORRECT ANSWER Replacement cost" "Amy asked you to appraise their property. This property had no monthly income and had no comparables in the market. You would most likely use the - CORRECT ANSWER cost appraoch" "Mary wanted to sell her house which had a serious leak in the roof. The broker told Mary that she must replace the roof in order for the house to sell. The leaky roof is considered what kind of depreciation? - CORRECT ANSWER Physical deterioration" "If the GRM of a property is 120 and generates a semi-annual income of $15,000.00 what is the property sales price? - CORRECT ANSWER 300,000" "In appraising a single-purpose building, such as a church, the most reliable approach to an indication of its value would generally be the - CORRECT ANSWER cost approach" "The most probable price a property will bring in a competitive market, allowing for reasonable time to find a knowledgable purchaser with neither party under duress and payment in cash or the equivalent, is associated with - CORRECT ANSWER Market value" "Depreciation applies to - CORRECT ANSWER the building only" ""The present worth of future benefits arising from the ownership of real property" is a definition of - CORRECT ANSWER value" "You list a home for your neighbor with an exclusive-right-to sell listing. Your relationship with the seller is - CORRECT ANSWER the seller is your client" “The Buyer and Seller execute a purchase contract for 127,000. Five days later, the Buyer asks the Seller to increase the sales price to 129,730.50 to cover a funding fee. What is this to the contract? - CORRECT ANSWER Amendment" "If a seller makes any changes in an offer from a buyer prior to acceptance, the buyer - CORRECT ANSWER Is relieved of the original offer" "Which of the following is the best explanation of an option? - CORRECT ANSWER An agreement granting exclusive right to buy, sell, or lease property at a given price within a stated period of time" "During the executory period of a sale contract, the buyer enjoys which of the following interests? - CORRECT ANSWER Equitable title" "Who are the parties to a Listing Agreement? - CORRECT ANSWER Seller and Broker" "The seller makes a counteroffer. The buyer accepts and decides to reply using "snail mail" when is a valid purchase contract created using the Post Office? - CORRECT ANSWER When the offer puts the acceptance in the mail" "For a contract to be enforceable it should - CORRECT ANSWER None of the above: Incorrect - See unit: Real estate contract law Screen 2 of 6 (correct possibly in writing)" "They buyer signs a contract for deed, but five years after making all monthly payments the buyer fails to submit a payment. The seller gets a judgement to reclaim property because of what? - CORRECT ANSWER Acceleration Clause" "A buyer submits an offer to the seller. While the seller is considering the offer, a buyer calls and cancels the offer, saying the home was too expensive. The seller protests, claiming she was going to accept the contract. Which of the following is true? - CORRECT ANSWER The original offer is cancelled, the protest means nothing" "A realtor agrees by "a handshake" to sell the house of his former high school chemistry teacher. Realtor finds a buyer who submits a full price offer with no provisions. The house sells, but the Seller refuses to pay commission to realtor. What kind of contract does the realtor have with the seller? - CORRECT ANSWER Unenforceable" "Bill has a 2 year lease on a piece of property from Cathy with an option to purchase. Bill paid 1,500 for the option to purchase. If Bill wishes to purchase the property at the end of the lease he must inform Cathy in writing within 60 days of lease expiration. Bill sells his option to purchase to Zepeda for 10,000. Cathy does not like Zepeda and would like to not sell the property to them. Zepeda decides to enact his option. Cathy can do what? - CORRECT ANSWER refuse to sell and take Zepeda to court. Zepeda will most likely loose because the option was assigned to him Incorrect - See Contracts (possibly correct: contract is assignable unless specifically stated in the contract)" "Of the following, which is NOT necessary to have a valid contract for the Sale of Real Estate? - CORRECT ANSWER Earnest money" "What is this: A seller may employ a number of brokers. Only the broker who produces the buyer earns a commission. The seller may sell the property. - CORRECT ANSWER Open listing" "When is an offer to purchase property accepted? - CORRECT ANSWER The seller accepts and the signed contract is delivered to the buyer" "Allen who is a lender, wishes to make the yield on a loan lower than the current market value. What would Allen charge to make the loan more competitive? - CORRECT ANSWER Discount Points" "Adam was trying to get a home loan and was rejected. Because of the Federal Equal Credit Opportunity Act, Adam must be notified in writing for the reason she was denied within.. - CORRECT ANSWER 30 days" "In general, the borrower no longer pays Mortgage Insurance when the Loan-to-Value equals... - CORRECT ANSWER 0.8" "Which of the following best describes Regulation Z? - CORRECT ANSWER Regulation of mortgage interest rates Incorrect - See Financing" "An industrious Realtor advertised a house listed for $125,000 as, "Move-in for Only $671.00 /Month." Did the Realtor violate any restriction? - CORRECT ANSWER Yes. Regulation Z" "Which of the following Secondary Mortgage Market entities can purchase FHA and VA loans? - CORRECT ANSWER All of them: Fannie Mae, Ginnie Mae, Freddie Mac" "Of the following sources of loan money, which does not service their loans? - CORRECT ANSWER Mortgage Broker" "A mortgagee may include in a mortgage items which, when they occur, are considered a default by the mortgagor and grounds for a foreclosure action. Such items include all of the following except? - CORRECT ANSWER detrimental zoning by a city or county" "All of the following closing expenses are allowed under the Real Estate Settlement Procedures Act, except - CORRECT ANSWER fees paid by an escrow company to a sales associate for referring business" "Which statement is true regarding FHA loans? - CORRECT ANSWER FHA insures approved lenders" "The city of Tulsa forced Bob, who is a landowner in Tulsa to sell his property to the city for public use. The city of Tulsa was exercising it's right of.. - CORRECT ANSWER eminent domain" "A broker has a listing contract on a vacant house. It has taken longer to sell than anticipated. The broker hires a lawn company to mow and trim. Who owes the mower? - CORRECT ANSWER The broker" "The two types of actual authority in the common law of agency are - CORRECT ANSWER expressed and implied" "When a realtor and a seller sign a listing contract, the broker becomes - CORRECT ANSWER Special agent" "Real estate brokers authorized to conduct a single transaction for their principals are usually classed as - CORRECT ANSWER Special agents" "A Sales Associate list a property. Three weeks later, The Sales Associate is tragically killed in a car accident on the way to show the property. What is the status of the Listing Contract? - CORRECT ANSWER Agency terminates with the death of the listing sales agent Incorrect - See Laws of Agency (correct possibility broker must notify the OREC of their trust accounts)" "The Ad reads, "Your new home has the most stunning view in the country" is there a problem? - CORRECT ANSWER No. This is considered puffing" "Under a special agency agreement, a broker is not authorized to - CORRECT ANSWER execute a contract for sale agreement" "A Buyer inquires to the listing broker (who represents the Seller) why the Seller is selling and what is the lowest price the seller would accept in an offer. The Listing Broker should... - CORRECT ANSWER tell the buyer to ask the seller directly as care and account Incorrect - See Laws of Agency (not answer that question to loyalty to the seller)" "a principal instructs an agent to inform any minority buyer that the property was just put under contract an hour ago and is no longer available. the agent refuses to comply. in this case - CORRECT ANSWER The agent has not violated fiduciary duty" "An agency relationship may be terminated by all the following except - CORRECT ANSWER reciprocity" "A buyer representative locates a suitable property through an owner broker. The buyer buys the property; the seller pays a commission, and the two agents split the commission. In this instance, the owner broker is acting as - CORRECT ANSWER a subagent of the buyer representative Incorrect - See Agency Screen 5 of 7; Laws of Agency (correct possibly single agent for the owner)" "What is the primary aim of a marketing program for a managed property? - CORRECT ANSWER To find and attract the right kind of tenants" "The most common kind of landlord default is - CORRECT ANSWER failure to maintain the property and provide services" "How does the Equal Credit Opportunity Act affect property managers? - CORRECT ANSWER Managers must be consistent and nondiscriminatory in evaluating the creditworthiness of tenant applicants" "Which of the following is NOT a latent defect? - CORRECT ANSWER A crack in the living room ceiling" "Typically before a mortgage company will finance a home they will want to make sure there are no encroachments on the property they are financing. To check for any encroachments the mortgage company should order a A. survey. B. a signed affidavit from the seller. C. special title policy. D. title insurance. - CORRECT ANSWER title insurance Incorrect - See Mandated Disclosures (correct possibly a survey)" "All of the following are illegal activities involving fair housing except... - CORRECT ANSWER Segregating families into buildings Incorrect - See Practice of Real Estate" "What agency promulgates regulation Z? - CORRECT ANSWER Federal Reserve System" "A family is looking for a home in a certain price range. The wife suggests several listing on the east side of town, and the agent agrees to show the family the suggested properties. En route to the targeted neighborhood, the agent drives a certain route to show the family certain retail services and two schools. What has the agent done wrong? - CORRECT ANSWER He has steered the family Incorrect - See Practice of Real Estate (correct possibly done nothing wrong)" "There are different employment relationships which exist in our economy. A person who is only responsible to an employer for the results of work is - CORRECT ANSWER an employee Incorrect - See Brokerage Business Screen 4 of 8 Practice of Real estate" "What is the time limitation for reporting alleged violations of the Federal Fair Housing Act and Amendements? - CORRECT ANSWER 365 days" "Exceeding the limits of the authority granted is a major risk in.. - CORRECT ANSWER The fulfilling of listing agreements" "This law prohibited racial discrimination in the buying, selling, holding, or conveying of real and personal property? - CORRECT ANSWER Federal fair housing act of 1968 Incorrect - See Ethics: Laws and Practices Screen 3 of 6 (correct Civil Rights Act of 1866)" "Albert who is broker went to get a listing on a piece of property Bill was wanting to sell Bill indicated to Albert that he did not want his house sold to an Hispanic. Which of the following should Albert do? - CORRECT ANSWER Refuse to list the property" "The illegal practice of sending potential home buyers or renters to equivalent properties areas in order to maintain the homogeneity of an area is called? - CORRECT ANSWER steering" "You have your license under a broker. Your broker is required to put your real estate license on display in the office. Which of the following is your broker also required to display? - CORRECT ANSWER A photo located at the top left side of each license Incorrect - See Practice Real estate" "The primary jeopardy of overpricing a property is that - CORRECT ANSWER The client's expectations may not be achieved" "Which statement best describes the definition of a trust account? - CORRECT ANSWER an account for not commingling general business funds Incorrect - Practice of Real estate" "The Listing Agent decided to "spice-up" the advertisement by stating, "Only $50 down and $500 a month get you a new Home!" Whats the problem? - CORRECT ANSWER Violates Regulations Z" "When a licensee is sued by the Federal Trade Commission, it is usually for - CORRECT ANSWER violating antitrust laws" "In a lien theory state - CORRECT ANSWER the lender records a lien while the borrower retains title to the mortgaged property." "Which of the following is a six-mile strip running parallel to the meridian - CORRECT ANSWER Range" "Which of the following would NOT be considered an Economic Characteristic of Land? - CORRECT ANSWER Indestructible" "A township contains - CORRECT ANSWER 36 square miles" "Under this freehold estate characterized by co-ownership and the owner's right of survivorship but usually with no right of partition, the owners must be husband and wife. - CORRECT ANSWER Tenancy by entirety" "You're negotiating a listing agreement. At what price should you list the property if the seller wants to leave the closing with $25,000? You estimate closing costs at $5,000. The existing loan payoff is $90,000. You charge a 6% commission. Round to the nearest $100. - CORRECT ANSWER 127,700" "You're reviewing the H-25 for a closing on June 25. In this country property taxes are paid in arrears. If the annual property taxes are 5,400 what should be the prorated tax to the Seller (Using the 12 Month 360 day Method) - CORRECT ANSWER 2,625 Seller Credit Incorrect - See Real Estate Calculations (possibly correct - debit seller 2187)" "The 250,000 house is taxed at 80% Assessed Value. If the house is taxed at 27 per 1000, what is the monthly property tax? - CORRECT ANSWER 450" "What is the total interest your friend will pay over the life of the 185,000 loan at 6% interest for 30 years? The month P&I is 1,109.17. The monthly taxes are 321 - CORRECT ANSWER 214,301.20" "If the seller discovers another defect to the property a month after completing the property disclosure statement, what must the seller do? - CORRECT ANSWER Amend the Disclosure Statement" "Stewart is working with a broker and is in the process of making an offer on a home located in Tulsa, Oklahoma. Stewart asks his broker if anyone has ever been murdered in the house he wants to purchase. Stewarts broker - CORRECT ANSWER should follow the steps as described in the Oklahoma Real Estate Commission rules concerning requirements for furnishing psychological factors" "At what date is the Residential Property Condition Disclosure Statement no longer valid? - CORRECT ANSWER 180 days after completion" "If you engage in the sale of Real Estate before OREC issues your license, what may be the consequences? - CORRECT ANSWER Choice #3 plus the greater of the earned commission of 5,000" "The Oklahoma Real Estate Commission offices are located - CORRECT ANSWER in OKC" "Which of the following would NOT be considered Advertising? - CORRECT ANSWER Conducting a seminar on Down Payment Assistance programs Incorrect - Laws and Rules affecting OK real estate" "If a fine imposed by OREC is not paid within 30 days, what are the consequences. - CORRECT ANSWER Both 2 and 3 are correct which is a dollar added each day and find is doubled" "A person is not required to hold a real estate license to - CORRECT ANSWER be a resident manager for the owner of a multi-family apartment building" "Which statement is false? - CORRECT ANSWER OREC is exempt from being sued but may sue." "All of the following must possess a valid Oklahoma Real estate license except? - CORRECT ANSWER A real estates broker employee who leases affordable housing" "It may be cause for suspension or revocation of license to - CORRECT ANSWER guarantee future profits from resale of real estate" "Al wants to receive his real estate brokers license. Which of the following qualifications must Al meet to obtain his Oklahoma real estate brokers license? - CORRECT ANSWER Pass a 90 hour Advanced Course in Real estate, back ground check, active sales associate license for past 2 years and pass state exam" "Claire, who is a real estate broker, closes her office. Claire - CORRECT ANSWER must terminate all advertising in the name of her firm and offering signs must be removed within 30 days" "A real estate licensee should generally reveal the license status - CORRECT ANSWER in any real estate transaction" "Which of the following is NOT a requirement to obtain a Provisional Sales Associate License? - CORRECT ANSWER be at least 18 years old" "Which of the following situations would not require holding a real estate license? - CORRECT ANSWER All of the above : act as an attorney for owner of real estate, renovate buildings, and appraisal" "Members of the Oklahoma Real Estate Commission are appointed for - CORRECT ANSWER 4 years" "A licensed real estate associate may receive a commission from a broker other than their sponsoring broker under which of the following conditions? - CORRECT ANSWER Under no circumstances" "Earl is a real estate broker and has recently changed his business address, Earl - CORRECT ANSWER must notify the commission office within 10 days" "One member of the Oklahoma Real Estate Commission shall be - CORRECT ANSWER The secretary treasurer of the real estate commission Incorrect - State specific laws, Laws and rules affecting Oklahoma real estate (correct possibly is a lay person not in the real estate business)" "Earl who is a real estate broker, decides to close his office and cease real estate business, Earl - CORRECT ANSWER is required to notify the commission of the effective date and where the record will be stored" "All members of the Oklahoma Real Estate Commission must be citizens of the United States and residents of Oklahoma for how long before appointment to the Oklahoma Real Estate Commission? - CORRECT ANSWER 3 years" "Jim is a licensed real estate sales or broker associate who has hired an unlicensed assistant. Jim's broker, Larry is - CORRECT ANSWER responsible for Jim's unlicensed assistant" "A broker who is duly licensed in another state and who has not obtained an Oklahoma nonresident license may enter a cooperative brokerage agreement with - CORRECT ANSWER a licensed real estate broker in this state" "A broker must notify the Oklahoma Real Estate Commission of their trust account(s). How many trust accounts is a broker allowed? - CORRECT ANSWER unlimited" "The Oklahoma Real Estate Commission shall have the powers and duties of - CORRECT ANSWER imposing administrative fines in accordance with state statutes"