BARNEY FLETCHER REAL ESTATE EXAM STUDY GUIDE
2025/2026 QUESTIONS WITH SOLUTIONS GRADED A+
✔✔civil rights act of 1866 - ✔✔prohibits discrimination based on race
✔✔fair housing act of 1968 - ✔✔pans discrimination based on race, color, religion, sex,
national origin
✔✔exceptions to federal fair housing laws: (7) - ✔✔private / individual owners
owner occupants
religious organizations
private membership clubs
all-elderly housing exemption
threat to health / safety
occupancy restrictions
✔✔affirmative marketing - ✔✔real estate brokers must display equal opportunity posters
in all places of business, model homes, other related locations
✔✔listing contract is what kind of agreement - ✔✔personal service agreement
✔✔injunction - ✔✔court order requiring a party to do or refrain from specific acts
✔✔what creates a voluntary lien on real property - ✔✔mortgage or deed of trust
✔✔promissory note - ✔✔contract signed by the maker who promises to pay the lender
✔✔accelerationclause - ✔✔if the borrower fails to keep the covenant/trust deed, the
entire loan balance is due / payable upon demand
✔✔Alienation (Due on Sale) Clause - ✔✔upon alienation, mortgagee may demand the
balance of the debt be paid first
✔✔defeasance clause - ✔✔provides for the defeat or cancellation of the mortgage or
trust deed
once debt is paid the mortgage is cancelled
✔✔prepayment clause - ✔✔mortgagor pays penalty if loan is paid off prior to original
maturity date
✔✔subordination clause - ✔✔usually found in junior mortgage
- if existing mortgage is paid off, junior mortgage will remain subordinate
✔✔exculpatory clause - ✔✔if you're deficient, they can come after personal items
, ✔✔escalator clause - ✔✔loan payments are adjusted up or down
✔✔partial release clause - ✔✔used by developers to provide for the release of lots as
the principal amount of the loan is payed back
✔✔assumption of mortgage - ✔✔when buyer assumes personal liability for full
repayment of debt
✔✔subject-to mortgage - ✔✔just like a sublease
✔✔three approaches to value - ✔✔market data approach
cost approach
income approach
✔✔market data approach - ✔✔adjustments are made for area/location, financing,
physical characteristics
✔✔income approach - ✔✔PGI - V = EGI - O = NOI
✔✔cost approach - ✔✔land value + replacement costs - depreciation = property value
✔✔who usually uses blanket mortgages/ why - ✔✔developers use with partial release
clauses to allow them to sell off one at a time without having to pay the full development
loan
✔✔how is balloon payment represented - ✔✔amortized for 30 years with 10 year due
date
✔✔tax assessors parcel numbers / prop address is not a formal legal description, you
should use - ✔✔metes and bounds, plats map, etc.
✔✔substitution - ✔✔concept that a propertys value is set by acquiring a similar property
✔✔ARM - ✔✔adjustable rate mortgage
negative amortization is not a part of this
✔✔who makes final decision on loan approval - ✔✔underwriter
✔✔non-disturbance clause - ✔✔
✔✔borrowing as much as possible - ✔✔leverage
2025/2026 QUESTIONS WITH SOLUTIONS GRADED A+
✔✔civil rights act of 1866 - ✔✔prohibits discrimination based on race
✔✔fair housing act of 1968 - ✔✔pans discrimination based on race, color, religion, sex,
national origin
✔✔exceptions to federal fair housing laws: (7) - ✔✔private / individual owners
owner occupants
religious organizations
private membership clubs
all-elderly housing exemption
threat to health / safety
occupancy restrictions
✔✔affirmative marketing - ✔✔real estate brokers must display equal opportunity posters
in all places of business, model homes, other related locations
✔✔listing contract is what kind of agreement - ✔✔personal service agreement
✔✔injunction - ✔✔court order requiring a party to do or refrain from specific acts
✔✔what creates a voluntary lien on real property - ✔✔mortgage or deed of trust
✔✔promissory note - ✔✔contract signed by the maker who promises to pay the lender
✔✔accelerationclause - ✔✔if the borrower fails to keep the covenant/trust deed, the
entire loan balance is due / payable upon demand
✔✔Alienation (Due on Sale) Clause - ✔✔upon alienation, mortgagee may demand the
balance of the debt be paid first
✔✔defeasance clause - ✔✔provides for the defeat or cancellation of the mortgage or
trust deed
once debt is paid the mortgage is cancelled
✔✔prepayment clause - ✔✔mortgagor pays penalty if loan is paid off prior to original
maturity date
✔✔subordination clause - ✔✔usually found in junior mortgage
- if existing mortgage is paid off, junior mortgage will remain subordinate
✔✔exculpatory clause - ✔✔if you're deficient, they can come after personal items
, ✔✔escalator clause - ✔✔loan payments are adjusted up or down
✔✔partial release clause - ✔✔used by developers to provide for the release of lots as
the principal amount of the loan is payed back
✔✔assumption of mortgage - ✔✔when buyer assumes personal liability for full
repayment of debt
✔✔subject-to mortgage - ✔✔just like a sublease
✔✔three approaches to value - ✔✔market data approach
cost approach
income approach
✔✔market data approach - ✔✔adjustments are made for area/location, financing,
physical characteristics
✔✔income approach - ✔✔PGI - V = EGI - O = NOI
✔✔cost approach - ✔✔land value + replacement costs - depreciation = property value
✔✔who usually uses blanket mortgages/ why - ✔✔developers use with partial release
clauses to allow them to sell off one at a time without having to pay the full development
loan
✔✔how is balloon payment represented - ✔✔amortized for 30 years with 10 year due
date
✔✔tax assessors parcel numbers / prop address is not a formal legal description, you
should use - ✔✔metes and bounds, plats map, etc.
✔✔substitution - ✔✔concept that a propertys value is set by acquiring a similar property
✔✔ARM - ✔✔adjustable rate mortgage
negative amortization is not a part of this
✔✔who makes final decision on loan approval - ✔✔underwriter
✔✔non-disturbance clause - ✔✔
✔✔borrowing as much as possible - ✔✔leverage
