Rockwell Real Estate Exam MAIN
1. Which of the following loans would be subject to the Truth In Lending
Act?
CORRECT ANSWER: A loan to a first-time home buyer
Explanation:
The Truth in Lending Act (TILA/Regulation Z) applies to consumer credit
transactions, including mortgages for personal, family, or household purposes. A
loan to a first-time home buyer qualifies as a consumer loan, making it subject to TILA.
2. Art sold his house, which was not encumbered with a mortgage.
Closing expenses were $5,264, and he paid a commission of 7% of the
selling price. He received a check at closing for $372,316. What did the
house sell for?
CORRECT ANSWER: $406,000
Explanation:
1. Net proceeds = Selling price – (Commission + Closing expenses).
2. $372,316 = Selling price – (7% of selling price + $5,264).
3. Let Selling price = X.
4. $372,316 = X – (0.07X + $5,264)
5. $372,316 = 0.93X – $5,264
6. $377,580 = 0.93X
7. X = $377,.93 = $406,000
, 3. Frank gives Stella an option to buy his house. Stella, as the optionee, is
obligated to:
CORRECT ANSWER: Pay consideration for the option right
Explanation:
• An option contract requires consideration (payment) to be valid.
• The optionee (Stella) must pay for the exclusive right to purchase the property
within a specified time.
• The optionor (Frank) cannot sell to anyone else during the option period.
4. A corn field with a depth of 900 ft and a frontage of 484 feet is
bisected by an access road, leaving two triangular lots. If the land sells
for $2,000 per acre, how much is each lot worth?
CORRECT ANSWER: $10,000
Explanation:
1. Area of one triangular lot = ½ × base × height = ½ × 900 ft × 484 ft
= 217,800 sq ft.
2. Convert to acres (1 acre = 43,560 sq ft):
o 217,,560 = 5 acres per lot.
3. Value per lot = 5 acres × $2,000 = $10,000.
5. Which is a list of duties owed to a principal by an agent?
CORRECT ANSWER: Loyalty, confidentiality, reasonable care, accounting
1. Which of the following loans would be subject to the Truth In Lending
Act?
CORRECT ANSWER: A loan to a first-time home buyer
Explanation:
The Truth in Lending Act (TILA/Regulation Z) applies to consumer credit
transactions, including mortgages for personal, family, or household purposes. A
loan to a first-time home buyer qualifies as a consumer loan, making it subject to TILA.
2. Art sold his house, which was not encumbered with a mortgage.
Closing expenses were $5,264, and he paid a commission of 7% of the
selling price. He received a check at closing for $372,316. What did the
house sell for?
CORRECT ANSWER: $406,000
Explanation:
1. Net proceeds = Selling price – (Commission + Closing expenses).
2. $372,316 = Selling price – (7% of selling price + $5,264).
3. Let Selling price = X.
4. $372,316 = X – (0.07X + $5,264)
5. $372,316 = 0.93X – $5,264
6. $377,580 = 0.93X
7. X = $377,.93 = $406,000
, 3. Frank gives Stella an option to buy his house. Stella, as the optionee, is
obligated to:
CORRECT ANSWER: Pay consideration for the option right
Explanation:
• An option contract requires consideration (payment) to be valid.
• The optionee (Stella) must pay for the exclusive right to purchase the property
within a specified time.
• The optionor (Frank) cannot sell to anyone else during the option period.
4. A corn field with a depth of 900 ft and a frontage of 484 feet is
bisected by an access road, leaving two triangular lots. If the land sells
for $2,000 per acre, how much is each lot worth?
CORRECT ANSWER: $10,000
Explanation:
1. Area of one triangular lot = ½ × base × height = ½ × 900 ft × 484 ft
= 217,800 sq ft.
2. Convert to acres (1 acre = 43,560 sq ft):
o 217,,560 = 5 acres per lot.
3. Value per lot = 5 acres × $2,000 = $10,000.
5. Which is a list of duties owed to a principal by an agent?
CORRECT ANSWER: Loyalty, confidentiality, reasonable care, accounting
