Rockwell Cram Exam #3 Questions with Answers (100%
Correct Answers)
When homes in a new development are sold, a $2,000 fee is charged to the buyers. This fee
covers the homeowners association dues for the first year. HOA dues for each subsequent year
are $1,000. In the development's first year, ten homes are sold. Ten more are sold the second
year. Assuming that the HOA's account had no disbursements or expenses (and ignoring any
possible contributions from the developer), what is the balance of the account after two years?
—Answer: $50,000
Teresa gives her little brother, Mark, a life estate pur autre vie. Which of the following is true?
—Answer: Mark is the life tenant, but the measuring life is someone else (Our Autre Vie= "for
another life" the measuring life is someone other than the life tenant.
Jack receives a life estate in a property, for the life of Larry. When Larry dies, the property
passes to Mary, rather than to the grantor or the grantor's heirs. This is a: —Answer: life estate
pur autre vie, in remainder Reversion= Reverting to the grantor (original owner)
A 17-year-old purchased a house. He moved in, lived in it for a year, and then decided he didn't
want the responsibility of owning a home. He refused to honor the contract. In this case the
contract: —Answer: was voidable when signed; however, the buyer probably ratified it by
living in the house
A store owner would like to sell common stock in her business (a chain of stores) to investors.
She asks an inexperienced licensee for help. The licensee should: —Answer: refer the client to a
securities dealer
A seller has entered into a listing agreement with an expiration date of April 30. Under which of
these circumstances would the listing NOT terminate on the date mentioned in the answer
option? —Answer: The licensee who took the listing is legally declared incompetent on April
26
XYZ Realty has the exclusive right to represent a new subdivision. An agent working for the
subdivision office, and named on the listing agreement, shows a property to the Meyers, who
are not working with their own agent. When the Meyers decide to buy, they have XYZ's agent
provide basic help in filling out an offer form. Which of the following is true? —Answer: The
buyers are not represented by an agent. (if the agent is already representing another party
© 2025 All rights reserved
, under a written agreement (usually, a listing agreement), then providing minimal services does
not create an agency.)
Maria offered to purchase Alexander's house for $135,000. After talking it over with his agent,
Alexander signed the offer and returned it to Maria. At this point, what type of title does Maria
have to the house? —Answer: Equitable
A builder plans to construct a single-family home on spec, which he will then sell himself. He
needs to borrow $60,000 to do so, and he approaches the local bank for a construction loan. Is
this loan subject to Truth in Lending Act disclosure laws? —Answer: No, because no disclosure
is required for business loans
A property owner would like to use a tax-deferred exchange. The owner's property would
qualify if it was: —Answer: used in a business or trade
A homeless shelter, which contains a number of units for different families, is owned by a
religious group. The religious group's leaders instruct the shelter's manager to limit occupancy
only to individuals who are of their faith. This would be permissible under which of the
following circumstances? —Answer: Membership in the religious organization is not restricted
on the basis of race, color, or national origin
With the closing date fast approaching, the buyer's real estate agent learns that the seller's sister
may have an ownership interest in the property. The parties have already signed the purchase
and sale agreement. The buyer's agent should: —Answer: ask the listing agent to suggest that
the seller see a lawyer about obtaining a quitclaim deed from the sister
A woman owns a large house in a subdivision that is zoned strictly residential. She would like
to operate a preschool out of her house. She should seek to obtain a/an: —Answer: conditional
use permit
Chris, a real estate agent, met with Zach, a property owner, to discuss listing the property. Zach
told Chris that he was illiterate and that he needed Chris to read the listing agreement to him.
Chris did so, plus he spent a long time explaining the various terms and answering Zach's
questions. Zach agreed to everything, and signed the agreement with an "X." The listing
agreement is: —Answer: valid, because Zach was illiterate, not mentally incompetent
© 2025 All rights reserved
Correct Answers)
When homes in a new development are sold, a $2,000 fee is charged to the buyers. This fee
covers the homeowners association dues for the first year. HOA dues for each subsequent year
are $1,000. In the development's first year, ten homes are sold. Ten more are sold the second
year. Assuming that the HOA's account had no disbursements or expenses (and ignoring any
possible contributions from the developer), what is the balance of the account after two years?
—Answer: $50,000
Teresa gives her little brother, Mark, a life estate pur autre vie. Which of the following is true?
—Answer: Mark is the life tenant, but the measuring life is someone else (Our Autre Vie= "for
another life" the measuring life is someone other than the life tenant.
Jack receives a life estate in a property, for the life of Larry. When Larry dies, the property
passes to Mary, rather than to the grantor or the grantor's heirs. This is a: —Answer: life estate
pur autre vie, in remainder Reversion= Reverting to the grantor (original owner)
A 17-year-old purchased a house. He moved in, lived in it for a year, and then decided he didn't
want the responsibility of owning a home. He refused to honor the contract. In this case the
contract: —Answer: was voidable when signed; however, the buyer probably ratified it by
living in the house
A store owner would like to sell common stock in her business (a chain of stores) to investors.
She asks an inexperienced licensee for help. The licensee should: —Answer: refer the client to a
securities dealer
A seller has entered into a listing agreement with an expiration date of April 30. Under which of
these circumstances would the listing NOT terminate on the date mentioned in the answer
option? —Answer: The licensee who took the listing is legally declared incompetent on April
26
XYZ Realty has the exclusive right to represent a new subdivision. An agent working for the
subdivision office, and named on the listing agreement, shows a property to the Meyers, who
are not working with their own agent. When the Meyers decide to buy, they have XYZ's agent
provide basic help in filling out an offer form. Which of the following is true? —Answer: The
buyers are not represented by an agent. (if the agent is already representing another party
© 2025 All rights reserved
, under a written agreement (usually, a listing agreement), then providing minimal services does
not create an agency.)
Maria offered to purchase Alexander's house for $135,000. After talking it over with his agent,
Alexander signed the offer and returned it to Maria. At this point, what type of title does Maria
have to the house? —Answer: Equitable
A builder plans to construct a single-family home on spec, which he will then sell himself. He
needs to borrow $60,000 to do so, and he approaches the local bank for a construction loan. Is
this loan subject to Truth in Lending Act disclosure laws? —Answer: No, because no disclosure
is required for business loans
A property owner would like to use a tax-deferred exchange. The owner's property would
qualify if it was: —Answer: used in a business or trade
A homeless shelter, which contains a number of units for different families, is owned by a
religious group. The religious group's leaders instruct the shelter's manager to limit occupancy
only to individuals who are of their faith. This would be permissible under which of the
following circumstances? —Answer: Membership in the religious organization is not restricted
on the basis of race, color, or national origin
With the closing date fast approaching, the buyer's real estate agent learns that the seller's sister
may have an ownership interest in the property. The parties have already signed the purchase
and sale agreement. The buyer's agent should: —Answer: ask the listing agent to suggest that
the seller see a lawyer about obtaining a quitclaim deed from the sister
A woman owns a large house in a subdivision that is zoned strictly residential. She would like
to operate a preschool out of her house. She should seek to obtain a/an: —Answer: conditional
use permit
Chris, a real estate agent, met with Zach, a property owner, to discuss listing the property. Zach
told Chris that he was illiterate and that he needed Chris to read the listing agreement to him.
Chris did so, plus he spent a long time explaining the various terms and answering Zach's
questions. Zach agreed to everything, and signed the agreement with an "X." The listing
agreement is: —Answer: valid, because Zach was illiterate, not mentally incompetent
© 2025 All rights reserved
