NATIONAL REAL ESTATE TEST
1. Jorge accepted a seller's offer of insurable title. The transaction hasn't reached closing, and
a previously unknown title defect has been revealed.What happens now?
Jorge has to take steps to remove the defect before he can close.
The seller is still required to clear the title defect before closing.
The seller may not be required to attempt to clear the defect before closing.
The title insurance company is required to cover the title defect.: The seller maynot be required to
clear the defect before closing; depending on the type of defect (e.g., an easement) it may not
impact closing. Other types of defects may require action before closing.
2. A former client has filed a formal complaint against Ajit, claiming he failedto properly
disclose a material fact that the seller didn't disclose. Which of these statements about Ajit's
liability is true?
Ajit is only responsible for disclosing adverse material facts.
Ajit may be liable if he operates in a state that requires licensees to make areasonable effort to
discover adverse material facts.
The claim has no base because the seller didn't disclose the information.
The claim is likely to be dismissed if Ajit operates in a non-full disclosure state.: Ajit may be
liable if he operates in a state that requires licensees to make areasonable effort to discover
adverse material facts.
Licensees must follow state laws regarding disclosure of all material facts, but typi- cally
there's no distinction between disclosure of material facts or adverse material facts. Ajit may be
liable even if the seller didn't disclose the fact, depending on statelaw.
3. Jerrica is set to close on the property she's buying on Friday. Because of other delays in
the closing date, Jerrica's interest rate as of the day of closing will increase by 1/4 of a percent.
What impact does this have on the closing?
A new Closing Disclosure must be issued at least three days before the closingdate.
A new Loan Estimate must be issued, so the closing date must be moved back.
Jerrica will not be able to close until she re-applies for her loan.
,The closing date will remain the same, but Jerrica will need to bring additional funds to the
closing.: A new Closing Disclosure must be issued at least three daysbefore the closing date.
Any interest rate change of more than 1/8 of a percent requires a new ClosingDisclosure,
triggering a new three-day waiting period.
4. Sam's kids talked him into putting up the basketball hoop that their grand-parents got them
for Christmas. On a quiet Saturday afternoon, Sam is busynailing the backboard to the front of
their garage facing the street when one of the officers of the homeowners association walks
by. "I'm so sorry," she says, "but you'll have to take that down. Basketball hoops in direct
view of the street are prohibited." What is in place in Sam's subdivision that would prohibit
this?: CC&Rs
Developers manage the visual and aesthetic details of a given neighborhood through covenants,
conditions, and restrictions (CC&Rs).
5. Your buyer client, Percy, wants to start searching for his dream house and knows he needs
to obtain financing to accomplish that. What's his first step?Complete a loan application.
Obtain a pre-qualification letter.Sign a purchase agreement.
Write an offer.: Obtain a pre-qualification letter.
Before Percy even begins looking for properties, he should get pre-qualified.
He mayalso consider getting pre-approved.
6. Lydia put the minimum 3.5% down on her $210,000 home. She'll have topay an MIP.
What type of loan does Lydia have?
Conventional FHA
StandardVA: FHA
Based on the minimum down payment amount of 3.5% and the fact that she's paying MIP, Lydia
has an FHA loan.
7. Homestead Realty had a listing agreement with Gertrude. The listing ex- pired, and
Gertrude moved the listing to another firm. Another licensee at Homestead Realty has a buyer
client who's interested in Gertrude's property.What restrictions are in place for Homestead
Realty?
Homestead may not represent a buyer for the previously listed property.
Homestead may represent the buyer but may not disclose any informationabout the property or
previous offers on it.
Homestead may represent the buyer, must disclose material facts about theproperty, and must
maintain Gertrude's confidentiality.
, No restrictions are in place since the previous property listing expired.: Home- stead may
represent the buyer, must disclose material facts about the property, and must maintain
Gertrude's confidentiality.
Homestead must adhere to its fiduciary duties of confidentiality (to Gertrude) and disclosure
(to all parties).
8. Which act states that communities and facilities that meet certain criteria for providing
housing to older persons are legally exempt from familial statusdiscrimination?
Fair Housing Amendments Act of 1988
Federal Fair Housing Act of 1968
Housing and Community Development Act of 1974
Housing for Older Persons Act of 1995: Housing for Older Persons Act of 1995
Under the Housing for Older Persons Act of 1995, housing must have one person who is 55 or
older residing in at least 80% of its occupied units to be exempt from charges of familial status
discrimination by age preference.
9. Which of these statements accurately describes finance- and housing-re-lated legislation?
As a stipulation of the Housing and Community Development Act, lenders must offer reasons
when rejecting loan applications and must respond to allapplications within 30 days.
The Americans with Disabilities Act added familial status and disability (both physical and
mental) to the existing protected classes.
The Equal Credit Opportunity Act of 1974 required lenders to provide con- sumers with equal
access to credit and prohibited credit discrimination based
on just the three protected classes of race, color, or national origin.
The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, andfinancing of
housing based on race, color, religion, or national origin.: The FairHousing Act of 1968
prohibited discrimination in the sale, rental, and financing of housing based on race, color,
religion, or national origin.
The Fair Housing Act of 1968 made race, color, national origin, and religion protectedclasses and
prohibits housing and housing financing discrimination. The ECOA prohibits discrimination
based on any protected class.
10. A brokerage firm that hires licensees as employees instead of as indepen-dent contractors
must .
Advise the state licensing regulators of the non-traditional working relation-ship
1. Jorge accepted a seller's offer of insurable title. The transaction hasn't reached closing, and
a previously unknown title defect has been revealed.What happens now?
Jorge has to take steps to remove the defect before he can close.
The seller is still required to clear the title defect before closing.
The seller may not be required to attempt to clear the defect before closing.
The title insurance company is required to cover the title defect.: The seller maynot be required to
clear the defect before closing; depending on the type of defect (e.g., an easement) it may not
impact closing. Other types of defects may require action before closing.
2. A former client has filed a formal complaint against Ajit, claiming he failedto properly
disclose a material fact that the seller didn't disclose. Which of these statements about Ajit's
liability is true?
Ajit is only responsible for disclosing adverse material facts.
Ajit may be liable if he operates in a state that requires licensees to make areasonable effort to
discover adverse material facts.
The claim has no base because the seller didn't disclose the information.
The claim is likely to be dismissed if Ajit operates in a non-full disclosure state.: Ajit may be
liable if he operates in a state that requires licensees to make areasonable effort to discover
adverse material facts.
Licensees must follow state laws regarding disclosure of all material facts, but typi- cally
there's no distinction between disclosure of material facts or adverse material facts. Ajit may be
liable even if the seller didn't disclose the fact, depending on statelaw.
3. Jerrica is set to close on the property she's buying on Friday. Because of other delays in
the closing date, Jerrica's interest rate as of the day of closing will increase by 1/4 of a percent.
What impact does this have on the closing?
A new Closing Disclosure must be issued at least three days before the closingdate.
A new Loan Estimate must be issued, so the closing date must be moved back.
Jerrica will not be able to close until she re-applies for her loan.
,The closing date will remain the same, but Jerrica will need to bring additional funds to the
closing.: A new Closing Disclosure must be issued at least three daysbefore the closing date.
Any interest rate change of more than 1/8 of a percent requires a new ClosingDisclosure,
triggering a new three-day waiting period.
4. Sam's kids talked him into putting up the basketball hoop that their grand-parents got them
for Christmas. On a quiet Saturday afternoon, Sam is busynailing the backboard to the front of
their garage facing the street when one of the officers of the homeowners association walks
by. "I'm so sorry," she says, "but you'll have to take that down. Basketball hoops in direct
view of the street are prohibited." What is in place in Sam's subdivision that would prohibit
this?: CC&Rs
Developers manage the visual and aesthetic details of a given neighborhood through covenants,
conditions, and restrictions (CC&Rs).
5. Your buyer client, Percy, wants to start searching for his dream house and knows he needs
to obtain financing to accomplish that. What's his first step?Complete a loan application.
Obtain a pre-qualification letter.Sign a purchase agreement.
Write an offer.: Obtain a pre-qualification letter.
Before Percy even begins looking for properties, he should get pre-qualified.
He mayalso consider getting pre-approved.
6. Lydia put the minimum 3.5% down on her $210,000 home. She'll have topay an MIP.
What type of loan does Lydia have?
Conventional FHA
StandardVA: FHA
Based on the minimum down payment amount of 3.5% and the fact that she's paying MIP, Lydia
has an FHA loan.
7. Homestead Realty had a listing agreement with Gertrude. The listing ex- pired, and
Gertrude moved the listing to another firm. Another licensee at Homestead Realty has a buyer
client who's interested in Gertrude's property.What restrictions are in place for Homestead
Realty?
Homestead may not represent a buyer for the previously listed property.
Homestead may represent the buyer but may not disclose any informationabout the property or
previous offers on it.
Homestead may represent the buyer, must disclose material facts about theproperty, and must
maintain Gertrude's confidentiality.
, No restrictions are in place since the previous property listing expired.: Home- stead may
represent the buyer, must disclose material facts about the property, and must maintain
Gertrude's confidentiality.
Homestead must adhere to its fiduciary duties of confidentiality (to Gertrude) and disclosure
(to all parties).
8. Which act states that communities and facilities that meet certain criteria for providing
housing to older persons are legally exempt from familial statusdiscrimination?
Fair Housing Amendments Act of 1988
Federal Fair Housing Act of 1968
Housing and Community Development Act of 1974
Housing for Older Persons Act of 1995: Housing for Older Persons Act of 1995
Under the Housing for Older Persons Act of 1995, housing must have one person who is 55 or
older residing in at least 80% of its occupied units to be exempt from charges of familial status
discrimination by age preference.
9. Which of these statements accurately describes finance- and housing-re-lated legislation?
As a stipulation of the Housing and Community Development Act, lenders must offer reasons
when rejecting loan applications and must respond to allapplications within 30 days.
The Americans with Disabilities Act added familial status and disability (both physical and
mental) to the existing protected classes.
The Equal Credit Opportunity Act of 1974 required lenders to provide con- sumers with equal
access to credit and prohibited credit discrimination based
on just the three protected classes of race, color, or national origin.
The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, andfinancing of
housing based on race, color, religion, or national origin.: The FairHousing Act of 1968
prohibited discrimination in the sale, rental, and financing of housing based on race, color,
religion, or national origin.
The Fair Housing Act of 1968 made race, color, national origin, and religion protectedclasses and
prohibits housing and housing financing discrimination. The ECOA prohibits discrimination
based on any protected class.
10. A brokerage firm that hires licensees as employees instead of as indepen-dent contractors
must .
Advise the state licensing regulators of the non-traditional working relation-ship
