Rockwell WA Real Estate Exam Questions with Answers (100% Correct Answers) |LATEST & A+ GARDED

Rockwell WA Real Estate Exam Questions with Answers (100% Correct Answers) © 2025 All rights reserved Rockwell WA Real Estate Exam Questions with Answers (100% Correct Answers) Five people buy an investment property. They take title so that they each have equal ownership shares, and so that if one of them dies, his share will pass to his heirs. How did they take title? A. Community property b. Joint tenancy c. Tenancy in common d. Term Tenancy —Answer: c. Tenancy in common What would cause a judgment lien to be imposed on a landowner's property? a. Foreclosure b. Lawsuit c. Unpaid construction project d. Unpaid property taxes —Answer: b. Lawsuit Cluster zoning, which allows smaller lot sizes and reduced frontages, is suitable if a development: a. includes both commercial and residential uses b. still has a density ratio consistent with the general plan c. abuts a wetland or other sensitive site d. abuts state-or city-owned land —Answer: b. still has a density ratio consistent with the general plan © 2025 All rights reserved A broker would need to have a securities license to participate in: a. a sale of both real and personal property b. a sale of a commercial building that is showing a profit c. a transaction involving an investment contract d. listing a property owned by a corporation —Answer: c. a transaction involving an investment contract Buyer Perry would like to assume Seller Joan's loan with ABC Mortgage Company, in a way that would mean no further liability for Joan. To accomplish this, Perry and Joan should use a: a. acknowledgement of the agreement from ABC Mortgage. b. purchase contract signed by the buyer and seller c. release of liability signed by the ABC Mortgage d. release of liability signed by Joan —Answer: c. release of liability signed by the ABC Mortgage A buyer who records a deed is giving: a. constructive notice b. actual notice © 2025 All rights reserved c. pending notice d. statutory notice —Answer: a. constructive notice John leases a commercial property. In the lease, he agrees to pay part of the utilities and taxes, as well as a fixed monthly rent amount, This is a: a. net lease b. percentage lease c. ground lease d. graduated lease —Answer: a. net lease By what right would a railroad company acquire private land necessary for a new railway line? a. Partition action b. Eminent domain c. Suit in federal court d. condemnation —Answer: b. eminent domain A real estate agent lists Harold's home, which he owns as a life estate. Harold's children hold the remainder interest. Which of the following is true? a. someone who buys Harold's life estate receives only the interest held by Harold b. Harold's children need to sign the listing agreement © 2025 All rights reserved c. The buyer will automatically receive a fee simple absolute interest d. Since a life estate cannot be sold, the listing is invalid —Answer: a. someone who buys Harold's life estate receives only the interest held by Harold The entity that determines the maximum number of people who may legally live in a rental unit is the: a. Department of Housing and Urban Development b. state government c. local health department and zoning authority d. property owner —Answer: c. local health department and zoning authority A borrower defaults on a mortgage. What does the acceleration clause in the mortgage allow the lender to do? a. Compel the borrower to sell the property and repay the debt b. Demand immediate payment of the entire loan balance c. Prevent the borrower from selling the property d. Report the borrower to a collection agency —Answer: b. Demand immediate payment of the entire loan balance after the sale of a property in a 1031 exchange, the seller must close on the new property within: a. 10 days b. 30 days c. 45 days © 2025 All rights reserved d. 180 days —Answer: d. 180 days Which law prohibits discrimination in real estate transactions based on race, with no exceptions? a. Civil Rights Act of 1866 b. Civil Rights Act of 1964 c. Civil Rights Act of 1968 d. Fair Housing Act —Answer: a. Civil Rights Act of 1866 If a buyer wants to protect herself against unrecorded encumbrances, she should: a. assume the seller's standard policy of title insurance b. Order a survey c. request a title insurance policy that has the fewest exceptions d. have her attorney prepare an abstract of title —Answer: c. request a title insurance policy that has the fewest exceptions An easement for ingress and egress that is created by a court of law where it is reasonably necessary for the enjoyment of the property is an easement: a. appurtenant b. by necessity c. by prescription d. in gross —Answer: b. by necessity © 2025 All rights reserved A three-year lease ends. The tenant is allowed by the landlord to stay on and to continue to pay rent, on a month-to-month basis. This would be a: a. estate for years b. periodic tenancy c. term tenancy d. tenancy at sufferance —Answer: b. periodic tenancy Brances of an apple tree hang over the fence, and overripe fruit falls into the neighbor's yard. This is an example of a/an: a. easement in gross b. emblement c. encroachment d. lien —Answer: c. encroachment The purpose of a building code is to: a. support zoning objectives b. acquire land for public use c. establish lot size and setbacks requirements d. provide minimum standards for construction —Answer: d. provide minimum standards for construction Which of the following methods would be most appropriate for valuing a recently built, singlefamily home? © 2025 All rights reserved a. Replacement cost and income approach b. Income approach and cost approach c. Market analysis and replacement cost d. Income approach and cap rate —Answer: c. Market analysis and replacement cost A corporation takes title to real property through a/an: a. estate in severalty b. joint tenancy c. tenancy at will d. A corporation may not take title —Answer: a. estate in severalty For how long is a deed restriction valid? a. Potentially forever b. only as to the first purchaser of the property c. only if the restriction is a covenant, not a condition d. Until a subsequent buyer and seller agree to release it —Answer: a. Potentially forever A property investor sells his 100-acre rural parcel of land w/ the restriction that the buyer may not divide the land into parcels smaller than 1acre each. This restriction: a. invalid; this violates the rule against perpetuities b. invalid; one cannot put private restrictions on rural land ; restrictions are always valid on agriculture land © 2025 All rights reserved d. valid; this restriction doesn't violate public property —Answer: d. valid; this restriction doesn't violate public property In a government survey description, one side of a section is how many feet long? a. 100 b. 2,640 c. 5,280 d. 43,560 —Answer: c. 5,280 A property owner dies without a will or any known heirs. The property passes to the state, under its: a. escheat power b. police power c. power of eminent domain d. taxation power —Answer: a. escheat power An elderly woman gives a power of attorney to her son to manage all of her affairs. What sort of agent is he? a. ostensible agent b. special agent c. universal agent d. unlimited agent —Answer: c. universal agent A letter of intent: © 2025 All rights reserved a. contains all terms & conditions of a contractual agreement b. is generally binding c. is used regularly in small residential transactions d. sets out basics prior to negoations —Answer: d. sets out basics prior to negoations A tenancy in which the tenant is in possession w/ the permission of the landlord, but there is no definite rental period of duration of possession, is called a/an: a. estate in remainder b. estate for years c. periodic estate d. estate at will —Answer: d. estate at will An increasingly common land use pattern allows for subdivisions w/ smaller lots sizes and little or no setback & sideboards requirements while keeping the same density rations are known as: a. horizontal Property divisons b. downzoning c. planned unit developments d. spot zoning —Answer: c. planned unit developments A real estate agent has assisted an investor w/ the purchase of a number of commercial properties. The investor will be out of the country for part of the year and asks the agent to manage properties, including advertising & leasing. The real estate agent will be a/an — Answer: a. general agent © 2025 All rights reserved The mortgagee assigns its interest and the assignee records the assignment. The mortgagor now needs to make payments to the: a. assignee b. assignor c. beneficiary d. mortgagee —Answer: a. assignee A percolation test will examine the: a. likelihood of landslides or subsidence b. presence of toxic contamination in soil c. roofing material's ability to repel rain d. soil's ability to absorb and retain water —Answer: d. soil's ability to absorb and retain water A property manager bases the operating budget on: a. rental rates b. the rental market c. anticipated expenses and revenue d. state landlord-tenant law —Answer: c. anticipated expenses and revenue Which of the following would characterizes a tenancy in common? a. only available to married persons b. requirements of equal interests © 2025 All rights reserved c. right of survivorship d. tenants can will a partial interest in the property —Answer: d. tenants can will a partial interest in the property A buyer accepts a warranty deed from a seller believe that the seller is the sole owner of the property. The buyer later finds out that the seller is only a co-owner. Has a covenant in the warranty deed been violated? —Answer: D. Yes, there is a covenant providing marketable title. K buys a piece of landlocked property from L on the condition that L provides an easement across the property for ingress and egress but the easement isn't recorded. K later sells the property. Is the easement still valid for the new owner? —Answer: c. Yes, because this type of easement runs with the land, rather than belonging to an individual. Gail gives ABC Realty a listing that stipulates it is the only real estate firm to list her home. She also insist that she can sell her own home w/out paying commission to ABC. What listing has she created? —Answer: D. Exclusive agency listing A contract deed wouldn't be good idea if the seller's mortgage has a/an a. acceleration clause b. alienation clause c. defeasance clause d. subordination clause —Answer: b. alienation clause A buyer is getting a loan to purchase a five-acre apple farm with no residence on it. The Truth in Lending Act requires: a. a 3 day rescission period if the borrower changes her mind b. disclosure of all settlement charges on a loan estimate form c. disclosure of the finance charge © 2025 All rights reserved d. no disclosure, because the land is agricultural —Answer: d. no disclosure, because the land is agricultural A property manager needs a real estate license when engaged in which of the following activities? a. managing property owned by the company that employs her b. managing self-owned property c. managing a self-storage facility d. Third- party property managment —Answer: d. Third- party property managment A company that is organized as an LLC wants to represent clients in the transaction. Who must be licensed? —Answer: The Company and a person w/ controls over operational and financial decisions S's real estate license is inactive. This is because: a. her app has not yet been received by the DOL b. She has not gotten a listing in over six months c. her license has been delivered to the Director of the Department of Licensing d. she failed to renew her license before the exp. date —Answer: c. her license has been delivered to the Director of the Department of Licensing According to the Washington license law, a licensee who is acting as a property manager must give the owner a summary statement for all of the following except: a. rent receipts b. property condition © 2025 All rights reserved c. outstanding balances d. owner's contributions —Answer: b. property condition In place of three years of actual full-time real estate sales experience, a managing broker license applicant can qualify to take the managing broker's exam within: —Answer: Five years of experience as a mortgage loan broker How many years of experience in real estate is required for appointment as a real estate commissioner? a. 2 b. 3 c. 4 d. 5 —Answer: d. 5 A person who represents a real estate brokerage in selling, listing, renting, leasing or exchanging real property, and who is managed by a designated or managing broker is a/an? — Answer: d. Real estate broker When making the required agency disclosure, a licensee must always: —Answer: a. Conduct herself in conformity w/ the agency disclosure she has made. Where should an amendment to a purchase and sale agreement be filed? —Answer: d. In the appropriate transaction file When can an earnest money deposit be held by someone other than the firm that the check is made out to? —Answer: b. When both parties agree in writing An out-of-state real estate licensee (who is licensed in another state) may enter Washington to engage in which real estate activity? —Answer: Commercial sales or leasing © 2025 All rights reserved A licensee is considering an employment offer from a brokerage firm. The position would involve control over the firm's operational and financial decisions. The level of licensure required would be: —Answer: managing broker, w/ a designated broker endorsement A buyer enters into a buyer agency agreement w/a real estate licensee to negotiate the purchase of a FSBO property. The buy enters into a purchase and sale, but the property he agreed to buy is condemned. Which is true? —Answer: a. The agency is terminated. A new subdivision requires payment of homeowners association dues. If unpaid, what type of lien do they create? a. general lien b. involuntary lien that does not pass to next buyer c. personal debt not secured by real property d. specific lien that encumbers the property —Answer: d. specific lien that encumbers the property Adjusted basis is: a. initial basis, less capital expenditures, plus depreciation b. initial basis, less repair expenses, plus capital expenditures c. initial basis, plus capital expenditures, plus repair expenses d. initial basis, plus capital expenditures, less depreciation —Answer: d. initial basis, plus capital expenditures, less depreciation Which of the following rental transactions would be covered but he Fair Housing Act even if no real estate agent were involved? —Answer: c. Rental of a unit in a triplex, using no discriminatory advertising Moe has an appurtenant easement over Ray's land. Ray's land is called a/an: © 2025 All rights reserved A. dominant estate B. servient estate C. encroachment D. license —Answer: b. servant estate a condensed history of the ownership of a property is called a/an: a. abstract title b. chain of title c. lis pendens d. title insurance policy —Answer: a. abstract of title An investor looks at a property listed for $150,000, with a monthly net operating income of $1,000. He decides instead to offer $120,000. What kind of income approach analysis would he have used to arrive at that conclusion? —Answer: a. Capitalization rate If an agent fails to renew a license within one year after expiration, the license is considered: a. inactive b. suspended c. revoked d. canceled —Answer: d. canceled Interest on a loan for a home purchase is which type of interest? © 2025 All rights reserved a. Annually paid b. compound c. complex d. simple —Answer: d. simple An exclusive listing agreement is an example of a/an: A. express contract B. illusory contract C. implied contract D. unilateral contract —Answer: A. Express contract Which of the following statements regarding RESPA is true? —Answer: The borrower is entitled to a loan estimate showing settlement costs within three days of submitting an application When someone assumes the mortgage and it is approved by the lender and the seller is released from the mortgage, this is an example of what? —Answer: Novation Which of the following is the proper method for determining the gross income mulitplier? a. Divide monthly income by sales price b.Divide annual income by sales price c. Divide sales price by gross income d. Divide assessed value by gross income —Answer: c. Divide sales price by gross income © 2025 All rights reserved The primary purpose of the Truth in Lending Act (Reg Z) is to require the lender to: —Answer: Disclose the complete cost of credit to consume loan applicants A seller wanting to get an estimate of the value of her property before settling on a listing price should obtain a/an: —Answer: Fee Appraisaa A property management agreement is amended to take into account some changing circumstances. The amendment must be signed by the owner and: —Answer: The designated broker for the firm providing management services An optionee's rights can be assigned under all of the following circumstances, except when the: a. Option $ is $10 or less b. Option $ is in the form of a promissory note c. Optionor has died d. Optionee has died —Answer: b. Option $ is in the form of a promissory note An older retail building has narrow hallways and window air conditioning units rather than central AC. These would be examples of: —Answer: Functional obsolescence When the parties to a contract put themselves back into the same position they were in before they entered into the contract, the contract has been: —Answer: Rescinded Of the following types of contracts, which one is a unilateral contract? a. Escrow Instructions b. Exclusive right-to-sell listing c. Lease d. Option —Answer: d. option © 2025 All rights reserved A transaction will include a home warranty. There sellers agent should find out: —Answer: Which party will be responsible for the one-time premium A dual-state brokerage firm doing business in Washington must: a. maintain a trust account in WA if holding any funds in trust b. Keep its transaction records on file with the DOL c. Only hire out-of-state licensees d. Maintain an office in W —Answer: a. maintain a trust account in WA if holding any funds in trust Which of the following is EXEMPT from the pooled interest-bearing account requirements? — Answer: Property management trust funds In the course of business, a firm earns property management fees that are to be paid out of the trust account. The fees must be taken out of the account: —Answer: Monthly An attorney at law is exempt from real estate licensing laws when: —Answer: Arranging the sale of real property while settling a client's estate When does an active license become inactive? —Answer: When it is delivered to the Director for any reason A broker may accept compensation for the services he provides in a given transaction from: — Answer: The broker's designated broker only 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 A buyer received a warranty deed when she took title to a property. The seller's cousin showed up several months later and claimed an ownership interest in the property. The buyer would be protected against this claim by the warranty deed's: Covenant ______ —Answer: Covenant of seisin © 2025 All rights reserved A real estate firm handles property management for a number of property owners. Rather than use one standard form, though, each lease must be separately drafter, based on individual negotiations. Which statement is true? —Answer: b. An attorney must be engaged to draft each contract 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 Paul would like to make an offer on a house right away, but he doesn't have the cash available for an earnest money deposit yet. He does have a large commission check coming in , so he offers the seller a promissory not for $10,000 as earnest money deposit. Will the Promissory note be tied to the buyers mortgage? —Answer: No, the promissory note is a promise to pay a debt and is a contract on its own. A property owner would like to use a tax-deferred exchange. The owner's property would qualify if it was: a. a principal residence b. financed over a 30-year loan term c. owner-occupied d. used in a business or trade —Answer: d. used in a business or trade 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 Sarita bought a home. She had poor credit, so the owner agreed to finance the purchase. The parties agreed to a 20 year loan term. Sarita took title to the property, and the seller held a lien against the property. What type of financing instrument was used? —Answer: Purchase money mortgage © 2025 All rights reserved The full cost of which of the following is most likely deductible as an expense in the year incurred from the income taxes of the owner of an investment property? —Answer: Repainting the building Special, general, and universal agency all: —Answer: originate with the principal Which of the following items would a homeowner generally be able to deduct on her income taxes? a. depreciation b. maintenance expenses c. points paid on the mortgage d. The downpayment at the time of purchase —Answer: c. points paid on the mortgage Ryan needs to replace his roof; not having the cash available, he decides to borrow several thousand dollars through a home equity line of credit, which is a: —Answer: secured loan In spite of Delia's objection, the city took a portion of her lot as part of a street widening project. Which of the following is true about eminent domain? —Answer: Delia's property was taken through the process of condemnation Which of the following would be subject to real property taxes? a. A house and the land it's on b. Cars and motorcycles c. Household furnishings D. Only the land, but not the improvements —Answer: a. A house and the land it's on © 2025 All rights reserved Two parties enter into an option agreement, scheduled to end in December. However, in October the optionee decides he doesn't want to buy the property. What should the parties do in order to terminate the option? —Answer: Nothing, the option will expire automatically. Encroachments are: —Answer: Considered a trespass Sonya buys a parcel of land and pays taxes on it for five years. After she builds a home on it, the taxes she'll pay are: a. special assessments b. ad valorem taxes c. estate taxes d. excise taxes —Answer: c. ad valorem taxes ( General real estate taxes are ad valorem taxes) Which of the following situation would be exempt under the Fair Housing Act? —Answer: The owner of a fourplex lives in one unit and refuses to rent the other three units to students because of their national origin. A tenant signs a one-year lease. Four months later the owner sells the property to a third party, who wants to move in immediately. Which is correct? —Answer: The new owner takes ownership subject to the lease and must wait until the lease ends to move in. Which of the following is true concerning federal fair house law? —Answer: Enforcement may be brought about by filing a complaint with the Dept. of the Housing and Urban Development. A landowner is negotiating the lease of his land to a developer who wants to build a mall there. They should use a: a. gross lease b. ground lease c. net lease © 2025 All rights reserved d. percentage lease —Answer: Ground lease A lease is most likely to be a net lease if it requires the tenant to pay: a. A portion of the tenant's business income b. periodic rent increases based on a measure of inflation like the consumer price index c. utilities d. property taxes —Answer: d. property taxes Janet wants to rent a heated garage and is willing to pay a flat rate of $100 per month. Which type of lease would this be? a. gross lease b. ground lease c. net lease d. percentage lease —Answer: a. gross lease A real estate broker represents the seller in a transaction involving an investment property. Several months later, the new owner asks the broker if he would act as a property manager for that property. The broker may take this position: —Answer: only if this designated broker allows it A brokerage manages a property. The property management records must be kept in: a. a location where the firm is licensed to have an office b. the property bring managed c. the firm's personal files © 2025 All rights reserved d. the firm's safe deposit box —Answer: a. a location where the firm is licensed to have an office T represents J, a buyer. A week after J purchases a home, he decides to resell it. What role can T play in the resale transaction? —Answer: a. T could act as dual agent for the two parties, or represent either of them A real estate licensee would automatically enter into a buyer agency relationship when she: — Answer: agrees to show the buyer another agent's listing. Who is responsible for the earnest money deposit? a. the listing firm b. the selling firm c. the mortgage company d. the firm to which the check is made payable —Answer: d. the firm to which the check is made payable Real estate license fees are put into the a. Director's personal account b. Real Estate Commission Account c. Real Estate Education Fund d. Washington Association of Relators trust account —Answer: b. Real Estate Commission Account M tells her next door neighbor, P, that she will pay him a commission if he can help sell her home. P, an unemployed bartender, locates a buyer and a sale results. M changes her mind and refuses to pay P his promised commission. Which of the following is true? —Answer: P is not entitled to a commission, because he is unlicensed © 2025 All rights reserved Who issues rules and regulations that govern the activities of real estate licensees? a. Director b. Governor c. Real Estate Commission d. Real Estate Program Manager —Answer: a. Director Appointments to the Real Estate Commission are made by: a. general election b. the Director of the Department of Licensing c. the Governor d. the state legislature —Answer: c. the Governor Under what circumstances could an agent contact a previous client without having to consult the Do Not Call Registry? —Answer: If he represented the buyer within the previous 18 months Washington State's real estate agency law does not address which of the following? —Answer: Penalties for not disclosing agency status L's broker's license was issued on October 16. L's license will expire at the end of: a. this year, on Dec 31st b. next year, on Dec 31st c. one year, on Oct 16th d. Two years, on Oct 16th —Answer: d. Two years, on Oct 16th © 2025 All rights reserved What does the expression "Caveat Emptor" mean? —Answer: Let the buyer beware 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 The best definition of a fee simple estate is: —Answer: The greatest interest one can own in land What is the best way to ascertain if a physical object encroaches on a boundary line? —Answer: Order a survey What type of title does a buyer receive to the property once the sales contract has been signed? —Answer: Equitable An appraiser makes projections about how the population of a metropolitan area will grow and how much residents' income will increase, using data about both basic and non-basic industries. This is known as: —Answer: economic-base analysis An agent is ready to list a farm that was previously owned by a deceased woman with four adult children. Two of the children asked the agent to take the listing. Before taking the listing, the agent should: —Answer: Check the public records to see who owns the property A developer wants a construction loan to build 20 homes. The lender requires a take-out commitment. This means the developer needs: —Answer: a permanent lender who will provide financing once construction is complete When determining the value of a vacant lot, an appraiser will typically use the: a. cost approach b. income approach c. sales comparison approach d. summation approach —Answer: c. sales comparison approach © 2025 All rights reserved Which of the following is the proper method for determining the gross income multiplier? a. Divide monthly income by sales price b. Divide annual income by sales price c. Divide sales price by gross income d. Divide assessed value by gross income —Answer: c. Divide sales price by gross income In an option: A. no consideration is required B. the seller is the optionee and the buyer is the optionor C. the seller must apply the option money to the purchase price if the optionee exercises her option D. the option agreement must clearly state all the terms and conditions of the sale —Answer: D. the option agreement must clearly state all the terms and conditions of the sale Who is responsible for preparing and conducting real estate licenses examinations? a. The Department of Licensing b. The Director c. The attorney general d. The Real Estate Commission —Answer: d. The Real Estate Commission An easement appurtenant is one that: a. can only be created by prescription © 2025 All rights reserved b. is of more benefit to the servant tenant than the dominant tenant c. is given to a commercial tenant d. runs with the land —Answer: d. runs with the land A new subdivision is built in a rural area, outside urban growth boundaries. It is set up so that houses are situated on small lots, with most of the subdivision's land taken up by green space that is held by all owners in common. This is an example of: —Answer: Rural Cluster Development How many feet are in a mile? —Answer: 5280 feet in a mile Which of the following instance is an example of an agency relationship terminated by operation of law? a. A broker renounces angency b. a client revokes the agency c. Broker and client mutually agree to end the agency d. The subject property, a single family residence burns down. —Answer: d. The subject property, a single family residence burns down. An affiliated licensee rarely works in the firm's main office. The records for the licensee's transactions must be kept in: —Answer: The Firm's office Maria buys a home in a subdivision that is subject to restrictive covenants. The city Maria lives in allows fences, but the subdivision's restrictive covenants don't. Of the following, which is true? —Answer: The deed's restrictive covenants take precedence over the city because they are more restrictive. For income tax purposes, a homeowner can deduct: a. property taxes © 2025 All rights reserved b. principal payments on a mortgage c. capital expenditures d. the adjusted basis —Answer: a. property taxes Buyer Perry would like to assume Seller Joan's loan with ABC Mortgage Company, in a way that would mean no further liability for Joan. To accomplish this, Perry and Joan should use a: —Answer: release of liability signed by ABC Mortgage Most conventional loans contain an alienation clause which prohibits: a. the sale of the property b. prepayment of the loan c. the loan from being assumed w/out the lenders consent d. increase or decrease in the loan's interest rate. —Answer: c. the loan from being assumed w/out the lenders consent a corporation takes title to real property through a/an? a. estate in severalty b. joint tenancy c. tenancy at will d. a corporation may not take title —Answer: a. estate in severalty A $4,500 earnest money check bounces because of insufficient funds. The first thing the broker should do is: —Answer: Notify the principals 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 © 2025 All rights reserved this loan subject to Truth in Lending Act disclosure rules? —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: a. a principals residence b. financed over a 30-yr loan term c. owner-occupied d. used in a business or trade —Answer: d. used in a business or trade 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: —Answer: conditional use permit A real estate contract, in order to be valid, must include: a. a contingency b. a "time is of the essence" clause c. an option d. consideration —Answer: d. consideration