ROCKWELL FUNDAMENTAL UPDATED EXAM SCRIPT
QUESTIONS AND ANSWERS RATED A+
✔✔A licensee hears that a religious group will be opening a commune in a
neighborhood. He begins contacting neighbours and telling them about this,
encouraging them to list their properties with him before property values decline. This is:
a. blockbusting
b. redlining
c. steering
d. legal - ✔✔A. blockbusting
✔✔An investor is interested in purchasing a multi-family dwelling. He would most likely
want to look for a:
a. property that will offer a low rate of return
b. property where the rents are similar to comparable properties in the same area
c. property with a high vacancy rate
d. rent-controlled property - ✔✔b. property where the rents are similar to comparable
properties in the same area.
✔✔Zoning requirements state that a lot must be at least four times the size of the
building located on the lot. An architect draws up plans for a building that is 20,000
square feet. At least how many aces does the lot need to be?
a. 1
b. 2
c. 3
d. 4 - ✔✔B. 2
(20,000 x 4 = 80,000 sq.ft)
In order to exceed the required 80,000, you need a 2 acre lot. (43,560 x 2 = 87,120
sq.ft)
✔✔Tests to distinguish a fixture from a personal property include all of the following,
EXCEPT:
a. method of attachment
b. cost of the item
c. intent of the annexor
d. adaptability - ✔✔B. cost of the item
✔✔A primary advantage of owning a property in severalty is:
a. flexibility
b. inheritability
c. joint occupancy
d. shared risk - ✔✔A. flexibility
,✔✔All of the following are requirements for a valid deed, EXCEPT:
a. acknowledgement
b. adequate legal description
c. signature of grantor
d. words of conveyance - ✔✔A. acknowledgement
✔✔A homeowner has been sharing with a friendly neighbour the use of a driveway that
crosses both of their properties. However, the neighbour is about to move out, and the
remaining homeowner would like to make sure that she can continue to use the
driveway even if the new neighbour is not amenable to that. The homeowner should
request a/an:
a. easement
b. encumbrance
c. license
d. profit - ✔✔A. easement
✔✔A local ordinance states that no sign can extend more than two feet above the
roofline. The Morgans want to put a sign on their roof, but the sign is six feet high. To
install their sign legally, the Morgans must apply for a:
a. sign clearance
b. nonconforming use permit
c. variance
d. residual - ✔✔C. variance
✔✔A property is listed for $275,000. The buyers offer $265,000 and insist that the
gourmet six-burner stove remain with the property. When the signed offer is presented
to the sellers, the sellers accept the price, but want to take the stove with them. They
cross out the item about the stove, sign the form, and return it to the buyers. Under
these circumstances:
a. there is now a valid contract that has been signed by all parties
b. the offer has been invalidated and the buyers will need to being looking for a new
property
c. the sellers can turn around and accept the original offer, if the buyers won't go along
with giving up the stove
d. the original offer is terminated, and the sellers have made a counteroffer - ✔✔D. the
original offer is terminated, and the sellers have made a counteroffer
✔✔A seller's agent, upon meeting with a prospective buyer, becomes concerned that
the buyer is unlikely to be financially qualified. The agent should:
a. perform a full examination of the buyers finances
b. refuse to accept that buyers offer
c. relay those concerns to the seller, who will decide
d. withdraw from the listing - ✔✔C. relay those concerns to the seller, who will decide
✔✔Net listings are strongly discouraged because they are likely to be unfair to the:
,a. broker
b. buyer
c. seller
d. all of the above - ✔✔C. seller
✔✔A purchase and sale agreement is for $150,000, with 80% financing, closing in 30
days with possession at closing, and a rent provision for possession after closing. This
is an example of a/an:
a. acceptance
b. contract with contingencies
c. counteroffer
d. unilateral contract - ✔✔B. contract with contingencies
✔✔A promissory note that is secured by a mortgage is:
a. a defeasance agreement
b. primary evidence of the debt
c. a guarantee of payment
d. security for the loan - ✔✔B. primary evidence of the debt
✔✔Which of the following is an advantage of using private mortgage insurance, from a
borrowers perspective?
a. it allows for a smaller downpayment
b. it protects against default
c. it protects the buyers title against other claimants
d. it reimburses a borrower for property damage from problems like fire or flooding -
✔✔A. it allows for a smaller downpayment
✔✔The market price of a property would be best defined as:
a. the amount paid to obtain the property
b. the initial basis, plus capital improvements and minus depreciation
c. the price that the property would likely bring in a sale under normal circumstances
d. the value of the property to a particular owner - ✔✔A. the amount paid to obtain the
property
✔✔Bronson agreed to sell his house to the Hatchers. Closing is scheduled for May 15.
Bronson already paid the taxes for the entire year, but the Hatchers are assuming
responsibility for the taxes as of the closing date. The settlement statement will prorate
the taxes as a:
a. credit to the buyer, and debit to the seller
b. debit to the buyer, and credit to the seller
c. debit to the seller
d. credit to the buyer - ✔✔B. debit to the buyer, and credit to the seller
✔✔An agent shows his customer, who is Asian-American, homes only in
neighborhoods that are predominantly Asian-American. This is called:
, a. panic selling
b. steering
c. blockbusting
d. redlining - ✔✔B. Steering
✔✔A property manager will be paid 3% of a property's annual gross rental income. The
rent paid is $24,000 base rent; $12,000 percentage rent; $8,000 maintenance, taxes,
and insurance (triple net). The commission amount that the manager will receive is:
a. $720
b. $1,080
c. $1,320
d. $1,200,000 - ✔✔B. $1,080
calculate rent paid each year: ($24,000 + $12,000 = $36,000)
calculate commission amount: ($36,000 x 0.03 = $1.,080)
✔✔A borrower is purchasing a $300,000 home. She will be using a loan with an LTV of
80%. She will also be paying 3 discount points. What is the total amount of cash that
she will need to bring to closing?
a. $7,200
b. $13,200
c. $67,200
d. $69,000 - ✔✔c. $67,200
calculate size of loan: ($300,000 x .80 = $240,000)
($300,000 - $240,000 = $60,000)
calculate discount point using loan amount: ($240,000 x 0.03 = $7,200)
($60,000 + $7,200 = $67,200)
✔✔A rectangular parcel of land, starting from the point of beginning, measures 180 ft
north, then 90 feet east, then 180 feet south. What is the length and direction of the last
side?
a. 90 feet east
b. 90 feet west
c. 180 feet north
d. 180 feet west - ✔✔B. 90 feet west
✔✔A seller finds that he cannot provide marketable titles because of a cloud on the title.
To clear the title, he should file a/an:
a. adverse passion claim
b. quiet title action
c. quitclaim deed
d. partition suit - ✔✔B. quiet title action
QUESTIONS AND ANSWERS RATED A+
✔✔A licensee hears that a religious group will be opening a commune in a
neighborhood. He begins contacting neighbours and telling them about this,
encouraging them to list their properties with him before property values decline. This is:
a. blockbusting
b. redlining
c. steering
d. legal - ✔✔A. blockbusting
✔✔An investor is interested in purchasing a multi-family dwelling. He would most likely
want to look for a:
a. property that will offer a low rate of return
b. property where the rents are similar to comparable properties in the same area
c. property with a high vacancy rate
d. rent-controlled property - ✔✔b. property where the rents are similar to comparable
properties in the same area.
✔✔Zoning requirements state that a lot must be at least four times the size of the
building located on the lot. An architect draws up plans for a building that is 20,000
square feet. At least how many aces does the lot need to be?
a. 1
b. 2
c. 3
d. 4 - ✔✔B. 2
(20,000 x 4 = 80,000 sq.ft)
In order to exceed the required 80,000, you need a 2 acre lot. (43,560 x 2 = 87,120
sq.ft)
✔✔Tests to distinguish a fixture from a personal property include all of the following,
EXCEPT:
a. method of attachment
b. cost of the item
c. intent of the annexor
d. adaptability - ✔✔B. cost of the item
✔✔A primary advantage of owning a property in severalty is:
a. flexibility
b. inheritability
c. joint occupancy
d. shared risk - ✔✔A. flexibility
,✔✔All of the following are requirements for a valid deed, EXCEPT:
a. acknowledgement
b. adequate legal description
c. signature of grantor
d. words of conveyance - ✔✔A. acknowledgement
✔✔A homeowner has been sharing with a friendly neighbour the use of a driveway that
crosses both of their properties. However, the neighbour is about to move out, and the
remaining homeowner would like to make sure that she can continue to use the
driveway even if the new neighbour is not amenable to that. The homeowner should
request a/an:
a. easement
b. encumbrance
c. license
d. profit - ✔✔A. easement
✔✔A local ordinance states that no sign can extend more than two feet above the
roofline. The Morgans want to put a sign on their roof, but the sign is six feet high. To
install their sign legally, the Morgans must apply for a:
a. sign clearance
b. nonconforming use permit
c. variance
d. residual - ✔✔C. variance
✔✔A property is listed for $275,000. The buyers offer $265,000 and insist that the
gourmet six-burner stove remain with the property. When the signed offer is presented
to the sellers, the sellers accept the price, but want to take the stove with them. They
cross out the item about the stove, sign the form, and return it to the buyers. Under
these circumstances:
a. there is now a valid contract that has been signed by all parties
b. the offer has been invalidated and the buyers will need to being looking for a new
property
c. the sellers can turn around and accept the original offer, if the buyers won't go along
with giving up the stove
d. the original offer is terminated, and the sellers have made a counteroffer - ✔✔D. the
original offer is terminated, and the sellers have made a counteroffer
✔✔A seller's agent, upon meeting with a prospective buyer, becomes concerned that
the buyer is unlikely to be financially qualified. The agent should:
a. perform a full examination of the buyers finances
b. refuse to accept that buyers offer
c. relay those concerns to the seller, who will decide
d. withdraw from the listing - ✔✔C. relay those concerns to the seller, who will decide
✔✔Net listings are strongly discouraged because they are likely to be unfair to the:
,a. broker
b. buyer
c. seller
d. all of the above - ✔✔C. seller
✔✔A purchase and sale agreement is for $150,000, with 80% financing, closing in 30
days with possession at closing, and a rent provision for possession after closing. This
is an example of a/an:
a. acceptance
b. contract with contingencies
c. counteroffer
d. unilateral contract - ✔✔B. contract with contingencies
✔✔A promissory note that is secured by a mortgage is:
a. a defeasance agreement
b. primary evidence of the debt
c. a guarantee of payment
d. security for the loan - ✔✔B. primary evidence of the debt
✔✔Which of the following is an advantage of using private mortgage insurance, from a
borrowers perspective?
a. it allows for a smaller downpayment
b. it protects against default
c. it protects the buyers title against other claimants
d. it reimburses a borrower for property damage from problems like fire or flooding -
✔✔A. it allows for a smaller downpayment
✔✔The market price of a property would be best defined as:
a. the amount paid to obtain the property
b. the initial basis, plus capital improvements and minus depreciation
c. the price that the property would likely bring in a sale under normal circumstances
d. the value of the property to a particular owner - ✔✔A. the amount paid to obtain the
property
✔✔Bronson agreed to sell his house to the Hatchers. Closing is scheduled for May 15.
Bronson already paid the taxes for the entire year, but the Hatchers are assuming
responsibility for the taxes as of the closing date. The settlement statement will prorate
the taxes as a:
a. credit to the buyer, and debit to the seller
b. debit to the buyer, and credit to the seller
c. debit to the seller
d. credit to the buyer - ✔✔B. debit to the buyer, and credit to the seller
✔✔An agent shows his customer, who is Asian-American, homes only in
neighborhoods that are predominantly Asian-American. This is called:
, a. panic selling
b. steering
c. blockbusting
d. redlining - ✔✔B. Steering
✔✔A property manager will be paid 3% of a property's annual gross rental income. The
rent paid is $24,000 base rent; $12,000 percentage rent; $8,000 maintenance, taxes,
and insurance (triple net). The commission amount that the manager will receive is:
a. $720
b. $1,080
c. $1,320
d. $1,200,000 - ✔✔B. $1,080
calculate rent paid each year: ($24,000 + $12,000 = $36,000)
calculate commission amount: ($36,000 x 0.03 = $1.,080)
✔✔A borrower is purchasing a $300,000 home. She will be using a loan with an LTV of
80%. She will also be paying 3 discount points. What is the total amount of cash that
she will need to bring to closing?
a. $7,200
b. $13,200
c. $67,200
d. $69,000 - ✔✔c. $67,200
calculate size of loan: ($300,000 x .80 = $240,000)
($300,000 - $240,000 = $60,000)
calculate discount point using loan amount: ($240,000 x 0.03 = $7,200)
($60,000 + $7,200 = $67,200)
✔✔A rectangular parcel of land, starting from the point of beginning, measures 180 ft
north, then 90 feet east, then 180 feet south. What is the length and direction of the last
side?
a. 90 feet east
b. 90 feet west
c. 180 feet north
d. 180 feet west - ✔✔B. 90 feet west
✔✔A seller finds that he cannot provide marketable titles because of a cloud on the title.
To clear the title, he should file a/an:
a. adverse passion claim
b. quiet title action
c. quitclaim deed
d. partition suit - ✔✔B. quiet title action
