AYPO Real Estate Law of Contracts Exam 2025 (Actual Exam) | All
Questions and Correct Answers | Graded A+ | Verified Answers | Latest
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After passing state exam, you have ___ days to apply for a Temporary License, either on an Active or
Inactive basis. - (CORRECT ANSWER)90
Temporary Licenses are only valid for ___ year(s), and cannot be renewed. - (CORRECT ANSWER)1
For an Original License, you must pass a ___ hour post-license course. - (CORRECT ANSWER)30
If Temporary License is ACTIVE, the post-license course must be completed within ___ months. -
(CORRECT ANSWER)6.
If the post-license course is not completed within ___ year(s), the Temporary License lapses. This period
begins on the FIRST DAY of the month AFTER passing the state exam. - (CORRECT ANSWER)1
For Broker's License, applicant must have ACTIVE Salesperson License for ___ out of ___ years
immediately preceding the application. - (CORRECT ANSWER)2/3
The fee to transfer your Salesperson License to a new Qualifying Broker is $___. - (CORRECT
ANSWER)$25
An owner's mortgage includes a clause requiring a prepayment penalty. Three percent of any
outstanding loan principal would be charged by the lender if the owner paid off the principal before the
scheduled time. Payments were $296.88, due on the first of each month, and included both principal
and interest in arrears at 8% per annum. After the owner's July 1 payment, her loan balance was
$8,946.23. On August 1, after handing her lender the check for her August 1 payment, the owner paid
off the entire remaining loan balance. What is the approximate prepayment penalty? - (CORRECT
ANSWER)The monthly house payment, $296.88, includes both interest and principal. The prepayment
penalty is charged only on the principal, not on interest. Therefore, one must determine how much the
new principal loan balance will
be after the August 1st house payment is made. The calculations are as follows:
, 2
The loan balance after the July 1 payment is $8,946.23 x 0.08 interest rate = $715.70 a year ÷ 12 months
= $59.64 interest for July.
$296.88 monthly house payment $59.64 interest = 237.24 principal payment on August 1 payment.
$8946.23 loan balance $237.24 principal paid in August leaves new principal balance of $8708.99 after
August 1st payment.
This is the amount on which the prepayment penalty will be based:
$8708.99 x 0.03 penalty = $261.27
A managing broker requires his licensees to mention a particular lender to buyers. The broker has a
financial interest in this particular mortgage lender. Which of the following should the licensee
recommend to buyers? - (CORRECT ANSWER)Consider this lender, disclosing the broker's interest, and
other lenders.
Licensees should generally avoid recommending only one lender, and if a financial interest is involved, it
should be disclosed. Since rates can change, a licensee most likely would not know which lender has the
best rates. Licensees may provide a list of lenders without having to display the lenders in any particular
order.
When using the sales comparison approach, a licensee determines that a comparable property's tile
floor in the entry hall is worth $2,000. The subject property does not have tile floors at all. Which of the
following adjustments should be made? - (CORRECT ANSWER)The comparable should be adjusted
downward.
In the sales comparison (market data) approach to appraisal, it is always the comparables that are
adjusted, never the subject property. If the comparable is better than the subject property, the
, 3
adjustment to it is downward. If the comparable is not as good as the subject property, the adjustment
to it would be upward.
On February 1, a licensee with ABC Realty takes a 3month exclusive right-to-sell listing on a house. On
March 1, the licensee moves out of state and inactivates his license. What happens to this listing? -
(CORRECT ANSWER)It remains a valid exclusive right-to-sell listing contract with ABC Realty.
The listing belongs to the brokerage firm; it does not belong to an individual licensee. The licensee takes
the listing on behalf of the firm, and, if the licensee leaves or becomes unlicensed during the listing, the
listing would remain in whatever form it was originally taken. The listing would still be in effect with the
firm until it expires or is terminated.
A person bought property from a seller and received a general warranty deed. Two years later, the
seller's brother came forth and claimed he had an ownership interest in the property. The brother
stated he knew the court would uphold his interest. In a general warranty deed, the buyer is protected
from this situation by the covenant-- - (CORRECT ANSWER)--of seisin.
Although all covenants in a general warranty deed work together to protect the buyer, the covenant of
seisin specifically guarantees that the owner owned the real estate at the time of the sale and had the
right to convey it.
A listing licensee has what obligations to a buyer? - (CORRECT ANSWER)A licensee's duties to a buyer or
customer are fairness, honesty, and accuracy.
A builder is obtaining a construction loan of $95,000 for a single-family residence. Under the Truth-in-
Lending Act, disclosure of a prepayment penalty by the lender is-- - (CORRECT ANSWER)--not required
for a business loan.
The Truth-in-Lending Act is applicable to individual home owners, but it does not apply to a construction
loan for a builder because the loan is for a business purpose.
, 4
To qualify as a tax-deferred exchange, a property must be-- - (CORRECT ANSWER)--held for productive
use in trade or business.
To defer the gain on the sale of an income-producing property, a tax-deferred exchange may be used.
An office building is valued at $800,000 when the annual net income is capitalized at a rate of 20%. If the
operating expenses and vacancy and rent loss total 40% of the gross income, what is the approximate
gross annual income? - (CORRECT ANSWER)$266,667
The income approach to value is calculated as follows:
Annual net income divided by capitalization rate equals value.
Therefore, net income ÷ 0.2 $800,000.
The net income is $800,000 × 0.2 = $160,000.
The net income is 60% (100% 40%) of the gross income.
The gross income is $160,000 ÷ 0.6 = $266,667.
AREC has ___ commissioners; each commissioner serves a ___ year term, with no more than ___
consecutive terms. - (CORRECT ANSWER)9 commissioners; 5 years per term; 2 consecutive term max.
AREC commissioners are appointed by the ___ with the advice and consent of the ___. - (CORRECT
ANSWER)Governor; Senate.
Questions and Correct Answers | Graded A+ | Verified Answers | Latest
Version (Just Released)
After passing state exam, you have ___ days to apply for a Temporary License, either on an Active or
Inactive basis. - (CORRECT ANSWER)90
Temporary Licenses are only valid for ___ year(s), and cannot be renewed. - (CORRECT ANSWER)1
For an Original License, you must pass a ___ hour post-license course. - (CORRECT ANSWER)30
If Temporary License is ACTIVE, the post-license course must be completed within ___ months. -
(CORRECT ANSWER)6.
If the post-license course is not completed within ___ year(s), the Temporary License lapses. This period
begins on the FIRST DAY of the month AFTER passing the state exam. - (CORRECT ANSWER)1
For Broker's License, applicant must have ACTIVE Salesperson License for ___ out of ___ years
immediately preceding the application. - (CORRECT ANSWER)2/3
The fee to transfer your Salesperson License to a new Qualifying Broker is $___. - (CORRECT
ANSWER)$25
An owner's mortgage includes a clause requiring a prepayment penalty. Three percent of any
outstanding loan principal would be charged by the lender if the owner paid off the principal before the
scheduled time. Payments were $296.88, due on the first of each month, and included both principal
and interest in arrears at 8% per annum. After the owner's July 1 payment, her loan balance was
$8,946.23. On August 1, after handing her lender the check for her August 1 payment, the owner paid
off the entire remaining loan balance. What is the approximate prepayment penalty? - (CORRECT
ANSWER)The monthly house payment, $296.88, includes both interest and principal. The prepayment
penalty is charged only on the principal, not on interest. Therefore, one must determine how much the
new principal loan balance will
be after the August 1st house payment is made. The calculations are as follows:
, 2
The loan balance after the July 1 payment is $8,946.23 x 0.08 interest rate = $715.70 a year ÷ 12 months
= $59.64 interest for July.
$296.88 monthly house payment $59.64 interest = 237.24 principal payment on August 1 payment.
$8946.23 loan balance $237.24 principal paid in August leaves new principal balance of $8708.99 after
August 1st payment.
This is the amount on which the prepayment penalty will be based:
$8708.99 x 0.03 penalty = $261.27
A managing broker requires his licensees to mention a particular lender to buyers. The broker has a
financial interest in this particular mortgage lender. Which of the following should the licensee
recommend to buyers? - (CORRECT ANSWER)Consider this lender, disclosing the broker's interest, and
other lenders.
Licensees should generally avoid recommending only one lender, and if a financial interest is involved, it
should be disclosed. Since rates can change, a licensee most likely would not know which lender has the
best rates. Licensees may provide a list of lenders without having to display the lenders in any particular
order.
When using the sales comparison approach, a licensee determines that a comparable property's tile
floor in the entry hall is worth $2,000. The subject property does not have tile floors at all. Which of the
following adjustments should be made? - (CORRECT ANSWER)The comparable should be adjusted
downward.
In the sales comparison (market data) approach to appraisal, it is always the comparables that are
adjusted, never the subject property. If the comparable is better than the subject property, the
, 3
adjustment to it is downward. If the comparable is not as good as the subject property, the adjustment
to it would be upward.
On February 1, a licensee with ABC Realty takes a 3month exclusive right-to-sell listing on a house. On
March 1, the licensee moves out of state and inactivates his license. What happens to this listing? -
(CORRECT ANSWER)It remains a valid exclusive right-to-sell listing contract with ABC Realty.
The listing belongs to the brokerage firm; it does not belong to an individual licensee. The licensee takes
the listing on behalf of the firm, and, if the licensee leaves or becomes unlicensed during the listing, the
listing would remain in whatever form it was originally taken. The listing would still be in effect with the
firm until it expires or is terminated.
A person bought property from a seller and received a general warranty deed. Two years later, the
seller's brother came forth and claimed he had an ownership interest in the property. The brother
stated he knew the court would uphold his interest. In a general warranty deed, the buyer is protected
from this situation by the covenant-- - (CORRECT ANSWER)--of seisin.
Although all covenants in a general warranty deed work together to protect the buyer, the covenant of
seisin specifically guarantees that the owner owned the real estate at the time of the sale and had the
right to convey it.
A listing licensee has what obligations to a buyer? - (CORRECT ANSWER)A licensee's duties to a buyer or
customer are fairness, honesty, and accuracy.
A builder is obtaining a construction loan of $95,000 for a single-family residence. Under the Truth-in-
Lending Act, disclosure of a prepayment penalty by the lender is-- - (CORRECT ANSWER)--not required
for a business loan.
The Truth-in-Lending Act is applicable to individual home owners, but it does not apply to a construction
loan for a builder because the loan is for a business purpose.
, 4
To qualify as a tax-deferred exchange, a property must be-- - (CORRECT ANSWER)--held for productive
use in trade or business.
To defer the gain on the sale of an income-producing property, a tax-deferred exchange may be used.
An office building is valued at $800,000 when the annual net income is capitalized at a rate of 20%. If the
operating expenses and vacancy and rent loss total 40% of the gross income, what is the approximate
gross annual income? - (CORRECT ANSWER)$266,667
The income approach to value is calculated as follows:
Annual net income divided by capitalization rate equals value.
Therefore, net income ÷ 0.2 $800,000.
The net income is $800,000 × 0.2 = $160,000.
The net income is 60% (100% 40%) of the gross income.
The gross income is $160,000 ÷ 0.6 = $266,667.
AREC has ___ commissioners; each commissioner serves a ___ year term, with no more than ___
consecutive terms. - (CORRECT ANSWER)9 commissioners; 5 years per term; 2 consecutive term max.
AREC commissioners are appointed by the ___ with the advice and consent of the ___. - (CORRECT
ANSWER)Governor; Senate.
