Rockwell Real Estate Final Exam Questions and Answers Latest 2023/2024

Rockwell Real Estate Final Exam Questions and Answers Latest 2023/2024. The interest that passes to a designated person upon the death of a life tenant (or other measuring life) is a fee simple estate. Will has a remainder interest only up until the moment Ben dies. Once Ben is dead, Will's interest immediately becomes a fee simple interest. A buyer accepts a general warranty deed from a seller, believing 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 general warranty deed been violated? A. No, the only covenant in a general warranty deed promises that the previous owner didn't encumber the property B. No, the principle of caveat emptor controls matters concerning a deed C. Yes, there is a covenant providing equitable title D. Yes, there is a covenant providing marketable title D. Yes, there is a covenant providing marketable title The general warranty deed contains a covenant of the right to convey, meaning that the grantor either has title to the interest or is an agent of the owner with the authority to transfer the interest. A plaintiff files a lawsuit involving a property and also files a separate document intended to provide notice of the lawsuit. This recorded notice of a pending legal action is called a/ an: A. Abstract of judgement B. Petition for alienation Rockwell Exam Real Estate Classes WA Final Exam Questions and Answers Latest 2023/2024 C. Writ of execution D. Lis Pendens D. Lis Pendens A Lis Pendens is a recorded notice stating that there is a lawsuit pending that may affect title to the defendant's real estate and that could bind the purchaser of the property. A movie theater was built ten years ago. If the neighborhood is now zoned entirely residential, the movie theater: A. will have to be torn down B. must be remodeled to better conform to the neighborhood's intended use C. will be allowed to continue if the owner obtains a conditional use permit D. will be allowed to continue since it was built before the new zoning law went into effect D. Will be allowed to continue since it was built before the new zoning law went into effect The movie theater is an example of a nonconforming use, which predated a zoning change. Nonconforming uses are generally allowed to continue, although they may not be enlarged, or resumed if they are stopped. In a bilateral contract: A. a duty wil be performed by only one party B. one party can restrict the performance of another party C. two parties have exchanged promises, and both parties are obligated to perform D. all parties have fully performed their duties C. two parties have exchanged promises, and both parties are obligated to perform In a bilateral contract, two parties have exchanged promises and both parties are obligated to perform. (Bi=two way) Gerald engages a licensee to list his property and find a buyer for it. In this context, the licensee is acting as a: A. General agent B. power of attorney C. property manager D. special agent D. Special Agent When a licensee represents a seller in a single transaction, and is authorized to perform typical duties associated with listing a property, she acts as a special agent. A licensee located what seems like a ready, willing, and able buyer. However, the deal falls through at closing because the buyer cant obtain necessary financing. At the same time, though, a seller turns out to be unable to provide marketable title. Does the seller still owe a commission to the listing agent in this case? A. No, because the sale didn't close B. No, because there was no ready, willing, and able buyer C. Yes, because the licensee saw the transaction through the closing date D. Yes, because the seller has an absolute duty to provide marketable title at closing B. No, because there was no ready, willing, and able buyer The most important rule of determining whether a seller is obligated to pay a commission is whether a ready, willing, and able buyer was found during the listing period. This would take precedence over the seller's failure to provide marketable title. A buyer who does not have financial ability to complete the purchase does not qualify as "able." Legally, how much earnest money must be submitted with a valid purchase and sale agreement? A. 1% of the purchase price B. 3% of the purchase price C. 5% of the purchase price, but the amount over 3% cannot be retained as liquidated damages D. No earnest money is required D. No earnest money is required While almost all buyers will include an earnest money deposit along with the purchase and sale agreement, that is because of tradition. There is no contractual or legal requirement of a particular amount, or any earnest money at all. A mortgage often includes a clause requiring the lender's consent before another borrower may assume the mortgage. This clause is called a/ an: A. power of sale clause B. subordination clause C. defeasance clause D. alienation clause (due-on-sale clause) D. Alienation clause (due-on-sale clause) an Alienation clause prevents assumption without the lender's consent by stipulating that the loan balance is due and payable in full if the property is sold. A buyer is unfamiliar with the concept of discount points and asks a licensee to explain. The licensee responds " Discount points are used to replace funds that are being held by the Federal Reserve, so that more funds are available to lend." Is that description correct? A. No, discount points are used to increase yield for lenders who will sell the loans on the secondary market B. No, discount points are used to pay brokers' commissions C. Yes, banks hold discount points in escrow until sufficient funds have been accumulated to make more loans D. Yes, discount points lower interest rates, which make loans more affordable for everyone A. No, discount points are used to increase the yield for lenders who will sell the loans on the secondary market. Discount points are paid to a lender in order to increase the lender's upfront yield on a loan. Typically, the lender will compensate for this by charging a below-market interest rate. A small house is situated n a larger lot in a mixed-use neighborhood. The city decides that the area will, in the future, be zoned commercial. What will most likely happen to the property's value? A. It will increase, because of the fears of new businesses built nearby B. It will increase in anticipation of the changing uses C. No effect, since the house is a nonconforming use D. No effect, until the change actually occurs B. It will increase, in anticipation of the changing uses. Under the principle of anticipation, a property's value is based on expectations of what will happen to the property in the future. Generally commercial land is worth more than residential land. A small house on a large lot would be viewed as a tear down. 00:0201:15 The Real Estate Settlement Procedure Act ( RESPA) applies to: A. contracts for deed B. seller-financed transactions C. commercial and residential mortgages D. residential first mortgages D. residential first mortgages RESPA applies to mortgages secured by a dwelling with up to four units. It does not apply to commercial transactions or seller financing. (A contract for deed, which is the same thing as a land contract, can only be used in a seller-financed transaction.) A homeowner bought his home for $150,000. Ten years later, he refinanced his mortgage and borrowed $100,000. Which of the following is true for this type of property? A. Interest on the difference between the original loan amount and the refinanced amount is not deductible B. Interest on only half of the difference between the original amount and refinanced amount is deductible C. Interest on loans such as this one for the purchase or refinance of a principal residence is deductible D. Interest deductibility will depend on the borrower's tax bracket C. Interest on loans such as this one for the purchase or refinance of a principal residence is deductible For a principal residence, interest on a purchase or refinance loan is fully deductible. Interest on a home equity loan of up to $100,000 is also deductible, regardless of the size of the purchase loan, and regardless of the taxpayer's income. Under Title VIII of the Civil RIghts act of 1968, certain transactions are exempt. Which one of the situations below would be exempted and not a violation of the act?] A. A church-owned apartment complex where the language in the lease restrict tenancy to memers of a specific national orgin B. Members of a certain ethnic group are denied lodging in facilities operated by a private club for commercial purposes C. An unlisted home that is for sale by owner, where the only advertising is a sign in front of the property that simply reads " For Sale" and the owner owns only one other home D. An Absentee owner who rents units in a four-plex without the help of a real estate agent C. An unlisted hoe that is for sale by woenr, where the only advertising is a sign in front of the property that simply reads "For Sale" and the owner owns only one other home The Federal Fair Housing Act ( Title VIII of the Civil Rights Act of 1968) does not apply to the sale or rental of a single-family home by its owner, provided that the owner doesn't own more than three such homes, no real estate agent is used, and no discriminatory advertising is used. As a property manager, you may: A. advertise that units are available, even when their not B. use diferent application forms for minority applicants C. require credit checks for some applicants, but not others D. offer inducements to prospective tenants D. offer inducements to prospective tenants Property managers may offer inducements to attract tenants; waiving the first month's rent. A property manager should perform credit checks on all prospective tenants. Price fixing is prohibited by the: A. state usuary act B. federal Regulation Z C. Sherman Antitrust Act and state antitrust laws D. federal Real Estate Settlement Procedures Act C. Sherman Antitrust Act and state antitrust laws The Sherman Antitrust Act and state antitrust laws prohibits price fixing, group boycotts, market allocation, and tie-in arrangements. A metes and bounds description reads as follows: "started at the intersection of Route 120 and Wells Lane. Proceed due south 1,815 feet, then due east 1,200 feet. Proceed due north 1,815 feet, then return west to point of beginning." How many acres is this property? A. 5 B. 20 C. 50 D. 100 C. 50 Sketch as described. Area = Length x Width. Multiple 1,815 x 1,200 = 2,178,000 sq. ft. convert to acreage by dividing by 43,560, which equals 50. (43,560 equals square feet in one acre.) A survey has been completed, and stakes have been placed marking off the property. The survey can be used to: A. construct fences and driveways B. measure soil stability C. determine freehold interests D. verify known liens A. construct fences and driveways survery is used to determine where exactly a property's boundary lines fall. Erin entered into a lease that begins February 1, and is to end on January 31 three years later. This leasehold is a/an: A. estate for years B. tenancy at sufferance C. periodic tenancy D. estate from year to year A. estate for years An estate for years begins on a certain date an ends ona certain date. Which of the following is true about survey's? A. they determine placement of improvements on a property B. They identify setback lines from property boundaries C. The protect against easements by prescription D. They reveal encroachments not of public record D. They reveal encroachments not of public record A survey may reveal matters that are not part of the public record that would only be discovered through a personal inspection, such as encroachments. Why they are performed as part of obtaining extended coverage title insurance policy. Allen begins providing construction services on May 2 and records a construction lien on May 5. Bart begins providing services on May 3 and records a construction lien on May 4. On May 10, a judgment lien against the property is recorded. The property's owner also receives on May 10 that he is in arrears on his property tax payments. Which lien has lien priority? A. Allen's Lien B. Bart's Lien C. Judgement Lien D. Tax Lien D. Tax Lien Property tax liens take priority over other liens, including construction liens. Allen's lien still takes priority over Bart's. As a construction lien takes priority based on the date of the start of construction, but the tax lien takes priority over both. Which of the following is true about building designated a historical landmark? A. All lead paint must be removed immediately B. It ay not be willfully destroyed without a permit C. It may only be sold to family members D. It must comply with all local ordinances B. It may not be willfully destroyed without a permit, Historical preservation ordinances may protect exsiting buildings of historical value, and cannot be destroyed or modified without approval from an appropriate local authority. W, age 17, enters into an installment contract to purchase a five-year-old-car fro S, an adult. From a legal point of view, the contract is: A. void B. voidable by W only C. voidable by S only D. voidable by either S or W B. voidable by W only The contract is voidabole by minor, but not by other party. A real estate agent shows a listing to two different buyers. One buyer decided in the early morning to make an offer on the property for less than the listed price. The agent writes up an offer and plans to meet with the seller later in the day. The other buyer the contacts the agent and says she would like to make a full price offer. What should the agent do? A. Meet with the seller a but present the first offer, and then present the second offer only if the first offer is rejected B. Present both offers to the seller at the same time C. Tell the second buyer that her offer is invalid because there is already an offer on the property D. Tell the second buyer that he can only present the first offer to the seller, then he'll present her offer if the first one is rejected B. Present both offers to the seller at the same time A real estate agent has the duty to present all written communications to and from all parties in a timely manner. Failing to inform a party of any offer would be a breach of this duty. This is the law no matter who the agent is representing. To be valid, a listing agreement may be signed by: A. an attorney in fact B. the buyer C. the designated broker only, with the owner's authorization via telephone D. the licensee only A. the attorney in fact a listing agreement needs to be signed both by the listing agent, on the listing firm's behalf, and by the seller. An attorney in fact, someone the seller has appointed in a power of attonrney and granted the authority to convey the property may sign the listing agreement on the seller's behalf. An apartment building was built in 1960. An apartment is being rented to a couple ith no children. Which of the following is true? A. The rules on lead-based paint don't apply unless the tenant have children B. The rules on lead-based paint don't apply to tenants, only purchasers C. The tenants must receive a ten-day window in order to test for lead-based paint D. The tenant should sign the lead-based paint disclosure and receive a pamphlet on lead-based paint D. The tenant should sign the lead-based paint disclosure and receive a pamphlet on lead-based paint A landlord must disclose the location of any known lead-based paint, provide a copy of any report concerning lead-based paint if the property has been inspected, and give tenants a copy of the lead-based paint pamphlet. Tenants do not receive ten-day period in which to have the home tested for lead-based paint that buyers do. Once a contract for deed is signed by the parties, buyer immediately receives: A. a life estate B. legal title C. equitable title D. the right to lease the property C. equitable title A buyer recives equitable title to the property once th eland contracy has been signed. The seller retains legal title. The seller transfers legal title once the buyer finishes paying off the contract/purchase price. A buyer's agent has reportedly seen sales collapse at the last minute because the buyers weren't able to obtain financing. How could he best limit this in the future? A. Qualify all prospects himself B. Refer buyers to a specific lender C.Require prospects to be apprioved first D. Show lower-priced properties C. Require prospects to be approved first Getting preapproved for a loan before beginning the house hunting process is now standard procedure. An agent is performing a competitive market analysis for a potential client, working with four comparables. Which of the following comparables would require an upward adjustment in its sales price? A. Comparable W: is on a larger lot size than the subject property B. Comparable X: lacks a garage which subject property has C. Comparable YL has a swimming pool which subject property lacks D. Comparable Z: is in a superior neighborhood compared to subject property B. Comparabl X: lacks a garage, whih the subject property has WHile performing a CMA, you adjust a comparable's sales price upward if it does not have a feature that the subject property has. A federal law requires lenders to give a booklet "Shopping for your Home Loan" to all prospective borrowers within three business days of loan application. WHat law is this? A. Regulation Z B. Home Loan Disclosure Statement Act C. RESPA D. Truth in lending Act C. RESPA RESPA requires that all lenders give prospective borrowers a copy of the booklet about settlement procedures. A property manager of a ten-unit building shows an apartment to a woman who uses a wheelchair. The woman says that she would need to make some modifications, such as adding a grab bar in the shower and removing some carpeting in the bedroom. The landlord: A. can refuse to rent to the tenant because of the tenant's proposals B. must allow the tenant to make the modifications at her own expense, but can require her to restore the property at the end of the lease C. must allow the tenant to make the modifications at her own expense, and cannot require the tenant to restore the property at the end of the lease D. must make the modifiations and pay for the expenses himself B. must allow the tenant to make the modifications at her own expense, but can require her to restore the property at the end of the lease The Fair Housing Act says that a disabled tenant may make reasonable modifications to a leased property at her own expense. The tenant can be required to restore the premises at the end of the tenancy. To avoid tenant problems, a landlord is best off using a standardized lease form that includes: A. a copy of the Uniform Landlord Tenant Act B. a warranty of quiet enjoyment C. a tenancy at will provision D. specific rules and regulations D. specific rules and regulations including rules that govern the tenancy in the lease itself helps disputes between landlord and tenant. A warehouse is listed at 60 feet long anf 90 feet wide with 15 foot ceilings. The building rents for five cents per cubic foot per month. What is the amount of the monthly rental payment? A. $270 B. $2,700 C. $4,050 D. $405,000 C. $4,050 First calculate the building's volume ( 60 x 90x 15= 81000 cubic feet) Multiply that by monthly rate (81000 x .05= 4050) Chin, a home seller, is talking to his real estate agent. He mentions that he rents the backup generator; it doesn't belong to him. The generator would be considered: A. a fixture B. a natural attachment C. a trade fixture D. personal property D. personal property The generator is he personal property of the company that owns it. While it might remain on the property after possession of the property changes, it still belongs to the rental company and they could reclaim it according to the terms of their contract. Which of the following would characterize a tenancy in common? A. only available to married persons B. Requirments of equal interests C. Right to survivorship D. Tenants can will a partial interest in the property D. Tenants can will a partial interest in th eproperty Unlike joint tenancy, a tenant in common can deed or will her share of the property to someone else. There is no right of survivorship, and no requirements of equal interests, in a tenancy in common. Carl is housebound and never goes outside. Neighbor Salvador plants a veggie garden on a corner of Carl's property that is not visible from the main house. After the required period of time, Salvador claims a prescriptive easement over this portion of Carl's land. This easement is A. not valid, because Salvador had a duty to inform Carl of his intended use B. not valid, because Carl didn't know of the use and had no chance to formally object C. valid, Salvadors' veggie garden is a productive use of land D. valid, the use was open and Carl's knowledge of the use isn't considered D. valid, the use was open and Carl's knowledge of the use isn't considered prescriptive easement requires a use that is open and notorious, rule only requires actions that would be enough to put the typical owner on notice that his property interest is threatened. A licensee is helping her buyer purchase some property. The buyer would like to make an offer on a corner lot that may have once been used as a storage site for a heating oil company. The Licensee should advise her uyer to: A. consult with an environmental expert b. request a spot zone C. seek tentative approval from the Environmental Proptection Agency D. use a condemnation clause in the offer A. consult with an environmental expert