National - Real Estate Exam Practice Questions (Set One)

"Definite duration" refers to: A. Life estate B. Estate for years C. Estate at will D. Periodic tenancy - answer-b. Estate for years "Et ux" means: A. And wife B. And others C. According to value D. None of the above - answer-a. And wife A borrower takes out a mortgage loan that requires monthly payments of $875.70 for 20 years and a final payment of $24,095. This is what type of loan? A. Wraparound B. Accelerated C. Balloon D. Variable - answer-c. Balloon A building was sold for $260,000, with the purchaser putting 10% down and obtaining a loan for the balance. The lending institution charged a 1% loan origination fee. What was the total cash used for the purchase? A. $2,340 B. $23,400 C. $28,340 D. $26,000 - answer-c. $28,340 A buyer is purchasing a condominium unit in a subdivision and obtains financing from a local bank. In this situation, which term BEST describes this buyer? A. Vendor B. Mortgagor C. Grantor D. Lessor - answer-b. Mortgagor A contract that binds one party to its terms but which is unenforceable against the other party is best described as: A. Void contract B. Voidable contract C. Invalid contract D. Partially binding contract - answer-b. Voidable contract A country music singer who owns a cattle ranch enters into a sale and leaseback agreement with a local dentist. Which statement is TRUE of this arrangement? A. The singer retains title to the ranch B. The dentist receives possession of the property C. The dentist is the lessor D. The singer is the lessor - answer-c. The dentist is the lessor A developer built a structure that has six stories. Several years later, an ordinance was passed in that area banning any building six stories or higher. This building is a: A. Nonconforming use B. Situation in which the structure would have to be demolished C. Conditional use D. Violation of the zoning laws - answer-a. Nonconforming use A general warranty deed has: A. No covenants B. Three covenants C. Neither of the above D. Eight covenants - answer-c. Neither of the above A grantor conveys property by delivering a deed. The deed contains five covenants. This is MOST likely a? A. General warranty deed B. Quitclaim deed C. Special warranty deed D. Deed in trust - answer-a general warranty deed A large home that lacks sufficient indoor plumbing suffers from which condition: A. Functional obsolescence B. Curable physical deterioration C. Incurable physical deterioration D. External obsolescence - answer-a. Functional obsolescence A license is an example of? A. Easement B. Encumbrance C. Condemnation D. Police power - answer-b. Encumbrance A licensed real estate sales associate has a written contract with the employing broker that specifies that the sales associate will not be treated as an employee for federal tax purposes. The sales associate's entire income is from sales commissions rather than an hourly wage. Based on these facts, the sales associate will be treated by the IRS as: A. Real estate assistant B. Employee C. Subagent D. Qualified real estate agent - answer-d. Qualified real estate agent A licensee who is charged with a violation of license law: A. Is entitled to a hearing B. Is guilty until proven innocent C. Must post bond in the amount determined by the Commission D. Must stop listing and selling property immediately - answer-a is entitled to a hearing A parcel of vacant land has an assessed valuation of $274,550. If the assessment is 85% of the market value, what is the market value? A. $315,732 B. $320,000 C. $1,830,333 D. $323,000 - answer-d. $323,000 A percolation test: A. Needed to qualify a buyer for financing B. Required to determine radon levels C. Must be passed to determine if a lot will sustain a septic system D. Necessary if a house can be installed with an outside water spigot - answer-c. Must be passed to determine if a lot will sustain a septic system A primary benefit of property held in joint tenancy is: A. Ownership by a maximum of two people B. The fractional interests of the owners, which can be different C. The fact that additional owners may be added later D. The right of survivorship - answer-d. The right of survivorship A property is bought based on fraudulent statements by the listing broker. The sales contract is most likely: A. Void B. Voidable C. Valid D. Illegal - answer-b. Voidable A real estate broker hired by an owner to sell a parcel of real property must comply with? A. Any and all instructions of the owner B. Any and all instructions of the buyer C. Concept of caveat emptor D. Law of agency - answer-d. Law of agency A real estate broker specializes in helping both buyers and sellers with the necessary paperwork involved in transferring property. Although not an agent of either party, the broker may not disclose either party's confidential information to the other. The broker is BEST described as a(n): A. Buyer's broker B. Independent contractor C. Dual agent D. Transaction broker - answer-d. Transaction broker A real estate professional does not show non-Asian clients any properties in several traditionally Asian neighborhoods. The real estate professional bases this practice on the need to preserve the cultural integrity of Asian immigrant communities. Which statement is TRUE regarding the real estate professional's policy? A. The real estate professional's policy is steering and violates federal and state fair housing laws regardless of motivation. B. Because the real estate professional is not attempting to restrict the rights of any single minority group, the practice does not constitute steering. C. The real estate professional's policy in steering, but is does not violate the fair housing laws because cultural preservation is the motive, not exclusion or discrimination. D. The real estate professional's policy has the effect, but not the intent, of steering. - answer-a. The real estate professional's policy is steering and violates federal and state fair housing laws regardless of motivation. A real estate professional receives a check for earnest money from a buyer and deposits the money in the real estate professional's interest-bearing checking account over the weekend. This action exposes the real estate professional to a charge of: A. Commingling B. Novation C. Subrogation D. Accretion - answer-a. Commingling A real estate professional signs a contract with a buyer. Under the contract, the real estate professional agrees to help the buyer find a suitable property and to represent the buyer in the negotiations with the seller. The buyer may not sign an agreement with any other real estate professional. What kind of agreement has this real estate professional signed? A. Exclusive buyer listing agreement B. Exclusive buyer representation agreement C. Open buyer agency agreement D. Option contract - answer-b. Exclusive buyer representation agreement A sales contract was signed by a minor. Which term describes this contract? A. Voidable B. Breached C. Discharged D. Void - answer-a. Voidable A seller wants to net $165,000 from the sale of a house after paying the broker's fee of 6% and other closing costs of $2,635. The seller's gross sales price will be: A. $152,623 B. $174,900 C. $152,465 D. $178,335 - answer-d. $178,335 A sub-divider who does not have a real estate license hires a broker to see her property. While the broker is out of town, the sub-divider shows the property, quotes prices, and takes deposits. Her actions: A. Place the broker in jeopardy, since she is acting as an unlicensed salesperson B. Must be compensated by the broker C. Have made her subject to disciplinary actions by the Real Estate Commission D. Were entirely proper - answer-d. Were entirely proper A tenant on a long-term commercial lease wants to go out of business. Since the rent is now worth much more than she is currently paying, she might most likely consider: A. Assigning the lease B. Subletting the property C. Asking the owner to rescind the lease D. Surrendering the premises - answer-b. Subletting the property A tenant's landlord plans to sell the building in which the tenant lives to the state so that a freeway can be built. The tenant's lease has expired, but the landlord permits the tenant to stay in the apartment until the building is torn down. The tenant continues to pay the rent as prescribed in the lease. What kind of tenancy does this tenant have? A. Holdover tenancy B. Month-to-month tenancy C. Tenancy at sufferance D. Tenancy at will - answer-d. Tenancy at will A woman conveys the ownership of an office building to a nursing home. The nursing home agrees that the rental income produced by the building will pay for the expenses of caring for the women's parents. When both her parents have died, ownership of the office building will revert to the woman. The estate held by the nursing home is a: A. Remainder life estate B. Legal life estate C. Life estate pur autre vie D. Temporary leasehold estate - answer-c. Life estate pur autre vie A woman grants a life estate to her son-in-law and stipulates that, upon his death, the title to the property will pass to her grandson. The grandson's interest is known as a(n): A. Remainder B. Reversion C. Estate at sufferance D. Estate for years - answer-a. Remainder All but which of the following forms of ownership are recognized in Maryland? A. Tenancy in common B community property C. Trust D. Ownership in severity - answer-b. Community property All of the following are used in calculating income rate value (IRV) except: A. Property value B. Rate of return C. Net annual income D. Depreciation factor - answer-d. Depreciation factor All of the following have been proven to pose health hazards EXCEPT: A. Asbestos fibers B. Carbon monoxide C. Radon D. Lead-based paint - answer-c. Radon An individual who owns a living unit plus a share in a common recreation area and parking area in fee most likely owns a: A. Standard subdivision B. Planned unit development C. Cooperative D. Condominium - answer-d. Condominium An ordinary life estate? A. Cannot be sold B. Greatest estate in real property C. Inheritable estate D. Cannot be "wasted" - answer-d. Cannot be "wasted" An owner of land that borders a non-navigable stream: A. Owns the land up to the mean high water mark B. Owns the entire stream and the land under it C. Owns the land under the water to the exact center line of the waterway D. Does not own the stream since it is a public waterway - answer-c. Owns the land under the water to the exact center line of the waterway Assuming that the listing agent and the selling agent in a transaction split their commission equally, what was the sales price of the property if the commission rate was 5.5% and the listing agent received $12,584? A. $228,800 B. $242,871 C. $457,600 D. $692,120 - answer-c. $457,600 Functional obsolescence can be created by: A. Deterioration of the driveway B. An over-improvement C. Deterioration of of the property next door D. Forces outside the property itself - answer-b. An over-improvement If a borrower computed the interest charged for the previous month on a $260,000 loan balance as $1,300, what is the borrower's interest rate to the nearest half percent? A. 6% B. 6½% C. 5% D. 5½% - answer-a. 6% If a person dies without a will: A. He has died intestate B. The state will look to its laws of descent and distribution to determine how the property will pass C. The government will take the property through escheat if there are no heirs D. All of the above - answer-d. All of the above If the holder of an easement owns adjacent land and his physical use of the land is benefited by the easement, he is said to have: A. Easement in gross B. Prescriptive easement C. Easement appurtenant D. License - answer-c. Easement appurtenant If the owner-lessor of a unit in an owner-occupied three-family dwelling discriminates: A. There is an exemption in the 1968 federal Fair Housing Act, as long as a broker is not employed and no discriminatory advertising is used B. There are no exemptions to the 1968 law