Rockwell Cram Exam #3 UPDATED
ACTUAL Questions and CORRECT
Answers
When homes in a new development are sold, a $2,000 fee is charged to the buyers. This fee
covers the homeowners association dues for the first year. HOA dues for each subsequent year
are $1,000. In the development's first year, ten homes are sold. Ten more are sold the second
year. Assuming that the HOA's account had no disbursements or expenses (and ignoring any
possible contributions from the developer), what is the balance of the account after two years? -
CORRECT ANSWER - $50,000
Teresa gives her little brother, Mark, a life estate pur autre vie. Which of the following is true? -
CORRECT ANSWER - Mark is the life tenant, but the measuring life is someone else
(Our Autre Vie= "for another life" the measuring life is someone other than the life tenant.
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: - CORRECT
ANSWER - life estate pur autre vie, in remainder Reversion= Reverting to the grantor
(original owner)
A 17-year-old purchased a house. He moved in, lived in it for a year, and then decided he didn't
want the responsibility of owning a home. He refused to honor the contract. In this case the
contract: - CORRECT ANSWER - was voidable when signed; however, the buyer
probably ratified it by living in the house
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: - CORRECT
ANSWER - refer the client to a securities dealer
A seller has entered into a listing agreement with an expiration date of April 30. Under which of
these circumstances would the listing NOT terminate on the date mentioned in the answer
option? - CORRECT ANSWER - The licensee who took the listing is legally declared
incompetent on April 26
, 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? - CORRECT
ANSWER - The buyers are not represented by an agent. (if the agent is already
representing another party under a written agreement (usually, a listing agreement), then
providing minimal services does not create an agency.)
Maria offered to purchase Alexander's house for $135,000. After talking it over with his agent,
Alexander signed the offer and returned it to Maria. At this point, what type of title does Maria
have to the house? - CORRECT ANSWER - Equitable
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
this loan subject to Truth in Lending Act disclosure laws? - CORRECT 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: - CORRECT ANSWER - used in a business or trade
A homeless shelter, which contains a number of units for different families, is owned by a
religious group. The religious group's leaders instruct the shelter's manager to limit occupancy
only to individuals who are of their faith. This would be permissible under which of the
following circumstances? - CORRECT ANSWER - Membership in the religious
organization is not restricted on the basis of race, color, or national origin
With the closing date fast approaching, the buyer's real estate agent learns that the seller's sister
may have an ownership interest in the property. The parties have already signed the purchase and
sale agreement. The buyer's agent should: - CORRECT ANSWER - ask the listing agent to
suggest that the seller see a lawyer about obtaining a quitclaim deed from the sister
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/an: - CORRECT
ANSWER - conditional use permit
ACTUAL Questions and CORRECT
Answers
When homes in a new development are sold, a $2,000 fee is charged to the buyers. This fee
covers the homeowners association dues for the first year. HOA dues for each subsequent year
are $1,000. In the development's first year, ten homes are sold. Ten more are sold the second
year. Assuming that the HOA's account had no disbursements or expenses (and ignoring any
possible contributions from the developer), what is the balance of the account after two years? -
CORRECT ANSWER - $50,000
Teresa gives her little brother, Mark, a life estate pur autre vie. Which of the following is true? -
CORRECT ANSWER - Mark is the life tenant, but the measuring life is someone else
(Our Autre Vie= "for another life" the measuring life is someone other than the life tenant.
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: - CORRECT
ANSWER - life estate pur autre vie, in remainder Reversion= Reverting to the grantor
(original owner)
A 17-year-old purchased a house. He moved in, lived in it for a year, and then decided he didn't
want the responsibility of owning a home. He refused to honor the contract. In this case the
contract: - CORRECT ANSWER - was voidable when signed; however, the buyer
probably ratified it by living in the house
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: - CORRECT
ANSWER - refer the client to a securities dealer
A seller has entered into a listing agreement with an expiration date of April 30. Under which of
these circumstances would the listing NOT terminate on the date mentioned in the answer
option? - CORRECT ANSWER - The licensee who took the listing is legally declared
incompetent on April 26
, 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? - CORRECT
ANSWER - The buyers are not represented by an agent. (if the agent is already
representing another party under a written agreement (usually, a listing agreement), then
providing minimal services does not create an agency.)
Maria offered to purchase Alexander's house for $135,000. After talking it over with his agent,
Alexander signed the offer and returned it to Maria. At this point, what type of title does Maria
have to the house? - CORRECT ANSWER - Equitable
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
this loan subject to Truth in Lending Act disclosure laws? - CORRECT 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: - CORRECT ANSWER - used in a business or trade
A homeless shelter, which contains a number of units for different families, is owned by a
religious group. The religious group's leaders instruct the shelter's manager to limit occupancy
only to individuals who are of their faith. This would be permissible under which of the
following circumstances? - CORRECT ANSWER - Membership in the religious
organization is not restricted on the basis of race, color, or national origin
With the closing date fast approaching, the buyer's real estate agent learns that the seller's sister
may have an ownership interest in the property. The parties have already signed the purchase and
sale agreement. The buyer's agent should: - CORRECT ANSWER - ask the listing agent to
suggest that the seller see a lawyer about obtaining a quitclaim deed from the sister
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/an: - CORRECT
ANSWER - conditional use permit
