Alabama Real Estate Final Exam Study
Guide - 60 Hour Course Questions With
Complete Solutions
A condominium estate is distinguished by:
A. Ownership of a share in an association and a condominium lease on the owned unit
B. Tenancy in common interest in airspace and common areas of the property
C. Fee simple ownership of a unit and undivided share of the common areas
D. Fee simple ownership of an equal share of the entire property - ✔️✔️C. Fee simple
ownership of a unit and undivided share of the common areas
A critical determinant of commercial and residential property demand in a market is
A. availability
B. employment
C. existing supply
D. per capita income - ✔️✔️B. employment
A business buyer wants to acquire a business in its totality including the business
identity and all rights, obligations, liabilities, and assets. This type of transaction that
would accomplish this aim is:
A. an asset sale
B. a stock sale
C. a proprietary lease
D. a rights lease - ✔️✔️B. a stock sale
A buyer representative locates a suitable property through an owner broker. The buyer
buys the property; the seller pays a commission, and the two agents split the
commission. In this instance, the owner broker is acting as
A. a single agent for the owner
B. a dual agent
C. a subagent
D. a co-operating agent - ✔️✔️A. a single agent for the owner
A buyer submits an offer to the seller. While the seller is considering the offer, the buyer
calls and cancels. The seller protests claiming she was going to accept. Which is true?
A. the buyer may not revoke the offer in such a short period
B. the seller may accept the offer thus binding the buyer to the contract
C. the seller can offer to lower the price binding the buyer
D. the original offer is cancelled and the protest means nothing - ✔️✔️D. the original
offer is cancelled and the protest means nothing
, A borrower grosses $4,000 per month and pays $600 monthly for debt obligations.
What monthly payment for housing expenses (principal, interest, taxes, insurance) can
this person afford based on an FHA debt ratio of 41%?
A. $760
B. $1,394
C. $1.040
D. $1,404 - ✔️✔️C. $1.040
A broker and salesperson agree to a 40-60 commission split. This commission rate
A. must be within guidelines set by state regulation
B. must be approved by the listing client
C. is probably the result of an agreement with other brokers
D. is probably a reflection of competitive commission rates - ✔️✔️D. is probably a
reflection of competitive commission rates
A certain investor wants an 11% return on investment from any real estate investment.
A property priced at $360,000 has a gross income of $60,000 and expenses of $22,000.
Approximately how much too high or too low is the price of this property for the investor
to obtain her desired return exactly?
A. $1,000 overpriced
B. $8,000 underpriced
C. $15,000 overpriced
D. $16,000 underpriced - ✔️✔️C. $15,000 overpriced
A landlord agrees to pay a broker for procuring a tenant unless someone else finds the
tenant first. This is an example of a(n)
A. exclusive right to sell agreement
B. exclusive agency agreement
C. open listing
D. net listing - ✔️✔️C. open listing
A lender determines that a homebuyer can afford to borrow $120,000 on a mortgage
loan. The lender requires an 80% loan to value ratio. How much can the borrower pay
for a property and still qualify for this loan amount?
A. $96,000
B. $106,000
C. $150,000
D. $160,000 - ✔️✔️C. $150,000
A major employer relocates, leaving many homes in an area vacant and unmaintained.
This is an example of
A. physical deterioration
B. functional obsolescence
C. incurable economic obsolescence
D. curable external obsolescence - ✔️✔️C. incurable economic obsolescence
Guide - 60 Hour Course Questions With
Complete Solutions
A condominium estate is distinguished by:
A. Ownership of a share in an association and a condominium lease on the owned unit
B. Tenancy in common interest in airspace and common areas of the property
C. Fee simple ownership of a unit and undivided share of the common areas
D. Fee simple ownership of an equal share of the entire property - ✔️✔️C. Fee simple
ownership of a unit and undivided share of the common areas
A critical determinant of commercial and residential property demand in a market is
A. availability
B. employment
C. existing supply
D. per capita income - ✔️✔️B. employment
A business buyer wants to acquire a business in its totality including the business
identity and all rights, obligations, liabilities, and assets. This type of transaction that
would accomplish this aim is:
A. an asset sale
B. a stock sale
C. a proprietary lease
D. a rights lease - ✔️✔️B. a stock sale
A buyer representative locates a suitable property through an owner broker. The buyer
buys the property; the seller pays a commission, and the two agents split the
commission. In this instance, the owner broker is acting as
A. a single agent for the owner
B. a dual agent
C. a subagent
D. a co-operating agent - ✔️✔️A. a single agent for the owner
A buyer submits an offer to the seller. While the seller is considering the offer, the buyer
calls and cancels. The seller protests claiming she was going to accept. Which is true?
A. the buyer may not revoke the offer in such a short period
B. the seller may accept the offer thus binding the buyer to the contract
C. the seller can offer to lower the price binding the buyer
D. the original offer is cancelled and the protest means nothing - ✔️✔️D. the original
offer is cancelled and the protest means nothing
, A borrower grosses $4,000 per month and pays $600 monthly for debt obligations.
What monthly payment for housing expenses (principal, interest, taxes, insurance) can
this person afford based on an FHA debt ratio of 41%?
A. $760
B. $1,394
C. $1.040
D. $1,404 - ✔️✔️C. $1.040
A broker and salesperson agree to a 40-60 commission split. This commission rate
A. must be within guidelines set by state regulation
B. must be approved by the listing client
C. is probably the result of an agreement with other brokers
D. is probably a reflection of competitive commission rates - ✔️✔️D. is probably a
reflection of competitive commission rates
A certain investor wants an 11% return on investment from any real estate investment.
A property priced at $360,000 has a gross income of $60,000 and expenses of $22,000.
Approximately how much too high or too low is the price of this property for the investor
to obtain her desired return exactly?
A. $1,000 overpriced
B. $8,000 underpriced
C. $15,000 overpriced
D. $16,000 underpriced - ✔️✔️C. $15,000 overpriced
A landlord agrees to pay a broker for procuring a tenant unless someone else finds the
tenant first. This is an example of a(n)
A. exclusive right to sell agreement
B. exclusive agency agreement
C. open listing
D. net listing - ✔️✔️C. open listing
A lender determines that a homebuyer can afford to borrow $120,000 on a mortgage
loan. The lender requires an 80% loan to value ratio. How much can the borrower pay
for a property and still qualify for this loan amount?
A. $96,000
B. $106,000
C. $150,000
D. $160,000 - ✔️✔️C. $150,000
A major employer relocates, leaving many homes in an area vacant and unmaintained.
This is an example of
A. physical deterioration
B. functional obsolescence
C. incurable economic obsolescence
D. curable external obsolescence - ✔️✔️C. incurable economic obsolescence
