RE Exam questions with complete
solutions graded A+ passed
The (blank) outlines the borrower's promise to repay the loan. - correct answer ✔✔Promissory Note
The (blank) secures the property as collateral for the loan. - correct answer ✔✔Deed of Trust
Which two documents are necessary to establish a legally binding mortgage loan? - correct answer
✔✔Promissory note and deed of trust
When there is an easement appurtenant between two separately owned parcels of land, what does it
signify? - correct answer ✔✔Both parcels have equal rights to use a portion of each other's land
An (blank) grants one property the right to use a specific part of another property, usually for access or
utility purposes, while both properties retain separate ownership. - correct answer ✔✔Easement
Appurtenant
In real estate, what is the closest meaning to the term "quieting a title"? - correct answer ✔✔Clearing
any liens or encumbrances on a property
(Blank) refers to the legal process of resolving any claims, defects, or disputes that could cloud or
challenge the ownership rights of a property, ensuring a clear and marketable title. - correct answer
✔✔"Quieting a Title"
Which of the following is NOT a way by which an offer to purchase real estate would be
terminated? - correct answer ✔✔Acceptance by the seller.
(Blank) by the seller indicates agreement and leads to the formation
of a contract. - correct answer ✔✔Acceptance
,The (blank) of an offer can occur through revocation,
counteroffer, or rejection, but not acceptance. - correct answer ✔✔Termination
The (blank) states that a property's value tends to increase when surrounded by higher-valued
properties. - correct answer ✔✔Principle of Progression
Conducting (blank) without a license is prohibited in most
jurisdictions. Showing the property, quoting prices, and accepting deposits, violate licensing
requirements and can result in legal consequences. - correct answer ✔✔Real estate activities.
(Blank) refers to the buyer's interest in the property before obtaining legal title. It typically occurs after
signing the purchase agreement, granting the buyer certain rights and responsibilities while the closing
process is underway. - correct answer ✔✔Equitable Title
(Blank) in the appropriate government office established the legal proof of ownership and protects the
property rights of the owner. - correct answer ✔✔Recording a deed
Lessor (renter) leases space for a restaurant and installs fixtures such as counters, booths, and
stoves. Who will own these fixtures? - correct answer ✔✔Lessor (renter)
In which type of loan does the lender set the interest rate? - correct answer ✔✔Fixed-rate mortgage
In a (blank), the lender sets the interest rate at the beginning of the loan term, and it remains constant
throughout the duration of the
loan. - correct answer ✔✔Fixed-rate mortage
What does the term "merchantable title" (or "marketable title") refer to? - correct answer ✔✔A title
free from defects and legal encumbrances?
(Blank) refers to a property title that is considered clear and free from defects, liens, or other legal issues
that could affect ownership rights or transferability. - correct answer ✔✔"Merchantable title" (or
"marketable title")
, If a landlord receives rent at the start of the month and sells the property ten days later, how should the
rent be prorated at settlement? - correct answer ✔✔The rent is divided based on the number of days
owned by the seller and the buyer.
To ensure fair settlement, the rent should be (blank), dividing it based on the number of days the seller
and buyer each own the property. - correct answer ✔✔Prorated
The (blank) states that any verbal agreements or discussions made prior to a written contract are
invalidated and cannot be considered in the contract's interpretation. - correct answer ✔✔Parol
Evidence Rule
Which formula is used to determine value through the income approach in real estate? - correct answer
✔✔Value = Gross Rent Multiplier x Monthly Rent
The (blank) approach calculates value by multiplying the Gross Rent Multiplier (GRM) with the monthly
rent, providing an estimation of the property's worth based on its income potential. - correct answer
✔✔Income
How is effective gross income defined in the income approach to property valuation? - correct answer
✔✔Total rental income minus vacancies and collection losses.
(Blank) in the income approach refers to the total rental income generated by the property, minus any
vacancies and collection losses. It represents the income stream available for property valuation. -
correct answer ✔✔Effective gross income
At what point does legal title to real property transfer from the seller to the buyer? - correct answer
✔✔Closing or settlement
(Blank) to real property typically transfers from the seller to the buyer at
the closing or settlement, where all necessary documents are signed,
funds are exchanged, and ownership is officially transferred. - correct answer ✔✔Legal title
solutions graded A+ passed
The (blank) outlines the borrower's promise to repay the loan. - correct answer ✔✔Promissory Note
The (blank) secures the property as collateral for the loan. - correct answer ✔✔Deed of Trust
Which two documents are necessary to establish a legally binding mortgage loan? - correct answer
✔✔Promissory note and deed of trust
When there is an easement appurtenant between two separately owned parcels of land, what does it
signify? - correct answer ✔✔Both parcels have equal rights to use a portion of each other's land
An (blank) grants one property the right to use a specific part of another property, usually for access or
utility purposes, while both properties retain separate ownership. - correct answer ✔✔Easement
Appurtenant
In real estate, what is the closest meaning to the term "quieting a title"? - correct answer ✔✔Clearing
any liens or encumbrances on a property
(Blank) refers to the legal process of resolving any claims, defects, or disputes that could cloud or
challenge the ownership rights of a property, ensuring a clear and marketable title. - correct answer
✔✔"Quieting a Title"
Which of the following is NOT a way by which an offer to purchase real estate would be
terminated? - correct answer ✔✔Acceptance by the seller.
(Blank) by the seller indicates agreement and leads to the formation
of a contract. - correct answer ✔✔Acceptance
,The (blank) of an offer can occur through revocation,
counteroffer, or rejection, but not acceptance. - correct answer ✔✔Termination
The (blank) states that a property's value tends to increase when surrounded by higher-valued
properties. - correct answer ✔✔Principle of Progression
Conducting (blank) without a license is prohibited in most
jurisdictions. Showing the property, quoting prices, and accepting deposits, violate licensing
requirements and can result in legal consequences. - correct answer ✔✔Real estate activities.
(Blank) refers to the buyer's interest in the property before obtaining legal title. It typically occurs after
signing the purchase agreement, granting the buyer certain rights and responsibilities while the closing
process is underway. - correct answer ✔✔Equitable Title
(Blank) in the appropriate government office established the legal proof of ownership and protects the
property rights of the owner. - correct answer ✔✔Recording a deed
Lessor (renter) leases space for a restaurant and installs fixtures such as counters, booths, and
stoves. Who will own these fixtures? - correct answer ✔✔Lessor (renter)
In which type of loan does the lender set the interest rate? - correct answer ✔✔Fixed-rate mortgage
In a (blank), the lender sets the interest rate at the beginning of the loan term, and it remains constant
throughout the duration of the
loan. - correct answer ✔✔Fixed-rate mortage
What does the term "merchantable title" (or "marketable title") refer to? - correct answer ✔✔A title
free from defects and legal encumbrances?
(Blank) refers to a property title that is considered clear and free from defects, liens, or other legal issues
that could affect ownership rights or transferability. - correct answer ✔✔"Merchantable title" (or
"marketable title")
, If a landlord receives rent at the start of the month and sells the property ten days later, how should the
rent be prorated at settlement? - correct answer ✔✔The rent is divided based on the number of days
owned by the seller and the buyer.
To ensure fair settlement, the rent should be (blank), dividing it based on the number of days the seller
and buyer each own the property. - correct answer ✔✔Prorated
The (blank) states that any verbal agreements or discussions made prior to a written contract are
invalidated and cannot be considered in the contract's interpretation. - correct answer ✔✔Parol
Evidence Rule
Which formula is used to determine value through the income approach in real estate? - correct answer
✔✔Value = Gross Rent Multiplier x Monthly Rent
The (blank) approach calculates value by multiplying the Gross Rent Multiplier (GRM) with the monthly
rent, providing an estimation of the property's worth based on its income potential. - correct answer
✔✔Income
How is effective gross income defined in the income approach to property valuation? - correct answer
✔✔Total rental income minus vacancies and collection losses.
(Blank) in the income approach refers to the total rental income generated by the property, minus any
vacancies and collection losses. It represents the income stream available for property valuation. -
correct answer ✔✔Effective gross income
At what point does legal title to real property transfer from the seller to the buyer? - correct answer
✔✔Closing or settlement
(Blank) to real property typically transfers from the seller to the buyer at
the closing or settlement, where all necessary documents are signed,
funds are exchanged, and ownership is officially transferred. - correct answer ✔✔Legal title
