NATIONAL REAL ESTATE EXAM PRACTICE TEST ALL SOLUTION 2024/2025 GUARANTEED GRADE A+

NATIONAL REAL ESTATE EXAM PRACTICE TEST ALL SOLUTION 2024/2025 GUARANTEED GRADE A+ In most cases, broker compensation, as a percentage of home price, falls somewhere between: 5-7% A Christian organization owns a fourplex. It wants to rent to only Christian tenants. Under the federal Fair Housing Act, is this legal? Yes. Religious organizations which rent to tenants for residential purposes are exempt from the Fair Housing Act What happens to trade fixtures after a business moves out of a leased property? The tenant removes their trade fixtures and takes them upon moving out. Suppose that a borrower has a gross monthly income of $3,000 and wants to qualify for a conforming loan (total debt service ratio of 36%) with a monthly PITI payment of $800. What is the maximum amount of additional long-term obligations this borrower may have after PITI? $280 A square bedroom measures 10 feet by 10 feet. What is the area of the room? 100 square feet Which of these is an economic characteristic that makes land a distinctive commodity?* situs In a fixed-rate mortgage that is fully amortized, the total amount of interest to be paid is: predetermined Which is exempt from the federal Fair Housing Act? renting a room in a house occupied by the owner The Americans with Disabilities Act applies to: privately owned or government-owned public accommodations Condemnation is the act of seizing private property from citizens. What gives the government the right to do this? eminent domain The PHYSICAL characteristics of land are that land is indestructible, non-homogenous, and: immobile Which statement BEST defines the term contingency? stipulation that must be satisfied before the contract can be performed If a borrower is behind on payments, the acceleration clause gives the lender the ability to: call the entire loan balance due immediately A metes and bounds legal description always returns to: the point of beginning What should a license holder do if a client instructs them to do something that would discriminate against a protected class? advise the client they cannot legally discriminate against certain groups What is a novation? the substitution of one contract for another A married couple bought a home ten years ago for $400,000. Their neighborhood has rapidly grown in popularity, and they were able to sell their home this year for $950,000. How much of that money will they be required to pay capital gains tax on? $50,000 Which element of a valid contract states that the contract cannot require any illegal activities or outcomes? lawful objective Deanna wants to sue her real estate agent, but finds out that she has no legal recourse because too many years have passed since the offending incident. What is this an example of? statute of limitations Pedro bought his house for $370,000. The assessed value is $290,000. If the tax rate for Pedro's county is 2.375%, what will he pay in ad valorem taxes this year? $6,887.50 A potentially valid contract in which at least one party has the option to rescind is described as: voidable When you're talking about mortgages, what is another name for an origination fee? points Both parties involved in an agency agreement agree to end the agreement early. What is this called? mutual rescission What does a standard title insurance policy do?* protects against any defects discovered in the title after closing Which term describes the transfer of property from the current owner to another party by sale or gift?* voluntary alienation In the sales comparison approach to property valuation, what does the principle of substitution state?* The value of a property is only what a consumer would pay to acquire a comparable property. Who can require a buyer to purchase homeowners insurance? lender Which of the following statements may represent the unauthorized practice of law?* "You should proceed without ordering a new abstract - this title is clear." A property owner has the right to tell other people that they cannot trespass on their property. What is this right called? right of exclusion The term for when the client initiates the termination of the agency agreement is known as: revocation Which of the following terms refers to a surveyor's or developer's map that identifies lots and blocks? plat The statute of frauds requires that real estate agreements: be in writing Which type of deed includes the five implied warranties (covenants)? general warranty deed Which of these scenarios does NOT violate fair housing law? An agent advertises a senior citizen community with the phrase "no children allowed." What is the difference between a bill of sale and a deed? A bill of sale is for personal property; a deed is for real estate. A buyer offers additional consideration to add a 10-day option period to the sales contract. During this period, the buyer can:* terminate the contract for any reason Brenda and her husband are interested in buying a house that was constructed in 1971 that has all the original paint, windows, and flooring. What is required from the listing agent in this situation?* The agent needs to furnish the buyers with a pamphlet approved by the EPA concerning lead based paint prior to closing. In order to be valid, what MUST a deed have? a legal description Hans bought an investment property for $5,250,000. The NOI of this property is $367,500. At what cap rate did he purchase this property? 7% What does the principle of anticipation state about the valuation of property? The present value of a property is affected by the anticipated income or utility that property will give its property owner. Which of these is a naturally occurring mineral that is commonly used in insulation, but if airborne or inhaled, can cause severe respiratory health issues? abestos How long after an incident does a victim of housing discrimination have to file a complaint with HUD? one year What is the term for deliberate deception done with the intention of gaining something of value or causing damage to another person? fraud Mary has a loan whose payments and interest rate will stay the same throughout the life of the loan (not including the cost changes caused by insurance and tax rates). What kind of loan does Mary have? fixed-rate, fully amortized Seller Benjamin told his listing agent, Tyson, that his house does not have a termite problem. Tyson doesn't see any visible evidence of pests. Tyson then relays this information to a buyer, citing Benjamin as his source. The buyer later finds out the home has a termite infestation. What did Agent Tyson engage in? innocent misrepresentation Melissa signed a listing agreement with Shane, a local real estate agent. Melissa was then contacted by a neighbor who agreed to purchase the house, but Shane still received compensation. What type of listing agreement did Melissa and Shane sign? exclusive right-to-sell listing What is unique about an exclusive right-to-sell listing agreement? The broker gets compensation regardless of who sells the property. Which one of the following actions would be considered the unauthorized practice of law by a broker? drafting a legal document that transfers an interest in a real property Which of these is an example of a general agency relationship? broker and sponsored agent What is the defining feature of an estate for years? It has a definite ending period and there is no automatic renewal. Which federal law amended the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)? Superfund Amendments and Reauthorization Act (SARA) Which of these is a protected class under the federal Fair Housing law? disability An example of a voidable contract is a contract that: is made with one party who is not competent An investor has purchased a one-family home that they plan to rent as an investment. Which of these statements accurately describes how it can be depreciated? It can be depreciated over 27.5 years. In general, a broker is responsible for: their own actions and the actions of agents they supervise A contract is not considered valid unless consideration is involved. This is due to the idea that a person: CANNOT do something of value without receiving something in turn How can homeowners get insurance coverage in case of a flood? Take our a specific flood insurance policy. Which survey system is most commonly used in urban areas? lot and block Jordan took out a loan in the amount of $265,000. Her annual interest rate is 4%. What will she pay monthly in interest? $883.33 Which of the following is a participant in the secondary mortgage market? FNMA (Fannie Mae) Who must fill out the Seller's Disclosure Notice? seller For a listing agreement to be enforceable in court, it MUST be: in writing CERCLA was passed in 1980 to: establish a Superfund to clean up uncontrolled hazardous waste sites and to respond to spills Sabrina accepted Rebecca's offer to purchase her house, and the closing date is in a few weeks. Until then, what does Rebecca have? equitable title Steering is the practice of: directing people to or away from a particular area due to the protected class of the buyer or residents of the neighborhood in a manner that perpetuates segregated housing Darla is suing Arlo for specific performance. If she is successful, what will happen? Arlo will be required to perform according to the terms of the contract. Undivided ownership of an estate, with an interest that is exclusive from other owners is called: ownership in severalty If a contract specifies a legal land description, it is most likely a(n): listing agreement A debit to the buyer has what effect on charges made to the parties involved in the transaction? increases the amount due from the buyer at closing Burt is buying a house for $100,000 and is making a 20% down payment. He is paying a 1-point origination fee to a mortgage lender, $500 for a new survey, and $800 for an environmental report. Based on this, before any prorations, how much cash will Burt have to bring to the closing? $22,100 Which appraisal method would an appraiser be most likely to use on an owner-occupied residential home? sales comparison approach A property manager's PRIMARY responsibility to the owner is to: realize the highest return possible and maximize the owner's return on that investment A credit to the seller has what effect on charges made to the parties involved in the transaction? increases the amount the seller receives at closing The EPA requires that a lead-based paint disclosure be presented to buyers of all residential property built prior to: 1978 Which of these is an example of a legally competent party who can enter an enforceable contract? adult who did not finish high school Which of these will most lenders require homeowners to obtain before closing? homeowners insurance On Kandy Dr., many older homes have been upgraded or torn down, with high-value homes built in their place. 201 Kandy Dr. is now the smallest, shabbiest home on the block, but it recently appraised for more than a similar home in a less-upgraded neighborhood. What principle of value explains this? principle of progression To determine the value of a highly specialized building, like a museum, an appraiser would most likely use and heavily weight which of the following appraisal methods? cost approach Tareq represented the seller in the sale of a house for $427,000. The commission agreed upon was 7% and Tareq gave half to the buyer's representative. What will he take home if the split with his brokerage is 80% Tareq - 20% broker? $11,956 A new contract substituting the obligations of an original contract is a(n): novation Which of these is an easement that is attached to a piece of land, regardless of owner? easement appurtenant A bank refuses to issue mortgages to a historically Black part of town. This practice is: redlining, and it's illegal If two parties to a contract both promise to perform the actions specified in the contract, we describe the contract as: bilateral Which law requires a lender to give a buyer an estimate of closing costs? RESPA What does it mean when a contract says that time is of the essence? Parties must perform their contractual duties by a specific date and time in order to avoid a breach of contract. What type of permission allows an individual property to deviate from a specific provision of a zoning ordinance? variance How does errors and omissions insurance (E&O) affect the defendants in fair housing cases?* E&O may not cover any defense for a fair housing violation. An agent should present all offers to their client UNLESS:* the client explicitly instructs the agent not to present any offers below a certain amount in writing TILA does NOT apply to which of the following kinds of loans? business loans Allie cannot depreciate her investment property for a tax deduction. What kind of property is it? undeveloped land An appraisal is required for all: federally related loan programs Erin pays a flat fee every month to rent her apartment. Her landlord pays for the property's maintenance, security, taxes, utilities, and all other operating expenses. What kind of lease is this? gross lease The purpose of the Truth-in-Lending Act (TILA) is to provide which of the following?* meaningful disclosure of credit terms of the loan to the borrower There are no exceptions for discrimination based on: race A valid sales contract stipulates that the seller must repair a hole in the roof before closing day. The seller failed to do so, which makes the seller guilty of: breach of contract What usually happens to earnest money at the successful closing of the sale? It counts towards the buyer's closing costs. Liability for others by mandate of law or by express agreement is called: vicarious liability Which type of listing agreement is most likely to cause a conflict of interest, and is therefor discouraged? net listing John submitted an offer to buy a condo, but he can only carry out the purchase if the bank approves his request for a loan. For this reason, the contract must contain a: contingency If a buyer makes a 15% down payment and obtains a $120,000 mortgage, what is the sales price of the property? $141,176 What is eminent domain? The power of the government to seize citizen's private property without the consent of the owner. The party responsible for paying the origination fee when obtaining conventional financing is: the borrower What is attached to an original contract before it is signed? addendum CONTINUED...