Barney Fletcher Practice Exam 1
$1,000 is paid for a 30 day option to buy. Which of the following BEST describes the listing
agent's commission?
A. it is earned at the time the option is entered into
B. it is earned when the option is exercised
C. the commission comes out of the $1,000
D. the commission is payable at the end of the 30 day option period - ANS-B. it is earned when
the option is exercised
A buyer borrowed $1,500 to purchase a hot tub. If the agreement between the parties was for
the total principal and interest to be repaid in a single payment, what was the interest rate on the
loan if the payment was $1,695?
A. 11.3%
B. 11.5%
C. 13.0%
D. 15.0% - ANS-C. 13.0%
$1,695 - $1,500 = $195. $195 divided by $1,500 = interest rate of 13%
A buyer put 20% down on the purchase of a house. The lender required the buyer to pay two
discount points in order to obtain a loan. The buyer paid $1,000 for the discount points. What
was the purchase price of the house?
A. $50,000
B. $62,500
C. $75,000
D. $87,000 - ANS-B. $62,500
$1,000 divided by 2% = $50,000. The buyer putting down 20% means the loan must have been
at 80% of the purchase price. $50,000 divided by 80% = $62,500
A contract would be considered executed when:
A. the deed has been delivered and accepted
B. all contract terms have been satisfied
C. the deed has been recorded
D. the deed has been acknowledged - ANS-B. all contract terms have been satisfied
A cooperative would take title to property under which of the following categories?
A. tenants in common
B. joint tenancy
, C. severalty
D. tenancy by the entireties - ANS-C. severalty
A corporation set up a business to do office rental services. Which of the following acts could
the members do without a real estate license?
A. handle the leasing of its own property
B. lease other companies' properties
C. procure tenants for other owners
D. receive referral fees from brokers but no actual commissions - ANS-A. handle the leasing of
its own property
A husband and wife filed for and received a divorce. The wife then tried to sell the property but
the ex husband's name was still on the deed. Which of the following actions would be best in
trying to remedy the situation?
A. suit to partition
B. quiet title suit
C. lis pendens
D. notice of lien - ANS-B. quiet title suit
A lender had a loan to value ratio of 97% on the first $25,000 of a sales price and 95% on the
balance. If the sales price was $68,000, what was the down payment?
A. $2,000
B. $2,900
C. $4,200
D. $5,440 - ANS-B. $2,900
$25,000 x 97% = $24,250. $68,000 - $25,000 = $43,000. $43,000 x 95% = $40,850. $24,250 +
$40,850 = $65,100. The price of $68,000 - $65,100 = a down payment of $2,900
A lender packaged a number of loans to sell to investors. This is referred to as a type of interim
financing called:
A. blanket financing
B. package financing
C. warehouse financing
D. discount financing - ANS-C. warehouse financing
A loan for which of the following would NOT fall under Regulation Z?
A. residential home
B. a loan involving discount points
C. shoe store in a commercial shopping strip
D. a duplex - ANS-C. shoe store in a commercial shopping strip
A loan with a balance of $21,000 prior to the June 1 payment was figured with interest at 11%
annually and monthly principal and interest payments of $571.80. There was a 1% pre payment
$1,000 is paid for a 30 day option to buy. Which of the following BEST describes the listing
agent's commission?
A. it is earned at the time the option is entered into
B. it is earned when the option is exercised
C. the commission comes out of the $1,000
D. the commission is payable at the end of the 30 day option period - ANS-B. it is earned when
the option is exercised
A buyer borrowed $1,500 to purchase a hot tub. If the agreement between the parties was for
the total principal and interest to be repaid in a single payment, what was the interest rate on the
loan if the payment was $1,695?
A. 11.3%
B. 11.5%
C. 13.0%
D. 15.0% - ANS-C. 13.0%
$1,695 - $1,500 = $195. $195 divided by $1,500 = interest rate of 13%
A buyer put 20% down on the purchase of a house. The lender required the buyer to pay two
discount points in order to obtain a loan. The buyer paid $1,000 for the discount points. What
was the purchase price of the house?
A. $50,000
B. $62,500
C. $75,000
D. $87,000 - ANS-B. $62,500
$1,000 divided by 2% = $50,000. The buyer putting down 20% means the loan must have been
at 80% of the purchase price. $50,000 divided by 80% = $62,500
A contract would be considered executed when:
A. the deed has been delivered and accepted
B. all contract terms have been satisfied
C. the deed has been recorded
D. the deed has been acknowledged - ANS-B. all contract terms have been satisfied
A cooperative would take title to property under which of the following categories?
A. tenants in common
B. joint tenancy
, C. severalty
D. tenancy by the entireties - ANS-C. severalty
A corporation set up a business to do office rental services. Which of the following acts could
the members do without a real estate license?
A. handle the leasing of its own property
B. lease other companies' properties
C. procure tenants for other owners
D. receive referral fees from brokers but no actual commissions - ANS-A. handle the leasing of
its own property
A husband and wife filed for and received a divorce. The wife then tried to sell the property but
the ex husband's name was still on the deed. Which of the following actions would be best in
trying to remedy the situation?
A. suit to partition
B. quiet title suit
C. lis pendens
D. notice of lien - ANS-B. quiet title suit
A lender had a loan to value ratio of 97% on the first $25,000 of a sales price and 95% on the
balance. If the sales price was $68,000, what was the down payment?
A. $2,000
B. $2,900
C. $4,200
D. $5,440 - ANS-B. $2,900
$25,000 x 97% = $24,250. $68,000 - $25,000 = $43,000. $43,000 x 95% = $40,850. $24,250 +
$40,850 = $65,100. The price of $68,000 - $65,100 = a down payment of $2,900
A lender packaged a number of loans to sell to investors. This is referred to as a type of interim
financing called:
A. blanket financing
B. package financing
C. warehouse financing
D. discount financing - ANS-C. warehouse financing
A loan for which of the following would NOT fall under Regulation Z?
A. residential home
B. a loan involving discount points
C. shoe store in a commercial shopping strip
D. a duplex - ANS-C. shoe store in a commercial shopping strip
A loan with a balance of $21,000 prior to the June 1 payment was figured with interest at 11%
annually and monthly principal and interest payments of $571.80. There was a 1% pre payment
