Real Estate Final Exam 1(2024 – 2025) Question and Answers

Real Estate Final Exam 1(2024 – 2025) Question and Answers Octogenarians Gertie and Frank met in Sunset Living, a skilled nursing center for people with advanced Alzheimer's disease, where they're both residents. They fell in love and get hitched, signing a marriage certificate. This is an example of a(n) ______ contract. a. Executory b. Implied c. Invalid d. Valid - correct answer c. Invalid When a prospective homebuyer isn't represented, what doesn't she have? a. An agency agreement b. A seller's agreement c. Responsibility to pay the seller's commission d. The legal right to purchase - correct answer a. An agency agreement What's a foreclosure? a. A property sale that occurs in less than one week b. A sale that fails to receive a high enough bid at auction and then falls to the bank's ownership c. The forced sale of a property due to the borrower defaulting on the mortgage loan d. The sale of a property when the market value of the home is less than what is owed, plus closing costs - correct answer c. The forced sale of a property due to the borrower defaulting on the mortgage loan _______ can be defined as everything that's not real property. a. Land property b. Personal property c. Private property d. Real estate - correct answer b. Personal property What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach? a. Broad and specific b. Components and measures c. Elements and units d. General and detailed - correct answer c. Elements and units Which of the following items must be included in the security instrument used for a real estate transaction? a. Borrower credit report b. Legal description of the property c. Lender disclosures d. Title insurance abstract - correct answer b. Legal description of the property Which of the following statements best describes a mortgage broker? a. An institution that focuses on commercial lending b. An institution that specializes in taking in savings deposits then lends money out as loans and mortgages c. A person who works for a specific lender and can offer products from that particular institution d. A person who works with multiple lenders to find the product that works best for the client - correct answer d. A person who works with multiple lenders to find the product that works best for the client Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison. a. Bracketing b. Competition c. Correlation d. Substituting - correct answer a. Bracketing At what point in a residential transaction must a seller's agent deliver a completed Residential Real Property Disclosure Report to a buyer? a. At least five days prior to closing b. Prior to showing the property to the prospective buyer c. Prior to the parties signing a purchase agreement d. Within three days after the parties sign a purchase agreement - correct answer c. Prior to the parties signing a purchase agreement Which of the following is a residential dwelling with attached walls, where the owner also typically owns the land on which the home sits? a. Apartment b. Condominium c. Single-family detached home d. Townhome - correct answer d. Townhome A ______ is the expected rate of return on an investment. a. Capitalization rate b. Cash flow c. Income ratio d. Profit margin - correct answer a. Capitalization rate A borrower makes the same monthly mortgage payment for the entire term of the loan. At the end of the loan period, all of the interest and principal is paid off. This is known as a ______ loan. a. Fully amortized b. Growing equity c. Negative amortization d. Reverse annuity - correct answer a. Fully amortized In Illinois, how are commissions commonly split between the listing brokerage and brokerage that represents the tenant? a. 100% to the brokerage that finds the tenant b. 20% listing brokerage, 80% brokerage that finds the tenant c. 50% listing brokerage, 50% brokerage that finds the tenant d. 80% listing brokerage, 20% brokerage that finds the tenant - correct answer c. 50% listing brokerage, 50% brokerage that finds the tenant Carolyn is representing John in the sale of his home. Which listing agreement clause gives her additional authority and obligates her to distribute the listing to other brokers? a. Broadcast clause b. Broker extension clause c. Marketability clause d. Multiple listing clause - correct answer d. Multiple listing clause _______ are artificial attachments to land that include items such as fencing, buildings, and walkways. a. Emblements b. Encroachments c. Improvements d. Levies - correct answer c. Improvements