WA State Real Estate Exam Prep:
Rockwell Institute Sample Exam With
Correct Verified Solutions.
A home inspection revealed that black mold is present in a home. What should the buyer's
agent tell the buyer?
A. That black mold is toxic, and that the buyer should not buy the house
B. That mold is commonplace, and can be cleaned up with bleach
C. To require the seller to remedy the problem
D. To seek expert advice - Answer answer:
D: seek expert advise
A buyer's agent typically does not have expertise in environmental hazards. The proper step, for
the matters in a transaction outside the agent's expertise, is to advise the principal to seek
expert advice. In this case, that would be a mold remediation specialist.
A seller wants to net $60,000 from a transaction, but will have to pay off a mortgage and other
fees, at a total cost of $181,800. The seller will also need to pay a 7% commission. What will the
property need to sell for?
A. $241,800
B. $258,726
C. $260,000
D. $276,060 - Answer Answer:
C: $260,000
Start by adding the desired net and the other cost, including the mortgage ($60,000 + $181,800
+ $241,800).
Subtract the commission percentage from 100% (100% -7%=93%)
Then divide the total by that percentage ($241,800 / .93 = $260,000)
Since the agent bases her commission on the total selling price, you can't simply add 7% of the
,A buyer asks the buyer's agent to write an offer on terms that don't match the listing
agreement. The buyer's agent refuses to write the offer and then, in writing, unilaterally
terminates the agency relationship with the buyer. Which is true?
A. Buyer's agent will be subject to disciplinary action
B. Buyer's agent is permitted to unilaterally terminate the agency relationship
C. Buyer's agent is allowed to terminate the agency, but must write the offer before terminating
D. Buyer's agent is not permitted to write such an offer - Answer answer:
B. Buyer's agent is permitted to unilaterally terminate the agency relationship
An agent may unilaterally renounce an agency relationship. Termination of the agency may
involve a breach of contract; if so, the agent could be liable to the principal for damages
resulting from the breach. However, breach of contract isn't in itself grounds for disciplinary
action. Failure to present an offer is grounds for disciplinary action; but here, since the agent
didn't write the offer, no offer exists yet. (An agent is free to renounce rather than help the
principal do something pointless or unwise.)
Closing is set for August 1. The seller has already paid the property taxes for the year, totaling
$6,000. How much of that amount is the buyer's responsibility?
A. $2,000
B. $2,500
C. $3,000
D. $3,500 - Answer answer
B: $2,500
Since the buyer is taking title on August 1, she's responsible for the property taxes for the
remaining five months of the year (August, September, October, November, and December).
Divide the annual taxes by 12 to find the monthly amount: $6, - $500. Multiply that
figure by 5 to determine the buyer's share of taxes: 5 x $500 = $2500 (Generally the state will
tell you when to treat all months as equal, but here even set of dollar amounts in the answers
lets you know that)
The IRS issues rules that determine when a real estate agent is an employee and when he is an
independent contractor. Which of the following statements on that topic is FALSE?
,D. The brokerage will tell an employee when to work certain hours - Answer answer
B. The brokerage may require an independent contractor to have a cell phone
This question is a bit dated but you may encounter something similar on the license exam. That
said, one of the key differences between employees and independent contractors is the level of
supervision; an independent contractor uses his judgment how to perform a task, while an
employee receives specific instructions on how to accomplish each task.
An instruction to carry a particular equipment doesn't particularly suggest an independent
contractor
relationship, making B the only possible answer. But certainly all agents carry cell phones now
whether instructed to do so or not.
A tenant has already paid his $1,200 rent for the month for a single-family property. The
property's owner sells it to a new buyer, with closing occurring on the 15th of June. The parties
decide the seller is entitled to rent for the closing date. On the settlement statement, the
prorated rent will appear as a:
A. $600 debit for the buyer and a $600 credit for the seller
B. $600 debit for the seller and a $600 credit for the buyer
C. $1,200 credit for the buyer
D. $1,200 credit for the seller - Answer Correct Answer: B
36% of students missed this question
The rent has already been paid to the seller, so the seller will need to give some of that rent to
the buyer. The buyer's prorated share will be a debit for the seller and a credit for the buyer on
the settlement statement. The seller's share is for the 1st through the 15th (15 days), and the
buyer's share is for the 16th through the 30th (also 15 days), so the $1,200 can be divided in
half. The settlement statement will show a $600 debit for the seller and a $600 credit for the
buyer.
Mineral rights associated with real property are always:
A. conveyed along with the surface rights to the property
, Mineral rights may be sold separately from the land. However, they are appurtenant to the land
and will be
conveyed with the land unless there is an agreement otherwise.
John, Kevin, and Lyle own a property as tenants in common, but only Kevin and Lyle live on the
property. John would like to sell the property for redevelopment, but Kevin and Lyle refuse.
What is John's best option?
A. Charge Kevin and Lyle rent
B. Create a trust to manage the property
C. Evict Kevin and Lyle
D. Obtain a court order to sell the property - Answer Correct Answer: D
When co-owners can't agree on whether to sell or how to divide their property, one or more of
them may file a
partition action to terminate the co-ownership. If there isn't a feasible way to physically divide
the property, the
court will order that the property be sold and the sale proceeds be divided between the former
co-owners.
W, age 17, enters into an installment contract to purchase a five-year-old car from S, an adult.
From a legal point of view, the contract is:
A. void
B. voidable by W only
C. voidable by S only
D. voidable by either S or W - Answer Answer: B
The contract is voidable by the minor, but not by the other party.
An investor wants to invest $250,000 in the development of a strip mall by taking out a loan
secured by a residential property that he owns. Will the Truth in Lending Act apply to this
transaction?
Rockwell Institute Sample Exam With
Correct Verified Solutions.
A home inspection revealed that black mold is present in a home. What should the buyer's
agent tell the buyer?
A. That black mold is toxic, and that the buyer should not buy the house
B. That mold is commonplace, and can be cleaned up with bleach
C. To require the seller to remedy the problem
D. To seek expert advice - Answer answer:
D: seek expert advise
A buyer's agent typically does not have expertise in environmental hazards. The proper step, for
the matters in a transaction outside the agent's expertise, is to advise the principal to seek
expert advice. In this case, that would be a mold remediation specialist.
A seller wants to net $60,000 from a transaction, but will have to pay off a mortgage and other
fees, at a total cost of $181,800. The seller will also need to pay a 7% commission. What will the
property need to sell for?
A. $241,800
B. $258,726
C. $260,000
D. $276,060 - Answer Answer:
C: $260,000
Start by adding the desired net and the other cost, including the mortgage ($60,000 + $181,800
+ $241,800).
Subtract the commission percentage from 100% (100% -7%=93%)
Then divide the total by that percentage ($241,800 / .93 = $260,000)
Since the agent bases her commission on the total selling price, you can't simply add 7% of the
,A buyer asks the buyer's agent to write an offer on terms that don't match the listing
agreement. The buyer's agent refuses to write the offer and then, in writing, unilaterally
terminates the agency relationship with the buyer. Which is true?
A. Buyer's agent will be subject to disciplinary action
B. Buyer's agent is permitted to unilaterally terminate the agency relationship
C. Buyer's agent is allowed to terminate the agency, but must write the offer before terminating
D. Buyer's agent is not permitted to write such an offer - Answer answer:
B. Buyer's agent is permitted to unilaterally terminate the agency relationship
An agent may unilaterally renounce an agency relationship. Termination of the agency may
involve a breach of contract; if so, the agent could be liable to the principal for damages
resulting from the breach. However, breach of contract isn't in itself grounds for disciplinary
action. Failure to present an offer is grounds for disciplinary action; but here, since the agent
didn't write the offer, no offer exists yet. (An agent is free to renounce rather than help the
principal do something pointless or unwise.)
Closing is set for August 1. The seller has already paid the property taxes for the year, totaling
$6,000. How much of that amount is the buyer's responsibility?
A. $2,000
B. $2,500
C. $3,000
D. $3,500 - Answer answer
B: $2,500
Since the buyer is taking title on August 1, she's responsible for the property taxes for the
remaining five months of the year (August, September, October, November, and December).
Divide the annual taxes by 12 to find the monthly amount: $6, - $500. Multiply that
figure by 5 to determine the buyer's share of taxes: 5 x $500 = $2500 (Generally the state will
tell you when to treat all months as equal, but here even set of dollar amounts in the answers
lets you know that)
The IRS issues rules that determine when a real estate agent is an employee and when he is an
independent contractor. Which of the following statements on that topic is FALSE?
,D. The brokerage will tell an employee when to work certain hours - Answer answer
B. The brokerage may require an independent contractor to have a cell phone
This question is a bit dated but you may encounter something similar on the license exam. That
said, one of the key differences between employees and independent contractors is the level of
supervision; an independent contractor uses his judgment how to perform a task, while an
employee receives specific instructions on how to accomplish each task.
An instruction to carry a particular equipment doesn't particularly suggest an independent
contractor
relationship, making B the only possible answer. But certainly all agents carry cell phones now
whether instructed to do so or not.
A tenant has already paid his $1,200 rent for the month for a single-family property. The
property's owner sells it to a new buyer, with closing occurring on the 15th of June. The parties
decide the seller is entitled to rent for the closing date. On the settlement statement, the
prorated rent will appear as a:
A. $600 debit for the buyer and a $600 credit for the seller
B. $600 debit for the seller and a $600 credit for the buyer
C. $1,200 credit for the buyer
D. $1,200 credit for the seller - Answer Correct Answer: B
36% of students missed this question
The rent has already been paid to the seller, so the seller will need to give some of that rent to
the buyer. The buyer's prorated share will be a debit for the seller and a credit for the buyer on
the settlement statement. The seller's share is for the 1st through the 15th (15 days), and the
buyer's share is for the 16th through the 30th (also 15 days), so the $1,200 can be divided in
half. The settlement statement will show a $600 debit for the seller and a $600 credit for the
buyer.
Mineral rights associated with real property are always:
A. conveyed along with the surface rights to the property
, Mineral rights may be sold separately from the land. However, they are appurtenant to the land
and will be
conveyed with the land unless there is an agreement otherwise.
John, Kevin, and Lyle own a property as tenants in common, but only Kevin and Lyle live on the
property. John would like to sell the property for redevelopment, but Kevin and Lyle refuse.
What is John's best option?
A. Charge Kevin and Lyle rent
B. Create a trust to manage the property
C. Evict Kevin and Lyle
D. Obtain a court order to sell the property - Answer Correct Answer: D
When co-owners can't agree on whether to sell or how to divide their property, one or more of
them may file a
partition action to terminate the co-ownership. If there isn't a feasible way to physically divide
the property, the
court will order that the property be sold and the sale proceeds be divided between the former
co-owners.
W, age 17, enters into an installment contract to purchase a five-year-old car from S, an adult.
From a legal point of view, the contract is:
A. void
B. voidable by W only
C. voidable by S only
D. voidable by either S or W - Answer Answer: B
The contract is voidable by the minor, but not by the other party.
An investor wants to invest $250,000 in the development of a strip mall by taking out a loan
secured by a residential property that he owns. Will the Truth in Lending Act apply to this
transaction?
