Rockwell exam study guide
1. A life estate will last until:
• CORRECT ANSWER: The death of the recipient
o A life estate is a type of ownership interest that lasts only for the lifetime
of a specified person (the "life tenant"). Upon the death of the life tenant,
the property automatically reverts to the original owner or passes to a
remainderman.
2. The deed that states that there is a conveyance of interest, if any, is
the:
• CORRECT ANSWER: Quitclaim deed
o A quitclaim deed transfers whatever interest the grantor has in the
property, without any warranties or guarantees of title. It is often used in
divorces, gifting property, or clearing title defects.
3. A judgement lien:
• CORRECT ANSWER: When paid off, requires a satisfaction of judgement to be
recorded to clear the record
, o A judgment lien is a court-ordered claim against a debtor’s property. Once
the debt is satisfied, the creditor must file a satisfaction of judgment to
remove the lien from public records.
4. The seller listed the property for $95,000. Assuming that their listing
agreement is typical, the broker would NOT be entitled to a commission
if the seller:
• CORRECT ANSWER: Rejected a $90,000 offer from a financially qualified buyer
o In most listing agreements, the broker earns a commission if they produce
a "ready, willing, and able" buyer, even if the seller rejects the offer.
However, if the listing specifies a minimum acceptable price, the broker
may not be entitled to a commission if the seller rejects an offer below
that threshold.
5. Usury laws fix which of the following?
• CORRECT ANSWER: Maximum interest rates
o Usury laws set the highest legal interest rate that can be charged on loans
to prevent predatory lending.
6. For which of the following people would an adjustable-rate loan not
be a good idea?
• CORRECT ANSWER: A person about to retire
, o Adjustable-rate mortgages (ARMs) have fluctuating interest rates, which
can lead to higher payments. Retirees on fixed incomes may struggle with
unpredictable payment increases.
7. An appraiser needs to be state-certified to perform which of the
following appraisals?
• CORRECT ANSWER: Appraisal related to an FHA loan
o Federally related transactions (such as FHA loans) require state-certified
appraisers to ensure compliance with federal regulations.
8. On a settlement statement, an earnest money deposit that will be held
by the brokerage firm until closing is a:
• CORRECT ANSWER: Credit to the buyer
o The earnest money deposit is applied toward the buyer’s down payment
or closing costs, so it appears as a credit on the settlement statement.
9. A licensee hears that a religious group will be opening a commune in a
neighborhood. He begins contacting neighbors and telling them about
this, encouraging them to list their properties with him before property
values decline. This would be:
• CORRECT ANSWER: Blockbusting
o Blockbusting is an illegal practice where agents encourage homeowners to
sell by spreading fear about demographic changes (e.g., race, religion) to
profit from panic selling.
1. A life estate will last until:
• CORRECT ANSWER: The death of the recipient
o A life estate is a type of ownership interest that lasts only for the lifetime
of a specified person (the "life tenant"). Upon the death of the life tenant,
the property automatically reverts to the original owner or passes to a
remainderman.
2. The deed that states that there is a conveyance of interest, if any, is
the:
• CORRECT ANSWER: Quitclaim deed
o A quitclaim deed transfers whatever interest the grantor has in the
property, without any warranties or guarantees of title. It is often used in
divorces, gifting property, or clearing title defects.
3. A judgement lien:
• CORRECT ANSWER: When paid off, requires a satisfaction of judgement to be
recorded to clear the record
, o A judgment lien is a court-ordered claim against a debtor’s property. Once
the debt is satisfied, the creditor must file a satisfaction of judgment to
remove the lien from public records.
4. The seller listed the property for $95,000. Assuming that their listing
agreement is typical, the broker would NOT be entitled to a commission
if the seller:
• CORRECT ANSWER: Rejected a $90,000 offer from a financially qualified buyer
o In most listing agreements, the broker earns a commission if they produce
a "ready, willing, and able" buyer, even if the seller rejects the offer.
However, if the listing specifies a minimum acceptable price, the broker
may not be entitled to a commission if the seller rejects an offer below
that threshold.
5. Usury laws fix which of the following?
• CORRECT ANSWER: Maximum interest rates
o Usury laws set the highest legal interest rate that can be charged on loans
to prevent predatory lending.
6. For which of the following people would an adjustable-rate loan not
be a good idea?
• CORRECT ANSWER: A person about to retire
, o Adjustable-rate mortgages (ARMs) have fluctuating interest rates, which
can lead to higher payments. Retirees on fixed incomes may struggle with
unpredictable payment increases.
7. An appraiser needs to be state-certified to perform which of the
following appraisals?
• CORRECT ANSWER: Appraisal related to an FHA loan
o Federally related transactions (such as FHA loans) require state-certified
appraisers to ensure compliance with federal regulations.
8. On a settlement statement, an earnest money deposit that will be held
by the brokerage firm until closing is a:
• CORRECT ANSWER: Credit to the buyer
o The earnest money deposit is applied toward the buyer’s down payment
or closing costs, so it appears as a credit on the settlement statement.
9. A licensee hears that a religious group will be opening a commune in a
neighborhood. He begins contacting neighbors and telling them about
this, encouraging them to list their properties with him before property
values decline. This would be:
• CORRECT ANSWER: Blockbusting
o Blockbusting is an illegal practice where agents encourage homeowners to
sell by spreading fear about demographic changes (e.g., race, religion) to
profit from panic selling.
