Lesson 16: Essentials of Property Management:
Pop questions with correct answers 2026
A buyer would like to start out with a significant amount of equity invested in his
house, so that he can reborrow against the equity if necessary. When structuring a
loan, what should the buyer's highest priority be?
A.Largest downpayment possible
B.Longest loan term possible
C.Lowest interest rate possible
D.Smallest downpayment possible - CORRECT ANSWER -A.Largest
downpayment possible
Equity refers to the difference between the property's value and the loans against
the property. Therefore, the larger the downpayment the buyer makes, the more
equity in the property he will have initially.
Vandelay Industries sells its office building to Howard Holding Co. in order to
raise some cash, but leases it back from them, so they won't have to move. Once
this transaction closes, what kind of interest does Vandelay have in the property?
A.Fee simple defeasible
B.Freehold estate
C.Life estate
D.Non-freehold estate - CORRECT ANSWER -D.Non-freehold estate
The selling party in a sale-leaseback transaction will have a leasehold interest (in
other words, a non-freehold interest) in the property once the transaction is
completed.
,In a sale-leaseback:
A.the grantor becomes the grantee
B.the grantor becomes the lessee
C.the broker has purchased the property
D.the property is sold at a loss - CORRECT ANSWER -B.the grantor becomes the
lessee
The grantor (seller) sells the property, but remains in possession as a lessee
(tenant).
One tax advantage of investing in real estate is:
A.high liquidity
B.low risk
C.homestead protection
D.sheltering of income - CORRECT ANSWER -D.sheltering of income
Real estate investment is often thought of as a "tax shelter" because it serves to
partially shelter investors from income tax liability.
A property management agreement is amended to take into account some changing
circumstances. The amendment must be signed by the owner and:
A.the designated broker for the firm providing management services
B.anyone who works for the brokerage company
C.the tenant
, D.the tenant and the real estate licensee - CORRECT ANSWER -A.the designated
broker for the firm providing management services
A property management agreement is a contract between a property owner and the
real estate firm that provides the management services. It is not a contract between
the property owner and an individual licensee, although in some cases a licensee
may sign on behalf of his brokerage.
A property management agreement must contain which of the following?
A.A salary for the property manager
B.What percentage of the property's net income will be used as the manager's
commission
C.Marketing plans
D.The property manager's scope of authority - CORRECT ANSWER -D.The
property manager's scope of authority
Any property management agreement should include the scope of the manager's
authority, such as whether he can collect and disburse funds. It should also discuss
the manager's compensation, but the compensation need not take the form of
salary; it could be by commission, for example.
A property manager decides to offer some additional services beyond what is
specified in the property management agreement. She may do so after:
A.giving the tenants 30 days' notice
B.obtaining written authorization from the owner
C.providing notice to the Department of Licensing
Pop questions with correct answers 2026
A buyer would like to start out with a significant amount of equity invested in his
house, so that he can reborrow against the equity if necessary. When structuring a
loan, what should the buyer's highest priority be?
A.Largest downpayment possible
B.Longest loan term possible
C.Lowest interest rate possible
D.Smallest downpayment possible - CORRECT ANSWER -A.Largest
downpayment possible
Equity refers to the difference between the property's value and the loans against
the property. Therefore, the larger the downpayment the buyer makes, the more
equity in the property he will have initially.
Vandelay Industries sells its office building to Howard Holding Co. in order to
raise some cash, but leases it back from them, so they won't have to move. Once
this transaction closes, what kind of interest does Vandelay have in the property?
A.Fee simple defeasible
B.Freehold estate
C.Life estate
D.Non-freehold estate - CORRECT ANSWER -D.Non-freehold estate
The selling party in a sale-leaseback transaction will have a leasehold interest (in
other words, a non-freehold interest) in the property once the transaction is
completed.
,In a sale-leaseback:
A.the grantor becomes the grantee
B.the grantor becomes the lessee
C.the broker has purchased the property
D.the property is sold at a loss - CORRECT ANSWER -B.the grantor becomes the
lessee
The grantor (seller) sells the property, but remains in possession as a lessee
(tenant).
One tax advantage of investing in real estate is:
A.high liquidity
B.low risk
C.homestead protection
D.sheltering of income - CORRECT ANSWER -D.sheltering of income
Real estate investment is often thought of as a "tax shelter" because it serves to
partially shelter investors from income tax liability.
A property management agreement is amended to take into account some changing
circumstances. The amendment must be signed by the owner and:
A.the designated broker for the firm providing management services
B.anyone who works for the brokerage company
C.the tenant
, D.the tenant and the real estate licensee - CORRECT ANSWER -A.the designated
broker for the firm providing management services
A property management agreement is a contract between a property owner and the
real estate firm that provides the management services. It is not a contract between
the property owner and an individual licensee, although in some cases a licensee
may sign on behalf of his brokerage.
A property management agreement must contain which of the following?
A.A salary for the property manager
B.What percentage of the property's net income will be used as the manager's
commission
C.Marketing plans
D.The property manager's scope of authority - CORRECT ANSWER -D.The
property manager's scope of authority
Any property management agreement should include the scope of the manager's
authority, such as whether he can collect and disburse funds. It should also discuss
the manager's compensation, but the compensation need not take the form of
salary; it could be by commission, for example.
A property manager decides to offer some additional services beyond what is
specified in the property management agreement. She may do so after:
A.giving the tenants 30 days' notice
B.obtaining written authorization from the owner
C.providing notice to the Department of Licensing
