NATIONAL REAL ESTATE EXAM PRACTICE TEST
A bank refuses to issue mortgages to a historically Black part of town. This practice is: - answer-
redlining, and it's illegal
A buyer offers additional consideration to add a 10-day option period to the sales contract. During
this period, the buyer can:* - answer-terminate the contract for any reason
A buyer representation agreement establishes an agency relationship between a buyer and a: -
answer-broker
A Christian organization owns a fourplex. It wants to rent to only Christian tenants. Under the
federal Fair Housing Act, is this legal? - answer-Yes. Religious organizations which rent to tenants for
residential purposes are exempt from the Fair Housing Act
A contract can still be valid even if it lacks: - answer-earnest money
A contract is not considered valid unless consideration is involved. This is due to the idea that a
person: - answer-CANNOT do something of value without receiving something in turn
A credit to the seller has what effect on charges made to the parties involved in the transaction? -
answer-increases the amount the seller receives at closing
A debit to the buyer has what effect on charges made to the parties involved in the transaction? -
answer-increases the amount due from the buyer at closing
A homeowner sells her primary residential home and realizes a profit of $185,000. How much tax
will this homeowner pay on the capital gains? - answer-None. Homeowners are exempt from capital
gains up to $250,000 per person every two years.
A married couple bought a home ten years ago for $400,000. Their neighborhood has rapidly grown
in popularity, and they were able to sell their home this year for $950,000. How much of that money
will they be required to pay capital gains tax on? - answer-$50,000
A metes and bounds legal description always returns to: - answer-the point of beginning
A new $350,000 home is being built in a neighborhood of mostly $200,000 homes. Although the
home has many updates and is in better condition than the surrounding houses, its value is
significantly less than the price. Which principle of appraisal can explain this? - answer-principle of
regression
A new contract substituting the obligations of an original contract is a(n): - answer-novation
A potentially valid contract in which at least one party has the option to rescind is described as: -
answer-voidable
A property manager's PRIMARY responsibility to the owner is to: - answer-realize the highest return
possible and maximize the owner's return on that investment
A property manager's PRIMARY responsibility to the owner is to: - answer-realize the highest return
possible and maximize the owner's return on that investment
, A property owner has the right to tell other people that they cannot trespass on their property.
What is this right called? - answer-right of exclusion
A square bedroom measures 10 feet by 10 feet. What is the area of the room? - answer-100 square
feet
A valid sales contract stipulates that the seller must repair a hole in the roof before closing day. The
seller failed to do so, which makes the seller guilty of: - answer-breach of contract
All federally related loan programs require a property to have which of these? - answer-an appraisal
Allie cannot depreciate her investment property for a tax deduction. What kind of property is it? -
answer-undeveloped land
An agent should present all offers to their client UNLESS:* - answer-the client explicitly instructs the
agent not to present any offers below a certain amount in writing
An alienation clause would require a borrower to: - answer-pay the mortgage debt in its entirety
upon the property being sold
An appraisal is required for all: - answer-federally related loan programs
An appraisal report is a report from a: - answer-licensed appraiser that sums up a property's market
value based on collected data
An example of a voidable contract is a contract that: - answer-is made with one party who is not
competent
An executory contract is a contract that: - answer-has not yet been fully performed
An investor has purchased a one-family home that they plan to rent as an investment. Which of
these statements accurately describes how it can be depreciated? - answer-It can be depreciated
over 27.5 years.
An unmarried Texas couple purchased real estate together. How would the deed identify how they
hold their interests if they specify they want them passed to the survivor in case of death? - answer-
joint tenancy with rights of survivorship
Arturo is buying a house for $400,000. He will be making a down payment of 5%. He already
submitted a check for $2,000 as earnest money, which will be applied to the purchase. How much
will Arturo need to pay on closing day? - answer-$18,000
Asbestos, an environmental hazard, is a mineral that has been used for many years as: - answer-
insulation
Ben manages an apartment complex that has an effective gross income of $100,000. Operating
expenses were $60,000. What is the net operating income of the property? - answer-$40,000
Both parties involved in an agency agreement agree to end the agreement early. What is this called?
- answer-mutual rescission
A bank refuses to issue mortgages to a historically Black part of town. This practice is: - answer-
redlining, and it's illegal
A buyer offers additional consideration to add a 10-day option period to the sales contract. During
this period, the buyer can:* - answer-terminate the contract for any reason
A buyer representation agreement establishes an agency relationship between a buyer and a: -
answer-broker
A Christian organization owns a fourplex. It wants to rent to only Christian tenants. Under the
federal Fair Housing Act, is this legal? - answer-Yes. Religious organizations which rent to tenants for
residential purposes are exempt from the Fair Housing Act
A contract can still be valid even if it lacks: - answer-earnest money
A contract is not considered valid unless consideration is involved. This is due to the idea that a
person: - answer-CANNOT do something of value without receiving something in turn
A credit to the seller has what effect on charges made to the parties involved in the transaction? -
answer-increases the amount the seller receives at closing
A debit to the buyer has what effect on charges made to the parties involved in the transaction? -
answer-increases the amount due from the buyer at closing
A homeowner sells her primary residential home and realizes a profit of $185,000. How much tax
will this homeowner pay on the capital gains? - answer-None. Homeowners are exempt from capital
gains up to $250,000 per person every two years.
A married couple bought a home ten years ago for $400,000. Their neighborhood has rapidly grown
in popularity, and they were able to sell their home this year for $950,000. How much of that money
will they be required to pay capital gains tax on? - answer-$50,000
A metes and bounds legal description always returns to: - answer-the point of beginning
A new $350,000 home is being built in a neighborhood of mostly $200,000 homes. Although the
home has many updates and is in better condition than the surrounding houses, its value is
significantly less than the price. Which principle of appraisal can explain this? - answer-principle of
regression
A new contract substituting the obligations of an original contract is a(n): - answer-novation
A potentially valid contract in which at least one party has the option to rescind is described as: -
answer-voidable
A property manager's PRIMARY responsibility to the owner is to: - answer-realize the highest return
possible and maximize the owner's return on that investment
A property manager's PRIMARY responsibility to the owner is to: - answer-realize the highest return
possible and maximize the owner's return on that investment
, A property owner has the right to tell other people that they cannot trespass on their property.
What is this right called? - answer-right of exclusion
A square bedroom measures 10 feet by 10 feet. What is the area of the room? - answer-100 square
feet
A valid sales contract stipulates that the seller must repair a hole in the roof before closing day. The
seller failed to do so, which makes the seller guilty of: - answer-breach of contract
All federally related loan programs require a property to have which of these? - answer-an appraisal
Allie cannot depreciate her investment property for a tax deduction. What kind of property is it? -
answer-undeveloped land
An agent should present all offers to their client UNLESS:* - answer-the client explicitly instructs the
agent not to present any offers below a certain amount in writing
An alienation clause would require a borrower to: - answer-pay the mortgage debt in its entirety
upon the property being sold
An appraisal is required for all: - answer-federally related loan programs
An appraisal report is a report from a: - answer-licensed appraiser that sums up a property's market
value based on collected data
An example of a voidable contract is a contract that: - answer-is made with one party who is not
competent
An executory contract is a contract that: - answer-has not yet been fully performed
An investor has purchased a one-family home that they plan to rent as an investment. Which of
these statements accurately describes how it can be depreciated? - answer-It can be depreciated
over 27.5 years.
An unmarried Texas couple purchased real estate together. How would the deed identify how they
hold their interests if they specify they want them passed to the survivor in case of death? - answer-
joint tenancy with rights of survivorship
Arturo is buying a house for $400,000. He will be making a down payment of 5%. He already
submitted a check for $2,000 as earnest money, which will be applied to the purchase. How much
will Arturo need to pay on closing day? - answer-$18,000
Asbestos, an environmental hazard, is a mineral that has been used for many years as: - answer-
insulation
Ben manages an apartment complex that has an effective gross income of $100,000. Operating
expenses were $60,000. What is the net operating income of the property? - answer-$40,000
Both parties involved in an agency agreement agree to end the agreement early. What is this called?
- answer-mutual rescission
