NATIONAL REAL ESTATE STUDY GUIDE
1. Mary's parents gave her a life estate on a house. John is the remainderman. Mary leased the
property to Bob for 5 years. During the lease, Bob died. What happens to the property?: When
the tenant dies the property goes to Mary
2. A buyer who wants to be sure that he is getting good title to a propertyshould rely on: (c)
a general warranty deed.
3. A buyer has provided confidential information about his income and bankaccount to his
agent. The agent has forwarded this information to the listing agent. The listing agent has
disclosed details to his seller client. Who is liablefor violation of the duties of agency?: The
buyer's agent and broker.
4. When does a buyer's offer become a binding contract?: When it is acceptedand the
acceptance is communicated.
5. A landlord and tenant negotiate a verbal lease agreement on the phone for an 8 month
term. The tenant later decides not to move in. What term bestdescribes the lease agreement
these two parties had?: valid and enforceable
6. A senior apartment complex has more than 80% of the units occupied by someone 55
years old or older. There is a vacant apartment. Can they refuse to lease it to a single mother
with a child?: Yes.
7. Which of the following closings would be regulated by RESPA?: a condo-minium
8. Two brokers are discussing commissions at a social function with the intention of setting
a rate for their market. After the function, they never act ontheir conversation. What is true?: The
discussion is a violation of Anti-Trust law.
9. In many instances a lender will require a buyer to purchase PMI whenfinancing the
purchase of a home. What does PMI do?: Insures the lender'sexposure of risk, usually the top
25-30% of the loan amount.
10. In a property manager's quarterly report to the owner, which of the follow- ing would be
considered an operating expense?: property maintenance/repaint-ing
11. When a broker sponsors a license holder, the license holder usually re- mains an
independent contractor. If a broker moves an independent contrac-tor to employee status, the
broker MUST: pay payroll taxes for the license holder.
12. An individual has applied for credit and the application has been denied.What federal law
states that the individual is now entitled to a free copy of his/her credit report: The Fair Credit
Reporting Act
13. John owns the dominant estate with an easement appurtenant. John sellsthe property. What
happens to the easement?: It belongs to the buyer.
14. . A commercial tenant's lease will expire at the end of this month. He is currently in the
process of removing his display cases from the shop. What istrue?: He can take these trade
, fixtures as long as he removes them prior to lease end.
15. John, Maria and Mark are joint tenants. Mark dies. Maria sells her share toJane. John and
Jane are:: tenants in common
16. Mark's fence is trespassing on John's land. This is an example of:: anencroachment.
17. John owns lakefront property. He has been granted water rights to the lake.He has:: littoral
rights.
18. A property owner has defaulted on his mortgage and the lender has sent a notice of
foreclosure. Before the foreclosure sale the owner is able to pay all he owes and reclaim the
property. This is an example of:: redemption.
19. The local government has changed property use from commercial to R-1(single-family
residential) in your neighborhood. This is an example of the right of:: police power.
20. Joe received payment from his title insurance company to compensate him for a defect in
his title. Subsequently he was awarded a judgment againstthe seller, and collected the funds
from the seller, to compensate him for
the same defect. The title company has claimed the right to a refund from
Joe. What clause in the title policy allows the title company to make thisclaim?: subrogation.
21. At closing a seller learns that he has an unsatisfied M&M Lien on his property. This is
most likely the result of:: a fence that was built on the property,but not paid for.
22. An appraiser requires a property to have four characteristics to have value.They are::
demand, utility, scarcity and transferability.
23. An appraiser has valued a single-family rental property in a neighborhood where almost all
the homes are leased. What approach did he most likely use to determine the value for this
property?: the income approach
24. An older home has been updated for technology to eliminate what type of depreciation?:
functional obsolescence
25. The closing of a real estate transaction in which all the appropriate doc-uments are
signed and the proceeds of the loan are disbursed is known as: Consumation
26. The principal of appraisal that states value is influenced by the cost ofacquiring a
comparable replacement is the: Principal of substitution
27. The deed that contains no warranties of ownership and gives the buyer theleast protection
is the: Quitclaim Deed
28. The role of a property manager is established by a written agreementcalled: Management
agreement
29. When should a buyer do a final walk through of a property: 1 to 3 days beforeclosing
30. The TREC buyer and seller temporary lease agreements are for periodsof: 30 days or less
1. Mary's parents gave her a life estate on a house. John is the remainderman. Mary leased the
property to Bob for 5 years. During the lease, Bob died. What happens to the property?: When
the tenant dies the property goes to Mary
2. A buyer who wants to be sure that he is getting good title to a propertyshould rely on: (c)
a general warranty deed.
3. A buyer has provided confidential information about his income and bankaccount to his
agent. The agent has forwarded this information to the listing agent. The listing agent has
disclosed details to his seller client. Who is liablefor violation of the duties of agency?: The
buyer's agent and broker.
4. When does a buyer's offer become a binding contract?: When it is acceptedand the
acceptance is communicated.
5. A landlord and tenant negotiate a verbal lease agreement on the phone for an 8 month
term. The tenant later decides not to move in. What term bestdescribes the lease agreement
these two parties had?: valid and enforceable
6. A senior apartment complex has more than 80% of the units occupied by someone 55
years old or older. There is a vacant apartment. Can they refuse to lease it to a single mother
with a child?: Yes.
7. Which of the following closings would be regulated by RESPA?: a condo-minium
8. Two brokers are discussing commissions at a social function with the intention of setting
a rate for their market. After the function, they never act ontheir conversation. What is true?: The
discussion is a violation of Anti-Trust law.
9. In many instances a lender will require a buyer to purchase PMI whenfinancing the
purchase of a home. What does PMI do?: Insures the lender'sexposure of risk, usually the top
25-30% of the loan amount.
10. In a property manager's quarterly report to the owner, which of the follow- ing would be
considered an operating expense?: property maintenance/repaint-ing
11. When a broker sponsors a license holder, the license holder usually re- mains an
independent contractor. If a broker moves an independent contrac-tor to employee status, the
broker MUST: pay payroll taxes for the license holder.
12. An individual has applied for credit and the application has been denied.What federal law
states that the individual is now entitled to a free copy of his/her credit report: The Fair Credit
Reporting Act
13. John owns the dominant estate with an easement appurtenant. John sellsthe property. What
happens to the easement?: It belongs to the buyer.
14. . A commercial tenant's lease will expire at the end of this month. He is currently in the
process of removing his display cases from the shop. What istrue?: He can take these trade
, fixtures as long as he removes them prior to lease end.
15. John, Maria and Mark are joint tenants. Mark dies. Maria sells her share toJane. John and
Jane are:: tenants in common
16. Mark's fence is trespassing on John's land. This is an example of:: anencroachment.
17. John owns lakefront property. He has been granted water rights to the lake.He has:: littoral
rights.
18. A property owner has defaulted on his mortgage and the lender has sent a notice of
foreclosure. Before the foreclosure sale the owner is able to pay all he owes and reclaim the
property. This is an example of:: redemption.
19. The local government has changed property use from commercial to R-1(single-family
residential) in your neighborhood. This is an example of the right of:: police power.
20. Joe received payment from his title insurance company to compensate him for a defect in
his title. Subsequently he was awarded a judgment againstthe seller, and collected the funds
from the seller, to compensate him for
the same defect. The title company has claimed the right to a refund from
Joe. What clause in the title policy allows the title company to make thisclaim?: subrogation.
21. At closing a seller learns that he has an unsatisfied M&M Lien on his property. This is
most likely the result of:: a fence that was built on the property,but not paid for.
22. An appraiser requires a property to have four characteristics to have value.They are::
demand, utility, scarcity and transferability.
23. An appraiser has valued a single-family rental property in a neighborhood where almost all
the homes are leased. What approach did he most likely use to determine the value for this
property?: the income approach
24. An older home has been updated for technology to eliminate what type of depreciation?:
functional obsolescence
25. The closing of a real estate transaction in which all the appropriate doc-uments are
signed and the proceeds of the loan are disbursed is known as: Consumation
26. The principal of appraisal that states value is influenced by the cost ofacquiring a
comparable replacement is the: Principal of substitution
27. The deed that contains no warranties of ownership and gives the buyer theleast protection
is the: Quitclaim Deed
28. The role of a property manager is established by a written agreementcalled: Management
agreement
29. When should a buyer do a final walk through of a property: 1 to 3 days beforeclosing
30. The TREC buyer and seller temporary lease agreements are for periodsof: 30 days or less
