Real Estate Exam
Comprehensive Questions and
Solutions Graded A+
Which two documents are necessary to establish a legally binding mortgage loan? - Answer:
Promissory note and deed of trust
The promissory note outlines the borrower's promise to repay the loan, while the deed of trust
secures the property as collateral for the loan
If a buyer defaults on a sales contract after providing $10,000 as earnest money for a $200,000
property, what can the seller do with the $10,000? - Answer: Keep the entire amount as
compensation.
Earnest money serves as a form of security deposit and is typically forfeited by the buyer in the
event of default as a way to compensate the seller for any losses or damages
Surface rights, air rights and subsurface rights are all rights that can be sold by a property owner
while still retaining the property itself. These rights are known as: - Answer: Severable rights
Surface rights, air rights, and subsurface rights can be sold separately and are called severable
rights.
When an easement allows the use of a neighboring property which automatically transfers
upon the sale of either dominant or servient property, it is called what type of easement? -
Answer: Easement Appurtenant
, Appurtenant means "runs with the land". An easement Appurtenant is an easement allowing
the use of a neighboring property which automatically transfers upon the sale of either
dominant or servient property.
In real estate, what is the closest meaning to the term "quieting a title?" - Answer: Clearing any
liens or encumbrances on a property.
Refers to legal process of resolving any claims, deflects, or disputes that could cloud or
challenge ownership rights of a property, ensuring a clear and marketable title.
What is the highest form of land ownership which includes the full and complete bundle of
property rights? - Answer: Fee Simple Absolute
It is the highest level of property ownership giving the owner(s) the right of possession, control,
exclusion, enjoyment, & disposition.
If your broker sells a triangular parcel of land for $750 an acre, and your commission rate is 8%,
what will be your commission if the land has a base length of 1,200 feet and a height of 700
feet? - Answer: $578.71
The triangular parcel's area is (1/2) x 1,200 ft x 700 ft = 420,000 square feet. There is 43,560 Sqft
in an acre 420,000/43,560=9.65 acres x 750= $7,231.40 x 8% = $578.51
Tom is constructing a new house valued at $100,000. Given that the average property value of
his surrounding neighbors is $225,000, which principle suggests that Tom will experience a
positive effect on his property value? - Answer: Principle of progression
States that a property's value tends to increase when surrounded by higher-valued properties.
Tom's property values may benefit from the higher average property value of his neighbors.
Comprehensive Questions and
Solutions Graded A+
Which two documents are necessary to establish a legally binding mortgage loan? - Answer:
Promissory note and deed of trust
The promissory note outlines the borrower's promise to repay the loan, while the deed of trust
secures the property as collateral for the loan
If a buyer defaults on a sales contract after providing $10,000 as earnest money for a $200,000
property, what can the seller do with the $10,000? - Answer: Keep the entire amount as
compensation.
Earnest money serves as a form of security deposit and is typically forfeited by the buyer in the
event of default as a way to compensate the seller for any losses or damages
Surface rights, air rights and subsurface rights are all rights that can be sold by a property owner
while still retaining the property itself. These rights are known as: - Answer: Severable rights
Surface rights, air rights, and subsurface rights can be sold separately and are called severable
rights.
When an easement allows the use of a neighboring property which automatically transfers
upon the sale of either dominant or servient property, it is called what type of easement? -
Answer: Easement Appurtenant
, Appurtenant means "runs with the land". An easement Appurtenant is an easement allowing
the use of a neighboring property which automatically transfers upon the sale of either
dominant or servient property.
In real estate, what is the closest meaning to the term "quieting a title?" - Answer: Clearing any
liens or encumbrances on a property.
Refers to legal process of resolving any claims, deflects, or disputes that could cloud or
challenge ownership rights of a property, ensuring a clear and marketable title.
What is the highest form of land ownership which includes the full and complete bundle of
property rights? - Answer: Fee Simple Absolute
It is the highest level of property ownership giving the owner(s) the right of possession, control,
exclusion, enjoyment, & disposition.
If your broker sells a triangular parcel of land for $750 an acre, and your commission rate is 8%,
what will be your commission if the land has a base length of 1,200 feet and a height of 700
feet? - Answer: $578.71
The triangular parcel's area is (1/2) x 1,200 ft x 700 ft = 420,000 square feet. There is 43,560 Sqft
in an acre 420,000/43,560=9.65 acres x 750= $7,231.40 x 8% = $578.51
Tom is constructing a new house valued at $100,000. Given that the average property value of
his surrounding neighbors is $225,000, which principle suggests that Tom will experience a
positive effect on his property value? - Answer: Principle of progression
States that a property's value tends to increase when surrounded by higher-valued properties.
Tom's property values may benefit from the higher average property value of his neighbors.
