75+ most common real estate exam questions

A bill of sale is used to transfer the ownership of what? - answer-Personal property A borrower takes out a mortgage loan that requires monthly payments of $875.70 for 20 years, and a final payment of $24,095. What type of loan is this? - answer-balloon loan A buyer and a seller both sign a purchase contract. What kind of title interest does the buyer have in the property at this point? - answer-Equitable (refers to a persons right to obtain full ownership of a property or property interest) A change in flight patterns that caused a loss in property value would be an example of: - answer-Economic Obsolescence (form of depreciation that from causes outside your property lines) A court order to a properly designated individual to sell property in order to satisfy a judgment is called: - a deficiency judgment - a writ of execution - a lis pendens - an attachment - answer-a writ of execution (a court order to sell something) A listing broker had a signed sales contract on a house. The broker noticed a crumbling wall in the basement. The broker should inform: - both the buyer and seller - the seller only - the buyer, seller, mortgage company - the buyer only - answer-Both the buyer and seller (have to disclose all material facts to both buyer and seller) A normal section in the Government Rectangular Survey System contains: - answer-1 sq mile A person who has complete control over a parcel of real estate is said to own a: - life estate - fee simple estate - leasehold estate - defeasible estate - answer-fee simple estate (highest degree of ownership) A portion of Joe's building was inadvertently build on Ginny's land. This is called an: - easement - encroachment - avulsion - accretion - answer-- Encroachment A portion of Joe's building was inadvertently built on Ginny's land. This is called an: - easement - encroachment - avulsion - accretion - answer-encroachment A possessory right or ownership interest in real estate is called an - answer-Estate A purchaser is qualified to obtain an FHA loan for his new home. Which of the following would he apply to? - answer-An FHA lender A real estate broker was responsible for a chain of events that resulted in the sale of one of his clients properties. The broker is legally called the: - responsible party - compensable cause - initiating factor - procuring cause - answer-procuring cause (the agent who caused the buyer to purchase the home and earned the commission is generally the procuring cause agent) A township contains only: - 640 acres - 36 sq yards - 23,040 feet - 36 sections - answer-36 sections (section is 1 sq mile, township is 36 sections, township is 36 sq miles) An agent becomes the agent of the seller when both the seller and the agent sign: - answer-Listing agreement An appraiser examines a building that is 25 years old. Because of superior upkeep, it has the condition of an 11 year old building. The appraiser may use the 11 year old age as the: - actual age - effective age - numerical age - physical age - answer-Effective age (the age based on its condition) Blockbusting, panic selling, and panic peddling - answer-panic a neighborhood into thinking property values will decline due to unwanted persons moving in (against FHA) Construction onto the property of another, like a wall fence, building, is known as what? - answer-Encroachment (think of somebody stepping over a line from their side to yours. an encroachment is the physical intrusion of a structure or improvement on the land of another. *ex: fence or driveway or tree over the property line) Discrimination is prohibited in lending practices under which act? - answer-Equal Credit Opportunity Act (ECOA) (passed in 1992) Economic obsolescence in a property is generally: - answer-a type of depreciation that is incurable. (when there is economic obsolescence people move) eminent domain - answer-the right of government to take private property for public use Eminent domain and escheat are examples of what - answer-involuntary alienation (government taking property from you whether you like it or not) Encumbrance - answer-Anything which affects or limits the fee simple title to property (anything that limits you: easements, clouds on title, liens, mortgages) If one uses the words "of definite duration" to describe a lease, it's most likely: - answer-estate for years If the owners of a shopping center want a major department stores lease to provide rental payments that reflect the store's sales, they are most likely to use which type of lease? - answer-Percentage lease In a new counter-offer: - terms of offer can not be changed - counter offeror becomes the counter offeree - counter offeror can change the terms of the offer unilaterally - answer-- counter offeror becomes the counter offeree (brand new offer) In some states, instead of a mortgage they use - answer-a deed of trust In the formation of contracts, "valuable", "good", "sufficient", and "adequate" are terms most closely associated with which of the following? - consideration - bilateral contracts - compensation - performance - answer-Consideration (can be anything of value that is being exchanged for the purpose of the contract. oftentimes this is money but it can be anything 'valuable, good, sufficient, adequate) Inverse Condemnation - answer-describes a situation in which a person takes action against the government for taking private property but failing to pay compensation as required by the 5th amendment Involuntary methods of conveying property include all of the following except: - quitclaim deeds - adverse possession - escheat - condemnation - answer-quitclaim deeds (most immediate way to transfer property, usually done between friends and family. these deeds are a form of voluntary conveyance of a property without any warranties) Jones put his house on the market. Brown made a written purchase offer that Jones accepted in writing. When is the contract valid? - When Brown is notified of the acceptance - When the broker gets his fee - As soon as the signatures are notarized - Immediately - answer-When Brown is notified of the acceptance Land that is subject to easement is said to be: - encroached - appurtenant - restricted - encumbered - answer-encumbered Listing Agreement - answer-- both unilateral and bilateral - employment contract - contract to find a buyer for a property An employment contract between a property owner and a real estate firm/broker by which the broker is employed to find a ready, willing and able buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission. O-R-E-E Rule - answer--or gives -ee receives "lessor, vendor, optionor, grantor to give or the proper tour for your pleasure lessee, vendee, optionee, grantee, give me property makes me happy" one acre equals - answer-43,560 square feet One example of an easement in gross is the right of: - Owners to cut across their neighbors property - Utility companies to access a property in order to maintain wires or pipes - owners to use the neighbors backyard for their own recreation - a roofing company working on repairs to store some of the equipment in the neighbors yard - answer-Utility companies to access a property in order to maintain wires or pipes Part of the consideration offered to a seller when the buyer signs an agreement of sale is called - an option - a recognizance - earnest money - a freehold of state - answer-earnest money (a deposit that shows you are serious about an offer) Promise in exchange for a promise, supported by consideration, is the basis for a: - multilateral contract - unilateral contract - offer to lease - valid, binding, bilateral contract - answer-valid, binding, bilateral contract (a promise for a promise, unilateral is one promise) Real property can become personal property by the process called: - answer-severance (literally by detaching it from the land) Redlining - answer-A process by which banks refuse loans to homeowners in certain segments of the city (against FHA) Regression - answer-The principle of regression is the reason people are cautioned against owning the most expensive house in the neighborhood RESPA would apply to which of the following? - homes and residential dwellings only - 1-4 family residential dwellings - commercial real estate only - subdivisions - answer-1-4 family residential dwellings Steering - answer-Channeling prospective buyers or tenants to particular neighborhoods based upon their race, religion, national origin, or ancestry. (against FHA) Tenancy at sufferance - answer-an agreement in which a property renter is legally permitted to live on a property after a lease term has expired but before the landlord demands the tenant vacate the property The addition to one's land by the gradual deposit of soil through natural causes is: - answer-accretion the amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the: - amortization ratio - debt to equity ratio - capital use ratio - loan to value ratio - answer-loan to value ratio (aka LTV is the first and usually most important lending consideration. without an acceptable LTV, most deals won't go through) The difference between a freehold and leasehold estate - answer-ownership versus possession (freehold estates are estates of ownership while in a leasehold estate the property owner gives the tenant possession of the property) The difference between the value of a property and the total amount of liens against it is known as: - answer-equity (difference between how much property is worth and how much is owed on the property) The effectiveness of the market data approach is limited most by which of the following factors? - Th