DONALDSON FINAL EXAM REAL ESTATE PRINCIPAL QUESTIONS & ANSWERS 100% CORRECT!!

DONALDSON FINAL EXAM REAL ESTATE PRINCIPAL QUESTIONS & ANSWERS 100% CORRECT!! “Which of the following is an economical characteristic of land? - CORRECT ANSWER Situs"n "An agency is best described as when the: - CORRECT ANSWER broker represents the principal."n "In the appraisal of a public building, an appraiser would most likely select to apply which of the common methods of appraisal? - CORRECT ANSWER cost approach"n "Lenders help protect themselves from loss by using - CORRECT ANSWER Impound accounts"n "A partial release clause is generally found in a: - CORRECT ANSWER Blanket mortgage"n "A man gave his best friend the right to go hunting on his farm. This would be an example of a (an): - CORRECT ANSWER Easement in gross"n "You and your spouse own your house in a form of ownership in which neither of you can sell the house individually your form of ownership is most likely: - CORRECT ANSWER Tenancy by entirety"n "When discussing the concept of total square footage with your client , what is the best way to describe how the total square footage is measurement ? - CORRECT ANSWER Total are under Roof (TAUR)"n "An Eastman by necessity is generally utilized to - CORRECT ANSWER Grant access to a Landlocked land owner"n "Joint Tennessee is a form of: - CORRECT ANSWER Coownership"n "A joint tenant may transfer his or her interest under which of the following circumstances? - CORRECT ANSWER At any time, without permission or approval, but the purchaser will not be a joint tenant"n "A natural object , such as a boulder stream or tree, maybe use as a marker in what form of legal description - CORRECT ANSWER Metes and bounds"n "What is the method of land description that identify as parcel by its shape boundaries? - CORRECT ANSWER Metes and bounds"n "Does Zone of property with a gas station is substantially changed to allow residential use only which of the following is true regarding the future use of a gas station - CORRECT ANSWER The gas Station may continue in is current use"n "The process of taking property while providing just compensation, is called - CORRECT ANSWER condemnation"n "An Easement by necessity is generally utilized to - CORRECT ANSWER Grant access to land lock land owner"n "Restrictive covenants are valid against: - CORRECT ANSWER current and subsequent owners"n "Which of the following values is the most likely to set the residential price for a sale? - CORRECT ANSWER market value"n "The penalty for charging a usury rate is: - CORRECT ANSWER forfeiture of the entire interest"n "Which of the following grants zoning authority to municipal government? - CORRECT ANSWER State enabling act"n "Zoning laws, building codes in environmental law or example of government use of - CORRECT ANSWER Police power"n "An appraisal uses. the cost approach, in appraiser a home the appraisal should not use which of the following type of information - CORRECT ANSWER Depreciation on the lane"n "For consideration during the appraisal process, which of the following is most likely be used as part of the valuation or estimation process - CORRECT ANSWER Effective age"n "An agent is trying to establish value for a residential rental home, using sold, rental comparables, in the neighborhood which of the following is the most likely methods use for the income approach to value - CORRECT ANSWER Gross rent multiply method"n "Which of the following types of depreciation is general in curable - CORRECT ANSWER "n "The amount of commission charged a client is established - CORRECT ANSWER In negotiation between broker and seller."n "A deposit in a typical Real Estate transaction - CORRECT ANSWER Must be maintained by the broker In the brokers designated escrow Account."n "When the association of an associate broker or salesperson is terminated with their firm for any reason, the broker must return the license to the LREC: - CORRECT ANSWER With in 5 days"n "If a broker is involved in obtaining deposits in property management, the broker must - CORRECT ANSWER open an account titled "Security Deposit Trust Account"."n "Sale people cannot accept a commission or valuable consideration for the performance of any act under the license law from any person except their - CORRECT ANSWER Sponsoring broker"n "According to the license law must be . - CORRECT ANSWER In writing"n "If a broker cannot resolve a dispute over a sales deposit - CORRECT ANSWER he must give the money to the local court and notify commission ."n "Every license must sign a sworn statement on their application attesting that they shall not induce any person to sell or rent and dwelling by representation regarding the entry of any person to the area due to that persons race color religion or national origin this prohibited is know as - CORRECT ANSWER Block busting"n "A law suite base on lesion by and moiety must be filled within - CORRECT ANSWER One year"n "If two or more person own the same piece of property each as an undivided share , this is refined to ad a - CORRECT ANSWER Undivided interest"n "A vendor who wishes to keep a life interest and convey the remainder to a relative may best do this by which of the following methods? - CORRECT ANSWER "n "you sign lease for one year and took possession of an apartment when the lease expired you continued to live in the apartment without the owner consent your tendency would be considered to be - CORRECT ANSWER Tenancy at sufferances"n "A man gave his best friend the right to go hunting on his farm. This would be an example of a (an): - CORRECT ANSWER easement in gross"n "Zoning regulations and decision are usually handle by - CORRECT ANSWER Town and cities"n "Ad valorem is Latin for - CORRECT ANSWER According to value"n "A property is sold under a deed restriction ( CCR) that state s the property may not be use as a bakery under these conditions which of the following is true? - CORRECT ANSWER A adjoining property owner may enforce the restriction by a court injunction"n "John own a peace of property and want to build a new structure with in 15 feet of his property line how ever local law requires a 20 foot set back for any improvement he should apply to the local government for a - CORRECT ANSWER "n "Disclosing a suicide or murder that occurred on the property - CORRECT ANSWER not a material fact"n "Material Facts include - CORRECT ANSWER easements. encroachments. and structural issues."n "Of the following, which would not be considered a material fact that should be disclosed to a purchaser if the agent is representing the seller and is aware of the situation? - CORRECT ANSWER The previous owner murdered his wife in the home and committed suicide."n "Defects that a seller is required by law to correct include: - CORRECT ANSWER none of the above"n "The current occupancy of the property by someone with HIV is: - CORRECT ANSWER illegal to disclose."n "A seller has slab problems which have resulted in cracked walls. The seller covers up the cracks and does not disclose to anyone that there is a problem. Under these conditions, which of the following is true? - CORRECT ANSWER the buyers can sue the seller for concealing the defect."n "A buyer notices that the roof does not seem quite right and asks their agent if the roof leaks. The agent responds that upon asking the seller about the roof he was told that there is no seepage and no leaks. However, later it is discovered that there is a seepage problem with the roof. Which of the following best describes the agent's position in this situation? - CORRECT ANSWER Nothing was done wrong improper in this situation ."n "The broker has listed an owner's home. This agreement will be terminated by all of the following EXCEPT: - CORRECT ANSWER "n "Under the Law of Agency, the Principal owes the Agent: - CORRECT ANSWER assistance in the sale of the property. compensation for service. reimbursement for agreed upon expenses. All of the above."n "The relationship of the broker to the listing owner who hired him or her is best described using which term? - CORRECT ANSWER Fiduciary"n "The amount of the commission is determined by: - CORRECT ANSWER negotiation of the parties"n "All of the following are considered agents EXCEPT - CORRECT ANSWER personal assistant"n "Which of the following is an example of a Principal-Agency Contract? - CORRECT ANSWER Buyer Representative Contract"n "As a licensed real estate salesperson, Mary works as a designated agent for her broker on a listing for Sally the seller. Mary also likes to work with buyers, and has several buyers currently working with her in addition to Sally's listing. One of Mary's buyers attends her open house for Sally seller's property and expresses interest in the home. The potential buyer asks Mary about the asking price and how much "room for negotiation" there is, and Mary tells her buyer client that the home is definitely overpriced. Choose the statement which BEST identifies this situation: - CORRECT ANSWER By showing the listed property to her buyer client, Mary is acting as an undisclosed dual agent since no disclosure form was used. Furthermore, she has breached her fiduciary duty to her seller by discussing the property's pricing with her buyer client."n "Bob the broker has been contacted by a bank to provide a valuation estimate on a home going into foreclosure. For an agreed upon fee, Bob prepares a valuation report and submits it to the bank representative. What would this report MOST likely be considered? - CORRECT ANSWER A Broker Price Opinion (BPO)."n "The Principle of Substitution states that no one will pay more for a property than: - CORRECT ANSWER they would have to pay for an equivalent substitute property"n "A four-bedroom house with one bathroom carries a market value of $120,000. The same house would likely be worth $125,000 if a bathroom could be easily added for a cost of $10,000. This is an example of: - CORRECT ANSWER Incurable functional obsolescence"n "In a term loan with an annual payment structure, if the interest rate is 10% and the amount borrowed is $100,000 what is the annual payment amount during the term of the loan (other than the final payment)? - CORRECT ANSWER $10,000"n "Regulation Z of the Truth in Lending Act requires that if any of the terms of a loan (trigger terms) are advertised, then the ad must include details of all of the terms. These required terms include: - CORRECT ANSWER "n "The disadvantage of a balloon loan is which of the following? - CORRECT ANSWER The last payment is larger than the regular payments, and if you cannot pay it the loan may go to foreclosure."n "A man has his property listed with a broker. On June 23, a fire causes considerable damage to the property. On June 25, the owner revokes the listing. On June 29, the broker is deemed incompetent. Two days later, on July 1, the listing expires. On what date was the listing terminated? - CORRECT ANSWER June 23"n "The broker has listed an owner's home. This agreement will be terminated by all of the following EXCEPT: - CORRECT ANSWER Death of the listing salesperson"n "The responsibilities of a real estate sales agent in a listing agency relationship include all of the following EXCEPT: - CORRECT ANSWER repair of defects"n "All of the following are considered agents EXCEPT: - CORRECT ANSWER personal assistant"n "The relationship of the broker to the listing owner who hired him or her is best described using which term? - CORRECT ANSWER Fiduciary"n "A broker that does not represent the seller or the buyer but simply is paid a fee to bring the two together is called a: - CORRECT ANSWER transactional broker"n "Under the Law of Agency, the Principal owes the Agent: - CORRECT ANSWER all of the above"n "Agent Johnson has been appointed by his broker as the agent of the seller in a listing agreement. Only Agent Johnson represents the seller, no one else in Agent Johnson's office. Agent Johnson is best described as: - CORRECT ANSWER designated agent"n "A licensee sees a water stain on the second floor ceiling of a house he is about to list. What is the licensee required by law to do? - CORRECT ANSWER ask the seller about the stain"n "Defects that a seller is required by law to correct include: - CORRECT ANSWER none of the above"n "Defects that a purchaser is required by law to have corrected include: - CORRECT ANSWER None of the above"n "Broker A is involved in an exclusive right to sell listing with his seller client, Seller S. After receiving the property condition disclosure form from Seller S, Mark hosts an open house to promote his new listing. At the open house a customer expresses concerns about radon levels in the area. Seller S did not indicate a radon problem on the property disclosure. What is Broker A's best course of action in this situation? - CORRECT ANSWER Broker A should acknowledge the customer's concerns and inform the customer of their right to view the property disclosure form. Unless Broker A is personally aware of a radon problem specific to this property not disclosed by the seller, he should not disclose any further information to the customer."n "Any knowledge the agent has pertaining to coming changes in school district boundaries would: - CORRECT ANSWER be considered a material fact that must be disclosed"n "Disclosing a suicide or murder that occurred on the property - CORRECT ANSWER not a material fact"n "The current occupancy of the property by someone with HIV is: - CORRECT ANSWER illegal to disclose."n "A licensee working for a buyer notices that the floor slopes badly in one section of the house. The buyer's agent should - CORRECT ANSWER advise the buyer to get an expert to get an opinion as to the cause of the slope."n "You have just signed an option agreement that gives your friend the option to buy your house. Which of the following statements is not correct? - CORRECT ANSWER Your friend is obligated to buy your house."n "One who is too young to be held to a contract is most likely considered: - CORRECT ANSWER lacking legal capacity."n "Agent Sam has a purchase agreement to buy a house from Mr. Smith for $100,000. Agent Sam and Mr. Smith agree to new terms including a price of $102,000. and sign a new agreement to replace the old one. Then Agent Sam sells the right to buy the house for $102,000. to Mr. Jones who will go to the Act of Sale and actually buy it. What are two legal concepts that have occurred? - CORRECT ANSWER Novation and Assignment"n "You list your property for sale with a broker. The listing contract stipulates that the seller will receive $110,000 "net," with all proceeds over $110,000 being the broker's commission. This type of listing is: - CORRECT ANSWER net listing"n "Agent Branson wrote a new agreement between the buyer and seller because they both decided to agree to seller financing instead of the buyer getting a conventional mortgage. The new agreement cancels the original agreement by a legal process called: - CORRECT ANSWER novation"n "The lessee signs a six month written lease and pays the rent timely. The landlord sells the property just two months later. The new owner: - CORRECT ANSWER legally must honor the lease for the remainder of the term"n "A broker listed a property for 90 days. Soon after the listing expired, the owner sold the property to someone who had been shown the property by the broker during the listing period. The owner was obligated to pay the broker a commission on this. This obligation is covered in which clause of the listing agreement? - CORRECT ANSWER protection"n "A broker listed a home under the condition that the owner receive $210,000 from the sale, with the broker being able to sell the property for as much as possible and to keep the difference as the commission. This agreement is an example of: - CORRECT ANSWER net listing"n "You have a Listing on a piece of property and you get a ready, willing and able purchaser to agree to a contract with the seller. Before the act of sale, the buyer and seller mutually agree to rescind the contract. Under these conditions, which of the following is true? - CORRECT ANSWER The broker will return the deposit to the buyer, unless the termination agreement says otherwise."n "If a contract is replaced by a new agreement between the parties, essentially terminating the previous agreement, it is called: - CORRECT ANSWER novation"n "A quitclaim deed provides which of the following warranties: - CORRECT ANSWER A quitclaim deed provides no expressed or implied warranties. Its most common use is to clear title."n "A grantor wishes to convey title to a grantee in a deed that creates the least protection for the grantee. The grantor should give the grantee a - CORRECT ANSWER Quitclaim deed"n "When a signature is acknowledged: - CORRECT ANSWER it is legal evidence that the signature is voluntary and genuine."n "Recording a document in the public record legally makes everyone responsible to know what is in the public record and therefore the document is valid and enforceable against other parties. This concept is called: - CORRECT ANSWER constructive notice"n "Which of the following types of transactions would NOT be considered federally related under TRID guidelines? - CORRECT ANSWER Cash sales recorded on public record."n "The act of redhibition is not available if: - CORRECT ANSWER all of the above"n "A nonfarm lease that has expired is presumed to have been continued for another month if the tenant holds over without opposition for: - CORRECT ANSWER one week"n "The penalty for charging a usury rate is: - CORRECT ANSWER forfeiture of the entire interest"n "A contract to sell real property that requires the purchase price to be paid in installments and title is to be delivered to the buyer only after a stipulated sum has been paid or the terms met is a(an) - CORRECT ANSWER Bond for Deed"n "If a prospective tenant is handicapped, the landlord must - CORRECT ANSWER allow the tenant to pay for improvements"n "To be considered an independent contractor by the IRS: - CORRECT ANSWER a written salesperson agreement is required."n "Acceptance of an irrevocable offer under Louisiana Civil Law is best defined as: - CORRECT ANSWER When the offer is signed and received by the offeror"n "A contract in which the party who accepts an obligation of the other does not assume a reciprocal obligation is called a (an) - CORRECT ANSWER unilateral contract"n "At a local Board meeting, two brokers from different companies are discussing the concept of setting a commission rate for all participating members of the Board. Which statement best describes this situation? - CORRECT ANSWER This is illegal as it is considered price-fixing under Anti-Trust laws."n "The Housing and Community Development Act, passed in 1974, provides that it is unlawful to discriminate on the basis of: - CORRECT ANSWER sex"n "John made an offer of $80,000 on a house and included a check for $5,000 in earnest money. The seller accepted the offer. The next day, John found a house he liked better and asked the seller to release him from the original contract. In this case the seller may: - CORRECT ANSWER Release John from the contract and keep the $5,000"n "Several brokerage firms agree to not cross over into each other's territory and further agree to charge the same commission rate. Which of the following statements is true about this agreement? - CORRECT ANSWER This violates the Antitrust Laws"n "A farm lease that has expired is presumed to have been continued for another year if the tenant holds over without opposition for: - CORRECT ANSWER one month"n "To secure a deficiency judgment in the state of Louisiana, all of the following are true EXCEPT: - CORRECT ANSWER "n "Broker X is showing buyer Y, an Asian, homes only in Asian neighborhoods. The broker may be guilty of - CORRECT ANSWER steering"n "Salesperson A, who works for broker C on a 50-50 basis, sold a house listed by broker E for $193,950. The seller agreed to pay a 6 percent commission but stipulated in the listing that 60 percent was to go to the selling broker. How much commission (to nearest dollar) will Salesperson A make on this sale? - CORRECT ANSWER $3,491.10"n "Sex was added as a protected class in Fair Housing by what law? - CORRECT ANSWER "n "The term "mother-in-law suite" - CORRECT ANSWER is considered a common physical description"n "Which is not a protected class under Fair Housing? - CORRECT ANSWER Dependence on public assistance"n "Sam, a licensed broker who prefers to represent sellers, recently had a listing go under contract. He provided the buyer's deposit to his accountant who then proceeded to deposit the money into Sam's designated escrow account. Just before closing it was discovered that Sam's accountant had withdrawn escrow money to pay operational expenses. Which statement BEST describes this situation? - CORRECT ANSWER "n "A man gave his best friend the right to go hunting on his farm. This would be an example of a (an): - CORRECT ANSWER easement in gross"n "A joint tenant may transfer his or her interest under which of the following circumstances? - CORRECT ANSWER At any time, without permission or approval, but the purchaser will not be a joint tenant"n "The zoning of a property with a gas station is subsequently changed to allow residential use only. Which of the following is true regarding the future use of the gas station? - CORRECT ANSWER The gas station may continue in its current use."n "Which of the following grants zoning authority to municipal governments? - CORRECT ANSWER State enabling acts"n "Joe was showing a home built before 1978. He must provide the purchaser a disclosure regarding what environmental hazard before the purchaser enters into a purchase agreement? - CORRECT ANSWER Lead-based paint"n "UFFI - CORRECT ANSWER an insulation that was used in mobile homes and renovations until determined to be an irritant."n "Which of the following concepts or requirements was NOT a result of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980? - CORRECT ANSWER innocent landowner immunity"n "An appraiser uses the cost approach in appraising a home. The appraiser should NOT use which of the following types of information? - CORRECT ANSWER Depreciation of land"n "A buyer researches the neighborhood and purchases the property with the lowest asking price among several similar properties. This is an example of valuing using the Principle of: - CORRECT ANSWER substitution"n "When adjusting comparable properties for the purposes of a valuation estimate, all of the following are common adjustments which are made for comparables EXCEPT: - CORRECT ANSWER Demographic makeup of the neighborhood"n "In selecting comparables for the Sales Comparison Approach, the appraiser selects from ___________________ the properties most similar to the subject property. - CORRECT ANSWER recent closed sales"n "Which of the following is most likely used in the cost approach? - CORRECT ANSWER "n "Bob the broker has been contacted by a bank to provide a valuation estimate on a home going into foreclosure. For an agreed upon fee, Bob prepares a valuation report and submits it to the bank representative. What would this report MOST likely be considered? - CORRECT ANSWER A Broker Price Opinion (BPO)."n "A four-bedroom house with one bathroom carries a market value of $120,000. The same house would likely be worth $125,000 if a bathroom could be easily added for a cost of $10,000. This is an example of: - CORRECT ANSWER Incurable functional obsolescence"n "You are appraising a property in which seller motivation is a significant factor. The motivation would be most important in utilizing which of the following? - CORRECT ANSWER Sales comparison approach"n "Of the following liens, which generally would be given the highest priority in a debt collection procedure? - CORRECT ANSWER Unpaid property taxes"n "For Regulation Z to apply, a creditor is someone who extends consumer credit more than 25 times a year or more than _____ times a year if the transaction involves a residence as security. - CORRECT ANSWER 5"n "Agent Stanley has a client that plans on staying in the same home for at least 20 years and the current interest rates are at relatively low levels. What type of loan would probably be recommended? - CORRECT ANSWER A fully amortized 30 term loan."n "Lenders help protect themselves from loss by using: - CORRECT ANSWER Impound accounts"n "The borrower under a note secured by a mortgage is known as the: - CORRECT ANSWER Mortgagor"n "In comparing an ARM and a GPM: - CORRECT ANSWER They both have lower payments in the early years, but the GPM has negative amortization."n "Which of the following is a responsibility of the Agent to the Principal according to the Laws of Agency? - CORRECT ANSWER care, obedience, loyalty"n "An agency is best described as when the: - CORRECT ANSWER broker represents the principal."n "Salesperson A for broker B has listed a home. Salesperson C for broker D is trying to sell the home to his own buyer. Salesperson C is a designated agent. Salesperson C is primarily responsible to: - CORRECT ANSWER his own buyer."n "Under the Law of Agency, the Principal owes the Agent: - CORRECT ANSWER all of the above"n "Under which of the following conditions is a mutual release unfair to the agent? - CORRECT ANSWER Buyer finds a better property"n "A broker has listed a home for sale. The broker will earn a commission: - CORRECT ANSWER when a "ready, willing and able buyer" signs an offer to purchase that meets the terms of the listing contract or terms acceptable to the seller."n "The broker has listed an owner's home. This agreement will be terminated by all of the following EXCEPT: - CORRECT ANSWER Death of the listing salesperson"n "Agent Johnson has been appointed by his broker as the agent of the seller in a listing agreement. Only Agent Johnson represents the seller, no one else in Agent Johnson's office. Agent Johnson is best described as: - CORRECT ANSWER designated agent"n "The amount of the commission is determined by: - CORRECT ANSWER negotiation between seller and broker"n "A man has his property listed with a broker. On June 23, a fire causes considerable damage to the property. On June 25, the owner revokes the listing. On June 29, the broker is deemed incompetent. Two days later, on July 1, the listing expires. On what date was the listing terminated? - CORRECT ANSWER June 23"n "An agent is told by the seller that the taxes are $1500 per year. The agent is asked by the buyer how much the taxes are on the property. The agent should - CORRECT ANSWER verify the tax figure for accuracy."n "Broker A is involved in an exclusive right to sell listing with his seller client, Seller S. After receiving the property condition disclosure form from Seller S, Mark hosts an open house to promote his new listing. At the open house a customer expresses concerns about radon levels in the area. Seller S did not indicate a radon problem on the property disclosure. What is Broker A's best course of action in this situation? - CORRECT ANSWER Broker A should acknowledge the customer's concerns and inform the customer of their right to view the property disclosure form. Unless Broker A is personally aware of a radon problem specific to this property not disclosed by the seller, he should not disclose any further information to the customer."n "Material Facts include - CORRECT ANSWER easements. encroachments. and structural issues."n "The current occupancy of the property by someone with HIV is: - CORRECT ANSWER illegal to disclose."n "An special assessment is confirmed after the agent got the listing. The assessment is to be paid in 5 equal installments including interest as researched by the agent. The agent is: - CORRECT ANSWER required to inform the buyer that there will be a special assessment lien at the transfer."n "Which of the following does not correctly describe how real estate licensees should handle the possibility of hazardous substances on a property being sold ? - CORRECT ANSWER Licensees should not disclose the problem because it might harm the seller"n "A licensee working for a buyer notices that the floor slopes badly in one section of the house. The buyer's agent should - CORRECT ANSWER advise the buyer to get an expert to get an opinion as to the cause of the slope."n "Agent Robinson has a seller that admits he is HIV positive. When listing the property, Agent Robinson should: - CORRECT ANSWER not disclose this information. Disclosure is illegal and not considered a material fact regarding the house."n "A broker listed a property for 90 days. Soon after the listing expired, the owner sold the property to someone who had been shown the property by the broker during the listing period. The owner was obligated to pay the broker a commission on this. This obligation is covered in which clause of the listing agreement? - CORRECT ANSWER protection"n "One who is too young to be held to a contract is most likely considered: - CORRECT ANSWER lacking legal capacity."n "Agent Branson wrote a new agreement between the buyer and seller because they both decided to agree to seller financing instead of the buyer getting a conventional mortgage. The new agreement cancels the original agreement by a legal process called: - CORRECT ANSWER novation"n "Which of the following bests describes a counteroffer? - CORRECT ANSWER It terminates the previous offer by making a new one back to the other party."n "You have just signed an option agreement that gives your friend the option to buy your house. Which of the following statements is not correct? - CORRECT ANSWER Your friend is obligated to buy your house."n "Which of the following is true about an Exclusive Right to Sell Listing? - CORRECT ANSWER If the seller finds a buyer for the property, the listing broker still gets a commission."n "You are managing a property that has a one year written lease signed 3 months ago. The landlord dies. The new owner wants to manage the property himself when your management contract expires in one month. You should: - CORRECT ANSWER turn over the security deposit and the lease and tenant information to the new owner at the end of your contract."n "A contract with a mentally incompetent person is: - CORRECT ANSWER voidable"n "The giver of an option is called the: - CORRECT ANSWER Optionor"n "A drunken man signed an offer to purchase. The contract that he signed is: - CORRECT ANSWER voidable"n "An offer and acceptance must have: - CORRECT ANSWER meeting of the minds"n "When new land is acquired as water recedes it is called: - CORRECT ANSWER Reliction"n "Generally when a notary places their seal on a signature, this is intended to prove: - CORRECT ANSWER acknowledgment"n "If a deed is signed by the grantor on Saturday, but did not deliver to the grantee until Sunday, which of the following is true? - CORRECT ANSWER The deed is effective to transfer title"n "The profit that is excluded from taxes for a married couple selling the home that has been their primary residence for at least 2 of the last 5 years is: - CORRECT ANSWER "n "Sally Salesperson received 3 offers on one of her listings, one at 9 am, one at 11 am, one at 1 pm - all on the same day. How should Sally present these offers when she sees the seller that evening at 7 pm? - CORRECT ANSWER Present all offers at the same time to the seller."n "Which of the following types of transactions would NOT be considered federally related under TRID guidelines? - CORRECT ANSWER Cash sales recorded on public record."n "According to the 1988 amendment to the Fair Housing Act of 1968, a person found guilty of violating the law can receive a civil penalty not exceeding: - CORRECT ANSWER $16,000 for the first offense"n "At a local Board meeting, two brokers from different companies are discussing the concept of setting a commission rate for all participating members of the Board. Which statement best describes this situation? - CORRECT ANSWER This is illegal as it is considered price-fixing under Anti-Trust laws."n "Brokers get together and divide their market areas by region. This is: - CORRECT ANSWER a violation under Antitrust Laws."n "The Housing and Community Development Act, passed in 1974, provides that it is unlawful to discriminate on the basis of: - CORRECT ANSWER sex"n "Salesperson A, who works for Broker C on a 50-50 basis, sold a house listed by Broker E for $203,000. The seller agreed to pay a 6 percent commission but stipulated in the listing that 60 percent was to go to the selling broker. How much commission (to nearest dollar) will Salesperson A make on this sale? - CORRECT ANSWER "n "The exemption regarding housing for older persons applies to: - CORRECT ANSWER housing occupied solely by those 62 or older."n "In 1988 the Federal Fair Housing Act was amended to add which of the following protected classes? - CORRECT ANSWER familial status"n "Which is not a protected class under Fair Housing? - CORRECT ANSWER Dependence on public assistance"n "If a prospective tenant is handicapped, the landlord must - CORRECT ANSWER allow the tenant to pay for improvements"n "Sex was added as a protected class in Fair Housing by what law? - CORRECT ANSWER Housing and Community"n "To be considered an independent contractor by the IRS: - CORRECT ANSWER a written salesperson agreement is required."n "Several brokerage firms agree to not cross over into each other's territory and further agree to charge the same commission rate. Which of the following statements is true about this agreement? - CORRECT ANSWER This violates the Antitrust Laws"n "A driveway is 10 feet wide and 150 feet 6 inches long. The cost to build it is $25 per square yard. What is the total cost of the driveway? - CORRECT ANSWER $4180.56"n "A sale closed on July 21. Real estate taxes of $3,420 for the current year have not been paid. What is the settlement sheet entry for the proration of the real estate taxes? - CORRECT ANSWER Debit seller $1,909.50; credit buyer $1,909.50"n "The lender has approved the buyer for a loan with an LTV of 96.5% If the purchase price of the property is under contract at $150,000 what would the downpayment required of the buyer be in this case? - CORRECT ANSWER $5,250.00"n "You are estimating the value of an apartment building. The monthly scheduled gross income is $4000. The annual operating expenses are $23,000. The rate of return a typical buyer expects is 8%. If the average vacancy rate is 5%, what would be your estimate of value? - CORRECT ANSWER $282,500"n "You receive a monthly salary of $1,200 plus a 3 percent commission on all of your listings that sell and 2.5 percent on all of your sales. None of the listings that you took sold last month, but you receive $6,300 in salary and commission. What is the value of the property that sold? - CORRECT ANSWER $204,000"n "You receive a monthly salary of $600 plus 3.5 percent commission on all of your listings that sell and 2.5 percent on all of your sales. None of the listings that you took sold last month, but you received $8,460 in salary and commission. What was the value of the property you sold? - CORRECT ANSWER $314,400"n "The Americans with Disabilities Act states that any employer with _____ or more employees must adopt non discriminatory employment procedures - CORRECT ANSWER 15"n "Property management duties include all of the following except - CORRECT ANSWER be an environmental expert"n "How much are Commission members compensated for attending to Commission business? - CORRECT ANSWER $50 plus actual expenses"n "The Louisiana Real Estate Commission is comprised of - CORRECT ANSWER 11 members appointed by the Governor"n "The Commission elects from its members a - CORRECT ANSWER chairman"n "The Commission has the full power and authority by law to do which of the following? - CORRECT ANSWER Fine violators up to $5000."n "The Commission is required by law to meet: - CORRECT ANSWER Quarterly"n "Which of the following would be required to have a real estate license? - CORRECT ANSWER A person referring real estate business to licensees for a fee."n "Which of the following statements is true regarding broker applicants? - CORRECT ANSWER A. At least 30 hours of the broker educational requirement must be obtained in course work emphasizing broker responsibilities. B. The commission may accept real estate related credit hours from an accredited college or university as partial substitution of the broker licensing educational requirement. C. The commission shall have the authority to accept experience in the real estate business or related fields as credit toward fulfillment of the education requirement. D. All of the above."n "Any corporation or partnership operating as a broker in the state of Louisiana must have - CORRECT ANSWER $100,000 bond with the Louisiana Real Estate Commission."n "Which of the following is true about inactive status? - CORRECT ANSWER A. A transfer to inactive status requires the licensee to remit the applicable fees."n "What is the minimum age required to receive a real estate license in Louisiana? - CORRECT ANSWER 18"n "Which of the following best describes the education requirements for a broker applicant? - CORRECT ANSWER 150 hours of education excluding the salesperson hours, in courses specified by the LREC."n "Broker Bob plans to open an additional real estate office in his home. He will use the office to meet prospects and do occasional computer work. The Louisiana license law will require him to: - CORRECT ANSWER Apply for a branch office license."n "In regards to sales deposits which are related to the real estate transaction: - CORRECT ANSWER Deposits must be held in the broker's escrow account."n "Considering the following circumstances, when should the agency disclosure informational pamphlet be provided to persons by a licensed real estate agent? - CORRECT ANSWER At first face-to-face contact, or whenever substantive information is solicited or received."n "A salesperson advertising or marketing on a site on the Internet must include the following data on each page of the site on which the licensee's advertisement or information appears: - CORRECT ANSWER The salesperson's name, city and state of broker's office, sponsoring broker's name, and license jurisdiction."n "If you wish to pay a fee or part of a fee earned to an unlicensed person for finding you business, you: - CORRECT ANSWER may not do so. It is illegal to pay an unlicensed person for finding you business."n "Every licensee must sign a sworn statement on their application attesting that they shall not induce any person to sell or rent any dwelling by representations regarding the entry of any person to the area due to that person's race, color, religion, or national origin. This prohibited practice is known as: - CORRECT ANSWER Blockbusting"n "Which of the following information must appear on every page of an email advertisement: - CORRECT ANSWER none of the above"n "If a real estate licensee advertises his own property for sale - CORRECT ANSWER he is not required to have "agent/owner" or "licensed agent" in the ad if he lists it through his broker."n "The broker's name; city,state, and country of the broker's main office; and the jurisdiction of his license must appear if he advertises on a website: - CORRECT ANSWER On every page"n "Which of the following MUST be included on an internet advertisement, but not on a printed advertisement for residential real estate? - CORRECT ANSWER The associate broker or salesperson's name and contact information."n "Licensees are required to furnish to their clients a copy of any document which the client has signed pertinent to a real estate transaction: - CORRECT ANSWER immediately"n "Licensees are required to furnish to their clients, a copy of any document which the client has signed pertinent to a real estate transaction: - CORRECT ANSWER immediately"n "If a client refuses to sign an agency disclosure, the licensee must - CORRECT ANSWER put the time and date on the disclosure"n "When the association of an associate broker or salesperson is terminated with their firm for any reason, the broker must return the license to the LREC: - CORRECT ANSWER within 5 days"n "In the event of a dispute between the potential buyer and seller regarding the return of the earnest money, the real estate broker may do any of the following EXCEPT: - CORRECT ANSWER Retain the money as part of the broker's commission, ensuring proper payment of all real estate fees in a timely manner."n "A broker can keep more than $2500 of his personal or company funds in an escrow account: - CORRECT ANSWER Only in a rental trust account to pay current financial obligations of a client."n "A contract to sell real property that requires the purchase price to be paid in installments and title is to be delivered to the buyer only after a stipulated sum has been paid or the terms met is a(an) - CORRECT ANSWER Bond for Deed"n "A triangular parcel of land was 393 feet on the base and 600 feet along the side perpendicular to the base. How many acres of land did the parcel contain? - CORRECT ANSWER approximately 2.7 acres"n "A property's basis includes: - CORRECT ANSWER purchase price, closing costs, and costs of improvements"n "Real Estate as an investment has many advantages. One of the disadvantages most commonly found is - CORRECT ANSWER illiquidity"n "If a broker's license is revoked due to a violation of the License Law, what happens to her salespeople? - CORRECT ANSWER Automatically suspended"n "A broker using E-mail must include which of the following on each page of his E-mail? - CORRECT ANSWER A. The broker's name as registered with the Commission B. The city, state and country in which the broker's main office is located C. The regulatory jurisdiction(s) in which the broker holds a real estate brokerage license D. All of the above ***Correct***"n "A broker can keep more than $2500 of his personal or company funds in an escrow account: - CORRECT ANSWER Only in a rental trust account to pay current financial obligations of a client."n "If a client refuses to sign an agency disclosure, the licensee must - CORRECT ANSWER put the time and date on the disclosure"n "If either party dies or becomes incapacitated before acceptance, then an offer: - CORRECT ANSWER IS NULL"n "A charge on one property for the benefit of another property is - CORRECT ANSWER predial servitude"n "An offer with a termination date for the offer in Louisiana is said to be - CORRECT ANSWER irrevocable"n "The donation of property while living is called - CORRECT ANSWER donation inter vivos"n "If two or more persons own the same piece of property, each as an undivided share, this is referred to as a (an): - CORRECT ANSWER undivided interest"n "Consent of both parties to form a contract is established through: - CORRECT ANSWER offer and acceptance"n "Upon testate death of a spouse, the surviving spouse must be given: - CORRECT ANSWER Usufruct over the community property"n "An undivided interest in real property is best defined in Louisiana Civil Law as: - CORRECT ANSWER The property is owned by more than one person who share the same thing"n "Subdivision regulations (private deed restrictions) may be modified by those affected within what time period? - CORRECT ANSWER After 10 years if both (a) owners representing 2/3 of the land and (b) 2/3 of the owners of the land agree"n "All persons have legal capacity to contract except: - CORRECT ANSWER Persons denied of reason at the time of contract Interdicts Unemancipated minors"n "Which of the following statements are true? - CORRECT ANSWER Deposits are not considered earnest money unless so stated in the contract."n "When the performance of the obligation of each party is correlative to the performance of the other this is called a (an): - CORRECT ANSWER commutative contract"n "All of the following are requirements to perfect a sale in Louisiana EXCEPT: - CORRECT ANSWER Constructive notice of the sale."n "After how many days notice after a buyer's default in payments may a Bond for Deed be cancelled? - CORRECT ANSWER 45 days"n "A farm lease that has expired is presumed to have been continued for another year if the tenant holds over without opposition for: - CORRECT ANSWER one month"n "The avoidance of a sale on account of some vice or defect in the thing sold is called: - CORRECT ANSWER Redhibition"n "In dual agency in Louisiana, - CORRECT ANSWER each client and licensee only know the information they were actually given."n "Which of the following is not true about confidential information? - CORRECT ANSWER Confidential information can be disclosed by a designated agent to his broker for the purpose of seeking advice or assistance for the benefit of the client. (not correct)"n "If another agent is representing a buyer and is showing your listing and you tell him that your seller is eager and may accept a lower price if they make an offer right away, this is - CORRECT ANSWER undisclosed dual agency"n "Which of the following is true about customers? - CORRECT ANSWER Licensees shall treat all customers honestly and fairly"n "Ministerial Acts" do not include - CORRECT ANSWER showing a potential buyer through your listing."n "Your buyer client specifically tells you about some negative information about his past as a sex offender. He specifically requests you not divulge this information. You are concerned that the neighbors and seller would want to be aware. The information is spread by someone else and the seller asks you directly if you know that this is true. You acknowledge the truth. According to the Louisiana Law of Agency - CORRECT ANSWER you have not violated the law."n "A relationship in which a real estate broker or licensee represents a client by the client's consent in an immovable property transaction is referred to as - CORRECT ANSWER agency"n "When acting as a dual agent, a licensee shall not disclose: - CORRECT ANSWER the price the seller or landlord will take other than the listed price."n "If one client does not consent to dual agency in a Louisiana transaction, - CORRECT ANSWER the licensee must give a written disclosure to both clients to receive a referral fee for the one withdrawing"n "Under which of the following circumstances may a salesperson lawfully refuse to show a home to a minority prospect who has specifically asked to see it? - CORRECT ANSWER When the owner is out of town and has instructed the agent that no showings may be made in her absence"n "Which of the following is not a Ministerial act? - CORRECT ANSWER Showing property and responding to questions about the property from a person"n "If an unmarried couple wished to purchase a home together and have the right of survivorship, which form of ownership would they choose? - CORRECT ANSWER Joint tenancy"n "A competitive market analysis most likely determines the: - CORRECT ANSWER probable price of the property"n "Which of the following is most likely to be a factor used in a Competitive Market Analysis? - CORRECT ANSWER date of sale"n "Regulation Z of the Truth in Lending Act requires that if any of the terms of a loan (trigger terms) are advertised, then the ad must include details of all of the terms. These required terms include: - CORRECT ANSWER "n "The legislation that requires appraisers to be state licensed or certified to appraise property for the purpose of federally related mortgage loans is: - CORRECT ANSWER FIRREA"n "When acting as a dual agent, which of the following is easiest to do for both parties at the same time? - CORRECT ANSWER Confidentiality"n "An owner lists her home for $98,000 and the listing broker tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $96,000 and the - CORRECT ANSWER "n "Defects that a purchaser is required by law to have corrected include: Select one: A. Asbestos B. Ghosts C. Lead-based paint D. None of the above - CORRECT ANSWER d. none of the above"n "Any knowledge the agent has pertaining to coming changes in school district boundaries would: - CORRECT ANSWER be considered a material fact that must be disclosed"n "Disclosing a suicide or murder that occurred on the property - CORRECT ANSWER not a material fact"n "Agent Thurmond has a listing that is in a flood hazard area that floods often and has been deemed ineligible for flood insurance.That condition would make the property ineligible for typical federally-related first mortgage financing. Agent Thurmond is representing only the seller in this transaction. Agent Thurmond has received an offer from a potential buyer that plans to pay cash and would not be required to have flood insurance because he is not getting a mortgage. Agent Thurmond must: - CORRECT ANSWER disclose the material fact about the flood hazard to the buyer."n "The giver of an option is called the: - CORRECT ANSWER Optionor"n "A drunken man signed an offer to purchase. The status of the contract is - CORRECT ANSWER voidable"n "You have entered into a lease that requires you to pay 20 percent of the owner's expenses. Your lease would be an example of - CORRECT ANSWER "n "Agent Branson wrote a new agreement between the buyer and seller because they both decided to agree to seller financing instead of the buyer getting a conventional mortgage. The new agreement cancels the original agreement by a legal process called: - CORRECT ANSWER novation"n "Recording a document in the public record legally makes everyone responsible to know what is in the public record and therefore the document is valid and enforceable against other parties. This concept is called: - CORRECT ANSWER constructive notice"n "Under Fair Housing, a "handicap" does not include: - CORRECT ANSWER drug use"n "Which of the following must be proved in a Fair Housing Complaint? - CORRECT ANSWER discrimination occurred"n "The exemption regarding housing for older persons applies to: - CORRECT ANSWER housing occupied solely by those 62 or older."n "Refusing a tenant on the basis of their profession is - CORRECT ANSWER not a violation of Fair Housing"n "Broker X is showing buyer Y, an Asian, homes only in Asian neighborhoods. The broker may be guilty of Select - CORRECT ANSWER "n "Intentional acts of discrimination are called - CORRECT ANSWER disparate treatment"n "In a Fair Housing Complaint, which of the following must be proved to show an act was a violation? - CORRECT ANSWER disparate impact"n "A property's basis includes: - CORRECT ANSWER purchase price, closing costs, and costs of improvements"n "The owner of an apartment building is best known as the: - CORRECT ANSWER lessor"n "Appeals of Louisiana Real Estate Commission findings are reviewable by - CORRECT ANSWER 19th Judicial District Court"n "Which of the following parties is exempt from the requirements regarding real estate licensing? - CORRECT ANSWER A person who provides signs and websites for persons to sell their homes."n "An individual person licensed as a real estate broker and not a corporation or partnership is known as a (an): - CORRECT ANSWER Individual real estate broker"n "George sold a house but the closing was delayed until after renewal time and George decided not to renew his license. Which of the following is true? - CORRECT ANSWER George is allowed by license law to be paid his commission"n "If a broker's license is revoked due to a violation of the License Law, what happens to her salespeople? - CORRECT ANSWER Automatically suspended"n "In printed advertising placed by an associate broker or salesperson - CORRECT ANSWER the associate broker or salesperson's name may appear."n "A licensee should ensure any annotated offers signed by their respective clients are returned: - CORRECT ANSWER immediately"n "Which of the following is a legitimate reason for a broker to remove a deposit from her escrow account? - CORRECT ANSWER "n "Any knowledge the agent has pertaining to coming changes in school district boundaries would: - CORRECT ANSWER be considered a material fact that must be disclosed"n "Disclosing a suicide or murder that occurred on the property - CORRECT ANSWER not a material fact"n "Agent Thurmond has a listing that is in a flood hazard area that floods often and has been deemed ineligible for flood insurance.That condition would make the property ineligible for typical federally-related first mortgage financing. Agent Thurmond is representing only the seller in this transaction. Agent Thurmond has received an offer from a potential buyer that plans to pay cash and would not be required to have flood insurance because he is not getting a mortgage. Agent Thurmond must: - CORRECT ANSWER disclose the material fact about the flood hazard to the buyer."n "The giver of an option is called the: - CORRECT ANSWER Optionor"n "A drunken man signed an offer to purchase. The contract that he signed is: - CORRECT ANSWER voidable"n "You have entered into a lease that requires you to pay 20 percent of the owner's expenses. Your lease would be an example of a: - CORRECT ANSWER Net lease"n "The legislation that requires appraisers to be state licensed or certified to appraise property for the purpose of federally related mortgage loans is: - CORRECT ANSWER FIRREA"n "When acting as a dual agent, which of the following is easiest to do for both parties at the same time? - CORRECT ANSWER Confidentiality"n "An owner lists her home for $98,000 and the listing broker tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $96,000 and the seller accepts. In this situation: - CORRECT ANSWER the broker violated the agency relationship by explaining the seller's position."n "A broker recently has listed a home under an exclusive-right-to-sell listing contract. The broker generally will earn his commission when: - CORRECT ANSWER he finds a buyer "ready, willing, and able" to buy on the terms of the listing"n "A Seller confides with their agent in a conversation that he is willing to take less for the property under certain conditions. Considering this information, what is the agent's best option moving forward? - CORRECT ANSWER The agent should advertise the property under the original terms of the listing contract"n "An agent is to disregard instructions from a principal when those instructions: - CORRECT ANSWER are illegal"n "A man has his property listed with a broker. On June 23, a fire causes considerable damage to the property. On June 25, the owner revokes the listing. On June 29, the broker is deemed incompetent. Two days later, on July 1, the listing expires. On what date was the listing terminated? - CORRECT ANSWER June 23"n "Defects that a purchaser is required by law to have corrected include: Select one: A. Asbestos B. Ghosts C. Lead-based paint D. None of the above - CORRECT ANSWER d. none of the above"n "A licensee sees a water stain on the second floor ceiling of a house he is about to list. What is the licensee required by law to do? - CORRECT ANSWER ask the seller about the stain"n "Any knowledge the agent has pertaining to coming changes in school district boundaries would: - CORRECT ANSWER be considered a material fact that must be disclosed"n "Disclosing a suicide or murder that occurred on the property - CORRECT ANSWER not a material fact"n "Mold disclosures are required: - CORRECT ANSWER for all clients"n "Agent Thurmond has a listing that is in a flood hazard area that floods often and has been deemed ineligible for flood insurance.That condition would make the property ineligible for typical federally-related first mortgage financing. Agent Thurmond is representing only the seller in this transaction. Agent Thurmond has received an offer from a potential buyer that plans to pay cash and would not be required to have flood insurance because he is not getting a mortgage. Agent Thurmond must: - CORRECT ANSWER disclose the material fact about the flood hazard to the buyer."n "The seller asks listing Agent Johnson what disclosure is required for past termite infestation. There was no structural damage and the infestation was promptly treated. It occurred over 5 years ago. Agent Johnson should advise the seller that: - CORRECT ANSWER termite infestation should always be disclosed."n "The lessee signs a six month written lease and pays the rent timely. The landlord sells the property just two months later. The new owner: - CORRECT ANSWER legally must honor the lease for the remainder of the term"n "The giver of an option is called the: - CORRECT ANSWER Optionor"n "You list your property for sale with a broker. The listing contract stipulates that the seller will receive $110,000 "net," with all proceeds over $110,000 being the broker's commission. This type of listing is: - CORRECT ANSWER a net listing."n "A broker listed a home for sale under an exclusive-right-to-sell listing. A second broker cooperated with the listing broker and sold the home. The house was sold and the commission split between the listing broker and the selling broker. Which of the following is FALSE? - CORRECT ANSWER The selling broker gets the whole commission because he was the procuring cause."n "A drunken man signed an offer to purchase. The contract that he signed is: - CORRECT ANSWER voidable"n "You have entered into a lease that requires you to pay 20 percent of the owner's expenses. Your lease would be an example of a: - CORRECT ANSWER net lease"n "Agent Branson wrote a new agreement between the buyer and seller because they both decided to agree to seller financing instead of the buyer getting a conventional mortgage. The new agreement cancels the original agreement by a legal process called: - CORRECT ANSWER novation"n "What is the purpose of the deposit in a real estate transaction? - CORRECT ANSWER To provide evidence of the buyer's intention to buy the property"n "Answering an offer by changing some of the terms and offering the new terms back to the original offeror is called: - CORRECT ANSWER counter offer"n "Which of the following bests describes a counteroffer? - CORRECT ANSWER It terminates the previous offer by making a new one back to the other party."n "If a building that is leased with 7 months remaining to the lease term is transferred to an heir because of the landlord's death, what is the effect on the lease? - CORRECT ANSWER A. None, the lease is binding on the heir."n "When a signature is acknowledged: - CORRECT ANSWER it is legal evidence that the signature is voluntary and genuine."n "Recording a document in the public record legally makes everyone responsible to know what is in the public record and therefore the document is valid and enforceable against other parties. This concept is called: - CORRECT ANSWER constructive notice"n "The covenant that the grantor guarantees the title is good against a third party is: - CORRECT ANSWER Quiet enjoyment"n "A summary of all the recorded instruments affecting the title to a property is called a(an) - CORRECT ANSWER Abstract of title"n "If the signature on a deed is acknowledged: - CORRECT ANSWER it is legal evidence that the signature is voluntary and genuine."n "Under Fair Housing, a "handicap" does not include: - CORRECT ANSWER drug use"n "The term "mother-in-law suite" - CORRECT ANSWER is considered a common physical description"n "At a local Board meeting, two brokers from different companies are discussing the concept of setting a commission rate for all participating members of the Board. Which statement best describes this situation? - CORRECT ANSWER This is illegal as it is considered price-fixing under Anti-Trust laws."n "Brokers get together and divide their market areas by region. This is: - CORRECT ANSWER a violation under Antitrust Laws."n "Which of the following must be proved in a Fair Housing Complaint? - CORRECT ANSWER That discrimination occurred"n "The exemption regarding housing for older persons applies to: - CORRECT ANSWER housing occupied solely by those 62 or older.