1 ASI PRACTICE EXAM 1. Which of the following items would not be

1.
ASI PRACTICE EXAM
Which of the following items would not be an appurtenance?
a.
Right
b.
Privilege
c.
Improvement
d.
Reversion
2.
Which of the following statements BEST describes the effect on mineral rights when the land is
sold?
a.
They always pass with the sale of the land
b.
Mineral rights cannot be sold separately from the land
c.
They pass to the grantee unless specifically noted
d.
They belong to the federal government
3.
A buyer made an offer on a house and the seller accepted the offer as written. The buyer wanted
some of the seller’s personal property to remain with the house. The personal property would
transfer to the buyer under which of the following conditions?
a.
If it fits into a particular spot in the house
b.
If it was included in the contract
c.
If it was verbally stated by the listing broker
d.
If it was verbally agreed to between the seller and buyer.
4.
A commercial tenant installed some display cases for fish in a leased space. Which of the
following statements BEST describes what happens to the cases upon the expiration of the lease?
a.
The tenant would be able to take the cases only if the tenant paid the owner for the fair
market value of the cases.
b.
The tenant would be able to take the cases as they were installed by the tenant.
c.
The owner would be able to keep the cases, as once the cases were installed, they became
real property.
d.
The owner would be able to keep the cases, as they would be considered emblements.
5.
Which of the following is NOT a fixture?
a.
Claw foot bathtub.
b.
Chandelier.
c.
Built-in dishwasher
d.
Above ground pool.
6.
The “quantity, nature and extent of a person’s interest in real estate” BEST defines which of the
following terms?
a.
Equity.
b.
Estate
c.
Estoppel
d.
Easement
7.
The process of taking private land for public use is:
a.
Eminent domain
b.
Condemnation.
c.
Escheat
d.
Police power
8.
Which of the following rights would NOT have a limiting effect on one’s ownership rights in real
estate?
a.
Taxation.
b.
Police power
c.
Title insurance.
d.
Escheat.
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9.
A city ordinance stated that any commercial building needed to have adequate off street parking.
This is accomplished under which government right?
a.
Police power.
b.
Escheat.
c.
Eminent domain.
d.
Taxation.
10.
The government, in taking private property to build a highway, is exercising which of the
following rights?
a.
Police power
b.
Escheat
c.
Eminent domain
d.
Taxation.
11.
The zoning commission has the authority to zone under which government right?
a.
Escheat.
b.
Condemnation.
c.
Police power
d.
Eminent domain.
12.
Which of the following terms BEST describes an estate where the title does not pass back to the
grantor?
a.
Reversion.
b.
Remainder
c.
Tenants in common
d.
Severalty
13.
Owner J gave J’s housekeeper a life estate in a property. J also stipulated that the property go to
J’s child when the housekeeper died. J died prior to the housekeeper. J’s child is refereed to as
the:
a.
Life tenant.
b.
Remainderman.
c.
Grantor
d.
Pur autre vie
14.
Which of the following types of ownership specifically refers to a married couple with the right of
survivorship?
a.
Joint tenants.
b.
Tenants by the entirety.
c.
Tenants in common
d.
Severalty.
15.
In order to have joint tenancy, there must be the unities of title, interest, possession and:
a.
Right of survivorship.
b.
Curtesy rights.
c.
Time of acquisition.
d.
Equal financing.
16.
Ownership in severalty is best described as:
a.
One person owns the property.
b.
Several people own the property.
c.
Property held by co-owners.
d.
Owning more than one piece of property.
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17.
Which of the following is NOT a leasehold estate?
a.
Estate for years.
b.
Periodic tenancy
c.
Tenancy at will
d.
Life estate.
18.
What is use to describe the right of the lessor to reclaim a property once a lease expires?
a.
Redemption.
b.
Reversion
c.
Repossession
d.
Reverse annuity
19.
Which of the following estates is the lowest form of estate?
a.
Conditional fee
b.
Tenancy at sufferance
c.
Estate at will
d.
Periodic tenancy
20.
A person owned a condominium and leased it to K for one year. What did this create?
a.
A leasehold estate.
b.
A time share
c.
A tenancy by the entireties
d.
A conditional fee estate
21.
Which is a voluntary lien against a person’s property?
a.
Mortgage lien
b.
Mechanic’s lien
c.
Judgment lien
d.
Property tax lien.
22.
Mr. X bought a house in an area that restricted fences. He then bought a dog and began
constructing a fence. What remedies do the neighbors have?
a.
Eminent domain.
b.
Police power
c.
File a private suit in court.
d.
Building code enforcement.
23.
A trespass of an improvement is which of the following?
a.
Encroachment.
b.
Easement
c.
License.
d.
Lien.
24.
Which of the following items restricts the physical condition and specific use of a property?
a.
Mortgage
b.
Easement
c.
Deed of trust
d.
Title
25.
A neighbor had encroached on a property but the owner did not complain within the legally
specified time period. The neighbor would obtain rights to the land by:
a.
License.
b.
Easement by necessity.
c.
Easement by prescription.
d.
Easement in gross.
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26.
An easement giving a person the right of ingress and egress would be BEST classified as an:
a.
Appurtenance.
b.
Emblements
c.
License
d.
Encroachment
27.
T gave a neighbor the right to cross over T’s property. T’s property would be referred to as:
a.
A licensed property
b.
An encroached upon property
c.
The servient tenement
d.
The dominant tenement
28.
A person owned a property next to a stream. The owner’s rights to use the stream are referred to
as:
Dower
Curtesy
Riparian
Navigations.
29.
What is the greatest type of interest an owner can receive in a condominium?
Fee simple.
Leasehold
Right of free use
Stock.
30.
Persons who buy into a cooperative receive which of the following items?
a.
Shares of stock.
b.
Deed to the common areas.
c.
Real estate tax bill.
d.
Deed to the complex.
31.
Which of the following would NOT be classified as a free hold estate?
Cooperative
Condominium
Fee simple
Life estate
32.
If a grantor desired to transfer title but only guarantee it against claims occurring during the
grantor’s ownership period, the grantor should sign which of the following deeds?
a.
General warranty.
b.
Special warranty
c.
Bargain and sale
d.
Quitclaim
33.
A warranty deed was issued with a name misspelled. Which of the following deeds would most
likely be issued to correct it?
a.
Quitclaim
b.
Bargain and sale
c.
Grant
d.
Special warranty.
34.
The type of deed which gives the greatest liability to the grantor is:
Quitclaim deed
Special warranty deed
General warranty deed
Bargain and sale deed.
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35.
A person who obtains property through a deed is called a:
a.
Grantor.
b.
Grantee.
c.
Beneficiary
d.
Trustee.
36.
The purpose of the encumbrances clause in a general warranty deed is to protect against:
a.
Recorded easements.
b.
Unrecorded liens that may affect the value of property.
c.
Recorded tax liens
d.
Recorded covenants.
37.
A person conveys a property to another whereby there are no warranties given by the seller. The
type of deed most likely used to accomplish this would be a:
a.
General warranty deed.
b.
Special warranty deed
c.
Quitclaim deed
d.
Bargain and sale deed
38.
Existing easements, restrictions, liens and taxes are listed in which of the following clauses in a
warranty deed?
a.
Habendum
b.
Reservations.
c.
Granting
d.
Conservation
39.
Title is transferred when a deed is:
a.
Recorded
b.
Delivered and accepted.
c.
Signed
d.
Acknowledged
40.
Which of the following must be contained in a deed in order for the deed to be valid?
a.
Words of conveyance
b.
Signature of the grantee
c.
Recordation
d.
Description of the personal property included in the sale.
41.
Unless specified otherwise, when a property is sold, when would possession of the property
normally be given?
a.
Upon proof of the lender’s approval on the buyer’s loan.
b.
Upon the signing of the contract by both seller and buyer.
c.
At the time of the title commitment being given by the title company
d.
Upon the deed being delivered and accepted by the buyer.
42.
Documents are recorded to provide:
a.
Constructive knowledge
b.
Actual knowledge
c.
Practical knowledge
d.
Official knowledge
43.
The purpose of recording the deed is to protect the:
a.
Grantor
b.
Grantee
c.
Optionor
d.
Optionee
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44.
Acquiring property through open, continuous and notorious use is called:
a.
Eminent domain
b.
Adverse possession
c.
Escheat
d.
Easement in gross.
45.
Which of the following is NOT a way for transfer of title to real estate to take place?
a.
Inheritance
b.
Deed
c.
Adverse possession
d.
Lease.
46.
A mortgagee’s title insurance policy is made to protect the:
a.
Trustee
b.
Lender
c.
Buyer
d.
Seller
47.
What is a schedule of exceptions in a title policy?
a.
Encumbrances
b.
Tax liens
c.
List of things not insured in the policy
d.
Defects
48.
Which of the following would a standard title insurance policy NOT cover?
a.
Forged Deeds
b.
Government regulations
c.
Undisclosed heirs
d.
Incompetent grantors
49.
Which of the following items would NOT place a limitation on your rights in property?
a.
Taxation
b.
Police power
c.
Title insurance
d.
Eminent domain
50.
Which of the following liens would be characterized as a specific line?
a.
Judgment line
b.
Inheritance tax lien
c.
Income tax lien
d.
Ad valorem tax line
51.
A property was assessed at $100,000 with a rate of $25.00 per $1,000. The next year, the tax rate
was reduced to $20.00 per $1,000 and the assessed value went up by 25%. The taxes would :
a.
Be increased
b.
Be decreased
c.
Stay the same
d.
Be abated
52.
A property was assessed at 60% of market value. The market value was $75,000 and the taxes
paid were $1,350. What was the tax rate per hundred?
a.
$2.00
b.
$3.00
c.
$4.00
d.
$5.00
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53.
All are methods of involuntary alienation EXCEPT:
a.
Eminent domain
b.
Dedication
c.
Adverse possession
d.
Escheat
54.
Zoning laws and deed restrictions are enacted for all of the following reasons EXCEPT to:
a.
Protect the public from uncontrolled growth
b.
Protect the compatibility of the surrounding land
c.
Provide for the health, safety and welfare of the general public
d.
Provide for the highest and best use of a particular piece of property
55.
Construction plans are submitted to municipality before a building permit is issued in order to:
a.
Keep nonconforming uses apart
b.
Keep others from building like properties
c.
Determine if the building complies with local regulations
d.
Determine if the owner has sufficient finances to complete the project
56.
An established family grocery store is in an area that has recently been zoned residential. If the
grocery store were to be sold, what document would be needed to allow continued use of the
grocery store?
Building permit
Special use permit
Non-conforming use
Variance
57.
Property used for something other than the current zoning is referred to as:
a.
Illegal
b.
An encroachment
c.
A non-conforming use
d.
An easement
58.
In foreclosure, after the mortgage and all other debts are paid, to whom would the excess go?
a.
The owner who was foreclosed upon
b.
Mortgagee
c.
Court
d.
Sheriff
59.
Which instrument indicates involuntary alienation?
Grant deed
Deed in foreclosure
Quitclaim deed
Executor’s deed
60.
Which of the following liens would take priority over all others?
a.
The lien that was recorded first
b.
Judgment line
c.
Mechanic’s lien
d.
Real estate tax lien
61.
The value of a property over and above all outstanding debts is called?
a.
Net income
b.
Equity
c.
Net value
d.
Book value
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62.
A mortgagee foreclosed but the sale did not produce enough to pay all debts. Which of the
following is the MOST likely course of action for the mortgagee to take?
a.
File for a judgment lien against the borrower
b.
Have the borrower sign a deed of assumption
c.
Have the borrower sign a sales contract
d.
The mortgagee could do nothing
63.
Which of the following is NOT contained in a note?
a.
Interest rate
b.
Total interest
c.
Title insurance
d.
Mortgage amount
64.
The right of a defaulting borrower to retain title to a property by satisfying the debt prior to the
foreclosure sale is referred to as:
a.
Equitable redemption
b.
Statutory redemption
c.
Trustee’s sale
d.
Remainder rights
65.
Which of the following statements is true regarding security for a debt?
a.
The note secures the mortgage
b.
The mortgage secures the note
c.
The warranty deed secures the note
d.
The note secures the warranty deed
66.
A property was sold in a state using a trust deed as the form of security. Who benefits MOST
from the holding of the trust deed?
a.
Trustee
b.
Trustor
c.
Beneficiary
d.
Landlord
67.
A mortgage is recorded to protect the:
a.
Mortgagor
b.
Mortgagee
c.
Trustor
d.
Trustee
68.
A loan where each payment makes contributions toward principal and interest is a(n):
a.
Straight loan
b.
Package loan
c.
Term loan
d.
Amortized loan
69.
A loan was amortized for a 30-year period. If the remaining loan balance was due at the end of 7
years, this is BEST described by which of the following terms?
a.
Reverse annuity
b.
Term note
c.
Balloon payment
d.
Amortized segment.
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70.
A mortgage where the interest rate is subject to adjustments periodically is:
a.
Limited reduction
b.
Wrap-around
c.
Graduated payment
d.
Adjustable rate.
71.
Which of the following best describes a term loan?
a.
Reverse annuity
b.
Amortized
c.
Interest only
d.
Interest and principal
72.
The payment on a graduated payment mortgage usually has gradual increases:
a.
And then returns to the original low payment for the remainder of the term
b.
Over the term of the loan
c.
And then levels out for the remainder of the term
d.
As the index increases over the remainder of the term
73.
A buyer obtained a $50,000 loan with a 9% interest rate. The loan was amortized over 30 years
with a monthly payment of $403. Which of the following statements is true?
a.
The total amount of interest paid over the term was $145,080.
b.
The total amount of interest paid over the term was $135,650
c.
The amount of principal in the first month’s payment was $129.00.
d.
The amount of principal in the first month’s payment was $28.00.
74.
A person obtained a $15,000 term loan at an 11% annual interest rate. If the loan was repaid in a
single payment after 18 months, what would be the total amount of the payment?
a.
$ 2,475
b.
$15,000
c.
$16,650
d.
$17,475
75.
A buyer obtained a 10% interest rate loan in the amount of $90,000. The term of the loan was 30
years and the monthly payment of principal and interest was $789.81. How much of the first
month’s payment will be paid on the principal?
a.
$ 39.81
b.
$ 40.02
c.
$750.00
d.
$751.32
76.
A buyer purchased a $60,000 house and was able to obtain a $36,000 loan. The loan was
amortized over 20 years with an interest rate of 9% and a principal and interest payment of
$323.90 per month. What was the total interest paid over the term of the loan?
a.
$ 36,000
b.
$ 41,736
c.
$ 77,736
d.
$116,604
77.
A homeowner’s monthly house payment if $9 per $1,000 of loan. What would be the
homeowner’s debt service on a $100,000 loan at 9% interest amortized over 20 years?
a.
$900
b.
$9,000
c.
$10,100
d.
$10,800
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78.
A buyer took out a $6,000 loan for 10 years at 10.5% interest. The buyer made principal
payments of $75 a month on the loan in addition to interest. What would be the principal loan
balance after 6 months of payments?
a.
$5,000
b.
$5,235
c.
$5,550
d.
$6,000
79.
A buyer purchased a property that closed on March 1. The annual principal and interests
payments were $12,470. The loan was $100,000. The down payment was 25% and the interest
rate was 10.5% with a 10-year term. How much of the second year’s payment would be applied to
principal?
a.
$ 1,970.00
b.
$ 2,176.85
c.
$10,293.15
d.
$10,500.00
80.
A buyer assumes an FHA loan. If the seller does not desire to remain liable for the loan, which of
the following actions should be taken?
a.
Get a written agreement from the buyer.
b.
Have the buyer purchase “subject to” the existing loan.
c.
Have the buyer execute an estoppel certificate.
d.
Novate the mortgage.
81.
Which of the following normally triggers an alienation clause?
a.
Failure to pay mortgage payments.
b.
Failure to pay taxes.
c.
Sale or assignment of the mortgaged property.
d.
Cancellation of the insurance.
82.
A mortgage clause that states that the mortgage is due and payable upon certain conditions, such
as non-payment is:
a.
Prepayment
b.
Subordination
c.
Defeasance
d.
Acceleration
83.
All of the following clauses could be included in a mortgage EXCEPT:
a.
Defeasance
b.
Alienation
c.
Subrogation
d.
Acceleration
84.
To protect the lender, which of the following items is usually NOT required for the borrower to
pay?
a.
Hazard insurance
b.
Life insurance
c.
Property taxes
d.
Principal and interest
85.
Which of the following statements best describes the purpose of an alienation clause in a
mortgage?
a.
To make sure that the principal and interest payments are kept current.
b.
To make sure that the real estate taxes are paid in a timely fashion
c.
To protect a lender’s security position
d.
To make sure the property had adequate maintenance and repairs.
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86.
What clause in a mortgage allows the holder of a note to increase or decrease the interest rate?
a.
Defeasance
b.
Alienation
c.
Acceleration
d.
Escalator
87.
If a person paid off a loan before maturity, which of the following mortgage clauses might apply?
a.
Subordination
b.
Pre-payment penalty
c.
Alienation
d.
Acceleration
88.
A buyer purchased a property from a seller. The agreement was for the buyer to take over the
seller’s loan but not be liable for the loan. The term used to best describe this situation would be:
a.
Subject to
b.
Assumption
c.
Hypothecate
d.
Accelerate
89.
A blanket mortgage usually contains which of the following clauses?
a.
Escalation
b.
Subordination
c.
Release
d.
Subrogation
90.
Which type mortgage does a seller who wants to help a buyer in the financing MOST commonly
use?
a.
Wraparound mortgage
b.
Open end mortgage
c.
Package mortgage
d.
Purchase money mortgage
91.
A buyer who had insufficient funds for a down payment gave a note and mortgage to the seller for
the difference. This is BEST referred to as:
a.
Wraparound mortgage
b.
Open end mortgage
c.
Purchase money mortgage
d.
Package mortgage
92.
A blanket mortgage is usually designed to cover:
a.
Both real estate and personal property
b.
More than one transaction
c.
More than one piece of property
d.
Loans over an extended time period
93.
Which of the following mortgages uses both real and personal property as security?
a.
Chattel
b.
Package
c.
Purchase money
d.
Blanket
94.
Which of the following usually occurs in a construction loan?
a.
The total loan proceeds are advanced before the construction begins
b.
NO funds are advanced before the construction begins
c.
The funds are advanced in installments as the construction progresses
d.
The interest on the entire loan would start from the beginning of the construction loan.
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95.
Which of the following items would convert a first mortgage into a junior mortgage?
a.
Subordination
b.
Joint tenancy
c.
Tenancy in common
d.
Alienation
96.
K was purchasing a property from L for $80,000. L had a current loan on the property in the
amount of $32,000. K was going to put 20% down and have L finance the balance of the purchase
price. L was going to keep and still be responsible for the $32,000 existing loan. This type of
financing would be called a:
a.
Swing loan
b.
Conventional loan
c.
Wrap-around mortgage
d.
Blanket mortgage
97.
A buyer purchased a house from a seller for $90,000. The seller allowed the buyer to assume the
current $40,000 loan on the house but also required the buyer to put 25% down. The seller then
personally loaned the buyer the balance of the purchase price. This type of financing best
describes a:
a.
Blanket mortgage
b.
Package mortgage
c.
Purchase money mortgage
d.
Shared appreciation mortgage
98.
A mortgage where the mortgagee pays the mortgagor a fixed amount every money is referred to as
a(n):
a.
Reverse annuity mortgage
b.
Open end mortgage
c.
Wraparound mortgage
d.
Shared appreciation mortgage
99.
What is the difference between an FHA loan and a VA loan?
a.
Interest rates are lower on a VA loan.
b.
Veterans receive a certificate of eligibility in obtaining a VA loan
c.
The money comes from the federal government on FHA loans
d.
The Veteran’s Administration insurance does not cost any extra money.
100.
A buyer purchased a $60,000 home with $2,000 in closing costs. The lender will loan 97% of the
first $25,000, 95% of the balance of the purchase price and 95% of the closing costs. What was
the amount of the loan?
a.
$57,500
b.
$59,400
c.
$60,000
d.
$62,000
101.
A buyer purchased a property for $79,650. The buyer obtained a first mortgage for 83% of the
purchase price with a 6% down payment. The owner financed the balance of the purchase price.
What would be the amount for the second mortgage financed by the seller?
a.
$ 8,235.81
b.
$ 8,761.50
c.
$13,540.50
d.
$17,345.98
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102.
A buyer was interested in purchasing a home. The buyer found a house to buy but had to obtain
financing to purchase. The buyer talked to a lender who gave the buyer in writing a commitment
on the interest rate and discount points. This letter is called a:
a.
Lock-in commitment
b.
Good faith estimate
c.
Disclosure statement
d.
Uniform Settlement Statement (HUD-1 Form).
103.
A house sold for $120,000 with a down payment of $20,000. The Mortgage Company charged
two discount points. How much money did the buyer pay for the discount points?
a.
$1,500
b.
$2,000
c.
$3,600
d.
44,200
104.
A property sold for $129,000 with the buyer putting 20% down payment. The lender charged 2
points and $750 closing costs. What was the total due from the buyer at closing?
a.
$ 2,814.
b.
$ 3,330
c.
$28,614
d.
$29,614
105.
What type of interest does the buyer receive in the property after the seller accepts the offer?
a.
Equitable
b.
Easement
c.
Record
d.
Equity
106.
In a commercial sale-leaseback, the tenant may:
a.
Depreciate the property as a tax deductible expense
b.
Deduct the rental payments as a tax deductible expense
c.
Use the mortgage interest as a tax deductible expense
d.
Sell the property.
107.
Which of the following terms BEST describes the seller in an agreement of sale?
a.
Offeror
b.
Vendor
c.
Trustor
d.
Mortgagor
108.
Which of the following terms BEST describes the buyer in a purchase agreement.
a.
Vendee
b.
Vendor
c.
Mortgagor
d.
Mortgagee
109.
A buyer tried to qualify for a $100,000 loan to purchase a home. The loan was denied and the
seller agreed to accept a $20,000 purchase money mortgage if the buyer borrowed the additional
$80,000. When the deed is executed, what type of title does the buyer receive?
a.
Equitable Title
b.
Legal Title
c.
Tenancy in Common
d.
Joint Tenancy
13
110.
A contract for deed can be best thought of as an:
a.
Option
b.
Lease
c.
Sale/leaseback
d.
Installment sale contract.
111.
A buyer wanted to purchase a property from a seller and assume the FHA loan on the property.
The buyer, however, did not have enough money to assume the loan and make the down payment
on the property. The buyer agreed to make equal monthly payments to the seller for one year for
the down payment. This type of financing would be called a:
a.
Shared appreciation mortgage
b.
Package mortgage
c.
Reverse annuity mortgage
d.
Contract for deed.
112.
Regulation Z would require disclosure of all the following items EXCEPT:
a.
Total finance costs
b.
The annual percentage rate
c.
Title insurance costs
d.
Total interest costs
113.
A seller sold a house for $80,000 and received a 20% down payment. The seller agreed to finance
the 80% balance for the buyer. Which of the following statements is NOT correct regarding this
transaction?
a.
The seller could use a land sale contract.
b.
The seller MUST comply with RESPA.
c.
The seller could use a purchase money mortgage.
d.
The seller could use a wraparound mortgage.
114.
At closing, a lender must give to the buyer and seller a copy of the:
a.
Settlement statement.
b.
HUD closing cost booklet.
c.
Sales contract.
d.
Good faith estimate of closing costs.
115.
When a buyer goes in to apply for a loan on a new first mortgage, what must the lender give to the
buyer?
a.
The broker’s commission amount.
b.
An estimate of the buyer’s closing costs
c.
An estimate of the seller’s closing costs.
d.
A three day right of rescission document on the buyer’s loan.
116.
Why is the annual percentage rate (APR) higher than the interest rate?
a.
Because the APR uses a calendar year and interest rate is computed based upon 360 days.
b.
Because the APR includes the finance charges the buyer pays in addition to the interest.
c.
Because the APR is quoted annually and the interest rate over 30 years.
d.
Because the APR includes the interest rate and the broker’s commission.
117.
A salesperson, while showing two different houses to a buyer, advised the buyer that one of the
houses would be a better buy. Which type agency may have been created?
a.
Expressed
b.
Exclusive
c.
Implied
d.
Executory
14
118.
What does a person have who can sign legal papers for another person?
a.
Attorney-in-fact
b.
Power of attorney
c.
Ostensible agency
d.
Attorney at law
119.
One who engaged another to act for him or her in a transaction is a(n):
a.
Testator
b.
Agent
c.
Trustee
d.
Principal
120.
Who does a salesperson owe loyalty to?
a.
Buyer
b.
Seller
c.
Broker
d.
Bank
121.
Which type of relationship is established between a principal and a broker?
a.
Trustor
b.
Trustee
c.
Blanket
d.
Fiduciary
122.
What type of agency is normally created between a broker and seller?
a.
Special agency
b.
General agency
c.
Ostensible agency
d.
Universal agency
123.
Broker A enters a listing in the multiple listing service under the rules of sub-agency. Broker B, a
member of the multiple listing service, finds a buyer and shows the house under the rules of subagency. Which of the following statements best describes the relationships of the parties?
a.
The buyer was an agent of Broker B
b.
Broker B was an agent of Broker A
c.
Broker B was an agent of the buyer
d.
Broker B was an agent of the seller.
124.
Salesperson T works for Broker R and obtains a listing from Seller S. Which of the following best
describes the relationship?
a.
Salesperson T works for Broker R and Salesperson T is an agent of Seller S.
b.
Salesperson T is an agent of Broker R and Broker R is an agent of Seller S
c.
Salesperson T is an agent for Seller S and Broker R is an agent of Seller S.
d.
Salesperson T is a dual agent representing both Broker R and Seller S.
125.
Broker L was the listing agent. Broker S was the selling agent. Both were members of a multiple
listing service. L did not know the buyer and S did not have any contact with the seller. No buyer
agency agreement existed. Which of the following is the MOST likely agency relationship?
a.
L is a subagent of S
b.
S and L both represent the seller
c.
L is an agent of the buyer
d.
S is an agent of the buyer
15
126.
An owner of an apartment hired a broker to manage and lease the apartments. Which of the
following terms BEST describes the relationship between the broker and the apartment complex
owner?
a.
Trustor
b.
Trustee
c.
Beneficiary
d.
Fiduciary
127.
XYZ Realty listed a property that was sold by ABC Realty. Salesperson J of ABC Realty
procured the buyer. There was no buyer agency agreement involved. Which of the following
statements best describes the most likely agency relationship?
a.
ABC Realty represented XYZ Realty and the buyer
b.
ABC Realty represented the buyer only
c.
ABC Realty is a sub-agent of XYZ Realty
d.
XYZ Realty is a sub-agent of ABC Realty
128.
How does a buyer become a client of a broker?
a.
By signing an agency agreement with a broker.
b.
By looking at a broker’s in-house listings
c.
By writing a sales contract with a broker
d.
By looking at other companies’ listings with a broker.
129.
A buyer was considering purchasing a new home that the listing broker was aware had been built
on a toxic waste dump. What duty does the listing broker owe to the buyer?
a.
Disclosure
b.
Accountability
c.
Loyalty
d.
Obedience
130.
An agent took a listing in which the seller said to sell it in “as is” condition. The agent then found
a major structural flaw in the property. Which of the following BEST describes what the agent
should do?
a.
Tell the buyer the property is sold “as is”.
b.
NOT reveal the flaw unless asked by the buyer.
c.
Inform the buyer of the flaw
d.
NOT reveal the flaw, as the agent is a fiduciary of the seller.
131.
A listing broker has to exercise all the following duties to a seller EXCEPT:
a.
Due care
b.
Accountability
c.
Obedience
d.
Management
132.
AN agent gathering information on a listing should gain as much information as possible for
which of the following reasons?
a.
In order to list more properties.
b.
To reduce the odds of being sued
c.
In order to have as much information as possible when showing the house.
d.
In order to sell more properties
133.
A listing agent tells a buyer that the insulation in the property may be cancer causing. The agent:
a.
Should NOT disclose this, as the agent was a seller’s agent.
b.
Has acted appropriately
c.
Has acted unethically
d.
Has gone beyond what is required by law
16
134.
What duty does a listing agent owe to a prospective buyer?
a.
Fiduciary
b.
Honesty and fairness
c.
Confidentiality
d.
Obedience
135.
From which of the following persons may a salesperson lawfully receive a commission?
Seller
MLS
The salesperson’s broker
A cooperating broker
136.
A home sold for $23,000. The buyers paid closing costs of 6% and taxes and insurance of $299.
Upon what price was the commission rate computed?
a.
$23,000
b.
$23,299
c.
$24,468
d.
$24,786
137.
At closing, to which of the following is the commission usually paid?
a.
Listing salesperson
b.
Listing broker
c.
Selling salesperson
d.
Selling broker
138.
AAA Realty had a listing with a seller. BBT Realty sold the property as a sub-agent for the seller.
Salesperson K was the salesperson for AAA Realty and salesperson R was the salesperson for
BBT Realty. Who is the commission paid to?
The broker of AAA Realty
Salesperson K of AAA Realty
The broker of BBT Realty
Salesperson R of BBT Realty
139.
A house was listed for $127,000. An offer of $120,000 was made and accepted. The commission
on the sale was 7% of which the salesperson received 40%. How much would the salesperson
receive?
a.
$1,680
b.
$3,360
c.
$3,556
d.
$5,334
140.
A broker was paid commission of 5% of the first $50,000 of a sale price and 3% of all over
$50,000. If the total commission was $3,475, what was the sale price?
a.
$32,500
b.
$43,438
c.
$82,500
d.
$97,500
141.
A house sold for $84,500 with a commission rate of 6%. The listing broker received 50% of the
commission. How much would the selling salesperson receive if the salesperson and the broker
split their portion of the commission 40/60?
a.
$ 816
b.
$1,014
c.
$1,521
d.
$2,856
17
142.
An investor initially paid $10,500 for a lot. Later the investor sold it for 20% less that the original
investment and paid a 10% commission. What was the net loss?
a.
$2,10
b.
$2,940
c.
$3,150
d.
$7,560
143.
A salesperson earned 2.75% commission on $600,000 in sales for the year. However, the
salesperson had only taken a draw against commission of $150 per week for the entire year for the
salesperson’s salary. What would be the total amount earned by the salesperson?
a.
$ 7,00
b.
$ 8,700
c.
$12,400
d.
$16,500
144.
The property management agreement is between the property manager and:
a.
His/her employees
b.
The property owner
c.
The tenants
d.
The lender
145.
A broker acting as a property manager usually indicates which type of agency?
a.
managerial
b.
Special
c.
General
d.
Ostensible
146.
Which of the following duties BEST describes the duty of a property manager to the owner?
a.
Fair
b.
Honest
c.
Accurate
d.
Fiduciary
147.
A property manager of a 10-unit apartment complex received a commission of 8% of the annual
gross rental income plus $175 for each new tenant. Six of the units rent for $650 each per month
and the remainder rent for $550 each per month. The manager was able to find four new tenants
during the year. If there was a 10% vacancy factor, what was the property manager’s annual
income?
a.
$1,188
b.
$4,880
c.
$5,970
d.
$6,556
148.
Which of the following items would be prorated at closing?
a.
Security deposit
b.
Broker’s commission
c.
Interest on an assumed loan
d.
Earnest money
149.
What is the purpose of a broker preparing a closing statement for the buyer and seller at closing?
a.
To provide the buyer and seller a list of all the loan costs
b.
To be in compliance with the equal credit opportunity act
c.
To be in compliance with Regulation Z
d.
To provide the buyer and seller with an accounting of all funds related to the transaction
18
150.
A seller sold their condominium to a buyer. Which of the following items would NOT be a
proration at closing?
a.
Rent
b.
Earnest money deposit
c.
Assumed insurance
d.
Taxes
151.
A seller had originally purchased a property for $50,000. The seller then sold the property paying
6% commission and expenses of $200. In order to receive a net profit of 40% of the original
purchase price, what would be the minimum amount the property would have to sell for?
a.
$73,150
b.
$74,400
c.
$74,412
d.
$74,681
152.
Real estate taxes of $1,160 were paid for the year on January 1. The house sold with a closing
date of September 15. How much would the seller receive back?
a.
$290.01
b.
$338.31
c.
$800.00
d.
$821.69
153.
A rental property sold with a closing date of September 18th. The rent of $500 had been paid on
September 1st. The buyer is credited with the day of closing. Which of the following statements is
correct?
a.
Buyer pays the seller $216.67
b.
Buyer pays the seller $300.00
c.
Seller pays the buyer $216.67
d.
Seller pays the buyer $300.00
154.
A buyer purchased a $100,000 home with an 80% loan. There was a real estate commission of 8%
and a loan origination fee of $100. The buyer’s attorney charged $75 and the credit report was
$35. If the loan discount points were 2% of the loan, what was the total of the buyer’s closing
costs?
a.
$ 210
b.
$1,810
c.
$2,210
d.
$8,610
155.
A seller wanted to net $72,000 after paying $1,400 in closing costs and an 8% commission. What
would the sales price have to be?
a.
$73,400.00
b.
$79,272.00
c.
$79,782.61
d.
$80,255.61
156.
An apartment complex was sold to a new owner with several leases still in effect. Which
statement BEST describes what happens to the leases?
a.
The carryover tenants will be considered tenants in sufferance
b.
The new owner must release all the tenants from their obligations
c.
The leases must be renewed when they expire
d.
The new owner must honor the leases in effect.
19
157.
If the tenant is paying rent, property taxes and hazard insurance, which of the following leases is
MOST likely in use?
a.
Percentage lease
b.
Net lease
c.
Gross lease
d.
Ground lease
158.
A lessee complained to an owner that the furnace would not work. After an extended period, the
lessee finally moved out in the winter and refused to pay rent. This is known as:
a.
Tenancy at sufferance
b.
Actual eviction
c.
Constructive eviction
d.
Forced eviction
159.
What is it called when a tenant is a lessee of an original tenant?
a.
Assignment
b.
Assumption
c.
Sublease
d.
Subject to
160.
Which of the following tax deductions would benefit the lessee in a net lese?
a.
Mortgage interest
b.
Real estate taxes
c.
Depreciation on the property
d.
Brokerage fee
161.
A property manager of a shopping center desired to rent space to a department store whereby the
rent would be based upon the annual gross sales. Which of the following leases would BEST
accomplish this?
a.
Gross lease
b.
Net lease
c.
Graduated lease
d.
Percentage lease
162.
Which of the following items would NOT always be part of a lease?
a.
The names of the parties involved
b.
Terms of the lease
c.
An option renewal clause
d.
A description of the property
163.
A tenant was considering a lease on a 50 x 100 foot space. The rent was quoted at $5.00 per
square foot annually with a 4-year lease term. If the tenant can negotiate a 5-year lease and only
pay rent for the first 4 years, what would be the effective rent per month on a 5-year lease?
a.
$ 4.00
b.
$ 5.00
c.
$1,667
d.
$2,083
164.
Which of the following would NOT nullify a listing?
a.
Seller revokes the listing.
b.
Broker resignation
c.
Death of a salesperson
d.
Destruction of the property
20
165.
An owner listed a property with only one broker. After the sale, the broker was NOT due a
commission. Which type of listing was MOST likely in effect?
a.
Exclusive agency
b.
Open
c.
Exclusive right to sell
d.
Net
166.
An owner listed a property with a broker. However, the broker failed to do anything to market the
property. If the owner wanted to sell the property personally without paying a commission, what
should the owner do?
a.
Write a letter of abandonment to the broker
b.
Wait 60 days and relist with another broker
c.
Terminate the listing before the expiration date
d.
File a suit for abandonment
167.
A salesperson who wanted to obtain a listing with the best protection for the broker should ask for
a(n):
a.
Open listing
b.
Net listing
c.
Exclusive agency agreement
d.
Exclusive right to sell agreement
168.
A broker gets a commission regardless of who sells the property. What type of a listing is this?
a.
Open listing
b.
Net listing
c.
Exclusive agency listing
d.
Exclusive right to sell listing
169.
What must a listing have in it?
a.
Appraised value
b.
Expiration date
c.
Signature of the buyer
d.
Assessed value.
170.
A seller could terminate a listing contract with a broker without liability EXCEPT for:
a.
Destruction of property
b.
Condemnation of property
c.
Bankruptcy of principal
d.
Decision by principal
171.
A broker took an open listing with a seller. Which of the following statements is correct
concerning the open listing?
a.
The broker will only get paid if the broker sells the property
b.
The broker will get paid regardless of who sells the property
c.
The broker cannot use sub-agents in trying to sell the property
d.
The broker must put the listing in the multiple listing service
172.
Which of the following would be tax deductible on an individual’s personal tax return?
a.
Credit card interest
b.
Mortgage interest on their residence
c.
Depreciation on their residence
d.
The cost of replacing a roof on their residence
21
173.
Which of the following properties would an owner be able to depreciate for tax purposes?
a.
An owner occupied residence
b.
A second home used for vacation purposes
c.
An owner’s past residence that is now rented out
d.
An owner’s past rental home that is now owner occupied
174.
When is a purchaser said to have “equitable title”?
a.
At the signing of the sales contract by both buyer and seller.
b.
When transference occurs
c.
When the purchaser gives earnest money
d.
When the offer is submitted to the seller
175.
A salesperson received an offer on a house. While preparing to present the offer, another offer on
the same house came into the office. Which of the following statements BEST describes what the
salesperson should do?
a.
NOT present the second one until after the first offer has been acted upon
b.
Present both offers at the same time
c.
Present the offer that would net the seller the best price
d.
Present the offer with the highest price that would yield the highest commission
176.
Which of the following items would NOT always be part of a real estate purchase contract?
a.
Competent parties
b.
Offer and acceptance or meeting of the minds
c.
Earnest money
d.
Consideration
177.
A contract is not completed and binding until it is signed by the:
a.
Mortgagor
b.
Offeree
c.
Offeror
d.
Lessor
178.
S owns a property and lists the property for sale with a broker. The broker finds a buyer who
makes an offer on the property. S is considered to be the:
a.
Grantor
b.
Grantee
c.
Offeror
d.
Offeree
179.
Which of the following elements must be in a contract to have a valid contract?
a.
A clear description of the land
b.
A clear description of the land, house and improvements
c.
Earnest money
d.
Good faith estimate of closing costs.
180.
A buyer made an offer on a property a broker had listed. The broker presented the offer to the
seller. While the seller was still considering the offer, the buyer contacted and informed the
broker that the buyer wanted to withdraw the offer. The broker should:
a.
Tell the buyer the offer cannot be withdrawn
b.
Tell the seller to accept the offer anyway
c.
Continue to market the property for the seller
d.
Tell the seller to sue the buyer for specific performance
22
181.
All parties have signed an agreement but the terms have NOT been fully performed. Which of the
following BEST describes the current status of this agreement?
a.
Executed contract
b.
Executory contract
c.
Implied contract
d.
Unilateral contract
182.
Which of the following statements BEST describes the usual legal effect of a contract signed
between an adult and a minor?
a.
Void on its face
b.
Binding on both parties
c.
Voidable by the minor
d.
Voidable by either party
183.
A contract where one or more of the parties can rescind is called:
a.
Void
b.
Voidable
c.
Valid
d.
Unenforceable
184.
A contract whose purpose is for an unlawful objective would be classified as:
a.
Valid
b.
Enforceable
c.
Void
d.
Voidable
185.
When a loan is transferred from one lender to another, this is known as:
a.
Release
b.
Reconveyance
c.
Novation
d.
Assignment
186.
A seller and a buyer agreed on the price and terms on the sale of a house. Both seller and buyer
signed the sales contract. Before closing, the seller and buyer agreed to change the closing date.
Which of the following would both parties need to sign?
a.
Addendum
b.
Assignment
c.
Acknowledgment
d.
Assessment
187.
A buyer and a seller entered into an agreement to purchase and sell a property. Prior to the closing
rd
the buyer wished to transfer the purchase rights to a 3 party. In order for the transfer to take
place, the buyer must initiate an:
a.
Anticipatory agreement
b.
Addendum
c.
Assumption
d.
Assignment
188.
A seller sold a property to a buyer with both signing the contract. The buyer, however, could not
come up with the funds to purchase the property until five days after the closing date. Which of
the following documents should both parties sign in order to accomplish the five-day extension?
a.
Assignment
b.
Amendment
c.
Acceleration
d.
Alienation
23
189.
A seller and buyer agreed contractually on the sale of a property. The sale could not be closed on
time according to the original contract. However, both parties wanted to extend the closing date.
Which of the following would be BEST to accomplish this?
a.
Void the original contract and re-write a new contract.
b.
Change the closing date in the original contract and have the seller initial the change
c.
Change the closing date in the original contract and have all parties initial the change
d.
No initials are needed as to the change since both parties have verbally agreed to the
changes.
190.
When an option to buy is exercised, the contract becomes:
a.
Bilateral
b.
Unilateral
c.
Expressed
d.
Implied
191.
Which of the following terms BEST describes an “option to purchase”?
a.
Deposit
b.
Down payment
c.
Contract
d.
Lease
192.
A prospective buyer wanted to have the right to purchase a home at a set price within the next 90
days but did not want to be obligated to purchase it. Which of the following documents would
allow the buyer to do this?
a.
Quitclaim deed
b.
Estoppel
c.
Right of first refusal
d.
Option
193.
A mortgage contingency usually includes all of the following items EXCEPT:
a.
The amount of the mortgage
b.
Commitment date
c.
Maximum interest rate
d.
Name of the lending institution
194.
A buyer signed a contract with a contingency clause stating the buyer must obtain a loan or the
contract can be voided. A lender approves the buyer for the loan and gives the buyer a lock-in
commitment letter. The buyer decides to cancel the contract and sends a letter to the seller stating
the buyer’s intention to cancel. Which of the following could happen?
a.
The buyer may rescind the contract and is entitled to the earnest money.
b.
The buyer may rescind the contract and the earnest money will be forfeited.
c.
The seller may file a specific performance suit for breach of contract.
d.
The seller may file a suit for financial alienation
195.
A purchaser entered into a contract to purchase a home. The purchaser wanted a clause in the
contract to protect against the loss of earnest money in the event a loan could not be obtained.
Which of the following items would BEST protect the purchaser?
a.
Financing contingency
b.
Listing contingency
c.
A statement of special arrangements to get the earnest money refunded
d.
Option contingency
24
196.
A broker produces a ready, willing and able buyer who enters into a contract with a seller. At
closing the seller cannot produce a marketable title. In the absence of instructions to the contrary,
which of the following actions should the broker take regarding the earnest money?
a.
Return it to the buyer immediately
b.
Return it to the buyer minus the broker’s expenses
c.
Return it to the buyer minus ½ of the broker’s commission
d.
Return it to the buyer minus the broker’s commission
197.
A salesperson, in writing an offer to purchase on a pre-printed contract approved for use, may:
a.
scratch out and delete where NOT applicable
b.
add information where needed
c.
fill in the blanks but leave the contract in its current form
d.
review each paragraph (phrase) and amend when appropriate
198.
Which of the following legal descriptions uses a plat map?
a.
Metes and bounds
b.
Lot and block
c.
Geodetic survey
d.
Rectangular survey system
199.
Linear feet, markers and degrees are used in which of the following legal descriptions?
a.
Lot and Block
b.
Metes and Bounds
c.
Government Survey System
d.
Plat Map
200.
A licensee lists a 30-acre property for $10,000,000. The seller originally paid $5.50 per square
foot for the property. How much per square foot has the property increased in value?
a.
$1.65
b.
$2.15
c.
$7.65
d.
$9.15
201.
Some undeveloped real estate measured 1,980 ft by 1,320 ft. Allowing 16-2/3% of this land for
streets and parks, how many 1/3-acre tracts of land could be made from this parcel?
a.
9.88
b.
29.64
c.
50.00
d.
150.00
202.
A piece of property measuring 600’ by 300’ contains how many acres?
a.
4.00
b.
4.13
c.
5.12
d.
5.79
203.
A buyer purchased 4/5 of a property containing 2,178,000 square feet at $2,500 per acre. What
was the sale price?
a.
$ 60,000
b.
$ 75,000
c.
$100,000
d.
$125,000
25
204.
A Corporation who purchased a piece of real estate as a co-owner with an individual would
usually take title in which of the following manner?
a.
Joint tenancy
b.
Tenancy in common
c.
Tenancy by the entirety
d.
Community property
205.
Which of the following transactions would be governed by securities laws?
a.
An adjustable rate mortgage with the interest rate tied to the one-year treasury bills.
b.
A broker selling share in a Real Estate Investment Trust (REIT).
c.
The Federal Housing Administration in insuring loans for lenders
d.
A lending institution selling mortgages to Freddie Mac.
206.
Which of the following terms BEST describes the practice of encouraging owners to move from
an area due to minorities moving in?
a.
Steering
b.
Block-busting
c.
Redlining
d.
Puffing
207.
A broker found a ready, willing and able minority who offered full price for a house. The seller
refused to sell because the buyer was a minority. The broker could legally do all of the following
EXCEPT:
a.
Sue for a commission
b.
Inform the prospective buyer that help is available from HUD
c.
Inform the seller that a violation of federal fair housing laws has occurred.
d.
Show the property only to non-minorities.
208.
A mobility-impaired person was renting a unit in an apartment complex. Half of the units have
assigned parking spaces near the door. The other half do not. The owner:
a.
May charge extra money too the handicapped person for providing the parking space near
the door
b.
Must take a vote of all the tenants to see if the other tenants want to allow the
handicapped person a parking space
c.
Must give a parking space near the door to the handicapped person if one is available and
a need is demonstrated
d.
Must give a parking space near the door only if other disabled persons had also been
given parking spaces near the door.
209.
Which of the following would be exempt under the Federal Fair Housing Law of 1968?
a.
An owner of an 8-unit apartment building who lives in one of the units.
b.
An individual selling a personal residence who does NOT discriminate in advertising.
c.
A private club that was an annex of a commercial motel.
d.
A religious group that discriminated only on the basis of national origin.
210.
A lender would not loan or properties in certain areas due to the ethnic makeup of the areas. This
is called:
Blockbusting
Redlining
Steering
Panic lending
26
211.
An apartment building was exempted from the rules regarding famili al status under the Fair
Housing Law. Which of the following applicants would it be allowed to accept and still fall under
the familial status exemption?
a.
A 50 year old nurse who is currently employed.
b.
A retired construction worker who is age 53
c.
A 54 year old retired teacher
d.
A 63 year old postal worker who is currently employed
212.
Under the Federal Fair Housing Law, which of the following qualifies as a protected class under
the definition of familial status?
a.
A person 55 or older
b.
A person not currently married
c.
A child under the age of 18
d.
A family with dependent children regardless of age.
213.
In advertising for prospects, all of the following terms could be used EXCEPT:
Political party affiliation
Military personnel
Upper bracket buyers
National origin
214.
Which of the following transactions is EXEMPT from the requirements of the Federal Fair
Housing Act?
a.
Broker selling vacant land on which a house will be built in the future
b.
Broker selling a residential condominium
c.
Owner renting one room in an owner occupied residence
d.
Religious community running a commercial venture for profit.
215.
A real estate agent was distributing leaflets in an area of town trying to improve the racial balance
in that neighborhood. This is:
a.
Illegal, as this would be Blockbusting
b.
Illegal, as this would be redlining
c.
Illegal, as this would be a forced eviction
d.
Legal, as the agent was trying to improve the racial balance in the area.
216.
What is recompense for an appraiser?
a.
A fee based on a percentage of the appraised value
b.
A fee based on the amount of time and effort
c.
A fee agreed upon after the appraisal is completed
d.
A standard fee agreed upon by the national appraisal organizations
217.
Utility, scarcity and transferability would MOST relate to which of the following terms?
a.
Appraisal process
b.
Value
c.
Zoning process
d.
Supply and Demand.
218.
A property owner can deduct depreciation for tax purposes on a property in which of the following
circumstances?
a.
When the property is a rental property
b.
When the property is sold
c.
When the property owner makes improvements on the property
d.
When the homeowner takes the 55 or over capital gains exclusion
27
219.
When an owner takes the original cost of real property and takes tax deductions over the life of the
property, this is referred to as:
a.
Appreciation
b.
Depreciation
c.
Physical life
d.
Economic life
220.
Which of the following properties would an appraiser NOT depreciate?
a.
Improvements on real property over 50 years old
b.
Improvements on real property less than 10 years old
c.
Rental property of less than 5 rental units
d.
Vacant land to be used for commercial property.
221.
A house valued at $350,000 will depreciate an average of 3.5% per year. What will be the value
after 4 years?
a.
$301,000
b.
$303,513
c.
$325,500
d.
$337,750
222.
A three-year-old property appraised for $98,000. If it depreciated an average of 10% per year,
what was the original value of the property?
a.
$ 68,600
b.
$132,000
c.
$140,000
d.
$326,667
223.
A decision to replace a 2-family structure with a commercial building would be an example of:
a.
Eminent domain
b.
Highest and best use
c.
Condemnation
d.
Police power
224.
A seller was considering listing the seller’s residential property for sale. A real estate agent found
3 comparable properties in the seller’s neighborhood that had sold for $120,000, $140,000 and
$160,000. In order to estimate the value of the seller’s home, which of the following would be the
salesperson’s best choice?
a.
Take a weighted average of the three comparables with more emphasis on the $120,000
property.
b.
Value the seller’s property closer to the $120,000 property
c.
Value the seller’s property closer to the $160,000 property
d.
Make adjustments to the comparables and then compare to the seller’s property.
225.
The direct sales or market data approach is based upon the principle of:
a.
Competition
b.
Anticipation
c.
Substitution
d.
Conformity
226.
A person built a $150,000 house in a $50,000 neighborhood. It was also downwind from a
sewage plant. The builder did not put closets in 2 of the bedrooms. Which is correct concerning
the property?
a.
It was over-improved thus leading to economic obsolescence.
b.
It suffers from functional obsolescence due to the sewage plant
c.
It suffers from economic obsolescence due to the lack of closets.
d.
It suffers from physical depreciation due to the sewage plant.
28
227.
A property was in an area with a lot of smoke and soot from nearby factories. It suffers from:
a.
Physical depreciation
b.
Functional obsolescence
c.
Locational depreciation
d.
Economic (external) obsolescence
228.
The difference between reproduction cost and present value is:
a.
Appreciation
b.
Depreciation
c.
Market value
d.
Book value
229.
When doing an appraisal, an appraiser would MOST likely use which of the following
measurements?
a.
Inside dimensions
b.
Outside dimensions
c.
Individual room measurements, less garage and basement, all added together
d.
All individual room measurements added together
230.
A residential property was equipped to handle electrical service of 60 amps. The standard in the
rest of the homes in the area was 100 amps. Having only 60 amps causes the home to suffer from:
a.
Functional obsolescence
b.
Environmental obsolescence
c.
Economic depreciation
d.
Physical depreciation
231.
A residential property was worth $75,000 based on comparable properties and $85,000 based on
reproduction cost. The property was sold at a bankruptcy sale for $70,000. What would be the
fair market value of this property?
a.
$70,000
b.
$75,000
c.
$80,000
d.
$85,000
232.
What is the difference between reproduction cost and replacement cost?
a.
Exact replica/same utility function
b.
Square footage/cubic footage
c.
Individual increments/total replacement
d.
Unit-in-place/quantity survey
233.
A person bought a lot for $28,000 and then added improvements in the amount of $150,000. The
owner wanted to make a profit of 5% on the lot and 40% on the improvements. What would the
sale price have to be?
a.
$210,000
b.
$228,000
c.
$239,400
d.
$258,100
234.
A building was to be constructed with the dimensions of 130 feet long, 30 feet wide and 24 feet
high. Contractor A was going to build the building at $8.90 per square foot while Contractor B
was going to build it as $.375 per cubic foot. How much could be saved by using contractor A
rather than Contractor B?
a.
$ 200
b.
$ 390
c.
$2,500
d.
$7,332
29
235.
A person owns a 6 unit apartment complex that was purchased for $102,000. 2 units rent for $400
each per month, 2 units rent for $275 each per month and the others rent for $200 each per month.
The monthly expenses are $645. What is the annual net rate of return?
a.
10%
b.
11%
c.
13%
d.
14%
236.
A property with a net income of $3,000 per year, capitalized at 7.5%, yields which of the
following values?
a.
$30,000
b.
$40,000
c.
450,000
d.
460,000
237.
An apartment complex had an annual gross income of $240,000, annual debt service of $100,000,
annual maintenance of $35,000, annual utilities of $5,000, annual insurance of $10,000 and an
annual property manager’s salary of $50,000. What would be the net operating income for this
apartment complex?
a.
$ 40,000
b.
$140,000
c.
$175,000
d.
4240,000
238.
A buyer purchased a property with an annual gross income of $95,000. What would be the annual
cash flow before income taxes if the property had $5,500 per month in debt service, $8,400 per
year in taxes, $210 per month for insurance and $6,000 per year in maintenance?
a.
$12,080
b.
$18,080
c.
$74,890
d.
$78,080
239.
Two rooms in a house measure 15’ by 12’ and 18’ by 14’. If carpet costs $18 per square yard,
how much would it cost to carpet both rooms?
a.
$864.
b.
$920
c.
$975
d.
$990
240.
The zoning on a residential development allowed for multi-family units to be built. The private
deed restrictions on the development allowed for only single family dwellings with a minimum lot
size of 100 x 150. Which of the following would be allowed to be built in this subdivision?
a.
1 duplex per acre
b.
2 single family dwellings per acre
c.
7 single family dwellings per acre
d.
1 four-plex per acre
241.
When appraising a 30-year-old residence, an appraiser should most heavily rely on which
approach to value?
a.
Reproduction cost
b.
Replacement cost
c.
Income approach
d.
Market data approach
30
242.
An appraiser who is looking at the growth, stability and decline of an area is dealing with:
a.
Neighborhood cycle
b.
Site analysis
c.
Functional obsolescence
d.
Economic obsolescence
243.
Which valuation approach would be used on a 20-unit apartment building?
a.
Market data
b.
Cost
c.
Income
d.
Unit-in-place
244.
Which valuation approach is most accurate to use on a church?
a.
Market data
b.
Cost
c.
Income
d.
Gross rent
31
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
D
C
B
B
D
B
B
C
A
B
C
B
B
B
C
A
D
B
B
A
A
C
A
B
C
A
C
C
A
A
A
B
A
C
B
B
C
B
B
A
D
A
B
B
D
B
C
B
C
D
C
B
B
D
C
C
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
C
A
B
D
B
A
C
A
B
C
B
D
C
D
C
C
D
D
A
B
D
C
B
D
C
D
C
B
C
D
B
A
C
D
C
C
B
C
A
C
C
A
B
B
B
A
B
C
A
B
B
A
B
D
D
C
113.
114.
115.
116.
117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.
128.
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.
139.
140.
141.
142.
143.
144.
145.
146.
147.
148.
149.
150.
151.
152.
153.
154.
155.
156.
157.
158.
159.
160.
161.
162.
163.
164.
165.
166.
167.
168.
B
A
B
B
C
D
B
C
D
A
B
B
B
D
C
A
A
C
D
C
B
B
C
A
B
A
B
C
B
B
D
B
C
D
C
C
D
B
D
B
C
B
C
D
B
C
C
B
D
C
C
C
A
C
D
D
169.
170.
171.
172.
173.
174.
175.
176.
177.
178.
179.
180.
181.
182.
183.
184.
185.
186.
187.
188.
189.
190.
191.
192.
193.
194.
195.
196.
197.
198.
199.
200.
201.
202.
203.
204.
205.
206.
207.
208.
209.
210.
211.
212.
213.
214.
215.
216.
217.
218.
219.
220.
221.
222.
223.
224.
B
D
A
B
C
A
B
C
B
D
A
C
B
C
B
C
D
A
D
B
C
A
C
D
D
C
A
A
C
B
B
B
D
B
C
B
B
B
D
C
B
B
D
C
D
C
A
B
B
A
B
D
A
C
B
D
225.
226.
227.
228.
229.
230.
231.
232.
233.
234.
235.
236.
237.
238.
239.
240.
241.
242.
243.
244.
C
A
D
B
B
A
B
A
C
B
C
B
A
A
A
B
D
A
C
B
32

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