Practice Exam 4

Question 1

5 acres of land were zoned for residential and area surrounding too. If the owner of the 5 acres wants to re-zone to commercial, what would they have to obtain to allow for the change?

Answer 1

spot zoning

Question 2

When a transaction that involves earnest money has consummated, when and how must the sponsoring broker disburse the funds?

Answer 2

according to the terms of the contract regarding the release of earnest money

Question 3

Amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the

Answer 3

LTV ratio

Question 4

5 individuals join together to purchase a property and they own the property in severally. What type of business organization have they formed?

Answer 4

corporation

Question 5

Person who has the entire bundle of rights in a parcel of real estate unencumbered de deed conditions is said to own a

Answer 5

fee simple absolute estate

Question 6

The type of lease that is for an indefinite amount of time and may be cancelled by the landlord or tenant at any time is known as a

Answer 6

estate at will

Question 7

The loss of value due to the normal wear and tear on a property is what type of depreciation?

Answer 7

physical deterioration

Question 8

Points are usually charged to do what?

Answer 8

improve the yield on a mortgage

Question 9

3 people own a property as joint tenants. 1 tenant dies, how is the property now owned?

Answer 9

The 2 remaining joint tenants now own 1/2 of the property each as joint tenants

Question 10

a lot measuring 120’x200’ is selling for $300 a front foot. What is its price?

Answer 10

120’ x $300 = $36,000

Question 11

If the amount realized at a sheriff’s sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to whom?

Answer 11

the mortgagor (previous owner)

Question 12

As an agent for the seller, a real estate broker can

Answer 12

solicit an offer to purchase the property from a prospective buyer

Question 13

The physical characteristics of land represent the land’s immobility, non homogeneity and

Answer 13

indestructible nature

Question 14

A metes and bounds legal description is used to describe what?

Answer 14

irregular pieces of property

Question 15

An extension of credit from a seller to a buyer to allow the buyer to complete the transaction is what type of mortgage?

Answer 15

purchase money mortgage

Question 16

Tyler purcahsed a home and applied for a mortgage at Southgate Bank. The loan was made and payments were paid on the 1st of each month, after 3 years Tyler lost his job and could not make the payments. What can the mortgagee do?

Answer 16

file a court action to have the house sold to satisfy the debt

Question 17

Bill is building a new house and makes sure the 1st floor joists are completely covered with sub-flooring upon which exterior walls and interior partitions are erected. What type of frame construction is this?

Answer 17

platform frame

Question 18

Which is not an involuntary method of conveying property?

escheat
condemnation
quitclaim
adverse possession

Answer 18

quit claim

Question 19

PM’s represent the ____ interest, not the _____

Answer 19

owner’s, tenant’s

Question 20

A deed conveys a ____ interest in real estate

Answer 20

present

Question 21

A will conveys ____ interest in real estate until after the death of a testator

Answer 21

no

Question 22

A will conveys __ interest in real estate until it is ___

Answer 22

no, probated

Question 23

If the NOI and the cap rate were known, how would an appraiser find the value of a property using the income cap approach to value?

Answer 23

NOI / cap rate

Question 24

High vacancy rate may be caused by any of the following EXCEPT:

inept management
poor location
excessive rent
impressive amenities

Answer 24

impressive amenities

Question 25

Some states also allow a licensee to act in a non-agency capacity. Depending on the sate, the licensee could be known as all of the following EXCEPT transaction broker subagent facilitator coordinator

Answer 25

subagent

Question 26

What is the primary benefit of radio and TV ads for real estate firms?

Answer 26

they reach a much larger audience than most other mediums

Question 27

The benefit, interest or value that induces the parties to enter into a contract is known as

Answer 27

consideration

Question 28

Buildings that were erected before the enactment of a zoning ordinance and do not comply with the zoning limits are called

Answer 28

nonconforming use

Question 29

If a property owner tells a licensee that their commission will be anything above x listing price, the listing is known as

Answer 29

a net listing

Question 30

After contracting for a house, a buyer applied for a conventional loan at a mortgage banker. What would NOT be listed on the good faith estimate of closing costs?

Answer 30

broker's commission because they are usually paid by the seller

Question 31

a recorded value deed must contain all of the following EXCEPT signature of grantor signature of grantee granting clause an acknowledgement

Answer 31

signature of the grantee

Question 32

an oral contract in which the parties state the contracts terms and express their intentions in words is known as

Answer 32

an express contract

Question 33

What is NOT a type of listing? open exclusive agency exclusive right to sell MLS contract

Answer 33

MLS contract

Question 34

Blockbusting is an attempt

Answer 34

to panic a neighborhood into thinking property values will decline due to unwanted person(s) moving in

Question 35

A broker places a buyer's earnest money deposit in his personal funds account. The broker does not spend the money before the closing. The broker has

Answer 35

commingled funds which is an illegal act

Question 36

It is necessary to calculate a dollar value for depreciation when using what approach?

Answer 36

cost approach to value

Question 37

What would require the value of the land to be calculated separately form the value of the improvement?

Answer 37

cost approach

Question 38

The rights of ownership of real property does NOT include the right of

Answer 38

compatibility (deals with the transaction and not the property itself)

Question 39

A contract in which all the parties have fulfilled all their promises and performed the contract is known as

Answer 39

an executed contract

Question 40

The Civil Rights Act of 1866 permits discrimination in housing based on race under what circumstance?

Answer 40

NEVER

Question 41

Broker decides not to disclose to a buyer that the property's well is almost dry. The broker has

Answer 41

committed passive fraud

Question 42

The government's right to make laws and regulations for the general welfare of the public is known as

Answer 42

police powers