Ultimate Test 1

Question 1

A “single party listing” must not include:

Answer 1

b) A holdover clause

Question 2

A broker may list a property currently listed by another broker when:

Answer 2

a) The new listing begins after the current listing ends

Question 3

A Township consists of:

Answer 3

b) 36 square miles

Question 4

The main difference between Federal and Colorado fair housing laws is that:

Answer 4

c) Colorado covers residential and commercial properties

Question 5

A qualified fee simple estate may be:

Answer 5

b) Reclaimed in grantor’s name

Question 6

A life estate may not be:

Answer 6

a) Passed by a will

Question 7

What is the value of a property where the gross rent multiplier is 170 and the annual rent is
$12,000?

Answer 7

$170,000

Question 8

A buyer purchasing a house in which the security system on lease is owned by a security company:

Answer 8

c) Should negotiate with the security company if he wishes to take over the lease

Question 9

One of the major differences between Joint Tenancy and Tenancy in Common is that:

Answer 9

a) Joint Tenancy is not probated

Question 10

The difference between a cooperative and a condominium is that a condominium owner may:

Answer 10

a) Own and finance their property

Question 11

Which type of description would include “Beginning at the:

Answer 11

a) Metes and Bounds

Question 12

The Lender’s margin is:

Answer 12

b) An amount added to the Index Rate on an adjustable mortgage.

Question 13

The higher the leverage:

Answer 13

a) The greater the L.T.V

Question 14

Whether or not an FHA loan is a qualified or unqualified assumption depends on:

Answer 14

b) The date of the loan

Question 15

A property owner wants to sell his home but does not want to list his property. He tells a broker “If you sell my home I will pay you a commission”. This is most likely:

Answer 15

d) An open listing

Question 16

Which would not be considered in the Comparison Approach:

Answer 16

b) Accrued depreciation

Question 17

An appraiser uses comparable homes for his appraisal. He is using the principle of:

Answer 17

c) Substitution

Question 18

Which of the following is never considered a fixture:

Answer 18

c) Land

Question 19

A conditional use permit would reflect a slight variance in:

Answer 19

c) Zoning

Question 20

A developer tries to obtain financing for property in a low income part of town. He is turned down by three lenders. These lenders are possibly guilty of:

Answer 20

b) Red lining

Question 21

A Lead-Based Paint Disclosure must be signed by the seller and broker before the Buy and sell contract when the:

Answer 21

c) A building permit was obtained prior to January 1, 1978

Question 22

The Fair Housing Act does not prohibit discrimination based on:

Answer 22

b) Homosexuality

Question 23

The difference between a license and an easement is that:

Answer 23

c) A license can be canceled

Question 24

RESPA requirements must be given to a borrower:

Answer 24

a) Within 3 days of loan application

Question 25

Who is not required to carry E & O Insurance:

Answer 25

b) An inactive broker

Question 26

The Square Footage Disclosure does not require the listing broker to:

Answer 26

c) Measure the property himself/herself

Question 27

When a contract dispute arises the parties must:

Answer 27

c) Mediate within 30 days

Question 28

Mineral Rights

Answer 28

c) May belong to a third party

Question 29

Closing Statements held by a broker associate must be given to their broker:

Answer 29

a) Immediately

Question 30

A broker may reintroduce a buyer to a property after listing has expired due to:

Answer 30

a) An extension or protection clause

Question 31

The broker's commission:

Answer 31

d) Is always negotiable

Question 32

The broker's commission

Answer 32

d) Is always negotiable

Question 33

In a counterproposal, only new dates and deadlines may be entered:

Answer 33

c) A counterproposal can only change the sales prices

Question 34

If a broker decides not to accept a listing assignment

Answer 34

d) He may accept or decline the listing at his discretion

Question 35

If a broker measures the property, he must:

Answer 35

a) Disclose methodology

Question 36

If a broker does not measure the property they:

Answer 36

b) Must disclose source of measurement

Question 37

Which of the following advertisements would be permissible under Fair Housing Laws?

Answer 37

c) Cozy for one or two

Question 38

There is a three-day right of recession right under the Truth in lending laws for all but which one of the following:

Answer 38

a) A first mortgage loan to buy a new house

Question 39

A protection clause in a listing contract provides limited protection for:

Answer 39

d) The listing broker

Question 40

A property is valued at $72,000. The assessment ratio is 50% and the mill rate is 60 mills. The property tax is:

Answer 40

a) $2,160

Question 41

A local bank's underwriting policy provides that the monthly mortgage payment cannot be more than 25% of the borrower's monthly gross income. If the mortgage payment is $900 the monthly income of the borrower is:

Answer 41

b) $3,600

Question 42

When a house is sold “as is” the listing broker:

Answer 42

b) Should question the seller about possible defects

Question 43

When a broker and his client wish to change the list price on a property they would use:

Answer 43

b) An amend and extend (listing contract)

Question 44

One disadvantage of real estate as an investment is its:

Answer 44

c) Illiquidity

Question 45

A comparative market analysis is based primarily on the economic principle of:

Answer 45

a) Substitution

Question 46

When conducting a comparative market analysis, the broker would not:

Answer 46

c) Consider depreciation

Question 47

An important factor in successful real property management is:

Answer 47

c) Careful selection of tenants

Question 48

A borrower applies for an $80,000 loan at 8.5% interest. The bank requires an escrow of two months’ interest from the borrower. The amount in escrow would be:

Answer 48

$1,133.33

Question 49

An owner wants to net $80,000 after paying a 7% commission to his broker. He must sell his house for:

Answer 49

b) $86,021

Question 50

A renter would not be protected by Fair Housing laws if:

Answer 50

d) He is only using illegal drugs

Question 51

The purpose of a master plan is to:

Answer 51

b) To provide for orderly future growth

Question 52

The statement by a broker that “This is the best house in the neighborhood” is probably:

Answer 52

c) Puffing

Question 53

Net listings are illegal in many states because:

Answer 53

c) They could encourage a broker to be dishonest

Question 54

High leverage results in:

Answer 54

a) High returns relative to equity

Question 55

A comparative market analysis will indicate:

Answer 55

c) The most probable sales price of a house

Question 56

An improvement location certificate would most likely reveal:

Answer 56

d) Encroachments

Question 57

All metes and bounds legal descriptions start and end at:

Answer 57

b) A monument

Question 58

A broker who is negotiating a sale involving a seller assisted down payment should work with

Answer 58

d) Tax counsel ???

Question 59

The best way to describe a novation is:

Answer 59

c) A new contract which substitutes for an old contract

Question 60

In Real Estate practice a variance is best described as:

Answer 60

c) Permission to deviate from a setback requirement in zoning laws

Question 61

Which of the following would be an example of a legal non-conforming use:

Answer 61

c) Being allowed to continue a residential use as land formerly zoned for residential use which has recently been rezoned to commercial use

Question 62

Which of the following would most likely result in a contract being declared void:

Answer 62

c) One of the parties has been certified by a court as insane

Question 63

A person has equitable title when:

Answer 63

b) A buyer has purchased land and is paying the seller in 60 equal installments before the title is transferred

Question 64

Equitable title would best be described as:

Answer 64

c) The rights of the buyer to a property after contract but before closing ???

Question 65

A custom built appliance which is placed permanently in a specially built recess in a residence is:

Answer 65

d) A fixture

Question 66

The legal process by which personal property becomes a fixture is:

Answer 66

d) Annexation

Question 67

Which of the following would be an easement by necessity:

Answer 67

a) A driveway through a neighbor's property which provides the only access to a public street

Question 68

Which of the following would terminate a listing contract:

Answer 68

c) The death of the seller

Question 69

A direct real estate origination is available from which of the following:

Answer 69

d) A regional credit union

Question 70

Discrimination against a borrower based on age is addressed in:

Answer 70

b) The Equal Credit Opportunity Act

Question 71

The appraised value of a house is an estimate of:

Answer 71

b) The most probable selling price of the house in an open and competitive market

Question 72

A seller informs his broker that he needs to sell his house quickly and that he wants $80,000 for it. The broker is experienced in the area and thinks the house is worth more than the seller's asking price. What should the broker do?

Answer 72

c) Suggest that the seller have a comparative market analysis done before listing

Question 73

A personal check is not considered “good funds”, except:

Answer 73

a) When it clears prior to closing

Question 74

If the Lead-Based Paint Disclosure is not given prior to closing, the contract is:

Answer 74

d) Void

Question 75

In the Colorado approved Residential Sales Contract, the cost of an appraisal of the house is:

Answer 75

b) A negotiable item

Question 76

A broker working with a buyer who wants to make an offer must in terms of the disclosure laws give the buyer:

Answer 76

c) Definitions of all brokerage relationships

Question 77

If a lead-based paint disclosure is not completed and signed before the sales contract is signed, the sales contract of a house where the building permit was issued prior to January 1,1978:

Answer 77

b) Is void

Question 78

An earnest money receipt is referenced:

Answer 78

a) Within the approved residential sales contract

Question 79

A TD 1000 is used by the county assessors to:

Answer 79

c) Help ensure fair property tax records

Question 80

A listing agent was instructed by the seller that bad and potentially dangerous fumes from his workshop might be present in his house. He requests that all showings are to be by appointment only. The listing agent puts a MLS lock box and instructs his office to inform brokers to call first before showing the house. A broker wishing to show the house calls but gets no reply. He enters the house with his client and both get sick from the fumes. In this case:

Answer 80

a) The listing agent did not do enough to follow the seller's instructions

Question 81

An employing broker may be party to a principal's confidential information if:

Answer 81

c) If the associate broker has the written consent of his/her principal

Question 82

Which of the following would normally be a charge to the buyer in a new loan settlement statement:

Answer 82

d) Loan discount points

Question 83

Which of the following is not required in the broker trust account documentation and records:

Answer 83

d) The address of the payee

Question 84

A broker can satisfy the Colorado requirement for continuing education by successfully completing and passing:

Answer 84

c) The Colorado portion of the exam only

Question 85

As a listing agent, is it legal to rebate a portion of your commission to the seller?

Answer 85

a) Yes

Question 86

A party who requests information on a brokerage relationship not offered by a broker in terms of the broker's office policy, must be given:

Answer 86

b) Written definitions of all brokerage relationships

Question 87

Jane wants to advertise her services as an associate broker with a large franchise. She must, as a minimum requirement, state in addition to her name:

Answer 87

c) The employing broker's name as licensed in the state records???

Question 88

If a licensee changes employment, her listings:

Answer 88

b) Belong to the employing broker

Question 89

When a real estate broker makes an evaluation of any reason other than marketing, the evaluation must contain a written notice that:

Answer 89

c) The preparer is not registered, licensed or certified as an appraiser

Question 90

A complex is occupied over 80% by 55+ year olds:

Answer 90

a) It is exempt from Colorado’s Fair Housing Familial Status Law

Question 91

Appraised value is an estimate of

Answer 91

d) The most probable selling price based on the market

Question 92

A single party listing would not include:

Answer 92

b) A thirty-day holdover period

Question 93

A house was sold for $200,000 and the loan-to-value ration was 80%. What was the loan amount?

Answer 93

c) $160,000

Question 94

Who pays for the mortgagee title insurance?

Answer 94

c) The buyer

Question 95

When can a lender pay a fee to a broker for introducing a loan:

Answer 95

a) Never

Question 96

The broker selected by an employing broker to represent a seller in a transaction is called a/an:

Answer 96

d) Designated broker

Question 97

What is the lowest level of disciplinary action the Commission can impose on a licensee?

Answer 97

d) Write a letter of admonishment