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NATIONAL REAL ESTATE EXAM PRACTICE QUESTIONS
WITH VERIFIED CORRECT ANSWERS
"A broker has written permission to represent both the seller and the buyer as a dual agent. Under these circumstances, which of the duties of the agent would be the easiest for him to
fulfill? - CORRECT ANSWER Accounting"
"Who is responsible for providing a lead paint disclosure? - CORRECT ANSWER The seller"
"A property has lead paint in the interior and on the exterior. Which of the following statements
is true? - CORRECT ANSWER The seller has no duty to remediate lead, simply to disclose it"
"E signature or electronic signature - CORRECT ANSWER are valid for parties that have agreed
to their use with the consent of the other parties" "A practice of trying to induce homeowners to sell by convincing them that a minority group is
moving into the area causing property values to drop is - CORRECT ANSWER blockbusting"
"John has a loan with equal regular payments of principal and interest. Long before the debt is satisfied, the balance is due in a payment substantially larger than all the others. This is best
described as a: - CORRECT ANSWER Partial Amortization Loan"
"An investor/developer has borrowed money to build a retail shopping center. His lender has provided a very competitive interest rate, however when the investment property is completed and sold the lender will collect the amount borrowed plus a percent of the developer's profits.
What type of loan is this? - CORRECT ANSWER shared appreciation loan"
"A young couple leases an apartment in an apartment complex for one year. During the year, they become concerned about crime in the area and ask for permission to install an alarm system in the apartment. The landlord grants permission. When the lease is up, what happens to the alarm
system? - CORRECT ANSWER the system stays as it is now a fixture"
"A broker has a trust account set up to hold client funds. He has earnest money deposits from
several clients in the account at the same time. This is: - CORRECT ANSWER acceptable as long
as he has written records"
"A license holder is representing a young couple purchasing their first home. She shows them many properties and finally they find one to buy. They have some concerns about the contract
and ask to speak an attorney. the agent should... - CORRECT ANSWER Send the clients to an
attorney of their choice before they sign" "A sales agent had a listing and the property did not sell. The listing expired. During the term of the listing the seller had disclosed confidential information to the agent. Several months later, the agent has a buyer client interested in purchasing the same property. How long must the seller's
private information be kept confidential? - CORRECT ANSWER the duty of confidentiality
never expires and the agent must keep that information confidential forever" "A salesperson designed an innovative tech in the office that would substantially improve service
to clients. He must - CORRECT ANSWER obtain permission from his broker before using it"
"What is considered evidence against a broker accused of discrimination? - CORRECT
ANSWER failure to display the equal housing poster in their office"
"A property owner has a waterfront lot on a stream. He has the right to use the water from the
stream. What is this right called? - CORRECT ANSWER riparian"
"A tenant is aware that his lease will expire at the end of the month. He has begun to disassemble
his display cabinets and shelves. Which of the following statements about this is true - CORRECT
ANSWER the tenant can take these as they are trade fixtures"
"A seller is attending the closing on his property. The title company has discovered an unsatisfied
M&M lien on the property. Which of the following is the most likely reason for the lien? -
CORRECT ANSWER plumbing work that was completed but never paid for"
"Which of the following statements about an easement is true? - CORRECT ANSWER an
easement is a benefit to the dominant property owner"
"P, Q and R are joint tenants. P wants to sell the property, but Q and R do not. What can P do? -
CORRECT ANSWER file a suit for partition"
"A, B and C are joint tenants. C dies. B sells his share to D. What type of ownership do A and D
have? - CORRECT ANSWER tenants in common"
"A zoning ordinance would affect which of the following? - CORRECT ANSWER the
concentration of housing in a residential area"
"If a person dies without a will, who receives their estate? - CORRECT ANSWER spouse and
children"
"What are the requirements/ criteria for real estate to have values? - CORRECT ANSWER
demand, utility, scarcity, transferability" "A licensed broker is advertising that he will perform a free appraisal if you contact him for a
listing appointment. He is not in violation of the law... - CORRECT ANSWER if he is a licensed
appraiser"
"Which of the following is NOT an example of functional obsolescence? - CORRECT ANSWER
deferred maintenance"
"According to the Statute of Frauds, which of the following leases must be in writing? - CORRECT
ANSWER a lease for more than one year"
"A signed sales contract that has not yet gone to closing is... - CORRECT ANSWER executory"
"When does an offer become a contract? - CORRECT ANSWER When the offeree gives the
offeror notice of the acceptance" "Which of the following statements is true about the duties of an agent according to the common
law of agency? - CORRECT ANSWER an agent must treat both clients and customers with
honesty and fairness" "A licensee is representing a seller in a commercial transaction. The property is under contract and all contingencies have been met. The listing agent learns the State Department of Transportation has authorized the construction of an exit ramp to the interstate right behind the commercial property. The exit ramp will greatly increase the value of the seller's property. What
should the agent do? - CORRECT ANSWER tell the seller and encourage the seller to complete
the negotiated sale"
"A listing agent is showing his listing to a buyer customer and notices a problem with the exterior
of the property that he missed when he listed the property. What should he do? - CORRECT
ANSWER point it out to the buyer as it is a material fact"
"A buyer's agent has accidentally forwarded confidential information about his buyer's financial
background to the listing agent. What is true? - CORRECT ANSWER the buyer's agent is guilty
of negligence and the listing agent must disclose the information to the seller"
"What is the difference between replacement cost and market value? - CORRECT ANSWER
depreciation"
"Economic life is defined as - CORRECT ANSWER years of depriciation"
"An unlicensed assistant gets a call from a listing owner with questions about a contract- what
should the assistant do? - CORRECT ANSWER take the information to the listing broker"
"An underage college student signs a lease, then discloses his age to the landlord. What is true?
CORRECT ANSWER the contract is voidable at the minor's option"
"Which of the following facts about listed property must be disclosed - CORRECT ANSWER
death due to structural defects"
"A lead paint disclosure is required for all properties built before - CORRECT ANSWER 1978"
"Which of the following statements about lead is NOT true? - CORRECT ANSWER the property
owner must remediate the presence of lead"
"CERCLA is under the administration of: - CORRECT ANSWER EPA"
"Which of the following used in 1978 is both extremely hazardous and friable? - CORRECT
ANSWER asbestos"
"Which of the following properties would be the least desirable neighborhood? - CORRECT
ANSWER brownfields"
"A seller must keep a copy of the lead paint disclosure he provided to the buyer for - CORRECT
ANSWER 3 years"
"Which of the following is NOT an example of due diligence in a sales contract? - CORRECT
ANSWER a broker completes a CMA for a buyer client prior to the buyer making an offer"
"A sales agent just obtained a listing. The seller told the agent that she needs to sell the property
because she is going through a divorce. What must the salesperson do - CORRECT ANSWER
obtain the signatures of all owners on the listing agreement"
"Wetlands typically contain which of the following? - CORRECT ANSWER navigable waters"
"What is the max amount of time allowed for a victim to file a Fair Housing complaint? -
CORRECT ANSWER 24 months"
"A property manager notices that the building stucco needs repair. He notifies the landlord and recommends a contractor. The landlord uses the contractor who does not do a good job. The new
stucco leaks and mold grows. The tenant becomes ill from the mold. Who is responsible? -
CORRECT ANSWER the landlord"
"An apartment building owner has renovated and modified several units to be handicapped
accessible. Can he advertise this accommodation? - CORRECT ANSWER Yes"
"When did the second amendment of the Federal Fair Housing Act go into effect? - CORRECT
ANSWER March 12, 1989"
"What is the purpose of a property management trust account? - CORRECT ANSWER to hold
tenant security deposits"
"The main purpose of Regulation Z is - CORRECT ANSWER to notify borrowers of the true cost
of credit"
"What is a requirement of the CFPB - CORRECT ANSWER Lenders must provide borrowers
with the LE form at the time of or within 3 business days of application"
"Which of the following closings would be covered by RESPA (1-4 residential family housing) -
CORRECT ANSWER a condominium"
"When does the buyer under contract for deed get title to the property? - CORRECT ANSWER
when the final loan payment is made"
"What is another name for Contract for Deed - CORRECT ANSWER installment contract"
"What department of the government oversees the FHA insurance program? - CORRECT
ANSWER HUD"
"A buyer is aware that the interest rates should go down over the nest few months. What type of loan should he get to enable him to buy now and take advantage of declining rates in the future?
CORRECT ANSWER ARM"
"Which of the following is unlikely to have a negative impact on seller's credit score? - CORRECT
ANSWER a straight assumption"
"In rental properties, increased demand can be the result of - CORRECT ANSWER high
mortgage interest rates"
"Which of the following would not be eligible for a VA loan - CORRECT ANSWER a parent or
sibling of a veteran"
"What is required of a loan servicer before foreclosing on a VA loan - CORRECT ANSWER the
VA must be notified before the foreclosure"
"Who must be notified to take money out of the trust account in a real estate transaction? -
CORRECT ANSWER both buyer and seller"
"How is earnest money recorded on the closing disclosure a. debit to the seller b. debit to the buyer c. credit to the seller
d. credit to the buyer - CORRECT ANSWER Credit to the buyer"
"What type of mortgage loan would allow the property owner to borrow additional funds at
future dates - CORRECT ANSWER an HELOC"
"A seller has received $225,000 for the sale of his home. This represents a 20% profit. What did he
pay for the house when he purchased it? - CORRECT ANSWER $187,500"
"John is purchasing a lot 125 feet wide and 127 feet deep for $5.65 a square foot plus $15 a front foot. (A front foot refers to frontage and is the width of the lot.) How much will he pay for the lot?
- CORRECT ANSWER $91,568.75" "The fact that an individual must go to the land described which of the physical characteristics of
land? - CORRECT ANSWER Immobility"
"John and Mary are co-owners of a property. John has 60% interest in the property and Mary has
a 40% interest. What type of freehold estate do they have? - CORRECT ANSWER Tenancy in
common" "A property is surveyed to determine a legal description. The surveyor works from a point of beginning, and measures terminal points and angles. What method of land description is he
using? - CORRECT ANSWER Metes and bounds"
"Mary and John are married with grown children. Both are intestate. If John dies and Mary
becomes the owner of their home, what type of ownership did they have? - CORRECT
ANSWER Tenancy by the entirety"
"The local government needs your land to build a new high school. They have the right to take
your land for the public good. This is called - CORRECT ANSWER The right of eminent domain"
"One of the property owners in a subdivision is violating the deed restrictions. What can the other
property owners do to get him to comply? - CORRECT ANSWER Seek an injunction from the
courts" "Your property borders a non-navigable waterway and you have riparian rights. You have built a
10 foot pier at the water's edge. How do measure your property? - CORRECT ANSWER To the
middle of the waterway" "Mary, a single woman, has no children. She owns real property and dies intestate. What happens
to her real property? - CORRECT ANSWER The court will appoint an administrator and it will
be distributed to her heirs by the Law of Descent"
"A property owner has a gas station on his land. The zoning committee changes the zoning to R-1.
What must the property owner do? - CORRECT ANSWER Nothing- his property is
automatically considered a non-conforming use" "A property owner has installed a chain link fence on his property. He has received on official
notice requiring the removal of this type of fence. This fence is most likely a violation of... -
CORRECT ANSWER Deed restrictions or deed covenants"
"A single property is regulated by building codes, zoning and deed restrictions. The rules are in
conflict with one another. Which must the property owner obey? - CORRECT ANSWER The
property owner must obey whichever rules are the strictest or most limiting"
"Which of the following conveys title to real property and insure good title? - CORRECT
ANSWER A general warranty deed"
"A buyer has discovered a defect in title and has suffered a loss due to the defect. The title company has compensated the buyer for the loss. Subsequently, the buyer is awarded a judgement against the seller. The title company is entitled to a portion of the judgment as
reimbursement for the claim it paid. This describes... - CORRECT ANSWER Subrogation"
"A landowner wants to sell his property. A title search uncovers a cloud on the title. There is no
one available to sign a quit claim deed to clear up the cloud. What can the owner do? - CORRECT
ANSWER Pursue an action to quiet title in court"
"Appraisers are most often asked to determine: - CORRECT ANSWER market value"
"A builder is using inferior siding and paint in an effort to construct affordable housing. This would
be an example of... - CORRECT ANSWER functional obsolescence"
"A builder is very successful and active in a new subdivision. Homes in the subdivision are selling well, and the builder is making a good profit on the sales. Two new builders arrive and begin to sell in the same subdivision. All experience a lower level of profit. This demonstrates which
principle of appraisal. - CORRECT ANSWER The principle of competition"
"When measuring gross area the appraiser measures the - CORRECT ANSWER under roof"
"Which of the following contracts would be voidable? - CORRECT ANSWER A contract with a
minor" "A buyer and his agent visit a listed property. The buyer loves the property and wants to purchase it. He speaks with the seller, who is at home at the time, and they come to an agreement regarding price and terms. They shake hands on the agreement and the buyer happily leaves the
property. His agent should: - CORRECT ANSWER Warn the buyer that the verbal sales contract
is unenforceable" "Which of the following terms is used to describe a situation where a buyer and seller agree to
terminate a contract? - CORRECT ANSWER Mutual recession"
"A seller's property is listed for $399,900. A buyer makes an offer for $389,000. The seller counter offers for $392,500. The buyers have not responded to the counteroffer. The sellers receive
another offered for $395,000. They would like to accept this new offer. What is true - CORRECT
ANSWER They can accept the new offer, but only after withdrawing their counteroffer"
"A broker owes customers - CORRECT ANSWER honesty and fairness"
"What are an agents duties to his principal? - CORRECT ANSWER Reasonable care, obedience,
loyalty, disclosure, accounting and confidentiality" "An agent has acted without authority to do so. His principal has found out about the actions and
accepted them. What kind of agency does this describe? - CORRECT ANSWER agency by
ratification" "Broker B has signed a Buyer Representation Agreement with his clients. As a Buyer's agent he
must disclose all of the following except: - CORRECT ANSWER his buyer's ability to make a
higher offer" "A property at 123 Main street has been listed by Mary, a sales license holder at ABC Realty for several weeks. Last week, Mary died. What effect will Mary's death have on the Listing
Agreement? - CORRECT ANSWER None"
"Which of the following is not a duty of an agent? - CORRECT ANSWER (OLD CAR) Trust"
"A signed employment agreement is necessary to... - CORRECT ANSWER sue for commission"
"A listing agent would probably not disclose - CORRECT ANSWER death on the property due to
natural causes"
"Which of the following deaths on the property should never be disclosed? - CORRECT
ANSWER Death due to HIV/AIDS"
"Which of the following properties would be the least desirable neighbor? - CORRECT
ANSWER Brownfields"
"How long must a seller or landlord keep a copy of the lead paint disclosure? - CORRECT
ANSWER 3 years"
"All of the following are hazardous substances that a license holder should be aware of except -
CORRECT ANSWER Acrylic paint"
"Which of the following is the best example of puffing - CORRECT ANSWER I think this is the
best floor plan available from this builder" "A buyer's agent has helped a buyer to find a home. The buyer has expressed concern about the
possible presence of radon. What should the buyer's agent do in this case? - CORRECT
ANSWER Recommend an inspection for hazardous materials"
"A chemical manufacturing company purchases a plant. After closing they discover that the previous owners had spilled hazardous materials on the land. According to CERCLA, who is liable
for the cost of the cleanup? - CORRECT ANSWER both the new owners and the previous
owners" "A license holder has just taken a class on networking and marketing through social media. She is very excited about the possibilties and hes established Facebook, Twitter, Linkedln and Pinterest acocunts. She is also writing a blog. She has decided to market a new listing on these sites. The property has been built to resemble an Antebellum mansion. How can she advertise the propert?
- CORRECT ANSWER Antebellum style mansion"
"Which claim for damages would most likely be covered by a homeowner warranty policy? -
CORRECT ANSWER A furnace that breaks down a few weeks after the buyer move in"
"Which of the following does NOT pledge property as security for a debt? - CORRECT ANSWER
note"
"Which of the following instruments is the promise to repay a debt? - CORRECT ANSWER
note"
"What is the advantage to the borrower of a VA loan? - CORRECT ANSWER the guarantee on
the VA loan is free"
"For what group of buyers would the ARM be the least desirable? - CORRECT ANSWER those
on a fixed income"
"Where can you expect to find MIP? - CORRECT ANSWER On an FHA loan"
"What is a point? - CORRECT ANSWER 1% of the loan amount"
"Where does the secondary market get its funds? - CORRECT ANSWER From investors"
"A retired couple is on a fixed income. They own their own home. They are having a hard time making ends meet, yet they do not want to sell their home. What type of loan should they
consider? - CORRECT ANSWER a reverse annuity mortgage"
"John has leased commercial property and pays rent based on the receipts of his business. This
type of rent is referred to as - CORRECT ANSWER percentage rent"
"Which of the following would be considered an operating expense by a property manager
preparing an operating budget for the owner? - CORRECT ANSWER interior painting of
apartments"
"The property management agreement creates what kind of agency? - CORRECT ANSWER
General agency"
"Who would use the remedy of Forcible Entry and Detainer? - CORRECT ANSWER the
landlord"
"The landlord pays the expenses of the property. The tenants pay rent plus utilities. What type of
lease is this? - CORRECT ANSWER net lease"
"When a landlord allows the property condition to deteriorate so much that the tenants are
forced to leave it is called: - CORRECT ANSWER constructive eviction"
"A couple is moving to a new city and they would like time to learn the city before they purchase a
home. What type of lease should their agent recommend? - CORRECT ANSWER a periodic
tenancy"
"What type of verbal lease agreement would be enforceable? - CORRECT ANSWER a lease for
one year or less" "John has a three year lease on office space. In the second year the landlord dies. His heirs inherit the property. They do not want it and they sell it. The new owner wants John to move out. Does
John have to leave? - CORRECT ANSWER No, because he has a lease"
"What type of business entity is owned by shareholders, but avoids "double taxation"? -
CORRECT ANSWER An S corporation"
"What is the difference between a general partner and a limited partner? - CORRECT ANSWER
a general partner has full liability and a limited partner has limited liability"
"A one on one relationship between a broker and a client is called - CORRECT ANSWER
agency"
"A license holder sponsored by a broker must have a written agreement - CORRECT ANSWER
to work as an independent contractor" "Which of the following actions of a broker could jeopardize the independent contractor status of
the license holders he sponsors? - CORRECT ANSWER Requiring his license holders to work
scheduled hours" "A buyer's agent is working with a buyer to purchase a property. The buyer is concerned about
the location of the fence as it appears to be encroaching. What should the buyer's agent do? -
CORRECT ANSWER Recommend a survey"
"Which of the following is an example of economic obsolescence? - CORRECT ANSWER air
pollution" "Every broker must display the Equal Housing Opportunity Poster in his office. The poster is
usually distributed by - CORRECT ANSWER HUD"
"Which of the following best describes an FHA loan? - CORRECT ANSWER it is totally insured
by the FHA"
"A broker is most often - CORRECT ANSWER special agent"
"What type of loan has a rate linked to an economic index? - CORRECT ANSWER ARM"
"When should an agent advise a client to get title work done? - CORRECT ANSWER before
closing" “A property owner has decided to do some landscaping work on his yard. He has planted a tree
surrounded by some flowering shrubs. The tree and shrubs are an example of... - CORRECT
ANSWER improvements"
"A listing agent went to inspect a seller's property hoping to list it for sale. The seller told the
listing agent that his neighbor's satellite dish trespasses on his property. This is an example of... -
CORRECT ANSWER encroachment"
"A father gives his son a life estate on a property. The son leases the property. The tenant dies.
What happens to the property? - CORRECT ANSWER it goes back to the son until he dies"
"A man leaves his second wife a life estate in their home after which the property goes to his
children from his first marriage. The children... - CORRECT ANSWER are remaindermen"
"A couple purchased a condominium. The complex has an exercise room for all residents. The couple does not use the exercise room and does not want to pay the monthly fee for the use of
the facility. What can they do to avoid this fee? - CORRECT ANSWER they must pay the fee as
they have a tenancy in common interest in all common areas"
"A buyer has purchased a property and after closing the seller will continue to occupy the
property. This is an example of... - CORRECT ANSWER sale and leaseback"
"Tenants have signed a 3 year lease on a property. In the second year the owner dies and his heirs
inherit the property. They give the tenants notice to vacate. What is true? - CORRECT ANSWER
the tenants can stay until the end of the lease"
"What principle of value defines the most important factor for appraisal? - CORRECT ANSWER
highest and best use" "What approach would an appraiser most likely use to value a residential rent house in
neighborhood where a majority of the homes are leased? - CORRECT ANSWER income
approach" "Your client is an investor who would like to have the right to purchase a commercial tract for $
million for the next 6 months. What type of contract should he enter into with the seller? -
CORRECT ANSWER an option contract"
"A property manager is hired and signs a management agreement with the owner. At this time,
the property manager is... - CORRECT ANSWER a general agent"
"A buyer and seller have negotiated a contract on the seller's property with a closing set for June 14th, time is of the essence. On June 12th the listing agent calls the buyer's agent and tells him the seller will be unable to close on the 14th. The seller can close on the 16th. At this time, what is
true? - CORRECT ANSWER the contract is voidable by the buyer"
"A seller comes into the office to sign a contract. The seller is stumbling and smells of alcohol.
How do you proceed? - CORRECT ANSWER tell the seller to leave and return another time"
"A high rise condominium property is advertised as having the "Most beautiful view of the city".
This ad is best described as - CORRECT ANSWER puffing"
"Accurate record keeping is the responsibility of all the brokers. If a broker's computers are stolen
what steps could have been taken to protect records? - CORRECT ANSWER offsite or cloud
storage" "A license holder has just attended a training seminar about technology in real estate and is excited about using social media with her clients. Which of the following statements about social
media in real estate is NOT true? - CORRECT ANSWER an agent with permission to advertise a
