Practice Questions for the PA State Realtor Exam
1. In Pennsylvania, brokerage fees are:
a. Set by law.
b. Set by the Pennsylvania Real Estate Commission.
c. Determined by local groups of brokers operating a multiple listing
service.
d. Negotiable between the consumer and the broker employed by the
consumer.
2. Several weeks after a closing, an associate broker received a thank-you
letter and a nice bonus check from the seller of the house. The associate
broker cashed the check because he felt that he earned it. In this situation,
which is TRUE?
a. The associate broker may accept the bonus because he is licensed
as an associate broker.
b. Accepting the money is allowed if more than 30 days have elapsed
since closing.
c. The associate broker may accept the money if his broker permits him
to do so.
d. Accepting the money is a violation of the Real Estate Licensing and
Registration Act.
3. In a dual agency situation, a broker may collect compensation from both
the seller and the buyer if:
a. the broker is licensed as a dual agent.
b. the buyer and the seller are related by blood or marriage.
c. both parties give their informed consent in writing to the dual
compensation.
d. both parties are represented by attorneys.
-1-
4. While representing a seller under a listing contract, the broker learned
confidential information about the seller’s urgency to sell and minimum
acceptable selling price. The listing expired and the property was listed
with a different broker. The original broker now represents a buyer-client
who is interested in making an offer on the property. At this time, the
broker:
a. as the buyer’s agent must disclose to the buyer any information the
broker knows about the seller’s motivation and minimum acceptable
price.
b. must refer the buyer-prospect to the new listing broker to write the
offer to purchase.
c. must renounce his agency relationship with the buyer and act as the
subagent of the seller.
d. may not reveal the seller’s confidential information or use it to the
advantage of the buyer-client.
5. A broker who operated a sole proprietorship dies. Another licensed broker
is now supervising the termination of the deceased broker’s business. The
second broker may:
a. take new listing agreements not to exceed a term of 90 days.
b. promote unexpired listings unless the seller elects to cancel the
agreement.
c. not take pending agreements of sale to closing.
d. hire new licensees.
6. A consumer hires a broker to serve as a buyer’s agent. The broker
currently has a property exclusively listed for sale that fully meets the
buyer prospect’s needs. Which BEST describes the responsibility of the
broker in this situation?
a. The broker is required to designate one salesperson to represent the
buyer prospect and a different salesperson to represent the seller
whose property is listed with the broker.
b. Because the broker already represents the seller, the broker cannot
enter into a buyer agency contract with regard to the listed property.
c. The broker must refer the buyer to a cooperating broker on a referral
basis if the buyer wants representation.
d. Following disclosures required at the initial interview, the broker
must secure the written consent of both parties in order to act as a
dual agent.
-2-
7. If a licensed salesperson owns multifamily residential property for
investment purposes, then she:
a. must deposit collected rents into an escrow account.
b. must disclose her license status to prospective tenants before the
tenant enters into a lease agreement.
c. may pay a referral fee to another salesperson employed by the same
broker if the referred prospect leases a unit in the building.
d. must hire the employing broker as the property manager and
conduct all leasing activity through the broker.
8. When discussing the possibility of listing a large parcel of vacant land with
an owner, the broker determines that he would like to secure an option to
purchase the property. How should the broker proceed?
a. Include language in the listing contract granting the option to the
broker for purposes of the listed property.
b. Arrange to have the owner enter into an option agreement with a
straw party selected by the broker in order to avoid a conflict with
the seller.
c. Secure an exclusive right to sell long term listing but refuse to
aggressively market the property until his option has expired.
d. Disclose his interest and license status to the owner and discuss
terms of the option agreement prior to and distinct from the listing
agreement.
9. If a licensed salesperson, without the knowledge or consent of the
employing broker, violates requirements regarding delivery of a Consumer
Notice at the initial interview, what are the consequences?
a. The broker will have his license suspended or revoked for failing to
exercise supervision over the licensed salesperson.
b. The salesperson may have his license suspended or revoked.
c. Unless the consumer files a written complaint with the Pennsylvania
Real Estate Commission, neither the broker nor the salesperson is
subject to disciplinary proceedings.
d. As long as the Consumer Notice is signed by the parties prior to
entering into an agreement of sale, there is no violation.
10. In the case of the sale of an existing single-family home, property condition
disclosures must be delivered to the buyer:
a. prior to the buyer making a written offer.
b. at the time the seller agrees to the offer.
c. at the time of the home inspection.
d. at the closing.
-3-
11. In Pennsylvania, when a broker is listing a home and asks the seller to
complete a property condition disclosure, which statement is TRUE?
a. The disclosures are optional, and the seller may avoid liability by
refusing to make any disclosures about the condition of the
property.
b. The required disclosures cover a narrow range of structural
conditions only.
c. An agent should assist the seller by providing advice regarding
which property conditions to disclose and which to ignore.
d. The seller should be advised that disclosure of known property
conditions is required by Pennsylvania statute.
12. Six months after the buyer bought a house, the roof leaked during a
rainstorm. When the house was originally listed, the seller told the broker
that the roof leaked, and they both agreed not to disclose this fact to
prospective buyers. The broker now claims that the buyer did not ask
about the roof. Under these facts, the buyer:
a. may sue the broker and the seller.
b. may not sue the broker because the broker was following the
instructions of his principal, the seller.
c. may sue the seller under the license law.
d. has no recourse because the leaking roof could have been
discovered by conducting a home inspection.
13. All of the following are exempt from the Property Condition Disclosure Act
EXCEPT:
a. a foreclosure sale.
b. a new construction sale covered by a builder’s warranty.
c. a conveyance of a primary residence from one former spouse to
another under a divorce settlement agreement.
d. a sale by owner of a two unit residential property when the owner is
a real estate licensee.
14. A real estate broker representing the seller knows that the property has a
cracked foundation and that its former owner committed suicide in the
kitchen. By law, what must the broker disclose to a prospective buyer?
a. Both the suicide and the cracked foundation.
b. The suicide, but not the cracked foundation.
c. The cracked foundation, but not the suicide.
d. Neither the suicide nor the cracked foundation.
-4-
15. Five years ago, a condominium unit was the site of a brutal and highly
publicized murder. The unit was sold to an elderly woman who contracted
the AIDS virus in a blood transfusion and died in the unit last year. As the
agent for the woman’s estate, what must you disclose to prospective
purchasers of the unit?
a. You must disclose both the murder and the AIDS-related death.
b. You are specifically prohibited by law from disclosing either event.
c. You are not required to disclose either event.
d. You are not required to disclose the murder, but you must disclose
the AIDS-related death.
16. In order to become a member of the Pennsylvania Real Estate Commission,
a candidate must:
a. be endorsed by the state and local associations of REALTORS.
b. be appointed by the governor.
c. be a licensed broker or salesperson actively engaged in the real
estate business.
d. Post a surety bond in the amount of $10,000.
17. How many members of the Pennsylvania Real Estate Commission are
required to be licensed real estate brokers at the time of their appointment?
a. 5.
b. 6.
c. 9.
d. 11.
18. In Pennsylvania, the real estate license law is administered by the:
a. Department of State.
b. Pennsylvania Real Estate Commission.
c. state association of REALTORS.
d. Department of Housing and Urban Development,
19. The purpose of the license law is to:
a. prevent convicted criminals from engaging in real estate activities.
b. generate license and renewal fees for the state treasury.
c. authorize the Pennsylvania Real Estate Commission to promulgate
rules and regulations.
d. ensure that the public interest is protected.
-5-
20. The Pennsylvania Real Estate Commission has the authority to:
a. make and enforce the rules by which all real estate licensees must
abide.
b. compose the examination questions on the state exam.
c. administer the exams given at the testing sites.
d. enact the laws that govern real estate licensees.
21. Who is subject to disciplinary action by the Pennsylvania Real Estate
Commission?
a. Employees of a real estate appraisal firm.
b. Elected officers of a banking institution handling real estate
transactions for the bank.
c. An attorney-in-fact rendering services under an executed and
recorded power of attorney.
d. A campground membership salesperson.
22. A salesperson has engaged in activities that constitute several violations
of the Pennsylvania Human Relations Act, including blockbusting and
discrimination on the basis of disability. The salesperson has also cashed
a $25,000 earnest money check from a prospective buyer and used the
proceeds to buy a new car. The salesperson’s employing broker was
unaware of all these activities. What is the impact on the employing
broker’s license when the salesperson’s violations are brought to the
attention of the Pennsylvania Real Estate Commission?
a. The employing broker might not have his license revoked as a result
of the salesperson’s violations.
b. The employing broker will be required to pay any fine imposed
against the salesperson out of his personal funds.
c. The salesperson’s actions are legally the responsibility of the
employing broker, who will be subject to the same disciplinary action
as the salesperson regardless of whether he knew the violations had
occurred.
d. The employing broker will be held liable for the Pennsylvania Human
Relations Act violations only.
23. A listing broker offers a $500 bonus to any salesperson who sells a
particular listing within the next 30 days. Which statement is TRUE?
a. The seller must give his consent in writing to the broker allowing him
to offer the bonus.
b. The broker may only pay the bonus to a salesperson who is
employed by the listing broker.
c. The broker may directly pay the bonus to a salesperson employed by
another broker with the consent of the other broker.
-6-
d. A bonus for selling property must be paid to the salesperson directly
by the seller rather than the broker.
24. Which activity would most likely result in disciplinary action against a
broker?
a. Allowing a newly licensed salesperson to hold open houses for the
public before completing the company’s training program.
b. Paying a bonus directly to a licensed salesperson employed by
another licensed broker.
c. Requiring associate brokers in the broker’s employ to agree to
noncompete clauses in their employment contracts.
d. Having a salesperson employed by the broker found guilty of making
a misrepresentation, even if the broker had no knowledge of the
misrepresentation.
25. A broker is convicted of felony possession and distribution of a controlled
substance. Both the crime and the conviction took place out of state. After
45 days, the broker calls the Pennsylvania Real Estate Commission and
leaves a message informing the Commission of the conviction. Based on
these facts, which statement is TRUE?
a. The broker has properly informed the Commission after the
conviction and the broker’s license will not be affected.
b. Both the conviction and the broker’s failure to properly notify the
Commission within 30 days of the conviction are grounds for
suspension or revocation of the broker’s license.
c. Because the conviction did not occur in Pennsylvania, it is not
grounds for suspending or revoking the broker’s license.
d. The conviction is evidence of both improper dealing and fraud.
26. An individual is found guilty of engaging in business as a broker or
salesperson without being properly licensed, The penalty for the first
offense includes a fine of up to:
a. $500, imprisonment for a maximum of three months, or both.
b. $1,000.
c. $1,000 or three months in prison.
d. $5,000 and imprisonment for a maximum of two years.
-7-
27. What is the maximum penalty that may be imposed on an individual found
guilty for the second time of engaging in the real estate business without a
license?
a. A fine of $1,000.
b. A fine of $2,000 and imprisonment for one year.
c. A fine of $5,000 and imprisonment for a period of two years.
d. Imprisonment for three months.
28. Under which circumstance may a salesperson’s violation of the license
law be grounds for suspension or revocation of the employing broker’s
license?
a. The broker’s license is only subject to suspension or revocation if
the broker participated with the salesperson in violating the license
law.
b. The broker’s license is subject to suspension or revocation if it can
be shown that the broker had actual knowledge of the violation
committed by the salesperson.
c. Because the salesperson is employed by the broker, the broker’s
license is always subject to suspension or revocation as a result of
any violation on the part of the salesperson.
d. Only the licensee actually found to have violated the license law may
have a license suspended or revoked, so the broker’s license may
not be suspended or revoked because of the salesperson’s
misconduct.
29. If a licensee has had his license revoked, how many years must he wait
before reapplying for licensure?
a. Three.
b. Five.
c. Seven.
d. Ten.
30. A real estate licensee must notify the Pennsylvania Real Estate
Commission of the conviction of a felony within:
a. 5 days.
b. 10 days.
c. 15 days.
d. 30 days.
-8-
31. A broker who wishes to place a For Sale sign on a listed property must
first:
a. obtain the written consent of the owner of the property.
b. sell the property.
c. secure an exclusive-listing contract from the seller.
d. get permission from the neighbors and the local governing body.
32. When advertising real property for sale, real estate salespersons:
a. need only include their personal phone number.
b. may simply give a phone number to call for more information.
c. must include the name of their employing broker in the
advertisement.
d. must identify the location of the property.
33. A real estate salesperson decides to sell her property by owner. When
advertising the property, she:
a. must disclose the name, address, and phone number of her
employing broker.
b. must disclose in the advertisement the fact that she is a real estate
licensee.
c. does not need to disclose her license status in the advertisement
since she is selling her property as for sale by owner.
d. is prohibited from advertising as a for sale by owner.
34. When advertising property for sale, what must the broker include in the
advertisement?
a. The listing price of the property.
b. The name of the salesperson who secured the listing.
c. The broker’s business name designated on the license.
d. A disclosure statement identifying who the broker is representing.
35. A broker has developed a Web site advertising the broker’s office. What, if
anything, does he need to include?
a. His name as it appears on his license.
b. The brokerage license number and a list of all current licensees.
c. The names of active licensees with addresses and phone numbers.
d. No disclosure is required.
-9-
36. An unlicensed individual who engages in activities for which a real estate
license is required is subject to which penalty upon conviction for a first
offense?
a. A fine not to exceed $500.
b. A fine not to exceed $1,000 and one-year imprisonment.
c. A civil penalty of $5,000 in addition to other penalties provided by
law.
d. A fine not to exceed $5,000 and a mandatory prison term not to
exceed five years.
37. An individual wants to sell her house by owner. In this situation, she:
a. does not need a real estate license to sell her house.
b. must first obtain a real estate license issued by the Pennsylvania
Real Estate Commission.
c. may obtain a temporary real estate license in order to legally sell her
house.
d. may sell her house without obtaining a real estate license only if she
is a licensed attorney.
38. An unlicensed individual acting as a real estate consultant negotiates a
sale of property and is unable to collect the agreed-upon fee from the
seller. As an unlicensed individual, this person:
a. may file a lawsuit for breach of contract in the court of common
pleas in the county where the land is located.
b. may seek compensation from the Real Estate Recovery Fund for the
unpaid fee.
c. has no recourse under the law, because a real estate consultant is
required to have a broker’s license.
d. may record a judgment against the owner if the contract contained a
confession of judgment clause.
39. A salesperson remains inactive without renewing his license for over five
years. Before his license will be reissued, the applicant must:
a. complete 14 hours of mandatory continuing education with no exam
requirement.
b. complete 60 hours of coursework and pass the salesperson’s license
exam.
c. submit to and pass the salesperson’s license examination.
d. successfully complete the employing broker’s training program.
- 10 -
40. A broker operating as a sole proprietor wants to locate the main office of
his business at his personal residence. In this case, all of the following
requirements would apply EXCEPT:
a. the office must be devoted to the transaction of real estate business
and be arranged so that business can be conducted in privacy.
b. the entrance to the office must be separate from the entrance to the
residence.
c. the business name of the broker as designated on the license must
be displayed prominently and in permanent fashion outside the
office.
d. The broker may not employ salespersons or associate brokers to
work at an office in a personal residence.
41. Under Pennsylvania licensing law, a partnership, association, or
corporation will be granted a broker’s license only if:
a. one officer or partner is designated as the broker of record.
b. every member and officer actively participating in the brokerage
business has a broker’s license.
c. all license papers are filed with the secretary of state.
d. the brokerage business has paid a one time fee to the Real Estate
Recovery Fund.
42. Which is a requirement to obtain a real estate salesperson’s license in
Pennsylvania?
a. Successful completion of 14 credit hours of real estate law, finance,
and appraisal classes.
b. Successful completion of 60 classroom hours of instruction in
courses prescribed by the Pennsylvania Real Estate Commission.
c. An associate degree in real estate from an accredited college,
university, or proprietary school.
d. U.S. citizenship.
43. Which candidate for licensure is required to take the standard real estate
salesperson’s license examination and score a passing grade, but is NOT
required to complete any mandatory education requirement prior to taking
the exam?
a. A builder-owner salesperson applicant.
b. A cemetery salesperson applicant.
c. A rental listing referral license applicant.
d. A campground membership salesperson license applicant.
- 11 -
44. Which applicant for licensure is NOT required to pass a written exam for
licensure?
a. A builder-owner salesperson.
b. A rental listing referral agent.
c. A cemetery salesperson.
d. A cemetery broker.
45. When do real estate salespersons’ licenses expire in Pennsylvania?
a. Biennially, in the month issued.
b. May 31 of every even-numbered year.
c. December 31 of the third year of licensure.
d. Two years from the date the license was issued.
46. The on-site property manager employed directly by the owner of an
apartment complex is responsible for collecting rents for the apartments.
In this position, the on-site manager:
a. must have a salesperson’s license.
b. must have a broker’s license.
c. is exempt from the licensing requirements.
d. is not required to be licensed if he or she is an independent
contractor.
47. A licensed real estate salesperson may engage in all of the following
activities on behalf of the salesperson’s employing broker EXCEPT:
a. perform an appraisal for a federally related mortgage loan.
b. negotiate the purchase, sale, or exchange of commercial real estate.
c. assist the broker in the management of residential multifamily real
estate.
d. negotiate a loan on real estate.
48. Rental listing referral agents are licensed to:
a. show residential rental units in multifamily housing to prospective
tenants.
b. collect rental information for the purpose of referring prospective
tenants to rental units or locations of rental units.
c. engage in commercial property management activities on behalf of
more than one employing broker at the same time.
d. collect rental application fees and security deposits on behalf of an
owner of rental property.
- 12 -
49. Rental listing referral agents are licensed to:
a. show residential rental units in multifamily housing to prospective
tenants.
b. collect rental information for the purpose of referring prospective
tenants to rental units or locations of rental units.
c. engage in commercial property management activities on behalf of
more than one employing broker at the same time.
d. collect rental application fees and security deposits on behalf of an
owner or rental property.
50. A builder-owner salesperson employed by a builder-owner of single family
and multifamily dwellings may legally:
a. lease a newly constructed home owned by his employer to a
prospective tenant.
b. negotiate a mortgage loan on behalf of a buyer purchasing one of his
employer’s homes.
c. list for sale a property owned by a purchaser who wants to purchase
one of the builder’s model homes.
d. collect referral fees from real estate brokers in return for listing
leads.
51. Real Estate licensing is required in order to engage in the:
a. sale of time-share interests.
b. negotiation of leases by employees of a public utility.
c. sale of property by an individual acting as a trustee in a bankruptcy
proceeding.
d. sale of real estate by a licensed auctioneer at a bona fide auction.
52. In reference to the Real Estate Licensing and Registration Act and the
Rules and Regulations of the Pennsylvania Real Estate Commission, what
does the term broker of record refer to?
a. An employing broker who employs other associate brokers to work
on her behalf.
b. An individual broker responsible for the real estate transactions of a
partnership, association, or corporation that holds a broker’s
license.
c. A sole proprietor who maintains multiple branch offices and hires
associate brokers to manage those offices.
d. An associate broker authorized to directly control and supervise
activities at a licensed branch office.
- 13 -
53. Regarding licensing and employment of personal real estate assistants in
Pennsylvania, the personal assistant:
a. must always be licensed.
b. may deposit and withdraw funds from the broker’s escrow account
without being licensed.
c. may host open houses for the public only if he or she is licensed.
d. must be employed by the broker rather than directly by a
salesperson.
54. A salesperson’s licensed assistant worked late nights and weekends to
help ensure the successful completion of a difficult transaction. The
assistant’s extra work included making several phone calls to the
prospective buyers and encouraging them to accept the seller’s
counteroffer. Largely because of the assistant’s efforts, the sale went
through with no problem. The salesperson wants to pay the assistant a
percentage of the commission “because he really earned it.” Under
Pennsylvania law, the salesperson may:
a. directly compensate the assistant in the form of a commission under
the circumstances described here.
b. not pay the assistant a cash commission but is permitted to make a
gift of tangible personal property.
c. not directly pay a commission to the assistant under the facts
presented here because it would be a violation of the license law.
d. directly pay a commission to the assistant only if the assistant is an
independent contractor.
55. A real estate salesperson has been working with buyer-clients and helps
them negotiate for their home. The buyers then ask the salesperson if she
can help them secure a mortgage loan. The salesperson knows a lender
that pays a fee for referring purchasers to them. Can the salesperson refer
the buyers to this lender in order to collect the referral fee?
a. No, because the salesperson would be violating the license law by
accepting compensation from someone other than her employing
broker.
b. Yes, if the salesperson and the buyers have previously entered into a
written buyer agency agreement.
c. No, unless the salesperson first discloses the referral fee to the
buyers.
d. Yes, if the lender offers the best interest rates and terms available in
the market.
- 14 -
56. Under the terms of a sales contract, the seller is required to pay for and
provide a termite certificate. The seller requests that the salesperson order
one. The salesperson does so, knowing he will receive a referral fee
directly from the pest control company. The referral fee is NOT discussed
with the seller. Is this a violation of the license law?
a. No, if the fee is less than $25.
b. No, if the fee is split with the broker.
c. Yes, because the licensee did not disclose the compensation to the
consumer.
d. Yes, because fees may be paid to the salesperson only by the seller.
57. An airplane pilot told a broker about some friends who were looking for a
new home. The broker contacted the friends and eventually sold them a
house. When may the broker pay the airline pilot a referral fee?
a. As soon as a valid sales contract is signed by the parties.
b. Only after the sale closes.
c. As soon as the broker begins working with the buyer prospect.
d. Never, because a broker may not pay a referral fee to an unlicensed
individual.
58. A couple visited a time-share property and received a gift of a highdefinition television for signing a purchase agreement for a time-share
interest that day. Four days later, the couple decided not to go through
with the transaction. Under which circumstances may they void the
contract?
a. Although the couple may cancel the purchase agreement, they must
return the high-definition television.
b. The couple is bound to the terms of the purchase agreement and
does not have the right to cancel the purchase.
c. The couple may cancel the purchase agreement until midnight of the
fifth day following the purchase and they may keep the television.
d. Because it is illegal to offer promotional prizes and gifts as an
inducement, the purchase agreement is void.
- 15 -
59. In Pennsylvania, brokers and salespersons may:
a. bind the principal they represent to contracts.
b. fill in blanks on preprinted contract forms customarily used in their
community.
c. write additional language for the purpose of modifying a sales
contract between a buyer and a seller after advising them of the legal
consequences of the new language.
d. give advice concerning the legal significance of specific preprinted
contract clauses to a buyer or seller.
60. Which could be construed as the unauthorized practice of law?
a. Informing the buyer of the broker’s personal opinion of the condition
of the seller’s title to the property.
b. Making sure that the written agreement of sale includes a statement
as to whether the broker is the agent of the seller or agent of the
buyer.
c. Providing each party with a written estimate of reasonably
foreseeable expenses associated with the sale before the agreement
of sale is executed.
d. Keeping copies of all documents involved in the transaction on file
for three years after consummation of the transaction.
61. Unless the parties to an agreement of sale agree otherwise, earnest money
deposits received by a broker on behalf of the principal must be deposited
in an escrow account:
a. three days after receiving the offer.
b. three days after obtaining all signatures on the contract.
c. five working days after receiving the offer.
d. by the end of the next business day following its receipt in the office
where the escrow records are maintained.
- 16 -
62. A broker received an earnest money deposit from a buyer. Under
Pennsylvania law, the broker should:
a. open a special, separate escrow account that will contain funds for
this transaction only, separate from funds received in any other
transaction.
b. deposit the money in an existing escrow account in which all earnest
money received from buyers may be held at the same time.
c. immediately, or by the next business day, deposit the earnest money
in the broker’s personal interest-bearing checking or savings
account.
d. hold the earnest money deposit in a secure place in the broker’s real
estate brokerage office until the transaction closes.
63. A licensed broker is employed by the owner of a residential multifamily
housing complex to serve as the property manager. One of the broker’s
duties is to collect rent due from the tenants. When the rents are collected,
she should:
a. deposit rents received into a rental management account that is
separate from her escrow account and general business account.
b. immediately deliver the rents to the owner of the complex for deposit
in the owner’s business account.
c. deposit the rents into her escrow account because they are the
property of the owner.
d. deposit them into her personal or business account to cover the cost
of repairs and maintenance at the complex.
64. When a selling broker negotiates a sale of property listed by a cooperating
broker, who is responsible for assuming the duties regarding escrow of the
buyer’s deposit check?
a. The listing broker representing the seller is required to hold the
deposit in an escrow account.
b. The selling broker is required to hold the buyer’s deposit in escrow if
acting as the buyer’s agent.
c. If the buyer gives the sales deposit to the listing broker rather than to
the selling broker, the listing broker assumes the escrow duty.
d. The rules of the local multiple listing service dictate which broker will
hold the escrow deposit.
- 17 -
65. Which is TRUE regarding a broker’s escrow account?
a. As long as all parties to the transaction agree in writing, the broker’s
escrow duty may be waived.
b. If a dispute arises between the parties over entitlement to the money
that is held in escrow, the broker retains the money in escrow until
the dispute is resolved.
c. Funds received must be deposited in the broker’s escrow account by
the end of the next business day following their receipt by the
salesperson involved in the transaction.
d. The account must be an interest-bearing account if the funds will be
held for more than six months.
66. A licensed salesperson receives an earnest money deposit check from a
buyer at the time the buyer makes an offer to purchase property listed by
another broker. The seller is unavailable, so the offer will not be presented
for four days. What procedure should the salesperson follow regarding the
earnest money deposit check?
a. Because the duty to escrow funds does not begin until the
agreement of sale is signed by all parties, the salesperson may keep
the check in the file with the offer to purchase until the offer is
presented.
b. The salesperson is responsible for immediately depositing the check
into the company escrow account.
c. The selling broker must deliver the earnest money check to the
listing broker, who will be responsible for depositing it.
d. If written permission of both buyer and seller has been obtained, the
broker may refrain from depositing the check pending the seller’s
acceptance of the offer.
67. A purchaser tenders an earnest money deposit check with an offer to
purchase and instructs the salesperson not to deposit the check until the
seller accepts the offer. What should the salesperson do?
a. If the salesperson is a buyer’s agent, the salesperson must follow
the instruction of the buyer and refrain from depositing the check.
b. The deposit check must be deposited by the end of the next
business day following its receipt.
c. If both the buyer and the seller have given written permission, the
deposit check may be held pending the seller’s acceptance of the
offer.
d. The salesperson may refrain from depositing the check only if the
broker’s office policy permits such conduct.
- 18 -
68. A licensed broker receives an earnest money deposit from a buyer and
promptly deposits it in an interest-bearing account opened at a local bank
in the name of the seller. The buyer is provided with the account number,
verification of the deposit, the seller’s name, and the name of the bank.
Which statement is TRUE?
a. The broker acted properly by providing all information about the
deposit to both parties to the transaction.
b. The broker should have opened the account in the names of both the
buyer and the seller.
c. The broker should have deposited the funds in an escrow account
maintained in his name and identifying the broker as trustee.
d. The deposit must be available to be withdrawn by either the buyer or
seller upon proper written notice to the bank.
69. During a listing presentation, a prospective seller informs the salesperson
of her intent to refuse to sell the property to persons of a specific national
origin group. What is the BEST course of action for the salesperson in this
situation?
a. List the property and follow the instructions of the seller as required
under the law of agency.
b. List the property but document the conversation in the listing file
with reference to the company policy of nondiscrimination.
c. Refuse to list the property for sale if the seller persists in her
intention to discriminate because of the national origin of a buyer
prospect.
d. Refuse to accept a written exclusive listing on the property but agree
to represent the seller under an oral open-listing agreement.
70. A 55-year old woman inquirers about renting a three-bedroom, singlefamily home that a broker has listed for rent. In response to this inquiry,
which action by the broker is legal?
a. Refusing to show the property to the prospect because the owner
has instructed the broker to rent only to people under the age of 40.
b. Informing the prospect that the owner would never accept less than
the stated security deposit because the property would only be
occupied by one person.
c. Charging a rental amount different from what would be charged to a
family with children.
d. Verifying the income and ordering a credit check in order to
determine the applicant’s ability to meet her obligations under the
terms of the lease.
- 19 -
71. A housing discrimination charge must be filed with the Pennsylvania
Human Relations Commission within:
a. 30 days.
b. six months.
c. one year.
d. two years.
72. A landlord has a “no pets” policy in his apartment building. A trainer or
handler of service dogs for persons with disabilities wants to rent an
apartment from the landlord and requests that these dogs be permitted in
the apartment. Does the landlord have to let the dogs in?
a. If the landlord’s “no pets” policy is applied uniformly in a
nondiscriminatory manner, it may be legally applied to service dogs
as well.
b. The Pennsylvania Human Relations Act specifically prohibits the
landlord from refusing to rent to the handler or trainer of service
animals on the basis of the owner’s “no pets” policy.
c. Under the Pennsylvania Human Relations Act, the landlord may not
discriminate against the trainer or handler on the basis of a “no
pets” policy, but the landlord may require the tenant to pay an
additional security deposit or charge a higher rental rate.
d. The Pennsylvania Human Relations Act does not address the issue
of service dogs or other animals.
73. A Pennsylvania real estate salesperson may lawfully collect compensation
for engaging in real estate activities from:
a. either a buyer or a seller.
b. her employing broker only.
c. any party to the transaction or the party’s representative.
d. a licensed real estate broker who cooperated with the salesperson’s
employing broker.
74. A sole proprietor broker has her license suspended for two years. What
effect does this have on the associate brokers and salespersons affiliated
with the broker?
a. Affiliates’ licenses will be revoked, subject to reinstatement after one
year.
b. Affiliates’ licenses will also be suspended for a two-year period.
c. Suspension has no effect on the affiliates.
d. Affiliates’ licenses are terminated.
- 20 -
75. Once issued, a salesperson’s license must be:
a. carried by the salesperson at all times.
b. maintained at the main office of the employing broker.
c. displayed in a conspicuous place at the local association of
REALTORS.
d. presented to the consumer prior to engaging in an initial interview.
76. When a sales person applies for a real estate license, the employing
broker is responsible for:
a. issuing an official transcript verifying completion of the educational
requirement.
b. submitting a sworn statement certifying that the employing broker
will actively train and supervise the applicant.
c. verifying that the candidate is a U.S. citizen.
d. payment of the initial fee to the Real Estate Recovery Fund on behalf
of the licensee.
77. A licensed salesperson may perform all of the following activities for or on
behalf of his employing broker EXCEPT:
a. negotiate a loan on real estate.
b. lease commercial office space.
c. buy or offer to buy real estate.
d. appraise a single-family property.
78. If an employing broker refuses to pay compensation to a licensee
according to the terms of an employment contract, the licensee may:
a. immediately file an application for compensation from the Real
Estate Recovery Fund.
b. transfer all current listings to a new employing broker.
c. petition the Pennsylvania Real Estate Commission to arbitrate the
dispute.
d. file a lawsuit against the broker.
79. Which is TRUE of a real estate salesperson’s license?
a. It must be shown to every consumer at the initial interview.
b. It is issued in the name of the salesperson exclusively and may be
used to represent more than one broker at the same time.
c. It is not valid until the broker certifies that the salesperson has
completed the company training program.
d. It must be maintained with the current license of the broker at the
main office of the broker.
- 21 -
80. When the employing broker submits a salesperson’s license application to
the Pennsylvania Real Estate Commission, the broker is certifying that the:
a. salesperson is a citizen of the United States.
b. salesperson has not been convicted of any criminal offense.
c. broker will actively supervise and train the salesperson.
d. salesperson has successfully completed the mandatory requirement.
81. An associate broker is changing employing brokers. While the change of
employment forms are being processed by the Pennsylvania Real Estate
Commission, the associate broker may:
a. represent both employing brokers until the new license is received.
b. manage a branch office on behalf of the new employing broker.
c. continue to list properties for sale in the name of the former
employing broker.
d. act as a transaction licensee without representing either broker until
the new license is processed.
82. In Pennsylvania, representation agreements that obligate the buyer to pay
a fee:
a. must be in writing.
b. must be on specific forms approved by the Pennsylvania Real Estate
Commission.
c. are not regulated under license law.
d. are not permitted, because only sellers pay fees for real estate
services.
83. All of the following provisions are included in the Pennsylvania Real
Estate Commission’s rules regarding exclusive listing agreements
EXCEPT:
a. a listing agreement must state the fee the broker expects to earn.
b. a listing agreement must be accompanied by a qualified expert’s
report of the property’s condition.
c. an exclusive listing agreement must be in writing and signed by the
seller.
d. the seller must receive a copy of the listing agreement after signing
it.
- 22 -
84. All of the following must appear in a written exclusive listing agreement
EXCEPT:
a. the commission or fee to be received by the broker.
b. a complete legal description of the property being sold.
c. the time duration of the listing.
d. the proposed gross sales price of the property.
85. A broker signs a three-month listing agreement with a seller. The
agreement contains the following clause: “If the property has not been sold
after three months from the date of this signing, the agreement will
automatically continue for additional three-month periods thereafter until
the property is sold.” In Pennsylvania, this clause is:
a. legal because it contains a reference to a specific time limit.
b. illegal.
c. illegal if there are more than three renewal periods.
d. legal because the renewal periods are for less than one year.
86. Upon obtaining an exclusive listing, a licensed broker or salesperson is
obligated to:
a. set up a listing file and issue it a number in compliance with the
Rules and Regulations of the Pennsylvania Real Estate Commission.
b. place advertisements in the local newspapers.
c. cooperate with every real estate office wishing to participate in the
marketing of the listed property.
d. give the person or persons signing the listing a legible, signed, true,
and correct copy.
87. Which type of listing agreement is required to contain a statement in
boldface type stating that the broker earns a commission on the sale of
property during the listing period even if the owner sells the property
without the aid of a broker?
a. Exclusive-right-to-sell listing.
b. Exclusive-agency listing.
c. Multiple listing.
d. Open listing.
- 23 -
88. A salesperson is discussing the possibility of listing a seller’s home for
sale. Before the agreement is signed, what information should the
salesperson provide the seller?
a. The broker’s policies regarding cooperation with other brokers,
including the sharing of fees.
b. The common or typical rate of commission charged by brokers in the
area.
c. The approximate number of times the house will be advertised for
sale.
d. The inclusion of an automatic renewal clause in the broker’s
exclusive listing agreement.
89. Under certain circumstances, which agreement may be oral?
a. Exclusive-agency listing.
b. Open listing.
c. Exclusive-right-to-sell listing.
d. Exclusive buyer agency listing.
90. A property owner wants to list his property for sale with a broker but does
not want to sign an exclusive listing contract. May the broker accept an
oral open listing?
a. Yes, as long as the licensee provides the seller a written
memorandum stating the terms of the agreement.
b. No, the Rules and Regulations of the Pennsylvania Real Estate
Commission require that all contracts and agreements be in writing.
c. No, the statute of frauds requires that listing agreements be in
writing in order to be enforceable.
d. Yes, as long as the parties agree that the licensee is not acting as an
agent of the seller in the transaction.
91. How accurate are statements of estimated cost and return provided by
licensees required to be?
a. As accurate as may be reasonably expected of a person having
knowledge of and experience in real estate sales.
b. Within 10 percent of the actual figures determined at settlement.
c. No specific requirement regarding accuracy of the information for
estimates.
d. Within $500 of the actual cost or return in order to avoid liability.
- 24 -
92. Failure to include which of the following in an agreement of sale would
give a buyer the option to void the agreement without a requirement of
court action?
a. Zoning classification of the property if the agreement is for a
commercial building.
b. Mortgage contingency if the buyer is securing financing.
c. Specific date for possession and closing.
d. Complete and accurate legal description of the property.
93. If an agreement of sale is conditioned on the ability of the buyer to obtain
mortgage financing, all of the following must be included in the agreement
EXCEPT:
a. the deadline for the buyer to obtain the mortgage loan.
b. a copy of the buyer’s credit report.
c. the nature and extent of assistance that the broker will render to the
buyer.
d. the type of mortgage.
94. Regarding the agreements of sale, which statement is FALSE?
a. The licensee must furnish a copy of the sales contract to all
signatories at the time of execution.
b. The salesperson must retain copies for three years from the date it
was signed.
c. The agreement must contain a statement identifying the capacity in
which the broker is engaged.
d. The agreement must contain a statement that access to a public road
may require issuance of a highway occupancy permit.
95. When are statements of estimated cost and return provided to the parties
to a transaction by the broker involved in the transaction?
a. Before an agreement of sale is executed by the parties.
b. One business day prior to settlement of the transaction.
c. Within three days of the buyer’s loan application.
d. When all contingencies addressed in the contract have been
satisfied.
- 25 -
96. Statements of estimated costs and returns must:
a. be signed by the seller and buyer upon receipt.
b. be an exact representation of all costs to be incurred by the party for
whom they were prepared.
c. be preented to the parties prior to execution of an agreement of sale.
d. include a disclosure indicating who the broker that prepared the
statements represents.
97. When a broker negotiates an agreement of sale between a buyer and a
seller, the broker is responsible for all of the following EXCEPT:
a. furnishing a copy of the agreement of sale to both parties at the time
of execution.
b. furnishing a copy of the agreement with original signatures of all
parties to the mortgage lender.
c. preserving a copy of the agreement for a period of three years
following its consummation.
d. ensuring that the agreement of sale is in writing.
98. When included as a provision in an agreement of sale, a mortgage
contingency must include all of the following EXCEPT:
a. type of mortgage.
b. maximum interest rate of the mortage.
c. amount of the mortgage payment.
d. deadline for the buyer to obtain the mortgage.
99. All of the following are mandatory provisions of a sales contract EXCEPT:
a. identifying the rate or amount of commission to be paid to the
broker.
b. identifying the capacity in which the broker is engaged in the
transaction.
c. describing the purpose of the Real Estate Recovery Fund.
d. a statement of the zoning classification of the property, unless the
property is zoned solely or primarily to permit single-family
dwellings.
100.
Which provision must be included in an agreement of sale?
a. Dates for payment and conveyance.
b. Language relieving the seller of responsibility for defects discovered
after settlement.
c. Zoning classification for single-family housing.
d. Language addressing the buyer’s ability to secure mortgage
financing.
- 26 -
101.
An aggrieved person is awarded a judgment against a real estate
licensee for violation of the Real Estate Licensing and Registration Act.
Regarding the Real Estate Recovery Fund, the aggrieved party:
a. may immediately apply to the Pennsylvania Real Estate Commission
for payment from the recovery fund for the full judgment amount
plus court costs and attorney’s fees.
b. has the right to an award amount up to a maximum of $20,000 from
the recovery fund.
c. may seek additional money from the licensee in a private civil action
after being compensated from the recovery fund.
d. may seek a $10,000 maximum recovery from the recovery fund plus
limited court costs and attorney’s fees.
102.
The Pennsylvania Real Estate Commission may assess an
additional fee against licensees in order to increase the balance in the Real
Estate Recovery fund if the:
a. amount paid from the fund exceeds $500,000 during any one year.
b. number of new license fees during a biennial renewal period drops
below $25,000.
c. Department of State determines that available funds appear
insufficient to satisfy outstanding claims.
d. balance in the fund is less than $300,000 at the beginning of a
biennial renewal period.
103.
A residential borrower whose loan is in default but whose property
has not yet been sold at a foreclosure sale has certain rights. Under the
equitable right of redemption in Pennsylvania, the borrower:
a. must always pay the full outstanding balance due plus attorney’s
fees and costs to avoid foreclosure.
b. loses all property rights when the lender exercises its right under the
acceleration clause and initiates the foreclosure proceeding.
c. may cure the default and avoid the foreclosure sale by bringing the
payments up-to-date if the outstanding balance is $50,000 or less.
d. must wait until the sale before offering to make any payments.
- 27 -
104.
In a cooperating broker transaction, the listing broker represents the
seller and a broker acting as a buyer’s agent represents the buyer. Which
broker holds the buyer’s earnest money deposit in an escrow account?
a. The listing broker always has the duty to hold the earnest money
deposit on behalf of the seller.
b. The broker representing the buyer is required to hold the buyer’s
earnest money deposit.
c. With appropriate notices to buyer and seller, either broker may
assume the duty to hold the earnest money deposit in an escrow
account.
d. Because of the conflict of interests, the earnest money deposit
should be held by a disinterested third party.
105.
Which statement is TRUE regarding a salesperson licensee who is
convicted of a felony or misdemeanor while holding an active
salesperson’s license?
a. The licensee must notify the Pennsylvania Real Estate Commission
of the conviction within 30 days of the verdict.
b. The licensee is only required to notify the Pennsylvania Real Estate
Commission if the offense involved activities related to acts for
which a real estate license is required.
c. The salesperson’s license is automatically suspended if the
individual is convicted of a felony or misdemeanor.
d. The employing broker of the salesperson licensee is responsible for
notifying the Pennsylvania Real Estate Commission and
recommending appropriate disciplinary action.
106.
May a licensed real estate salesperson collect a referral fee for
construction, repair, or inspection services utilized by a consumer as a
result of the licensee’s referral?
a. Yes, if the salesperson provides the consumer with a written
disclosure of the referral fee or commission at the time the
salesperson first advises the consumer that the service is available
or when the salesperson first learns the consumer will be using the
service.
b. Yes, but only if the licensed salesperson is also an owner or
employee of the firm providing the construction, repair, or inspection
service.
c. No, because the real estate salesperson may never receive
compensation from anyone other than the employing broker.
d. No, because the consumer is required to independently select
providers of services related to the real estate transaction.
- 28 -
107.
A broker acting as a transaction licensee would be in violation of the
Rules and Regulations of the Pennsylvania Real Estate Commission if the
broker engaged in which activity?
a. Providing assistance with document preparation.
b. Advising the consumer about compliance with laws pertaining to real
estate transactions without rendering legal service.
c. Disclosing to a buyer that the seller will accept a price less than the
asking/listing price.
d. Keeping the consumer informed about the transaction and the tasks
to be completed.
108.
Which individual is NOT required to hold a real estate license when
engaging in real estate activities?
a. An individual employed full-time by a builder-owner of single-family
homes who is authorized to sell homes owned by the builder-owner
employer.
b. A person acting as a trustee in bankruptcy proceedings.
c. An individual acting as an independent contractor who sells or offers
to sell campground memberships.
d. A person who owns or manages a business that collects rental
information for the purpose of referring prospective tenants to rental
units.
109.
Licensing fees required under the Real Estate Licensing and
Registration Act are set by the:
a. Pennsylvania House of Representatives Professional Licensure
Committee.
b. Department of State.
c. Pennsylvania Senate Appropriations Committee.
d. Pennsylvania Real Estate Commission.
110.
Which requirement must be met in order for an individual to be
issued a real estate license?
a. The individual must have a reputation for honesty, trustworthiness,
integrity, and competence to transact business.
b. The individual must be a U.S. citizen.
c. The individual must certify that he or she has not been convicted of a
felony or misdemeanor within the three years immediately preceding
application for licensure.
d. The individual must be financially solvent and have an acceptable
credit rating.
- 29 -
111.
A licensed salesperson or associate broker wants to change her
employment from one licensed broker to another. What is required in order
for the licensee to conduct activities on behalf of her new employing
broker?
a. The salesperson or associate broker may not engage in any activity
on behalf of the new employing broker until a new license is received
from the Pennsylvania Real Estate Commission.
b. The salesperson or associate broker must notify the Pennsylvania
Real Estate Commission in writing no later than ten days after the
intended date of change, pay the reuired fee, and return her current
license.
c. The previous employing broker and prospective employing broker
must agree to the license transfer before the Pennsylvania Real
Estate Commission will issue the new license.
d. The salesperson or associate broker must provide a current police
criminal record check with the application for license transfer.
112.
If a seller provides inaccurate or incomplete information on a
property condition disclosure statement, is the licensee liable for the action
of the seller?
a. Yes, because the licensee has a responsibility to conduct an
independent inspection of the property.
b. No, because the licensee has no duty to conduct an independent
inspection or verify the accuracy of statements reasonably believed
to be accurate and reliable.
c. Yes, because the licensee must verify the accuracy of any
representations made by the seller-client on a disclosure statement.
d. No, because the licensee is not a party who would be harmed as a
result of the inaccurate or incomplete information.
113.
Which individual may be given written authority to withdraw funds
from a broker’s escrow account for payments properly chargeable to the
account?
a. An unlicensed accountant or bookkeeper employed by the broker.
b. A member of the Pennsylvania Real Estate Commission conducting
an investigation of the brokerage company.
c. A licensed salesperson employed by the broker designated as
trustee for the account.
d. An unlicensed clerical or administrative employee acting on behalf of
the employing broker.
- 30 -
114.
Under which circumstance may a real estate licensee perform a
comparative market analysis for a consumer?
a. A licensee may perform a comparative market analysis for a sellerclient only after the licensee and the seller have entered in to an
exclusive listing agreement.
b. A licensee representing a seller-client may prepare a comparative
market analysis for an unrepresented buyer in order to assist the
buyer in determining an offering price.
c. A licensee may perform a comparative market analysis only if the
licensee is an unbiased, disinterested third party, acting with
impartiality and independence.
d. A licensee under contract to act as a buyer’s agent may perform a
comparative market analysis for the purpose of determining the
offering price for a specific parcel of real estate in an identified
market at a specified time.
115.
A buyer has decided to represent himself in a real estate
transaction. What is the listing agent’s responsibility with regard to the
buyer?
a. Present the buyer’s written offer to the seller.
b. Advise the buyer that his offer is too high.
c. Not tell the seller the reasons why the buyer is making the offer that
he is.
d. Verifying that the seller’s disclosure is accurate.
116.
A real estate licensee is expected to provide all of the following
services to any consumer in a real estate transaction EXCEPT:
a. accounting for any monies received.
b. confidentiality.
c. disclosure of any financial interest that the licensee has in the
transaction.
d. to present all written offers to and from each party in the transaction.
117.
A licensee who represents the seller in a real estate transaction is
obligated to:
a. conduct an independent inspection of the property.
b. tell the buyer’s agent the reason why the seller is selling.
c. make a continuous effort to find a buyer for the property.
d. not list competing properties until the first seller’s property is under
contract.
- 31 -
118.
The buyer’s agent has shown the buyers five different threebedroom homes. The agent just listed a home that is perfect for these
buyers. To continue with this transaction, the sellers and buyers must
agree to:
a. seller-only agency.
b. buyer-only agency.
c. dual agency.
d. transaction brokerage.
119.
The broker has asked the licensee who took the listing to represent
the seller in the transaction. The broker then asked another licensee in the
office to represent the buyer. This is an example of:
a. single-agency.
b. dual agency.
c. transaction brokerage.
d. designated agency.
120.
A licensee represents the seller. A licensee from another office
represents the buyers who wish to buy the seller’s home. The two
licensees are acting as:
a. transaction brokers.
b. dual agents.
c. designated agents.
d. single agents.
121.
What duty, if any, does a transaction licensee owe the parties with
whom the licensee is working?
a. Full confidentiality.
b. Limited confidentiality.
c. Advocacy.
d. No duty.
122.
What can a licensee acting as a dual agent disclose to either or both
of the consumers?
a. The foundation is slowly sinking.
b. The seller is willing to accept less than the list price.
c. The buyer is willing to offer more than the first offer.
d. The seller is dying of AIDS.
- 32 -
123.
Which of the following duties is owed to all consumers of real estate
services and cannot be waived?
a. Confidentiality of the consumer’s intention.
b. Disclosure of the motivation for the consumer’s offer or counteroffer.
c. Accounting for all escrow and deposit funds.
d. Independent inspection of the property.
124.
A broker received several offers for a property he has listed. The
broker must present each offer to the seller:
a. Promptly on receipt.
b. Individually.
c. As soon as the seller decides on any previous offer.
d. Prior to the seller’s deciding on any previous offer.
125.
A broker earned a commission on the sale of her listing by another
broker. The listing broker may pay part of the commission to:
a. The selling broker.
b. The selling sales-person.
c. The out-of-state sales-person who referred the seller to him.
d. The buyer’s attorney.
126.
A broker just received an earnest money payment on an offer to
purchase. The broker must place the earnest money in a:
a. Trust account.
b. Business account.
c. Personal checking account.
d. Savings account.
127.
A broker’s license can be revoked if he or she:
a. Advertises the property without including the salesperson’s name in
the advertisement.
b. Negotiates the commission based on what the broker says in the rate
set by the broker board of REALTORS.
c. Pays the commission that exceeds the customary rate.
d. Advertises free market analysis as a means of obtaining a listing.
- 33 -
128.
What is the listing broker’s responsibility to a prospective
purchaser?
a. The broker must not use fraud or deceit.
b. The broker must help the buyer to get the lowest price possible.
c. The broker is only the middleman; neither the buyer nor the seller
can charge him with avoiding a legal duty.
d. There is none at all.
129.
a.
b.
c.
d.
Which of the following would not be classified as a latent defect?
An unknown underground oil tank.
Hidden structural damage.
A large crack in the living room ceiling.
A cracked heat exchange in the furnace.
a.
b.
c.
d.
The lessee in a leasing agreement is the:
Tenant.
Property manager.
Landlord.
Rental agent.
130.
131.
The lease that is signed by a person who is 17 years of age (still a
minor) is:
a. Unilateral.
b. Void.
c. Illegal.
d. Voidable.
132.
Contracts for the sale of real estate must be in writing to be
enforceable according to the:
a. Statute of limitations.
b. Parole evidence rule.
c. Statute of frauds.
d. Real estate commission.
- 34 -
133.
A broker lists a home for $80,000. The broker brings an offer for
$78,000, which is rejected by the sellers. The broker obtains another offer
of $80,000 for the seller. Before he can deliver the offer, however, the
offerer withdraws by calling the broker at the seller’s home. There is:
a. An implied contract.
b. A unilateral contract.
c. An executor contract.
d. No contract.
134.
A broker and a seller have signed an open listing contract. This
agreement is an example of:
a. A unilateral contract.
b. An executed contract.
c. A bilateral contract.
d. An unenforceable contract.
135.
a.
b.
c.
d.
Which of the following correctly describes an open listing?
The seller can employ any number of brokers.
Only a broker is authorized to act as an agent for the seller.
A broker is entitled to commissions regardless of who sells the
property.
The broker’s commission is based on excess over the sales price
stated in the listing.
136.
The salesperson obtains a written offer to purchase a home that she
has listed for sale. The seller accepts the offer and the salesperson
promptly telephones the purchaser to notify him of the acceptance.
Because the purchaser lives in a nearby town, the salesperson informs him
that she will deliver the contract in three days. The salesperson has an
enforceable contract when:
a. The seller signs the acceptance.
b. The offer to purchase is presented to the seller.
c. The acceptance is telephoned to the salesperson representing the
purchaser.
d. A copy of the contract is delivered to the purchaser in three days.
- 35 -
137.
Both the buyer and the seller agree to wait until the broker’s
exclusive right-to-sell listing has expired. They then have the third party
buy the home. After a short while, the third party conveys ownership to the
interested buyer, who was introduced to the owner by the listing broker. In
this case:
a. The broker is not entitled to a commission because the listing has
expired.
b. If the listing broker can prove collusion, he can collect the full
commission.
c. The broker may sue the buyer and the seller for the commission.
d. The broker is entitled to his commission because he performed the
task for which he was hired.
138.
Procuring cause would not be required for a broker to receive a
commission in:
a. An open listing.
b. An exclusive right-to-sell listing.
c. A net listing.
d. An exclusive agency listing.
139.
When a broker sold a property, the sales contract contained the
following statement: “Buyer to accept the property in an ‘as is’ condition.”
Both the seller and the broker knew the plumbing was in a major state of
disrepair but did not tell the buyer. Would an action for damages against
the broker based on fraud be successful?
a. No, the ‘as is’ provision is avoidance of a meeting of the minds.
b. No, the contract specifically stated that the property was being sold
‘as is’.
c. Yes, the duty to disclose a material fact cannot be avoided by an ‘as
is’ provision.
d. Yes, the ‘as is’ provision refers only to exterior defects.
140.
The broker brings an offer-to-purchase contract for the listed price of
$114,500 with the stipulation that the seller must furnish a title insurance
policy to prove marketable title. The seller refuses the offer. The broker:
a. Can collect full commission because the seller must always provide
title insurance.
b. Can collect one-half of the commission.
c. Can collect nothing.
d. Can collect one-half the first month’s mortgage payment.
- 36 -
141.
A seller listed her home with a broker. Shortly thereafter, the seller
telephoned the broker and withdrew the exclusive right-to-sell listing. A
week later, she sold the house to her neighbor for a higher price than the
price on the listing. In this situation, which of the following is true?
a. The owner has the right to terminate the listing at any time without
being liable for the damages.
b. Under an exclusive right-to-sell listing, the broker is not entitled to
damages.
c. The broker is not entitled to a commission because the seller
obtained a better price than she would have received through the
broker’s effort.
d. If the owner withdrew the listing after the broker spent money on it,
the owner might be liable to the broker for damages.
142.
A salesperson for a broker listed an owner’s home under the
exclusive right-to-sell listing contract. Which of the following statements
describes this situation?
a. The listing belongs to the salesperson.
b. If the principal sells his house, he will not have to pay the
commission.
c. The listing belongs to the broker.
d. The listing belongs to both the salesperson and the broker.
143.
An owner gives an exclusive right-to-sell listing to a broker for a sixmonth period. During the exclusive period, the owner also gives an open
listing to another broker who produces the buyer. What is the owners’
liability for payment of commission?
a. Only one commission must be paid, which both brokers share on a
50/50 basis.
b. The owner is liable to the first broker for the payment of the
commission.
c. The owner is liable for payment of the commission to both brokers.
d. The owner is liable only to the second broker for payment of the
commission.
- 37 -
144.
A buyer has contracted with a seller to purchase property. The
contract was ratified on January 10th. The closing was on March 31st. What
is the status of the contract on April 1st?
a. Void.
b. Anticipatory.
c. Executed.
d. Executory.
145.
a.
b.
c.
d.
146.
A listing contract:
Is a conveyance.
Is a contract of employment.
Is a unilateral contract.
Is terminated on the death of the listing salesperson.
d.
A salesperson:
May receive a commission directly from the principal.
Can carry out activities in his or her own name.
Is responsible primarily to the broker who holds the salesperson’s
license.
May place a blind advertisement.
a.
b.
c.
d.
The deed that provides the buyer the greatest protection is the
Bargain and sale deed.
General warranty deed.
Quiteclaim deed.
Special warranty deed.
a.
b.
c.
d.
A warranty deed generally will transfer title to the grantee when it is:
Acknowledged.
Signed by the grantee.
Signed by the grantor.
Delivered and accepted.
a.
b.
c.
d.
Which of the following would be an example of voluntary alienation?
Sale.
Eminent domain.
Escheat.
Adverse possession.
a.
b.
c.
147.
148.
149.
- 38 -
150.
A grantee has received an executed, notarized deed. The grantee
takes possession of the property but does not record the deed. The
conveyance is:
a. Invalid between the parties and valid to third parties with constrictive
notice.
b. Valid as between the parties and valid to the subsequent recorded
interests.
c. Valid as between the parties and invalid as to subsequent recorded
interests without notice.
d. Invalid as between the parties.
151.
a.
b.
c.
d.
Generally, title insurance coverage extends to:
Defects known to the buyer.
Liens listed in the policy.
Defects listed in the policy.
Defects not found in public record.
a.
b.
c.
d.
A deed must be signed by the:
Grantor.
Vendee.
Grantee.
Vendor.
152.
153.
What do the following situations have in common?
a. A man’s property is taken by the city and used for a new highway.
b. A woman’s land gradually is wearing away because of the wind.
c. A developer’s property is sold at foreclosure sale.
a.
b.
c.
d.
They will require the use of a warranty deed to transfer title.
They are examples of voluntary alienation of title.
They are examples of eminent domain.
They are examples of involuntary alienation.
- 39 -
154.
A and B have entered into a binding offer to purchase. B will buy A’s
house. Which of the following correctly describes the status of the
transaction?
a. A will have equitable title until closing.
b. B will have legal title when the offer to purchase becomes binding on
both parties.
c. A will have legal title until the offer becomes binding, at which time A
will hold equitable title.
d. A will hold legal title until closing and B will hold equitable title until
closing.
155.
The need for loan closing to be prepared on a Uniform Settlement
Statement is a requirement of:
a. Regulation Z.
b. The federal fair housing laws.
c. Government National Mortgage Association (Ginnie Mae).
d. RESPA.
156.
The requirement that a lender give each loan applicant a copy of
Settlement Costs and You is created under:
a. Federal Home Loan Mortgage Corporation (Freddie Mac) (FLMNC).
b. Federal Housing Administration.
c. RESPA.
d. Regulation Z.
157.
Section 1031 of the Internal Revenue Code allows real estate
investors to do which of the following when making a property exchange:
a. Avoid the capital gains tax only if the exchange is of like kind.
b. Phase out the capital-gains tax.
c. Defer the capital-gains tax.
d. Avoid the capital-gains tax even if the exchange is of like kind.
158.
You are receiving the mortgage from your local bank. Regulation Z
requires your bank to disclose:
a. You right rescind within a three business day period.
b. The amount of your closing cost.
c. The annual percentage rate.
d. Penalties to the bank if you do not comply with the laws.
- 40 -
159.
a.
b.
c.
d.
The federal fair housing laws prohibit discrimination on the basis of:
Sexual orientation.
Political beliefs.
Marital status.
Sex.
160.
Persuading someone to sell by telling him that minorities are moving
into the neighborhood is illegal and called:
a. Redlining.
b. Blockbusting.
c. Testing.
d. Steering.
161.
Which of the following is exempted from the federal fair housing
laws?
a. Rental of a room in an owner-occupied, five-family dwelling.
b. Rental of an owner-occupied, five-family dwelling.
c. Rental of a single-family home when a broker is used.
d. Lodgings of a private club when the lodgings are not operated
commercially.
162.
The practice of channeling potential buyers of one race into one area
and potential buyers of another race into another area is known as:
a. Canvassing.
b. Blockbusting.
c. Redlining.
d. Steering.
163.
The federal fair housing laws prohibit which of the following types
of private housing:
a. A Lutheran organization giving preference to its members in renting.
b. A Norwegian advertising his house for “Norwegians Only”.
c. The Elks Club operating a rooming house on a nonprofit basis.
d. A Masonic Lodge operating a rooming house on a nonprofit basis.
- 41 -
164.
Which of the following categories is NOT protected against
discrimination under federal fair housing laws?
a. Religion.
b. Parental status.
c. Disabled status.
d. Lawful source of income.
165.
The denial of a loan by a lender would not be a violation of federal
fair housing laws if it were based on:
a. Lack of income.
b. Sex.
c. Age.
d. Marital status.
166.
Which of the following laws provides comprehensive guidance for
making public facilities accessible?
a. RESPA.
b. Regulation Z.
c. Federal fair housing laws.
d. Americans with Disabilities Act (ADA).
167.
Which of the following activities would be legal under the familial
status category under federal fair housing laws?
a. Charging higher rents for people with pets.
b. Charging higher security deposits for families with children.
c. Segregating families within buildings.
d. Segregating families within certain buildings.
168.
Which of the following finance charges would NOT be used by a
bank to calculate the annual percentage rate for disclosure to the
borrower?
a. Loan fees.
b. Credit fees.
c. Home inspection fees.
d. Service charges.
- 42 -
a.
b.
c.
d.
“Trigger Terms” relates to:
ADA.
The Federal Fair Housing Law.
RESPA.
Regulation Z.
a.
b.
c.
d.
Which of the following would be considered to be real property?
A leasehold estate.
Fixtures.
Chattels.
Trade fixtures.
169.
170.
171.
Your uncle died without a will and you inherited his real estate. The
way in which you would acquire his estate is by:
a. Accession.
b. The statute of descent and distribution.
c. Escheat.
d. Novation.
172.
by:
Loans to low-income people in rural areas are made and guaranteed
a.
b.
c.
d.
The Federal Home Loan Mortgage Corporation (FHLMC).
Rural Development.
Farm Service Agency.
The Federal Housing Administration (FHA).
173.
A man receives possession of property under a deed that states that
he will own the property as long as the present building standing on the
property is not torn down. The type of estate the man holds is which of the
following?
a. Life estate.
b. Non-destructible estate.
c. Fee simple estate.
d. Determinable fee estate.
- 43 -
174.
You would like to hire more than one broker to sell your house and
be able to sell the house yourself without paying a commission to a broker.
Which of the following listing agreements should you choose?
a. Net.
b. Open.
c. Exclusive agency.
d. Exclusive right-to-sell.
175.
Which of the following is responsible for investigating and
prosecuting violations of federal fair housing laws?
a. National Association of Realtors (NAR).
b. Equal Employment Opportunity Commission (EEOC).
c. Department of Housing and Urban Development (HUD).
d. Associate of Real Estate License Law Officials(ARELLO).
176.
You have been making constant payments of $653 per month on
your mortgage. The balance after your last payment was $80,300. The
interest rate on your mortgage is 8 percent. What will the balance of your
mortgage by after your next payment?
a. $79,647.00.
b. $80,067.32.
c. $80,182.33.
d. $847.00.
177.
Using the mortgage factor 6.653, appropriate for a 30-year mortgage
at 7 percent per year, what is the monthly payment for $121,000 at 7
percent for 30 years?
a. $733.19.
b. $805.02.
c. $816.75.
d. $847.00.
178.
Assuming a monthly mortgage payment of $804.63, what is the total
interest paid on a 30-year mortgage for $121,000?
a. $166,709.23
b. $167,514.74
c. $168,319.46
d. $168,674.00
- 44 -
179.
Which of the following statements correctly identifies a defining
characteristic of conventional mortgages?
a. They are assumable.
b. There is no down payment.
c. They are guaranteed by the federal government.
d. Their interest rates are set by the lender.
180.
A home valued at $92,000 is assessed at 70 percent of its value and
is taxed at a rate of $3.40 per $100. What are the semi-annual taxes on this
property?
a. $1,094.80.
b. $1,564.80.
c. $2,189.60.
d. None of the above.
181.
A broker has been showing homes to some prospects. The
prospects have learned of a home for sale by its owner, which they are
interested in visiting. The broker calls the owner to arrange a showing,
although the owner will not list with the broker. The broker shows the
home and writes the offer to purchase, which is accepted by the owner.
Which of the following statements correctly describes the situation?
a. The owner is legally bound to pay the broker a commission.
b. The prospects are responsible for paying a commission to the
broker.
c. The owner and the prospects are legally bound to pay a commission
to the broker.
d. Neither the owner nor the prospects are legally bound to pay a
commission to the broker.
182.
A veteran wishes to receive a loan for $70,000 to buy a home. The
home has been appraised by the VA at $68,000. Which of the following
statements most accurately describes the veteran’s situation?
a. The veteran may buy the home with a VA loan only if he is able to
lower the price to $68,000.
b. The veteran may buy the home with a VA loan if the seller agrees to
hold a second mortgage of $2,000.
c. The veteran may buy the home with a VA loan if he makes a down
payment of $2,000.
d. The veteran may not buy the home.
- 45 -
183.
You are paying interest on a $75,000 mortgage for three years after
which the entire loan is due. This is called a(n):
a. Amortized mortgage.
b. Graduated payment mortgage.
c. Purchase money mortgage.
d. Term mortgage.
184.
A farmer is unable to pay the county taxes on his farm. The
delinquent taxes would be considered:
a. A lien.
b. An attachment.
c. An easement.
d. An appurtenance.
185.
A licensee’s relative asks the licensee for information about one of
the licensee’s listings. After reviewing it, the relative arranges to see the
property with the licensee. Two weeks later, the relative submitted an offer
through another agency on the licensee’s listing. Which of the following
statements about this situation is correct?
a. The listing licensee should disclose the family relationship with the
buyer to the seller.
b. The selling licensee should refuse to continue with the transaction if
the buyer mentions the listing licensee’s family status.
c. The buyer has breached an express agency relationship with the
listing licensee and must resubmit the offer using the listing
licensee.
d. The listing licensee is entitled to a portion of the selling licensee’s
compensation for having introduced the buyer to the property.
186.
Which of the following Internal Revenue Service (IRS) forms is used
to report commissions paid to salespeople by brokers?
a. W-9.
b. 1031.
c. 1040.
d. 1099 Misc.
- 46 -
187.
A retired woman owns her home free and clear and is looking for a
mortgage that would provide her with monthly payments until she dies.
This type of mortgage is called a:
a. Guaranteed payment mortgage.
b. Blanket mortgage.
c. Participation mortgage.
d. Reverse annuity mortgage.
188.
A man leased a store with the agreement that he would pay a fixed
rent and the landlord would pay all operating expenses. This is an example
of a:
a. Gross lease.
b. Graduated lease.
c. Net lease.
d. Percentage lease.
189.
You have entered into a land contract for the sale of your home.
Which of the following statements is NOT correct?
a. The seller is the vendor.
b. The buyer is the vendee.
c. The seller will hold legal title during the term of the contract.
d. The seller will retain possession during the term of the contract.
190.
Which of the following terms identifies the practice of charging loan
interest rates in excess of the maximum allowed by law?
a. Usury.
b. Leverage.
c. Arbitrage.
d. Novation.
191.
Which of the following statements correctly describes the way in
which a listing broker should represent her client?
a. The listing broker can tell a prospective buyer the lowest price her
client will accept.
b. The listing broker may choose which offers to present to her client.
c. The listing broker with two offers may hold back on presenting the
second offer until her client has responded to the first offer.
d. The listing broker must present all offers to her client promptly when
received.
- 47 -
192.
Which of the following is true as it relates to an easement
appurtenant?
a. This easement may be acquired by prescription only.
b. The easement right cannot be terminated.
c. The dominant tenement owner pays taxes only on the dominant
estate.
d. The easement right reverts to the owner of the servient estate on the
death of the owner of the dominant estate.
193.
A man died and left a will which transferred one-half of his 36-unit
apartment building to his wife, one-fourth to his son, and one-fourth to his
daughter. The devisees will be holding title as:
a. Tenants in common.
b. Tenants by the entirety.
c. Joint tenants.
d. Tenants at will.
194.
A licensee has entered into a written buyer-broker agreement with a
client whereby the licensee will be compensated if the client buys a
property of the type described in the agreement within the agreement
period, regardless of whether or not the licensee located the property for
the buyer. This type of agreement is known as
a. Dual agency.
b. Open buyer agency.
c. Exclusive buyer agency.
d. Exclusive-agency buyer agency.
195.
a.
b.
c.
d.
A mortgage is all of the following EXCEPT:
An encumbrance.
A lien on real property.
A recordable legal document.
An example of involuntary alienation.
196.
Three investors decided to pool their savings and buy an office
building for $200,000. If one invested $70,000 and the second contributed
$40,000, what percentage of ownership was left for the third investor?
a. 20 percent.
b. 35 percent.
c. 45 percent.
d. None of the above.
- 48 -
197.
A broker is selling a home for $85,900. The owner tells the broker
that the roof needs repair, the basement leaks, the house is a
nonconforming use, and that she will accept an offer well below $85,900.
The broker now is negotiating with a prospect for the sale of the home.
The broker should NOT tell the prospect that the:
a. Roof needs repair.
b. Basement leaks.
c. House is a nonconforming use.
d. Seller will accept an offer well below $85,900.
198.
You listed a home for sale under an exclusive right-to-sell agreement
and showed the property to a man who wrote an offer that was rejected by
the owner. The owner subsequently sold the house to a woman who then
sold it immediately to the man for whom you had written the first offer. The
MOST LIKELY description of your right to compensation from these
transactions is that you are entitled to compensation for:
a. The first transaction only.
b. Both transactions, if you had a broker protection clause in the listing
agreement.
c. Both transactions regardless of whether or not you had a broker
protection clause in the listing agreement.
d. The first transaction and perhaps to damages from the second if the
first one was conducted under fraudulent circumstances to reduce
your original commission.
199.
An investor finds that the cost of installing an air-conditioning
system in an office building is greater than is justified by the rental
increase that might result from the improvement of the property. However,
the investor installs the air-conditioning to avoid having tenants move to
comparable office space nearby that is air-conditioned. The investor’s
decision is most reflective of the principle of:
a. Anticipation.
b. Compensation.
c. Contribution.
d. Highest and best use.
- 49 -
200.
Person A loaned money to her sister and in return took a mortgage
as security for the debt. She immediately recorded the mortgage.
Thereafter, Person B loaned money to the same sister, took a mortgage
and recorded it. The sister later defaulted, and a court determined that B’s
interest had priority over A’s interest. Under these circumstances, chances
are that:
a. A knew B was going to make a loan before A made her own loan.
b. B’s loan was larger than A’s loan.
c. A had signed a subordination agreement in favor of B.
d. B had signed a satisfaction.
201.
A sale closed on July 29th. Real estate taxes of $2,380 for the current
year have not been paid. What is the settlement sheet entry for the
proration of real estate taxes?
a. Credit seller $1,381.70; debit buyer $1,381.70.
b. Debit seller $998.30; credit buyer $1,381.70.
c. Debit seller $1,381.70; credit buyer $1,381.70.
d. Debit buyer $0.00; credit seller $2,380.00.
202.
You receive a monthly salary of $600 plus 3 percent commission on
all your listings that sell and 3.5 percent on all your sales. None of the
listings that you took sold last month, but you receive $4,100 in salary and
commission. What was the value of the property you sold?
a. $100,000.
b. $116,666.
c. $117,142.
d. None of the above.
203.
A broker has been asked to serve as an agent of a friend who wishes
to sell his home. Prior to listing the friend’s home, the broker is asked by
another friend to serve as her agent in finding a home. Relatives of the two
friends also have asked the broker to serve as their agent in helping them
find homes. Which of the following statements is correct?
a. The broker is not allowed to work with the relatives because he
would have a conflict of interest.
b. The broker may not serve as agent to the various parties unless he
gets permission from all the parties.
c. The broker may serve only as the agent of the seller.
d. The broker may serve as the agent for any of the buyers and sellers.
- 50 -
204.
a.
b.
c.
d.
Which of the following types of depreciation is incurable?
A leaky roof.
A worn-out water heater.
A zoning variance of the neighbor’s property for commercial use.
Warped doors.
205.
A salesperson would like to be classified as an independent
contractor by his broker. What percentage of his income must be based on
sales production for him to qualify for independent-contractor status?
a. 60 percent.
b. 70 percent.
c. 80 percent.
d. 90 percent.
206.
A couple is interested in buying a property located in an
economically distressed section of town. Although the couple has an
excellent credit history, they have been refused a loan by three different
lenders. The MOST LIKELY statement regarding these lenders is that they
are:
a. Engaged in illegal redlining.
b. Violating antitrust laws by all making the same decision.
c. Violating the requirements of the Equal Credit Opportunity Act
(ECOA).
d. Not engaging in illegal activities as the rejections are based on
independently made economic-based property reviews.
207.
You have listed a property. The seller told you that he must net at
least $14,000 after all fees and expenses are paid. You estimate the seller’s
closing cost to be $3,500 and he must pay off an existing loan of $108,750.
In addition, you are going to charge 7 percent commission on the sale.
What is the least amount that the property can sell for to return the seller’s
desired net?
a. $126,250.
b. $134,310.
c. $135,088.
d. None of the above.
- 51 -
208.
Which approach to value is an appraiser most likely to emphasize in
the appraisal of a single-family home?
a. Cost approach.
b. Gross income multiplier approach.
c. Income capitalization approach.
d. Sales comparison approach.
209.
Which of the following installment sales amounts is NOT covered by
the imputed interest law?
a. $2,000.
b. $4,000.
c. $9,000.
d. $10,000.
210.
a.
b.
c.
d.
The tax on the profit realized from an exchange of property is:
Ordinary income in the year of the exchange.
Deferred.
Eliminated.
None of the above.
211.
You own an apartment building that provides you a gross income of
$40,000 a year. Your annual expenses are $10,000 a year. The value of
your real estate if you need a 12 percent return on your investment is:
a. $83,333.
b. $250,000.
c. $333,333.
d. $444,444.
212.
Which of the following statements does NOT correctly describe joint
tenancy?
a. It is a form of co-ownership.
b. Owners have the right of survivorship.
c. Owners must be husband and wife.
d. Owners may partition the property.
- 52 -
213.
Which of the following statements does NOT correctly describe
radon gas?
a. As radon is released from the rocks, it finds its way to the surface
and usually is released into the atmosphere.
b. Radon enters a house through the roof vents.
c. Radon can become concentrated in the crawl space.
d. Long-term exposure to radon gas is said to cause lung cancer.
214.
a.
b.
c.
d.
215.
a.
b.
c.
d.
Strict liability under Superfund means that:
Each individual owner is personally responsible for the damages in
the whole.
The owner is responsible to the injured party without excuse.
The liability is not limited to the person who currently owns the
property but also includes people have owned the site in the past.
Anyone who has been involved in the transaction will be liable for
damages.
Which of the following may NOT be governed by deed restrictions?
Height of a building.
Ethnicity of tenants.
Use of a residence as a business.
Types of pets that can be housed within the subdivision.
216.
The business ownership structure of an S corporation provides
which of the following benefits over the standard corporation structure?
a. Profits are not taxed.
b. The requirements for incorporation are simpler.
c. The liability of individual owners for losses is removed.
d. The investor’s membership list does not have to be disclosed to the
Internal Revenue Service (IRS).
217.
The rent on a house is $400 a month or $4,800 a year, and the house
recently sold for $52,000. The gross rent multiplier on the house was:
a. 10.8.
b. 108.
c. 130.
d. 130.8.
- 53 -
218.
The rate of return an investor will require to invest in real estate is
called a(n):
a. Gross rent multiplier.
b. Gross income multiplier.
c. Capitalization rate.
d. Assemblage.
219.
National advertising and economies of volume purchasing are
advantages for:
a. Franchises.
b. Quasi-franchises.
c. Broker cooperatives.
d. Broker associations.
220.
A broker requires that all budgeted costs for the planning period be
justified each time a new budget is developed. This requirement reflects:
a. The cash method of keeping financial records.
b. The concept of cash flow.
c. The concept of desk cost.
d. The concept of zero-base budgeting.
221.
Which of the following statements does NOT currently describe the
independent contractor relationship?
a. The salesperson contracts with a broker to produce specific
outcomes such as a commission.
b. The broker may not tell salespeople how to sell real estate.
c. The broker must provide a pension plan.
d. The salesperson must pay his or her board dues.
222.
a.
b.
c.
d.
A salesperson works for a broker. The salesperson may:
Work for the broker as an independent contractor.
Place an advertisement without identifying the broker.
Receive a commission directly from a seller.
Receive a commission directly from another broker.
- 54 -
223.
A broker has listed a home. The broker generally will earn her
commission when:
a. She submits an offer to purchase to the seller.
b. The seller indicates that he thinks an offer to purchase is acceptable.
c. She finds a buyer ready, willing, and able to buy on the terms of the
listing.
d. The closing takes place.
224.
An Hispanic buyer has asked a broker to show her homes in a white
neighborhood. The broker’s response to the buyer should be:
a. “I think you would be happier in a neighborhood with people of
similar background.”
b. “I don’t think you would be comfortable with the people in that
neighborhood because they do not welcome outsiders.”
c. “I’ll be happy to show you homes in that neighborhood but I think
you could do better than that.”
d. “I’ll be happy to show you homes in that neighborhood or any other
neighborhood.”
225.
During a listing presentation, the seller tells the broker that she will
not sell to Hispanics. Should the broker follow the seller’s instructions?
a. Yes. The owner has a right to choose prospective buyers.
b. Yes. The broker is the seller’s agent and must honor his fiduciary
responsibility.
c. No. The broker might lose any commission by limiting potential
buyers.
d. No. The broker should not accept the listing.
226.
You are preparing a Competitive Market Analysis (CMA) on a twostory, three-bedroom house with one bathroom on the first floor and all of
the bedrooms on the second floor. The appraisal term that BEST identifies
how this affects the list price is:
a. Physical deterioration.
b. Deferred maintenance.
c. Functional obsolescence.
d. Economic obsolescence.
- 55 -
227.
a.
b.
c.
d.
Which of the following is NOT an example of real property?
A neighbor’s strawberry bush, which she calls “Fructus naturales”.
Percolating water.
Unexcavated clay.
The clay bricks that you will use to build your patio wall.
228.
A listing broker acting as a single agent in the course of selling the
property would be in violation of the broker’s fiduciary duties to the seller
by:
a. Telling a prospective buyer the lowest price the seller will accept
below the list price.
b. Paying for a property appraisal during the course of helping the
owner set the list price.
c. Accepting a commission that is lower than usual for marketing
similar properties in the area.
d. Allowing prospective buyers to prepare and submit offers through
buyer-brokers instead of subagents of the seller.
229.
A CORRECT statement about a Competitive Market Analysis (CMA)
is that it:
a. Must be performed by a licensed appraiser.
b. Must be reviewed by an employing broker in order to be valid.
c. Is based on the sales comparison (market data) approach to value.
d. Will develop a final assessment of value by averaging three bank
appraisals.
230.
Which of the following forms of ownership is characterized by
double taxation?
a. Corporation.
b. Sole proprietorship.
c. S corporation.
d. General proprietorship.
- 56 -
231.
A man wants to know how much money he owes on his mortgage
loan. He knows that the interest part of the last monthly payment was
$608.52. If he was paying interest at the rate of 10 percent, what was the
outstanding balance of his loan before the last payment was made?
a. $60,852.20.
b. $66,937.20.
c. $73,022.40.
d. $77,942.26.
232.
Your aunt bought her house one year ago for $62,400. Property in
her neighborhood is said to be increasing at a rate of 7 percent annually. If
this is true, what is the current market value of your aunt’s real estate?
a. $65,520.
b. $66,144.
c. $66,768.
d. $66,971.
233.
Your home is valued at $104,000. Property in your city is assessed
at 70 percent of its value, and the local tax rate is $3.35 per $100. What is
the amount of your monthly taxes?
a. $192.86.
b. $203.23.
c. $290.33.
d. $331.64.
234.
In the cost approach, an appraiser makes use of which of the
following?
a. Sales prices of similar properties.
b. The owner’s original cost of construction.
c. An estimate of the building’s replacement cost.
d. Multiplying the net income by the capitalization rate.
235.
a.
b.
c.
d.
An appraisal of a church probably would be based on the:
Market/data approach.
Cost approach.
Income approach.
Capitalization approach.
- 57 -
236.
a.
b.
c.
d.
With an FHA loan, the buyer will NOT be required to:
Pay a 20 percent down payment.
Find an approved lender willing to make the loan.
Buy a house that meets minimum FHA credit standards.
Buy mortgage insurance to protect the lender.
a.
b.
c.
d.
Which of the following statements regarding points is true?
Points must be charged to the seller.
One point equals 1 percent of the loan.
Points must be charged to the buyer.
One point equals ¼ percent of the loan.
237.
238.
X, who works for broker Y on a 50-50 basis, sold a house listed by
broker Z for $167,750. The seller agreed to pay a 7 percent commission,
but stipulated in the listing that 65 percent was to go to the selling broker.
How much commission will X make on the sale (to the nearest dollar)?
a. $2,054.
b. $3,816.
c. $4,110.
d. $7,633.
239.
a.
b.
c.
d.
The net spendable income from an investment is known as the:
Budget.
Cash flow.
Company dollar.
Gross income.
240.
A broker has calculated the amount of income remaining after
deducting all of the firm’s commissions from the firm’s gross income. The
broker has calculated the:
a. Budget.
b. Cash flow.
c. Company dollar.
d. Desk cost.
- 58 -
241.
A broker has an annual overhead of $200,000; there are ten desks,
each accommodating two salespeople. The broker’s desk cost is:
a. $5,000.
b. $10,000.
c. $15,000.
d. $20,000.
242.
The discriminatory practice of guiding ethnic minorities toward
available housing in neighborhoods made up of residents of the same
ethnic group is referred to as:
a. Puffing.
b. Steering.
c. Redlining.
d. Blockbusting.
243.
Which of the following statements does NOT apply to both purchase
money mortgages and land contracts?
a. The seller is financing the transaction.
b. The buyer takes possession when the contract is executed.
c. The buyer gives the seller a down payment.
d. The buyer has equitable title during the life of the contract.
244.
a.
b.
c.
d.
245.
law?
a.
b.
c.
d.
Which of the following is covered by Regulation Z?
A personal property credit transaction for $20,000.
A loan with three installments.
A real estate purchase agreement.
An agricultural loan for $29,000.
Which of the following is exempted from the federal fair housing
The rental of rooms in an owner-occupied, four-family dwelling.
The rental of rooms in an owner-occupied, five-family dwelling.
The rental of a single-family home when a broker is used.
The lodgings of a private club when the lodgings are operated
commercially.
- 59 -
246.
You purchased a residence and neither took possession nor
recorded the deed. Which of the following statements BEST describes the
status of your property ownership?
a. You have given actual notice of ownership.
b. You do not have a valid deed from the previous owner.
c. You have not provided constructive notice of ownership.
d. You will have to go to court to assert your ownership rights prior to
reselling the property.
247.
The relationship of the broker to the listing owner who hired him or
her is that of a(n):
a. Attorney-in-fact.
b. Strawman.
c. Trustee.
d. Fiduciary.
248.
Which of the following would NOT be deposited in your trust
account?
a. The commission you earn on the transaction.
b. Earnest money received on a transaction.
c. The down payment for a land contract company.
d. An amount sufficient to cover the bank service charges on the
account.
249.
Which of the following statements does NOT correctly describe a
limited liability company?
a. It offers the single-level taxation of a partnership.
b. It may not be directly managed by members.
c. It offers the limited liability of a corporation.
d. It must have at least one member.
250.
In order to represent legally all parties in the same real estate
transaction, a licensee MUST:
a. Hold a securities license.
b. Agree to receive a commission from only one of the principals.
c. Ensure that all documents that the licensee signs are notarized.
d. Obtain the informed consent to dual agency from all principals.
- 60 -
251.
You are working as an agent for a prospective buyer. The buyer
buys a house listed on the multiple-listing service (MLS) of which you are a
member. Which of the following statements does NOT correctly describe
the situation?
a. You acted as a disclosed dual agent.
b. You will be entitled to a commission from the buyer.
c. You could be paid by the seller if the parties agree.
d. The listing broker is an agent of the seller.
252.
Tenancy in common is distinguished by which of the following
characteristics?
a. The co-owners have right of survivorship.
b. Ownership interests must be equal.
c. A co-owner cannot will his or her interest in a property.
d. Each co-owner’s interest may be conveyed separately.
253.
A plumbing company installed a new furnace and filed a lien for
nonpayment immediately on completion. This was most likely a:
a. Voluntary lien.
b. General lien.
c. Novation.
d. Specific lien.
254.
Which of the following is NOT an example of functional
obsolescence?
a. A five-bedroom house with one bathroom.
b. Outdated plumbing fixtures.
c. A roof that leaks.
d. A poor floor plan.
255.
A broker listed and sold a seller’s home. The broker most likely
earned her commission when:
a. The transaction was closed.
b. She found a buyer “ready, willing and able” to buy on the terms of
the listing.
c. The buyer’s financing contingency was removed from the offer to
purchase.
d. The buyer’s check cleared the bank after closing.
- 61 -
256.
A salesperson has taken a four-month exclusive right-to-sell listing
on a house. Prior to the expiration of the listing, the salesperson leaves
the state and inactivates her license. Which of the following correctly
describes the status of the listing?
a. The listing automatically terminates when the salesperson leaves the
state and inactivates her license.
b. The seller may terminate the listing once the salesperson has left the
state.
c. The broker will have to negotiate with the seller to retain the listing.
d. The listing will continue as a valid contract between the seller and
the broker.
257.
a.
b.
c.
d.
A parcel of property that measure 1/8 mile by 1/8 mile is equal to:
10 acres.
40 acres.
160 acres.
320 acres.
258.
loan?
a.
b.
c.
d.
Which of the following is NOT an advantage of the FHA-insured
259.
Which of the following is NOT a legal requirement of an option?
A purchase price and how it will be determined.
Consideration.
The date on which the option will expire.
The exercise of the option by the optionee.
a.
b.
c.
d.
Low down payment.
Buyer protection with FHA insurance.
Enables cash-short buyer to enter the real estate market.
Protects a lender with FHA insurance.
260.
A 300-acre farm is divided into house lots. The streets require oneeighth of the whole farm and there are 280 lots. How many square feet are
in each lot?
a. 38,115.
b. 40,838.
c. 46,671.
d. None of the above.
- 62 -
261.
The process of reviewing the various approaches to value in order to
arrive at a final estimate of market value is called:
a. Assemblage.
b. Capitalization.
c. Balance.
d. Reconciliation.
262.
A broker and a seller have just signed a listing contract for the sale
of the seller’s house. Which of the following statements does NOT
correctly describe their situation?
a. A fiduciary relationship now exists between the broker and seller.
b. The broker has become a general agent for the seller.
c. The broker is an agent and the seller is the principal.
d. The broker has become a special agent for the seller.
263.
The Americans with Disabilities Act (ADA) requires that an employer
with a MINIMUM of how many employees must comply with the ADA
requirements?
a. 3.
b. 5.
c. 10.
d. 15.
264.
You have just listed a property and the owner has informed you that
the roof leaks and the fourth bedroom was added without a building permit
being issued. Which of the following best describes the type of disclosure
you should make to potential buyers?
a. You should disclose that the roof leaks.
b. You do not have to disclose that the bedroom was added without a
permit because the project has already been completed.
c. You do not have to disclose either unless you are instructed to do so
by the seller.
d. You must disclose both the roof leak and the lack of a building
permit.
- 63 -
265.
Person A agreed to lease person D’s house on a month-to-month
basis. This lease is an example of a(n):
a. Tenancy at will.
b. Estate for years.
c. Tenancy at sufferance.
d. Periodic estate.
266.
According to the federal fair housing laws, parties who feel that they
have been aggrieved by a discriminatory housing practice have a
MAXIMUM of how long after the event to file a complaint?
a. Thirty days.
b. Sixty days.
c. Six months.
d. One year.
267.
You lease the 36 apartments in your building for a total monthly
rental of $8,000. If this figure represents an 8 percent annual return on
your investment, what was the original cost of the property?
a. $100,000.
b. $236,000.
c. $1,200,000.
d. $2,360,000.
268.
A man bought a house for $160,000 five years ago. His mortgage
was for $128,000. Today his house is valued at $200,000 and his mortgage
balance is $123,000. What is his equity in the property?
a. $32,000.
b. $37,000.
c. $72,000.
d. $77,000.
269.
The county zoo holds title to the land that includes a condition that
the zoo will hold title so long as it does not charge an admission fee. This
is an example of a:
a. Fee simple estate.
b. Defeasible fee estate.
c. Conventional life estate.
d. Tenancy at will.
- 64 -
270.
a.
b.
c.
d.
The owner of life estate in property:
Does not pay real estate taxes.
Is entitled to possession of the property.
May not receive income from the property.
Is not responsible for all repairs to the property.
271.
Three women own a motel as tenants in common. One of the women
decides to sell all her assets. She may legally:
a. Sell because a tenant in common may sell her portion of assets if the
majority of the co-owners also agree to sell.
b. Not sell because the tenant in common’s interests always remains
encumbered.
c. Sell because a tenant in common has an undivided interest in real
property that is transferable.
d. Not sell because there is a right of survivorship.
272.
a.
b.
c.
d.
Specific lien would NOT be including which of the following?
Mortgage liens.
Judgments.
Real estate taxes.
Mechanic’s liens.
273.
A farmer purchased land with no access to a street or public way.
After an unsuccessful attempt to gain access through negotiation, he was
able to gain access through an:
a. Easement appurtenant.
b. Easement in gross.
c. Easement by necessity.
d. Easement by prescription.
274.
A woman built a fence that extended beyond the boundary of the
property onto her neighbor’s property. This is an example of
a. Laches.
b. Easement by necessity.
c. Encroachment.
d. Easement appurtenant.
- 65 -
275.
a.
b.
c.
d.
A section contains:
43,560 square feet.
640 acres.
160 square roads.
320 square roads.
276.
Which of the following forms of ownership may a wife and husband
only hold?
a. Tenancy in common.
b. Tenancy by entirety.
c. Tenancy at will.
d. Joint tenancy.
277.
The county Zoo holds title to its land with the condition that, if it
charges admission fees, the title will revert to the original grantor of state.
This is an example of a:
a. Fee simple estate.
b. Defeasible fee estate.
c. Legal life estate.
d. Conventional life estate.
278.
When the county board acquires land for a freeway, it is exercising
the power of:
a. Zoning.
b. Environmental protection laws.
c. Escheat.
d. Eminent domain.
279.
a.
b.
c.
d.
One example of the use of police power by a city is:
Taxation.
Eminent domain.
Laches.
Environmental protection law.
- 66 -
280.
A builder developed a subdivision in which the demand for homes
was great. He sold the last lot in his subdivision for a much higher price
than that for which he had sold the first lot in the area. This example
illustrates the principle of:
a. Highest and best use.
b. Substitution.
c. Conformity.
d. Supply and demand.
281.
In appraising a special purpose building such as a post office, the
most reliable approach to an indication of its value would generally be the:
a. Cost approach.
b. Market data approach.
c. Income approach.
d. Sales comparison approach.
282.
a.
b.
c.
d.
Depreciation generally applies to:
The building only.
The land only.
Both the land and the building.
The net income of the building.
a.
b.
c.
d.
The GRM is used in the:
Market data approach.
Income approach for office buildings.
Cost approach.
Income approach for single-family homes.
283.
284.
An airport routing was charged with the result that airplanes flew
over a residential area. The subsequent loss in the value caused by the
airplane noise would be best described as:
a. Physical depreciation.
b. Functional obsolescence.
c. Economic obsolescence.
d. Eminent domain.
- 67 -
285.
a.
b.
c.
d.
286.
a.
b.
c.
d.
All of the following are participant in the second mortgage EXCEPT:
FHLMC.
FNMA.
FDIC.
GNMA.
Which of the following is NOT characteristic of a conventional loan?
It is neither insured nor guaranteed by public agency.
Security rests on the borrower’s ability to pay and the collateral
pledged.
It is never insured by the private agency.
The ratio of the loan to the value of the property usually does not
exceed 80 percent without private mortgage insurance.
287.
Which of the following is NOT characteristic of a Federal Housing
Administration (FHA) loan:
a. A mortgage insurance premium is charged.
b. The lender is insured against loss.
c. The maximum mortgage is determined by formula.
d. The FHA provides the money for the loan.
288.
c.
d.
Which of the following is not characteristic of a VA loan?
The loan is guaranteed.
Only an eligible veteran or eligible dependents of veterans as well as
reservists and National Guard members who have served for six
years may qualify for the loan.
The loan is insured.
Little or no down payment is required.
a.
b.
c.
d.
The mortgage that covers more than one parcel of real estate is:
A junior mortgage.
A blanket mortgage.
A package mortgage.
An open-end mortgage.
a.
b.
289.
- 68 -
290.
A veteran buys a home with a VA guaranteed loan. Two years later
the veteran sells the home to a buyer who, with the lender’s approval,
assumes the veteran’s loan. In this situation the veteran is:
a. Responsible for paying an insurance fee charged by the VA.
b. Responsible for paying the loan origination fee.
c. No longer financially responsible if the buyer defaults six months
later.
d. Financially responsible if the buyer defaults six months later.
291.
Reserve requirements for banks are controlled by which of the
following agencies?
a. FNMA.
b. GNMA.
c. Federal Deposit Insurance Corporation (FDIC).
d. The “Fed”.
292.
Person A agrees to buy Person B’s real estate for $128,000.00.
Person A signs a sales contract and deposits $12,300 earnest money with
Person B’s broker, Person C. Person B is unable to show good title, and
Person A demands the return of his earnest money from Person C, as
provided in the contract. What should Person C do?
a. Deduct commissions and return the balance to Person A.
b. Deduct commissions and pay the balance to Person B.
c. Return the entire amount to Person A.
d. Pay the entire amount to Person B to dispose of as Person B sees fit.
293.
A broker employs several salespeople at her office. Early one day,
one of the salespeople submits a written offer with an earnest money
deposit on a house listed with the broker. Later that same day, another
salesperson submits a higher written offer on the same property, also
including an earnest money deposit. The broker in accordance with the
policy of her office does not submit a second offer unless the first has
been presented and rejected by the seller. In this case, the seller accepts
the first offer so the seller is not informed of the second offer. In this
situation, the broker’s actions are:
a. Permissible provided that the commission is split between the two
salespeople.
b. Permissible if such an arrangement is written in the sales
employment contract.
c. Not permissible because the broker must submit all offers to the
seller.
d. Not permissible because the broker must notify the second buyer of
the existence of the first offer.
- 69 -
294.
You are a broker who listed a home for a neighbor. Which of the
following terms describes your relationship with the seller?
a. You are a subagent of the seller.
b. The seller is your client.
c. The seller is your customer.
d. The seller is your agent.
295.
A broker received several offers for a property that he has listed.
The broker must present each offer to the seller:
a. Promptly on receipt.
b. Individually.
c. As soon as the seller decided on any previous offer.
d. Prior to the seller’s deciding on any previous offer.
296.
A broker earned a commission on the sale of her listing by another
broker. The listing broker may pay part of her commission to:
a. The selling broker.
b. The selling salesperson.
c. The out-of-state salesperson who referred the seller to her.
d. The buyer’s attorney.
297.
A broker has just received an earnest money payment on an offer to
purchase. The broker must place the earnest money in:
a. A trust account.
b. A business account.
c. A personal checking account.
d. A savings account.
298.
A broker’s license can be revoked if he or she:
a. Advertizes the property without including the salesperson’s name in
the advertisement.
b. Negotiates the commission based on what the brokers say in the rate
set by the broker board of REALTORS.
c. Pays a commission that exceeds the customary rate.
d. Advertizes free market analysis as a means of obtaining the listing.
- 70 -
299.
What is the listing broker’s responsibility to a prospective
purchaser?
a. The broker must not use fraud or deceit.
b. The broker must help the buyer to get the lowest price possible.
c. The broker is the only middleman; neither the buyer nor seller can
charge him with avoiding a legal duty.
d. There is none at all.
300.
A broker and a seller have signed an open listing contract. This
agreement is an example of:
a. A unilateral contract..
b. An executed contract.
c. A bilateral contract.
d. An unenforceable contract.
301.
Which of the following correctly describes an open listing?
a. The seller can employ any number of brokers.
b. Only the broker is authorized to act as the agent for the seller.
c. A broker is entitled to commissions regardless of who sells the
property.
d. The broker’s commission is based on excess over the sales price
stated in the listing.
302.
The salesperson obtains a written offer to purchase a home that she
has listed for sale. The seller accepts the offer and the salesperson
promptly telephones the purchaser to notify him of the acceptance.
Because the purchaser lives in a nearby town, the salesperson informs him
that she will deliver the contract in three days. The salesperson has an
enforceable contract when:
a. The seller signs the acceptance.
b. The offer to purchase is presented to the seller.
c. The acceptance is telephoned to the salesperson representing the
purchaser.
d. A copy of the contract is delivered to the purchaser in three days.
- 71 -
303.
Both the buyer and the seller agree to wait until the broker’s
exclusive right-to-sell listing has expired. They then have a third party buy
the home. After a short while, the third party conveys ownership to the
interested buyer who was introduced to the owner by the listing broker. In
this case:
a. The broker is not entitled to a commission because the listing has
expired.
b. If the listing broker can prove collusion, he can collect the full
commission.
c. The broker may sue the buyer and the seller for the commission.
d. The broker is entitled to his commission because he performed the
task for which he was hired.
304.
Procuring cause would not be required for a broker to receive a
commission in:
a. An open listing.
b. An exclusive right-to-sell listing.
c. A net listing.
d. An exclusive agency listing.
305.
An owner gives an exclusive right-to-sell listing to a broker for a sixmonth period. During the exclusive period, the owner also gives an open
listing to another broker who produces a buyer. What is the owner’s
liability for payment of the commission?
a. Only one commission must be paid, which both brokers share 50/50.
b. The owner is liable to the first broker for the payment of the
commission.
c. The owner is liable for payment of the commission to both brokers.
d. The owner is liable only to the second broker for the payment of the
commission.
306.
A buyer has contracted with a seller to purchase property. The
contract was ratified on January 10th. The closing was on March 31st. What
is the status of the contract on April 1st?
a. Void.
b. Anticipatory.
c. Executed.
d. Executory.
- 72 -
307.
a.
b.
c.
d.
308.
A listing contract:
Is a conveyance.
Is a contract of employment.
Is a unilateral contract.
Is terminated upon the death of the listing salesperson.
d.
A salesperson:
May receive a commission directly from the principal.
Can carry out activities in his own name.
Is responsible primarily to the broker who holds the salesperson’s
license.
May place a blind advertisement.
a.
b.
c.
d.
The deed that provides the buyer the greatest protection is the:
Bargain and sale deed.
General warranty deed.
Quitclaim deed.
Specialty warranty deed.
a.
b.
c.
309.
310.
What do the following situations have in common?
1. A man’s property is taken by the city and used for a new highway.
2. A woman’s land gradually is wearing away because of wind.
3. A developer’s property is sold at a foreclosure sale.
a. They will require the use of a warranty deed to transfer title.
b. They are examples of voluntary alienation of title.
c. They are examples of eminent domain.
d. They are examples of involuntary alienation.
311.
Person A and Person B have entered into a binding offer to
purchase. Person B will buy Person A’s house. Which of the following
correctly describes the status of the transaction?
a. Person A will have equitable title until closing.
b. Person B will have legal title when the offer to purchase becomes
binding on both parties.
c. Person A will have legal title until the offer becomes binding, at
which time Person A will hold equitable title.
d. Person A will hold legal title until closing and Person B will hold
equitable title until closing.
- 73 -
312.
The need for loan closing to be prepared on a Uniform Settlement
Statement is a requirement of:
a. Regulation Z.
b. The federal fair housing laws.
c. The Government National Mortgage Association (Ginnie Mae)
d. RESPA.
313.
The requirement that a lender give each loan applicant a copy of
Settlement Costs and You is created under the:
a. Federal Home Loan Mortgage Corporation (Freddie Mac) (FLMNC).
b. Federal Housing Administration.
c. RESPA.
d. Regulation Z.
314.
Section 1031 of the Internal Revenue Code allows real estate
investors to do which of the following when making a property exchange?
a. Avoid the capital gains tax only if the exchange is of like kind.
b. Phase out the capital gains tax.
c. Defer the capital gains tax.
d. Avoid the capital gains tax even if the exchange is of like kind.
315.
The federal fair housing laws prohibit which of the following types of
private housing?
a. A Lutheran organization giving preference to its members in renting.
b. A Norwegian advertizing his house for “Norwegians Only”.
c. The Elks Club operating a rooming house on a nonprofit basis.
d. A Masonic Lodge operating a rooming house on a nonprofit basis.
316.
Which of the following categories is NOT protected against
discrimination under federal fair housing laws?
a. Religion.
b. Parental status.
c. Disabled status.
d. Lawful source of income.
- 74 -
317.
The denial of a loan by a lender would not be a violation of federal
fair housing laws if it were based on:
a. Lack of income.
b. Sex.
c. Age.
d. Marital status.
318.
Which of the following laws provides comprehensive guidance for
making public facilities accessible?
a. RESPA.
b. Regulation Z.
c. Federal fair housing laws.
d. Americans with Disabilities Act (ADA).
319.
Which of the following activities would be legal under the familial
status category of federal fair housing laws?
a. Charging higher rents for people with pets.
b. Charging higher security deposits for families with children.
c. Segregating families within buildings.
d. Segregating families within certain buildings.
320.
The Civil Rights Act of 1866 prohibits racial discrimination in
housing on the basis of:
a. Religion.
b. Race.
c. Sex.
d. Handicap.
321.
a.
b.
c.
d.
The deed that provides the buyer the greatest protection is the
Bargain and sale deed.
General warranty deed.
Quitclaim deed.
Special warranty deed.
a.
b.
c.
d.
A deed generally will transfer title to the grantee when it is:
Acknowledged.
Signed by the grantee.
Signed by the grantor.
Delivered and accepted.
322.
- 75 -
323.
a.
b.
c.
d.
Which of the following would be an example of voluntary alienation?
Sale.
Eminent domain.
Escheat.
Adverse possession.
324.
A grantee has received an executed, notarized deed. The grantee
takes possession of the property but does not record the deed. The
conveyance is:
a. Invalid between the parties and valid as to third parties with
constructive notice.
b. Valid as between parties and valid as to the subsequent recorded
interests.
c. Valid as between the parties and invalid as to subsequent recorded
interests without notice.
d. Invalid as between the parties.
325.
a.
b.
c.
d.
Generally, title insurance coverage extends to:
Defects known to the buyer.
Liens listed in the policy.
Defects listed in the policy.
Defects not found in public record.
326.
Section 1031 of the Internal Revenue Code allows real estate
investors to do which of the following when making a property exchange:
a. Avoid the capital gains tax only if the exchange is of like kind.
b. Phase out the capital gains tax.
c. Defer the capital gains tax.
d. Avoid the capital gains tax even if the exchange is not of like kind.
327.
Which of the following would not be a protected class with the
Federal Equal Credit Opportunity Act?
a. Marital status.
b. Age.
c. Sexual orientation.
d. Dependency on public assistance.
- 76 -
328.
a.
b.
c.
d.
Disclosure of cost in a credit transaction is required by:
RESPA.
Regulation Z.
The Federal Equal Credit Opportunity Act.
The Federal Fair Housing Law.
329.
A second violation of the Americans with Disabilities Act can result
in a civil penalty of up to:
a. $10,000.
b. $25,000.
c. $50,000.
d. $100,000.
330.
a.
b.
c.
d.
A man signed a lease for 6 months. This is an example of:
An estate for years.
A periodic estate.
A tenancy at will.
A tenancy at sufferance.
331.
Which of the following statements does not correctly describe the
Interstate Land Sales Full Disclosure Act?
a. It regulates unimproved land sold through interstate sales.
b. It is aimed at avoiding fraudulent marketing claims.
c. It covers subdivisions with fewer than 25 lots
d. It requires developers to file reports with HUD prior to offering
unimproved lots to interstate consumers by telephone.
332.
a.
b.
c.
d.
Using borrowed money to finance investment is known as:
Appreciation.
Cash flowing.
Leverage.
Pyramiding.
a.
b.
c.
d.
Which of the following may not be depreciated?
A motel.
Land.
An office building.
An apartment building.
333.
- 77 -
334.
Inventory and equipment sold as part of a business would be
transferred to the buyer by a:
a. Bargain and sale deed.
b. Bill of sale.
c. Quitclaim deed.
d. Warranty deed.
335.
The law that governs documents and forms when personal property
is used as security for a loan is the:
a. Interstate Land Sale Full Disclosure Act.
b. Horizontal Property Act.
c. Real Estate Settlement Procedures Act.
d. Uniform Commercial Code.
336.
The highest form of ownership interest a person may hold in real
estate is:
a. Life estate.
b. Fee simple.
c. Legal life estate.
d. Base fee.
337.
Two unrelated people owned a three-unit apartment building as
tenants in common. One wants to sell but the other does not. Which of the
following statements describes the legal rights of the party who wants to
sell?
a. The party may request a court to partition the building.
b. The party may require the co-owner to sell.
c. The party may record a lis pendens on the property.
d. The party may refinance the mortgage in his own name, thus
eliminating the co-owners interest in the property.
338.
Your aunt died intestate and you inherited her house. The way in
which you acquired the title to her house was by:
a. Curtsy.
b. Descent.
c. Escheat.
d. Laches.
- 78 -
339.
a.
b.
c.
d.
Which of the following terms are NOT leasehold estates?
An estate for years.
Periodic estate.
Time-share estate.
Estate from year to year.
340.
A state wants to build a publicly owned convention center to attract
private development in its largest city. Can the state use eminent domain
to acquire the land?
a. No, because private investments would not be allowed.
b. Yes, if just compensation is paid to the owners of the land.
c. No, because eminent domain can only be used for highway
expansion.
d. Yes, if the owner holds fee simple interest in the land.
341.
a.
b.
c.
d.
Riparian rights would exist in a:
Condominium on a bay.
House on a bay.
Hotel abutting a large lake.
Cooperative on a river.
342.
A developer was able to buy two adjoining single-family lots for
$20,000 each. He combined the lots into one parcel with a value of $90,000.
This is known as:
a. Accession.
b. Attachment.
c. Exchange.
d. Plotage.
343.
A meat packing plant has just been built one block from your house.
The strong odors are lowering property values in your neighborhood. The
loss in value would be classified as:
a. Functional obsolescence.
b. Physical deterioration.
c. The principle of change.
d. External obsolescence.
- 79 -
344.
a.
b.
c.
d.
In the appraisal of a public building, an appraiser would use the:
Cost approach.
Income capitalization approach.
Sales comparison approach.
Gross rent multiplier.
a.
b.
c.
d.
A four-bedroom house with one bathroom would be an example of:
Physical deterioration.
Functional obsolescence.
Economic obsolescence.
Environmental obsolescence.
345.
346.
Which of the following agencies would be involved in administering
special assistance programs for housing?
a. Fannie Mae.
b. Ginnie Mae.
c. Freddie Mac.
d. The “Fed”.
347.
All loans subject to the Real Estate Settlement Procedures Act
(RESPA) require lenders to:
a. Charge the seller for all loan discount points.
b. Document any reason for declining credit to a loan applicant.
c. Deliver a Uniform Settlement Statement (HUD-1) form to both buyer
and seller.
d. Allow the buyer to rescind the contract any time prior to the first
payment due date.
348.
You finance your property with a two party mortgage and have just
made the final mortgage payment on your property. Recording which of
the following documents will provide notice that the mortgage lien has
been removed:
a. Reconveyance deed.
b. Satisfaction of mortgage.
c. Alienation of the mortgage instrument.
d. Reversion of the “deed”.
- 80 -
349.
Regulation Z, the Truth-in-Lending Act, provides which of the
following penalties for licensees who willfully fail to comply with its
advertizing guidelines for real estate financing?
a. Fines only.
b. License revocation.
c. Fines and/or imprisonment.
d. None, all violations of Regulation Z are referred to state licensing
agencies.
350.
Salesperson A for broker B has listed a home. Salesperson C for
Broker D is trying to sell the home to his own buyer. Salesperson C is
primarily responsible to:
a. His own buyer.
b. Salesperson A.
c. Broker B.
d. Broker D.
351.
Commissions and fees paid by the seller to a listing agency are
determined by:
a. Standards promulgated by the local board of REALTORS.
b. Negotiations between the seller and the listing licensee.
c. Applying the prevailing customary fees charged in that area.
d. An industry index computed monthly from multiple listing service
data.
352.
A listing broker is MOST likely to have earned a commission from a
principal when which of the following events occurs?
a. An offer to purchase has been presented to the client.
b. Title has been transferred to the buyer.
c. The seller accepts and signs an offer to purchase.
d. A “ready, willing, and able” buyer signs an offer to purchase that
meets the terms of the listing contract.
- 81 -
353.
A broker listed an owner’s home and later received an offer from
another licensee that met all of the listing terms and conditions. After
considering the offer, the owner informed the broker that the owner no
longer wished to sell and asked to be released from the listing agreement
immediately. Which of the following is a TRUE statement about the
broker’s position in this situation?
a. The broker must release the owner without obligation.
b. The broker must tell the owner that he may sue him for specific
performance.
c. The broker may succeed in collecting an earned commission from
the owner.
d. The broker may keep the earnest money that accompanied the offer
as liquidated damages.
354.
Which of the following is a similarity between an exclusive-right-tosell listing and an exclusive-agency listing?
a. Under both, the seller avoids paying the broker a commission if the
seller sells the property without the help of the broker.
b. Both give the responsibility of representing the seller to just one
broker.
c. Both are net listings.
d. Under both, the seller authorizes one specific salesperson to show
the property.
355.
A buyer has entered into an agreement with more than one buyer’s
agent at the same time, but owes compensation only if she uses the
services of a buyer’s broker. This arrangement is known as:
a. A multiple-listing agreement.
b. An exclusive right agreement.
c. An exclusive agency agreement.
d. An open agreement.
356.
Brokers who violate the Sherman Antitrust Act may be punished by a
maximum fine of:
a. $10,000.
b. $25,000.
c. $50,000.
d. $100,000.
- 82 -
357.
Broker X is showing Buyer Y, an Asian, homes in only Asian
neighborhoods. The broker may be guilty of:
a. Arbitrage.
b. Blockbusting.
c. Redlining.
d. Steering.
358.
Which of the following types of loan would be considered to be
conventional?
a. A private insured loan.
b. An FHA loan.
c. A Freddie Mac loan.
d. A VA loan.
359.
Which of the following agencies administers special assistance
programs in second mortgage markets?
a. FDCA.
b. FNMA.
c. FHLMC.
d. GNMA.
360.
A margin is added to the index to determine the rate in which of the
following types of mortgages?
a. Adjustable rate.
b. Blanket.
c. Graduated payment.
d. Package.
361.
In the traditional exclusive right-to-sell agreement, how many agents
are involved?
a. Two.
b. One.
c. As many as the owner chooses.
d. As many salespeople as the broker has in his office.
- 83 -
362.
The broker has listed an owner’s home. This agreement will be
terminated by all of the following EXCEPT:
a. The death of the listing salesperson.
b. The death of the owner.
c. The death of the broker.
d. The bankruptcy of the broker.
363.
An appraiser is trying to determine the value of an income property
by capitalizing the income stream. Which of the following factors will the
appraiser use?
a. Mortgage interest.
b. Net income.
c. Replacement cost.
d. Income taxes.
364.
Which of the following scenarios would NOT be considered
discriminatory under the federal fair housing law?
a. A man owns and lives in his four-unit apartment building and he
refuses to rent to families with children.
b. A landlord charges higher security deposits to tenants with children.
c. A landlord places all families in selected buildings in his apartment
complex.
d. A landlord refuses to rent to a pregnant woman.
365.
a.
b.
c.
d.
Which of the following is a requirement for a valid deed?
The grantee must sign the deed.
The consideration must be in dollars.
It must contain a subordination clause.
It must contain a granting clause.
366.
A lender that refuses to provide loans on properties located in a
minority neighborhood regardless of the ethnicity of the applicant would be
engaged in a discriminatory practice known as:
a. Steering.
b. Redlining.
c. Blockbusting.
d. Hypothecating.
- 84 -
367.
You have sold your home and taken back a mortgage from the buyer
for part of the balance due. The type of mortgage you hold is a:
a. Blanket mortgage.
b. Purchase money mortgage.
c. Participation mortgage.
d. Wraparound mortgage.
368.
Within the field of real estate finance, what does the secondary
mortgage market refer to?
a. The placing of junior liens.
b. The transferability of mortgages among mortgagees.
c. The transferability of mortgages among mortgagors.
d. None of the above.
369.
A summary of all the recorded instruments affecting the title to a
property is called:
a. An abstract of title.
b. A certificate of title.
c. Escrow.
d. A title insurance policy.
370.
Which of the following terms would include the interests, benefits,
and rights inherent in the ownership of real estate?
a. Chattels.
b. Personal property.
c. Real property.
d. Trade fixtures.
- 85 -