Download Real Estate Exam Practice Questions: Multiple Choice and more Exams Nursing in PDF only on Docsity!
National RE exam practice questions
well answered to pass
Which task is NOT the responsibility of an escrow officer? Determine how earnest money is to be distributed in case of a dispute. Manage transaction documents from all parties. Prepare closing documents and manage the closing meeting. Verify funding of the buyer's loan. - correct answer ✔✔Determine how earnest money is to be distributed in case of a dispute. Which of these is excluded on a title insurance policy on Martha's property because of the schedule of exceptions? A mechanic's lien recorded by A1 Siding and Windows A verbal lease agreement Martha has with her neighbor who leases Martha's garage Last year's unpaid property taxes The current year's unpaid property taxes - correct answer ✔✔A verbal lease agreement Martha has with her neighbor who leases Martha's garage The title policy doesn't exclude property taxes (assuming they're properly recorded), though the taxes must be paid before the policy is issued. The verbal lease agreement is excluded since it's not shown in public records. The Hendersons don't have enough money to make the full 20% down payment their institutional lender requires. To close the sale, the seller is willing to finance a loan for the amount between the home's list price and what the institutional lender is willing to loan. What's this type of financing called? Equity mortgage Purchase agreement Purchase money mortgage Seller-insured loan - correct answer ✔✔Purchase money mortgage
A purchase money mortgage is the term for seller financing that's typically used to bridge the gap between the home's list price and the institutional loan, though it can also be used to finance the entire purchase price. Which legal description method uses compass headings and directions? Block and grid Lot and block Metes and bounds Rectangular government survey - correct answer ✔✔Metes and bounds Metes and bounds uses compass headings and directions. The rectangular system divides land into townships and further divides those into sections. Broker Sam has extended an offer to licensee Jane, who has accepted the offer. Jane will work as an independent contractor for Sam. Based on this, which of the following statements is true? As an independent contractor, Jane will not have to fill out any tax-related or IRS-related paperwork. It is up to Jane whether or not she wants to have taxes withheld from her pay. If she does choose to have taxes withheld, she must complete a W-4. Jane will need to fill out a W-4 for tax withholding information. Jane will need to fill out a W-9 for IRS reporting purposes. - correct answer ✔✔Jane will need to fill out a W-9 for IRS reporting purposes. Independent contractors are required to fill out a W-9 for IRS reporting purposes. Only actual employees are required to complete the W-4. The question, "What's the purpose of this appraisal?" can be answered by this first step of the appraisal process. Determine highest and best use. Estimate land value. Identify data needed.
Loan and value - correct answer ✔✔Borrower and property The property's value (as underlying collateral) and the borrower's ability to repay the loan will be equal considerations for the lender. Which fiduciary duty may continue even after the transaction closes? The duty of accounting The duty of disclosure The duty of obedience The duty of reasonable skill and care - correct answer ✔✔The duty of accounting The duty of accounting continues even after the transaction closes. For instance, any money the agent holds after a transaction closes must be accounted for until it's delivered to the appropriate party. Which of these is NOT a likely features of a bridge loan? Amortized loan paid back over a period of no more than five years Interest-only loan Secured by the borrower's existing home Temporary, short-term loan - correct answer ✔✔Amortized loan paid back over a period of no more than five years. A bridge loan is usually a temporary, short-term interest-only loan secured by the borrower's existing home. While working with a buyer client, Jeffrey filled in the blanks on the purchase agreement, drafted an early occupancy addendum, and assured his buyer that she was "fully protected" and would get her earnest money back if the sale didn't close. He encouraged her to hire an attorney to review the contract and addendum, and then invoiced her for a nominal $15 fee to prepare transaction documents. Which of the following tasks was Jeffrey legally permitted to do? Charge a fee for preparing legal documents Draft the early occupancy addendum Fill in the contract blanks
Interpret the contract provisions regarding the buyer's full protection and getting her earnest money returned - correct answer ✔✔Fill in the contract blanks Jeffrey did just about everything wrong! The only two tasks he performed that are NOT considered unauthorized practice of law are filling in the blanks on the purchase agreement and encouraging the buyer to seek legal advice. Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine's transaction covered by the Real Estate Settlement Procedures Act? No; commercial and business loans are exempt from RESPA requirements. No; RESPA only applies to loans obtained from private lenders. Yes; all loans secured by real estate are subject to RESPA requirements. Yes; because she obtains the loan from a federally insured financial institution, the loan is subject to RESPA requirements. - correct answer ✔✔No; commercial and business loans are exempt from RESPA requirements. Jeanetta leases an apartment from Quad City Leasing. Jeanetta has filed a complaint with the state real estate licensing division stating that Marissa, Quad City's property manager, breached her fiduciary duty of loyalty to Jeanetta. Which of these statements about this situation is true? As a property manager, Marissa doesn't owe fiduciary duties to clients or residents. As a property manager, Marissa owes fiduciary duties to her client and the apartment community. If Marissa did breach a fiduciary duty to Jeanetta, Jeanetta has a legitimate complaint. Marissa owes fiduciary duties only to the landlord. - correct answer ✔✔Marissa owes fiduciary duties only to the landlord. Property managers owe fiduciary duties to their clients (the landlord) and the community as a whole, not to individual residents. Cambridge Apartments provides an open parking lot for its residents. There is adequate parking, and all spaces are available on a "first-come, first-served" basis. Alton has multiple sclerosis and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?
ad valorem tax - correct answer ✔✔based on the value of the real estate. General property taxes may pay for items such as schools, police, fire, etc Special assessment taxes - correct answer ✔✔imposed only on properties that benefit from the improvement, such as a tax to install a sewer line or city water line on one specific street. Other examples may include paved streets, curbs, sidewalks, or street lighting. eminnent domain - correct answer ✔✔Power of a government to take private property for public use. The government must fairly compensate private owners for property taken through eminent domain. taking - correct answer ✔✔Governmental appropriation of property; a taking may or may not use the power of eminent domain. The process of taking title and physical possession of private property using the government's power of eminent domain; the property owner is paid just compensation for the value of the property. - correct answer ✔✔condemnation action The government takes private property but fails to compensate the owner; property owners are forced to file suit to obtain compensation. The taking may be physical through occupation, or regulatory, where government regulations cause the property to lose economic value. - correct answer ✔✔Inverse Condemnation The state's power to take the property of a decedent who dies without a will, heirs, or creditors. - correct answer ✔✔Escheat the government's authority, at any level, to do what it can to ensure the health, safety, and welfare of its citizens. includes licensing, public services, zoning, and building codes. - correct answer ✔✔Police Power allows otherwise prohibited development in return for the developer providing a community benefit. - correct answer ✔✔incentive zoning
regulates the density of a given area by requiring certain building height limitations, lot width, setback requirements, etc. applies to both residential and commercial zoning. - correct answer ✔✔bulk zoning process of assigning a lower-density use zone to an area previously allowing a higher density. - correct answer ✔✔downzoning Deviates from current zoning but is grandfathered in (such as a home built years ago in an area that's now commercially zoned). Buyers should never assume use can continue after the transfer of ownership or the destruction of improvements. - correct answer ✔✔nonconforming use Temporarily halts new property development - correct answer ✔✔moratorium Allows use that's not normally permitted but is considered an "allowable" use within that zoning, such as a church within a residentially zoned area - correct answer ✔✔special use permit Permitted deviation in the zoning ordinance requirements; typically granted when the zoning has created a hardship or burden on the property owner. Both special use permits and variances require a public hearing before they're granted. - correct answer ✔✔variance land that's divided into lots for development. - correct answer ✔✔subdivision map of a subdivision that represents a tract of land, showing the boundaries and location of individual properties, streets, easements, and other pertinent information. A developer submits this to a planning board or zoning commission. - correct answer ✔✔plat map Meetings held by planning and zoning boards must be open to the public because of - correct answer ✔✔the Sunshine Act is part of the Freedom of Information Act (FOIA). Each state usually has its own version of FOIA or a sunshine law. provides guidelines for waters, including wetlands. - correct answer ✔✔clean water act
