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PA National Practice Exam - Colibri Real
Estate questions with correct answers
Earl orally agreed to an 18-month lease with landlord Blake. Is this contract enforceable? Yes, all oral leases are enforceable. No, all leases for longer than one year must be in writing to be enforceable. Yes, all leases for longer than 6 months are enforceable. No, it is not enforceable unless Earl is older than 50 years old. - CORRECT ANSWER- ✔✔✅ No, all leases for longer than one year must be in writing to be enforceable. On a $280,000 loan, the lender charges a 2 point service charge. How much does the borrower have to pay for just these two points? $28, $ $2, $5,600 - CORRECT ANSWER- ✔✔✅ $5, 160 County Drive has 4 acres of open pasture and a 1,900 square foot home. The home has 2 bedrooms and 4 bathrooms. Call 555-555-5555 now for information! What is missing from this advertisement that makes it a blind ad? The price The broker's identification The reason the property is for sale How long the property has been on the market - CORRECT ANSWER- ✔✔✅ brokers identification A(n) ________ is one that conflicts with the ordinances that were enacted after the use commenced. illegal conforming use enhanced nonconforming use escheat use
legal nonconforming use - CORRECT ANSWER- ✔✔✅ legal nonconforming use Why is the condition of bearing walls more important than non-bearing walls? Bearing walls protect the home from the outdoor elements and radon gas. Bearing walls are part of the interior framework of the house. Bearing walls support the ceiling and the roof. Bearing walls are much weaker than non-bearing walls. - CORRECT ANSWER- ✔✔✅ Bearing walls support the ceiling and the roof. The cost to replace an improvement with original materials is known as replacement cost. placebo cost. cloning cost. reproduction cost. - CORRECT ANSWER- ✔✔✅ reproduction cost Real estate licensees should know enough about building ordinances to be able to conduct a professional home inspection. provide solid legal advice. answer all client questions about a building's compliance. alert clients of potential problems in a home. - CORRECT ANSWER- ✔✔✅ alert clients of potential problems in a home. Which parties typically purchase title insurance once the transaction is complete? The HUD and seller The lender and buyer The licensee and buyer The broker and lender - CORRECT ANSWER- ✔✔✅ The lender and buyer Broker Austin represents a party in a transaction where there is a dispute regarding the deposited escrow money. What should Austin do?
Doctrine of Laches Stringent Theory Torrens Theory - CORRECT ANSWER- ✔✔✅ Doctrine of Laches The Doctrine of Laches states that if a property owner is lax in protecting his or her rights, the property owner may lose those rights. The essential criteria for an acceptable legal description is that it only contains the mailing address. accurately locates the parcel when using Google Maps. accurately locates the parcel in the opinion of a court. includes at least 2 landmarks. - CORRECT ANSWER- ✔✔✅ accurately locates the parcel in the opinion of a court. Which is false regarding a promissory note? The property is collateral for the promissory note. A promissory note is a negotiable instrument, which means that the lender can sell the note to a third party. It is the primary evidence of a loan. It is the term used for a note that is guaranteed or insured by a governmental agency. - CORRECT ANSWER- ✔✔✅ It is the term used for a note that is guaranteed or insured by a governmental agency. Why is designated agency a good alternative to traditional dual agency? Fair housing laws do not apply to transactions involving designated agency. Even though the same broker represents each party, both the buyer and seller have a licensee who exclusively acts as their agent in the transaction. Designated agency is legal in all 50 states while dual agency is banned in every state. Only the broker is involved in the transaction and the parties do not have an exclusive agent. - CORRECT ANSWER- ✔✔✅ Even though the same broker represents each party, both the buyer and seller have a licensee who exclusively acts as their agent in the transaction.
Justin defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Justin's house sold for $339,000 and the unpaid balance of his loan is $400,000. What must the lender do to recover the $61,000 Justin still owes? Nothing, they cannot recover the $61,000. Seek a deficiency judgment. Contact their state's Recovery Fund for compensation. Seek a quitclaim suit. - CORRECT ANSWER- ✔✔✅ Seek a deficiency judgment. The Quarry Mountain Subdivision requires all properties to have fences that are at least 8 feet tall surrounding each property. This is an example of a zoning restriction. an easement. escheat. a deed restriction. - CORRECT ANSWER- ✔✔✅ deed restriction In the appraisal process, looking at the number of recreational facilities, the distances to schools and adequacy of public transportation is called demographic analysis. market data approach. neighborhood analysis. comparative market analysis. - CORRECT ANSWER- ✔✔✅ neighborhood analysis. What is a forecast of income and expenses that can be projected over five years? Cash flow statement Stabilized budget Balance Sheet Capital budget - CORRECT ANSWER- ✔✔✅ Stabilized budget A stabilized budget is a forecast of income and expenses that can be projected over a short period of time, usually five years.
Which of the following would qualify as an example of retail property? A hospital A farm A shopping center A warehouse - CORRECT ANSWER- ✔✔✅ shopping center The system of land ownership in the United States is known as what? The allodial system The feudal system The aristocratic system The riparian system - CORRECT ANSWER- ✔✔✅ allodial The size of jurisdiction's tax base is derived by adding exemptions to market values. dividing the number of eligible properties by the total number of properties. subtracting exemptions from assessed values. multiplying the total income of the jurisdiction's property owners by the millage rate. - CORRECT ANSWER- ✔✔✅ subtracting exemptions from assessed values. Tax base = assessed values - exemptionsThe The first step in the appraisal process is to estimate the value of the land. state the problem. analyze the neighborhood. gather data. - CORRECT ANSWER- ✔✔✅ state the probelm Under what type of contract is a seller obligated to sell, but the buyer is not obligated to buy? Bilateral
Option Chance Recovery - CORRECT ANSWER- ✔✔✅ option Licensee Alex only represents the buyer in a transaction. What is Alex called in this situation? A listing agent A dual agent A single agent A married agent - CORRECT ANSWER- ✔✔✅ single Jordan has a month-to-month lease with landlord Greg. What type of lease did Jordan sign? Estate from period-to-period Estate at sufferance Estate at will Estate at easement - CORRECT ANSWER- ✔✔✅ Estate from period-to-period Why would a property with a rectangular system description also have a metes and bounds legal description? Because the property is irregular in shape Because the property is larger than 20 acres Because the law requires it Because the property is agricultural - CORRECT ANSWER- ✔✔✅ Because the property is irregular in shape Which of these is a violation of Sherman Antitrust laws? Commingling Zoning Redlining Market allocation - CORRECT ANSWER- ✔✔✅ redlining
Which of the following would be found in a management proposal? Tenant credit histories The desired demographic of the property Schedule of maintenance requirements A list of all pets residing in the complex - CORRECT ANSWER- ✔✔✅ Schedule of maintenance requirements Given the net income of a property, the appraiser can determine an opinion of the value for that property by multiplying by the rate of depreciation. multiplying by the rate of economic appreciation. dividing by the percent of capital gains. dividing by the rate of capitalization. - CORRECT ANSWER- ✔✔✅ dividing by the rate of capitalization. A broker induces an owner to sell by telling him that Muslims are moving into the neighborhood. This broker is guilty of greenlining. conversion. testing. blockbusting. - CORRECT ANSWER- ✔✔✅ blockbusting What is the balance on an amortized loan of $780,000 after the first payment if the interest rate is 5% with a monthly P&I payment of $3,780? $779, $776, $776, $779,121 - CORRECT ANSWER- ✔✔✅ $779,
multiple balance by 5%, divide by 12. subtract from monthly payment. subtract final answer by balance Which form does RESPA require lenders to use to detail the costs that the buyer and seller will pay at closing? Loan Estimate Truth-in-Lending Form Closing Disclosure RESPA Settlement Statement - CORRECT ANSWER- ✔✔✅ closing disclosure Which of the following statements best describes what happens with a judicial foreclosure? The mortgaged property is transferred directly to the lender. The mortgaged property is sold without the supervision of a court. The mortgaged property is sold under the supervision of a court. The mortgaged property is transferred directly to the state - CORRECT ANSWER- ✔✔✅ The mortgaged property is sold under the supervision of a court. Which of the following types of property sales typically requires a property condition disclosure? A transfer of an interest that is less than fee simple A foreclosure or deed-in-lieu of foreclosure A property transferred to the seller's parent A three unit, multi-family dwelling - CORRECT ANSWER- ✔✔✅ A three unit, multi-family dwelling Bobbie decided to redeem her property after a tax sale. Bobbie exercised her legal right of rescission. statutory right of redemption. optional right of disclosure. required right of recourse. - CORRECT ANSWER- ✔✔✅ statutory right of redemption.
exercised one of his police powers. permanently transferred his subsurface rights. transferred a portion of his bundle of rights. encroached his bundle of rights. - CORRECT ANSWER- ✔✔✅ transferred a portion of his bundle of rights. Which of the following would be considered community property in a community property state? A car the spouses bought together after the marriage Income received from stocks owned by one spouse Property inherited by one spouse after the marriage A coin collection bought by a spouse before the marriage - CORRECT ANSWER- ✔✔✅ A car the spouses bought together after the marriage What type of clause allows a broker to collect a commission for some period of time after the listing expires? A return on investment clause A recovery clause A self-dealing clause A carryover clause - CORRECT ANSWER- ✔✔✅ A carryover clause Which of these statements about an independent contractor is false? A broker cannot tell an independent contractor how to work. He or she is reimbursed for all business expenses. He or she is paid commission on all sales. He or she will have to pay income taxes. - CORRECT ANSWER- ✔✔✅ He or she is reimbursed for all business expenses. A buyer told broker Lena that she wants to move to a Cuban neighborhood. Then the buyer asked if Lena could show her the best home in a Cuban area. How should Lena respond to this request? Lena should comply with this request to the best of her abilities.
Lena should explain to the buyer that she ethically and legally cannot recommend housing based on national origin. Lena should not answer the question unless the buyer offers to pay her more. Lena should refer the buyer to a brokerage that can legally steer buyers. - CORRECT ANSWER- ✔✔✅ Lena should explain to the buyer that she ethically and legally cannot recommend housing based on national origin. What are the primary advantages of PEX piping? PEX piping is lightweight but not flexible. PEX piping is able to withstand both high and low temperatures and it is highly resistant to chemicals. PEX piping is strong and sturdy. PEX piping is ideal for septic systems and sewer systems. - CORRECT ANSWER- ✔✔✅ PEX piping is able to withstand both high and low temperatures and it is highly resistant to chemicals. Broker Ron wants to open a separate escrow account for each transaction he is involved in. Is this legal? No, only lawyers and trust companies can open escrow accounts. No, each broker can only have one escrow account. Yes, this is legal unless he has more than three escrow accounts open at once. Yes, there is no legal limit on the number of escrow accounts a broker can have. - CORRECT ANSWER- ✔✔✅ Yes, there is no legal limit on the number of escrow accounts a broker can have. One of the major considerations in a master plan is how to best maximize tax revenue. the effect of new development on traffic patterns and the environment. the effect on the voting boundaries of an area. the effect on the culture of an area. - CORRECT ANSWER- ✔✔✅ the effect of new development on traffic patterns and the environment. Which of the following is a valuable skill for a property manager to have? Knowledge of building systems
What type of agency cannot be revoked by the principal, nor is terminated if the principal dies? Dual agency Universal agency Agency coupled with an interest Agency coupled with fraud - CORRECT ANSWER- ✔✔✅ Agency coupled with an interest A property has a Gross Income Multiplier of 14, and value of $800,000. What is its annual income? $50, $57, $66, $11,200,000 - CORRECT ANSWER- ✔✔✅ $57, "This property has the best view in the entire county." This statement is an example of fraud. unintentional misrepresentation. puffing. a fair housing violation. - CORRECT ANSWER- ✔✔✅ puffing Carla has been walking across a path on John's property for the past 22 years. John knows about this but has never given Carla permission. What might a court grant to Carla? An easement by necessity An easement by prescription An encroachment by necessity Ownership by prescription - CORRECT ANSWER- ✔✔✅ An easement by prescription Unlike buyer/seller agency agreements that create _________, the management agreement creates ________. general agency, special agency
universal agency, special agency special agency, universal agency special agency, general agency - CORRECT ANSWER- ✔✔✅ special agency, general agency Unlike buyer/seller agency agreements that create special agency, the management agreement creates general agency. Home Hoarding Realty is advertising to the public that their managing broker has been in the business 37 years and has sold over 1,250 homes. This is an example of selfish advertising. product advertising. institutional advertising. antitrust advertising. - CORRECT ANSWER- ✔✔✅ institutional advertising. A cooperative is a type of residential property. a type of commercial property. a hybrid between residential and recreational property. a type of institutional property. - CORRECT ANSWER- ✔✔✅ a type of residential property. Seller Monica is selling her property to Harriet. What is Monica's primary responsibility at closing? To deliver marketable title To ensure the closing is conducted properly To ensure her agent gets paid To sign Harriet's new mortgage documents - CORRECT ANSWER- ✔✔✅ To deliver marketable title What is the most common lease term for space in an office building? 3-6 months 2 years
Should a licensee who represents both the buyer and seller tell the buyer about material defects on the seller's property? No, material defects cannot be shared with the buyer when dual agency exists. Yes, any defects known to the broker should have been disclosed to the buyer. No, the broker can only disclose material facts that the seller tells him to disclose. No, caveat emptor would apply in this case. - CORRECT ANSWER- ✔✔✅ Yes, any defects known to the broker should have been disclosed to the buyer. Which clause protects a lender if he does not want the loan to be assumed by another party? Abandonment Subordination Satisfaction Alienation - CORRECT ANSWER- ✔✔✅ Alienation An income producing property rents for $2,790 per month and the GRM is 97. What is the estimated market value of the property? $270, $287, $1,004, $301,550 - CORRECT ANSWER- ✔✔✅ $270, How does Planned Unit Development zoning differ from ordinary zoning? It applies only to residential and commercial properties. It is organized by HUD instead of local zoning committees. It requires developers to obtain a separate building permit for every structure. It requires that multiple tracts of land be developed according to a single design for efficient use of space. - CORRECT ANSWER- ✔✔✅ It requires that multiple tracts of land be developed according to a single design for efficient use of space. What is the definition of "valuable consideration" in regard to contract validity?
Cash or cash equivalents Tangible goods Something specifically offered in exchange for something else Something offered by only one party - CORRECT ANSWER- ✔✔✅ Something specifically offered in exchange for something else Which of the following best describes the principle of conformity? The value of a home increases when the supply is short. A home maintains its highest value by being in a neighborhood with similar-type housing. A property will decrease in value if there are rumors of a zoning change. Valuewise, it is best for a neighborhood to have little demographic diversity. - CORRECT ANSWER- ✔✔✅ A home maintains its highest value by being in a neighborhood with similar-type housing. How might a voidable contract become valid? If the party who has reason to disaffirm the contract elects instead to perform it If neither party agrees to the terms If the party who wants to enforce the contract seeks damages If the party who wants to enforce the contract seeks legal relief - CORRECT ANSWER- ✔✔✅ If the party who has reason to disaffirm the contract elects instead to perform it Ownership of a property reverted to the grantor of the estate when its usage failed to conform to a stated condition in the grant. What type of estate existed? Fee simple defeasible Freehold estate with reversion Life estate with condition subsequent Fee simple absolute - CORRECT ANSWER- ✔✔✅ Fee simple defeasible Broker Torrey hires salesperson Wes as an independent contractor. As an independent contractor, Wes can expect which of the following from Broker Torrey? Company laptop
