CT Real Estate Licensing Practice Exam

CT Real Estate Licensing Practice Exam

A couple listed their home with a broker. After 2 months, the seller found a buyer, and the sale closed. The seller was not obligated to pay a commission to the broker. This listing was MOST likely:

1. an exclusive agency listing.
2. an exclusive right to sell listing.
3. a net listing.
4. an advance fee listing.
5. an exclusive agency listing.

A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called:

1. a buy-sell agreement.
2. an option contract.
3. an installment contract.
4. a vendor’s lien interest.
5. an option contract.

A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so?

1. The person must obtain prior written approval by a licensed psychiatrist or psychologist.
2. The person must be capable of understanding the transaction.
3. The person appointed by the court to act for the disabled person must contract on his or her behalf.
4. The person may enter a contract under any conditions, because the law prohibits discrimination against persons with disabilities.
5. The person appointed by the court to act for the disabled person must contract on his or her behalf.

In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT:

1. closing costs may be lower.
2. loan originator has knowledge of the underwriter’s policies.
3. more variety of loan programs available.
4. originator and lender are part of same company.
5. more variety of loan programs available.

Without checking the facts, a broker who is the seller’s agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker’s statement and makes an offer on a house in the neighborhood. Before closing, it is determined that the taxes are actually among the highest in the area. The buyer could seek to rescind the contract on the basis of:

1. puffing.
2. misrepresentation.
3. lack of care and diligence.
4. nothing; property taxes are a matter of public record and it was the buyer’s responsibility to check them.
5. misrepresentation.

An agency relationship between a property owner and a property manager is usually created by:

1. a management agreement.
2. payment of a management fee.
3. an exclusive agency agreement.
4. an independent contractor agreement.
5. a management agreement

Earnest money should be deposited into a trust account

1. in a timely manner, according to state laws.
2. upon removal of all contingencies.
3. at the broker’s discretion.
4. according to MLS rules.
5. in a timely manner, according to state laws.

A lender will make an 80% loan-to-value loan on a property that is appraised for $72,250 and sells for $73,500. If the buyer has saved $14,450 for a down payment, how much more (if any) will he need in order to make the down payment required under the terms of this loan?

1. He has $1,000 more than he needs for the down payment.
2. He has exactly the amount needed for the down payment.
3. He needs an additional $250 in order to make the down payment.
4. He needs an additional $1,250 in order to make the down payment.
5. He needs an additional $1,250 in order to make the down payment.

A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given

1. actual notice.
2. prescriptive notice.
3. constructive notice.
4. exculpatory notice.
5. constructive notice.

Even with title insurance, the policyholder may still suffer losses arising from

1. forged documents.
2. incompetent grantors.
3. defects found in recorded public records.
4. land use change due to zoning ordinances.
5. land use change due to zoning ordinances.

Under the common law of agency, licensees owe the broker with whom they are associated all of the following duties EXCEPT

1. loyalty.
2. competence.
3. indemnification.
4. full disclosure.
5. indemnification.

To be valid, every deed must

1. contain a warranty.
2. include granting language.
3. be executed by the grantor.
4. be signed by the grantee if there are covenants.
5. be executed by the grantor.

An example of a contract terminated due to inability to perform would be one in which the

1. purchaser had suffered financial reverses so that she could not make payment as required by the contract.
2. seller had died after the contract became binding but before the closing.
3. seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant.
4. property had been severely damaged by fire after the contract became binding but before the closing.
5. seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant.

What is the duration of a home warranty’s coverage?

1. the expected life of the purchaser
2. the expected life of the product or system covered
3. as disclosed in the contract that offers the warranty
4. a minimum of 5 years or the duration of the purchaser’s ownership, whichever is shorter
5. as disclosed in the contract that offers the warranty

A home buyer is obtaining a fully amortized loan in the amount of $140,000. The savings and loan will give him the loan for 15 years at 5% or for 30 years at 6%. To the nearest dollar, what is the difference between the monthly payments for these two loans? (BE SURE TO USE THE AMORTIZATION TABLE.)

1. $74
2. $87
3. $267
4. $342
5. $267

Failure of a real estate agent to comply with Fair Housing practices is punishable by:

1. license revocation only.
2. criminal prosecution only.
3. license revocation and criminal prosecution.
4. probation.
5. license revocation and criminal prosecution.

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA,

1. will no longer lend or guarantee loans on these older properties.
2. require evidence of testing for and disclosure of any type of lead contamination before they will lend or guarantee loans on such properties.
3. require funds to be escrowed for lead abatement as a condition of lending or guaranteeing loans on such properties.
4. require the buyer to acknowledge disclosure of the presence of any known lead paint.
5. require the buyer to acknowledge disclosure of the presence of any known lead paint.

State laws differ on whether a buyer is entitled to know about:

1. a suicide that occurred in the house last year.
2. possible lead paint in the property.
3. the flooding of the basement every spring.
4. the fact that the sellers are getting a divorce.
5. a suicide that occurred in the house last year.

Three people buy a house as tenants in common. Subsequently, two of the owners want to sell, but the third discourages each potential purchaser. The two owners who wish to sell the house can:

1. sell without the third owner’s consent.
2. file an action for partition against the third owner.
3. file for a lien against the third owner’s interest as damages.
4. force the third owner to sell if they invoke the rule of specific performance.
5. file an action for partition against the third owner.

A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of:

1. substitution.
2. contribution.
3. conformity.
4. anticipation.
5. anticipation.

A gross lease can be best defined as one where the tenant pays, as a part of the rent,

1. all property changes excluding utilities.
2. no operating expenses of the leased space.
3. outside maintenance and property taxes only.
4. all property expenses except the interest on the owner’s mortgage.
5. no operating expenses of the leased space.

The Civil Rights Act of 1866 prohibits any type of discrimination based on:

1. gender.
2. race.
3. race and gender.
4. religion.
5. race.

Ordinances that specify construction standards are:

1. building codes.
2. building permits.
3. construction alterations.
4. certificates of occupancy.
5. building codes.

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called:

1. an agency.
2. an assessment.
3. a contract.
4. a fiduciary obligation.
5. a contract.

Legal descriptions using the government survey system are NOT generally used in:

1. the original 13 states.
2. subdivisions.
3. quitclaim deeds.
4. mortgages or deeds of trust.
5. the original 13 states.

Alex, 14, and Kent, 17, inherited a piece of property. The next year, Kent deeded the whole property to Alex, who immediately put it on the market. An adult buyer made a written offer which was accepted by Alex. Which of the following is TRUE?:

1. Kent must also sign the contract and any deed.
2. The signature of Alex’s guardian is required.
3. The buyer cannot legally compel Alex to sell.
4. Both buyer and seller are bound by the contract.
5. The buyer cannot legally compel Alex to sell.

Antitrust laws prohibit competing brokers from all of the following EXCEPT:

1. boycotting other brokers in the marketplace.
2. dividing the market to restrict competition.
3. agreeing to set sales commissions and management rates.
4. receiving compensation from both the buyer and the seller.
5. receiving compensation from both the buyer and the seller.

A couple are moving to a new city. They have decided to rent temporarily before buying a house to see which part of the city they would like to live in. What type of lease would BEST suit the couple’s needs?

1. Lease option.
2. Rental lease.
3. Month-to-month lease.
4. Lease purchase.
5. Month-to-month lease.

At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing?

1. Credit seller $300; credit buyer $300.
2. Debit seller $300; debit buyer $300.
3. Credit seller $300; debit buyer $300.
4. Debit seller $300; credit buyer $300.
5. Debit seller $300; credit buyer $300.

A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to the complaining party is that:

1. the case will be more thoroughly reviewed.
2. there is no dollar limit on damages paid.
3. only a district court judge can order that the property be sold to the complaining party.
4. only a district court judge can order jail time for the guilty party.
5. there is no dollar limit on damages paid.

A real estate salesperson is representing only the buyer in a transaction. Which of the following actions would be a violation of the salesperson’s agency duties to the client?

1. disclosing the price the seller originally paid for the property
2. disclosing the highest price the buyer is willing to pay
3. preparing a competitive market analysis
4. identifying latent property defects
5. disclosing the highest price the buyer is willing to pay

Building codes are:

1. created to establish zoning in a neighborhood.
2. ordinances that specify construction standards.
3. established in each neighborhood or development.
4. set up to hear complaints about effects of zoning ordinances.
5. ordinances that specify construction standards.

An environmental impact statement typically describes the effects of a proposed project on factors such as:

1. public health and safety.
2. zoning regulations.
3. highest and best use of the land.
4. mapping requirements.
5. public health and safety.

To what party or parties does the broker owe the fiduciary duty of care?

1. the seller
2. both the buyer and the seller
3. the party or parties employing the broker
4. the party or parties paying the commission
5. the party or parties employing the broker

A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as:

1. steering.
2. blockbusting.
3. redlining.
4. conciliation.
5. steering.

A broker and the buyers he represents are anxiously awaiting the closing on their new home. The closing is scheduled in 4 days. The buyers inform the broker that they just received revised Loan Estimate and Closing Disclosure forms from the lender, indicating the Annual Percentage Rate on their loan has increased by 0.3%. Based on the TILA-RESPA Integrated Disclosure rule, what action should the broker take in this situation?

1. Assist the buyers in calculating the new loan payments and ask them if they want to proceed with the closing as scheduled.
2. Advise the buyers to file a legal action against the lender for violation of predatory lending practices under the Real Estate Settlement Procedures Act.
3. Call the lender and inform them that they are in violation of the seven-day waiting period and cannot change the terms of the loan this close to the closing.
4. Confirm with the seller’s broker, the lender and the closing entity that the closing must be delayed to allow for a new seven-day waiting period because of the interest rate revision.
5. Confirm with the seller’s broker, the lender and the closing entity that the closing must be delayed to allow for a new seven-day waiting period because of the interest rate revision.

The FHA functions MOST like:

1. a bank or savings and loan association.
2. a mortgage company.
3. an investment group.
4. an insurance company.
5. an insurance company.

If the terms of a contract indicate that Party A will be obliged to perform her part of the contract only if Party B chooses to take a certain action, then the contract is a:

1. unilateral contract in which only Party B has made a promise to perform.
2. unilateral contract in which only Party A has made a promise to perform.
3. bilateral contract which both parties are obliged to perform.
4. void contract.
5. unilateral contract in which only Party A has made a promise to perform.

A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have?

1. The buyer has no recourse because he negotiated the sale himself.
2. The buyer may declare the sales contract invalid.
3. The buyer may sue the seller for partial performance.
4. The buyer may sue the seller for specific performance.
5. The buyer may sue the seller for specific performance.

A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when:

1. any offer is delivered to the seller.
2. the seller accepts the offer.
3. all contingencies are removed.
4. the sale closes.
5. the seller accepts the offer.

An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than:

1. $100,000.
2. $250,000.
3. $500,000.
4. $1,000,000.
5. $250,000.

Under the terms of their listing contract, the owners may sell their house themselves and pay no commission. If their agent sells it, a commission will be due. What kind of listing contract do the owners have?

1. Multiple listing.
2. Net listing.
3. Exclusive agency listing.
4. Exclusive right to sell listing.
5. Exclusive agency listing.

A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property?

1. Seller.
2. Agent.
3. Company that manufactured the waste.
4. Federal government.
5. Seller.

The main difference between tenancy in common and joint tenancy is that with tenancy in common, when a co-owner dies,

1. his undivided interest passes to his heirs.
2. the last surviving owner holds title in severalty.
3. his undivided interest passes to the surviving co-owners.
4. the principle of the right to survivorship determines the rights of the surviving co-owners.
5. his undivided interest passes to his heirs.

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