Pearson VUE practice test Flashcards

Pearson VUE practice test Flashcards

• Obtain an up-to-date flood map from FEMA 40. When a prospective buyer asks about a property's

location in regard to a flood zone, the licensee should direct

the buyer to:a. Calculate the average cost of flood

insurance in the areab. Obtain an up-to-date flood map from FEMAc. Determine how far the property is from a flood plaind. Locate the property on a flood map

• Fulfills the terms of the option45. A property owner MUST convey property that is subject

to an option when the optionee:a. Assignes the optionb.

Sells the optionc. Fulfills the terms of the optiond. Offers to exercise the option at a reduced price

• time share73. An individual with an ownership interest that involves a

specific period of occupancy along with an interest in common areas, such as the use of exterior lands, pools,

and tennis courts, has a:a. partnershipb. condominiumc.

cooperatived. time share

• The contract binds both parties to complete the sale

within a given period of time.

• Which of the following statements about a real estate

sales contract is CORRECT?a. The contract conveys legal title to property when it has been signed by both parties.b.The contract binds both parties to complete the sale within a given period of time.c. Both parties have the right of specific performance.d. The broker may keep the earnest money if the buyer defaults.

• Tenancy in common53. An unmarried couple wants to buy a house and take

title so that, when one of them dies, the deceased's share will go to the deceased's heirs. The form of ownership that

would allow for this is:a. Joint tenancyb. Tenancy in

commonc. Tenancy in severaltyd. Tenancy by the entirety

• credit to the buyer and a debit to the seller A property owner sells a house to a buyer and agrees to

finance $10,000 of the purchase price on an installment

note. At closing, the $10,000 will be a:a. credit to the buyer

and a credit to the sellerb. credit to the buyer and a debit to the sellerc. debit to the buyer and a debit to the sellerd.debit to the buyer and a credit to the seller

• 232,33319. The potential gross income of a warehouse is $36,000

per year, and the vacancy allowance is 2%. The taxes are $2,000 per year, and annual maintenance costs are $3,600. Annual reserves for replacement are $1,800, debt service is $13,500, and depreciation is $3,500. If the capitalization rate is 12%, what is the estimated value of the warehouse?a. 134,333b. 203,167c. 218,167d. 232,333

• The broker and seller are liable for misrepresentation70. A buyer enters into a purchase agreement on a

property that is "for sale by owner." The inspection reveals serious structural defects, which causes the transaction to fail. The seller completes minor cosmetic repairs to cover the defects and then lists the property with a broker, who is aware of the defects. A second buyer has an inspection that reveals no serious problems and the broker makes no disclosure of the defects. The transaction closes. Six months later the defects are discovered. Which of the following statements about liability for misrepresentation is CORRECT?a. Only the seller is liable for misrepresentationb. The broker and seller are liable for misrepresentationc. The second buyer has no legal recourse because the second inspection revealed no defects.d. Only the second buyer's inspector is liable because they did not discover the defects.

• Exclusive Neighborhood54. Which of the following phrases is considered

discriminatory advertising by HUD?a. Quiet Neighborhoodb. Master Bedroomc. Exclusive Neighborhoodd. Over 62 Condo complex

• 837.5074. Under a city's rent-control guidelines, a four-unit

property owner may improve the property and increase the monthly rent per unit at a rate of 1.5% of the cost of the improvement. If an improvement costs $2,500, the owner

MAY increase the monthly unit rents from $800 to:a.

837.50b. 830.00c. 809.38d. 807.50

• Be responsible for monetary fines72. A broker met with a Hispanic couple that wanted to see

homes in a predominately Caucasian neighborhood.Instead, the broker took them to a Hispanic neighborhood.The broker was later informed the couple were "testers," and a discrimination complaint was filed. The broker

MAY:a. Be exonerated because they were testersb.

Immediately lose their licensec. Be responsible for monetary finesd. Be required to close their office until the matter is resolved

• 14320A buyer purchases a home for $55,000 and gets a

commitment from a lender for an 80% loan. The lender has advised the buyer that 3 discount points will be charged. If additional closing costs are $2,000, how much total cash MUST the buyer have at closing?a. 1300b. 13200c.14320d. 15650

• Exclusive right-to-sell61. Which of the following listing agreements gives the

broker the MAXIMUM protection of receiving a commission?a. Openb. Exclusive agencyc. Netd. Exclusive right-to-sell

• The option need not be consummated58. An option contract differs from a contract for the sale of

real estate in that:a. The option does not need

consideration to be legally bindingb. An option is revocable by the optionorc. The option need not be consummatedd.The option automatically renews itself

• It remains enforceable55. If a property owner gives an interested party a properly

executed option with a fixed expiration date of December 31 but dies before that date, which of the following statements about the option is CORRECT?a. It remains enforceableb. It immediately becomes voidc. It remains in effect only if the property owner dies intestated. It remains valid but must be exercised within a statutory period

• Liquidated damages76. When the parties to a contract stipulate that a specified

sum must be paid by any party who breaches the contract,

the sum is called:a. Punitive damagesb. Liquidated

damagesc. Compensatory damagesd. Actual damages

• No legal recourse to sue the individual is possible57. An individual asks a neighbor, who is an inactive

licensee, to sell a home for the individual and the individual agrees to pay the neighbor a commission. After the home is sold, the individual refuses to pay the commission. What is the neighbor's BEST option?a. Sue the individual for the agreed upon commission under a verbal agreementb. Sue the individual under a signed commission agreementc. No legal recourse to sue the individual is possibled. Put a lien on the home in order to obtain the commission

• An estimate of value43. An appraiser submits an appraisal report based upon:a.

The loan amountb. An estimate of valuec. A predetermined value for the clientd. The purchase agreement

• Zoning variance52. A seller owns property that is currently zoned as a

single family residential. The seller wants to add an in-law

apartment. The owner MUST request a:a. Comprehensive

plan changeb. Plat amendmentc. Zoning varianced.Grandfathered-use permit

• A broker is subdividing a 4-1/2 acre parcel into 50-foot

x 100-foot lots. After allowing 71,020 square feet for streets, how many lots can the parcel hold?a. 18b. 22c.25d. 39

• 27,49578. A seller has an outstanding loan balance of $47,244 on

a house that sells for $91,000. At the December 15 closing, the seller pays a 6% brokerage fee, a prorated portion of the annual $577 property taxes paid in arrears (with the seller responsible for the day of closing), $82 for deed preparation, and a $165 transfer fee. In this situation, the seller's net, figured on the basis of a 360-day year, will

be:a. 35,645b. 27,495c. 38,025d. 38,049

• 128,00079. The reproduction cost new of a subject commercial

building is $800,000. The effective age is 8 years, and the remaining economic life is 42 years. On the basis of this information, which of the following amounts is the estimated accrued depreciation?a. 16,000b. 19,048c.128,000d. 152,381

• Waivers of mechanic's lien rights71. Before distributing funds for construction loans, lenders

usually require general contractors to provide:a. Interest

due to dateb. Waivers of mechanic's lien rightsc. Proof of payments to all subcontractorsd. Proof of payment of takeout loan insurance.

• Ground-floor apartments only75. A builder plans to construct fifty garden apartments in a

two-story building. The building will not have an elevator.Which of the apartments MUST meet adaptability requirements according to the Federal Fair Housing Act?a.Ground-floor apartments onlyb. Second-floor apartments onlyc. Apartments rented to elderly persons onlyd. The entire apartment complex

• Earnest monies received from a clients properties in the

agency's business account

A licensee is commingling trust funds by depositing:a.

Earnest monies received from a clients properties in the agency's business accountb. Earnest monies and rents received from a client's various properties in the same escrow/trust accountc. Rents received from the licensee's own properties in a personal accountd. Tenants security depositites received from various clients properties in the same escrow/trust account.

• Current, certified survey59. A CORRECT metes and bounds legal description can

be found in a(n):a. Current, certified surveyb. Previous

appraisalc. Geodetic mapd. Abbreviated legal description

• Unenforceable65. A buyer enters into a verbal contract to purchase a

house and immediately gives the licensee an earnest money check for $500. Prior to performance under this

contract, the verbal contract is considered legally:a.

Voidableb. Validc. Unenforceabled. enforceable

• Nonconforming useK owns and operates a small restaurant in an area recently

annexed by a nearby city. As part of the annexation, the area was zoned for single-family residence, but K is allowed to continue operating the restaurant under the city's amended zoning ordinance. The allowance for K's

continued operation is known as:a. Varianceb. Spot

zoningc. Conditional used. Nonconforming use

• Secure the note by signing a mortgage 33. At a closing that involves the financing of real estate,

the mortgagor MUST:a. Execute a purchase agreementb.

Assign the note to a third partyc. Secure the deed by signing a mortgaged. Secure the note by signing a