Pearson Vue Real Estate Practice Exam Flashcards

Pearson Vue Real Estate Practice Exam Flashcards In addition to real property, pledging a freestanding stove and refrigerator as security for a loan is an example of which of the following mortgages?Package The compensation a buyer agrees to pay under the terms of a buyer representation agreement is to be paid at settlement to the?Buyers broker An agreement that restricts the use and occupancy of real estate, is part of a conveyance, and is binding on all subsequent buyers is called?Covenant The difference between the value of a property and the total amount of liens against it is known as?Equity The value of a property is affected by negative forces outside the property, which are beyond the control of the owner. This is referred to as?Economic Obsolescence The difference between reproduction cost and the present value of property is?Depreciation A child inherits their parent's property prior to their 18th birthday. If the child decides to sell the property, and enters into a purchase agreement, the contract is?Voidable by the seller With the exception of court-ordered sales, the amount of earnest money to be deposited by a prospective buyer is determined by the?Agreement between the seller and the buyer According to the Federal Fair Housing Act, which of the following individuals is permitted to reside in housing with a familial status exemption?A 63-year-old employed postal worker The price at which a willing and informed buyer would buy, and a willing and informed seller would sell, is called the?Market Value When private property is abandoned, the state MAY acquire title to that property under the right of?Escheat To be certain that a property has no encroachments, an appraiser should check a?Survey The act of recovering title to property lost through foreclosure on a mortgage is called?Redemption A seller rejects an offer of $84,000 on a property that is listed for $85,000. One week later, another prospective buyer asks the salesperson to submit an offer. In this situation, the salesperson should?Present the offer to the seller In a real estate closing, the buyer generally pays for the?recording of a new mortgage The direct sales comparison (market data) approach would be most appropriate for establishing the value of a?

• year old single family residence

Which of the following types of legal descriptions identifies a property by outlining its boundaries in terms of a series of directions and distances?Metes & Bounds A landlord enters into a lease with a tenant. The lease contains a provision stating that, if the landlord decides to sell the property during the term of the lease, the first right of refusal to purchase the property. Prior to the tenant's lease expiration, the landlord would like to sell the property.The landlord?Must offer the tenant the first opportunity to purchase The CERCLA is administered by the?Environmental Protection Agency (EPA) The presence of government-regulated wetlands on a building lot?Is a material fact Potential buyers tell their sales agent that they are worried about the presence of radon gas in a home they are thinking about buying. What should the sales agent advise?I suggest that a Radon inspection be performed A licensee deposited a client's earnest money into the licensee 's personal account to hold. This is considered illegal and?Commingling The owners of a house sign a listing agreement and later tell the licensee that the garage roof leaks. If the owners tell the licensee not to reveal the roof's condition to any prospective buyers the licensee must?Disclose the condition of the roof to prospective buyers A homeowner who plans to travel for a year asks a real estate firm to rent the house for this period and indicates a preference for a white family rather than a black family, "if at all possible." Under the Federal Fair Housing Act, the broker should inform that these instructions?Can't be followed because they violate the act The donation of private land for public use is called?Dedication A loan that provides for increases and decreases in the interest rate during its term is known as?An ARM, adjustable-rate mortgage A title insurance policy will protect a buyer from financial losses that are caused by an?Encumbrance to which the policy hasn't taken an exception Buyers make an earnest money deposit on a property and sign a contract that is contingent on specific financing terms. Though a bank commits to the financing, the buyers end up changing their minds. The buyers proceed to notify the seller, in writing, that they do not intend to buy the property. Which of the following statements is correct?The seller may sure for breach of contract.A valid real estate sales contract must? Be signed by the seller Public regulations that control the specific uses of land in a given are area called?Zoning Laws Which of the following documents is usually prepared when a real estate buyer also purchases a sell riding lawn mower?A Bill of Sale

A plaintiff files a lawsuit against a licensee for a property that was later determined to have termite damage. The licensee was unaware of any. The type of insurance that protects the licensee in this situation is?Errors & Omissions As defined in a real estate contract, the due diligence period allows which party to thoroughly investigate a property?Buyer Under a sales contract, the legal remedy that MAY be used to force the seller to consummate the sale is called?Specific Performance A net lease affords the lessee the?Deduction for real estate taxes Under the law of agency, a broker's responsibility to the principal is?Exercise Care, obedience, accounting and disclosure When a married couple takes title to a property as tenants in common, they have elected a form of ownership that allows for?Unequal shares of Ownership Which of the following actions best describes proper supervision of a licensee by their broker?Reviewing all documents and transaction files prior to closing When a broker lists a property that is owned by a married couple as joint tenants, the broker should make sure that the listing agreement is signed by?The broker and both the spouses A property owner must convey property that is subject to an option when the optionee?Fulfills the terms of the option In order for a property manager to determine net operating income on a property, which of the following fees is subtracted from the effective gross?Operating expenses A 40-foot easement exists across the front of a property, and a zoning ordinance requires setback of 50 feet from the front property line. If the property licensee should take which of the following actions when notifying buyers about this situation?Inform them of the existence of both the easement and the setback line A licensee preparing a Competitive Market Analysis (CMA) has information on a comparable property that is similar in all respect to the subject property except that, while the subject property is ten years old and has two baths, the comparable property is five years old and has one bath. In this case, the licensee should adjust the?Sale price of the comparable property, down for the age and up for the number of baths Which of the following actions is an example of blockbusting?Stating that the presence of certain persons in a neighborhood will increase crime.When a buyer purchases a property subject to a sellers existing mortgage, which of the following statements is correct?The seller's obligation under the existing mortgage remains unchanged Which of the following clauses will put the priority of an existing mortgage or deed of trust below that of a mortgage recorded later?A subordination clause

A minority couple asks a licensee to show them a listed house. The licensee suggests that they look at houses in areas with larger minority populations than that of the listed house. What is the licensee guilty of?Steering The gross income multiplier (GIM) is best used to value?Commercial Properties A licensee pays for maintenance on a rental unit using a tenants security deposit. This is an example of?Conversion of Funds

A portion of an advertised reads: "New four-bedroom,

two-bath home for sale in a family neighborhood. Yours for only $1,100 per month". This advertisement violates the?Truth in Lending and Fair Housing Acts If a purchase contact for a commercial property includes a due diligence contingency for the buyer, then the buyer may?Terminate the contract if the buyer is not satisfied with the inspection.Federal law requires a written disclosure be provided to purchasers for which of the following environmental hazards?Lead based paint The final decision in establishing the listing price in made by the?Seller A property manager works in the best interest of the?Owner Which of the following phrases is considered discriminatory advertising by HUD?Exclusive Neighborhood The income approach is most likely to be used when determining the value of an?Office building When using the cost approach to determine the value of a residential dwelling, an appraiser should?Determine replacement value less depreciation Which of the following items would have to be disclosed to prospective buyers by the listing broker?A defect existing in the property being offered.Broker P lists a property for a seller. A buyer, represented by Broker Q, submits an offer to purchase the house and tells Broker P that they are willing to pay the set offer price, if the seller counters. In this situation, Broker P is?Obligated to convey the information to the seller because of the duties to their client.The owner of a farm has found a buyer for the property, which is leased to a tenant farmer. With regard to any growing crops that were planted statements is TRUE?The tenant owns the crops The federal act that provides funds for waste management and solutions for cleanup is the?Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) On Tuesday, buyers make an offer to purchase a house for $250,000 and include a provision to buy the dining room

furniture. The offer expires at 5:00pm on Sunday. The

sellers reply in writing that they will accept the offer of 250,000 but they will not include the dining room furniture.While the buyers are considering the counteroffer the sellers change their minds and decide to accept the original offer, including the dinning room furniture, in writing. What is the current obligation of the buyers?They are not legally obligated to purchase the house