WA State Real Estate Exam Prep: Rockwell Institute Sample Exams

WA State Real Estate Exam Prep: Rockwell Institute Sample Exams

Flashcards The deed that states that there is a conveyance of interest,

if any, is the:A. grant deedB. bargain and sale deedC.

quitclaim deedD. special warranty deed

Correct Answer: C30% of students missed this

questionWhen signing a quitclaim deed, the grantor is saying, "I hereby quitclaim, remise, and release whatever interest I have in the property, if any." Property management for residential property is different from property management for commercial property, in that

a manager would be more concerned about:A. a written

lease for a residential tenant than for a commercial tenantB. future space needs of a commercial tenant than of a residential tenantC. the credit rating of a commercial tenant than of a residential tenantD. the security deposit of a commercial tenant than of a residential tenant

Correct answer: BA commercial tenant may need to

expand into remodeled adjacent units, if its operations grow, so a property manager will want to consider that possibility when helping a commercial tenant find the right space. However, this is not usually a concern for residential tenants. By contrast, a written lease, a security deposit, and a check of credit scores are all common in both commercial and residential leases.Under which of the following circumstances would a listing be terminated?A. Real estate agent who took the listing diesB. Seller diesC. Property is rezoned after listing is signedD. Listing agent goes to work for another firm

Answer: BAccording to agency law, if either the principal (in

this case the seller) or the agent dies, the agency isterminated. However, the agent in a real estate agency relationship is the real estate firm, not the individual who took the listing; so the listing is still in effect even if the individual real estate agent dies or moves to anotherfirm.Gerald engages a licensee to list his property and find a

buyer for it. In this context, the licensee is acting as a:A.

general agentB. power of attorneyC. property managerD.special agent

Correct Answer: D37% of students missed this

questionWhen a licensee represents a seller in a specific transaction, and is authorized to perform typical duties associated with listing a property, she acts as a special agent.For which of the following people would an adjustable-rate loan not be a good idea?A. A person about to retireB. A person planning to refinance after several yearsC. A person who will live in the house only a short timeD. A person whose income is expected to go up soon

Correct Answer: AWith an adjustable-rate mortgage, the

borrower runs the risk that the interest rate will rise sharply in the future. Thus, an ARM can leave a borrower on a fixed income struggling to make payments. By contrast, someone whose income is expected to grow would be better positioned to handle an interest rate increase.While preparing a competitive market analysis, an agent finds four comparables to choose from. Comparable 1 sold for $180,000 13 months ago under normal conditions.Comparable 2 sold for $190,000 14 months ago under normal conditions. Comparable 3 sold for $175,000 10 months ago as a foreclosure. Comparable 4 sold for $180,000 16 months ago as a foreclosure. The agent

should use:A. the oldest twoB. the newest twoC. all fourD.

none of them, because they are all older than nine months

Correct Answer: DIdeally, comparable sales should have

occurred within the past six months. A sale older than six months can be used if there's no choice and adjustments for inflation are made. Comparables generally must have sold under normal conditions, which rules out answers A, B, C, since those all include at least one foreclosure.This leaves D as the best answer. The agent should try to cast a wider net for comparables, even if that means using houses that need more adjustments for features or are located farther away.

An offer is dated June 4. The offer is accepted on June 7.The buyers are approved for a loan and satisfy the financing contingency on June 9. The transaction closes on

June 28. The date of the contractis:A. June 4B. June 7C.

June 9D. June 28

Correct Answer: BThe date on which acceptance occurs is

considered to be the date of the contract. In this case, that would beJune 7.The protected class of "familial status" in the federal Fair

Housing Act refers to the presence of:A. adult children of

tenants living on the propertyB. children under the age of 18 living on the propertyC. persons over the age of 65 living on the propertyD. unmarried persons living on the property

Answer: BDiscrimination based on familial status refers to

discrimination against someone because a child (a person under 18 years old) is or will be living on the property. In addition to parents, this rule protects legal guardians, pregnant women, and people in the process of obtaining custody of a child.A purchase and sale agreement is for $150,000, with 80% financing, closing in 30 days with possession at closing, and a rent provision for possession after closing. This is an

example of a/an:A. acceptanceB. contract with

contingenciesC. counterofferD. unilateral contract

Answer: BThis is a question that is best answered by the

process of elimination. Answer A is too vague to be a good answer. There is no mention of a counteroffer so C doesn't apply. Nor does D since a purchase and sale agreement is a bilateral contract, not a unilateral contract. Therefore, you can conclude that B is correct and financing is a contingency here.A mortgage that uses both real and personal property to

secure the borrower's debt is a:A. reverse equity

mortgageB. budget mortgageC. package mortgageD. deed of trust

Correct Answer: CA package mortgage includes both real

and personal property as collateral.A contract specifies that "time is of the essence." This

means that:A. the seller must fulfill her contractual duties

by the date set forth in the contract, but the buyer does not haveB. the buyer must fulfill her contractual duties by the date set forth in the contract, but the seller does not havec.The agent must fulfill his contractual duties by the date set forth in the contract, but the buyer and seller doD. all contractual duties must be fulfilled on or before the date set forth in the contract

Correct Answer: DA time is of the essence clause means

that all parties to the contract are legally required to meet all deadlines set in the agreement. Failure to meet any deadline by either party is a breach of contract.An investor rents a property to a tenant. For tax purposes,

depreciation on this property is basedon:A. market value,

plus capital improvements, minus land valueB. market value, plus rental income, minus land valueC. price, plus capital improvements, minus land valueD. price, plus rental income, minus land value

Correct Answer: C56% of students missed this

questionDepreciation is deducted from how much the

owner has spent on the property: initial basis plus capital

expenditures. The value of the land must also be subtracted from what is depreciable; land does not wear out, so depreciation doesn't apply.A real estate agent shows a listing to two different buyers.One buyer decides in the early morning to make an offer on the property for less than the listed price. The agent writes up the offer and plans to meet with the seller later in the day. The other buyer then contacts the agent and says that she'd like to make a full price offer. What should the agent do?A. Meet with the sellers but present only the first offer, and then present the second offer only if the first offer is

rejected.B. Present both offers to the seller at the same timeC. Tell the second buyer that her offer is invalid because there is already an offer on the propertyD. Tell the second buyer that he can only present the first offer to the seller, but he'll present her offer if the first one is rejected.

Answer: BA real estate agent has the duty to present all

written communications to and from all parties in a timely manner. Failing to inform a party of any offer would be a breach of this duty. This is the law no matter who the agent is representing.A licensee hears that a religious group will be opening a commune in a neighborhood. He begins contacting neighbors and telling them about this, encouraging them to

list their properties with himbefore property values decline.

This is:A. blockbustingB. redliningC. steeringD. legal

Answer: ABlockbusting occurs when a licensee tries to

induce homeowners to list their properties by predicting that persons from a protected class (usually on the basis of