Economics /National Real Estate Exam Practice Test Part 1
In most cases, broker compensation, as a percentage of home price, falls somewhere between:
5-7%
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Key Terms
Term
Definition
In most cases, broker compensation, as a percentage of home price, falls somewhere between:
5-7%
A Christian organization owns a fourplex. It wants to rent to only Christian tenants. Under the federal Fair Housing Act, is this legal?
Yes. Religious organizations which rent to tenants for residential purposes are exempt from the Fair Housing Act
What happens to trade fixtures after a business moves out of a leased property?
The tenant removes their trade fixtures and takes them upon moving out.
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Suppose that a borrower has a gross monthly income of $3,000 and wants to qualify for a conforming loan (total debt service ratio of 36%) with a monthly PITI payment of $800. What is the maximum amount of additional long-term obligations this borrower may have after PITI?
$280
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A square bedroom measures 10 feet by 10 feet. What is the area of the room?
100 square feet
Which of these is an economic characteristic that makes land a distinctive commodity?*
situs
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| Term | Definition |
|---|---|
In most cases, broker compensation, as a percentage of home price, falls somewhere between: | 5-7% |
A Christian organization owns a fourplex. It wants to rent to only Christian tenants. Under the federal Fair Housing Act, is this legal? | Yes. Religious organizations which rent to tenants for residential purposes are exempt from the Fair Housing Act |
What happens to trade fixtures after a business moves out of a leased property? | The tenant removes their trade fixtures and takes them upon moving out. |
Suppose that a borrower has a gross monthly income of $3,000 and wants to qualify for a conforming loan (total debt service ratio of 36%) with a monthly PITI payment of $800. What is the maximum amount of additional long-term obligations this borrower may have after PITI? | $280 |
A square bedroom measures 10 feet by 10 feet. What is the area of the room? | 100 square feet |
Which of these is an economic characteristic that makes land a distinctive commodity?* | situs |
In a fixed-rate mortgage that is fully amortized, the total amount of interest to be paid is: | predetermined |
Which is exempt from the federal Fair Housing Act? | renting a room in a house occupied by the owner |
The Americans with Disabilities Act applies to: | privately owned or government-owned public accommodations |
Condemnation is the act of seizing private property from citizens. What gives the government the right to do this? | eminent domain |
The PHYSICAL characteristics of land are that land is indestructible, non-homogenous, and: | immobile |
Which statement BEST defines the term contingency? | stipulation that must be satisfied before the contract can be performed |
If a borrower is behind on payments, the acceleration clause gives the lender the ability to: | call the entire loan balance due immediately |
A metes and bounds legal description always returns to: | the point of beginning |
What should a license holder do if a client instructs them to do something that would discriminate against a protected class? | advise the client they cannot legally discriminate against certain groups |
What is a novation? | the substitution of one contract for another |
A married couple bought a home ten years ago for $400,000. Their neighborhood has rapidly grown in popularity, and they were able to sell their home this year for $950,000. How much of that money will they be required to pay capital gains tax on? | $50,000 |
Which element of a valid contract states that the contract cannot require any illegal activities or outcomes? | lawful objective |
Deanna wants to sue her real estate agent, but finds out that she has no legal recourse because too many years have passed since the offending incident. What is this an example of? | statute of limitations |
Pedro bought his house for $370,000. The assessed value is $290,000. If the tax rate for Pedro's county is 2.375%, what will he pay in ad valorem taxes this year? | $6,887.50 |
A potentially valid contract in which at least one party has the option to rescind is described as: | voidable |
When you're talking about mortgages, what is another name for an origination fee? | points |
Both parties involved in an agency agreement agree to end the agreement early. What is this called? | mutual rescission |
What does a standard title insurance policy do?* | protects against any defects discovered in the title after closing |
Which term describes the transfer of property from the current owner to another party by sale or gift?* | voluntary alienation |
In the sales comparison approach to property valuation, what does the principle of substitution state?* | The value of a property is only what a consumer would pay to acquire a comparable property. |
Who can require a buyer to purchase homeowners insurance? | lender |
Which of the following statements may represent the unauthorized practice of law?* | "You should proceed without ordering a new abstract - this title is clear." |
A property owner has the right to tell other people that they cannot trespass on their property. What is this right called? | right of exclusion |
The term for when the client initiates the termination of the agency agreement is known as: | revocation |
Which of the following terms refers to a surveyor's or developer's map that identifies lots and blocks? | plat |
The statute of frauds requires that real estate agreements: | be in writing |
Which type of deed includes the five implied warranties (covenants)? | general warranty deed |
Which of these scenarios does NOT violate fair housing law? | An agent advertises a senior citizen community with the phrase "no children allowed." |
What is the difference between a bill of sale and a deed? | A bill of sale is for personal property; a deed is for real estate. |