Real Estate Practice Exam Questions with Answers latest Updated Graded A+

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1. Brokerage definition... - ANSWER the business practice of bringing together the parties in a practice. 2. What are two examples of special use property? - ANSWER schools and cemetary 3. What ... is an example of functional obsolescence? - ANSWER bathroom 4. Principal definition... - ANSWER a consumer of real estate services who has entered into an agency relationship with a broker or another licensee employed by a broker. 5. Capitalization definition... - ANSWER the process of determining the present value of a property from it's future income. 6. What is the salespersons obligation to a buyer under single agency listing? - ANSWER Inform the buyer 8. All are examples of real estate except... - ANSWER factories 9. What is homeowners insurance? - ANSWER Insurance to protect owners from fires and other etc. 10. Special agent definition... - ANSWER the type of agency in which the principal authorizes the agent to represent the agent in "one specific transaction or business activity" 11. Which is not used to determine cost approach to estimate value? -Quantity Survey Method -Unit-in-Place Method -Square Foot Method -Gross Rent Multiplier Method - ANSWER Gross Rent Multiplier Method What is steering? - ANSWER the unlawful act of keeping a buyer away from certain communities or guiding them to purchase in certain communities. 15. Entitlement to commission when transaction is not consummated. - ANSWER Except when listing broker does not disclose information 16. Can a salesperson give legal advice? - ANSWER No, not unless they are an attorney. 17. Who determines the commission in a listing contract? - ANSWER An agreement between the owner and broker 19. All are typical duties of a property manager with the exception of... - ANSWER Investing profits 20. Transfer tax is typically paid by for by whom? - ANSWER Buyer and seller 21. Blockbusting definition... - ANSWER An illegal real estate practice caused by inciting fear and panic selling by suggesting that persons of minority background are or may be moving into an area or that the majority of residents are moving out of an area. 23. Special agency listing definition... - ANSWER n/a 25. Net listing definition... - ANSWER a type of listing in which a seller desires to sell real property and receive a guaranteed amount of money for the sale, so that the broker's commission is any sale price amount of money over and above the guaranteed price to the seller. 26. The main factor a property manager should use to evaluate a prospective tenant is - ANSWER can they make monthly rent payments on time. 27. All are examples of single agency disclosures with the exception of - ANSWER revealing the owner will except less. 30. What is the most reliable method of appraisal for residential real estate? - ANSWER Sales comparison approach 31. Assemblage definition... - ANSWER consolidating two separate lots into one. 32. What would not be a depreciation of value? - ANSWER Unimproved land 33. What has the greatest effect on real estate value? - ANSWER Demand of people and location 34. What rules require fair housing laws to be in a listing contract? - ANSWER PA Human Relations Act 40. Typically who pays for title insurance? - ANSWER Buyer 44. What is the transfer tax charged by the state of PA? - ANSWER 1% of the sales price 45. What should you do about material defect disclosures? - ANSWER inform the buyer and seller 48. What is private mortgage insurance? - ANSWER It protects the lender if their is default 49. What is the first step in the appraisal process? - ANSWER Indicate objective of appraisal 50. What is an example of external depreciation? - ANSWER Nearby property that suffers from lack of maintenance and is negatively affecting the sellers property. 52. Who does a selling salesperson represent under buyer agency? - ANSWER Buyer 54. What is not an example of a real estate business violation of the antitrust laws? - ANSWER opening offices in new locations 56. Equity definition... - ANSWER the value of real estate above any debt on that property. 57. Who are the parties in a listing agreement? - ANSWER owner and listing broker. 58. All are examples of fiduciary responsibilities under a single agency listing agreement except.. . - ANSWER negotiate lowest price. 60. Reconciliation definition... - ANSWER the process of comparing the property values derived from different approaches to value, selecting the most suitable approach for the particular property being appraised and coming to a final conclusion of value. 62. The following are typical property management operation expenses except... - ANSWER ceiling replacement 65. The following are examples of agricultural property except... - ANSWER government owned rural land 66. Physical deterioration... - ANSWER associated with normal wear and tear. 68. Proper listing price of the property... - ANSWER based on seller 69. Exclusive Right to Sell Listing definition... - ANSWER A type of listing to list and sell real estate property in which the seller employs one broker but that broker earns a commission "no matter who sells the property including the owner" 70. What type of property would be most appropriate to use the cost approach method? - ANSWER 25 year old church 71. Definition of appraisal... - ANSWER supportable estimate of value 73. What is the PA law that prohibits discrimination in housing? - ANSWER PA Human Relations Act 75. Is special price setting allowed for certain categories of people? - ANSWER No it's illegal 77. When is the consumer notice given? - ANSWER At the first discussion of needs and motivation. 78. What are the conditions to when an agreement of sale becomes a binding contract? - ANSWER When the buyer accepts the offer and the seller is notified. 80. What does the C stand for in the fiduciary dities - ANSWER Care and confidentiality 81. Characteristics of sale and leaseback... - ANSWER buyer becomes lessor 83. What is a broker's obligation to a buyer without buyer agency? - ANSWER Give the agreement of sale 84. Redlining definition... - ANSWER the unlawful practice of refusing real estate related business services based on location of a person's real property. ie: lending institutions or insurance companies 85. What is a way of termination a listing agreement? - ANSWER Bankruptcy Court 92. What is a type of depreciation that is not curable? - ANSWER external depreciation 94. Disclosure requirements to a seller under a listing agreement force brokers to disclose info except... - ANSWER the buyer had AIDS 96. Sale and leaseback definition... - ANSWER a combination real estate transaction where there is both a sale of real property by an owner and then an immediate lease on the same property giving the seller the right to remain in the same property that was just sold. 13. All are characterisitics of a contract for a deed except... - ANSWER the buyer receives title when the contract is signed. 18. Who is considered the lender in a purchase money mortgage? - ANSWER Seller 22. What is the purpose of RESPA? - ANSWER to to provide disclosure of closing cost info. 28. Purchase money order is a debit to the... - ANSWER Debit to the SELLER (It's a loan in which the seller provides financing to help buyer) 29. Balloon Mortgage definition... - ANSWER A mortgage with a balloon payment 36. Obligations of an owner in a listing agreement if he refused to sell when presented with a full offer... - ANSWER He is liable for broker compensation 37. Is undisclosed dual agency allowable by law? - ANSWER No, you can lose your license. 38. Earnest money deposit is a credit to whom - ANSWER to the buyer 39. Convert 3 mills to a decimal - ANSWER .003 41. Loan origination fee is a debit to whom? - ANSWER buyer 42. What is prorated by day on a HUD 1? - ANSWER Interest on an assumed mortgage 46. What is the source of money for an FHA loan? - ANSWER A qualified lending institution 51. What is the role of a mortgage broker? - ANSWER To find mortgage lenders for borrowers. 55. What is true about the contract rules regarding printed form sales agreement? - ANSWER Handwritten words take precedent over printed words 59. What is a shares appreciation mortgage? - ANSWER The lender receives a share of capital gain at time of sale. 61. Determine the value by the Income Approach formula - ANSWER NET INCOME divided by RATE OF CAPITALIZATION 63. Fiduciary responsibility in a property management contract is to the - ANSWER lessor 64. What is the formula for the Gross Rent Multiplier? - ANSWER SALE PRICE divided by MONTHLY RENT 67. All are federal income tax deductions for a homeowner except... - ANSWER property management 74. An example of an item that is prorated at settlement is... - ANSWER Rental Income 76. Paid tax is a credit to whom? - ANSWER Credit to the Seller 82. Selling agent represents who in a single agency listing agreement? (Scenario Question) - ANSWER Dangerfield represents Crawford [Show More]

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