National Real Estate Exam Practice Questions

A property owner has decided to do some landscaping work on his yard. He has planted a tree surrounded by some flowering shrubs. The tree and shrubs are an example of...

A property owner has a waterfront lot on a stream. He has the right to use the water from the stream. What is this right called?

A tenant is aware that his lease will expire at the end of the month. He has begun to disassemble his display cabinets and shelves. Which of the following statements about this is true

A seller is attending the closing on his property. The title company has discovered an unsatisfied M&M lien on the property. Which of the following is the most likely reason for the lien?

A listing agent went to inspect a seller's property hoping to list it for sale. The seller told the listing agent that his neighbor's satellite dish trespasses on his property. This is an example of...

A father gives his son a life estate on a property. The son leases the property. The tenant dies. What happens to the property?

A man leaves his second wife a life estate in their home after which the property goes to his children from his first marriage. The children...

Which of the following statements about an easement is true?

P, Q and R are joint tenants. P wants to sell the property, but Q and R do not. What can P do?

A, B and C are joint tenants. C dies. B sells his share to D. What type of ownership do A and D have?

Under what right can the government change property use from commercial to residential only?

Ownership of the common areas of condominiums is most likely to be:

What should a buyer do to ensure that his is getting the best title to real property?

Which covenant in a deed guarantees that the owners will not suffer or be disturbed by any claims on the property?

Excess money at a foreclosure sale goes to...

After defaulting on a real estate loan, a borrower is able to pay off the loan prior to the foreclosure sale. This is called:

The required distance between buildings and a federally protected endangered species wetlands is an example of...

A couple purchased a condominium. The complex has an exercise room for all residents. The couple does not use the exercise room and does not want to pay the monthly fee for the use of the facility. What can they do to avoid this fee?

Which of the following is personal property?

A landlord leased space in his new retail property to an inexperienced business person. Based on location and the type of business, the landlord believes it will be a great success. What type of lease can he enter into with the tenant that will allow the landlord to benefit from the tenant's success?

A buyer has purchased a property and after closing the seller will continue to occupy the property. This is an example of...

Your client will be able to qualify for a property they wish to purchase in about 6 months, after they had an opportunity to reduce their consumer debt. They have found a property that they would like to purchase now. What type of agreement can they enter into with a seller that will allow them to occupy the property now and purchase it within the 6 months?

Tenants have signed a 3 year lease on a property. In the second year the owner dies and his heirs inherit the property. They give the tenants notice to vacate. What is true?

A developer decides to build a commercial property in the middle of a residential subdivision. What is required?

A zoning ordinance would affect which of the following?

If a person dies without a will, who receives their estate?

What are the requirements/ criteria for real estate to have values?

What principle of value defines the most important factor for appraisal?

What approach would an appraiser most likely use to value a residential rent house in neighborhood where a majority of the homes are leased?

A licensed broker is advertising that he will perform a free appraisal if you contact him for a listing appointment. He is not in violation of the law...

Which of the following is NOT an example of functional obsolescence?

According to the Statute of Frauds, which of the following leases must be in writing?

Your client is an investor who would like to have the right to purchase a commercial tract for $5 million for the next 6 months. What type of contract should he enter into with the seller?

A signed sales contract that has not yet gone to closing is...

When does an offer become a contract?

Which of the following statements is true about the duties of an agent according to the common law of agency?

A property manager is hired and signs a management agreement with the owner. At this time, the property manager is...

A buyer and seller have negotiated a contract on the seller's property with a closing set for June 14th, time is of the essence. On June 12th the listing agent calls the buyer's agent and tells him the seller will be unable to close on the 14th. The seller can close on the 16th. At this time, what is true?

A licensee is representing a seller in a commercial transaction. The property is under contract and all contingencies have been met. The listing agent learns the State Department of Transportation has authorized the construction of an exit ramp to the interstate right behind the commercial property. The exit ramp will greatly increase the value of the seller's property. What should the agent do?

A listing agent is showing his listing to a buyer customer and notices a problem with the exterior of the property that he missed when he listed the property. What should he do?

A buyer's agent has accidentally forwarded confidential information about his buyer's financial background to the listing agent. What is true?

What is the difference between replacement cost and market value?

Economic life is defined as

An unlicensed assistant gets a call from a listing owner with questions about a contract- what should the assistant do?

An underage college student signs a lease, then discloses his age to the landlord. What is true?

A seller comes into the office to sign a contract. The seller is stumbling and smells of alcohol. How do you proceed?

A high rise condominium property is advertised as having the "Most beautiful view of the city". This ad is best described as

Which of the following facts about listed property must be disclosed

A lead paint disclosure is required for all properties built before

Which of the following statements about lead is NOT true?

CERCLA is under the administration of:

Which of the following used in 1978 is both extremely hazardous and friable?

Which of the following properties would be the least desirable neighborhood?

A seller must keep a copy of the lead paint disclosure he provided to the buyer for

It has been found that mold can develop due to

General liability insurance will

A condo owner's policy will most likely cover the owner if

A condo complex has liability complex has liability insurance. This is least likely to cover

Accurate record keeping is the responsibility of all the brokers. If a broker's computers are stolen what steps could have been taken to protect records?

A license holder has just attended a training seminar about technology in real estate and is excited about using social media with her clients. Which of the following statements about social media in real estate is NOT true?

A sales agent is showing a property. He trips in the house causes major damage to property of the owner. What type of insurance will cover this accident?

Prior to its amendments, the Civil Rights Act of 1968 prohibited discrimination based on...

An agent working with immigrant buyers must be careful

An agent is accused of discrimination. What will HUD do...

A mobility impaired tenant has leased an apartment in a complex with unassigned parking. He has requested an assigned reserved space near to his unit. What is true?

An investor has 15 rent houses. He has hired an agent to lease the houses. Which of the following actions by the agent would NOT be in violation of fair housing laws.

Which of the following would NOT be an operating expense included in the property manager's operating budget

Which of the following would be most likely to hire a property manager?

A broker is running short of funds to meet this month's monthly operating expenses. He places a client's earnest money deposit in his business account and uses it to pay is rent. After his next closing, he replaces the client's deposit in his trust account. The broker...

Which of the following is NOT an example of due diligence in a sales contract?

A sales agent just obtained a listing. The seller told the agent that she needs to sell the property because she is going through a divorce. What must the salesperson do

Wetlands typically contain which of the following?

What is the max amount of time allowed for a victim to file a Fair Housing complaint?

A property manager notices that the building stucco needs repair. He notifies the landlord and recommends a contractor. The landlord uses the contractor who does not do a good job. The new stucco leaks and mold grows. The tenant becomes ill from the mold. Who is responsible?

An apartment building owner has renovated and modified several units to be handicapped accessible. Can he advertise this accommodation?

When did the second amendment of the Federal Fair Housing Act go into effect?

What is the purpose of a property management trust account?

Regulation Z applies to:

The main purpose of Regulation Z is

What is a requirement of the CFPB

Which of the following closings would be covered by RESPA (1-4 residential family housing)

When does the buyer under contract for deed get title to the property?

What is another name for Contract for Deed

What department of the government oversees the FHA insurance program?

A buyer is aware that the interest rates should go down over the nest few months. What type of loan should he get to enable him to buy now and take advantage of declining rates in the future?

Which of the following is unlikely to have a negative impact on seller's credit score?

In rental properties, increased demand can be the result of

Which of the following would not be eligible for a VA loan

What is required of a loan servicer before foreclosing on a VA loan

Who must be notified to take money out of the trust account in a real estate transaction?

How is earnest money recorded on the closing disclosure a. debit to the seller b. debit to the buyer c. credit to the seller d. credit to the buyer

What type of mortgage loan would allow the property owner to borrow additional funds at future dates

A seller has received $225,000 for the sale of his home. This represents a 20% profit. What did he pay for the house when he purchased it?

A seller wants to net $185,000 on the sale of his property. He must pay a loan balance of $180,530 and closing costs at $10,000. The commission to the listing broker will be 6%. What is the lowest price the property can sell for to accomplish this?

If an appraiser uses the cost approach to determine the value of a two story building 128 x 97 at $120/sq. ft, with $10,000 in depreciation and a $27,500 lot, what is the value of the property?

Mark purchased a home for $150,000 He had an 80% LTV. He has paid off $42,000 of his purchase mortgage. He is selling the house for $179,000. How much equity does he have?

Maria is planning to buy a house for $200,000. The lender has indicated that he will charge 3 points plus an origination point. Maria is considering the difference between an 80% LTV and a 75% LTV. How much will she save on points if she chooses the 75% LTV?

An office space is 24 feet long and 27 feet wide with 9-ft ceilings. The owner wants to carpet the office. How many square yards of carpet does he need?

A property is listed for $399,500. It sells for $396,000. The negotiated commission is 6% and will be split evenly between the selling broker and the listing broker. The selling broker pays his sales associates 60% of the broker's commission. How much does the selling broker earn?

A developer has 2,178,000 sq.ft of property. He sells 80% of it for $5,000 an acre. What is the total sale price?

An office building has a potential gross rent of $20,000.per month. It has a vacancy rate of 15%. Yearly expenses for the property toatl $115,000. If the owner is earning a 10% rate of return, what is the value of the building?

What monthly income will your buyers need to qualify for a $200,000 loan at 6% for 30 years if lenders are qualifying at 28%? (The loan factors is $6.00). Monthly taxes and insurance will be $900.

A seller is closing on the sale of his home on April 23rd. The property taxes have not been paid for this year. The annual tax bill is $2,008. Using a 360-day year, how much will the seller owe for taxes at closing?

An owner sold his house for $250,000 with a $50,000 take back. (A take back is seller financing. The seller receives a note for this amount at closing and will collect this amount over the agreed-upon term of the loan). He paid off his loan of $138,500 and ha paid a 5% commission. He had closing costs of $10,000. How much did the seller net at closing?

John is purchasing a lot 125 feet wide and 127 feet deep for $5.65 a square foot plus $15 a front foot. (A front foot refers to frontage and is the width of the lot.) How much will he pay for the lot?

A sale is closing on June 15th and the annual property tax bill has not been paid. The house is assessed at $350,000 and the tax rate is $2.50 per $100. Using a 360-day year, how much will the seller owe for the taxes at closing (to the nearest dollar) and how will this be shown on the CD?

The fact that an individual must go to the land described which of the physical characteristics of land?

John and Mary are co-owners of a property. John has 60% interest in the property and Mary has a 40% interest. What type of freehold estate do they have?

A property is surveyed to determine a legal description. The surveyor works from a point of beginning, and measures terminal points and angles. What method of land description is he using?

Mary and John are married with grown children. Both are intestate. If John dies and Mary becomes the owner of their home, what type of ownership did they have?

The local government needs your land to build a new high school. They have the right to take your land for the public good. This is called

You have recently purchased property in an area regulated by zoning. It has come to your attention that you have a zoning violation on the property. What should you do?

One of the property owners in a subdivision is violating the deed restrictions. What can the other property owners do to get him to comply?

Your property borders a non-navigable waterway and you have riparian rights. You have built a 10 foot pier at the water's edge. How do measure your property?

Mary, a single woman, has no children. She owns real property and dies intestate. What happens to her real property?

A property owner has a gas station on his land. The zoning committee changes the zoning to R-1. What must the property owner do?

A property owner receives a notice that his land is in an improvement district. What does this mean?

A property owner has installed a chain link fence on his property. He has received on official notice requiring the removal of this type of fence. This fence is most likely a violation of...

A single property is regulated by building codes, zoning and deed restrictions. The rules are in conflict with one another. Which must the property owner obey?

Which of the following conveys title to real property and insure good title?

A buyer has discovered a defect in title and has suffered a loss due to the defect. The title company has compensated the buyer for the loss. Subsequently, the buyer is awarded a judgement against the seller. The title company is entitled to a portion of the judgment as reimbursement for the claim it paid. This describes...

A landowner wants to sell his property. A title search uncovers a cloud on the title. There is no one available to sign a quit claim deed to clear up the cloud. What can the owner do?

Appraisers are most often asked to determine:

A builder is using inferior siding and paint in an effort to construct affordable housing. This would be an example of...

A builder is very successful and active in a new subdivision. Homes in the subdivision are selling well, and the builder is making a good profit on the sales. Two new builders arrive and begin to sell in the same subdivision. All experience a lower level of profit. This demonstrates which principle of appraisal.

When measuring gross area the appraiser measures the

Which of the following is the best definition of market value?

In preparing an appraisal, which of the following would have the least impact on the appraiser's estimate of value?

An appraiser has been hired to value a commercial office building that is fully leased. What approach to appraisal will he use to determine his opinion of value?

What is the least important factor for a license holder preparing a CMA

An appraiser is using the Market Data Approach to determine the value of a residential property. What is FALSE?

What expenses of home ownership can a buyer deduct on his income taxes?

Mark has an option to purchase Bob's property. The option expires at the end of the month and Mark would like to extend the option. What would he need to do?

A buyer has signed an agreement to purchase a property from a seller. He has met all the terms and conditions of the listing. The listing broker has taken the agreement to the seller. The seller has changed his mind about selling and refuses to sign the agreement. What is true?

Mark has an Open Listing on a seller's property. He had shown the property three times to the same potential buyers. Each time, he notified the sellers of the showing by phone. He heard from the sellers that he should no longer show the property as it was sold. Several weeks later, he learned that it was sold to the buyers he brought to the property. What are Mark's rights with respect to a commission from the sellers?

The best description of a counteroffer is

Which of the following contracts would be voidable?

A buyer and his agent visit a listed property. The buyer loves the property and wants to purchase it. He speaks with the seller, who is at home at the time, and they come to an agreement regarding price and terms. They shake hands on the agreement and the buyer happily leaves the property. His agent should:

Which of the following terms is used to describe a situation where a buyer and seller agree to terminate a contract?

A seller's property is listed for $399,900. A buyer makes an offer for $389,000. The seller counter offers for $392,500. The buyers have not responded to the counteroffer. The sellers receive another offered for $395,000. They would like to accept this new offer. What is true

A broker owes customers

What are an agents duties to his principal?

An agent has acted without authority to do so. His principal has found out about the actions and accepted them. What kind of agency does this describe?

Broker B has signed a Buyer Representation Agreement with his clients. As a Buyer's agent he must disclose all of the following except:

A broker has written permission to represent both the seller and the buyer as a dual agent. Under these circumstances, which of the duties of the agent would be the easiest for him to fulfill?

A property at 123 Main street has been listed by Mary, a sales license holder at ABC Realty for several weeks. Last week, Mary died. What effect will Mary's death have on the Listing Agreement?

Which of the following is not a duty of an agent?

A signed employment agreement is necessary to...

A listing agent would probably not disclose

Which of the following deaths on the property should never be disclosed?

Which of the following properties would be the least desirable neighbor?

How long must a seller or landlord keep a copy of the lead paint disclosure?

All of the following are hazardous substances that a license holder should be aware of except

Which of the following is the best example of puffing

A buyer's agent has helped a buyer to find a home. The buyer has expressed concern about the possible presence of radon. What should the buyer's agent do in this case?

A chemical manufacturing company purchases a plant. After closing they discover that the previous owners had spilled hazardous materials on the land. According to CERCLA, who is liable for the cost of the cleanup?

Who is responsible for providing a lead paint disclosure?

A property has lead paint in the interior and on the exterior. Which of the following statements is true?

A license holder has just taken a class on networking and marketing through social media. She is very excited about the possibilties and hes established Facebook, Twitter, Linkedln and Pinterest acocunts. She is also writing a blog. She has decided to market a new listing on these sites. The property has been built to resemble an Antebellum mansion. How can she advertise the propert?

Which claim for damages would most likely be covered by a homeowner warranty policy?

Under a new construction Home Owner Warranty policy, which of the following would not be covered?

Which of the following statements about flood insurance is FALSE

After several years of selling residential property a license holder wishes to begin working on industrial sales. He should

A property has foundation problems. The seller has painted over them to hide them. He lists his property for sale "as is", and does not disclose the problem. The listing broker views the property but does not detect any defects. A buyer purchases the property and after closing discovers the problems. Which of the following statements is true?

E signature or electronic signature

In senior housing communities, at least one person over the age of 55 must be living in what percent of the units?

A practice of trying to induce homeowners to sell by convincing them that a minority group is moving into the area causing property values to drop is

The main goal of the ADA is the removal of barriers. All of the following are required under ADA except:

According to Regulation Z, which of the following is not a trigger term?

Which of the following is false regarding the Civil Rights Act of 1968

Which of the following loans would not have a 3 day right of recession?

What form replacing the HUD-1 must be provided to the consumer and when must it be provided?

Which of the following does NOT pledge property as security for a debt?

Which of the following instruments is the promise to repay a debt?

What is the advantage to the borrower of a VA loan?

John has a loan with equal regular payments of principal and interest. Long before the debt is satisfied, the balance is due in a payment substantially larger than all the others. This is best described as a:

For what group of buyers would the ARM be the least desirable?

Where can you expect to find MIP?

What is a point?

Where does the secondary market get its funds?

A retired couple is on a fixed income. They own their own home. They are having a hard time making ends meet, yet they do not want to sell their home. What type of loan should they consider?

An investor/developer has borrowed money to build a retail shopping center. His lender has provided a very competitive interest rate, however when the investment property is completed and sold the lender will collect the amount borrowed plus a percent of the developer's profits. What type of loan is this?

John has leased commercial property and pays rent based on the receipts of his business. This type of rent is referred to as

Which of the following would be considered an operating expense by a property manager preparing an operating budget for the owner?

The property management agreement creates what kind of agency?

Who would use the remedy of Forcible Entry and Detainer?

The landlord pays the expenses of the property. The tenants pay rent plus utilities. What type of lease is this?

When a landlord allows the property condition to deteriorate so much that the tenants are forced to leave it is called:

A couple is moving to a new city and they would like time to learn the city before they purchase a home. What type of lease should their agent recommend?

A young couple leases an apartment in an apartment complex for one year. During the year, they become concerned about crime in the area and ask for permission to install an alarm system in the apartment. The landlord grants permission. When the lease is up, what happens to the alarm system?

What type of verbal lease agreement would be enforceable?

John has a three year lease on office space. In the second year the landlord dies. His heirs inherit the property. They do not want it and they sell it. The new owner wants John to move out. Does John have to leave?

What type of business entity is owned by shareholders, but avoids "double taxation"?

What is the difference between a general partner and a limited partner?

A one on one relationship between a broker and a client is called

A license holder sponsored by a broker must have a written agreement

A broker has a trust account set up to hold client funds. He has earnest money deposits from several clients in the account at the same time. This is:

Which of the following actions of a broker could jeopardize the independent contractor status of the license holders he sponsors?

A buyer's agent is working with a buyer to purchase a property. The buyer is concerned about the location of the fence as it appears to be encroaching. What should the buyer's agent do?

A couple is purchasing a home and ask their agent how they should take title so that if one spouse dies, immediately the surviving spouse will be the sole owner of the property. The license holder should:

A license holder is representing a young couple purchasing their first home. She shows them many properties and finally they find one to buy. They have some concerns about the contract and ask to speak an attorney. the agent should...

A license holder advertises a listed property as having the most beautiful landscaping in the neighborhood. This is an example of...

A license holder is showing her own listing to a buyer customer. While showing the property she notices that there is a serious slope to the porch floor. What should she do?

Which of the following is false about a property manager?

A leased property is not for sale at this time. The tenant has a four year lease on the space. The tenant also has the right to match or better any offer before the property will be sold to anyone else. What agreement between the landlord and tenant gave the tenant that right?

Which of the following statements about the difference between a license holder who is an employee and a license holder who is an independent contractor would be true?

Wetlands are often associated with

A veteran cannot use his/her entitlement to obtain

The due on sale clause is found in a

A sales agent had a listing and the property did not sell. The listing expired. During the term of the listing the seller had disclosed confidential information to the agent. Several months later, the agent has a buyer client interested in purchasing the same property. How long must the seller's private information be kept confidential?

A metes and bounds description will always

Which of the following is an example of economic obsolescence?

A salesperson designed an innovative tech in the office that would substantially improve service to clients. He must

Every broker must display the Equal Housing Opportunity Poster in his office. The poster is usually distributed by

Which of the following best describes an FHA loan?

A broker is most often

What type of loan has a rate linked to an economic index?

When should an agent advise a client to get title work done?

What is considered evidence against a broker accused of discrimination?