Practice of Real Estate and Real Estate Calculations Practice Test

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• Which disclosures are required for pre-1978 residential properties regarding lead-based paint?
• Ownership where the owner's heirs gain ownership upon death.
• Which costs are typically included in deductible costs of homeownership?
• Which statement best distinguishes cap rate from DSCR?
• Warranty that only covers defects during the grantor's ownership.
• Which document accompanies lead-based paint disclosure in pre-1978 properties?
• What is the difference between a grant deed and a warranty deed?
• Procuring cause is best described as the broker's what?
• Which ownership form is typically associated with married couples and includes survivorship rights?
• What is the purpose of a title search performed before closing?
• In a net lease, who typically pays some or all operating expenses?
• Which method is commonly used to clear a cloud on title?
• In environmental disclosures, which item is commonly required by law or contract?
• What does loan-to-value (LTV) ratio measure and how is it calculated?
• What is the typical purpose of a residential lease security deposit, and what is a common range?
• In a typical closing timeline, which document is typically reviewed just before funding and closing?
• Which term denotes a loan guaranteed by the Department of VA?
• What describes the relationship in which an agent is placed in a position of trust and confidence to the principal?
• In recording statutes, how is lien priority determined?
• What clause gives the lender the right to declare the loan balance due if the borrower sells or transfers the secured property?
• Which concept correctly identifies the economic characteristic of land described by scarcity, location, and durability?
• Which loan requires interest-only payments until maturity?
• What is the process by which a mortgagor regains interest in a property?
• Which statement best describes closing costs?
• Which expenses are subtracted from gross operating income to compute net operating income (NOI) for an income property?
• Impossibility of performance.
• What are discount points in mortgage financing, and how do they affect rate and payment?
• PITI stands for which components?
• Dictate materials, standards, and regulations for construction.
• Which laws prohibit a licensee from receiving compensation from both the buyer and the seller in the same transaction?
• Discrimination complaints in housing are often heard by which forum first, before possible federal court action?
• Which policy pertains to imputing interest on installment sales that exceed a threshold?
• A broker may commit which violation by engaging in discriminatory practices?
• Rental of rooms in an owner-occupied, 4-family dwelling falls under which exemption?
• What is required to disclose lead-based paint and who is responsible for providing the disclosure?
• In a land contract, the seller finances the property for the buyer. What is this arrangement called?
• Which contract clause makes performance timing critical by requiring that time is of the essence?
• Which instrument empowers the sale of debtor's property to satisfy a judgment?
• Which loan allows initial lower monthly payments for a home purchase?
• Which information is typically disclosed for IRS reporting in a real estate transaction?
• What term describes the termination of an easement when the dominant and servient properties are owned by the same person?
• Which term describes the maximum FHA-insured loan amount for a single-unit dwelling, which varies by geographic location?
• Which ownership estate is described as passing to the owner's heirs upon death?
• Which document is the promise to repay a debt?
• Which loan is not insured or guaranteed by a public agency?
• Which element is NOT required for a valid real estate contract?
• Failure to display which poster constitutes a violation of fair housing obligations?
• What are considered encumbrances on real property?
• In property health hazards, the first action is to identify and remedy the cause.
• What valuation requirement applies to property valued over $250,000?
• Which ownership form inherently includes the right of survivorship and is commonly used by married couples?
• What is Phase I ESA primarily designed to identify, and when is it typically conducted?
• Which employment status is defined by receiving 90% of income based on sales production?
• Distinguish between capitalization rate (cap rate) and internal rate of return (IRR).
• Which statement best contrasts planning and zoning?
• What is a seller's property disclosure statement and when is it typically provided?
• Which trio are the commonly cited economic characteristics of land?
• Which loan type best describes a loan where payments cover principal and interest over the term?
• Which department administers federal housing programs?
• Which contract type is created when both parties promise to perform?
• In a 1031 exchange, which requirement is true?
• Which form of ownership is described as owned by tenants in common?
• Which act provides remedies for discrimination against individuals with disabilities?
• Which budgeting approach begins from a zero-base and requires justification for each line item?
• A cloud on title is best described as...
• If a property is in a zone that allows residential use but restricts commercial development, this is an example of which concept?
• Which relationship is appropriate when broker loyalty to the seller is difficult to maintain?
• Which instrument would a lender rely on to accelerate repayment upon sale?
• Hearings conducted by administrative law judges within HUD are called what?
• A small, one-story home often associated with a low-pitched roof is commonly known as a?
• Ownership by two or more with rights of survivorship.
• Which rule prohibits a licensee from collecting compensation from both the buyer and the seller in the same transaction?
• What term describes the practice of paying kickbacks or undisclosed referral fees in real estate transactions?
• Which option represents a change to a will after it has been executed?
• What is the term for changing a will after it is executed, without creating a new will?
• In an adjustable-rate mortgage, which element defines the maximum and minimum rate changes?
• What is the difference between lender's title insurance and owner's title insurance?
• What is the standard depreciation period for residential rental property, and how is annual depreciation calculated?
• Which budgeting method requires justification of all expenses from a zero base?
• The essential elements of a deed include which requirement?
• How do market value and assessed value differ for property tax purposes?
• Which description method uses feet, degrees, and natural markers to describe land?
• What costs are capitalized versus expensed in property improvements?
• Which concept is not dependent on a specific buyer-seller agreement?
• Which deed offers protection against defects arising only during the grantor's ownership?
• The seller's disclosure statement is typically provided when?
• What are typical duties of a licensed property manager?
• In a deed of trust, who holds the beneficial interest and is repaid by the borrower?
• What does NOI stand for and what does it represent?
• The increased value and usability from assemblage is known as?
• Which regulation addresses accessibility for people with disabilities in the workplace?
• Which ownership arrangement is owned by tenants in common?
• Which listing type allows multiple brokers to compete and does not guarantee a commission unless a sale occurs?
• What environmental disclosures are commonly required in real estate transactions?
• Which statement about triple net leases is correct?
• The concept that determines who receives the broker's commission if the sale results from the broker's efforts is called?
• Which entity guarantees a lender up to four times the amount of the veteran's entitlement?
• Loan insured by the Federal Housing Administration.
• Which act requires disclosure of costs and provides customer rights in credit transactions?
• Which loan means the veteran is no longer financially responsible if the buyer defaults?
• At closing, how are annual property tax prorations typically handled?
• What is the purpose of real estate licensing laws and what penalties can occur for violations?
• Which land description method uses a rectangular grid of townships and ranges?
• In a mortgage arrangement, which party typically holds the mortgage note?
• Recorded judgment provides notice to subsequent purchasers.
• Which of the following is a fiduciary duty owed by a broker to a principal in an agency relationship?
• Which statement about deeds is true?
• Which of the following is a common regulatory tool used to prevent incompatible land uses and preserve neighborhood values?
• Which listing type allows the seller to personally sell the property without paying a broker a commission if they find a buyer themselves?
• Foreclosed property sales are usually conducted through which method?
• Which document is not evidence of title?
• The seller's legal remedy when the other party breaches the contract, including forfeiture or seeking damages, is called what?
• Which disclosures govern consumer loan transactions and include requirements about costs and penalties?
• A listing where the broker owns the rights to sell and earns a commission upon sale is called what?
• What is cash-on-cash return and what is its formula?
• What is the break-even occupancy ratio and how is it used?
• Which ownership form includes a right of survivorship and unity of possession?
• Which statement best describes a gross lease?
• Which characteristic is protected under the Federal Fair Housing Act?
• Which of the following are major antitrust concerns in real estate brokerage?
• Which term best describes the area between a garden apartment and a shopping center?
• Which term describes a professional analysis using comparable sales to estimate market value?
• Which term describes the seller's recourse when the other party breaches a contract?
• Which loan is guaranteed by the Department of Veterans Affairs?
• How is the gross rent multiplier calculated and what is its purpose?
• Foreclosed property sales are typically conducted through which method?
• Which system is used in states where water is scarce?
• Which court decision upheld the Civil Rights Act of 1866 in real estate matters?
• Which law addresses accessibility for people with disabilities and remedies for discrimination?
• What term identifies the exact boundaries and location of a parcel of land for conveyance?
• Which body of law governs negotiable instruments?
• Who retains title when using property as collateral for a loan?
• Which party typically pays the conveyance tax when title is transferred?
• Which term describes the right to compensation for broker involvement in a sale that was initiated by the broker?
• Depreciation in real estate is calculated based on the cost of which component?
• A contract lacking a legal object is called what?
• Which financing arrangement involves the seller providing financing and the buyer paying installments, with the seller retaining title until fully paid?
• Which concept governs how land should be used to maintain neighborhood character and property values?
• What is radon and how is it typically addressed in a real estate transaction?
• What must happen to a lien to transfer title free of liens?
• Which mortgage type has interest rates set by the lender?
• Which corporate structure is taxed as a pass-through entity, with profits allocated to owners?
• Which party typically holds the lien until the loan is paid?
• Under the federal Fair Housing Act, which of the following is protected?
• Which of the following are features of an adjustable-rate mortgage and how do payments respond?
• Which act prohibits discrimination in housing based on race, color, religion, sex, or national origin?
• Which federal law prohibits racial discrimination in the conveyance of real property?
• Which laws regulate land use to maintain property values?
• Which agreement pays the buyer's agent regardless of the property source?
• Which of the following correctly defines a gross rent multiplier and its use?
• What does CAM stand for in lease context?
• Which type of easement benefits a person or entity rather than a specific parcel of land?
• Which statement best describes an easement?
• What is the formula to calculate the monthly payment on a fixed-rate mortgage for principal and interest?
• Which term is used to describe pledging property as collateral without surrendering possession?
• What is a common result of taking on too much leverage in an investment property?
• The liability standard that imposes responsibility without fault for certain environmental cleanup obligations is known as?
• Which ownership form allows each co-owner's interest to be conveyed separately?
• Which information is typically reported to the IRS regarding a real estate sale?
• Combining several parcels of land into one is called what?
• Which instrument is used by a creditor to obtain satisfaction against a debtor's property?
• Which architectural detail describes a house with a single gable?
• In terms of protecting property values, which policy is primarily used by municipalities to regulate development?
• Which term describes a mortgage with payments that start low and rise over time?
• Amortization is best described as which of the following, and how does it affect the principal and interest portions of payments over time?
• Which phrase describes the penalty for violating conditions in a deed?
• Which term describes pledging property as security for a loan without giving up possession?
• Which adjustment is commonly associated with veterans affairs financing in real estate transactions?
• Distinguish between the note rate and annual percentage rate (APR) in mortgage lending.
• Merger of titles can result in the termination of which interest?
• Which element should be consistent with prior transfers and verified by a surveyor?
• Joint tenancy where the co-owners are husband and wife.
• Which term describes a right on land that allows use for a specific purpose?
• What are typical steps in a real estate closing timeline from offer to closing?
• What is the term for a buyer's remedy that includes rescinding the contract or suing for damages?
• If the listing agent's prospecting results in a sale, the concept ensuring a commission arises from the agent's involvement is called?
• Which term denotes a loan guaranteed by the Department of Veterans Affairs?
• Which mortgage type has interest rates set by the lender?
• Which program reduces down payments to as low as 3.5%?
• How can HOA fees affect property value and financing?
• Which disclosure indicates the buyer's knowledge about lead paint?
• Carrying costs in real estate refer to ongoing costs of ownership. Which option best describes these costs?
• In real estate, what is a Phase I Environmental Site Assessment (ESA) and when is it performed?
• What is a closing statement (HUD-1/Closing Disclosure), and what items does it show?
• Which statement about lien priority is correct?
• First action is to identify and remedy the cause.
• Which statement describes the purpose of an escrow account in real estate transactions?
• Which appraisal approach relies on market data from recent sales of similar properties?
• Which term describes using money that belongs to someone else?
• What is a dual agency, and what conflicts can arise?
• Not an example of depreciation caused by factors such as wear and tear?
• Covers installment sales amounts over $3,000.
• Which regulation is required for employers with a minimum of 15 employees?
• A bungalow is best described as which type of housing?
• A home described as having a gable profile is most likely what style?
• Which arrangement is used to maintain the confidentiality of the legal owner's identity?
• Lender is viewed as the conditional owner of the mortgaged land.
• Which mechanism influences neighborhood stability by controlling lot sizes, setbacks, and allowable densities?
• Which land description method is commonly described as Rectangular Survey in some jurisdictions?
• Which loan feature is not computed as a percentage of the selling price?
• Which tax is assessed on the transfer of real property from seller to buyer?
• Which ownership arrangement is commonly used to conceal the true owner of property?
• Determines distribution of estate when there is no will.
• Which instrument allows for simpler and faster foreclosure?
• Buyer must acknowledge disclosure of known lead paint presence?
• Which practice constitutes a RESPA violation in real estate transactions?
• How is a fixture determined and how does it affect transfer of real property?
• If a broker represents a buyer exclusively and owes fiduciary duties to the buyer, this is called what?
• Which federal department is responsible for investigating and prosecuting fair housing law violations?
• Ownership by two or more without rights of survivorship.
• Mortgage given by a buyer to secure a portion of the purchase price.
• Which type of easement benefits a particular parcel of land and runs with the land?
• What term represents the gain in value from combining parcels, used also to describe the process?
• Which contract type is created when only one party makes a promise?
• How do you calculate the capitalization rate (cap rate) from annual NOI and property value?
• What is a 1031 exchange and what are key timing requirements?
• Which term describes the combining of parcels into one?
• What term describes a permanent right to pass over another's land?
• Which corporate form features pass-through taxation, avoiding corporate-level tax on profits?
• Which remedy is a court order requiring performance to compel sale, when appropriate?
• Which term refers to rules that regulate land use to protect property values?
• Which statement describes general warranty deed vs quitclaim?
• Which deed provides a warranty of title limited to the grantor's period of ownership?
• What are ad valorem taxes and how are they calculated?
• What term means the difference in interest rates in financing arrangements?
• Why do lenders require property insurance (hazard and flood) for mortgaged properties?
• Who holds funds in an escrow account during a real estate transaction?
• What is a competitive market analysis (CMA) and what data is typically used?
• Mortgage is viewed as a lien on the property.
• How do you compute debt service coverage ratio (DSCR) and what does it indicate for lenders?
• Which deed provides the most protection to a grantee against title claims?
• Name the three primary approaches to real estate appraisal.
• The term 'bungalow' is most closely associated with which architectural feature?
• Which term is used to determine property value by comparing similar properties?
• What is a lien?
• Which factor is associated with a greater variety of loan programs available to a borrower?