Real Estate Exam Practice Test 2023 (60 Question Answers)

A settlement is held on April 20 involving the purchase of a property by way of an assumption of the loan. The interest rate is 8.5%, and the loan balance is $198,000. How is interest on the loan payment adjusted?

The person who receives real property through a will is known as a

The business of maintaining escrows, collections, and processing of tax records related to mortgage loans is called

The buyers who sign a statement about the price and terms on which they are ready to purchase property have created

Within the agency agreement is a statement that binds the buyer to paying the broker’s fee if, within a stated number of days, the buyer purchases a property that was shown to the buyer during the agency period. This clause is the called the

When the Franks bought their first home, some of their costs included payment of points, establishment of an escrow account, premium for title insurance, and commission to their own buyers’ agent. On that year’s income tax return they may deduct the

An investor recently paid $500,000 for a building that yields about $65,000 in annual income. The cap rate on this investment is evidently around

The type of depreciation always classified as incurable is

When construction of a new building has been completed in a satisfactory manner, the local building inspector issues

If a VA guarantee is $50,750, then the maximum loan with no down payment would be

For appraising a 20-year-old single-family residence, the best data is the

A farmers’ market had been in operation continuously for 50 years at the intersection of Routes 50 and 29. A new master plan was approved by the local jurisdiction and placed that tract of land in a residential zone. In order to stay in business, the owner of the farmers’ market should

Real estate licensees are required to disclose early in a transaction

In the government survey system of land measurement, how many square miles does a township contain?

The Civil Rights Act of 1866 prohibits

At a general meeting of the brokers trade association, several members begin talking about fees and business practices. This sort of activity could be considered

Neighbors are allowed input through public hearings when someone applies for a zoning

The fiduciary duty of notice requires the seller’s agent to

Information gathered when the agent lists property should include data on

A tenant applicant confined to a wheelchair is interested in renting a townhome. A request is made to the landlord to allow the tenant to have an access ramp constructed. Which of the following is true in this situation?

The ownership of a specific property for use at a specific period of time during the year is called

Prices are likely to rise when there is a

A cap rate is used in what type of appraisal?

The investor criteria for a home mortgage is an uninsured loan to value ratio of 75% of the appraisal. The sales agreement and appraisal is in the amount of $180,000. Following underwriting guidelines, the buyer qualifies for a loan of $145,000. How much of the purchase will be financed by this investor?

Each party is bound to a specific date for performance if a real estate sales contract contains

Common covenants found in a mortgage could be any of the following EXCEPT a promise to

The Truth in Lending Act (Regulation Z) applies to lender’s practices

In order to reach the lake, the Browns have a permanent right of way across their neighbor’s lakefront property. The Browns own

The broker’s responsibility at the closing is to

The Real Estate Settlement Procedures Act mandates all of the following procedures EXCEPT

Newly constructed buildings are best appraised giving most weight to the

After listing the property, the listing agent receives comments from other agents that the property is overpriced by about $15,000. Which of the following actions should the agent take?

Before a closing takes place, a buyer will want to make a final

A mini-ranch is being established on a newly acquired 25-acre parcel of land. The new owner plans to enclose the property with a split-rail fence. The rectangular lot has 1,000 feet of frontage on the state road. How many feet of fencing will be needed?

A qualified veteran of the armed forces may obtain a mortgage for the full purchase price of a home with no requirement for down payment. To provide an additional benefit to the veteran, the Veterans Administration will

When advertising credit terms in conjunction with a sale of property, the broker mentions the amount of the monthly payment. The broker must also include all of the following pieces of information EXCEPT the

The cautious owner offers property on an “as is” basis. If agent has knowledge of a latent defect, the agent and owner must

A representative with full authority to bind the principal to all agreements is

The party most likely to sue for specific performance in the purchase of real estate is the

Once an agency relationship is ended, any confidential information learned by the agent during the relationship is

One example of an easement in gross is the right of

The government’s ability to pass legislation to protect the public is acquired from

A broker may be compensated for providing brokerage services in any of the following ways EXCEPT

Which of the following programs would probably be of the most benefit to owners of property located in the lowlands along a river?

If a principal terminates the listing agreement during the listing period, the broker may be able to do any of the following EXCEPT

A lawsuit to enforce a contract must be started within a certain number of years, as specified for the particular type of contract by that state’s

Richard Morgan wants to buy Daniel Johnson’s house, but Daniel doesn’t want to turn over title until he receives the purchase price. They could use either a lease option or a land contract. Richard would prefer a lease option because

A purchase that is financed by the seller holding title until a specified number of payments have been made is known as a

A land contract for the purchase of real estate is also known as

The Millers put their house on the market, the Blacks made a written purchase offer, and the Millers accepted the offer in writing. When is the contract valid?

The furnace at 39 State Street doesn’t work properly. However, because the prospective buyers inspect the house in July, there is no indication of this. The condition of the furnace is known as

After a purchase contract is accepted, the parties may later make additional agreements without changing the original document by use of

When describing the particulars about a property, the agent does not disclose that a capital improvement project has been approved that will result in a special assessment to the owner in the near future. The broker has

The lender’s underwriting criteria is a maximum payment to income ratio of 35% of gross monthly income. If the applicant proves annual earnings of $75,000 in the previous year, and that salary rate is continuing, the maximum monthly PITI would be

Joseph Flannery is borrowing $15,000 from his brother Tim in order to have enough for the down payment on his new house. They have agreed that the $15,000 will bear an interest rate of 12% with a flat semi-annual payment of $1,000 plus earned interest. How much will Joseph’s first payment to Tim be?

Laura Murphy is buying a new home for $193,000. She makes a $40,000 down payment and finances the balance with a 7.5% 30- year conventional loan. The factor for repayment is $7.00 per thousand, and escrows add $250 to the monthly payment. After making the first payment, what is the remaining balance on Laura’s loan?

A building permit may be issued even if the proposed structure violates existing

The settlement of a sales agreement occurs on September 15. Property taxes are $3,600, paid semi-annually, and the first half have been paid. How are the taxes adjusted on the closing statement?

James Kingsley has just settled on his new home. He obtained a new loan of $290,000 at 8% that requires a monthly payment of $7.34 per thousand. He also has an estimated annual property tax of $2,900 and an insurance premium of $560 per year, which he will pay in monthly deposits into escrow. What is the monthly payment for James?

The Simons have defaulted on their loan payments and are behind in paying the rest of their bills, so their home is being sold in a foreclosure auction. Of the many liens against it, which will have first claim on the proceeds of the sale?