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REAL ESTATE FINAL EXAM ONE QUESTIONS AND VERIFIED ANSWERS
"Bob sells his property to Carl. Carl makes a down payment of $15,000. Bob carries back a note for the balance. On the closing statement, the carryback note would be shown as: a. A debit to the buyer b. A debit to the buyer and a credit to the seller c. A credit to the seller and a debit to the buyer
d. A debit to the seller - CORRECT ANSWER d. A debit to the seller"
"In writing an offer to purchase, if the purchasers are husband and wife and the purchase is to be made in cash, in order for the new ownership to exist as community property it will be necessary to: a. Obtain only one purchaser's signature b. Obtain both the purchaser's signatures c. Have the one purchaser's signature acknowledged
d. Have both purchaser's signatures acknowledge - CORRECT ANSWER a. Obtain only one
purchaser's signature" "In Arizona, the property tax assessment rate applied to owner occupied residential property is: a. 10% b. 12% c. 14%
d. 16% - CORRECT ANSWER a. 10%"
"Any person who passes the examination for broker or salesperson, MUST activate their license within how many months after the examination date to avoid retaking the examination? a. 12 b. 9 c. 6
d. 3 - CORRECT ANSWER a. 12"
""Puffing" relates to exaggerations not made as representations of fact. That is: a. Discouraged by the Arizona Department of Real Estate. b. A violation of the Arizona Revised Statutes. c. Illegal
d. Prohibited - CORRECT ANSWER a. Discouraged by the Arizona Department of Real Estate."
"In Arizona, the charges for the day of closing are customarily: a. Charged to the seller b. Charged to the buyer c. Split between the seller and buyer
d. Paid by the escrow company - CORRECT ANSWER b. Charged to the buyer"
"If a seventeen-year old person enters into a contract to purchase real property, the contract is: a. Valid b. Unenforceable by either the buyer or the seller c. Void because the buyer is a minor
d. Voidable by the buyer because he is a minor - CORRECT ANSWER d. Voidable by the buyer
because he is a minor" "If more than one offer on a property is received, the listing broker MUST present: a. The first offer b. The last offer c. The best offer
d. All offers - CORRECT ANSWER d. All offers"
"In a real estate transaction, both the seller's agent and the buyer's agent are legally required to put whose interest first? a. Their own prospect's b. The buyers' c. The seller's
d. Their principal's - CORRECT ANSWER d. Their principal's"
"Homeowner's Association fees are levied: a. Monthly b. Quarterly c. Semi-annually
d. Annually - CORRECT ANSWER d. Annually"
"In a real estate transaction, transfer of title from the seller to the buyer occurs at the time of:
"The only thing a subdivider can sell before receiving the commissioner's Public Report is: a. An undivided interest b. An estate of inheritance c. A lot reservation
d. An option contract - CORRECT ANSWER c. A lot reservation"
"Which of the following is a requirement for a valid agency relationship? a. Written agreement b. Compensation c. Mutual consent
d. Brokerage license - CORRECT ANSWER c. Mutual consent"
"What is it called if property passes back to the state? a. Succession b. Escheat c. Will
d. Bequeath - CORRECT ANSWER b. Escheat"
"Which of the following agreements is required to be in writing? a. Commission agreements between brokers b. Leases for one year c. Listing agreements
d. Month to month rental agreements - CORRECT ANSWER c. Listing agreements"
"Which statement BEST describes the prepayment clause in a mortgage? a. It stipulates the prorated amounts of taxes and insurance that must be included in the monthly payment b. It establishes the lender's position with regard to payments made before any liens are satisfied c. It allows the lender to accelerate the date of the mortgage under specific terms and conditions
d. It allows the borrower to pay off the mortgage early under specific terms and conditions -
CORRECT ANSWER d. It allows the borrower to pay off the mortgage early under specific
terms and conditions" "The reason for submitting construction plans to the city before obtaining a building permit, is to: a. Supercede conflicting deedterm-7 restrictions b. Provide evidence of compliance with local regulations
c. Prevent adjacent construction of incompatible uses
d. Maintain municipal control over the density of land use - CORRECT ANSWER b. Provide
evidence of compliance with local regulations" "Which of the following is true? a. All agency agreements must be in writing b. Since agency is a contract, there must be consideration c. A salesperson cannot create an agency relationship for his broker
d. None of the above - CORRECT ANSWER d. None of the above"
"The relationship between the seller and a listing broker is that of: a. Principal and agent b. Attorney and client c. Optioner and optionee
d. Seller and purchaser - CORRECT ANSWER a. Principal and agent"
"The owner of a property with a condition subsequent has: a. A remainder interest b. An estate for years c. Less than a freehold interest
d. A defeasible estate - CORRECT ANSWER d. A defeasible estate"
"The commissioner may deny the issuance of a Public Report for a new subdivision, if the developer is unable to: a. Deliver title or interest contracted for b. Meet the opening day deadline c. Provide floor plans and elevations
d. Provide paved roads - CORRECT ANSWER a. Deliver title or interest contracted for"
"When all parties to a contract have agreed to its terms, this is referred to as: a. Legality of contractual object b. Meeting of the minds c. Contractual competency
d. Specific performance - CORRECT ANSWER b. Meeting of the minds"
"What type of loan can change in payment, interest rate and amount owed?
c. Tom's attempt to cancel the agreement is ineffective because the listing term hasn't expired
d. Vicky can sue Tom for damages - CORRECT ANSWER d. Vicky can sue Tom for damages"
"Which of the following sections in township is considered fractional? a. 6 b. 10 c. 12
d. 17 - CORRECT ANSWER a. 6"
"The full cash value of a property is $90,000. It is assessed at 10% of the F.C.V. for tax purposes. The tax rate is $10.95 per $100 of assessed valuation. What is the simi-annual tax payments? a. $492. b. $985. c. $550.
d. $476.50 - CORRECT ANSWER a. $492.75"
"When a claim is settled by the Title Insurance Company, the Company acquires all rights and claims of the insured against any other person who is responsible for the loss. This is called: a. Escrow b. Surety c. Subrogation
d. Subordination - CORRECT ANSWER c. Subrogation"
"Which of the following is not part of the Landlord/Tenant Act? a. Security deposits regulations b. Regulation of property management agreements. c. Notices for eviction.
d. Notice period for condominium conversions. - CORRECT ANSWER b. Regulation of
property management agreements." "What is the distance in miles from the principal meridian that describes Range 4 West? a. 12 to 18 b. 18 to 24 c. 24 to 30
d. 30 to 36 - CORRECT ANSWER b. 18 to 24"
"The borrower's rights after a mortgage foreclosure are referred to as rights of:
a. Forfeiture b. Reinstatement c. Foreclosure
d. Redemption - CORRECT ANSWER d. Redemption"
"The real estate recovery fund will be refunded if on June 30 the fund balance falls below: a. $30, b. $100, c. $300,
d. $600,000 - CORRECT ANSWER d. $600,000"
"When one is advised to add a tennis court to an apartment complex, this is determined by the appraisal principle of: a. Regression b. Progression c. Contribution
d. Economic Life - CORRECT ANSWER c. Contribution"
"The right to use water that is adjacent to the land is referred to as: a. Surface water rights b. Avulsion c. Riparian
d. Reliction - CORRECT ANSWER c. Riparian"
"The legal capacity of a person entering into a real estate contract is affected by: a. Age b. Sobriety c. Both A and B
d. Neither A or B - CORRECT ANSWER c. Both A and B"
"Which of the following elements is necessary in order for a mortgage to be considered valid? a. Recordation of the note b. Competent parties c. An alienation clause
d. A federally regulated lender - CORRECT ANSWER c. An alienation clause"
d. Vacant land for residential construction - CORRECT ANSWER b. Commercial and
industrial properties" "A mortgage assumption on a settlement statement would appear as a: a. Credit to the seller b. Balance factor c. Debit to the buyer
d. Credit to the buyer - CORRECT ANSWER d. Credit to the buyer"
"A broker offers to prepare documents for a real estate transaction at a fee of $350. Which of the following is true? a. He cannot charge for this service b. He may charge for this service of both parties agree c. He may charge for this service if it is considered an escrow fee
d. He may charge for this service if the fee is negotiable - CORRECT ANSWER a. He cannot
charge for this service" "A real estate purchase transaction closes on February 15. The buyer does not record the deed until April 24. A judgment for $12,000 against the grantor is filed and recorded on April 21. The judgment: a. Is a lien against the property b. Is invalid relative to the subject property c. Constitutes a judgment inchoate
d. Is a judgment in reversion - CORRECT ANSWER a. Is a lien against the property"
"A real estate license is required for: a. A trustee selling real estate under a deed of trust b. An attorney-at-law in the performance of his duties c. Person employed by developer to answer questions concerning home sales.
d. A receiver in bankruptcy or a person acting under a court order - CORRECT ANSWER c.
Person employed by developer to answer questions concerning home sales." "A valid contract could be unenforceable because of: a. Lack of contractual capacity b. The Statute of Limitations c. The absence of consideration
d. An illegal purpose - CORRECT ANSWER b. The Statute of Limitations"
"An agent has an offer on a property listed by another real estate company. No one in the listing brokerage is available within 24 hours. The salesperson MUST: a. Have his employing broker present the offer b. Return the offer to the buyer c. Send the offer by registered mail
d. Get written permission from the seller to present the offer - CORRECT ANSWER d. Get
written permission from the seller to present the offer" "A broker is instructed not to show a property while the owner, a white, is away. While the owner is out of town, a black couple requests to be shown the property. The broker should: a. Show the property b. Refuse to show the property c. Ask HUD for an exception to the Fair Housing Act.
d. Inform the prospects that the home is not available. - CORRECT ANSWER b. Refuse to
show the property" "A real estate salesperson may NOT: a. Buy or sell real estate as a principal b. Accept a commission from another broker c. Show property on which her office has no listing
d. Represent both buyer and seller in a transaction - CORRECT ANSWER b. Accept a
commission from another broker" "A buyer who desires to reduce the contract interest rate on the thirty year promissory note from 8 3/8 percent to 8 percent per annum would pay: a. 2 points b. 3 points c. 4 points
d. 5 points - CORRECT ANSWER b. 3 points"
"A developer desires to offer for sale thirty time-share intervals in a resort property. Prior to offering such interests in the resort, the developer MUST obtain: a. Ownership free of encumbrances b. A public report issued by the Real Estate Commissioner c. Approval from the State Corporation Commission-Securities Division
"A tenant calls the property owner several times asking that a leaking roof be repaired. If the property owner refuses to fix it of there is unreasonable delay, the tenant may move out on the legal grounds of: a. Constructive eviction b. Inverse condemnation c. Hypothecation
d. Non-conforming use - CORRECT ANSWER a. Constructive eviction"
"When more than one offer is received on a subject property, the listing agent shall: a. present all offers to the seller including verbal offers b. present all written offers c. present all offers in the order they were received
d. present the written offers only in the order they were received. - CORRECT ANSWER *?
a. present all offers to the seller including verbal offers" "A mortgage lender agrees to lend 80% of the purchaser price for four points. If the purchase price of the property is $165,000, how much will the lender receive for the discount? a. $3, b. $6, c. $5,
d. $8,250 - CORRECT ANSWER c. $5,280"
"A broker and an owner discussed several types of listing agreements and decided upon an exclusive right to sell. The broker drafted the listing, but the owner did not sign it. The broker subsequently produced a willing buyer and demanded the commission from the owner based upon the exclusive right to sell. The commission is: a. Not due because the unsigned agreement amounts to a net listing. b. Due because there is an implied contract between the broker and owner. c. Due because an oral agreement is all that is required for an exclusive right to sell to be enforceable.
d. Not due because the agreement was not signed by the owner. - CORRECT ANSWER d. Not
due because the agreement was not signed by the owner." "A Phase I environmental assessment includes all of the following procedures EXCEPT: a. A site inspection b. Title research c. Hydrology studies
d. Pollution cleanup - CORRECT ANSWER d. Pollution cleanup"
"A fibrous mineral used for fireproofing, but which is considered to be a carcinogen is: a. Lead b. Popcorn c. Asbestos
d. Radon - CORRECT ANSWER c. Asbestos"
"A tenant leases an apartment, but the landlord fails to repair the water heater within a reasonable period of time. This situation can cause: a. Actual eviction b. Forcible detainer c. Constructive eviction
d. Tenancy of sufferance - CORRECT ANSWER c. Constructive eviction"
"A real estate agent in an agency relationship must exercise all of the following EXCEPT: a. Management b. Accounting c. Obedience
d. Due Professional Care - CORRECT ANSWER a. Management"
"A legal procedure or action brought about by one party to a contract to enforce the terms of the contract against the other party is: a. Lis Pendens b. Specific Performance c. Punitive Damages
d. Exemplary Damages - CORRECT ANSWER b. Specific Performance"
"All of the following are TRUE regarding an Unrepresented Seller Compensation Agreement, EXCEPT: a. The parties to the agreement are the Seller and Buyer b. The agreement has a beginning and expiration date. c. The compensation terms are included
d. The agreement states that the Broker is acting solely as the Buyer s Agentʼ - CORRECT
ANSWER a. The parties to the agreement are the Seller and Buyer"
"A provision in an executory contract that prohibits a debtor-inpossession from rejecting the contract pursuant to the Bankruptcy Code is: a. Unenforceable b. Illegal c. Voidable
d. Enforceable - CORRECT ANSWER *?
a. Unenforceable" "A seller accepts an offer that is accompanied by an earnest money check. How should the broker handle the check? a. Hold it until the buyer's loan is approved b. Hold it until the day of closing c. Deposit it in the escrow account
d. Deposit it in the operating account - CORRECT ANSWER c. Deposit it in the escrow
account" "A management agreement between an owner and a broker states that the management fee will be 7% of the first $200,000 of the annual gross rents collected and 8% of the rents collected that exceed that amount. If last year's gross rents collected totaled $222,500, how much was the management fee? a. $15, b. $16, c. $17,
d. $17,800 - CORRECT ANSWER a. $15,800"
"An advantage of a net lease to the lessee is: a. He can deduct mortgage interest on his income taxes b. He can deduct the property taxes on his income taxes c. He can deduct building depreciation on his income taxes
d. He does not have to pay utilities - CORRECT ANSWER b. He can deduct the property taxes
on his income taxes" "A seller is unable to convey a marketable, unencumbered title to a buyer. What action should the listing broker take with any earnest money held in escrow? a. Pay it all out to the seller b. Return it in full to the buyer
c. Deduct any commissions and expenses due and pay the balance to the seller
d. Deduct any commissions and expenses due and return the balance to the buyer. - CORRECT
ANSWER b. Return it in full to the buyer"
"A power of sale clause would MOST likely be found in: a. A mortgage b. A promissory note c. A trust deed
d. A listing contract - CORRECT ANSWER c. A trust deed"
"A type of loan where the lender pays the owner of the property a monthly income is called: a. A reverse annuity b. An open-end mortgage c. A flexible balance loan
d. A blanket mortgage - CORRECT ANSWER a. A reverse annuity"
"A seller makes a loan to the buyer to assist with the down payment and secures that loan with a lien on the property. This kind of lien is considered: a. An installment note b. A special assessment c. A purchase money mortgage
d. A blanket mortgage - CORRECT ANSWER c. A purchase money mortgage"
"A commercial property was in foreclosure and after the sale, the mortgagee did not receive enough money to satisfy the note. Which of the following statements is true? a. The lender can sue for a deficiency judgment against the borrower b. The lender would not be able to sue for a deficiency judgment c. The lender's only recourse if the property and the new owner
d. The lender could only look to equity above the homestead exemption - CORRECT ANSWER
a. The lender can sue for a deficiency judgment against the borrower" "A pre-transfer inspection of On-Site Wastewater Treatment Facilities is required on the re-sale of properties by the: a. Arizona Department of Environmental Quality b. Arizona Department of Real Estate c. Arizona Department of Agriculture
d. A reversionary interest - CORRECT ANSWER b. A life estate"
"In Arizona, the use of surface water is governed by all the following, except: a. riparian rights b. Prior appropriation c. Reasonable use
d. Recorded permit issued by the Department of Water Resources - CORRECT ANSWER a.
riparian rights" "John Jamison, a salesperson with Taylor Realty, lists the property of Charles and Loretta Simpson for sale at $52,000. The Simpson's have told Mr. Jamison that they are pressed to sell and would accept a purchase price of $49,000. Jamison shows the property to Rand Evans and tells Evans he can purchase the property for $49,000. Jamison has: a. Property performed his duties to his client b. Violated his relationship with his client c. Acted in the best interest of all parties
d. Typically acted as a salesperson is expected to act. - CORRECT ANSWER b. Violated his
relationship with his client" "Chris is the broker hired to sell Erin's house. Chris shows the house to the Martin's, who want to put in an effort on it. At this point, what duties does Chris legally owe to the Martin's? a. Confidentiality and fairness b. Fairness and honesty c. Obedience and disclosure
d. Confidentiality and honesty - CORRECT ANSWER b. Fairness and honesty"
"Condominium ownership is MOST commonly represented by a: a. Deed b. Stock c. Bill of sale
d. Proprietary - CORRECT ANSWER a. Deed"
"In an advertisement offering her only house for sale, the owner states that she will give preference to cash buyers who are female and member of the Catholic religion. The owner subsequently refuses a cash offer because the offeror was a male Presbyterian. Which of the following is CORRECT? a. Since the seller only owned one house, she is exempt from the 1968 Act. b. Since the advertisement only states a preference, it is not discriminatory.
c. Since the seller's main purpose was to obtain cash, the refusal is not discriminatory. d. Since the advertisement was in fact discriminatory, the seller's exemption is lost and she has
violated the 1968 Act. - CORRECT ANSWER d. Since the advertisement was in fact
discriminatory, the seller's exemption is lost and she has violated the 1968 Act." "In the use of a trust deed, which of the following MAY serve as a trustee? a. The trustor b. The beneficiary c. A member of the Arizona State Bar
d. A broker involved in the transaction - CORRECT ANSWER c. A member of the Arizona State
Bar" "In Arizona, which of the following legal descriptions measures the smallest unit of property? a. Government check b. Lot and block c. Monument survey
d. Government survey - CORRECT ANSWER b. Lot and block"
"Lydia Goodheart has made a written offer to purchase Bud Perkins' home. The offer states that Perkins has five days in which to accept it. The day after Goodheart made the offer and prior to Perkins' acceptance, she informs the broker that she wants to withdraw the offer. The broker should tell Goodheart that: a. That the offer is irrevocable and she must wait four more days. b. Only her death would revoke the offer prior c. She may not resubmit the offer once the five-day period has expired
d. She can withdraw the offer and demand the return of her earnest money - CORRECT
ANSWER d. She can withdraw the offer and demand the return of her earnest money"
"Kickbacks to the lender from service providers are prohibited by: a. RESPA b. Truth in Lending Act c. Equal Credit Opportunity Act
d. FHA - CORRECT ANSWER a. RESPA"
"Recording does NOT give: a. Actual Notice b. Constructive Notice c. Priority as to the interest
