Pearson VUE State Practice Exam

Pearson Vue Practice Exam 1

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Question 1

Prepaid rent on a real estate closing statement is always

A	Debit to the buyer
B	Debit to the seller
C	Credit to the seller
D	Balance factor

Question 1 Explanation:

The unearned rent goes to the buyer

Question 2

Which of the following choices are Meridians a concern to?

A	An appraiser
B	A mortgage broker
C	A surveyor
D	A property manager

Question 2 Explanation:

Government north/south survey lines.

Question 3

Two-year occupancy is required for a homeowner to be eligible for capital gains exclusion.

A	True
B	False

Question 4

In which case is the grantor a lessee of a sale-leaseback?

A	When a party rents property from the property owner and then subsequently leases it out to another tenant.
B	When the grantor sells and becomes a tenant of the grantee.
C	When the landlord pays for the building's property taxes, insurance and maintenance.
D	When the tenant pays a base rent plus a percentage of any revenue earned while doing business on the rental premises.

Question 5

What can Subleasing be described as?

A	An assignment
B	Greater than an assignment
C	A hypothecation
D	Less than an assignment

Question 5 Explanation:

The original lease remains with the sublessor.

Question 6

Obligatory advances apply to what loan type?

A	Shared Appreciation mortgage
B	Construction loan
C	Growing equity mortgage
D	Participation mortgage

Question 6 Explanation:

They are advances the lender is obligated to make as work meets agreed-upon stages of construction.

Question 7

A woman that receives a property by descent receives the property by

A	Escheat
B	Dedication
C	Inheritance
D	Adverse use

Question 7 Explanation:

Acquiring property by inheritance

Question 8

A standard title insurance policy covers the purchaser from title problems relating to

A	forgery in the chain of title.
B	zoning changes.
C	matters not of public record.
D	rights of parties in possession.

Question 9

Which of the following tenancies is a free-hold interest?

A	Life estate
B	Estate for years
C	Estate at will
D	Periodic tenancy

Question 9 Explanation:

Life estates and fee simple are freehold estates. Leasehold interests are nonfree-hold estates.

Question 10

What is the last action against a debtor?

A	Lis pendens
B	Attachment
C	Execution
D	Judgment

Question 10 Explanation:

Sheriff's seizure and sale of assets after judgement.

Question 11

FHA loans are made by

A	HUD.
B	the FHA.
C	qualified lenders.
D	the Federal Reserve.

Question 11 Explanation:

Institutional lenders approved by the FHA.

Question 12

A property manager, in apartment renting, might require that

A	unmarried mothers have lease cosigners.
B	the security deposit be $200 per person for each unit.
C	all lessees provide three character references.
D	families without children receive a $100 discount form the scheduled rent.

Question 12 Explanation:

Reasonable and nondiscriminatory .

Question 13

Landlords would have just cause to evict a single person who

A	joined a tenant organization.
B	became pregnant.
C	complained to health authorities about the condition of the rental.
D	refused to pay the last month’s rent when the security deposit was greater than the rent due.

Question 13 Explanation:

This prohibited by Uniform residential Landlord and Tenant Act. (A) and (C) are a retaliatory eviction, and (B) is prohibited by the Fair Housing Law.

Question 14

A real estate license is required by

A	a developer selling more than 10 homes.
B	an attorney-in-fact selling property for a principal.
C	a trustee selling under court order.
D	an attorney at law taking a listing.

Question 14 Explanation:

The attorney isn't acting as an attorney but as a real estate broker

Question 15

Homeowners insurance includes

A	mortgage life coverage.
B	flood insurance.
C	earthquake damage.
D	liability protection.

Question 15 Explanation:

Others require separate policies.

Question 16

An oil and gas lease is classified as

A	personal property.
B	an emblement.
C	a remainder interest.
D	a reversionary interest.

Question 16 Explanation:

Lease interests are personal property (chattels real), but oil and gas rights are real property.

Question 17

An exclusive listing in a broker’s inventory before sale is called a

A	executed bilateral contract.
B	executory bilateral contract.
C	executed unilateral contract.
D	executory unilateral contract.

Question 17 Explanation:

Executory because broker has not yet found a buyer and bilateral because there were mutual promises.

Question 18

An extended policy for title insurance also includes

A	forgery.
B	undisclosed spousal interests.
C	failure of delivery of prior deeds.
D	defects discovered by property inspection.

Question 18 Explanation:

The others are covered by the standard policy.

Question 19

Which act requires accessibility to places of public accommodation?

A	RESPA
B	The Americans with Disabilities Act
C	The 1988 Fair Housing Amendments Act
D	The Civil Rights Act of 1968

Question 19 Explanation:

Must be accessible if achievable.

Question 20

If a property was acquired using forged income statements by the listing broker, that sale is

A	void.
B	voidable.
C	valid.
D	illegal.

Question 20 Explanation:

At the option of the purchaser.

Question 21

When is it appropriate for a broker to receive commission from the buyer and seller?

A	The listing did not prohibit it
B	Both parties agreed to it
C	The listing was nonexclusive
D	Separate services were performed for both parties

Question 21 Explanation:

Both parties must agree to both dual agency and receiving any commission from another party. Otherwise of could be a breach of fiduciary duty.

Question 22

Which hazardous condition does high humidity relate to?

A	Radon gas
B	Perchlorate
C	Toxic mold
D	PCB’s

Question 22 Explanation:

Mold thrives in wet and damp conditions.

Question 23

A substitute of buyer in a purchase contract by the seller is known as

A	reformation.
B	novation.
C	satisfaction.
D	rescission.

Question 23 Explanation:

Substitute of parties.

Question 24

What is the Federal Emergency Management Agency in charge of?

A	Enforcement of CERCLA
B	Waste disposal site approval
C	Flood hazard area maps
D	EMF regulations

Question 24 Explanation:

They prepare maps and are concerned with disasters.

Question 25

Ingress and egress refer to

A	assumability.
B	leases.
C	easements.
D	transferability.

Question 25 Explanation:

Entering and exiting

Question 26

A valid deed needs

A	recording.
B	witnesses.
C	acceptance.
D	acknowledgment.

Question 26 Explanation:

Although in some cases acceptance can be presumed. Between the parties recording is not required.

Question 27

In a closing statement, rental security deposits are referred to as

A	credits to the buyer.
B	credits to the seller.
C	debits to the buyer.
D	prorated items.

Question 27 Explanation:

They must be turned over to the buyer. They are debits to the seller.

Question 28

“Quiet enjoyment” refers to

A	the neighborhood.
B	the tenant’s right of possession.
C	the tenant’s right to use without interference from the owner or others claiming an interest.
D	habitability.

Question 28 Explanation:

It is an implied covenant in a lease.

Question 29

Fidelity bonds safeguard brokers against

A	employee turnover.
B	employee theft.
C	liability for injury.
D	damage to property.

Question 29 Explanation:

Protection to broker and principal.

Question 30

What information is the seller obligated to release to the buyer?

A	The status of existing loans
B	Known defects in the property
C	The chain of title
D	All latent defects

Question 30 Explanation:

In a property report, only known defects need to be disclosed.

Question 31

Where in the deed would the term “to have and to hold” appear?

A	Safety clause
B	Habendum clause
C	Execution clause
D	Description clause

Question 31 Explanation:

Defines extent of estate conveyed.

Question 32

What happens when the amortization period of a loan is expanded?

A	Monthly payments will decrease
B	Interest rates will decrease
C	Total loan costs will decrease
D	Lender risk will decrease

Question 32 Explanation:

But the total interest paid for the term of the loan would increase.

Question 33

Whom does SAFE licensing apply to?

A	Home Inspectors
B	Mortgage Loan Originators
C	OSHA
D	Risk Management

Question 33 Explanation:

The Federal Secure and Fair Mortgage Licensing Act of 2008 (SAFE)

Question 34

When a person dies intestate, the court appoints

A	an executor
B	an administrator
C	a devise
D	a testator

Question 34 Explanation:

Appointed by the court to act as a representative of the deceased. An executor is named in a will by the decedent.

Question 35

It is proper to include in an ad that a property

A	has a 55-year age restriction.
B	is across the street from a catholic church.
C	owners prefers married couples.
D	is in the most desirable Chinese neighborhood.

Question 35 Explanation:

Exception under the 1988 Fair Housing Amendments Act.

Question 36

What is the nominal rate of interest?

A	The rate stated in the note
B	The true rate expressed as the APR.
C	The minimum interest allowed by law.
D	The usury rate

Question 36 Explanation:

Which, because of loan fees, is less than the APR.

Question 37

With an assessed value of $149,500, an equalization factor of 118%, and a tax rate of 0.018, the taxes are

A	$2,691
B	$2,791
C	$3,175
D	$3,764

Question 37 Explanation:

$149,500 assessed value x 1.18 equalization factor = $176,410, which the tax rate applies to; $176,410 x 0.018 = $3,175

Question 38

It is a legal business practice to

A	cut fees below what competitors are charging.
B	agree with your competitors as to a uniform fee schedule.
C	agree with your competitors not to advertise in a paper that is unfriendly to your profession.
D	divide the local market geographically among your competitors so that buyers and sellers can be better served.

Question 38 Explanation:

The others are violations of the Sherman Antitrust Act.

Question 39

Without having set a specified closing date, a real estate transaction must close

A	immediately.
B	within 3 days.
C	within 30 days.
D	within a reasonable period of time.

Question 39 Explanation:

A court would decide what is reasonable if conflict arises.

Question 40

One form of voluntary alienation is

A	a deed.
B	escheat.
C	eminent domain.
D	police power.

Question 40 Explanation:

The others are involuntary transfers.

Question 41

If a person is on the National Do Not Call Registry, you can still call if

A	you have not called them before.
B	you call on a for-sale-by-owner ad to obtain a listing.
C	you know the party.
D	your call is to a business telephone.

Question 41 Explanation:

Applies only to residential telephones.

Question 42

Procuring cause refers to what?

A	entitlement to commission.
B	depreciation.
C	exercise of options.
D	mortgage insurance.

Question 42 Explanation:

It determines entitlement to a commission on an open listing or exclusive agency listing.

Question 43

Obligatory advances would apply to what loan type?

A	Shared appreciation mortgage
B	Construction loan
C	Growing equity mortgage
D	Participation mortgage

Question 43 Explanation:

They are the advances the lender is obligated to make as work meets agreed-upon stages of construction.

Question 44

Whom should be concerned about meridians?

A	An appraiser.
B	A mortgage broker.
C	A surveyor.
D	A property manager.

Question 44 Explanation:

Government north/south survey lines.

Question 45

Eligibility for a homeowner's capital gains exclusion requires

A	the home be the principal or secondary residence.
B	the homeowner not previously taken the exclusion.
C	five-year ownership.
D	two-year occupancy.

Question 45 Explanation:

And it can be taken every two years.

Question 46

Subleasing is best described as

A	an assignment.
B	greater than an assignment.
C	a hypothecation.
D	less than an assignment.

Question 46 Explanation:

The original lease remains with the sublessor.

Question 47

If you receive a property by descent, then you received it by

A	escheat.
B	dedication.
C	inheritance.
D	adverse use.

Question 48

The legal process used to remove a title is

A	a quitclaim deed.
B	an action to quiet title.
C	an action in personam.
D	a writ of mandamus.

Question 48 Explanation:

Court makes determination of title.

Question 49

Prepaid rent on a closing statement is always a

A	debit to the buyer.
B	debit to the seller.
C	credit to the seller.
D	balance factor.

Question 49 Explanation:

The seller has to turn over the unearned rent to the buyer.

Question 50

The Real Estate Settlement Procedures Act refers to

A	home equity loans.
B	purchase loans on one-to-four residential unit buildings.
C	loans for one-to-six residential unit buildings.
D	residential, commercial, and industrial financing.

Question 50 Explanation:

That are federally related.

Question 51

What happens to the value of a commercial property that is on a long-term lease at a fixed rate when interest rates increase?

A	They would result in the use of a lower capitalization rate.
B	They would increase the gross multiplier.
C	They would lower the property's value.
D	They would require that the property be appraised using the cost approach to value.

Question 51 Explanation:

Rising interest rates would result in the investor's using higher capitalization rates that would result in lower value.

Question 52

A piece of land was purchased for $328,000 at 82% of the price it was listed. What was the list price?

A	$268,960
B	$387,040
C	$400,000
D	$437,000

Question 52 Explanation:

$328,000 part divided by 0.82% = whole.

Question 53

Compound interest is typical in which type of mortgage?

A	Straight.
B	Bimonthly.
C	Reverse annuity.
D	Amortized.

Question 53 Explanation:

Because the interest accruing each month accrues on a previously charged interest.

Question 54

How is an offer terminated?

A	Rejection by the offeror.
B	Rejection by the offeree.
C	Revocation by the offeree.
D	Request for an extension by the offeree.

Question 54 Explanation:

The offeror can revoke, the offeree rejects.

Question 55

The words good, valuable, and legal refer to

A	income.
B	consideration.
C	commission.
D	capacity.

Question 55 Explanation:

Love and affection are "good" consideration but not "valuable"

Question 56

Lower interest rates will likely result in

A	lower sale prices.
B	more buyers entering the market.
C	a reduction in sales activity.
D	higher capitalization rates.

Question 56 Explanation:

Because more buyers could qualify for loans.

Question 57

A loan that yields future advances is

A	an open-end loan.
B	a shared appreciation loan.
C	a growing equity mortgage.
D	a blanket mortgage.

Question 57 Explanation:

Up to an agreed-upon limit. Home equity loan approvals and home equity credit cards do the same thing.

Question 58

Warehousing refers to the process of

A	loans being used as collateral for other loans.
B	servicing mortgages for other owners.
C	the process of assemblage.
D	nonconforming loans.

Question 58 Explanation:

Mortgage bankers borrow on inventory of loans. A short-term line of credit to make additional loans.

Question 59

Seller financing is typically shown on a closing statement

A	as a prorated factor.
B	as a credit to the buyer and a debit to the seller.
C	as a debit to the buyer and a credit to the seller.
D	not at all.

Question 59 Explanation:

It is credited to the buyers as part of what they have to pay and deducted (debited) from what the sellers will receive at closing.

Question 60

What do both the FHA and VA loans have in common?

A	Absence of prepayment penalties.
B	Absence of loan gains.
C	Requirement of mortgage insurance.
D	Requirement of a certificate of reasonable value.

Question 60 Explanation:

Neither penalizes prepayment.

Question 61

A women stationed overseas with the National Guard receives notice that her home will be foreclosed. The women's rights include

A	the right to appeal any foreclosure.
B	staying the foreclosure until 90 days after the end of active service.
C	the right to have interest forgotten.
D	a one-year period of redemption after foreclosure.

Question 61 Explanation:

Service Members Civil Relief Act.

Question 62

Potential buyers have access to personal information of a neighbor through which law?

A	Americans with Disabilities Act.
B	Megan's Law.
C	1988 Fair Housing Amendments Act.
D	Civil Rights Act of 1968.

Question 62 Explanation:

Buyer may be informed as to availability of data about sex offenders in the area.

Question 63

By calling in a loan, the lender

A	gives a new loan.
B	accelerates loan payments.
C	shortens the loan term.
D	changes the interest rate.

Question 63 Explanation:

Under an acceleration clause.

Question 64

What does a broker have the power to do in a listing?

A	Everything necessary to conclude a sale.
B	Any act performed in the owner's best interest.
C	The customary authority of a general agent.
D	Only the authority granted or implied.

Question 64 Explanation:

It is a special agency.

Question 65

A 1 acre plot of land sold for $58,900. What was the approximate price per square foot?

A	$0.73.
B	$0.94.
C	$1.22.
D	$1.35.

Question 65 Explanation:

Divide the price paid by square feet in an acre.

Question 66

The first act in violation of the Americans with Disabilities Act comes with a maximum penalty of

A	$5,000.
B	$25,000.
C	$45,000.
D	$55,000.

Question 66 Explanation:

$110,000 for subsequent violations.

Question 67

What does MOL mean when used in a listing?

A	Measurement of land.
B	Measurement owner's liability.
C	More or less.
D	Measured on legal.

Question 67 Explanation:

Used when exact acreage is difficult to ascertain, as with a metes-and-bounds description.

Question 68

If a man makes a gift of his home in writing to a friend, what type of contract is that?

A	Valid.
B	Void.
C	Voidable.
D	Implied.

Question 68 Explanation:

Because it lacks valuable consideration, love and affection cannot support a promise.

Question 69

What are all the rights of ownership called?

A	Emblements of title.
B	The bundle of rights.
C	Chattels real.
D	Fructus naturales.

Question 69 Explanation:

All beneficial rights of ownership.

Question 70

Disclosure must be made to purchaser of

A	the true reason the property is being sold.
B	any serious health problem of prior occupants.
C	any known neighborhood nuisance problem.
D	actual annual utility costs.

Question 70 Explanation:

Known detrimental information must be revealed.

Question 71

Which of the statements about agency is true?

A	Death of the agent terminates the agency.
B	Any agency can be terminated by repudiation by principal or agent.
C	Termination of an agency relieves the agent of confidentiality duties.
D	An agent can assign all interest in the agency to another agent.

Question 71 Explanation:

An agency coupled with an interest may not be terminated, confidentiality of an agency remains and an agency is a personal contract that cannot be assigned.

Question 72

Stigmatized property is a house

A	condemned by the city as unfit for habitation.
B	in an undesirable neighborhood.
C	with numerous physical defects.
D	regarded by the community as unlucky.

Question 73

Instruments that could contain subordination clauses are

A	deeds.
B	mortgages.
C	leases.
D	options.

Question 73 Explanation:

It makes a secondary in priority to a later recorded loan.

Question 74

What is a salesperson called when a broker makes him/her the sole agent for an owner?

A	A facilitator
B	A dual agent.
C	The designated agent.
D	A cooperating agent.

Question 74 Explanation:

Another salesperson could be the buyer's agent. Designated agency avoids the problems of dual agency.

Question 75

Readily obtainable alterations to premises might be required because of

A	RESPA.
B	The Americans with Disabilities Act.
C	The 1988 Fair Housing Amendments Act.
D	The Civil Rights Act of 1968

Question 75 Explanation:

When required to makes premises accessible to person with disabilities.

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