Transcript PRINCIPLES OF REAL ESTATE Quiz – Chapters 1 – 5

Which of the following is NOT included in one’s right to control their property?
A. The right to invite people on the property for a political fundraiser
B. The right to exclude the utilities’ meter reader
C. The right to erect “no trespassing” signs
D. The right to enjoy pride of ownership
1
Statements by a real estate licensee exaggerating the benefits of a property are called.
A. polishing.
B. puffing.
C. prospecting.
D. marketing.
2
When demand decreases and supply remains the same
A. prices tend to rise.
B. prices tend to fall.
C. prices are not affected.
D. the market becomes stagnant.
3
M listed her real estate for sale at $100,000.
If her cost was 80 percent of the listing price,
what will her percentage of profit be if her real estate sold for the listing price?
A.
B.
C.
D.
10%
15%
20%
25%
4
Certain items on the premises that are installed
by the tenant and are related to the tenant’s business are called?
A. fixtures.
B. emblements.
C. trade fixtures.
D. easements.
5
Which of the following is NOT a test for determining a fixture?
A. Intent of the parties
B. Size of the item
C. Method of attachment of the item
D. Adaptation of the item to the real estate
6
Fixtures are
A. real property.
B. chattels.
C. removable by a tenant before the expiration of the lease.
D. removable by a tenant after the expiration of the lease.
E. both a and c
7
The Smith’s sold their vacation home for $88,000.
If they made a profit of 10%, what was the original cost of the property?
A.
B.
C.
D.
$61,000
$79,000
$79,200
$80,000
8
Which of the following is NOT an economic characteristic of land?
A. Scarcity
B. Permanence of investment
C. Uniqueness
D. Area preference
9
Which of the following would NOT affect supply?
A. Population
B. Construction costs
C. Government controls
D. The labor force
10
John’s house has been listed for sale
for more than one year and he is very anxious
to move into a retirement condominium.
A salesperson, who is a subagent of the seller,
tells a prospective buyer to make a low offer because
the salesperson is sure that the seller will accept it.
Regarding the salesperson’s conduct,
which of the following would NOT be true?
A. The salesperson acted appropriately to get John’s property sold.
B. The salesperson violated the fiduciary to the seller.
C. The salesperson’s conduct could indicate that she is working for the buyer.
D. The salesperson should not assume that an anxious seller will accept a lower offer.
11
A homeowner who wishes coverage greater than
that provided by a basic insurance policy
may choose a broad-form policy for coverage
of which of the following additional perils?
A. Flood or earthquake
B. War or nuclear explosion
C. Falling objects
D. Volcanic eruption
12
Federal income tax regulations allow a homeowner to reduced
his or her taxable income by amounts paid for
A. repairs and maintenance.
B. hazard insurance premiums.
C. real estate taxes.
D. principal and interest.
13
A broker cannot legally collect commissions from
both the seller and the buyer without
A. notifying both parties of this fact verbally after the
B. sale has closed.
C. notifying both parties of this fact in writing after the sale has closed.
D. having exclusive listing agreements signed by both the seller and the buyer.
E. having the prior knowledge and written consent of both the buyer and the seller.
14
Which of the following would be considered to be a dual agency?
A. The broker acting for both the buyer and the seller in the same transaction.
B. Brokers cooperating with each other.
C. The broker representing different principals.
D. The broker listing and selling the same property.
15
Which of the following would NOT need to be licensed when acting for another person
in the sale or lease of real estate?
A. one who is personally representing a dealer in real estate
B. anyone acting under a power of attorney
C. a relative of the party
D. a next-door neighbor
16
A buyer who is shown properties listed for rent by a broker is the broker’s
A. client.
B. principal.
C. customer.
D. fiduciary.
17
Upon discovering a latent defect in the property, the licensee should discuss
the problem with the seller and then
A. notify the seller that the defect must be repaired
B. arrange for the repairs himself or herself.
C. inform any prospective buyers of the defect.
D. contact the city building inspector about the defect.
18
The relationship of a sales associate to the supervising broker is
A. that of a special agent.
B. subject to all laws and rules of agency.
C. an employer-employee relationship.
D. that of a universal agent.
19
Jim, a sales agent, in the course of selling a home told the
prospective buyer that the foundation was
“solid as a rock” when he knew that it was slowly sinking
into the landfill on which it was built.
Which of the following is he NOT likely to be subjected to?
A. Having his real estate license revoked
B. Being sued criminally for restitution
C. Being sued civilly for damages
D. Being sued criminally for fraud
20
In the event that a homeowner’s insurance policy provides coverage
for less than 80% of the full replacement
cost of the dwelling, then the loss of the residence will be settled for
A. the market value of the property less the land value.
B. the lowest bid.
C. either the actual case value or the prorated repair cost.
D. the total replacement cost.
21
The buyer of a $125,000 home has paid $2,000 as earnest
money and has a loan commitment
for 70% of the purchase price.
The balance of the cash the buyer needs to complete the transaction is
A.
B.
C.
D.
$ 3,500
$35,500
$37,000
$37,500
22
One of the expenses the homeowner may NOT
deduct when preparing his annual income tax return is
A. real estate taxes.
B. mortgage interest on a first home.
C. mortgage interest on a second home.
D. mortgage interest on a third home.
23
For a real estate salesperson to be considered an independent contractor,
all of the following conditions must be met EXCEPT:
A. The associate must be a licensed real estate agent.
B. Compensation must be based on sales production.
C. There must be a written agreement setting forth the
associate’s independent contractor status.
D. The broker must withhold federal income taxes and social
security contributions from the associate’s earnings.
24
A seller has listed her home with a broker for $90,000, and the broker tells a prospective
buyer to submit a low offer because the
seller is desperate to sell. The buyer offers $85,000 and the seller accepts it.
In this situation,
A. the broker has violated his agency relationship with the seller.
B. the broker was unethical, but the seller did get to sell her property.
C. the broker acted properly to obtain a quick offer on the property.
D. any broker is authorized to encourage such bids for the property.
25
Mary is interested in a house that fits most of her needs,
but it is located in a busy downtown
area where she is not sure she wants to live.
Her concern about the property’s location is called
A. physical deterioration.
B. area preference.
C. permanence of investment.
D. immobility.
26
Which of the following is NOT meant by the word “improvement”?
A. streets
B. a sanitary sewer system
C. trade fixtures
D. the foundation
27
Which of the following best defines the “law of agency”?
A. The selling of another’s property by an authorized agency
B. The rules of law that apply to the responsibilities of a person who acts for another
C. The principles that govern one’s conduct in business
D. The rules and regulations of the state’s licensing agency
28
A broker is permitted to represent both the seller and the buyer
in the same transaction when
A. the principals are not aware of such action.
B. the broker is a subagent rather than the agent of the seller.
C. commissions are collected from both parties.
D. both parties have been informed and agree to the dual representation.
29
The federal tax provisions allowing for the exclusion of a certain level
of capital gain from taxation applies if the home is
A. single family.
B. condominium.
C. part of a PUD.
D. any of these
30
Before being granted an original salesperson’s license, an applicant must
A. pass the examination for salesperson licensure.
B. name the broker with whom the applicant will be associated.
C. complete any state-mandated education requirements.
D. all of the above.
31
The physical characteristics of land include which of the following?
A. uniqueness
B. scarcity
C. permanence of investment
D. adaptation
32
Can an agent protect himself from liability to disclose defects in a
property by stating in writing that the property is being sold “as is”?
A. Yes, because the statement makes it clear that the purchaser
is aware of all problems that might arise.
B. Yes, because of the rule of Caveat Emptor.
C. No, because he may still be liable for having withheld
material facts about the property.
D. No, because the purchaser waives any right to future
claims by accepting the property “as is”.
33
Nonfactual or extravagant statements which would be recognized by
a reasonable person as exaggeration
A. should be used with care because of the potential liability for misrepresentation.
B. are known as puffing or puffery.
C. both A and B.
D. neither A nor B.
34
The owner of a house wants to fence the yard for her dog.
When the fence is erected, the fencing materials are converted to real estate by
A. severance.
c. immobility.
B. annexation.
d. indestructibility.
35
As an agent for the seller, a real estate broker can
A. guarantee a prospective buyer that the seller will accept an
offer at the listed price and terms.
B. solicit an offer to purchase the property from a prospective buyer.
C. advise a prospective buyer of the best manner of taking title to the property.
D. change the terms of the listing contract on behalf of the seller.
36
Sally owns no real property other than her home and does not hold a real estate license.
She told her friends she was planning to sell her home herself and they
gave her the following advice. Which of these statements is/are true?
A. The law does NOT permit her to sell her home unless she first passes
a state-administered real estate exam.
B. Sally can sell her home without a real estate license only if she
first appoints herself as a trustee for the property.
Both A and B.
Neither A nor B.
37
Land is considered to be
A. indestructible.
B. a wasting asset.
C. immune to the forces of supply and demand.
D. subordinate to real property rights.
38
A person who sells real estate for others
A. must be licensed in order to collect compensation.
B. need not be licensed if no compensation is involved.
C. both A and B.
D. neither A nor B.
39
Most homeowner’s insurance policies contain which of the following clauses?
A. A property improvement clause
B. A coinsurance clause
C. A co-ownership clause
D. A property devaluation clause.
40
Which of the following is NOT described as personal property?
A. Chattels
B. Trade fixtures
C. Emblements
D. Fixtures
41
The geographic location of any parcel of land
A. can be changed as some substances are removable from the land.
B. can never be changed.
C. can be changed because the topography can be changed.
D. can be changed only under certain legal circumstances.
42
All of the following are normally exempt from the requirement for licensure
in order to sell real estate as an incidental part of their duties EXCEPT:
A. an attorney at law.
B. the executor of an estate.
C. a trustee under a deed of trust.
D. a real estate appraiser.
43
Federal income tax law excludes gain realized on the sale of a
primary residence for singles and couples.
The amount of the exclusion is (single/couple):
A.
B.
C.
D.
$100,000/$200,000
$125,000/$250,000
$250,000/$500,000
$300,000/$600,000
44
Which of the following would be considered to be fixtures because of
the manner of their attachment to the property?
A. A fireplace grate and andirons.
B. A set of fire tools for a fireplace.
C. Both A and B.
D. Neither A nor B.
45
The term “real estate” includes
A. the right to use land.
B. anything affixed to land with the intent of being permanent.
C. rights to the air above the land.
D. all of the above.
46
A real estate broker may share a commission on a real estate sale with
any of the following EXCEPT:
A. a salesperson licensed in his employ.
B. a broker licensed in another state.
C. another broker licensed in his state of licensure.
D. a salesperson licensed with another broker in his state of licensure.
47
A 12’ x15’ room will cost $500 to carpet. How much is this per square yard?
A. $ 2.50
B. $ 20.00
C. $ 25.00
D. $180.00
48
The basement for a new home requires an excavation that is
45 feet by 27 feet by 9 feet deep.
At a cost of $6.00 per cubic yard to dig, what will be the cost of this excavation?
A.
B.
C.
D.
$ 405.00
$1,481.48
$1,822.50
$2,430.00
49
To whom should a disclosure of non-representation be made?
A. To the seller of a listed property you are selling when you represent the buyer.
B. To the seller of a listed property when you are representing the seller.
C. To the buyer of a listed property when you are representing the seller.
D. To a FSBO when you are representing the buyer.
E. None of the above
F. Two of the above
G. All of the above
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