1. A property management fee should not be based on

(A) a fixed fee.

(B) a percentage of gross income.

(C) a lease fee.

(D) amount of remuneration from contractors.

2. One of the primary differences between independent contractors and employees is that independent contractors

(A) pay their own social security.

(B) don’t have to obey office policy.

(C) can’t deduct work-related expenses.

(D) work a different set of standard hours than an employee.

3. Broker A and Broker B met on January first and agreed that during the year A will service only sellers on the north side of town and B will service only sellers on the south side of town.

(A) This is legal market division because everyone is guaranteed to get service

(B) This is illegal price fixing.

(C) This is boycotting because they left Broker C out of the arrangement.

(D) This is illegal market allocation.

4. The case that dealt with real estate broker price fixing was

(A) Brown vs. the Board of Education.

(B) United States vs. Foley.

(C) Dred Scott.

(D) Jones vs. Mayer.

5. A special agent is one who

(A) handles a single transaction.

(B) is appointed by the broker only in dual agency situations.

(C) is the typical agency for a property manager.

(D) always represents the seller.

6. “The landscaping on this house is beautiful,” which in reality consists of two scraggly bushes in the yard, is an example of

(A) puffing.

(B) fraud.

(C) negligent misrepresentation.

(D) intentional misrepresentation.

7. Which of the following need not be disclosed to a seller client?

(A) Recent customer bankruptcy

(B) Self-dealing

(C) Current customer divorce

(D) All of the above must be disclosed

8. Joe is Mary’s seller client. Fred is Sally’s buyer client who is interested in Joe’s house. Based on this information, which of the following relationships is accurate?

(A) Mary and Sally are each other’s sub agents.

(B) Mary and Sally are dual agents.

(C) Joe is Sally’s sub agent whereas Fred is Mary’s sub agent.

(D) Fred is Mary’s customer and Joe is Sally’s customer.

9. Using your best efforts on behalf of your client even if they conflict with your own self-interest is

(A) loyalty.

(B) care.

(C) obedience.

(D) accountability.

10. Broker Allen has a listing and is the agent for the seller Sam. Buyer Ben hires Broker Allen as his buyer’s agent and wants to see Sam’s house. Broker Allen

(A) must refuse to work with Buyer Ben as his agent.

(B) must disclose his relationship to Sam and Ben.

(C) must engage another broker to represent Ben.

(D) must obtain informed consent to continue with this arrangement.

11. Seller Cindy asks Broker Bob to help her sell her house. Broker Bob agrees, and they settle on a fee but nothing is put in writing. This appears to be

(A) an express agency.

(B) an implied agency.

(C) a designated agency.

(D) an agency by ratification.

12. Seller Slim agrees to let Broker Barbara list his house for sale and agrees to pay her a 4 percent commission if the sale goes through. But Slim continues to advertise the house himself, and Barbara agrees that there will be no commission owed if he sells his own house. What type of listing agreement did Slim sign?

(A) Open listing

(B) Owner acting as seller listing

(C) Exclusive right to sell

(D) Exclusive agency

13. A buyer asks you to show them homes in a Christian neighborhood.

(A) You can comply with their request because they initiated the request.

(B) You must immediately stop working with the buyer.

(C) You can tell them where the Christian neighborhoods are, but you can’t show them houses there because real estate agents are held to a higher standard.

(D) You may show them houses in a variety of neighborhoods that meet their financial and other housing needs.

14. Which of the following is not a protected class under federal fair housing law?

(A) Gender

(B) Race

(C) Marital status

(D) National origin

15. The unique enforcement provision of the 1866 Civil Rights Act is that

(A) all complaints are brought to the department of Housing and Urban Development.

(B) suits are always brought in state court.

(C) suits are brought directly in federal court.

(D) the FBI is charged with investigating the complaint.

16. What is the rule regarding a housing exemption for religious organizations?

(A) No limits on the exception due to freedom of religion

(B) Limited to three or fewer units

(C) No limits as long as no real estate agent is used

(D) The religion itself must not discriminate in its membership rules

17. Because there’s a significant Jewish population in a particular community, two multiple listing organizations have been established — one Jewish and one non-Jewish. Real estate agents may belong to one but not both.

(A) This is legal market allocation.

(B) This is no problem.

(C) This is discriminatory but not a fair housing violation.

(D) This is a fair housing violation.

18. The rights of an owner to the waters of an abutting river or stream are called

(A) littoral rights.

(B) riparian rights.

(C) prior appropriation rights.

(D) homestead rights.

19. Title to property donated to the county park system has automatically reverted back to the original owner because the parks department is no longer using it for the purpose for which it was donated. The donation was probably made as

(A) fee simple absolute.

(B) fee simple condition precedent.

(C) fee simple condition subsequent.

(D) fee simple determinable.

20. You give your aunt the right to live in your second home until your cousin dies. You’ve likely given her

(A) curtesy rights.

(B) homestead rights.

(C) a life estate pur autre vie.

(D) an ordinary life estate.

21. Personal property attached to a building

(A) remains personal property.

(B) becomes a fixture.

(C) becomes personalty.

(D) is assumed to not remain with the property upon sale.

22. Another term for tenancy in severalty is

(A) sole ownership.

(B) common ownership.

(C) joint ownership.

(D) community property.

23. Tenancy by the entirety

(A) means one owns the entire property rather than shares.

(B) is the way several people can own equal shares of the property.

(C) is characterized by the four unities.

(D) is specific to property ownership by a married couple.

24. A person who buys the interest of someone who owns property in joint tenancy becomes

(A) a new joint property owner.

(B) a tenant in common.

(C) a tenant by the entirety.

(D) a tenant in trust.

25. Tenancy in common owners always have

(A) equal shares.

(B) the right of survivorship.

(C) divided ownership.

(D) the ability to sell without permission of the other owners.

26. Which of the following statements is correct?

(A) All encumbrances are financial limitations on property ownership.

(B) Encumbrances are only physical limitations on properties.

(C) Easements are not considered encumbrances.

(D) Encumbrances may be physical or financial.

27. A mortgage lien is

(A) voluntary and specific.

(B) involuntary and specific.

(C) voluntary and general.

(D) involuntary and specific.

28. An easement by prescription is created by

(A) the actions of a person.

(B) utility companies only.

(C) agreement.

(D) eminent domain.

29. An easement that benefits a person rather than a property is called an easement

(A) by necessity.

(B) by prescription.

(C) in gross.

(D) appurtenant.

30. The fact that I must paint my house white is probably because of

(A) an easement.

(B) a deed restriction.

(C) a lien.

(D) an infrastructure clause.

31. Which of the following is not considered a public land use restriction?

(A) Deed restriction

(B) Zoning

(C) Building code

(D) Special permit use

32. If a density zoning ordinance is applied to a subdivision all the lots must

(A) be grouped in a small area.

(B) allow for at least 30 percent of the land to be left open.

(C) total the lot count in a normal subdivision.

(D) be below the normal size called for by the zoning.

33. If a person dies without a will and without heirs, the state government obtains the property by

(A) eminent domain.

(B) claim of prior appropriation.

(C) escheat.

(D) lien rights.

34. Title to property is actually conveyed

(A) when the contract is signed.

(B) when all the conditions in the contract are met.

(C) when title insurance is issued.

(D) when the deed is delivered to the buyer and accepted by him.

35. The allocation of certain expenses between a buyer and a seller is called

(A) proration.

(B) settlement and procedures.

(C) kickbacks.

(D) payoffs.

36. The section due east of section 36 in the rectangular (government) survey system is section

(A) 36.

(B) 31.

(C) 25.

(D) 1.

37. In the rectangular (government) survey system a principal meridian and a baseline cross to form a

(A) township.

(B) section.

(C) quadrangle.

(D) nothing; they never cross because they are parallel.

38. A deed commonly used in family property transfers that gives no warrantees is a

(A) bargain and sale deed.

(B) deed in trust.

(C) grant deed.

(D) quitclaim deed.

39. Whose signature is required to make a deed valid?

(A) Grantor only

(B) Grantee only

(C) Grantor and grantee

(D) Grantor, grantee, and the title company representative

40. In a warranty deed the covenant of quiet enjoyment means

(A) that no one will come along to claim ownership of the property.

(B) that the grantor must compensate the grantee if any later claims of ownership turn out to be valid.

(C) both A and B

(D) neither A nor B

41. In the proration, an accrued item

(A) is paid by the seller.

(B) is paid by the buyer.

(C) could be paid by either.

(D) has been paid by the mortgage lender.

42. Constructive notice of a real estate transaction is generally provided by

(A) registered mail.

(B) the title company notifying the town tax assessor.

(C) the buyer to the seller.

(D) registering the deed in the public records.

43. The continuous use of property by someone other than the owner could result in a claim of

(A) eminent domain.

(B) avulsion of title.

(C) adverse possession.

(D) grant of title.

44. Title to a park created as part of a new development might be given to the local town by

(A) grant.

(B) dedication.

(C) possessory interest.

(D) partition.

45. When the town takes property for unpaid taxes the process is called

(A) foreclosure.

(B) eminent domain.

(C) public grant.

(D) forfeiture.

46. Person B wants $300,000 for her house. Person A offers $250,000. Person B counteroffers $280,000. Person A counteroffers $252,000. Person B gets disgusted and counteroffers $310,000 back to Person (A) Can Person B do this?

(A) Yes

(B) No

(C) Only if the negotiations are conducted verbally

(D) Only as long as both real estate brokers agree

47. A contingency in a real estate sales contract

(A) must be satisfied for the contract to be enforceable.

(B) can be dropped from the contract by mutual agreement.

(C) can be dropped by the party who placed the contingency in the contract.

(D) All of the above

48. The words vendor and vendee are often associated with what type of contract?

(A) Lease

(B) Real estate sales contract

(C) Option agreement

(D) Installment or conditional sales contract

49. Forcing someone to sell you their house in accordance with the contract you both signed is called

(A) specific performance.

(B) forfeiture.

(C) compensatory damages.

(D) rescission.

50. A building contractor taking over the contract of another builder is called

(A) the assignee.

(B) the vendor.

(C) the subcontractor.

(D) the contractor of record.

51. The owner of a two-family (duplex) house with two tenants might want to put what clause in the lease that would allow the new owner to evict either or both of the tenants.

(A) Sale clause

(B) Use clause

(C) Occupancy clause

(D) Subleasing clause

52. What kind of lease is typically used in an office building?

(A) Gross lease

(B) Percentage lease

(C) Proprietary lease

(D) Net lease

53. If the date/day is not stated in the lease, legally when is the rent due on a rental apartment?

(A) The monthly anniversary of when the lease was signed

(B) The last day of the month

(C) The first of the month

(D) Whenever the state stipulates as the default payment date

54. The principle difference between a net lease and a triple net lease is

(A) There is no difference other than terminology.

(B) the type of building.

(C) the number of different expenses paid by the tenant.

(D) the term of the lease.

55. Friable is a term generally associated with

(A) lead paint.

(B) asbestos.

(C) sewage disposal.

(D) brownfields.

56. Which phase of environmental assessment deals with remediation of the polluted area?

(A) Phase 1

(B) Phase 2

(C) Phase 3

(D) Phase 4

57. The cutoff below which tanks are generally exempted by the LUST program is

(A) 2,600 gallons.

(B) 2,100 gallons.

(C) 1,600 gallons.

(D) 1,100 gallons.

58. Brownfields refer to

(A) former military bases.

(B) former industrial sites.

(C) farms where the soils are depleted.

(D) sanitary landfills.

59. Chlorofluorocarbons are associated with

(A) lead in water.

(B) mold.

(C) sewer gases.

(D) air-conditioning equipment.

60. At what vacancy rate is potential gross income calculated?

(A) 100 percent

(B) The actual rate

(C) 0 percent

(D) 80 percent

61. Reconciliation in appraising involves

(A) averaging the value estimates from each approach.

(B) weighing the value estimates from each approach and relying on the most appropriate approach for that type of property.

(C) adjusting the three values so they’re no more than five percent apart.

(D) eliminating any value that doesn’t meet the expectation of the client.

62. Which of the following is not a formula in the income capitalization approach?

(A) Value ÷ income = rate

(B) Value × rate = income

(C) Income ÷ rate = value

(D) Income ÷ value = rate

63. Vacancy and collection loss is subtracted from

(A) potential gross income.

(B) net operating income.

(C) effective gross income.

(D) gross rental income.

64. The formula for determining the gross rent multiplier is

(A) gross rent × gross rent multiplier.

(B) potential gross income ÷ capitalization rate.

(C) sales price ÷ gross rent.

(D) value × rate.

65. Of the various approaches to apprising property, what approach would be most suitable to appraising a unique nonresidential property with few comparables?

(A) Sales comparison approach

(B) Gross rent multiplier approach

(C) Income capitalization approach

(D) Cost approach

66. In the cost approach, a severely broken foundation that could be repaired would be classified as what kind of depreciation?

(A) Functional obsolescence curable

(B) Functional obsolescence incurable

(C) Physical deterioration curable

(D) Physical deterioration incurable

67. A gas station near a house is a form of

(A) functional obsolescence.

(B) external obsolescence.

(C) physical deterioration.

(D) straight-line depreciation.

68. If the subject has a newly remodeled kitchen and the comparable does not, you

(A) add the adjustment value to the comparable.

(B) add the adjustment value to the subject.

(C) subtract the adjustment value from the comparable.

(D) subtract the adjustment value from the subject.

69. Other than the borrower’s ability to repay the loan what is the most important thing in consideration of how much the lender will lend?

(A) LTV

(B) NOI

(C) Property value

(D) Property cost

70. Which piece of federal legislation dealt with banks making loans within their communities?

(A) The Community Reinvestment Act

(B) The Equal Credit Opportunity Act

(C) The Truth in Lending Act

(D) The Neighborhood Affordable Housing Act

71. In which case does the buyer become personally liable for the balance of the mortgage loan?

(A) Estoppel

(B) Presumption

(C) Subject to

(D) Assumption

72. You can calculate the first month’s interest on an amortized 30-year mortgage by multiplying

(A) the loan amount by the interest rate and dividing by 30.

(B) the loan amount by the interest rate and dividing by 12.

(C) the loan amount by the interest rate and dividing by 30 then dividing by 12.

(D) the monthly loan payment by the interest rate.

73. The interest rate on an adjustable rate mortgage is calculated as follows:

(A) Index plus margin

(B) Annual cap plus margin

(C) Lifetime cap minus margin

(D) Index minus margin

74. What is negative amortization?

(A) Additional money borrowed on a home equity loan

(B) An increase in the principal balance of a loan due to money owed but not paid

(C) The total payment due at the end of a term loan

(D) The result of a drop in the index from one year to the next in an adjustable rate loan

75. The total monthly payment on an amortized loan is composed of

(A) principal and interest.

(B) principal only.

(C) interest only.

(D) principal, interest, taxes, and insurance.

76. I’m in contract to sell my house. I’ve bought another house and the seller wants to close before I can close on my own house. What kind of financing might help me?

(A) Temporary loan

(B) Swing loan

(C) Bridge loan

(D) All of the above

77. Mom and Dad lent you money to buy a house with the stipulation that you not only pay them back what you borrowed but also a portion of the profit you make on the house when you sell it. This is probably a

(A) blanket mortgage.

(B) package mortgage.

(C) purchase money mortgage.

(D) shared equity mortgage.

78. A partial release provision is characteristic of what kind of mortgage?

(A) Blanket mortgage

(B) Construction loan

(C) Package mortgage

(D) Open end mortgage

79. Another name for the estoppel certificate is

(A) reduction certificate.

(B) certificate of reasonable value.

(C) assumption certificate.

(D) payoff certificate.

80. Which of the following is not the same tax rate as the others?

(A) $8 per $100

(B) $80/$1,000

(C) 8 mills

(D) 80 mills

81. Assuming no special exemptions, properties with the same market value should

(A) pay the same taxes but not necessarily have the same assessments.

(B) pay the same taxes and have the same assessments.

(C) have the same assessments but may pay different taxes.

(D) not be concerned if their taxes differ periodically.

82. An equitable right of redemption with respect to a tax sale comes

(A) after the tax sale.

(B) before the tax sale.

(C) either before or after the tax sale.

(D) after the in rem proceeding.

83. What priority does a tax lien have over other liens?

(A) All liens are prioritized by date.

(B) Tax liens come last.

(C) Tax liens take priority over all other liens.

(D) Tax liens take the second position right after the mortgage regardless of when other liens were filed.

84. A protest against high taxes should be brought to

(A) the tax grievance board.

(B) the tax assessor.

(C) small claims court.

(D) elected officials.

85. When rent from an investment is used to pay off an amortized mortgage it’s called

(A) capital appreciation.

(B) cash flow.

(C) depreciation.

(D) equity buildup.

86. An owner of an investment building gets to deduct from the taxes he owes a certain amount of money he spent making his building environmentally more efficient. Most likely the government has given him

(A) a grant.

(B) a tax credit.

(C) an exemption.

(D) a tax deduction.

87. The cash owed to someone in an uneven property exchange is called

(A) boot.

(B) like kind.

(C) capital gains.

(D) deferred depreciation.

88. In a real estate investment, which of the following is correct with respect to risk and expected return?

(A) Risk up, return up

(B) Risk up, return down

(C) Risk down, return the same

(D) Risk up, return the same

89. Another term for cost recovery is

(A) capital gains.

(B) profit.

(C) return on investment.

(D) depreciation.

90. The fact that equal amounts of deprecation are taken every year is referred to as

(A) accelerated.

(B) cost recovery.

(C) straight line.

(D) limited.

91. You’re selling the NW1/4 of the SW1/4 of the S1/2 of the W1/2 of Section 31. How many square feet of land are you selling?

(A) 435,600

(B) 43,560

(C) 21,780

(D) 4,356

92. An owner wants to net $300,000 from selling his house after she pays you a 5 percent commission. What price must she sell her house for?

(A) $315,000

(B) $315,789

(C) $300,000

(D) 320,000

93. You sold 20 houses last year and 25 houses this year. What percent fewer houses did you sell last year than this year?

(A) 25 percent

(B) 20 percent

(C) 10 percent

(D) 5 percent

94. A couple gets a 30-year amortized mortgage loan for $200,000 at 5 percent interest. The monthly payment for principal and interest is $1,074. They make 15 years of payments when they come into some money and are able to pay off the remaining $120,000 balance of the loan. Approximately how much total interest did they pay on the mortgage loan?

(A) $113,000

(B) $105,000

(C) $93,000

(D) $78,000

95. What is the first month’s interest on a 20-year mortgage loan for $90,000 at 4 percent interest?

(A) $3,600

(B) $300

(C) $200

(D) $180

96. A couple has $24,000 a year available to buy a house. Annual taxes are $4,000; one year’s insurance is $1,000. The mortgage rate they’ve secured calls for a payment of $4.50 per month per $1,000 of mortgage. The couple has $30,000 to put down on the house. What is the highest price house they can afford?

(A) $474,444

(B) $444,444

(C) $381,851

(D) $138,000

97. The market value of a property is $400,000. The town’s assessment ratio is 80 percent. The tax rate is 15 mills. What are the annual taxes for this property?

(A) $480

(B) $600

(C) $4,800

(D) $6,000

98. Six months taxes of $3,600 are paid in advance on February 1. Sale of the house closes on August 1. Who owes how much to whom?

(A) Buyer owes the seller $3,600

(B) Seller owes the buyer $3,600

(C) Seller and buyer owe each other $1,800

(D) Buyer owes seller nothing

99. The subject property has a third bathroom that is not present in the comparable; however, the comparable has a renovated kitchen that the subject property does not have. If the bathroom is valued at $5,000, the renovated kitchen has a value of $10,000, and the comparable recently sold for $330,000, what is the indicated value of the subject?

(A) $315,000

(B) $325,000

(C) $335,000

(D) $345,000

100. Three multifamily properties sold as follows:

Sales Price	Gross Annual Rent
$700,000	70,000
$650,000	$65,000
$720,000	$72,000

     The property you are interested in purchasing has a gross annual rent of $68,000. Using the gross rent multiplier method, what’s the value of the property you want to buy?

(A) $680,000

(B) $710,000

(C) $780,000

(D) $6,800,000