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National Real Estate Exam Practice Test Part 3
This deck covers key concepts and questions from the National Real Estate Exam Practice Test Part 3, focusing on appraisal methods, property management, contracts, and real estate laws.
Which appraisal method would an appraiser be most likely to use on an owner-occupied residential home?
sales comparison approach
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Key Terms
Term
Definition
Which appraisal method would an appraiser be most likely to use on an owner-occupied residential home?
sales comparison approach
A property manager's PRIMARY responsibility to the owner is to:
realize the highest return possible and maximize the owner's return on that investment
A credit to the seller has what effect on charges made to the parties involved in the transaction?
increases the amount the seller receives at closing
The EPA requires that a lead-based paint disclosure be presented to buyers of all residential property built prior to:
1978
Which of these is an example of a legally competent party who can enter an enforceable contract?
adult who did not finish high school
Which of these will most lenders require homeowners to obtain before closing?
homeowners insurance
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| Term | Definition |
|---|---|
Which appraisal method would an appraiser be most likely to use on an owner-occupied residential home? | sales comparison approach |
A property manager's PRIMARY responsibility to the owner is to: | realize the highest return possible and maximize the owner's return on that investment |
A credit to the seller has what effect on charges made to the parties involved in the transaction? | increases the amount the seller receives at closing |
The EPA requires that a lead-based paint disclosure be presented to buyers of all residential property built prior to: | 1978 |
Which of these is an example of a legally competent party who can enter an enforceable contract? | adult who did not finish high school |
Which of these will most lenders require homeowners to obtain before closing? | homeowners insurance |
On Kandy Dr., many older homes have been upgraded or torn down, with high-value homes built in their place. 201 Kandy Dr. is now the smallest, shabbiest home on the block, but it recently appraised for more than a similar home in a less-upgraded neighborhood. What principle of value explains this? | principle of progression |
To determine the value of a highly specialized building, like a museum, an appraiser would most likely use and heavily weight which of the following appraisal methods? | cost approach |
Tareq represented the seller in the sale of a house for $427,000. The commission agreed upon was 7% and Tareq gave half to the buyer's representative. What will he take home if the split with his brokerage is 80% Tareq - 20% broker? | $11,956 |
A new contract substituting the obligations of an original contract is a(n): | novation |
Which of these is an easement that is attached to a piece of land, regardless of owner? | easement appurtenant |
A bank refuses to issue mortgages to a historically Black part of town. This practice is: | redlining, and it's illegal |
If two parties to a contract both promise to perform the actions specified in the contract, we describe the contract as: | bilateral |
Which law requires a lender to give a buyer an estimate of closing costs? | RESPA |
What does it mean when a contract says that time is of the essence? | Parties must perform their contractual duties by a specific date and time in order to avoid a breach of contract. |
What type of permission allows an individual property to deviate from a specific provision of a zoning ordinance? | variance |
How does errors and omissions insurance (E&O) affect the defendants in fair housing cases? | E&O may not cover any defense for a fair housing violation. |
An agent should present all offers to their client UNLESS: | the client explicitly instructs the agent not to present any offers below a certain amount in writing |
TILA does NOT apply to which of the following kinds of loans? | business loans |
Allie cannot depreciate her investment property for a tax deduction. What kind of property is it? | undeveloped land |
An appraisal is required for all: | federally related loan programs |
Erin pays a flat fee every month to rent her apartment. Her landlord pays for the property's maintenance, security, taxes, utilities, and all other operating expenses. What kind of lease is this? | gross lease |
The purpose of the Truth-in-Lending Act (TILA) is to provide which of the following? | meaningful disclosure of credit terms of the loan to the borrower |
There are no exceptions for discrimination based on: | race |
A valid sales contract stipulates that the seller must repair a hole in the roof before closing day. The seller failed to do so, which makes the seller guilty of: | breach of contract |
What usually happens to earnest money at the successful closing of the sale? | It counts towards the buyer's closing costs. |
Liability for others by mandate of law or by express agreement is called: | vicarious liability |
Which type of listing agreement is most likely to cause a conflict of interest, and is therefore discouraged? | net listing |
John submitted an offer to buy a condo, but he can only carry out the purchase if the bank approves his request for a loan. For this reason, the contract must contain a: | contingency |
If a buyer makes a 15% down payment and obtains a $120,000 mortgage, what is the sales price of the property? | $141,176 |
What is eminent domain? | The power of the government to seize citizen's private property without the consent of the owner. |
The party responsible for paying the origination fee when obtaining conventional financing is: | the borrower |
What is attached to an original contract before it is signed? | addendum |
Arturo is buying a house for $400,000. He will be making a down payment of 5%. He already submitted a check for $2,000 as earnest money, which will be applied to the purchase. How much will Arturo need to pay on closing day? | $18,000 |
An alienation clause would require a borrower to: | pay the mortgage debt in its entirety upon the property being sold |