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Quiz
#5 - Review for Test #1
Choose the BEST answer
1.
A small office building sold for $949,000 and broker received a commission
of $54,900. What was the broker’s commission rate?
a. 5.8%
b. 6.2%
c. 7%
d. 11.3%
2. A property owner wishes to net $56,500 from the sale of her small building.
After paying an advertising allowance of $160 and a 5%
commission what must
the selling price be, rounded to the nearest
dollar?
a. $1,660,455
b. $1,133,200
c. $60,753
d. $59,642
3. Assuming that the listing and selling broker split the commission evenly.
What
is the sales price of a house if the listing broker received
$2,593.50 and the total
commission rate is 6 ½ %?
a. $88,400
b. $79,800
c. $76,200
d. $39,900
4. Which of the following would NOT affect demand:
a. population
b. demographic
c. wage levels
d. fiscal policy
5. The phrase “bundle of legal rights” is properly included in:
a. the definition of real property
b. a legal description
c. real estate transactions
d. leases for less than one year
6. According to law, a trade fixture is?
a. not removable
b. an easement
c. personalty
d. a license
7. Which of the following is NOT a physical characteristic of land
a. indestructibility
b. uniqueness
c. immobility
d. scarcity
8. Real property can become personal property?
a. severance
b. purchase
c. hypothecation
d. attachment
9. Which of the following is considered to be personal property?
a. wood burning fireplace
b. awnings
c. light fixtures
d. patio furniture
10. Which of the following is NOT meant by the word improvements?
a. streets
b. a sanitary sewer system
c. trade fixture
d. the foundation
11. Generally, personal property can be distinguished from real property by
its?
a. greater variety
b. mobility
c. price
d. multiplicity of use
12. Legally, 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
13. A real estate salesperson who is an independent contractor receives:
a. a monthly salary or hourly wage
b. company-provided health insurance
c. a company-provided automobile
d. negotiated commission on transactions
14. 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 repaid bid
c. either the actual cash value or the prorated repair cost
d. the total replacement cost
15. What is the capital gains tax exclusion available to homeowners who file
their
income taxes singly?
a. $125,000
b. $225,000
c. $250,000
d. $500,000
16. Most homeowner’s insurance policies contain which of the following
clauses?
a. a property improvement clause
b. a co-insurance clause
c. a co-ownership clause
d. a property devaluation clause
17. The L’s sold their vacation home for $88,000. If they made a profit of
10%,
what was the original cost of the
property?
a. $61,000
b. $79,000
c. $79,200
d. $80,000
18. 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. $3,50
b. $79,000
c. $37,000
d. $37,500
19. M listed her real estate at $100,000. If her cost was 80% of the listing
price what
will her percentage of profit be if her real estate is sold for the
listing price?
a. 10%
b. 15%
c. 20%
d. 25%
20. The real estate broker’s responsibility to keep the principal informed of
all the
fact that could affect a transaction if the duty
of:
a. care
b. disclosure
c. obedience
d. accounting
21. The relationship of a broker to his or her client is that of a(n)?
a. trustee
b. subagent
c. fiduciary
d. attorney-in-fact
22. 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
23. When Broker H was told by his principal not to advertise her property in the
XYZ newspaper, which was out of the area, Broker
H complied because he:
a. had never advertised in XYZ newspaper anyway
b. must obey the lawful instructions of his principal
c. was not intending to advertise the property at all
d. is allowed to advertise only in the local newspaper
24. It is the duty of the agent to disclose to the principal every step taken in
the
transaction of the principal’s business. This is because
the:
a. commission can be adjusted up or down according to the agent’s effort
b. agent has fiduciary obligations to the principal
c. terms of the listing contract require the agent to do so
d. terms of the purchase contract required the agent to do so
25. 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
26. 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
27. A buyer who is shown properties listed for sale by the broker is the broker’s
a. client
b. principal
c. customer
d. fiduciary
28. A salesperson sells a buyer property listed by another brokerage firm in the
MLS.
The salesperson has been working with the buyer for many
months but does not
have an agency contract with the buyer. This
salesperson has fiduciary
obligations to:
a. the seller
b. the buyer
c. no one
d. the public
29. A broker who is the agent of the buyer should do which of the
following?
a. disclose to the seller that the buyer is a minority person
b. disclose to the seller the maximum price the buyer is willing to pay
c. present to the seller only offers that are acceptable
d. advise the buyer if the listing price of the seller’s house is
unrealistic
30. A broker cannot legally collect commission from both seller and the buyer
without:
a. notifying both parties of this fact verbally after the sales has closed
b. notifying both parties of this fact in writing after the sale has
closed
c. having exclusive listing agreements signed by both the seller and the
buyer
d. having the prior knowledge and written consent of both the seller and the
buyer
31. The amount of commission due to a salesperson is determined by:
a. state law
b. the local real estate board
c. mutual agreement
d. court decree
32. A salesperson may advertise a property for sale only if he or she
a. personally listed the property
b. uses the employing broker’s name in the advertisement
c. personally pays for the advertisement
d. is a member of the
local real estate board
33. A real estate broker was responsible for a chain of events that resulted in
the
sale of one of his client’s properties. This is referred
to as a:
a. pro forma
b. procuring cause
c. private offering
d. proffered offer
34. A broker’s salesperson lists a unit for sale in a condominium building.
The salesperson in this transaction:
a. has a direct contractual relationship with the owner of the unit
b. acts on behalf of the broker
c. acts on behalf of the condominium association
d. must find a buyer for the unit to obtain a share of the commission
35. Which of the following is NOT a reason a listing agreement may be
terminated?
a. sale of the property
b. death of the salesperson
c. agreement of the parties
d. destruction of the premises
36. A building sold for $157,000. The broker charged a 6% commission and divided
it as follows: 10% to the salesperson Who took the
listing; one-half of the
balance to the salesperson who made the sale; and the
remainder to the broker.
What was the listing salesperson’s commission?
a. $239
b. $942.
c. $1,570
d. $4,239
37. The type of listing agreement that provided for the payment of a commission
to the broker even though the owner makes the Owner
makes the sale without
the aid of the broker is called a(n)
a. exclusive-right-to-sell listing
b. open listing
c. exclusive-agency listing
d. option listing
38. A property owner lists his property for sale with a broker. During the
negotiations, the owner told the broker that the owner wanted $138,000 for the
property, and anything above that amount the broker could keep
as his
commission The listing with this type of provisions is known as a(n):
a. gross listing
b. net listing
c. open listing
d. non-exclusive listing
39. A listing contract in which the broker’s commission is contingent on the
broker
being able to produce a buyer before the property is
sold by the owner is called
a(n):
a. open listing
b. net listing
c. exclusive-right-to-sell listing
d. exclusive-agency listing
40. A statutory right that a family has in its residence is called
a. entirety
b. survivorship
c. curtesy
d. homestead
41. A portion of W’s building was inadvertently built on G’s land. This is
called:
a. accretion
b. avulsion
c. encroachment
d. easement
42. Which of the following has an indefinite duration ?
a. freehold estate
b. less-than-freehold estate
c. estate for years
d. license
43. The purchase of a ticket for a professional sporting event gives the
bearer:
a. a easement right to park his car
b. a license to enter and claim a seat for the duration of the game
c. an easement in gross interest in the professional sporting team
d. a license to sell goods and beverages at the sporting event
44. A voluntarily created life estate conveys to the life tenant
a. a leasehold for life
b. a reversionary interest
c. an estate of inheritance
d. ownership for life
45. The most all-inclusive type of real property ownership is a
a. fee simple estate
b. life estate
c. conditional fee estate
d. reversionary interest
46. The major intent of zoning regulations is to
a. demonstrate the police power of the state.
b. ensure the health, safety and welfare of the community
c. set limits on the amount and kinds of businesses in a given area
d. protect the residential neighborhoods from encroachment by business
and
industry
47. Your neighbors use you driveway to reach their garage on their property.
Your
attorney explains that the ownership of the neighbor’s
real estate includes an
easement appurtenant giving them the driveway right.
Your property is the:
a. leasehold interest
b. dominant tenement
c. servient tenement
d. license property
48. Which of the following is NOT an ownership right to real estate?
a. buildings located on the property
b. air space above the property
c. easements running with the land
d. navigable rivers running through the
property
49. The rights of the owner of property located along the banks of a river are
called:
a. littoral rights
b. prior appropriation
c. riparian rights
d. hereditaments
50. A deed conveys ownership to the grantee so long as the existing building is
not
torn down. What type of estate did this deed create?
a. a life estate
b. a nondestructible estate
c. a fee simple estate
d. a determinable fee simple estate
51. L conveys the ownership of his house to his motherand stipulates that upon
her
death he will recapture the ownership. The interest L
has in the ownership is a:
a. remainder estate
b. curtesy estate
c. legal life estate
d. reversion estate
52. K an U owned a combination apartment building with a small bar and grill on
the
premises. They shared their profits and losses on
their venture equally, but they
did not own the business under any written
partnership agreement. One day,
U died of a heart attack. If, after U’s
death, K continued to own the same
undivided interest in the real
estate as he did before U’s death and no more,
then:
a. they were joint tenants
b. they tenants in common
c. they were stockholders in their own
corporation
d. U died intestate
53. To create a joint tenancy relationship in the ownership of real estate,
there must
by unity of:
a. grantees, ownership, claim of right and possession
b. title, interest, encumbrance, and survivorship
c. possession, time,
interest, and title
d. ownership, possession,
heirs, and title
54. The Real Estate Commission shall consist of:
a. two members at large from each congressional district.
b. one member at large from each congressional district.
c. one district member from each congressional district.
d. all members are licensed real estate brokers or salespersons.
55. If the government acquires privately owned property through a condemnation
suit, it is exercising its power of
a. escheat
b. reversion
c. license
d. eminent domain
56. The following are true concerning the Real Estate Commission, EXCEPT :
a. a majority of the current members of the commission constitutes a
quorum to
conduct business.
b. a majority of those members present is required to bind the commission
c. the chairperson is required to give reasonable notice to all members of the
time and place of each meeting.
d. each member is entitled to the minimum salary per diem
57. The following are unlawful acts under the Indiana License Law EXCEPT:
a. paying a commission to an unlicensed
b. offering property for sale on terms other than those authorized by the
seller.
c. representing the buyer in a transactioin
d. guaranteeing future profits from the resale of a property
58. A person purchases a fee simple estate and has an undivided interest in the
common elements. What does this person own?
a. a tenancy in common
b. a cooperative
c. a condominium
d. a tenancy by the entireties
59. A and B are joint tenants. B sells his interest to C. What is the
relationship
of A and C?
a. they are joint tenants
b. they are tenants in common
c. there is no relationship because B can not sell to
C
d. A owns a 2/3 interest and C owns a 1/3
interest
60. Mr. and Mrs. J decide to sell their house and move to a cooperative
apartment
building. In a cooperative they will:
a. become stockholders in the cooperative
b. own their own individual apartment
c. own the common elements
d. receive a 20 year lease to their
apartment
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