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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 brokerís 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 Ĺ %? 

                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 ďbundle of legal rightsĒ 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 homeownerís 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 homeownerís 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 Lís 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 brokerís 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 principalís business. This is because the: 

              a. commission can be adjusted up or down according to the agentís 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 ďlaw of agency?Ē 

              a. the selling of anotherís 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 oneís conduct in business 
              d. the rules and regulations of the stateís licensing agency 

27. A buyer who is shown properties listed for sale by the broker is the brokerís 

              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 sellerís 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 brokerís 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 clientís properties. This is referred to as a:

              a. pro forma 
              b. procuring cause 
              c. private offering 
              d. proffered offer 

34. A brokerís 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 salespersonís 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 brokerís 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 Wís building was inadvertently built on Gís 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 neighborís 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 Uís death, K continued to own the same
       undivided interest in the real estate as he did before Uís 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 

 

QUIZ #5 - Review for Test #1
Answers

1. A 11. B 21. C  31. C 41. C 51. D
2. D 12. A 22. A 32. B 42. A 52. B
3. B 13. D 23. B 33. B 43. B 53. C
4. D 14. C 24. B 34. B 44. D 54. C
5. A 15. C 25. C 35. B 45. A 55. D
6. C 16. B 26. B 36. B 46. B 56. C
7. D 17. D 27. C 37.A 47. C 57. C
8. A 18. B 28. A 38. B 48. D 58. C
9. D 19. D 29. D 39. D 49. C 59. B
10. C 20. B 30. D 40.  D 50. D 60. A
61. A
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