National Real Estate Exam with Verified Answers Graded A+
1. Olivia took out a 15-year loan secured with a Because the property deed
deed of trust. She worked two jobs in order was held by a third-par-
to pay the loan back and finally made her last ty trustee instead of the
payment this month. What happens now? lender, the trustee grants
a reconveyance deed to
Olivia.
2. Warren signed a contract with the Samsons A party can't promise to do
for the sale of property he didn't own. What something impossible in a
type of contract is this? contract. Doing so makes
the contract void.
3. Which amendment to CERCLA says that "in- The Superfund Amend-
nocent landowners" aren't responsible for ments and Reauthorization
clean-up of hazardous contamination? Act, or SARA, says that
innocent landowners aren't
responsible for clean-up of
hazardous contamination.
4. With the cost approach to value, what is the The replacement cost re-
replacement cost? flects the cost to build
a functionally equivalent
improvement, as opposed
to the reproduction cost,
which is the cost to build
an exact replica of the sub-
ject, with the same materi-
als and deficiencies.
5. Antje's clients closed on their property yes- The duty of accounting
terday, but Antje still has some paperwork may continue even after
that she needs to deliver to them as soon as the transaction closes. The
possible. Under which fiduciary duty is Antje agent must account for any
acting? documents or money be-
longing to the client until it
is delivered to the appropri-
ate party.
6.
,National Real Estate Exam with Verified Answers Graded A+
When real estate licensee Brian discovered REALTOR Brian could
that Arnold was using a 'Choose Your Neigh- charge Arnold with violat-
bor' letter to market a property without also ing Article 10 of the Code
listing the property in the MLS, in the local pa- of Ethics, which prohibits
per, or even putting a for sale sign in the yard, REALTORS from agree-
what charge could he bring against Arnold to ing to discriminate against
the National Association of REALTORS? people belonging to a pro-
tected class.
7. What is estate at sufferance? Estate at sufferance is
when a tenant remains on
the property after the law-
ful authority has expired
(a holdover tenant), after
which the landlord may
evict.
8. Which entity typically enforces the code re- While builders and de-
strictions and licensing and insurance re- velopers self-regulate to
quirements for contractors, thereby enforc- some degree, they're not
ing the building code? responsible for enforcing
the building code. This is
the local building depart-
ment's responsibility.
9. Under which types of agency agreement may Open, exclusive right to
a buyer and agent operate? represent, and exclusive
agency
10. What is a survey? A survey is used to cre-
ate, verify, or correct a le-
gal description. It's a pro-
fessional on-site measure-
ment of the lot lines and
dimensions of a property.
11. Melisa's mother gave her house to Melisa, To preserve the chain of ti-
along with a signed copy of the deed granting tle, Melisa needs to record
ownership to Melisa. Years later, Melisa de- the signed deed. Then fu-
cides to downsize by selling the property. The
,National Real Estate Exam with Verified Answers Graded A+
title company shows that the property is still ture records will show an
in Melisa's mother's name. What does Melisa unbroken chain of title.
have to do to clear this up?
12. Prior to the , there was no legal protec- The Housing and Commu-
tion for women who endured sexual harass- nity Development Act of
ment from landlords and sellers when they 1974 included gender or a
attempted to obtain housing. person's sex in the list of
protected classes.
13. Which document is used to give a buyer an Title insurance companies
overview of the title history and information issue a preliminary report
about what is or isn't covered in an insurance with the current title histo-
policy? ry and any liens or encum-
brances. It outlines what
the insurance company will
or won't cover on its forth-
coming insurance policy if
the title is found to be ac-
ceptable.
14. When is a lead disclosure required? A lead disclosure is re-
quired for residential prop-
erties built before 1978 be-
cause paint manufacturers
used lead in paint before it
was banned that year.
15. Which of the following is a potential disad- Depending upon the con-
vantage for a buyer who enters into a lease tract's terms, a potential
with an option to buy contract? disadvantage for a buyer
who enters into a lease
with an option to buy is that
he could lose any funds
credited to the purchase
price if he breaches the
terms of the lease.
16. Joe gave land to a school, but still wanted to A fee simple determinable
have some control over its use, so a deed was has limitations as to what
, National Real Estate Exam with Verified Answers Graded A+
prepared that gave the school title as long can or can't be done with
as the land is used for educational purposes. a property. It uses phras-
What type of interest does the school have? es such as "so long as,"
"while," or "during" to de-
scribe the required condi-
tion.
17. You represent the buyer in one transaction You have a buyer agency
and the seller in a different transaction. What relationship with the buyer
type of agency relationship do you have with in one transaction and a
the buyer? seller agency relationship
with the seller in the other
transaction.
18. What does the Federal Trade Commission Any ad or business prac-
consider to be an unfair ad? tice that causes or is likely
to cause injury is consid-
ered an unfair ad, accord-
ing to the FTC's Unfairness
Policy Statement.
19. As part of the sales contract, Garth, the seller, A voidable contract can be
was supposed to provide a copy of the sell- cancelled by one or more
er's disclosure to the buyer, Melanie, but he parties because it's miss-
failed to do so. What type of contract is this? ing an essential element. In
this situation, Melanie, the
buyer, has the right to can-
cel the contract and have
her earnest money refund-
ed.
20. How are principal meridians and baselines Each legal description in
used in the rectangular government survey this system originates at
system? the intersection of a prin-
cipal meridian and a base-
line.
21. When the lender gathers all kinds of This is all part of the appli-
information about the borrower's assets, cation process.
debts, income, employment history, and
