Free Real Estate Exam Practice Test

A utility company holds a permanent legal right to access a 10-foot strip of land along the rear boundary of a homeowner's parcel in order to install and maintain municipal power lines. This interest does not benefit an adjacent parcel of land. Which type of encumbrance does the utility company hold?

A borrower takes out a conventional mortgage to finance the purchase of a single-family home. Which mortgage clause specifies that the lender's security interest in the property is formally extinguished and the title is cleared once the borrower pays off the loan balance in full?

A property sells for $450,000 with an agreed total brokerage commission rate of 6%. The listing broker and the buyer's broker agree to split the total commission equally (50/50). If the listing salesperson has a 70/30 commission split agreement with their listing broker (salesperson receives 70%), how much gross commission does the listing salesperson earn from this transaction?

A buyer purchases a home appraised at $380,000 with a contracted purchase price of $375,000. A mortgage lender agrees to fund a conventional loan with a maximum Loan-to-Value (LTV) ratio of 80%. What is the maximum loan amount the lender will issue, and what is the minimum down payment required from the buyer?

A prospective buyer submits a written purchase offer on a residential property for $320,000 with a 5-day financing contingency. The seller reviews the offer and signs it after crossing out $320,000, writing in $330,000, and initialing the change. What is the legal status of the transaction at this point?

A listing agent represents a seller who is selling their home due to an impending corporate job relocation in three weeks. A prospective buyer asks the listing agent, "Is the seller under pressure to sell quickly, and would they take 10% below asking price?" If the seller has not authorized disclosure of their timeline, how must the listing agent respond?

A real estate agent is working with a prospective buyer couple with young children. Without being asked, the agent steers the buyers exclusively toward suburban neighborhoods with high concentrations of single-family homes and avoids showing them available, affordable condominiums in an urban downtown area, stating, "Downtown isn't suitable for families with kids." Which federal law has the agent violated, and under which protected class?

A homeowner lists a residential property built in 1965 for sale. Under the federal Residential Lead-Based Paint Hazard Reduction Act (Title X), what specific disclosure requirement must the seller and their real estate broker fulfill prior to executing a binding purchase contract?

Which of the following is NOT one of the four unities required to create a joint tenancy with right of survivorship?

Which type of deed gives the grantee the greatest protection by including the grantor's covenants and warranties covering the entire history of the property?

A city council adopts a zoning ordinance restricting the use of land in a residential district. The council's authority to do so comes from which government power?

An investor is considering a rental property that produces gross monthly rent of $1,500. Comparable properties in the area sell at a gross rent multiplier (GRM) of 140 based on monthly rent. What is the estimated value of the property?

Which appraisal approach is generally considered the most reliable for estimating the value of a single-family residence?

A commercial building has a net operating income (NOI) of $36,000 per year. If the appropriate capitalization rate is 8 percent, what is the estimated value of the building?

Under the federal TILA-RESPA integrated disclosure rules, within how many business days after receiving a mortgage loan application must the lender provide the borrower with a Loan Estimate?

A buyer is financing a home with a conventional loan. At what down payment level does a lender typically require private mortgage insurance (PMI)?

A rectangular parcel of land measures 330 feet by 660 feet. How many acres does the parcel contain? (1 acre = 43,560 square feet)

A home has a market value of $250,000. The county assesses property at 60 percent of market value and sets a tax rate of $4.20 per $100 of assessed value. What is the annual property tax?

A home sale closes on June 1. The seller has not yet paid the annual property taxes of $3,600 for the calendar year, which are paid in arrears. Using a 30-day month, 360-day year and assuming the buyer owns the property from the day of closing, how much will the seller be charged (debited) at closing for taxes?

Under the statute of frauds, which of the following agreements must be in writing to be enforceable?

Which statement best describes an option contract?

A broker wishes to represent both the buyer and the seller in the same transaction. In most states, what must occur before the broker may act as a dual agent?

An agent tells several homeowners in a stable neighborhood that families of a different race are moving in and urges them to sell quickly before property values drop. This practice is known as

A salesperson receives an earnest money check from a buyer along with a signed offer. What should the salesperson do with the check?

A landlord sells a building that is leased to a tenant under a valid three-year written lease with two years remaining. What is the effect of the sale on the lease?