NATIONAL REAL ESTATE EXAM PRACTICE
TEST WITH VERIFIED ANSWERS(100%
CORRECT)
In most cases, broker compensation, as a percentage of home price, falls somewhere between: -
ANSWER5-7%
QUESTION A Christian organization owns a fourplex. It wants to rent to only Christian tenants.
Under the federal Fair Housing Act, is this legal? - ANSWERYes. Religious organizations which
rent to tenants for residential purposes are exempt from the Fair Housing Act
QUESTION What happens to trade fixtures after a business moves out of a leased property? -
ANSWERThe tenant removes their trade fixtures and takes them upon moving out.
QUESTION Suppose that a borrower has a gross monthly income of $3,000 and wants to
qualify for a conforming loan (total debt service ratio of 36%) with a monthly PITI payment of
$800. What is the maximum amount of additional long-term obligations this borrower may have
after PITI? - ANSWER$280 ANSWER100 square feet
QUESTION A square bedroom measures 10 feet by 10 feet. What is the area of the room? -
QUESTION Which of these is an economic characteristic that makes land a distinctive
commodity?* - ANSWERsitus
QUESTION In a fixed-rate mortgage that is fully amortized, the total amount of interest to be
paid is: - ANSWERpredetermined
QUESTION Which is exempt from the federal Fair Housing Act? - ANSWERrenting a room in
a house occupied by the owner
, QUESTION The Americans with Disabilities Act applies to: - ANSWERprivately owned or
government-owned public accommodations
QUESTION Condemnation is the act of seizing private property from citizens. What gives the
government the right to do this? - ANSWEReminent domain
QUESTION The PHYSICAL characteristics of land are that land is indestructible, non-
homogenous, and: - ANSWERimmobile
QUESTION Which statement BEST defines the term contingency? - ANSWERstipulation that
must be satisfied before the contract can be performed
QUESTION If a borrower is behind on payments, the acceleration clause gives the lender the
ability to: - ANSWERcall the entire loan balance due immediately
QUESTION A metes and bounds legal description always returns to: - ANSWERthe point of
beginning
QUESTION What should a license holder do if a client instructs them to do something that
would discriminate against a protected class? - ANSWERadvise the client they cannot legally
discriminate against certain groups
QUESTION What is a novation? - ANSWERthe substitution of one contract for another
QUESTION A married couple bought a home ten years ago for $400,000. Their neighborhood
has rapidly grown in popularity, and they were able to sell their home this year for $950,000.
How much of that money will they be required to pay capital gains tax on? - ANSWER$50,000
QUESTION Which element of a valid contract states that the contract cannot require any illegal
activities or outcomes? - ANSWERlawful objective
, QUESTION Deanna wants to sue her real estate agent, but finds out that she has no legal
recourse because too many years have passed since the offending incident. What is this an
example of? - ANSWERstatute of limitations
QUESTION Pedro bought his house for $370,000. The assessed value is $290,000. If the tax
rate for Pedro's county is 2.375%, what will he pay in ad valorem taxes this year? -
ANSWER$6,887.50
QUESTION A potentially valid contract in which at least one party has the option to rescind is
described as: - ANSWERvoidable
QUESTION When you're talking about mortgages, what is another name for an origination fee?
- ANSWERpoints
QUESTION Both parties involved in an agency agreement agree to end the agreement early.
What is this called? - ANSWERmutual rescission
QUESTION What does a standard title insurance policy do?* - ANSWERprotects against any
defects discovered in the title after closing
QUESTION Which term describes the transfer of property from the current owner to another
party by sale or gift?* - ANSWERvoluntary alienation
QUESTION In the sales comparison approach to property valuation, what does the principle of
substitution state?* - ANSWERThe value of a property is only what a consumer would pay to
acquire a comparable property.
QUESTION Who can require a buyer to purchase homeowners insurance? - ANSWERlender
QUESTION Which of the following statements may represent the unauthorized practice of
law?* - ANSWER"You should proceed without ordering a new abstract - this title is clear."
TEST WITH VERIFIED ANSWERS(100%
CORRECT)
In most cases, broker compensation, as a percentage of home price, falls somewhere between: -
ANSWER5-7%
QUESTION A Christian organization owns a fourplex. It wants to rent to only Christian tenants.
Under the federal Fair Housing Act, is this legal? - ANSWERYes. Religious organizations which
rent to tenants for residential purposes are exempt from the Fair Housing Act
QUESTION What happens to trade fixtures after a business moves out of a leased property? -
ANSWERThe tenant removes their trade fixtures and takes them upon moving out.
QUESTION Suppose that a borrower has a gross monthly income of $3,000 and wants to
qualify for a conforming loan (total debt service ratio of 36%) with a monthly PITI payment of
$800. What is the maximum amount of additional long-term obligations this borrower may have
after PITI? - ANSWER$280 ANSWER100 square feet
QUESTION A square bedroom measures 10 feet by 10 feet. What is the area of the room? -
QUESTION Which of these is an economic characteristic that makes land a distinctive
commodity?* - ANSWERsitus
QUESTION In a fixed-rate mortgage that is fully amortized, the total amount of interest to be
paid is: - ANSWERpredetermined
QUESTION Which is exempt from the federal Fair Housing Act? - ANSWERrenting a room in
a house occupied by the owner
, QUESTION The Americans with Disabilities Act applies to: - ANSWERprivately owned or
government-owned public accommodations
QUESTION Condemnation is the act of seizing private property from citizens. What gives the
government the right to do this? - ANSWEReminent domain
QUESTION The PHYSICAL characteristics of land are that land is indestructible, non-
homogenous, and: - ANSWERimmobile
QUESTION Which statement BEST defines the term contingency? - ANSWERstipulation that
must be satisfied before the contract can be performed
QUESTION If a borrower is behind on payments, the acceleration clause gives the lender the
ability to: - ANSWERcall the entire loan balance due immediately
QUESTION A metes and bounds legal description always returns to: - ANSWERthe point of
beginning
QUESTION What should a license holder do if a client instructs them to do something that
would discriminate against a protected class? - ANSWERadvise the client they cannot legally
discriminate against certain groups
QUESTION What is a novation? - ANSWERthe substitution of one contract for another
QUESTION A married couple bought a home ten years ago for $400,000. Their neighborhood
has rapidly grown in popularity, and they were able to sell their home this year for $950,000.
How much of that money will they be required to pay capital gains tax on? - ANSWER$50,000
QUESTION Which element of a valid contract states that the contract cannot require any illegal
activities or outcomes? - ANSWERlawful objective
, QUESTION Deanna wants to sue her real estate agent, but finds out that she has no legal
recourse because too many years have passed since the offending incident. What is this an
example of? - ANSWERstatute of limitations
QUESTION Pedro bought his house for $370,000. The assessed value is $290,000. If the tax
rate for Pedro's county is 2.375%, what will he pay in ad valorem taxes this year? -
ANSWER$6,887.50
QUESTION A potentially valid contract in which at least one party has the option to rescind is
described as: - ANSWERvoidable
QUESTION When you're talking about mortgages, what is another name for an origination fee?
- ANSWERpoints
QUESTION Both parties involved in an agency agreement agree to end the agreement early.
What is this called? - ANSWERmutual rescission
QUESTION What does a standard title insurance policy do?* - ANSWERprotects against any
defects discovered in the title after closing
QUESTION Which term describes the transfer of property from the current owner to another
party by sale or gift?* - ANSWERvoluntary alienation
QUESTION In the sales comparison approach to property valuation, what does the principle of
substitution state?* - ANSWERThe value of a property is only what a consumer would pay to
acquire a comparable property.
QUESTION Who can require a buyer to purchase homeowners insurance? - ANSWERlender
QUESTION Which of the following statements may represent the unauthorized practice of
law?* - ANSWER"You should proceed without ordering a new abstract - this title is clear."
