MA Real Estate Exam Questions with
Correct Answers
An example of a contract terminated due to inability to perform would be one in
which the
a) purchaser had suffered financial reverses so that she could not make payment as
required by the contract.
b) seller had died after the contract became binding but before the closing.
c) seller had contracted for sale of the entire property without the knowledge or
consent of the other joint tenant.
d) property had been severely damaged by fire after the contract became binding but
before the closing. - ANSWER-c) seller had contracted for sale of the entire property
without the knowledge or consent of the other joint tenant.
In helping a buyer to select a lender, if the buyer believes he has good credit and his
income is documentable as a salary and by tax returns, the licensee might
recommend a mortgage banker, instead of a mortgage broker, for all of the following
reasons EXCEPT
a) closing costs may be lower.
b) loan originator has knowledge of the underwriter's policies.
c) more variety of loan programs available.
d) originator and lender are part of same company. - ANSWER-c) more variety of
loan programs available.
A property management plan may serve different purposes for different owners, and
generally has to strike a balance between preservation of the property's value and
generation of income. Which of the following owners would MOST likely prefer a
property manager who emphasizes cash flow or income over the maintenance of
value?
a) An individual entrepreneur who owns several apartment buildings.
b) The Department of Housing and Urban Development.
c) A bank acting as a trustee.
d) A cooperative corporation. - ANSWER-a) An individual entrepreneur who owns
several apartment buildings.
A minority couple come to a salesperson looking for a house. The salesperson has
some properties for which the couple qualify but avoids showing or mentioning these
listings. Instead, the salesperson shows only properties in low-priced and integrated
neighborhoods. This practice is known as
a) steering.
,b) blockbusting.
c) redlining.
d) conciliation. - ANSWER-a) steering
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is
called
a) an agency.
b) an assessment.
c) a contract.
d) a fiduciary obligation. - ANSWER-c) a contract
Which of the following real estate contracts is a service contract?
a) a purchase agreement
b) a listing agreement
c) an option contract
d) a mortgage - ANSWER-b) a listing agreement
A borrower has defaulted on the mortgage. The mortgage contains an acceleration
clause. This permits the lender to
a) confiscate the borrower's personal assets.
b) demand immediate payment of the entire note.
c) report the borrower to the Federal Housing Administration.
d) force the borrower to vacate the premises. - ANSWER-b) demand immediate
payment of the entire note.
An agency relationship between a property owner and a property manager is usually
created by
a) a management agreement.
b) payment of a management fee.
c) an exclusive agency agreement.
d) an independent contractor agreement. - ANSWER-a) a management agreement.
Even with title insurance, the policyholder may still suffer losses arising from
a) forged documents.
b) incompetent grantors.
c) defects found in recorded public records.
d) land use change due to zoning ordinances. - ANSWER-d) land use change due to
zoning ordinances.
An escheat occurs when
a) property is seized to satisfy a tax lien.
b) property is condemned for a necessary public use.
c) a property owner dies without heirs or a valid will.
,d) a property owner fails to perform legally required cleanup of toxic waste. -
ANSWER-c) a property owner dies without heirs or a valid will.
Antitrust laws prohibit competing brokers from all of the following EXCEPT
a) boycotting other brokers in the marketplace.
b) dividing the market to restrict competition.
c) agreeing to set sales commissions and management rates.
d) receiving compensation from both the buyer and the seller. - ANSWER-d)
receiving compensation from both the buyer and the seller.
A managing broker can be held responsible for
a) all actions of associated salespersons.
b) all real estate activities of salespersons.
c) only those real estate activities the broker is aware of.
d) no activities of independent contractors. - ANSWER-b) all real estate activities of
salespersons.
Which rule-of-thumb formula for estimating property value is being offered to an
investor who is told that a house renting for $900 a month should sell for about
$90,000?
a) CMA
b) IRV
c) NOI
d) GRM - ANSWER-d) GRM
A salesperson lists a property with a contract that allows for subagency and dual
agency. The salesperson is
a) an independent contractor to the broker and an agent to the principal.
b) an agent to the broker and a subagent to the principal.
c) a subagent to the broker and an agent to the principal.
d) an agent to the broker and an agent to the principal. - ANSWER-b) an agent to the
broker and a subagent to the principal.
State laws differ on whether a buyer is entitled to know about
a) a suicide that occurred in the house last year.
b) possible lead paint in the property.
c) the flooding of the basement every spring.
d) the fact that the sellers are getting a divorce. - ANSWER-a) a suicide that
occurred in the house last year.
A landowner wishes to build a neighborhood grocery store on a busy street in an
area zoned for residential use. Which of the following would MOST likely be used to
obtain permission for this store?
a) Deed amendment.
, b) Approval of surrounding property owners.
c) Inclusionary zoning.
d) Conditional use permit or zoning variance. - ANSWER-d) Conditional use permit
or zoning variance.
A licensee is listing a property in a known flood plain. The seller flatly denies that the
structure and the property have ever been flooded. What is the licensee required to
do in this situation?
a) Rely on the face value of seller's statement.
b) Inform the seller of potential legal consequences if this claim is untrue.
c) Inform the seller of the legal obligation to disclose facts regarding flood plains.
d) Refuse to list the property and explain to the seller that all properties in this area
flood. - ANSWER-c) Inform the seller of the legal obligation to disclose facts
regarding flood plains.
An owner lists his home and agrees to pay a 6% commission provided he nets
$10,000 after paying the commission and the balance of his mortgage, which is
$75,000. To the nearest dollar, what should the selling price be to net the owner his
$10,000?
a) $79,787
b) $80,189
c) $90,100
d) $90,426 - ANSWER-d) $90,426
Ps-0.06Ps = 75,000 + 10,000. 0.94
Ps = 85,000. Ps = $90,426 = Selling price.
During the listing presentation, the seller questions the amount of commission to be
paid and is told
a) the amount is set by law.
b) everyone charges the same amount.
c) the amount of commission is negotiable.
d) the agent that charges a lower commission will not do as good a job selling the
property. - ANSWER-c) the amount of commission is negotiable.
Salesperson Susan was at the local coffee shop with some agents from other
offices. The subject of commissions came up, and agents began to compare their
commission rates. Susan should
a) excuse herself from the discussion as this could constitute illegal blockbusting.
b) advise her friends this could constitute a violation of Sherman Antitrust Act.
c) listen carefully so she can be more competitive in the market.
d) be certain her company is charging as much as the others. - ANSWER-b) advise
her friends this could constitute a violation of Sherman Antitrust Act.
Correct Answers
An example of a contract terminated due to inability to perform would be one in
which the
a) purchaser had suffered financial reverses so that she could not make payment as
required by the contract.
b) seller had died after the contract became binding but before the closing.
c) seller had contracted for sale of the entire property without the knowledge or
consent of the other joint tenant.
d) property had been severely damaged by fire after the contract became binding but
before the closing. - ANSWER-c) seller had contracted for sale of the entire property
without the knowledge or consent of the other joint tenant.
In helping a buyer to select a lender, if the buyer believes he has good credit and his
income is documentable as a salary and by tax returns, the licensee might
recommend a mortgage banker, instead of a mortgage broker, for all of the following
reasons EXCEPT
a) closing costs may be lower.
b) loan originator has knowledge of the underwriter's policies.
c) more variety of loan programs available.
d) originator and lender are part of same company. - ANSWER-c) more variety of
loan programs available.
A property management plan may serve different purposes for different owners, and
generally has to strike a balance between preservation of the property's value and
generation of income. Which of the following owners would MOST likely prefer a
property manager who emphasizes cash flow or income over the maintenance of
value?
a) An individual entrepreneur who owns several apartment buildings.
b) The Department of Housing and Urban Development.
c) A bank acting as a trustee.
d) A cooperative corporation. - ANSWER-a) An individual entrepreneur who owns
several apartment buildings.
A minority couple come to a salesperson looking for a house. The salesperson has
some properties for which the couple qualify but avoids showing or mentioning these
listings. Instead, the salesperson shows only properties in low-priced and integrated
neighborhoods. This practice is known as
a) steering.
,b) blockbusting.
c) redlining.
d) conciliation. - ANSWER-a) steering
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is
called
a) an agency.
b) an assessment.
c) a contract.
d) a fiduciary obligation. - ANSWER-c) a contract
Which of the following real estate contracts is a service contract?
a) a purchase agreement
b) a listing agreement
c) an option contract
d) a mortgage - ANSWER-b) a listing agreement
A borrower has defaulted on the mortgage. The mortgage contains an acceleration
clause. This permits the lender to
a) confiscate the borrower's personal assets.
b) demand immediate payment of the entire note.
c) report the borrower to the Federal Housing Administration.
d) force the borrower to vacate the premises. - ANSWER-b) demand immediate
payment of the entire note.
An agency relationship between a property owner and a property manager is usually
created by
a) a management agreement.
b) payment of a management fee.
c) an exclusive agency agreement.
d) an independent contractor agreement. - ANSWER-a) a management agreement.
Even with title insurance, the policyholder may still suffer losses arising from
a) forged documents.
b) incompetent grantors.
c) defects found in recorded public records.
d) land use change due to zoning ordinances. - ANSWER-d) land use change due to
zoning ordinances.
An escheat occurs when
a) property is seized to satisfy a tax lien.
b) property is condemned for a necessary public use.
c) a property owner dies without heirs or a valid will.
,d) a property owner fails to perform legally required cleanup of toxic waste. -
ANSWER-c) a property owner dies without heirs or a valid will.
Antitrust laws prohibit competing brokers from all of the following EXCEPT
a) boycotting other brokers in the marketplace.
b) dividing the market to restrict competition.
c) agreeing to set sales commissions and management rates.
d) receiving compensation from both the buyer and the seller. - ANSWER-d)
receiving compensation from both the buyer and the seller.
A managing broker can be held responsible for
a) all actions of associated salespersons.
b) all real estate activities of salespersons.
c) only those real estate activities the broker is aware of.
d) no activities of independent contractors. - ANSWER-b) all real estate activities of
salespersons.
Which rule-of-thumb formula for estimating property value is being offered to an
investor who is told that a house renting for $900 a month should sell for about
$90,000?
a) CMA
b) IRV
c) NOI
d) GRM - ANSWER-d) GRM
A salesperson lists a property with a contract that allows for subagency and dual
agency. The salesperson is
a) an independent contractor to the broker and an agent to the principal.
b) an agent to the broker and a subagent to the principal.
c) a subagent to the broker and an agent to the principal.
d) an agent to the broker and an agent to the principal. - ANSWER-b) an agent to the
broker and a subagent to the principal.
State laws differ on whether a buyer is entitled to know about
a) a suicide that occurred in the house last year.
b) possible lead paint in the property.
c) the flooding of the basement every spring.
d) the fact that the sellers are getting a divorce. - ANSWER-a) a suicide that
occurred in the house last year.
A landowner wishes to build a neighborhood grocery store on a busy street in an
area zoned for residential use. Which of the following would MOST likely be used to
obtain permission for this store?
a) Deed amendment.
, b) Approval of surrounding property owners.
c) Inclusionary zoning.
d) Conditional use permit or zoning variance. - ANSWER-d) Conditional use permit
or zoning variance.
A licensee is listing a property in a known flood plain. The seller flatly denies that the
structure and the property have ever been flooded. What is the licensee required to
do in this situation?
a) Rely on the face value of seller's statement.
b) Inform the seller of potential legal consequences if this claim is untrue.
c) Inform the seller of the legal obligation to disclose facts regarding flood plains.
d) Refuse to list the property and explain to the seller that all properties in this area
flood. - ANSWER-c) Inform the seller of the legal obligation to disclose facts
regarding flood plains.
An owner lists his home and agrees to pay a 6% commission provided he nets
$10,000 after paying the commission and the balance of his mortgage, which is
$75,000. To the nearest dollar, what should the selling price be to net the owner his
$10,000?
a) $79,787
b) $80,189
c) $90,100
d) $90,426 - ANSWER-d) $90,426
Ps-0.06Ps = 75,000 + 10,000. 0.94
Ps = 85,000. Ps = $90,426 = Selling price.
During the listing presentation, the seller questions the amount of commission to be
paid and is told
a) the amount is set by law.
b) everyone charges the same amount.
c) the amount of commission is negotiable.
d) the agent that charges a lower commission will not do as good a job selling the
property. - ANSWER-c) the amount of commission is negotiable.
Salesperson Susan was at the local coffee shop with some agents from other
offices. The subject of commissions came up, and agents began to compare their
commission rates. Susan should
a) excuse herself from the discussion as this could constitute illegal blockbusting.
b) advise her friends this could constitute a violation of Sherman Antitrust Act.
c) listen carefully so she can be more competitive in the market.
d) be certain her company is charging as much as the others. - ANSWER-b) advise
her friends this could constitute a violation of Sherman Antitrust Act.
