CP-FS Practice Test Questions with Correct
Answers Latest Edition
Terms in this set (87)
a broker's price opinion (BPO).
A divorce attorney hires a broker
to (The answer is a broker's price opinion (BPO). A BPO is a
determine the value of the broker's opinion of the value of a particular property, often in
property the couple owns. The the form of a comparative market analysis (CMA).
broker will MOST likely prepare: The BPO may not be labeled an appraisal, which may only be
conducted by a state licensed or certified appraiser. The sales
comparison approach is used in both the BPO and an appraisal.
The cost approach is used when conducting an appraisal.)
void.
A broker took a listing and later
discovered that the client had (The answer is void. A contract made by a person who has been adjudicated
been declared legally incompetent is void because the judgment of sanity is a matter
incompetent before signing the of public record. The contract is not valid or voidable because
listing. The listing is now: it is missing the essential element of
competency or competent parties.)
,A couple enters a real estate an implied agency relationship with the buyers.
office asking to see a property
listed with another (The answer is an implied agency relationship with the buyers.
brokerage office. A real estate The salesperson has unintentionally created an agency
salesperson calls the listing agent relationship with the buyers. There is no formal oral or written
and makes an agency contract with the buyers. Express agency occurs when
appointment to show the two parties enter into an oral or written formal agency
property. Without having the agreement. Universal agency empowers the agent to do
couple sign a written buyer anything the principal could do personally, such as that
agency contract, the salesperson authorized by a power of attorney. General agency allows the
drives the couple to the house, agent to act for the principal in a wide range of matters, as
and even recommends that authorized, for example, in a property
management contract.)
before they buy the house, they
secure an independent
property inspection. He also
confides to the couple that he
knows the owners are getting a
divorce and want to sell the
house quickly. In this case, the
salesperson has created:
If the closing date passes and no closing takes place, the party
who failed to close is considered to be in default.
A buyer and a seller agree on a
purchase price of $200,000 for
(The answer is if the closing date passes and no closing takes
a house. The contract contains a
place, the party who failed to close is considered to in default.
clause stating that "time is of
The nondefaulting party may have remedies to retain the earnest
the essence." Which statement
money (liquidated damages) or to sue the defaulting party to
is TRUE?
perform the contract terms (specific performance).)
Equitable
A buyer and a seller have entered
into a
binding contract for the sale of (The answer is equitable. The buyer has equitable title, which
real estate. During this phase and recognizes that he has an interest but has not received legal
until closing, the buyer has title. Legal title will pass at closing when the
seller gives the buyer the deed.)
which type of title?
chain of title.
(The answer is the chain of title. A chain of title is the historical
, record of a property's ownership and encumbrances. Each
The historical records of all owner is linked to the next so that a chain is formed. A title
owners and
search is the process of examining the chain of title for defects
encumbrances of a specific parcel of
or
real estate is known as:
errors. A title commitment lists current encumbrances and any defects found
in the
title upon completing the search. An abstract of title is a
historical summary report of what the title search found in the
public record; only when coupled with a title opinion can the
buyer know if there are title issues.)
uses descriptions moving in a set direction.
(The answer is uses descriptions moving in a set direction. A
metes-and-bounds description starts at a point of beginning
A metes-and-bounds legal (POB) and moves clockwise around the boundaries, always
description: ending back at the POB so that the described tract is completely
enclosed. The metes-and-bounds, government survey, and lot
and block are all
accepted in courts. The method may be used in areas included in the
rectangular
survey system. The metes-and-bounds method is often used to
survey large parcels of land before the parcels are broken into
subdivision plats.)
An investment property was $42,000.
purchased for
$250,000. The owner added a The answer is $42,000.
tennis court at a cost of $250,000 + 10,000 = $260,000
$10,000. Two years later, the $325,000 - 22,750 (7%) = $302,250 - 250 = $302,000
property sold for $325,000 and $302,000 - 260,000 = $42,000
the seller paid a 7% commission
plus $250 in attorney fees. If he
purchases another property for
$350,000, how much capital gains
will he exclude?
Answers Latest Edition
Terms in this set (87)
a broker's price opinion (BPO).
A divorce attorney hires a broker
to (The answer is a broker's price opinion (BPO). A BPO is a
determine the value of the broker's opinion of the value of a particular property, often in
property the couple owns. The the form of a comparative market analysis (CMA).
broker will MOST likely prepare: The BPO may not be labeled an appraisal, which may only be
conducted by a state licensed or certified appraiser. The sales
comparison approach is used in both the BPO and an appraisal.
The cost approach is used when conducting an appraisal.)
void.
A broker took a listing and later
discovered that the client had (The answer is void. A contract made by a person who has been adjudicated
been declared legally incompetent is void because the judgment of sanity is a matter
incompetent before signing the of public record. The contract is not valid or voidable because
listing. The listing is now: it is missing the essential element of
competency or competent parties.)
,A couple enters a real estate an implied agency relationship with the buyers.
office asking to see a property
listed with another (The answer is an implied agency relationship with the buyers.
brokerage office. A real estate The salesperson has unintentionally created an agency
salesperson calls the listing agent relationship with the buyers. There is no formal oral or written
and makes an agency contract with the buyers. Express agency occurs when
appointment to show the two parties enter into an oral or written formal agency
property. Without having the agreement. Universal agency empowers the agent to do
couple sign a written buyer anything the principal could do personally, such as that
agency contract, the salesperson authorized by a power of attorney. General agency allows the
drives the couple to the house, agent to act for the principal in a wide range of matters, as
and even recommends that authorized, for example, in a property
management contract.)
before they buy the house, they
secure an independent
property inspection. He also
confides to the couple that he
knows the owners are getting a
divorce and want to sell the
house quickly. In this case, the
salesperson has created:
If the closing date passes and no closing takes place, the party
who failed to close is considered to be in default.
A buyer and a seller agree on a
purchase price of $200,000 for
(The answer is if the closing date passes and no closing takes
a house. The contract contains a
place, the party who failed to close is considered to in default.
clause stating that "time is of
The nondefaulting party may have remedies to retain the earnest
the essence." Which statement
money (liquidated damages) or to sue the defaulting party to
is TRUE?
perform the contract terms (specific performance).)
Equitable
A buyer and a seller have entered
into a
binding contract for the sale of (The answer is equitable. The buyer has equitable title, which
real estate. During this phase and recognizes that he has an interest but has not received legal
until closing, the buyer has title. Legal title will pass at closing when the
seller gives the buyer the deed.)
which type of title?
chain of title.
(The answer is the chain of title. A chain of title is the historical
, record of a property's ownership and encumbrances. Each
The historical records of all owner is linked to the next so that a chain is formed. A title
owners and
search is the process of examining the chain of title for defects
encumbrances of a specific parcel of
or
real estate is known as:
errors. A title commitment lists current encumbrances and any defects found
in the
title upon completing the search. An abstract of title is a
historical summary report of what the title search found in the
public record; only when coupled with a title opinion can the
buyer know if there are title issues.)
uses descriptions moving in a set direction.
(The answer is uses descriptions moving in a set direction. A
metes-and-bounds description starts at a point of beginning
A metes-and-bounds legal (POB) and moves clockwise around the boundaries, always
description: ending back at the POB so that the described tract is completely
enclosed. The metes-and-bounds, government survey, and lot
and block are all
accepted in courts. The method may be used in areas included in the
rectangular
survey system. The metes-and-bounds method is often used to
survey large parcels of land before the parcels are broken into
subdivision plats.)
An investment property was $42,000.
purchased for
$250,000. The owner added a The answer is $42,000.
tennis court at a cost of $250,000 + 10,000 = $260,000
$10,000. Two years later, the $325,000 - 22,750 (7%) = $302,250 - 250 = $302,000
property sold for $325,000 and $302,000 - 260,000 = $42,000
the seller paid a 7% commission
plus $250 in attorney fees. If he
purchases another property for
$350,000, how much capital gains
will he exclude?
