Ednalyn Pearson Vue Practice Test

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happyedi253
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Ednalyn Pearson Vue Practice Test
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2010-02-26 20:41:13
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Pearson Vue Real Estate License Washington
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Ednalyn Pearson Vue Practice Test
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  1. Alice tenders $500.00 earnest money to Bill's agent. What must Bill do with the earnest money?

    A. Deposit it in the broker's trust account
    B. Do whatever the contract says to do with the earnest money
    C. Give it directly to the seller
    D. Deposit it in the broker's management account
    B. Do whatever the contract says to do with the earnest money

    Absent a clause to the contrary, earnest money must be deposited into a broker's trust account. However, if the contract says to do something else with the earnest money, then the terms of the contract must be followed.
    (this multiple choice question has been scrambled)
  2. The Real Estate Settlement and Procedures Act is administered by:

    A. The National Association of Realtors
    B. The American Land Title Association
    C. The Department of Housing and Urban Development
    D. The Division of Real Estate
    C. The Department of Housing and Urban Development

    HUD administers RESPA rules and compliance.
    (this multiple choice question has been scrambled)
  3. Cindy Agent wishes to leave her company, ABC Real Estate, owned by Bob Broker. She currently has 3 sales " pending" and 4 active listing. What will happen to these

    A. The active listing and all sales pending belong to Bob
    B. The active listing and all sales pending belong to Cindy
    C. The active listings belong to Bob, and she will be paid for pending sales as per her contract with the office
    D. The active listing belong to Cindy, and she will be paid for pending sales as per her contract with the office
    C. The active listings belong to Bob, and she will be paid for pending sales as per her contract with the office

    Unless stated otherwise in her agreement with the office, all listing belongs to the office. Handling of pending sales (ones that have sold and not yet closed) should be covered in her employment agreement.
    (this multiple choice question has been scrambled)
  4. What is the form of co-ownership in which two or more persons each have an undivided interest in the property but no right of survivorship?

    A. Tenancy by the entireties
    B. Statutory survivorship tenancy
    C. Tenancy in common
    D. Tenancy at sufferance
    C. Tenancy in common

    A and B both include a right of survivorship; tenancy at sufferance deals with leasehold estates
    (this multiple choice question has been scrambled)
  5. The seller lists her house with New Age Realty. The next day, the seller goes to work and mentions listing her house. A co-worker expresses interest in the listing. What kind of listing would make the broker entitled to a commission if the co-worker makes an offer acceptable to the seller?

    A. Exclusive right to sell
    B. Open listing
    C. Net listing
    D. Exclusive agency
    A. Exclusive right to sell

    Only the exclusive right to sell listing agreement entitle a broker to a commission no matter who brings the buyer
    (this multiple choice question has been scrambled)
  6. A borrower pays off his loan. However, the lender refuses to cancel the mortgage. Which of the following clauses of a mortgage has the lender violated?

    A. Conveyance clause
    B. Defeasance clause
    C. Habendum clause
    D. Notary clause
    B. Defeasance clause

    A defeasance clause states that when the loan is paid, the mortgage is void. The bank's failure to cancle the mortgage of record is a violation of this clause. The habendum clause is the "to have and to hold" clause. The conveyance clause states that the property is being coveyed in a deed, not a mortgage. The notarial clause is signed by the notary, stating that the mortgage was signed freely and voluntarily by the borrower.
    (this multiple choice question has been scrambled)
  7. Of the following, which is not an encumbrance?

    A. License
    B. Appurtenant easement
    C. Lien
    D. Condition
    A. License

    Since a license is revocable, it cannont burden the property owner's title. A license does not create an interest in another's land.
    (this multiple choice question has been scrambled)
  8. What is holder in due course?

    A. One who sells property
    B. One who sells loans on the secondary market
    C. The borrower
    D. One who acquires a negotiable instrument in good faith and for consideration
    D. One who acquires a negotiable instrument in good faith and for consideration

    A secondary market investor will only buy negotiable instruments as a hoder in due course.
    (this multiple choice question has been scrambled)
  9. "Net income" best describes

    A. Income after expenses
    B. Income before expenses
    C. Potential gross income
    D. Effective gross income
    A. Income after expenses

    Expenses such as trash removal, repairs, and maintenance subracted from gross income equals net income.
    (this multiple choice question has been scrambled)
  10. What power does the government exercise when it takes private property for public use

    A. Condemnation
    B. Eminent domain
    C. Appropriation
    D. Adverse possession
    B. Eminent domain

    Condemnation, or appropriation, describe the act of taking the land. Eminent domain is the power that makes it possible.
    (this multiple choice question has been scrambled)
  11. Bob and Jerry take title together. Bob owns one half and jerry owns one half of the same property. What form of co-ownership does the law presume?

    A. Estate by the entireties
    B. Joint tenancy with right of survivorship
    C. Severalty
    D. Tenancy in common
    D. Tenancy in common

    Severalty is not a form of co-ownership. Estate by entireties applies to husband and wife with right of survivorship. Tenancy in common would be the presumed form of ownership, since the question does not st ate whether the two owners take property with or without the right of survivorship. If the property is equal without the right of survivorship, it is tenancy in common. If it is equal with the right of survivorship, it is joint tenancy.
    (this multiple choice question has been scrambled)
  12. Tom, Rick, and Harry own a house. When Rick dies, his heirs receive his 1/3 interest. What type of co-ownership did they have?

    A. Tenancy in common
    B. Tenancy by the entireties
    C. Joint tenancy
    D. Statutory survivorship
    A. Tenancy in common

    When an ownership interest is inheritable, the only allowable kind of co-ownership is tenancy in common.
    (this multiple choice question has been scrambled)
  13. Which of the following is a general lien?

    A. Ad valorem taxes
    B. Easement
    C. Mortgage lien
    D. Judgment lien
    D. Judgment lien

    A judgement lien is a lien, acquired in a court of law, which attaches to all the defendant's property (both real and personal). A Mortgage is a specific lien against real property only. The property taxes are a lien against the property being accessed, and a mechanic's lien is specific to a certain property. An easement is not a lien, but it is an encumbrance on the use of property. The phrase to remember. "while all liens are encumbrances, not all encumbrances are liens."
    (this multiple choice question has been scrambled)
  14. The mortgagee is:

    A. The seller
    B. The broker
    C. The lender
    D. The borrower
    C. The lender

    The lender is receiving the mortgage, so it is the mortgagee.
    (this multiple choice question has been scrambled)
  15. All of the following are examples of specific liens except:

    A. Special assessments
    B. Property taxes
    C. Judgment
    D. Mechanic's
    C. Judgment

    Judgment liens are general; they can attach to any property a debtor owns.
    (this multiple choice question has been scrambled)
  16. What regulation under the Truth-in-Lending Act requires a lender to disclose credit costs?

    A. Regulation D
    B. Regulation Z
    C. Regulation C
    D. Regulation A
    B. Regulation Z

    Regulation Z of the Truth-in-Lending Act does ot set a limit on what lenders can charge for interest, but does require all charges to buyer to be disclosed.
    (this multiple choice question has been scrambled)
  17. What title policy gives the holder of the right to use someone else's land?

    A. Leasehold
    B. Easement
    C. Owner's fee
    D. Mortgagee
    B. Easement

    The holder of the right to use another's land under an easement policy in the title.
    (this multiple choice question has been scrambled)
  18. What law creates an automatic lien on a commercial property, subject to the listing agreement?

    A. Broker lien law
    B. Agency law
    C. Lis pendens
    D. Attachment
    A. Broker lien law

    In some states, an automatic lien attaches to the commercial property to secure the payment of the broker's commission.
    (this multiple choice question has been scrambled)
  19. An appraiser has selected three comparable sales for the property she is appraising. After making adjustments, she has adjusted sales prices of $100,000, $107,000 and $110,000. How does she reconcile these three different number?

    A. Use the lowest of the three prices
    B. Use a weighted average, giving the most weight to the most similar property
    C. Add them together and divide by three
    D. use the highest of the three prices
    B. Use a weighted average, giving the most weight to the most similar property

    There is no "magic" formula. The appraiser must use her best judgment. Usually, the most weight is given to the comparable with the least adjustments.
    (this multiple choice question has been scrambled)
  20. A sales person commits racial steering if:

    A. He steers clients into particular neighborhood because of race, religion, etc.
    B. He directs prospective clients to another licensee of the same national origin or color
    C. He directs prospective tenants away from a certain neighborhood because of the racial make-up of that neighborhood
    D. All of the above
    D. All of the above

    Racial steering refers not only to directing clients to or away from certain neighborhoods, but also to directing clients to agents of the same race, religion, etc.
  21. The money to fund FHA loans is provided by

    A. Federal Reserve Bank
    B. Lending institution
    C. The Federal Housing Administration
    D. A government agency
    B. Lending institution

    Lending institution provide the money for all loans. FHA insures that a loan will be repaid to a lending institution, while VA guarantees the fact that a loan will be repaid to a lending institution.
    (this multiple choice question has been scrambled)
  22. What document lets buyer and seller see the costs involved with closing the transaction?

    A. Purchase agreement
    B. Escrow agreement
    C. HUD-1 statement
    D. Good faith estimate
    C. HUD-1 statement

    The good faith estimate is for buyers. The escrow and purchase agreements only illustrate the agreement.
    (this multiple choice question has been scrambled)
  23. The Doctrine of "Caveat Emptor" implies which of the following

    A. The seller is liable when a residency is vacant more than 30 days
    B. Dual agency is limited based on customer versus client relationships
    C. Special regulations prohibit commingling of broker funds with those of the principal
    D. A buyer is responsible to examine a property thoroughly, rather than relying on the seller to point out potential problems
    D. A buyer is responsible to examine a property thoroughly, rather than relying on the seller to point out potential problems

    The Doctrine of Caveat Emptor puts the duty on the buyer/customer to inspect the property regardless of the seller's assurances.
    (this multiple choice question has been scrambled)
  24. What accounts holds 1/12th of the taxes and insurance to be paid when those items are due?

    A. Escrow
    B. Lender
    C. Broker
    D. Savings
    A. Escrow

    The escrow or reserve account is a separate account from the transaction, used for the payment of accrued items.
    (this multiple choice question has been scrambled)
  25. Which of the following would be the best example of functional obsolescence?

    A. A noisy factory next door
    B. Sloping hardwood flooring in the dining room
    C. Walking through one bedroom to reach another
    D. Faulty wiring in a detached garage
    C. Walking through one bedroom to reach another

    Functional obsolescence is a result of faulty design or a feature rendered inferior because of advances in construction techniques. It would not include broken or damaged parts of the property or anything.
    (this multiple choice question has been scrambled)
  26. In regards to settlement statements, the initials RESPA stand for

    A. Real Estate Settlement Procedures Act
    B. Recent Estimate of Selected Properties Appraised
    C. Real Estate For Property Appraisal
    D. Real Estate Sales Practice Act
    A. Real Estate Settlement Procedures Act

    The other three choices are all finctional
    (this multiple choice question has been scrambled)
  27. A closing conducted by a disinterested third party best describes a/an

    A. Escrow closing
    B. Broker closing
    C. Lender closing
    D. Roundtable closing
    A. Escrow closing

    A closing conducted by a disinterested third party is an escrow closing. The roundtable closing involves all of the parties to the transaction signing documents at the same place at the same time.
    (this multiple choice question has been scrambled)
  28. A right that runs with the land is said to be

    A. An appurtenance
    B. A lien
    C. A leasehold estate
    D. In gross
    A. An appurtenance

    Appurtenance literally means "runs with the land." The "bundle of rights" are appurtenances in property, as they run with the land forever.
    (this multiple choice question has been scrambled)
  29. Prorated taxes would be shownon teh settlement statement as a

    A. Credit to buyer and credit to seller
    B. Debit buyer, credit to seller
    C. Debit to buyer and debit to seller
    D. Credit to buyer, debit to seller
    D. Credit to buyer, debit to seller

    Prorated taxes are a credit to the buyer and a debit to the seller. The seller is responsible for taxes payable through the date of closing. Since (in most states) homeowners pay taxes in arrears of one year, the seller would have bring the taxes current and give that money to the buyer as a credit.
    (this multiple choice question has been scrambled)
  30. Which of the following is not a protected class under the Federal Fair Housing Act?

    A. Race
    B. Sex
    C. Religion
    D. Ancestry
    D. Ancestry

    Under the Civil Rights Act of 1866 (and some states) ancestry is included in the protected groups. The Federal Fair Housing Act does not designate ancestry as a protected group.
    (this multiple choice question has been scrambled)
  31. Negligence that causes harm is a/an:

    A. Accident
    B. Tort
    C. Actual fraud
    D. Breach of contract
    B. Tort

    Breaching the duty of reasonable skill and care is considered to be tortuous behavior; both broker and agent can be held liable. It is not actual fraud because there is no intent to cause harm.
    (this multiple choice question has been scrambled)
  32. How many square feet are in an acre?

    A. 43,560
    B. 46,350
    C. 42,650
    D. 43,650
    A. 43,560

    There are 640 acres in a square mile and 43,560 square feet in an acre
    (this multiple choice question has been scrambled)
  33. Genuince assent means:

    A. Consent must be freely given before a contract can be legally binding
    B. A contract can be binding even under duress
    C. A contract can be binding even under undue influence
    D. A contract can be binding even under fraud
    A. Consent must be freely given before a contract can be legally binding

    A contract entered into under fraud, undue influence, or duress is not legally binding.
    (this multiple choice question has been scrambled)
  34. The salesperson entered into a buyer-broker contract with her brother. A week later, the salesperson takes a new listing and prepares an offer for her seller from her brother/client. What disclosure does the salesperson owe to the buyer and seller?

    A. Disclose the material relationship with the buyer on the dual agency disclosure
    B. Only to declare herself a dual agent
    C. Execute an agency disclosure statement
    D. None
    A. Disclose the material relationship with the buyer on the dual agency disclosure

    If one agent represents both clients in the same transaction, then a material relationship exists that both sides of the transaction are entitled to know about. This should be disclosed before seeking consent to dual agency.
    (this multiple choice question has been scrambled)
  35. The typle of legal description that references monuments and landmark best describes

    A. Metes and bounds
    B. Lot and block
    C. Rectangular survey system
    D. Leaps and bounds
    A. Metes and bounds

    The metes and bounds system describes property by starting at an easily identifiable point of beginning, and ends up back at the same point.
    (this multiple choice question has been scrambled)
  36. A "credit" is

    A. Money for the lender
    B. Money a seller pays the broker
    C. A sum of money that is to be received
    D. Money that is owed
    C. A sum of money that is to be received

    money that is to be received must show up on a balance sheet as a credit.
    (this multiple choice question has been scrambled)
  37. A broker takes a listing and onw of his non-management level licensees represents a buyer that makes an offer acceptable to the seller. Which agent is the dual agent?

    A. Broker
    B. Seller
    C. Buyer
    D. Salesperson
    A. Broker

    In an "in-company" transaction, the broker is a dual agent. When the broker is the listing agent the broker needs to declare dual agency before presenting the offer.
    (this multiple choice question has been scrambled)
  38. To emphasize the timely performance as an essential part of the contract, a contract would use the words:

    A. The contract is at will
    B. Material breach
    C. Time is of the essence
    D. Time is of no concern
    C. Time is of the essence

    If the words, "time is of the essence," are included, the lack of timely performance can be a material breach of contract.
    (this multiple choice question has been scrambled)

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