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Pearson Vue Real Estate Insurance Exam
Questions with Verified Answers
100% Guarantee passing score of 90% or higher
Consist of 80 multichoice Questions with Answers
- a broker charges a leasing fee of one-half of the first months rent and a management fee of 8% of all rents collected. the broker negotiates a two-year lease at a monthly rental of $550. which of the following amounts will the broker earn on this lease a. $1,378 b $1, c. $1, d. $1, Answer: B. $1,
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- a property manager works in the BEST interests of the a. tenant b. owner
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- the income approach is MOST likely to be used when determining the value of a A. vacant residential lot b. office building c. single-family home d. cooperative apartment Answer: B. office building
- the G's purchased a house from the T's. the G's agreed to the following terms: monthly payments of $650 to the T's and the balance to be paid in full after 7 years. at the time the balance is paid, the T's will give the G's a warranty deed transferring title. in this situation, what type of financing was used a. fha loan b. wrap around mortgage c. package mortgage d. contract for deed Answer: D. contract for deed
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- In stating a seller's price and terms to a prospective buyer, the seller's broker is required by the law of agency to state ONLY those terms that are a. included in the listing agreement b. based on the brokers evaluation of prevailing prices and terms c. favorable for the seller, as determined by the broker d. attractive to buyers, as determined by the broker Answer: A. included in the listing agreement
- a lot measuring 110 feet wide by 140 feet deep has a required setback of 30 feet in front, 20 feet in the rear, and 20 feet on each side. if a builder wants to put a one-story building on the lot, the MAXIMUM square footage it can contain is a. 3,300 sq ft b. 3,600 sq ft c. 6,300 sq ft d. 6,600 sq ft Answer: C. 6,300 sq ft
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- a broker who represents a buyer is trying to negotiate on the buyer's behalf in a potential transaction. the broker realizes that by negotiating a reduced price for the buyer, the broker's commission will also be reduced. in this situation, the broker is obligated to negotiate the BEST price for the A. buyer and broker b. buyer c. seller d. brokerage Answer: B. buyer
- K and R bought a house as tenants in common. If K dies, which of the following statements about ownership of the house is CORRECT? a. it automatically becomes tenancy in severalty b. it is divided, with R retaining R's original interest and the balance going to K's estate C. R holds fee simple ownership in k's share of the property
8 / d. R holds life estate ownership in K's share of the property Answer: B. it is divided, with R retaining R's original interest and the balance going to K's estate
- a visually-impaired person with a service animal completes an application for rental of an apartment that has a vigorously enforced "no pets" policy in the building. according to the federal fair housing act the owner MAY: a. refuse to rent as a result of policy b. require the person to house the animal outside c. require the person to restore any damage that results from the animal d. increase the customary security deposit Answer: C. require the person to restore any damage that results from the animal
- Under a sales contract, the legal remedy that may be used to force the seller to consummate the sale is called a. adverse possession b. foreclosure c. specific performance
10 / b. leasehold c. sale and leaseback d. lease option Answer: B. leasehold
- the owners of a house sign a listing agreement and later tell the licensee that the garage roof leaks. if they tell the licensee not to reveal the roof's condition to any prospective buyers the licensee MUST a. abide by the owners request b. advise the sellers that they must disclose the condition of the roof to prospective buyers c. advice only those prospective buyers who ask about the roof d. refer all prospective buyers who have questions about the roofs condition to sellers Answer: B. advise the sellers that they must disclose the condition of the roof to prospective buyers
- which type of mortgage loan has provisions for periodic changes in the amount of the payment, the interest rate, the maturity date, and the remaining balance owed? a. fha loan
11 / b conventional loan c. blanket loan d. adjustable loan Answer: D. adjustable loan
- a salesperson who completes a written listing agreement with a seller is helping to create a contractual relationship between the a. salesperson and the seller b. salesperson and the buyer c. salesperson and the listing broker d. salespersons broker and the seller Answer: D. salespersons broker and the seller
- buyers make an earnest money deposit on a property and sign a contract that is contingent on specific financing terms. if a bank commits to the financing, but the buyers change their minds and notify the seller in writing that they do not intend to buy the property, which of the following statements is correct a. the bank may sue the buyers b. the seller may sue the buyers for breach of contract c. the buyers may rescind the contract only after paying the brokerage fee
13 / b. advertising a neighborhood party where alcohol will be served c. making sales calls to neighbors who are on the Do Not Call list d. stating that the presence of certain persons in a neighborhood will increase crime Answer: D. stating that the presence of certain persons in a neighborhood will increase crime
- A lender's title policy will protect the: a. lender against default in loan payments b. borrower against default in loan payments c.. lender against existing, undiscovered title defects d. borrower against unrecorded liens Answer: C. lender against existing, undiscovered title defects
- which of the following BEST describes personal property that, by its attachment to real property, is regarded as real estate a. emblements b. personality c. fixtures d. appliances Answer: C. fixtures
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- which of the following credit terms may be included in an advertisement for real estate without further disclosure? a. "8% annual percentage rate" b. "5 years to repay" c. "$5,000 down payment d. "$300 monthly payment" Answer: A. "8% annual percentage rate"
- when a contract states that "time is of the essence," the contract MUST be delivered and presented a. within 24 hours b. within 48 hours c. electronically d. as soon as possible Answer: D. ASAP
- which of the following clauses in a conventional mortgage instrument entitles the lender to accelerate the loan if the loan is assumed A. prepayment
16 / should check a a. survey b. deed
17 / c. field book d. tax map book Answer: A. survey
- a licensee is contacted by a potential buyer interested in purchasing a commercial property as an investment. the licensee has no experience with this type of property. what SHOULD the licensee do? a. contact an attorney to draft a specialized agency contract b. discourage the potential buyer from purchasing a commercial property w/o seeking advise from a cpa c. inform the potential buyer that the licensee has limited experience with this type of property. d. assess the brokerage's current commercial property inventory and suggest possible listings to the client Answer: C. inform the buyer that the licensee has limited experience with this type of property
- what type of insurance would cover a mistake or negligence on a licensee's part that results in financial loss to a client a. general liability insurance b. errors and ommissions (E&O) insurance c. hazard insurance
19 / b. dedication c. assignment d. condemnation Answer: B. dedication
- when a private property is abandoned, the state MAY acquire title to that property under the right of a. escheat b. eminent domain c. police power d. taxation Answer: A. escheat
- a lease that provides for periodic increases of rent at regular intervals is called a a. graduated lease b. percentage lease c. yearly lease d. long-term lease Answer: A. graduated lease
- a listing salesperson MUST disclose what info to potential buyers
20 / a. any zoning changes made after the property was listed b. any ethnic diversity in the neighborhood c. the financial status of the seller d. the amount the seller originally paid for the property Answer: A. any zoning changes made after the property was listed
- the taxes on a property are based on an assessment ratio of 50% of a market value of $174,000. the tax rate is $4.75 per $100. the amount of the semi- annual tax payment is a. $1, b. $2, c. $4, d. $8, Answer: B. $2,
- on tuesday, buyers make an offer to purchase a house for $250, and include a provision to buy the dining room furniture. the offer expires at 5 pm on sunday. on thursday the sellers reply in writing that they will accept the offer but they will not include the dining room
