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SC Real Estate Pre-Licensing Practice

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Real Estate SC Real Estate Quiz on SC Real Estate Pre-Licensing Practice , created by Wilhelmina Littel on 11/03/2017.
Wilhelmina Littel
Quiz by Wilhelmina Littel, updated more than 1 year ago
Wilhelmina Littel
Created by Wilhelmina Littel over 7 years ago
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Resource summary

Question 1

Question
Ownership of a property by only one person is known as
Answer
  • Entirety
  • Remainder interest
  • Reversionary interest
  • Severalty

Question 2

Question
Jane Doe and Richard Roe, who are not married, want to buy a house together. In order to ensure that if one dies the other automatically becomes full owner, their deed must state that they are
Answer
  • Joint tenants with rights of survivorship
  • Tenants in common
  • Tenants in severalty
  • Tenants by the entirety

Question 3

Question
Mary White and Elizabeth Brown, widowed sisters, are buying a home together. To ensure that if one dies her share will go to her children, they should purchase the property as
Answer
  • Tenants in severalty
  • Tenants by the entirety
  • Tenants in common
  • Joint tenants with right of survivorship

Question 4

Question
An article of personal property that is permanently attached and becomes part of the real estate is known as
Answer
  • An emblement
  • An accretion
  • A chattel
  • A fixture

Question 5

Question
All of the following are approaches that an appraiser may use to establish value EXCEPT
Answer
  • market comparison approach
  • cost approach
  • income approach
  • tax assessment approach

Question 6

Question
In order to reach the lake, the Browns have a permanent right of way across their neighbor's lakefront property. The Browns own
Answer
  • An easement appurtenant
  • A license
  • A deed restriction
  • A lien

Question 7

Question
Express covenants that protect the grantee are found in a
Answer
  • Quitclaim deed
  • Bargain and sale deed
  • Sheriff's deed
  • Warranty deed

Question 8

Question
A subdivision has a deed restriction requiring houses to be at least 2,000 sq feet. The town, however, has no such restriction and gives the Smith-Joneses a building permit for a little bungalow in the subdivision. If the neighbors object, their best course of action would be to
Answer
  • attempt to negotiate with the building inspector's office
  • wait until a clear violation has occurred before taking any legal actions
  • request a change of the local zoning ordinance
  • ask a court to prevent the construction or to order that the bungalow be expanded

Question 9

Question
Henkel is buying an abandoned church as an investment for future development. His appraiser will use which of the following appraisal approaches to arrive at the best determinant of value?
Answer
  • The income approach
  • The cost approach
  • The market approach
  • The assessment approach

Question 10

Question
When Pete makes statements about the quality or condition of his property that a reasonable person would recognize as nonfactual or extravagant, Pete's actions
Answer
  • are in violation of deceptive trade practices and consumer protection acts
  • are considered "puffing" and are not considered illegal
  • are considered fraudulent and could cause license revocation
  • must be repudiated by his broker to preclude further action

Question 11

Question
The difference between the market value of a property and the sum of the liens against it is called
Answer
  • Equity
  • Leverage
  • Cash asset
  • Pledge

Question 12

Question
An acre contains approximately
Answer
  • 5,270 square yards
  • 40,000 square feet
  • one quarter square mile
  • 43,560 square feet

Question 13

Question
Bill's house has four bedrooms and one bath. When he sells the house and the appraiser uses the cost approach to value, what kind of depreciation would the appraiser consider in establishing value?
Answer
  • Economic obsolescence
  • Functional obsolescence
  • Physical deterioration
  • External obsolescence

Question 14

Question
A legal description that includes phrases such as "starting at the intersection of Smith and Baird roads and proceeding westerly 150 feet to a stream" is referred to as
Answer
  • Metes and bounds
  • Rectangular survey
  • Lot and block
  • Recorded plat

Question 15

Question
Title insurance protects the owner or lender against unexpected claims arising from past
Answer
  • Forged documents
  • Zoning ordinances
  • Unpaid property taxes
  • Recorded easements

Question 16

Question
An abstract of title contains
Answer
  • the summary of a title search
  • an attorney's opinion of title
  • a registrar's certificate of title
  • a quiet title lawsuit

Question 17

Question
Michael Harrison refuses to sell his farm to the estate, which needs it to complete the route for a new highway. The state may go to court and ask that his farm be condemned, allowing the state to purchase the land using its right of
Answer
  • laches
  • adverse possession
  • easement by necessity
  • eminent domain

Question 18

Question
With regard to electromagnetic fields (EMFs), which of the following statements is true?
Answer
  • It is easily provable the EMFs cause cancer in residents of specific properties
  • All lawsuits against power companies for health problems have been found in favor of the plaintiff
  • It has been proven the EMFs cause brain cancer
  • The successful lawsuits involving EMFs have been for causing "stigma"

Question 19

Question
Agency is the act of representing someone in the purchase, sale, or lease of a property. Subagency is the act of representing
Answer
  • a lending institution
  • a principal who is already represented by an agent
  • a department of the federal government
  • an anonymous purchaser

Question 20

Question
Mary Jones is the listing agent for the Greens' property. She has been approached by Jack Smith to prepare an offer to purchase the property. Smith does not have his own buyer agent. Smith's relationship to Mary is that of a
Answer
  • client
  • customer
  • principal
  • subagent

Question 21

Question
When describing the particulars of a property, the agent does not disclose that a capital improvement project has been approved that will result in a special assessment to the owner in the near future. The broker has
Answer
  • acted in accordance with the duties of a fiduciary
  • refrained from disclosing anything that would weaken the principal's bargaining position
  • failed to provide proper disclosure as required by law
  • prevented future legal problems for the seller client

Question 22

Question
To be legally entitled to a commission related to a real estate transaction, the agent must be all of the following except
Answer
  • licensed
  • authorized to be involved in the marketing effort
  • the procuring cause of the transaction
  • under contract to either the buyer or seller

Question 23

Question
A listing agent would be required to disclose all of the following except that
Answer
  • the sellers are facing bankruptcy if the house does not sell quickly
  • the listing agent is the seller's mother
  • the furnace has a cracked heat exchanger and is leaking carbon monoxide
  • the house was built before 1978 and may have lead-based paint

Question 24

Question
A seller, anxious to sell, tells a cooperating agent that she will give the agent a riding lawnmower if he brings an acceptable offer by the end of the week. All of the following are true in this situation except
Answer
  • the agent may accept the lawnmower because it is not cash
  • the agent should report the incident to the listing broker
  • the agent would be in violation of the law if he took the lawnmower
  • the cooperating agent could legally receive the lawnmower from his broker

Question 25

Question
A broker lists a property for sale. As time goes by, it is evident that the property is not very desirable. The broker and a partner observe that with a zoning variance and some modest remodeling, the character of the property could be changed to make it more valuable and salable. The partner purchases the property without revealing the plan to the seller or identifying his relationship with the broker. Which of the following is true of this transaction?
Answer
  • The broker has acted appropriately, since the property was ultimately sold.
  • The seller received all of the benefits of having an agent.
  • The business relationship between the broker and buyer should have been disclosed.
  • The buyer should have offered the seller the opportunity to participate in the venture.

Question 26

Question
Within the agency agreement is a statement that binds the buyer to paying the broker's fee if, within a stated number of days following the expiration of the agreement, the buyer purchases a property that was shown to the buyer during the agency period. This clause is called the
Answer
  • broker protection clause
  • limited coverage clause
  • buyer liability clause
  • automatic extension clause

Question 27

Question
Any qualified person wishing to obtain a mortgage loan for the purchase of a home may obtain any of the following types of loans except a
Answer
  • conventional 15 year loan
  • FHA insured 30 year loan
  • VA guaranteed 30 year loan
  • reverse equity mortgage

Question 28

Question
A farmers' market had been in operations continuously for 50 years at the intersection of Route 50 and 29. A new master plan, approved by local jurisdiction, placed that tract of land in a residential zone. In order to stay in business, the owner of the farmers' market should
Answer
  • apply for a new zoning category
  • modernize and expand the facility
  • raze and reconstruct a new market
  • keep the business going without modification

Question 29

Question
A commercial property investment has a tax liability when the
Answer
  • income is exceeded by expenses
  • income exceeds depreciation and expenses
  • gross income exceeds debt service
  • income exceeds debt service and depreciation

Question 30

Question
The Comprehensive Environmental Response Cleanup and Liability Act (CERCLA) establishes the potentially responsible parties who are liable for the cleanup of toxic contaminated sites. Which of the following would be considered a potentially responsible party?
Answer
  • The operator of the toxic waste site.
  • The current owner of the toxic waste site.
  • The previous owner of the toxic waste site.
  • All answers apply.

Question 31

Question
The term commingling refers to
Answer
  • looking for real estate business at community social events
  • mixing funds held for other persons with one's own money
  • the same office acting as the buyer's broker and seller's broker for the same property
  • one office finding a buyer for another office's listing

Question 32

Question
The Webers own three pieces of real estate: their house, a lakeside cottage, and a tract of woodland. Which of the following expenses may be deducted for all three properties on the Webers' income tax return?
Answer
  • mortgage interest
  • insurance premiums
  • property taxes
  • both mortgage interest and property taxes

Question 33

Question
Minimum standards for materials and construction of buildings are set by
Answer
  • state law
  • federal law
  • building codes
  • zoning laws

Question 34

Question
In most states, no property tax is levied on land belonging to
Answer
  • golf courses
  • senior citizen housing
  • churches
  • shopping malls

Question 35

Question
When a real estate broker is involved, the Federal Fair Housing Laws are applicable in all of the following transactions except
Answer
  • leasing space in an office tower
  • leasing space in a residential condominium tower
  • leasing space in a residential cooperative tower building
  • renting one half of a residential duplex

Question 36

Question
Maud is selling a house she bought in 1960. Which of the following should Maud be required to disclose?
Answer
  • mold only
  • mold, asbestos, and radon
  • asbestos and radon only
  • radon only

Question 37

Question
Someone who feels discriminated against in the attempt to buy or lease a home could seek which of the following remedies?
Answer
  • File a written complaint with the Department of Housing and Urban Development (HUD)
  • File a complaint with the US Attorney General
  • File a court action directly in a US District Court or state or local court
  • All answers apply

Question 38

Question
Zoning laws may be imposed by
Answer
  • large real estate developers
  • the federal government
  • cities and municipalities
  • any property owner

Question 39

Question
Samantha Mulder goes to a bank and borrows money for the purchase of her first home, thereby becoming a
Answer
  • mortgagor
  • mortgagee
  • lienor
  • lienee

Question 40

Question
A building permit may be issued without question even if the proposed structure violates existing
Answer
  • zoning laws
  • deed restrictions
  • building codes
  • setback requirements

Question 41

Question
If a person dies leaving no will and no natural heirs, his or her property passes to
Answer
  • local charities
  • the state
  • the IRS
  • the Department of Housing and Urban Development

Question 42

Question
The term APR stands for
Answer
  • annual percentage rate
  • appraisal procedure regulations
  • associate property reviewer
  • average purchase ratio

Question 43

Question
Zoning laws
Answer
  • tell landowners the use to which they may put their land
  • compensate owners for loss of property value due to zoning
  • require government entities to take title to zoned properties
  • may not be grandfathered in the event of a nonconforming use

Question 44

Question
Anna Jamison rents a small building for her boutique. In addition to rent, she also pays property taxes, utility bills, and insurance on the property. She must have a
Answer
  • net lease
  • percentage lease
  • variable lease
  • ground lease

Question 45

Question
One example of a periodic estate is
Answer
  • a month to month tenancy
  • an estate at will
  • a net lease
  • a sublet

Question 46

Question
Barry represents Sally, who is buying her first home. In his zeal to make the best deal for his client, Barry includes in the contract that Sally will have the right to cancel the contract if she cannot secure financing. Is this action permissible?
Answer
  • Yes, because this is a business item, not a legal issue.
  • Yes, because Barry is a licensed broker, not a salesperson.
  • No, because this would be considered the unauthorized practice of law.
  • No, because Barry did not need to consult an attorney.

Question 47

Question
Unique or special purpose buildings, like a church or a school, are best valued giving most weight to the
Answer
  • cost approach
  • sales comparison approach
  • income approach
  • gross rent multiplier

Question 48

Question
Economic or external obsolescence refers to loss of value due to
Answer
  • wear and tear
  • outdated design
  • factors outside the property lines
  • incurable defects in the subject property

Question 49

Question
The type of depreciation always classified as incurable is
Answer
  • economic or external obsolescence
  • physical deterioration
  • fictional depreciation
  • functional obsolescence

Question 50

Question
Tom Jones asks Sarah Smith, a real estate salesperson, to help him set the right asking price for his home. Sarah's broker will help her prepare
Answer
  • a reconciliation of value
  • an assessment analysis
  • a competitive market analysis
  • a limited appraisal

Question 51

Question
The seller has agreed to pay three points to the lending institution to help the buyers obtain a mortgage loan. The house was listed for $200,000 and is being sold for $180,000. The buyers will pay 10% in cash and borrow the rest. How much will the seller owe to the lender for points?
Answer
  • 1620
  • 4860
  • 5400
  • 6000

Question 52

Question
An investor recently paid $500,000 for a building that yields about $65,000 in annual net operating income (NOI). The cap rate on the investment is around
Answer
  • 7.69%
  • 11.5%
  • 13%
  • 32.5%

Question 53

Question
On January 1, Fred buys a small residential rental property for $300,000, with the land accounting for 20% of the value. The IRS allows him to depreciate the property investments over a period of 27.5 years. How much can Fred deduct as a charge for depreciation on this year's income tax return?
Answer
  • $6,000.00
  • $8,727.27
  • $10,909.09
  • $24,000.000

Question 54

Question
After paying a 7% commission to his broker, a seller receives $103,000 from the sale of his house. How much did the house sell for?
Answer
  • $95,790
  • $110,000
  • $110,420
  • $110,753

Question 55

Question
Bob and his former classmate in real estate school have the two largest real estate firms in Beeville County. At one of their frequent lunches, they conspire to set all their commission rates at higher than most of the other brokerage offices. This action would be a violation of
Answer
  • the Sherman Anti-Trust Act
  • the Federal Fair Housing Act
  • the Equal Credit Opportunity Act
  • none of the above. There would be no legal consequences for a simple business arrangement.

Question 56

Question
Property on Main St in Lake Pleasant is selling for $250 per front foot. If Mary Akerman buys a lot that is 300 x 500, how much should it cost her?
Answer
  • $12,500
  • $15,000
  • $75,000
  • $125,000

Question 57

Question
The Owens are buying a $100,000 house with 5% down and an FHA mortgage for the rest. They must pay an upfront MIP of 1.5%, in addition to other closing costs that total $1,000. How much money will they need at the closing?
Answer
  • $8,375
  • $7,425
  • $6,000
  • $2,425

Question 58

Question
Richard gets a call from a prospective buyer for his listing. The caller does not want to be represented by a broker. Richard would owe the caller the duty of
Answer
  • loyalty
  • honesty
  • obedience
  • confidentiality

Question 59

Question
How many acres are contained in a parcel 121 feet wide and 240 yards deep?
Answer
  • 1
  • 1.5
  • 2
  • 2.5

Question 60

Question
Administration of which of the following would best be handled by a property manager?
Answer
  • a single-family home
  • a condominium unit
  • a townhouse
  • a shopping center

Question 61

Question
If Betty's property is determined to be partially or totally a federal wetlands, what would possibly allow Betty to develop the site?
Answer
  • Using wetlands banking, she could contribute property elsewhere as a dedicated wetlands
  • She could fill in the wetlands area with soil from another source
  • She could contend that the property is grandfathered by the US Fish and Wildlife Service
  • Under no condition could she develop the property

Question 62

Question
The buyer gives the owner a $5,000 payment and a written agreement stating that on July 1 of the following year, the buyer may purchase the property for $150,000 cash or the owner may keep the money. This transaction is known as
Answer
  • a lease with the option to purchase
  • a purchase contract with a delayed settlement
  • an option agreement
  • a limited partnership

Question 63

Question
If a contract for real estate is vague in its basic terms, a court could hold that it is
Answer
  • binding on the offeror
  • unenforceable
  • valid against all parties
  • invalid until rewritten by an attorney

Question 64

Question
A buyer makes the required number of monthly payments, and the owner conveys the property title to the buyer. This transaction is known as
Answer
  • a lease with an option to purchase
  • an installment sales contract
  • a sales agreement with a delayed settlement
  • a wraparound contract

Question 65

Question
Kelly lists her house and tells her listing agent, Sheila, "I'm listing for $180,000, but I might take less." Sheila may properly
Answer
  • advertise the property for $180,000 or less
  • explain Kelly's position to prospective buyers in an effort to obtain an offer
  • share Kelly's statement only with the buyer's broker
  • keep the information to herself

Question 66

Question
Ron will be in Tokyo for several months until he sells his house, and then he will move there to take a full time job. Ron lists his house with Charlie, giving her the exclusive right to sell as well as the duties of maintenance, bill paying, and making any decisions concerning the house. The agency created would be a
Answer
  • special agency
  • subagency
  • general agency
  • designated agency

Question 67

Question
The best way for a broker acting as a dual agent to minimize his or her risk to
Answer
  • negotiate a win/win transaction from which each party walks away satisfied
  • obtain written acknowledgement from each party that it consents to the agent acting for both sides
  • obey each party's instructions even if they are in conflict
  • give notice to each party of any information useful in negotiation

Question 68

Question
The typical relationship between broker and salesperson for tax purposes is known as
Answer
  • indentured servant
  • independent contractor
  • statutory agent
  • transaction facilitator

Question 69

Question
The Hansons' home was listed with a broker, but they ended up locating a buyer at Mr. Hanson's place of employment and sold the property themselves. They were still obligated, however, to pay a brokerage fee. What kind of listing had they agreed to?
Answer
  • a net listing
  • an open listing
  • an exclusive right to sell
  • an exclusive agency

Question 70

Question
The listing broker's commission is earned when
Answer
  • the property is listed
  • an offer has been accepted
  • financing has been arranged
  • the property is finally closed

Question 71

Question
Which of the following statements is true of a land contract?
Answer
  • The buyer is given the right to possess
  • The seller has a lien on the title
  • The buyer has legal title to the property
  • The seller cannot provide any of the financing

Question 72

Question
A deed is the instrument used to convey ownership of
Answer
  • personal property
  • short-term use of real estate
  • real property
  • crops and other produce

Question 73

Question
A customer orders dinner in a restaurant. At the end of the meal, is the customer legally obligated to pay the check?
Answer
  • Yes, because by ordering, the customer entered into an implied contract to pay for the meal.
  • No, because strictly speaking, the customer did not promise to do so.
  • Yes, but only if the customer is over the age of 17.
  • Yes, because the customer is liable through the process of novation.

Question 74

Question
The statue of frauds requires that
Answer
  • real estate brokers answer buyers' and sellers' questions honestly
  • the seller of real estate provide a written disclosure about the condition of the property
  • certain contracts, including those for the sale of real estate, must be in writing to be enforceable
  • a mortgage borrower has three days in which to cancel the loan

Question 75

Question
Delta Dawn, a salesperson working for Betty, lists Sally's house with an exclusive right to sell listing agreement. Which of the following occurrences would not cause the termination of this agreement?
Answer
  • Delta's death
  • Sally's death
  • Mutual agreement
  • Destruction of Sally's property

Question 76

Question
The duty of faithful performance, meaning that the agent is to obey all legal instructions given by the principal and to apply best efforts and diligence to carry out the objectives of the agency, is also known as they duty of
Answer
  • loyalty
  • confidentiality
  • obedience
  • reasonable care

Question 77

Question
In May, the Kleins accepted an offer to sell their house to the Grosses. In July, the Grosses paid the purchase price and received a deed to the house and the keys. After July, their contract was considered
Answer
  • void
  • implied
  • liquidated
  • executed

Question 78

Question
Repair or remodeling of a property generally adds to its value. In recognition of the role contractors and suppliers play in increasing the value of a property, in many states, they are assured payment for their goods and services by being able to file a
Answer
  • declaratory judgement against the owner
  • lis pendens against the title insurance company
  • mechanic's lien against the property
  • registration with the new owner

Question 79

Question
When several real estate brokers are invited to list a property, with commission due only to the one who produces the first acceptance buyer, the owner is offering
Answer
  • an open listing
  • an exclusive right to sell
  • an exclusive agency
  • a multiple listing

Question 80

Question
The earnest money accompanying a purchase offer
Answer
  • is generally 10 percent of the proposed purchase price
  • should be held in escrow by the seller
  • is mandated by state law
  • is not necessary to establish a valid contract
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