PA Real Estate Fundamentals – FINAL EXAM
1. Radon in a home is a problem that…?
A. Can destroy a home.
B. Has no bearing on a property sale.
C. Should not be addressed by a real estate salesperson.
D. Can be easily fixed, in most cases.
2. The allowed building envelope on a property is set forth in which of the following documents?
A. Zoning ordinances
B. Building code
C. Appraisal
D. CMA
3. Height and setback regulations set forth in the local zoning ordinances help determine which of the following?
A. The amount of property taxes owed for a particular property.
B. The appraised value of a property.
C. The building envelope of a property.
D. The market value of a property.
4. The State Real Estate Commission is responsible for issuing which of the following licenses…?
A. All of the answer choices provided are correct.
B. Real estate salesperson
C. Real estate broker
D. Time-share salesperson
5. Which of the following could cause title to real property to not be marketable?
A. There are competing claims to title to the property.
B. The current owner can not establish a clear chain of title.
C. The are unresolved liens on title to the property.
D. All of the answer choices provided are correct.
6. Who is required to pay the deficiency after foreclosure?
A. The property owner.
B. The federal government pays it.
C. The home buyer if the home is sold as a foreclosure.
D. The lender will write this off.
7. An easement by condemnation can occur when…?
A. The property owner falls behind on tax payments
B. The government exercises eminent domain powers
C. The property is landlocked
D. Property escheats to the government
8. What is the main difference between assignment and novation?
A. Assignment and novation are two parts of a single process.
B. In assignment, a new obligor promises to perform an existing contract, but the old obligor remains liable for performance; in novation, a new contract substitutes a new obligor for the old one.
C. In novation, a new obligor promises to perform an existing contract, but the old obligor remains liable for performance; in assignment, a new contract substitutes a new obligor for the old one.
D. There is no substantial difference.
9. Which of the following ensures that a factory is not built next to a residential neighborhood?
A. Zoning ordinances
B. Tax maps
C. Demographic studies
D. Building codes
10. What type of easement created by written agreement would give the dominant estate holder access over adjacent land included in the servient estate?
A. Easement by prescription
B. Adverse possession easement
C. Implied easement
D. Easement by necessity
11. Zoning ordinances regulate which of the following?
A. All of the answer choices provided are correct.
B. Front yard setbacks
C. Rear yard setbacks
D. Side yard setbacks
12. If the statute of frauds requires all real estate contracts to be in writing, why would a court ever need to interpret a real estate contract?
A. Because written contracts can’t provide for every possible circumstance.
B. Because courts like to regulate real estate contracts.
C. Because contracts are written in legalese that the parties can’t understand.
D. Because litigious parties will do anything to get out of a bad deal.
13. A landowner wants to subdivide a large piece of property into small residential lots. He needs to create streets, easements, and access. There will be several phases, and each will be a separate subdivision, which will be submitted to the city or county for review. He hires a surveyor to create…?
A. A plat map without any other descriptions, as they are mutually exclusive.
B. A plat map, which might include metes and bounds.
C. A Government Survey.
D. A legal description.
14. Julie misses the grace period for catching up on her loan. What happens?
A. Julie’s home is sold.
B. The lender moves forward with foreclosure.
C. Julie will be given a 30-day opportunity to catch up.
D. The lender turns to the trustee to force Julie to pay.
15. An exclusive listing agreement cannot exceed a term of…?
A. 2 years
B. 4 years
C. 3 years
D. 1 year
16. Pat and Tracy are buying a house with a well. They’ve never had a well before and are unsure what to do. They worry about the water quality and groundwater contamination. Their real estate agent tells them…?
A. Groundwater contamination is rare, since the water filters through the aquifer.
B. An environmental inspector can test the water quality and make recommendations, if necessary.
C. Wells are insulated against contaminants.
D. All the information they need is in the Seller’s Disclosure Statement.
17. Who is affected by a deed restriction on a property?
A. Future property owners only.
B. Current property owners only.
C. Both the current property owners and all future property owners.
D. Current property owners and their immediate successors in interest only.
18. John Sample died, leaving no will and no identifiable heirs. As a result, his real estate reverted back to the state. Which police power describes what happened?
A. Eminent domain
B. Easement
C. Estoppel
D. Escheat
19. A sheriff can sell real property by involuntary alienation in what circumstance?
A. A tax sale by the county for unpaid real estate taxes.
B. Private foreclosure by a bank.
C. When the value of the property exceeds $500,000.
D. Giving a mortgage to a real property owner.
20. What term describes an encumbrance that creates a security interest in real property as payment for the property owner’s debt or other financial obligations?
A. Entitlement
B. Lien
C. Escheatment
D. Lis pendens
21. What makes a valid contract different from a sincere promise?
A. You can change the terms of a promise.
B. A court will enforce a valid contract.
C. A court will enforce a sincere promise.
D. Breaking a contract is not immoral.
22. A real estate broker must be at least ……….years of age.
A. 20
B. 21
C. 25
D. 18
23. What type of commercial lease is often used by retail stores in shopping malls or strip malls, or other multi-tenant spaces?
A. Single net leases
B. Triple net leases
C. Percentage leases
D. Ground leases
24. Can a homeowner pay off their home loan early?
A. No, they are within the contract for the agreed upon term.
B. Yes, but they will still have to pay the full amortized value.
C. Yes, though some may face an early payment penalty if their contract states this.
D. No, unless they sell the home.
25. What is the defeasance clause?
A. A statement requiring immediate payment in full if the borrower defaults.
B. A clause stating the lender can require payment in full at any time.
C. A statement giving the mortgagor to ability to redeem the property when payment of the obligations are made to the mortgagee.
D. A statement outlining the borrower’s rights to refinance the loan.
26. Agent Alice wants to help Owner Owen sell his property, but Alice wants to make absolutely sure she receives a commission when the property is sold. What kind of listing agreement should she ask Owen to make with her?
A. An exclusive agency listing
B. An exclusive right to sell listing
C. A net listing
D. An open listing
27. What is the collateral in a mortgage?
A. The credit history of the borrower
B. The home’s structure
C. The down payment
D. The home and land
28. The bundle of rights allows a property owner to do which of the following?
A. Encumber the property
B. Sell the property
C. Quiet enjoyment of the property
D. All of the answer choices provided are correct.
29. A municipality’s comprehensive plan ensures that which of the following are met for the citizens?
A. All of the answer choices provided are correct.
B. Social needs
C. Cultural needs
D. Financial needs
30. When we say that real estate is unique, we mean…?
A. There is plenty of the same land in many places.
B. Land can never be owned by more than one person.
C. There is really no ownership interest in land. It’s a legal fixture.
D. That each parcel has its own characteristics and there isn’t another like it on earth.
31. The sale of a property in foreclosure is an example of…?
A. Involuntary alienation
B. Voluntary alienation
C. Express alienation
D. Implied alienation
32. George is renting an apartment from Jerry. George wants to install new countertops in the kitchen. Is he allowed to do so…?
A. No, a tenant may never make improvements to leased property.
B. Yes, but only if the new countertops are a necessary improvement to make the unit handicapped-accessible.
C. Yes, a tenant has an unrestricted right to make improvements to leased property.
D. Yes, a tenant has an implied right to make improvements, with the landlord’s permission.
33. Millie asks Joshua, “Will you buy my house for $150,000, with closing to occur in June?” Joshua replies, “That’s a great offer! Yes! I’ll give you $155,000, and we can close in May.” Has offer and acceptance occurred?
A. No, because Millie’s original offer was just an invitation to treat.
B. Yes, because Joshua agreed to pay a higher price, sooner.
C. Yes, because Joshua said, “Yes.”
D. No, because Joshua agreed to terms different from Millie’s offer, resulting in a rejection and a counteroffer by Joshua.
34. Radon can be found in any building, but it also can be found…?
A. In well water.
B. In fencing material.
C. In clothing.
D. In cars.
35. When can involuntary alienation occur in bankruptcy?
A. When the owner voluntarily sells property to get out of bankruptcy protections.
B. When the trustee seizes real property to sell and pay off creditors.
C. Property is never taken in bankruptcy.
D. When the owner retains his property pursuant to a reaffirmation agreement.
36. A new subdivision is located within blocks of a previous sanitary landfill. The buyers are concerned about the possibility of hazardous waste contamination, so their real estate agent tells them?
A. They don’t have to be concerned, since hazardous waste is only present on commercial or industrial properties.
B. Is easy to detect and can always be removed cleanly and completely.
C. They can hire a qualified environmental professional to run an Environmental Site Assessment.
D. Is not a problem in a residential area.
37. When do breaks occur in the chain of title?
A. There is a mortgage on the property.
B. When the owners, sellers, and buyers in the title history of a property line up perfectly.
C. When the property is sold.
D. The sequence of buyer to seller is broken, and a buyer is found in the history of deeds with a seller that did not have title to the property.
38. Fixtures are generally defined as…?
A. The permanent house on the land.
B. Structures built on the land like a fence or a barn.
C. The trees on top of the ground.
D. Everything underneath the ground.
39. A quitclaim deed is commonly used when…?
A. Real property is being foreclosed.
B. When one individual conveys real property to another.
C. Complete title with all rights is being conveyed.
D. The owner is only conveying a narrow or specific right to real property.
40. In a fee simple determinable estate, what action is necessary for title to revert to the grantor when a specified condition is not met or is violated?
A. No action is required.
B. A warranty deed must be executed and recorded within 30 days.
C. The property owner and his or her heirs must agree.
D. Title can only revert after judicial decree.
41. Do non-judicial foreclosures include a right to redeem?
A. No, non-judicial foreclosures never offer this opportunity.
B. Right to redeem determination is up to the trustee to decide on.
C. Yes, this is a requirement of the foreclosure process.
D. It is not present in all non-judicial states.
42. What type of lien allows a judgment creditor to have the subject property sold to pay the judgment?
A. Mechanic’s lien
B. Fee simple lien
C. Statutory lien
D. Equitable lien
43. How will most of the real estate sales contracts in which you participate be terminated?
A. Mutual agreement and novation
B. Breach
C. Full performance by both parties
D. Assignment
44. A ………… signifies a structure is safe for habitation.
A. Certificate of Fire Safety
B. Certificate of Occupancy
C. A Certificate of Sustainability and Environmental Responsibility
D. Certificate of Electrical and Plumbing Integrity
45. Which of the following is responsible for enforcing the rules and regulations set forth in RELRA?
A. State Real Estate Commission
B. Pennsylvania Attorney General
C. Pennsylvania Real Estate Board
D. Pennsylvania Governor
46. What word describes a situation that occurs when one property owner is, in effect, using part of a neighbor’s property in an unwanted manner?
A. Easement
B. Estoppel
C. Encroachment
D. Covenant
47. Which is probably NOT sufficient consideration for a contract?
A. A specified sum of money
B. An agreement to not enforce a legal right
C. A legal detriment
D. Love and affection
48. An estate for years typically lasts for…?
A. At least two years.
B. Longer than twenty years.
C. At least one year.
D. At least five years.
49. The Environmental Protection Agency (EPA) has determined that formaldehyde could be a carcinogen that would affect humans…?
A. And the use of it is banned in the USA.
B. And there are rigid regulations on exposure levels.
C. But it has no effect on animal or plant life.
D. But they haven’t established any standards for exposure at this time.
50. Jack and Diane don’t have a formal lease in place with their landlord. Their tenancy can be terminated at any time. What type of leasehold estate do Jack and Diane have?
A. Estate for years
B. Periodic estate
C. Estate at sufferance
D. Estate at will
51. Mark just signed a commercial lease agreeing to pay rent each month, which may fluctuate based on changes to the consumer price index. What type of lease did Mark probably sign?
A. Oil and gas lease
B. Graduated lease
C. Percentage lease
D. Ground lease
52. A type of trust created specifically to hold title to real estate for the benefit of someone else is called a…?
A. Intervivos trust
B. Testamentary trust
C. Land trust
D. Supplemental needs trust
53. If Bill helped his neighbor install a fence that extends five feet into Bill’s property, can he claim that this is an encroachment?
A. Yes. The fence is on his side of the property line.
B. Yes. This is a prescriptive easement.
C. Probably not, since he helped install the fence.
D. No. A fence can never be an encroachment.
54. Easements can be classified as either…?
A. Easements appurtenant or implied easements
B. Easements in gross or easements appurtenant
C. Easements in gross or implied easements
D. Easements in gross or Dominant easements
55. What is an acceleration clause in a loan?
A. An allowance given to the lender to require payment due immediately and in-full for the loan.
B. A statement in the documentation requiring a balloon payment.
C. A standard clause without ramifications.
D. A requirement to pay the loan back within a year.
56. When is a contract an executed contract?
A. When the contract is signed.
B. When one party has fully performed.
C. When both parties have fully performed.
D. When the parties say so.
57. Which is probably a void contract?
A. A contract for the sale of real property.
B. A contract that prevents a landowner from building on the owner’s vacant lot.
C. A contract involving a minor.
D. A contract for the sale of a stolen painting.
58. What is a junior lien on a mortgage?
A. A tax lien on the property.
B. A mortgage on the home.
C. Any additional secondary loan on real estate after the main mortgage.
D. A credit card.
59. Mold is a concern because it can affect indoor air quality and irritate skin, nose, eyes, and lungs. Exposure to mold has been linked to respiratory issues like asthma or allergic complaints, and prolonged exposure can destroy furniture and wood products. Kelly is a real estate agent who is walking through a home with buyers, and they see a substance that looks like mold in the corner of the bathroom. Kelly suggests…?
A. That the only way to correct a mold problem is very expensive and requires a team of experts.
B. That mold is not a problem, and wipes the mold off the floor with a tissue.
C. That because bathrooms are often damp and mold needs water or moisture to grow, the problem might be easily solved, but an inspection could determine the extent of the mold.
D. That they stop considering this house and find a different house.
60. Whether a building is a condominium or not can be determined by…?
A. The building style or architecture of the property.
B. The owner’s statement.
C. The lender’s evaluation.
D. The legal description, which can be found on the deed to the property.
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