Mock Exam 1

The rights of ownership of real property include all of the following EXCEPT

• compatibility

• disposition

• exclusion

• control

An important characteristic of land is that it may be modified or improved at some point in time. Depending on its type, an improvement may increase the value of real estate greatly. All of the following are considered to be improvements EXCEPT

• sewers.

• crops.

• buildings.

• roads.

A man leases a store space to open a restaurant. He installs ovens, booths, counters, and other equipment. When would these items become real property?

• At lease expiration, if the man does not remove them

• After they are installed

• After the man defaults on his rental payments

• After the lease takes effect

A real estate professional sells property listed by another brokerage firm in the multiple listing service. The real estate professional has been working with the buyer for many months but does not have an agency contract with him. This real estate professional has fiduciary obligations to

• the buyer.

• no one.

• the public.

• the seller.

A man’s house has been listed for sale for more than one year and he is very anxious to move into a retirement community. A real estate professional, who is a subagent of the seller, tells a prospective buyer to make a low offer because she is sure that the seller will accept it. Regarding the real estate professional’s conduct, which of the following is FALSE?

• She acted appropriately to sell the seller’s property.

• Her conduct implies she is representing the buyer.

• She should not assume that an anxious seller will accept a lower offer.

• She violated her fiduciary duty to the seller.

A real estate professional who represents the seller is showing a house to a prospective buyer-customer. The real estate professional knows that the house has water problems in the basement. Which of the following is TRUE?

• Withholding the information prevents the buyer from making an informed decision.

• Withholding the information properly protects the confidence of the seller.

• Disclosing the information could create a fiduciary relationship with the buyer.

• Disclosing the information violates the real estate professional’s fiduciary duty to the seller.

What is the commission rate of 5% on a sale of $250,000?

• $25,000

• $1,750

• $12,500

• $3,571

A broker’s newest sales associate lists a unit in a condominium building for sale. In this transaction, the sales associate

• has a direct contractual relationship with the owners of the unit.

• acts on behalf of the broker.

• acts on behalf of the condominium association.

• must personally find a buyer for the unit to obtain a share of the commission.

The commission on the sale of a house is $9,410, and 30% goes to the broker who listed the property. Of the remainder, the broker whose sales associate completed the transaction gets 45%, and the sales associate receives the balance. How much does the sales associate who made the sale receive?

• $4,389

• $3,728

• $3,622.85

• $2,425

The type of real estate ownership that is MOST all-inclusive is a

• life estate.

• fee simple estate.

• conditional fee estate

• reversionary interest.