161. An open-end provision in a mortgage would benefit the borrower the most if the borrower:

A. Prepaid the loan

B. Allowed a subsequent buyer to assume the loan

C. Had a loan subordinated to a construction loan

D. Borrowed additional money

Answer: D. Borrowed additional money

162. The owner of a 5-unit apartment complex has decided to sell each apartment to the present tenants, who will own their own unit in fee but will own the common areas in undivided joint ownership. This plan would legally be a:

A. Lot split

B. Stock cooperative

C. Subdivision

D. Variance

Answer: C. Subdivision

163. A lien may be created by recording:

A. A notice of non-responsibility

B. A mortgage

C. An easement

D. A restriction

Answer: B. A mortgage

164. Which of the following is the purpose of the federal Truth-In-Lending Act?

A. To limit interest rates

B. To regulate fees charged by lenders

C. To provide consumers with information concerning the cost of credit

D. All of the above

Answer: C. To provide consumers with information concerning the cost of credit

165. When making a loan, amortization tables are used to determine the:

A. Interest rate

B. Monthly payment

C. Term of the loan

D. APR

Answer: B. Monthly payment

166. When a real estate agent acts exclusively as a buyer’s agent, he or she cannot:

A. Present offers directly to the seller

B. Present offers to the seller or seller’s agent

C. Withhold negative information about the buyer from the seller

D. Act as the agent of the seller when his or her commission is paid by the seller

Answer: D. Act as the agent of the seller when his or her commission is paid by the seller

• Broker John Doe lives in a suburb, he sets up his office in his house. He hired A who is unlicensed to hand out flyers and get clients. He pays A $250 per client A gets for him. He puts up a sign “Realtor” on his door but he doesn’t belong to any association. He saves all the client’s funds from the real estate business in a chest in his office and deposits it into bank once a week when he goes to town. All of the followings are wrong except:

A. Using his home as an office location 

B. Making payment to A 

C. management of trust fund 

D. Placement of Realtor sign

Answer: A

167. Functional obsolescence might be attributed to each of the following except:

A. No air conditioning in a commercial building in a warm climate

B. The proximity of obnoxious nuisances

C. Outmoded or outlandish design

D. Improvements which have lost their usefulness

Answer: B. The proximity of obnoxious nuisances

• What type of loan is NOT regulated under Regulation Z truth in lending:

A. Business Loan backed by company assets 

B. Personal loan 

C. refinance of a home loan 

D. Investor purchasing a 2 unit residential rental property

Answer: A

168. Which of the following defines the term “equity” of an owner at the time of purchase?

A. The owner’s interest in the real property over and above all liens against it

B. The difference between the loan amount and the value or price of the property

C. The initial down payment on the property

D. Any of the above

Answer: D. Any of the above

169. Which of the following would usually be true concerning a hard money second trust deed?

A. It always has lower than normal interest rates

B. It is secured by real estate and given to a third party to obtain a cash loan

C. It is carried back by a conventional lender

D. It is always repayable in three years

Answer: B. It is secured by real estate and given to a third party to obtain a cash loan

170. If a seller refuses to state on a Real Estate Transfer Disclosure Statement that the property is in a slide area, when it is, the real estate agent should:

A. Go ahead and accept the listing

B. Not accept the listing

C. Advise the seller to sell the property on their own

D. Accept the listing verbally

Answer: B. Not accept the listing