Multiple Choice Questions Flashcards
7 cards from real Real Estate Sales Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Multiple Choice Questions flashcards as text
A broker holds a buyer's earnest money deposit in a separate account distinct from the broker's operating funds. This practice is called:
Answer: Segregation (trust accounting)
Proper trust accounting requires brokers to keep client funds in a separate escrow or trust account, preventing commingling with business funds.
An owner wants to sell but refuses to list with a broker who brings an offer. Under an open listing, the owner owes a commission only if:
Answer: The broker is the procuring cause of the sale
Under an open listing, commission is owed only to the broker who is the procuring cause—the one whose efforts directly led to the sale.
Which appraisal approach is MOST appropriate for a special-purpose property like a church or school?
Answer: Cost approach
The cost approach—estimating land value plus the depreciated cost to replace improvements—is most reliable for special-purpose properties that rarely sell and produce no income.
A contract signed by a minor is generally considered:
Answer: Voidable at the minor's option
Contracts with minors are voidable—the minor may disaffirm the contract, but the adult party is bound unless the minor elects to void it.
Which federal law requires lenders to provide borrowers with a Loan Estimate within three business days of a loan application?
Answer: TILA/RESPA Integrated Disclosure (TRID)
The TILA-RESPA Integrated Disclosure (TRID) rule, effective 2015, replaced the GFE and TIL disclosure with a Loan Estimate delivered within 3 business days.
When a seller accepts a buyer's offer and communicates acceptance to the buyer, what has been created?
Answer: A bilateral executory contract
A purchase agreement is a bilateral contract (both parties promise performance) that is executory (not yet fully performed) at the point of mutual acceptance.
The capitalization rate (cap rate) is calculated as:
Answer: Net Operating Income ÷ Value
Cap rate = NOI ÷ Property Value; it expresses what percentage return an investor earns on value at current income levels.
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