State: Pennsylvania | Category: Real Estate | All tests in this Category:
Practice Test 1 Practice Test 21. The main purpose of a real estate appraisal is to determine:
The primary goal of a real estate appraisal is to determine the property's market value, which reflects the price it would likely sell for under typical market conditions.
2. An accounting duty for PA licensees includes:
Licensees must handle client funds properly, keeping them separate from personal funds and maintaining accurate records.
3. Who records the deed in Pennsylvania after closing?
The closing agent coordinates recording with the county recorder of deeds after closing, ensuring the deed is properly indexed and the title chain is updated.
4. In Pennsylvania, which relationship involves representing both the buyer and the seller in the same transaction with the same licensee?
Dual agency occurs when one licensee represents both parties in the same transaction; PA requires informed consent for dual agency.
5. The PA Property Tax/Rent Rebate program is administered by which department?
The Property Tax/Rent Rebate program is administered by the Pennsylvania Department of Revenue.
6. In PA, a landlord may deduct from the security deposit only for damages caused by the tenant beyond normal wear and tear.
Deductions are limited to damages beyond ordinary wear and tear (and unpaid rent where applicable).
7. Private mortgage insurance (PMI) protects the lender against:
PMI provides financial protection to lenders if a borrower defaults on a mortgage with a low down payment.
8. Statute of limitations for breach of a written Pennsylvania real estate contract?
PA generally provides a 4-year statute of limitations for breach of written contracts.
9. PA property taxes are calculated using which value as the tax base?
Property tax is calculated using the assessed value of the property, not its full market value.
10. Which statement best describes a Modified Gross Lease in PA?
In a modified gross lease, operating expenses are shared between landlord and tenant, with utilities often paid by the tenant depending on the negotiated terms.
11. When must earnest money be deposited into the escrow/trust account in a PA transaction?
PA practice generally requires prompt deposit of earnest money, commonly within 3 business days after acceptance of the offer.
12. Building codes in PA regulate fire separation and fire-resistance between occupancies primarily for what purpose?
Code requirements for fire-rated assemblies and fire separations help protect occupants and limit fire spread between different occupancies.
13. Which loan is paid first in a foreclosure sale?
In foreclosure, loans are paid in order of priority. The first trust deed (senior loan) is paid before junior liens or second trust deeds.
14. Where can a PA property owner appeal an assessment decision if they disagree with the assessed value?
Appeals of assessments are typically heard by the County Board of Assessment Appeals (or local equivalent), not directly by the school board or state agencies.
15. A mortgage loan where only interest is paid during the term and the principal is due at the end is called:
A straight note, also called an interest-only loan, requires the borrower to pay only interest during the term. The entire principal is due as a lump sum at maturity.
16. A contractor or material supplier who furnishes labor or materials for a PA property may file which type of lien?
Mechanic's liens protect those who contribute labor or materials to an improvement of real estate.
17. Which statement best describes the PA Real Estate Commission's role in discipline?
The PA Real Estate Commission has authority to suspend, revoke, or place licenses on probation for violations of license law and rules.
18. Which of the following is primarily a residential mortgage lender in the U.S.?
Savings and loan associations (S&Ls) historically focus on residential mortgages, whereas commercial banks have broader lending portfolios.
19. If a licensee represents both the buyer and the seller in the same PA transaction, what is required?
PA allows dual or designated agency but requires written consent and disclosure of agency relationships to protect all parties’ interests.
20. Which language creates a life estate?
"To Z for life" creates a life estate. Other phrasings typically create a fee simple or other interest.
21. Effective gross income is calculated by:
Effective gross income = potential gross income – vacancy and collection losses, representing the actual expected income from the property.