Free Property Practice Test — LicenseIQ

Question 1

A real estate licensee who is not an attorney may:

Accepted Answer

Licensees may complete attorney-prepared forms but may not draft contracts, amendments or addenda or give legal advice - that is the unauthorized practice of law.

Question 2

A building has a no-pets policy. An applicant who is blind has a guide dog. The property manager must:

Accepted Answer

Fair housing law requires reasonable accommodations for persons with disabilities, including service animals despite no-pet rules.

Question 3

A home is assessed at $312,000 with a tax rate of 2.25%. What is the QUARTERLY tax payment?

Accepted Answer

Annual tax = $312,000 x 0.0225 = $7,020; quarterly = $7,020 / 4 = $1,755.

Question 4

Which action may a life tenant take WITHOUT the remainderman's consent?

Accepted Answer

A life tenant may occupy or lease the property for the duration of the life estate but cannot sell, mortgage or commit waste that harms the remainderman's future interest.

Question 5

A quitclaim deed is most often used to:

Accepted Answer

Quitclaim deeds convey whatever interest the grantor may have, without warranties, making them useful for removing clouds or releasing claims.

Question 6

A borrower's monthly principal and interest payment is $1,193.54. Annual property taxes are $6,000 and annual homeowner's insurance is $1,200. What is the monthly PITI payment?

Accepted Answer

Taxes = $6,000 / 12 = $500; insurance = $1,200 / 12 = $100. PITI = $1,193.54 + $500 + $100 = $1,793.54.

Question 7

A buyer of a unit in a cooperative receives:

Accepted Answer

In a co-op the corporation owns the building; members own shares and a proprietary lease (personal property). Condominium owners receive a deed.

Question 8

When an owner dies with no will and no heirs, the property passes to the state through:

Accepted Answer

Escheat transfers ownerless property to the state when there is no will and no heirs.

Question 9

In general, a 'stigmatized' property refers to one:

Accepted Answer

Stigmatized properties are affected by events (crime, death) rather than physical condition; disclosure rules vary by state. (Well-established principle; not detailed in the course.)

Question 10

A timeshare that lets the owner use the property during a specific, set week each year is a:

Accepted Answer

Fixed-week timeshares assign the same week every year; floating weeks allow different weeks subject to availability.

Question 11

Which appraiser credential allows appraisal of any type of property, residential or commercial, without a value limit?

Accepted Answer

Certified General appraisers may appraise any property. Certified Residential appraisers are limited to 1-4 unit residential; Licensed Residential to noncomplex 1-4 units under $1 million.

Question 12

In a life estate, the person who receives the property when the life tenant dies is the:

Accepted Answer

The life tenant has a present interest; the remainderman holds a future interest. If the property returns to the grantor, it is a reversion.

Question 13

In a general warranty deed, the grantor's promise that he owns the property and has the right to convey it is the covenant of:

Accepted Answer

Seisin = ownership and right to convey. Quiet enjoyment protects against superior title claims; further assurance obligates the grantor to cure defects; warranty forever defends title against all claims.

Question 14

A property use that legally existed before a new zoning ordinance and is allowed to continue is a:

Accepted Answer

A legal nonconforming ('grandfathered') use predates the ordinance and may continue, usually with limits on expansion. A variance is permission to deviate from a current requirement.

Question 15

Under a land contract (contract for deed), during the payment period the buyer holds:

Accepted Answer

In an installment/land contract the buyer has equitable title and possession; the seller keeps legal title until the final payment.

Question 16

The reasonably probable use of a property that is legally permissible, physically possible, financially feasible and maximally productive is its:

Accepted Answer

Highest and best use is the use producing the greatest value that meets the four tests.

Question 17

An investor buys a property for $180,000 and sells for $216,000. What is the percent of profit on cost?

Accepted Answer

Profit = $36,000; $36,000 / $180,000 (cost) = 20%. Dividing by the sale price ($216,000) would give 16.7%.

Question 18

A title search is performed primarily to:

Accepted Answer

A title search establishes the chain of title and reveals encumbrances or defects before closing. (Reclassified from section 17 to section 9 / CORE - not NJ-specific.)

Question 19

A property has a first mortgage (recorded 2015), a judgment lien (2018), a mechanic's lien (2020) and unpaid property taxes. Which is paid FIRST from sale proceeds?

Accepted Answer

Real property tax liens take priority over all others regardless of recording date; other liens generally follow in order of recording.

Question 20

When a tenant in common dies, that owner's share:

Accepted Answer

Tenancy in common has NO right of survivorship, so a deceased co-owner's interest passes by will or to heirs. Automatic passage to co-owners describes joint tenancy.

Question 21

A borrower facing default voluntarily conveys the property to the lender in exchange for release of the debt. This is a:

Accepted Answer

In a deed in lieu, the borrower voluntarily deeds the property to the lender, which avoids the foreclosure process; the lender must agree, and the borrower should get a written release of any remaining debt. In a short sale, the property is sold to a third party for less than owed with lender approval. Credit-reporting effects vary by lender and situation, so licensees should not promise a borrower any particular credit outcome.

Question 22

In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

Accepted Answer

The ADA's accessibility rules primarily cover public accommodations and commercial facilities; housing accessibility is governed mainly by the Fair Housing Act.

Question 23

A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

Accepted Answer

EGI = $240,000 - 8% = $220,800; value = $220,800 x 6 = $1,324,800.

Question 24

Which is required for a deed to be valid?

Accepted Answer

A valid deed needs a writing, competent grantor who signs, identifiable grantee, consideration, granting and habendum clauses, legal description, delivery and acceptance. The grantee does not sign; recording is not required for validity.

Question 25

Which document is recorded in the county records and makes the property collateral for a loan?

Accepted Answer

The mortgage creates the lien and is recorded. The promissory note is the borrower's personal promise to repay and is not recorded.

National real estate property practice test

1. A real estate licensee who is not an attorney may:

2. A building has a no-pets policy. An applicant who is blind has a guide dog. The property manager must:

3. A home is assessed at $312,000 with a tax rate of 2.25%. What is the QUARTERLY tax payment?

4. Which action may a life tenant take WITHOUT the remainderman's consent?

5. A quitclaim deed is most often used to:

6. A borrower's monthly principal and interest payment is $1,193.54. Annual property taxes are $6,000 and annual homeowner's insurance is $1,200. What is the monthly PITI payment?

7. A buyer of a unit in a cooperative receives:

8. When an owner dies with no will and no heirs, the property passes to the state through:

9. In general, a 'stigmatized' property refers to one:

10. A timeshare that lets the owner use the property during a specific, set week each year is a:

11. Which appraiser credential allows appraisal of any type of property, residential or commercial, without a value limit?

12. In a life estate, the person who receives the property when the life tenant dies is the:

13. In a general warranty deed, the grantor's promise that he owns the property and has the right to convey it is the covenant of:

14. A property use that legally existed before a new zoning ordinance and is allowed to continue is a:

15. Under a land contract (contract for deed), during the payment period the buyer holds:

16. The reasonably probable use of a property that is legally permissible, physically possible, financially feasible and maximally productive is its:

17. An investor buys a property for $180,000 and sells for $216,000. What is the percent of profit on cost?

18. A title search is performed primarily to:

19. A property has a first mortgage (recorded 2015), a judgment lien (2018), a mechanic's lien (2020) and unpaid property taxes. Which is paid FIRST from sale proceeds?

20. When a tenant in common dies, that owner's share:

21. A borrower facing default voluntarily conveys the property to the lender in exchange for release of the debt. This is a:

22. In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

23. A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

24. Which is required for a deed to be valid?

25. Which document is recorded in the county records and makes the property collateral for a loan?

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