Maryland Real Estate Salesperson Examination Questions and Answers
Question 29
What's the purpose of a home inspection?
Options:
A.
To determine a listing price for the property
B.
To determine whether the purchase price reflects the property's value
C.
To get a true picture of a property's condition
D.
To help licensees uncover red flags
Answer:
C
Explanation:
A home inspection is a professional, non-invasive evaluation of the property’s physical condition (systems and components) to inform buyers about defects and needed repairs. It is not an appraisal (value) and doesn’t set list price; while it can reveal “red flags,” its primary purpose is to provide the buyer an accurate picture of condition to inform negotiations and contingency decisions.
[References: Maryland 60-Hour Course: “Real Estate Contracts” (inspection contingencies; inspection vs. appraisal); “Environmental Issues and Disclosures” (property condition considerations).]
Question 30
What are PCBs?
Options:
A.
A chemical compound that occurs naturally in the environment
B.
A substance resulting from the decay of uranium
C.
A substance that grows due to moisture problems
D.
Chemical compounds used in cooling and insulating, mainly in electrical transformers
Answer:
D
Explanation:
Polychlorinated biphenyls (PCBs) are synthetic chemical compounds formerly used as coolants and insulators in electrical equipment, hydraulic systems, and fluorescent-light ballasts. They are toxic, persistent in the environment, and regulated by the U.S. EPA under the Toxic Substances Control Act (TSCA). Maryland’s course covers PCBs among major environmental hazards requiring disclosure or remediation.
What type of ownership do most corporations use to hold real property?
Options:
A.
Common
B.
Joint tenancy
C.
Severalty
D.
Trust
Answer:
C
Explanation:
A corporation is a single legal entity, separate from its shareholders. When it holds title to real property, ownership is in severalty, meaning “sole” ownership by one legal person. Unlike joint tenancy or tenancy in common, there are no co-owners in severalty; the corporate entity alone holds all rights of ownership. This principle is highlighted in the ownership portion of the Maryland pre-licensing curriculum.
[Reference:Maryland 60-Hour Principles and Practices Course – “Forms of Real Estate Ownership” Topic; Maryland Real Property Article §1-101 (definition of person includes corporation)., , , ]
Question 32
Jillian has a loan-to-value ratio of 90/100. This means—
Options:
A.
Her loan is 10% of the value of the real estate used as collateral and she is obtaining a second mortgage for 90%.
B.
Her loan is 90% of the value of the real estate used as collateral and she is putting 10% down.
C.
She is putting 10% down, with 90% being pulled from her IRA.
D.
The property is only worth 90% of the amount loaned.
Answer:
B
Explanation:
The loan-to-value (LTV) ratio compares the loan amount to the property’s appraised value or purchase price, whichever is less. An LTV of 90/100 (or 90%) means the borrower’s loan equals 90% of the property’s value, and the borrower provides a 10% down payment.
Lenders use the LTV ratio to assess risk and determine if mortgage insurance is required. Maryland’s pre-licensing course explains this formula in the “Real Estate Financing” section under “Loan Underwriting and Ratios.”
[Reference:Maryland 60-Hour Principles and Practices Course – “Real Estate Financing” Topic; Federal Mortgage Underwriting Standards (FHA/Conventional Loan Guidelines)., , ]
