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Pearson Vue Practice Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified
Which of the following best describes a mortgage?
- A savings account for real estate agents
- A government grant for homebuyers
- A rental agreement between two parties
✔✔ B. A loan secured by property as collateral
What is the purpose of an appraisal during a home purchase?
- To determine insurance value
- To inspect the building for code violations
- To calculate property tax
✔✔ C. To estimate the property’s fair market value
Which factor most directly affects property location value?
- Interior design style
✔✔ B. Nearby amenities and infrastructure 1 / 4
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- Color of the house exterior
- Number of bedrooms only
What is equity in real estate?
- Total mortgage amount owed
- Property tax due annually
- Estimated future price
✔✔ D. Ownership value after debts
Why would an investor choose a commercial property over residential?
- Lower maintenance costs
- Shorter tenant leases
- More flexible zoning laws
✔✔ C. Potential for higher rental returns
What does a high loan-to-value (LTV) ratio indicate?✔✔ A. A greater proportion of the home is financed
- The property has a higher resale value 2 / 4
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- The loan has already been repaid
- Property tax is very high
Which of these is a benefit of using a property management company?✔✔ A. Professional handling of tenant issues
- Direct ownership of the management firm
- Higher monthly loan payments
- Full waiver of taxes
What is the main advantage of a fixed-rate mortgage?✔✔ A. Predictable monthly payments
- Higher approval chance
- Variable interest rates
- Government forgiveness program
Which document shows who legally owns a property?✔✔ A. Title deed
- Lease agreement 3 / 4
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- Inspection report
- Utility bill
What is the function of escrow in a real estate transaction?
- Secure mortgage interest rates
- Increase down payment
- Adjust property taxes
✔✔ C. Hold funds or documents until conditions are met
What does "under contract" mean in a property sale?✔✔ A. Buyer and seller have agreed but not yet closed
- The property is already sold
- Price has not been determined
- The house is still under construction
Which of the following increases cash flow in rental property?✔✔ A. Reducing vacancy and increasing rent
- Adding more furniture
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