Get Real Estate Licensing Massachusetts-Real-Estate-Salesperson Exam Practice Questions - Real and Updated

Answer : B

The loan-to-value ratio (LTV) is the loan amount compared to the property's value or purchase price.

A lower LTV ratio means that the borrower must make a larger down payment, reducing the lender's risk.

A higher LTV ratio (A) increases risk and is more common in loose lending markets.

C (balloon payments) is a loan feature, not directly related to tightening standards.

D (waiving ECOA) is illegal; lenders cannot require waiving anti-discrimination protections.

Thus, in tighter credit markets, lenders protect themselves by requiring lower LTV ratios.

Answer : B

Massachusetts law (M.G.L. c. 112, 221--226, Home Inspector Licensing Act) regulates the relationship between real estate agents and home inspectors. To prevent conflicts of interest and protect consumers, a real estate broker or salesperson may not directly recommend one specific home inspector. Instead, they are required to provide buyers with the official list of licensed home inspectors prepared by the Commonwealth of Massachusetts.

This rule ensures impartiality and prevents brokers from steering buyers to inspectors who might be biased. Giving out business cards or providing a shortened list of inspectors violates this regulation. The buyer is free to choose any licensed inspector from the state-approved list.

Answer : C

Building codes establish minimum standards for construction and materials to protect public health and safety. These codes regulate structural integrity, electrical systems, plumbing, mechanical installations, and fire prevention requirements.

In Massachusetts, the State Building Code (780 CMR) governs these practices and is enforced by local building inspectors. Building codes ensure that properties meet safe construction standards and prevent hazardous conditions.

Zoning ordinances (A) regulate land use (e.g., residential vs. commercial), restrictive deed conditions (B) are private limitations placed in deeds, and zoning committees (D) are administrative, not regulatory. Therefore, only building codes directly address the protection of health and safety from poor construction practices.

Answer : D

A salesperson in Massachusetts, when selling their own property, has the same rights as a non-salesperson owner. The broker-salesperson distinction does not apply when an individual is selling their own property. A salesperson is not restricted from selling their own property, even if it is an income-producing property like an apartment complex.

The key distinction is that salespersons are prohibited from engaging in real estate activities for others without the supervision of a licensed broker. However, in this scenario, the salesperson is acting as an individual property owner and is free to advertise and sell the apartment complex without violating the law.

Therefore, the salesperson is not violating the law and has all the rights of a non-salesperson property owner.

Answer : A

Comprehensive and Detailed Explanation (150--250 words):

Lien priority generally follows the rule of ''first in time, first in right,'' meaning liens are paid in the order they are recorded. A subordination agreement is a legal document where a lienholder agrees to give up its normal priority position in favor of another lienholder. This often occurs when refinancing: a first mortgage lender will only agree to refinance if its lien remains in first position, so the holder of a second mortgage (or other lien) must sign a subordination agreement to remain subordinate.

This agreement does not initiate foreclosure (B), does not pledge property for collateral (C---that's the function of the mortgage itself), and does not assign rents (D---that would be an ''assignment of rents'' clause).

Massachusetts exam content emphasizes lien priority and the use of subordination agreements as key in refinancing scenarios. Thus, the correct answer is A.