Comprehensive and Detailed Explanation (150–250 words):

A competitive market analysis (CMA) is a tool prepared by real estate licensees to help sellers establish a listing price and to help buyers determine an appropriate offer. It compares recent sales of similar properties, active listings, and expired listings to estimate a property’s fair market value.

A: Insurance companies use replacement cost appraisals, not CMAs.

B: Depreciable value is for tax accounting and appraisals, not CMAs.

C: Local tax assessments do not typically reflect current market value and are not the basis of a CMA.

Because it helps both sellers and buyers understand market value, the correct answer is D.

Comprehensive and Detailed Explanation (150–250 words):

When a mortgage is assumed, the buyer takes over the existing loan obligations. The buyer typically becomes personally liable for the debt if the lender approves the assumption, but the seller remains liable unless formally released by the lender through a novation.

Thus, the seller “may or may not be released” depending on lender approval. The assumption is different from a “subject to” transaction, where the buyer makes payments but is not personally liable.

A is incorrect: the buyer is not relieved of liability—they are assuming it.

C is incorrect: a new note is not signed; the existing obligation is assumed.

D is incorrect: transfer of a deed does not release liability; only lender approval/novation does.

Therefore, the correct answer is B.

The correct answer is B. An estate for years is a leasehold estate created for a definite period. Despite its name, the term does not actually need to be measured in years; it could be for months, weeks, or another precisely defined period.

Its defining characteristic is that the tenancy has a specified termination point.

Massachusetts Board landlord-tenant curriculum expressly distinguishes an estate for years from periodic tenancy or tenancy at will. It also recognizes that leases exceeding one year implicate Massachusetts Statute of Frauds requirements.

A periodic tenancy differs because it renews automatically from period to period until proper termination notice is given.

An estate for years is also a non-freehold or leasehold estate. The tenant receives a possessory interest rather than the landlord ' s fee ownership.

When the fixed contractual term expires, the tenant ' s right of possession under that estate generally terminates unless the parties establish a new tenancy.

Study Guide Reference: Contracts — Estate for Years versus Periodic Tenancy/Tenancy at Will.

The correct answer is A. A lis pendens—literally, a pending lawsuit—is recorded to notify parties examining title that litigation exists concerning rights to the particular real estate, its title, possession, use, or occupation.

Massachusetts Land Court guidance explains that a notice of lis pendens is a memorandum recorded to alert anyone examining title that the land or building is the subject of pending litigation. The memorandum identifies information including the parties, court, complaint date, municipality, and sufficient property description.

Because litigation can ultimately change or impair ownership rights, an effective lis pendens creates a significant cloud or warning on title. A purchaser who acquires an interest after notice is recorded may take subject to the outcome of that proceeding.

A lis pendens is not simply another name for a mortgage or ordinary debt lien. Its function is notice of litigation involving property rights.

Study Guide Reference: Transfer of Title — title examination, clouds on title, recording and lis pendens; M.G.L. c.184 §15.

The correct answer is C. There is no universal Massachusetts rule requiring every purchaser to provide a specific percentage or dollar amount of earnest money. The amount is ordinarily a negotiated contractual term between buyer and seller.

Earnest money demonstrates the buyer ' s commitment and can provide security for contractual obligations, but its treatment depends on the wording of the offer and subsequent purchase-and-sale agreement.

Massachusetts Board contract curriculum specifically lists earnest money among the key terms of an offer to purchase.

Once deposit money comes into a broker ' s possession, Massachusetts escrow regulations become critical. Unless the parties have agreed otherwise in writing, transaction funds must be placed promptly in the broker ' s escrow account, and the broker has responsibility for those funds until the transaction is consummated or terminated.

Candidates should therefore distinguish how much earnest money is negotiated from how deposited money must subsequently be handled.

Study Guide Reference: Contracts — Offers to Purchase, Earnest Money and Escrow Deposits.

The correct answer is A, a federally related mortgage loan. RESPA and Regulation X govern specified settlement-service practices connected with federally related mortgage loans.

The CFPB ' s current guidance explains that RESPA Section 8 applies to referrals and settlement services incident to or part of a real-estate settlement involving a federally related mortgage loan.

Settlement services can include mortgage origination, title work, closing services, appraisal, credit reporting, surveys, real estate brokerage services, mortgage brokerage, and other services associated with settlement.

RESPA does not simply apply because any real property changes hands. Certain transactions and loan types fall outside its coverage, and purely cash transactions do not automatically become federally related mortgage transactions.

A major RESPA examination topic is Section 8 ' s prohibition on kickbacks and unearned referral fees. Current Regulation X prohibits paying or accepting a thing of value for settlement-service referrals in covered transactions.

Study Guide Reference: Financing — RESPA and Federally Related Mortgage Loans.

The correct current answer is C, 3.5%. HUD states that an FHA borrower ' s down payment can be as low as 3.5% of the purchase price for qualifying properties and borrowers.

HUD ' s FHA policy materials describe the borrower ' s Minimum Required Investment as at least 3.5% of the adjusted value in the standard qualifying circumstance.

Therefore, the older source-bank statement that FHA permits a minimum down payment “as low as 3%” is outdated and should be corrected to 3.5% for current exam preparation.

The actual funds needed at closing can exceed the down payment because borrowers may also face closing costs, prepaid expenses, mortgage-insurance premiums, reserves, and other transaction charges. FHA also imposes credit, occupancy, property, appraisal, loan-limit, and underwriting requirements.

FHA insurance protects the lender; it does not constitute a government grant of the down payment.

Study Guide Reference: Financing — FHA Loans, Minimum Required Investment and Mortgage Insurance.

Comprehensive and Detailed Explanation (150–250 words):

An option to buy is a unilateral contract where the seller (optionor) gives the buyer (optionee) the exclusive right to purchase property within a set period at agreed terms. Ownership does not transfer when the option is signed — only when the optionee exercises the option and a purchase contract is completed.

A: The option itself does not transfer ownership.

B: Optionor has no further obligations beyond honoring the option.

D: Expiration ends the option with no transfer.

Thus, title passes only after the optionee exercises the option and proceeds with purchase.

The correct answer is B, approximately $385,106.

If the seller pays a 6% commission, the seller retains:

100% − 6% = 94%

Let the sale price equal P:

P × 0.94 = $362,000

Therefore:

P = $362,000 ÷ 0.94

P = $385,106.38

Rounded to the nearest dollar, the required price is $385,106.

The common mistake is to calculate 6% of $362,000 and add it to the desired net. That understates the required sale price because the commission must be calculated on the gross sales price, not on the seller ' s desired net.

Whenever a problem asks for a gross amount required to produce a specified net after a percentage expense, divide the desired net by the percentage retained.

If additional expenses such as conveyancing fees, mortgage payoff, taxes, or other seller costs were specified, they would also have to be incorporated.

Study Guide Reference: Real Estate Calculations — Brokerage Commissions and Seller-Net Calculations.

The correct answer is B, Aeolian soil. “Aeolian” describes geological material that is eroded, transported, or deposited by wind. Sand dunes are a classic example.

Alluvium or alluvial material, by contrast, is sediment deposited by running or moving water, particularly rivers or streams. This distinction corrects the false proposition tested earlier in Q63.

Reliction concerns land that becomes exposed through the gradual or permanent recession of water. It is therefore a change associated with water boundaries rather than wind deposition.

These concepts appear in real-estate courses because natural processes can alter the physical characteristics and, in some circumstances, legal boundaries of waterfront or coastal property. Related terms include accretion, erosion, avulsion, and reliction.

Candidates should remember the simple distinction:

Aeolian = wind.

Alluvial/alluvion = water deposition.

Avulsion = sudden water-related change.

Reliction = water recedes and exposes land.

Study Guide Reference: Property Ownership — water and natural-force effects on land; accretion, erosion, avulsion and reliction.