Washington State Real Estate Practice Exam

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Prepare for the Washington State Real Estate Exam. Study with interactive quizzes featuring multiple-choice questions designed to reinforce your understanding of real estate principles and laws. Gain the confidence you need to excel in your certification exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What does it mean to have negative equity in a house?

The home is worth less than the mortgage owed
The home is fully paid off
The home is rented out
The homeowner has paid more than the market value

The correct answer is: The home is worth less than the mortgage owed

Having negative equity in a house means that the current market value of the home is less than the amount still owed on the mortgage. In this scenario, if a homeowner needs to sell their property, they would not be able to recoup the full mortgage amount, resulting in a financial loss. This situation can arise from various factors such as declining property values, economic downturns, or taking out a large mortgage relative to the home's market value. The other options describe different circumstances unrelated to negative equity. For example, a fully paid-off home indicates positive equity, while renting out a home doesn't necessarily reflect on equity at all. Similarly, having paid more than the market value relates to perceived investment rather than the current financial standing against the mortgage.