Real Estate Exam Part 1

A buyer agrees to all terms of a seller's offer except price. The buyer lowers the price by $1,000, signs the form, and mails it back to the seller. At this point, the seller's offer a. is void. b. becomes an executory contract. c. becomes a counteroffer. d. has been accepted.

A

A central goal of public land use planning is to a. balance individual property rights with the community's welfare. b. develop an accord between property owners and tenants. c. impede development by for-profit developers and construction contractors. d. subordinate private interests to the public good.

A

A construction boom in a market is an indication that prices a. have been increasing. b. have been declining. c. have been in equilibrium. d. have exceeded supply.

A

A distinguishing feature of a deed condition is that a. it gives the grantor the right to re-possess the property if the grantee violates the condition. b. it ceases to apply if a violation is allowed to continue for a certain period of time. c. it can be filed at any time after title has been transferred. d. it restricts who may own the property.

A

A good example of a unilateral contract is a. an option to purchase. b. a listing agreement. c. a personal services agreement. d. a sale contract.

A

A multiple listing authorization gives a broker what authority? a. To list the owner's property in a multiple listing service b. To sell several properties for the owner at once c. To sell or lease the property d. To delegate the listing responsibilities to other agents

A

A non-profit organization wants to erect a much-needed daycare center in a residential zone. Given other favorable circumstances, the local authorities grant permission by allowing a. a special exception. b. an illegal nonconforming use. c. a variance. d. a license.

A

A notable weakness of the sales comparison approach to value is that a. there may be no recent sale price data in the market. b. the approach is not based on the principle of substitution. c. the approach is only accurate with unique, special purpose properties. d. sale prices cannot be compared, since all real estate is different.

A

A principal discloses that she would sell a property for $375,000. During the listing period, the house is marketed for $425,000. No offers come in, and the listing expires. Two weeks later, the agent grumbles to a customer that the seller would have sold for less than the listed price. Which of the following is true? a. The agent has violated the duty of confidentiality. b. The agent has fulfilled all fiduciary duties, including confidentiality, since the listing had expired. c. The agent is violating the duties owed this customer. d. The agent has created a dual agency situation with the customer.

A

A section contains how many acres? a. 640 b. 320 c. 160 d. 40

A

A transaction broker should disclose his or her agency relationship to the transaction principals a. upon first substantive contact. b. upon completion of the listing agreement. c. immediately following completion of any offer. d. upon initial contact of any kind.

A

An agency relationship may be involuntarily terminated for which of the following reasons? a. Death or incapacity of the agent b. Mutual consent c. Full performance d. Renewal of the agent's license

A

An agent is operating as a disclosed dual agent on a transaction. In this case, the agent a. may not represent one party's interests to the detriment of the other. b. must withdraw from the relationships. c. must be obedient and loyal to both parties. d. must require that the principals share equally in paying the commission.

A

An agent owes customers several duties. These may be best described as a. fairness, care, and honesty. b. obedience, confidentiality, and accounting. c. diligence, care, and loyalty. d. honesty, diligence, and skill

A

An important difference between a judicial foreclosure and a non-judicial foreclosure is a. there is no right to redeem the property in a non-judicial foreclosure. b. a judicial foreclosure forces a sale of the property. c. a non-judicial foreclosure ensures that all liens are paid in order of priority. d. the lienor receives title directly in a non-judicial foreclosure.

A

An important legal feature of a contract is a. it represents a "meeting of the minds." b. it must use precise wording in a document. c. it is not voidable. d. it can be created only by an attorney.

A

An owner transfers title to a property to a buyer in exchange for a consideration. This is an example of a. voluntary alienation. b. escheat. c. hypothecation. d. estoppel.

A

As a component of real estate value, the principle of substitution suggests that a. if two similar properties are for sale, a buyer will purchase the cheaper of the two. b. if one of two adjacent homes is more valuable, the price of the other home will tend to rise. c. if too many properties are built in a market, the prices will tend to go down. d. people will readily move to another home if it is of equal value.

A

Highest and best use of a property is that use which a. is physically and financially feasible, legal, and the most productive. b. is legal, feasible, and deemed the most appropriate by zoning authorities. c. entails the largest building that zoning ordinances will allow developers to erect. d. conforms to other properties in the area.

A

If a person dies with no legal heirs or relations and has left no valid will, what happens to real property owned by that person? a. It is taken by the state according to the process called escheat. b. It is reconveyed to the previous owner in the chain of title. c. It is taken by the title insurance company according to the process called involuntary alienation. d. It is conveyed to the highest bidder at a public auction.

A

If a person having several heirs dies intestate, the property will a. pass to heirs by the laws of descent and distribution. b. escheat to the state. c. pass to the surviving spouse through elective share. d. pass to the surviving heirs according to the provisions of the will.

A

In addition to government entities, organizations that may be able to condemn property under the power of eminent domain include a. public utilities. b. financial institutions. c. major employers. d. neighborhood associations.

A

One difference between a cooperative estate and a condominium estate is that a. a default by a coop owner may cause a foreclosure on the entire property instead of just a single unit, as with a condominium. b. the condominium owner must pay expenses as well as rent. c. the coop owner owns stock and a freehold real estate interest whereas the condominium owner simply owns real estate. d. the condominium owner owns the common elements and the airspace whereas the coop owner only owns the apartment.

A

One of the most important actions an owner's agent is authorized to perform under an exclusive listing agreement is a. showing the property. b. assisting the customer in evaluating the relative merits of other properties. c. authorizing price adjustments in a timely manner. d. executing the sale or lease agreement.

A

One situation in which a zoning board might permit a variance is when a. it would cause the property owner unreasonable hardship to bring the property into compliance with zoning ordinances. b. the property owner is the one who brings the variance to the attention of the zoning board. c. the variance was caused by a contractor rather than by the property owner. d. the property is in conflict with no more than one zoning ordinance.

A

Real estate contracts that are not personal service contracts a. may be assigned. b. are not assignable. c. must be in writing. d. are exempt from the statute of frauds.

A

The "four unities" required to create a joint tenancy include which of the following conditions? a. Parties must acquire respective interests at the same time. b. Parties must be legally married at the time of acquiring interest. c. Parties must be family members. d. Parties must have joint financial resources.

A

The Torrens System differs from other title recording systems in that a. title is conveyed only when conveyance is registered on the title certificate. b. the Torrens System requires prior approval of a transaction before it can be registered. c. the Torrens System is not recognized by title insurance companies. d. it allows unrecorded encumbrances to cloud title.

A

The area running north and south between meridians is a a. range. b. township. c. strip. d. tier.

A

The first two steps in the cost approach are to estimate the value of the land and the cost of the improvements. The remaining steps are a. estimate depreciation, subtract depreciation from cost, and add back the land value. b. subtract deterioration from cost, estimate land depreciation, and total the two values. c. estimate depreciation of land and improvements, subtract from original cost. d. estimate obsolescence, subtract from the cost of land and improvements.

A

The legal description of a parcel in a subdivision that has been recorded with lot and block numbers on a plat of survey is a. the lot and block number, with section, township and meridian references. b. the standard rectangular survey description. c. the subdivision plat map. d. the lot and block number.

A

The major sources of real estate law are legislation at federal, state and local level, and a. court decisions. b. professional real estate associations. c. real estate commissions. d. local practices.

A

The meaning and import of the agency relationship should be disclosed to the client a. prior to completing a listing agreement. b. prior to or upon completion of an offer. c. upon the initial contact with the person. d. whenever a dual agency relationship is indicated.

A

The most significant difference between an owner representation agreement and a buyer representation agreement is a. the client. b. the commission amount. c. agency law applications. d. contract law applications.

A

The primary distinction between the legal concepts of real estate and real property is that a. real property includes ownership of a bundle of rights. b. real property includes improvements. c. real property is physical, not abstract. d. real estate can be owned.

A

The principal mechanism for implementing a master plan is a. zoning. b. referendum. c. public elections. d. property management.

A

The principal shortcoming of the gross rent multiplier approach to estimating value is that a. numerous expenses are not taken into account. b. the multiplier does not relate to the market. c. the method is too complex and cumbersome. d. the method only applies to residential properties.

A

The purpose of a covenant clause in a deed of conveyance is to a. state the grantor's assurance or warrant to the grantee that a certain condition or fact concerning the property is true. b. state the grantee's promise to use the property in a prescribed manner. c. warrant that the grantor has never encumbered title. d. describe the consideration that the grantee promises to give in return for title.

A

The right to use real property is limited by a. the right of others to use and enjoy their property. b. the police. c. taxation and subordination. d. Title 12 of the U.S. Civil Code.

A

The statute of limitations requires that parties to a contract who have been damaged or who question the contract's provisions a. must act within a statutory period. b. must select a specific, limited course of action for recouping their losses. c. must arbitrate prior to taking court action. d. must wait a statutory period before they may take legal action.

A

The type of listing that assures a broker of compensation for procuring a customer, regardless of the procuring party, is a(n) a. exclusive right-to sell agreement. b. exclusive agency agreement. c. open listing. d. net listing.

A

To be valid, a local zoning ordinance must a. reasonably promote community health, safety and welfare. b. comply with federal zoning laws. c. apply only to unique properties. d. be published periodically in the local newspaper.

A

Two important concerns of retail property users are a. trade area population and spending patterns. b. quality of life and dwelling amenities. c. costs of occupancy and building efficiency. d. environmental regulations and access by suppliers.

A

Under the doctrine of littoral rights, an owner claims ownership of all of the land underlying a lake where there are three other abutting property owners. Which of the following is true? a. The owner's claim is invalid, because the state owns the underlying land. b. The owner's claim is invalid, because the underlying land is shared equally with the other owners. c. The owner's claim is invalid, because he may only own underlying land to the middle of the lake. d. The owner's claim is valid, because the lake is navigable.

A

Upon the death of the owner, a life estate passes to a. the original owner or other named person. b. the owner's heirs. c. the state. d. the owner's spouse.

A

What distinguishes a lien from other types of encumbrance? a. It involves a monetary claim against the value of a property. b. It lowers the value of a property. c. It is created voluntarily by the property owner. d. It attaches to the property rather than to the owner of the property.

A

What is the principal purpose underlying legal descriptions of real property? a. To create a consistent, unchanging standard for locating the property. b. To eliminate all possible boundary disputes. c. To comply with federal laws. d. To eliminate cumbersome metes and bounds descriptions.

A

When a single individual or entity owns a fee or life estate in a real property, the type of ownership is a. tenancy in severalty. b. tenancy by the entireties. c. absolute fee simple. d. legal fee simple.

A

Which of the following describes a situation in which an easement might be created against the wishes of the property owner? a. The property has been continuously used as an easement with the knowledge but without the permission of the owner for a period of time. b. The owner of an adjoining property asks the property owner for an easement, is refused, and then uses the property anyway without the knowledge of the owner. c. The owner of an adjoining property decides he needs to widen his driveway by sharing his neighbor's driveway and sues in court to create an easement by necessity. d. The owner of an adjoining property grants an easement to a third party that includes an easement on the first property.

A

Which of the following happens when a leased property is sold? a. The buyer acquires title subject to the lease. b. The lease is cancelled. c. The lease expires within thirty days unless renewed. d. A new lease is automatically executed.

A

Which of the following is an important economic characteristic of real estate? a. The demand must literally come to the supply. b. Real estate is a highly liquid product. c. The product is quick to adapt to market changes. d. The market is centralized.

A

Which of the following is considered real property? a. A tree growing on a parcel of land b. A tree that has been cut down and is lying on a parcel of land c. A tractor used to mow grass on a parcel of land d. A prefabricated shed not yet assembled on a parcel of land

A

Which of the following is included in the legal concept of land? a. The surface of the earth and all natural things permanently attached to the earth b. Only the surface of the earth that is delineated by boundaries c. The surface of the earth except for lakes and streams d. Everything above, on and below the surface of the earth

A

Which of the following is true of a cooperative? a. A cooperative may hold an owner liable for the unpaid operating expenses of other owners. b. The owners have a fee simple interest in the airspace of their respective apartments. c. Owners may retain their apartments even if they sell their stock in the cooperative. d. The proprietary lease is guaranteed to have a fixed rate of rent over the life of the lease term.

A

Which of the following is true of a homestead? a. A homestead interest cannot be conveyed by one spouse. b. A homestead interest cannot be passed to the children of the head of household. c. A homestead interest is a form of conventional life estate. d. A homestead is a primary or secondary residence occupied by a family.

A

Which of the following lease types conveys rights other than the rights to exclusive use and occupancy of the entire property? a. A rights lease b. A percentage lease c. A gross lease d. A net lease

A

Which of the following professionals involved in the real estate business are most concerned about procuring buyers and sellers for clients? a. Brokers and agents b. Property managers c. Corporate real estate managers d. Appraisers

A

10. A primary objective of residential zoning is to a. control the value ranges of homes in a neighborhood. b. regulate density. c. ensure that only a limited amount of commercial and industrial activity is permitted in a particular residential zone. d. maximize intensity of usage.

B

A "protection period" clause in an exclusive listing provides that a. the owner is protected from all liabilities arising from the agent's actions performed within the agent's scope of duties. b. the agent has a claim to a commission if the owner sells or leases to a party within a certain time following the listing's expiration. c. agents are entitled to extend a listing agreement's term if a transaction is imminent. d. an owner is not liable for a commission if a prospective customer delays in completing an acceptable offer.

B

A broker is hired to procure a customer for a client. In order to earn compensation, the agent must procure a customer who a. has seen the property and reviewed all documents. b. is ready, willing, and able to transact. c. has completed an acceptable sale or lease contract. d. will successfully complete the transaction at closing.

B

A client suddenly decides to revoke an exclusive right-to-sell listing midway through the listing term. The reason stated: the client did not like the agent. In this case, a. the client is criminally liable for discrimination on the basis of the cause for cancellation. b. the client may be liable for a commission and marketing expenses. c. the agent can sue the client for specific performance, even if no customer had been located. d. the agent has no recourse but to accept the revocation.

B

A contract may be defensibly terminated without damages if a. it is abandoned by one party. b. it is impossible to perform. c. it is deemed to be valid. d. both parties breach its terms.

B

A court renders a judgment which authorizes a lien to be placed against the defendant's house, car, and personal belongings. This is an example of a a. specific judgment lien. b. general judgment lien. c. voluntary judgment lien. d. superior judgment lien.

B

A defaulting borrower may avoid foreclosure by giving the mortgagee a. a promissory note. b. a deed in lieu of foreclosure. c. a redemption notice. d. a lis pendens.

B

A grocer temporarily installs special fruit and vegetable coolers in a leased grocery store in order to prevent spoilage. The coolers would be considered which of the following? a. Trade fixtures that are real property b. Trade fixtures that are personal property c. Permanent fixtures that are real property d. Permanent fixtures that are personal property

B

A home is located in a neighborhood where homeowners on the block have failed to maintain their properties. This is an example of a. curable external obsolescence. b. incurable economic obsolescence. c. functional obsolescence. d. physical deterioration.

B

A homeowner encourages an agent to aggressively persuade a buyer to purchase his house by overinflating historical appreciation rates. The agent and the seller agree that 25% annual appreciation would work, even though this figure is four times actual rates. The pitch succeeds, and the seller accepts the buyer's resulting offer. This contract is a. enforceable. b. voidable. c. void. d. valid.

B

A landlord and tenant complete a one-year lease. The following week, the landlord dies. Which of the following is true? a. The lease is cancelled and must be re-written. b. The tenant must continue to abide by all lease terms. c. The tenant may annul the lease at his or her option. d. The landlord's heirs may cancel the lease at their option.

B

A landlord suddenly terminates a tenant's lease in violation of the lease terms. The tenant takes action to compel the landlord to comply with the violated terms. This is an example of a suit for a. rescission. b. specific performance. c. damages. d. forfeiture.

B

A one-time tax levied on a property for purposes of recording a transaction is called a. an intangible sales tax. b. a documentary stamp tax. c. an ad valorem tax. d. a franchise tax.

B

A one-year lease on a house has expired, but the tenant continues sending monthly rent checks to the owner, and the owner accepts them. What kind of leasehold estate exists? a. Estate for years b. Estate from period to period c. Estate at will d. Estate at sufferance

B

A principal empowers an agent to conduct the ongoing activities of one of her business enterprises. This is an example of a. limited agency. b. general agency. c. universal agency. d. special agency.

B

A principal instructs an agent to market a property only to families on the north side of town. The agent refuses to comply. In this case, a. the agent has violated fiduciary duty. b. the agent has not violated fiduciary duty. c. the agent is liable for breaching the listing terms. d. the agent should obey the instruction to salvage the listing.

B

A property owner can avert the danger of losing title by adverse possession by a. recording proof of ownership in county title records. b. inspecting the property and evicting any trespassers found. c. claiming hostile and notorious possession. d. filing a claim of right with the county recorder.

B

A property owner has an easement appurtenant on her property. When the property is sold to another party, the easement a. terminates. b. transfers with the property. c. transfers with the owner to a new property. d. becomes a lien on the property.

B

A property owner is precluded by deed restriction from developing a thirty foot boat dock. The limitation prompts the owner to sell to another party. The new owner a. is free to build the dock since the next door neighbor built a similar dock two weeks later. b. takes title subject to the same restriction. c. can build the dock with special permission from the zoning board. d. may build, since the restriction is extinguished by the sale.

B

A property owner who is selling her land wants to control how it is used in the future. She might accomplish her aim by means of a. an injunction. b. a deed restriction. c. an easement. d. a land trust.

B

A property seller empowers an agent to market and sell a property on his behalf. This is an example of a. general agency. b. special agency. c. universal agency. d. no agency.

B

A property survey reveals that a new driveway extends one foot onto a neighbor's property. This is an example of a. a easement appurtenant. b. an encroachment. c. an easement by prescription. d. a party wall easement.

B

A seller immediately accepts a buyer's offer but waits eight days before returning the accepted document to the buyer. Meanwhile, the offer has expired. Which of the following is true? a. The buyer is bound to the contract since it was accepted immediately. b. The buyer has no obligations to the seller whatsoever. c. The buyer may not rescind the expired offer. d. The seller may sue for specific performance.

B

A significant difference between an appraisal and a broker's opinion of value is a. the appraiser tends to use only one or two of the approaches to value. b. the broker may not be a disinterested party. c. the broker is subject to government regulation in generating the opinion. d. the appraiser uses less current market data.

B

A tenant representative should disclose his or her agency relationship to the owner's agent a. immediately prior to the initial contact. b. upon initial contact. c. immediately prior to substantive contact. d. immediately following any offer executed by the landlord.

B

A town has a rapidly growing population, but there are no longer any vacant lots around the lake to build more houses. In this case, it is likely that the price of existing homes on the lake a. will stabilize, since the population must stabilize. b. will increase. c. will decline, since no further building can take place. d. will not show any predictable movement.

B

Agent Bob, who works for Broker Bill, obtains an owner listing to lease a building. Bill's other agent, Sue, locates a tenant for Bob's listing. In the absence of any arrangement to the contrary, Broker Bill in this instance is a. an implied agent. b. a dual agent. c. a single agent. d. a subagent.

B

An agent fails to discover flood marks on the walls in the basement of a property. The agent sells the property, and the buyer later sues the agent for failing to mention the problem. In this case, the agent a. may be guilty of intentional misrepresentation. b. has an exposure to a charge of negligent misrepresentation. c. has little exposure, since the problem was not mentioned on the signed disclosure form. d. is not vulnerable, since the problem was not discovered.

B

An owner agrees to pay a broker for procuring a tenant unless it is the owner who finds the tenant. This is an example of a(n) a. exclusive right-to sell agreement. b. exclusive agency agreement. c. open listing. d. net listing.

B

Counties and municipalities have the legal right to control land use due to a. the doctrine of appropriation. b. delegation of authority by state-level enabling acts. c. custom and tradition. d. consensus of the local community through referendum.

B

Dower refers to a. joint tenancy of husband and wife. b. a wife's life estate interest in her husband's property. c. a wife's homestead interest. d. a child's life estate interest in his or her parents' homestead.

B

Four principal determinants of value underlying the price for a product are a. durability, quality, scarcity, and materials. b. desire, utility, scarcity, and purchasing power. c. popularity, utility, quality, and discount. d. desire, costs, convenience, and time.

B

How is a conventional life estate created? a. It happens automatically when title transfers unless a fee simple is specifically claimed. b. A fee simple owner grants the life estate to a life tenant. c. It is created by judicial action. d. It is created by a statutory period of adverse possession.

B

If a parcel does not have a lot and block number and is too irregular to be described as a fraction of a section, the legal description a. is the street address. b. will include a metes and bounds description. c. will use an estimate of the sectional fraction. d. will create a special reference number.

B

If the monthly rent of a property is $3,000, and the gross rent multiplier (GRM) is 80, what is the value of the property? a. $45,000 b. $240,000 c. $267,000 d. $288,000

B

In the sales comparison approach, an adjustment is warranted if a. the buyer obtains conventional financing for the property. b. the seller offers below-market seller financing. c. a comparable is located in another, albeit similar neighborhood d. one property has a hip roof and the other has a gabled roof.

B

The abbreviation POB stands for a. perimeter of boundaries. b. point of beginning. c. point of bounds. d. plat of boundary.

B

The amount of a real estate broker's commission is a. established among competing brokers. b. established through negotiation with clients. c. established by the Board of Realtors. d. established by state real estate license law.

B

The approval process for development of multiple properties in an area includes submission of a. a covenant of restriction. b. a plat of subdivision. c. a court order. d. a developer's pro forma.

B

The area running east and west between base lines parallels is a a. range. b. tier. c. parameter. d. parallel.

B

The cost of constructing a functional equivalent of a subject property is known as a. reproduction cost. b. replacement cost. c. restitution cost. d. reconstruction cost.

B

The foremost factor contributing to commercial and residential demand in a market is a. marketing. b. base employment. c. existing supply of properties. d. household income.

B

The guardian for a mentally incompetent party enters into an oral contract with another party to buy a trade fixture. This contract a. does not meet validity requirements. b. is possibly valid and enforceable. c. must be in writing to be valid. d. is valid but unenforceable.

B

The income capitalization approach to appraising value is most applicable for which of the following property types? a. Single family homes b. Apartment buildings c. Undeveloped land d. Churches

B

The purpose of the Statute of Frauds is to a. invalidate certain oral contracts. b. require certain conveyance-related contracts to be in writing. c. nullify oral leases and listing agreements. d. eliminate fraud in real estate contracts.

B

The roof of a property cost $10,000. The economic life of the roof is 20 years. Assuming the straight-line method of depreciation, what is the depreciated value of the roof after 3 years? a. $10,000 b. $8,500 c. $7,000 d. $1,500

B

To be marketable, title must be a. registered in Torrens. b. free of undisclosed defects and encumbrances. c. abstracted by an attorney. d. guaranteed by a title certificate.

B

What are the three unique physical characteristics of land? a. Fixed, unchangeable, homogeneous b. Immobile, indestructible, heterogeneous c. Three-dimensional, buildable, marketable d. Natural, measurable, inorganic

B

What distinguishes a freehold estate from a leasehold estate? a. A freehold includes the right to dispose or use. b. A leasehold endures only for a specific period of time. c. A freehold cannot be defeasible. d. A leasehold is subject to government restrictions.

B

What is meant by a "lien-theory" state? a. A state in which liens are given priority over other encumbrances b. A state in which a mortgagor retains title to the property when a mortgage lien is created c. A state in which the holder of a mortgage lien receives title to the mortgaged property until the debt is satisfied d. A state in which liens exist in theory but not in practice

B

What is one important difference between a sublease and a lease assignment? a. In an assignment, responsibility for the original lease is transferred completely to the assignee. b. In a sublease, the original tenant retains primary responsibility for performance of the original lease contract. c. A sublease does not convey any of the leasehold interest. d. A sublease conveys the entire leasehold interest.

B

What part of a non-navigable waterway does the owner of an abutting property own? a. To the low-water mark b. To the middle of the waterway c. To the high-water mark d. None

B

Which of the following is a distinctive feature of metes and bounds descriptions? a. They use meridians and base lines. b. They identify an enclosed area, beginning and ending at the same point. c. They use lot and block numbers.as the street address. d. They incorporate elevation into the descriptions.

B

Which of the following is an illustration of the legal concept of elective share? a. A surviving spouse places a lien on a debtor's property. b. A widow who was excluded from a will makes a claim to a portion of the couple's principal residence. c. A spouse who loses her home because of her husband's gambling debt sues in court for exemption from the debt. d. A widower whose spouse died without a will sues to change the provisions of the will.

B

Which of the following ways of specializing is common in the real estate brokerage business? a. By type of house b. By geography c. By financial background of client d. By type of mortgage

B

If net income on a property is $20,000 and the cap rate is 5%, the value of the property using the income capitalization method is a. $100,000. b. $400,000. c. $1,000,000. d. $4,000,000.

B income(I)/ rate (R) = value (V)

This protects creditors against loss of collateral in an indebted business through the undisclosed sale of the business's inventory.

Bulk Sales Act

A certain legal description contains the phrase "...southeasterly along Happ Road to the stone landmark..." What kind of description is this? a. Plat survey plat of survey is b. Government grid c. Metes and bounds d. Rectangular survey

C

A contract is discharged whenever a. there is a cooling period. b. both parties have signed it. c. it is performed. d. the parties agree to their respective promises.

C

A county or municipal authority usually grants a certificate of occupancy for new construction only after a. all contractors have been paid for services. b. all work has been completed for at least thirty days. c. the construction complies with building codes. d. the tax assessor has valued the improvement.

C

A datum is a reference point used for legal descriptions of a. agricultural and ranch properties. b. properties that straddle state boundaries. c. properties located above or below the earth's surface. d. irregularly-shaped properties.

C

A declaration of restriction in a planned unit development is unlike a deed restriction in that a. it applies only to aesthetic standards of property use. b. it attaches to rights rather than interests. c. it cannot be terminated by a single individual. d. it takes effect only when approved by a homeowners' association.

C

A homeowner borrows money from a lender and gives the lender a mortgage on the property as collateral for the loan. The homeowner retains title to the property. This is an example of a. intermediation. b. forfeiture. c. hypothecation. d. subordination.

C

What is the value of something based upon?

1. How much do I desire it? 2. How useful is it? 3. How scarce is it? 4. Am I able to pay for it?

What terminates an offer?

1. acceptance 2. rejection 3. revocation 4. expiration 5. counteroffer 6. death or insanity

What are the distinguishing features of exclusive buyer agency clause from exclusive right-to-sell clause?

1. buyer's representation of exclusivity 2. agent compensation 3. buyer's acknowledgement of other buyers

A homeowner has hired a contractor to build a room addition. The work has been completed and the contractor has been paid for all work and materials but fails to pay the lumber yard for a load of lumber. What potential problem may the home owner experience? a. The contractor may place a mechanic's lien for the amount of the lumber against the homeowner's real property. b. The lumber yard may place a vendor's lien against the contractor and the homeowner for the amount of the lumber. c. The lumber yard may place a mechanic's lien for the amount of the lumber against the homeowner's real property. d. The homeowner has no liability because the contractor was paid for the lumber.

C

A landlord promises to compensate a broker for procuring a tenant, provided the broker is the procuring cause. This is an example of a(n) a. exclusive right-to sell agreement. b. exclusive agency agreement. c. open listing. d. net listing.

C

A lease contract is best described as a. a temporary transfer of legal title. b. an instrument of conveyance of limited title. c. a conveyance of a possessory interest. d. a title conveyance in exchange for rent.

C

A property that conformed with zoning ordinances when it was developed but does not conform to new ordinances is said to be a. a special exception. b. a variance. c. a legal nonconforming use. d. an anomaly.

C

A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, the status of the offer is a. an accepted offer, therefore a valid contract. b. an invalid contract. c. a counteroffer. d. an invalid offer.

C

A unique feature of a land trust is that a. the trustee controls both the trustor and the beneficiary. b. the trustee takes ownership of both land and improvements. c. the identity of the beneficiary may not be identified. d. the properties in the trust are probated in the states where the properties are located.

C

According to contract law, every valid contract is also a. void. b. enforceable. c. enforceable or unenforceable. d. voidable.

C

An affirmative easement gives the benefited party a. the right to possess a defined portion of another's real property. b. the right to prevent the owner of a real property from using it in a defined way. c. the right to a defined use of a portion of another's real property. d. the right to receive a portion of any income generated by another's real property.

C

An agent's performance of due diligence concerning a listing can best be described as a. initiating the marketing plan on or before a deadline. b. expending an amount of effort that is commensurate with the nature and size of the transaction. c. ascertaining the facts about the client and the property at the onset of the listing period. d. helping customers satisfy their needs to the extent they are entitled.

C

An interest in real estate is best defined as ownership of a. the full bundle of rights to real property. b. an estate. c. one or more of the bundle of rights to real property. d. the right to possession and use of real property

C

An outside broker locates a seller for a buyer representative's client. In this instance, the outside broker is acting as a. a single agent. b. a dual agent. c. a subagent. d. a secret agent.

C

An unscrupulous investor completes a contract with a buyer to sell a property the investor does not own. The sale contract for this transaction a. is voidable. b. must be in writing. c. is void. d. is illegal yet potentially enforceable.

C

For a deed to convey title, it is necessary for the deed to be a. on a standard form. b. certified by the grantor. c. accepted by the grantee. d. signed by the grantee.

C

If a lease does not state a specific ending date, when does it terminate? a. Immediately, since it is an invalid lease b. After one year c. When either party gives proper notice d. Whenever the property is sold

C

If commercial real estate rental prices are falling in a market, it is likely that a. demand has outstripped supply of space. b. the market is in equilibrium. c. the market is over-supplied. d. employment is increasing.

C

Implied agency arises when a. an agent accepts an oral listing. b. a principal accepts an oral listing. c. a party creates an agency relationship outside of an express agreement. d. a principal agrees to all terms of a written listing agreement, whether express or implied.

C

In accordance with the Statute of Frauds, a. leases in excess of one year must be recorded to be enforceable. b. oral leases are not enforceable. c. a five-year lease must be in writing to be enforceable. d. an unwritten lease is fraudulent.

C

In an agency relationship, the principal is required to a. promote the agent's best interests. b. accept the advice of the agent. c. provide sufficient information for the agent to complete the agent's tasks. d. maintain confidentiality.

C

In appraisal, loss of value in a property from any cause is referred to as a. deterioration. b. obsolescence. c. depreciation. d. deflation.

C

In most jurisdictions, the master plan is managed by a. the mayor or county superintendent. b. the Board of Equalization. c. the planning commission. d. the zoning board of adjustment.

C

Net operating income is equal to a. gross income minus potential income minus expenses. b. effective gross income minus debt service. c. potential gross income minus vacancy and credit loss minus expenses. d. effective gross income minus vacancy and credit loss.

C

Owner agents must disclose their agency relationship to tenants or buyers a. immediately prior to the initial contact. b. upon initial contact. c. whenever substantive contact is made. d. immediately following any offer executed by the customer.

C

Price is best described as a. what suppliers charge for goods and services. b. the amount of money consumers are willing to pay for a product or service. c. the amount of money a buyer and seller agree to exchange to complete a transaction. d. a control placed on prices by the federal government.

C

Property management and real estate asset management are both real estate management professions. The primary distinction between the two is that a. property managers always report to an asset manager. b. asset managers have greater knowledge of a property's finances. c. property managers handle day-to-day operations while asset managers manage portfolios of properties. d. asset managers are primarily responsible for maintenance technicians.

C

The distinguishing features of a condominium estate are a. ownership of a share in an association that owns one's apartment. b. tenancy in common interest in airspace and common areas of the property. c. fee simple ownership of the airspace in a unit and an undivided share of the entire property's common areas. d. fee simple ownership of a pro rata share of the entire property.

C

The duties of an agent acting as a facilitator are most similar to those of a a. subagent. b. single agent. c. dual agent. d. implied agent.

C

The fundamental purpose of recording instruments that affect real property is to a. prove ownership of the property. b. avoid adverse possession. c. give constructive notice of one's rights and interests in the property. d. assemble all relevant documents in a single place.

C

The process of enforcing a lien by forcing sale of the lienee's property is called a. execution. b. attachment. c. foreclosure. d. subordination.

C

The steps in the income capitalization approach are: a. estimate gross income, multiply times the gross income multiplier. b. estimate effective income, subtract tax, apply a capitalization rate. c. estimate net income, and apply a capitalization rate to it. d. estimate potential income, apply a capitalization rate to it.

C

The steps in the market data approach are a. choose nearby comparables, adjust the subject for differences, estimate the value. b. gather relevant price data, apply the data to the subject, estimate the value. c. select comparable properties, adjust the comparables, estimate the value. d. identify previous price paid, apply an appreciation rate, estimate the value.

C

The type of statutory deed that contains the most complete protection for the grantee is a a. guardian's deed. b. special warranty deed. c. general warranty deed. d. quitclaim deed.

C

Three people have identical rights but unequal shares in a property, share an indivisible interest, and may sell or transfer their interest without consent of the others. This type of ownership is a. joint tenancy. b. equal ownership. c. tenancy in common. d. estate in severalty.

C

Two important concerns of office property users are a. trade area population and visibility. b. convenience and neighborhood make-up. c. costs of occupancy and building efficiency. d. environmental regulations and zoning.

C

What distinguishes a pur autre vie life estate from an ordinary life estate? a. The pur autre vie estate endures only for the lifetime of the grantor. b. The pur autre vie estate endures only for the lifetime of the grantee. c. The pur autre vie estate endures only for the lifetime of a person other than the grantee. d. The pur autre vie estate cannot revert to the grantor.

C

What is "chain of title?" a. The list of all parties who have ever owned real estate. b. The bundle of rights linked to the recorded title to a parcel. c. A chronology of successive owners of record of a parcel of real estate. d. Involuntary conveyance of title by statutory rules of descent.

C

What is the "Doctrine of Prior Appropriation?" a. A pre-emptive zoning ordinance b. The right of government to confiscate land and improvements c. A doctrine that gives the state control of water use and the water supply d. A real estate tax applied to owners of water rights

C

What is the primary danger of allowing an encroachment? a. An encroachment automatically grants the benefiting party an easement. b. The encroached party may be liable for additional real estate taxes to cover the area being encroached upon by the neighboring property. c. Over time, the encroachment may become an easement by prescription that damages the property's market value. d. An encroachment creates a lien.

C

What is the primary thrust of federal involvement in real estate law? a. Taxation b. Licensing c. Broad regulation of usage d. Zoning

C

When an owner leases her property, she temporarily relinquishes the right to a. transfer the property. b. encumber the property. c. occupy the property. d. maintain the property.

C

Which of the following contracts must be in writing to be enforceable? a. A parol contract. b. A six-month lease. c. A two-year lease. d. An executory contract.

C

Which of the following is included in the bundle of rights inherent in ownership? a. To inherit b. To tax c. To transfer d. To vote

C

Which of the following is the best definition of real estate? a. Land and personal property b. Unimproved land c. Land and everything permanently attached to it d. An ownership interest in land and improvements

C

Which of the following life estates is created by someone other than the owner? a. Conventional life estate b. Ordinary life estate c. Legal life estate d. Community property life estate.

C

With the exception of a Torrens certificate, the best evidence of marketable title is a. a signed deed. b. a title certificate. c. title insurance. d. an attorney's opinion.

C

Zoning, building codes, and environmental restrictions are forms of local land use control known as a. force majeure. b. pre-emption. c. police power. d. concurrency.

C

How many acres are there in the S 1/2 of the NW ¼ of Section 3? a. 20 acres b. 40 acres c. 80 acres d. 160 acres

C, formula is to multiply denominators of section fractions, and divide product by 640

True or False An agency relationship requires compensation.

False!

This defined participation in a limited partnership as a security

Federal Securities Act of 1933

The primary federal law outlining securities registration and licensing is what? This law requires that any person selling securities must be registered, or licensed, with the Securities and Exchange Commission (SEC).

Federal Securities Exchange Act of 1934

These regulations banned lead in the manufacture of paint and established disclosure requirements and guidelines for testing and remediation.

Lead-based paint ban (1978) and Residential Lead-based Paint Hazard Reduction Act (1992, 1996).

This act created the EPA, giving them a mandate to establish environmental standards for land use planning.

National Environmental Policy Act (1969)

What should be done before selling a property with an environmental problem.

Phase I audit or ESA

These acts addressed disposal of solid and toxic wastes and measures for managing waste. In addition, the Superfund act provided money for hazardous waste disposal and the authority to charge cleanup costs to responsible parties.

Resource Recovery Act (1970), the Resource Conservation and Recovery Act (1976), the Comprehensive Environmental Response, Compensation and Liability Act (Superfund) (1980), the Superfund Amendment and Reauthorization Act (1986).

This prohibits restraint of interstate and foreign trade by conspiracy, monopolistic practice, and certain forms of business combinations , or mergers.

Sherman Antitrust Act 1890

if the syndicator, the property, and all investors are located within a single state, the syndication is exempt from registration

The intrastate Exemption

Which of the following rights is conveyed with a leasehold estate?

The right to possess and use the premises.

This regulates the sale of personal property on a state-by-state basis, and forms the basis for standardized sale documents.

Uniform Commercial Code (UCC)

These acts addressed standards to control water pollution and industrial wastes from the standpoints of future prevention as well as remediation of existing pollution.

Water Quality Improvement Act (1970), the Water Pollution Control Act amendment (1972), the Clean Water Act Amendment (1977).

A corporation would like an agent to sell its country grocery store. Included in the sale are the inventory, equipment, and real property. The agent locates a full-price buyer who does not want to acquire any of the business's actual or potential liabilities. To do this transaction, the corporation would most likely a. propose an asset sale. b. undertake a stock sale. c. propose an exchange. d. enter into a sale-leaseback transaction.

a

Among the usual remedies available to the injured party if tenant or landlord defaults on the terms of a lease is the right to a. sue to compel performance of the contract. b. enter a lien against the other's estate. c. lock the other party out of the premises. d. apply the security deposit to legal expenses.

a

An important distinction between an independent contractor salesperson (IC) and an employee salesperson is a. the IC is responsible for taxes; the broker does not withhold. b. the IC must obtain his or her own training; it is not provided by the broker. c. the employee is not entitled to company benefits. d. the IC must abide by all office policies and meeting schedules.

a

Real estate sales agents are legally authorized to a. represent their employing broker in procuring clients and customers. b. act directly on a client's behalf to discharge the broker's listing responsibilities. c. negotiate and execute contracts for sale on behalf of the client. d. take on the listing responsibilities for other listings in MLS.

a

The three principal brokerage firms in a market agree to pay sales agents 15% more than any other competitor currently in practice. This is an example of a. collusion. b. price fixing. c. allocation of markets. d. steering.

a

Which of the following is a valid distinction between a corporation and a proprietorship? a. A corporation has perpetual existence; a proprietorship terminates upon the owner's death. b. Proprietorships are liable for their actions, while corporations are not. c. Proprietorships may broker real estate, while corporations may not. d. Corporations are not subject to taxation, while proprietorships are.

a

A sale contract may specifically deal with tax withholding responsibility if the seller is a foreigner. What is this responsibility? a. The buyer must withhold 15% of the purchase price at closing for the seller's capital gain tax payment. b. The buyer must withhold 15% of the purchase price at closing for the buyer's capital gain tax payment. c. The seller must withhold 15% of the buyer's funds as a deposit on the buyer's capital gain tax. d. The seller must withhold 15% of the sale price to pay the seller's capital gain tax.

a. The buyer must withhold 15% of the purchase price at closing for the seller's capital gain tax payment. (199)

A sale contract contains an open-ended financing contingency: if the buyer cannot obtain financing, the deal is off. Six months later, the buyer still cannot secure financing. Which of the following is true? a. The seller may cancel the contract, since it can be ruled invalid. b. The buyer can continue indefinitely to seek financing, and the seller's property must remain off the market. c. The seller must return the buyer's deposit. d. The seller can force a lender to commit to a loan under fair financing laws.

a. The seller may cancel the contract, since it can be ruled invalid. (196)

A tenant exercises an option to buy a condominium. The landlord agrees, but raises the agreed price by $3,000, claiming financial distress. The landlord does, however, offer the tenant two months of free rent before closing as an offset. Which of the following is true? a. The tenant can force the sale at the original terms. b. The landlord has taken a fully legal action which the tenant must abide by. c. The option is null, and the optionee may reclaim any option money paid. d. The landlord must offer sufficient free rent to equal the $3,000 price increase.

a. The tenant can force the sale at the original terms. (201)

The purpose of an escrow account is to a. entrust deposit monies to an impartial fiduciary. b. enable the principals to access the funds in escrow without interference from the other party. c. ensure that the broker receives her commission. d. prevent the buyer from withdrawing the offer.

a. entrust deposit monies to an impartial fiduciary. (195)

During the executory period of a sale contract, the buyer acquires an equitable title interest in the property. This means that a. the buyer can potentially force the seller to transfer ownership. b. both parties own the property equally. c. if contract contingencies are not met, the buyer takes legal title. d. the buyer owns equity in the subject property to the extent of the funds deposited in escrow.

a. the buyer can potentially force the seller to transfer ownership. (195)

A broker is reviewing the balance sheet of her new listing to sell a business. Three of the entries on the books are licenses, trademarks, and goodwill. These would be examples of a. tangible assets. b. intangible assets. c. short-term liabilities. d. long-term liabilities.

b

A lease automatically terminates under which of the following circumstances? a. The tenant fails to pay rent. b. The leased property is foreclosed. c. The tenant goes out of business. d. The landlord cancels the lease.

b

A primary theme of the Uniform Residential Landlord and Tenant Act is that both landlord and tenant a. waive their rights to sue for damages. b. bargain with each other in good faith. c. give sixty days' notice of intent to terminate the lease. d. observe the Realtor's Code of Ethics.

b

A salesperson's commission rate and structure is established by a. state regulation. b. competitive conditions. c. agreement with other brokers in the market. d. negotiations with the client.

b

A syndication is a. a group of general partners who invest in and manage real estate for a profit. b. a group of inactive investors who join with a number of active partners to purchase, manage, and sell properties for a profit. c. a network of active brokers who purchase and sell properties. d. an organization engaged in illegal property acquisition and sale.

b

Conversion is the act of a. mixing escrow funds with the broker's operating funds. b. appropriating client or customer deposits for use in the agency's business. c. converting an offer into a binding contract. d. converting escrow funds into equity funds in a property at the closing.

b

In marketing an owner's property, the objective of an agent's marketing plan is to a. actively participate in the multiple listing service. b. expose the property to the maximum number of prospects in relation to marketing expenses and efforts. c. ensure that a transaction occurs that will compensate the agent. d. convince prospects of the property's superiority over other properties.

b

In order to sell interests in a syndication, an agent must a. obtain a Series 39 securities license. b. obtain a Series 22 securities license. c. obtain a real estate broker's license. d. obtain a syndicator's license.

b

One similarity between a general partnership and a limited partnership is that a. both are subject to double-taxation. b. both may broker real estate if properly licensed. c. the partners in both organizations take an active role in managing the business. d. all partners bear full liability for debts to the extent of the debt.

b

One weakness of the cost approach for appraising market value is that a. builders may not pay market value for materials or labor. b. market value is not always the same as what the property cost. c. comparables used may not have similar quality of construction. d. new properties have inestimable costs and rates of depreciation.

b

The percentage lease is most often used by a. industrial landlords. b. retail landlords. c. residential landlords. d. office landlords.

b

To be valid, a listing agreement a. must be in writing. b. may be oral or written. c. must be an express agreement. d. must be enforceable.

b

To complete the sales comparison approach, the appraiser a. averages the adjustments. b. weights the comparables. c. discards all comparables having a lower value. d. identifies the subject's value as that of the nearest comparable.

b

Two leading agencies jointly agree to raise commissions charged a certain class of client to 8% of the sales price. Which of the following is true? a. This is a perfectly legitimate business practice. b. The brokers have illegally fixed prices. c. The brokers have allocated markets. d. The brokers have engaged in legal collusion.

b

What is co-brokerage? a. An owner agent and a buyer agent combine efforts to complete a sale. b. Outside brokers acting as subagents assist a listing agent in procuring a customer. c. An owner or buyer lists with several brokers to complete a transaction. d. Agents from a single agency cooperate to generate listings for the broker.

b

Which of the following characterizes a real estate franchisee? a. A local brokerage owned and operated by a national franchisor b. A locally-owned brokerage affiliated with a national franchisor for purposes of enhanced image and resources c. A national brokerage company which charges local brokers fees for membership d. A national firm which contracts with local franchisors to promote the national identity

b

Who owns the property in a time-share estate? a. Ownership is shared by the developer and the broker. b. The property is owned by tenants in common or by a freehold owner who leases on a time-share basis. c. A real estate investment trust holds a fee simple estate. d. A general partner holds a fee simple interest and interval estates are owned by limited partners.

b

An important legal characteristic of an option-to-buy agreement is that a. the potential buyer, the optionee, is obligated to buy the property once the option agreement is completed. b. the optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so. c. the contract can be executed at no cost to the optionee. d. it is a bilateral agreement

b. the optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so. (201)

Several buyers are competing for the last available home in a desirable new subdivision. One buyer calls the owner-developer directly on the phone and offers $10,000 over and above the listed price. The developer accepts the offer. At this point, a. the parties have a valid, enforceable sale contract on the home. b. the parties have completed a verbal, executory contract. c. the parties may not cancel their contract. d. the developer could not entertain other offers on the property.

b. the parties have completed a verbal, executory contract. (194)

covenant "I own, but won't defend"

bargain and sale deed

An important commitment employing brokers make to salespeople is a. a pledge of continued employment over a predetermined period. b. a guarantee of market-based, competitive commission structures. c. providing them with all listings in the agency. d. producing a sufficient number of customers through advertising to make a reasonable living.

c

Constructive notice of ownership of a parcel of real estate is primarily demonstrated through a. direct inspection to see who is in possession. b. title insurance. c. title records. d. a construction permit.

c

In business brokerage, the notion of goodwill is best defined as a. the commitment by the agent to expend maximum effort on the listing. b. establishing pricing levels that will generate the good will of prospective customers. c. the value or price of the business over and above the value of its other assets. d. the portion of the sale price that is depreciable.

c

In obtaining offers from a buyer, an agent must be careful to a. pursue only those offers which are at or near the listing price. b. balance the owner's price expectations with the buyer's opinion of value. c. avoid disclosing what price the owner will accept d. avoid completing offers that are beneath market value.

c

Pricing property correctly is pivotal to marketing listings, because a. underpriced properties do not require the broker's services. b. overpricing a property will lengthen the time required to receive compensation for services. c. underpricing a property does not serve the best interests of a client. d. overpricing a property does not serve the best interests of customers.

c

Real estate advertising is a regulated activity. One important restriction in placing ads is a. a broker may only place blind ads in approved publications. b. a broker must have all advertising approved by the proper state regulatory agency. c. the advertising must not be misleading. d. sales agents may only advertise in their own name.

c

The objective of the listing presentation is to a. explain how the agent and the agency enjoy a competitive advantage over other companies. b. condition the owner to price the property at the lowest possible level. c. provide all information necessary for the owner to execute the listing. d. execute the listing agreement, then explain its provisions.

c

When a property is "under contract," a. the principals have agreed to an option to purchase, provided the buyer can obtain financing. b. the buyer and the seller are engaged in negotiations to complete a sale contract. c. the principals have entered into a sale contract and must satisfy any contingencies prior to closing. d. certain contingencies must be satisfied before the buyer or seller will agree to sign the sale contract.

c

Which of the following represents the core activity of real estate brokerage? a. Prospecting for and qualifying potential customers b. Buying and selling properties for one's company c. Procuring customers for clients and effecting transactions d. Negotiating sale or lease terms for a client

c

An owner completes a contract to sell her property. Before closing, the seller runs into financial trouble and assigns the contract to her principal creditor. The buyer cries foul, fearing the property will be lost. Which of the following is true? a. The buyer can sue the assignee to disallow the illegal assignment. b. The buyer can take legal action against the assignor. c. The assignor has completed a legal action. d. The sale contract is nullified.

c. The assignor has completed a legal action. (195)

Which of the following is true regarding the legal nature of option contracts? a. They are not assignable. b. They are enforceable, whether written or oral. c. They give the optionee an equitable interest in the property. d. They must be recorded to be valid.

c. They give the optionee an equitable interest in the property. (203)

Which of the following best characterizes a conventional sale contract? a. Voluntary, unilateral, and executory b. Involuntary, bilateral, and contingent c. Voluntary, bilateral, and executory d. Involuntary, unilateral, and executory

c. Voluntary, bilateral, and executory (194)

An important distinction between a contract for deed and a contract for sale is a. a contract for deed requires no action on the part of the seller. b. a contract for deed requires no action on the part of the buyer. c. the seller retains legal title in a contract for deed transaction until fully executed. d. the buyer acquires legal title in a contract for deed transaction.

c. the seller retains legal title in a contract for deed transaction until fully executed. (203)

A potential danger involved in a contract for deed is that a. the vendor may rightfully sell legal title to another party during the contract period. b. the vendor's rights to encumber the property are extinguished. c. the vendee may not have a right of redemption. d. the vendee must make an inordinately high down payment, which can be lost.

c. the vendee may not have a right of redemption. (204)

longer term, entails tenant improvements, complex, and negotiable lease terms are what type of lease

commercial lease

States that do not have dower and curtsey usually have

community property laws and elective share laws

knowledge one could or should have obtained, as presumed by law; imparted by recording in public records "for all to see" is called what?

constructive notice

This is the act of nullifying a contract, where you are allowed a statutory amount of time after entering into a contract to rescind the contract without cause.

cooling-period rescission

A person claims ownership of a parcel of real estate to a prospective buyer, stating that she has lived on the property for five years and nobody has ever bothered her. The claimant also shows the buyer a copy of the deed. The legal basis of this claim is referred to as a. prescriptive notice. b. constructive notice. c. hostile notice. d. actual notice.

d

An owner leases a property to a business in exchange for rent. The tenant is required to pay all operating expenses as well. This is an example of a a. proprietary lease. b. percentage lease. c. gross lease. d. net lease.

d

Commingling is the practice of a. blending escrow funds on a number of properties in one escrow account. b. mixing socially with prospects at open houses or other marketing functions. c. appropriating client or customer deposits for use in the agency's business. d. mixing escrow funds with the broker's operating funds.

d

One of the aims of the Uniform Residential Landlord and Tenant Act is to a. create a standard residential lease for use nationwide. b. force states to enact tenants' rights laws. c. establish uniform rental rates for each type of property. d. discourage the use of unfair and overly complex leases.

d

The term "Realtor" a. is the generic name used by brokers throughout the country as a trade identity. b. is the identity for any duly licensed, active agent or broker. c. is the trade identity for all members of any properly chartered real estate trade organizations. d. may only be used by brokers belonging to the National Association of Realtors®.

d

Three of the most important skills involved in the listing process are a. persuasion, appraisal, and market analysis. b. communicating, co-brokering, and timing. c. marketing, advertising, and conducting open houses. d. locating clients, pricing property, and making listing presentations.

d

Two real estate companies agree to conjoin their resources for the development and sale of an apartment complex, for which profits will be shared equally. This is an example of a. a cooperative association. b. a real estate investment trust. c. a limited partnership. d. a joint venture.

d

Which of the following best summarizes the critical skills in real estate brokerage? a. Communications, market knowledge, mathematics, and analysis b. Selling skills, law, and qualification c. Fiduciary duties d. Listing, marketing, facilitating transactions, and managing information

d

Which of the following summarizes the general terms of a ground lease? a. The landlord sells the ground to another, then leases it back. b. A tenant buys the landlord's ground, then leases the improvements. c. The landlord leases the ground floor of the building to a commercial tenant. d. The tenant leases the ground from the landlord and owns the improvements.

d

A tenant has an option-to-purchase agreement with the landlord that expires on June 30. On July 1, the tenant frantically calls the landlord to exercise the option, offering the apology that she was busy with a death in the family. Which of the following is true? a. Since options contain grace periods, the landlord must sell. b. The tenant loses the right to buy, but can claim the money paid for the option from the landlord. c. The landlord does not have to sell, but must renew the option. d. The option is expired, and the tenant has no rightful claim to money paid for the option.

d. The option is expired, and the tenant has no rightful claim to money paid for the option. (201)

In the event of a buyer's default, a provision for liquidated damages in a sale contract enables a seller to a. sue the buyer for the anticipated down payment. b. force the buyer to quitclaim equitable title. c. sue the buyer for all liquid assets lost as a result of the default. d. claim the deposit as relief for the buyer's failure to perform.

d. claim the deposit as relief for the buyer's failure to perform. (196)

While a property is under a contract for deed, the seller, or vendor, mortgages her equity in the property, and has a separate judgment lien placed on the property. Faced with financial loss, the vendor assigns the contract to another party, then leaves town. What can the vendee do in this case? a. rightfully cancel the agreement and reclaim all deposits. b. sue the creditor for removal of the judgment lien. c. disclaim the lien and the mortgage due to homestead rights. d. comply with the contract and take legal title when its terms are fulfilled.

d. comply with the contract and take legal title when its terms are fulfilled. (204)

A due-on-sale clause in a sale contract puts parties on notice that a. the full price of the property is due the seller at closing. b. any loans surviving closing become immediately payable. c. all of the seller's debts must be retired before or upon closing. d. third-party loans surviving closing may be accelerated by the lender.

d. third-party loans surviving closing may be accelerated by the lender. (199)

covenant " I own and I will defend"

general warranty deed

Examples of voluntary transfer of title?

grant, deed, or will

landlord pays expenses, tenant pays more rent is what type of lease

gross lease

landlord owns and leases ground but does not own improvements

ground lease

This type of contract is an unstated or unintentional agreement that may be deemed to exist when the actions of any of the parties suggest the existence of an agreement.

implied contract

The primary benefits that contribute to real estate value are what?

income, appreciation, use, and tax benefits

receive rent, repossess, and monitor property condition are whose rights?

landlord rights

This establishes an agency for a specified transaction and has a stated expiration.

listing agreement

Unlike a determinable estate, the grantor of a condition subsequent estate

may repossess the property within a limited time frame if restrictions are violated.

The north-south, longitudinal lines on the survey grid are _______________________

meridians

Older east coast states generally employ which method for legally describing parcels of real estate

metes and bounds rather than the rectangular survey system

tenant pays some or all expenses, and rent is less is what type of lease

net lease

The east-west, latitudinal lines not he survey grid are _____________________.

parallels

landlord receives rent minimum plus percentage of retailer's sales is what type of lease

percentage lease

for cooperative unit owners; indefinite term; assigned to new unit owner on sale

proprietary lease

covenant "I may or may not own, and I won't defend"

quit claim deed

Gross lease hybrid, short term, uniform terms reflect landlord-tenant standards are what type of lease

residential lease

Who carries the greatest exposure under CERCLA and the Superfund Amendment of 1986 that said current landowners as well as previous owners of a property may be held liable for environmental violations, even if "innocent" of a violation.

sellers

This type of statutory deed does no protect the grantee against claims that predate the owner's period of ownership

special warranty deed

covenant " I own and will defend against my acts only"

special warranty deed

paying rent, maintain premises and following the rules are examples of what?

tenant obligations

exclusive use and possession, quiet enjoyment and profits are examples of whose rights?

tenant rights

if the syndication is limited to 35 investors or fewer, and the syndication is not advertised in any way, the program is exempt

the Private Offering Exemption

To provide support and services, and maintenance is

the landlords obligations

What is a fiduciary?

the principal (client) hires the agent as a fiduciary to perform desired service on the clients behalf

The area representing the intersection of a range and a tier is called

township

Bill and Bob share ownership of a real property, but neither owns a physical portion of the property. The kind of interest they each own is an

undivided interest

In this type of agency relationship, the principal empowers the agent to perform any and all actions to may be legally delegated to an agency representative.

universal agency

a contract that meets criteria

valid

What creates a contract?

valid offer and valid acceptance

a contract that has certain oral contracts

valid yet unenforceable

a contract that does not meet criteria

void

a contract that is invalid if disaffirmed

voidable

Real estate professionals perform the following property-related functions?

1. creation and improvement 2. management and maintenance 3. demolition 4. investment ownership 5. regulation 6. transfer

What is the superior lien rank order?

1. real estate tax liens 2. special assessment liens 3. federal estate tax liens 4. state inheritance tax liens

What two factors determine lien priority?

1. the lien's categorization as superior or junior 2. the date of recordation of the lien

A brick fence straddles the property line of two neighbors. The neighbors agree not to damage it in any way. This is an example of a. a party wall. b. an encroachment. c. a trade fixture. d. a deed restriction.

A

Among junior liens, the order of priority is generally established according to a. the date of recordation. b. the amount. c. the order of disbursement. d. special agreement among lienees.

A

Encumbrances and police powers are a. interests that do not include possession. b. limited forms of an estate. c. unrelated to interests. d. types of public interests.

A

What is an encumbrance?

An interest in and right to real property that limits the legal owner's freehold interest

The level of government which is most active in regulating real estate licensees is the a. federal government. b. state government. c. county government. d. municipal government where the person resides.

B

The overriding test of whether an item is a fixture or personal property is a. how long it has been attached to the real property. b. its definition as one or the other in a sale or lease contract. c. how essential it is to the functioning of the property. d. how it was treated in previous transactions.

B

The term "commercial property" generally refers to a. non-owner-occupied properties. b. retail, office and industrial properties. c. multi-tenant properties. d. retail properties.

B

Unlike tenants in common, joint tenants a. own distinct portions of the physical property. b. cannot will their interest to a party outside the tenancy. c. may own unequal shares of the property. d. cannot sell their interest to outside parties.

B

A certain property has the following liens recorded against it: a mortgage lien dating from three years ago; a mechanic's lien dating from two years ago; a real estate tax lien for the current year; and a second mortgage lien dating from the current year. In case of a foreclosure, which of these liens will be paid first? a. First mortgage lien b. Mechanic's lien c. Real estate tax lien d. Second mortgage lien

C

An item can be converted from real to personal property and vice versa by means of which processes? a. Assemblage and plottage b. Application and dissolution c. Affixing and severance d. Personalty and severalty

C

Easements and encroachments are types of a. lien. b. deed restriction. c. encumbrance. d. appurtenance.

C

In a community property state, a basic distinction is made between a. property acquired together and property acquired separately over the duration of the marriage. b. property owned privately versus property owned by the state. c. property acquired during a marriage and property already owned by each party at the time of marriage. d. property acquired during the marriage and property acquired after the marriage.

C

Surface rights, air rights and subsurface rights are a. inviolable. b. unrelated. c. separable. d. not transferrable.

C

A property owner allows Betty Luanne to cross his property as a shortcut to her kindergarten school bus. One day the property owner dies. What right was Betty given, and what happens to it in the future? a. A personal easement in gross, which continues after the owner's death b. An easement by prescription, which continues after the owner's death c. A license, which continues after the owner's death d. A license, which terminates at the owner's death

D

The highest form of ownership interest one can acquire in real estate is the a. dower and curtesy. b. conventional life estate. c. defeasible fee simple estate. d. absolute fee simple estate.

D

The lien priority of junior liens can be changed by a lienor's agreement to a. forgive portions of the debt. b. assign the note. c. foreclose on the note. d. subordinate.

D

The primary distinction between the legal concepts of land and real estate is that a. real estate includes air above the surface and minerals below the surface. b. real estate is indestructible. c. land has no defined boundaries. d. land does not include man-made structures

D

There are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation, property A is said to be which of the following in relation to property B? a. Subservient estate b. Servient estate c. Senior tenant d. Dominant tenement

D

What guarantees the right of private ownership of real estate in the United States? a. Common law b. Local statutes c. The Napoleonic Code d. The Constitution

D

Which level of government controls zoning laws? a. State b. Taxing authorities c. Federal d. County and local

D

True or False, a lien conveys ownership?

False, once exception is a mortgage lien in a title-theory state

T/F A lien attaches to the property?

True

Which of the following best describes the concept of "legal title" to real estate?" a. Ownership of the bundle of rights to real estate b. The right of a buyer or lender to obtain ownership under certain circumstances c. Possession of a deed d. Absolute proof of ownership of real estate

a

What does equitable title mean?

a conditional right to legal title subject to an owner's agreements with buyers and creditors

People in the real estate business who primarily focus on creating new properties are a. brokers. b. developers. c. zoning administrators. d. excavators.

a. developers

Ownership of some combination of the bundle of rights defines

an interest in real estate

The distinguishing feature of a defeasible fee simple estate is that a. it can be passed on to heirs. b. it has no restrictions on use. c. the estate may revert to a grantor or heirs if the prescribed use changes. d. it is of unlimited duration.

c

this type of property relates to the fact that the property can potentially generate income from a business's usage.

commercial property

What are littoral rights?

concern properties abutting bodies of water that are not moving (lakes and seas)

A freehold estate of potentially unlimited duration is a

fee simple estate

What are real estate professionals?

individuals and business organizations whose sole enterprise is performing a real estate-related service or function

Which of the following is included in the legal concept of land?

land and all man-made structures that are permanently attached to the land

An estate limited to the life of the owner is a

life estate

What part of a navigable, non-moving body of water does an abutting property owner own?

littoral right of use, ownership to the high water mark

If a state does not operate under the doctrine of prior appropriation it operates under the common law doctrines of

littoral rights and riparian rights

A portion of land delineated by boundaries

parcel or tract

Explain an example of a easement in gross

personal- beachfront property owner grants a person easement in gross to the neighbor across the trees to access the beach through their property. This is non transferrable and irrevocable, and terminated upon grantees death

An interest in real estate includes which rights?

possess use transfer encumber exclude

What is a condition subsequent type of a fee simple defeasible estate?

previous owner may repossess the property, and reversion is not automatic

this type of property is owned and used for habitation

residential property

What form of ownership is traditionally reserved for husband and wife, that features survivorship, equal interests, and limited exposure to foreclosure?

tenancy by entireties

An ordinary life estate ends with

the death of the life estate owner

What is a determinable type of a fee simple defeasible estate?

the estate automatically reverts to the grantor or heirs

In an estate in trust, a fee owner-- the grantor or _______-- transfers legal title to a fiduciary-- the _________-- who holds and manages the estate for the benefit of another party, the ____________.

trustor trustee beneficiary

What is an encroachment?

unauthorized, physical use of another's property

What are the principal areas of regulation in real estate?

usage taxation housing administration

What are the approximate dimensions of a township in the rectangular survey system? a. Thirty-six miles on a side b. Twenty-five square miles. c. Depends on the state. d. Six miles by six miles

D

What is an advisory service provider? a. A broker of fee simple titles b. A corporate real estate broker c. A broker performing non-transactional services for a commission d. A broker who renders real estate services for a fee

D

What is an emblement? a. A piece of equipment affixed to the earth b. A limited right to use personal property c. A sign indicating a property boundary d. A plant or crop that is considered personal property

D

What is the fundamental purpose of a building permit? a. To restrict the number of new development projects b. To establish the basis for an inspection c. To promote certificates of occupancy d. To ensure that improvements comply with codes

D

When a tenant acquires a leasehold estate through a lease, what does the property owner acquire? a. A freehold estate b. A reduced leasehold estate c. A leasehold estate d. A leased fee estate

D

Which of the following is an example of intangible property? a. Real estate b. Personal property c. Artwork d. Stock

D

Which of the following terms refers to the rights of a property that abuts a stream or river? a. Allodial b. Alluvial c. Littoral d. Riparian

D

How many sections are there in a township? a. One b. Six c. Twelve d. Thirty-six

D, each section 1 mile

lost title to public for the greater good

eminent domain

A lease agreement was signed for 8 months by the lessor and the lessee. What kind of lease is this?

estate for years

This prevents a person from claiming a right or interest that is inconsistent with the person's previous statements or acts.

estoppel

This type of contract is one in which all of the terms and covenants of the agreement have been manifestly states and agreed to by all parties, whether verbally or in writing.

express contract

What are the criteria for validity of a contract?

1. competent parties 2. mutual consent 3. valuable consideration 4. legal purpose 5. voluntary, good faith act

Validity for a conveyance contract?

1. must be in writing 2. contain a legal description 3. be signed by 1 or more parties

What are the types of contracts?

1. oral or written 2. express or implied 3.. unilateral or bilateral 4. executed or executory

The essence of the agency relationship between an agent and a principal can best be described as a relationship of a. mutual consent, consideration, and acceptance. b. diligence, results, and compensation. c. service, dignity, and respect. d. trust, confidence, and good faith.

D

The only required clause in a deed of conveyance is one that a. states restrictions and limitations to the estate being conveyed. b. states the parties and the type of estate being conveyed. c. states that the grantor has done nothing to impair title to the property being conveyed. d. states the grantor's intention, names the parties, describes the property, and indicates a consideration.

D

This legalizes certain labor strikes, picketing, and boycotts.

Clayton Antitrust Act 1914

This act authorized the EPA to establish air quality standards for industrial land use as well as automobile and airplane emissions.

Clean Air Amendment (1970)

2. The best definition of a master plan is a. an annual review of all land use permits and zones. b. a comprehensive analysis of existing land use patterns in a market. c. a state or regional land use law requiring compliance on a county-by-county basis. d. a fusion of land use laws and local land use objectives and strategies.

D

A buyer submits an offer to a seller. Two hours later, the buyer finds a better house, calls the first seller, and withdraws the offer. Which of the following is true? a. The buyer may not revoke the offer in such a short period of time. b. The first seller may sue the buyer for specific performance. c. If the seller accepted the offer, the buyer must perform. d. The original offer is legally extinguished.

D

A deed restriction or declaration of restriction may be enforced by means of a a. sheriff's warrant. b. zoning commission order. c. foreclosure action. d. court injunction.

D

A hermit secretly lives in a cave on a 200-acre property. After twenty years, the person makes a claim of ownership to the property. This claim will likely be a. upheld through adverse possession. b. upheld because of the length of possession. c. declined through the doctrine of prior appropriation. d. declined because possession was secretive.

D

A local government could stimulate the real estate market by a. increasing labor costs and curbing the money supply. b. increasing taxes and interest rates. c. declaring a moratorium on construction. d. expanding the sewer system.

D

A person wishes to convey any and all interests in a property to another without making any assurances as to encumbrances, liens, or any other title defects on the property. This party would most likely use which of the following types of deed? a. A sheriff's deed b. A special warranty deed c. A partition deed d. A quitclaim deed

D

A property owner agrees to pay a broker a commission, provided the owner receives a minimum amount of proceeds from the sale at closing. This is an example of a(n) a. exclusive right-to sell agreement. b. exclusive agency agreement. c. open listing. d. net listing.

D

An agent informs a buyer that a clause in a contract is standard language. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for a. violating duties owed a customer. b. misinterpreting the clause. c. intentional misrepresentation. d. practicing law without a license.

D

An office building lacks sufficient cooling capability to accommodate modern computer equipment. This is an example of a. physical deterioration. b. economic obsolescence. c. incurable depreciation. d. functional obsolescence.

D

An owner's agent is showing a buyer an apartment building. The buyer notices water stains on the ceiling, and informs the agent. The agent's best course of action is to a. immediately contract to paint the ceiling. b. immediately contract to repair the roof. c. suggest the buyer make a lower-price offer. d. inform the seller.

D

As part of a construction contract between a contractor and a buyer, the contractor promises to complete construction by November 20. This promise can be construed as a. competency on behalf of the contractor. b. mutual consent. c. good faith. d. valuable consideration.

D

If a municipality exerts its power of eminent domain against a certain property owner, what happens? a. The owner must pay higher property taxes or give up the property. b. The owner must cede an easement without receiving any compensation. c. The municipality annexes the property. d. The owner must sell the property or grant an easement to the municipality for just compensation.

D

If there is a significant undersupply of homes in a market, construction will tend to increase. This is an example of a. supply outstripping demand. b. overpricing products. c. the price mechanism. d. the market tending toward equilibrium.

D

Just prior to passing away, a person tells two witnesses that she would like her estate to pass to her husband. One witness records the statement and signs his name. This is an example of a. an enforceable holographic will. b. an unenforceable holographic will. c. an enforceable nuncupative will. d. an unenforceable nuncupative will.

D

The concept of market value is best described as a. the price a buyer will pay for a property, assuming other similar properties are within the same price range. b. the price an informed, unhurried seller will charge for a property assuming a reasonable period of exposure with other competing properties. c. the price a buyer and seller agree upon for a property assuming stable interest rates, appreciation rates, and prices of other similar properties. d. the price that a willing, informed, and unpressured seller and buyer agree upon for a property assuming a cash price and the property's reasonable exposure to the market.

D

usage restriction that can trigger repossession by a previous owner if violated

deed condition

Examples of involuntary transfer of title?

descent, escheat, eminent domain, foreclosure, adverse possession, and estoppel