Virginia Real Estate TESTPREP - Category Review (3)

A house sold for $140,000 with the buyer making a 20% down payment. The grantor's tax is charged at $1.00 per $1,000, what would the tax amount to:

$140.00 - based on the selling price.

Personal property which is attached to a building and which will convey with the land is known as:

A fixture

Amalia owns property and gladly allows her friend Sophie to use the land, reserving for herself the right to periodic inspections. In order to maintain her interest, Amalia should give Sophie:

A license.

Statutory protection for a person supplying building materials or labor for improvements to real property is provided by:

A mechanic's lien.

Which of the following best describes the principle of "highest and best use"?

A property that is utilized in the manner most profitable at the time that the value is estimated

A cloud on a title could be removed by:

A quitclaim deed

An owner sells his property and immediately leases it back from the purchaser. This describes:

A sale and leaseback transaction

The accumulation of soil on an owner's property caused by the movement of water is known as:

Accretion.

Upon signing a management contract with an owner, a broker becomes a/an:

Agent.

A clause in a mortgage to prevent a buyer from assuming an existing loan is called the:

Alienation clause

A settlement agent is responsible for paying which of the following?

All of the above a. Balance due on the seller's mortgage b. Title insurance premium c. Costs of recording

The value of real property is affected by which of the following?

All of the above a. Real estate taxes b. The cost of financing c. Government regulations and zoning

The clause in a lease that allows the rent to increase is:

An escalator clause

A quitclaim deed may be used to:

Any of the above a. Transfer ownership of a fee simple estate b. Transfer interest in a life estate c. Terminate an easement

A broker acts as an agent in all of the following functions EXCEPT:

Appraising property

To qualify for a tax-deferred exchange, properties MUST:

Be of like kind.

A developer divides his property into 5 separate building lots. He pledges all 5 as security for a loan to obtain money for construction of a house on each parcel. When he sells one lot, with improvements, the bank will release that particular lot from the security so that the developer may convey title to the new purchaser. The loan obtained by the developer could be described as which of the following:

Blanket mortgage.

Owner Kelly is leaving the area for a one year period. She asks salesperson Boren to manage her rental house for $45 per month while she is gone. Which of the following is true in this situation?

Boren must work through her broker

A defeasance clause in a mortgage will take effect when the:

Borrower repays the entire debt.

A lien that is established by the state legislature is:

Both a statutory lien and an involuntary lien

A listing broker had a signed sales contract on a house. The broker then noticed a crumbling wall in the basement. Which of the following should the broker inform about the wall?

Both buyer and seller

Soil from Smith's land is washed down and deposited on Brown's property. Who owns the soil?

Brown.

Once a property has been appraised, then exposed to the market for a reasonable length of time and finally sells, who has determined the value of the property?

Buyer

Casper is planning to sell his house and desires the broadest possible exposure. He gives Bert an exclusive right-to-sell listing, Gail an exclusive agency listing and Mark an open listing. Mark sells the house. Under these circumstances, which of the following statements is true?

Casper owes 3 commissions.

The best approach for appraising a 20-year old residence is:

Comparable sales

A survey is made of Tony's property and it is found that a portion of the neighbor's garage is on his property. Tony is planning to sell his property. This encroachment of the garage onto his lot:

Could cause his property to be unmarketable

When the grantor's tax is calculated, how does the amount of the tax appear on the settlement sheet?

Debit the seller; nothing to the buyer.

If a person has been discriminated against in a real estate transaction, they would file a complaint with the:

Department of Housing and Urban Development

Which of the following agency responsibilities most likely would be limited in dual agency representation?

Disclosure.

Two building lots were for sale. One was zoned for multi-family and the other for commercial. A builder wanted to buy the lots and have them rezoned for single family homes. Which of the following best describes the situation?

Down zoning

A piece of property is owned by X, Y and Z. The note they signed with their mortgage states that they are jointly and severally liable. This means:

Each is responsible for the entire indebtedness.

Which of the following is NOT a private limitation on title?

Eminent domain

According to the 1988 amendments to the Federal Fair Housing Law, which of the following would be allowed regarding a handicapped person in an apartment complex?

Evicting for playing loud music (excessive noise) at night

Mr. Gregory has a home for sale with a sign, FOR SALE BY OWNER, in the front yard. Salesperson Gary calls, identifies himself and asks for the key to show the property. Mr. Gregory agrees. Which of the following best describes any agency relationship that may exist?

Gary's broker is the agent of Mr. Gregory for a reasonable time.

A lease that allows for annual rent to increase on each anniversary is a:

Graduated lease

A quitclaim deed conveys only the interest of the:

Grantor

Which of the following would cause a deed to be void?

Illegal purpose

Which of the following is NOT an economic characteristic of land?

Immobility

The three (3) approaches used in the appraisal of real property are:

Income; cost; market data

A financing agreement that exposes the buyer to the greatest risk would be:

Installment land sales contract.

What can a homeowner legally deduct on his or her personal income taxes?

Interest on the mortgage note

If the landlord (owner) of property dies during the period of a valid lease, what effect would it have on the lease and the tenant?

It has no effect

If a mortgage is subordinate, what type of mortgage is it?

Junior

A mortgagee's title insurance provides protection to which of the following?

Lender.

According to the Truth-in-Lending Law, certain words used in advertisements trigger full disclosure of ALL of the terms of financing. Which of the following statements would NOT require any additional disclosure?

Liberal terms available

Which of the following real estate related contracts could be considered an employment agreement?

Listing agreement

Which of the following factors would have the LEAST effect on an appraisal?

Livelihood of the prospective buyer.

When a contract is breached, the injured party:

May rescind the contract unilaterally

Which of the following is NOT an encumbrance that affects property physically?

Mechanic's liens

Which of the following describes market value?

Most probable selling price

In order to claim depreciation on a property, the property:

Must be improved

An owner listed a farm with a broker. Although the owner did not mention it, the broker knew the owner was in poor health. What should the broker tell potential buyers?

NOT tell them because it would reduce the seller's bargaining leverage

The part of the appraisal report that addresses issues of zoning, schools, and shopping is called the:

Neighborhood analysis

To find the value of real property using the Income approach, which of the following would be divided by the capitalization rate?

Net income

The type of lease where the tenant pays all the maintenance and taxes is called a:

Net lease

An owner listed a property with Broker Dole on May 1. On July 1 the owner was declared legally insane. The broker brought a full price offer on July 3 to the seller which was accepted. How much commission is Broker Dole due?

No commission since the listing was terminated when the owner was declared legally insane

A person invested $5,000 in a limited partnership. One of his concerns was the amount of his liability. Since he is one of the limited partners, can he be held liable for more than his initial investment?

No, because he is only liable for his initial investment

An owner and tenant signed a one year lease agreement. The owner sold the property to a buyer 4 months later. The buyer wanted to move into the property immediately. The original lease contract signed by the seller and tenant was silent on this point. Can the buyer of the property move in immediately?

No, because the tenant can stay in the property for the duration of the original lease contract

A seller sold a property to a buyer knowing that a third party had a claim in the property. In this case, would the buyer have received marketable title?

No, because there was a cloud on the title

Under the statutory definition of a broker, which of the following would be required to have a real estate license?

None of these choices

Several persons hold property as tenants in common. One of the owners dies. His interest in the property will:

Pass to his heirs.

Which of the following terms describes a lease under which the rent is based on sales volume?

Percentage

Ownership as tenants in common and ownership as joint tenants have only one thing in common, aside from the fact that there is more than one party involved in each. What is the only common element in these two types of ownership?

Possession.

The actual amount of money paid for a particular parcel of real estate is said to be that property's:

Price

To be legally binding, a real estate contract MUST contain a:

Property description.

One of the functions of the FHA is:

Provide insurance protection to lenders.

The Real Estate Settlement Procedures Act:

Provides for disclosure of estimated closing costs

When a salesperson or broker does a Comparative Market Analysis (CMA), he or she could be doing any of the following, EXCEPT:

Providing an appraisal of value

Pruitt gives Gray a quitclaim deed to a property which Gray has bought. This means that:

Pruitt's rights are terminated

The Civil Rights Act of 1866 prohibits discrimination on the basis of:

Race.

In 1968 the Supreme court ruled in the Jones vs. Mayer Co. case. The courts' decision upheld the law which provides protection on the basis of:

Racial discrimination.

Which of the following is NOT prorated between buyer and seller at closing?

Recording fees.

A mortgage is released by?

Satisfaction

If a buyer defaults on a valid sales contract and the seller wants to enforce the terms of the contract, the seller would file suit for which of the following?

Specific performance

A buyer purchased a tract of land at a tax sale to satisfy the claim for delinquent taxes. If no one redeems the property during the statutory time period, the purchaser would most likely receive which of the following as evidence of ownership?

Tax deed

A mortgage loan which provides for payment of the total principal amount of the loan at the maturity date would be referred to as a:

Term loan.

In Fair Housing discrimination cases, the burden of proof is on the claimant. The claimant must be able to prove:

That discrimination occurred

The enforcement of the Fair Housing Law of 1968 is the responsibility of:

The Department of Housing and Urban Development.

What is the advantage of filing a Fair Housing complaint in Federal Court instead of with HUD?

The Federal court may impose higher monetary penalties.

An agent has the responsibility of care, obedience, accountability, loyalty and disclosure to which of the following?

The client

The covenant in a deed which guarantees to the grantee that no one has any other interest in the property, that will disturb the grantee's possession of the property, is known as the:

The covenant of quiet enjoyment

If a seller deposits the deed with an escrow agent but the seller dies before it is delivered to the purchaser, the transfer of title becomes effective on the date the deed was deposited into escrow due to the:

The doctrine of relation-back.

Which of the following is used to estimate value using a comparison between gross monthly rents and the selling price?

The gross rent multiplier

When a seller and licensed salesperson agree to a listing, on terms acceptable to the broker, an agency relationship is established between:

The listing broker and the seller

Chris, a salesperson working for Broker Janet, is assigned to work on a listing that started on January 3, 2019. The listing is a 90 day exclusive right-to-sell agreement. On March 1, 2019, Chris is killed in an automobile accident. What is the status of the listing agreement?

The listing remains valid

If a fence or wall is built on the property line between two adjoining properties, who owns the fence or wall?

The owners of the adjoining properties own it together.

Value is best described as?

The present worth of future benefits.

Which is an example of ostensible agency?

The principal showed by actions that the agent's actions were accepted

Which of the following principles of value would a real estate salesperson consider first when doing a CMA (competitive market analysis)?

The principle of conformity.

If an offer is mailed to the seller, a contract exists when:

The seller mails his acceptance.

When the last heir of a property owner dies, absent a provision in a will devising the property, title will revert to:

The state.

Which of the following persons executes a trust deed?

Trustor.

After an offer to purchase has been made and accepted, the broker may change the contract, under which of the following circumstances?

With the approval of all parties involved in the contract.

Bill, the buyer, signs an offer to purchase agreement and gives broker Joan, a $1,000 earnest money deposit. The next day, before Joan has a chance to present the offer to the seller, Bill finds he needs his $1,000. What should he do?

Withdraw his offer and ask Joan for his money

Under Common Law Agency, the listing agent should disclose material facts to the seller AND buyer. Which of the following would NOT be a material fact?

Worn carpeting.

A joint tenant wants to sell his interest in a real property without the consent of the other joint tenants. Can he do this?

Yes, because each joint tenant has separate ownership rights and can act independently of the other tenants.

A broker had an agreement with a buyer to find a home for a flat fee of $5,000. The broker found a special home listed by another broker that the buyer liked and purchased. Is the buyer's broker entitled to receive a commission from both the buyer and the seller?

Yes, if disclosure was made to all parties in writing

A situation whereby a person loses land but the boundary lines remain the same would be an example of:

avulsion

A clause in a mortgage releasing the indebtedness once the loan is paid off is:

defeasance

A salesperson receives an earnest money deposit on Monday while working with broker Allan. On Friday, the salesperson goes to work for broker Bob. What should be done with the earnest money deposit?

it stays with broker Allan