Fin 351 Final

Which of the following would most likely be involved in the Equity Capital Market: a. Building Tenant b. Building Owner c. Mortgage Lender d. Insurance Companies

Building Owner

If we desire to classify land by its use, land that does not include any improvements to the land would be categorized as: a. building site b. developed land c."raw" or undeveloped land d. property infrastructure

"raw"or undeveloped land

Which of the following is an example of an affirmative easement appurtenant? a. right of way for a railroad b. a driveway easement across one parcel to another c. a sunlight easement d. conservation easement

a driveway easement across one parcel to another

Which of the following is an example of a negative easement appurtenant? a. rights-of-way for roads b. a scenic easement used to restrict construction on adjacent parcels so as to preserve a valued view c. a common drive easement where owners of adjoining lots must permit each other to use a driveway lying on their shared property line d. a driveway easement across one parcel to another

a scenic easement used to restrict construction on adjacent parcels so as to preserve a valued view

Real estate values derive from the interaction of three different sectors in the economy. Which of the following sectors serves to allocate financial resources among households and firms requiring funds? a. capital market b. user market c. property market d. government

capital market

Considered a fundamental pricing metric in commercial real estate markets, the ratio of a property's annual net income to its market value is more commonly referred to as a(n): a. discount rate b. appreciation rate c. internal rate of return d. capitalization rate

capitalization rate

Which of the following types of ownership estates is the most complete bundle of rights, and therefore carries the greatest value? a. fee simple conditional b. ordinary life estate c. fee simple absolute d. legal life estate

fee simple absolute

Consider the following excerpt from a sample deed: "The Seller covenants with The Buyer that it has a good right to convey, that the property is free from all encumbrances, and that it forever warrants to defend all of the property so granted to The Buyer against every person lawfully claiming the same." Based on your understanding of the relation between a deed's covenants and the type of deed being conveyed, which type of deed is being conveyed in the statement above? a. quitclaim deed b. special warranty deed c. deed of bargain and sale d. general warranty deed

general warranty deed

Real estate is property, which can be either a tangible or an intangible asset. Which of the following would be considered an intangible asset? a. land b. mortgage c. building d. fence

mortgage

Real estate is defined as land and its permanent improvements. Which of the following is an example of an improvement to the land? a. sewer system b. personal property c. building d. fence

sewer system

Which of the following forms of co-ownership, historically used for apartment buildings, is not considered a form of true direct co-ownership but rather qualifies as a proprietary corporation? a. cooperative b. tenancy by the entirety c. condominium d. partnership

cooperative

An important distinction both practically and conceptually is the difference between an easement and a license. All of the following characteristics pertain to a license except: a. a license can be granted orally b. a license is revocable by the grantor c. a license grants permission to use another's land for a specific and limited purpose d. a license is enduring.

a license is enduring.

Capital markets can be divided into two broad categories: equity interests and debt interests. Equity investors in real estate expect to earn a return on their investment through the: a. receipt of property taxes b. case of a borrower default on required mortgage payments c. collection of rent and price appreciation d. collection of interest on the borrowed funds used to purchase the property.

collection of rent and price appreciation

Property rights can be divided into two classes, real and personal. Which of the following is an example of real property? a. commercial building b. stocks and bonds c.patents d. vehicles

commercial building

The covenants in a deed are the most important differences among types of deeds. Which of the following covenants promises that the grantor truly has good title and the right to convey it? a. covenant of quiet enjoyment b. covenant against encumbrances c. covenant of seizin d. exceptions and reservation clause

covenant of seizin

In order for a deed to be a valid conveyance of property, there must be an observable, verifiable transfer of the deed to the grantee. Typically this is accomplished when the grantor hands the deed to the grantee at closing. Which of the following basic requirements of a deed does this represent? a. words of conveyance b. recital of consideration c. delivery d. acknowledgment

delivery

Once a document conveying an interest in real property is placed in the public records it is binding on the public, whether or not they make an effort to learn of it. Based on the common law tradition, this policy is known as the: a. habendum clause b. actual notice c. doctrine of constructive notice d. statute of frauds.

doctrine of constructive notice

A lien is an interest in real property that serves as security for an obligation. Which of the following is an example of a general lien? a. property tax and assessment lien b. lien arising from a court judgment unrelated to ownership of the property c. mechanics' lien d.mortgage lien

lien arising from a court judgment unrelated to ownership of the property

A deed is a special form of written contract used to convey a permanent interest in real property. Unlike most contracts, a deed requires: a. only the grantor to be legally competent and of legal majority age b. both parties to make promises to perform c. both parties to be legally competent and of legal majority age d. only the grantee to be legally competent and of legal majority age.

only the grantor to be legally competent and of legal majority age

Co-ownership can occur in a variety of ways, with significant variation in how the bundle of rights is jointly held. All of the following entities are forms of direct co-ownership except a. tenancy in common. b. partnership c. condominium d. tenancy by the entirety

partnership

Which of the following types of liens is automatically superior to any other lien? a. mortgage lien b. lien arising from a court judgment unrelated to ownership of the property c. property tax and assessment lien d. mechanics' lien

property tax and assessment lien

Which of the following types of deeds is worded to imply no claim of title, but rather only conveys what interest the grantor actually has, if any? a. quitclaim deed b. special warranty deed c. deed of bargain and sale d. general warranty deed

quitclaim deed

Capital markets can be divided into four main categories: private equity, public equity, private debt, and public debt. An example of a real estate asset that trades in the private equity market is: a. real property. b. equity REITs. c. home mortgages. d. mortgage backed securities

real property

Restrictive covenants impose constraints on the use of the land, yet are limited in terms of their enforcement. All of the following are true regarding the enforcement of restrictive covenants except: a. restrictive covenants are public in nature and therefore can be enforced by those who do not hold a legal interest in the property. b. courts have been reluctant to maintain restrictive covenants for an unreasonably long time and in some cases states have enacted a time limit on their applicability c. courts may refuse to enforce restrictive covenants due to changing neighborhood character d. courts may refuse to enforce restrictive covenants due to abandonment of the property.

restrictive covenants are public in nature and therefore can be enforced by those who do not hold a legal interest in the property.

A law requiring any contract conveying a real property interest to be in writing in order to be enforceable is a modern application of the: a. habendum clause b. actual notice c. statute of frauds d. doctrine of constructive notice.

statute of frauds

All of the following are examples of an improvement on the land except: a. streets b. fences c. building d. walls.

streets

Direct co-ownership implies that each co-owner holds a titled interest in the property but without exclusive possession with respect to the other co-owners. Which of the following types of ownership is a divisible percentage ownership and not a shared ownership in the entire property? a. tenancy at will b. tenancy in common c. tenancy by the entirety d. condominium

tenancy in common

The demand for real estate derives from the need that market participants (e.g., owners occupants, tenants, renters) have for shelter and convenient access to other locations. This competition for physical location and space occurs in the: a. capital market b. government sector c. property market d. user market.

user market

The City of Grand Rapids installed a new water main on Oak Street. The city then decided to charge the property owners along Oak Street a proportional cost of the new water main. If a property owner refuses to pay his or her proportional share of the cost, the city may file a(n): a. general lien b. property tax lien c. mechanics' lien d. assessment lien

assessment lien

A principal definition of real estate is as a bundle of rights associated with the possession, use, and disposition of property. Each of the following is a fundamental characteristic of property rights except: a. they apply only to tangible assets b. they are enduring c. they are enforceable by the government d. they are non-revocable.

they apply only to tangible assets