Real Estate National Exam

INCORRECT A

The tax on a property is $600. The tax rate is 30 mills. Property is assessed at 50% of market value. What is the market value of the property? Select one: A. $20,000 B. $40,000 C. $50,000 D. $60,000

$1,134

The tax on real estate in Sunny Beach is 42 mills. A property is purchased for $90,000. Assessment is 30% of market value. How much is the total tax bill? Select one: A. $1,240 B. $1,360 C. $1,260 D. $1,134

to produce income and maintain the value of the property.

What are the two MAIN functions of a property manager? Select one: A. to produce income and maintain the value of the property. B. To collect rent and take care of repairs C. To show property and lease space D. To handle complaints and maintain security

actual and constructive

What are the two types of eviction? Select one: a. actual and constructive b. constructive and destructive c. actual and conductive d. conducive and permissive

changes the priority of recorded mortgages

What does a subordination agreement do? Select one: A. makes the full amount of the loan due B. changes the term of the loan C. changes the priority of recorded mortgages D. makes a down payment unnecessary

$125,000

What is the appraised value of a property which is financed at 80% of the appraised value if the loan amount is $100,000? Select one: A. $120,000 B. $125,000 C. $80,000 D. $100,000

ALL OF THE ABOVE

Which of the following groups would be protected under the familial status category? Select one: A. children under the age of 18 living with their parents. B. a pregnant woman. C. a child under the age of 18 who is living with a person who is seeking legal custody. D. all of the above.

KNOWLEDGE

Which of the following is NOT a fiduciary duty? Select one: A. obedience B. disclosure C. confidentiality D. knowledge

The seller decides he would rather sell the house himself.

Which of the following is NOT a valid reason for terminating an agency relationship? Select one: A. The seller decides he would rather sell the house himself. B. The broker dies. C. The house that is for sale burns down. D. Mutual agreement of the parties.

INCORRECT D

Which of the following is NOT deductible on your federal income tax? Select one: A. mortgage interest payments B. real estate taxes C. homeowners insurance D. loan discount points

...

Which of the following is NOT true of FHA loans? Select one: A. They are insured. Incorrect B. The borrower must pay an insurance premium. C. There is no pre-payment penalty D. The FHA provides the funds to finance the property.

indestructibilty

Which of the following is a physical characteristic of land? Select one: A. indestructibility B. scarcity C. fixity of investment D. situs

the property contains asbestos insulation.

Which of the following is an agent required to disclose to a potential buyer? Select one: A. a person was murdered in the house. B. a person living in the house has AIDS. C. the property has been burglarized several times. D. the property contains asbestos insulation.

OPTION

Which of the following is an example of a unilateral contract? Select one: A. net listing B. option C. exclusive listing D. exclusive agency

decreasing land value

Which of the following is the LEAST likely cause for depreciation? Select one: A. decreasing land value B. physical depreciation C. functional depreciation D. being next to a busy highway

lender

mortgagee

the lender

mortgagee

borrower

mortgagor

the borrower

mortgagor

PITI Mortgages (principle, interest, taxes, insurance)

mortgagor agrees to assign a certain portion of each monthly payment for insurance and taxes

tenancy (or estate) for years

most common type of leasehold interest; leasehold that runs for a determinable length of time, up to a specified date of expiration; automatically terminates upon expiration date

fee simple estate can also be called fee simple absolute

most complete form of ownership recognized by law; confers ownership in an absolute sense; no restrictions or conditions placed upon inheritance; owner may own land and all its rights together, or just a few rights by themselves; lasts forever and may be passed from heir to heir

mystic will

must be in writing, signed by the testator, sealed and notarized with three witnessess

INCORRECT B

Which type of financing gives the LEAST protection to the vendee? Select one: A. blanket mortgage B. purchase money mortgage C. package mortgage D. Installment Land Contract

EXCLUSIVE RIGHT TO SELL LISTING

Which type of listing is the best one to ensure the broker a commission? Select one: A. net listing B. open listing C. exclusive agency listing D. exclusive right to sell listing

INCORRECT C

n areas where common law is accepted, a broker lists a house for sale and receives an offer from another client of the broker. In this relationship, the broker is considered a: Select one: a. agent to the seller and nothing to the buyer b. dual agent c. agent to the seller and sub-agent to the buyer d. messenger

surviving spouse

n states recognizing community property as a form of husband and wife co-ownership, upon the death of a spouse the entire estate is transferred to the: Select one: a. surviving spouse. b. children. c. heirs named in the will. d. spouse and children equally.

INCORRECT B

n the Common Law states the act of taking private property for public use is called: Select one: a. condemnation. b. eminent domain. c. adverse possession. d. tacking.

by mutual agreement

neighbors may agree to construct and share a pier centered on the line dividing their lake front properties

special assessments

never used by government to raise revenue; imposed only on specific segments of the community and only at such times as specific improvements for those segments are deemed necessary; street lights, water curbs, streets, recreational facilities, etc

the lender

Who does the mortgagee's title insurance benefit? Select one: A. the lender B. the borrower C. the seller D. the buyer

severalty Ownership in Severalty

a person owning property by himself is said to own it in:

freehold estates

a person owning some or all of the rights contained in the Bundle of Rights; an ownership interest in real property extending for an indeterminable length of time; owns the property indefinitely, until he dies, sells, or wills it to someone else

advertising

no advertisement of property for sale or rent may include language indicating a preference or limitation

conventional loans

non government backed loans

mortgage brokers mortgage bankers pension funds trust funds private individuals foreign investors university and hospital endowment funds, credit unions

non institutional lenders

market grm

numerical value of a property's grm is established through a market analysis of the gross incomes and sale prices of comparable properties which have sold recently. this will establish

insurance covenant

obligates the borrower to maintain adequate hazard insurance to protect the property

mistakes-of-law

occur when a party, in full knowledge of the facts, comes to an erroneous conclusion as to their legal ramifications

statutory rights of redemption (none in Louisiana except for tax sales which is 3-5 years)

occurs after the actual foreclosure sale; the borrower may have up to 2 years to redeem his property by paying off the debt in full, and he may be permitted to remain in possession of the property

equitable redemption

occurs after the borrower goes into default but before the actual foreclosure sale; can redeem the property by paying the current indebtedness

implied agency

occurs when the parties ACT in such a way to indicate that they have agreed to an agency; occurs when the parties behave as though there is an agency agreement

one who receives an offer

offeree

one who makes an offer

offeror

general warranty deed sale with warranty in LA

offers more comprehensive guarantee of title than any other type of deed; grantor certifies that the title his is conveying is free of defects which may have arisen either before or during the time he owned the property; best type of deed because it contains all covenants warranting back through all previous owners

familial status

one or more individuals who have not reached the age of 18 being domiciled with a parent or another person who has or is seeking legal custody; also includes a person who is pregnant; unless the property meets standards for exemption as "housing for older persons" all properties must be available under the same terms and conditions as are available to all other persons

legatee

one who inherits property in a will

...

A property sells for $150,000. The buyer obtains an 80% loan at 7% for 30 years. The transfer tax is $3/1000. If the seller is paying 40% of the tax, how much will the buyer owe? Select one: A. $180 B. $144 C. $216 Incorrect D. $270

...

A property sold for $180,000 six years ago. Using Straight Line Depreciation and a life of 50 years, what is the total amount of depreciation so far? Select one: A. $19,285 Incorrect B. $21,600 C. $18,000 D. $17,565

INCORRECT C

A type of lease which requires fixed payments at regular intervals and does not include the costs of taxes, insurance, or maintenance, is a Select one: A. gross lease B. fixed lease C. straight lease D. all of the above

exclusive agency

A type of listing agreement in which the seller retains the right to sell the property himself without paying a commission even if listed with a broker is Select one: A. exclusive agency B. exclusive right to sell C. net listing D. open listing

exclusive agency listing

A type of listing in which the seller retains the right to sell her property without paying a commission is a/an Select one: A. exclusive listing B. exclusive right to sell listing C. exclusive agency listing D. net listing

condemnation

acquisition of private lands for public use, in exchange for just compensation

adverse possission

acquisition of title to property by possession of the property for a statutory number of years; in order to claim title, the occupancy and possession of the property myst be continuous, open, hostile, exclusive and notorious; must occupy the property he claims continuously for a period of from five to thirty years, as determined by sate law

competition

active demand for real estate in short supply by two or more market participants

menace

actual threat to commit duress

codicil

addition to an existing will by which changes in the provisions of the will are made

equitable right of redemption

additional time within which the borrower can pay his debt

Amendment to FFH law effective March 1989

adds handicap and familial status to list of protected classes and give HUD more authority in enforcement

warranty of title clause

affirms that mortgagor holds good and clear title to the property and has the right to convey it

certificate of title

after the abstract is done, it is sent to an attorney for legal examination of the title evidence, the attorney gives an opinion as to who the owner is and as to anyone else with a legitimate interest in the property; the attorney then gives ________, which is his opinion written, signed, and attached to the abstract; gives a professional evaluation but offers no guarantee of the title's soundness

agency coupled with interest

agency relationship in which the agent is given an interest in the subject of the agency, such as the property being sold

confidentiality

agent is bound to keep any personal information which the client discloses to him confidential, for example, that the client is getting a divorce and must sell quickly

disclosure

agent must disclose any relevant information to the client that might affect the transaction

allocation of customers or markets

agreement among brokers to divide their markets and refrain from competing for each other's business; division may take place on a geographic basis or on a certain price range of homes

gross lease

aka fixed lease, straight lease, flat lease; requires rent payment in fixed amts at specified intervals throughout the lease's terms; lessee pays the same amount periodically for the duration of the term

constructive notice

all docs that create, transfer or encumber a property must be recorded in the public records to protect the interest of the grantee and insure future marketability of title

offer and acceptance

all parties must enter into a contract with a clear understanding of the contract's terms and agreements; meeting of the minds

legal capacity

all parties to a contract must be legally competent and authorized; generally, minors may not enter into a legal agreement without the protection of a legal guardian; intoxication and insanity are also grounds, if a party to a contract is considered to be incompetent, the contract may be voidable

Rights of Possession

allow an owner to occupy the property he owns

Rights of Control

allow the owner to control the way in which his property is used

Right of Disposition

allow the owner to dispose of his property as he chooses, that is, sell, give away or will the property

eminent domain

allows the government to temporarily or permanently claim private property for public use without consent from the owner; typically used to acquire land for roads, schools, hospitals, government buildings, etc. gov must prove that the property is needed and pay the owner just compensation

novation

allows the substitution of one party to the contract with a new party, or the replacement of a new obligation for an old one

right to sequester

alternative to eviction; if there is a possibility of recovering unpaid rent, he or she can file for sequestration of property

straight line method of depreciation

amount of depreciation is the same each year and is found by dividing the value by the number of years over which the property is being depreciated (value/number of years)

BOTH A AND B

an an offer that has been made but not yet accepted by the seller be revoked by the buyer? Select one: A. Yes, in most states an offer is revocable up until the time it is accepted by the seller. B. No, in Louisiana an offer is binding and irrevocable. C. both a and b.

fixure

an item of personal property which has been permanently attached to real property such that it is considered a part of the real property.

license

an oral agreement granting the short term use of real property

mineral rights

an owner's rights to things below the surface of his property are called (considered real property)

life estate

another type of free hold estate; owner of a life estate hold title as long as he or some other specified person is alive; when the owner dies, title passes to a designated third party or reverts back to the original owner or his heirs

separate property

any property acquired outside the marriage

RESPA

applies only to first mortgage transactions which are financed by federal programs including FHA and VA backed loans

executor or executrix if female

appointed in the will to carry out the instructions of the will

easement by necessity

appurtenant easement that arises when an owner sells a part of his land which has no access to the street except across the original owner's land

by implication

arise from an unexpressed, but legally binding understanding between parties involved; example, if an owner sells the rights to the oil on his property he does so with understanding he will allow the purchases to enter the property to extract the oil

192 ft. X 192 ft or 5/6 acre

arpent = ______ ft x ______ ft or ______ acre

tenancy in partnership

association of two or more persons joined together for business purposes as co owners

covenant of seizen

assures that the grantor fully possesses or is seized with the title he is conveying

covenant against encumbances

assures the grantee that the property is free from liens and encumbrances, other than those specified in the deed

specific lien

attaches only to the property explicitly encumbered by the lien; ex. property taxes

general lien

attaches to all of a person's property, real and person

Attorney's opinion

based on an attorney's examination of the history of the title

effective age

based on condition of the property; if two houses were both built 10 years ago and one has been well maintained and one has not, the one that has been maintained would have a lower ________ than the other

express agency

based on formal agreement between the parties in which the parties express the establishment of an agency and state the terms and conditions, for example, a listing agreement; may be written or oral, can also be created between a broker and a buyer and is known as buyer representation agreement

tenancy by the entirety

based on the common law principle that husband and wife constitute a single legal entity; the entire estate is said to be owned by both spouses as a single person, in order for a property to be transferred, both spouses must sign; lasts as long as the marriage lasts; can only be dissolved by divorce or death; only legally married persons; we not have have this in LA

1. description of the deed for the property 2. conditions of the sale, such as purchase price and loan terms 3. buyer is responsible for paying taxes and insurance 4. signatures of both parties dated and notarized 5. escrow provisions and prepayment privilege 6. protections for the seller, such as the right to declare entire purchase price due if buyer defaults

basic elements of a contract for deed

principle of anticipation

basis for the income approach

chain of title

basis of the abstract is the property's _________; a continuous linking of owner's stretching back ideally to the time when the land's first owner received it by patent or grant from the gov

title insurance

began as protection for attorneys for any errors they might make in abstract but now available to anyone; protects owner and lender against possible claims by third parties; offers financial protection if the title proves unsound; protects only against the past, not the future

open end loan

borrower increases his existing mortgage to the original amount

bilateral contract

bother parties promise to perform as stated in the contact; example is a real estate sales contract; seller promises to sell a parcel of real estate and the buyer promises to pay a certain sum of money; must be signed by both parties

abstract of title

brief summary of all recorded instruments which have affected the title, including records of taxes, special assessments, judgements, mortgages, and trust deed

reasonable care

broker is always mindful of the principal's interests and concerns, for example, acting to secure the highest possible price for his client's property

loyalty

broker is faithful to his principal and works for no other interested party without the knowledge or permission of the principal; agent must but his client's interests above his own and must be careful to avoid situations that might involve conflict of interest

accountability

broker is strictly accountable for any of the principal's assets coming in to his hands and must take care to handle them responsibly

obedience

broker obeys all the legitimate instructions of the principal, for example, when he may show the property; agent must represent the client in good faith to the best of his abilities at all times; however, not if the instrctions are unethical

nonconforming use

building which was built before a zoning ordinance was enacted may not conform to current zoning regulations; often allowed to continue until the building is torn down or use is changed

straight loan or term loan

calls for payment of interest only for the term of the loan; at the end of the term, the entire sum of the principle is due in one balloon payment plus any remaining interest

by prescription

can be created only through one party's open, hostile, exclusive, notorious and uninterrupted use of a portion of the land of another for a period of time specified by state law

transferability

can be readily transferred from the seller to the buyer' Can the product be conveyed or transferred from one person to another?

satisfaction of judgement

cancels debt and defeats any interest the mortgage has had in the collateral property

housing for older persons

certain properties can be restricted for occupancy by the elderly; housing occupied solely by persons age 62 or older or housing occupied by atleast one person 55 years or older per unit is exempt from familial status protection

downzoning

change in zoning from a high density to a lower density use, for example, from residential to agricultural

counteroffer

changes made by the offeree to the original offer and rejection of the original offer

joint tenancy

characterized by possession, interest, time and title or PITT. All members must acquire their interest at the same time, each tenant holds an equal share, and it has the right of survivorship; tenant can not will his share but he can sell it; the new owner would be a tenant in common; has been called a Poor Man's Will; although it can not be considered an actual will; illegal in Louisiana because of the forced heirship laws; In LA, there can be no right of survivorship

loan origination fee

charged by most lenders for generating a loan; not prepaid interest; paid to the lender and are usually 1% of the loan amount

encumbrances

claim or burden on a property which limits, restricts, or otherwise affects one's right, interest or use of that property; anything which diminishes a person's right of ownership, does not represent ownership of another party's property

escalated lease

clause provides for periodic increases in rental rates

PUD's: Planned Unit Developments

combine different land uses such as housing, recreation, and businesses in one development; require special zoning ordinances; owners do not have direct ownership interest in the common areas

assemblage

combining two or more lots into one large parcel may invest the new site with a value greater than the sum of its previous parts

actual fraud

committed when there is intent to deceive, for example, lying, withholding pertinent info

constructive fraud

committed with no intent to harm, mislead, or misrepresent. for example, breach of trust, responsibility, or duty

contsructive or actual

communication of acceptance; occurs when an offeror specifies the means by which he wants his offer accepted; legally binding as soon as the offeree follows the offeror's directions; if no specific means of communication is desired by the offeror, actual communication is said to occur when the offeror received written or oral communication of acceptance, or when there is a meeting of the minds

social trends

community's social ideals and standard can shape patterns of collective behavior which in term affect the value of real property

quantity survey method

computes the cost of every item that must be purchased to build the structure;then factors in labor. most accurate and most expensive

progression

concept that the value of an inferior property is enhanced by its association with better properties of the same type

directive zoning

concerned primarily with the function of land; used to promote the highest and best use of the land

proprietary lease

confers rights that are more than an ordinary renter's, but less than a full owner's

procuring clause

considered to be person whose actions are the primary reason for the sale taking place

price fixing

conspiracy among brokers to set prices for their services, rather than negotiate such fees

encroachments

constitutes the unauthorized use or occupation of another's property

valid contract

contact that is binding and enforceable; contains all the essentials of a legal contract; each party may be required to perform, as stated in the contract, by any of the other parties

warranty deed

contains covenants, or promises, of warranty, guarantees that the title it conveys is good

mortgage

contract between the buyer and the lender

unenforceable contract

contract if its terms cannot be enforced by the courts; has all essential elements of a valid contract, however, for some reason, neither party can sue the other for specific performance, example, oral contract.

executed contract

contract in which all the parties have met all the terms and conditions of the contract; contract is completed

consideration

contract is not valid unless each party has pledged to exchange something with the other party; may be tangible or intangible and may include granting the legal right to do something, or making a promise not to do something

time is of the essence

contract must be performed within the time limit specified; a party who fails to perform on time is liable for breach of the contract

legal objective

contract that are in violation of the law lack legality of purpose and are therefore not valid; contracts are also invalid if they infringe on the right of other or are formed with the intent of harming another person or his property; an illegal contract is unenforceable in court because it is not vail

illegal contact

contract that is in violation of local, state, or federal law

legal contract

contract that is required or permitted by law

voidable contract

contract that is still binding but is flawed. Contracts arising from threat or fraud are _________ by the wronged party; if the wronged party chooses not to void, the guilty party remains bound to it; considered to be valid unless voided by the wrong party within a prescribed period of time (relatively null in Louisiana)

executory contract

contract which has not been completed or fulfilled; all of the terms of the contract have yet to be met (in the process)

reproduction cost

cost at current prices to produce an exact duplicate

replacement cost

cost at current prices to replace a building with one of equivalent utility

blanket mortgage

covers several properties but each may be released separately

Real Estate Settlement Procedures Act

covers the disclosure of settlement costs, the expense a buyer must pay at the closing before he receives actual possession of the property

bufferzones

created for the purpose of separating one land use from another

by reservation

created when a seller of a property reserves an easement for his use after the sale

deed in lieu of foreclosure

dation en paiement in Louisiana, friendly foreclosure; the borrower sells the property to the lender in return for the lender cancelling the note; lender does not retain the right of a deficiency jedgement if the property sells for less than the borrower owed

special warranty deed

deed contains only one covenant; in this covenant, the grantor guarantees the condition of title only for the time he actually owned the property; claims no responsibility for title claims arising from past periods of ownership, or for encumbrances other than those he himself has incurred and specifically listed in the deed

scarcity

dependent upon human demand and the uses of the land

curable depreciation

depreciation in which the amt of money spent on repairing the deficiency is equal to or less than the resulting increase in value

incurable depreciation

depreciation in which the amt of money spent on repairing the deficiency is more than the resulting to increase in caluse

Lot, Block, and Tract - or Subdivision Method

designed to do what rectangular survey cannot, provide efficient, easily read and understood descriptions for small urban and suburban properties

demand

desire to purchase along with the ability

fully amortized loan

direct reduction loan; features a schedule of equal payments consisting of both principle and interest; usually long term, up to thirty years

by performance by partial performance with written acceptance substantial performance impossibility of performance mutual agreement of the parties to cancel operation of law by accord and satisfaction by novation by destruction of property by bankruptcy by statute of limitations due to fraud or misrepresentation breach of contract recission

discharged contract can be brought about in many ways:

Rectangular (Government) Survey System

divides surveyed land into a checkerboard of rectangular parcels; except for seaboard states and Texas, this is widely used throughout most of the U.S.

mortgage brokers

do not use their own funds; find money to lend, acting as an intermediaries between the borrower and the lender, has nothing to do with servicing the loan

general partnership

each partner is responsible for the partnership's debts up to the limits of his own private resources, and is held individually liable for any business losses and obligations

metes and bounds

earliest for of legal description; method of describing or locating real property; length and boundaries; a description starting with a well-marked point of beginning and following the boundaries of the land until it returns once more to the point of the beginning

environmental conditions and physical factors

economic worth of a parcel of land is influenced by geographical, locational, and economic factors

community property

emphasizes not the unity of spouses but their equality as married partners; all property, both real and person, that is acquired by the marriage is owned by both spouses as equal partners, each having half interest; either spouse may buy property without the other's consent but neither may sell or transfer without the other's agreement

building codes

enacted to specify the standards for construction of new buildings and alteration or repairing of old ones

regulation z

enforces the truth in lending law; establishes guidelines for three aspect of the lending process 1. disclosure of loan cost 2. borrower's right of recission 3. fair advertising practice

Federal Housing Administration

entirely self supporting and operates over 50 programs providing assistance to homeowners and other borrowers; rarely provides mortgage funds directly to borrowers; does not build houses and does not set interest rates; large FEDERAL MORTGAGE INSURANCE AGENCY; does not have income limits to determine who is eligible for assistance; sets a maximum amount that it will insure

mistake-of-fact

errors regarding the facts of a contract, for example, a misunderstanding as to the location of a parcel of land being conveyed

income approach

estimate the present worth of a property's expected future income and is used for appraising income producing properties

bargain and sale deed

guarantees more than the quitclaim, but not as much as a warranty, conveys title without explicit guarantees, but does imply that title is good; there is assurance that the grantor does in face possess the rights which he is conveying

INCORRECT B

he difference between the value of a property and the loan balance is the Select one: A. equity B. down payment C. LTVR D. PMI

demand, utility scarcity, transferability

he four determinants of value are Select one: A. demand, utility scarcity, transferability B. desire, dust, competition, change C. change, competition, demand, contribution D. demand, utility, situs, transferability

quantity survey method

he method of estimating cost which is the most accurate and the most time consuming is the Select one: A. square foot method B. cubic foot method C. unit-in-place method D. quantity survey method

redemption

he process through which a mortgagor can regain his property after default is called Select one: A. redhibition B. redemption C. foreclosure D. release

collateral

he property pledged as security for a debt is called the Select one: A. collateral B. hypothecation C. mortgage D. laches

INCORRECT C

he subject property is a 2,500 square foot home. A comparable is found that has 2,300 square feet. Using a value of $100 per square foot, what adjustment should be made for the difference in square feet? Select one: A. +$20,000 B. -$20,000 C. +$2,000 D. -$2.000

monthly cost

hen using a 360 day year to calculate prorated taxes, the cost of the taxes is based on ________. Select one: a. monthly cost. b. daily cost. c. semi-annual cost. d. average cost.

latent defect

hidden structural defect that would not be discovered by the ordinary inspection; failing to disclose a known defect in a violation of the fiduciary relationship; he may also be liable for damages

MUD's: Mixed Use Development

highrise developments which combine offices, stores, theaters, and apartments in a single building; may offer laundry facilities, restaurants, hair salons, etc

curtesy

husband's interest in his wife's estate

exclusive right to sell listing

only one broker hired and the agent and he is give the exclusive right to sell the property; regardless of who actually sells the property, the seller must pay the broker a commission; most common and popular type of listing agreement for broker and sellers alike

modification

improvements affect not only the properties they are built on but also other surrounding properties; example, an airport can have a variety of effects on the value of adjacent land; residential values would likely fall and commercial would wise

fixity of investment

improvements on the land rep capital invested in the lad; a building is capital immobilized, or fixed to a specific site; improvements to land are generally long-range investments

servitude

in Louisiana, the term use for easement is

sale without warranty

in Louisiana, this is comparable to the Quitclaim deed

limited partnership

includes on or more general partners as well as its silent or limited partners; limited partners put up mist of the investment capital but do not have much to say in the management of the business

extended coverage

includes the protection of a standard policy plus additional protections against defects such as rights of parties in possession, examination of a survey and certain unrecorded liens

net annual income / capitalization rate x value

income approach formula

blockbusting

inducing panic selling for financial gain by insinuating that a minority group is moving into the area; also called panic peddling, involves stating or insinuating that by minority-group invasion of the neighborhood, property values will fall

savings and loans commercial banks mutual savings banks life insurance companies

institutional lenders

trust deed

instrument that is employed to pledge an interest in real property in exchange for a loan or other consideration; involves three parties; lender is the beneficiary

Rights of Quiet Enjoyment

insure that an owner will be able to use and enjoy his property without interference of other parties

protection clause

insures that the broker will receive a commission if his client buys the house within a certain time period after the listing agreement has expired

dower

interest a widow hold in her deceased husband's estate

tenancy (or estate) at sufferance

interest formed by a tenant's occupying a premises without the landlord's consent; lowest estate interest recognized by law; tenant's interest is solely possessory

non-freehold estates leasehold estate

interest in real property that does not last indefinitely; limited to a specific period of time; interests of a tenant rather than an owner

yearly

interest is always calculated on a ________ basis

remaindermain interest

interest remainderman acquires

taxation

involuntary specific lien; practiced in two ways, ad valorem taxes and special assessments

transfer by accession

involves the acquisition of real property interests through natural or artificial causes, or acts of God

voluntary transfer

involves the intentional conveyance of title, by sale or gift, from one owner to another by means of deed or patent; most are private grants

partition sale

joint tenancy and tenancy in common can be dissolved by partition suit. only of of the co owners need to initiate the suit; outcome is usually a court ordered sale of the property and the proceeds are divided proportionally among the co tenants

exclusion

keeps others from entering or using property

easement appurtenant

kind of easement that the rights are vested in the land itself and not in person

triple net lease

landlord charges the tenant for increases in utility charges, maintenance, property taxes along with base rent; participation clause is included (escalator)

forced heir (In LA)

law that parents, when making a will, must leave a certain portion of their estate to their children

proprietary lease

lease given by the corporation that owns a cooperative apartment building to the shareholder for the shareholder's right as a tenant to an individual apartment

Periodic tenancy

leasehold of determinate length, of so many days, months, or years; renews automatically when it expires for another term of equal length unless the lessor or the lessee acts to terminate it

tenancy (or estate) at will

leasehold that runs indefinitely ; has no determinate period in days, months, or years nor any specific date of termination; lease can be terminated by either party without notice; most states however require sufficient notice

suit to quiet title

legal action in which the court is asked to resolve any possible clouds on the title

corporation

legal entity in the eyes of the law; management is controlled by board of directors; individuals invest by purchasing stock; stock is considered person property

tenant

lessee

net lease

lessee agrees to pay a fix amt of rent, plus a share or all of the property's operating expenses (taxes, insurance, maintenance, etc); lessor is freed from management and maintenance responsibilities; widely used for commercial and industrial properties

ground lease

lessee pays rent at a fixed rate plus property expenses; however the lessee rents only an unimproved parcel of land from the lessor, generally with the stipulation that he, the lessee, erect a building or make some other value enhancing improvement on the property

landlord

lessor

specific lien

lien that affect only that particular property

general lien

lien that affects all property, both real and person

involuntary

lien that is not a matter of choice

voluntary

lien which is created intentionally

legal life estate

life estate created by state law

conventional life estates

life estate created by the deed or will of the owner

partially amortized loan

limited reduction load, renegotiable rate mortgage, payments are calculated over a 20 or 30 year amortized period with a loan term of 5 years; repaid in regular installments of principle and interest but one or more payments are is a balloon payment

right of use

limited right of one person to a specific use of another's property

cloud on title

lingering, often vague or uncertain claim or encumbrance that impairs an owner's title

government controls and regulations

local, state, and federal agencies are empowered to tax and otherwise control real property in a variety of ways, and are obligated as well to provide certain goods and services for the benefit of owners and renters of real property

external depreciation

loss in value caused by unfavorable economic influences occurring outside the property; can be due to location or to economic factors; is never curable; sometimes called economic depreciation or economic obsolescnce

physical depreciation

loss in value due to such factors as wear and tear from use, structural defects, and exposure to the elements; always curable

functional depreciation

loss in value due to the development of new technology or design, and is an inadequacy or a lack of functional utility, or super adequacy, due to overbuilding or over design; sometimes curable

depreciation

loss in value for any reason and is the difference between the cost to construct an improvement and the amount paid for it once built

deed restrictions

made by the executor of the deed (grantor) and conveyed to the party receiving the property (grantee) by a clause in the deed

ad valorem taxes

main source of revenue for local governments; means according to value

quitclaim deed

makes no promises at all; grantor simply relinquishes any claim to title which he may not may not have had; conveys whatever title the grantor possesses, whether it is a clear, unimpaired title, a defective title claim or no title interest at all; used frequently for removing clouds on title

economic and financial factors

market value of a given piece of real property is affected by the operation of large economic forces apart from the intrinsic value of the particular property itself

expense stop provision

may be included in a lease and limits the amt by which property expenses may increase; ceiling to property expense increases must be specified in the provision

appraising

may not give consideration to race, color, religion, national origin, sex, handicap, or familial status when arriving at a value of a property

Pour Autre Vie

means "for the life of another"; another type of life estate; means that the life estate owner retains title until death of a third party

utility

meet a need or render a service; "Does the product satisfy a need?"

co-operatives

members own shares of stock rather than real property; sole purpose of providing houses for its members; the stock each member holds entitles him to exclusive use of one of the housing units

reverse mortgage

A type of mortgage designed for retirees in which regular monthly payments are made to the borrower based on the equity, and in which the loan is paid from the sale of the property at the owner's death is a Select one: A. reverse mortgage B. open end loan C. buydown D. sale and leaseback

vendor's lien

A type of seller financing used in connection with a Purchase Money Mortgage is a: Select one: a. mechanic's lien b. vendor's lien c. vendee's lien d. seller's lien

specific voluntary lien

A vendor's lien is a: Select one: A. specific voluntary lien B. specific involuntary lien C. general voluntary lien D. general involuntary lien

NOT D

A violation of the Fair Housing Law is Select one: A. a criminal act B. punishable only if damages occur C. a misdemeanor D. punishable by a $5000 fine

a misdemeanor

A violation of the fair housing act is Select one: A. a misdemeanor B. a felony C. punishable only if damages occur D. punishable by up to 20 years in prison

party wall easement

A wall that lies on the boundary line between two lots is called a/an: Select one: a. party wall easement. b. easement by necessity. c. easement in gross. d. easement by prescription.

no, unless he appeals for and receives a zoning variance.

A warehouse is in an area that has recently been zoned residential, but the warehouse is allowed to remain as a non-conforming use. The owner decides he needs a bigger building. If he tears it down, can he rebuild a larger facility in that location? Select one: A. yes, because he was allowed to remain after the zoning change. B. no, under no circumstances C. no, unless he appeals for and receives a zoning variance. D. only if he gets the entire area rezoned

holographic or olographic will

A will that is written by the testator and in his own handwriting, dated and signed by him is known as a Select one: A. statutory will B. holographic or olographic will C. nuncupative will D. mystic will

executor

A will usually names a person to carry out the instructions of the will. This person is called the Select one: A. administrator B. dower C. curtesy D. executor

holographic will

A will which is written in the testator's own handwriting, signed and dated, but not witnessed is a Select one: A. statutory will B. holographic will C. nuncupative will D. mystic will

$35,000

A woman bought a house 7 years ago for $85,000. The down payment was $10,000, and she obtained a loan of $75,000. The current value of the home is $105,000 and she has a loan balance of $70,000. What is her equity? Select one: A. $35,000 B. $30,000 C. $25,000 D. none of the above

promissory note

A written promise to repay a debt is a Select one: A. lien B. mortgage C. promissory note D. judgment

independent contractor

Agent Al works strictly on commission and his broker does not withhold any taxes. Al is probably considered a/an Select one: A. independent contractor B. employee C. part time employee D. assistant

False

All lenders must use a standard mortgage form. Select one: True False

sale with warranty

All of the following are examples of involuntary alienation EXCEPT Select one: A. escheat B. eminent domain C. sale with warranty D. adverse possession

acquisitive prescription.

All of the following are examples of transfer by accession EXCEPT: Select one: a. acquisitive prescription. b. accretion. c. reliction. d. attachment.

they are always paid by the borrower

All of the following are true concerning discount points EXCEPT Select one: A. they are pre-paid interest B. they are increased yield to the lender C. they are rate equalization factors D. they are always paid by the borrower

the promissory note is security for the debt

All of the following statements are true EXCEPT Select one: A. the lender is the mortgagee B. the owner of the financed property is the mortgagor C. the promissory note is security for the debt D. the mortgage is a lien

economic

All of the types of depreciation may be curable EXCEPT Select one: A. physical B. functional C. economic D. They are all curable.

TRUE

All real estate sales and rental offices must display the Fair Housing poster where it can be seen by all. Select one: True False

misrepresentation

An agent shows a house that has a leaky roof. The ceiling has been patched and painted over. If the agent knows about the leak but does not disclose this to prospective buyers he is guilty of? Select one: A. mistake of fact B. nothing, because he is acting in the seller C. puffing D. misrepresentation

MISREPRESENTATION

An agent tells a prospective buyer that seepage in a basement has been corrected, knowing that the crack has simply been filled and painted over. This is an example of Select one: A. puffing. B. mistake of fact. C. misrepresentation. D. permissible because the owner told him to say it.

disclosed dual agent

An agent who represents both the buyer and seller in the same transaction with the written consent of both is a/an Select one: A. undisclosed dual agent B. disclosed dual agent C. subagent D. illegal agent

license

An agreement granting the short term use of a property and which is revocable at any time is called a/an Select one: A. easement B. encroachment C. license D. servitude

homestead exemption

An amount which is deducted from the assessed value of a home and which reduces property taxes for your primary residence is called: Select one: a. homestead exemption. b. ad valorem exemption. c. special assessment. d. tax reduction.

non-conforming use

An apartment building in an area that is zoned for single family residences would be an example of Select one: A. variance B. non-conforming use C. spot zoning D. blockbusting

easement by necessity

An appurtenant easement that arises when an owner has no access to the street except across his neighbor's land is called: Select one: A. easement by necessity B. easement in gross C. natural servitude D. right of use

about 5/6 of an acre

An arpent contains: Select one: a. about 5/6 of an acre. b. 36 sections. c. 3 townships. d. 1/2 mile.

credit to buyer, debit to seller

An assumption of the seller's loan would be listed on the settlement statement as Select one: A. debit to buyer, credit to seller B. credit to buyer, debit to seller C. debit to buyer, nothing to seller D. credit to seller, nothing to buyer

credit to buyer, debit to seller

An assumption would be listed how on the settlement statement? Select one: a. credit to buyer, debit to seller b. debit to buyer credit to seller c. credit to buyer, nothing to seller d. debit to seller, nothing to buyer

both A and C

An easement appurtenant can be cancelled by Select one: A. the dominant tenement B. the servient tenement C. merger D. both A and C

at least two tracts of land

An easement appurtenant involves Select one: A. one tract of land B. two tracts of land C. at least two tracts of land D. one or more tracts of land

easement in gross

An easement granted for a utility, pipeline, railroad, or water line would most likely be a/an Select one: A. easement appurtenant B. easement in gross C. easement by necessity D. right of use

...

An encroachment would most likely be found by Select one: A. title exam Incorrect B. survey C. suit to quiet title D. abstract of title

covers projected environmental impact of proposed structures.

An environmental impact statement Select one: A. summarizes the environmental impact of existing structures. B. covers projected environmental impact of proposed structures. C. is required only for industrial developments. D. is required only for construction in wetlands.

the projected impact of proposed structures on the environment

An environmental impact statement covers Select one: A. the impact of existing structures on the environment B. the impact of increased population on the environment C. the projected impact of proposed structures on the environment D. the impact of water use on the environment

a fence that extends beyond the property line

An example of an encroachment is Select one: A. a driveway giving access to an adjoining property B. a lien C. a mortgage D. a fence that extends beyond the property line

two brokers agreeing to set the same fee structure.

An example of price fixing would be Select one: A. charging the commission agreed upon with the seller. B. two brokers agreeing to set the same fee structure. C. charging the sale price the seller wants. D. charging a fee lower than your competitors.

has been signed but not performed

An executory contract is one which Select one: A. has been signed and completed B. has been recorded C. has been notarized D. has been signed but not performed

mortgagee's policy

An insurance policy which protects the lender for the amount of the loan as to problems with the title to the property is called a Select one: A. mortgagee's policy B. mortgagor's policy

$400,000

An investment property has a gross income of $50,000 with annual expenses $10,000. If the capitalization rate is 10%, what is the value of the property? Select one: A. $40,000 B. $350,000 C. $400,000 D. $433,000

severance

An item of real property may become personal property by

revocable

An offer which has been made but has not yet been accepted is Select one: A. irrevocable B. revocable C. binding D. none of the above

INCORRECT B

An office building rents for $1000 per month. The GRM for the area is 120. What is the value of the building? Select one: a. $1,440,000 b. $120,000 c. $12,000,000 d. $14, 400,000

$250,000

An office building rents for $2,500 per month. Using a GRM of 8.34, what would the value of the building be? Select one: A. $250,200 B. $450,000 C. $500,000 D. $520,000

curable functional depreciation

An older house has very small closets, however there is enough room to enlarge the closets without detracting from the size or appearance of the rooms. This would most likely be an example of Select one: A. curable physical depreciation B. incurable physical depreciation C. curable functional depreciation D. incurable functional depreciation

True

An owner may appeal to the Zoning Review Board for a variance which exempts the owner from a particular zoning ordinance. Select one: True False

mistake of fact

An unintentional error regarding the facts of a contract is known as Select one: A. actual fraud. B. constructive fraud. C. mistake of fact. D. mistake of law.

involuntary specific lien

An unpaid swimming pool lien placed by the installer would be an example of Select one: A. voluntary general lien B. involuntary general lien C. voluntary specific lien D. involuntary specific lien

all of the above

Another name for Contract for Deed is Select one: A. Installment Land Contract B. Conditional Sales Contract C. Agreement to Convey D. All of the above.

LIQUIDATED DAMAGES

Another term for earnest money is Select one: A. specific performance. B. liquidated damages. C. deposit. D. reserves.

Length x Width = Area

Area Formula for square or rectangle

Base x Height / 2

Area of a triangle

True

Assessed value is a percentage of market value. Select one: True False

1. to produce the best possible net operating income 2. to maintain and increase the value of the principal's investment

Basic functions of a property manager

substitution

Basis for the Sales Comparison Approach

exclusive agency

only one broker is hired to act as the exclusive agent of the principal; the seller, however, can still sell his property himself and not pay a commission to the broker

36

ow many sections are in a township? Select one: A. 10 B. 25 C. 36 D. 48

43,560

ow many square feet are in one acre? Select one: a. 43,560 b. 43,650 c. 45,360 d. 46,350

INCORRECT C

ow much does an owner sell for if he nets $30,000, pays off a mortgage of $55,000, gives his attorney $1,500 for services, and pays his broker an 6% commission? Select one: A. $91,690 B. $92,021 C. $93,400 D. $94,000

trusts

ownership arrangement in which property is held by one party for the benefit of another; three parties involved; trustor conveys title to the property to the trustee, who will own the property for one or more people, the beneficiary; trustee is count to act in the beneficiary's interest in administering the trust

co ownership

ownership by two or more people; rights of ownership are shared; five main types (known as ownership in indivision in Louisiana)

by necessity

ownership of real property is understood to convey the rights of ingress and egress; in most states, owners of landlocked property may claim an easement appurtenant across adjoining land

qualified or determinable fee estate

ownership with conditions; example, an owner may confer ownership on the condition that no alcohol is sold on the premises, or for as long as the owner does not marry; uses the wording "as long as" or "during"; if the restriction is violated, ownership reverts to the former owner; considered future interests

federal consumer protection act

passed because of problems with consumer confusion regarding interest charges, points, misleading advertising practices and confusion as to the actual cost of consumer credit

defeat the conveyance

paying off the debt

graduated payment mortgage

payments starts small and become larger as the mortgage goes on

anticipation

perception that value is created by the expectation of benefits to be derived in the future; basis for the income approach to value

economic life

period of time over which property may be profitability used; 40-60 years is normal

partial release clause

permits each parcel to be released from the mortgage as it is sold

designated agency

person authorized by the broker to act as the agent of a specific principal; agent is the only agent who has fiduciary responsibilities to the principal; this makes the other agents in the company free to act as agents for the other party in a transaction; therefore, two people from the same company can rep different parties in the same transaction; however, in this situation, the broker may be considered a dual agent and disclosure is required. In Louisiana, if you have the listing, you represent the seller; if someone else sponsored by the same broker shows the house, the rep the buyer and does not constitute dual agency. In Mississippi, it would be considered dual agency.

property manager

person who manages property for an owner as an agent; only by training and experience does one realistically acquire the necessary skills; role is fiduciary

handicap or disability

physical or mental impairment or having a history of such impairment that substantially limits one or more of a person's major life activities; does not include the current illegal use of or addiction to a controlled substance; however, a person in an addiction recovery program is protected; individuals who have AIDS are protected under the handicap classification

restrictive conditions

places limitations on the grantee's property; used to determinable or qualified fee estates; may require that a property be used for a certain purpose or not used for a certain purpose

mortgage

pledge or hypothecate real property as security for payment of a debt or obligation

collateral

pledged property

granting clause

pledging the collateral property to the mortgage

externalities

principle that states that conditions not directly related to a parcel of property can have a positive or negative effect on the value of that property; ex. landfill

private liens

private individuals may also place liens against real property

capital gain

profit realized from the sale or exchange of an asset, including real property

ECOA (Equal Credit Opportunity Act)

prohibits discrimination based on race, color, religion, national origin, sex, marital status or age in the granting of credit; protects more classes than the Fair Housing Act; also includes marital status and age' prevents lenders from discriminating against recipients of public assistance programs such as food stamps and social security

The Home Mortgage Disclosure Act of 1976

prohibits redlining and also sets up monitoring procedures for lenders requiring disclosure of loan activity by neighborhood

restrictive covenants

promise by contract or deed between a private person and a subdivider; may specify uses of the property, construction methods, size and style of improvements, lot size, etc

covenant of further asurance

promises that the grantor will defend the grantee's title against all claims which may arise from the period prior to transfer

promissory note

proof of debt; written promise to pay a certain sum of money at a definite date in the future

specific voluntary

properties encumbered by mortgages have __________ ___________ liens.

reappraisal lease

property is reappraised periodically and the rental rate is adjusted

covenant of quiet enjoyment

protects the grantee's rights to physical possession of the property without being disturbed by other parties making claims against his rights

mortgagee's or lender's policy

protects the lender who takes the property as collateral for a loan; only protects the amount owed on the loans and the insured amount is reduced as the loan is paid off

mechanic's lien

protects workemn, contractors, engineers, architects, suppliers of materials and others who provide labor or material to build or improve real property

mutual mortgage insurance fund

provides a function similar to private mortgage insurance companies; insuring private lenders against losses cause by borrower defaults on fha insured loans

graduated or stepped lease

provides for the rent to be increased at set dates in the future

farmer mac

purchases agricultural loans from original lenders and issues guaranteed mortgage backed securities

interest escalation clause

pushes the interest rate to the highest rate allowed by law

executory process

quicker foreclosure process, does not have to go through judicial process; already includes waiver of notice

1. land 2. improvements 3. plants, trees and cropes

real property consists of three possible components

devise

real property transferred by will is known as the

separate areas of differing land use

Buffer zones are used to Select one: A. separate areas of differing land use B. separate areas having different market value C. provide land for parks D. provide extra traffic lanes

125

Burk has a 15 acre tract that he wants to divide into 50 X 100 foot lots, leaving 28,400 square feet for roads. How many lots can you get out of this tract? Select one: A. 100 B. 125 C. 130 D. 150

all of the above

Easements may be created by Select one: A. mutual agreement B. necessity C. prescription D. all of the above

scarcity, modification, fixity of investment, and situs

Economic characteristics that influence the values of land as an investment include:

holographic and notarial (same as statutory)

Effective July 1,1999, LA recognizes only two forms of wills:

credit to the buyer

On the closing statement any new loan proceeds would be listed as Select one: A. credit to the buyer B. credit to the seller C. debit to the buyer D. debit to the seller

ready, willing, and able buyer

Once a seller accepts a _______. _______. ___________, the broker is entitled to a commission. (buyer who is prepared to buy on the seller's terms and has the means_

procuring cause

Once a seller accepts a ready, willing, and able buyer, the agent is entitled to a commission because of the principle of Select one: A. subagency B. implied agency C. designated agency D. procuring cause

LACHES

One may lose his legal rights if he inexcusably fails to exercise them within a reasonable time period under the concept of Select one: A. rescision. B. laches. C. breach. D. menace.

right os disposition

One of the basic rights to freehold ownership is the

maintain property values

One of the main purposes of zoning laws is to Select one: A. regulate depreciation B. maintain property values C. provide for a wide variety of property types in an area D. promote industry

unilateral contract

One party makes a promise with the hope that it will motivate another party to do something; second party is not legally obligated to comply but if he does, the first party is obligated to keep the promise; only needs to be signed by oneparty

$92,021

How much does an owner sell for if he nets $30,000, pays off a mortgage of $55,000, gives his attorney $1,500 for services, and pays his broker an 6% commission? Select one: A. $91,690 B. $92,021 C. $93,400 D. $94,000

INCORRECT C

Ordering a meal in a restaurant and being expected to pay for it would be an example of what type of contract? Select one: A. express B. unilateral C. implied D. void

to the midpoint

Ownership along non-navigable riparian waterways is Select one: A. to the water B. to the high water line C. to the midpoint D. to the low water line

severalty

Ownership by one person is known as ownership in Select one: A. severance B. severalty C. indivision D. common

the right of a person or persons to use and enjoys things to the exclusion of other persons; as the right to use, enjoy and dispose; as the right by which something belongs do some particular person or persons

Ownership can be defined in many ways:

...

Ownership of a condominium usually includes: Select one: A. joint ownership of the unit and the common areas B. tenancy in common of the unit and the common areas C. fee simple ownership of the unit and a specified undivided interest in the common areas D. separate ownership of the unit and joint tenancy in the common areas Incorrect

...

Ownership of a property in the proportion of ¼ and ¾ would be Select one: A. joint tenancy B. tenancy by the entirety C. tenancy in common D. tenancy in severalty Incorrect

co-ownership

Ownership of real estate by a corporation would be Select one: A. in trust B. in severalty C. co-ownership D. joint tenancy

administrator

IF no executor, the court will appoint an

the top portion of the loan proceeds over and above the standard 80%

PMI, or Private Mortgage Insurance covers Select one: A. the top portion of the loan proceeds over and above the standard 80%. B. the full loan amount C. the top 20% of the loan. D. the top 10% of the loan.

the top portion of the loan proceeds over and above the standard 80%.

PMI, or Private Mortgage Insurance covers Select one: A. the top portion of the loan proceeds over and above the standard 80%. B. the full loan amount C. the top 20% of the loan. D. the top 10% of the loan.

BLOCKBUSTING

Panic selling for financial gain by insinuating that a minority group is moving into the area is known as Select one: A. steering. B. blockbusting. C. redlining. D. permissible practice.

INCORRECT C

Paying off the debt is said to ________ the loan. Select one: a. defeat. b. complete. c. release. d. alienate.

remainderman

Person the owner designates who will own the property upon the death of the life estate owner

FALSE

Persons who are exempt from licensing requirements such as owners or administrators can still collect a commission. Select one: True False

permanence or indestructability immobility complexity uniqueness

Physical characteristics of land

hypothecation

Pledging a property as security for a debt while retaining title is called Select one: A. defeasance B. hypothecation C. alienation D. subordination

deed restrictions

Police powers include all of the following EXCEPT Select one: A. zoning B. building codes C. deed restrictions D. subdivision regulations

joint tenancy

Possession, interest, time and title (or PITT) are associated with what type of ownership? Select one: A. tenancy in common B. ownership in severalty C. joint tenancy D. sole ownership

credit to seller, debit to buyer

Prepaid taxes are recorded as what on the closing statement? Select one: a. credit to seller, debit to buyer b. debit to seller, credit to buyer c. credit to seller, nothing to buyer d. credit to buyer, nothing to seller

True

Prepayment penalties are not allowed in FHA and VA loans. Select one: True False

INCORRECT D

Recording documents in the public record of the court house gives what type of notice? Select one: a. constructive b. actual c. personal d. standard

disclosure of financing costs including interest rate

Regulation Z requires Select one: A. disclosure of closing costs B. disclosure of financing costs including interest rate C. a minimum down payment D. a fair market value

timeshare ownership

method by which multiple chasers can buy interest in real estate; each purchaser has the right to the property for a fixed period of time; has fee simple ownership for a specific period of time

highest and best use

reasonable and probable use which at the time of the appraisal is most likely to product the greatest net return in terms of money or amenities to the land or improvements over a given period of time

right of habitation

right of a person to dwell in the house of another

eminent domain

right to acquire private property, by government for public use; lands thus acquired must be used for specific public purpose ad the owners affected must be justly compensated for their loss of title

right of usufruct

right to the use and fruits on the property

riparian rights

rights that apply to land adjacent to running water; allow an owner to use and enjoy, within reasonable limits, the water that borders or runs through his property; reasonable rights usually include to fish, swim, build a pier or boat house, or divert water for irrigation; do not include the right to dam a stream or alter its natural course

value of component

sale price of property with component - sale price without component =

louisiana permits this type of foreclosure; if the property does not sell for the full amount owed, the creditor may obtain a deficiency judgement for the amount owed by the borrower above the proceeds of the sheriff's sale

sale with appraisement

independent contractor

salesperson enjoys a large amount of freedom; works on commission and establishes his own working schedule and manner of doing business; however, he is still under the supervision of the broker; pays his own income tax and social security

public grant

transfers legal title to land from the government to a private party

deed of reconveyance

transfers the title back to the original owner

private grant

transfers title to real property from one private person to another

added third party

trustee

one who receives a trust obligation and works on behalf of the trustor

trustee

borrower

trustor

one who creates a trust

trustor

boycotting

two or more businesses conspire against other businesses to reduce competition

qualified or determinable fee estate condition subsequent

two types of fee simple defeasable estate

valuable consideration

type of consideration; refers to items of material value, such as real property, money, etc

good consideration

type of consideration; refers to things of abstract value such as the promise for love, affection, friendship, loyalty

revisionary interest

whatever the lessor grants to the lessee, he will recover in the future

buyer as principal

when a buyer contracts with a broker to find and purchase property, the broker becomes an agent of the buyer and the buyer is said to be the client or the principal of the broker; the seller becomes the customer a fiduciary relationship is established between the broker and the buyer

equitable title

when a buyer signs a contract to purchase real estate, he or she does not receive title. title transfers upon delivery and acceptance of deed; however, after both buyer and seller have executed a sales contract, the buyer's interest in the property is known as _____________

intestate

when a person dies without leaving a valid will, he dies __________. In this case, state law determines how property will be divided. An administrator is named to administer.

seller as principal

when a seller contracts with a broker to market the seller's property, the broker becomes an agent of the seller and the seller is said to be the client of the principal of the broker; a fiduciary relationship is established

by performance

when all term of the contract are satisfactorily carried out

escheat

when an owner dies without leaving a will and without heirs, his property title reverts to the state; since property can not be allowed to remain ownerless, the state must assume ownership where there is not legal claim to title

undisclosed dual agency

Representing both the buyer and the seller in the same transaction without the written consent of both parties would be Select one: A. dual agency B. single agency C. undisclosed dual agency D. open agency

DUAL AGENCY

Representing two principals to a transaction at the same time is known as: Select one: a. dual agency. b. designated agency. c. subagency. d. illegal agency.

substantial performance

when one party has substantially performed to the terms of the contract but has not completed every detail exactly as the contract requires; contract may be discharged or specific adjustments may be made

escape clause

when selling contingent upon buyer selling his house, this clause protects the seller from having to keep his house off the market for an extended period of time

substitution

when several similar commodities are available, the one with the lowest price will attract the greatest demand and widest distribution

right to eviction

when the conditions of the lease are breached by the lessee, the lessor may recover possession of the premises through court-ordered conviction

Cancellation of a contract

Rescission of a contract is best defines as which of the following? Select one: A. Ratification of a contract by all parties B. Cancellation of a contract C. A revision in the terms of a contract D. A transfer of responsibility from one of a contract

usufruct

Surviving spouse is given the right of ___________, the right of enjoying the use of the property and the income produced by the property

residential housing only

The Fair Housing Act applies to Select one: A. residential housing only B. all public buildings C. residential and commercial buildings D. apartments only

1. refusing to rent, lease, or sell property or to negotiate the sale of same, on the basis of discriminatory considerations 2. varying the terms of property lease or sale, or the nature of brokering services provided for discriminatory reasons 3. advertising in such a way as to exclude minorities from consideration as tenant or buyers 4. misleading minority customers as to the availability of certain properties for sell or lease 5. refusing home loans or adjusting their conditions on a discriminatory basis 6. restricting minority membership or participation in multiple listing services, or other professional brokering groups or associations

The Fair Housing Act of 1968 clearly proscribed the following practices:

value

The GRM times the rent = the ____________. Select one: a. value. b. net income. c. capitalization rate. d. gross rent multiplier.

lien

monetary claim upon property which uses the property itself as security for payment of debt

by partial performance with written acceptance

when the person to who acts have not been done or to whom money has not been paid accepts in writing partial performance of the terms of the contract

dower

wife's interest in her husband's estate at his death

holographic will

will completed entirely in the testator's own handwriting, dated and signed by him but not witnessed by another other person; not recognized by some states; recognized in LA but called olographic

substitution

The Sales Comparison Approach is based on what appraisal principle? Select one: A. substitution B. competition C. supply and demand D. anticipation

True

The Sales Comparison Approach is not normally used for properties not sold on the open market such as churches. Select one: True False

Familial Race Sex/Gender Handicap Color Religion National Origin

The Seven Protect Classes

Lead based paint disclosure addendum

The ________________________ allows for buyers to waive a lead-based paint inspection.

novation

The act of discharging one party to a contract by replacing him with another party is called Select one: A. subrogation B. substitution C. novation D. subjugation

...

The act of taking private property for public use is Select one: A. condemnation B. eminent domain C. escheat Incorrect D. quick taking

sanction of judgment

The action which cancels the note when the full debt is paid and defeats any interest the mortgagee has had in the collateral property is called Select one: A. satisfaction of judgment B. de-pledging C. collateral removal D. cancellation action

customer

The agent owes only honesty and truthfulness to the Select one: A. client. B. principle. C. customer. D. buyer.

designated agent

The agent who is appointed by the broker to represent a particular client is known as the Select one: A. sponsoring agent B. designated agent C. co-operating agent D. dual agent

range lines and township lines

The area in the square created by the meridians and baselines is further divided by

produce income and maintain the value of the property

The basic functions of a property manager are Select one: A. to collect rents B. take care of repairs C. produce income and maintain the value of the property D. handle difficult tenants

As many as necessary

The best answer to the question of how many comparables should be used is: Select one: a. 1-2 b. 3-5 c. 5-7 d. As many as necessary.

exclusive right to sell listing

The best type of listing for the broker to be sure of a commission is Select one: A. open listing B. exclusive right to sell listing C. exclusive agency listing D. implied listing

INCORRECT C

The buyer's loan amount and deposit would both be listed on the settlement statement as: Select one: A. credit to buyer, nothing to seller B. credit to buyer, debit to seller C. debit to buyer, credit to seller D. debit to buyer, nothing to seller

plat of survey

The characteristics of lot, block and tract is

INCORRECT A

The clause which removes the mortgage when the debt is paid is the Select one: A. acceleration B. granting C. escalation D. defeasance

LACHES

The concept that one may lose his legal rights if he inexcusably fails to exercise them within a reasonable time is known as: Select one: a. duress b. laches c. menace d. consideration

...

The cost of adding street lights to a subdivision would be paid for by Select one: A. the city Incorrect B. the developer C. special assessment D. the parish

the buyer

The deposit on a rejected offer should be given to Select one: A. the seller B. the buyer C. the lender D. the listing agent

demand

The desire to purchase along with the ability is called Select one: A. value B. competition C. supply and demand D. demand

demand

The desire to purchase along with the ability is known as Select one: A. desire B. supply and demand C. substitution D. demand

demand

The desire to purchase along with the necessary capital is the definition of Select one: A. capitalization B. supply and demand C. demand D. anticipation

6 miles

The distance between township lines is Select one: A. 1 mile B. 6 miles C. 16 miles D. 36 miles

setback

The distance from streets or sidewalks that buildings can be erected is known as: Select one: a. easement. b. setback. c. zoning. d. downzone.

promissory note

The document which contains the promise to repay along with specific conditions and stipulations is a Select one: A. collateral B. mortgage C. promissory note D. pledge

1. Office of Equal Opportunity 2. Dept of Housing and Urban Development (for complaints under the Civil Rights Act of 1968) 3. Fed. court (complaints under CivilRights Act of 1866) 4. Suit can be filed in state court under substantially similar state fair housing laws

The following agencies are responsible for the enforcement of the Federal Housing Laws:

police powers, eminent domain, taxation, escheat

The four basic ways governments can encumber real estate are Select one: A. police powers, eminent domain, taxation, escheat B. zoning, appropriation, deed restriction, liens C. police powers, deed restrictions, taxation, escheat D. eminent domain, taxation, police powers, deed restrictions

1. demand 2. utility 3. scarcity 4. transferability

The four factors which create value

INCORRECT D

The instrument which transfers the title back to the original owner once the trust deed is paid off is called a/an Select one: A. deed of reconveyance B. transfer deed C. trustee D. defeasance deed

FRAUD

The intentional misrepresentation of a material fact is: Select one: A. fraud B. negligent misrepresentation C. negligent omission D. puffing

the total amount of interest which will be payable during the full term of the loan

The lender is NOT required to reveal

True

The lender is NOT required to reveal the total amount of interest which will be payable during the full term of the loan. Select one: True False

Comparative Market Analysis

The letters CMA stand for: Select one: a. Comparative Market Analysis b. Cost Market Analysis c. Comparative Market Assessment d. Certificate of Market Analysis

point of beginning

The letters POB, when used in describing land, stand for: Select one: a. point of beginning. b. post office box. c. point of bearing. d. placement of bearing.

...

The loan to value ratio is calculated as Select one: A. a percentage of the sale price Incorrect B. a percentage of the appraised value C. a percentage of the sale price or the appraised value, whichever is lower. D. 80% of the value.

erosion

The loss of property by wearing away of soil by wind or water is: Select one: a. accretion. b. reliction. c. erosion. d. attachment.

national government

The maximum interest rate for FHA loans is set by the Select one: A. lender B. national government C. regional government D. city government

quantity survey method

The most accurate method of estimating cost is the Select one: A. square foot method B. cubic foot method C. unit in place method D. quantity survey method

3 years

The period for redemption of property sold for taxes in Louisiana is a minimum of Select one: A. 1 year B. 2 years C. 3 years D. 5 years

economic life

The period of time over which a particular property is expected to be useful is called Select one: A. effective life B. economic life C. total life D. highest and best use

dominant estate

The person benefiting from an easement appurtenant is called the Select one: A. dominant estate B. servient estate

PRINCIPLE

The person who is represented by the licensee is the Select one: A. customer B. fiduciary C. agent D. principle

remainderman

The person who will own the property after the death of a life estate owner is called the: Select one: a. reversionary b. dower c. curtesy d. remainderman

plat book

The plat is then filed in a public government office, usually the county recorder's office, where it is kept in what is called a __________; open to the public inspection

police powers

The power of the government to enact and enforce laws to protect the health, safety, and welfare of the public is Select one: A. police powers B. zoning laws C. restrictive covenants D. eminent domain

escheat

The power of the government to seize ownerless land is called: Select one: a. escheat. b. eminent domain. c. taxation. d. ad valorem.

foreclosure by sale

The practice which requires the lender to refund to the borrower any profit realized on the sale of the foreclosed property after satisfaction of the debt is Select one: A. foreclosure by sale B. strict foreclosure C. deficiency judgment D. ordinary process

will

written instrument by which a person arranges for the conveyance of his property to take effect after his death

mortgage created a lien and a deed conveys title

The primary difference between a mortgage and trust deed:

INCORRECT C

The principle that states that the value of an inferior property is increased by being near a better property, and the value of the better property is decreased by being near an inferior property, is called Select one: A. Surplus productivity B. Progression and regression C. Conformity D. Competition

severance

The process of converting real property to personal property is known as Select one: A. severalty B. accession C. defeasance D. severance

the state

The property of a person who dies with no will and no heirs goes to Select one: A. the state B. charity C. the federal government D. the sheriff

list any and all liens on a property

The purpose of a mortgage certificate is to Select one: A. list any and all liens on a property B. state the amount of the mortgage C. state the terms of the mortgage D. cancel a mortgage

True

The right of disposition gives an owner the right to sell, will, lease, or give away his property rights. Select one: True False

right to sequester

The right of the lessor to remove tenant's personal property and hold it until rent is paid is called: Select one: A. right to eviction B. right to sequester C. right to assign D. right to retain improvements.

eminent domain

The right to take private land for public use is called Select one: A. eminent domain B. acquisitive prescription C. expropriation D. escheat

Bundle of Rights

The rights of the real property can be represented as a bound together collection of sticks known as (are both separable and divisible)

all of the above

The role of the Federal Reserve System is to Select one: A. maintain sound credit conditions B. help counteract inflationary and deflationary trends C. create a favorable economic climate D. all of the above

debit to the buyer, credit to the seller

The sale price of a property would be listed on the closing statement as a Select one: A. credit to the buyer, debit to the seller B. debit to the buyer, credit to the seller C. debit to the buyer, nothing to the seller D. credit to the seller, nothing to the buyer

substitution

The sales comparison approach is based on the principle of Select one: A. anticipation B. substitution C. highest and best use D. supply and demand

He should advise the buyer that he should not disclose any information that he would not tell the seller himself.

The seller's agent is helping a buyer write a purchase agreement. The buyer tells the salesperson that if it came down to it he would pay more. What should the salesperson do with this information? Select one: a. He should advise the buyer that he should not disclose any information that he would not tell the seller himself. b. tell the seller c. keep it confidential d. disclose confidential information about the seller to keep it fair

cooperating broker

The selling broker is often referred to as the Select one: A. cooperating broker B. listing broker C. subagent D. lesser broker

situs

The single most important factor in determining the value of a property is Select one: A. CMA B. situs C. demand D. comparison

True

The state's authority to enact and enforce police powers is passed on the the municipalities through enabling acts. Select one: True False

enabling acts

The state's authority to enact and enforce police powers is passed on the the municipalities through: Select one: A. enabling acts B. zoning laws C. restrictive covenants D. escheat

...

The subject property has a garage which adds $4000 to the value. Comparable one does not have a garage but is larger than the subject property which would increase its value by $2000. If the value of the comp is $75,000, what is the value of the subject property? Select one: A. $73,000 B. $75,000 Incorrect C. $77,000 D. $79,000

89,083

The subject property is a 1500 sq.ft. home. Comparable one is 1450 sq.ft., selling price $85,000. Comparable two is 1475 sq.ft., selling price $88,000. Comparable three is 1550 sq.ft., selling price $93,000. Based on square foot alone, and using a value of $50 per square foot for adjustment, what would the value of the subject property be? Select one: A. 87,500 B. 89,250 C. 90,500 D. 89,083

deed

written instrument by which title to real property is formally transferred from one party to another; must be conveyed to and accepted by the party to whom title is being transferred

a rectangular survey description

The symbol T3NR2E would be used in Select one: A. a metes and bounds description B. a lot, block, and track description C. a rectangular survey description D. a monuments and markings description

grantor (vendor in LA)

the party conveying the title is known as

grantee (vendee in LA)

the party receiving title is known as the

ownership

the state or condition of holding legal claim or title to something

...

The FHA is most similar to a/an Select one: A. bank Incorrect B. savings and loan C. insurance company D. mortgage company

balloon loan

A loan which has smaller monthly payments with a lump sum due at the end of the term is a Select one: A. term loan B. balloon loan C. negatively amortized loan D. junior loan

208.71 ft x 208.71 ft

1 acre = _______ ft x _________ ft

43,560 square feet

1 acre = _________ sq feet

5,280 feet

1 mile = _________ feet

1 square mile

1 section = _________ square mile(s)

36 square miles

1 township = ___________ square miles

assist in providing housing opportunities for low and moderate income families

FHA's main objective

buyer

vendee

seller

vendor

as many as necessary

How many comparables should be used when using the sales comparison approach to value? Select one: A. 3 B. 3 to 5 C. at least 5 D. as many as necessary

principal meridians

vertical lines

public dedication

voluntary conveyance of title as a gift from a private owner to the government is known as

160 acres

1/4 section = _________ acres

real property

A fixture which is permanently attached to a structure is considered Select one: A. chattel B. real property C. personal property D. movable

1. relationship between a potential purchaser and the thing he desires 2. desirability or worth of a thing- property, goods, or services - to buyers and sellers 3. present worth of future benefits that arise from the ownership of real property 4. quantity of one thing, which can be obtained in exchange for another

4 Value defintion

1. find recent comparable sales and listings 2. verify data 3. select relevant units of comparison 4. compare to subject property and adjust for difference 5. reconcile into single value or range of values

5 steps in the sales comparison approach

1. defining the problem 2. conducting the preliminary survey 3. gathering data 4. comparing, analyzing and classifying data 5. reconciliation 6. issuing the appraisal report

6 step appraisal process

1 square mile

640 acres = __________ square mile(s)

The contract is voidable by the 17 year old.

A 17 year old enters into a contract with his 42 year old cousin. Which of the following is true? Select one: A. The contract is voidable by the 17 year old. B. The contract is voidable by either party. C. The contract is illegal. D. The contract is valid and is not voidable.

$37,500

A 50 acre tract of land sold for $15,000 per acre. The commission was 10%. The selling agent received 50% of the commission paid to the broker. How much did the selling agent receive? Select one: A. $750 B. $3,750 C. $37,50 D. $37,500

special warranty deed

A Bargain and Sale Deed with Covenant is equivalent to a Select one: A. general warranty deed B. special warranty deed C. bargain and sale deed D. quitclaim deed

STEERING

A Hispanic couple asks you to find them a house to buy. You proceed to show them property only in neighborhoods occupied by predominantly Hispanic families. This is an example of Select one: A. blockbusting B. steering C. redlining D. puffing

640

A Section contains how many acres? Select one: a. 640 b. 36 c. 16 d. 24

safety clause

A ________ may be included to extent the broker's right to claim a commission for an additional period of time beyond the contract's term.

conodminium

A form of ownership involving several owners holding fee simple title to individual units in a property and common ownership in the property's common grounds is called a: Select one: A. co-operative B. condominium C. MUD D. PUD

INCORRECT B

A borrower obtains a $76,000 mortgage loan at 10½% interest. If the monthly payments of $695.21 are credited first on interest and then on principal, what will the balance of the principal be after the borrower makes the first payment? Select one: A. $75,969.79 B. $75,369.79 C. $75,304.79 D. $75,000.00

$26,800

A borrower qualifies for an 80% LTVR. The selling price of the property is $110,000 and the appraised value is $104,000. How much will be required for the down payment? Select one: A. $22,000 B. $20,800 C. $26,800 D. $6,000

an agency coupled with an interest

A broker agrees to finance the construction of houses in a subdivision with the understanding that he will be able to list the houses once they are built. This is an example of Select one: A. an illegal contract B. an agency coupled with an interest C. dual agency D. none of the above

EXCLUSIVE AGENCY

A broker in listing a house, wanted an exclusive right to sell the property for 90 days. The seller wanted to retain the right to sell the property himself. What type of listing would be best? Select one: A. open listing B. multiple listing C. exclusive agency D. exclusive right to sell

5%

A broker received a 10% commission on the first $100,000 of the sale price on a vacant piece of land which sold for $199,000. If the broker received $14,950 for the sale, give the rate of commission for the balance. Select one: A. 4% B. 4.5% C. 5% D. 6%

The broker is guilty of commingling.

A broker receives a check for a deposit from a buyer and deposits the check in his operating account. Which of the following is true? Select one: A. This is the correct action. B. This is okay as long as he transfers the money to an escrow account before the closing. C. The broker is guilty of confusion. D. The broker is guilty of commingling.

special agent

A broker who lists a property is considered a Select one: A. general agent B. universal agent C. special agent D. dual agent

$1,500

A building has 3,000 square feet. The lessee wants to lease this building for $6.00 per square foot. Based on the annual rent, how much would it lease for per month? Select one: A. $500 B. $1,000 C. $1,500 D. $2,500

$115,440

A building is 130 feet long, 100 feet wide and 24 feet tall. A contractor will build it for $0.37 per cubic foot. How much will it cost? Select one: A. $48,100 B. $98,200 C. $115,440 D. $125,400

the agent presents him with the accepted contract

A buyer becomes obligated when Select one: A. he signs the purchase agreement B. the seller accepts the purchase agreement C. the agent presents him with the accepted contract D. the offer is presented.

$318.90

A buyer is assuming an outstanding mortgage, which had an unpaid balance of $58,200 after the last payment on August 1. Interest at 10% per annum is paid in advance each month. The sale is to be closed on August 11. What is the amount of prorated mortgage interest to be credited to the seller at the closing? Seller pays for day of closing. Use a 365 day year. Select one: A. $15.65 B. $318.90 C. $485.00 D. $582.00

Selling "as is" does not relieve the seller or the agent of the duty to disclose material defects.

A buyer purchases a property "as is". The seller and the broker both knew that the house had bad wiring but did not tell the buyer. Which of the following statements is true? Select one: A. Since the buyer knew he was purchasing the property in "as is" condition he can do nothing. B. Selling "as is" does not relieve the seller or the agent of the duty to disclose material defects. C. If the buyer purchases "as is" it is his duty to have the property inspected.

present the offer

A buyer wants to make an offer that is much lower than the listed price and the agent is sure the seller will not accept it. What should the agent do? Select one: A. tell the buyer to make a higher offer B. not present the offer C. present the offer D. tell the buyer his offer will insult the seller

every time a new occupant moves into a building

A certificate of occupancy is issued when Select one: A. a building is first built B. a building is first occupied C. every time a new occupant moves into a building D. every time the building is modified

partial release clause.

A clause in a blanket mortgage which allows for each property to be released from the mortgage as it is sold is called a: Select one: a. partial release clause. b. defeasance clause. c. reverter clause. d. package clause.

acceleration clause

A clause in a loan which calls for immediate payment of the entire balance if the borrower gets behind on his loan payments is a Select one: A. alienation clause B. novation clause C. defeasance clause D. acceleration clause

acceleration clause

A clause in a loan which makes the entire principle and interest due immediately upon default is Select one: A. defeasance clause B. enforcement clause C. acceleration clause D. novation clause

acceleration clause

A clause in a promissory note that gives the lender the right to demand payment in full of the entire unpaid debt if the borrower defaults is called a/an Select one: A. defeasance clause B. acceleration clause C. prepayment clause D. lock-in clause

PROTECTION CLAUSE

A clause in the listing agreement which ensures that the agent receives a commission if his client buys the house after the listing contract has expired is called a Select one: A. subordination clause. B. alienation clause. C. protection clause. D. acceleration clause.

escalation clause

A clause which allows the lender to increase the interest rate during the term of the loan is called a/an Select one: A. acceleration clause B. lock-in clause C. prepayment clause D. escalation clause

subordination clause

A clause which is found in certain types of mortgages that gives permission for another, subsequent lender to assume the rights of a first mortgage lien is called a Select one: A. alienation clause B. acceleration clause C. subordination clause D. defeasance clause

False

A general warranty deed absolutely guarantees good title regardless of flaws of title, unrecorded claims, undisclosed encumbrances, or fraud. Select one: True False

HUD

A complaint against a salesperson for discrimination would be filed with Select one: A. HUD B. FHA C. Board of Realtors D. ECOA

voidable by the minor

A contract between a 17 year old and an adult would be Select one: A. void B. voidable by the minor C. voidable by either party D. illegal

a unilateral contract in which Mr. Jones has the option

A contract in which Mr. Smith is obligated to sell but Mr. Jones is not obligated to buy would be Select one: A. a unilateral contract in which Mr. Smith has the option B. a unilateral contract in which Mr. Jones has the option C. a bilateral contract D. there is no such contract

the house burns down.

A contract is signed between buyer and seller. The contract would become impossible to perform if Select one: A. the seller dies B. the buyer is under age. C. the buyer does not have the money D. the house burns down.

INCORRECT D

A contract is signed for the purchase of a house, but before the sale is closed the seller dies. The heirs do not wish to sell. The buyer can Select one: A. sue for specific performance. B. do nothing. C. pay the seller double the deposit. D. ask the real estate commission to intervene.

IMPLIED CONTRACT

A contract thAt is formed by the suggestion of the parties' acts and conduct is a/an: Select one: a. implied contract. b. express contract. c. unilateral contract. d. onerous contract.

voidable

A contract that is signed by a 16 year old is Select one: A. void B. voidable C. illegal D. enforceable

implied contract

A contract which is determined by the actions of the parties is a/an Select one: A. implied contract B. express contract C. void contract D. unilateral contract

regression

A contractor builds a house that costs $500,000 in a neighborhood where houses have values between $250,000 and $300,000. When he tries to sell the house he finds he must sell at a loss. This is an example of the principle of Select one: A. competition B. progression C. regression D. contribution

8%

A couple obtains an ARM loan with an interest rate of 7%. The rate is tied to a national index with a 2 point margin and 1% per year cap. If the index for the new year is 6.5%, what will the new interest rate on the loan be? Select one: A. 8.5% B. 8% C. 9% D. not enough information

...

A couple wants to borrow $75,000 at 8½% for 30 years. The factor from the amortization table is 7.69. What will their monthly payment be, principal and interest? Select one: A. $531.25 B. $550.00 Incorrect C. $576.75 D. $695.00

INCORRECT C

A deed must be signed by the Select one: A. grantor B. grantee C. grantor and grantee D. vendee

quitclaim deed

A deed which makes no guarantees at all as to the title is a Select one: A. general warranty deed B. special warranty deed C. bargain and sale deed D. quitclaim deed

60 minutes

A degree can be broken down into

conditions

A determinable fee estate is ownership with Select one: A. a set length of time B. a lease C. conditions D. life estate

20

A developer has 160,000 square feet that he will divide into lots that measure 75 X 100. He will reserve 10,000 for streets. How many lots will he have? Select one: a. 20 b. 15 c. 25 d. 30

prepayment penalty

A fee charged for paying off a loan before the end of the prescribed term is called a Select one: A. early payment penalty B. defeasance penalty C. prepayment penalty D. there is no such fee

fee simple defeasable estate

A fee simple estate may have special conditions or limitations attached to the ownership.

Federal Home Loan Mortgage Corporation

A group which buys mortgages from savings and loans thereby providing them liquidity for their mortgage assets is Select one: A. A. Federal National Mortgage Association B. Government National Mortgage Association C. Federal Home Loan Mortgage Corporation D. Federal Agricultural Mortgage Corporation

80%

A house appraised for $74,000. It sells for $72,000. The mortgage is $57,600. What was the loan to value ratio? Select one: A. 78% B. 80% C. 90% D. 95%

$100,000

A house has 2,000 square feet. Replacement cost is currently $50 per square foot. Using the cost approach, what would be the estimated value of the house? Select one: A. $100,000 B. $90,000 C. $110,000 D. $150,000

...

A house has a market value of $150,000. Property in the area is assessed at 20%. The tax rate is 35 mills. How much is the property tax? Select one: A. $5,250 B. $4,200 Incorrect C. $1,500 D. $1,050

$300

A house is sold and the closing is scheduled for June 30th. The taxes for the year of $600 were paid by the seller on January 1st. How much will the buyer owe at the closing for the taxes? Use a 360 day year. Select one: A. $350 B. $250 C. $300 D. $400

$2,625

A house sells for $125,000. The brokerage firm charges a 6% commission. Both the selling agent and the listing agent work for the same broker. If the listing agent receives 35% of the full commission, how much will she earn? Select one: A. $7,500 Incorrect B. $3,750 C. $2,625 D. $1,250

$36,000

A house sells for $180,000 and the buyers have obtained an 80% loan. The house appraised for $185,000. How much will be required for the down payment? Select one: A. $144,000 B. $36,000 C. $41,000 D. $37,000

$800

A house sold for $200,000. The transfer tax is $4 per $1000. How much is the tax? Select one: a. $800 b. $2000 c. $400 d. $600

$568

A house was listed for $145,000 and sold for $142,000. The loan amount was $113,600. The transfer tax is $4 per $1000. How much is the tax? Select one: A. $454 B. $475 C. $568 D. $580

The children have no ownership in the home.

A husband and wife own their home as tenants in the entireties. The wife dies and names their two children to inherit her interest in the home. Which of the following statements is true? Select one: A. The children and their father own the home as joint tenants. B. The children and their father own the home as tenants in common. C. Only the children own the home. D. The children have no ownership in the home.

Sale & Leaseback

A lease agreement which is often used as a way of raising capital is a Select one: A. Sale & Leaseback B. Index Lease C. Capital Lease D. Proprietary Lease

ground lease

A lease in which the lessee rents only the land is called a Select one: A. gross lease B. ground lease C. index lease D. proprietary lease

percentage lease

A lease in which the rent is a percentage of the business Select one: A. percentage lease B. net lease C. escalated lease D. gross lease

non-freehold estate

A lease is a Select one: A. freehold estate B. non-freehold estate C. fee simple estate D. none of the above

1. names of parties to the lease 2. legal capacity of parties to the lease 3. mutual consent of both parties to the provisions of the lease 4. amount of consideration (rent) and terms of the leas must be listed 5. rights and obligations of bother parties must be stated in the lease 6. objectives of the lease must be legal 7. the lease must be properly executed by the lessor

A lease must meet certain legal requirements:

attorney's opinion

A legal action in which the court seeks to resolve any possible clouds on the title is called a/an Select one: A. attorney's opinion B. abstract of title C. suit to quiet title D. certificate of title

redlining

A lender refusing to make a loan to a qualified borrower because of the location of the property is an example of Select one: A. blockbusting B. steering C. age discrimination D. redlining

$1400

A lender requires 3 months escrow of interest for a loan of $80,000 at 7%. How much must be escrowed? Select one: A. $5,600 B. $467 C. $700 D. $1400

True

A levee would be an example of a legal servitude. Select one: True False

...

A listing broker presents an offer to purchase and the seller accepts. Later the seller decides not to sell. Which of the following is true? Select one: A. The seller does not have to sell Incorrect B. The seller owes the broker a commission. C. The seller can rescind the sale. D. The buyer has no recourse.

$176,807

A loan is obtained for $100,000 for 30 years at 8.5%. The monthly payment is $768.91. What is the total interest on the loan? Select one: a. $176,807 b. $276,807 c. $76,807 d. $27,706

$632

A loan is obtained for $95,000 at 7% for 30 years. The factor from the amortization table for $1000 at 7% for 30 years is 6.65. What would be the principle and interest amount of the monthly note, to the nearest dollar? Select one: A. $632 B. $555 C. $665 D. not enough information

INCORRECT C

A loan was approved for 90% of the appraised value. If the first monthly interest payment is $393.75 and the interest rate is 7%, what was the appraised value? Select one: A. $67,500 B. $75,000 C. $56,250 D. $51,030

INCORRECT D

A loan which has a fixed monthly payment consisting of interest and principle in which the principle portion increases each month and the interest portion decreases each month is a Select one: A. straight term loan B. amortized loan C. adjustable loan D. graduated loan

The man's sister is the beneficiary with her son as the trustee.

A man conveys his interest in a pharmaceutical company to his ailing sister's son with the condition that the income from the company be used for his sister's medical care. Which of the following is true? Select one: A. The man's sister is the beneficiary with her son as the trustee. B. The man is the trustee with his sister as the beneficiary. C. The man's sister is the trustee and her son is the trustor. D. The sister's son is the beneficiary and the sister is the trustee.

...

A man dies and leaves his property to his two children. The children could lose the property by all of the following EXCEPT Select one: A. a relative contesting the will B. condemnation C. adverse possession Incorrect D. escheat

INCORRECT A

A man is a co-owner with three others of a warehouse. The man dies and his interest in the warehouse is inherited by his heirs. The man's interest in the warehouse was as a: Select one: A. joint tenant B. tenant in common C. tenant in the entirety D. tenant in severalty

none

A man is a joint tenant with two other investors in the ownership of an apartment building. He dies leaving his entire estate to his only child. What percent of the apartment building does the child own? Select one: A. One third B. One fourth C. One half D. None

INCORRECT B

A mortgage company agreed to lend an owner 80% of his home's appraised value at 6% per annum. If the interest payment for the first month is $96, what was the appraised valuation? Select one: A. $19,200 B. $15,360 C. $24,000 D. $23,350

...

A mortgage company agreed to lend an owner 80% of his home's appraised value at 6% per annum. If the interest payment for the first month is $96, what was the appraised valuation? Select one: A. $19,200 B. $15,360 Incorrect C. $24,000 D. $23,350

2,3

A mortgage requires ___ parties, whereas a trust deed requires ___ parties. Select one: a. 2,3 b. 3,2 c. 1,2 d. 1,3

graduated payment mortgage

A mortgage which allows the borrower to have initial lower monthly payments that increase over the term of the loan is a Select one: A. partial increase mortgage B. graduated payment mortgage C. accelerated mortgage D. index mortgage

...

A mortgage which allows the borrower to have initial lower monthly payments that increase over the term of the loan is a Select one: A. partial increase mortgage B. graduated payment mortgage C. accelerated mortgage Incorrect D. index mortgage

leasehold

A non-freehold estate is Select one: A. ownership for an indeterminable length of time B. full, complete ownership C. not real ownership D. a leasehold

lower

A partially amortized loan with a balloon payment would have a ____________________ monthly payment than a fully amortized loan. Select one: A. higher B. lower

variance

A permit which exempts an owner from a particular zoning ordinance is a/an: Select one: a. variance. b. setback. c. non-conforming use. d. spot zone.

tenant at sufferance

A person occupying a property without the consent of the owner is a Select one: A. tenant in common B. tenant at sufferance C. tenant at will D. tenant for years

mortgage broker

A person who is an intermediary between the lender and the borrower is a Select one: A. mortgage broker B. listing agent C. selling agent D. bank

all of the above

A person who owns a life estate can Select one: A. sell it B. lease it C. mortgage it D. all of the above

...

A person who wishes to leave the title to property that he owns in severalty to his wife and daughter on a one-third, two-thirds, undivided basis, would convey title as Select one: A. owners in severalty B. tenants in common C. tenants by the entireties D. joint tenants

metes and bouds

A property description that begins at one point on the property line and proceeds along the perimeter of the property using compass directions and linear measurements is Select one: A. lot, block and tract B. rectangular survey C. metes and bounds D. the subdivision method

$500

A property has an assessed value of $25,000. The tax rate is 20 mills. What is the tax? Select one: A. $450 B. $525 C. $500 D. $475

service contract

A property management agreement would be an example of a Select one: A. specific contract B. lease contract C. agency contract D. service contract

he must negotiate an easement with the owner of the waterfront property.

A property owner owns land near a waterway with no access to the water. He obtains permission from the state to use the waterway under the doctrine of prior appropriation. How does he obtain access to the waterway? Select one: A. apply for an easement by necessity B. acquire an easement by prescription C. he must buy the neighboring land in order to gain access. D. he must negotiate an easement with the owner of the waterfront property.

...

A property sells for $120,000. The buyers obtain an 80% loan at 7% for 30 years. Their monthly P&I payment is $638.69. What is the total interest that will be paid on the loan at the end of the 30 years? Select one: A. $133,928.54 B. $167,410.68 C. $201,600.00 Incorrect D. $252,000.00

the broker to receive a commission if the property sells within a specified number of days after the expiration date to someone whom the broker introduced to the seller

A protection clause in a listing agreement provides for Select one: A. the listing to continue for 30 days beyond the expiration date if the broker chooses B. the broker to be protected from vicarious liability C. the broker to receive a commission if the house sells after the listing has expired D. the broker to receive a commission if the property sells within a specified number of days after the expiration date to someone whom the broker introduced to the seller

INCORRECT A

A purchase agreement is signed for the purchase of a $400,000 house. A deposit of $10,000 is given to the broker and put in his escrow account. A month later, the buyer and seller agree not to go through with the sale. Which of the following should the agent do? Select one: A. The broker can retain a portion of the commission due him from the deposit and return the rest to the buyer. B. The broker can retain his full commission from the deposit. C. The broker can retain an amount equal to his expenses from the deposit. D. The broker must return the deposit to the buyer.

owner financing

A purchase money mortgage is used in Select one: A. owner financing. B. conventional loans. C. VA financing. D. FHA loans.

SPECIAL AGENCY

A real estate agent representing a seller would most likely be which type of agency relationship? Select one: A. universal agency B. general agency C. special agency D. dual agency

$3000

A rental property was purchased for $150,000. Using straight line depreciation and an economic life of 50 years, what is the amount of depreciation per year? Select one: a. $3000 b. $5000 c. $4000 d. Not enough information.

$1,600

A room measures 24 feet by 30 feet. How much would it cost to carpet the room if the cost of the carpet is $20 per square yard, including installation? Select one: A. $14,400 B. $1,600 C. $1,440 D. $1,200

he can only share this information if he has the seller's permission

A seller tells his salesperson that they must sell within one week or face foreclosure. What should the salesperson do with this information? Select one: a. Tell prospective buyers about the foreclosure to gain more interest b. keep it confidential under all circumstances c. he can only share this information if he has the seller's permission d. post an "under foreclosure" sign on the property

$80,319

A seller wants to sell his house and pay off a mortgage of $43,000. He will have attorney's fees of $2,500, and he needs to net $30,000 cash. If he has to pay a 6% commission to his broker, what does the selling price need to be? Select one: A. $80,319 B. $80,030 C. $80,000 D. $85,000

$44,680

A seller wants to sell his house. With the proceeds he must pay off an existing mortgage of $30,000, pay closing costs of $2,000, and he wants to receive $10,000 cash. He must pay a 6% commission. What must the selling price be? Select one: A. $44,680 B. $44, 520 C. $44,250 D. $44,000

...

A special assessment has been levied for a subdivision to improve the drainage system in the subdivision. Which homeowner can expect to pay the largest tax, if taxed as front footage? Select one: A. The lowest lot because it has the worst drainage problem B. All lots will be assessed equally. C. The corner lots D. The largest corner lots.

changes the priority of liens

A subordination agreement Select one: A. changes the payment schedule for a loan B. delays foreclosure on a property C. removes a lien D. changes the priority of liens

rectangular survey

A system of measurement that is based on squares of land which are known as townships and sections is Select one: A. lot, block and tract B. rectangular survey C. metes and bounds D. monuments and markings

annexation

A tenant was renting a property for use as a beauty shop. When she moved out of the property she failed to remove the chairs that she used for her business. The chairs, although trade fixtures, are now the property of the owner. Under what principle does the landowner acquire the trade fixtures? Select one: A. dereliction B. severance C. annexation D. assumption

mortgagee's policy

A title insurance policy that protects the lender is a: Select one: a. mortgagee's policy. b. mortgagor's policy. c. standard policy. d. extended policy.

290.4 feet

A two acre lot is 300 feet wide. How long is this lot? Select one: A. 290.4 feet B. 250.6 feet C. 202.9 feet D. 145.2 feet

general warranty deed

A type of deed which grants title free of defects past and present is known as a Select one: A. general warranty deed B. special warranty deed C. bargain and sale deed D. quitclaim deed

physical depreciation

A type of depreciation that results from normal wear and tear and is always Select one: A. physical depreciation B. functional depreciation C. external depreciation D. economic depreciation

construction loan

A type of interim financing used for construction and is paid out in draws at regular intervals is a Select one: A. interval loan B. construction loan C. package loan D. blanket loan

index lease

A type of lease in which the rent is tied to an external index, such as the cost-of-living index or the consumer price index, is a/an Select one: A. gross lease B. percentage lease C. graduated lease D. index lease

sale-leaseback

A type of lease that is used by a business to raise capital and involves selling the property and then leasing it from the new owner is called a Select one: A. escalated lease B. index lease C. ground lease D. sale-leaseback

downzoning

Changing the zoning of an area from one of higher density to one of lower density is called Select one: A. spot zoning B. protective zoning C. downzoning D. buffer zoning

1. rights are described in promissory note and mortgage agreement 2. borrower holds legal title with the lender having a lien or security interest 3. defaulted borrower is allowed to retain possession, title and rights in the property until the lien is perfected by foreclosure 4. borrower, after default, ay have equitable right of redemption; after foreclosure sale, borrower may have statutory period of redemption

Characteristics of lien theory

1. lender's rights are manifested by contract for deed 2. lender remains the legal owner of the property until the debt is paid 3. borrower retains equitable rights in the property

Characteristics of title theory

CONTINGENCY CLAUSES

Clauses specifying provisions and conditions which must be met before an agreement is binding are called: Select one: a. contingency clauses. b. option clauses. c. consent clauses. d. riders.

assemblage

Combining two or more lots into one is known as: Select one: a. assemblage. b. contribution. c. combination. d. alteration.

Small # / % = Big # OR Small # / Big # = % OR % x Big # = Small #

Commissions Formula

agency

Condition which legally exists when a principal contracts with an agent to perform on his behalf.

1972 Amendment to The Fair Housing Act

Congress amended Title VIII to institute the use of an equal opportunity poster, which is required to be displayed in all sales and rental offices in a conspicuous location

Yearly rents minus yearly expenses.

How is net income calculated? Select one: a. Yearly rents minus yearly expenses. b. Yearly rents plus yearly expenses. c. Yearly rents. d. Yearly expenses.

Covenant of seizen covenant against encumbrances covenant of further assurance covenant of quiet enjoyment covenant of warranty forever

Covenants are included in a general warranty deed

the Civil Rights act of 1964

Covered discrimination in public accommodations, facilities and education along with equal employment opportunity; also reinforced Executive Order No. 11063, by prohibiting discrimination in any program receiving federal financial assistance, such as federally funded housing programs

special assessment

Curbs and gutters for a specific segment of a community would be paid for by Select one: A. income taxes B. sales taxes C. special assessment D. school taxes

restrictive covenants

Deed restrictions are the same as Select one: A. police powers B. zoning laws C. restrictive covenants D. deed of trust

"Dust" Demand Utility Scarcity Transferability

Determinants of Value

pre-paid interest

Discount points can be thought of as: Select one: a. pre-paid interest. b. part of the down payment. c. part of the principal. d. insurance.

$2,125

Discount points for a 30 year loan at 8½ % are 2 ½. The loan amount is $85,000. How much will the points cost? Select one: A. $1,500 B. $1800 C. $2,125 D. $2,500

constructive eviction

Dispossession resulting from the lessor's failure to maintain his part of the lease agreement is: Select one: A. actual eviction B. constructive eviction C. default eviction D. direct eviction

1. provisions of the agreement 2. legally competent parties 3. mutual consent 4. exchange of consideration 5. legal purpose

Elements of a mortgage

1. property rights conveyed 2. financing terms 3. conditions of sale 4. market conditions 5. location 6. physical characteristics

Elements of comparison and over adjustments

actual notice

Encroachments are an example of what type of notice? Select one: A. constructive notice B. actual notice C. conditional notice D. restrictive notice

actual notice; survey

Encroachments constitute __________ and are typically discovered by ___________.

correction line

Every fourth township line serves as a Select one: A. correction line B. datum point C. bench mark D. arpent

correction line

Every fourth township line serves as a Select one: A. datum point B. bench mark C. correction line D. setback

less stringent qualifying standards higher property standards low down payment mip is required long term loans loans are assumable no prepayment penalty

FHA Loans in Review

low down payments

FHA down payments are often lower than conventional loans, and although minimum down payments can't be borrowed, they can be gifts

lender

FHA insurance protects the Select one: A. buyer B. seller C. lender D. borrower

1. Downpayment of at least 3.5%, closing cost can be included in the loan 2. borrower is charged a mortgage insurance premium 3. property must be appraised by an approved FHA appraiser 4. maximum mortgage limits are set for various regions of the country 5. borrower must meet standard fha credit qualifications 6. includes financing for manufacture or factory build houses

FHA loan Requirements

Dept of Housing and Urban Development (HUD)

FHA loans are insured by the federal government through the

True

FHA permits no pre-payment penalties or lock-in clauses on its insured loans. Select one: A. True B. False

higher property standards

FHA scrutinizes houses to determine if they will need any obvious major repairs so borrowers don't need to spend money fixing them

Federal National Mortgage Association

Fannie Mae is the nickname for a program that was etablished to provide a market for buying and selling government insured mortgages. The name Fannie Mae stands for: Select one: a. Federal National Mortgage Association b. Federal National Home Loan Association c. Federal Lending Association

Federal National Mortgage Association

Fannie Mae; original purpose was to establish a market for the buying and selling of gov insured mortgages and thereby to assist holder of certain residential mortgages; gov owned enterprise

OLD CAR Obedience Loyalty Disclosure Confidentiality Accountability Responsible Care

Fiduciary Resonsibilities

constructive notice

Filing a contract in the public records of the court house is considered Select one: A. actual notice B. specific notice C. constructive notice D. acknowledgment

residential agricultural commercial special purpose industrial

Five categories of real property

yearly

For mortgages, interest is always calculated on a _________ basis. Select one: a. yearly b. monthly c. daily d. quarterly

640

How many acres are there in a section? Select one: A. 36 B. 160 C. 640 D. 5,280

Tax = Tax Rate x # of 1000's of assessed value

Formula for Taxes

Federal Home Loan Mortgage Corporation

Freddie Mac; founded in 1971 to allow savings and loans to liquidity for their mortgage assets; buys mortgages from these institutions and supplies them with cash to originate new mortgages; gov owned enterprise

qualified lending instructions

Funds for FHA loans are provided by Select one: A. qualified lending institutions B. any governmental agency C. FHA only D. FDIC only

GRM = Market Value / Rent OR GRM x Rent = Market Value

GRM =

value

GRM x income =

Government National Mortgage Assocaion

Ginnie Mae; sponsored and administered by the federal gov and is under the auspices of the dept of Housing and Urban Development

TRUE

Handicap status does NOT include illegal drug users. Select one: True False

mortgage interest payment on most first and second homes real estate taxes certain loan origination fees loan discount points loan prepayment penalties

Homeowners may deduct from their gross income

baselines

Horizontal lines are called

all of the above

How can an agency relationship be terminated? Select one: A. expiration B. mutual agreement of the parties C. completion of the purpose of the agency D. all of the above

by comparing the property to recent sales of similar properties

How does a real estate agent usually arrive at the listing price? Select one: A. by asking his or her broker B. by asking the seller C. by comparing the property to recent sales of similar properties D. by calculating the cost per square foot to build a similar structure

commingling

If a broker deposits a client's earnest money deposit into the broker's personal account, this would be: Select one: A. commingling B. okay as long as he does not spend it C. puffing D. accretion

subordinated

If a buyer has a mortgage on a piece of land on which he plans to build a house, he may need to have that loan ______________ in order to get a loan to build the house. Select one: a. subordinated. b. subrogated. c. conveyed. d. alienated.

alienation

If a buyer is allowed to assume the seller's loan, but must pay the current interest rate, the loan must have had what type of clause Select one: A. alienation B. subordination C. assumption D. defeasance

price fixing

If a multiple listing service sets the commission rate that its members can charge, this would be an example of Select one: A. fair business practice B. blockbusting C. price fixing D. monopoly

adverse possession

If a person claims to own a property to which he does not have clear title, in front of the owner and witnesses and the owner does not object, he may acquire title through Select one: A. adverse possession B. attachment C. quitclaim D. suit to quiet title

...

If a person wants to build a grocery store on the corner of a residential subdivision, he would need a Select one: A. zoning variance B. non-conforming use C. zoning permit Incorrect D. protective zoning

...

If a power company obtains an easement to build a power line across a person's property, this would be an example of Select one: A. eminent domain B. easement in gross C. easement appurtenant Incorrect D. rescission

no

If a property is downzoned and there is an decrease in value because of the downzoning, is the owner eligible for compensation from the city? Select one: A. yes B. no

VOID

If a property is sold for an illegal purpose, that contract is Select one: A. void B. voidable C. unenforceable D. valid

void

If a property is sold for an illegal purpose, then the contract would be considered Select one: A. void B. voidable C. valid D. unilateral

the seller can take back the property

If a property is sold with conditions and the buyer does not abide by the conditions, what can happen? Select one: A. the buyer will be fined B. the buyer can rescind the sale C. the seller can take back the property D. the property must be sold

True

If a seller defaults on a sales contract, the buyer could place a vendee's lien on the property to recover his deposit. Select one: True False

He must return it to the buyer plus a like amount.

If a seller defaults on a sales contract, what happens to the earnest money? Select one: A. He must return it to the buyer. B. He must return it to the buyer plus a like amount. C. He may keep it. D. He must use it to pay the broker

The original offer is void.

If a seller makes a counteroffer, which of the following is true? Select one: A. The buyer is still obligated to the terms of the original offer. B. The buyer is obligated to accept the counteroffer. C. The original offer is void. D. The buyer is obligated to make a new offer if the terms of the counteroffer are not acceptable.

in severalty

If a single owner receives title to a property what type of ownership does he have? Select one: A. common B. in severalty C. joint tenancy D. tenancy by the entirety

the agent is responsible for paying his own Social Security and income taxes.

If an agent is working as an independent contractor for the broker: Select one: A. the broker is required to withhold Social Security and income taxes. B. he is an employee of the broker C. the agent is responsible for paying his own Social Security and income taxes. D. the broker can require the agent to work set hours.

misrepresentation

If an agent knows of a material defect and does not tell a prospective buyer about it, this would be Select one: A. puffing B. mistake of fact C. misrepresentation D. steering

all at the same time

If an agent receives two offers on a property on the same day and can not meet with the seller until evening, how should the agent present the offers? Select one: A. in the order that they were received B. the highest offer first C. all at the same time D. only present the best offer

7.0%

If net annual income is $35,000 and the value is $500,000, what is the capitalization rate? Select one: A. 6.5% B. 7.0% C. 7.5% D. 8.0%

life estate in reversion

If no remainderman is name, title reverts to the original owner or his heirs.

partition suit

If one of the owners in a joint tenancy or tenancy in common wishes to force the sale of the property, he does so through: Select one: A. escheat B. condemnation C. partition suit D. eminent domain

specific performance

If the contract does not state "earnest money" then it is __________________.

obtain a deficiency judgment

If the full amount of the debt is not recovered through foreclosure, the lender can Select one: A. obtain a deficiency judgment B. sue for secondary foreclosure C. do nothing D. obtain a partial release

holdover tenant

If the lessee in a periodic tenancy continues to pay rent after the lease expires, he is known as a/an: Select one: a. holdover tenant. b. tenant at sufferance. c. tenant at will. d. non-tenant.

Except for trade fixtures, the lessor has the right to retain the improvements.

If the lessee makes improvements to the property, which of the following is TRUE? Select one: a. Except for trade fixtures, the lessor has the right to retain the improvements. b. The lessor must pay the lessee for the improvements. c. The lessee must remove the improvements when vacating the property. d. The lessee can deduct the cost of the improvements from the rent.

sue for specific performance

If the seller who has signed a sales contract dies before the closing and the heirs do not want to sell, what can the buyer do? Select one: A. nothing B. sue for specific performance C. sue for partition sale D. appeal to the board of realtors

INCORRECT A

If there are several similar houses in the same area for sale, the one with the lowest price will probably sell first. This is an example of the principle of Select one: A. conformity B. substitution C. change D. highest and best use

tacking

If two or more adverse claimants occupy the same property in succession, the years of their occupancy may be combined for the benefit of the most recent claimant. This is called: Select one: a. tacking. b. acquisition. c. escheat. d. eminent domain.

Equal credit opportunity

If you are turned down for a loan, what law gives you the right to be furnished with the reason you were turned down? Select one: A. Equal credit opportunity B. Regulation Z C. Truth in Lending D. Credit Disclosure Act

external depreciation

If your property is located next to a toxic waste dump, you might expect to have which of the following types of depreciation? Select one: A. physical depreciation B. functional depreciation C. external depreciation D. none of the above

someone other than the owner of the land

Improvements and other immovable can be owned by

10% of market value for residential property 15% for commercial improvements 105 for lots

In LA assessed value is:

a privilege

In La, a lien is called

succession

In La, the term for probate is

specific performance

In Louisiana, a deposit is not required. If no money accompanies the contract it is

personal servitude

In Louisiana, an easement in gross is called

LESION BEYOND MOIETY

In Louisiana, if a property is sold for less than half of the market value at the time of sale, the seller or his heirs can sue to rescind the sale for up to one year from the time of the sale under the concept of Select one: A. constructive fraud. B. legal objective. C. duress. D. lesion beyond moiety.

separate immovables or movables.

In Louisiana, improvements which are not owned by the owner of the land are either known as

confusion

In Louisiana, merger is called

condo declaration

In Louisiana, only by checking the _________ can you tell if the land beneath the condo is tenancy in common or sole ownership

ownership in indivision

In Louisiana, tenancy in common the only form of co ownership for unmarried persons. The Louisiana term for this type of ownership is

usus, fructus, and absus

In Louisiana, the bundle of rights may be compared to the rights of

the person he is with

In Louisiana, the law states that, unless there is a written agreement to the contrary, the agent represents ______________

acquisitive prescription

In Louisiana, the term adverse possession is _______________. If a claimant occupies a parcel of property in good faith, it may become his in ten years; if in bad faith, it takes thirty years.

component by attachment

In Louisiana, the term for a fixture is

full or perfect ownership

In Louisiana, the term for fee simple estate ownership is

borrower's name, lender

In Louisiana, the title is in the _____________ name but the __________ has a lien.

sole ownership

In Louisiana, we call Ownership in Severalty

cause (promise is considered to be cause)

In Louisiana, we must have ________ for a contract to be considered valid.

equitable right of redemption

In Louisiana, we only have _______________. The right is extended from the notice of foreclosure until the property actually is sold at sheriff's sale.

farm and non-farm

In Lousiana, leases are _______ and __________

deferred

In a 1031 tax exchange, capital gains tax on the sold property is Select one: A. eliminated B. reduced C. deferred D. evaded

...

In a net listing, the broker receives Select one: A. any monies remaining after the seller pays off all liens B. a percentage of the sales price Incorrect C. a fixed preset amount D. any amount above a preset amount determined by the seller at the time of the listing

liberal terms available to qualified buyer

In a real estate advertisement that includes information on mortgage financing, which of the following statements is legally permissible if no further information is given? Select one: A. liberal terms available to qualified buyer B. two thousand dollars down C. monthly payment, four hundred dollars D. interest rate only 9%

1. he may sue for rescission of the contract relieving all parties of their original contractual obligations, and returning valuable considerations to the owners 2. he may sue for damages to receive compensation for money lost in the breached contract 3. he may sue to have the sale completed; this is called specific performance

In a specific performance contract, if either party fails to meet contractual obligations, he has several choices for recourse:

The more restrictive one.

In a subdivision where restrictive covenants and zoning regulations are present, which one takes precendence over the other? Select one: a. The more restrictive one. b. The one created first. c. The one created last. d. Whichever one is preferred.

trustor

In a trust deed, the owner is the ________. Select one: a. trustor. b. trustee. c. beneficiary. d. subordinator.

irrevocable if it contains the clause "This offer is binding and irrevocable"

In most states an offer to purchase may be revoked at any time prior to acceptance by the seller; however, in Louisiana, one an offer is present to the seller, it is

TRUE

In order to get a deficiency judgment there must be an appraisal before the sale. Select one: True False

YES

Is a person who is recovered from mental illness protected by the handicap status? Select one: a. Yes. b. No.

INCORRECT B

In some states the borrower may have up to two years to redeem his property by paying off the debt after the foreclosure. This is known as? Select one: a. statutory rights of redemption b. equitable redemption c. deficiency judgment d. non-judicial foreclosure

doctrine of prior approach

In states where water is scarce, ownership and use of water is often controlled by the state rather than by the adjacent land owner. This practice is known as Select one: A. states B. doctrine of prior appropriation C. avulsion D. water allocation rights

doctrine of prior approach

In states where water is scarce, the ownership and use of water is often determined by the

CONSIDERATION

In the Common Law states, a contract is not considered valid unless each party has pLedged to exchange something of value with the other party. This is called: Select one: a. consideration. b. acceptance. c. objective. d. capacity.

merger

In the case of the ______________ of the dominant and servient tenements, the easement is terminated because it is impossible for a person to hold an easement on his own proerty

his earnest money back plus an equal amount from the seller as liquidated damages

In the case of the default of the seller, the buyer must receive ________________

credit to the buyer

In the closing statement, new loan proceeds are listed as Select one: A. credit to the buyer B. credit to the seller. C. debit to the buyer D. debit to the seller.

CONSIDERATION

In the other 49 states a contract must be accompanied by Select one: A. good faith. B. intent. C. cause D. consideration.

contract for deed

In this type of financing, the sale and financial agreement are generally in one document; buyer does not receive full title until the terms have been met; the seller delivers the deed when all of the payments have been made

cooperative

In which of the following real estate investments does the owner own stock in a corporation but no ownership of the property itself? Select one: A. cooperative B. condominium C. apartment building D. subdivision

index lease

In which of the following types of leases is the rent generally tied to an external index? Select one: a. Graduated Lease b. Ground Lease c. Index Lease d. Straight Lease

special warranty deed

In which type of deed does the grantor guarantee the title only during the time that he actually owned the property? Select one: A. general warranty deed B. special warranty deed C. quitclaim deed D. bargain and sale deed

net lease

In which type of lease does the lessee pay a flat fee plus a portion of the expenses? Select one: A. gross lease B. net lease C. percentage lease D. straight lease

percentage lease

In which type of lease would the lessee pay a percentage of his income? Select one: A. gross lease B. net lease C. percentage lease D. graduated lease

INCORRECT A

In which type of loan would you generally pay the least amount of total interest, assuming the same interest rate? Select one: A. amortized loan, ten year term B. amortized loan, five year term C. straight loan, ten year term D. straight loan, five year term

The Fair Housing act of 1968

Inaugurated a national policy of fair housing; forbade discrimination in the sale, rental and financing of housing and in the provision of brokerage services, on the basis of race, color, religion or nationality; in 1974 sex was added to the list

government lots

Incomplete quarters of fractional sections are divided into parcels of roughly equal area called

True

Incurable depreciation is a loss in value because of things that would cost more to repair than the resulting increase in value. Select one: True False

yes, because the law covers anyone who is currently mentally ill or recovered.

Is a person with a mental illness who is completely cured covered by the Civil Rights Act of 1968? Select one: A. no, because this law does not address disabilities. B. no, because this law covers only those currently disabled. C. yes, because the law covers anyone who is currently mentally ill or recovered. D. no, because the law only covers familial status and sex.

Scarcity

Is the available supple scarce or limited relative to the desire or demand for the product?

true

It is the duty of the agent to obtain the highest possible price for the client's property. Select one: True False

10%

June Wright has a mortgage balance of $55,000 for which she pays $5,500 per year in interest. What is the interest rate? Select one: A. 8% B. 9% C. 9.75% D. 10%

good and valuable consideration

LA state law does not require contracts to be written but LREC requires that all contracts be in writing. Other 49 states require that an offer accompanied by "______________________", usually money, but money is not required by Louisiana, only "cause".

situs

LOCATION. every parcel of land occupies a specific location; location has value primarily in terms of is accessibility and its desirability as an object of human demand; land is a determinant of economic value; what makes one site or location preferable to another is largely a matter of personal choice; positive include safety, low traffic volume, schools, stores etc

True

Land is permanent, immobile, complex and unique. Select one: True False

10

Landlord must give the tenant _______ days notice and the same hold true for the tenant to terminate the lease.

surviving spouses and children grandchildren parents siblings other distant relations

Laws of succession vary from state to state, but typically they will satisify interest of heirs in the following order:

3 days of the loan application

Lender must prepare a good faith estimate of closing costs within

True

Lenders are not required to advertsie credit terms, but if they advertise some credit details, they fust fully disclose the terms. Select one: True False

HUD.

Lenders who make FHA loans must be approved by: Select one: a. HUD. b. the VA. c. the real estate commission. d. the department of finance.

race.

Licensees should be aware that no exemptions involve

court judgement

Liens may also be placed against real property through court proceedings; the plaintiff first files a lis pendens, a recorded notice of impending litigation against the property

special agency

Listing agreement forms a ____________ relationship between the broker and the seller in that it authorizes the broker to represent the principal's property for sale, solicit offers, and submit offers to the principal

numbered; lettered

Lots are ___________________ and the blocks are _________ for identification.

mortgage guarantee mortgage corporation

Maggie mae; private organization in which specializes in buying and selling mortgages and is financed entirely by private funds

Rights of Possession Rights of Control Rights of Quiet Enjoyment Rights of Disposition Exclusion

Main groups of rights that comprise the bundle of rights are:

present

Market price refers to the amount paid for something in the: Select one: a. present. b. future. c. past. d. market.

future value

Market value always refers to the

1. property owner transfers title to a third party in exchange for a loan or other consideration from the lender or beneficiary; borrower or trustor executes both a promissory note and a trust deed; borrower's signature is required on both docs 2. trustee hold title for the benefit of the lender or beneficiary to secure the loan the lender has made to the trustor 3. trust deed conveys bare or naked title which is held by the third party 4. when the trust deed is paid off, the trustee myst give the trustor a deed of reconveyance

Mechanics of the trust deed

1. comparative unit or square foot method 2. unit in place method 3. cubic foot method 4. quantity survey method

Methods of estimating cost

lenders

Mortgagee title policies protect against _________ loss? Select one: A. sellers B. buyers C. lenders D. all of the above

mineral rights, right of lateral support, air right, riparian rights

Most important land rights of these are

both

Mr. Baker and Mr. Adams are partners in a business which sells golf balls. Mr. Baker owns 60% of the business and Mr. Adams holds 40%. Who must sign in order to sell the business? Select one: A. Mr. Baker B. Mr. Adams C. both D. neither

$53,192

Mr. Smith wants to sell his house and net $20,000. He must also pay off his mortgage of $30,000. The commission will be 6%. What is the least he can sell for? Select one: a. $50,000 b. $53,192 c. $53,000 d. %54,000

wraparound mortgage

Mr. and Mrs. Buyer purchase a home from the Sellers. They will assume the Sellers' existing loan and the Sellers will owner finance the remaining balance after the down payment. This type of financing is called a: Select one: A. blanket mortgage B. package mortgage C. creative mortgage D. wraparound mortgage

no children = no forced portion one child = 1/4 forced portion two or more children = 1/2 forced portion

Number of forced portion depends on number of children

15%

On a loan of 95%, on what part of the loan would PMI be required? Select one: A. 5% B. 10% C. 15% D. 95%

INCORRECT C

On a scale drawing, a room is 3" X 5". If each inch equals ten feet, and you want to carpet this room at $15.00 per square yard of carpet, how much would the carpet cost? Select one: A. $225 B. $2500 C. $2,250 D. $7500

in the contract for deed, the seller retains legal title to the property until part or all of the debt is paid, until this time the buyer holds equitable title only; with the purchase money mortgage, the buyer receives full legal title at the time of sale

Primary difference between the purchase money mortgage and the contract for deed is that

1. federal taxes 2. state taxes 3. property taxes 4. special assessments 5. mechanic's lien 6. mortgages

Priority of Liens

covenant, conditions, restrictions, rights of way and recorded easements (CCRs)

Private parties may encumber without placing a lien against it. Such encumbrances may be effected by deeds or written contracts. Such encumbrances are referred to as:

EXCLUSIVE RIGHT TO SELL LISTING

Procuring cause would not be required in order for a broker to receive a commission in a Select one: A. exclusive right to sell listing B. exclusive agency listing C. net listing D. none of the abov

False

Property managers do NOT have to abide by the fair housing laws. Select one: True False

positive situs

Property situated in an economically desirable location that allows it to successfully fulfill human needs, is said to benefit from

all of the above

Property values may be affected by Select one: A. demographic trends B. current financial climate C. levels of wages and salaries D. all of the above

all of the above

RESPA applies to Select one: A. first mortgage transactions backed by FHA or VA B. HUD loans C. Loans that are to be bought by FNMA, GNMA, or FHLMC D. All of the above

A good faith estimate of all closing costs within 3 days of loan application

RESPA requires Select one: A. A good faith estimate of all closing costs within 3 days of loan application B. A return of the deposit within 3 days of loan application if the buyer changes his mind. C. Rescind the loan within 3 days if interest rates change D. Disclosure of all financing costs including interest rate

north-south

Range lines are lines which run Select one: A. north-south B. east-west

a 1031 tax-deferred exchange.

Real Estate investors can defer taxation of capital gains by making a property exchange. This is called: Select one: a. a 1031 tax-deferred exchange. b. a 1099 tax exchange. c. a 941 tax-deferred exchange. d. a capital gains exchange.

residential, commercial, agricultural, industrial, and special purpose

Real property can be categorized as Select one: A. residential, commercial, agricultural, industrial, and special purpose B. residential, business, agricultural, industrial and commercial C. residential, agricultural, mixed use, industrial, and commercial D. residential, commercial, agricultural, and industrial

land, improvements, plants, and air

Real property consists of Select one: A. land B. land and improvements C. land, improvements, and plants D. land, improvements, plants, and air

RACE

The Civil Rights Act of 1866 prohibits discrimination based on Select one: A. sex B. color C. race D. national origin

True

Riparian rights only apply when more than one property adjoins the same body of water. Select one: True False

amenities directional growth behavioral regulations demographic trends proportion of homeowners and renters

Social forces affecting property are:

police powers, eminent domain, taxation, mechanic

Some examples of involuntary encumbrances include Select one: A. police powers, eminent domain, taxation, mechanic B. mortgages, taxation, police powers, eminent domain C. escheat, vendor D. property taxes, mortgages, police powers, easements

police powers eminent domain escheat taxation

State is permitted to encumber real property in four ways

Tax Rate X # of 1000s of assessed value

Tax =

$150, seller owes

Taxes on a house are $600 for the year, paid in arrears. The tax year runs from April 1st to March 31st. The closing is on June 30th. Using a 360 day year, who owes for the taxes and how much? Select one: A. $450, seller owes B. $150, seller owes C. $450, buyer owes D. $150, buyer owes

joint tenancy

Tenancy by the entirety is most similar to Select one: A. joint tenancy B. tenancy in common C. community property D. ownership in severalty

familial status and handicapped

The 1988 amendment to the Fair Housing Act added which two protected classes? Select one: A. sex and handicapped B. familial status and sex C. familial status and handicapped D. national origin and familial status

$50,000

The 1999 taxes on a residence are $400. The millage rate for all taxes is 40 mills. The taxing authority has assessed the property at 20% of the established market value. What is the market value? Select one: A. $10,000 B. $20,000 C. $40,000 D. $50,000

1. labor 2. management 3. capital 4. land

The 4 agents of Productivity

point of beginning, linear measurements, fixed reference points, compass directions.

The 4 distinguishing features of the Metes and Bounds System are Select one: A. point of beginning, linear measurements, fixed reference points, compass directions. B. ranges, townships, section lines, point of beginning. C. monuments, point of beginning, compass directions, linear measurements. D. point of beginning, lot, block, tract.

1. social trends 2. economic and financial factors 3. gov controls and regulations 4. environmental conditions and physical factors

The 4 forces that influence value

purchase money mortgage

The Browns are selling their house, which is unencumbered, to the Blacks for $115,000. The Blacks have given an earnest money deposit of $5,000. At the closing they will make a cash payment of $40,000. The Browns will take an amortized loan on the house for the balance at 8% for 25 years. This mortgage arrangement is best described as a Select one: A. purchase money mortgage B. balloon mortgage C. partially amortized mortgage D. junior mortgage

highest and best use

The theory that there is one particular use for each property that will bring the highest value, is called Select one: A. competition B. progression and regression C. balance D. highest and best use

INCORRECT D

The title to property in a trust deed is held by the ___________________ until the debt is fully paid. Select one: A. trustee B. trustor C. beneficiary D. lender

fructus industriales.

The two classifications for things that grow on the land are fructus naturales and: Select one: a. fructus industriales. b. farm crops. c. trees and bushes. d. fixtures.

conventional and government backed

The two general categories of loans are Select one: A. conventional and government backed B. conventional and general C. general and specific D. lender and seller

external

The type of depreciation which is NEVER curable is called Select one: A. physical B. functional C. external D. straight line

contribution

The value that one particular component of a structure contributes to the total value is Select one: A. substitution B. contribution C. conformity D. balance

36; 32

There are ________ principal meridians and ________ baselines in all.

36

There are how many sections in a township? Select one: A. 16 B. 35 C. 36 D. 48

1. residential 2. retail and commercial 3. industrial

There are three types of properties that require management

in gross

There are two types of easements. They are called easement appurtenant and easement: Select one: a. in gross. b. dominant. c. servient. d. tenement.

1988 Amendment to The Fair Housing Act

This amendment prohibits discrimination in housing based on familial status (families with children) or handicap, and provides for more authority in the enforcement of the Civil Rights Act by establishing the maximum fines that can be imposed for discrimination

The Civil Rights act of 1866

This law prohibits any type of discrimination based on race

He can sell his interest because he owns a separate legal title to an undivided interest in the business.

Two businessmen own a business as tenants in common. One of the men decides to sell his interest in the business. Which of the following is true? Select one: A. He can not sell unless his partner agrees. B. He can sell his interest because he owns a separate legal title to an undivided interest in the business. C. He can sell, but the new owner would be a joint tenant. D. He can not sell without going to court.

Metes and Bounds Rectangular Survey Lot, Bloch and Track

Three formal precise ways of describing land

open listing exclusive agency exclusive right to sell

Three main typed of listing agreements

INCORRECT A

Three owners own a property as joint tenants. One of the owners sells his interest to a fourth party. The fourth party is a Select one: A. joint tenant B. tenant in common C. owner in severalty D. none of the above

1. right of usufruct 2. right of habitation 3. right of use

Three types of personal servitudes

are in the public records

Title insurance generally covers defects that Select one: A. are known to the buyer B. are in the public records C. are listed in the deed D. none of the above

all of the above

Title problems could include which of the following? Select one: a. encroachments. b. technical errors. c. hidden defects in public records. d. All of the above.

all of the above

To acquire a property through the right of eminent domain, the city must Select one: A. obtain a judgment in court B. pay just compensation to the landowner C. prove that the action is necessary D. all of the above

INCORRECT C

To be valid, a deed must have all the following EXCEPT Select one: A. names of grantor and grantee B. consideration C. description of property being conveyed D. signature of grantee

5

To evict in LA, landlord must give how many days notice

six mile intervals on north and south of, and parallel to baselines.

Township lines run at

True

True of False? You can not use the Cost Approach to appraise land. Select one: A. True B. False

produce an income and maintain the value of the property

Two basic goals of a property manager are to Select one: A. collect rent and provide for repairs B. produce an income and maintain the value of the property C. find tenants and collect rent D. hire staff and rent units

listing agreement

Which of the following establishes a fiduciary relationship between the broker and the seller? Select one: A. an option B. An offer to purchase C. a lease D. a listing agreement

They would each have a different effective age.

Two houses in the same neighborhood were both built twenty years ago. The first house is in excellent condition and the second one needs a lot of repairs. Which of the following statements is TRUE? Select one: A. They would both have the same assessed value. B. They would each have a different effective age. C. The house needing repair would be an example of functional depreciation. D. The house needing repairs would probably sell quicker.

INCORRECT B

Two investors buy a building as joint tenants. One of the investors dies. Which of the following is true as to ownership of the building? Select one: A. The dead investor's interest goes to his heirs B. The remaining investor owns the building as a co-owner with the heirs. C. The remaining investor owns the building in severalty. D. The heirs and the remaining investor are now joint tenants.

tenants in common

Two investors can own an investment property in unequal shares as Select one: A. joint tenants B. tenancy by the entirety C. tenants in common D. tenancy in severalty

INCORRECT B

Two investors own an apartment building as joint tenants. One man dies leaving his entire estate to his two children. Which of the following best describes what will happen as to ownership of the apartment building? Select one: A. The children do not inherit the apartment building. B. The apartment building is now owned jointly by the children and the other investor. C. The children are co-owners of the apartment building. D. The investor must sell the apartment building and give half of the proceeds to the two children.

plottage increment

Two lots which are too narrow to build on are combined into one lot that is more useful and has a higher value. This is increase in value is called Select one: A. plottage increment B. assemblage C. reconciliation D. recombination

St. Helena and one baseline

Two principal meridians in Louisiana

conventional legal life

Two types of life esate

...

Under a lease, a landlord does which of the following with his possessory interest in the property? Select one: A. subordinates it B. alienates it Incorrect C. novates it D. assigns it

RECISION

Under certain conditions, one party may cancel or terminate a contract. This is known as Select one: A. novation. B. substantial performance. C. rescision. D. breach.

the state rather than the adjacent landowner

Under prior appropriation, the right to use water for any purpose other than limited domestic use is controlled by

specific performance contract

a monetary deposit is required which accompanies the offer to purchase

trust deed

Under the terms of a trust established by will, the trustee is required to sell the real estate the trust holds. The type of deed that will be delivered at the closing is a Select one: A. Deed of release B. Warranty deed C. Trustee D. Trust deed

Length x Width X Height

Volume formula

paying unpaid taxes filing Suit to Quiet Title use of the Quitclaim deed

Ways to clear title defects

list any questionable items in the purchase agreement

What is the best way to avoid disputes over whether an item is a fixture? Select one: A. settle any disputes in court B. list any questionable items in the purchase agreement C. tell the buyers that the seller has the last word on what is or is not a fixture D. hire an attorney

$55,000

What is the penalty if there have been 2 or more fair housing violations within the past 7 years? Select one: A. $11,000 B. $25,000 C. $35,000 D. $55,000

Give it to the listing broker in a timely fashion

What should the buyer's agent do with earnest money or deposit given with a purchase agreement? Select one: a. Give it to the listing broker in a timely fashion b. Give it directly to the seller in a timely fashion c. Earnest money is not required for a contract to be valid. d. Note the amount on the purchase agreement and give it to the buyer's broker.

general

What type of agency relationship exists in a property management agreement? Select one: A. universal B. general C. special D. none of the above

Subordination agreement

What type of agreement changes the priority of liens to be paid in a foreclosure? Select one: a. Subordination agreement b. Lis pendens agreement c. Attachment agreement d. Involuntary agreement

subordination clause

What type of clause gives a mortgage priority over a previously recorded mortgage? Select one: A. defeasance clause B. subrogation clause C. subordination clause D. alienation clause

INCORRECT C

What type of deed conveys severed interests in co-owned property resulting from a court ordered partition? Select one: a. Partition Deed b. Cession Deed c. Sheriff's Deed d. Executors Deed

NOT A

What type of fixture is considered personal property even though it is attached to the building? Select one: A. Annexed property B. Trade fixtures C. Movables D. There is no such thing.

...

What type of payment plan allows for regular payments of interest only, with the principle paid as a lump sum at the end of the term? Select one: A. amortized B. partially amortized Incorrect C. straight or term D. partial release

cooperative

What type of real estate investment has no real property ownership? Select one: A. cooperative B. condominium C. bond D. fee simple

equitable title

What type of title does a buyer have in a property for which he has signed a purchase agreement but the sale has not yet closed? Select one: A. legal title B. right of entry C. equitable title D. none

BROKER COOPERATION

When a commission is shared between the listing broker and the selling broker, this is known as: Select one: a. broker cooperation. b. commission splits. c. commingling. d. This is illegal,

By necessity

When a landowner has no access to his property he may claim an easement appurtenant by what method? Select one: a. By necessity. b. By implication. c. By condemnation. d. By expropriation.

tenancy at sufferance

When a tenant occupies a premises without the landlord's consent, it is called Select one: A. tenancy for years B. periodic tenancy C. tenancy at will D. tenancy at sufferance

probate

When a testator dies, his will is admitted to ________; court proceeding designed to establish the validity and authenticy of the will and allow the legatees, creditors, and other interested parties to claim their shares of the estate

INCORRECT B

When appraising a special purpose building such as a school or church, the appraiser would most likely have to use which approach to value? Select one: A. Cost B. Sales Comparison C. Income D. GRM

replacement cost

When appraising an older house for which there are no comparables to be found, what method would you most likely use? Select one: A. replacement cost B. reproduction cost C. income approach D. sales comparison approach

Monthly debt service, or the mortgage payment

When calculating the value of an income property using the Capitalization Rate, which of the following expenses is NOT included? Select one: a. Monthly debt service, or the mortgage payment b. Management fees c. Vacancy losses d. Taxes and insurance

if disclosed to all parties

When can an agent receive a fee for obtaining a service contract? Select one: A. if disclosed to all parties B. if under $75 C. if requested by the seller or buyer D. never

the building only

When depreciating a property you would normally depreciate Select one: A. the land only B. the building only C. the land and the building D. not enough information

all of the above

When do the exemptions to the Fair Housing Act NOT apply? Select one: A. when they involve race B. when a licensed real estate agent is used C. when discriminatory advertising is used. D. All of the above

upon expiration of the contract date.

When does a listing contract terminate? Select one: A. upon expiration of the contract date. B. upon the death of the sales agent. C. when the sales agent transfers to another broker. D. when the broker determines.

SUBSTANTIAL PERFORMANCE

When one party has substantially performed the terms of the contract, but has not completed every detail exactly as the contract states, this is known as Select one: A. partial performance. B. substantial performance. C. accord and satisfaction. D. equitable performance.

BROKER COOPERATION

When the commission is shared between the listing broker and the selling broker, this is known as: Select one: a. sharing. b. broker cooperation. c. protection. d. This is illegal.

fee simple

Which of the following estates is always inheritable? Select one: A. life estate B. fee simple C. joint tenancy D. leasehold

homosexuals

Which of the following groups is NOT protected by fair housing laws? Select one: A. homosexuals B. alcoholics C. persons with AIDS D. Muslims

public dediation

When the government gives land to a private party it is called a public grant. When a private party gives land to the government it is known as a Select one: A. public grant B. private grant C. public dedication D. private dedication

INCORRECT B

When the lender holds the title to the property, the borrower has ____________ the title to the lender. Select one: a. alienated. b. lent. c. executed. d. referred.

...

When the lessor dies, how is the lease affected? Select one: A. It becomes void. B. It is terminated. C. It must be renegotiated. D. It is not affected in any way.

borrower property location of the property

When underwriting a loan, the lender concentrates on three areas

yearly rent

When using the gross rent multiplier for commercial properties, the rent is based on: Select one: a. yearly rent. b. monthly rent. c. net rent. d. commercial rent.

monthly rent

When using the gross rent multiplier for residential properties, the rent is based on: Select one: a. monthly rent. b. yearly rent. c. net rent. d. market rent.

DISCLOSURE

Which duty is easiest to perform as a dual agent? Select one: A. obedience B. disclosure C. loyalty D. care

fee simple

Which estate is ALWAYS inheritable? Select one: A. life estate B. leasehold C. freehold D. fee simple

ILLEGAL DRUG USERS

Which group is not protected by fair housing laws? Select one: A. families with children under 18 B. persons 55 or older C. alcoholics D. illegal drug users

street address

Which is the LEAST acceptable form of property description? Select one: A. metes and bounds B. rectangular survey C. lot, block and tract D. street address

Unit-in-place method

Which method of estimating cost relies on average cost for each component part of the structure? Select one: a. Unit-in-place method b. Square foot method c. Cubic foot method d. Quantity survey method

cubic foot method

Which method of estimating cost would most likely be used to estimate the cost of a warehouse with 30 foot ceilings? Select one: a. cubic foot method b. square foot method c. unit-in-place method d. quantity survey method

all of the above

Which of the following are duties of the property manager? Select one: a. collect rent b. show and lease space c. maintain the property d. All of the above.

all of the above

Which of the following are exempt from the provisions of the Fair Housing Act? Select one: A. the sale or rental of a single family home occupied by a person who does not own more than 3 such homes, a broker or salesperson is not used, and discriminatory advertising is not used. B. the rental of rooms or units in an owner occupied one- to four-family dwelling. C. units owned by private clubs or religious organizations, as long as membership is not discriminatory. D. All of the above

restrictive covenants

Which of the following are private means of regulating land use? Select one: A. zoning B. restrictive covenants C. building permits D. eminent domain

All of the above

Which of the following are types of Involuntary Transfer? Select one: A. Eminent Domain B. Escheat C. Adverse Possession D. All of the above

all of the above

Which of the following are ways of clearing title defects? Select one: A. paying unpaid taxes B. filing a suit to quiet title C. using a quitclaim deed D. all of the above

ANY OF THE ABOVE

Which of the following can terminate an agency relationship? Select one: a. Destruction of the property b. Mutual agreement c. Expiration of the terms of the agency d. Any of the above

loyalty

Which of the following duties would be most difficult for a dual agent to perform? Select one: A. loyalty B. accounting C. disclosure D. obedience

An inspection can be waived.

Which of the following is true if a buyer of a home is given a lead based paint brochure? Select one: a. The seller is responsible for removing all lead based paint inside the house. b. The seller is responsible for any injuries resulting from lead based paint in the house. c. An inspection can be waived. d. The seller must remove all lead based paint on the inside walls of the house only.

It is not mutually binding.

Which of the following is true of an option? Select one: A. It is a sales contract. B. It is a bilateral contract. C. It is not mutually binding. D. It is a type of purchase agreement.

All of the above

Which of the following is/are examples of involuntary alienation? Select one: A. A portion of a woman's property is taken by the city to widen the road. B. A man dies without a will and with no heirs and his property is given to the state. C. A joint tenancy is dissolved by partition suit and sold. The proceeds are divided between the owners. D. All of the above.

Both A and B

Which of the following is/are examples of voluntary alienation? Select one: A. A subdivider dedicates an area of the subdivision to the city to be used for streets and parks. B. A man sells his house to another person. C. Both A and B D. None of the above.

all of the above

Which of the following is/are fiduciary duties? Select one: A. disclosure B. obedience C. loyalty D. all of the above

all of the above

Which of the following is/are forms of owner financing? Select one: A. all of the above B. contract for deed C. installment land contract D. bond for deed

all of the above

Which of the following is/are ways in which a lease may be terminated? Select one: A. expiration of the term of the lease. B. Agreement of the parties C. Eviction D. All of the above.

Federal taxes

Which of the following liens would be paid before property taxes in a foreclosure? Select one: a. Federal taxes. b. Mechanic's liens c. Special assessments d. Mortgages

all of the above

Which of the following participate in the secondary market? Select one: A. Fannie Mae B. Ginnie Mae C. Freddie Mac D. All of the above.

Estimate the replacement cost of the improvements.

Which of the following procedures would be used in the Cost Approach to value? Select one: A. Estimate the replacement cost of the improvements. B. Determine the original cost to build and depreciate it. C. Compare sales prices of similar properties D. Perform an age-life calculation.

Farmer Mac

Which of the following purchases agricultural loans from original lenders? Select one: A. Farmer Mac B. GNMA C. GHLMC D. HUD

INCORRECT B

Which of the following statements is true of an option? Select one: A. It is a sales contract. B. It is a type of purchase agreement. C. It is not mutually binding. D. It is unenforceable.

tenancy in common

Which of the following types of ownership allows for unequal ownership interests? Select one: A. joint tenancy B. tenancy in common C. tenancy by the entireties D. community property ownership

cooperative

Which of the following types of ownership involves stock ownership with the use of a proprietary lease? Select one: A. condominium B. cooperative C. town homes D. subdivision

annual income

Which of the following would NOT be used when determining the value of a house using the Sales Comparison Approach? Select one: A. financing terms B. location C. annual income D. market conditions

the foundation has a crack in it

Which of the following would an agent be required to disclose to a potential buyer? Select one: A. a person living in the house died of AIDS B. there was a murder on the property C. the house was previously occupied by a drug dealer D. the foundation has a crack in it

The applicant has a history of late payments.

Which of the following would be a valid reason for rejecting an applicant for a loan? Select one: a. The applicant has a history of late payments. b. The applicant is divorced and receiving alimony. c. The applicant lives in an area where property values are declining. d. The applicant is single.

listing agreement

Which of the following would be considered a service contract? Select one: A. listing agreement B. purchase agreement C. option D. executed sales contract

unpaid tax lien

Which of the following would be found on a mortgage certificate? Select one: A. privilege B. encroachment C. unpaid tax lien D. variance

INCORRECT C

Which of the following would be the best example of a buffer zone? Select one: a. A park between a subdivision and a shopping center. b. An apartment building between a shopping center and a gas station. c. A warehouse between a factory and a shopping center. d. A school between a shopping center and an apartment building.

...

Which of the following would not have to be disclosed under RESPA? Select one: A. cost of homeowner's insurance B. appraisal fee C. loan discount points Incorrect D. cost of credit report

INCORRECT B

Which of the following would not transfer with the sale of a house at closing? Select one: A. emblements B. a storage building not attached to the house C. fences D. a hot water heater

mortgagee's title insurance

Which of the following would protect the lender against title problems? Select one: A. mortgagor's title insurance B. mortgagee's title insurance C. private mortgage insurance D. banker's insurance

3 month old federal tax lien

Which of the following would receive payment first? Select one: A. 6 month old mechanic B. 3 month old federal tax lien C. 2 month old state tax lien D. 10 month old mechanic

sex

Which protected class was added to the Fair Housing Act in 1974? Select one: A. race B. national origin C. handicapped D. sex

coporation

Which type of business ownership has the disadvantage of being subject to double taxation? Select one: A. Sole proprietorship B. General Partnership C. Limited Partnership D. Corporation

timeshare

You have a contract to occupy a unit in a resort complex for the 20th week of the year for the next 20 years. What type of ownership do you have? Select one: A. condominium B. tenancy in common C. co-operative D. timeshare

lead based paint

________ was used before 1978 and is often found in older houses; banned because of the danger of lead poisoning from peeling and flaking paint that children may put in their mouths, can result in damage to the brain, nervous system, kidneys, and blood; results range from mental retardation to death; purchasers must be informed of the possible presence in houses built before 1978 and the dangers

land and improvements

__________ and _________ are the two things that make up real property, one an element of nature and the other an element of man.

VA

___________ loans are guaranteed

agency disclosure brochure

________________ must be signed by the client and the agent at the first substantive contact.

Encapsulation

________________ of asbestos is often safer than removal.

option

example of a unilateral contract; right extended to purchase real property for a specified amount within a specified period of time

homestead

exemption of the family's primary residence from forced sale for the satisfaction of personal debts

HUD

f a complaint is filed against a property manager for discrimination, the complaint is filed with Select one: A. HUD B. NAR C. Board of Realtors D. Board of Complaints

sandwich lease

f a lessee sublets a property that he is leasing, this is known as a/an: Select one: a. sandwich lease. b. package lease. c. sublessee lease. d. partial release lease.

...

f an apartment building is sold while it is leased, which of the following is true? Select one: A. The lease terminates at the act of sale. Incorrect B. The lease terminates 30 days after the act of sale. C. The tenants must negotiate a new lease with the new owner. D. The new owner must honor the lease.

secondary mortgage market

facilitates the buying and selling of mortgages that have been made by the primary mortgage market

actual notice

firsthand info regarding a property which is known by a single interested party, or which should be known by this party (surveyor)

disclosure

for a real estate contract to be valid, an accurate legal description of the subject property must be disclosed; the street address of the property should be mentioned as well

condominiums

form of ownership that involves several owners holding fee simple title to individual units in a property and proportional shares in the whole property's common elements (land, pools, walls, structural supports, etc) owner owns property in severalty as sole owner of his until and as a co owner of the common elements; has full fee simple ownership rights in his unit and may sell, mortgage or will it; does not have the right to separate it from the complex

statutory will

formally prepared will, usually by an attorney, which is witnessed and signed

townships

formed by the intersection of range lines and township lanes; basic unit of subdivision in the rectangular survey system

implied contract

formed by the suggestion of the parties acts and conduct; conduct of the parties is a demonstration of their agreement; terms do not need to be written or even spoken to be effective and legally binding; example, Mr. Baker eats breakfast at a certain restaurant every day and the waitress routinely bring him toast and coffee. Just by sitting down, he enters into a contract with the waitress. That is, if she brings him food, he agrees to pay for it

fructus industriales

fruits of industry, or emblements, are essentially farm crops , things that are grown and harvested every year ; considered to be personal property; however, if land is sold during the growing season and before harvest time, the unharvested crops may be considered as real property.

fructus naturales

fruits of nature, are naturally growing things on the land that do not need annual cultivation; considered real property

less stringent qualifying standards

generally easier for borrowers to qualify for FHA loans because higher debt ratios are allower

donation mortis cause

gift in a will

subordination clause

gives the lender permission for a subsequent lender to assume first mortgage lien rights

acceleration clause

gives the lender the right of demand payment in full of the entire unpaid debt in the event of a default

mortgagor's or borrower's policy

good for the full amount of coverage as stated on the policy and for as long as the owner or his heirs have an interest in the property

police powers

gov's power to enact and enforce laws to protect the health, safety, morals and welfare of the general public

easement

grants a designated person or persons the right to use a portion of the land of another for a specific purpose; grants a right of way, that is the right to walk or drive across a neighboring property

vendee's lien

if a buyer has given a seller a deposit for the purchase of real property and the sals contract has been signed and the seller defaults, the buyer can place a lien on the property to recover the deposit

lesion beyond moiety

if a property is sold for less than half of the market value at the time of sale, the seller can sue to rescind the sale for up to one year from the time of sale

notice of offer and acceptance

if a prospective buyer finds a piece of property that he wants, a contract of sale, or purchase agreement is drawn up and signed by the prospective buyer; it is then presented to the seller by the agent; if the seller agrees to the terms of the offer exactly as it as made, he then signs the offer; by signing the purchase agreement, he is accepting the offer and the contract is vaild

sale without appraisement

if no appraisal has been made, the lender forfeits the right to obtain a deficiency judgement

liquidated damages

if the buyer should default, the seller may retain the earnest money deposit as

deficiency judgement

if the lender is unable to recover his full interest in the collateral property, he may, in some states, be permitted to seek a __________ against the borrower in order to recover the remaining debt; allows the lender to attach and seize the borrower's unsecured personal and real property to make up the difference between the amount realized at the foreclosure sale and the borrower's remaining outstanding obligation

right of re entry

if the lessee breaches the agreement, or exceptional circumstances, the lessor may enter without the lessee's consent

counteroffer

if the seller wants to reject the offer but would like to continue negotiations, he may take a _______________

$103,000

ill has a loan for $50,000 at 9.625% interest for 30 years. The factor from the amortization table is 8.50 for $1,000. Over the total loan, how much interest will Bill pay? Select one: A. $103,000 B. $153,000 C. $133,000 D. $ 53,000

steering

refers to channeling home seekers to, or away from particular areas, based on race, color, religion, sex, or nationality; includes trying to exclude minority groups from a certain area plus trying to direct them toward minority neighborhoods; is the reason for most of the fair housing complaints filed against people in the real estate business

conformity

refers to the concept that form, manner, and character of structures are in harmony with one another

market cost

refers to the past outlay of sufficient capital for the supervision, land, materials, labor and other valuables that are needed to bring an improvement into existence

redlining

refusing to make loans or issue insurance policies within certain areas that are considered to be bad risk areas, regardless of the borrower's ability to repay the loan

protective zoning

regulates the size and placement of buildings on their lots, population density, and overall use of space; regulates distance from streets and sidewalks that buildings can be erected, known as setbacks

zoning regulations

regulations controlling the use of land to protect property values and promote the health, safety, and welfare of the general public

loan to value ratio

relationship between the amount of the down payment and the amount of the load; divide the amount of the loan by either the appraised value or the selling price, whichever is less

housing expense ratio

relationship of the borrower's total monthly housing expense to income

index lease

rent is tied to come external standard, usually cost of go vliving index, consumer price index, or the prime lending rate; rent will be adjusted accordingly

income appraoch

rent that the subject property is likely to product is estimated by analyzing the rents of comparable properties

disclosed dual agency

representing both the buyer and the seller in the same transaction with the informed consent of both; disclosure minimizes the risk to the broker and alerts the clients to inherent dangers in dual representation; duties of disclosure and confidentiality may be limited or compromised

undisclosed dual agency

representing two principals to a transaction without knowledge and consent of both; usually illegal and may occur unintentionally be either carelessness or misunderstanding

earned money contract

required along with the offer to purchase; buyer customarily puts down a cash deposit with his offer to prove his intent to carry out the terms of the contract

1. must be in writing 2. must be a legal description of the property 3. must have a definite termination date 4. lot size should be indicated 5. square footage of all buildings and improvements on the property should be given 6. must show the broker's fee 7. type of deed that the seller will deliver must be included 8. all personal property (movables) if any should be listed

requirements of listing agreements

easement in gross

requires only one tract of land; granted to an individual or corporation, neither of which need be a landowner; commonly, such easement are granted for installation of utilities on a property

plottage increment

result of assemblage increases value is designated a

mortgage (trust deed)

security instrument that creates a lien; document that makes property security for the repayment of a debt

open listing

seller retain the right to employ as many brokers as he wants to try to sell his property, but is only obligated to pay a commission to the one who actually find a ready, willing and able buyer; if the seller sells the property himself, he is not obligated to pay any commission

mortgage bankers

set up loan transaction using their own capital and also service the loan

cubic foot method

similar to square foot method but based on volume instead of area; may be used for something unusual like high ceilings in a warehouse

tenancy in common

simplest type of co-ownership; each tenant or owner hold title to a specific share of the property, there are as many titles to the property as there are tenants; each tenant may sell, will or dispose of his share as he chooses; although each tenant hold separate title, his interest is said to be undivided; no matter what proportion of the property an owner holds, he has the right of use and access for all of it; the tenant may will his share, and upon his death, his share passes to his heirs if there is no will

bargain and sale deed with covenant

special type of bargain and sale deed which includes a covenant assuring the grantee that the grantor has done nothing to encumber the property during the time he has owner it; this covenant, in effect, turns the deed into a special warranty deed

vendor's lien

specific voluntary lien; used in connection with the purchase money mortgage (seller accepts downpayment from the buyer and give the buyer a mortgage on the balance owed on the property); seller can place this lien against the property for the outstanding balance; seller may foreclose if the buyer defaults on the payment

habendum clause

specifies the kind of estate being transferred, that is, fee simple, life, etc, and lists any covenants, warrants or promises; deed restrictions and encumbrances are usually listed immediately following this clause

specific performance

sue to have the sale completed

reverse mortgage

tailored for older home owners, retired, or near retirement, who own a hoe free and clear and wish to use some of the equity they have in their home

sales comparison approach

technique of estimating the value of real estate by analyzing and comparing data of actual sales of similar, or comparable properties

cost approach

technique of estimating the value of the subject property by adding the depreciated replacement cost or reproduction cost of the improvements to the value of the land, if vacant

express contract

terms are communicated with words; can be either written or spoken, each party is aware of exactly what is being contracted and exactly what is expected and what time; if Mr. Baker actually tells the waitress to bring him toast and coffee; under statute of frauds, some contracts must be in writing to be enforceable

single agency

the agent represent only one party in any single transaction, and only owes fiduciary duties to that party, whether it is the buyer or the seller

market price

the amount that is actually paid, or about to be paid

private mortgage insurance

the borrower pays an insurance premium for an insurance policy which covers the top portion of the loan proceeds advance over and above the standard 80%; covers potential deficiency in proceeds which the lender might experience after foreclosure and sale of the collateral

agency

the fiduciary relationship between the principal and the agent in which the agent represents the principal in a transaction

condemnation

the government's right of eminent domain is expressed through court action known as

lien theory

the lender holds a lien; most states follow

title theory

the lender holds the title; some states follow

hypothecate

the lender is given a lien against the borrower's collateral property, and if default occurs, the lender can file foreclosure proceedings in order to recover his interest in the property

foreclosure by sale

the lender is required to refund the borrower any profit realized on the sale of the foreclosed property

condition subsequent

the new owner is prevented from performing some action or activity; if the conditions are not met, the grantor has the right to reclaim ownership, however, it is not automatic and he must go to court to assert his right; considered future interests

discharged contract

the obligation of all parties to perform or not to perform is terminated

the devisee

the person to whom such real property is transferred is known as

disposable portion

the portion of the estate that is not forced

underwriting or loan qualification

the process of determining the risk a lender is incurring by lending a sum of money to a certain borrower to finance a particular property

subrogation

the right of a company to acquire any remedy or damages available to the insured once the title company makes a payment to settle a claim

right to consideration

the right to collect rent from the lessee as agreed upon in the lease

situs

the site, place, location or position occupied by real property

land

the surface of the earth; include anything that is permanently attached to earth's surface, such as trees and water

contribution

the value of a component is measured in terms of its ______ to the value of the whole property; a swimming pool may cot $20,000 but may only add $5,000 to the value of the property

regression

the value of a superior property is adversely affect by its association with an inferior property of the same type

listing agreement

the way in which the sellers of property furnish real estate brokers and salespeople with their inventory; also an employment contract, that is, employment of the broker by the principal to find a ready, willing and able buyer for his property; forms a special agency relationship between the broker and seller in that it authorizes the broker to represent the principal's property for sale, solicit offers, and submit offers to the principal

curtesy

the widower's interest in the estate of his deceased wife

change

the world is in a constant state of flux, and that changes in physical, social, economic and government forces continuously effect the value of property

escheat

third government power is the power to seize ownerless land, power is used when a person dies without a will and with no heirs; property would go to the state

navigable waterways

those accessible to commercial boat traffic, are publicly owned, cannot become the private property of anyone; thus for land adjacent to ___________________, ownership stops at the water's edge; owner would have the same usage rights as the public

dower curtesy homestead

three type of legal life estate

sole proprietorship

title to a business is held by one person

transfer by will

title to real property may be transferred by will

involuntary transfer

title to real property may be transferred involuntarily, or without the owner's consent

1. must be in writing 2. grantor must be identified by name and marital status and must be competent, legally of age, and capable of conveying the ownership rights being transferred 3. grantee must be identified by name and marital status and must be capable of holding title to the property conveyed, he need not be mentally competent not legally of age to acquire title 4. a statement of some consideration was given 5. property being conveyed must be accurately described 6. specific words of conveyance 7. restrictions must be stated 8. title must be acquired in the present not in the future 9. grantor must sign 10. there must be delivery and acceptance of the deed 11. recordation of the deed is required to give notice to third parties

to be valid, a deed must meet the following requirements:

Installment Sale, Land Contract, or Contract for Deed

type of owner financing in which the owner retains the title to the property until the debt for it is paid off; since the seller retains the title, he does not have to foreclose if they buyer defaults; the buyer promises to make regular payments on the balance of the purchase price; these payments usually include interest, taxes, an insurance, in return, the buyer received equitable title to the property, legal title is received when all his contractual obligations have been met (In Louisiana, this is called Bond for Deed)

encroachments

unauthorized intrusion of a building or other improvement onto the land of another person

bankruptcy

under certain conditions, may cause a contract to be discharged, will not relieve you of fraudulent debt

covenant of warranty forever

underwrites each of the other four covenants and guarantees absolutely the grantees ownership rights and title; the grantor agrees to compensate the grantee for losses suffered from the breach of any of the deed's covenants

metes

units of linear measure used to determine distances

duress

unlawful influence exerted upon a person to force him to act against his own will; includes physical force, property damage and confinement

mortgage foreclosure

upon default, the property is sold at the sheriff's sale and proceeds, up to the amount of the debt, go to the lender

naked owner

upon the death of the parent, children are given abusus of the property, the right to sell or mortgage the property and the right to the proceeds of the sale

undue influence

use of one's power or authority to force another person to enter into an agreement against his will

construction loan

used for building or repairing either residential or commercial property and is a type of interim financing

gross rent multiplier

used for obtaining a rough estimate of the value of certain kinds of properties, mainly smaller income properties or single family home

wrap around mortgage

used for owner financing and is originated by a second lender combining equity and money owed into a second mortgage

executor's deed

used to convey title to real property to the devisee

sale and leaseback

used to finance large commercial or industrial properties; sold to an investor, such as an insurance company; property is then leased back by the buyer to the seller, who continues to conduct business on the property as a tenant

discount points

used to lower the interest rate on the loan while increasing the yield to the lender; can be though of as pre paid interest; paid as a lump sum at the time of closing; AMOUNT PAID FOR THEM IS EQUAL TO 1% OF THE LOAN AMOUNT FOR EACH POINT PAID

comparative unit or square foot method

uses an avg cost per square foot including material and labor; most commonly used method

unit in place method

uses assigned values for each component part of the structure

void contract

usually no contract at all; has no legal effect and is not binding by either party; often created when the subject of the agreement does not conform with the law (null in Louisiana)

adjustable rate mortgage

variable rate mortgage, interest rate fluctuates according to some external index, such as the open market interest rate, prime lending rate or consumer price index

percentage lease

variable rent lease; used commonly in retail businesses; bases its rent upon a percentage of the business's gross income, or on a flat rate charge- the base rent plus a percentage of the gross