Real Estate Prep MO

The purchase of a ticket for a professional sporting event gives the bearer what? 1 A license to sell food and beverages at the sporting event 2 Partial ownership in the professional sporting team 3 A license to enter and claim a seat for the duration of the game 4 An easement right to park his car

A license to enter and claim a seat for the duration of the game Easements grant access, not use. Commercial licenses, such as those required to sell beverages, souvenirs or services, cover extended periods. Although tickets to sporting events, concerts, shows and the like are technically licenses, they differ from most in their degree of restriction. For example, a concert ticket does not give the bearer the right to sit anywhere he or she chooses or wander backstage to meet the performers.

Jack owns a leasehold interest in a property whose owners or tenants agree to use the property on a periodic, non-overlapping basis. With what type of property does Jack have this leasehold interest? 1 A planned-urban development 2 A condominium 3 A time-share 4 A cooperative

A time-share Time-shares are most common with vacation and resort properties. Time-share arrangements provide for equal sharing of the property's expenses among the owners.

The system of ownership of real property in the United States is what? 1 Feudal 2 Command 3 Allodial 4 Incorporeal

Allodial "Allodial" is the modern form of ownership and is often contrasted with "feudal" in which land is held on the condition of rent or service due the government. For example, a medieval knight held property subject to coming to his baron's service when called. Similarly, the baron's land holdings were conditional on his raising an army and fighting for the king in times of conflict. Failure of any party to "perform as promised" was cause for holdings to be confiscated, often as a preliminary step to more extreme actions.

Which of the following statements concerning listings is false? 1 Listing agreements may not have automatic extensions. 2 An appraisal must be conducted before a listing agreement is signed. 3 Listing agreements must contain expiration dates. 4 A copy of the listing agreement must be provided to the seller.

An appraisal must be conducted before a listing agreement is signed. The listing agreement is a contract between the owner of the property and the listing broker. There is no appraisal requirement with listings.

Anna owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. She wishes to subdivide the parcel into salable lots, but she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. Which of the following types of access rights would provide the greatest protection for a prospective purchaser? 1 A license 2 An easement by necessity 3 An appurtenant easement 4 An easement in gross

An appurtenant easement Appurtenant easements afford the most protection since they are generally a permanent feature of the property. Thus, in the case of sale, the lake access passes to any new owners. By contrast, an "easement in gross" is between two individuals, which would severely limit the attractiveness and value of the property if the original owner wished to sell.

What do liens and easements have in common? 1 Both are money claims against the property. 2 Neither can be done without the consent of the owner. 3 Both must be on the public record to be valid. 4 Both are encumbrances.

Both are encumbrances. Liens are, of course, serious in that they indicate the owner has failed to pay a debt secured directly or indirectly by the property. Easements, on the other hand, are generally a practical necessity for most residential properties.

Michael Harris is a licensed salesperson. He has listed his property in the local paper. He is selling the property as a FOR SALE BY OWNER (FSBO). What information must he disclose in his ad? 1 For Sale - Call Harris Realty at 991-9294 ask for Michael Harris 2 For Sale By Owner-Salesperson 3 For Sale - Appraised at $350,000. Call 991-9294 for details 4 For Sale by Owner - 1,458 square feet

For Sale By Owner-Salesperson License Law requires that a licensees disclose their status as a licensees when selling their property by owner rather than listing with the broker..

When real estate under an estate for years is sold, what happens to the lease? 1 It is valid but unenforceable. 2 It is subject to termination with proper notice. 3 It binds the new owner. 4 It expires with the conveyance.

It binds the new owner. Tenancy for years is the common form of rental agreements and binds all future owners for the term of the lease

Under which of the following types of liens can both the real property and the personal property of the debtor be sold to pay the debt? 1 Assessment lien 2 Judgment lien 3 Mechanic's lien 4 Real estate tax lien

Judgment lien Most liens are against a specific property, such as a primary residence. Thus, a contractor seeking payment for a new deck cannot have a homeowner's car attached in settlement. A judgment lien, however, is a decision directed by the courts and can apply to whatever assets it deems appropriate.

Which of the following is/are considered to be personal property? 1 Lamps 2 Bathtubs 3 Furnace 4 Wood-burning fireplace

Lamps The concept of personal property typically comes into play at the time of sale. Things that are part of the house--bathroom fixtures, fireplaces, carpeting and such--go with the sale. (Unless specifically excluded, as can happen in the case of a dining room chandelier or one or two other objects with which the owners have an emotional attachment.) Furniture, rugs, lamps and other portable items that are not "nailed down" constitute personal property and are not included in the sale.

Jim and Sandy are next-door neighbors. Sandy tells Jim that he can store his camper in her yard for a few weeks until she needs the space. Sandy did not charge Jim rent for the use of her yard. Sandy has given Jim a(n) what? 1 License 2 Estate in land 3 Easement by necessity 4 Easement appurtenant

License Granting the use of property for a defined period for a specific purpose is almost always a form of licensing. Easements grant only access, not ownership, use or occupancy rights. Further, that access is generally for the benefit of the property owner, such as maintaining utilities or sidewalks.

What is a Schedule of Exceptions on a title policy? 1 Defects 2 List of things not insured in the policy 3 Tax liens 4 Encumbrances

List of things not insured in the policy Almost no title insurance policy protects against all conceivable events. As the name suggests, the Schedule of Exceptions is a specific list of items not covered and can include things such as unrecorded mechanic's liens, assessments, water rights and mining claims.

Which of the following liens does not need to be recorded to be valid? 1 Mechanic's lien 2 Judgment lien 3 Real estate tax lien 4 Materialman's lien

Real estate tax lien The requirement for individuals to record liens is due in part to the necessity of correctly identifying the complainant. For example, not just "Jones Contracting," but the specific Jones Contracting that performed the work and is owed the money. Because they bear the authority of government and are easily identified, liens by taxing authorities do not need to be recorded.

Salesperson Ramirez, pre-qualified buyer Wayant for the purchase of real-estate. At this time, salesperson Ramirez took personal information from Mr. Wayant and then had Mr. Wayant sign a Missouri Broker Disclosure form. Finally, Mr. Ramirez showed Mr. Wayant several listings. What, if anything, did Mr. Ramirez do incorrectly? 1 Salesperson Ramirez incorrectly showed homes to the buyer without qualifying Mr. Wayant. 2 Salesperson Ramirez did nothing incorrectly. He only needs to disclose his agency if prompted by the buyer. 3 Salesperson Ramirez incorrectly took personal information before disclosing his agency. 4 Salesperson Ramirez did nothing incorrectly. He showed the homes only after disclosing his agency.

Salesperson Ramirez incorrectly took personal information before disclosing his agency. The MREC is protecting both real estate licensees and consumers when it requires full disclosure of agency prior to the exchange of information. Therefore, before a licensee may take personal information, he must first disclose his agency status. The Missouri Broker Disclosure form is not an agency agreement; it informs the consumer of representation options and does not require signature of the consumer.

Sarah, a licensee, took three continuing education courses to meet the requirements for her license renewal. Each class she attended was 6 hours long. In which of the following manners may she apply these credits to her renewal requirement? 1 She may apply 3 hours toward the elective portion of the requirement. 2 She may apply all 18 hours towards this renewal period. 3 She may apply 9 of the hours toward this period, and carry the other 9 over toward her next licensure period. 4 She may apply 12 of the hours towards the requirement, assuming at least one of the courses was a core course.

She may apply 12 of the hours towards the requirement, assuming at least one of the courses was a core course. A licensee may elect to take as many classes for self betterment as they like. However, only 12 hours of these courses may be applied toward license renewal.

Owner Stan has been defaulting on mortgage payments and owes more than his property is worth. Stan's lender is allowing him to sell the property for less money than necessary to satisfy the loan. The bank has permitted Stan to do what? 1 "Flip" the property 2 Deed the property to HUD 3 Short sale the property 4 Commit tax fraud

Short sale the property Short sales avoid the delay and expense of a foreclosure sale. The lender usually forgives the mortgage balance owed after the sale.

Erica filed a complaint with the Missouri Real Estate Commission (MREC) against broker Jessica Hall. Which of the following could the MREC do? 1 Subpoena broker Hall, her business records, and anyone else in the state of Missouri who might pertain to the case 2 Subpoena only broker Hall and her personal records 3 Jail broker Hall until the hearing 4 Immediately revoke broker Hall's license

Subpoena broker Hall, her business records, and anyone else in the state of Missouri who might pertain to the case The MREC is concerned with verifying the complaint. Therefore, they may subpoena the broker, other individuals in Missouri who might pertain to the case, and records relating to the broker's business. MREC cannot jail licensees, immediately revoke licenses, nor subpoena persons in other states.

Sylvia is the unlicensed secretary at a residential real estate office. Joann, a broker from another company calls her office seeking information on a current listing. There are no licensees at the office at the time of the call. What action may Sylvia legally take? 1 Take the broker's name and number for a licensee to return the call 2 Deliver the information via email 3 Give only her personal opinions of the property and its value 4 Give the broker the information requested, since the broker is a licensee

Take the broker's name and number for a licensee to return the call It would be inappropriate for the secretary to give any information about a listing. She must wait until a salesperson or broker returns to the office because only a licensee may provide information about a listed property.

Which of the following types of ownership CANNOT be created by operation of law, but must be created by the parties' expressed intent? 1 Condominium ownership 2 Tenancy in common 3 Community property 4 Tenancy by the entireties

Tenancy by the entireties Tenancy by the entireties is a form of ownership that husbands and wives can choose or create by deciding to do so and declaring it as such in contracts and deeds. Tenancy in common is put in motion by state law. Community Property is a law of ownership that exists in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and some other states. Tenancy by the Entireties is an estate that is recognized in some states between husband and wife, who have equal right of possession and enjoyment during their joint lives and with the right of survivorship--that is when one dies, the property goes to the surviving tenant. (In many states, if couples do not specify "Joint Tenancy," this form of ownership will be automatically assumed.) Tenancy in Common is a type of joint ownership by parties NOT married, that allows a person to sell his share or leave it in a will without the consent of the other owners. If a person dies without a will, his share goes to his heirs, not to the other owners.

In a gift of a parcel of real estate, one of the two owners was given an undivided 60 percent interest and the other received an undivided 40 percent interest. The two owners hold their interests as what? 1 Tenants in common 2 Community property owners 3 Joint tenants 4 Cooperative owners

Tenants in common In order to create joint tenancy, some form of relationship must exist between the parties involved, whether business, spousal or other. Because their interests were acquired as a gift, the parties in this instance become tenants in common, with all the ownership benefits of joint tenancy, but not the survivorship rights.

Which entity is prohibited from collecting taxes on real property? 1 The Federal Government 2 Cities 3 Townships 4 Counties

The Federal Government There are no federal taxes on real property. The Constitution of the United States specifically prohibits such taxes. The federal government does, however, tax income derived from real property and gains realized on the sale of real property. The federal government can impose a tax lien against property for failure to pay any tax due the Internal Revenue Service.

Which of the following could happen if the authorities investigate a legal violation by a licensee? 1 The Administrative Hearing Commission could impose criminal penalties 2 The Administrative Hearing Commission could revoke or suspend the affiliated licensee's or broker's license 3 The Missouri Real Estate Commission could revoke or suspend the affiliated licensee's or broker's license 4 The Missouri Real Estate Commission could impose criminal penalties

The Missouri Real Estate Commission could revoke or suspend the affiliated licensee's or broker's license The Missouri Real Estate Commission has the power to revoke or suspend the license of a salesperson or broker if the licensee is found in violation of the law. The commission is not a court of law, and therefore, can not impose criminal penalties. The MREC can cause a civil penalty of up to $2,500 to be imposed by the courts.

Which of the following is not required in a property management agreement? 1 The current date 2 Identification of the property 3 A statement regarding whether security deposits will be held by the broker or the owner 4 Specific terms and conditions on which the broker will remit income from the property

The current date A management agreement is a contract that specifies how a property is to be "managed." This would include the identification of the specific property, and how the funds will be handled by the broker/property manager. While all good contracts should include the date signed by each party, the current date is not a necessary component of a management agreement between a property manager and an owner.

If the owner of the dominant tenement becomes the owner of the servient tenement and merges the two properties, what happens? 1 The properties retain their former status. 2 The easement is terminated. 3 The easement is unaffected. 4 The easement becomes dormant.

The easement is terminated. "Dominant" and "servient" tenements involve two adjacent properties in which an easement is involved. For example, let's say Bridle Creek Farms and Barnstable Farms are separate parcels divided by a country lane that provides access to the county road system. The lane is owned by Bridle Creek, but the deeds of both properties stipulate that Barnstable Farms shall have unrestricted access for the purpose of accessing county roads. That access is an easement. Thus, if the owner of Barnstable Farms buys Bridle Creek Farms, the need for the easement disappears.

What must be true for a person to obtain a real estate license in Missouri? 1 The person must score higher than 100 on an IQ test 2 The person must be a US citizen 3 The person must be a resident of Missouri 4 The person must be at least 18 years old

The person must be at least 18 years old In the state of Missouri, a real estate licensee candidate must be at least 18 years old. A licensee is not required to be a citizen of the US or of Missouri. IQ tests are not required.

What amount of time is allotted for a salesperson to deliver earnest money to the broker? 1 The salesperson must deliver the money immediately. 2 5 banking days 3 2 banking days 4 7 banking days

The salesperson must deliver the money immediately. All money from consumers must be placed into an escrow account. A salesperson must deliver the earnest money to the broker immediately. Except as otherwise agreed to in writing, in any real estate transaction in which one broker holds a listing contract on a property and the selling broker receives earnest money, the selling broker must deliver the contract and the earnest money to the listing broker who must deposit the earnest money no later than ten banking days following contract acceptance.

Which of the following provides a buyer with the best assurance of clear, marketable title? 1 General warranty deed 2 Abstract of title 3 Title insurance 4 Certificate of title

Title insurance Title insurance provides the best assurance of marketable title.

Tom leases store space to Kim for a restaurant, and Kim installs her ovens, booths, counters, and other equipment. When do these items become real property? 1 When the lease expires, if the items are not taken by the tenant 2 When the lease takes effect 3 When Kim defaults on her rental payments 4 When they are installed

When the lease expires, if the items are not taken by the tenant Kim is free to move these fixtures at the end of her lease. However, if she chooses to leave them behind, they are considered a permanent part of the structure (just like a dining room chandelier in a home) and revert to Tom.

A homeowner owned a house on a lot. The front ten feet of the lot were taken by eminent domain for a sidewalk. Would the homeowner be entitled to compensation? 1 No. Compensation is not given on land taken for public use. 2 No. He still had use of the house and lot. 3 Yes. He must be paid for the use of the sidewalk. 4 Yes. The land was taken for public use by eminent domain.

Yes. The land was taken for public use by eminent domain Governments and municipalities can only seize property (other than in criminal cases) for the public good and through eminent domain, which is a process, not an arbitrary action. Part of that process involves determining fair compensation to the owner.

Homeowner Tanya acquired the ownership of land that was deposited by a river running through her property by 1 accretion. 2 avulsion. 3 succession. 4 reliction.

accretion Accretion means the addition to a parcel of land by sand or soil deposits due to the action of a river or other body of water over time. Avulsion refers to the loss of land as a result of its being washed away by sudden or unexpected action of nature, such as a flash flood that re-routes a river.

A special warranty deed differs from a general warranty deed in that the grantor's covenant in the special warranty deed 1 protects all subsequent owners of the property. 2 is implied and is not written in full. 3 covers the time back to the original title. 4 applies only to a definite limited time.

applies only to a definite limited time. The more common deed in most states is the general warranty, because it establishes the ownership trail and validity of title going back to the original recorded ownership (for example, the purchase of Manhattan Island and all subsequent divisions, subdivisions and resales). Under a special warranty deed, an owner transfers property guaranteeing the quality of title only during the period of his or her ownership, leaving subsequent buyers vulnerable to prior claims.

Evan lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan covering the entire property. Like the other residents, Evan owns stock in the corporation and has a lease on his apartment. This type of ownership is called a(n) 1 cooperative. 2 time-share. 3 planned unit development. 4 condominium.

cooperative. This is the distinguishing characteristic that differentiates cooperative from condominium ownership. Although often confused, a condominium owner holds title to his individual unit. A co-op owner, on the other hand, is technically a renter. It's his stock in the corporation holding title to the property that gives him the right to lease the unit as well as sell that right to another.

The covenant in a deed which states that the grantor is the owner and has the right to convey the title is called 1 covenant against encumbrances. 2 covenant of seisin. 3 covenant of warranty forever. 4 covenant of power.

covenant of seisin. Another outgrowth of the feudal system, "seisen" derives from the French meaning to "sit upon or own" and gives owners the right to sell or transfer property at will.

A defaulting borrower who faces foreclosure may avoid court actions and costs by voluntarily deeding the property to the mortgagee. This is accomplished with a __________, which transfers legal title to the lienholder. 1 caveat emptor 2 deed in lieu of foreclosure 3 deficiency judgment 4 short sale

deed in lieu of foreclosure With the deed in lieu option, a borrower voluntarily deeds collateral property in exchange for a release from all obligations under the mortgage. The transfer, however, does not terminate any existing liens on the property.

Owner Grace's property has been foreclosed. After the property was sold for $340,000, she still owed $60,000 to the lender. The lender may be able to get a personal judgment against Grace for the $60,000. This is called a 1 deficiency judgment. 2 reverse foreclosure judgment. 3 partition lawsuit. 4 leverage lien.

deficiency judgment. A deficiency judgment enables the lender to attach and foreclose a judgment lien on other real or personal property the borrower owns.The lender's ability to pursue such a judgment may be limited, however.

The title to real estate passes when a valid deed is 1 executed and mailed. 2 filed and uploaded to the cloud. 3 delivered and accepted. 4 signed and recorded.

delivered and accepted. Fundamentally, real estate transactions only involve two parties--the buyer and the seller. All that's necessary to create a legal sale is for one party to make an offer the other accepts. Recording, escrow, real estate licensees, mortgage companies and the like facilitate and support the transaction process but are not requirements of a legal sale

A portion of Wendell's building was inadvertently built on Ginny's land. This is called an 1 easement. 2 encroachment. 3 avulsion. 4 accretion.

encroachment The principal attributes of an encroachment are: 1) It is accidental and 2) it involves only part of a structure. Typically, the issue would be resolved by selling Wendell an easement or a lease or, if practical, actually moving the structure.

A person who has complete control over a parcel of real estate is said to own a 1 defeasible fee estate. 2 life estate. 3 fee simple estate. 4 leasehold estate.

fee simple estate. All the other options have conditions attached. A leasehold estate is, as the name implies, leased property. Similarly, a life estate gives a person ownership or control of a property only for the duration of his or her natural life. "Defeasible estates" give a person or entity control over a property only so long as certain conditions are met or avoided. For example, a community might be deeded a property on the condition that it be used only for building a school, or land willed to a child on the condition it never be used for commercial development. If the community tries to use the property for a recreation complex or the heir tries to sell to a retail developer, control would automatically revert to another party and the deed would become void.

Personal property includes all of the following EXCEPT 1 fixtures. 2 emblements. 3 fructus industriales. 4 chattels.

fixtures. "Chattel" is a legal term that means personal property. Emblements and fructus industriales refer to profit from crops that are grown as a result of a person's labor, such as corn, as opposed to those that occur naturally, such as grass or minerals. By the custom of English common law, they are considered personal property. By contrast, a fixture is considered attached to a property and thus part of the structure.

The recording of a deed 1 warrants the title to real property. 2 insures the interest in a parcel of real estate. 3 gives constructive notice of the ownership of real property. 4 is all that is required to transfer the title to real estate.

gives constructive notice of the ownership of real property. Recording a deed does not convey, insure or warrant ownership. However, it does protect the owner's interest in a property by serving notice that the recorded owner is the only recognized holder of title. This places a larger burden of proof and process on someone trying to assert a prior ownership interest and/or claiming a deedholder's title is clouded.

Sam and Nancy bought a store building and took title as joint tenants. Nancy died testate. Sam now owns the store 1 in trust. 2 as a tenant in common with Nancy's heirs. 3 in severalty. 4 as a joint tenant with rights of survivorship.

in severalty. Joint tenancy means that two parties have an undivided interest in a particular property and, upon the death of one party, full ownership automatically goes to the survivor. Despite the way it sounds, "in severalty" means as sole owner.

To create a joint tenancy relationship in the ownership of real estate, there must be unities of 1 ownership, possession, heirs, and title. 2 possession, time, interest, and title. 3 title, interest, liens, and survivorship. 4 desires, ownership, claim of right, and possession.

possession, time, interest, and title. This essentially means that all parties to the agreement share equally in all aspects of the property, including the length of time it's been held. That means if one party sells or transfers interest in a joint tenancy relationship, his or her place is taken by another in the same capacity.

Jim, Manny, and Harry are joint tenants owning a parcel of land. Harry conveys his interest to his long-time friend Wendell. After the conveyance, Jim and Manny 1 remain joint tenants owning a two-thirds interest. 2 become joint tenants with Wendell. 3 continue to be joint tenants with Harry. 4 become tenants in common.

remain joint tenants owning a two-thirds interest. Because joint tenancy must be declared, Jim and Manny remain joint tenants with a two-thirds interest while Wendell, because of his passive acquisition of his share of the property, becomes a tenant in common with Jim and Manny. The difference between the two forms is that Jim and Manny's share retains the right of survivorship provisions but Wendell's does not.

The rights of the owner of property located along the banks of a river are called 1 hereditament rights. 2 riparian rights. 3 prior appropriation rights. 4 littoral rights.

riparian rights. "Littoral" and "prior appropriation" are different kinds of water rights: in the first case, navigation rights to an ocean or other large body of water; in the second, the right to use a water source for irrigation. A hereditament is any inheritable property.

All of the following are physical characteristics of land EXCEPT 1 scarcity. 2 immobility. 3 uniqueness. 4 indestructibility.

scarcity. Scarcity is a fundamental economic concept that holds that the rarer and more desirable something is, the more valuable it will be. For example, professional athletes are highly paid because only the smallest percentage of people have the ability to perform at that level. Land is "scarce" because there is a finite amount available and, as Will Rogers once said, "They ain't making any more of it."

A mechanic's lien would be properly classified as a(n) 1 statutory lien. 2 general lien. 3 voluntary lien. 4 equitable lien.

statutory lien A "statutory lien" is one that arises out of specific law (otherwise known as statutes). By contrast, an "equitable lien" has its roots in common law or custom. A "voluntary lien" is one entered with the property owner's knowledge and consent, such as a mortgage. A "general lien" grants a creditor the right to file a claim against all of a debtor's assets, not just a particular property.

The right to control one's property includes all of the following EXCEPT 1 the right to enjoy pride of ownership. 2 the right to erect "no trespassing" signs. 3 the right to exclude the utilities meter reader. 4 the right to invite people on the property.

the right to exclude the utilities meter reader. This right to enter and work on a property is granted to utility companies (water, sewer, gas and electric) as well as telephone and cable companies. Essentially, if a company provides a service and owns the equipment (e.g., phone and cable lines), they are usually granted an easement.

The word "improvement" would refer to all of the following EXCEPT 1 the foundation. 2 trade fixtures. 3 a sanitary sewer system. 4 streets.

trade fixtures The term "trade fixture" refers to an item installed by a tenant in a rented commercial property that he or she removes at the end of the occupancy.

The primary purpose of a deed is to 1 prevent adverse possession. 2 give constructive notice. 3 transfer title rights. 4 prove ownership.

transfer title rights. A deed is the instrument by which ownership of a property is transferred from one person to another, while a title is evidence of that ownership.

The local utility company dug up Charlotte's garden to install a natural gas line. The company claimed it had a valid easement and proved it through the county records. Charlotte claimed the easement was not valid because she did not know about it. The easement 1 was not valid because Charlotte was not informed of its existence when she purchased the property. 2 was not valid because it had not been used during the entire time that Charlotte owned the property. 3 was an appurtenant easement owned by the utility company. 4 was valid even though the owner did not know about it.

was valid even though the owner did not know about it. Easements grant only access, not ownership, use or occupancy rights. Further, that access is generally for the benefit of the property owner, such as maintaining utilities or sidewalks. As such, they "attach" to a deed or lease and remain in effect, until specifically lifted.