Real Estate 2
A trustor's relationship to a beneficiary is most nearly the same as a
Mortgagor to a mortgagee
A truster's relationship to a beneficiary is most nearly the same as
Mortgagor to mortgagee
Under the terms of a normal net lease, the lessee is responsible for all of the following except
mortgage payments
An earnest money agreement signed by all parties is
binding on the seller
In a brokered real estate transaction, the amount of earnest money is determined by the
by agreement between the buyer and seller
In the absence of a special provision for such an event, an offer to purchase will probably be voided
by the death of either buyer or seller before acceptance
With regard to renting one vacant apartment, advertising money is usually most effectively spent on
newspaper
If the vendee is in default, the vendor
is in title
A real estate contract can be declared void if
it is signed by an unmarried minor
A tenant seeking both flexibility for himself and commitment from the landlord would request a
lease with options to renew
Who holds a less than freehold estate under a valid lease?
lessee
If a lease must be acknowledged for recording, whose signature should be acknowledged?
lessor
The sum of money agreed upon in advance to be the damages in the event certain problems occur later is best described as
liquidated damages
To be legally competent, a person must reach the age of
majority
All of the following are essential elements of a contract EXCEPT
monetary consderation
The tenant has signed a percentage lease. The terms of the lease are $500 per month plus an annual payment equal to 9% of gross sales over $250,000. If, at the end of the year, the tenant is celebrating a million dollars in gross sales, how much additional rent does he still owe?
$67,500
A neutral third party would be found in
A deed of trust
In the US, the instrument most commonly used to evidence a debt on real property is
A promissory note
A beneficiary allows a clause in his contract stating that another lender's interest will be allowed to take precedence over whist some later date. This clause is known as
A subordination clause
A deed given as security for the loan against real estate is known as
A trust deed
Who is the truster in a deed of trust?
Borrower
When a borrower gets behind on his loan payments, the lender could call for the entire balance due immediately based on the
Acceleration clause
A real estate broker could most likely be held liable to a buyer if a broker
Acts in excess of the authority given to him by the seller under a listing agreement
The beneficiary's right, upon default, to take physical possession and collect income generated by the property is called
Assignment of rents
A property is sold and the buyer promises the seller in writing that he, the buyer, will repay the existing loan. This is called
Assuming the loan
If an owner of a single-family residence defaults on his mortgage, it can
Be foreclosed on
When a loan is secured by a deed of trust, the promissory note is held by the
Beneficiary
When a property is financed by means of a deed or trust, to whom are the payments made?
Beneficiary
Who benefits the most by the inclusion of a subordination clause in a mortgage?
Borrower
An option to purchase real property is NOT
Cancelable by the optionor
A mortgage or true deed is considered to be
Debt security
A mortgagor signs a deed conveying title to the mortgagee, leaving the mortgage without recourse. This is an example of
Deed in lieu of foreclosure
If a foreclosed property has sold for less than the loan amount, the difference between the indebtedness and the sale price of the real estate at the foreclosure sale is called the a. net price. b. deficit. c. net market value. d. deficiency.
Deficiency
When a clause in a mortgage allows the lender to proceed against a borrower's other assets if the foreclosure sale does not satisfy the debt, the result is called a a. statutory redemption. b. deficiency judgment. c. equity of redemption. d. foreclosure redemption.
Deficiency judgement
Howard signed an option with Paula giving Paula the "right to purchase" in 90 days. Paula decided she did not want the property and did not exercise her option. Howard can
Do nothing
Under a deed of trust on real property, the trustee is a. the owner of the property covered by the deed of trust. b. empowered to foreclose upon default after advertising the sale. c. the equitable owner of the property. d. the holder of the grant deed.
Empowered to foreclose upon default after advertising the sale.
A land sales contact passes
Equitable title
A newly recorded trust deed
Establishes a voluntary lien
At the time the expiration of an option to purchase, the optionee
Forfeits his option money if he doesn't buy the property
A "due on sale" clause
Gives the lender the right to call the entire loan balance upon alienation
The trustee of a deed of trust
Has naked title
When the prospective tenant signed the lease, he indicated that he would bu using the building to sell appliances. Later, the landlord discovered that illegal bingo games were being played there. What can the landlord do?
He can declare the lease void and start eviction proceedings
A promissory note
Is the primary evidence of a loan
John and Jay are brothers who received title to a property from their father. When they decided to sell the property, Jay was out of town. In order to properly transfer title, the deed could be signed by
John, with a properly recorded power of attorney from Jay
A second mortgage is
Junior to a superior mortgage lien
An alienation clause in a mortgage loan is to the advantage of the
Lender
When a loan evidenced by a note is secured by a mortgage, the funds are furnished by the
Lender
Betty is six months behind on her mortgage payments. Foreclosure by public auction has been ordered. The sale has not been completed. Betty may redeem her property by paying the
Loan balance, accrued interest, and the accumulated cost on the foreclosure action and sale
The phrase "jointly and severally liable" in a note or bond applies when there are two or more
Makers
Unless there is a specific agreement to the contrary, the mortgage having first priority will be the
Mortgage first recorded
The parties to a mortgage are called
Mortgager and mortgagee
After a trustee's sale has been held and the property goes to the highest bidder, in most states the original trustor has a. 21 days to pay off the loan balance. b. 90 days equity of redemption. c. one year to redeem the property. d. no recourse.
No recourse.
A borrower defaults on a deed of trust loan. Before the lender can foreclose, the lender must
Notify the borrower, trustee
When a property is optioned, the optionor is the
Owner
Which of the following requires a public sale?
Power of sale
A borrower who wanted to make a monthly payment larger than that called for by the note, could do so if the note contains a
Prepayment privilege
Which lien would have highest priority?
Property tax lien
Which of the following claims against a real property interest would be the first to be satisfied?
Property taxes
Which of the following is true of a land sales contract?
Purchaser hold equitable title
Which is an example of pledged property?
Real estate given as security
With regard to a deed of trust, the trustee
Receives naked title
The right of the mortgagor to reclaim his property upon payment in full of the obligation is
Redemption
The right, which allows the mortgagor to regain his property following a mortgage foreclosure, is known as a. right of redemption. b. due on sale. c. satisfaction of mortgage. d. defeasance.
Right of redemption
A trust deed can be used for all of the following EXCEPT
Secure a mortgage
Barry purchased Bob's home without accepting obligation for the existing loan. Barry is said to be buying the house
Subject to the loan
Of the following parties to a mortgage, whose interest is benefited by an acceleration clause?
The Mortgagee
One of the main differences between a regular mortgage and a deed of trust is
The number of parties
One of the major differences between a regular mortgage and a deed of trust is
The redemption period allowed
When default is declared on a loan secured by deed of trust, which of the following is true? a. The trustee must sell the property at a private sale. b. The successful bidder at the trustee's sale receives a trustee's deed at the time of sale. c. The defaulting borrower has a one year period of redemption after the trustee's sale. d. After a year, the successful bidder at the trustee's sale receives a trustee's deed.
The successful bidder at the trustee's sale receives a trustee's deed at the time of sale
Two persons make an oral agreement. A day later they put it in writing with several small changes. What is true about the agreement in a court of law?
The written one would prevail.
The legal grace period in an option to purchase real estate is how long?
There is no grace period
The instrument which conveys naked title to a trustees is the
Trust deed
A deed for reconveyance would be signed by the a. beneficiary. b. trustor. c. trustee. d. grantee.
Trustee
A deed of trust conveys naked title to the
Trustee
Under a deed of trust, reconveyance would be signed by the
Trustee
When a debt secured by a deed of trust is paid off, naked legal title reverts to the borrower from the a. mortgagee. b. trustor. c. beneficiary. d. trustee.
Trustee
Who must sign the reconveyance of a deed of trust?
Trustee
Upon payment of the debt secured by a deed of trust, the
Trustee issues a release deed for reconveyance
The borrower under a deed of trust arrangement is called the
Trustor
The borrower under a deed of trust is called the
Trustor
A 100-unit apartment building would typically require how many full-time management personnel?
Two
An option is given wherein consideration is state as $10.00. The option is
Valid
Assuming that no fraud is intended, what is the status of a contract signed by an illiterate person?
Valid
The phrase "as is" when used in real estate contracts means the buyer is accepting the property without
warranty as to physical condition
When a person signs a note with no guarantee to the person receiving it, he is said to be signing it a. with recourse. b. without recourse. c. in blank. d. jointly and severally.
Without recourse
All of the following are real estate contracts except
a closing statement
A meeting of the minds creating enforceable rights is called
a contract
If title to real property remains in the seller's name after it is sold on an installment payment plan, the buyer would have purchased it under
a contract for deed`
A mortgagee in a lien theory state holds
a note
A lease under which the amount of rent is based upon the tenant's sales volume is known as
a percentage lease
The broker has the power to sign documents for the principle. This is probably because she holds
a power of attorney
A valid lease must contain
a property description
A contract that contains predetermined rent increases to take effect during the life of the lease is
a step-up lease
In some states, a mortgage is considered to be a lien on real property. In other states a mortgage is interpreted as
a transfer of title
When one party to a contract makes a promise without first receiving any promise of performance from the other, it is called
a unilateral contract
An offeree who wishes to bind the offerer to the contract may do which of the following with an offer?
accept it
Which of the following is an essential element of a contract?
acceptance
The total transfer of a tenant's rights to another person is called
an assignment
A lease for six months is classified as
an estate for years
The seller decided that he didn't want to sell his house a few days before closing. He can
be sued by the buyer for specific performance and damages
A valid enforceable sales agreement must
be written and delivered
A contract that results when a promise is exchanged for a promise is called
bilateral contract
A lease is an example of a
bilateral contract
When a seller wishes to convey title by means of statutory deed form, the salesperson
can advise seller to obtain the services of a lawyer
The term "rescinded" in real estate means
cancelled
A real estate licensee may advise sellers or buyers regarding which of the following?
choices of financing of the transaction
If a shopping center building collapsed and several of the tenants' stores could not be reopened, the effect on the tenants' leases would be
constructive eviction
An executory contract is a
contract in which certain things are still to done
If a contract of sale is subject to the buyer's ability to secure a loan, and after diligent effort the buyer is unable to do so by the stated deadline, the
contract would be voidable by the buyer
Which of the following are considered to be legally competent?
corporations
A valid, written lease will automatically be terminated by
court eviction of the tenant
A residential apartment tenant would be expected to pay the landlord for
damage to the apartment caused by the tenant
Residential landlord tenant laws recently enacted in many states have modified the reliance on common law and contract tenancy right. These changes include all of the following EXCEPT
defining a leasehold as a recordable real property belonging to the tenant
The printed portion of a standard residential sales contract refer to all the following EXCEPT
discount rates
A lease takes on value when
economic rent exceeds contract rent
A purchase agreement for the purchase of real property is
enforceable when the seller signs it and the buyer is notified of the seller's acceptance
Under a conditional land sales contract,
equitable title is held by the vendee
A tenant who operates a coffee shop rented a property under a lease which stated there would be no alcohol served. The tenant subsequently began serving liquor. The landlord would most likely seek
eviction
The agency relationship of a real estate broker with his client is most often established by
express contract
A lease which requires a fixed constant amount of rent for each payment period of the term is called a
gross lease
A tenant will know in advance how much his rent will be at any time during the lease under a
gross lease
A man put up $10,000 as earnest money on a property for sale. The next day, he needed the money back and attempted to cancel his offer. Which of the following is true?
he would have to revoke the offer before the seller accepted it
The buyer agreed to buy the property at the seller's asking price. They shook hands on the deal. Later, the seller refused to sell. If the buyer still wants to buy, he can
hire an attorney and sue for non-performance
A broker is preparing an original real estate sales contract for a buyer and seller. Whom may he lawfully charge for this service?
no one
When property is purchased using a land sales contract, the instrument used to convey legal title would be
non-existent since legal title is not transferred until the contract is paid off
A lessee is in possession of a valid lease when a buyer agrees to assume a veteran's loan and close sale subject to the lease. The earnest money contract is signed before the lease is due to expire. The lease can
not be terminated by the buyer
The party making an offer is called the
offeror
A couple's one year lease has expired, but they continued living on the premises. If they now pay rent on a monthly basis, this type of tenancy is
periodic
When buying property under a land sales contract, which of the following does the buyer receive immediately?
possession
Upon termination of a rental contract,
possession is returned to the lessor
The process of dividing ongoing expenses and income items as of the closing date is called
prorating
In any valid lease, the lessor by law gives an implied covenant of: a. quiet enjoyment b. satisfaction c. reconveyance d. undue influence
quiet enjoyment
If a lease on a commercial building contains an escalation clause, the
rent could change
If a contract is breached and the damaged party wants the contract carried out, he would sue for
specific performance
A real estate purchase agreement contract used by a multiple listing member may be all of the following EXCEPT
statement of the buyer's costs
What should a salesperson do if he receives a second bona fide offer after one offer has already been submitted to the seller but not yet accepted or rejected?
submit the second offer immediately
When a valid, enforceable lease is terminated before expiration by means of a mutual agreement, but no penalties are required between the lessor and the lessee, the situation would be referred to as
surrender
Lonnie and Connie had a one-year lease that ended November 30. They were still living in the apartment as of December 12 without a new lease and without the landlord's permission. They have become
tenants at sufferance
The phrase "time is of the essence" means
that punctual performance of the time limits set by the contract is essential
The amount of earnest money necessary for a given transaction is not determined by
the broker
Current legal thinking with regard to owner's obligations under a residential rental contract is that
the owner is obligated to keep the premises repaired
A rental contract gives the tenant
the right of possession
The requirement that transfers of real property be in writing is known as
the statute of frauds
From the following, select the parties to a land sales contract
vendor-vendee
A contract created under duress
voidable
A contract entered into by a minor is
voidable
When a contract appears to be good and binding but, in fact, one of the parties may legally reject it, the contract is said to be
voidable
If a lease were signed by a lessee who is a minor, the lease is
voidable by the tenant
