Real Estate Review Questions #1
Nine requirements for valid deed:
- Grantor who has the legal competency to execute the deed - grantee named with reasonable certainty to be identified - statement of consideration (usually required for recording of the deed) - Granting clause (words of conveyance) - Habendum clause, which defines the ownership right received by the grantee - accurate legal description of the property conveyed - any relevant exceptions or reservations to conveyance of full title - acknowledgment (notarization) of the signature of the grantor - delivery of the deed and acceptance by the grantee to pass title
general warranty deed
- covenant of seisin - covenant against encumbrances - covenant of further assurance - covenant of quiet enjoyment - covenant of warranty forever
Legal tests for a fixture
- method of annexation - adaptability of item to land's use - relationship of parties - intention in placing item on the land - agreement of the parties
elements of a contract:
- offer and acceptance - consideration - legally competent parties - consent - legal purpose
antitrust violations
- price-fixing - the group boycott - allocation of customers - allocation of markets - tie-in agreements
The Equal Credit Opportunity Act prohibits discrimination in granting credit based on
- race - color - religion - national origin - sex - marital status - age - receipt of public assisstance
Bundle of legal rights
1. possession 2.control 3.enjoyment 4.exclusion 5.disposition right of possession right to control the property within the framework of the law right of enjoyment (to use property in any legal manner) right to exclusion (to keep others from entering or using the property), and right of disposition (to sell, will, transfer, or otherwise dispose of ir encumber the property)
A parcel of land that fronts on interstate 45 in Houston, Texas, is for sale at $5,000 per front foot. What will it cost to purchase this parcel of land if the dimensions are 150 feet by 100 feet?
150 is the frontage because it is the first dimension given. 150 front feet x $5,000 = $750,000 cost $750,000 is answer
one acre is how many square feet
43,560 square feet
how many square feet in an acre
43,560 square feet in each acre
mile
5,280 ft; 1,760 yards; 320 rods
one square yard is equal to
9 square feet
life estate
A freehold estate limited in duration to either the life of the holder of the estate or the life of some other designated person or persons.
net listing
A listing based on the net price the seller will receive if the property is sold. Under a net listing, the broker can offer the property for sale at the highest price obtainable to increase the commission. This type of listing is illegal in many states.
exclusive agency listing
A listing contract under which the owner appoints a real estate broker as the exclusive agent for a designated period of time to sell the property, on the owner's stated terms, for a commission. The owner reserves the right to sell without paying anyone a commission if the owner sells to a prospect who has not been introduced or claimed by the broker.
open listing
A listing contract under which the real estate professional's compensation is contingent on the real estate professional producing a ready, willing, and able buyer before the property is sold by the seller or another real estate professional.
a section is
A one-square-mile block of land, containing 640 acres, or approximately 1/36 of a township.
nonagent
Also referred to as facilitator, intermediary, transactional broker, transaction coordinator, or contract broker. Someone who works with a buyer and a seller, assisting one or both parties with the transaction without representing either party's interests.
Blank
Blank
fiduciary responsibilities/duties of an agent
COLD-AC: Care Obedience Loyalty Disclosure Accounting Confidentiality
The fair housing act is administered by
Department of Housing and Urban Development (HUD) (also make equal opportunity poster)
Three physical characteristics of land
Immobility, Indestructibility, Uniqueness
Real estate
Land plus all human-made improvements to the land that are permanently attached (annexed) to it
Four unities necessary to create a joint tenancy
Possession Interest Time Title (PITT)
The basic costs of owning a home are
Principal Interest Taxes and Insurance
Six categories of real estate property:
Residential Commercial Mixed-use Industrial Agricultural Special purpose
recission
Returns the parties to their original positions before the contract, so any monies or property exchanged must be returned.
Four Economic Characteristics of Real Estate
Scarcity, improvements, permanence of investment, area preference or situs ("location, location, location")
Advantages of cooperative
The IRS treats ownership of a cooperative as it does a fee simple interest in a single-family home or condominiums in regard to deductibility of loan interest and property taxes, and homesellers' tax exclusions.
redlining
The practice of refusing to make mortgage loans or issue insurance policies in specific areas for reasons other than the economic qualifications of the applicants
True or false: Courts can declare a contract invalid because the contract did not contain a time or date for performance.
True
Doctrine of Prior Appropriation
Under this doctrine, the right to use any water, with the exception of limited domestic use, is controlled by the state rather than by the landowner adjacent to the water. To secure water rights in prior appropriation states, a landowner must demonstrate to a state agency that the owner's plans are for beneficial use, such as crop irrigation.
four ways to create a lien
Voluntary, Involuntary, Statutory, Equitable
pur autre vie
a life estate pur autre vie (for the life of another) provides for inheritance of the property right by the life tenant's heirs, but the right exists only until the death of the identifies person or persons.
appurtenance
a right or privilege associated with the property; something that is transferred with or "runs with" the land (parking spaces, water rights, easements)
breach of contract
a violation of any of the terms or conditions of a contract; a contract may be terminated if it is breached by one of the parties
A developer is planning a building that will contain 103,000 Square feet. Construction costs are estimated to be $62.00 per square foot. Ninety-five percent financing is available for the structure. How much money must the developer put up to complete the project? a)$319,300 b)$638,600 c)$5,747,400 d)$6,066,700
a) $319,300
Real property can become personal property by a)Severance b)Purchase c)Hypothecation d)attachment
a) Severance
Documents affecting real estate are recorded or filed in the county in which the property is located to A) enable interested parties to know where to look to discover the various interests of other parties to the transaction. B) give actual notice of the grantee's interest in the property. C) comply with the terms of the statute of frauds that all transfers for more than one year be in writing and signed. D) prove the validity of the execution of the document.
a) enable interested parties to know where to look to discover the various interests of other parties to the transaction.
A real estate broker acting as the agent of the seller a) must promote and safeguard the seller's best interest b) can disclose the seller's minimum price c) should present to the seller only the highest offer for the property d) can accept an offer on behalf of the seller
a) must promote and safeguard the seller's best interest
***A homestead exemption protects against judgemensts a) of unsecured creditors b) that result from unpaid taxes c) that result from foreclosure of a mortgage d) that result from the costs of improvements
a) of unsecured crediors
After the construction of a building in the air rights above a railroad right-of-way, the trains can a) operate as usual b) no longer use the tracks under the building c) Use the tracts under the building only if they cause no problem for the building's occupants d) Use the tracks under the building as long as they first obtain the building owner's permission
a) operate as usual
Which of the following is a variance? a. an exception to a zoning ordinance b. a court order prohibiting certain activities c. a reversion of ownership d. a nullification of an easement
a. an exception to a zoning ordinance
The clause in a mortgage instrument that would prevent the assumption of the mortgage by a new purchaser is a a. due-on-sale clause b. power of sale clause c. defeasance clause d. certificate of sale clause
a. due-on-sale clause
Carbon monoxide is not a. easy to detect b. a result of incomplete combustion c. quickly absorbed in the body d. a natural result of combustion
a. easy to detect
The sales comparison approach to value would be most important when estimating a(n) a. existing residence b. apartment building c. retail location d. new residence
a. existing residence
The provisions of the Fair Housing Act apply a. in all states b. only in those states that have ratified that act c. only in those states that do not have substantially equivalent laws d. only in those states that do not have specific state fair housing laws
a. in all states
A landowner constructed a building 7 stories high. Several years later the municipality changed zoning ordinance, prohibiting buildings that exceed 6 stories in height. Which of the following is true regarding the existing 7-story building? a. it is a nonconforming use b. the building must be demolished c. it is a conditional use d. the owner must obtain a variance
a. it is a nonconforming use
That plat for a proposed subdivision is submitted to the a. municipality b. property owners c. developer d. state
a. municipality
All of the following would affect supply EXCEPT a. population b. construction costs c. government controls d. the labor force
a. population
The Civil Rights Act of 1866 prohibits any limitation of property rights based on a. race b. religion c. sex d. handicap
a. race
Someone looking for a tax advantaged investment similar to a mutual fund would probably invest in a a. real estate investment trust b. general partnership c. limited partnership d. corporation
a. real estate investment trust
Acquiring property when trade fixtures that are not removed become the real property of the landlord (i.e. Tool shed that becomes real property of landlord) is known as
accession (and constructive annexation)
What is a formal declaration before a notary public that a signature is voluntary and genuine?
acknowledgement
Tax levied according to value; used to refer to real estate taxes
ad valorem
based on the value of the property being taxed and are specific, involuntary, statutory liens
ad valorum (general real estate tax is an ad valorum tax)
Possession by a claimant that is open, notorious, continuous, and hostile may result in a title transfer called
adverse possession
an _____ is a person authorized to act on behalf of the principal in dealings with a third person
agent
Rights to use the open space above the surface of a property
air rights
encumbrances
all liens will be paid in full by the seller of be assumed by the buyer at the closing
***an unacknowledged deed is not eligible for recording -
an important act that puts the world on notice as to who owns the property
Fee Simple Subject to Condition Subsequent
an owner gives real estate on condition of ownership, which means there is a difference in the way the estate will terminate if there is a violation of the condition ("on condition that")
Conversion of personal property to real property, such as using wood to build a home
annexation
Appraisal principle that holds value is created based on the expectation of some future event
anticipation
Right, privilege, or improvement belonging to and passing with the land
appurtenance
equitable lien
arises out of common law; court ordered judgement that requires the debtor to pay the delinquent balance
The official process of valuing real estate for tax purposes
assessment
A writ that establishes court custody of property until a pending lawsuit concludes
attachment
risk management techniques
avoid it by removing the source of risk (i.e. swimming pool) control it by preparing for emergency (install alarms) transfer it (insurance policy) retain it
A house was listed for sale at $84,900. The seller received $71,424 after paying the broker a 7% commission. What was the selling price of the property? a) $76,423.68 b) $76,800.00 c) $78,957.00 d) $79,345.79
b) $76,800.00
How many acres are there in the property described as follows: the NW1/4 of the SW1/4 of the NE1/4 of section 16? a) 5 acres b) 10 acres c) only carry 1/8's d) 40 acres
b) 10 Acres
"Beginning at the SE corner of the NE¼ of the section, then due west 5,280 feet more or less to the SW corner of the NW¼, then north along the west line of the section 2,640 feet, more or less, to the NW corner of said NW¼, then in a straight line to the point of beginning." How many acres does this parcel contain? A) 80 B) 160 C) 240 D) 320
b) 160
The following legal description contains how many acres: the South 1/2 of the SE 1/4 of the NW 1/4 of the NE 1/4 of Section 7? a) 2.5 b) 5 c) 10 d) 20
b) 5
A 40-acre tract was sold for $2,200 per acre. The seller realized a 14.5 percent profit from the sale. What was the original cost of the tract? a) 75,240 b) 76,856 c) 100,760 d) 102,924
b) 76,856
A building sold for $157,000 The broker's commission was 6% and was divided as follows: 10% to the listing person 50% of the balance to the selling broker. What was the listing booker's commission? a) 1064 b) 942 c) 1124 d) 964
b) 942
The Human Torch was denied a) Human Rights b) Bank Loan c) Sex d) rights to see his son
b) Bank Loan
In some states the following type of listing is prohibited: a) Exclusive-right-to-sell b) Net listing c) Buyer Agency Agreement d) Open Listing
b) Net Listing
Which of the following is not a form of co-ownership? a) Tenancy in common b) Ownership in severalty c) Tenancy by the entirety d) Community property
b) Ownership in severalty
General real estate taxes are also known as A) special assessments. B) ad valorem taxes. C) appropriation funds. D) general, voluntary liens.
b) ad valorem taxes
***The main purpose of police power is to a) demonstrate the authority of the state b) ensure the health, safety, and welfare of the community c) set limits on the amount and kinds of businesses in a given area d) protect the residential neighborhoods from encroachment by business and industry
b) ensure the health, safety, and welfare of the community
The recordation of a warranty dead a) gives actual notice of the grantee's rights b) gives constructive notice of an individual's interest c) prevents claims of parties in possession d) provides defense against adverse possession
b) gives constructive notice of an individual's interest
Generally, personal property can be distinguished from real property by its a) greater variety b) mobility c) cost d) multiplicity of use
b) mobility
Rent would best be defined as: A. the contractual consideration to a third party B. the consideration for the use of the real property C. all monies paid by the lessor to the lessee D. the total amount owed under the terms of the lease
b) the consideration for the use of real property
In designated agency all of the following apply except a) the broker could be a dual agent b) the same agent may represent both the buyer and the seller at the same time c) the broker can choose an agent in the office to represent the seller d) the broker may appoint an agent to negotiate for the buyer
b) the same agent may represent both the buyer and the seller at the same time
***Kyle and Ursula owned a combination apartment building and restaurant. They shared their profits and losses on the venture equally, but they did not have any written partnership agreement. One day, Ursula died of a heart attack. If, after her death, Kyle continued to only own the same undivided interest in the real estate as he did before, then A) they were joint tenants. B) they were tenants in common. C) they were shareholders in their own corporation. D) Ursula died intestate.
b) they were tenants in common
Most homeowner's insurance polices contain which of the following clauses? a. a property improvement clause b. a coinsurance clause c. a co-ownership clause d. a property devaluation clause
b. a coinsurance clause
Mrs. Robinson has owned her house for over 50 years. It has fallen into disrepair, but because she lives on a fixed income, she does not have the money to make the needed repairs. She has a considerable amount of equity in the house. What type of loan best suits her needs? a. a home equity loan b. a reverse annuity mortgage c. a blanket loan d. an open-ended loan
b. a reverse annuity mortgage
Contamination from underground storage tanks is a. found only in petroleum stations b. addressed by EPA regulations c. only caused by tanks currently in use d. easily detected and eliminated
b. addressed by EPA regulations
At the closing, Frank's attorney informed him that he would be giving credit to Vito, the buyer, for certain accrued items. These items represent a. bills related to the real estate that have already been paid by the seller b. bills related to the real estate that have not been paid as of the time of the closing c. all of the seller's outstanding bills d. all of the buyer's outstanding bills
b. bills related to the real estate that have not been paid as of the time of the closing
All of the following loans to individuals are affected by the Truth in Lending Law under Regulation Z EXCEPT a. household use b. business use c. room additions d. swimming pools
b. business use
Fannie Mae a. makes FHA loans b. buys FHA loans c. services FHA loans d. insures FHA loans
b. buys FHA loans
In the income approach, the appraiser makes use of a. reproduction cost b. capitalization rate c. depreciation schedules d. replacement cost
b. capitalization rate
At closing, the listing broker's commission generally appears as a a. credit to the seller b. debit to the seller c. credit to the buyer d. debit to the buyer
b. debit to the seller
Accrued interest on an assumed mortgage loan is entered on the closing statement as a a. credit to the seller and a debit to the buyer b. debit to the seller and a credit to the buyer c. credit to both the seller and the buyer d. debit to both the seller and the buyer
b. debit tp the seller and a credit to the buyer
All of the following are categories of the uses of real property EXCEPT a. residential b. developmental c. agricultural d. industrial
b. developmental
In a closing statement, a prepaid item is a(n) a. item paid in advance by buyer b. item that is prepaid by the seller c. accrued expense d. a charge to the seller
b. item that is prepaid by the seller
The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the a. amortization ratio b. loan-to-value ratio c. debt-to-equity ratio d. capital-use ratio
b. loan-to-value ratio
The term depreciation refer to the a. value of real estate after the expiration of its useful life b. loss of value in real estate from any cause c. costs incurred to renovate or modernize a building d. capitalized value of lost rental income
b. loss of value in real estate from any cause
Fannie Mae, Ginnie Mae, and Freddie Mac all a. originate residential mortgage loans b. purchase existing mortgage loans c. insure residential mortgage loans d. guarantee existing mortgage loans
b. purchase existing mortgage loans
Deed restrictions are created by all of the following EXCEPT a. deed b. statute c. written agreement d. general plan of a subdivision
b. statute
In the cost approach to value, the appraiser makes use of a. the owner's original cost of the building b. the estimated replacement cost of the building c. the sales prices of similar buildings in the area d. the assessed value of the building
b. the estimated replacement cost of the building
An appraiser has been employed to estimate the market value of a parcel of vacant land. The resulting appraisal report would NOT include reference to a. the highest and best use of the parcel b. the listed price of the parcel c. the most probable price the parcel will bring d. the physical dimensions of the parcel
b. the listed price of the parcel
township
basic unit of rectangular survey system, 6 miles square and contains 36 square miles (23,040 acres)
Habendum clause
begins with words "to have and to hold", used when necessary to define or explain the ownership to be enjoyed by the grantee, a habendum clause may follow the granting clause
An exclusive right-to-sell listing contract is a
bilateral contract
An express agency relationship between a buyer and a broker is created by a
buyer representation agreement
If the market value of a property is $184,500 and the assessment ratio is 35 percent, what are the monthly taxes if the tax ratio is 30 mills? a) $1,937.25 b) $179.37 c) $161.44 d) $1614.38
c) $161.44
The current market value of a property is $255,000 and it is assessed at 35 percent of its current market value with an equalization factor of 1.25. What is the amount of real estate tax due if the tax rate is $3.50 per $100 of assessed value? a) $2,756.25 b) $3,445.31 c) $3,904.69 d) $4, 880.26
c) $3,904.69
In a typical agency relationship between broker and client, the broker's commission is determined by a) State Law b) The Local real estate board c) Mutual Agreement d) Minimums based on the property type
c) Mutual agreement
All of the following are economic characteristics of land EXCEPT a) Scarcity b) Permanence of Investment c) Uniqueness d) Area Preference
c) Uniqueness
What is the difference between a general lien and a specific lien? a) a general lien cannot be enforced in court, while a specific lien can be enforced. b) a specific lien is held by one person, while a general lien is held by at least two persons. c) a general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property d) a specific lien covers real estate, while a general lien covers personal property
c) a general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property
The tenant leases a heated apartment, but the landlord fails to provide heat because of a defective central heating plant. The tenant vacates the premises and refuses to pay rent. This is an example of a) abandonment b) actual eviction c) constructive eviction d) lessor negligence
c) constructive eviction
Two salespeople working for the same broker obtained offers on a property listed with their firm. The first offer was obtained early in the day. A Second offer for a higher purchase price was obtained later in the afternoon. The broker presented the first offer to the seller that evening. The broker did not inform the seller about the second offer so that the seller could make an informed decision about the first offer. Which of the following is true? a) the broker's actions are permissible provided the commission is split between the two salespeople b) After the first offer was received the broker should have told the salespeople that no additional offers would be accepted until the seller decided on the offer c) The broker has no authority to withhold any offers from the seller d) The broker was smart to protect the seller from getting into a negotiating battle over two offers.
c) the broker has no authority to withhold any offers from the seller
Which of the following investments can not be depreciated? a. shopping mall b. single family home c. 100 acres of vacant land d. commercial building
c. 100 acres of vacant land
An FHA-insured mortgage loan would be obtained from which of the following? a. The Federal Housing Administration b. The Department of Housing and Urban Development c. Any FHA-approved lending institution d. Any FHA-approved insuring institution
c. Any FHA-approved lending institution
Protection from threats or acts of violence against those who assist and encourage open housing rights is found in the a. Civil Rights Act of 1866 b. Civil Rights Act of 1964 c. Fair Housing Act of 1968 d. Fair Housing Amendments Act of 1988
c. Fair Housing Act of 1968
To find the value of a property using the income approach to value, if the net operating income and the capitalization rate were known, the appraiser would a. multiply the net operating income by the capitalization rate b. multiply the effective gross income by the capitalization rate c. divide the net operating income by the capitalization rate c. divide the capitalization rate by the net operating income
c. divide the net operating income by the capitalization rate
Electromagnetic fields a. have been proven to cause serious health problems in humans and animals b. are produced only by large electrical appliances c. from high power transmission lines are suspected of causing cancer and other health problems d. are a major national public health concern
c. from high power transmission lines are suspected of causing cancer and other health problems
The Real Estate Settlement Procedures Act (RESPA) applies to the activities of a. licensed real estate brokers when selling commercial and industrial properties b. licensed securities salespeople when selling limited partnership interests c. lenders financing the purchase of residential properties d. Fannie Mae and Freddie Mac when purchasing residential mortgages
c. lenders financing the purchase of the residential properties
Services offered by computerized loan origination (CLO) systems are permitted under RESPA as long as certain conditions are met. Which of the following are prohibited under RESPA? a. brokers may charge whatever fees they determine are fair for the service b. only borrowers may pay fees charged for the CLO service c. mortgage brokers may pay a referral fee for the mortgage loan d. brokers are required to disclose the existence of loan products other than those presented by their CLO
c. mortgage brokers may pay a referral fee for the mortgage loan
As provided in a valid purchase contract, the real estate transaction must be closed. Closing requires all the following EXCEPT a. that the seller clear the title so that the condition of the title complies with the terms of the contract b. that the purchaser pay the balance of the purchase price to the seller c. that the broker be present to receive any commission d. that the seller deliver the deed to the purchaser
c. that the broker be present to receive any commission
lien
charge against property that provides security for a debt or obligation of the property owner
Movable item of personal property such a appliances, hand tools, and jewels
chattel
What is a modification to an original will called?
codicil
the process by which the government exercises the right of eminent domain
condemnation
Maximum value is created when a property is in harmony with its surroundings
conformity
community property
consists of real and personal property acquired by either spouse during the marriage
bargain and sale deed
contains no express warranties against encumbrances, but it does imply that the grantor holds title possession of the property (implication that grantor holds title and possession)
bilateral contract
contract in which both parties exchange promises to perform some act
Laws affecting real esate
contract law general property law agency law real estate license law federal, state, and local laws and regulations
title insurance
contract under which the policyholder is protected from losses arising from defects of the title
Principle that the value of any part of a property is measured by its effect on the value of the whole property
contribution
Condo
conventional ownership; deed
trustee's deed
conveyance from trustee to third party
Process of estimating property value by adding cost of a new building (less depreciation) to estimated land value is called the ______ approach
cost
What is the covenant by which a grantor warrants that he or she owns the property and has the right to convey title?
covenant of seisin
statutory lien
created by statute; a real estate tax lien for example is a involuntary statutory lien
voluntary lien
created intentionally by the owner's action, such as when someone takes out a mortgage loan
A township square contains a) 6 square mils b) 640 acres c) 23,040 Square feet d) 36 sections
d) 36 Sections
An owner who is interested in selling his house is usually concerned about how much money he can get when it sells. A competitive market analysis may help the seller determine a realistic listing price. Which of the following is true? A) A competitive market analysis is the same as an appraisal. B) A broker, but not a salesperson, is permitted to prepare a competitive market analysis. C) A competitive market analysis is what is prepared by a certified real estate appraiser. D) A competitive market analysis contains a compilation of facts about similar properties that have recently sold.
d) A Competitive market analysis contains a compilation of facts about similar properties that have recently sold.
All of the following would be acceptable as evidence of marketable title EXCEPT a) A Torrens certificate b) A title insurance policy c) An Abstract and legal opinion d) A property owner's warranty deed
d) A property owner's warranty deed
***All of the following are physical characteristics of land except a) Indestructibility b) Uniquenss c) Immobility d) Scarcity
d) Scarcity
Homeowner Gurney acquired ownership of land that was deposited by a river running through his property by a) relicition b) Succession c) avulsion d) accretion
d) accretion
A Broker is permitted to represent both the seller and the buyer in the same transaction when a) the principals are not aware of such action b) the broker is a subagent rather than the agent of the seller c) commissions are collected from both parties d) both parties have been informed and agree to the dual representation
d) both parties have been informed and agree to the dual representation
A tenant has an estate for years. According to the written one-year lease, the tenancy will expire on May 1. To obtain possession as of that date, the landlord A) must give the tenant 30 days' notice. B) must give the tenant 60 days' notice. C) must give the tenant notice before April 15. D) is not required to give the tenant any notice.
d) is not required to give the tenant any notice
A broker showed an owner-occupied property that had window screens, custom venetian blinds, and a wall bed to a buyer whose offer was then accepted by the owner. Before the close of escrow, the seller may remove a) all of the identified items because they are trade fixtures b) only the venetian blinds as personal property c) only the wall bed because it is real property d) none of the identified items
d) none of the identified items
A life estate conveys to the life tenant a) a leasehold for life b) a reversionary interest c) a legal life estate d) ownership for life
d) ownership for life
Taxes levied on a property owner to pay for installation of sidewalks or sewers are called A) ad valorem taxes. B) general property taxes. C) special excise taxes. D) special assessments.
d) special assessments
Special assessments initiated by a public agency are a) generic liens b) voluntary liens c) equitable liens d) statutory liens
d) statutory liens
A broker who represents a seller under an exclusive-agency listing receives two offers for the property at the same time, one from one of his salespeople and one from the salesperson of a cooperating broker. What should the broker do? a) Submit the offer from his salesperson first b) Submit the offer from the other salesperson first c) Submit the higher offer first d) Submit both offers at the same time
d) submit both offers at the same time
Last month broker Wanda took a listing on a property. She now learns that her client has been declared incompetent by the court. Her listing now is a) binding as the broker was acting in good faith b) still valid c) the basis for commission if the broker produces a buyer d) terminated
d) terminated
Salesperson Nellie finally concluded some extremely difficult negotiations that resulted in the sale of a listed parcel of land. For all of her extra efforts, she can legally receive a performance bonus from a) The seller b) The buyer c) no one c) the broker
d) the broker
The clause in a trust deed or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is the a. judgement clause b. escalator clause c. forfeiture clause d. acceleration clause
d. acceleration clause
A wooded area with biking and hiking trails is situated between old cotton mills and a housing development. The area is considered a a. designated park required under federal guidelines b. variance to the existing zoning c. utility easement d. buffer zone
d. buffer zone
The type of loan that will most likely have the lowest loan-to-value ratio is a a. VA loan b. FHA loan c. PMI loan d. conventional loan
d. conventional loan
That portion of the value of owners' property that exceeds the amount of their mortgage debt is called a. equality. b. escrow. c. surplus. d. equity.
d. equity
An appraiser is responsible for a. finding value b. computing value c. determining value d. estimating value
d. estimating value
All of the following would affect demand EXCEPT a. population b. demographics c. wage levels d. fiscal policy
d. fiscal policy
The practice of channeling families with children away from other buildings into an apartment building where other families with children reside is a. most practical b. blockbusting c. redlining d. illegal discrimination
d. illegal discrimination
A real estate salesperson, classified by the IRS as an independent contractor, receives a. a monthly salary or hourly wage b. company-provided health insurance c. company-provided automobile d. negotiated commissions on transactions
d. negotiated commissions on transactions
The details of a closing are always governed by a. the wishes of the seller as expressed orally b. the wishes of the buyer as expressed orally c. the escrow instructions that both the seller and the buyer sign d. the terms of the property executed purchase contract
d. the terms of the property executed purchase contract
What is the written document that conveys title to or an interest in real estate?
deed
What is a conveyance by deed from a trustor to a trustee for the benefit of a beneficiary?
deed of trust
Delinquent tax lien
defaulted owners usually have the right to redeem the property within the time specified
Datum
defined as the mean sea level at New York Harbor, a surveyor would use a datum in determining the height of a structure or establishing the grade of a street
legal description
detailed way of describing a parcel of land in a document that will be accepted in a court of law (a description is legally sufficient if it allows a surveyor to locate the parcel)
What is a gift of property by a will called?
devise
What is a person called who receives real property through a testamentary transfer?
devisee
the right to use another's land for particular purpose
easement
Harvestable annual crops such as soybeans or tomatoes; considered to be personal property
emblements (fructus industriales)
the right of the government to acquire privately owned real estate for public use
eminent domain
claim, charge or liability that attaches to real estate
encumbrance
***A metes-and-bounds description always
ends back at the point of beginning (POB) so that the tract being described is completely closed key terms: "more or less" "Point of beginning" "monuments"
A factor used to achieve uniformity in statewide tax assessments; _______ factor
equalization
The right of a delinquent taxpayer to recover property before a tax sale; _______ right of redemption
equitable right of redemption
under state law, the transfer of property ownership to the state when an owner dies leaving no will and no heirs
escheat
Reduction in property value due to outside factors (off the property) is called _______ obsolescence
external
maximum possible estate or right of ownership of real property
fee simple absolute
an estate qualified by some action or activity that must or must not be performed
fee simple defeasible
monuments
fixed objects used to identify point of beginning (POB), all corners of the parcel or ends of the boundary segments, and the lcoation of intersecting boundaries
Item that was once personal property and is now permanently attached so that it becomes real property, such as wall shelves
fixture
acknowledgement
formal declaration under oath that the person who signs a written document does so voluntarily and that the signature is genuine
probate
formal judicial process; take place in county in which the decedent last resided.
a class of estates in land that last for an indeterminable period of time
freehold estate
Loss of value to an improvement to real estate because of problems such as changing tastes or poor design is called ________ obsolescence
functional
A lien that affects all of the real and personal property owned by a debtor
general
property management
general agent; extra 24 hours of classes from state
Which deed offers the most protection because the grantor warrants clear title?
general warranty deed
lis pendens
gives notice of litigation in progress that may affect title to property
To be valid, a deed must be signed by the grantor and accepted by the
grantee
The clause in a deed that states the grantor's intention to convey the property is the
granting clause
The owner who transfers the title is referred to as the
grantor
The "to have and to hold" clause in a deed is also called the
habendum clause
***A buyer purchased a half-acre parcel for $2.15 per square foot. What was the selling price of the parcel?
half acre = 21,780 x $2.15 = $46,827
latent defect
hidden structural defect that would not be discovered by ordinary inspection
a legal life estate in real estate occupied as the family home; protected from creditors during the owner's lifetime
homestead
When a joint tenant dies, when does ownership of the property pass to the other joint tenants?
immediately
an agency relationship may also result from the parties' behavior creating an
implied agency
Man-made attachment to the land, such as a garage, office building, or sidewalk
improvement
duty of diclosure
includes relevant information or material facts that the agent knows or in some cases should have known
_______ approach; appraisal process used to estimate value of rental property
income
What is the term for when a person dies without a will?
intestate
A type of lien created by law
involuntary
Title to property may be transferred without the owner's consent by
involuntary alienation
Fee simple determinable
is a fee simple defeasible estate that may be inherited. The language used to distinguish a special limitation: "so long as" "while" "during"
special power of attorney
is created only for a specific act or acts
The last survivor takes title in severalty and has all the rights of sole ownership, including the right to pass property to any heirs. Title in severalty is inheritable (inherit property as tenants in common)
joint tenancy with right of survivorship (title in severalty)
After judgement entered and recorded with county recorder, becomes a general lien on defendant's real and personal property
judgement lien
Earth's surface extending down to center of earth & up to infinity; includes permanent natural objects
land
volume of a room
length x width x height = volume of a box. If a frame question divide by 2
A charge or claim against a person's property, to enforce the payment of money
lien
a freehold estate limited in duration to the life of the owner of the life of some other designated person(s)
life estate
special warranty deed
limits the grantor's defense of the title transferred by warranting - that the grantor received title; and - that the property was not encumbered during the time the grantor held title, except as otherwise noted in the deed
A notice of a possible future lien based on a lawsuit
lis pendens
owner's rights in land that borders lakes, seas, and oceans
littoral rights
This system uses lot and block numbers referred to in a plat map
lot-and-block (recorded plat) method
Most probable price a property would bring in an arm's length transaction under normal market conditions on the open market
market value
Specific, involuntary lien in the property where contractors or other providers have labor or materials in the property
mechanic's lien
benchmarks
monuments that have been established as permanent reference point throughout the United States. (i.e. embossed brass markers)
Uniqueness, which is also known as
nonhomogeneity
involuntary lien
not a matter of choice; it is created by law and may be either statutory or equitable
encroachment
occurs when all or part of a structure illegally intrudes on the land of another or beyond legal building lines
Names for personal (four)
personalty, chattels, emblements, fructus industriales
increase in value or utility due to consolidation of two or more adjoining lots into one larger lot
plottage
Four governmental powers
police power eminent domain taxation escheat
covenants, conditions, and restrictions (CC&Rs)
private limitations on the use of land
What is the legal process by which a court determines heirs and assets of a decedent's estate?
probate
Escheat
process by which the state may acquire privately owned real or personal property. State laws provide for ownership to transfer, or escheat, to the state when an owner dies and leaves no heirs (as defined by the law) and there is no will or living trust instrument that directs how the real estate is distributed
Co-op
proprietary lease
general power of attorney
provides authority to carry out all of the business dealings of the person giving it
Quitclaim deed
provides guarantee with the least protection of any deed. It carries no covenants or warranties and generally conveys only whatever interest the grantor may have when the deed is delivered; used primarily to convey less than fee simple or to cure a title defect
What is the covenant by which the grantor guarantees that the grantee's title will be good against third parties bringing court actions?
quiet enjoyment
What is the type of deed that imposes the least liability on a grantor?
quitclaim deed
The Fair housing act prohibits discrimination based on
race, color national origin religion sex familial status disability
Land at, above, or below the earth's surface, plus all things, natural and artificial, that are attached to it
real estate
Interests, benefits, and rights automatically included in the ownership of land and real estate
real property
an agent owes a customer the duties of
reasonable care and skill, honest and fair dealing, and disclosure of known facts about the property
The right a mortgagor has to regain the property by paying the debt after a foreclosure sale is called
redemption
Construction cost at current prices of a property that is not an exact duplicate is called _______ cost
replacement
The distinguishing feature of a joint tenancy is the
right of survivorship
*** the distinguishing feature of joint tenancy is the
right or suvivorship (upon the death of a joint tenant, the deceased's interest transfers directly to the surviving joint tenant or tenants)
owner's rights in land that borders on or includes a stream or river
riparian rights
_______ approach; appraisal process that examines sales of similar properties
sales comparison
4 economic characteristics of real estate
scarcity area preference (situs) improvements permanence of investment
section 16 in a township is commonly called a
school section
liquidated damages
serves to compensate a seller in the event a buyer defaults
Conversion of real property to personal property, such as removal of a ceiling fan
severance
survey sketch
shows the location and dimensions of the parcel
rectangular survey system
sometimes called government survey system, established by congress in 1785 to standardize the description of land acquired by the newly formed federal government (uses principal meridian and base lines, 37 principle meridians in U.S.)
Tenancy by the entirety
special form of co-ownership used in some states that allows a spouse to inherit the other spouse's ownership interest upon death
Lien secured by property and affecting only that particular property
specific
survey
states the property's legal description
The right of a delinquent taxpayer to recover property after a tax sale; ______ right of redemption
statutory right of redemption
a sales associate acting as an agent of a broker who therefor owes fiduciary duties to the brokers client is also known as a
subagent (sales associate is general agent in relation to broker, and subagent in relation to client)
*** The lot-and-block system starts with the preparation of a _______ _______ by a licensed surveyor or engineer.
subdivision plat
A written agreement between lien holders to change the priority of a lien
subordination
Principle that maximum value of property trends to be set by cost of buying an equally desirable and valuable property
substitution
novation
substitution of a new contract
Rights to natural resources lying below the earth's surface
subsurface rights
Forms of co-ownership
tenancy in common joint tenancy tenancy by the entirety community property
Four types of ownership
tenancy in common - heirs can take ownership joint tenancy - right of survivorship tenancy by entirety - right of survivorship community property
***When two or more single individuals or couples acquire title to real estate and the form of ownership is not indicated the new owners are usually determined to have acquired title as
tenants in common
A person who has died with a will is said to die
testate
A person who makes a will is called a
testator
Exclusive Buyer Representation Agreement
the buyer works with only one broker, although the broker is free to represent other buyer clients
reversionary interest
the creator of the life estate may choose not to name a remainderman. In that case, ownership returns to the original owner upon the end of the life estate.
remainder interest
the creator of the life estate may name a remainderman as the person to whom the property will pass when the life estate ends
agency
the fiduciary relationship between the principal and the agent by which the agent is authorized to represent the principal in one or more transactions
express agreement
the principal and the agent may enter into a contract in which the parties formally express their intention to establish an agency and state its terms and conditions
survey
the process by which the boundaries are measured by calculating the dimensions and area to determine the exact location of a piece of land
chain of title is
the record of a property's ownership
executory contract
the status of a real estate sales contract prior to closing; something remains to be done by one or more of the parties
gross lease
the tenant pays a fixed rent and some or all of the utility expenses (residential and commercial office leases are most often gross lease)
statute of limitations deals with
time
The right to and evidence or ownership of land is called
title
marketable title
title that is acceptable to a reasonably prudent person and which will not subject the buyer to litigation. To be marketable, a title must - disclose no serious defects and not depend on doubtful questions of law or fact to prove validity; - not expose a purchaser to the hazard of litigation or threaten the quiet enjoyment of the property; and - convince a reasonably well-informed and prudent purchaser, acting on business principles and with knowledge of the facts and their legal significance, that the purchaser could sell or mortgage the property at a later time
Personal property permanently attached by business tenant; may be removed by tenant; if left, landlord becomes owner
trade fixture
assignment
transfer of rights, duties or parties to a contract; substitution of parties
What is a bill of sale used for
transfer ownership of personal property
What is a tax on conveyance of real estate called?
transfer tax
What type of deed is used by a trustee to convey real estate held in trust to anyone other than the trustor?
trustee's deed
Reconveyance Deed
used by trustee to return title to the trustor; conveyance from trustee back to trustor
trade fixture (or chattel fixture)
used for conducting business (tool sheds or pizza ovens); must be removed before the last day the property is rented
A contract may be:
valid - has all legal elements void - lacks one or more elements and has no legal force or effect voidable - has all legal elements on its face, but it may be rescinded or disafirmed unenforceable - appears to have all legal elements but cannot be enforced in court
a contract must be
voluntary an agreement or a promise made by legally competent parties supported by lawful consideration (a contract must be supported by something of value that induces a party to enter into the contract and; for a legal act
The legal terms for the voluntary transfer of title is
voluntary alienation
spot survey
when a survey shows the location, size, and shape of buildings on the lot
statute of frauds
writing; requiring certain contracts, such as real estate sales or lease agreements, to be in writing
