Deck 16: Understanding Real Estate: A Comprehensive Guide to Ownership, Rights, and Legalities

Question 1

Real estate is defined as just the land

Answer 1

False

Question 2

Home inspection before purchasing a home is crucial.

Answer 2

True

Question 3

There is no difference between real and personal property.

Answer 3

False

Question 4

The percentage of owner occupied homes in the United States is about 20%.

Question 5

Equity is defined as the fair market value of a house minus any outstanding loans.

Question 6

You may take out insurance on your neighbor's house.

Question 7

Holders of life estates have no duties associated with their estate.

Question 8

Holders of riparian water rights may not contaminate, interrupt or change the flow of the water.

Question 9

In a warranty deed, the person conveying title is called the grantor.

Question 10

The deed with the most comprehensive warranties is the special warranty deed.

Question 11

An encumbrance might include an easement, a debt owned by the property owner or a lien against the property.

Question 12

The loss of land by wind or water is called accretion.

Question 13

Originating loans happens in the secondary mortgage market.

Question 14

An open-end mortgage allows the borrower to take the loan in increments.

Question 15

The trustee in a bankruptcy works for the debtor and the creditors.

Question 16

A 'normal market' is one in which:

A) the cost of real estate is within the median
B) the number of sales fall within the normal range
C) neither the seller nor the buyer has the advantage
D) lenders charge low interest rates

Question 17

In a buyer's market:

A) there are more homes for sale than there are buyers
B) the prices for existing homes are up
C) seller's always get their listing price
D) lenders can demand higher interest rates

Question 18

Title insurance insures the buyer:

A) that the interest rate is reasonable
B) that there are no defects in the house itself
C) that he has marketable title
D) that he will be able to sell the house at a later date

Question 19

In real estate, illiquidity means:

A) turning an asset into cash can be time consuming
B) turning an asset into a lot of cash quickly
C) there will be no tax consequences in the sale of real estate
D) none of the above

Question 20

An easement created by a written document is called:

A) an easement by prescription
B) an easement by necessity
C) an express grant
D) an inferred grant

Question 21

In a warranty deed conveying a fee simple determinable, who has legal title:

A) the grantee
B) the grantor
C) the lender
D) a third party

Question 22

A valid deed must contain:

A) the names of the grantors and grantees
B) a correct legal description
C) the grantor must sign the deed
D) all of the above

Question 23

In a general partnership:

A) only the first general partner is liable for the debts of the partnership
B) all of the general partners are liable for the debts of the partnership
C) only the managing partner is liable for the debts of the partnership
D) the general partners and the limited partners are liable for the debts of the partnership

Question 24

A claim against both personal and real property may be called:

A) a judgment lien
B) a mechanics lien
C) an easement
D) is a specific lien

Question 25

The map that shows the elevations of a land parcel is called:

A) a plat map
B) a topographic map
C) a metes and bounds map.
D) a rectangular government survey map

Question 26

A property tax lien is:

A) a general lien
B) a special lien
C) a contract lien
D) is the same as a federal tax lien

Question 27

The deed of trust/mortgage contract

A) places a lien against real property
B) is the negotiable instrument setting out the debt
C) is never recorded
D) is sold to investors

Question 28

The mortgagee is:

A) the person who borrows the money
B) the person or institution that lends the money
C) always the seller of the property
D) the buyer of the property

Question 29

The power of sale clause in a deed of trust:

A) allows the lender to sell the note
B) allows for a non-judicial foreclosure
C) allows the borrower to sell the property
D) allows the IRS to take the property for back taxes

Question 30

The rule of 72 states that whatever annual rate of return you receive on your investment will double in the number of years you get when you divide the rate of return into 72. If you invest $500.00 in a CD with a rate of 4%, how many years will it take to double your return?

A) 18
B) 26
C) 9
D) none of the above

Question 31

In a judicial foreclosures, who oversees the process?

Question 32

Define fixture.

Question 33

Why would you rather have replacement insurance rather than insurance with an actual cash value clause?

Question 34

Name three ways that an involuntary conveyance may occur.

Question 35

The Statute of Frauds says that all transactions dealing with real estate must be ______________ to be enforceable.

Question 36

Of the foreclosure options, ________________ gives the owner the opportunity to make up back payments plus any incidental charges.

Question 37

An ________________________mortgage is a mortgage in which the interest rate may go up or down during the term of the loan.

Question 38

A ________ is a line, a point, or surface that serves as a reference point from which a distance, depth, or elevation can be measured.

Question 39

A ________________ bond insures that all workmen and suppliers of materials will get paid.

Question 40

Discuss the pros and cons of investing in real estate. In your discussion include tax advantages, the business cycle, and anything else relevant to the issue.

Question 41

You have decided to invest in commercial real estate. What sort of legal entity would best suit your purposes? How will you want to take title? What type of financing would you want?

Question 42

The Statute of Frauds stipulates that conveyances of real estate must be in writing

Question 43

The Federal Housing Administration (FHA) loans money to low income borrowers.

Question 44

Some of the ownership rights include the right of possession, the right of control and the right of disposition.

Question 45

The type of ownership which is most all inclusive is fee simple absolute.

Question 46

In a trust, the person who creates the trust is called the trustee.

Question 47

The most cost effective improvement in a remodel might be to add a swimming pool.

Question 48

A legal description must enable a qualified surveyor to locate the exact boundaries of a property.

Question 49

If a debtor can prove that the amount the lender is claiming is in default, the debtor can stay the foreclosure by going to court.

Question 50

The amount of real estate commissions are negotiated by the parties.

Question 51

A lockbox is a way to keep delinquent tenants out of their space.

Question 52

A decline in value due to factors outside the property itself is called physical depreciation.

Question 53

Time limits in offers are of a stated amount of time or a reasonable amount of time.

Question 54

Closing procedures are set by local custom and are not set by any statute.

Question 55

Typically a site manager at an apartment complex negotiates the leases and sets the rental rate.

Question 56

The relationship between the number of people who use or live in a building and the amount of land the building occupies is called density.

Question 57

An abstract of title:

A) insures marketable title
B) is the history of a piece of property
C) insures saleable title
D) insures the collateral for the lender

Question 58

The set of laws which is the Uniform Commercial Code deals with:

A) real property
B) fixtures
C) personal property
D) insurance

Question 59

Real Estate records ( deeds, deeds of trust, etc) are filed in:

A) the county court house
B) the district court house
C) the title company
D) the federal court house

Question 60

Mr. Smith deeds some acreage to his church to be used for a new church and puts that stipulation in the conveyance.

A) Mr. Smith has a life estate
B) the church has a fee simple determinable
C) the church has a leasehold estate until Mr. Smith dies
D) Mr. Smith has a fee simple determinable

Question 61

If you own a piece of real estate in severalty:

A) you own it with other people
B) you own it as community property
C) you are the only owner
D) you own it with members of you immediate family

Question 62

A claim placed on real property as a way to recover payment for a debt owned by the property owner is called:

A) a lien
B) an easement
C) adverse possession
D) joint tenancy

Question 63

GPS, the global positioning system consists of:

A) atlases of the world
B) 376 radio towers
C) 24 military satellites
D) all the plat maps

Question 64

The ratio between the loan amount and the sale price or the appraised value is called:

A) the loan to value ratio
B) the value of the loan on the secondary market to the appraised value
C) the loan to ARM value
D) the loan to list price

Question 65

If a broker directs minorities toward or away from certain neighborhoods or properties, he is:

A) blockbusting
B) steering
C) helping people achieve racial homogeneity in a neighborhood
D) fulfilling has obligation as an agent

Question 66

The duty (s) that an agent has to his principle include:

A) obedience to the orders of his principle
B) disclosure to his principle of all information that he learns
C) confidentiality in that all things he learns from his client may never be revealed to third parties
D) all of the above

Question 67

An appraisal is:

A) the precise value of a particular piece of property
B) the appraiser's opinion of the value of a particular piece of property
C) the lender's opinion of the value of a particular piece of property
D) the average of the three methods used to determine value for a particular piece of property

Question 68

Earnest money may be used as liquidated damages. What are liquidated damages?

A) an amount that the parties agree will compensate them in the event of a breach
B) the actual damages that occur in the event of a breach
C) the punitive damages that occur in the event of a breach
D) the amount of damages incurred in a deceptive trade practice

Question 69

RESPA requires that a copy of the closing statement be given on the business day before closing to which borrower:

A) a borrower buying an 16 unit apartment building
B) a borrower buying an office building
C) a borrower buying a single family residence
D) a borrower buying a shopping mall

Question 70

Changes made to the tax code:

A) may be retroactive
B) can never be retroactive
C) cannot be enforced until taxpayers have a three month opportunity to read about the changes
D) cannot be applied until a federal court has ruled on their constitutionality

Question 71

Land use may be controlled by:

A) Restrictions found in deeds
B) Restrictions filed in the county court house
C) Local zoning ordinances
D) all of the above

Question 72

Define Real Estate

Question 73

You own a house worth $100,000.00 that is insured for $50,000.00 and you have a claim for damages to your home in the amount of $30,000.00. How much will the insurance company actually pay you?

Question 74

Why can't you deed a piece of property to a child you hope to have in the future?

Question 75

What happens in a lease situation when the landlord or tenant dies and no provision for that has been addressed in the lease?

Question 76

What is RESPA?

Question 77

A __________________________ is a condition stipulated in a contract that must be satisfied in order for the contractual obligations to fulfilled .

Question 78

A _______________________title is one that is relatively free from the risk of litigation over possible defects.

Question 79

When the landlord so disturbs the tenant's enjoyment of the lease premises that the tenant has to move, the tenant has been_____________________ evicted.

Question 80

A ______________lien is a lien that has been recorded as part of the public record before another lien is recorded.