Deck 1: Real Estate

Question 1

Which of the following is not a characteristic of an easement:

A)It is an interest which can be protected against interference by third persons
B)It is capable of being created by a conveyance
C)It is considered a non-possessory interest
D)It is an interest that can be terminated at will by the processor of the land

Answer 1

It is an interest that can be terminated at will by the processor of the land

Question 2

When duly recorded in the county where the property of the judgment debtor is located, an abstract of judgment for money awarded by a court becomes:

A)An involuntary lien
B)A voluntary lien
C)An attachment lien
D)An equitable lien

Answer 2

An involuntary lien

Question 3

The term "periodic rate cap" refers to:

A)an adjustable rate mortgage
B)a limit on the amount the interest rate can increase or decrease during any one adjustment period
C)conventional fixed-rate loans
D)both A and B

Answer 3

both A and B

Question 4

The distinguishing characteristic of a real estate option when compared to a conventional contract of sale is its:

A)Lack of mutuality in obligation
B)Irrevocability
C)Mutuality of contract

Question 5

The hiring of a specialist in property management would be justified by:

A)Absentee ownership
B)Technological advances in building concepts
C)Vacancy factor high than normal
D)Urbanization

Question 6

If you are buying a piece of property and have someone else who is obligated on the loan and is on the title to the property, that person is called a:

A)spouse
B)family member or friend who shares the property and payments with you
C)co-borrower
D)none of the above

Question 7

The primary justification for zoning ordinances is that they:

A)Promote conformity in the outward appearances of structures
B)Limit the supply of specific businesses within a zoned area
C)Promote the general health, safety and welfare of the community
D)Increase the tax base of the local governing body

Question 8

In portfolio risk management, a lender considers:

A)Diversification
B)Liquidity
C)Reserves
D)All of the above

Question 9

Which of the following is true of "condominium"?

A)It applies to ownership, not to construction or development
B)It is a type of ownership where all of the owners own each other's interior units
C)It is an ownership where owners own the property, common areas, and buildings together
D)both A and C

Question 10

During Broker Shaw's preparation of the Exclusive Authorization and right to Sell on Seller Norman's property, Norman asked that a clause be included which would require the buyer to accept primary liability in connection with the existing loan is transferred to the buyer. Shaw should enter with of the following in Paragraph 2 of the Exclusive Authorization and Right to Sell from:

A)Buyer to take the property "subject to" the loan
B)Buyer to "assume" existing loan
C)Buyer to pay all cash
D)Buyer to make a large down payment to preclude possibility of a foreclosure

Question 11

________________ is the term applied to a mortgage in which you make the payments every two weeks, thereby making thirteen payments a year rather than twelve. This mortgage is paid off faster than a normal mortgage.

A)Twice-monthly mortgage
B)Accelerated mortgage
C)Bi-weekly mortgage
D)None of the above

Question 12

Which of the following is the classic definition of the boundaries of real property?

A)The surface area indicated on a map
B)A reasonable use of airspace and extended to the center or the earth
C)A reasonable distance down and unlimited airspace
D)A practical or reasonable use of the earth and unlimited airspace

Question 13

Which of the following is required in a valid homestead:

A)Statement that claimant is residing on the premises and desires to claim it as a homestead
B)Statement giving the exact cost of the homestead at time of purchase
C)A description of the property including a description of the improvements
D)Signature of both husband and wife

Question 14

A property is not listed for sale. A person who wants the property executes an offer to purchase it through a real estate agent and gives the broker a $5,000 check as a deposit. The broker:

A)Can accept the check on behalf of the property owner provided he presents the offer directly to the seller as the seller's agent
B)Cannot accept the check
C)Can accept the check as the exclusive agent of the buyer
D)None of the above

Question 15

You are selling the house you live in, but the house you're moving to is not completed. You need to stay on in the house a while after closing. You work out a deal with the new purchaser called a:

A)no-rent lease agreement
B)delayed possession for the new purchaser
C)sale-leaseback
D)lease for one year past closing

Question 16

The liquidation of a financial obligation on an installment plan or basis is:

A)Conversion
B)Amortization
C)Acceleration
D)Conveyancing

Question 17

An oral or written agreement that is binding in a court of law is called a:

A)gentlemen's agreement
B)contract
C)business deal
D)promissory note

Question 18

An offer by one of the parties to a real estate transaction to carry out that party's part of the contract is called a:

A)Gratuity
B)Satisfaction
C)Recourse
D)Tender

Question 19

The following could be used by the buyer as earnest money deposit in purchasing real property:

A)A promissory note secured by a deed of trust
B)A postdated check
C)An unsecured promissory note
D)All of the above

Question 20

A form that is usually prepared to allow a real estate licensee to act as an agent for all principle parties to the transaction involved is:

A)An agreement of sale
B)An exchange agreement
C)A loan broker's statement
D)A real property securities statement

Question 21

An assessment does which of the following?

A)Places a value on property for the purpose of real estate sales
B)Is the same as a competitive market analysis
C)Places a value on property for the purpose of taxation
D)Is usually carried out by the mayor of a town

Question 22

Occasionally, the title to real property becomes unmarketable. Which of the following causes would be least likely to result in that eventuality?

A)Imperfect title, due to a breach caused by adverse possession of a prior owner
B)A lis pendens filed by the husband of the owner of record
C)Restrictions imposed by a private owner through a deed notation
D)Public restrictions contained in zoning ordinances and building codes

Question 23

One who establishes the value of a property for taxation purposes is called:

A)a government tax appraiser
B)an assessor
C)an appraiser
D)all of the above

Question 24

Which of the following would normally install conduit?

A)Plumbers
B)Electricians
C)Roofers
D)Carpenters

Question 25

The term "note rate" refers to:

A)the speed at which a musician plays scales
B)the interest rate stated on a mortgage note
C)the interest rate stated on a personal loan
D)the rate at which a note is amortized

Question 26

Which of the following real estate syndicates requires 100 or more investors:

A)Limited partnership
B)Joint venture
C)Corporation
D)Real Estate investment trust

Question 27

The amount paid by a mortgagor for mortgage insurance, either government or private is called:

A)Mortgage insurance premium
B)Private mortgage insurance premium
C)FHA insurance premium
D)VA insurance premium

Question 28

A salesman receives a deposit together with a written offer to purchase and delivers them to the employing broker who presents it to the seller. The seller signs and accepts the offer. Without the consent of the salesman and through no fault of his own, the buyer and seller instruct the salesman's employing broker to return the deposit. Which of the following is true?

A)The salesman's employing broker may retain one-half of the deposit and must give one-half to the seller
B)The broker may sue the seller but must return the deposit
C)The broker may retain one-half of the deposit and must return only one-half to the buyer
D)The broker may retain the deposit to compensate him for his efforts

Question 29

Insofar as a residential neighborhood is concerned, which of the following would offer the least protection against blighting influences on future development:

A)Natural or artificial barriers
B)Partially built-up neighborhood
C)New neighborhood in the path of directional city growth
D)All families with similar income

Question 30

Which of the following is not true of the term "depreciation"?

A)It is a decline in the value of property
B)It is an accounting term showing the declining monetary value of an asset
C)It is a true expense where money is actually paid
D)Lenders add back depreciation expense for self-employed borrowers and count it as

Question 31

If you have a loan in which the interest rate does not change during the term of the loan you have a _____________ mortgage.

A)fixed-rate
B)conventional fixed-rate
C)owner financing
D)all of the above

Question 32

When a legal description uses only sections, townships and ranges, the lines relate to the:

A)Government survey lines
B)Contour lines
C)Recorded tract map
D)Metes and bounds descriptions

Question 33

A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record is called the:

A)Credit Reporting Act
B)Fair Credit Reporting Act
C)Consumer Protection Act
D)Truth-in-Lending Act

Question 34

A lender refers to the process of getting new loans as:

A)selling his product
B)loan origination
C)his bread and butter
D)more than just a job

Question 35

If you have not made your mortgage payment within 30 days of the due date, the mortgage is considered to be in:

A)arrears
B)default
C)trouble
D)bankruptcy

Question 36

If you go to a bank or mortgage company to apply for a home, what type of mortgage would you be applying for?

A)Government
B)Conventional
C)American
D)Adjustable rate

Question 37

If a veteran is eligible for a VA loan, he or she would receive a document from the VA called:

A)Certificate of Authenticity
B)Certificate of Approval
C)Certificate of Met Requirements
D)Certificate of Eligibility

Question 38

The security of a loan made on real property depends upon:

A)The borrower's credit
B)The value of the property being liened
C)The stability and value of money
D)All of the above

Question 39

If a lender agrees to make a loan to a specific borrower on a specific property, they have made a:

A)Decision to make the loan
B)Statement that both the buyer and the property pass inspection
C)Firm commitment
D)All of the above

Question 40

A title search of a property would show the following to be true:

A)the seller is the legal owner of the property
B)there are no liens or other claims against the property
C)the previous owners came over on the Mayflower
D)both A and B

Question 41

A schedule that shows how much of each payment will be applied to principal and how much toward interest over the life of the loan is called a/n:

A)amortization schedule
B)annual percentage rate
C)assumption
D)both A and C

Question 42

In simple terms, a sum of borrowed money (principal) usually repaid with interest is called a:

A)mortgage
B)loan
C)conventional loan
D)alternative mortgage

Question 43

A broker who is hired by an owner to sell his property must reveal all significant and material information to the principal. Which of the following would be considered material information and must be revealed?

A)The new lender will require the buyer to maintain an impound account
B)Agent's knowledge that a better offer to purchase is imminent
C)The prospective buyer is of oriental descent
D)None of the above

Question 44

Which of the following is not a necessary element in the formation of a contract:

A)Offer
B)Acceptance
C)Consideration
D)Performance

Question 45

What is "community property"?

A)Property that is owned by an entire condominium development
B)Property that is owned by an entire subdivision of single-family homes
C)Property acquired by a married couple during the marriage and considered to be jointly owned
D)Both A and B

Question 46

Which of the following items is usually considered to be a cost of home ownership?

A)Land depreciation
B)Improvement appreciation
C)Amenity value
D)Interest lost on the owner's equity

Question 47

When ownership of a mortgage is transferred from one company or individual to another, it is called:

A)an assumption
B)an assignment
C)an assessment
D)all of the above

Question 48

An insurance policy which combines personal liability insurance and hazard insurance coverage for a dwelling and its contents is called:

A)homeowner's insurance
B)buyer's insurance
C)errors and omissions insurance
D)all of the above

Question 49

A right-of-way which gives persons other than the owner access to or over a property is known as an:

A)easement
B)ingress
C)egress
D)none of the above