Question 1

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

Accepted Answer

The possessor of the land is the owner of the land. He cannot terminate the easement at will.

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:

Accepted Answer

A lien is a money encumbrance. In this instance, the encumbrance is placed on the property without the owner's consent and is, therefore, involuntary.

Question 3

The term "periodic rate cap" refers to:

Accepted Answer

For an adjustable rate mortgage, a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be is called a periodic rate cap.

Question 4

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

Accepted Answer

Only one party is bound by the contract in a real estate option: the optionee has the right to either purchase or not purchase.

Question 5

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

Accepted Answer

In absentee ownership. The owner lives away from the property and is not able to adequately supervise it.

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:

Accepted Answer

An additional individual who is both obligated on the loan and is on the title to the property is called a co-borrower.

Question 7

The primary justification for zoning ordinances is that they:

Accepted Answer

One of the requirements before a zoning ordinance is considered lawful is that it promotes the general health, safety and welfare of the community.

Question 8

In portfolio risk management, a lender considers:

Accepted Answer

In portfolio risk management, a lender determines what type of loans to have in their portfolio. Questions to aks imclude: How quickly can I sell these loans? What are my reserves? How diversified are these loans? Are they all business? Are they all residential? Are they a mixture of business and residential?

Question 9

Which of the following is true of "condominium"?

Accepted Answer

A condominium is real property where all the owners own the property, common areas and building together, with the exception of the interior of the unit to which they have title. Mistakenly referred to as a type of construction or development, it actually refers to type of ownership.

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:

Accepted Answer

If a buyer assumes an existing loan, he accepts primary liability for that loan.

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.

Accepted Answer

A mortgage in which you make payments every two weeks instead of once a month is called a bi-weekly mortgage.

Question 12

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

Accepted Answer

The surface of the earth and the material beneath the surface to the center of the earth is part of the real property. Since airways are now public domain, the ownership of airspace is 'use to an enjoyable and reasonable height'.

Question 13

Which of the following is required in a valid homestead:

Accepted Answer

Any person filing a homestead is required to reside on the premises at the time that he records the homestead and to sign a statement that he desires to claim it as a homestead. The person claiming a homestead does not have to give the cost, or a description of the improvements on the property and it can be filed by either a husband or a 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:

Accepted Answer

You can accept the check as exclusive agent for the buyer, but you have no listing with the seller.

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:

Accepted Answer

A sale-leaseback is a technique in which a seller deeds property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller.

Question 16

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

Accepted Answer

Amortization means to pay principle and interest over the life of the loan.

Question 17

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

Accepted Answer

A contract can be oral or written and is binding in a court of law.

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:

Accepted Answer

Usually made at the conclusion of the transaction, the tender is the offer to perform on the terms agreed to. If the other party cannot perform, then the party that made the tender can rightfully claim the other party defaulted.

Question 19

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

Accepted Answer

This deposit can be in any form but must be disclosed to the seller prior to the seller accepting the offer.

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:

Accepted Answer

Under an exchange agreement, the real estate licensee acts for both parties. This is one instance where he could earn a commission from each party to the transaction.

Quiz 1: Real Estate