Modern Real Estate Quiz
Circle the letter of the Answer that corresponds to the displayed Question.
1. Buyer-agency agreement
A. Radioactive odorless, tasteless gas; with long term exposure may cause lung cancer
B. A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency.
C. the document that pledges the property to the lender as security or collateral for a debt; also called mortgage.
D. When you deduct the annual operating expenses of the real estate from the effective gross income.
2. net lease
A. provides that in addition to the rent, the tenant pays all or some of the property charges such as maintenance, property taxes, and insurance; sometimes called a triple net lease.
B. A clause in a listing contract that says the listing broker is entitled to commission for a time period after the listing expires if the property is sold to a prospect that the broker initially
introduced to the client during the listing term.
C. Uniform Settlement Statement; the standard closing statement form required to be given to the borrower, lender, and seller at or before settlement by the closing agent in a transaction
covered under RESPA.
D. A reference to a publicly recorded document, usually an earlier deed. The referenced document typically contains a legal description of the property.
3. First Substantial Contact
A. a sale in which both the selling agent and the listing agent are from the same firm.
B. The purpose of a legally enforceable contract cannot be for illegal actions or acts against public policy.
C. A flexible moment in time when conversation between a licensee an a consumer begins to address confidential needs, desires and abilities; latest moment to legally disclose agency
choices to a consumer.
D. An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires.
4. when a lease is sublet, the original tenant retains primary liability for paying the rent; this interest in the real estate is known as _____ _______.
A. When a particular property or group of properties is rezoned to permit a use different form the neighboring properties use.
B. a charge for the use of borrowed money
C. the document that pledges the property to the lender as security or collateral for a debt; also called mortgage.
D. sandwich lease
5. nonjudicial foreclosure
A. The concept of land ownership that includes ownership of all legal rights to the land, i.e.. Disposition, exclusion, enjoyment, possession and control.
B. an increase in the loan balance.
C. a foreclosure under power of sale in which the deed of trust does not have to be foreclosed through a court action.
D. A method of condemnation in which title and possession of private property can immediately be transferred to a public authority.
6. Spot Zoning
A. The principle that affirms that the value of any component of a property is defined by what its addition contributes to the value of the whole or what its absence detracts from that value.
B. When the cost of an asset is depreciated evenly over its useful life.
C. When a particular property or group of properties is rezoned to permit a use different form the neighboring properties use.
D. sheets of flat, heavy material place on top of the roof boards to insulate and water proof the roof
7. option to purchase
A. In North Carolina, a fixture attached to leased property by a tenant farmer is considered the landowner's real property rather than the tenant's personal property.
B. the fiduciary relationship between the subagent ant the principal
C. a document acknowledging the full repayment of a mortgage debt
D. an agreement b/w property owner and possible buyer, secured by the payment of an option fee, to buy or not to buy property within a specific time period at negotiated terms.
8. consequential damages
A. One broker is appointed as sole agent of the seller and is given the exclusive right, or authorization, to represent the property in question
B. an agreement b/w property owner and possible buyer, secured by the payment of an option fee, to buy or not to buy property within a specific time period at negotiated terms.
C. Special damages that might be obtained if the damages upon breach were reasonably foreseeable to the breaching party at the time of making the contract.
D. Under this covenant, the lessor guarantees that the lessee may take possession of the leased premises and that no one, including the landlord, will interfere with the tenant's
possession or use of the property.
9. Judgments
A. created when a property owner promises to give the contracting party the first chance to buy the property or to match the bona fide offer of a third party, should the owner decide to sell.
B. Regulates standards for real property taxation, standards for tax assessment and appraisal.
C. uses the three-party deed of trust instrument as security for the mortgage debt; the borrower conveys legal title to a trustee to hold for the lender until the debt is paid off. NC uses this
theory.
D. A decree issued by a court.
10. 3 events in closing
, A. Real property uses that were legally established before adoption of current zoning plan, but have been "grandfathered".
B. Substituting a new contract for an old one or substituting new parties to an existing contract.
C. A deliberate agreement between parties offer and acceptance; "meeting of the minds." A requirement of a legally enforceable contract.
D. 1)the promises made in the sales contract are fulfilled 2)the mortgage loans funds are distributed to the buyer for use 3)other settlement costs or funds are dispersed
11. sole plate
A. Water that exists under earth's surface in tiny spaces or crevices in geological formations; if contaminated, threatens source of clean drinking water
B. the lowest horizontal member of the house frame; also on a window or door
C. A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transaction.
D. the bottom of the wall frame that connects the studs to the flooring
12. Sales comparison approach
A. A dwelling(mobile home) built under HUD regulations with a permanent chassis. Considered personal property until moving hitch, wheels and axles are removed, the unit is attached to
a permanent foundation on land, and an affidavit is filed with the DMV.
B. The interest or value that an owner has in property over and above any indebtedness.
C. AKA the market data approach. When an estimate of value is obtained by comparing the subject property with recently sold comparable properties.
D. Illegal eviction practices used by landlords instead of lawful use of summary ejectment.
13. short-term capital gain
A. Money damages awarded to the injured party to compensate them for the breach of contract, but not to punish the breaching party.
B. the bottom of the wall frame that connects the studs to the flooring
C. profits from assets owned for 12 months or less
D. The first place to file a complaint by those who have been injured by discriminatory housing acts.
14. Predatory Lending Act
A. A claim, charge, or liability that attaches to and is binding on real estate.
B. imposes restrictions and limitations on high-cost loans; revises permissible fees and charges on certain loans; prohibits unfair or deceptive practices by lenders
C. a reduction in a property's value resulting from a decline in physical condition; repairs that are physically possible and economically feasible and will result in an increase in appraised
value. Ex: Roof replacement, painting
D. the fiduciary relationship between the subagent ant the principal
15. partially amortized fixed-rate mortgage
A. When a particular property or group of properties is rezoned to permit a use different form the neighboring properties use.
B. Uniform Settlement Statement; the standard closing statement form required to be given to the borrower, lender, and seller at or before settlement by the closing agent in a transaction
covered under RESPA.
C. An attempt by the offeree to change any of the terms proposed by the offeror
D. a loan in which the monthly principal and interest payments are a constant amount, but that payment amount is not sufficient to completely pay off the loan within the loan term; balloon
payment due at maturity
16. power of sale foreclosure
A. Due and payable by the buyer/principal on the signing and acceptance of an offer to purchase property found by the buyer's agent.
B. The right to use the land of another for a particular purpose.
C. The form of foreclosure used in a title theory state; also called a nonjudicial foreclosure.
D. the specific duties of the principal: loyalty, obedience, accounting, disclosure of information, and skill, care, and diligence
17. straight-line amortized mortgage
A. someone who preserves the value of an investment property while generating income as an agent for the owner.
B. offer acceptance communication
C. A concurrent form of ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Ownership interest may be unequal. Right of
survivorship is not automatic in NC but can be added by an attorney.
D. A loan in which the mortgagor may pay a different amount for each installment, each payment consisting of a fixed amount credited toward the principal plus an additional amount for
the interest due since the last payment was made.
18. Marketable Title
A. gives the purchaser information about the exact location and size of the property
B. one who is employed by a person already acting as an agent (and agent of the agent).
C. A title that is free of liens and encumbrances, defects, and protects purchaser from hazard of litigation and is convincible legally significant.
D. A legally enforceable promise or set of promises between legally competent parties.
19. Cooperative
A. an estate in land that is generally considered personal property, because no ownership of the real property has changed hands.
B. exterior roofing material frequently made of fiberglass, asphalt, or wood
C. Owns a share of stock in the corporation and has a proprietary lease to the unit
D. sandwich lease
20. Offer to Purchase and Contract
A. A deed of conveyance executed by a trustee and generally used to transfer title after a foreclosure action.
B. The point where supply and demand is balanced.
, C. In NC, the most common title for a real estate sales contract
D. A claim, charge, or liability that attaches to and is binding on real estate.
21. Commingling
A. When a person dies without having left a will.
B. when trust funds and the firm/broker's personal/business funds are placed in the same account
C. a wooden board fastened at the top of the exterior wall under the eave soffit to prevent penetration of weather elements
D. A lack of uniformity; dissimilarity; heterogeneity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogenity
22. curable physical deterioration
A. A personal interest in or right to use the land of another. The right to use is not attached to any ownership. (personal or commercial)
B. A deed of conveyance executed by a trustee and generally used to transfer title after a foreclosure action.
C. a market for the purchase and sale of existing mortgages
D. a reduction in a property's value resulting from a decline in physical condition; repairs that are physically possible and economically feasible and will result in an increase in appraised
value. Ex: Roof replacement, painting
23. Condition
A. an administrative fee charged to the borrower by the lender for making a mortgage loan; usually computed as a % of the loan amount.
B. It limits coverage of a specified property in an insurance policy.
C. A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transaction.
D. Often used to store petroleum, if leaking can contaminate groundwater, only 10% of tank needs to be underground to require monitoring
24. Contingency
A. allows senior citizens on fixed incomes to utilize the equity buildup in their homes by receiving regular monthly payments from the bank
B. A buyer who is financially qualified, prepared to buy on seller's terms, and ready to take positive steps toward consummation of the transaction by showing willingness to enter into an
enforceable contract.
C. A provision in a contract that requires a certain act to be done or a certain event to occur before the contract becomes building; a condition of the contract.
D. Refers to a transfer of rights or duties under a contract to a third party.
25. deed of trust
A. law used to regulate underground storage tanks' discharge of any hazardous substance, including gas and oil.
B. Estimate based on the present worth of the future rights to income.
C. For the life of another. A life estate pur autre vie is a life estate that is measured by the life of a person other than the grantee.
D. the document that pledges the property to the lender as security or collateral for a debt; also called mortgage.
26. compensatory damages
A. 1)term 2)promise to pay 3)signature of the borrower(s)
B. sheets of flat, heavy material place on top of the roof boards to insulate and water proof the roof
C. 1) Owned by Husband and Wife ONLY 2)each own 100% 3) Both must sign when sold 4)a) Divorce changes to tenants in common automatically but legal separation does not b)if not
stated, the law presumes, tenants by entire 5) right of survivorship (automatic)
D. Money damages awarded to the injured party to compensate them for the breach of contract, but not to punish the breaching party.
27. purchase-money mortgage
A. a note secured by a mortgage or deed of trust given by a buyer as a borrower, to a seller, as lender, as part of the purchase price of the real estate.
B. The form of foreclosure used in a title theory state; also called a nonjudicial foreclosure.
C. A comparison of the prices of recently sold homes that are similar to a listing seller's home in terms of location, style, and amenities; an estimate of market value.
D. A state law that requires that certain instruments that convey interest in real estate be in writing to be legally enforceable, such as deeds, real estate sales contracts, and certain leases.
28. radon
A. Prevents the borrower from letting someone assume the debt without the lender's approval.
B. maximum amount of security deposit if tenancy is from week to week
C. Radioactive odorless, tasteless gas; with long term exposure may cause lung cancer
D. Demand, Utility, Scarcity & Transferability (DUST)
29. right of first refusal
A. Money damages awarded to the injured party to compensate them for the breach of contract, but not to punish the breaching party.
B. A clause in insurance policies covering real property that requires that the policyholder maintain fire insurance coverage generally equal to at least 80 percent of the property's actual
replacement cost.
C. Agency responsible for designating flood hazard areas bordering rivers and streams.
D. created when a property owner promises to give the contracting party the first chance to buy the property or to match the bona fide offer of a third party, should the owner decide to sell.
30. capital loss
A. a deed used to release a parcel of property from a mortgage or deed of trust lien when the real estate loan has been paid in full.
B. A future interest in real estate created by the grantor for some third party that will be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one
party and the remainder to another.
C. let the buyer beware
D. a loss derived from the sale of real property that may be deductible from ordinary taxable income.
, 31. Functional obsolescence curable
A. A policy that provides property owner coverage for the basic structure on that property.
B. Physical or design features that are no longer considered desirable by property buyers but can be replaced or redesigned at low cost. ex: changing fixtures
C. Water that exists under earth's surface in tiny spaces or crevices in geological formations; if contaminated, threatens source of clean drinking water
D. Arrangement where consumer asks licensee to perform specific real estate services for a set fee; unbundling of services; limited service firms.
32. Fannie Mae
A. defined as the land, everything that is permanently attached to the land (or goes with) the land
B. The support of the surface of land by the land's subsurface; duty of the owned of subsurface rights to support the surface of the land.
C. a quasi-government agency established to purchase any kind of mortgage loans in the secondary mortgage market from the primary lenders.
D. A type of contract in which both parties promise to do or refrain from doing something; one promise is exchanged for another. "I will do this and you will do that"
33. landfill
A. a federal law that requires sellers/landlords to disclose the known presence of lead-based paint in residential property to potential buyers/tenants via the required disclosure addendum
to sales contracts or leases
B. Demand, Utility, Scarcity & Transferability (DUST)
C. a loss of value in property due to any cause; an expense deduction for tax purposes taken over the period of ownership of income property
D. An enormous hole to store hazardous materials, lined to prevent leakage of waste materials; includes underground drainage pipes to monitor for leaks and leaching
34. Conditional-use Permit
A. An oral or written contract in which the parties state the contract's terms and express their intentions in words.
B. Granted to a property owner who wishes to use property in a special way that is in the public interest such as a church or hospital.
C. A written instrument by which an owner of real estate intentionally conveys right, title, or interest in the parcel of real estate to another.
D. The reappraisal process based on a statutory schedule of every eight years.
35. Land
A. The rental of rooms or units is exempt in an owner-occupied one-family to four-family dwelling.
B. The earth's surface, extending downward o the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water
C. A flexible moment in time when conversation between a licensee an a consumer begins to address confidential needs, desires and abilities; latest moment to legally disclose agency
choices to a consumer.
D. The amount of goods available in the market to be sold at a given price. The term is often coupled with demand'
36. Fructus Naturales
A. any fact that is important or relevant to the issue at hand; mandatory disclosure by all agents in a transaction to all parties of the transaction
B. the appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value.
C. The upward and downward fluctuations in business activities generally characterized by four stages: expansion, recession, depression, and revival
D. Plants that do not require annual cultivation and are considered real property.
37. Title Search
A. The examination of all public records that might affect a title
B. An official valuation of property for the purpose of establishing assessed value for tax purpose.
C. used as a means of financing large commercial or industrial plants; a transaction in which an owner sells improved property and, as part of the same transaction, signs a long-term
lease to remain in possession of the premises.
D. the primary duty of the land lord to supply fit and habitable premises to the tenant.
38. Chain of Title
A. The record of ownership of property over a period of time.
B. Uniform Settlement Statement; the standard closing statement form required to be given to the borrower, lender, and seller at or before settlement by the closing agent in a transaction
covered under RESPA.
C. 1)Note rate 2)Index 3)Margin 4)Interest rate caps 5)Payment Cap 6)Adjustment Period 7)Conversion option
D. the taxable profit earned from the sale of real property
39. Appurtenance
A. AKA the market data approach. When an estimate of value is obtained by comparing the subject property with recently sold comparable properties.
B. The record of ownership of property over a period of time.
C. A buyer who is financially qualified, prepared to buy on seller's terms, and ready to take positive steps toward consummation of the transaction by showing willingness to enter into an
enforceable contract.
D. A right, a privilege, or an improvement belonging to , and passing with, the land.
40. depreciation
A. systems to limit the source of environmental hazards and reduce their effect on humans and the surrounding environment
B. made up of lenders that originate mortgage loans
C. provides that on sale of the property by the borrower to a buyer who wants to assume the loan, the lender has the choice of either declaring the entire debt to be due and payable
immediately or permitting the buyer to assume the loan
D. a loss of value in property due to any cause; an expense deduction for tax purposes taken over the period of ownership of income property
