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Modern Real Estate Quiz review questions and AnswerKey 52 pages
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Modern Real Estate Quiz review questions and AnswerKey 52 pages
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Modern Real Estate QuizCircle the letter of the Answer that corresponds to the displayed Question.
1. Grantor
A. Land; a portion of the earth's surface extending downward to the center of the earth and upward infinitely into space, including all things permanently attached to it, whether naturally or
artificially
B. 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.
C. 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
D. The owner
2. Machinery Act
A. A type of zoning that is superimposed over another type of zoning.
B. Regulates standards for real property taxation, standards for tax assessment and appraisal.
C. The law pertaining to the period of time within which certain actions must be brought to court or be lost.
D. One who acts as an intermediary on behalf of others for a fee or commission; licensed to list, lease, buy, exchange, auction, negotiate or sell interest in real estate for others for a fee
3. Designated duel agency
A. created to handle problems that occur as a result of sedimentation in state waters
B. a person who retains possession of leased property after the lease has expired; the landlord may continue to accept rent or start eviction procedures.
C. used when a transaction is an in-house sale (when one agent from firm X represents the buyer and another agent from firm X represents the seller)
D. Money damages awarded to the injured party to compensate them for the breach of contract, but not to punish the breaching party.
4. Functional obsolescence curable
A. a concrete support under a foundation, chimney. or column that usually rests on solid ground and is wider than the structure being supported
B. Laws imposed by local government authorities that regulate and control the use of land and structures within a designated district or zone.
C. Department of Housing and Urban Development. Enforces the Federal Fair Housing Act.
D. 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
5. mitigation
A. Passed in 1980, established Superfund to clean up uncontrolled hazardous waste site and to respond to spills
B. A decree issued by a court.
C. systems to limit the source of environmental hazards and reduce their effect on humans and the surrounding environment
D. allows senior citizens on fixed incomes to utilize the equity buildup in their homes by receiving regular monthly payments from the bank
6. Accretion
A. A finite supply
B. An estate in which the holder has a fee simple title that may be terminated upon the occurrence or nonoccurrence of a specified event. Two categories of defeasible fee estates exist:
fee simple determinable and fee simple on condition subsequent.
C. attached to the top plate of a wall and carry the weight of the roof
D. Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.
7. Commercial
A. a flat strip of wood or metal that encloses the ends of the rafters; gutters are usually attached to it.
B. An easement acquired for a public purpose through the power of eminent domain.
C. Business property, including offices, shopping centers, stores, theaters, hotels and parking facilities.
D. Growing crops, such as grapes and corn, that are produced annually through labor and industry; also called fructus industriales. Usually considered to be personal property,
8. Priority of liens
A. A tenant's right to occupy real estate during the term of a lease, generally considered a personal property interest; nonfreehold estate.
B. A policy that provides property owner coverage for the basic structure on that property.
C. Property taxes and special assessments, then in order of time and date files (pure race), except mechanics lien, which dates to date labor began or materials were first provided.
D. the act of pledging real property as security for payment of a loan without giving up possession of the property.
9. Trade Fixture
A. An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires.
B. states that a borrower with good payment history will have PMI canceled when he or she has built up equity equal to 20% of purchase price or appraised value.
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. Something that is not covered for loss in an insurance policy.
10. percentage lease
A. a lease in which the rent is based on a percentage of the gross or net income received by a tenant doing business on the leased property.
B. Refers to a transfer of rights or duties under a contract to a third party.
, C. one of a series of sloping beams that extends from the center ridge board to an exterior wall and provides the main support for the roof.
D. An easement acquired for a public purpose through the power of eminent domain.
11. Client or Principal
A. Illegal eviction practices used by landlords instead of lawful use of summary ejectment.
B. the person who hires and delegates to the agent through a brokerage contract the responsibility of representing that person best interest.
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. an IRS sanctioned method for real estate investors to defer taxation of capital gains by making a property exchange rather than by selling the investment property
12. subprime mortgage
A. offer to purchase
B. A rule of law stating that once written acceptance is placed in control of the mailing service, it is considered accepted--not when the acceptance is actually received by the offeror.
C. A loan made to a borrower with a credit rating below what is required for regular loans creating greater liability for the lender that is countered by higher interest rates and fees; called B,
C, or D paper.
D. The reversion of property to the state in cases where a person dies intestate.
13. survey
A. A contract that has no legal force or effect. It is unenforceable in a court of law b/c it does not meet the essential elements of a contract.
B. federal law that ensures that residential buyers and sellers receive full disclosure of all settlement charges; mandates HUD booklet about closing costs, a good-faith estimate of closing
costs, and hUD-1 closing statement.
C. gives the purchaser information about the exact location and size of the property
D. Do not own land underneath unit; can stack vertically; 7 days to cancel; own "paint to paint" or enclosed airspace; common areas owned by all members as tenants in common
14. 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. Certain properties can be restricted to occupancy by elderly persons. HOPA--Housing for Older Persons Act of 1995. 62 or older or housing occupied by at least one person 55 or older
per unit.
B. sandwich lease
C. made up of lenders that originate mortgage loans
D. An estate in real estate that prohibits a specific condition on the property. Grantor has the right to re-enter the property and reclaim ownership through legal proceedings.
15. fascia board
A. a flat strip of wood or metal that encloses the ends of the rafters; gutters are usually attached to it.
B. 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
C. An appraisal principle that states that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property, assuming that no
costly delay is encountered in making the substitution.
D. the insulation value of materials
16. Reference to a recorded plat
A. A method of land description that uses lot and block numbers.
B. the space between the ground surface and the first floor; frequently found in homes w/o basements that are not built on a slab foundation
C. Encumbrances on real property. AKA: covenants, conditions, restrictions. A private agreement placed in public record that affect the use of the land.
D. A notice that there is and action or lawsuit pending that may adversely affect the title.
17. Redlining
A. Illegal practice by lending institutions to deny or discourage loan application in an area based on its racial composition or deterioration.
B. all property used for housing, from acreage to small city lots. both single family & multifamily, in urban, suburban, and rural areas.
C. 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.
D. a sale in which both the selling agent and the listing agent are from the same firm.
18. Proprietary Lease
A. a 1970s foam insulation that released gases that can cause respiratory problems such as skin irritations or asthma attacks
B. When a particular property or group of properties is rezoned to permit a use different form the neighboring properties use.
C. A lease given by the corporation that owns a cooperative apartment building to the shareholder for the shareholder's right as a tenant to an individual apartment.
D. A rule of law stating that once written acceptance is placed in control of the mailing service, it is considered accepted--not when the acceptance is actually received by the offeror.
19. Aesthetic Zoning
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 person who retains possession of leased property after the lease has expired; the landlord may continue to accept rent or start eviction procedures.
C. charging interest in excess than the maximum rate established by state law.
D. An area zoned strictly for aesthetic or appearance considerations
20. mailbox rule
A. A rule of law stating that once written acceptance is placed in control of the mailing service, it is considered accepted--not when the acceptance is actually received by the offeror.
B. a standardized conventional loan that meets Fannie Mae or Freddie Mac's requirements; made by for-profit lenders and are not insured by the federal gov't to the most creditworthy
borrowers.
, C. rights arising from traditional property law
D. the overhand of a sloping roof that extends beyond the walls of the house.
21. Deed of Release
A. a loan that includes not only the real estate, but also all fixtures and appliances installed on the premises; has been used extensively in financing furnished condo units
B. poisoning caused by an elevated level of lead in the human body that can result in damage to the brain, nervous system, kidneys, and blood.
C. Sealing off of disintegrating asbestos or chipping and peeling lead based paint; may be preferable to removal; still leaves hazard behind
D. 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.
22. Time-share Ownership
A. The act of encouraging people to sell or rent their homes by claiming that the entry of a protected class will have a negative impact on property values.
B. Used to guarantee a broker a commission if that particular property is sold to a specific buyer.
C. Any right to occupy a unit of real property during five or more separated time periods over a period of at least five years. 5 day cancellation (without penalty) 10 days developer keeps
money in trust; 30 days to refund; $500 fine to developer
D. the owner's initial cost for the real estate including closing expenses
23. Real Estate
A. 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.
B. A landowner's claim to use water in large navigable lakes and oceans adjacent to the property. The ownership rights to land bordering these bodies of water up to the average high-
water mark.
C. Land; a portion of the earth's surface extending downward to the center of the earth and upward infinitely into space, including all things permanently attached to it, whether naturally or
artificially
D. An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons.
24. Trustee's Deed
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. A deed of conveyance executed by a trustee and generally used to transfer title after a foreclosure action.
C. the fiduciary relationship between the subagent ant the principal
D. the business of bringing buyers and sellers together
25. frieze board
A. interest paid in advance; one point equals 1% of the loan amount for the borrower and increases the yield for the investor approximately 1/8%.
B. The construction cost, at current prices and using modern materials & methodology, of a property that is not necessarily an exact duplicate but serves the same purpose or function as
the original property.
C. A lack of uniformity; dissimilarity; heterogeneity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogenity
D. a wooden board fastened at the top of the exterior wall under the eave soffit to prevent penetration of weather elements
26. assignment
A. The right to use the land of another for a particular purpose.
B. Federal law that prohibits discrimination based on familial status, race, sex, handicap, color, religion, national origin. (FRESH CORN)
C. Refers to a transfer of rights or duties under a contract to a third party.
D. When a particular property or group of properties is rezoned to permit a use different form the neighboring properties use.
27. title theory
A. 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.
B. 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.
C. An area zoned strictly for aesthetic or appearance considerations
D. states that if the dwelling has four or less units and the owner lives in one of the units, it is exempt from the Fair Housing Act.
28. law of negligence
A. holds that the landlord is liable for injuries that occur in common areas (hallways, stairways, elevators, sidewalks, and parking lots) when the landlord negligently failed to maintain safe
conditions in those areas.
B. Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.
C. Areas designated by FEMA as being prone to flooding.
D. Do not own land underneath unit; can stack vertically; 7 days to cancel; own "paint to paint" or enclosed airspace; common areas owned by all members as tenants in common
29. prepayment penalty clause
A. Certain properties can be restricted to occupancy by elderly persons. HOPA--Housing for Older Persons Act of 1995. 62 or older or housing occupied by at least one person 55 or older
per unit.
B. included in a promissory note requiring the borrower to pay a penalty against the unearned portion of the interest for any payments made ahead of schedule.
C. written promise to repay a debt in definite installments with interest.
D. A map of a subdivision indicating the location and boundaries of individual properties. Generally shows lots, blocks, easements, streets, floodplains, etc. Usually requires official
approval before recordation.
30. foundation wall
, A. the masonry or concrete wall below ground level that serves as the main support for the frame structure; form the side walls of the basement or crawlspace.
B. the tenant's obligation to pay a fixed rental amount, and the landlord pays all taxes, insurance premiums, mortgage payments, repair costs; also called a gross lease.
C. a loan that requires a fixed amount of principal to be paid in each payment with the amount applied to interest varying as the balance is reduced
D. imposes restrictions and limitations on high-cost loans; revises permissible fees and charges on certain loans; prohibits unfair or deceptive practices by lenders
31. 10 reasons for terminating an easement
A. 1)no longer exist 2)easement holder becomes owner 3)release right 4) abandonment 5)non-use of prescription 6) adverse possession 7)demolition of a party wall 8)nonrecordation
9)lawsuit(quiet title) 10)residential easement converted to commercial purposes
B. made up of lenders that originate mortgage loans
C. exterior roofing material frequently made of fiberglass, asphalt, or wood
D. a form indicating the appraised value of a property being financed with a VA loan.
32. Economic Life
A. The period during which property is expected to remain useful for its original intended purpose.
B. Real property uses that were legally established before adoption of current zoning plan, but have been "grandfathered".
C. maximum amount of security deposit if tenancy is longer than month to month.
D. states that a borrower with good payment history will have PMI canceled when he or she has built up equity equal to 20% of purchase price or appraised value.
33. right of first refusal
A. Arrangement where consumer asks licensee to perform specific real estate services for a set fee; unbundling of services; limited service firms.
B. 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.
C. The need or desire for possession or ownership backed by the financial means to satisfy that need.
D. one who is employed by a person already acting as an agent (and agent of the agent).
34. Highest and best use
A. the insulation value of materials
B. Owns a share of stock in the corporation and has a proprietary lease to the unit
C. Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws.
D. The possible use of a property that would produce the greatest net income and thereby develop the highest value
35. Ratification
A. Areas outside incorporated limits that are subject to the zoning restrictions of a municipality
B. establishing an agency relationship by performing any act that accepts the conduct of the agent as that of an agent.
C. 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.
D. 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.
36. NC Dredge and Fill Act
A. The record of ownership of property over a period of time.
B. requires property owners to obtain a permit from the Coastal Resources Commission before participating in any dredging or filling that may affect vegetation or aquatic conditions in NC
waters or marshlands
C. a line of credit allowing the mortgagee to make additional future advances of funds to the mortgagor, and are generally set up as home equity loans.
D. this act governs residential leases and landlord-tenant relationships; its purpose is to ensure that only habitable residential unties are rented. Does not apply to hotels, motels, rent-free
or commercial properties.
37. Grantee
A. The one who receives title
B. A zone created to preserve historic buildings and sites that are irreplaceable.
C. Owned by two or more parties usually not husband and wife; undivided equal interest unless stated; each owner receives share when sold can transfer without other signing; can
acquire at different times; if not stated, tenants in common; never survivorship
D. a type of mortgage that generally originates at one rate of interest, with the rate fluctuating up or down during the loan term based on the movement of a published index.
38. strict foreclosure
A. the leasing of premises by a tenant to a third party for part of the lessee's remaining term
B. the top part of the wall framing that connects the stud to the ceiling framing
C. not used in NC; after appropriate notice has been given to the delinquent borrower and proper papers prepared, the court establishes a specific time period during which the balance of
the defaulted debt must be paid in full
D. Cost per square foot of a recently built comparable structure multiplied by the number of square feet in the subject property.
39. protection agreement
A. created to handle problems that occur as a result of sedimentation in state waters
B. an offer submitted to the property owner with knowledge that the owner is already under contract; a secondary offer.
C. The possible use of a property that would produce the greatest net income and thereby develop the highest value
D. Used to guarantee a broker a commission if that particular property is sold to a specific buyer.
40. Adverse Possession
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