Modern Real Estate Quiz
Circle the letter of the Answer that corresponds to the displayed Question.
1. Fee Simple Defeasible or defeasible fee estate
A. A loan in which only interest is paid during the term of the loan, with the entire principal due with the final interest
payment; also called a straight loan.
B. law used to regulate underground storage tanks' discharge of any hazardous substance, including gas and oil.
C. the only legal way a landlord can evict a tenant; through a hearing before a magistrate in small claims court.
D. 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.
2. Instead of using contingencies in an offer to purchase and contract, NC uses _______.
A. Money damages awarded to the injured party to compensate them for the breach of contract, but not to punish the
breaching party.
B. due diligence
C. Uses boundaries and measurements of the land.
D. Deed used when a grantor conveys property as a gift; must be recorded within two years or it becomes void.
3. water table
A. The yield that an investor will demand for the investment of capital. This is the rate of return.
B. The sudden tearing away of land, as by earthquake, flood, volcanic action, or the sudden change in the course of a
stream. The loss of land may not result in loss of title to the property.
C. natural water level whether it is above or below ground level
D. 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.
4. Contribution
A. Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the
current zoning laws.
B. AKA the market data approach. When an estimate of value is obtained by comparing the subject property with
recently sold comparable properties.
C. A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained
development or subdivision.
D. 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.
5. Substitution
A. the third party for whom some level of service is provided by an agent of another party, but who is not represented by
the agent
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. Warranties
D. 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.
,6. Scarcity
A. Issued upon the satisfactory inspection of a structure; building is fit for occupancy and there are no building code
violations
B. Uses boundaries and measurements of the land.
C. A finite supply
D. a gov't agency under HUD that sells mortgage-backed securities that are backed by pools of FHA and VA loans
7. adjusted basis
A. cost of any physical capital improvements that add value to the property or prolong its life (added to the cost basis)
B. Administers the Federal Fair Housing Act under the direction of the Secretary of HUD.
C. Notice given by way of making ownership part of public record (by recording conveyances of real property).
D. the document that pledges the property to the lender as security or collateral for a debt; also called mortgage.
8. 10 reasons for terminating an easement
A. The personal preference of people for one location over another, not necessarily based on objective facts and
knowledge
B. 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
C. A defect on a deed that is frequently cured by a quitclaim deed.
D. The legal remedy of canceling, terminating, or annulling a contract and restoring the parties to their original positions.
9. Reference to a recorded plat
A. A method of land description that uses lot and block numbers.
B. When a claimant has made use of another's land for a certain period of time. Use must be continuous, exclusive, and
without the owners approval. (20 years in NC)
C. Plants that do not require annual cultivation and are considered real property.
D. all property used for housing, from acreage to small city lots. both single family & multifamily, in urban, suburban, and
rural areas.
10. consequential damages
A. The form of foreclosure used in a title theory state; also called a nonjudicial foreclosure.
B. A non-warranty deed that provides the grantee with the least protection of any deed. It carries no covenant or
warranties and conveys only such interest, if any, that the grantor my have when the deed is delivered.
C. a mortgage that requires the mortgagor to pay a constant amount, usually monthly, that will completely pay off the
loan amount with the last equal payment.
D. 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.
11. Endorsement
A. a board around the bottom of a wall perpendicular to the floor; covers gap b/w the floor and wall; decorative
B. A real estate licensee who performs real estate activities under the supervision of a licensed real estate broker-in-
charge. Must complete post-licensing courses to remove the provisional license status
C. In an insurance policy, coverage added to general policy; a rider.
D. a flexible payment plan that allows a mortgagor to make lower monthly payments for the first few years of the loan
and larger payments for the remainder of the term.
, 12. FHA-insured loan
A. 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.
B. 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.
C. An area zoned strictly for aesthetic or appearance considerations
D. a loan insured by the FHA and made by an approved private lender according to FHA's regulations
13. Economic obsolescence (incurable)
A. Caused by factors outside the subject property & is not curable. ex: proximity to a polluting plant
B. the wooden skeleton of the house consisting of the floors, walls, ceilings, and roof
C. A real estate licensee who performs real estate activities under the supervision of a licensed real estate broker-in-
charge. Must complete post-licensing courses to remove the provisional license status
D. Due and payable by the buyer/principal on the signing and acceptance of an offer to purchase property found by the
buyer's agent.
14. Conditional-use Permit
A. Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the
current zoning laws.
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. Typically a small amount of compensation, usually paid up front by the buyer/client when the buyer-agency
agreement is established.
D. A title that is free of liens and encumbrances, defects, and protects purchaser from hazard of litigation and is
convincible legally significant.
15. fully amortized fixed-rate mortgage
A. a mortgage that requires the mortgagor to pay a constant amount, usually monthly, that will completely pay off the
loan amount with the last equal payment.
B. 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
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. one who is employed by a person already acting as an agent (and agent of the agent).
16. percentage lease
A. exterior roofing material frequently made of fiberglass, asphalt, or wood
B. A loan in which only interest is paid during the term of the loan, with the entire principal due with the final interest
payment; also called a straight loan.
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 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.
17. Brokerage
