RE 101 CH 10-13

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RE 101 Final

When properly recorded in the county where the real estate of the defendant is located, a judgment becomes a(n)
A) voluntary lien.
B) involuntary lien.
C) specific lien.
D) statutory lien.

B) involuntary lien.

When a company furnishes materials for the construction of a house and is subsequently not paid, it may file a(n)
A) deficiency judgment.
B) lis pendens.
C) estoppel certificate.
D) mechanic's lien.

D) mechanic's lien.

A mechanic's lien would be properly classified as a(n)
A) equitable lien.
B) voluntary lien.
C) general lien.
D) specific lien.

D) specific lien.

The current market value of a property is $35,000. For tax purposes, it is assessed at 40 percent of market value. The tax rate is $4 per $100 of assessed value. What is the amount of the tax due?
A) $560
B) $625
C) $705
D) $740

A) $560

Under which of the following types of liens can both the real property and the personal property of the debtor be sold to pay the debt?
A) Real estate tax lien
B) Mechanic's lien
C) Judgment lien
D) Assessment lien

C) Judgment lien

Which of the following is a voluntary lien?
A) Mortgage lien
B) Estate tax lien
C) Real estate tax lien
D) Judgment lien

A) Mortgage lien

Priority of mechanics' liens is based on
A) federal law.
B) state law.
C) common law.
D) case law.

B) state law.

John is involved in a lawsuit. He owns a rental home that is free of any mortgage. What can a creditor obtain to prevent John from selling the rental home before the lawsuit is settled?
A) Judgment
B) Foreclosure notice
C) Seizure notice
D) Writ of attachment

D) Writ of attachment

A property owner contracted to have a swimming pool installed on her property. When the pool was completed, she refused to pay for the improvement, and the contractor filed a lien for nonpayment. This lien was most likely a
A) general lien.
B) special lien.
C) specific lien.
D) voluntary lien.

C) specific lien.

A man has defaulted in the payment of several of his debts, and the court has ordered his property be sold to satisfy them. A title search revealed several outstanding liens against the property. Which of the following liens has highest priority?
A) Outstanding first mortgage lien dated and recorded one year ago
B) Real estate tax lien for the current year
C) Judgment lien rendered and recorded last month
D) Mechanic's lien for work started two months before the mortgage was recorded

B) Real estate tax lien for the current yea

After real estate has been sold by the state or county to satisfy a delinquent tax lien, the defaulted owner usually has a right to
A) have the sale canceled by paying the back taxes and penalties.
B) pay his or her creditors directly and have their liens removed.
C) redeem the property within the time specified by law.
D) record a notice of nonresponsibility for the unpaid taxes.

C) redeem the property within the time specified by law.

Normally, the priority of general liens is determined by the
A) order in which they are filed or recorded.
B) order in which the cause of action arose.
C) size of the claim.
D) court.

A) order in which they are filed or recorded.

All of the following are generally exempt from paying real estate taxes EXCEPT
A) cities.
B) for-profit assisted living facilities.
C) hospitals.
D) schools.

B) for-profit assisted living facilities.

What is the difference between a general lien and a specific lien?
A) A general lien cannot be enforced in court, while a specific lien can be enforced.
B) A specific lien is held by one person, while a general lien is held by at least two persons.
C) A general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property.
D) A specific lien covers real estate, while a general lien covers personal property.

C) A general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property.

Taxes levied on a property owner to pay for installation of sidewalks or sewers are called
A) ad valorem taxes.
B) general property taxes.
C) special excise taxes.
D) special assessments.

D) special assessments.

General real estate taxes are also known as
A) special assessments.
B) ad valorem taxes.
C) appropriation funds.
D) general, voluntary liens.

B) ad valorem taxes.

A mechanics lien would be properly classified as
A) Voluntary, statutory, general
B) Involuntary, statutory, general
C) Involuntary, statutory, specific
D) Voluntary, statutory, specific

C) Involuntary, statutory, specific

The assessment rate in Nevada is:
A) 25%
B) 35%
C) 45%
D) 50%

B) 35%

The right of a deliquent taxpayer to redeem his or her property before it has been sold at a tax sale is known as a(n)
A) equitable right of redemption
B) statutory right of redemption
C) common law right of redemption
D) statutory forgiveness

A) equitable right of redemption

All of the houses in Don Quixote Estates have been using septic tank systems but now must hook into the public sewage system. It will cost approximately $5,000 per hour for the hook up. The county will probably recover this cost by
A) raising taxes on the houses in Don Quixote Estates
B) charging a special assessment
C) using an equalization factor
D) holding several bake sales

B) charging a special assessment

A void contract is one that was
A) not in writing.
B) never legally enforceable.
C) rescindable by agreement.
D) voidable by only one of the parties.

B) never legally enforceable.

The essential elements of a contract include all of the following EXCEPT
A) offer and acceptance.
B) signatures of the parties.
C) competent parties.
D) consideration.

B) signatures of the parties.

If upon receipt of an offer to purchase subject to certain conditions the seller makes a counteroffer, the prospective buyer is
A) bound by his or her original offer.
B) bound to accept the counteroffer.
C) bound by whichever offer is lower.
D) relieved of his or her original offer

D) relieved of his or her original offer

The amount of earnest money deposit is determined by
A) real estate licensing statutes.
B) agreement between the parties.
C) the listing broker's office policy on such matters.
D) meeting the acceptable minimum of 5 percent of the purchase price

B) agreement between the parties.

If a buyer defaulted some time ago on a written contract to purchase a seller's real estate, the seller can still sue for damages if he is not prohibited from doing so by the
A) statute of frauds.
B) law of agency.
C) statute of limitations.
D) broker-attorney accord.

C) statute of limitations.

Which of the following BEST describes a voidable contract?
A) Contract that has no legal effect and never had any
B) Oral contract with no witnesses to the agreement
C) Contract that may be either enforced or declared void by one of the parties
D) Contract that has been accepted but the acceptance has not been communicated to the offeror

C) Contract that may be either enforced or declared void by one of the parties

Which of the following gives the BEST evidence of the buyer's intention to carry out the terms of the real estate purchase contract?
A) "Subject to" clause
B) Agreement to seek mortgage financing
C) Earnest money deposit
D) Provision that "time is of the essence"

C) Earnest money deposit

What action returns a contract's parties to their positions before the contract, including return of any deposit?
A) Cancellation
B) Rescission
C) Substitution
D) Subordination

B) Rescission

All of the following are essential to the formation of a contract EXCEPT
A) offer.
B) acceptance.
C) consideration.
D) performance.

D) performance.

An option
A) requires the optionee to complete the purchase.
B) gives the optionee an easement on the property.
C) binds the optionor for a specified time.
D) makes the seller liable for a commission.

C) binds the optionor for a specified time.

When a prospective buyer makes a written purchase offer that the seller accepts, then the
A) buyer may take possession of the real estate.
B) seller grants the buyer possessory rights.
C) buyer receives legal title to the property.
D) buyer receives equitable title to the property.

D) buyer receives equitable title to the property.

At the time a buyer was negotiating the purchase of a lot on which to build a new home, the seller represented that the soil was firm enough to support the construction of a building when, in fact, he knew it was not. This contract is
A) void.
B) voidable by the buyer because of fraud.
C) voidable by the seller because of the mistake.
D) voidable by neither party because no harm was done yet.

B) voidable by the buyer because of fraud.

To assign a contract for the sale of real estate means to
A) record the contract with the county recorder's office.
B) permit another broker to act as agent for the principal.
C) transfer one's rights under the contract.
D) allow the seller and the buyer to exchange positions.

C) transfer one's rights under the contract.

The broker receives an earnest money deposit with a written offer to purchase that includes a ten-day acceptance clause. On the fifth day, before the offer is accepted, the buyer notifies the broker that she is withdrawing the offer and demands the return of her earnest money deposit. In this situation, the
A) buyer cannot withdraw the offer because it must be held open for the full ten days.
B) buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money.
C) seller and the broker have the right to each retain one-half of the deposit.
D) broker declares the deposit forfeited and retains it for his services.

B) buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money.

All of the following are correct about contingencies EXCEPT
A) they create a contract that is unenforceable.
B) they must specify what is required to satisfy the contingency.
C) they must identify who will pay for any costs involved.
D) common contingencies include mortgage and inspection contingencies.

A) they create a contract that is unenforceable.

A broker took a listing and later discovered that the client had been declared legally incompetent before signing the listing. The listing is now
A) binding because the broker was acting as the owner's agent in good faith.
B) of no value to the broker because it is void.
C) the basis for the recovery of a commission if the broker produces a buyer.
D) renegotiable.

B) of no value to the broker because it is void.

A specified sum of money that serves to compensate a seller in the event of a buyer default is known as
A) actual damages.
B) liquidated damages.
C) escrow funds.
D) earnest money.

B) liquidated damages.

Which of the following is a type of unilateral contract sometimes used in large real estate transactions?

A) Purchase contract
B) A reward contract
C) An option to purchase contract
D) Any contract between a single buyer and a single seller.

C) An option to purchase contract

James, a 16 year old high school sophomore, entered a written agreement to buy 30 acres of land from Farmer Frank. Which of the following statement is TRUE about this contract?

A) It is a voidable contract as to James.
B) Farmer Frank does not have to sell because James is underage.
C) The contract is void.
D) This is a unilateral contract that Farmer Frank must honor but James, because he is underage, is not obligated to buy.

A) It is a voidable contract as to James.

Mary entered an oral contract to buy an apartment building from Carrie. In most states this contract is

A) unenforceable
B) implied contract
C) voidable
D) unilateral

A) unenforceable

The buyer agreed to purchase certain property, if he could first sell some property he already owned. This is known as a(n)

A) Covenant
B) Illusory promise
C) Contingency
D) Void contract

C) Contingency

A statute which requires certain contracts to be in writing to be enforceable is called a

A) Statute of Frauds.
B) Statute of Writings.
C) Statute of Memorandum.
D) Statute of limitations.

A) Statute of Frauds.

Tonya made an offer buy Emily's house for $200,000. Emily said no, but offered to sell the house for $210,000. Tonya said no thank you. Emily then told Tonya she would accept her original offer for $200,000. All communications took place in writing and neither of them has had an appraisal conducted. Do Tonya and Emily have a contract?

A) Yes, Emily accepted Tonya's offer for $200,000.
B) Yes, both parties have clearly expressed a willingness to buy and sell for $200,000.
C) No, there is no accepted offer.
D) No, without an appraisal it cannot be determined if the price is fair.

C) No, there is no accepted offer.

Darlene accepted an offer to purchase her house and pursuant to the terms of the offer delivered the acceptance by mail to the buyer. Later she changed her mind. Before the buyer received the the acceptance, she called the buyer and told her she was revoking her acceptance. What is the legal status of negotiations?

A) The buyer has a binding contract to purchase Darlene's house.
B) There is no contract because the buyer did not receive the acceptance yet.
C) There is no contract because Darlene did not revoke the acceptance in writing.
D) There is no contract, because Darlene revoked the acceptance.

A) The buyer has a binding contract to purchase Darlene's house.

Angelina has real property which has recently been appraised at $3,500,000. Misty has persuaded her to sell it in exchange for her broken down car. Is this legally sufficient consideration?

A) No, it is obvious that the so called friend is taking advantage of Angelina.
B) It depends on other circumstances not specified in the question.
C) No a car is not legally sufficient consideration for the sale of real property.
D) Yes

D) Yes

The part of the title insurance policy that sets forth all of the encumbrances and defects that will NOT be insured against is called the
A) schedule of defects.
B) citation clause.
C) nonexclusionary clause.
D) exclusions.

D) exclusions.

An abstract of title does NOT provide evidence of title unless it is accompanied by a(n)
A) copy of the title insurance policy.
B) letter of insurance coverage.
C) letter of warranty.
D) attorney's opinion of title.

D) attorney's opinion of title.

The history of all owners of a specific parcel of real estate is the property's
A) chain of title.
B) certificate of title.
C) title insurance policy.
D) abstract of title.

A) chain of title.

All of the following would be considered evidence of marketable title EXCEPT a(n)
A) abstract of title with a legal opinion.
B) title commitment or title insurance policy.
C) certificate of title by a real estate broker.
D) certificate of title by a real estate attorney.

C) certificate of title by a real estate broker.

The recordation of a warranty deed
A) gives actual notice of the grantee's rights.
B) gives constructive notice of an individual's interest.
C) prevents claims of parties in possession.
D) provides defense against adverse possession.

B) gives constructive notice of an individual's interest.

Documents affecting real estate are recorded or filed in the county in which the property is located to
A) enable interested parties to know where to look to discover the various interests of other parties to the transaction.
B) give actual notice of the grantee's interest in the property.
C) comply with the terms of the statute of frauds that all transfers for more than one year be in writing and signed.
D) prove the validity of the execution of the document.

A) enable interested parties to know where to look to discover the various interests of other parties to the transaction.

All of the following would be acceptable as evidence of marketable title EXCEPT a(n)
A) Torrens certificate.
B) title insurance policy.
C) abstract and legal opinion.
D) property owner's warranty deed.

D) property owner's warranty deed.

Under the Torrens system
A) title passes when the grantee's application for registration has been approved and the real estate has been registered.
B) the Torrens official performs exactly the same functions as the recorder of deeds.
C) the original deed is mailed to the buyer after it has been registered.
D) the registration of a title can be canceled by the owner at any time.

A) title passes when the grantee's application for registration has been approved and the real estate has been registered.

A document that protects against hidden risks such as forgeries and loss due to defects in the title, subject to specific exceptions, is called a(n)
A) chain of title.
B) abstract of title.
C) certificate of title.
D) title insurance policy.

D) title insurance policy.

The type of title insurance that will protect the owner and heirs is called a(n)
A) lender's policy.
B) owner's policy.
C) leasehold policy.
D) certificate of sale policy.

B) owner's policy.

A buyer took delivery of the deed to his new house but neither recorded the deed nor took possession of the property. Under these circumstances, the
A) transfer of the property from the seller is ineffective.
B) buyer's interest is not fully protected against third parties.
C) deed is invalid after 90 days.
D) deed in invalid after six months.

B) buyer's interest is not fully protected against third parties.

The mortgagee received a title insurance policy on the property a buyer is pledging as security for the mortgage loan. Which of the following is TRUE?
A) The policy is issued for the benefit of the buyer.
B) The policy guarantees that the buyer's equity will be protected.
C) The amount of coverage is commensurate with the loan amount.
D) The amount of coverage increases as the borrower's equity increases.

C) The amount of coverage is commensurate with the loan amount.

All of the following are true regarding public records EXCEPT they
A) give notice of encumbrances.
B) establish priority of liens.
C) guarantee marketable title.
D) provide constructive notice about interests in the property.

C) guarantee marketable title.

The BEST reason for a buyer to obtain title insurance is
A) that the mortgage lender requires it.
B) to ensure that the seller can deliver marketable title.
C) to ensure that the abstractor has prepared a complete summary of title.
D) to pay future liens that may be filed.

B) to ensure that the seller can deliver marketable title.

A suit to quiet title refers to
A) a title insurance company's search of the title.
B) a mortgagor relinquishing title after foreclosure.
C) the deposit of a title with an escrow agent.
D) the removal of a cloud on the title by court action.

D) the removal of a cloud on the title by court action.

Sponge Bob bought some property from Gary but Sponge Bob did not record the deed. Which of the following statements is TRUE
A) Sponge Bob does not own the property because recording is necessary.
B) Sponge Bob owns the property.
C) Gary owns the property until Sponge Bob records his deed.
D) Sponge Bob has equitable title to the property but will not have legal title until he records his deed

B) Sponge Bob owns the property.

The purpose of recording a deed is to:
A) Obtain title to the property
B) Give constructive notice, to the world, of the grantee's interest in the property
C) Give constructive notice, to the residents of the county in which the property is located.
D) Provide jobs for people who work at the recorder's office.

B) Give constructive notice, to the world, of the grantee's interest in the property

Which of the following is true about a state with a Torrens property registration system?
A) Registering the deed in a Torrens system has exactly the same effect as recording
B) Registering the deed is necessary to transfer title.
C) Nevada uses a Torrens system
D) The Torrens system is actually a method of describing property.

B) Registering the deed is necessary to transfer title.

The priority of liens is usually determined by
A) The date the lien was created
B) The date the lien was recorded
C) The amount of the lien
D) The type of lien

B) The date the lien was recorded

What should someone do to create a security interest in personal property?
A) Publish a notice in the newspaper
B) Advertise on the radio
C) Put a sticky note on the personal property
D) File a financing statement, also known as a UCC-1.

D) File a financing statement, also known as a UCC-1.

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