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Terms in this set (97)
A condensed history of the documents affecting real property is known as:
an abstractor title
A court action to remove a cloud from the title is called an action or suit:
to quiet title
Which statement is NOT true about title insurance?
it serves many of the same functions as homeowners' insurance
A quitclaim deed may be used to:
transfer ownership of a fee simple estate
transfer interest in a life estate
terminate an easement
The covenant in a deed where the grantor guarantees that no one has any other interest in the property that will disturb the grantee's possession is known as:
the covenant of quiet enjoyment
Each closed real estate transaction requires a report to be filed with the IRS on form 1099. Required information includes the seller's name, social security number, and:
the selling price of the property
Which term best describes the process of taxing real estate according to its value?
A house sold for $109,000, with the buyer making a 20% down payment. The grantor's tax is based on the:
To qualify for a tax-deferred exchange, properties MUST:
be of like-kind
The State of Order plans to condemn several pieces of property in the inner city to build a sports complex, displacing many poor families. The State then plans to lease the assembled property to three private citizens, who will operate the complex. Is this use of eminent domain consistent with the US Constitution?
yes, if just compensation is paid to the land-owners
The right of a city government to take title to private property for public improvements is subject to all of the following requirements, except:
a. the ownership interest held by the current owner
c. economically profitable uses of the land by the owner
The State decides to widen a highway. It will be necessary to use six feet of private property on each side. The State's power to take this property is derived from:
none of the above
One of the principal reasons for zoning is to:
An owner has been using a parcel of land for heavy industry since 1973. Subsequently, the property is zoned commercial, excluding industrial purposes. The owner's continued industrial use of the property is a(n):
violation of the existing zoning
All of the following situations are examples of down zoning except:
a. from single family dwellings to multi-unit apartments
b. from agricultural use to single family dwellings
A new residential development requires that all single-family houses have brick fronts. This requirement is most likely an example of:
Deed restrictions are usually imposed by:
n a residential subdivision, the developer established a central playground that uses four feet of the backyard of each owner. Brynes wants to put an organic garden in his backyard. However, a swing set from the central playground sits on Brynes' backyard. Brynes plans to remove the swing set to make room for his garden. His neighbor, Yates, objects. What can Yates do?
A property management contract is between the property manager and:
he owner of the property
Property management agreements usually represent:
To be a professional property manager of a large apartment complex, one would need to know about all of the following EXCEPT:
In terms of management, PUDs most clearly resemble:
Paul Property Owner makes significant improvements to a lot he has been holding for seven years. What is most likely to be true regarding Paul's improvements?
a. Paul's land will increase in value
b. Paul's land will decrease in value
Industrial property includes all of the following uses except:
A buyer and a seller enter into a valid sales contract. For personal reasons, the buyer asks to be released by the seller. The buyer also locates another person to buy the property. The seller then enters into a new sales contract with the new buyer and releases the first buyer. This is most likely an example of:
A 19-year-old inherits property from his grandfather and immediately enters into a contract to sell it. Can he later refuse to sell the property?
no, the contract is valid and binding on all parties
Liquidated damages from breach of a sales contract are usually available to the:
seller, in the event of the buyer's default
A listing agreement will automatically terminate:
on the date specified in the listing agreement
Broker Sam lists a house and sells it 2 months into the listing period. After closing, Sam tries to collect his commission, but the seller refuses and correctly asserts that he is not legally obligated to pay. What type of listing did Sam have?
The buyer-broker agreement that is most similar to the exclusive right-to-sell contract is an:
exclusive buyer agency agreement
Buyer-broker agreements could be:
ll of the above
Vernon presents an offer to a seller with the provision that it must be accepted within 72 hours. Under which of the following circumstances would the offer terminate?
all of the above would terminate the offer
A purchaser receives equitable title to real estate:
If a buyer defaults on a valid sales contract, which performance remedy is available to the seller?
When a seller makes a counteroffer, which of the following statements is NOT true?
it is a partial acceptance of the original offer
Under the typical lease, landlords are legally obligated to provide tenants all of the following EXCEPT:
use of the premises as the tenant and landlord negotiate
If a person has contracted for the opportunity to purchase property at a specified price, within a specified time, the person has:
Which item returns the parties to their original position
A general agency empowers the agent to:
transact the client's affairs in a certain business
All of the following are examples of dual agency except:
two salespersons in a firm represent a different buyer and seller
Bill, a broker with XYZ Realty, sells a property listed by Gene, an independent broker. In this transaction, what is the relationship between Bill and Gene?
a. Bill is the agent; Gene is the principal
A woman offers to buy property listed by her sister (a broker). However, she does not want her sister to tell the seller of their relationship. The sister should:
tell the seller that the prospective buyer is a relative
What is NOT a fiduciary duty that an agent has towards his client?
to obey all client instructions
An owner is listing his rental property with a broker. Based on past experience, the owner thinks that females cause less damage. He therefore tells the broker that he only wants to rent to females. What should the broker do?
advise the owner that this restriction is illegal
All of the following persons may act as escrow agents except:
A buyer's broker presentsan offer for property listed by another broker. Proper agency disclosures have been made. Prior to acceptance, the listing broker discovers a zoning change that will affect the value of the property. He tells the buyer and the offer is withdrawn. Which of the following statements is correct?
he listing broker has exercised due care and loyalty to his principa
If a religious organization operates a hotel as a means of raising money to support the organization, which of the following statements is true?
hey must make rooms available to all persons
In an all elderly housing development, 90% of the units are occupied by persons over age 55. A single mother with 2 small children wants to rent one of the units. Which of the following statements is true according to the Fair Housing Law, as amended in 1988?
the applicant can be denied a lease
A broker would be in violation of the Federal Fair Housing Act for all of the following actions, EXCEPT:
hiring salespersons on the basis of sex, regardless of experience or qualifications
A salesperson took a listing on a property that had a crack in the foundation due to water seepage. Although the owner told him that the water problem was fixed, it's obvious that the owner only filled in and painted over the crack. If the salesperson shows the property without advising potential buyers of issue, the salesperson would be guilty of:
An agent listed a property where a murder recently occurred. If the agent shows the property without advising potential buyers of the murders, the agent would be guilty of:
A broker has an exclusive right-to-sell listing, but the owner finds a buyer and sells the property while the listing is still in force. The broker is entitled to:
When does a broker earn commission?
when the offer to purchase has been signed and accepted by the seller
Wally Wells, a licensed salesperson, obtained an open listing agreement with Client 1 on Parcel A, and an exclusive right-to-sell agreement with Client 2 on Parcel B. Both listings expire without an offer. Three days later, Clients 1 and 2 exchange Parcels A and B under a 1031 exchange. Wally will receive:
no commission so long as Wally was not the procuring cause
Antitrust Laws are intended to protect the public from all of the following situations, EXCEPT:
In the process of taking a listing, a salesperson notices water stains on the ceiling of one of the rooms. What should the salesperson do?
ask the owner if there is a leak
Which of the following items is NOT a latent defect?
Broker A shows a house with a faulty roof. When he finds out about the roof, should he tell the buyer/customer?
yes, it is a material fact
Broker Johnson has listed Cheever's property and sells it to Brevard for $75,000. Before closing, Johnson discovers that the property has a serious structural defect. What should Johnson do?
tell Cheever and Brevard to avoid liability
A budget mortgage payment (PITI) would NOT normally include:
1/12 of the annual life insurance premium
The difference between the value of property and its debts is:
A lender advertises 80% LTV conventional loans. 80% is based on the:
ither a or b
A mortgage that includes both real and personal property is a(n):
A loan with constant payments, where increasing amounts are credited to the principal and decreasing amounts are charged for interest, is called:
an amortized loan
The type of loan a person would most likely receive from a commercial bank is:
short-term commercial loan
Which of the following entities is an investor in the secondary mortgage market?
S&Ls primarily make:
The FHA's involvement with real estate is comparable to:
an insurance company
The maximum amount of a VA Guaranteed loan is:
determined by lenders
A clause in a mortgage to prevent a buyer from assuming an existing loan is called the:
The promissory note accompanying a mortgage could create:
a personal obligation
What is the biggest disadvantage to a lender when it forecloses on a mortgage?
the lender could assume the role of property manager
The Real Estate Settlement Procedures Act (RESPA) requires lending institutions to provide a Good Faith Estimate of closing costs:
within 3 days of loan application
Under Truth-In-Lending requirements, the mortgagee:
must advise the borrower the total amount of interest that will be paid, if the loan is paid at the scheduled maturity date
RESPA does not apply to which of the following sales?
a residential property with 100% seller assisted financing
Dick and Jane build a home at a cost of $250,000 in a neighborhood where the other properties are valued around $125,000. Which economic principle most likely describes the value of Dick and Jane's home in relation to the others?
progression and regression
A buyer looked at four similar houses for sale in the same neighborhood. The buyer purchased the house with the lowest asking price. This decision is an example of:
In the capitalization approach, the appraiser considers all of the following factors, EXCEPT:
price of the property
Which of the following statements is true regarding the Cost Approach method of estimating value?
all of the above
Which appraisal approach is best suited to appraising vacant land?
Real estate salespersons often prepare a CMA when making listing price recommendations. Which principle is a CMA primarily based on?
the principle of substitution
Murphy is going to buy 2 parcels of land. One piece of land contains 3.5 acres and a second is 0.5 square miles in area. If the price is $2,000 per acre, what would Murphy have to pay for both parcels?
A developer owns four parcels of land. He plans to sell one parcel for construction of an office building. The building plans will require 2 acres, which will include the actual building, landscaping, and parking. What is the smallest parcel that would accommodate this construction?
Parcel C: 120 feet x 860 feet
An agent was to receive 5% commission on a piece of property that listed for $30,000. How much commission would he receive if the owner reduced the selling price by 15%?
Real estate taxes for the fiscal year are paid on June 30th. If the annual property taxes are $2,580 and a property sells and closes on April 15th, what is the settlement sheet entry for the proration of taxes?
credit to buyer $2042.50
A developer has 25 acres, which he plans to sub-divide into 1/2 acre building lots. Of the total tract, he must dedicate 5% for streets and 15% for recreation and open space. Each lot will sell for $19,560. What is the developer's potential income?
The current value of Pete and Martha's home minus the lot is $125,000. What did Pete and Martha originally pay assuming the home depreciated 6% per year for the past 10 years?
Sara is purchasing a home. How much down payment must she make if she agrees to pay $80,000 for a house and wants to make a mortgage down payment of 25%?
A house sells for $54,000 and is assessed at $39,400. Annual taxes are calculated at $0.92 per $100 and are paid every 6 months. What is the semi-annual tax bill?
Harry the Homeowner purchases a new home, financed with a conventional, amortized loan for $67,000. The interest rate on the loan is 8% payable over 30 years. Harry's first monthly payment is $500. What is the loan balance after Harry's first payment?
Taxes are $2,100 per year. The tax rate is $3.00 per $100. The assessed value of the property is 40% of the estimated market value. What is the market value of the property?
Which of the following formulas is used to determine annual real estate taxes?
Assessed Value multiplied by the Tax Rate
Sara is purchasing a home. How much is Sara's down payment if she agrees to pay $80,000 for a house and wants to make a mortgage downpayment of 25%?
Real estate taxes for each fiscal year are due on June 30th. The seller hadn't yet paid taxes because the property sells and closes on April 15th (before the bill is due). If the annual property taxes are $2,580, what is the settlement sheet entry for the proration of taxes??
Jimmie the Gent is interested in property valued at $450,000. Jimmie will qualify for a $375,000 loan. However, Jimmie refuses to purchase if his LTV would fall under 80%. Is Jimmie likely to purchase the property?
yes, the LTV is within Jimmie's range
Murphy is going to buy 2 parcels of land. One piece of land contains 3.5 acres and a second is one-half a square mile in area. If the price is $2,000 per acre, what would Murphy have to pay for both parcels?
The current value of Pete and Martha's home, minus the lot, is $125,000. What did Pete and Martha originally pay, assuming the home depreciated 6% per year for the past 10 years?
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Property Ownership Part 1
Property Ownership Part 2
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