Chapter 1 Flashcards
A licensed real estate professional acting as a point of contact between two or more people in negotiating the sale, rental or purchase of a property is a:
Sponsoring Broker
All of the following would affect demand EXCEPT:
Population
Demographics
Wage levels
Government fiscal policy
Government fiscal policy
What would affect demand?
Population, Demographics, Wage levels
what are the two characteristics of real estate that govern the way the market reacts to supply and demand are:
Financing and appraisal
Mobility and conformity
Uniqueness and immobility
Demographics and interest rates
Uniqueness and immobility
Real estate markets are best described as:
Local
Certain items on the premises that are installed by the tenant and are related to the tenant’s
business are called:
Trade fixtures
Which of the following is NOT described as personal property?
Chattels
Trade fixtures
Emblements
Fixtures
Fixtures
What are some examples of personal property?
Trade fixtures, Chattels, Emblements.
Real Estate is defined as:
Land at above and below the earth’s surface plus all things permanently attached to it.
According to law, a trade fixture is:
Personalty
Suzy is interested in a house that fits most of her needs; but is located in a busy downtown area where she is not sure she wants to live. Her concern about location is called:
Area preference
An important characteristic of land is that it may be modified or improved at any given time. Depending on its type, an improvement may increase the value of real estate greatly. Which one of the following would NOT be considered to be an improvement?
Sewers
Crops
Buildings
Roads
Crops
Which one of the following would be considered to be an improvement?
sewers, buildings, roads, foundation
The word Improvement refers to all of the following EXCEPT:
Streets
A sanitary sewer system
Trade fixtures
The foundation
Trade fixtures
Real property can become personal property by:
Severance
What is Severance?
Severance is the opposite of attachment. Severance involves taking an item that is attached to the land and removing it as personal property
what is Compatibility
relationship between the design of new development and the surrounding neighborhood. It’s the ability of different uses, activities, or designs to be located near each other in harmony.
What factors affect Compatibility?
Height, mass, bulk, scale, traffic impact, operational impact
The rights of ownership of real property does NOT include the right of:
Disposition
Exclusivity
Control
Compatibility
Compatibility
A rancher owns a parcel of land on which oil was discovered. If the rancher has not previously conveyed the oil rights, who owns the oil?
The rancher
The foremost consideration in the purchase of a home is its affordability. What is the second?
The location of the property
The real costs of owning a home include certain costs or expenses that many people overlook. All of the following are such costs or expenses EXCEPT:
The income lost on cash invested in the home
The interest paid on borrowed capital
Maintenance and repair expenses
Property taxes
The income lost on cash invested in the home
The real costs of owning a home include certain costs or expenses that many people overlook. All of the following are such costs or expenses
The interest paid on borrowed capital, Maintenance and repair expenses, Property taxes
A basic homeowner’s insurance policy would protect all of the following EXCEPT:
Fire and lightening
Earthquake and volcanic action
Windstorm and hail
Water damage caused by a leaking pipe
Earthquake and volcanic action
A basic homeowner’s insurance policy would protect all of the following
Fire and lightening, Windstorm and hail, Water damage caused by a leaking pipe
A longer mortgage loan term will:
Result in lower monthly mortgage payments
All of the following are categories of the uses of real property EXCEPT:
residential.
developmental.
agricultural.
industrial.
developmental.
What are 3 most important categories of the uses of real property:
residential, agricultural, industrial.
what is supply of a commodity?
The total amount of properties (like houses, apartments, or commercial buildings) available for sale or lease at a given time in a specific market
(the quantity of real estate that sellers are willing to put on the market at a particular price point.)
What is true about the decrease of the supply of a commodity:
prices tend to rise.
When the demand of a commodity decreases:
prices tend to drop.
The phrase “bundle of legal rights” is properly included in:
the definition of real property.
The right to control one’s property includes all of the following EXCEPT the right to:
invite people on the property for a political fundraiser.
exclude the utilities meter reader.
erect “no trespassing” signs.
enjoy pride of ownership.
exclude the utilities meter reader.
All of the following are considered to be real property EXCEPT:
A. wood-burning fireplace
awnings
bathtubs
patio furniture
patio furniture
The owner of a property attached a garage door opener to her house. Several years later when she listed her property, she instructed the agent that she intended to take the garage door opener
with her when she moved. Can she do this?
Yes, the act would be known as severance, and is permissible as long as it’s stipulated in the sales contract.
All of the following are physical characteristics of land
indestructibility, uniqueness, immobility.
What is scarcity?
the limited availability of properties in a desired location, type, or price point.
(When demand is high and properties are scarce, prices typically increase.)
All of the following are physical characteristics of land EXCEPT:
indestructibility.
uniqueness.
immobility.
scarcity.
scarcity.
Fixtures are:
real property.
All of the following are economic characteristics of land
Scarcity, permanence of investment, area preference.
All of the following are economic characteristics of land EXCEPT:
scarcity.
permanence of investment.
uniqueness
area preference.
uniqueness
The geographic location of any parcel of land will:
never be changed.
Legally, the term improvements refers to all of the following EXCEPT:
sidewalks
sewers.
shrubbery.
retaining walls.
shrubbery.
All of the following are tests for determining a fixture EXCEPT:
intent of the parties.
size of the item.
method of attachment of the item.
adaptation of the item to the real estate.
size of the item.
The owner of a house wants to fence the yard for her dog. When the fence is erected, the fencing materials are converted to real estate by:
annexation
What is annexation?
The process of bringing property into the City limits.
(Cities annex territory to provide urbanizing areas with municipal services and to exercise regulatory authority necessary to protect public health and safety.)
A mobile home is generally considered personal property UNLESS:
it has been permanently affixed to its foundation.
The official name of the law that governs real estate activities in Illinois is the:
Real Estate License Act of 2000.
Most homeowner’s insurance policies contain which of the following clauses?
A property improvement clause
A coinsurance clause
A co-ownership clause
A property devaluation clause
A coinsurance clause
What is Clauses
a section of a contract that outlines the details of a transaction, including what each party agrees to and who is responsible for the sale.
(Clauses are also known as conditions and act as requirements that must be met for the contract to be valid. If the conditions aren’t met, the buyer can back out of the deal without consequences.)
When preparing his or her annual income tax return, the homeowner may be able to deduct all of the following:
real estate taxes, mortgage interest on a first home, mortgage interest on a second home.
When preparing his or her annual income tax return, the homeowner may be able to deduct all of the following EXCEPT:
real estate taxes.
mortgage interest on a first home.
mortgage interest on a second home.
mortgage interest on a third home.
mortgage interest on a third home
Federal income tax regulations allow a homeowner to reduce his or her annual taxable income by amounts paid for:
real estate mortgage interest and real estate taxes.
Mr. and Mrs. Horton have been living in their condominium at the shore for the past 4 years and leasing to a tenant the house that they bought 25 years ago. If they sell their house, how much of the capital gain will be taxable?
50 percent
The value that an owner has in the property that exceeds the amount of the mortgage debt is called:
equity.
What is equity?
the difference between what you owe on your mortgage and what your home is currently worth.
The philosophy behind an exchange is:
Income tax should not apply as long as a real estate investment remains intact
