Chapter 1-Ownership

Question 1

An owner of a residential property had planted a rose bush several years ago on the property. The owner then decided to sell her property. Regarding the rose bush she had planted, this would be considered:

A. Personal property
B. Chattel
C. Real estate
D. Emblements

Answer 1

C. Real Estate

Question 2

*Def: Title

Answer 2

*Bundle of rights

Question 3

*Def: Deed

Answer 3

*Transfers real property rights

Question 4

*Def: Land

Answer 4

*Geographical location on the earth that goes down to the core & up to infinity.

Question 5

Def: Appurtenance

Answer 5

Right, privilege or improvement permanently attached to the land. Runs with the land.

Question 6

Def: Right, privilege or improvement permanently attached to the land. Runs with the land.

Answer 6

Appurtenance

Question 7

What are some examples of a Natural Appurtenance?

Answer 7

Spring, trees, pond, boulders

Question 8

What are some examples of a man-made appurtenance?

Answer 8

Well, house, shop, garage

Question 9

What are some examples of an Appurtenance in regards to Mineral Rights?

Answer 9

Oil, gold, (*unless stated otherwise)

Question 10

What are some examples of an appurtenance (with regard to air rights?)

Answer 10

Billboards, advertising, radio tower

Question 11

What are some examples of an Appurtenance in regards to Water Rights?

Answer 11

Stream, pond, river

Question 12

What are the 3 ways to transfer real estate?

Answer 12

1. Buy
2. Will (inherit)
3. Steal

Question 13

*Who else may have rights in real property?

Answer 13

• 1. The government
     
     2. The lender
     3. Easement rights (e.g. utility company)

Question 14

*What are the physical characteristics of land?

Answer 14

• 1. Immovable
     
     2. Indestructible
     3. Non-homogeneous

Question 15

*What are the economic characteristics of land?

Answer 15

• 1. Situs (location)
     
     2. Improvable
     3. Scarcity
     4. Permanence of investment

Question 16

Real Estate =

Answer 16

Land + Appurtenances

Question 17

What is personal property?

Answer 17

Not “real” property & Easily movable

Question 18

Def: Chattel

Answer 18

Legal name for personal property

Question 19

*Def: Bill of Sale

Answer 19

*Transfers the sale of personal property

Question 20

In a commercial property sale, what document would be used in conveying personal property, such as a detached refrigerator and stove?

A. Deed
B. Contract for Deed
C. Mortgage
D. Bill of sale

Answer 20

D. Bill of sale

Question 21

*Def: Severance

Answer 21

*Going from real property to personal property

Question 22

*Def: Fixture

Answer 22

*Going from personal property to real property

Question 23

*What 3 tests determine if something is personal property or real estate?

Answer 23

• 1. Method of attachment
     
     2. Intention of the attaching party
     3. Adaptation of the item

Question 24

Are trade fixtures personal property or real estate? (e.g. display cases or menu boards)

Answer 24

Personal property

Question 25

What happens to trade fixtures after the tenant moves out?

Answer 25

The tenant can take them at the end of lease and must pay for any repairs of damage caused by removal.

Question 26

Def: Emblement

Answer 26

Annual crops planted by tenant, who may return one time to harvest after moving out.

Question 27

Which of the following items would not be a fixture?

A. Chandelier
B. Built-in bookshelves
C. Heirloom rosebush
D. Cast iron garden bench

Answer 27

D. Cast iron garden bench

Question 28

Harvesting of crops that require annual planting means that the crops are considered to be:

A. Real property
B. Personal property
C. Fixtures
D. Trade fixtures

Answer 28

B. Personal property

Question 29

*Converting real property into personal property would be considered a(n):

A. Chattel
B. Annexation
C. Severance
D. Fixture

Answer 29

*C. Severance

Question 30

Which of the following items would automatically transfer with the sale of the property?

A. Trade fixtures
B. Plumbing fixtures
C. A free-standing appliance
D. Emblements

Answer 30

B. Plumbing fixtures

Question 31

*Def: Zoning

Answer 31

*Land use control

Question 32

Def: Eminent Domain

Answer 32

The right of the government to take private property for public good. The property owner is paid compensation for the property.

Question 33

Def: Condemnation

Answer 33

The process used to take the property when the government exercises the right of Eminent Domain

Question 34

Def: Escheat

Answer 34

The right of the government to take private property upon the owner dying intestate and having no heirs

Question 35

Def: Intestate

Answer 35

No will/no heirs

Question 36

Def: Abandonment

Answer 36

When somebody leaves the property without paying taxes

Question 37

Def: Estate

Answer 37

The degree, quantity, nature and extent of ownership interest in real property (AKA Possessory Rights)

Question 38

What is freehold estate?

Answer 38

What we usually think of as ownership. There is no definite ending date and it is for at least a lifetime.

Question 39

What is a leasehold estate?

Answer 39

What we usually think of as renting or leasing. It is for a definite period of time or limited duration.

Question 40

What rights do Freehold Estates include?

Answer 40

Maximum rights

Question 41

What rights do Leasehold Estates include?

Answer 41

Some rights, AKA “Part of the Bundle”

Question 42

The purpose of laws allowing for the state to take property through escheat is to:

A. Allow the property to be purchased cheaply by the state
B. Provide for more public land
C. Prevent land from becoming ownerless
D. Allow for the assessment of taxes

Answer 42

C. Prevent land from becoming ownerless

Question 43

A person dies with no valid will and no heirs. The state government could claim ownership of this property through what government right?

A. Eminent domain
B. Taxation
C. Escheat
D. Police power

Answer 43

C. Escheat

Question 44

A city wanted to take land as the space was needed to install a cloverleaf, allowing easier access to an interstate highway. The owner of the property refused to sell to the city. As a result of this, the city started the process of acquiring the property against the owner’s wishes. This process is referred to as:

A. Condemnation
B. Eminent domain
C. Escheat
D. Police power

Answer 44

A. Condemnation

Question 45

The government telling people how to use their property in order to protect the public would be an example of:

A. Police power
B. Taxation
C. Escheat
D. Eminent domain

Answer 45

A. Police power

Question 46

What do building codes require from real estate?

Answer 46

Structural integrity

Question 47

What is F.E.M.A.?

Answer 47

Federal Emergency Management Agency

Question 48

Who are flood insurance policies issued by?

Answer 48

F.E.M.A.

Federal Emergency Management Agency

Question 49

What are the government rights in real property?

Answer 49

1. Taxation
2. Police power
3. Eminent domain
4. Escheat

Question 50

What rights does the government have in real property regarding police power?

Answer 50

1. Zoning
2. Building Codes
3. Flood Maps

Question 51

What minimum two permits are required before a family may move into a new construction single family home?

Answer 51

1. Building permit (Comes before work)

2. Occupancy permit/Certificate of Occupancy (Comes after work)

Question 52

What are the 2 different types of fee estates?

Answer 52

1. Fee simple

2. Conditional fee/defeasible fee

Question 53

What is the difference between fee estates and life estates?

Answer 53

Fee estates are inheritable while life estates aren’t.

Question 54

What are the 2 different types of life estates?

Answer 54

1. Reversion/remainder

2. Dower - Curtsey - Homestead

Question 55

Def: Life Estate

Answer 55

Real estate deeded to someone for life or life of another.

Question 56

*Def: Estate in Reversion (Reverts back)

Answer 56

*When the grantor has deeded property to grantee for the rest of their life. When grantee dies, property goes back to grantor.

Question 57

*Def: Estate in Remainder

Answer 57

*The grantor deeds property to grantee for life. When grantee dies, property deed goes to remainderman grantor (usually) names in the form of fee simple.

Question 58

What is an example of estate in remainder?

Answer 58

When someone buys a house with old people living inside it and agrees to allow them to live there until they die, after which the property would be transferred to the buyer.

Question 59

X

Answer 59

X

Question 60

Def: Reservation

Answer 60

Grantor grants property to grantee for life. When grantee dies, grantor retains life estate.

Question 61

Def: Pur Autre Vie (For another’s life)

Answer 61

When grantor grants property to grantee for the duration of a third party’s life. When the third party dies, the property goes to the remainderman in the form of fee simple.

Question 62

Why were legal life estates created?

Answer 62

To protect people from being left homeless.

Question 63

What are the 3 different types of life estates?

Answer 63

1. Dower
2. Curtesy
3. Homestead

Question 64

Def: Dower

Answer 64

The life interest that the wife receives if the husband dies.

Question 65

Def: Curtesy

Answer 65

The life interest that the husband receives if the wife dies.

Question 66

Def: Homestead

Answer 66

Family home is protected from debts. (e.g. Credit card, car)

Question 67

Does the Homestead exemption apply to real estate taxes or mortgages?

Answer 67

No

Question 68

In a life estate situation, what happens to ownership of the property when the life tenant dies?

A. The life tenant’s heirs would get the property
B. The current title holder or heirs would get the property
C. The state government would get the property
D. Whoever had the mortgage on the property would get the property

Answer 68

B. The current title holder or heirs would get the property

Question 69

The highest quality of ownership for a person to obtain in real property is:

A. A life estate
B. Fee simple
C. A leasehold estate
D. A conditional fee estate

Answer 69

B. Fee simple

Question 70

What is the difference between a Fee Simple and Conditional Fee/Defeasible Fee?

Answer 70

Fee Simple has maximum rights and Conditional Fee/Defeasible Fee have only conditional rights.

Question 71

A person was served notice that a $20,000 judgment had been obtained against them. This person was concerned with losing their personal residence due to the judgment. Which of the following statements would be true?

A. The judgment must be over $25,000 to attach to a house
B. A judgment does not ever attach to a house
C. The Homestead Exemption might protect the person from losing the house
D. A person can always lose their house if a judgment is placed against the property.

Answer 71

C. The Homestead Exemption might protect the person from losing the house

Question 72

What are the 2 different types of Estates in Land?

Answer 72

Fee Estates and Life Estates

Question 73

Def: Severalty

Answer 73

To sever from all others (Individual or company)

Question 74

What are the 4 types of Co-Ownership?

Answer 74

1. Tenancy in Common
2. Joint Tenancy
3. Tenancy by the Entireties
4. Community Property

Question 75

XXX

Answer 75

XXX

Question 76

How many deeds are there in a Tenancy in Common situation?

Answer 76

How ever many owners there are.

Question 77

How many deeds are there in a Joint Tenancy situation?

Answer 77

One

Question 78

In a Tenancy in Common situation, if one owner dies, who gets their portion of ownership?

Answer 78

Their heirs.

Question 79

In a Joint Tenancy situation, is an owner required to notify the other owners if they intend to sell their portion?

Answer 79

Yes

Question 80

In a Tenancy in Common situation, can an owner sell their portion without notifying the other owners?

Answer 80

Yes

Question 81

Def: Suit to Partition

Answer 81

The court action to force the sale of the property in a Tenancy in Common situation if one owner wants out but there are no buyers and the other owners can’t afford their portion.

Question 82

In what type of co-ownership must the title be taken to the property at the same time?

A. Joint Tenancy
B. Tenancy by the Entireties
C. Tenancy in Common
D. Community Property

Answer 82

A. Joint Tenancy

Question 83

What are the Four Unities (T.T.I.P.) in Joint Tenancy?

Answer 83

T. Time (Must take title to the property at the same time
T. Title (One deed)
I. Interest (Interest has to be equal
P. Possession (Undivided interest)

Question 84

Def: Right of Survivorship

Answer 84

In a Joint Tenancy situation, if one owner dies, their interest passes to the surviving owners.

Question 85

In what type of co-ownership is a Suit to Partition used?

Answer 85

Tenancy in Common

Question 86

In what type of co-ownership is Right of Survivorship used?

Answer 86

Joint Tenancy

Question 87

How is a joint tenancy terminated?

Answer 87

When any of the 4 unities are destroyed.

Question 88

In a Joint Tenancy, if one owner sold their interest, how would that co-ownernship then be structured?

Answer 88

It would remain a Joint Tenancy between the original existing owners, but would be a Tenancy in Common between the original existing owners and the new owner.

Question 89

If a married couple buys a home together, what type of co-ownership would that fall under?

Answer 89

Tenancy by the Entireties (similar to joint tenancy)

Question 90

If someone buys a home then later gets married, what type of co-ownership would that property fall into?

Answer 90

Community Property

Question 91

X

Answer 91

X

Question 92

Joint Tenancy:

A. Is inheritable to the heirs
B. Has a right of transfer
C. Carries the right of survivorship
D. Has more than one deed

Answer 92

C. Carries the right of survivorship

Question 93

Two persons own a property under tenancy in common. Which statement would be correct assuming one of the owners dies?

A. The probate court wold have to make the final determination
B. The other owner would receive ownership under right of survivorship.
C. The heirs of the deceased would inherit the property
D. The administrator would determine the rightful owner

Answer 93

C. The heirs of the deceased would inherit the property

Question 94

Two unmarried people wanted to purchase property with the right of survivorship. What ownership form should they choose?

A. Joint tenancy
B. Tenancy in common
C. Tenancy in the entirety
D. Community Property

Answer 94

A. Joint Tenancy

Question 95

Three parties own a residence as tenants in common but only two live there. The third-party non-resident wants to sell the property, but the other two living there disagree and do not want to sell. In order to get the property sold, the third party would need to:

A. Initiate an actual eviction
B. Initiate a lease-purchase agreement
C. Initiate a lawsuit for partition
D. Refuse to pay the real estate taxes

Answer 95

C. Initiate a lawsuit for partition

Question 96

What are the 4 types of leasehold estates?

Answer 96

1. Estate for Years
2. Periodic Tenancy
3. Tenancy at Will
4. Tenancy at Sufferance

Question 97

Def: Lessor

Answer 97

Giver of the estate/Landlord

Question 98

Def: Lessee

Answer 98

Tenant

Question 99

Def: Demise

Answer 99

Transfer of rights in real property through a lease

Question 100

Def: Reversion (in leasehold estates)

Answer 100

When the lease expires, it goes back to the lessor

Question 101

Def: Estate for Years

Answer 101

Definite beginning & definite ending to the lease Doesn’t have to be years

Question 102

Def: Periodic Tenancy

Answer 102

Period-period (e.g. Month-to-month lease)

Question 103

Def: Tenancy at Will

Answer 103

No written lease

Has permission, but not protection

Question 104

Def: Tenancy at Sufferance

Answer 104

Without permission (tenant remains after lease end date)

Question 105

*A tenant was in possession of leased property. The landlord gave a written notice to the tenant to quit. The tenant, however, remained in the property and continued to send rent payments to the landlord. The landlord refused to accept the rent checks. This situation would be described as a:

A. Periodic tenancy
B. Tenancy at will
C. Tenancy at sufferance
D. Tenancy for years

Answer 105

*C. Tenancy at sufferance

Question 106

*A buyer was moving to a city. The buyer wanted to wait a little while and look around the city before purchasing a home. In the meantime, the buyer wanted to just rent. The best thing for this buyer would be a:

A. Lease option
B. Lease purchase
C. Month-to-month lease
D. Tenancy at sufferance

Answer 106

*C. Month-to-Month Lease

Question 107

What is the main difference between a freehold estate and a non-freehold estate?

A. A freehold estate always involves ownership
B. A freehold estate ends when a life estate terminates
C. A freehold estate is always inheritable
D. A freehold estate is for a fixed period of time

Answer 107

A. A freehold estate always involves ownership

Question 108

A tenant was able to negotiate with a landlord a two-month lease for entertainment purposes. What type of leasehold estate would this be?

A. Periodic tenancy
B. Tenancy for years
C. Estate at will
D. Tenancy at sufferance

Answer 108

B. Tenancy for years

Question 109

*Def: Encumbrance

Answer 109

*A restrictive covenant that burdens or limits your title or rights held by someone else.

Question 110

What is the difference between a specific lien and a general lien?

Answer 110

A specific lien is to a property while a general lien is to a person and can include the property.

Question 111

What are 3 types of specific liens?

Answer 111

1. Property tax lien
2. Mortgage lien
3. Mechanic’s lien

Question 112

What type of specific lien is ALWAYS prioritized above all others, general or specific?

Answer 112

Property tax lien

Question 113

What is the effective date representative of in a mechanic’s lien?

Answer 113

The date the work started.

Question 114

Who does a mechanic’s lien protect?

Answer 114

The contractor, subcontractors, and people supplying the material.

Question 115

*How are liens prioritized?

Answer 115

*Property taxes always first, by date after that.

Question 116

What are the 2 types of general liens?

Answer 116

1. Income Tax Lien

2. Judgment Lien

Question 117

*Def: Lis Pendens

Answer 117

*Pending Litigation

Question 118

*Def: Writ of Execution

Answer 118

*When the sheriff seizes property to satisfy a judgment.

Question 119

A contractor failed to pay subcontractors for work performed on a property. What could the subcontractors do?

A. Sue the contractor for fraud
B. Remove the materials from the improved property
C. File a mechanic’s lien on the improved property
D. Petition the attorney general for the money

Answer 119

C. File a mechanic’s lien on the improved property

Question 120

A home has a judgment lien filed against it. What happens to the lien when the home is sold?

A. The lien is released when the debt is paid to create a marketable title
B. The lien remains a cloud on the title
C. The lien is only released by court action
D. The lien transfers to other properties owned by the seller

Answer 120

A. The lien is released when the debt is paid to create a marketable title

Question 121

A judgment had been issued against a person for debts. The person owned a car, boat, farmhouse and some land. Which of the following pieces of property could the judgment lien be placed upon?

A. The car only
B. The car and boat only
C. The farmhouse and the land only
D. The car, boat, farmhouse and the land

Answer 121

D. The car, boat, farmhouse and the land

Question 122

Who places an encumbrance?

Answer 122

The grantor

Question 123

Who can enforce an encumbrance?

Answer 123

Only the court

Question 124

Who can bring action against someone the court has determined is breaking an encumbrance?

Answer 124

Any entrusted party (e.g. HOA, neighbor)

Question 125

How can one find out what encumbrances might be in place?

Answer 125

Public record-County recorders office

Question 126

Any deed restrictions would apply to the:

A. Current owner only
B. Present and future owners
C. Original developer
D. Home owners association

Answer 126

B. Present and future owners

Question 127

A developer would like to restrict the usage of the land in a particular development. He would do this through a:

A. Covenant in the deed
B. City restriction
C. Deed of trust
D. Mortgage

Answer 127

A. Covenant in the deed

Question 128

A developer was in the process of developing a brand-new subdivision of homes. In order to preserve the value of the new homes being built, the developer decided to require all homes built to have a minimum of 1,800 square feet. This would best be accomplished through:

A. An easement by prescription
B. Zoning laws
C. Subdivision deed restrictions
D. A lien

Answer 128

C. Subdivision deed restrictions

Question 129

If zoning & covenants are ever in conflict, which would the courts enforce?

Answer 129

Whichever is most restrictive

Question 130

Def: Easement

Answer 130

Gives someone else the right to use a part of your property while you still retain the ownership rights. An easement does not give possessory rights, just the right of ingress and egress. For that reason, an easement is said to be an interest in the property but not an estate (non-possessory). Easement = Servitude.

Question 131

What are the 3 types of easements?

Answer 131

1. Appurtenant Easement
2. Easement in Gross
3. Easement by Prescription

Question 132

Def: Appurtenant Easement

Answer 132

Easement by necessity. (Such as a road going through one property to get to a different property otherwise landlocked.) Appurtenant easements are given for the benefit of the particular land.

Question 133

What happens to an appurtenant easement if the land sells?

Answer 133

It runs with the land. It cannot be sold separately from the land.

Question 134

Def: Dominant Tenement

Answer 134

The land which the easement benefited.

Question 135

Def: Servient Tenement

Answer 135

The land which the easement burdened.

Question 136

Who can terminate an appurtenant easement?

Answer 136

The Dominant Tenement

Question 137

XXXXX

Answer 137

XXXXX

Question 138

What is an example of an easement in gross?

Answer 138

Utility company, billboards, railroads

Question 139

What are the 3 characteristics of an Easement by Prescription?

Answer 139

1. Continuous
2. Open
3. Notorious (Hostile)

Question 140

XXXXX

Answer 140

XXXXX

Question 141

Def: Easement of Prescription

Answer 141

The use of someone else’s property over a period of time that eventually leads to gaining rights to that property.

Question 142

What 4 ways are easements created?

Answer 142

1. Easement deeds
2. Long term use
3. Necessity
4. Encroachment

Question 143

*What are 3 ways easements are terminated?

Answer 143

1. Abandonment
   * 2. Dominant tenement
2. Properties get merged

Question 144

Why would an owner give their neighbor a license to cross their property?

Answer 144

It’s permission versus a right and can be revoked at any time.

Question 145

Def: Encroachment

Answer 145

Trespassing

Question 146

Which of the following scenarios would require an easement by necessity?

A. A railroad has to reroute tracks around a piece of land if not allowed to go straight through
B. A gas company having to run gas lines around a property
C. An owner was landlocked and could not gain access to their property
D. A utility company had no access to a subdivision

Answer 146

C. An owner was landlocked and could not gain access to their property

Question 147

An appurtenant easement can be terminated by:

A. The death of the dominant tenement
B. The death of the servient tenement
C. A merger of the properties
D. Destruction of property

Answer 147

C. A merger of the properties

Question 148

XXXXX

Answer 148

XXXXX

Question 149

Which of the following would not be an appurtenance?

A. Garage apartment
B. Easement on an adjacent property
C. Mortgage lien
D. Pipeline on a property

Answer 149

C. Mortgage lien

Question 150

Ann Carr planted a rose garden on the corner of Mrs. Baird’s property. Mrs. Baird was home-bound and never left her house. Mrs. Baird never knew that Ann Carr had planted a rose garden on her property. The statutory period had elapsed and Ann Carr claimed the rose garden. Would Ann Carr have a good chance of getting rights to an easement by prescription?

A. Yes, because she had made open use of the property
B. No, because Mrs. Baird did not know of the rose garden
C. Yes, because she made improvements that would not have been made otherwise
D. No, because no improvements had been made to the property.

Answer 150

A. Yes, because she had made open use of the property

Question 151

*The purpose of a survey is to determine:

A. Where improvements should be placed
B. If there are any encroachments on the property
C. If the property has any liens
D. The market value of comparable properties

Answer 151

*B. If there are any encroachments on the property

Question 152

A property owner noticed that her neighbor was crossing over her property every day in order to take a short-cut to work. If the property owner did not want the neighbor to obtain permanent rights of use to her property, she could give her neighbor a(n):

A. License
B. Appurtenant easement
C. Easement by prescription
D. Easement by necessity

Answer 152

A. License

Question 153

Def: Riparian

Answer 153

Flowing water

Question 154

What rights does someone have if their property borders a riperian water way?

Answer 154

Reasonable water use

Question 155

Def: Littoral

Answer 155

Bodies of water (i.g. lakes, ponds, ocean)

Question 156

Where is the property line on a property that borders a riperian water way?

Answer 156

The middle of the water bed.

Question 157

Where is the property line on a property that borders litoral water?

Answer 157

The high water mark.

Question 158

Def: Avulsion (with regards to prior appropriations)

Answer 158

Permission to divert water for other purposes

Question 159

Def: Water Table

Answer 159

Distance from the earth’s surface to underground percolating water.

Question 160

*Def: Percolation Test

Answer 160

*A test to determine the water absorption rate of soil

Question 161

*CERCLA is an acronym for what?

Answer 161

*Comprehensive Environmental Response, Compensation and Liability Act

Question 162

Who is responsible for CERCLA violations on a property?

Answer 162

Anyone who has ever owned the land.

Question 163

What are 6 types of environmental issues?

Answer 163

1. Flood-prone areas
2. Brownfield
3. Radon Gas
4. Asbestos
5. Lead based paint
6. Mold

Question 164

*What’s the best way to deal with asbestos?

Answer 164

*Encapsulate it

Question 165

Anything built before what year has to have a brochure given/signed disclosure about lead paint?

Answer 165

1978

Question 166

Def: Radon gas

Answer 166

Radioactive gases naturally decaying

Question 167

How is a build up of radon gas prevented?

Answer 167

A fan/vent to circulate air in and out of the basement.

Question 168

What conditions create mold?

Answer 168

High humidity/low air flow

Question 169

*Def: Brownfield

Answer 169

*Land where hazardous material has been dumped

Question 170

What entity is solely responsible for for flood insurance in flood-prone areas?

Answer 170

F.E.M.A.

Question 171

Riparian, littoral and prior appropriation all relate to:

A. Encumbrances
B. Easements
C. Water rights
D. Restrictions

Answer 171

C. Water rights

Question 172

With regards to water rights and prior appropriation concepts, which of the following terms might be applicable?

A. Survey
B. Estoppel certificate
C. Covenant
D. Avulsion

Answer 172

D. Avulsion

Question 173

In an effort to protect the public, the CERCLA law was passed dealing primarily with:

A. Asbestos
B. Stigmatized property
C. Radon gas
D. Hazardous waste

Answer 173

D. Hazardous waste

Question 174

What are 3 types of multi-owner properties?

Answer 174

1. Cooperative
2. Condominium
3. Time sharing

Question 175

*What are 6 characteristics of a cooperative multi-owner property?

Answer 175

• 1. All members could lose if coop is foreclosed on
     
     2. The coop owns in severalty
     3. Members own stock in coop
     4. Rental payments made to coop
     5. Coop pays mortgage and taxes
     6. Stockholders - Proprietary Lease - Leasehold Estate (Personal Property)

Question 176

What are 6 characteristics of a condominium?

Answer 176

1. Fee simple title to each unit
2. Bylaws list the rules and regulations governing the members - Board of Directors responsible for maintenance
3. Pay own mortgage, taxes and insurance on unit (walls in)
4. Common areas - Elements
5. Pay home’s association dues (Pool, parking, halls, etc. Owned as tenants in common [COA])
6. Master Deed or Declaration is recorded; basically creates condominium under state laws

Question 177

*What are 3 characteristics of a Time Share

Answer 177

• 1. Interval Ownership
     
     2. Fee Simple
     3. Tenancy in Common

Question 178

A person that has stock ownership in an apartment and a proprietary right to lease that space would be participating in a(n):

A. Condominium
B. Cooperative
C. Time Share
D. Alienation

Answer 178

B. Cooperative

Question 179

Time share ownership would be most evidenced by:

A. Joint Tenancy
B. Cooperative ownership
C. Tenancy in the entireties
D. Tenancy in Common

Answer 179

D. Tenancy in Common

Question 180

The common areas in a condominium are owned by the unit owners under

A. Severalty
B. Joint tenancy
C. Tenancy in Common
D. Tenancy in the Entireties

Answer 180

C. Tenancy in Common

Question 181

The main difference a manager would need to realize between managing a condominium and an apartment complex is that in a condominium:

A. The manager would not have to maintain the common areas
B. The need for swimming pool regulations would not be as great
C. The people who reside there are unit owners
D. The residents are still considered to be tenants

Answer 181

C. The people who reside there are unit owners

Question 182

*Def: Alienation

Answer 182

*Transfer

Question 183

What are 2 different ways sellers can transfer property to buyers?

Answer 183

1. Alienation

2. Transfer by deed

Question 184

What are 4 types of deeds?

Answer 184

1. General Warranty
2. Special Warranty
3. Bargain and Sale
4. Quitclaim

Question 185

What promises does a general warranty deed make?

Answer 185

The strongest deed. Seller owns it, has the right to sell & can provide marketable title. No one else owns, no hidden encumbrances. Seller can provide documents to prove ownership. Money back guarantee.

Question 186

What promises does a special warranty deed make?

Answer 186

Same promises as a general warranty deed but only for the time since the current owner has owned it.

Question 187

What promises does a bargain and sale deed make?

Answer 187

Only promising that they own it.

Question 188

What promises does a Quitclaim Deed make?

Answer 188

No promises, “If I own it.” Missing signature, name spelled incorrectly, cloudy title. “Title is cloudy.”

Question 189

Which of the following deeds would give the seller the least amount of liability?

A. Bargain and Sale Deed
B. Quitclaim Deed
C. Special Warranty Deed
D. General Warranty Deed

Answer 189

B. Quitclaim Deed

Question 190

Which statement would be true regarding a deed?

A. A deed must be signed by the grantor and grantee
B. The purpose of a deed is to convey title
C. The grantee must be of legal age
D. Acknowledgment and recording of a deed are required

Answer 190

B. The purpose of a deed is to convey title

Question 191

The type of deed that would provide the best protection for the buyer would be a(n):

A. Special Warranty Deed
B. General Warranty Deed
C. Quitclaim Deed
D. Bargain and Sale Deed

Answer 191

B. General Warranty Deed

Question 192

Who signs the deed?

Answer 192

The grantor

Question 193

What dates does the deed have on it?

Answer 193

The deed has no dates

Question 194

*What starred item is required for a valid deed?

Answer 194

*6. Exceptions and Reservations - List encumbrances

CCR = Covenants, Conditions & Restrictions

Question 195

*Def: Habendum

Answer 195

*“To have and to hold” - Words of conveyance

Question 196

*Which of the following statements would be true regarding a warranty deed?

A. Only the grantee has to sign the deed
B. The grantee has to record the deed to make it valid
C. The grantor has to record the deed to make it valid
D. Only the grantor has to sign the deed

Answer 196

*D. Only the grantor has to sign the deed

Question 197

Which of the following is not essential to the validity of a deed?

A. Signature of grantor and grantee
B. Legal description of the property
C. Words of conveyance
D. Consideration

Answer 197

A. Signature of grantor and grantee

Question 198

What are the 2 purposes of recording documents?

Answer 198

1. To establish priority (i.e. who was first)

2. To provide constructive notice

Question 199

If a document is not recorded who is it only valid between?

Answer 199

The parties who created it.

Question 200

What must happen before you can recored a document?

Answer 200

It must be “acknowledged” (AKA notarized)

Question 201

With the exception of real estate taxes, liens generally are repaid at a foreclosure sale based on the

A. Dollar amount of the lien
B. Actual need of the creditors involved
C. Recording date of the lien
D. Original date of the agreement that led to the lien being filed

Answer 201

C. Recording date of the lien

Question 202

*A judgment against a seller has been recorded on the public record. A buyer is interested in purchasing the seller’s property but does not know about the judgment. The buyer is said to have:

A. Actual notice
B. Preventative notice
C. Corrective notice
D. Constructive notice

Answer 202

*D. Constructive notice

Question 203

*What are the requirements of voluntary alienation?

Answer 203

*Must be of legal age and sound mind

Question 204

Def: Testate

Answer 204

Dying with valid will/heirs

Question 205

XXXXX

Answer 205

XXXXX

Question 206

Def: Testator

Answer 206

Person who dies who made the will

Question 207

Def: Devise

Answer 207

Transfer of real property via will

Question 208

Def: Devisee

Answer 208

Person who real property is transferred to via will

Question 209

Def: Bequest

Answer 209

Transfer of personal property via will

Question 210

Def: Executor

Answer 210

Person who carries out will (e.g. attorney, spouse)

Question 211

Def: Executor’s Deed

Answer 211

Deed created by the executor

Question 212

What are some different ways of having an involuntary transfer of real estate?

Answer 212

1. Descent
2. Adverse possession - Squatter’s rights
3. Involuntary deeds (Tax Deed / Sheriff’s Deed)
4. Transfer by water or wind
5. Transfer by the courts

Question 213

Def: Descent

Answer 213

Intestate-Government determines who gets what

Question 214

Def: Probate

Answer 214

The person who determines who gets what in what amounts

Question 215

Def: Administrator (with regards to descent)

Answer 215

Court appointed person who oversees distribution

Question 216

In adverse possession, what 4 things are required for a squatter to prove their claim (i.e. perfect the title?)

Answer 216

1. Continuous: 10 Years in Missouri
2. Open: Conspicuous
3. Notorious: W/O permission
4. Exclusive: Primary residence

Question 217

Def: Erosion

Answer 217

(With regard to transfer of deed by water or wind) Losing title because the property eroded away

Question 218

Def: Erosion (with regards to Transfer of Deed by Water or Wind)

Answer 218

Losing title because the property eroded away

Question 219

Def: Accretion

Answer 219

(With regard to transfer of deed by water or wind) Someone gains title by gradual build up of earth

Question 220

Def: Avulsion (with regards to transfer of deed by water or wind)

Answer 220

A sudden change in a natural boundary whereby the property boundary lines do not change and the owner does not lose title

Question 221

What is a cloud on a title?

Answer 221

Anything that impairs it and makes it unmarketable and lowers the value.

Question 222

What are the two ways to remove a cloud on a title?

Answer 222

1. Quitclaim Deed

2. Quiet Title Suit

Question 223

*Def: Quiet Title Suit

Answer 223

*Court removing a cloud on a title

Question 224

After closing, which of the following situations would require a quiet title suit?

A. The listing agent misrepresented a material fact about a property
B. The seller misrepresented to the buyer about a roof and basement leak in the property
C. The inspection company failed to discover the property contained mold
D. The seller’s cousin was claiming an ownership interest in the property and refused to sign a quitclaim deed

Answer 224

D. The seller’s cousin was claiming an ownership interest in the property and refused to sign a quitclaim deed

Question 225

*A homeowner used a 20-foot strip of his neighbor’s property for 15 years. The use of the 20-foot strip was done openly, continuously and notoriously. The homeowner wants to sell his property including the 20-foot strip. Would he be able to do this legally?

A. Yes, but only if he first pays consideration to the neighbor for the 20-foot strip of land
B. No, as this would constitute illegal trespassing for the entire 15 years
C. No, as adverse possession requires 30 years or more
D. Yes, but he must perfect the title first and then he can sell the entire property, including the 20-foot strip.

Answer 225

*D. Yes, but he must perfect the title first and then he can sell the entire property, including the 20-foot strip.

Question 226

*Def: Abstract

Answer 226

*Written history of the property

Question 227

Def: Abstractor

Answer 227

Person who does title search

Question 228

*Def: Chain of Title

Answer 228

*List of owners

Question 229

Does an abstract guarantee a clear title?

Answer 229

No

Question 230

What 2 ways prove ownership of real estate?

Answer 230

1. Abstract

2. Title Insurance

Question 231

In title insurance, what does a standard policy cover?

Answer 231

Recorded documents, forgeries, liens

Question 232

In title insurance what does an extended policy cover?

Answer 232

Unrecorded liens

Question 233

What 2 things are contained in a title insurance policy?

Answer 233

1. Legal description of the property

2. Type of ownership

Question 234

Who is covered in an owner’s title insurance policy?

Answer 234

The buyer

Question 235

Who is covered in a mortgagee’s title insurance policy?

Answer 235

The lender

Question 236

Def: Subrogation

Answer 236

A buyer signing over their rights to the title & claims insurance company to go after the seller in return for getting paid off.

Question 237

When does the buyer get reimbursed in subrogation?

Answer 237

When they lose the property.

Question 238

The best way to obtain a list of all previous owners on a piece of property would be through a(n):

A. Chain of Title
B. Abstract
C. Title Insurance Policy
D. Homeowner’s Insurance Policy

Answer 238

A. Chain of Title

Question 239

What document would be a condensed history of all records that affect the title?

A. a Survey
B. an Abstract
C. an Affidavit of Title
D. a Chain of Title

Answer 239

B. an Abstract

Question 240

What does a standard title insurance policy cover?

A. Questions of Survey
B. Rights of Parties in Possession
C. Unrecorded liens
D. Recorded title defects and liens

Answer 240

D. Recorded title defects and liens

Question 241

What are the 2 different types of real estate taxes?

Answer 241

1. General Assessment

2. Special Assessment

Question 242

What do general assessment taxes tax?

Answer 242

Land and improvements

Question 243

What are some examples of what general assessment taxes pay for?

Answer 243

Schools, police protection, fire protection, etc.

Question 244

Def: Special Assessment Taxes

Answer 244

Real estate taxes for special improvement projects in a specific community

Question 245

Six miles of curbs and gutters were installed to improve the properties in a certain area. The properties that were improved would most likely pay for the improvements through a:

A. Benevolent city fund
B. Special Assessment Tax
C. General Assessment Tax
D. Improvements Tax

Answer 245

B. Special Assessment Tax

Question 246

What kind of value does the government use in raising money for operations?

A. Appreciated value
B. Depreciated value
C. Assessed value
D. Original purchase price

Answer 246

C. Assessed value

Question 247

Which of the following would be true regarding special assessment taxes?

A. These are also called ad valorem taxes
B. If not paid, the property could be sold at a foreclosure sale
C. They are paid one time at closing
D. They are generally for the good of the entire community in raising money for police and fire protection

Answer 247

B. If not paid, the property could be sold at a foreclosure sale

Question 248

XXX

Answer 248

XXX

Question 249

Def: Master Land Plan

Answer 249

What a city adopts to plan for future growth

Question 250

Def: Buffer Zone

Answer 250

Separates incompatible areas

Question 251

What is an example of a buffer zone?

Answer 251

A park or apartment complex separating a house from a sky scraper.

Question 252

What are some various types of zoning?

Answer 252

1. Residential
2. Commercial
3. Agricultural
4. Industrial
5. Aesthetic

Question 253

Def: Planned Unit Development (PUD)

Answer 253

Diverse use of land

Question 254

*For what entity is FHRCS an acronym?

Answer 254

*Federal Historic Review Compliance Service

Question 255

Def: Downzoning

Answer 255

Going from more active or larger to smaller or less active

Question 256

Who is downzoning enforced by?

Answer 256

The courts

Question 257

Who is downzoning established by?

Answer 257

The city

Question 258

Who decides what to do with a building that has been deemed as a historical building?

Answer 258

The FHRCS

Question 259

What are the 3 exceptions to zoning?

Answer 259

1. Non-Conforming Use
2. Variance
3. Spot-Zoning

Question 260

Def: Non-Conforming Use Zoning

Answer 260

When a type of building exists before the area is zoned contrary to that type of building

Question 261

Def: Variance Zoning

Answer 261

When a type of building is permitted to be built in an existing are of zoning contrary to its building type

Question 262

Def: Spot Zoning

Answer 262

When a spot in a particular zone is re-zoned

Question 263

What 3 tiers of regulations does a subdivision have?

Answer 263

1. Government
2. Subdivider
3. Developer

Question 264

What are some examples regulations the government decides about subdivisions?

Answer 264

How wide the streets need to be, If the streets need a double yellow or dashed white line, etc.

Question 265

What does a subdivider to?

Answer 265

Separates the subdivision by drawing it all out and getting approval from planning and zoning.

Question 266

What does a developer do?

Answer 266

Improves the subdivision by building infrastructure

Question 267

What are 2 tiers of restrictions placed on a subdivision?

Answer 267

1. Developer

2. Home Owner’s Association

Question 268

Def: Dedication

Answer 268

Voluntary process where someone donates land to the government (often done in exchange for favorable zoning).

Question 269

Which of the following would be the best example of a buffer zone?

A. An agricultural property between multi-family dwellings and a commercial property
B. A single-family property between two commercial properties
C. A single-family property between a multi-family dwelling and a commercial property
D. A park between a high-rise apartment building and an industrial area

Answer 269

D. A park between a high-rise apartment building and an industrial area

Question 270

What is the purpose of zoning regulations?

A. To allow for taxation on real estate
B. To allow the government to take private property for public good
C. To determine the type of construction materials that can be used in a certain area
D. To implement the master land plan

Answer 270

D. To implement the master land plan

Question 271

A six-unit apartment complex in an area that has recently been rezoned R-1 for single family residential property only would be an example of a:

A. Variance
B. Non-Conforming Use
C. Building Code
D. Zoning Ordinances

Answer 271

B. Non-Conforming Use

Question 272

Where would one look to find out what type of structure is allowed to be build on a certain piece of ground?

A. Title policy
B. Plat Map
C. Abstract
D. Zoning Ordinances

Answer 272

D. Zoning Ordinances

Question 273

What is the purpose of a master plan?

A. To ensure safety in construction
B. To guide in the future development of cities
C. To give developers a way to make subdivisions uniform
D. To allow cities a way to acquire private property in the future if needed

Answer 273

B. To guide in the future development of cities

Question 274

*What does a promissory note/bond do?

Answer 274

*Creates debt between the buyer & lender

Question 275

What 3 things does a promissory note/bond include?

Answer 275

1. Term length
2. Interest rate
3. Loan amount

Question 276

What does a promissory note/bond not include?

Answer 276

Loan to value amount

Question 277

Def: Mortgage

Answer 277

Security for a loan

Question 278

XXX

Answer 278

XXX

Question 279

Def: Lien Theory

Answer 279

When the homeowner gets title to house and the lender puts mortgage lien on the home so you can’t sell until the lender is paid back

Question 280

Def: Title Theory

Answer 280

When the lender keeps the title so the homeowner can’t sell until the home is paid off.

Question 281

If payments are not made on a property, how is it foreclosed?

Answer 281

Judicial foreclosure

Question 282

Def: Judicial Foreclosure

Answer 282

Mortgagee has to go to court & judge will have to say they can foreclose. A Writ of Execution is ordered and the sheriff kicks people out of house if they do not leave.

Question 283

What does the power of sale clause do?

Answer 283

Prevents lender from having to go to court to foreclose.

Question 284

What 2 parties are involved in a mortgage?

Answer 284

1. Lender

2. Borrower

Question 285

What 3 parties are involved in a Trust Deed?

Answer 285

1. Lender
2. Borrower
3. Neutral third party

Question 286

What does the trustee do with regards to a trust deed?

Answer 286

Holds bare legal title in behalf of the lender

Question 287

What happens in a non-judicial foreclosure?

Answer 287

Trustee sells property then gives money to the lender

Question 288

Def: Redemption

Answer 288

When defaulting borrower has certain amount of time to buy property back after foreclosure

Question 289

*What are the 2 types of redemption?

Answer 289

• 1. Equitable

2. Statutory

Question 290

*Def: Equitable Redemption

Answer 290

*Foreclosure - When person redeems property before sale

Question 291

*Def: Statutory Redemption

Answer 291

*Foreclosure - When person redeems property after sale

Question 292

*Def: Deficiency Judgment

Answer 292

*Personal judgment agains defaulting borrower for difference of any amount that wasn’t satisfied if the property does not sell for the amount that is still owed on it

Question 293

*Def: Deed in Lieu of Foreclosure

Answer 293

*When the defaulting borrower willingly surrenders the property to the lender without going to court

Question 294

*Is Deed in Lieu of Foreclosure considered a voluntary or involuntary alienation?

Answer 294

*Involuntary alienation

Question 295

*Why might a borrower opt for a Deed in Lieu of Foreclosure situation?

Answer 295

*It may help borrower save credit

Question 296

Def: Short Sale

Answer 296

Lender takes loss & forgives the debt, owner loses right to redeem property

Question 297

A written document that is used to promise repayment of a loan is called a:

A. Promissory Note/Bond
B. Mortgage
C. Deed
D. Title

Answer 297

A. Promissory Note/Bond

Question 298

A lender is going through the foreclosure process. The lender, however, would like to resell the property as soon as possible. The lender should seek a:

A. Judicial Foreclosure
B. Quick Foreclosure
C. Power Foreclosure
D. Deed in Lieu of Foreclosure

Answer 298

D. Deed in Lieu of Foreclosure

Question 299

A property was sold by a foreclosure sale. The sale did not produce enough money to satisfy all the debts on the property. What could the creditors who weren’t paid now file?

A. A deed in Lieu of Foreclosure
B. An Estoppel Certificate
C. A Deficiency Judgment
D. A Blanket Mortgage

Answer 299

C. A Deficiency Judgment

Question 300

XXXXX

Answer 300

XXXXX

Question 301

*Def: Discounting (with regards to a note)

Answer 301

*When a lender sells a note for less than the value

Question 302

*When are real estate note payments paid?

Answer 302

*In arrears; when you pay your monthly mortgage, you are paying the previous month’s interest.

Question 303

*Def: Debt Service

Answer 303

*Principal & Interest

Question 304

*Def: Estoppel Certificate

Answer 304

*Issued by lender stating current loan balance

Question 305

A person purchased a property and obtained a 90% loan. The monthly payments on the debt service would apply to:

A. Principal & Interest
B. Principal, interest, taxes & insurance
C. Principal only
D. Interest only

Answer 305

A. Principal & Interest

Question 306

Mortgage interest is always computed:

A. As being paid in advance
B. As being paid in arrears
C. Using compound interest
D. With a variable interest rate

Answer 306

B. As being paid in arrears

Question 307

*The seller has an assumable loan on the property just listed by the listing broker. What is the best procedure to use in obtaining the outstanding balance on the loan for the official listing agreement?

A. Check the deed at the courthouse
B. Ask the seller directly for the balance
C. Have the seller fill out a lender’s loan information request form
D. Research the MLS data base

Answer 307

*C. Have the seller fill out a lender’s loan information request form

Question 308

Def: Interest

Answer 308

Percent of loan balance

Question 309

Def: Leverage

Answer 309

Borrowing money to make money

Question 310

Def: Fully Amortized Note

Answer 310

A loan consisting of equal, regular payments satisfying the total payment of principal and interest by the due date

Question 311

Def: Straight Note

Answer 311

A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment

Question 312

Def: Partially Amortized Note

Answer 312

A loan in which partial interest and principal payments are paid during the term of the loan, with the the remainder of interest and principal amounts due with the final payment

Question 313

Def: Graduated Payment Note

Answer 313

When the payment amount increases each year and then levels out for the remainder of the term

Question 314

Def: Adjustable Rate Mortgage (ARM)

Answer 314

Interest rate based on index, with there being a cap on how high or low it can go. Interest is at 2% above the rates paid on Treasure Bills with a maximum change of 2% in any year and a maximum change of 6% over the term of the loan.

Question 315

What are the 3 rules of adjustable rate mortgages?

Answer 315

1. Lender must give example
2. Lender can’t control index
3. Borrower can verify index

Question 316

Which of the following statements would be true of a partially amortized loan?

A. The amount going toward interest increases as time goes along
B. At the end of the loan, there is nothing left to be paid off
C. There are generally smaller monthly payments
D. The loan payments consist of interest only

Answer 316

C. There are generally smaller monthly payments

Question 317

A final payment on a loan that was larger than the previous payments would be called a(n):

A. Fully Amortized Loan
B. Balloon Payment
C. Straight Note
D. Term Loan

Answer 317

B. Balloon Payment

Question 318

Which of the following would provide for constant principal and interest payments with the loan completely paid off at the end of a loan?

A. Straight Note
B. Term Loan
C. Partially Amortized Note
D. Fully Amortized Note

Answer 318

D. Fully Amortized Note

Question 319

A 3-year straight note was obtained at 10% per year. Interest paid the first two years was $4,200. The loan on the house was 75% of the value. What was the total value of the property?

A. $21,000
B. $28,000
C. $31,040
D. $38,750

Answer 319

B. $28,000

Question 320

A buyer purchased a property for $200,000. The buyer obtained a 90% loan for 30 years at 4% interest. If the payment factor was $4.77, the monthly mortgage payment would be:

A. $858.60
B. $901.80
C. $978.20
D. $1,100.50

Answer 320

A. $858.60

Question 321

XXXXX

Answer 321

XXXXX

Question 322

Def: Pre-Payment Clause

Answer 322

Lender charges penalty for early pay-off

Question 323

What types of property are most likely to have a Pre-Payment Clause in the mortgage?

Answer 323

Commercial, not typically consumer home loans.

Question 324

Def: Acceleration Clause (Due on Default Clause)

Answer 324

Remaining loan balance becomes due immediately if person defaults on payments

Question 325

Def: Alienation Clause (Due on Sale Clause)

Answer 325

If the property is transferred to somebody else, the remaining loan balance becomes due immediately

Question 326

Def: Subordination Clause (Changes Priority)

Answer 326

Always makes 1st mortgage more important than 2nd mortgages

Question 327

Def: Defeasance Clause (Null and Void Clause)

Answer 327

Mortgage or trust deed is cancelled/terminated after loan is paid off

Question 328

What 2 things can be recorded to show that the note has been paid?

Answer 328

1. Mortgage-Mortgage Release/Satisfaction

2. Trust Deed-Deed of Reconveyance

Question 329

Def: Escalator Clause (with regards to purchase contracts)

Answer 329

Gives lender ability to lower/raise interest rate

Question 330

Def: Alterations Clause

Answer 330

Borrower must obtain lender’s permission for changes

Question 331

Def: Hypothecate

Answer 331

To pledge property as security for an obligation or loan without giving up possession of it

Question 332

Def: Pledging

Answer 332

To pledge property as security for an obligation or loan by giving up possession of it

Question 333

*Def: Impound (i.e. Escrow Account)

Answer 333

*Holding someone else’s money

Question 334

What does the acronym PITI stand for?

Answer 334

P. Principal
I. Interest
T. Taxes
I. Insurance

Question 335

What are 2 ways a buyer can take over a seller’s loan?

Answer 335

1. Subject-To

2. Assumption

Question 336

Def: Subject-To

Answer 336

Buyer takes over payments while the seller is solely liable to the lender

Question 337

Def: Assumption

Answer 337

Buyer takes over payments and primary liability to the lender while the seller is secondarily liable to the lender

Question 338

*In an assumption, what could the seller ask for to not be held liable?

Answer 338

*Release of Liability

Question 339

XXXXX

Answer 339

XXXXX

Question 340

*A lender is adding 1/12 of the annual taxes and insurance to a borrower’s monthly mortgage payment. These prepaid taxes and insurance are kept in a(n):

A. lender’s account of choice
B. borrower’s account
C. impounds or escrow account
D. state account

Answer 340

*C. impounds or escrow account

Question 341

In a subject-to sale, which of the following is always true?

A. The buyer is not required to sign the purchase agreement
B. The seller remains liable for deficiencies on the original loan
C. The deed is conveyed upon signing the purchase agreement
D. The broker gets a deferred commission

Answer 341

B. The seller remains liable for deficiencies on the original loan

Question 342

A prepayment penalty clause would apply to which of the following items?

A. A seller’s loan being assumed by a buyer
B. When personal property was being used as security for a loan
C. A borrower paying off an loan in advance
D. A mortgage where several properties were used as security

Answer 342

C. A borrower paying off an loan in advance

Question 343

Which mortgage clause allows a lender to regain their investment if a borrower does not pay their payment?

A. Alienation
B. Due on sale
C. Acceleration
D. Defeasance

Answer 343

C. Acceleration

Question 344

*A subordination clause in a mortgage does which of the following:

A. It changes the priority of the mortgages
B. It cancels the mortgage after the final payment
C. It prevents the loan from being assumed
D. It calls the loan due and payable upon nonpayment

Answer 344

*A. It changes the priority of the mortgages

Question 345

Which clause in a mortgage would make the loan non-assumable?

A. Acceleration
B. Due on Sale
C. Prepayment
D. Defeasance

Answer 345

B. Due on Sale

Question 346

What are the 11 different types of mortgages available?

Answer 346

1. First Mortgage
2. Second Mortgage (Junior Mortgage)
3. Purchase Money Mortgage
4. Blanket Mortgage
5. Package Mortgage
6. Open End Mortgage
7. Growing Equity Mortgage
8. Construction Loan Mortgage
9. Wraparound Mortgage
10. Reverse Annuity Mortgage
11. Shared Appreciation Mortgage (S.A.M.)

Question 347

Def: First Mortgage

Answer 347

Primary residence mortgage (whenever someone moves, the mortgage for their new home becomes their first mortgage)

Question 348

Def: Second Mortgage (Junior Mortgage)

Answer 348

Any other mortgages (can have multiple at the same time)

Question 349

*Def: Purchase Money Mortgage

Answer 349

*Owner financing. The seller carrying back 2nd mortgage. Seller deeds property to borrower and takes back note and mortgage

Question 350

Def: Blanket Mortgage

Answer 350

A mortgage covering more than one parcel of real estate, providing for each parcel’s partial release from the mortgage lien upon repayment of a definite portion of the debt

Question 351

Def: Package Mortgage

Answer 351

A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings, and major appliances

Question 352

Def: Open End Mortgage

Answer 352

Line of Credit. If you have a lot of equity, the lender will create a home equity line of credit (H.E.L.O.C.)

Question 353

Def: Growing Equity Mortgage

Answer 353

Paying a predetermined extra amount on principal loan balance based on index. Builds equity faster

Question 354

*Def: Construction Loan Mortgage

Answer 354

Money released as needed, the riskiest type of loan

Question 355

What’s the loan at the end of a construction loan?

Answer 355

First Mortgage (Take-Out Loan)

Question 356

Def: Wraparound Mortgage

Answer 356

When the 2nd lender assumes the 1st lender’s loan

Question 357

*Def: Reverse Annuity Mortgage (R.A.M)

Answer 357

*Mortgagee pays mortgagor money monthly. Must have house paid off to do it

Question 358

Def: Shared Appreciation Mortgage (S.A.M.)

Answer 358

Lender agrees to lower interest rate and over time the property appreciates. Once the property is sold, they split the profit.

Question 359

An elderly person has recently made the last payment on a mortgage. This person would like to supplement their retirement income. The loan most likely to help in this situation would be a:

A. Package Mortgage
B. Reverse Annuity Mortgage
C. Blanket Mortgage
D. Purchase Money Mortgage

Answer 359

B. Reverse Annuity Mortgage

Question 360

A homeowner decided to sell their property. However, due to bad economic times, the mortgage interest rates had been rising for several years. In an effort to sell the property, the seller should consider:

A. offering a listing price that is below market value to encourage a quick sale
B. finding a broker to list the property at a reduced commission rate
C. offering owner financing as part of the total financing package
D. making improvements on the property that are not normal for the neighborhood

Answer 360

C. offering owner financing as part of the total financing package

Question 361

A buyer entered into a written agreement to purchase a lot with the seller financing the purchase. The buyer obtained a construction loan to build the house which contained a subordination clause and take-out loan provision. The reason for this was that the buyer:

A. was still liable to both the seller and the lender on the entire financed project
B. would be considered to have a package mortgage to encompass the financing for both the land and the house
C. had to obtain a lender who would do the permanent financing
D. would need to be sheltered from liability in case the builder went bankrupt during the construction of the home

Answer 361

C. had to obtain a lender who would do the permanent financing

Question 362

Because of health problems with lead-based paint, some federal institutions such as FHA are requiring which of the following?

A. Only that a brochure be given to any buyer explaining lead-based paint
B. Verification of any reports issued and all disclosures about lead-based paint have been given to the buyer before a loan is approved
C. Money to be put aside for lead based paint abatement in the future if necessary
D. Disclosure only to the buyer of any known lead-based paint

Answer 362

B. Verification of any reports issued and all disclosures about lead-based paint have been given to the buyer before a loan is approved

Question 363

What is true about both FHA and VA loans?

A. Both require a certificate of eligibility
B. Both require owner occupancy
C. Both require MIP insurance
D. Both allow non-qualifying assumptions

Answer 363

B. Both require owner occupancy

Question 364

An 80% loan to value ratio means that the loan amount will be based on 80% of:

A. the contract price or appraisal, whichever is higher
B. the contract price or appraisal, whichever is lower
C. the contract price
D. the appraisal price

Answer 364

B. the contract price or appraisal, whichever is lower

Question 365

When an FHA 203-B loan is obtained, which generally happens?

A. an FHA appraiser appraises the property
B. There is a maximum of 20 years allowed for the loan term
C. FHA will guarantee a maximum of $27,500 in case of default
D. FHA loans will normally allow the buyer to obtain a 2nd mortgage to cover the down payment

Answer 365

A. an FHA appraiser appraises the property

Question 366

What is an advantage for a borrower who chooses to pay private mortgage insurance (P.M.I.) in receiving a loan?

A. The insurance is tax deductible
B. The borrower can purchase with a lower down payment
C. The borrower receives a lower interest rate
D. The borrower only pays this one time at closing

Answer 366

B. The borrower can purchase with a lower down payment

Question 367

What is the primary purpose of the Federal Housing Administration (F.H.A.)?

A. To buy notes from lenders
B. To make loans to borrowers
C. To set maximum interest rates
D. To insure loans for lenders

Answer 367

D. To insure loans for lenders

Question 368

A buyer purchased a property for $100,000 obtaining an 80% loan to value ratio. The appraisal came in at $80,000. What would be the down payment?

A. $12,800
B. $16,000
C. $19,200
D. $36,000

Answer 368

D. $36,000

Question 369

How much is 1 point worth?

Answer 369

1% of the loan amount

Question 370

*Why does a lender use points?

Answer 370

*To increase the effective yield

Question 371

Def: Buydown

Answer 371

A financing technique used to reduce the monthly payments for the first few years of a loan with discount points

Question 372

Def: Loan Origination Fee

Answer 372

Fee for initiating a loan

Question 373

Def: Lock-In Commitment

Answer 373

When the lender locks buyer in on interest rate and discount points

Question 374

The reason a lender charges discount points is to:

A. cover the costs of initiating the loan
B. increase the effective yield to the lender
C. offset selling the loan at a premium
D. account for the time value of money

Answer 374

B. increase the effective yield to the lender

Question 375

A buyer purchased a $200,000 house obtaining a 90% loan as well as putting up $5,000 in earnest money. The lender charged the buyer 2 discount points, a 1% loan origination fee and a lender’s title insurance fee of $500. How much must the buyer pay for the loan origination fee?

A. $500
B. $1,800
C. $2,000
D. $3,600

Answer 375

B. $1,800

Question 376

A buyer purchased a property for $60,000 putting 15% down and paying two discount points. How much in dollars were the points?

A. $1,020
B. $1,200
C. $1,320
D. $1,500

Answer 376

A. $1,020

Question 377

*What type of financing is Contract for Deed and Land Contracts/Installment Contracts?

Answer 377

*Owner financing

Question 378

*In a contract for deed, what type of title does the buyer obtain?

Answer 378

*Equitable Title

Question 379

What are some advantages of alternative financing?

Answer 379

1. No qualifications
2. Fewer closing costs
3. Low downpayment

Question 380

When does the buyer obtain legal title in a contract for deed?

Answer 380

After the final payment

Question 381

What do Contracts for Deed and Land Contracts/Installment Contracts all have in common?

Answer 381

Seller financing

Question 382

Def: Sale-and-Leaseback

Answer 382

A transaction in which the owner sells improved property and, as part of the same transaction, signs a long-term lease to remain in possession of the premises

Question 383

What are the advantages to a seller in a Sale-and-Leaseback type of financing?

Answer 383

1. Seller gets a lot of money right away

2. Get to deduct lease payments

Question 384

What is the advantage to a buyer in a Sale-and-Leaseback type of financing?

Answer 384

They have a property that increases in value

Question 385

A land contract is also referred to as a(n):

A. installment contract
B. right of first refusal
C. option contract
D. listing contract

Answer 385

A. installment contract

Question 386

In a land contract or contract for deed, the seller who retains the fee simple title is referred to as the:

A. optionor
B. optionee
C. vendee
D. vendor

Answer 386

D. vendor

Question 387

Which of the following statements is true regarding a contract for deed?

A. Seller retains equitable title; buyer gets legal title in one month
B. Seller retains equitable title; buyer gets legal title in one year
C. Seller retains legal title; buyer gets equitable title in one month
D. Seller retains legal title; buyer gets equitable title immediately

Answer 387

D. Seller retains legal title; buyer gets equitable title immediately

Question 388

A seller and a buyer entered into a contract for deed. Which of the following would be true regarding this type of contract?

A. Upon default, all the monies paid by the installment payer (buyer) would be returned to the buyer
B. The buyer receives an equitable title after the contract is paid off
C. The installment payer (buyer) would pay the taxes, insurance and assessments on the property
D. The deed is conveyed at the time of contract

Answer 388

C. The installment payer (buyer) would pay the taxes, insurance and assessments on the property

Question 389

What are 3 ways to control the money supply?

Answer 389

1. Reserve controls by the Federal Reserve
2. Discount Rates
3. Open Market Operations

Question 390

How do lower interest rates effect the economy?

Answer 390

Stimulates the economy

Question 391

How do higher interest rates effect the economy?

Answer 391

Slows the economy

Question 392

If the Federal Reserve Requirement is 30%, how much can lenders loan?

Answer 392

70% (The difference)

Question 393

Def: Discount Rate

Answer 393

The interest rate set by the Federal Reserve that member banks are charged when they borrow money through the Fed

Question 394

Def: Open Market Operations

Answer 394

Buying and selling securities (selling=decreasing money supply while buying=increasing the money supply)

Question 395

What 4 ways does a buyer go to receive a traditional home loan?

Answer 395

1. Savings and Loans (Primarily home loans)
2. Commercial Banks (Primarily business loans)
3. Insurance Companies (Primarily high dollar loans)
4. Mortgage Brokers

Question 396

*What is the main difference between a Mortgage Banker and a Mortgage Broker?

Answer 396

*A Mortgage Banker is part of the primary mortgage market while a Mortgage Broker is not.

Question 397

Mediators who work matching lenders with borrowers are called:

A. Mortgage Bankers
B. Mortgage Brokers
C. Banks
D. Savings and Loans

Answer 397

B. Mortgage Brokers

Question 398

*Why do banks sell their loans?

Answer 398

*Liquidity

Question 399

Def: Estoppel Certificate

Answer 399

States the current loan balance reduction certificate

Question 400

*Def: Federal National Mortgage Association (A.K.A. FNMA/Fannie Mae)

Answer 400

*#1 Purchaser of mortgager pooled mortgages. Raises money by selling government backed bonds.

Question 401

Def: Government National Mortgage Association (A.K.A. GNMA/Ginnie Mae)

Answer 401

Federally chartered, controlled by H.U.D. Buys FHA & VA loans in depressed areas

Question 402

Def: Federal Home Loan Mortgage Corporation (A.K.A. FHLMC/Freddie Mac)

Answer 402

Primarily buys conventional notes from savings & loans

Question 403

Which of the following entities would be part of the secondary mortgage market?

A. Federal National Mortgage Association
B. Savings and Loan
C. Commercial Bank
D. Mortgage Banker

Answer 403

A. Federal National Mortgage Association

Question 404

Def: Usury Laws

Answer 404

Maximum interest rate lenders can charge

Question 405

*What does Truth-In-Lending (Regulation Z) apply to?

Answer 405

• 1. Residential-4 units or less and 5 payments or more

2. Consumer credit

Question 406

*What doesn’t Truth-In-Lending (Regulation Z) apply to?

Answer 406

• 1. Businesses
     
     2. Commercial
     3. Agricultural
     4. Residential-5 units or more

Question 407

*Def: Truth-In-Lending (Regulation Z)

Answer 407

*Lender gives borrower all loan costs including annual percentage rate

Question 408

Def: Right of Rescission

Answer 408

3 Day right to back out

Question 409

*Does Right of Rescission apply to 1st mortgages?

Answer 409

*No

Question 410

How does advertising pertain to Truth-In-Lending (Regulation Z)?

Answer 410

To tell any credit terms, must tell all credit terms

Question 411

Who is exempt from advertising restrictions as it pertains to Truth-In-Lending (Regulation Z)?

Answer 411

For Sales by Owner (FSBO)

Question 412

What is the purpose of the Real Estate Settlement Procedures Act (RESPA)?

Answer 412

To inform borrowers of total closing costs

Question 413

What loans are covered under the Real Estate Settlement Procedures Act (RESPA)?

Answer 413

1. New 1st mortgages (4 units or less)
2. Any loan bought by FNMA
3. Only applies to 25 acres or less

Question 414

What are the 5 items required by Real Estate Settlement Procedures Act (RESPA)?

Answer 414

1. Home Loan Toolkit
2. The loan estimate
3. The Closing Disclosure
4. Limits on pre-paids (taxes and insurance)
5. Prohibition of Kickbacks

Question 415

When must the Home Loan Toolkit be given?

Answer 415

Within 3 business days of the loan application

Question 416

When must the Closing Disclosure (CD) be given?

Answer 416

Within 3 business days before closing

Question 417

What is the time limit on how much can be collected by a lender for escrow with regards to taxes and insurance?

Answer 417

3 Months

Question 418

Def: Prohibition of Kickbacks

Answer 418

Broker cannot be affiliated with lender to avoid conflicts of interest

Question 419

Def: Kickbacks

Answer 419

When the lender gives the broker a referral fee

Question 420

The Equal Credit Opportunity Act bans credit discrimination based on what 8 things?

Answer 420

1. Race
2. National origin
3. Color
4. Sex
5. Age
6. Marital status
7. Religion
8. Public assistance/welfare

Question 421

Which of the following would allow a lender to legally reject a loan for a residential house that was in good repair?

A. The buyer was of a different race than the other neighboring owners
B. The house was located in an area primarily used for light industrial
C. The house was located in a minority area of town
D. The buyer had been recently divorced

Answer 421

B. The house was located in an area primarily used for light industrial

Question 422

*A person was applying for a new VA loan on a single-family home purchase. Which federal law was passed to ensure the buyer received disclosure of the total closing costs?

A. Truth-In-Lending Laws (Regulation Z)
B. The Equal Credit Opportunity Act
C. Usury Laws
D. The Real Estate Settlement Procedures Act (RESPA)

Answer 422

*D. The Real Estate Settlement Procedures Act (RESPA)

Question 423

The Equal Credit Opportunity Act prohibits discrimination based on:

A. sexual orientation
B. a person being a minor
C. a person being a senior citizen
D. a person’s credit rating

Answer 423

C. a person being a senior citizen

Question 424

A lender charging an interest rate that is higher than allowed by law would be violating:

A. Fair Housing laws
B. Equal Credit Opportunity laws
C. Usury laws
D. Securities laws

Answer 424

C. Usury laws

Question 425

*Who oversees and administers the provisions of the Real Estate Settlement Procedures Act (RESPA)?

A. FBI
B. CIA
C. US Department of HUD
D. SEC

Answer 425

*C. US Department of HUD

Question 426

Which of the following loans would fall under the 3-day right of rescission allowed under Regulation Z?

A. A residential loan for a first mortgage
B. A loan for a commercial property
C. A loan for an agricultural property
D. A home improvement loan for a principal residence

Answer 426

D. A home improvement loan for a principal residence

Question 427

Def: Agent

Answer 427

Someone who represents someone else

Question 428

What are the 2 classifications of agents?

Answer 428

1. Special Agent

2. General Agent

Question 429

What is the difference between a Special Agent and a General Agent?

Answer 429

A Special Agent is an agent at one time in one area while a General Agent is an ongoing agent in several areas.

Question 430

What is an example of a General Agent?

Answer 430

Property Manager, Ongoing relationship with broker, etc.

Question 431

*Def: Attorney-In-Fact/Power of Attorney

Answer 431

*Written authority to sign a document for someone else

Question 432

What 3 ways can an agency relationship be created?

Answer 432

1. Expressed
2. Implied
3. Ostensible

Question 433

Def: Expressed Agency

Answer 433

Clearly stated intentions, written document

Question 434

Def: Implied Agency

Answer 434

If the actions of the parties imply they have mutually agreed

Question 435

Def: Ostensible Agency

Answer 435

Appears to be-similar to Implied Agency

Question 436

Def: Fiduciary

Answer 436

Responsibility of loyalty and trust that you owe to your client

Question 437

Def: Sub-Agency

Answer 437

When one broker employs the assistance of another broker to assist the seller

Question 438

XXX

Answer 438

XXX

Question 439

An agent wanting to represent both sides of a transaction and be a dual agent would need to:

A. have written informed consent from both parties
B. have payment from both parties
C. make sure both parties see an attorney
D. make sure both parties receive an agency brochure

Answer 439

A. have written informed consent from both parties

Question 440

A listing agent is showing property to a prospective buyer. The listing agent should disclose to the buyer that the agent:

A. represents both the buyer and seller
B. represents the seller only
C. represents neither the seller nor the buyer
D. is merely a consultant for both parties

Answer 440

B. represents the seller only

Question 441

*An agency agreement between a seller and broker is normally created with an:

A. implied agreement
B. offer and acceptance agreement
C. expressed agreement
D. option agreement

Answer 441

*C. expressed agreement

Question 442

A buyer’s agent presents an offer to a seller. The buyer’s agent is not acting as a dual agent. In relation to the buyer’s agent, the seller would be a(n):

A. client
B. customer
C. principal
D. prospect

Answer 442

B. customer

Question 443

*A husband went to Europe for an extended business trip. The wife then agreed to sell the house to a buyer while the husband was still away. The wife could sell the house herself if:

A. she obtained a letter from her husband authorizing the sale
B. the house was located in a state adhering to community property laws
C. she had been granted power-of-attorney by her husband to sign papers on his behalf
D. she was name executor of the estate

Answer 443

*C. she had been granted power-of-attorney by her husband to sign papers on his behalf

Question 444

A broker is representing a seller as a special agent. Which of the following activities would the broker be able to do?

A. Perform any act as there is no fiduciary relationship
B. Represent the seller in any transactions for which the broker is authorized
C. Deal only with other properties not involving a principal
D. Deal with all of the seller’s properties on a continuous basis

Answer 444

B. Represent the seller in any transactions for which the broker is authorized

Question 445

A fiduciary relationship is created when a broker does which of the following?

A. Brings an offer to purchase
B. Signs a listing contract
C. Takes a third party to apply for financing
D. Disburses earnest money

Answer 445

B. Signs a listing contract

Question 446

The agency relationship normally established between a broker and a seller is a:

A. general agency
B. universal agency
C. special agency
D. ostensible agency

Answer 446

C. special agency

Question 447

What are the 6 client level fiduciary duties (COLDAC)?

Answer 447

C. Care
O. Obedience
L. Loyalty
D. Disclosure (Full)
A. Accounting
C. Confidentiality

Question 448

What are the 3 customer level duties a broker has to a buyer?

Answer 448

1. Fairness
2. Honest
3. Accuracy

Question 449

Def: Latent Defect

Answer 449

Unseen defect

Question 450

*How long of a grace period do you have after the end of a transaction to contact a client?

Answer 450

*18 Months

Question 451

What does the acronym CAN-SPAM (Act) stand for?

Answer 451

Controlling the Assault of Non-Solicited Pornography & Marketing

Question 452

An agent, in trying to obtain a listing from a seller, notices that there are water stains on the ceiling. The seller tells the agent not to disclose to anyone about the water stains. What should the agent do?

A. List the property and follow the seller’s instructions
B. Tell the seller to paint over the water stains and then list
C. Advise all buyers to get inspections done before purchasing
D. Refuse to take the listing

Answer 452

D. Refuse to take the listing

Question 453

A licensee listed a property for sale. The seller informed the licensee that the property contained asbestos insulation in the basement. In this case, the licensee must:

A. tell the seller to remove or wrap the asbestos
B. tell the seller to contact the EPA and get an environmental report on the property
C. disclose of the asbestos to any prospective buyers
D. tell the seller that disclosure is not necessary as inspectors will determine if there are any issues with the asbestos

Answer 453

C. disclose of the asbestos to any prospective buyers

Question 454

*An agent owes care, obedience, accounting, loyalty, disclosure and confidentiality to:

A. principals
B. lenders
C. brokers
D. customers

Answer 454

*A. principals

Question 455

A seller and buyer are awaiting closing on a real estate transaction. The listing agent learns that a zoning change has just taken place on the property. What should the listing agent do?

A. Tell the seller only as the seller is the principal
B. Tell the seller and then see if the seller wants this information to be given to the buyer
C. Don’t tell anyone if the agent deems this information unnecessary
D. Disclose this to all parties in the transaction

Answer 455

D. Disclose this to all parties in the transaction

Question 456

Which of the following would a seller’s agent have to disclose to a buyer?

A. The seller had lived there for one year making no improvements to the property
B. The seller had been convicted of a felony one year ago but has been clean ever since
C. A mental institution was located one mile away
D. The roof on the seller’s property is in bad condition

Answer 456

D. The roof on the seller’s property is in bad condition

Question 457

A licensee was working with a seller principal and a buyer customer on the purchase of a residential home. The licensee was aware that an industrial plant was going to be build behind the residential property in the next few months. The licensee did not disclose this to the buyer. Two months after closing, the industrial plant construction began. In this scenario, the licensee is:

A. not liable as the buyer was a customer, not a client
B. not liable as it is the seller’s responsibility to disclose any adverse material facts
C. liable as the licensee was operating as an undisclosed dual agent
D. liable for failing to disclose of the industrial plant

Answer 457

D. liable for failing to disclose of the industrial plant

Question 458

As a buyer’s agent, which of the following would the agent not have to disclose to a seller?

A. The buyer’s ability to complete the contract
B. The agency relationship between the agent and buyer
C. Any change in the buyer’s financial ability that would affect the contract
D. The buyer was willing to pay more for the property than the offer price

Answer 458

D. The buyer was willing to pay more for the property than the offer price

Question 459

*Who signs a property disclosure statement?

A. Broker
B. Appraiser
C. Lender
D. Seller

Answer 459

*D. Seller

Question 460

A seller’s agent would be guilty of a breach of fiduciary obligation by doing which of the following?

A. Telling the buyer that the seller is in bad financial shape and would take less for the property than the asking price
B. Telling the buyer about property defects
C. Taking a full priced offer of a friend to the seller
D. Taking a full priced offer from the seller’s agent himself with full disclosures of all material and fiduciary facts

Answer 460

A. Telling the buyer that the seller is in bad financial shape and would take less for the property than the asking price

Question 461

How does commission money flow?

Answer 461

The seller pays the listing broker who pays the sales agent.

Question 462

How much commission does a listing agent receive from a sale?

Answer 462

Always negotiable, but generally a percentage of the sale. Could be a flat fee.

Question 463

Def: Sherman Anti-Trust Laws

Answer 463

Price Fixing; when brokers get together and decide to all charge the same commission rate. Illegal.

Question 464

Can a broker share commission with other people?

Answer 464

Only if they are licensed

Question 465

Def: Multiple Listing Service

Answer 465

When the seller pays the listing broker who pays the selling broker. Each broker shares with their own sales agents.

Question 466

What must a selling agent do in order to receive commission for a sale?

Answer 466

Procure Cause

Question 467

Def: Procuring Cause

Answer 467

The person who brings a ready, willing, able buyer to the table

Question 468

Who would sue a seller if they refused to pay the commission?

Answer 468

The listing broker

Question 469

Who would sue the listing broker if they refused to pay the sales agent from a sale?

Answer 469

The listing sales agent

Question 470

*Three real estate managing brokers in a small town all get together and decide to charge the same commission rate. This would be a violation of which law?

A. RESPA
B. Sherman Anti-Trust
C. TILA
D. ECOA

Answer 470

*B. Sherman Anti-Trust

Question 471

What is always true about a real estate commission?

A. An agent cannot be paid by both seller and buyer
B. It is always negotiable
C. The commission percentage is limited by state law
D. It is always paid by the seller

Answer 471

B. It is always negotiable

Question 472

A local multiple listing service (MLS) passed a rule saying that any broker who charges less than 4% commission in a minority area cannot belong to the MLS. Which of the following statements would be true?

A. This is legal as brokers cannot be forced to operate at a financial loss
B. This is legal because without this rule, other brokers would be scared away from joining the MLS
C. This is illegal as this violated federal fair housing laws
D. This is illegal as this violated price fixing laws under the Sherman Anti-Trust laws

Answer 472

D. This is illegal as this violated price fixing laws under the Sherman Anti-Trust laws

Question 473

Which of the following would be an example of a tying contract with a broker?

A. A group of brokers setting a common commission rate
B. A broker referring buyers to a particular lender
C. Requiring a builder to list a finished house with the broker after buying a lot in the subdivision
D. A broker listing a seller’s house for sale and then finding the seller a bigger house to buy in that same area

Answer 473

C. Requiring a builder to list a finished house with the broker after buying a lot in the subdivision

Question 474

*An industrial building sold for $535,000. The listing broker charged a 4.5% commission agreeing to cooperate with other brokers and split the commission 50/50. If a cooperating broker sold the property, how much would each of the brokers receive?

A. $10,535.50
B. $12,037.50
C. $24,075.00
D. $28,975.00

Answer 474

*B. $12,037.50

Question 475

*A broker sells a property receiving $8,400 by charging a 6% commission. What was the sale price?

A. $140,000
B. $157,000
C. $182,000
D. $302,000

Answer 475

*A. $140,000

Question 476

Who is a Property Management Agreement between?

Answer 476

Owner & property manager

Question 477

*What are the 2 purposes of a property manager?

Answer 477

• 1. Maintain property value

2. Produce income

Question 478

*What 5 functions is a property manager responsible for?

Answer 478

1. Collecting rent
2. Maintenance
3. Leases
4. Paying bills
5. Renting unit

Question 479

*What 3 functions is a property manager not responsible for?

Answer 479

• 1. Cannot enter premises without notice and/or permission
     
     2. Renovation
     3. Appraisal

Question 480

What is a property management budget for?

Answer 480

Operating expenses

Question 481

Def: Reserve Account

Answer 481

A savings account to replace long-life assets such as a roof or parking lot

Question 482

An agreement between a property owner and a property manager detailing the managers responsibilities in managing the property would be called a(n):

A. option contract
B. lease agreement
C. property management agreement
D. listing contract

Answer 482

C. property management agreement

Question 483

A property manager is contemplating renting a space to a tenant with a mental disability. The manager is worried about this tenant posing a threat to the other tenants in the building. Under federal guidelines, what should the manager do?

A. Distribute leaflets to the other tenants about the new tenant
B. Inform the property owner if the manager suspects any problems
C. Confer with a manager of a condominium to get another opinion
D. There are no federal guidelines on this issue

Answer 483

B. Inform the property owner if the manager suspects any problems

Question 484

A property manager’s two main objectives are to maintain the value of the property and:

A. generate and produce income from the property
B. minimize expenses
C. avoid lawsuits for the owner
D. get good tenants to occupy the space

Answer 484

A. generate and produce income from the property

Question 485

Def: Conveyance

Answer 485

Transfers deed to the buyer

Question 486

Whose responsibility is it to always produce a valid, marketable title?

Answer 486

The seller

Question 487

An assumed loan in a real estate transaction would appear on the closing statement as a:

A. credit to the buyer only
B. debit to the buyer, credit to the seller
C. debit to the seller, credit to the buyer
D. neither a debit nor credit to the seller

Answer 487

C. debit to the seller, credit to the buyer

Question 488

A listing real estate agent should be aware of all the ownership documents that will be used in a real estate transaction so the agent can:

A. know which documents the seller and buyer will have to sign to complete the transaction
B. give both parties advice on vesting
C. give the seller capital gains advice
D. give both parties inheritance advice

Answer 488

A. know which documents the seller and buyer will have to sign to complete the transaction

Question 489

All of the closing documents should be prepared in accordance with the terms of the:

A. listing contract
B. sales contract
C. right of first refusal contract
D. title policy

Answer 489

B. sales contract

Question 490

*How does earnest money appear on a closing statement?

A. Debit buyer only
B. Credit buyer only
C. Credit seller only
D. Credit buyer and seller

Answer 490

*B. Credit buyer only

Question 491

How would a loan origination fee normally show up on a closing statement?

A. Debit buyer - Credit seller
B. Debit seller - Credit buyer
C. Debit seller - No entry to buyer
D. Debit buyer - No entry to seller

Answer 491

D. Debit buyer - No entry to seller

Question 492

*A property sold for $350,000 with the buyer obtaining an 80% loan. If the transfer fee was $3 per $1,000, what was the amount of the fee?

A. $840
B. $1,050
C. $1,175
D. $1,300

Answer 492

*B. $1,050

Question 493

A property was sold with a 300-gallon fuel tank being part of the sale. The tank was 2/3 full at closing with a cost of $1.45 per gallon. What would be the proration at closing?

A. $100
B. $145
C. $290
D. $435

Answer 493

C. $290

Question 494

A property sold for $125,000 with a loan of $50,000. The seller paid $2,000 in closing costs and a 7% commission? How much would the seller net?

A. $54,250
B. $57,000
C. $61,250
D. $64,250

Answer 494

D. $64,250

Question 495

*Taxes on a property were paid in arrears running from July 1st to June 30th. If closing was on April 15th and the annual taxes were $912, what was the tax proration?

A. $191
B. $437
C. $721
D. $912

Answer 495

*C. $721

Question 496

*A seller received $75,000 at closing after paying a 6.5% commission. What would have been the sale price?

A. $79,875
B. $80,214
C. $82,570
D. $85,356

Answer 496

*B. $80,214

Question 497

XXXXX

Answer 497

XXXXX

Question 498

What are the 6 types of leases?

Answer 498

1. Gross Lease
2. Net Lease
3. Percentage Lease
4. Graduated Lease
5. Index Lease
6. Ground Lease

Question 499

Def: Gross Lease

Answer 499

Normal lease, landlord pays taxes, insurance, etc.

Question 500

Def: Escalation Clause (with regard to leasing)

Answer 500

If landlord’s expenses go up, they can pass part of those costs to the tenant

Question 501

Def: Net Lease

Answer 501

Tenant pays taxes, insurance, basically everything and get tax deduction

Question 502

*Def: Percentage Lease

Answer 502

*Commercial - Rent based on percentage of sales

Question 503

Def: Graduated Lease

Answer 503

Pre-determined that payments could go up (or down)

Question 504

Def: Index Lease

Answer 504

Lease is based on Consumer Pricing Index (published monthly)

Question 505

Def: Ground Lease

Answer 505

Long term leases (cell towers, billboards, oil wells, etc.)

Question 506

What are the 2 ways to transfer lease rights to others?

Answer 506

1. Assignment

2. Subleasing

Question 507

If a lease is assigned, who is liable to the landlord?

Answer 507

The original tenant and new tenant are equally liable. (Total transfer of rights)

Question 508

If a lease is subleased, who is liable to whom?

Answer 508

The new tenant is liable to the original tenant while the original tenant is liable to the landlord. (Partial transfer of rights)

Question 509

What effect does the sale of a home have on an existing lease?

Answer 509

No effect on lease, new owner must honor current leases.

Question 510

Def: Actual Eviction

Answer 510

Landlord would go to court to file a suit for possession

Question 511

Def: Constructive Eviction

Answer 511

When the lessor/landlord does not maintain the property in a livable condition and the lessee/tenant sues. Tenant must leave property.

Question 512

A person builds a building on ground that is leased from a land owner. Which of the following statements would be correct concerning this situation?

A. This is not allowed under federal law
B. When the lease expires, the land owner would own the building
C. It would be easier to get financing this way rather than the land owner and building owner being the same person
D. The land owner would have to notify the building owner if the land was to be sold

Answer 512

B. When the lease expires, the land owner would own the building

Question 513

A tenant signs a three-year lease with a landlord. The landlord dies with heirs inheriting the rental property. The heirs then sold the rental property to a new owner. The new owner would like to terminate the tenant’s lease. can the new owner do so?

A. Yes, because the death of the original landlord
B. Yes, because the rental property had been sold
C. No, unless the new owner gives property notice to the tenants
D. No, the lease is still valid for the remainder of the term

Answer 513

D. No, the lease is still valid for the remainder of the term

Question 514

When a tenant pays taxes and insurance in addition to normal rent, this would be called a:

A. graduated lease
B. percentage lease
C. gross lease
D. net lease

Answer 514

D. net lease

Question 515

*A commercial tenant leased a commercial space from a landlord. The tenant operated a grocery store on the premises. Which of the following statements would be true if the landlord died?

A. The heirs could terminate the lease
B. The heirs have to honor the lease as it runs with the land
C. The heirs could change the terms of the lease as the new owners
D. The heirs must give an automatic renewal to the tenant

Answer 515

*B. The heirs have to honor the lease as it runs with the land

Question 516

What are the 4 different types of listing contracts?

Answer 516

1. Open
2. Exclusive Agency
3. Exclusive Right to Sell
4. Net Listing

Question 517

Def: Open Listing

Answer 517

When anybody can be the procuring cause of the sale

Question 518

Def: Exclusive Agency

Answer 518

Owner and real estate professional both have rights to sell

Question 519

Def: Exclusive Right to Sell

Answer 519

Real estate professional has exclusive right to sell

Question 520

In an Exclusive Right to Sell agency, does the broker have to be the procuring cause to earn a commission?

Answer 520

No

Question 521

*Def: Net Listing

Answer 521

*Commission is the difference between what the seller wants to receive from the sale and the sales price

Question 522

What are the 2 different types of buyer agreements?

Answer 522

1. Open (Non-Exclusive)

2. Exclusive Buyer Agency

Question 523

Def: Open (Non-Exclusive) Agency

Answer 523

Any agent who is the procuring cause gets paid

Question 524

Def: Exclusive Buyer Agency

Answer 524

Only the authorized person can facilitate the buyer buying house

Question 525

What does a listing need to have in order to be valid?

Answer 525

An expiration date

Question 526

Def: Protective Period Clause

Answer 526

If list of people selling agent shows house to buys house within protective period after a listing has expired, selling agent receives commission

Question 527

Def: Employment Contract

Answer 527

The listing contract between a broker & seller is considered to be an employment contract

Question 528

A broker and buyer entered into an exclusive buyer agency agreement for 6 months which was signed on January 1st. In February, the buyer purchased a property on their own. The broker demanded that the buyer pay her a commission. Does the buyer owe the broker a commission?

A. No, because the buyer bought the property without the assistance of the broker
B. No, as sellers always pay commission in a real estate transaction
C. Yes, because of the exclusive buyer agency agreement
D. Yes, but the commission amount would be reduced to a referral fee

Answer 528

C. Yes, because of the exclusive buyer agency agreement

Question 529

*A for-sale-by-owner lists a property with a broker. The broker puts the listing in the multiple listing service. The seller continues to advertise the property themselves. The seller then finds a buyer for their own property but still owes a commission to the broker. This must have been a(n):

A. Exclusive Agency listing
B. Exclusive Right to Sell listing
C. Open listing
D. Net listing

Answer 529

*B. Exclusive Right to Sell listing

Question 530

An exclusive right to sell listing is given by an owner to a broker. Which of the following would be required of the owner?

A. To convey the property if a buyer offers full list price
B. To put the listing in the multiple listing service
C. Pay the broker a commission only if the broker can prove procuring cause
D. Pay the broker a commission upon completion of the sale of property

Answer 530

D. Pay the broker a commission upon completion of the sale of property

Question 531

A broker for Realty A took an open listing on a property. The seller had already signed another open listing with Realty B. The broker for Realty A found a buyer who wrote an offer on the listed property. What should the broker for Realty A do now?

A. Take the offer to Realty B and have Realty B present the offer to the seller
B. Present the offer to the seller
C. Present the offer to the lender
D. Wait a few days to present the offer in case a different buyer might want to make a competing offer

Answer 531

B. Present the offer to the seller

Question 532

A seller lists a property with Broker A. However, the listing provides that if any other broker sells the property, Broker A does not receive a commission. This type of listing would be called a(n):

A. exclusive agency
B. exclusive right to sell
C. open listing
D. net listin

Answer 532

C. open listing

Question 533

An agreement between a seller and a broker where a broker is hired to sell the seller’s property is referred to as a(n):

A. option contract
B. listing agreement
C. buy sell agreement
D. offer to purchase contract

Answer 533

B. listing agreement

Question 534

*A listing contract with a seller is about to expire. The broker has a buyer who is interested in the property but is not quite ready to make an offer. If the broker wants to be protected as far as earning commission if this buyer wants to purchase the property at a later date, the broker would need to do all of the following except:

A. make sure there is a protective period clause in the listing
B. make sure the protective period clause covers a certain number of days
C. give a notice in writing to the buyers that the buyers are on a protective period list
D. give in writing to the seller the names of all the buyers who have looked at the property through the broker

Answer 534

*C. give a notice in writing to the buyers that the buyers are on a protective period list

Question 535

An agency agreement can always be terminated by:

A. the seller unilaterally
B. the broker unilaterally
C. the licensee and seller
D. mutual agreement by all parties to the contract

Answer 535

D. mutual agreement by all parties to the contract

Question 536

A seller lists a property with one broker but reserves the right to sell it herself without paying a commission. This is an example of a(n):

A. exclusive right to sell listing
B. exclusive agency listing
C. open listing
D. net listing

Answer 536

B. exclusive agency listing

Question 537

*Which of the following would not be a valid way for an agent to take a listing?

A. Receiving a percentage of the sale price as a commission
B. Receiving a flat fee
C. Receiving money for fixed expenses in addition to a normal commission
D. Receiving as commission anything obtained in sales price over a certain amount for the seller

Answer 537

*D. Receiving as commission anything obtained in sales price over a certain amount for the seller

Question 538

XXXXX

Answer 538

XXXXX

Question 539

What are the 3 types of brokers insurance?

Answer 539

1. Errors and Omissions
2. Hazard
3. General Liability

Question 540

Def: Hazard Insurance

Answer 540

Protects licensee in case of vandalism

Question 541

Def: General Liability Insurance

Answer 541

Protects brokerage if someone gets hurt in the office

Question 542

A buyer and a seller entered into a contract for the sale of a house. The buyer applied for and was approved for a loan. At the last minute the seller backed out of the sale. Is the broker due a commission?

A. No, because the buyer did not meet all the personal requirements of the seller
B. No, since the sale did not close, the broker did not perform
C. Yes, because the buyer was able to perform all of the requirements in the contract
D. Yes, anytime a contract is signed the broker has performed and is due a fee

Answer 542

C. Yes, because the buyer was able to perform all of the requirements in the contract

Question 543

Def: Capitol Gain

Answer 543

Profit earned from the sale of an asset

Question 544

How much money can you make from the sale of your primary residence without having to pay Capitol Gains tax?

Answer 544

$250K if single or $500K if married and have lived there for 2 of the past 5 years.

Question 545

A buyer purchased a house by financing 90% of the sale price, thus putting 10% down. Which of the following statements would be true regarding this transaction?

A. If he sells the property for profit in the future, he can defer paying capital gains taxes by purchasing another home
B. If he sells the property at a loss, that would be tax deductible if he itemized deductions
C. He could deduct property taxes and mortgage interest if he itemized deductions
D. His taxes will always be lower because he pays mortgage interest on the loan

Answer 545

C. He could deduct property taxes and mortgage interest if he itemized deductions

Question 546

Which of the following statements is true regarding security for a debt?

A. The note secures the mortgage
B. The mortgage secures the note
C. The warranty deed secures the note
D. The note secures the warranty deed

Answer 546

B. The mortgage secures the note

Question 547

Existing easement, restrictions, liens and taxes are listed in which of the following clauses in a warranty deed?

A. Habendum
B. Reservations
C. Granting
D. Conservation

Answer 547

B. Reservations

Question 548

A buyer working with an agent makes an offer on a property offered for sale by owner. The offer is contingent upon the buyer securing an FHA loan. Does this loan have to follow RESPA guidelines?

A. No, because FHA and VA loans do not need to meet HUD guidelines but not RESPA
B. Yes, because an FHA loan is guaranteed by the government
C. No, because the offer was made by a buyer working with a broker
D. Yes, because it is a single family residential property

Answer 548

D. Yes, because it is a single family residential property

Question 549

What are the 2 essential elements of a contract?

Answer 549

1. Competent parties

2. Offer and acceptance - mutual assent

Question 550

At what point can a buyer not withdraw their offer?

Answer 550

When the offeree accepts

Question 551

What is required in order to be considered a competent party with regards to contracts?

Answer 551

1. Legal age + sound mind
2. Must be alive at the time of acceptance
3. Consideration
4. Legal object
5. Writing

Question 552

How does a buyer withdraw if they don’t like the seller’s counter-offer?

Answer 552

Just say no/walk away

Question 553

Once an offer is accepted, what does the buyer receive?

Answer 553

Equitable title

Question 554

If a seller backs out after an offer was accepted, what can the buyer do?

Answer 554

Gives buyer right to sue because buyer has received equitable title meaning they have legal interest in the property.

Question 555

Whose responsibility is earnest money?

Answer 555

The listing broker

Question 556

Can a promise to pay be considered earnest money?

Answer 556

Yes

Question 557

Def: Legal Object (with regards to a contract)

Answer 557

Has to be legal

Question 558

What type of contract cannot be enforced in court?

Answer 558

An oral contract

Question 559

Who must a contract be signed by?

Answer 559

All parties

Question 560

Def: Statute of Frauds

Answer 560

The body of law that governs real estate contracts, leases over a year, and deeds

Question 561

What must a real estate contract describe?

Answer 561

Must describe land legally or at lease adequately

Question 562

An agent brought an offer to a seller with the seller counter offering back to the buyer. In the meantime, another offer was brought to the seller with terms more favorable to the seller. The seller’s best option would be to:

A. rescind the first counteroffer before acceptance and then accept the better offer
B. go ahead and accept the better offer and just ignore the outstanding counteroffer
C. wait for a third offer and hope the other two buyers won’t go elsewhere
D. counteroffer on the new offer and wait back to hear from both buyers

Answer 562

A. rescind the first counteroffer before acceptance and then accept the better offer

Question 563

*A listing agent has received several offers on a listed property all at the same time. The listing agent should:

A. present the offers in the order received
B. present the best offer first
C. present all offers together at the same time
D. present only the offers with pre-approved buyers

Answer 563

*C. present all offers together at the same time

Question 564

What is true when a counteroffer is made?

A. This represents a partial acceptance
B. It is binding on the offeree
C. It voids only part of the previous offer
D. It voids the previous offer

Answer 564

D. It voids the previous offer

Question 565

When does a sales contract become legally binding for the buyer?

A. When the offer is made initially
B. When the offer is presented to the seller
C. When the offer is accepted by the seller
D. When the seller’s acceptance is communicated back to the buyer

Answer 565

D. When the seller’s acceptance is communicated back to the buyer

Question 566

*A person with a mental impairment would like to enter into a contract for the purchase of a piece of real estate. Which of the following statements would be true?

A. The person can sign the contract if a psychiatrist says okay
B. The state would have to provide housing for this person
C. A person appointed by the court as a guardian can sign the contract on behalf of the mentally impaired person
D. This person would never be able to purchase a property

Answer 566

*C. A person appointed by the court as a guardian can sign the contract on behalf of the mentally impaired person

Question 567

Which of the following would be an example of an impossibility of performance regarding a sales contract?

A. A buyer could not qualify for a loan
B. A seller died after signing the sales contract but before closing
C. A seller had signed the contract without the consent and knowledge of the other owners who were joint tenants
D. The property was destroyed by fire after the signing of the contract but before closing

Answer 567

C. A seller had signed the contract without the consent and knowledge of the other owners who were joint tenants

Question 568

A broker has a property listed for $110,000. A buyer tells the listing broker she would like to make an offer of $90,000. What should the listing broker do?

A. Pressure the buyer to raise the amount of the offer
B. Tell the buyer to increase the earnest money with such a low offer
C. Tell the buyer that the broker will present the offer to the seller
D. Tell the buyer that the seller has told the broker not to present such low offers

Answer 568

C. Tell the buyer that the broker will present the offer to the seller

Question 569

*An offer to purchase contract has been presented to the seller. Which of the following statements is true regarding the contract negotiation?

A. Any counteroffer must be close to the terms of the original offer
B. Any counteroffer must be in writing
C. The offer could be withdrawn any time prior to conveyance of an acceptance or rejection
D. The buyer would have a three day right of rescission even after acceptance by the seller

Answer 569

*C. The offer could be withdrawn any time prior to conveyance of an acceptance or rejection

Question 570

Real estate sales contracts must be in writing to be enforceable under which body of law?

A. Real Estate Settlement Procedures Act (RESPA)
B. Statute of Frauds
C. Truth-In-Lending (Regulation Z)
D. Equal Credit Opportunity Act

Answer 570

B. Statute of Frauds

Question 571

Which of the following would be correct concerning the validity of a contract?

A. A legal description of the property is required
B. Earnest money of at least $1 is required
C. Earnest money is not required
D. A verbal contract for real estate would be enforceable in a court of law

Answer 571

C. Earnest money is not required

Question 572

What 2 ways are contract created?

Answer 572

1. Expressed

2. Created by actions

Question 573

How is an expressed contract created?

Answer 573

By clearly stating intentions in writing

Question 574

How is an implied contract created?

Answer 574

By actions

Question 575

What is the difference of a uni-lateral versus a bi-lateral contract?

Answer 575

A uni-lateral contract is a promise for an action while a bi-lateral contract is a promise for a promise.

Question 576

Def: Executory Contract

Answer 576

A promise that’s been made but not completed

Question 577

Def: Executed Contract

Answer 577

All promises complete

Question 578

What can be put in a contract to ensure timely completion?

Answer 578

Time is of the Essence

Question 579

*Which of the following would be an executory unilateral contract?

A. An unexercised option on a property in which a sum of money had been paid for the option
B. An exclusive right to sell listing where the broker had already performed
C. An offer to purchase contract between a buyer and a seller
D. A lease agreement where the tenant had fallen behind six months on rent

Answer 579

*A. An unexercised option on a property in which a sum of money had been paid for the option

Question 580

Time is of the Essence in a contract means that the:

A. contract cannot be rescinded
B. contract terms should be performed punctually
C. transfer of the deed and title should be done as soon as possible
D. damages will be awarded if the contract is not closed on time

Answer 580

B. contract terms should be performed punctually

Question 581

A contract would be considered executed when:

A. the deed has been delivered and accepted
B. all contract terms have been satisfied
C. the deed has been recorded
D. the deed has been acknowledged

Answer 581

B. all contract terms have been satisfied

Question 582

What are 4 different ways to legally classify contracts?

Answer 582

1. Valid and Enforceable
2. Void
3. Voidable
4. Unenforceable

Question 583

What are the essential elements in a Valid and Enforceable contract?

Answer 583

All parties, legal age - sound mind, legal description

Question 584

Why might a contract be Void?

Answer 584

Party not of legal age or sound mind, illegal

Question 585

*What are some examples of voidable contracts?

Answer 585

• 1. Contract signed by a minor
     
     2. Contract signed under duress
     3. Contract signed due to misrepresentation

Question 586

Def: Misrepresentation

Answer 586

Property has been misrepresented; false statement about a material fact, a person intoxicated at the time of signing

Question 587

Def: Puffing

Answer 587

Subjective opinion, embellishing (“This house is on the prettiest side of town.”)

Question 588

Who could void a contract?

Answer 588

Injured party (minor, person under duress or misrepresented party)

Question 589

A property has had termite problems in the past. A broker tells a buyer that the termite problems have been taken care of knowing that the problems actually still exist. The broker is guilty of:

A. deceptive and fraudulent conduct
B. puffing
C. fraud only in skill and care
D. negligent misrepresentation

Answer 589

A. deceptive and fraudulent conduct

Question 590

A licensee, in showing a property to a buyer, told the buyer that property had the most beautiful view in the neighborhood. This would be an example of:

A. misrepresentation
B. puffing
C. rescission
D. just trying to make a sale

Answer 590

B. puffing

Question 591

*A sixteen-year old purchased a property. Two weeks later the seller found out that the buyer was a minor. Which of the following statements is true?

A. The seller could void the deal
B. The sixteen-year old, as the injured party, may void the deal
C. The contract is automatically void
D. The contract is binding on both parties as the two weeks exceeds the 3 day right of rescission

Answer 591

*B. The sixteen-year old, as the injured party, may void the deal

Question 592

What are 4 different ways to change a contract?

Answer 592

1. Breach
2. Assignment
3. Novation
4. Addendum/Amendment

Question 593

Def: Breach

Answer 593

When one or both parties don’t perform

Question 594

What 3 choices does a buyer have if a seller defaults?

Answer 594

1. Specific Performance Suit
2. Rescind
3. Sue for damages

Question 595

*Def: Rescind

Answer 595

*Go back to “status quo”

Question 596

What 4 choices does a seller have if a buyer defaults?

Answer 596

1. Declare contract forfeited
2. Specific performance suit
3. Rescind
4. Sue for damages

Question 597

When a seller declares a contract forfeited because the buyer did not perform, does the seller need to also return the buyer’s earnest money?

Answer 597

No

Question 598

Def: Liquidated Damages Clause

Answer 598

Predetermined damages if a party sues for damages

Question 599

What type of contract cannot be assigned?

Answer 599

Personal services (e.g. football player, lawyer)

Question 600

Def: Assignment (with regards to changing a contract)

Answer 600

Transfers rights (unless contract says otherwise) to new buyer. New buyer must perform.

Question 601

Def: Novation

Answer 601

An assumption with a release of liability (New replaces old)

Question 602

Def: Addendum

Answer 602

An addendum adds something to the contract

Question 603

Def: Amendment

Answer 603

An amendment changes the original contract

Question 604

When a change is needed in a contract, the best way to accomplish this would be with a(n):

A. verbal agreement
B. addendum
C. amendment
D. new contract

Answer 604

C. amendment

Question 605

A buyer and seller negotiated a sale whereby the seller was to include all the kitchen appliances. Upon moving in, the buyer discovered that the seller had taken all the kitchen appliances. What would be the buyer’s best remedy?

A. Declare the contract invalid
B. The buyer is out of luck as the buyer negotiated this himself
C. Sue the seller for partial performance
D. Sue the seller for specific performance

Answer 605

D. Sue the seller for specific performance

Question 606

A seller and buyer have agreed to a sales contract. The buyer backs out of the agreement. Which of the following could the seller not do?

A. Sue for specific performance
B. Rescind the agreement
C. File for a writ of execution
D. Sue for compensatory damages

Answer 606

C. File for a writ of execution

Question 607

What are the characteristics of a Right of First Refusal?

Answer 607

1. Formal Document
2. Person has first opportunity to buy if offered for sale or lease
3. Person can buy by matching any other offer
4. There is no definite sales price
5. All contract laws apply

Question 608

A seller and buyer agree on an option contract. Which of the following statements would be true?

A. It is non-binding on the seller
B. It is binding on the buyer
C. If the buyer does exercise the option, any option money paid would be automatically applied to the purchase price
D. It must be in writing to be enforceable

Answer 608

D. It must be in writing to be enforceable

Question 609

A contract that begins as unilateral but could end up being bilateral is a(n):

A. sales contract
B. option contract
C. offer to purchase contract
D. listing contract

Answer 609

B. option contract

Question 610

*A right to buy a property for a definite sale price with a definite time period is referred to as a(n):

A. sales contract
B. listing contract
C. right of first refusal
D. option contract

Answer 610

D. option contract

Question 611

What type of contract is used to transfer real estate?

Answer 611

Offer to purchase contract - Sales contract

Question 612

In an all cash deal, if either the buyer or seller died, would the contract be automatically terminated?

Answer 612

No. Seller’s estate would have to complete the contract by selling the property to the buyer. Likewise, buyer’s estate would have to complete the contract by buying the property.

Question 613

In a mortgage (financing) contingency clause, what happens to the deal if the buyer dies?

Answer 613

The deal falls through

Question 614

Is a sales contract uni-lateral or bi-lateral?

Answer 614

Bi-lateral

Question 615

Def: Contingency Clause

Answer 615

“I’ll buy your home IF…”

Question 616

What is the difference between a home warranty plan and a construction warranty?

Answer 616

A home warranty plan covers household appliances while a construction warranties are offered by the builder for construction issues.

Question 617

*When after obtaining an offer with earnest money must a sales person deliver to their broker?

Answer 617

*Immediately

Question 618

How much money can a broker keep of their own money in an escrow account?

Answer 618

$1,000

Question 619

Why must every broker have a separate escrow account?

Answer 619

To hold other person’s money

Question 620

*Who receives the interest that an escrow account for earnest money accrues?

Answer 620

*All parties must agree who gets interest

Question 621

Def: Commingling

Answer 621

When you mix personal/business money with escrow money. Illegal!

Question 622

A seller’s agent has a property listed. A buyer would like to make an offer on the property but wants to include an inspection contingency. In order to protect the seller, the listing agent should:

A. discourage these types of contingencies
B. refuse to take such an offer to the seller
C. make the inspection contingency for the shortest time frame possible
D. only allow contingencies based on financial issues

Answer 622

C. make the inspection contingency for the shortest time frame possible

Question 623

A buyer writes a contract with a contingency that says if a certain thing does not happen, the buyer does not have to purchase the property. The contract does not close due to this contingency. Normally, any earnest money should be given to the:

A. buyer
B. seller
C. broker
D. state

Answer 623

A. buyer

Question 624

What is the purpose of earnest money being part of a real estate contract?

A. Without it, there would be no consideration
B. It gives the broker commission money in case the buyer does not close
C. It establishes the intent of the buyer to carry out the contract
D. It provides for payment of some of the buyer’s closing costs

Answer 624

C. It establishes the intent of the buyer to carry out the contract

Question 625

Which of the following would be considered commingling?

A. A broker depositing two different buyer’s earnest money checks into one escrow account
B. A broker refunding a buyer’s earnest money out of the escrow account
C. A broker depositing a client’s earnest money check into the broker’s personal account
D. A broker paying a secretary’s salary out of the broker’s account

Answer 625

C. A broker depositing a client’s earnest money check into the broker’s personal account

Question 626

A buyer made an offer with earnest money to a seller on a listed property. The offer contained a clause saying the offer was only good for 24 hours. While the seller was considering the offer within the 24-hour time frame, the buyer changed his mind and called his buyer’s agent to rescind the offer. The buyer’s agent notified the listing agent of the rescission of the offer. In this case, the earnest money:

A. can only be returned to the buyer if the seller agrees
B. should be returned to the buyer immediately
C. should be held by the brokerage and applied to the next offer the buyer wishes to make
D. can only be returned to the buyer by court order

Answer 626

A. can only be returned to the buyer if the seller agrees

Question 627

*Can brokers draft legal documents?

Answer 627

*No, they can only fill in blank spaces on attorney approved forms. They cannot charge extra for this work or give legal advise.

Question 628

*Who are real estate contracts governed by?

Answer 628

*The state

Question 629

An agent is working with a married couple in the purchase of a home. The couple asks the agent how they should take title to the property. The agent should say:

A. tenancy in the entireties
B. joint tenancy
C. see an attorney
D. tenancy in common

Answer 629

C. see an attorney

Question 630

What are the 4 different types of legal property descriptions?

Answer 630

1. Metes & Bounds
2. Geodetic Survey System
3. Rectangular (Government) Survey System
4. Lot and Block System

Question 631

*Def: Metes & Bounds

Answer 631

*Physical description of the property. Metes means length (e.g. feet, paces, bounds) and Bounds means markers (e.g. oak tree, gravestone). *Must always begin and end at point of beginning.

Question 632

Def: Geodetic Survey System

Answer 632

“Bench marks”

Question 633

Def: Rectangular (Government) Survey System

Answer 633

Describes land by using Land & Tier lines

Question 634

How large is a township?

Answer 634

6 x 6 Miles

Question 635

How large is a section?

Answer 635

1 x 1 Mile

Question 636

How many acres are in a section?

Answer 636

640

Question 637

How many square feet are in an acre?

Answer 637

43,560

Question 638

*Somebody bought a 1/4 section + 15 acres, how many acres did they buy?

A. 175
B. 289
C. 560
D. 200

Answer 638

*A. 175

Question 639

Who must approve a plat map (with regards to a lot and block system?)

Answer 639

The city

Question 640

What does the description on a plat map list?

Answer 640

Lot #, Block #, Subdivision, County and State

Question 641

Def: Setback Lines

Answer 641

How far off the lot lines you can build

Question 642

Def: Front Footage

Answer 642

Linear footage lot line to lot line

Question 643

Def: Square Footage

Answer 643

Length x width

Question 644

*A legal description included Range 2 East and Tier 1 North of a principal meridian. This is an example of:

A. metes and bounds description
B. rectangular survey system description
C. lot and block description
D. geodetic survey system description

Answer 644

*B. rectangular survey system description

Question 645

• A legal description that uses directions, distances and monuments is called:

A. the rectangular survey system
B. the geodetic survey system
C. a metes and bounds description
D. a lot and block description

Answer 645

*C. a metes and bounds description

Question 646

Def: Sole Proprietorship

Answer 646

Where one person forms a company. One man show. No liability protection

Question 647

Def: Syndication

Answer 647

Getting a bunch of people together & pool money. Spreads risk. Raises money.

Question 648

XXXXX

Answer 648

XXXXX

Question 649

Def: Real Estate Investment Trust (REIT)

Answer 649

Big mutual funds for real estate investments. Minimum of 100 people.

Question 650

Def: Securities License

Answer 650

Sale of investment items to the public (e.g. Limited partnerships, REITs, Mortgage securities)

Question 651

Who governs the sale of securities?

Answer 651

The Securities and Exchange Commission (SEC)

Question 652

Def: Limited Liability Company (LLC)

Answer 652

Combines the benefits of the corporation with the benefits of a sole proprietorship. Profits and losses flow through to individual members.

Question 653

A person invested $5,000 in a limited partnership. One of his concerns was the amount of his liability. Since he is one of the limited partners, can he be held liable for more than his initial investment?

A. No because he is guaranteed a 25% return on his investment
B. Yes, because limited partners are responsible for a limited amount of all debts
C. Yes, because he is liable for three times the initial investment
D. No, because he is only liable for his initial investment

Answer 653

D. No, because he is only liable for his initial investment

Question 654

A person who wanted to invest in real estate but did not want to worry about management responsibilities would want to be a:

A. general partner
B. limited partner
C. corporation
D. sole proprietor

Answer 654

B. limited partner

Question 655

In a general partnership (unlimited liability), with regards to partnership, the partners share how much liability?

Answer 655

All liability

Question 656

What are the 3 main fair housing laws that pertain to real estate?

Answer 656

1. Civil Rights Act of 1866
2. Civil Rights Act of 1968 (Title VIII)
3. Fair Housing Amendments Act of 1988

Question 657

*Def: Civil Rights Act of 1866

Answer 657

*“All citizens of the United States shall have the same right in every state and territory as is enjoyed by white citizens thereof, to inherit, purchase, lease, sell, hold, and convey real and personal property.”

Question 658

What does the Civil Rights Act of 1866 protect?

Answer 658

Race only

Question 659

*What 7 things does the Civil Rights Act of 1968 (Title VIII) protect?

Answer 659

• 1. Race
     
     2. Color
     3. Religion
     4. National Origin
     5. Sex
     6. Handicap (1988)
     7. Familial Status (1988)

Question 660

XXXXX

Answer 660

XXXXX

Question 661

Def: Blockbusting

Answer 661

Inducing owners to sell by telling them persons of a protected class are moving into the neighborhood

Question 662

Def: Steering

Answer 662

Directing people towards an area based on a protected class

Question 663

Def: Redlining

Answer 663

Geographically blocking off locations from loaning

Question 664

What 4 parties are exempt from the Civil Rights Act of 1968 (Title VIII)?

Answer 664

1. An owner selling or renting a single-family home if owner
   A. Does not own more than three homes at once
   B. Does not use a broker or agent (must be a FSBO)
   C. Does not discriminate in advertising
2. Owner occupied 2-4-plex in renting
3. Religious organization discriminating on religion (Not commercial!)
4. Private club (Not commercial!)

Question 665

What 1 thing can never be discriminated on by parties exempt from the Civil Rights Act of 1968 (VIII)?

Answer 665

Race

Question 666

What 2 additional protected classes were added to Title VIII in 1988 (Fair Housing Amendments Act of 1988)?

Answer 666

1. Handicap

2. Familial Status

Question 667

What is a handicap?

Answer 667

Physical or Mental

Question 668

What is not a handicap?

Answer 668

Being addicted to illegal drugs

Question 669

XXXXX

Answer 669

XXXXX

Question 670

Who may file a suit with Housing and Urban Development (HUD) with regards to fair housing?

Answer 670

Whoever has been discriminated against

Question 671

What is the time limit to file a suit with Housing and Urban Development (HUD) with regards to fair housing?

Answer 671

1 Year from when discrimination took place

Question 672

If the state and HUD have differing laws regarding fair housing, which will be enforced?

Answer 672

Whichever laws are stricter

Question 673

*Def: Americans with Disabilities Act (ADA)

Answer 673

*Places of public accommodation must be accessible to persons with disabilities - hotels, shopping malls, etc.

Question 674

XXXXX

Answer 674

XXXXX

Question 675

The Americans with Disabilities Act (ADA) would not apply to a(n):

A. office building
B. real estate school
C. commercial building
D. church

Answer 675

D. church

Question 676

A broker has been accused of steering. Which of the following would HUD least consider?

A. What other properties the agent had shown to the person in question
B. Looking at the results from testers who had tested this same agent in the area of fair housing laws
C. That the broker thought he was doing what was in the buyer’s best interest
D. Whether there was a fair housing poster posted at the office

Answer 676

C. That the broker thought he was doing what was in the buyer’s best interest

Question 677

A violation of the federal fair housing laws:

A. may be a criminal act
B. must involve actual damages
C. is permissible under certain circumstances
D. must be filed with HUD within three years of the act

Answer 677

A. may be a criminal act

Question 678

Which of the following would not be a protected class under the federal fair housing laws?

A. A person with children under 18
B. A person with a mental handicap
C. A person with a different national origin
D. A person currently using illegal substances

Answer 678

D. A person currently using illegal substances

Question 679

An agent is working with buyers wishing to purchase an older home in a deteriorating neighborhood. Both of the buyers have good incomes and are well qualified. The buyers have been turned down by three lenders for a loan on the property. The lenders may be guilty of:

A. steering
B. blockbusting
C. price fixing
D. redlining

Answer 679

D. redlining

Question 680

*A broker listed a home for sale. The broker noticed that a lot of Russians were moving into the neighborhood because of a local Russian grocery store in the area. The broker decided to cancel advertising for that listing in the general newspaper and instead advertised the listed property on Russian websites only. This would be:

A. a good marketing plan
B. illegal as this would be discriminatory
C. helpful for Russian people who wanted to move into the area
D. allowed as the broker was not required to advertise in a general newspaper

Answer 680

*B. illegal as this would be discriminatory

Question 681

A broker has sold several homes in the same area to buyers having small children. The broker then advertises to other property owners in the area that they should sell now so they can move to a quieter neighborhood. This is an example of:

A. steering
B. blockbusting
C. redlining
D. puffing

Answer 681

B. blockbusting

Question 682

*Under the federal fair housing laws, which of the following advertisements would be allowed?

A. Adult building
B. No children
C. Wheelchair accessible
D. Down the road from the Holy Rosary

Answer 682

*C. Wheelchair accessible

Question 683

An owner of an 8-plex wants to advertise for seniors only. The building does not have any special facilities for older persons In order for the owner to do this, at least 80% of the units must be occupied by a person who is at least

A. 50 years old
B. 55 years old
C. 62 years old
D. 65 years old

Answer 683

B. 55 years old

Question 684

*Which of the following would be a good example of a person being protected under the federal fair housing laws?

A. A minority person being steered to minority neighborhoods only
B. A blind person with a seeing eye dog being able to rent an apartment that has a no pets policy
C. A property manager refusing to rent to a person with small children
D. A lender refusing to make loans in questionable areas

Answer 684

B. A blind person with a seeing eye dog being able to rent an apartment that has a no pets policy

Question 685

Under the federal fair housing laws, which of the following would not be discriminatory?

A. Refusing to rent to a person because of national origin
B. Refusing to rent to a person with children
C. Refusing to show a minority buyer homes in a white neighborhood
D. Requiring a tenant to remove a ramp from the deck of an apartment at the end of a lease

Answer 685

D. Requiring a tenant to remove a ramp from the deck of an apartment at the end of a lease

Question 686

How long does a person have who has been discriminated against to file a complaint with the Department of Housing and Urban Development (HUD)?

A. 6 Months
B. 1 Year
C. 3 Years
D. 5 Years

Answer 686

B. 1 Year

Question 687

What is the purpose of an appraisal?

Answer 687

To estimate the value of a property (primarily for lender)

Question 688

Def: Broker Price Opinion (BPO)

Answer 688

Similar to CMA, less extensive than appraisal (usually for short sales)

Question 689

How is an appraiser compensated?

Answer 689

All based on time and effort

Question 690

What are the 4 economic characteristics of value?

Answer 690

D. Demand (Is there high demand?)
U. Utility (Has to be useful)
S. Scarcity (Is there a limited supply?)
T. Transferability (Has to be transferrable/marketable title)

Question 691

When the supply is down and the demand is steady, does the home value increase or decrease?

Answer 691

Increase

Question 692

When the supply is up and the demand is steady, does the home value increase or decrease?

Answer 692

Decrease

Question 693

The best way to estimate value for a residential property is with:

A. the owner’s opinion
B. an appraisal
C. what the owner originally paid factoring in a multiplier
D. an estoppel certificate

Answer 693

B. an appraisal

Question 694

What are 2 different types of depreciation?

Answer 694

1. Tax Depreciation

2. Value Depreciation

Question 695

Def: Tax Depreciation

Answer 695

Deliberately lowering the value of an investment property. The amount you lower will come off taxes.

Question 696

Def: Value Depreciation

Answer 696

The item goes down in value because of wear & tear & age

Question 697

Does land ever depreciate in value?

Answer 697

No

Question 698

What are the 2 different types of life (with regards to depreciation)?

Answer 698

1. Physical Life

2. Economic Life

Question 699

Def: Physical Life (with regards to depreciation)

Answer 699

Number of years something can be structurally sound

Question 700

Def: Economic Life (with regards to depreciation)

Answer 700

Number of years something can be profitable

Question 701

Is physical life or economic life always shorter?

Answer 701

Economic life

Question 702

XXXXX

Answer 702

XXXXX

Question 703

Def: Effective Age (with regards to depreciation)

Answer 703

Based on condition. Maintained and improved over years (e.g. 30 year old property looks 20)

Question 704

Def: Chronological Age (with regards to depreciation)

Answer 704

Actual age of a property

Question 705

Which of the following would one normally depreciate?

A. A building only
B. Land only
C. Land and a building
D. The difference between land and a building

Answer 705

A. A building only

Question 706

XXXXX

Answer 706

XXXXX

Question 707

Def: Highest and Best Use (with regards to principles of value)

Answer 707

The purpose from which the lot can get the most value

Question 708

Def: Substitution (with regards to principles of value)

Answer 708

A property is only worth what you can get an identical one for

Question 709

Def: Conformity (with regards to principles of value)

Answer 709

Does the property conform to the market?

Question 710

Def: Progression (with regards to conformity and the principles of value)

Answer 710

When the worth of a cheaper property increases because it’s around more expensive properties

Question 711

Def: Regression (with regards to conformity and the principles of value)

Answer 711

When the worth of the more expensive property decreases because it is around cheaper properties

Question 712

Def: Anticipation (with regards to principles of value)

Answer 712

What’s going to happen in the next few years that might effect the property value?

Question 713

What drives competition (with regards to principles of value)?

Answer 713

Profit

Question 714

What is the worth of a contribution (with regards to principles of value)?

A. How much it cost to build
B. The value of the house minus the land
C. The previous property value times 1 1/2
D. What it added to the value of the property

Answer 714

D. What it added to the value of the property

Question 715

Def: Plottage Increment (Assemblage)

Answer 715

If the combination value is more than the sum

Question 716

The principle of progression in the selling of a property would be best illustrated when the other homes in the neighborhood:

A. had adequate maintenance and repairs
B. are not as nice as the sold property
C. were nicer than the sold property
D. were mostly rented properties

Answer 716

C. were nicer than the sold property

Question 717

A buyer purchases 3 properties. After the buyer combines all 3 properties, the entire parcel is now more valuable than before. This is called:

A. being in the right place at the right time
B. increasing returns
C. plottage
D. anticipation

Answer 717

C. plottage

Question 718

An investor purchases some agricultural land believing the property might someday end up being valuable commercial land for a shopping center. The investor is purchasing this land based on the concept of:

A. anticipation
B. plottage
C. conformity
D. substitution

Answer 718

A. anticipation

Question 719

What is the best way to appraise residential/vacant land?

Answer 719

Market Data Approach

Question 720

What is the best way to determine a list price for a residential property?

A. Mortgage value
B. Competitive Market Analysis (CMA)
C. Assessed value
D. Appraised Value

Answer 720

B. Competitive Market Analysis (CMA) or Sales Comparison

Question 721

A licensee does a competitive market analysis (CMA) in order to help a seller determine:

A. the assessed value
B. the value of the personal property located inside the house
C. a probable selling price
D. tax write-offs on their tax return

Answer 721

C. a probable selling price

Question 722

Which approach to value is best to use in estimating the value of vacant land?

A. Income approach
B. Cost approach
C. Sales comparison approach
D. Rent approach

Answer 722

C. Sales comparison approach

Question 723

Some out-of-towners had inherited some property. They contacted a local broker to sell the property. The out-of-towners wanted to list the property for $50,000. The broker knew that similar properties in that area were selling for $80,000. What should the broker do?

A. Buy the property personally because of the profit potential
B. List the property for $50,000 as a broker must be obedient to a client
C. Suggest a market analysis for the seller to estimate the current value of the property
D. Require a professional appraisal be done before listing the house

Answer 723

C. Suggest a market analysis for the seller to estimate the current value of the property

Question 724

How does an appraiser estimate the value if there are no comparables?

Answer 724

Cost Approach

Question 725

Why might a property not have any comparables?

Answer 725

New property, special purpose property (e.g. church)

Question 726

What are the 3 steps in the cost approach?

Answer 726

1. Estimate current replacement cost
2. Subtract for depreciation
3. Add the current land value

Question 727

XXXXX

Answer 727

XXXXX

Question 728

Def: Square Foot Method

Answer 728

Length x Width x cost per square foot

Question 729

Def: Cubic Foot Method

Answer 729

Length x Width x Height

Question 730

Def: Quantity Survey Method

Answer 730

Price items individually (brick-by-brick)

Question 731

Def: Unit-In-Place Method

Answer 731

Price items by units (wall-by-wall)

Question 732

Def: Reproduction Cost

Answer 732

An exact replica

Question 733

Def: Replacement Cost

Answer 733

Similar

Question 734

*Def: Physical Deterioration

Answer 734

*Property just got old, usually curable

Question 735

*Def: Functional Obsolescence

Answer 735

*Problems inside the property lines Original bad floor plan - incurable (e.g. missing closets, bathroom is outside)

Question 736

Def: Economic (External) Obsolescence

Answer 736

Outside property lines (e.g. house right next door to an airport)

Question 737

*A house with outdated plumbing fixtures would be an example of:

A. physical deterioration
B. economic obsolescence
C. curable functional obsolescence
D. incurable functional obsolescence

Answer 737

*C. curable functional obsolescence

Question 738

In the cost approach to value, which of the following would lease affect depreciation?

A. Land value going down
B. Physical deterioration to a building
C. Functional obsolescence on a property
D. Exterior obsolescence where a property is next to a toxic dump site

Answer 738

A. Land value going down

Question 739

The cost approach to value can best be defined as using:

A. capitalization rates
B. depreciated cost of construction
C. comparable sold properties
D. income factoring in vacancy rates

Answer 739

B. depreciated cost of construction

Question 740

A retail building suffers loss of usable space due to a number of narrowly spaced support columns. It also is cooled by window air conditioning units. This building suffers from:

A. deferred maintenance
B. functional obsolescence
C. economic obsolescence
D. external obsolescence

Answer 740

B. functional obsolescence

Question 741

*How might a property owner of a house suffer a loss of value due to a new shopping center being build nearby?

A. Psychological impact
B. Economic obsolescence
C. Basis analysis loss
D. Locational depreciation

Answer 741

B. Economic obsolescence

Question 742

The cost approach to value would be best used on a(n):

A. residential home
B. apartment complex
C. church
D. office building

Answer 742

C. church

Question 743

Which approach to value would be best for an apartment complex?

A. Market Data Approach
B. Income Approach
C. Cost Approach
D. Sales Comparison Approach

Answer 743

B. Income Approach

Question 744

What 2 different approaches to value both fall under the Income Approach?

Answer 744

1. Capitalization Approach

2. Gross Rent Multiplier

Question 745

What are the 3 approaches to value?

Answer 745

1. Market Data Approach
2. Cost Approach
3. Income Approach

Question 746

In the market data approach, which of the following items would be most important?

A. The gross rent multiplier
B. The capitalization rate
C. Sales comparisons
D. Original price paid for property

Answer 746

C. Sales comparisons