chapter 1 quiz review Flashcards by Corin Mora

A licensed real estate professional acting as a point of contact between two or more people in negotiating the sale, rental or purchase of a property Is known as a(n):

Sales affiliate
Sponsoring Broker
Property manager
Appraiser

sponsoring broker

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All of the following would affect demand EXCEPT:

Population
Demographics
Wage levels
Government fiscal policy

government fiscal policy

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The two characteristics of real estate that govern the way the market reacts to supply and
demand are:
Financing and appraisal
Mobility and conformity
Uniqueness and immobility
Demographics and interest rates

Uniqueness and immobility

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. Real estate markets are best described as:
Mobile
Balanced
Local
Immune to supply and demand forces

local

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Certain items on the premises that are installed by the tenant and are related to the tenant’s
business are called:
Fixtures
Emblements
Trade fixtures
Easements

trade fixtures

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Which of the following is NOT described as personal property?
Chattels
Trade fixtures
Emblements
Fixtures

fixtures

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Real Estate is defined as:
The earth’s surface extending downward to the center of the earth and upward to infinity.
Interest, rights, and benefits that are included in the ownership of Real Estate.
Land at above and below the earth’s surface plus all things permanently attached to it.
The ownership of Real Estate.

Land at above and below the earth’s surface plus all things permanently attached to it.

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According to law, a trade fixture is:
A fixture
An easement
Personalty
A license

Personalty

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Suzy is interested in a house that fits most of her needs; but is located in a busy downtown area where she is not sure she wants to live. Her concern about location is called:
Physical deterioration
Area preference
Permanence of investment
Immobility

Area preference

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An important characteristic of land is that it may be modified or improved at any given time. Depending on its type, an improvement may increase the value of real estate greatly. Which one of the following would NOT be considered to be an improvement?
Sewers
Crops
Buildings
Roads

crops

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The word Improvement refers to all of the following EXCEPT:
Streets
A sanitary sewer system
Trade fixtures
The foundation

trade fixtures

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Real property can become personal property by:
Severance
Purchase
Hypothecation
Attachment

severance

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The rights of ownership of real property does NOT include the right of:
Disposition
Exclusivity
Control
Compatibility

compatibility

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A rancher owns a parcel of land on which oil was discovered. If the rancher has not previously conveyed the oil rights, who owns the oil?
The rancher
The tenant to whom the property has been leased
The state government
The federal government

the rancher

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The foremost consideration in the purchase of a home is its affordability. What is the second?
Construction specifications
The age of the improvements
The location of the property
The landscaping and exterior

the location of the property

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The real costs of owning a home include certain costs or expenses that many people overlook. All of the following are such costs or expenses EXCEPT:
The income lost on cash invested in the home
The interest paid on borrowed capital
Maintenance and repair expenses
Property taxes

The income lost on cash invested in the home

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A basic homeowner’s insurance policy would protect all of the following EXCEPT:
Fire and lightening
Earthquake and volcanic action
Windstorm and hail
Water damage caused by a leaking pipe

Earthquake and volcanic action

A longer mortgage loan term will:
Decrease the number of loans being made
Result in lower monthly mortgage payments
Prevent many individuals from owning homes
cause interest rates to increase

Result in lower monthly mortgage payments

All of the following are categories of the uses of real property EXCEPT:
residential.
developmental.
agricultural.
industrial.

developmental

All of the following are false regarding the decrease of the supply of a commodity EXCEPT:
prices tend to rise.
prices tend to drop.
demand tends to rise.
demand tends to drop.

prices tend to rise

When the demand of a commodity decreases:
prices tend to rise.
prices tend to drop.
supply tends to rise.
supply tends to drop.

prices tend to drop

The phrase “bundle of legal rights” is properly included in:
the definition of real property.
a legal description.
real estate transactions.
leases for less than one year.

the definition of real property.

The right to control one’s property includes all of the following EXCEPT the right to:
invite people on the property for a political fundraiser.
exclude the utilities meter reader.
erect “no trespassing” signs.
enjoy pride of ownership.

exclude the utilities meter reader

All of the following are considered to be real property EXCEPT:
A. wood-burning fireplace
awnings
bathtubs
patio furniture

patio furniture

The owner of a property attached a garage door opener to her house. Several years later when she listed her property, she instructed the agent that she intended to take the garage door opener with her when she moved. Can she do this? Yes, the act would be known as severance, and is permissible as long as it's stipulated in the sales contract. Yes, the act would be known as annexation, and is permissible as long as it's stipulated in the sales contract. No, once the garage door opener was attached to a property the law considers it real property and it cannot be removed. No, because the owner should have removed the garage door opener before talking with an agent.

Yes, the act would be known as severance, and is permissible as long as it's stipulated in the sales contract.

All of the following are physical characteristics of land EXCEPT: indestructibility. uniqueness. immobility. scarcity.

scarcity

Fixtures are: real property. chattels. removable by a tenant before the expiration of the lease. removable by a tenant after the expiration of the lease.

real property

All of the following are economic characteristics of land EXCEPT: scarcity. permanence of investment. uniqueness area preference.

uniqueness

The geographic location of any parcel of land can: be changed as some substances are removable from the land. never be changed. be changed because the topography can be changed. be changed only under certain legal circumstances

never be changed

Legally, the term improvements refers to all of the following EXCEPT: sidewalks sewers. shrubbery. retaining walls.

shrubbery

All of the following are tests for determining a fixture EXCEPT: intent of the parties. size of the item. method of attachment of the item. adaptation of the item to the real estate.

size of the item

The owner of a house wants to fence the yard for her dog. When the fence is erected, the fencing materials are converted to real estate by: severance. annexation. immobility. indestructibility.

annexation

A mobile home is generally considered personal property UNLESS: it costs over $50,000. it is owner-occupied for more than six months out of each year. it has been permanently affixed to its foundation. it was transferred prior to March 1.

it had been permanently affixed to its foundation

The official name of the law that governs real estate activities in Illinois is the: Banking and Real Estate Licensure Act. Real Estate License Act of 2000. Real Estate License Law of 1997. Illinois Compiled License Law of 1983.

Real estate license act of 2000

Most homeowner’s insurance policies contain which of the following clauses? A property improvement clause A coinsurance clause A co-ownership clause A property devaluation clause

a coinsurance clause

When preparing his or her annual income tax return, the homeowner may be able to deduct all of the following EXCEPT: real estate taxes. mortgage interest on a first home. mortgage interest on a second home. mortgage interest on a third home.

mortgage interest on a third home.

Federal income tax regulations allow a homeowner to reduce his or her annual taxable income by amounts paid for: repairs and maintenance. hazard insurance premiums. real estate taxes only. real estate mortgage interest and real estate taxes.

real estate mortgage interest and real estate taxes.

Mr. and Mrs. Horton have been living in their condominium at the shore for the past 4 years and leasing to a tenant the house that they bought 25 years ago. If they sell their house, how much of the capital gain will be taxable? 0 percent 40 percent 50 percent 100 percent

50 percent

The value that an owner has in the property that exceeds the amount of the mortgage debt is called: equality. escrow. surplus. equity.

equity

The philosophy behind an exchange is: Income tax should not apply as long as a real estate investment remains intact A personal residence qualifies for tax deferment Increase depreciation deductions Marital rights need not be released

Income tax should not apply as long as a real estate investment remains intact