Exam 1: Definitions Exam 8

Question 1

Police power may be defined as the right or power of regulation by government for the promotion of the health, safety, or general welfare of the public. Which of the following is an example of the exercise of police power?
A)
The taking of private property for use by a municipality
B)
Condemnation of property by the federal government
C)
Zoning by a municipality
D)
Restrictions in a deed

Answer 1

Zoning by a municipality

Question 2

The quickness with which assets can be converted into cash is known as
A)
yield.
B)
liquidity.
C)
risk.
D)
leverage.

Answer 2

liquidity

Question 3

What is the first step in the appraisal process?
A)
Define the appraisal problem
B)
Organize the data program
C)
Make a preliminary survey and appraisal plan
D)
Classify the data

Answer 3

Define the appraisal problem

Question 4

Franklin offered to perform all of the obligations in a purchase contract. This act is considered a
A)
condition.
B)
demand.
C)
tender.
D)
covenant.

Answer 4

tender

Question 5

The bargained rent between the landlord and the tenant that is actually paid by the tenant is known as
A)
basic rent.
B)
contract rent.
C)
standard rent.
D)
economic rent.

Answer 5

contract rent.

Question 6

Broker Way had an open listing on Hall’s property. Way presented a low offer from Dole, which was not accepted by Hall. Later, Hall also gave an open listing to Broker Cass. Dole made a higher offer through Cass, which was accepted. Broker Way sued for his commission as the procuring cause of sale. Which of the following is most likely correct?
A)
Way could not collect as he or she had to be not only the procuring cause but also the one who consummated the sale.
B)
Way could not collect unless he or she had proof that the listing was in effect at the time of the sale.
C)
Way wins 50% of his commission.
D)
Way wins the entire commission.

Answer 6

Way could not collect as he or she had to be not only the procuring cause but also the one who consummated the sale.

Question 7

An apartment was purchased by a buyer who gave a $30,000 cash down payment, assumed a $60,000 first trust deed, and agreed to pay $2,400 for delinquent real property taxes. The buyer also agreed to pay 50% of the broker's 5% commission and $1,150 for closing costs. For tax purposes, the buyer's basis will be most nearly
A)
$92,400.
B)
$90,000.
C)
none of these.
D)
$95,800.

Answer 7

95,800

Question 8

A broker signs an exclusive loan listing with a borrower authorizing him to negotiate a loan directly or indirectly using real property as collateral. This agreement requires a definite termination date of NOT more than
A)
45 days.
B)
30 days.
C)
15 days.
D)
60 days.

Answer 8

45 days.

Question 9

All of these statements about depreciation are true EXCEPT
A)
it can be a loss of value due to wear and tear.
B)
it always is concerned with intrinsic factors but never with extraneous factors.
C)
it includes all influences that reduce the value of property below replacement cost.
D)
it is a loss of value from any cause.

Answer 9

it always is concerned with intrinsic factors but never with extraneous factors.

Question 10

A listing agent gave part of his commission to the buyer. He
A)
may be disciplined by the real estate commissioner.
B)
is guilty of committing a civilly wrong act.
C)
must disclose this to the seller.
D)
is guilty of criminal action

Answer 10

must disclose this to the seller.

Question 11

Under the Real Estate Settlement Procedures Act (RESPA) lenders are required to give borrowers
A)
a bill of sale.
B)
a good-faith estimate.
C)
an invoice not exceeding $10 for the special information booklet.
D)
the amount of mortgage interest.

Answer 11

a good-faith estimate.

Question 12

The act of a nonriparian owner who diverts water from a nearby lake or river for personal beneficial use is known as
A)
prescription.
B)
accretion.
C)
percolation.
D)
appropriation.

Answer 12

appropriation

Question 13

Which document is NOT a means of creating an interest in real property?
A)
Mortgage
B)
Deed
C)
Lease
D)
Bill of sale

Answer 13

Bill of sale

Question 14

A real estate licensee negotiated the sale of a farm for a seller. The agent's commission can be paid in which form?
A)
Check or cash
B)
Assignment of funds from buyer to seller
C)
Assignment of existing note
D)
Any of these

Answer 14

Any of these

Question 15

What BEST describes an attorney-in-fact?
A)
A legally competent person appointed to represent another person through a power of attorney
B)
A lawyer appointed by the court
C)
A person with a dual agency
D)
A lawyer acting as an attorney for a client

Answer 15

A legally competent person appointed to represent another person through a power of attorney

Question 16

A trend is defined by appraisers as being
A)
an observable change in the appraisal process.
B)
a series of related changes brought about by a chain of causes and effects.
C)
series of changes at the national level.
D)
changes brought about by the economic and political forces working in the market.

Answer 16

a series of related changes brought about by a chain of causes and effects.

Question 17

The subject matter, unknown to either party, ceased to exist so that the contract performance was impossible. The resultant contract is

Answer 17

void

Question 18

Which "runs with the land"?
A)
Covenants
B)
Appurtenant easements
C)
All of these
D)
Stock in a mutual water company

Answer 18

All of these

Question 19

Unless otherwise specifically stated, a grant deed presumes to convey
A)
a life estate.
B)
a fee simple defeasible estate.
C)
an estate for years.
D)
in fee simple.

Answer 19

in fee simple.

Question 20

The terms good, sufficient, valuable, and adequate relate to

Answer 20

consideration

Question 21

What would create an interest in property with possessory rights but no form of title?
A)
Easement
B)
Land contract
C)
Mortgage
D)
Sublease

Answer 21

Sublease

Question 22

In planning a shopping center in a suburban community, which would be the most important consideration?
A)
Amenities
B)
Proximity of shipping and warehousing facilities
C)
Weather
D)
Purchasing power

Answer 22

Purchasing power

Question 23

If an owner grants possessory rights in real property to another for less than the owner's interest, this would be identified as a(n)
A)
subordinated lease.
B)
uninsured lease.
C)
sale-leaseback.
D)
lease.

Answer 23

lease.

Question 24

The opposite of collusion is
A)
default.
B)
collaboration.
C)
bona fide.
D)
secret agreement.

Answer 24

bona fide.

Question 25

A real estate licensee is canvassing an area in order to secure listings for an office. The agent tells the prospective sellers that minority groups are moving into the area and it would be advantageous to sell at this time. If the licensee canvasses in this manner, she
A)
would not be disciplined by the real estate commissioner if the prospective sellers were members of a minority group.
B)
would not be disciplined by the real estate commissioner since this is a legitimate selling tactic.
C)
would not be disciplined by the real estate commissioner if the broker had instructed her to canvass in this manner.
D)
would be disciplined by the real estate commissioner for canvassing in this manner.

Answer 25

would be disciplined by the real estate commissioner for canvassing in this manner.