National 2

Question 1

A farmer is a tenant and is informed the land he farms has been sold. The farmer may have to

Answer 1

• Leave the property with a future right to harvest his growing crops at maturity
• The farmer has the right to return and harvest his plantings, if the sale happened after planting and before harvest when the lease expires.

Question 2

When the government takes private property for public use and pays just compensation, this is called

Answer 2

• Eminent domain
• Eminent domain is the right of the government to take private land for a public use. Condemnation is the legal action or process.

Question 3

Which of the following is an example of a private control on land?

Answer 3

Deed restrictions

Question 4

An example of police power to restrict an owner’s use and enjoyment of a property is

Answer 4

• Building codes

- Building codes are governmental controls to protect the welfare of the public

Question 5

When a court seizes a property by court order, and the property is security for a debt or judgment, this is known as

Answer 5

• Attachment

- The seizing of a dwelling by court order is attachment and may be sold at public auction

Question 6

A buyer would prefer which, a land contract or a purchase money mortgage?

Answer 6

• Purchase money mortgage
• With a land installment contract the deed does not pass to the buyer until final payment. With a purchase money mortgage the deed will pass upon the day of closing.

Question 7

A property’s gross rent multiplier is used to determine which type of income?

Answer 7

-Gross income is used to calculate a property’s GRM

Question 8

A motorcycle has a tax levied on the sales price. This is what type of tax?

Answer 8

• Ad valorem

- Ad valorem means according to value as in a sales tax

Question 9

The acceptance of another individual’s duties and rights in a pre-existing agreement is a(n)

Answer 9

• Assumption

- The taking of another person’s rights is an assumption

Question 10

As of the day of closing, real estate taxes are prorated. The real estate taxes are a

Answer 10

• Debit seller credit buyer

- Real estate taxes are a debit to the seller to bring the taxes current

Question 11

Any substance that can aggravate or cause cancer is considered to be

Answer 11

• Carcinogen

- A carcinogen can aggravate and cause cancer

Question 12

An estoppel certificate from a bank indicates

Answer 12

• Amount of principal still owed on a mortgage
• An estoppel certificate is a legal document stating the current principal balanced owed as of a certain date. The owner agrees the balanced owed is correct and will have no defense in the future otherwise.

Question 13

The income capitalization method uses

Answer 13

• Net income

- The annual capitalization method uses net income

Question 14

A single-family rental property would use which of the following income approach method?

Answer 14

• Gross rent multiplier

- GRM is best used on a smaller single family dwelling

Question 15

Molly buys a twenty year old home. She has the home tested for radon. The test results show a reading of 5.2 pCi/L. Is the seller required to mitigate the property?

Answer 15

• No, unless the seller and buyer agree to it per contract - - The government recommends mitigation on readings over4.0 pCi/L but does not require such mitigation.

Question 16

Government regulations that set standards for construction and building to protect the welfare of the public are

Answer 16

• Building codes

- Building codes set minimum standards for construction and building

Question 17

The legal description that uses distance and direction and a point of beginning is

Answer 17

Metes and bounds

Question 18

What document would special restrictions applying to all properties in a subdivision appear in?

Answer 18

• CC&R’s

- CC&R’s help to maintain property values

Question 19

A tax levied on property owners to support construction of improvements i.e. curbs, sidewalks sewers are referred to as

Answer 19

Special assessment tax Taxes for improvements to an area are called special assessments

Question 20

A buyer makes an offer of 245,000 on a property. The seller responds at no less than 260,000. The seller made a(n)

Answer 20

Counteroffer

Question 21

All property is classified into two categories, real and

Answer 21

Personal Personal property is not attached to the land and is moveable

Question 22

Which of the following is the result of gross income minus vacancies and collections?

Answer 22

• Effective gross income

- Effective gross income is the result of gross income minus vacancy and collections

Question 23

Concerning a voidable contract, which of the following is true?

Answer 23

• The innocent party may void the agreement

- Only the innocent party may void the contract, but is not required to.

Question 24

A daughter is selling her deceased mother’s property. She removes a bench seat that matches a built-in dining table, drapes, livingroom suite, and paintings hung on the wall. Which would be considered real property?

Answer 24

• Bench seat

- The bench seat would be considered real property because it was custom built to match the built-in dining table