NJ Real Estate 3

Question 1

A person has been using another person’s land for 30 years without permission. They may have a legal claim to the land by which means of ownership?

Answer 1

adverse possession

Adverse possession laws are very old laws found in every state. The idea behind this type of possession is that if the true owner is so disinterested in the land they own that they allow someone else to use it for a long period of time (depending on the state, 7-40 years), the person using it has rights based on the fact they were treating the property as their own.

Question 2

A condominium is legally defined as:

Answer 2

a community where homeowners have the title to one piece of indvidual property and the right to use community property shared with others

Question 3

A stream and large rock are referenced in a property description. Which type of land description would this be considered?

Answer 3

metes and bounds

Explanation:
Monuments and occupancy markers are sometimes used in metes and bounds property descriptions. Monuments include both natural and manmade items like large trees, rocks, or fences. Occupancy descriptions include more vague owned properties, such as “Carlson’s Farm.”

Governmental survey is just another term for rectangular survey.

Question 4

Rectangular survey is used in many states as a way to evenly divide property into 6 even square mile areas. What are these areas called?

Answer 4

townships

Explanation:
The divisions created in rectangular survey property descriptions are called townships.

Question 5

______ would determine if there is encroachment on a property?

Answer 5

Survey

Explanation:
A survey determines if one’s building or property encroaches (trespasses) on another’s. A survey is typically part of a real estate contract.

Question 6

What is meant by riparian rights?

Answer 6

The property owner has property that borders a moving body of water.

Explanation:
If a property owner has riparian rights, their property borders a moving body of water such as a river or stream. Typically, a property owner with riparian rights can not meddle with the natural flow of the water touching their property.

Question 7

Document outlines the environmental effects that are caused by new development?

Answer 7

Environmental Impact Report

The Environmental Impact Report (Statement) describes the likely environmental effects a new development will have. The document is sometimes required by local governmental agencies before new construction is started.

Question 8

Which deed is used to release rights to property in an effort to obtain clear title?

Answer 8

quitclaim deed

Explanation:
There is no warranty afforded with a quitclaim deed and the grantor gives up all rights to the property. In a bargain and sale deed, the grantor does maintain that he/she has an interest in the property. A reconveyance deed is used when a borrower (homeowner) is released from a mortgage; records will show that the mortgage has been paid off.

Question 9

What is the term for restrictions, easements, or liens that give others rights to a property?

Answer 9

encumbrances

Explanation:
Encumbrances give land use rights to others besides the owner, such as right-of-ways

Question 10

____ is the right to acquire ownership of private Real Estate for public use.

Answer 10

Eminent domain

Explanation:
When a government agency or a private entity needs land for public use, they access private land through eminent domain.

Question 11

____ is the right of the government to acquire property when the owner dies intestate and has no heirs eligible to inherit the property.

Answer 11

Escheat

Explanation:
When a property owner dies without a will or survivors, the state assumes title through escheat.

Question 12

Upon sale, the instrument that conveys ownership rights to personal property is a ____ and that dealing with real property is a ____.

Answer 12

bill of sale, deed

Explanation:
A bill of sale transfers title to personal property and a deed transfers title to real property.

Question 13

As is the case with most homes, what is the term for pledging something as security for a loan without the necessity of giving it up?

Answer 13

hypothecation

Explanation:
Hypothecation allows a property owner to use the property as security for the loan while still being able to occupy it.

Question 14

What is a right to use another’s land called?

Answer 14

easement

Explanation:
Easements such as party walls connecting adjoining dwellings allow others the right to use another’s land.

Question 15

____ are annual crops planted on real property but are considered personal property.

Answer 15

Emblements

Explanation:
Usually for agricultural easements, emblements are crops that are considered personal property while still being attached to the land.

Question 16

How many square feet in one acre?

Answer 16

There are 43,560 square feet in an acre.

Question 17

Mr. and Mrs. Conners sold their home and paid an 8% commission to their realtor. Assuming no other fees, if they walked away from the sale with $306,000, about how much did their house sell for?

Answer 17

$332,600

Explanation:
To solve this problem, set up an equation using P for the answer you seek:

You know that the seller walked away with $306,000.
If the agent was to take 8% of the selling price (P), then the seller received 92% of the selling price.
So, the equation would look like this:

Amount seller received (306,000) = P (selling price) x 92% (0.92)

306,000 = P x 0.92

To isolate P (the unknown) on one side, divide both sides of the equation by 0.92 and you have:

306,0000.92=P
Divide and you have the actual answer: 332,608.695 etc.

Notice that the question says “about,” so round to find the correct answer among the choices given: $332,600

Question 18

How does a home equity line of credit differ from a second mortgage?

Answer 18

With a home equity line of credit the borrower can draw money as they need it.

Explanation:
In a traditional second mortgage, a borrower would take all of the money loaned to them at one time. In a home equity line of credit the borrower may take up to a specified amount, but they do not need to take that amount in full or all at one time.

Question 19

What is the primary advantage of a biweekly mortgage?

Answer 19

faster loan payoff

Because there are 26 2-week periods each year, those with a biweekly mortgage will make 13 yearly payments instead of 12. This results in a faster loan payoff, typically between 18-22 years. While easier budgeting and a better interest rate may be true in certain mortgage scenarios, the primary advantage of a biweekly mortgage is faster loan payoff.

Question 20

When a property is released from a mortgage because it has been paid off by the borrower, what document does the lender provide to prove this to be true?

Answer 20

satisfaction piece

Question 21

Which government entity was created to encourage low-income housing?

Answer 21

GNMA (Ginnie Mae)

Explanation:
While all of these are second mortgage markets and Freddie Mac does have multiple low-income housing programs, only Ginnie Mae was created to encourage low-income housing.

Question 22

What is the purpose of underwriting?

Answer 22

to determine the risks of making a loan

Explanation:
Mortgage lenders use a process called underwriting to assess the risks of making a loan. To assess a potential borrower’s risk, they look at factors such as salary, credit history, and terms of employment.