Real Estate Exam

Question 1

Void Contract

Answer 1

A contract that was never legal to begin with.

Question 2

Voidable Contract

Answer 2

A contract that seems to be valid on the surface, but may be rejected by one or both parties.

Question 3

Buyer Agency Agreement

Answer 3

A principal-agent relationship in which the sponsoring broker is the agent for the buyer. Opposite of a listing agreement.

Question 4

Exclusive Buyer Agency Agreement

Answer 4

The broker is entitled to payment regardless of whether she locates the property.

Question 5

Exclusive-Agency Buyer Agency Agreement

Answer 5

Brokers are only entitled to payment if they locate the property the buyer purchases.

Question 6

Open Buyer Agency Agreement

Answer 6

Nonexclusive relationship between the buyer and broker. The buyer is obligated to compensate only the broker who locates the property the buyer purchases.

Question 7

General Warranty Deed

Answer 7

A deed in which the grantor fully warrants good clear title. Offers the most protection of any deed, and is used in most real estate transfer. Has FIVE covenants.

Question 8

Special Warranty Deed

Answer 8

A deed in which the grantor guarantees the title only against defects arising during the period of her ownership of the property (not against defects existing before that time).

Question 9

Bargain and Sale Deed

Answer 9

A deed that carries no warranties against liens or other encumbrances but does imply that grantor has the right to convey title. The grantor may add warranties to the deed at his discretion

Question 10

Quitclaim Deed

Answer 10

Grantor provides no warranties. Usually used when putting a family member on a deed.

Question 11

Deed in Trust

Answer 11

The trustor conveys real estate to a trustee for the benefit of a beneficiary. The real estate is held by the trustee to fulfill the purpose of the trust.

Question 12

Trustee’s Deed

Answer 12

Is used when a trustee conveys real estate held in the trust to the beneficiary.

Question 13

Deed Executed Pursuant to Court Order

Answer 13

Result of a foreclosure or bankruptcy.

Question 14

Who needs to sign a valid deed?

Answer 14

Grantor signature required, but not grantee.

Question 15

When is title transferred?

Answer 15

When the deed is actually delivered to and accepted by the grantee.

Question 16

In Illinois, a grantor’s spouse is expected to sign any deed of conveyance to waive homestead rights. True or False?

Answer 16

True

Question 17

Remainder Interest

Answer 17

Who the property will pass to when the life estate ends. Created by the grantor.

Question 18

Reversionary Interest

Answer 18

The creator of the life estate (grantor) may not choose to name a remainderman. If so, the grantor will recapture ownership when the life estate ends. The ownership is said to “revert to the original owner.”

Question 19

Police Powers

Answer 19

The government’s right to impose laws, statutes, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, and welfare.

Question 20

How many square feet in an acre?

Answer 20

43,560 square feet.

Question 21

National Do Not Call Registry

Answer 21

A list of phone numbers of consumers who do not want to be contacted by commercial telemarketers. Managed by the Federal Trade Commission (FTC). Licensees are allowed to call consumers with whom they have an established business relationship up to 18 months after the consumer’s last payment. For consumers who made inquiries, licensees are allowed to contact them for up to 3 months.

Question 22

Liquidated Damages Clause

Answer 22

Allows the seller to keep the earnest money deposit after a breach of contract from the buyer.

Question 23

Statute of Limitations

Answer 23

Oral Contracts: 5 years
Written Contracts: 10 years

Question 24

Amendment

Answer 24

A change to an existing contract.

Question 25

Addendum

Answer 25

Any provision added to an existing contract without altering the content of the original.

Question 26

Land Contract

Answer 26

The seller retains legal title, and the buyer takes possession and gets equitable title. Also called a Purchase Money Mortgage.

Question 27

Civil Rights Act of 1866

Answer 27

Race/Color

Question 28

Fair Housing Act of 1968

Answer 28

Race, Color, Religion, National Origin

Question 29

Housing and Community Act of 1974

Answer 29

Race, Color, Religion, National Origin, Sex.

Question 30

Fair Housing Amendments Act of 1988

Answer 30

Race, Color, Religion, National Origin, Sex, Disability, and Familial Status

Question 31

Illinois Human Rights Act

Answer 31

Race, Color, Religion, National Origin, Sex, Disability, and Familial Status, Age and Marital Status.

Question 32

General Lien

Answer 32

Affects all the property, both real and personal, of a debtor. Includes judgements, estate and inheritance taxes, decedent’s debts, corporate franchise taxes, and IRS taxes.

Question 33

Specific Lien

Answer 33

Secured by specific property and affect only that particular property. Includes mechanics liens, mortgage liens, real estate tax liens, and special assessment/utility liens.

Question 34

Subordination Agreements

Answer 34

Written agreements between lienholders to change the priority of mortgage, judgment, and other liens.

Question 35

Conditional Use Permit

Answer 35

Written governmental permission allowing a use inconsistent with zoning but necessary for the common good, such as locating an emergency medical facility in a predominantly residential area.

Question 36

Variance

Answer 36

Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances.

Question 37

Nonconforming Use

Answer 37

A use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area.

Question 38

Tenancy in Common

Answer 38

Each tenant holds an undivided fractional interest in the property.

Question 39

Joint Tenancy

Answer 39

Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon death of a joint tenant, the decedent’s interest passes to the surviving joint tenant or tenants by the Right of Survivorship.

Question 40

Rescission

Answer 40

Terminate the contract, and returns the parties to their original positions before the contract.

Question 41

Cancellation

Answer 41

Terminates a contract without a return to the original position.

Question 42

Escheat

Answer 42

When the state may acquire privately owned or personal property.

Question 43

Straight Loan

Answer 43

Also called a Term Loan. When only interest is paid during the term of the loan, while the entire principal amount due with the final interest payment.

Question 44

Appurtenance

Answer 44

A right, privilege, or improvement belonging to, and passing with the land.