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Real Estate Exam Prep > Real Estate Q's > Flashcards

Real Estate Q's Flashcards

1
Q

Main difference between the terms real estate and real property is that only real property includes

A

improvements

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2
Q

Littoral Rights

A

Property bordering a stationary body of water, such as a lake or sea. In contrast, riparian rights belong to the owner of property bordering a flowing body of water.

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3
Q

The land and improvements, and all legal rights, powers, and privileges of real estate ownership are called

A

real property

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4
Q

Readily movable property

A

personal property

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5
Q

To sell personal belongings such as household furnishings, one would most likely use a document called a

A

bill of sale; sales contracts and purchase offers are used in the sale of real property

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6
Q

The legal notice that a lawsuit is pending affecting title or possession of a specific property is a

A

lis pendens

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7
Q

Involuntary lien

A

occurs through a legal proceeding in which a creditor places a claim on real and/or personal property to obtain payment of a debt

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8
Q

Ownership of rights that belong to the owner of property bordering a flowing body of water are

A

riparian rights

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9
Q

A reference to a lot and block number can be generally found on

A

municipal tax maps and various deeds

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10
Q

Metes and bounds

A

Can be recognized by the fact that the description starts at a point of beginning. It is created from a survey of the property by a licensed surveyor.

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11
Q

Ownership, possession, and control of a property that is contingent upon living and lost at death define a

A

life estate

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12
Q

Ownership for an undetermined length of time is called a

A

freehold estate

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13
Q

Estate for years

A

An estate for a fixed time period.

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14
Q

Estate at sufferance

A

When a person does not leave the property after a lease has expired.

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15
Q

Fee simple estates and life estates are two examples of

A

freehold estates, which describe ownership for an undetermined length of time

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16
Q

periodic estate or tenancy

A

type of leasehold estate that renews itself automatically if no notice is given

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17
Q

Alienation

A

transfer of property

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18
Q

Periodic estates and estates for years are what type of estates?

A

leasehold

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19
Q

pur autre via

A

similar to a life estate except a person’s life interest will last for the life of another person instead of their own

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20
Q

The right of occupancy to a cooperative is evidenced by a

A

proprietary lease

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21
Q

A cooperative apartment purchase differs from other types of property transactions because

A

a cooperative purchase involves purchasing an interest in a corporation and purchasing shares of stock

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22
Q

escheat

A

reversion of an intestate decedent’s property to the state

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23
Q

lien

A

A type of encumbrance, a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. Ex: mortgage, judgement, and property taxes

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24
Q

easement by prescription

A

is obtained by the use of land without of the owner’s permission for a legally prescribed length of time

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25
Q

easement by condemnation

A

easement created by government’s right of eminent domain

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26
Q

easement in gross

A

refers to a type of commercial easement, ex: utility pole

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27
Q

surveyors and appraisers fees in relation to property development are

A

indirect costs

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28
Q

costs for labor and materials are

A

hard or direct costs

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29
Q

impact fees

A

made to the municipality by a developer for infrastructure and other requirements

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30
Q

arm’s length transaction

A

the parties act independently and have no relationship to each other, they are not relatives

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31
Q

plottage value of land

A

combining two or more parcels of land into one tract that has more value than the total value of the individual parcels

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32
Q

the appraisal approach to value that considers the price to reproduce a property when it was new

A

cost approach

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33
Q

Which appraisal approach to value is the most applicable approach for appraising single-family residential properties?

A

sales comparison approach to value, which takes other very similar properties and adjusts their value to come up with a value for the subject property

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34
Q

income approach to value

A

estimates the potential gross income, requires an estimate of net operating income of the property, is based on the principal of anticipation

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35
Q

properties such as schools, hospitals, and government office buildings are generally appraised using the

A

cost approach because there are few comparables and the properties are not income-producing

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36
Q

Reproduction Cost vs Replacement Cost

A

reproduction cost is the cost to produce an exact duplicate of a building while replacement cost does not produce an exact duplicate

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37
Q

A value estimate of real property is a(n)

A

appraisal of single-family home

38
Q

Feasibility studies, highest and best use studies, and land utilization studies are all forms of

A

evaluation studies

39
Q

Two elements used to derive the gross rent multiplier

A

comparable sales price and rental income for the property, Gross Rent Multiplier (GRM) = Sale Price / Potential Gross Income

40
Q

functional obsolescence

A

results from defects in the efficiency or functioning of a property such as a two-story residential property with only one bathroom

41
Q

Which appraisal approach to value depends most heavily on replacement value?

A

Cost

42
Q

sales comparison approach vs comparative market analysis

A

Adjustments are generally made only when using the sales comparison approach. The sales comparison approach is used by appraisers as one method of valuing residential property. The comparative market analysis is generally used by real estate agents to find a listing price for a property.

43
Q

In the sale of a real estate investment, the taxpayer is taxed on the

A

gain or profit; the time value of money calculates the value of an asset in the past, present, or future and is based on the premise that the original investment will increase in value over a certain time

44
Q

Tax Depreciation

A

A deductible allowance from net income of property when arriving at taxable income.

45
Q

An appraisal performed by a licensed or certified appraiser is required for all real estate-related financial transactions except those with a transaction value

A

$250,000 or less

46
Q

Certified General Appraiser

A

can appraise all types of real property

47
Q

If a municipality dies not have the services to support a new development, the municipality may impose a

A

moratorium - delay in allowing development of property that is imposed only for public welfare

48
Q

Permission to use the land in a way that is not normally allowed by the dimensional or physical requirements of the zoning ordinance.

A

Variance

49
Q

The Interstate Land Sales Full Disclosures Act regulates developers of subdivisions of

A

25 or more lots offered across state lines

50
Q

Cluster Development

A

occurs when buildings are built closer together to preserve open space (parks, trails, swimming pools, etc.)

51
Q

The document that permits occupation of a structure by tenants or owners is called a(n)

A

certificate of occupancy

52
Q

What is the rate at which at house appreciates?

A

New value – old value = change in value

53
Q

What is the rate at which at house depreciates?

A

Old value – new value = change in value

54
Q

Interstate Land Sales Full Disclosure Act

A

Developers offering 25 or more lots across state lines must provide a property report to the prospective buyer and a statement of record to HUD

55
Q

A permitted deviation from the dimensional or physical requirements of current zoning

A

Variance

56
Q

Special use permits

A

must be granted with special permission by the planning board/legislative body

57
Q

requires all documents that create a interest in real estate to be in writing

A

Statute of Frauds

58
Q

States if landowners are lax in protecting their rights, they may lose them

A

Doctrine of Laches

59
Q

an element that is friable and can cause lung cancer when released in the air

A

asbestos

60
Q

element that is radioactive and measured in picocuries

A

radon

61
Q

Law that seeks reimbursement from responsible parties that have caused hazardous waste

A

Comprehensive Environmental Response, Compensation, and Liability Act

62
Q

Federal org that oversees navigation, floor control, and dredging projects

A

US Army Corps of Engineers

63
Q

HUD

A

Department of Housing and Urban Development; administers funding for projects related to housing

64
Q

What happens next after an environmental impact statement for a development is completed?

A

A public comment period and public hearing

65
Q

The only true and impartial standard for setting assessments is

A

market value

66
Q

in rem

A

this legal proceeding occurs when an action is brought against the real property directly and not against an individual and his personal property

67
Q

The tax rate is determined by the amount of the

A

tax levy

68
Q

tax rate = __ / __

A

tax rate = tax dollars required/taxable assessed value

69
Q

appropriation

A

occurs when a government agency sets aside funds for a certain purpose

70
Q

tax map

A

type of map, drawn to scale, showing all of the real property parcels in a city, town, or other assessing units

71
Q

the division of property and school tax monies so that school districts, counties, towns, and cities in the different municipalities all pay their fair share of the tax levy

A

Apportionment

72
Q

A percentage of a property’s market value. This figure is used for property tax purposes and ultimately determines how the total tax is shared among property owners.

A

Assessment

73
Q

Tax Levy

A

The amount that the municipality must raise by taxes is the tax levy. The difference between proposed expenditures and revenues from various sources such as state and federal aid determine the tax levy.

74
Q

The giving of something, which need not be monetary value, as an inducement to contract

A

Consideration

75
Q

Mortgage Contingency Clause

A

States that the contract is contingent upon the purchaser’s receipt of a mortgage commitment. If the purchaser does not obtain a commitment by a certain date, the contract may be canceled and the deposit returned to the seller.

76
Q

Penalties for extremely bad behavior by a party and for fraudulent advantage taken by one party over another

A

punitive damages

77
Q

most typical example of liquidated damages

A

forfeiture of earnest money

78
Q

Fraud vs Misrepresention vs Mutual mistake

A

Fraud - intentional deceit
Mutual mistake - mistake of a material fact by both parties, causes the contract to be voidable but not void
Misrepresentation - unintentional misstatement of facts

79
Q

When the parties to the contract have definitely agreed to all terms and conditions, the contract is known as

A

Express

80
Q

Law that requires all contracts that create an interest in real estate be in writing to be enforceable in court is the

A

Statute of Frauds

81
Q

Cooperative Contract of Sale vs Proprietary Lease

A

A contract of sale that is specifically for the transfer of cooperatives is generally used for the sale of cooperative property. The proprietary lease documents the interest and regulations of the owner’s interest in the cooperative.

82
Q

Any improper control or influence by one person over another.

A

Undue influence

83
Q

The threat of violence or placing a person in fear of his/her safety.

A

Duress

84
Q

Fraud vs Misrepresentation

A

Fraud is the intentional misstatement of facts. Misrepresentation is the unintentional misstatement of facts.

85
Q

Subprime Lenders

A

Provide loans to borrowers who are risky candidates for repayment

86
Q

Actual conveyance of the title to a disinterested third party during the payment term

A

Title Theory

87
Q

Property condition disclosure forms are completed by

A

Seller

88
Q

Legacy vs Devise

A

Legacy is personal property given to someone by a will. Real property transferred at death is a devise.

89
Q

The seller accepts a purchase money mortgage from the buyer. On the closing statement this amount appears as a

A

seller debit

90
Q

In reference to condominiums and cooperatives, what defines an assessment?

A

Payable to the homeowner’s association for maintenance of the common elements

91
Q

Condensed history of a property’s title

A

Abstract of Title

92
Q

What is the long term (12+ months) capital gains tax for property owners in the 15%+ tax bracket?

A

15%, home sellers may be eligible to exclude of up $250,000 (single) or $500,000 (married) of the capital gain on the sale of a residence if they owned and resided in the home for at least two of the last five years before the sale

Real Estate Exam Prep (6 decks)

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