Which statement is true of title insurance?
a. It is required by law
b. It insures the owner against defects in title
c. It reveals all defects in the chain of title
d. It is only required for commercial property
The interest rate of an adjustable rate mortgage may rise or fall based on the
a. interest rate cap.
b. adjustment period.
c. index.
d. margin.
Which of the following is true of a land sales contract?
a. Beneficiary holds naked legal title
b. Purchaser holds equitable title
c. Vendee holds full legal title
d. Mortgagor holds title
Which of the following is a copyrighted term owned by NAR?
a. Realty
b. Realtist
c. REALTOR
d. Narob
In some states, a mortgage is considered to be a lien on real property. In other states a
mortgage is interpreted as
a. a bona fide purchase.
b. a transfer of title.
c. a sales contract.
d. equitable title.
A borrower can expect to pay a mortgage insurance premium for
a. an FHA insured loan.
b. an 80% conventional loan.
c. a graduated payment loan.
d. an accelerated payment loan.
The property tax year runs from January 1 through December 31. The taxes on a certain
house are $1,440 this year and have not yet been paid. If the house sells and the closing
date is December 10th, the
a. buyer owes the seller $82.85.
b. buyer owes the seller $1,357.15.
c. seller owes the buyer $82.85.
d. seller owes the buyer $1,357.15.
A property can be exempt from allowing children if
a. it is generally occupied by persons 62 years or older.
b. there is a swimming pool.
c. there are no schools nearby.
d. there is no play area.
If an investor is seeking the greatest risk and the greatest return, when should he buy?
a. Before construction
b. During construction
c. After construction
d. Upon occupancy by anchor tenants
When one holds unimproved land as an investment, expenses such as taxes and interest
are
a. not deductible for income tax purposes.
b. deductible in the year in which the expenses are incurred.
c. deductible the following year.
d. deductible only when the property is sold.
The value of the property above the total liens or mortgages is called
a. the equity.
b. due on sale.
c. the assessment.
d. the loan-to-value ratio.
A rental property produces $2,000 per month in rents and consumes $600 per month in
operating expenses. The mortgage payment is $1,200 per month. For the investor, this
property produces a
a. positive cash flow.
b. zero cash flow.
c. negative flow.
d. break even cash flow.
Sara Jane, a married woman, and Don Dudley, a single man, may NOT own real estate
as
a. tenants in common.
b. joint tenants.
c. tenants by the entirety.
d. a concurrent estate.
Which of the following is a lien on real property?
a. Paid property taxes
b. Easements
c. Mortgages
d. Right of way
If you are an owner of a unit in a co-op apartment, your interest would be
a. a tenancy at will.
b. a proprietary lease.
c. fee simple.
d. a stock-option.
Over time, states have established licensing requirements dealing with all EXCEPT
a. minimum age.
b. education.
c. residency.
d. Intelligence Quotient (IQ).
The sale of a timeshare is regulated in a growing number of states. These regulations
typically include requiring that
a. a timeshare developer and his staff must have a broker’s license.
b. there is a “cooling off” period before sales are final.
c. timeshares to be conveyed by deed.
d. developers purchase a bond to insure against a loss in exchange privileges.
Examples of zoning ordinances are
a. condemnations.
b. prescribed architectural design.
c. density limitations.
d. house color.
If a contract of sale is subject to the buyer’s ability to secure a loan, and after diligent
effort the buyer is unable to do so by the stated deadline, the
a. contract would become void.
b. contract would be voidable by the seller only.
c. buyer must be allowed additional time to meet the condition.
d. contract would be voidable by the buyer.
A standard owner’s title insurance policy covers
a. forgery and impersonation.
b. matters a prudent buyer could discover on their own.
c. water rights.
d. government restrictions.
The legal grace period in an option to purchase real estate is how long?
a. 72 hours
b. 5 days
c. 30 days
d. There is no grace period
Which of the following would be classified as limited common elements in a
condominium development?
a. Elevators
b. Hallways
c. Assigned parking spaces
d. The manager’s apartment
Residential landlord tenant laws recently enacted in many states have modified the
reliance on common law and contract tenancy right. These changes include all of the
following EXCEPT
a. the landlord must supply a fit and habitable premise.
b. limits on the amount of security deposit that can be required.
c. statutory procedures required for collecting back rent and evicting a tenant.
d. defining a leasehold as a recordable real property belonging to the tenant.
Weldon bought a duplex and lives in one half. On his tax report, he can deduct
a. all expenses on only the half he lives in.
b. all expenses on the rented half.
c. all expenses on both halves.
d. no expenses because it is his residence.
A timeshare offering typically includes
a. no guarantee that the resort rental will be available for a long period such as 20 to 40
years.
b. a long-term lease allowing use for one week each year with the rent paid in advance.
c. a cooperative corporation selling shares of stock and proprietary leaseholds.
d. a qualified fee estate for one or more weeks per year conveyed by deed.
The Americans with Disabilities Act (ADA) is a federal law giving disabled individuals
the right of access to commercial facilities open to the public.
To apply the market data approach, a real estate appraiser must collect all the following
data on each comparable sale EXCEPT
a. date of sale.
b. marketability of title.
c. financing terms.
d. sale price.
Which of the following will always involve a plat?
a. Lot and Block system
b. U.S. Geodetic survey system
c. U.S. rectangular survey
d. Tax assessor’s parcel numbers
The buyer agreed to buy the property at the seller’s asking price. They shook hands on
the deal. Later, the seller refused to sell. If the buyer still wants to buy, he can
a. hire an attorney and sue for non-performance.
b. go to a small claims court and sue for damages.
c. consult a real estate broker and ask her to explain that the seller must honor the
agreement.
d. do nothing.
A person who makes a will is called
a. a devisee.
b. a testator.
c. a legatee.
d. an executor.
Kelly finds that her intended improvement, a veterinary clinic, is allowed by the zoning
classification of her land only if she gets specific approval for that single use. This is
most likely an example of
a. a nonconforming use.
b. a variance.
c. an illegal spot zoning.
d. a conditional use permit.
A property is assessed at $25,000. With a tax rate of $2.50 per hundred, what will the
taxes be?
a. $100
b. $625
c. $1,000
d. $6,250
The first step in determining the amount of taxable gain upon the sale of an
owner-occupied residence is to calculate the home’s ____________________.
If an applicant is purchasing a home as a(n) ____________________, the lender will be
more cautious because, during periods of high vacancy, the property may not generate
enough income.
A ____________________ trust takes effect after death.
Under a deed of trust, the lender is known as the ____________________.
In the automatic form of trusteeship, the trustee is named in the deed of trust but is not
personally notified of the appointment.
A licensed salesperson has an open listing with Sara and an exclusive listing with
Kelley. One week after both listings expire, Sara and Kelley sell their homes to each
other. With no more information available, the licensee would claim a commission from
both parties.
Seller motivation is considered most in the income approach.
____________________ inflation results from increasing the money supply faster than
increases in goods and services to buy.
Any subsequent purchasers of a property must obtain a new policy if they desire title
insurance.
In regard to a partnership, ____________________ refers to the possibility that it may
be difficult to sell one’s partnership interest on short notice in order to raise cash.
A loan where items classed as personal property are included with the real estate is
called a(n) ____________________ mortgage.
The Federal Reserve Board influences the national economy by adjusting interest rates.
The absence of duress, menace and undue influence are requirements of lawful
objective.
The covenant of _________________________ requires the borrower to keep the
mortgaged property in good condition.
Timber on land becomes ____________________ property.
Among the items to be prorated at a settlement or escrow closing taxes and rents.
The deed from that is considered to be the best for the buyer is the
_________________________ deed.