Worksheets(Do Last) School Exam Study Guide 2
Total questions: 106
Worksheet time: 27hrs 30mins
In the sale of real property owned by a limited partnership, who must sign the sales contract or deed for it to be valid?
Each limited partner
Any limited partner
Each general partner
Any general partner
As agent of the seller, a real estate broker is usually NOT authorized to
bind the principal under a sales contract
advertise the listed property
place a For Sale sign on the listed property
cooperate with other brokers to effect a sale
Which is true about valid contracts?
Money must be the consideration
If the date is left off the contract, the contract is void
Earnest money is an essential consideration
The consideration can be the mutual promises to perform
A section of land sold for $1 million. What was the price per acre?
$22.95
$15,625
$22,960
$1,562.50
When a person dies testate, her real property will
escheat to the government
pass to the next kin
descend to the survivors
pass to the devisees
A civil action brought by the U.S. Attorney General, what is the maximum civil penalty that can be assessed against a respondent for a first violation of the federal Fair Housing Act?
$10,000
$25,000
$50,000
$100,000
In preparing the mortgage document, one should note that the
mortgagor is not named in the mortgage
mortgagee is not named in the mortgage
mortgagor does not sign the mortgage
mortgagee does not sign the mortgage
Usually, the right to declare a forfeiture of deposit money for breach of contract belongs to the
buyer
seller
lender
broker
Which of the following is NOT an example of external obsolescence?
Population density
Direct effect of the elements
Zoning
Nearby highway realignment
If a buyer can afford a $1,200 PI payment, amortized over 30 yrs 5.5%, using the factor of $5.68 per thousand, what is the buyer's borrowing potential?
$201,268
$211,268
$221,268
$231,268
The interest that a landlord has during a valid tenancy is called a
right to profits
reversionary interest
right of reentry
tenancy at sufferance
In which one of the following ways do mortgage brokers differ from mortgage bankers?
Brokers service the loans they arrange
Brokers arrange junior financing
Brokers do not provide their own funds to originate loans
Brokers operate in the primary mortgage market
The federal Fair Housing Act
makes it illegal lender to deny for any reason a loan to an applicant who is a member of minority group
exempts the owner of a private single-family residence if a real estate broker is not employed to sell the property and discriminatory ads are not used
prohibits loans to minority college students
exempts condominium owners from provisions of the act
A $120,000 home carries fire insurance on 80% of its value. If the rate is $3.50 per $1,000 of insured value for a three-year policy, what is the annual premium?
$112
$168
$224
$336
Which of the following BEST describes the highest and best use for a particular property?
The use that the owner wants
Whatever is the present use
The use that produces the greatest net return
Whatever use produces the highest density zoning
In a deed that states "to Jonathan for his life," the grantor has what type of interest?
Life estate
Remainder
Reversion
Right of reenetry
The useful life of a building, or period of time after which the income provided by it is NOT sufficient to warrant its maintenance, is called
recapture limit
economic life
reversion limit
investment duration
When a borrower defaults on an FHA-insured loan, any losses sustained by foreclosure are made up through
the Federal Treasury
the Mutual Mortgage Insurance Plan
an attachment lien against the borrow
an assessment against the lending institution
Two years ago, a property was assessed at $63,000. The tax rate was 90 mills. Last year, the assessment was up to 10%, but the tax rate was down 10%. The taxes paid were
up $47.80
up $56.70
down $56.70
the same
When one has permission to use land but has no other rights, one has a
tenancy in common
leasehold estate
tenancy at sufferance
license
In an assumption-of-mortgage transaction, the seller typically pays for
the deed
the promissory note
the mortgage
all closing costs
A woman hands a man a deed with the intent to pass title and asks the man not to record the deed until the woman dies. When is the deed valid?
The deed is valid on the woman's death
The deed is valid immediately
It is void
The deed is valid when the man records the deed
The covenant in a deed that states that the grantor has full possession of the premises in fee simple (or any other estate the grantor purports to convey) is called the covenant of
seisin
habendum
quiet enjoyment
further assurance
The rights to the space above the ground within vertical planes are BEST described as
air rights
the bundle of rights
solar rights
riparian rights
A back yard is drawn on a plan 6.5 by 3 in. If the scale is 0.5 in. = 5 ft. and sod costs $15 per square yard. How much would it cost to sod this lawn?
$1,625
$2,160
$3,250
$6,500
A deed prepared and signed but NOT delivered is
invalid as between the parties, but valid as to subsequent recorded interests.
valid as between the parties
valid as between the parties, but invalid as to subsequent recorded interests
invalid as between the parties
An example of less-than-freehold estate is
a life estate
a leasehold estate
an estate on condition subsequent
a mortgaged estate
When there is a default on a mortgage, which of the following is TRUE?
The lender can foreclose without the need of going through judicial proceedings if there is power-of-sale clause in the mortgage
After the foreclosure sale, the borrower has a 10-year statutory right to redeem the property by paying all cash.
The mortgagor can pay up all of the back payments at any time and thus remain in good standing with the lender
The lender can foreclose only if there is an escalation clause in the mortgage
A person receives a purchase-money $30,000 loan from the seller at a reduced rate of 9%. Assuming the loan interest is calculated on a declining balance, if the payment is $250/month, including interest, what is the person's balance after 3 payments?
$29,898.86
$29,924.43
$29,949.81
$29,975.00
Under the statue of frauds, all contracts for the sale of real estate must be in writing. The principal reason for this statue is to
prevent the buyer from defrauding the seller
prevent perjury and fraudulent proof of a fictitious oral contract
protect the buyer from broker
protect the general public from fraud due to unrecorded deeds
Which of the following is an essential element of any contract?
Written instructment
Words of conveyance
Consideration
Acknowledgment
When the seller finances the buyer's purchase of a home, it is MOST precisely described as
An conventional mortgage
a chattel mortgage
a purchase-money mortgage
home financing
The federal Truth in Lending Act requires that the lender disclose which of the following when a purchase-money mortgage is made?
Annual percentage rate
Right of rescission
Penalties for violating the act
Total closing costs
A copy of a listing agreement must
be presented to the person signing the agreement
include all the terms and conditions of the sale
be given to the purchaser
be given to the broker representing the purchaser
Like other home owners, condo owners do NOT benefit from
depreciation
a federal deduction for paid mortgage interest
the Taxpayer Relief Act 1997
homestead exemption
Which of the following BEST describes the difference between an administrator and an executor?
An administrator is assigned by the courts to administer a decedent's estate while an executor is named in a decedent's will to execute the decedent's last will and testament
An administrator is a devisee, while an executor is not
An administrator is a testator, while an executor is not
An executor has riparian rights, while and administrator does not
An adjustable-rate mortgage has a margin of 240 basis points and its initial index is 4.25%. If the index moves at the end of year one to 5.00%, what is the newly adjusted interest rate?
6.75
7.50
9.25
9.50
All owners of condominium units have all of the following EXCEPT their own
real estate tax bills on their units
deeds to their units
maintenance dues on their units
deeds to the common elements
A borrower wishes to locate first-mortgage financing that will not be charge a penalty if it is paid off before maturity. In most states, which of these loans types generally will NOT meet this need?
FHA
Conventional
Nonconvential
VA
Which of the following is NOT a way in which land use is regulated or controlled?
Resolutions passed by local REALTORS boards
Zoning ordinances
Public ownership
Restrictions contained in sellers' deeds
A property is valued at $180,000 and is making an 8% annual net return on the investment. By what percentage must a monthly profit be increased to make a 10% annual return?
15%
20%
25%
30%
A property on which a mortgage will be recorded is likely to have an on-site inspection under which of the following?
an ALTA extended policy
a standard coverage policy
Request by a mortgagor only
An inspection is necessary for any type of title insurance policy
The usual standard policy of title insurance insures against loss due to
forgery in the chain of recorded title
encumbrances not disclosed by official public records
rights of parties in possession
actions of government agencies
A broker reading that “time is of the essence” and the client's contract would know that it most nearly means
the contract is the least creating a tenancy for years
the contract refers to that time period over which a property can be profitably used
that the unity of time must be present
that performance must be on or before the date specified in the contract, with no extensions.
Where a contract of sale fails to mention the existence of a mortgage on the land but there is such a mortgage, which statement is true?
the seller can compel the buyer to complete the deal
the signing of the contract of sale automatically makes the mortgage void
the buyer has the right to demand title free and clear of the mortgage
the buyer must take title subject to the mortgage
When a property is sold under agreement of sale (land contract)
legal title passes to the buyer
the buyer receives a deed at the close of initial escrow
the vendor retains possession
the buyer has equitable title until satisfaction
Which of the following Provisions concerning the property should not be included in a rental agreement for a residential condominium apartment?
Appraised value
Intended use
Amount of rent
Expiration date
What is the name of the Fannie Mae Form 1004 that is used by residential appraisers?
Which statement is true regarding property having depreciation deductions that exceed the amount of income from the property?
the property will devaluate more rapidly
it is never advantageous to show a loss on income property
the loss must always be used to offset other income
within legal limits, it can be deducted and any excess depreciation may be applied for future years
At what stage in the typical real estate transaction is the sales contract signed by buyer and seller?
prior to the issuance of the buyer's title insurance policy
immediately after the lender commits to the loan
at the same time as recordation
before the listing contract
When an easement exists between two parcels of land that are separately owned, the
dominant tenement has use of this easement only for Ingress and egress
servient tenement must have created the easement in writing
dominant tenement is benefited by the easement
servient tenement may revoke the use of easement by giving proper notice
What is the name of the search that examines all the public records to determine whether any defect exists in the chain of ownership beginning with the present owner and Trace backward to a defined. of time?
title search
ownership search
root search
lien search
A person owning beachfront property sells the two lots between his lot and the public road. This person would be best advised to reserve from the transfer of which type of right-of-way?
Easement in gross
Easement of necessity
Easement appurtenant
license
This type of easement is distinguished by the existence of a dominant estate, which is the property that benefits from the easement and to which the easement attaches to
Easement in gross
Easement appurtenant
Easement by necessity
Easement by prescription
This type of an easement occurs where someone uses another's property for a certain amount of time without permission in a way in which the owner should be aware of. States set the time limits required for someone to achieve this type of an easement which can range from a few years to over twenty.
Easement in gross
Easement appurtenant
Easement by necessity
Easement by prescription
A legal right to use someone else's properties when there is no other reasonable physical or legal access depending on specific rules. It arises when a landlocked property owner requires an easement to access their property because there are no other reasonable means of entry. Giving a landowner right-of-way over an adjoining parcel of land in order to access a public road is the most common example of this type of easement.
Easement in gross
Easement appurtenant
Easement by necessity
Easement by prescription
This type of easement agreement benefits the property owner as an individual, not the property. A holder of this type of an easement will be unable to transfer the benefits to another party. For example, if your family owns land that is next to or has a common boundary with a highway and a local dairy farm wants to access that highway by cutting through your land, your family may sell a commercial easement ______________ to the dairy.
Easement in gross
Easement appurtenant
Easement by necessity
Easement by prescription
Is a form of ownership in which two or more people own an undivided interest in an entire property. A key characteristic of this type of ownership is that if one of the owners dies, their share is conveyed to their heirs, not the other owners who are still alive.
Tenancy in Common
Joint Tenancy
Tenancy by Entirety
Tenancy in Severalty
Is a form of ownership that exists when two or more people purchase a property. y. Each has equal rights to the property, and if one of them passes away, their share of ownership simply passes through to the surviving owner or owners; This type of ownership creates a right of survivorship, which means that when one owner dies, the other owners absorb the deceased owner's interest.
Tenancy in Common
Joint Tenancy
Tenancy by Entirety
Tenancy in Severalty
is a legal arrangement that only married couples can enter into. With this type of agreement, each partner owns an equal share
Tenancy in Common
Joint Tenancy
Tenancy by Entirety
Tenancy in Severalty
This type of tenancy occurs when someone has an exclusive right to ownership not shared with anyone else. This could apply to people or a corporation as the owner. An easy way to think of this type of tenancy is to just think: Sole Ownership.
Tenancy in Common
Joint Tenancy
Tenancy by Entirety
Tenancy in Severalty
A seller told an agent that he was thinking about selling, so the agent acted on their conversation and brought an offer for the seller to accept. if no conversation regarding agency transpired between the two, what is their agency relationship?
consensual dual
appointed
ostensible
non-client
Constructive notice of a fact is established by
entering it in the public record
acting openly in accordance with the fact
communicating the fact directly to each interested party
testifying to the existence of the fact under oath in open court
Which of the following is true about a tax credit?
it applies against tax deductions
it offsets gross taxable income
it is a dollar-for-dollar reduction and taxes owed
it increases the tax exclusion
A hospital receives a gift of real property from an elderly couple who reserve a life estate. the hospital is the
grantor
remainderman
reversionary party
donor
The seller's broker negotiating a difficult sales contract between an experienced seller of real estate and a novice purchaser should
not be concerned about the buyer’s lack of experience
refuse to continue negotiating with the purchaser
insist that the purchaser employee an attorney
suggest that the purchaser consider employing another broker or an attorney
To be admissible to record in the appropriate public record office, a deed must be
signed by grantor and grantee
a printed form
signed by the grantee
signed by the grantor
Fee simple is all of the following except
an estate of inheritance
a freehold estate
a less-than-freehold estate
indefinite as to its duration
periodic estate
A type of estate that consists of a long-term rental agreement secured by a written contract.
leasehold estate
periodic estate
life estate
estate in years
estate at will
A legal way to own property with someone else and pass it on to them automatically when you die. Creating this type of ownership arrangement can help remove the property from the probate process.
leasehold estate
estate in land
life estate
estate in years
estate at will
Is an ownership of a temporary right to hold land or property in which a lessee or a tenant has rights of real property by some form of title from a lessor or landlord; This type of estate allows the tenant to take possession of a real property for a period of time. If you're a landlord, you rent property to your tenants and have this form of estate.
leasehold estate
periodic estate
life estate
estate in years
estate at will
is a type of leasehold agreement between a tenant and a landlord that has successive terms but no end date and is only terminated if one of the parties wishes to end the agreement.
leasehold estate
periodic estate
life estate
estate for years
estate at will
This type of estate automatically terminates. This of course is due to the fact that the parties agreed to the ending date when the arrangement began.
leasehold estate
periodic estate
life estate
estate for years
estate at will
The most important thing to know about this type of estate is that it has no defined duration; The lease can run for an indefinite period. This arrangement may last for a month or go on for years.
leasehold estate
periodic estate
life estate
estate for years
estate at will
Three individuals from a business alliance for investment purposes. If all three of equal managerial responsibilities and share equally in the profits and losses they have formed a
Real Estate Investment Trust (REIT)
limited partnership
general partnership
real estate mortgage investment conduit (REMIC)
Which statement is true if a broker established a real estate trust account and an FDIC or NCUA institution?
the account may be called an escrow account
the account must include the word trust in its name
the account must be in a big differ from the broker's business checking account
the account must be interesting-bearing for the seller
A complainant under the federal fair housing act must file a complaint
directly with the governor's office
within 45 days of the alleged discriminatory act
within one year of the discriminatory act
directly to the State Attorney General
Besides delegated authority, what else is required to create an agency relationship?
an agreed commission
consent to act
a written agreement
power of attorney
A farm was listed by a seller. An interested buyer paid $5,000 for a 60-day option to purchase the farm for $85,000. After 45 days, the buyer submitted an offer to purchase the form for $75,000. Which of the following statements is true?
the option is terminated
the seller must accept the subsequent offer
a commission became payable when the seller gave a written option to the buyer
only if the seller accepts the offer will he owe a commission
Which unity is required to create a tenancy in common ownership interest?
possession
interest
property
time
title
An agency agreement to sell a specific piece of real property will not be terminated by
the death of the broker
bankruptcy of the seller
revocation of the listing salesperson's license
insanity of the broker
An installment contract for the sale of real estate does not give the buyer
the right to live on the property
the right to lease the property
the right of possession
legal title to the property
Who would most probably pay the initial 1% origination fee allowed by VA on guaranteed loans?
lending institution
buyer
seller
escrow
A person buys a house for $50,000 and wants to realize an 8% profit after paying a 6% real estate commission. Which should be the selling price?
$50,760
$53,191
$57,446
$90,000
Assume that a buyer is making fully amortized payments of $600 per month on a purchase-money mortgage. Which statement is true?
the amount applied to principal decreases each month
the interest payment stays the same
interests and principal payments are constant
the amount applied to interest decreases each month
The seller under a land contract is called the
grantor
grantor
vendor
vendee
Which of the following does not appear in a promissory note?
interest
interest
term of lease
purchase price of property
What phase in an environmental audit requires the taking and analyzing of soil and/or water samples?
phase I
phase II
phase III
phase IV
The mortgage clause that permits the borrower to pay off the entire debt ahead of schedule without being charged a penalty is
an acceleration clause
an escalation clause
A level-off-payment clause
A prepayment clause
Which of the following are the four characteristics of value in the real estate market?
demand, location, utility, and stability
scarcity, utility, price, and location
demand, utility, scarcity, and transferability
demand, discount rate, obsolescence, and stability
A freehold could be any of the following except
a life estate
a fee simple estate
An estate for years
a defeasible fee estate
The FHA does NOT
Help stabilize the mortgage market
improve housing standards
make Direct Loans in the primary mortgage market
stimulate housing activity
Which of these statements concerning the principal-agent disclosure is false?
as long as a broker discloses that he's acting for a named principal, the broker usually is not liable when the principal default
a broker is personally liable for the principal’s default on a contract that the broker negotiate it without naming the principal
the broker may work for either the buyer or seller, but not for both
The broker can act for both the buyer and the seller in the same transaction as long as his position is disclosed and agreed to in writing by both of the parties
Buying real property “subject to the mortgage” is
a type of conditional loan
a mortgage bought by Fannie Mae and sold to Ginnie Mae
the taking of title to property by a grantee with no personal responsibility to the lender for paying the mortgage loan
the right to foreclose without going to court
In real estate financing, the debt is evidenced by a
mortgage
promissory note
chattel mortgage
financing statement
Which of the following exemplifies a voluntary alienation?
eminent domain
esheat
A sale
adverse possession
Which of the following statements about deed restrictions is false?
they are frequently encountered in residential subdivisions
they are also called restrictive covenants
they terminate on the death of the grantor
once established, they run with the land and are limitations on the use of future grantees
For a deed to be valid, which of the following statements must be true?
the grantee must execute the deed
the deed must be delivered during the lifetime of grantor
the deed must be dated
the grantee must have legal capacity to contract
Which of the following can the listing broker usually not show the buyer?
a Subdivision map of the property
a copy of the seller's recorded deed
the listing contract
Tax Office data
An action brought by a landowner against the government in which the landowner claims money damages because her property value has been lessened due to government action is best called
subrogation
Attachment
inverse condemnation
lis pendens
When a deed does not specify the estate being conveyed, it is presumed to transfer
A defeasible fee
a fee simple absolute
an estate for years
a life estate
A secured loan with a payback based on 25 years, but that is to be paid in full in 10 years, may not be
a balloon mortgage
an installment contract
an amortized loan
a graduated payment mortgage
A property manager most likely would conduct a market survey to determine
appropriate use of the building
appropriate rents to charge
required maintenance
the availability of money
The legal remedy most likely used by the seller on abandonment and default by the buyer under a recorded contract of sale is called a
Trustee’s sale
Lis pendens action
partition action
Quiet Title suit
Both VA and FHA Loans cannot be made by
savings associations
commercial Banks
mortgage companies
credit unions
A man sells the residents for $115,000 that he bought 2 years ago for $78,000. He added a bathroom for $2,500 and a basketball court for $6,000. He buys another house 10 months later for $125,000. The realized gain on the sale is
$28,500
$34,500
$38,500
$41,000
