60,000 - 10,000 50,00050,000.08 625,000

Illinois Real Estate Practice Exam Flashcards Easement AppurtenantFor adjacent properties it's a right Using the income approach to value, what is the value of an apartment building if it has gross income of $60,000, operating expenses of $10,000 and a capitalization rate of 8%?

60,000 - 10,000 = 50,00050,000/.08 = 625,000

Transfer Of TitleWhen the deed is delivered and accepted Constructive EvictionIf a tenant's lease were breached because the landlord has allowed the tenants unit in the apartment building to become uninhabitable.MortgageWill include an acceleration clause Percentage LeasePay base amount every month plus a % of your gross annual sales Special Warranty DeedA grantor conveying title wishes to guarantee only that the property was not encumbered during the time the grantor held title, except for encumbrances noted in the deed. The type of deed used by the grantor is ..A couple purchases a cooperative apartment unit. In this situation, the couple will Become shareholders in a corporation LicensePersonal privilege last for specific period of time Deed In TrustEntrust the trustee creates a land trust SteeringLeading prospective buyers to or away from certain areas Best evidence of marketable titleTitle Insurance A property manager defaulted on a mortgage and the lender foreclosed on the property. The property sold at the foreclosure sale for less than the loan balance. To recover

the remainder of the money, the lender may:

Obtain a deficiency judgement Remainder InterestA fee simple holder of a parcel of real estate grants a life estate to her daughter and stipulates that upon the daughters death, the property will pass to her grandson.The second estate is called A rectangular parcel of land is 130 feet deep and 25 yards wide. How many square feet does it contain?25 x 3 = 7575 x 130 = 9750 square feet(3 feet in a yard) Building in ground lease burns..You continue to pay ground lease A tenant has negotiated a net lease with the property owner. Under the terms of the lease, the tenant would probably be responsible to pay which of the following expenses?Maintenance Deed Of TrustPersonal mortgage/private mortgage The following activities are prohibited by a real estate office from performing by the Anti Trust Laws Agreeing with other real estate companies in the are to divide the market based on the location of their officesAgreeing with other real estate companies in the

area on a commission scheduleAgreeing with other real estate companies in the are to create territories

General Warranty DeedThe deed that would contain the most convenants or warranties is called..(In Illinois signature of Grantor is needed in convey and warrant) PuffingExaggeration of a fact it is legal as long as it doesn't come in as a fraud Objectives of Federal Reserve SystemTo counteract inflationary and deflationary trends, to create a favorable economic climate, to maintain sound credit conditions but NOT to control the secondary mortgage market Ground LeaseLease the ground but own the building GrantorTo be valid, a deed must be signed by ..(Seller) Personal Easement In GrossIndividual access to property not transferable only till alive Right Of SurvivorshipOwners holding title to real estate by joint tenancy Variable LeaseLease that increases over a period of time Easement By NecessityA property owner subdivided a piece of property, selling the front half and retaining the back half. The back half of the property retained by the owner does not have access to any roads. The type of easement the courts might grant in this situation is Physical Curable DepreciationBroken windows, potholes in the driveway, and peeling paint are examples of OptioneeBuyer Functional ObsolescenceAn appraiser estimating the value of a house with outdated bathroom fixtures must take it into consideration In return for $5,000 a seller gives a prospective buyer an option to purchase the seller's property. In this situation the

:

Buyer does not have to purchase the property in the option period The difference between a specific lien and a general lien is

that:

A general lien covers all of a debtor's property while a specific lien covers a specific property Purchase Money MortgageA couple purchased a house for $200,000, making a down payment of $15,000. The buyers assumed the seller's existing mortgage of $180,000 and financed the remaining $5,000 through a mortgage given to them by the seller.This $5,000 mortgage is (seller financing mortgage) Blanket LoanOne loan secures multiple properties MortgageeLender An investor purchase an apartment building for $360,000 by paying 10% down and financing the rest of the purchase price. The lender charge two points as a loan origination fee. How much was the investor charge for the fee?360,000 x .90 = 324,000324,000 x .02 = 6480(Discount points are figured on loan & points are 1% of loan amount) Double Net LeasePay two of the charges and base amount The 1866 Civil Rights Act prohibits discrimination in all housing based on a person's Race ConversionFancy name for theft

Lis PendensWhen a suit is filed that affects title to real estate a special notice is recorded.(Litigation pending probably a foreclosure is going to happen) A property buyer obtains a term loan to finance a home purchase.The entire loan principal is due at the end of the loan period One of the provisions of the Truth In Lending Act (TILA) allows for a cooling off period (3 days) in which the loan can be rescinded. The recession provision would apply to which of the following loan?Consumer Credit Loan A prospective buyer delivers a written offer and gives an earnest money deposit to the listing broker. The offer indicates the seller has five days to accept. Two days later, before the seller has accepted, the prospective buyer notifies the broker that the offer is being withdrawn and demands that the deposit be returned. In this situation, the

prospective buyer:

Can withdraw the offer and recover the earnest money Market ValueThe amount at which a willing and informed seller would sell and a willing and informed buyer would buy a property Gift DeedLove and affection Defeasance ClausePayoff mortgage you don't owe anymore money. They issue a satisfaction of mortgage. (If they don't issue the satisfaction of mortgage the lender can be fined) The property in a real estate sales transaction has a 450-gallon heating oil tank that is one-quarter full. The current cost of oil is $1.25 per gallon. What is the appropriate entry to be made on the closing statement?450 / 4 = 112.50112.50 x $1.25 = $140.63(Credit the seller

$140.63)

Title to property is transferred by a deed when the deed is:Delivered and accepted by the grantee(It only needs signature of grantor if you need it in court of law then it needs to be acknowledged = acknowledgment-notarized signature) Index LeaseTied to something economic Easement By PrescriptionTrespassers rights due for a period of time you earn 20 years Net ListingA broker and seller enter into a listing agreement. Under the terms of the listing, the seller will receive $$ from the sale and with any sales proceeds over that amount going to the broker. (Fee is above what seller want to net) Local zoning ordinances are used to regulate Allowable uses for buildings, building heights, population density NOT rules for the conducting open spaces After paying the brokers fee of 6%, a seller want to net $180,000 from the sale of his house. What must the property sell for to satisfy both the eh broker and the seller?

100%-6%=94%=.94180,000 / .94 = 191489

Acceleration ClauseThe clause in a mortgage that give the lender the right to consider the entire balance due if there is a default in any payment is called a ...