75 most common real estate exam questions Flashcards

75+ most common real estate exam questions Flashcards The type of real estate ownership that is MOST all inclusive

is a:

fee simple absolute estate(highest interest in real estate recognized by law. absolute ownership) A person who has complete control over a parcel of real

estate is said to own a:- life estate- fee simple estate-

leasehold estate- defeasible estate fee simple estate(highest degree of ownership) A change in flight patterns that caused a loss in property

value would be an example of:

Economic Obsolescence(form of depreciation that from causes outside your property lines) eminent domainthe right of government to take private property for public use A portion of Joe's building was inadvertently build on

Ginny's land. This is called an:- easement- encroachment-

avulsion- accretion

• Encroachment

A portion of Joe's building was inadvertently built on

Ginny's land. This is called an:- easement- encroachment-

avulsion- accretion encroachment The principle of appraising, which states that the maximum value is achieved when the property is in harmony with its surrounding, is the principle of- conformity- highest and best use- contribution- competition conformity(maximum value is realized if the use of the land conforms to existing neighborhood standards) Real property can become personal property by the

process called:

severance(literally by detaching it from the land) A normal section in the Government Rectangular Survey

System contains:

• sq mile

Jones put his house on the market. Brown made a written purchase offer that Jones accepted in writing. When is the contract valid?- When Brown is notified of the acceptance- When the broker gets his fee- As soon as the signatures are notarized- Immediately When Brown is notified of the acceptance In some states, instead of a mortgage they use a deed of trust The portion of the value of an owners property that

exceeds the amount of the owners mortgage debt is called:

equity A buyer and a seller both sign a purchase contract. What kind of title interest does the buyer have in the property at this point?Equitable(refers to a persons right to obtain full ownership of a property or property interest) Part of the consideration offered to a seller when the buyer signs an agreement of sale is called- an option- a recognizance- earnest money- a freehold of state earnest money(a deposit that shows you are serious about an offer) RegressionThe principle of regression is the reason people are cautioned against owning the most expensive house in the neighborhood

Tenancy at sufferancean agreement in which a property renter is legally permitted to live on a property after a lease term has expired but before the landlord demands the tenant vacate the property A real estate broker was responsible for a chain of events that resulted in the sale of one of his clients properties. The

broker is legally called the:- responsible party-

compensable cause- initiating factor- procuring cause procuring cause(the agent who caused the buyer to purchase the home and earned the commission is generally the procuring cause agent) The effectiveness of the market data approach is limited most by which of the following factors?- The differences in the comparable property- economic conditions that rapidly change- the financing terms of comparable property- types of property that are regularly sols=d Economic conditions that rapidly change A listing broker had a signed sales contract on a house.The broker noticed a crumbling wall in the basement. The

broker should inform:- both the buyer and seller- the seller

only- the buyer, seller, mortgage company- the buyer only Both the buyer and seller(have to disclose all material facts to both buyer and seller) Listing Agreement- both unilateral and bilateral- employment contract- contract to find a buyer for a propertyAn employment contract between a property owner and a real estate firm/broker by which the broker is employed to find a ready, willing and able buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission.SteeringChanneling prospective buyers or tenants to particular neighborhoods based upon their race, religion, national origin, or ancestry.(against FHA) To help a buyer get an FHA loan, a real estate broker should put the buyer in contact with A lending institution approved by the FHA

A township contains only:- 640 acres- 36 sq yards- 23,040

feet- 36 sections 36 sections(section is 1 sq mile, township is 36 sections, township is 36 sq miles)

One example of an easement in gross is the right of:-

Owners to cut across their neighbors property- Utility companies to access a property in order to maintain wires or pipes- owners to use the neighbors backyard for their own recreation- a roofing company working on repairs to store some of the equipment in the neighbors yard Utility companies to access a property in order to maintain wires or pipes The difference between a freehold and leasehold estateownership versus possession(freehold estates are estates of ownership while in a leasehold estate the property owner gives the tenant possession of the property) RedliningA process by which banks refuse loans to homeowners in certain segments of the city(against FHA) A bill of sale is used to transfer the ownership of what?Personal property The addition to one's land by the gradual deposit of soil

through natural causes is:

accretion

A court order to a properly designated individual to sell

property in order to satisfy a judgment is called:- a

deficiency judgment- a writ of execution- a lis pendens- an attachment a writ of execution(a court order to sell something) When an appraiser is appraising a property he usually

considers all of the following except:- the assessed value-

the property rights to be valued- a definition of value- the property identification The assessed value(this is used for tax purposes, not by appraisers) If the owners of a shopping center want a major department stores lease to provide rental payments that reflect the store's sales, they are most likely to use which type of lease?Percentage lease

In a new counter-offer:- terms of offer can not be changed-

counter offeror becomes the counter offeree- counter offeror can change the terms of the offer unilaterally

• counter offeror becomes the counter offeree(brand new

offer) An appraiser examines a building that is 25 years old.Because of superior upkeep, it has the condition of an 11 year old building. The appraiser may use the 11 year old

age as the:- actual age- effective age- numerical age-

physical age Effective age(the age based on its condition)

Land that is subject to easement is said to be:-

encroached- appurtenant- restricted- encumbered encumbered If one uses the words "of definite duration" to describe a

lease, it's most likely:

estate for years EncumbranceAnything which affects or limits the fee simple title to

property(anything that limits you: easements, clouds on

title, liens, mortgages) In the formation of contracts, "valuable", "good", "sufficient", and "adequate" are terms most closely associated with which of the following?- consideration- bilateral contracts- compensation- performance Consideration(can be anything of value that is being exchanged for the purpose of the contract. oftentimes this is money but it can be anything 'valuable, good, sufficient, adequate) The term depreciation refers to:the loss of value in real estate due to any cause The difference between the value of a property and the

total amount of liens against it is known as:

equity(difference between how much property is worth and how much is owed on the property) Which of the following types of legal descriptions identifies a property by outlining its boundaries in terms of a series of directions from a specific point of beginning?Metes and bounds Which type of lease requires the lessee to pay a flat rent?- sandwich lease- percentage lease- gross lease- net lease Gross lease O-R-E-E Rule-or gives-ee receives"lessor, vendor, optionor, grantor to give or the proper tour for your pleasurelessee, vendee, optionee, grantee, give me property makes me happy" Inverse Condemnationdescribes a situation in which a person takes action against the government for taking private property but failing to pay compensation as required by the 5th amendment

Which method would an appraiser be most likely to use when appraising a newly build (1-year old) apartment with no rental history?- income approach- cost approach- capitalization approach- market approach Cost approach(great when there is nothing to compare it to.the most appropriate approach for a newly built income property with no income history. can't use this approach on older homes because you have to factor in depreciation) The total collection of rights which may be claimed by

private ownership is best described as:

The bundle of rights(the bundle of rights contain all the rights someone obtains with the ownership of real property, which include the right to enter, use, lease, sell, give away the real estate or the right to not do any of these things) Which of the following loans would be most likely to qualify for FHA insurance?- a loan to purchase a farm- a loan to buy a small business- a loan to purchase 1-4 units of residential rental property- a loan to buy farm equipment a loan to purchase 1-4 units of residential rental property(FHA loans are for residential property) Eminent domain and escheat are examples of what involuntary alienation(government taking property from you whether you like it or not) Blockbusting, panic selling, and panic peddling panic a neighborhood into thinking property values will decline due to unwanted persons moving in(against FHA) The removal of land when a stream suddenly changes its

channel is:

avulsion(the sudden violent tearing away of land) Discrimination is prohibited in lending practices under which act?Equal Credit Opportunity Act (ECOA)(passed in 1992) When a company furnishes materials for the construction of a house and is subsequently not paid, it may file a(n)"- deficiency judgment.- lis pendens.- estoppel certificate.- mechanic's lien.mechanic's lien(involuntary specific lien.) A borrower takes out a mortgage loan that requires monthly payments of $875.70 for 20 years, and a final payment of $24,095. What type of loan is this?balloon loan A purchaser is qualified to obtain an FHA loan for his new home. Which of the following would he apply to?An FHA lender What item will appear as a debit on the buyer's closing statement?- prepaid homeowners insurance- the purchase price- unpaid property taxes the purchase price(debit is money you owe, credit means money coming to you) When the rent charged is based on the gross sales of a

business, the lease is correctly termed:- gross lease- net

lease- voidable lease- percentage lease a percentage lease(based on gross receipts)

4 government powersP.E.T.E:Police powerEminent domainTaxationEscheat

Economic obsolescence in a property is generally: a type of depreciation that is incurable.(when there is economic obsolescence people move) Construction onto the property of another, like a wall fence, building, is known as what?Encroachment(think of somebody stepping over a line from their side to yours. an encroachment is the physical intrusion of a structure or improvement on the land of

another. *ex: fence or driveway or tree over the property

line)

With a tenancy for years:- a 30-day notice is required to

terminate the lease- no notice is required to terminate the