PA Real Estate Exam- National Portion Flashcards

PA Real Estate Exam- National Portion Flashcards On a $50,000 loan, the borrower is required to pay two discount points. How much does the borrower have to pay the lender in total including the loan amount plus the points?$51,000One discount point equals 1% of the total loan amount, so each point on a $50,000 loan costs the borrower $500. Two points cost $1,000, which becomes part of the buyer's total obligation to the lender- $50,000 for the loan and $1000 for the points equals $51,000 total.may affect title to real property based on the results of the lawsuit.A lis pendensA "lis pendens" is a legal document which gives notice that an action or legal proceeding (mechanic's lien filing, foreclosure) is pending in the courts that could affect the title to the designated property.An attorney-in-fact can best be described as a(n):legally competent person who has been given the power of attorney by another competent person.The type of mortgage loan which permits borrowing

additional funds at a later date is called:

Open-End clause is a provision in a mortgage contract that declares the mortgaged real estate may be used as security to borrow additional money A leasehold created by landlord and tenant for a particular period of time. The period of time could be a fixed number of years, months, weeks, or even days. Will always have a definite termination date.an estate for years The term "warehousing" as used in real estate financing,

means:

A mortgage company collecting loans prior to resale A right that a property owner has over a part of the property of another owner (usually the neighbor) for a certain purpose.An easement A judgment that has been recorded would be a(n): A: An involuntary lien;A judgment lien is an involuntary lien.If you placed a judgment lien on a person's property, he certainly did not agree to that lien.In the appraisal of residential property, the cost approach is

most appropriate in the case of a(n):

new propertyThe cost approach is most appropriate for new buildings, not old, because the cost of materials will still be similar to what it cost to build the new building. The older the building is, the more variables there are for estimating its value. But if something was built yesterday, then the estimation of how much it cost to build is much more accurate.An item permanently attached to the property and is considered real property.A fixture The buyer gives the owner a $2,500 payment and a written agreement stating that, on June 1 of the following year, the buyer will purchase the property for $475,000 cash or the

owner may keep the money. This transaction is known as:

an option agrementIn an option contract, the buyer purchases the right to buy a property at fixed terms within a defined period of time. If the option is not executed, the owner gets to keep the deposit.A borrower with a construction loan generally receives their

funds in:

stages, called draws, during the construction period.

On a settlement statement, the cost of the required lender's

title insurance policy is usually shown as a:

debit to the buyer Which of the following describes a mortgage that requires principal and interest payments at regular intervals and is called the liquidation of debt by periodic installment until the debt is satisfied?Amortized Loan When a lender makes a loan regulated by the real estate settlement procedures act, the loan applicant must be provided with A loan estimateIt is a disclosure required under the Real Estate Settlement Procedures Act (RESPA) and TRID (TILA/RESPA Integrated Disclosure) that must be given to all mortgage loan applicants at the time of application. The disclosure is an estimate of all settlement charges likely to be incurred at closing.Which of the following can be achieved by dividing the price of the property by the rent that is produced?Gross rent multiplier Bill owns an easement in Joe's property/land. Bill is not a property owner. What kind of easement does Bill have?easement in grossAn easement in gross is the limited right of one person (or party) to use another's land (servient estate) when such right is not created for the benefit of any land owned by the owner of the easement. In this case there is no dominant estate because the easement attaches personally to the owner, not a parcel of land.People like to use a cable company as an example, but that is not what it is by definition. Be careful not to confuse examples of something with the actual pure definition.

Real estate agents are licensed by:their state governing body

In a deed in which the grantor, Douglas, states "to Stephen for life", the grantor has what type of interest?A reversionary interestA reversionary interest in property law means that the grantor of the trust (or deed) has an interest in getting back a transferred property after some time or upon a certain condition. With life estates like the one in this question, after Stephen dies, estate ownership "reverts" back to Douglas (or his estate, if he has passed too). If there is no language in the deed indicating a remainderman, like "to Stephen for life, then to Mary", the property typically passes back to the grantor in reversion.The type of real estate ownership that is MOST all-inclusive

is a:

A fee simple absolute estateit is the highest interest in real estate recognized by law. Fee simple ownership is absolute ownership in which the holder is entitled to all rights to the property A type of mortgage where a seller extends credit to the

buyer in order to complete the transaction:

A purchase money mortgage: a type of owner financing in

which the seller extends credit to the buyer for some, or all, of a property's purchase price.The maximum permissible "loan to value ratios" are:based on sale price or appraised value, whichever is lower.

The primary purpose of a deed is to:transfer title rights

In negotiating a sale, a buyer wanted an attached basketball hoop to be included in the sale but did not want

to pay extra for it. What would BEST accomplish this?List the basketball hoop as a fixture in the sale contract.Since fixtures are automatically included in the

sale price, and since the basketball hoop is immovable and thus qualifies as a fixture, this is the best solution.A buyer taking title "subject to" a mortgage should request

a:

A reduction certificateA reduction certificate is a document signed by a lender stating the outstanding amount on a mortgage loan On Monday, a woman offers to sell her vacant lot to a man for $35,000. On Tuesday, the man counteroffers to buy the lot for $25,500. On Friday, the man withdraws his counteroffer and accepts the woman's original price of

$35,000. Under these circumstances:

no valid agreement exists because the counteroffer voided the original offer.Larry owned an income property with an adjusted cost basis of $150,000 and a fair market value of $200,000. He exchanged the property for another income property, which has a fair market value of $210,000. Both properties had no loans against them and no adjustment was made for the difference in value. For federal income tax purposes, the

new property will have a basis for Larry of:

$150,000In a tax deferred exchange transaction, the cost basis of the property transferred becomes the cost basis of the property which is acquired or received.A tenant signs a lease that stipulates that the lessee pays

the property tax. This lease is probably a:

Net LeaseNet leases are usually found in commercial real estate. The lessee pays not only the rent for occupancy, but also for maintenance and operating expenses such as taxes, insurance, utilities and repairs. The rent paid is said to be "net" to the lessor.In reviewing the deed to a listed property, a licensee noted a number of limitations regarding its use. These limitations

are commonly known as:

Restrictive covenantsthey are limitations on the use of property imposed or created by deeds or other documents in the chain of title.They are placed by private parties in a deed. Restrictive covenants If the owner of the dominant tenement becomes the owner of the servient tenement and merges the two properties, what happens?The easement is terminated Under a lease, the leasehold interest lies in the:lesseeA "leasehold interest" is the right to exclusive possession and use of real property for a fixed period of

time held by the lessee. Remember: lessor(landlord),

lessee (tenant).A clause may be inserted into a lease allowing rent to

increase based upon a formula. This is known as a:

An escalation causeMany commercial leases will include a rent escalation clause, allowing the landlord to increase rent based on a specific trigger or a specific timeline. Some

examples are: Stepped Increase Escalation (rent increases

by $X per year per sq. ft.); Tax Pass-Through Escalation (rent increases if property tax increases); Indexed Escalation (rent varies based on inflation).The landlord of an apartment building neglected to repair the building's plumbing system. As a result, the apartments did not receive water, as provided by the leases. If a tenant's unit becomes uninhabitable, which of the following would MOST likely result?Claim of constructive evictionConstructive eviction is a term used in the law of real property to describe a circumstance in which a landlord either does something or fails to do something that he or she has a legal duty to provide (e.g.the landlord refuses to provide heat or water to the