Real Estate - Definition Exam Flashcards

Real Estate - Definition Exam Flashcards

• This appraisal approach estimates the value of the

present worth of the future rights to the income the property generates by converting the net income of the property into

a value. This is known as:1 income approach2 cost

approach3 substitution4 comparative market analysisas income approach "The income approach, also called capitalization, is used to appraise investment or income-producing properties. Don't confuse this with the cost approach, which estimates the amount needed to reproduce or replace the property; the comparative market analysis, which compares recently sold, similar homes; or substitution, which isn't an appraisal approach, but is an economic principle comparing two similar homes."

26. This type of lien is created by law. It is known as:1 a

specific lien2 an equitable lien3 a voluntary lien4 a statutory lien a statutory lien "A statutory lien is created by law - think "statutes" - as opposed to voluntary liens, created by choice, equitable liens, created by agreement, or specific liens, secured by specific property."

• The law that requires real estate contracts to be in

writing to be enforceable is the1 parole evidence rule.2 law of descent and distribution.3 statute of limitations.4 statute of frauds.Statute of frauds. "Under the Statute of Frauds, contracts for sale of real property must be in writing to be enforceable -- this is to prevent FRAUD from occurring. Don't confuse this with the statute of limitations, which sets limits on the time in which actions may be brought against a person; constitutional law, which is the law arising from the federal and state constitutions; or descent, a term used in conjunction with inheritances."

• The joint ownership that is recognized in some states,

of property acquired by husband and wife during marriage,

is known as:1 tenancy in common2 tenancy by the

entirety3 joint tenancy4 severalty tenancy by the entirety "With tenancy by the entirety, when one spouse dies, the surviving spouse then owns the property. Don't confuse this with tenancy in common, which means the person owns an undivided interest in the property; severalty, which is ownership by one person only, or joint tenancy, which is a more general term describing the ownership of property by two or more people."

• A written document that provides for the transfer of title

of property owned by the deceased is a(n):1 will2 intestate3

testator4 testate Will "A will transfers the title to property owned by the testator, or the deceased. Remember that testate and intestate simply refer to the fact of whether a person died WITH a will (testate) or without one (intestate). A testator is the PERSON who makes the will."

• The remnant of an estate that has been conveyed to

take effect and be enjoyed after the termination of a prior estate, as when an owner conveys a life estate to one party

and the remainder to another, is called:1 the reversionary

interest2 the reversionary right3 the remainder estate4 the right of survivorship the remainder estate "The remainder estate is that which is left from a life estate. Don't confuse this with reversionary interest, which is the future interest that reverts to a grantor or his heirs, or reversionary right, which is the return of the rights of possession of the property to the lessor at the end of a lease. Right of survivorship doesn't involve leases at all, but joint ownership."

• The type of lien that is secured by specific property and

only affects that property is known as:1 a specific lien2 an

equitable lien3 a voluntary lien4 a statutory lien a specific lien "A specific lien involves specific property- as opposed to voluntary liens, created by choice, equitable

liens, created by agreement, or statutory liens, created by law"

• The type of mortgage that shifts the risk or reward of

changing interest rates from the lender to the borrower is

called:1 partially amortized loan2 fully amortized loan3

straight loan4 an adjustable-rate mortgage an adjustable-rate mortgage "An adjustable rate mortgage is one in which the risk or reward of changing interest rates is shifted from the lender to the borrower. Don't confuse this with a straight loan, which has a straight payment plan; a partially amortized loan, which is a combination of straight loan and fully amortized loan; or a fully amortized loan, which is fully paid off at the end of the loan term."

• With this type of contract, two or more parties are

bound to act as described in the contract.This is called a:1

involuntary lien2 voluntary lien3 bilateral contract4 unilateral contract bilateral contract "A bilateral contract is TWO- (or more) sided, as the prefix indicates. Remember that a unilateral contract is ONE-sided (think uni- as the prefix meaning "one"). Liens are not contracts, so neither voluntary nor involuntary liens apply in this case."

• In an appurtenant easement, the party that benefits is

known as the:1 dominant tenement2 servient tenement3

leaser4 lessee dominant tenement "The person whose land is benefited by the easement, and therefore is the DOMINATING PARTY, is considered the dominant tenement. The servient tenement is the opposite of this. Leaser and leasee involve lease agreements, and have nothing to do with easements."

• A person who dies without leaving a will is known as

having died:1 reversionary interest2 reversionary right3

intestate4 testate intestate "Remember that INTESTATE is WITHOUT a will, while testate is with a will. Don't confuse these terms with reversionary interest, which is the future interest that reverts to a grantor or his heirs, or reversionary right is the return of the rights of possession of the property to the lessor at the end of a lease."

• A listing contract under which the broker's commission

is contingent upon his producing a ready, willing, and able buyer before the property is sold by the seller or another

broker is known as:1 an open listing2 an exclusive

right-to-sell listing3 a net listing4 an exclusive listing an open listing "In an open listing, the broker only earns a commission if he provides a ready, willing, and able buyer before anyone else does. It allows the listing to be OPEN to many brokers, whereas with both exclusive listings and exclusive-agency listings, only one broker is involved. Net listings, which are illegal in many states, also involve only one broker."

• The clause in a mortgage that can be enforced to make

the entire debt due immediately if the mortgagor defaults

on the loan is the:1 a satisfaction2 due-on-sale clause3

acceleration clause4 alienation clause acceleration clause "The acceleration clause allows the lender to move up the date when the entire sum is due.Don't confuse this with the due-on-sale clause (which is the same as an alienation clause), which says that the balance must be paid in full if the property is sold; or a satisfaction, in which the debt is paid in full on a mortgage."

• The absolute ownership of a unit in a multi-unit building,

based on a legal description of the airspace the unit

actually occupies, is a:1 community property2 time

sharing3 cooperative4 condominium condominium "A condominium means the person actually OWNS the unit. This is not to be confused with a cooperative, or co-op, in which the person is actually a tenant with stock in the company. Community property is a system of property ownership only valid in certain states, while time sharing is the undivided ownership of real estate

for only a portion of a year."

• The situation in which a grantor promises that if at any

time in the future the title fails, he will be liable, is known