Real Estate Final Exam 1 Flashcards

Real Estate Final Exam 1 Flashcards Jim, Manny, and Harry are joint tenants owning a parcel of land. Harry conveys his interest to his long-time friend Wendell. After the conveyance, Jim and Manny 1 become tenants in common. 2 continue to be joint tenants with Harry. 3 become joint tenants with Wendell. 4 remain joint tenants owning a two-thirds interest.

• remain joint tenants owning a two-thirds

interest.Because joint tenancy must be declared, Jim and Manny remain joint tenants with a two-thirds interest while Wendell, because of his passive acquisition of his share of the property, becomes a tenant in common with Jim and Manny. The difference between the two forms is that Jim and Manny's share retains the right of survivorship provisions but Wendell's does not.A special warranty deed differs from a general warranty deed in that the grantor's covenant in the special warranty deed 1 applies only to a definite limited time. 2 covers the time back to the original title. 3 is implied and is not written in full. 4 protects all subsequent owners of the property.

• applies only to a definite limited time.The more common

deed in most states is the general warranty, because it establishes the ownership trail and validity of title going back to the original recorded ownership (for example, the purchase of Manhattan Island and all subsequent divisions, subdivisions and resales). Under a special warranty deed, an owner transfers property guaranteeing the quality of title only during the period of his or her ownership, leaving subsequent buyers vulnerable to prior claims.A partition suit is used for which of the following? 1 Determination of party fences 2 To allow construction of additional bedrooms or bathrooms in a house. 3 To force a division of property without all the owners' consents 4 To change a tenancy by entireties to some other form of ownership

• To force a division of property without all the owners'

consentsPartition suits are typically pursued when a co-owner of a property wants to sell his or her share and the other owners are opposed. Since it is a legal action involving the courts, it is an expense with often unsatisfactory results.A(n) _______ is when an owner takes his property off the market for a definite period of time in exchange for some consideration, but he grants the right to purchase the property within that period for a stated price. 1 option 2 contract of sale 3 right of first refusal 4 installment agreement

• optionIt's important to note that options generally give

flexibility to only one side of the transaction. For example, let's say Barney is expecting a big promotion in six months and wants to buy Fred's house for $300,000 if it comes through. In exchange for keeping his home off the market for six months and agreeing to sell it to Barney for $300,000 at Barney's option, Barney gives Fred $3,000.The $3,000 is Fred's to keep no matter what. However, Barney is not obligated to buy Fred's house; it's his choice.Further, if he does get the promotion and wants to exercise his option, Fred must sell Barney his home for $300,000, even if market conditions have now made it worth more.When a prospective buyer makes a written purchase offer that the seller accepts, then the 1 buyer may take possession of the real estate. 2 seller grants the buyer ownership rights. 3 buyer receives legal title to the property. 4 buyer receives equitable title to the property.

• buyer receives equitable title to the property."Equitable

title" means that the prospective buyer has obtained the right to acquire ownership of a property currently owned and occupied by another.

The illegal process of a banker refusing to approve loans for a neighborhood based on the racial composition of the area is 1 blockbusting. 2 steering. 3 redlining. 4 panic peddling.

• redlining.Loans may only be approved or denied on the

basis of whether a specific individual and property meet established standards. Thus lenders are well within their rights to deny a loan to a particular person because he or she lacks sufficient income or has poor credit. Additionally, a loan for a partially completed home or one that doesn't meet code can also be denied. However, "macro" issues such as race or neighborhood cannot be considered.H agrees to purchase V's real estate for $230,000 and deposits $6,900 earnest money with Broker L. However, V is unable to clear the title to the property, and H demands the return of his earnest money as provided in the purchase contract. Broker L should 1 deduct his commission and return the balance to H. 2 deduct his commission and give the balance to V. 3 return the entire amount to H. 4 give the entire amount to V to dispose of as he decides.

• return the entire amount to H.Brokers and salespeople

only earn their commission when a transaction closes.Since the transaction was never completed, no commission is owed. Additionally, H is entitled to have all his earnest money returned since it was the seller, not he, who defaulted on the contract.The illegal practice of directing minorities to areas populated by the same race or religion is called 1 steering.

• blockbusting. 3 redlining. 4 panic peddling.
• steering."Steering" is driving people towards particular

neighborhoods, and is the correct answer to this question.On the other hand, "blockbusting" is the opposite side of the same coin. Synonymous with "panic peddling," it refers to trying to generate panic selling in a neighborhood dominated by one race or ethnic group by representing that another group is about to start moving in.The right to control one's property includes all of the following EXCEPT 1 the right to invite people on the property. 2 the right to exclude the utilities meter reader. 3 the right to erect "no trespassing" signs. 4 the right to enjoy pride of ownership.

• the right to exclude the utilities meter reader.This right to

enter and work on a property is granted to utility companies (water, sewer, gas and electric) as well as telephone and cable companies. Essentially, if a company provides a service and owns the equipment (e.g., phone and cable lines), they are usually granted an easement.A broker and seller terminate the listing contract. An offer is received in the mail by the broker after the termination of the listing contract. The offer is for full price and includes all of the terms and conditions of the seller. Why is this NOT a valid contract? 1 There is no consideration involved. 2 No acceptance has been given. 3 No earnest money has been enclosed. 4 There is no current listing agreement.

• No acceptance has been given.It has not been

presented to or accepted by the owner. Remember, contracts aren't valid until both parties agree. However, even though the listing agreement has expired, the offer should be presented. If it's accepted and the transaction closes, the broker will generally be entitled to his or her full commission.The buyer of an apartment complex is told that the refrigerator in one of the apartments goes with the sale.After taking title, he discovered that the refrigerator belonged to the tenant. Which is true about this situation? 1 Since the refrigerator was in the apartment, it automatically belongs to the new owner. 2 The refrigerator is the personal property of the tenant. The seller had no right to offer it to the buyer. 3 The refrigerator was plugged into the

wall and that makes it real property. 4 The tenant will have to get permission from the new owner to remove the refrigerator.

• The refrigerator is the personal property of the tenant.

The seller had no right to offer it to the buyer.Plugging in an appliance does not constitute installation. Thus it is personal property that belongs to the tenant.The title to real estate passes when a valid deed is 1 signed and recorded. 2 delivered and accepted. 3 filed and uploaded to the cloud. 4 executed and mailed.

• delivered and accepted.Fundamentally, real estate

transactions only involve two parties--the buyer and the seller. All that's necessary to create a legal sale is for one party to make an offer the other accepts. Recording,

escrow, real estate licensees, mortgage companies and the like facilitate and support the transaction process but are not requirements of a legal sale.