Real Estate Principles Chapters 1-15 Exam Prep Flashcards

Real Estate Principles Chapters 1-15 Exam Prep Flashcards Someone who receives real property is known as thedevisor.grantee.mortgagee.grantor granteeA conveyance of real estate is called a grant; the person conveying the property is the grantor, and the person receiving the property is the grantee.Which of the following provides the BEST protection?Certificate of titleTitle insurance policyAbstract of titleGuarantee of title Title insurance policyTitle insurance can be for the benefit of either property owner or lender and takes effect as of the day of closing.The Real Estate Law treats a salesperson asa general agent.an independent contractor.a dual agent.an employee of the broker.an employee of the broker.A real estate salesperson can conduct business only as the agent of a broker and must have a written employment agreement with the broker. The Real Estate License Law always considers a salesperson to be an employee acting under the direct supervision and control of the broker. This is true even when the salesperson is treated by the broker as an independent contractor for compensation, work assignment, and tax purposes.An instrument by which property is hypothecated to secure the payment of a debt or obligation is known asa reconveyance deed.a sheriff's deed.an encroachment.a mortgage.a mortgageThe security instrument by which real estate serves as assurance that a debt will be repaid usually is referred to as a mortgage, even when it is a deed of trust.mechanic's lien requiresa promissory note.a servient tenement.a deed.preliminary notice.preliminary noticeIf a mechanic's lien will be filed, preliminary notice of intent to file the lien must be hand-delivered or sent by first-class registered or certified mail to the property owner, general contractor (if any), and construction lender (if any).Which of the following documents is used with a CalVet loan?Sheriff's deedLand contractGrant deedTrust deed Land contractCalVet loans are administered by the California Department of Veterans Affairs (CDVA), which authorizes, processes, funds, and services the loans. No outside lenders are involved, because the program is totally self-supporting. CDVA buys the selected property from the seller and resells the property to the veteran on a land contract. CDVA holds title until the veteran has repaid the amount owed, although the veteran has the right to possession of the property as her personal residence.A contract that has no legal effect from its inception is aquasi contract.valid contract.void contract.voidable contract.void contract The term real estate means the same thing asownership.personal property.real property.intangible personal property.real propertyIn California, the term real property is synonymous with the term real estate.Which of the following is NOT considered concurrent ownership?Community propertyTenancy in commonJoint

tenancyOwnership in severalty Ownership in severaltyConcurrent ownership is ownership by more than one person at the same time. Ownership in

severalty is ownership by only one person.With title insurance, the buyer ALWAYS receivesan extended coverage policy.an abstract of title.a regular coverage policy.a preliminary report.a preliminary report.After the title insurance policy is ordered and before the sale closes, the title insurer submits a preliminary report of the condition of the property title to the purchaser through the escrow holder.Real estate loans generally include a promissory note and agrant deed.security instrument.purchase contract.security instrumentReal estate loans in California generally are made using two instruments. The promissory note is the borrower's promise to pay the amount borrowed and is evidence of the debt. The security instrument, typically a deed of trust, transfers title to the real estate to a third party until the loan is repaid.Real estate licenses are renewable for a period offour years.two years.three years.one year.four yearsThe full term on renewal of a broker's or salesperson's license is four years.A real estate broker works for theprincipal.Bureau of Real Estate.real estate board.third party.principalAn agency agreement is a form of employment contract and can be structured in several ways. The principal is the employer, but the agent may act as either an employee or an independent contractor. The main difference is in the type of control the principal exercises over the agent.An installment sales contract is also called avoidable contract.terminable contract.temporary contract.land contract.land contract.The land contract (also referred to as a contract for deed or installment sales contract) is a form of seller financing in which the buyer takes possession of property and makes payments on its purchase but does not receive legal title to the property for at least one year from the date of possession.Personal property is usually transferred by abill of sale.purchase contract.deed.will.bill of saleOwnership of real property is usually transferred by an instrument called a deed. Personal property is usually transferred by a bill of sale.The applicant for a real estate salesperson's license must complete how many college-level courses before taking the licensing examination?SevenThreeOneFive ThreeAn applicant for a real estate salesperson's license must complete three college-level courses before taking the licensing examination.The right of possession is restricted under afreehold estate.fee simple subject to a power of termination.fee simple qualified.life estate with a right of reversion.fee simple subject to a power of terminationFee simple subject to a power of termination is ownership in which the right of possession is restricted in some way by some limitation or condition.A prohibition in a deed against a property use is known asan encroachment.an easement.a restriction.a condition.a restrictionAny form of restriction is a limitation on the use of land. The most common private restrictions are the covenants, conditions, and restrictions found in a deed.Subdivision developers frequently make use of deed restrictions to ensure that the uniform appearance of the homes in a subdivision is maintained.The typical real estate purchase agreement isan implied contract.a unilateral contract.a voidable contract.a bilateral contract.a bilateral contractThe typical real estate purchase contract is bilateral. One party promises to transfer the right of ownership or use of real estate, and the other party promises to pay some form of compensation for that right.

The transfer of existing mortgages between investors is theCorrectgrowing equity program.extended credit program.primary mortgage market.secondary mortgage market.secondary mortgage marketThe sale and purchase of mortgages secured by real estate take place on the secondary mortgage market.Land is torn away by the action of water in the process calledavulsion.accretion.evolution.reliction.avulsionThe natural force of a moving body of water acting gradually or suddenly may tear away land in the process called avulsion; it is distinct from erosion, in which rainfall wears away the surface of the soil.Which of the following generally does NOT require a down payment?FHA-insured loanVA-guaranteed loanCalVet loanLoan from a conventional lender VA-guaranteed loanAs long as the estimate of reasonable value does not exceed the amount of the VA loan guarantee, the VA does not require a down payment, although the lender may. The VA loan guarantee can never be more than the estimate of reasonable value, but a higher purchase price may be negotiated if the veteran pays the difference between the reasonable value and the purchase price in cash at the closing.The rectangular survey system is also known as theTorrens system.lot, block, and tract system.U.S.government survey system.metes and bounds system.U.S. government survey systemThe rectangular survey system is also called the section and township system, or the U.S. government survey system, and is used by the United States Surveyor General to survey public lands.RESPA requirements do NOT apply toconventional loans.commercial loans.FHA-insured loans.VA-guaranteed loans.commercial loansSettlement statements detailing transaction costs to buyers and sellers of dwellings of one to four units are required by the Real Estate Settlement Procedures Act (RESPA). Commercial (non-residential) loans are not subject to RESPA.In northern California, escrows are typically held byescrow companies.banks.real estate brokers.title insurance companies.title insurance companies.In Northern California, escrow typically is handled by a title insurance company. In Southern California, separately licensed escrow companies often are used, and financial institutions also perform many escrows.When a real estate license expires, licensed activity must cease but the license may be renewed up totwo years later.four years later.one year later.three years later two years laterA license that is not renewed before it expires may be renewed at any time up to two years from the expiration date. All licensed activity must cease before the license is renewed and a late renewal fee will be required.Ownership in severalty isseparate ownership.community property.concurrent ownership.a joint tenancy.separate ownershipOwnership in severalty, also called separate ownership or sole ownership, is ownership by one person. The property owner is the only person to receive the benefits (and responsibilities) of ownership.A notice of nonresponsibility would protect an owner froma mechanic's lien.a foreclosure.an eviction.trespassers.a mechanic's lienThe owner of real estate has protection if unauthorized work is begun on the property by posting a notice of nonresponsibility in a conspicuous place on the land and recording a copy of the notice with the county recorder within ten days of learning of the construction, repair, or other work. The notice must include a property