MID COURSE REVIEW Flashcards by Valerie Whiteman

The term real estate does NOT include:

a. air rights above the surface to infinity
b. mineral rights below the surface
c. the rights to use and enjoy the surface
d. encumbrances on the property

d. encumbrances on the property

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Those items permanently attached to the land are known as:

appurtenances

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Which of the following is a physical characteristic of land?

a. Scarcity
b. Immobility
c. Fixity
d. Situs

b. Immobility

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A characteristic of land which refers to location references is:

situs

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Land does not typically pay for itself in a short period of time. This characteristic is commonly known as:

a. nonhomogeneity
b. scarcity
c. fixity
d. indestructibility

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Those materials which make up a building that were once personal but are now real are known as:

fixtures

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The most effective test to determine if an item such as a gas grill, microwave oven or window treatments will stay with a property after sale is:

a. agreement
b. intentions of the annexing party
c. modification of the building
d. attachment of the item

a. Agreement

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Appurtenances:

a. require a bill of sale to pass ownership
b. typically lower the value of property
c. pass with the deed but only with specific mention
d. Automatically pass without specific mention in the deed

d. Automatically pass without specific mention in the deed

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The rights which a property owner enjoys on a body of flowing water is known as:

a. littoral rights
b. riparian rights
c. percolating
d. rights of capture

b. riparian rights

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A method of describing property using points angles, and distances is called:

a. metes and bounds
b. a short form description
c. the point of beginning
d. the government survey method

a. metes and bounds

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John contracts to purchase the Northeast 1/4 of the Northwest 1/4 of Section 4 AND the Eastern 1/2 of the Southwest 1/4 of Section 5 for $3,000 per acre. the purchase price is:

a. 240,000
b. 280,000
c. 320,000
d. 360,000

1/4 x 1/4 = 1/16

640 acres = a Section

640/16 = 40 acres

+
1/2 x 1/4 = 640/8 = 80 acres

80 + 40 = 120 acres
x $3,000/acre

= $360,000

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A parcel of property measures 180 feet wide and 1936 feet deep. The property sells for $14,500 per acre. What is the sales price?

180’ x 1936’ = 348,480 sq. feet.

43,560 / 348,480 = 8 acres
(feet in an acre)

8 x $14,500 = $116,000

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When the government zones a property to make it compatible with neighboring properties, the government is exercising:

Police Power

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The most common and inclusive form of ownership is:

a. conditional fee
b. fee simple
c. inclusive fee
d. fee determinable

b. Fee Simple

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Which of the following is TRUE regarding encumbrances and easements?

a. An encumbrance is always an easement
b. an easement is always an encumbrance
c. an easement will increase the value while an encumbrance will not
d. an encumbrance is a title claim and an easement is a monetary claim

b. an easement is always and encumbrance

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Of the following, which is NOT a method of creating an easement?

a. Condemnation
b. Necessity
c. Prescription
d. Merger of properties

d. Merger of properies

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Mary tells Mark that he may use her property to drive across so he will have easy access to a parcel he owns. Which of the following is most likely TRUE?

a. Mark’s right to use Mary’s property is a license and can be revoked at any time
b. After 7 years, this use will create a prescriptive easement
c. This is an appurtenant easement and will continue, even if Mary sells er property.
d. This is a personal easement in gross and will terminate with death of either party.

a. Mark’s right to use Mary’s property is a license and can be revoked at any time

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A right a person has to use the property of another which will pass if the property is sold is:

a. a license
b. an easement appurtenant
c. an encroachment
d. a personal easement

b. an easement appurtenant

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Ted has an irrevocable right to use John’s property to fish in the lake whenever Ted chooses. Ted’s right is MOST likely:

a. a license.
b. an easement appurtenant
c. an encroachment
d. a personal easement in gross

d. Attaches a right to use to an individual or entity rather than to the property.

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Which of the following is NOT a method of terminating an easement?

a. End of necessity
b. Merger
c. Condemnation
d. Abandonment

b. Merger

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The unauthorized intrusion of a fixture onto the property of another is BEST known as:

An encroachment

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Of the following, which is NOT a governmental restriction on the ownership of real property?

a. Police power
b. Zoning
c. Eminent Domain
d. Deed restrictions

d. Deed restrictions

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A lien which will attach to all real property and personal property of an owner is:

a. a special lien
b. a general lien
c. a mechanics lien.
d. a voluntary lien

b. a general lien

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A homeowner contracts with a roofing company to replace a failing roof. The contractor delivers shingles to the jobsite on July 1st and begins the tear-off phase on July 5th. The work will be completed on July 10th. If necessary, the contractor must record the affidavit of lien within 90 days of which date?

The Completion date July 10th.

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Which lien is both voluntary and specific?

A mortgage lien

Sally conveys a property to Ralph with the wording "under the condition the property is never used for the sale or consumption of demon liquor" 3 years later, Ralph opens a liquor store on the property. What is most likely to happen?

The property automatically reverts to Sally.

Upon his death, farmer John willed property to his wife Sue for the remainder of her life. Upon her death, the property is to go to their son Elmo. 2 years after John's death, Sue sells the property to Craig. What is going to happen to the property?

Elmo will receive the property when Sue dies.

Which of the following property rights are recognized in Georgia? a. Curtesy b. Freehold c. Dower d. Community Property

Freehold - Tried under real property laws - ownership

The storefront is leased for 3 months during the Christmas season. What type of estate would this be?

An estate for years. A start and an end date

A leasehold estate which can be terminated by either party with proper notification is MOST likely. a. an estate for years b. a periodic estate c. an estate at will d. an estate at sufferance

c. an estate at will

When a person has the revocable right to use the property of another, it is

A license

The XYZ Corporation would own its real estate as:

Ownership in Severalty

The form of concurrent ownership which is the least legally restrictive is:

Tenants in common

The most unique characteristic of joint tenancy is:

Right of survivorship

The form of concurrent tenancy which is NOT recognized in Georgia is: a. tenants in common b. sole ownership c. joint tenancy d. undivided interests

d. undivided interests

Which of the following is NOT true of community property? a. Separate property can be sold without spousal approval b. Property owned by married couples is owned 50/50 c. Most states recognize community property law. d. Property owned prior to marriage may be exempted from community property

c. Most states recognize community property law.

The Civil Rights Act of 1866 prohibits discrimination: a. Based on race b. based on race and national origin c. based on religion and sex d. in all circumstances

a. based on race

Title VIII (8) of the Civil Rights Act of 1968 is commonly referred to as:

The Fair Housing Law

The 1988 Amendments to the Fair Housing ACT include protections for:

Families with children and disability

A broker who is charged with illegal steering is working with:

Buyers or Tenants

Ownership of separate elements along with an ownership of common elements with others best describes what kind of ownership:

Condominium Ownership

Financing of condominium ownership is typically achieved:

By borrowing against the value of the ownership interest

Disadvantages of condominium living would include: a. a close proximity to neighbors b. low density c. a loss of "care-free" living d. limited recreational and social facilities

a. a close proximity to neighbors

A non-profit corporation is formed and real estate is purchased by the corporation. Stock in the corporation is then sold to individuals who receive along with the stock ownership, lease rights in a unit. This is called.

A cooperative

Separate ownership in a lot and a house with a common ownership in a community association which owns common areas best describes:

A PUD Planned Urban Development

A man purchased an interest in a time share development in north Georgia. After the purchase, the man became warry of tactics used and did some research. Through his research, he became aware of promises made which were, in his opinion, overstated. Which of the following is TRUE: a. He can rescind the contract within 7 days b. He can rescind the contract but must do so before closing the transaction. c. Sales contracts are final and cannot be rescinded d. in order to have any right to rescission based on misrepresentation, the alleged misrepresentation must be in writing.

A. He can rescind the contract within 7 days

Use of property which is inconsistent with current zoning but is allowed because the use was established prior to zoning: a. is created with a zoning amendment b. is a non-conforming use c. best describes spot zoning d. would require a buffer between this property and neighboring properties

b. Is a non-conforming use

The document which shows a new home meets the building code and is required for the property to be legally occupied is:

A certificate of Occupancy (CO)

A clause placed in a lease or deed which controls how a property may or may not be used in the future is:

A restrictive covenant

The person who Authorized another to act on their behalf is:

A principal

Dennis has a second home, and his neighbor Sue has been very helpful when needed. There is an issue with the HVAC and Dennis has called Little John Heating and Air to look at the system. Dennis has told Little John to contact Sue for access to the property. After checking the system, the technician tells Sue that a new condenser is needed, and the cost is $500. Sue authorizes the repair. Who should pay for the charge?

Dennis is responsible for the charge as Sue had Ostensible authority.

An agent has a duty to the principal to do what is best for that principal rather than what may be immediately best for themselves. This duty is known as:

Loyalty

Lead-based paint can be the cause of birth defects and developmental issues in children. Residential properties built before what date must include a lead-based paint disclosure?

1978

A seller of a property and any agent in the transaction is required to disclose:

Only known latent defects in the property.

Which of the following describes selling a property "as is": a. The property is old on the principal of "Caveat Emptor" and this relieves the seller of any responsibility of disclosure b. The property is sold without warranty or guarantee but the seller still must disclose knowledge of latent defects. c. The property is sold without warranty however the seller must disclose all defects. d. The property is sold with a warranty for good repair except for those defects properly disclosed.

b. The property is sold without warranty or guarantee but the seller still must disclose knowledge of latent defects.

Making a statement of obvious exaggeration or one which is nonfactual and not to be relied upon is:

Puffing and does not violate law

A principal's obligation to the agent would include:

Reimbursement

Representing both a buyer and a seller in a single transaction:

Is legal but does pose conflict of interest

Of the following, which is a termination of agency by an act of the parties? a. Death b. Incapacity c. Agreement d. Extinction

C. Agreement

Which of the following IS NOT a violation of the Sherman Antitrust Act? a. Two or more people conspiring to restrain competition b. Two or more people conspiring to charge a fixed fee c. Growing a business to such an extent that competition does not exist d. Tying one contract to another when there is a competition in the market.

d. Two or more people conspiring to restrain competition

Martha enters into a written agreement with Luke to lease a 3-bedroom home for 12 months, beginning on March 1 of this year. On July 15 of this year, Martha asks Luke to fix the air conditioning system which seems to work sporadically, at best. Luke refuses Martha's request. The agreement between the two is a: a. valid, unilateral, executed agreement b. valid, unilateral executory agreement c. valid, bilateral, executed agreement d. valid, bilateral, executory agreement.

d. valid, bilateral, executory agreement.

Which of the following is an essential element of a valid agreement? a. the agreement must be in writing b. the parties to the agreement must be at least 18 years old c. The purpose and formation of the agreement must be legal d. The agreement must be legally enforceable.

c. The purpose and formation of the agreement must be legal

When a broker has commission rights regardless of who sells the property the agreement signed is most likely:

An Exclusive Right to Sell the listing.

Ned enters into an agreement with the broker Sally to assist him in selling his property. The agreement between the parties is such that Ned can enter into agreements with other brokers also. What type of listing agreement is this?

This is most likely an Open Listing Agreement

What is a net listing

The seller is guaranteed a net amount of money, and the broker receives whatever is left over. Not legal in Georgia

Broker Ben enters into an agreement with Seller Sara to assist her in the sale of her property. When has Ben earned his commission?

Upon finding a ready, willing, and bale buyer at listing contract price and terms.

Which of the following is TRUE of procuring cause? a. A broker does not always have to be the procuring cause to earn a commission b. The broker who shows the property is always the procuring cause. c. The broker who writes the contract for the buyer is always the procuring cause. d. If a broker has an agency contract to represent the buyer, that indicates procuring causes.

a. A broker does not always have to be the procuring cause to earn a commission

Owner Russ hires broker Bill to sell his home. Russ and Bill enter into an agreement for 180 days and if Bill is successful in selling the property, Russ will pay a commission of 5% of the agreed upon purchase price at closing. Shortly after listing the property, the relationship between Russ and Bill begins to deteriorate. Russ charges that Bill is not doing enough to expose the property and Bill claims that Russ is being antagonistic, unreasonable, and threatening. Which of the following is TRUE? a. This agreement can be terminated mutually, and the agreement may include compensation for Bill. b. This agreement can be terminated mutually, but if so, there must be no obligation of Russ to pay compensation c. It would be best for Bill to stop responding to Russ because of the threats and let Russ terminate by abandonment d. This agreement is binding until the end of the 180-day period unless one party revokes or renounces the agency.

a. This agreement can be terminated mutually, and the agreement may include compensation for Bill.

Stu enters into a verbal agreement with Sally to purchase a residential property. The agreement between the two is explicit and detailed. The agreement is MOST LIKELY: a. valid but not enforceable b. valid and enforceable c. void and not enforceable d. void but enforceable as to price, not performance.

a. valid but not enforceable

To be valid and enforceable, a real estate sales contract does not have to have: a. earnest money b. a complete agreement between buyer and seller c. competent parties d. legal purpose

a. earnest money

The closing of a real estate sales contract typically indicates the contract is:

Executed

When a borrower transfers the rights and obligations to another person, this is known as a

Novation

A buyer and seller, at the time of entering into the purchase and sale agreement stipulate in the agreement that upon a default, the defaulting party shall pay $5,000 and upon receipt of payment, the non-defaulting party shall surrender any and all further rights. This is known as:

Liquidated damages

A contract is not binding upon the parties until

the acceptance of the offer has been communicated to the offeror.

The main difference between a sales agreement and an option agreement is:

One is bilateral and the other is unilateral

The most significant component of an installment contract is:

the seller does not pass legal title at the time of contract

An exhibit is added to a form contract at the time of negotiation. This exhibit could be properly referred to as:

A rider An Attachment An Addendum

A document which does not indicate how much, when, how, or even provides an obligation is:

A RIGHT TO FIRST REFUSAL

A type of loan payment where the entire principal is paid at the end of the period is known as:

A term Loan

Which of the following loan terms would yield the highest monthly payment? a. 8% interest, 20 year loan term. b. 8% interest, 30 year loan term c. 9% interest, 20 year loan term d. 9% interest, 30 year loan term

c. 9% interest, 20 year loan term

Roni purchased a home and the loan terms stipulated that while the monthly payments would be computed on a 30-year term, the remaining balance owed must be paid off in 10 years. What is this type of loan?

A partially amortized loan

Four years ago, Pam purchased a home for $175,000. Pam made a down payment of $35,000 and received a loan of $140,000. The current balance on that loan is $135,000 and according to an appraiser, the property is now worth $185,000. Two years ago, Pam received an equity loan of which there is a $20,000 balance. What is Pam's current equity in the property?

$30,000

Greg purchased a property for $180,000 and is approved for a 90% loan at 5% annual interest with a 30-year amortization. The lender is charging 3 points in closing costs. What is the closing cost?

$4,860

Which of the following would represent an 80% loan to value ratio? a. Sales price $225,000; down payment $43,750 b. Sales price $117,500; down payment $24,000 c. Sales price $345,800; Down payment $68,800 d. Sales price $262,400; down payment $52,400

b. Sales price $117,500; down payment $24,000

Which of the following statements about VA and FHA loans is true: a. FHA guarantees loans b. Both programs routinely provide 100% LTV loans c. VA is federal program; FHA; is a state program d. There is no maximum income to be eligible for either program.

d. There is no maximum income to be eligible for either program.

What non-government program would allow a borrower to get a loan routinely above 80% LTV?

PMI

Which of the following would not trigger the Truth in Lending Act if included in an advertisement for real estate? a. Payments less than $800 per month, including taxes and insurance b. 30-year financing available at great rates c. Long term financing available with payments less than rent d. Move in for only $1,000

c. Long term financing available with payments less than rent

What government program would allow a borrower to get a loan routinely above 80% LTV

PMI

A rate that includes the cost of borrowing money which consumers can use to compare more accurately offers from lenders is:

APR Annual percentage rate

A lender refuses to make loans in one neighborhood and limits the types of loans available in another neighborhood. What is this called?

Redlining

A relatively new innovation which is used to evaluate credit risk is:

Credit scoring

Consumers get most of their loans from:

The primary market

Disintermediation is the result of:

The public moving money from savings accounts to invest in government securities

The primary difference between mortgage bankers and mortgage brokers is:

Mortgage bankers loan their own money; mortgage brokers do not.

The primary purpose of the secondary market is:

to provide liquidity for the primary market

The largest entity in the secondary market is:

FNMA

A type of loan which would change periodically with market conditions is

ARM

Larry negotiated a loan in which the payment remains consistent, but the interest rate may go up over time. This arrangement could best result in:

Negative Amortization Loan

Stewart is interested in purchasing 50 acres and developing it into an 80-lot residential community. The best type of financing for Stewart would be:

A blanket mortgage

The seller Mike agrees to take back financing from Buyer Mary to lower her down payment. In doing this, Mike and Mary agree to increase the sales price $10,000 over the listed price. They further agree between themselves that no payments will be due for 6 months and at that time Mike will issue a satisfaction for the $10,000 loan. This activity is known as:

A silent second mortgage

Which of the following would NOT be a red flag indicating mortgage fraud? a. The seller is never at the principal residence b. the buyer provides inaccurate credit information c. The loan involves money to make repairs d. Sales price is substantially less than the list price because of the property condition

MID COURSE REVIEW Flashcards

TEST REVIEW (101 cards)