Quick Quiz 8 COPY Flashcards
(35 cards)
The trustee will deliver to the trustor a
reconveyance deed.
A trustee’s deed would be used in case of .
foreclosure and would not be delivered to the trustor
Which does NOT constitute an estate in real property? A) Reversion B) Leasehold C) Deed of trust D) Remainder
C) Deed of trust
A deed of trust conveys only a security interest, not a possessory interest. Estates in remainder and in reversion are both future possessory interests. A leasehold estate is a present possessory interest.
The principle of value that affirms that a purchaser will buy goods and services at the lowest cost available is A) regression. B) substitution. C) inflation. D) retribution.
B) substitution.
The principle of substitution states that when several similar commodities, goods, or services are available, the one with the lowest price attracts the greatest demand and widest distribution.
In real estate financing, lenders will sometimes refer to “nominal rate” when granting a loan. This means
A) the rate of interest specified in the promissory note.
B) the maximum rate of interest allowed by law is obtainable on financing a property.
C) that the rate of interest in the final granting of the loan will be greater than the commitment.
D) points will be required, as the rate required by the lender would exceed the legal rate of interest.
A) the rate of interest specified in the promissory note.
Buyer purchased a property from Seller on August 15, 2006. Buyer was to take possession as of September 30, 2006, with all prorations to be as of the same date. On November 1, 2005, Seller had paid the taxes for the fiscal year of 2005-2006. The escrow closing statement would show
A) Seller pays Buyer for three months’ taxes.
B) Seller pays Buyer for nine months’ taxes.
C) Buyer pays Seller for three months’ taxes.
D) Buyer pays Seller for nine months’ taxes.
A) Seller pays Buyer for three months’ taxes.The taxes have been paid to July 1, 2006, which is three months short of the close of escrow, September 30, 2006. The seller is obligated to pay the buyer for the taxes for the months of July, August, and September.
(1) C.O.E.: September 30, 2006
(2) D.I.: July 1, 2006* *Date of item: Taxes paid to July 2006
(3) Short of C.O.E. 3 mos. Therefore, seller owes 3 mos.
Which would cause an owner of a fee simple estate to convert her interest to a less-than-freehold estate?
A) Granting oil and mineral rights to a third party
B) Both granting oil and mineral rights to a third part and leasing for the purpose of agricultural use for a period of five years
C) Leasing for the purpose of agricultural use for a period of five years
D) A sale-leaseback
D) A sale-leaseback
The owner who sells her interest is conveying the fee title (a freehold estate) to the buyer. When the seller becomes a lessee of the former property through a leaseback arrangement, the seller has converted the former freehold (fee) estate to a less-than-freehold estate (a lease).
The power of eminent domain can be exercised by A) public education institutions. B) cities. C) public utilities. D) all of these.
D) all of these.
In the absence of expressed provisions in the deed restrictions and plans, which of these is part of a condominium unit? A) Bearing walls B) None of these C) Elevator D) Central heating system
B) None of these
Which is NOT a specific lien? A) Mechanic's lien B) Judgment lien C) Blanket mortgage D) Unrecorded property tax lien delinquent from prior years
B) Judgment lien
A judgment lien is a general lien on all property of the debtor not otherwise exempt by law. A property tax lien, a mechanic’s lien, and a blanket mortgage are all specific liens.
Real property taxes for the 2005-2006 fiscal year become a lien on A) February 10, 2006. B) January 1, 2005. C) December 10, 2005. D) November 1, 2005.
B) January 1, 2005.
Taxes become a lien on January 1, 2005 preceding the fiscal tax year.
Mr. and Mrs. Crest purchased a home two years ago, financing it with a long-term first trust deed and note. They encountered some financial difficulty and were unable to make their payment for two consecutive months. As a result, the beneficiary initiated foreclosure proceedings and the Crests received a copy of the notice of default that had been recorded. Their best course of action at this time is to exercise their right of A) loan moratorium. B) redemption. C) reinstatement. D) refinancing.
C) reinstatement.
Their right of reinstatement permits them to make up the delinquent payments plus any penalties during the three months following notification of default. Redemption refers to the right to pay the entire loan off, plus penalties, costs, and charges in order to keep the property.
On FHA loans, mutual mortgage insurance
A) insures the mortgagee against loss through foreclosure.
B) pays off the mortgage if the mortgagor dies.
C) is paid for by the mortgagee.
D) insures mortgagees against fire.
A) insures the mortgagee against loss through foreclosure.
FHA mutual mortgage insurance insures the lender (mortgagee) against loss in the event a foreclosure sale fails to satisfy the debt obligation. The mortgage insurance premium (MIP) is paid by the borrower (mortgagor).
A licensee who is guilty of “conversion” is one who is
A) misrepresenting.
B) failing to make full disclosure.
C) misappropriating the funds of clients.
D) commingling.
C) misappropriating the funds of clients.
Conversion is to change from one use to another as in the case of misappropriating funds entrusted to a licensee. Commingling is mixing funds of the agent with those of the client, and failure to make full disclosure can be referred to as negative fraud.
Able died leaving no heirs but had willed Blackacre Ranch to Baker. Talbot was in possession of Blackacre under an existing lease that had two years to run. During the probate of Able’s estate, the court found the will to be invalid. Under these circumstances, title to Blackacre would
A) pass to Talbot since he is in possession.
B) pass to Baker since it was Able’s intent.
C) pass by statutory provisions by a court of proper jurisdiction.
D) pass through an action by one or more of the heirs for declaratory relief.
C) pass by statutory provisions by a court of proper jurisdiction.
The court would follow the law of the state because the will failed. Therefore, with no heirs claiming the property, it would escheat to the state after a five-year period.
In appraising a property using the market data approach, how would an appraiser treat a feature value found in the comparable property but not found in the subject property?
A) Add the value of the amenity to the subject property
B) Subtract the value of the amenity from the sales price of the comparable property
C) Treat the amenity as not included in the valuation
D) Disregard the feature value as no two properties are exactly alike
B) Subtract the value of the amenity from the sales price of the comparable property
The appraiser would subtract the value of the amenity from the sales price of the comparable property in order to get an indication of the value of the subject property.
A real estate salesperson who advertises a property must provide in the advertisement
A) the broker’s name.
B) the broker’s name and address.
C) both the broker’s name and address and the salesperson’s name.
D) at least the salesperson’s name.
D) at least the salesperson’s name.
In the sales comparison approach, the adjusted sales price of the comparable property is
A) a direct relationship to market value.
B) indicated by agreement between the buyer and the seller.
C) an estimate of value of the comparable property with similar prominent characteristics to the subject property.
D) the only indication of the market value.
C) an estimate of value of the comparable property with similar prominent characteristics to the subject property.
Sales prices of “comps” are adjusted to reflect what the comparable property might have sold for had it been more nearly identical to the subject property-or had similar prominent characteristics to the subject property.
The Subdivision Map Act provides primary responsibility for the physical aspects of the subdivision to the
A) governing bodies of cities and counties.
B) real estate commissioner.
C) State Department of Public Health.
D) state land commissioner.
A) governing bodies of cities and counties.
The Subdivision Map Act is primarily a statewide enabling act giving local governments authority to control the physical characteristics of subdivisions within their jurisdictions, and outlining map filing procedures on a statewide basis.
In making a decision with regard to a proposed real estate loan for a borrower, lenders normally seeks to minimize
A) overall net yield.
B) the number of substandard loans in their portfolio.
C) loan-to-value ratio.
D) a borrower’s difficulties with regard to the results of divorce, death, or unforeseen events.
B) the number of substandard loans in their portfolio.
Lenders generally seek to minimize the number of substandard loans in their portfolios, thus reducing their risk of loss. A lender sometimes reduces the allowable loan-to-value ratio for a specific borrower to reduce the risk in making that loan, but the lender does not want to minimize the loan-to-value ratio.
A salesperson unlawfully takes kickbacks in connection with licensed real estate activities. The employing broker finds out about the kickbacks, fires the salesperson, and warns others in the office not to do this. Under these circumstances
A) both the salesperson and the broker could be disciplined by the real estate commissioner.
B) only the broker could be disciplined by the real estate commissioner.
C) a court could revoke the salesperson’s real estate license.
D) only the salesperson could be disciplined by the real estate commissioner.
A) both the salesperson and the broker could be disciplined by the real estate commissioner.
A broker is responsible for supervision of employed salespersons. A failure to supervise salespersons which might contribute to the salesperson’s violation of laws could lead to disciplinary action against the broker as well as against the salesperson. Only the real estate commissioner can revoke a real estate license, never the court.
All of these costs qualify for itemized deductions by the owner-occupant of a single-family residence in the appropriate tax year EXCEPT
A) the unreimbursed portion of a casualty or theft loss in excess of 10% of the adjusted gross income.
B) real property taxes.
C) interest on a deed of trust.
D) the cost of painting a bedroom.
D) the cost of painting a bedroom.
Real estate taxes, interest on loans, and the unreimbursed portion of casualty or theft losses are acceptable deductions on an owner-occupied residence, while the cost of painting a bedroom is not tax deductible.
In the narrative form of appraisal report, where would the property value be stated? A) Description of use B) Description of the neighborhood C) Purpose of the appraisal D) Legal description of the property
C) Purpose of the appraisal
The beginning or cover letter in a narrative form of appraisal sets forth the purpose of the appraisal and the final opinion of value. Everything that follows in this most comprehensive form of appraisal is the appraiser’s data to support the appraiser’s conclusion.
A primary source of funds for residential financing is the
A) Federal Home Loan Bank.
B) Federal Savings and Loan Association.
C) Federal Savings and Loan Insurance Corporation.
D) Federal Housing Administration.
B) Federal Savings and Loan Association.
