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Modern Real Estate Quiz AnswerKey updated 2024
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Modern Real Estate Quiz AnswerKey updated 2024
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Modern Real Estate QuizCircle the letter of the Answer that corresponds to the displayed Question.
1. Dominant tenement
A. The tract that benefits from an easement.
B. federal law that ensures that residential buyers and sellers receive full disclosure of all settlement charges; mandates HUD booklet about closing costs, a good-faith estimate of closing
costs, and hUD-1 closing statement.
C. Broker
D. boards or plywood sheets nailed directly to the floor joists; made of rough boards
2. Marketable Title
A. the right of a defaulted property owner to recover the property after its sale by paying the appropriate fees and charges
B. A title that is free of liens and encumbrances, defects, and protects purchaser from hazard of litigation and is convincible legally significant.
C. Federal law that requires federally chartered or insured lenders or provide buyers and sellers of 1-4 family homes, coops, condos with info on all settlement costs
D. sheets of flat, heavy material place on top of the roof boards to insulate and water proof the roof
3. ready, willing, and able buyer
A. the external underside of the eave; usually contains ventilation for the attic/roof
B. The personal preference of people for one location over another, not necessarily based on objective facts and knowledge
C. a sale in which both the selling agent and the listing agent are from the same firm.
D. A buyer who is financially qualified, prepared to buy on seller's terms, and ready to take positive steps toward consummation of the transaction by showing willingness to enter into an
enforceable contract.
4. celling joists
A. This means that the contract must be performed within the time limit specified, and any party who has not performed on time is liable for breach of contract.
B. Specifies that a condo is created and established when the developer executes and records a declaration of its creation in the county where the property is located
C. A legally enforceable promise or set of promises between legally competent parties.
D. attached to the top plate of a wall and carry the weight of the roof
5. Cooperation brokers
A. also called a "term loan", it only calls for periodic payments of interest.
B. those who act as subagents of the principal
C. The home is owned by an individual (not 3 or more/not sell more than 1 every 2 years.
D. The act of encouraging people to sell or rent their homes by claiming that the entry of a protected class will have a negative impact on property values.
6. Marketable Title Act
A. NC law that requires many types of real estate documents to be recorded for protection against claims from third parties.
B. Provides that if a chain of title can be traced back for 30 years and no other claim has been recorded during that time the title become a marketable title.
C. NC requirements as to construction standards, with the primary purpose being safety.
D. When the property does NOT sell for an unusually high or low price because of a special relationship between a buyer & a seller; parties are dealing from equal bargaining positions
7. Fructus Naturales
A. Plants that do not require annual cultivation and are considered real property.
B. The channeling of homeowners to particular neighborhoods based on the presence or absence of a protected class.
C. Required for each brokerage firm and branch office, the full broker responsible for displaying all licenses properly, ensuring advertising is done properly, maintaining the trust account
D. the practice of setting prices for products or services rather than letting competition on the open market establish them.
8. Universal agent
A. the leasing of premises by a tenant to a third party for part of the lessee's remaining term
B. one who is empowered to do anything the principal could do personally
C. Often used to store petroleum, if leaking can contaminate groundwater, only 10% of tank needs to be underground to require monitoring
D. A lack of uniformity; dissimilarity; heterogeneity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogenity
9. General agent
A. one who represents the principal in a broad range of matters related to a particular business or activity
B. a lease that provides for increases in rent to occur at set future dates; often used in the rental of office space for multiple-year terms. Also called a step-up lease.
C. For the life of another. A life estate pur autre vie is a life estate that is measured by the life of a person other than the grantee.
D. A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision.
10. Zoning Ordinances
A. a loan insured by the FHA and made by an approved private lender according to FHA's regulations
B. Laws imposed by local government authorities that regulate and control the use of land and structures within a designated district or zone.
, C. A Federal Act that facilitates accessibility and mobility by ramp construction, safety rails, wider doors, and other accommodations.
D. A legal test applied by the courts to determine whether an item is a fixture (and. therefore, part of the real property) or personal property.
11. Broad Form (HO-2)
A. An insurance policy covering buildings and personal property against loss or damage from fire, lighting, removal, windstorm, hail, explosion, riot, smoke, vandalism and theft.
B. A non-warranty deed that provides the grantee with the least protection of any deed. It carries no covenant or warranties and conveys only such interest, if any, that the grantor my have
when the deed is delivered.
C. The right to use the open space above a property, usually allowing the surface to be used for another purpose.
D. The State law of descent that dictates distribution of the real and personal property of the deceased that died without a will.
12. Stigmatized Properties
A. Often used to store petroleum, if leaking can contaminate groundwater, only 10% of tank needs to be underground to require monitoring
B. Property regarded as undesirable because of events that occurred there; also called psychologically impacted property. Some conditions; gang-related activity, proximity to a nuclear
plant, and even the alleged presence of ghost.
C. The amount of money that will compensate the injured party for breach, which the parties agree to at the time they enter into the contract.
D. law designed to protect, preserve, and give management guidelines in coastal areas of the state and places a severe limitation on developments
13. Equity
A. gives the purchaser information about the exact location and size of the property
B. The interest or value that an owner has in property over and above any indebtedness.
C. A rule of law stating that once written acceptance is placed in control of the mailing service, it is considered accepted--not when the acceptance is actually received by the offeror.
D. The Open, Continuous, Exclusive, Adverse, Notorious possession of another's land under a claim of title. Possession for a statutory period of 20 years in North Carolina may be a
means of acquiring title.
14. Personal Property or Personality
A. Items, called chattels, that do not fit into the definition of real property; movable objects like; furniture, clothing, jewelry, money, vehicles, etc.
B. Radioactive odorless, tasteless gas; with long term exposure may cause lung cancer
C. churches, schools, cemeteries, and government held lands.
D. Reference to linear measurements and compass directions.
15. closing agent
A. the one who usually conducts the proceedings at a closing and calculates the division of income and expenses between the parties.
B. Uses boundaries and measurements of the land.
C. a tax term used in exchanges; property may be exchanged for life in kind property and the tax postponed (does not refer to the physical similarity of the properties).
D. a flexible payment plan that allows a mortgagor to make lower monthly payments for the first few years of the loan and larger payments for the remainder of the term.
16. Overlay District
A. a column, usually of masonry block or steel-reinforced concrete; bears wall weight.
B. A type of zoning that is superimposed over another type of zoning.
C. Growing crops, such as grapes and corn, that are produced annually through labor and industry; also called fructus industriales. Usually considered to be personal property,
D. Residential, Commercial, Industrial, Agricultural, Special purpose.
17. Laches
A. holds that the landlord is liable for injuries that occur in common areas (hallways, stairways, elevators, sidewalks, and parking lots) when the landlord negligently failed to maintain safe
conditions in those areas.
B. Loss of a right through undue delay or failure to assert it.
C. insurance provided by a private carrier that protects a lender against a loss in the event of a foreclosure and deficiency
D. provides that on sale of the property by the borrower to a buyer who wants to assume the loan, the lender has the choice of either declaring the entire debt to be due and payable
immediately or permitting the buyer to assume the loan
18. secondary mortgage market
A. a standardized conventional loan that meets Fannie Mae or Freddie Mac's requirements; made by for-profit lenders and are not insured by the federal gov't to the most creditworthy
borrowers.
B. a market for the purchase and sale of existing mortgages
C. A method of condemnation in which title and possession of private property can immediately be transferred to a public authority.
D. the consummation of the real estate transaction; the point at which ownership of a property is transferred in exchange for the selling price; also called settlement
19. tax-deferred exchange
A. states that a borrower with good payment history will have PMI canceled when he or she has built up equity equal to 20% of purchase price or appraised value.
B. made up of lenders that originate mortgage loans
C. an IRS sanctioned method for real estate investors to defer taxation of capital gains by making a property exchange rather than by selling the investment property
D. a federal law that requires sellers/landlords to disclose the known presence of lead-based paint in residential property to potential buyers/tenants via the required disclosure addendum
to sales contracts or leases
20. Americans with Disabilities Act (ADA)
A. not used in NC; after appropriate notice has been given to the delinquent borrower and proper papers prepared, the court establishes a specific time period during which the balance of
the defaulted debt must be paid in full
B. A Federal Act that facilitates accessibility and mobility by ramp construction, safety rails, wider doors, and other accommodations.
, C. The easiest but least precise way to measure depreciation that uses the effective age of a building & its economic life.
D. occurs when the offeree signs the offer without making any changes to it, thereby evidencing his acceptance and willingness to be bound by and perform all terms of the offer.
21. frieze board
A. the lowest horizontal member of the house frame; also on a window or door
B. a wooden board fastened at the top of the exterior wall under the eave soffit to prevent penetration of weather elements
C. a loan that is not backed by a gov't agency.; lender bears all the risk in the event of default
D. People who are recognized by law as being able to contract with others; those of legal age and sound mind; a requirement of a legal enforceable contract.
22. Assessment
A. A concurrent form of ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Ownership interest may be unequal. Right of
survivorship is not automatic in NC but can be added by an attorney.
B. NC requirements as to construction standards, with the primary purpose being safety.
C. An official valuation of property for the purpose of establishing assessed value for tax purpose.
D. A dwelling consisting of a series of rooms or units built off-site according to the NC State Building Code; is considered real property as soon as it assembled on the land. May be multi-
storied
23. Contribution
A. The principle that affirms that the value of any component of a property is defined by what its addition contributes to the value of the whole or what its absence detracts from that value.
B. This means that the contract must be performed within the time limit specified, and any party who has not performed on time is liable for breach of contract.
C. Caused by factors outside the subject property & is not curable. ex: proximity to a polluting plant
D. The construction cost, at current prices and using modern materials & methodology, of a property that is not necessarily an exact duplicate but serves the same purpose or function as
the original property.
24. Federal Reserve System
A. A provision in a contract that requires a certain act to be done or a certain event to occur before the contract becomes building; a condition of the contract.
B. The country's central banking system, which controls the nation's monetary policy by regulating the supply of money and interest rates
C. a standardized conventional loan that meets Fannie Mae or Freddie Mac's requirements; made by for-profit lenders and are not insured by the federal gov't to the most creditworthy
borrowers.
D. The principle that affirms that the value of any component of a property is defined by what its addition contributes to the value of the whole or what its absence detracts from that value.
25. estate at sufferance
A. an estate that arises when a tenant who lawfully came into possession of real property continues, after the tenant's rights have expired, to hold possession of the premises without the
consent of the landlord; lowest estate in real estate.
B. A tenant's right to occupy real estate during the term of a lease, generally considered a personal property interest; nonfreehold estate.
C. The principle that states that excess profits generate competition.
D. A charge against property that provides security for a debt or an obligation of the property owner.
26. Business Cycle
A. the consummation of the real estate transaction; the point at which ownership of a property is transferred in exchange for the selling price; also called settlement
B. The capacity to satisfy future owners needs and desires; how future owners can make good use of the property.
C. A deliberate agreement between parties offer and acceptance; "meeting of the minds." A requirement of a legally enforceable contract.
D. The upward and downward fluctuations in business activities generally characterized by four stages: expansion, recession, depression, and revival
27. Surface Rights
A. A conditional transfer or pledge of real estate as security for the payment of a debt. Also the document creating a mortgage lien in a lien theory state.
B. maximum amount of security deposit if tenancy is longer than month to month.
C. Ownership rights in a parcel of real estate that are limited to the surface of the property and do not include the air above it (air rights) or the minerals below the surface (subsurface
rights).
D. Special damages that might be obtained if the damages upon breach were reasonably foreseeable to the breaching party at the time of making the contract.
28. Age Life Method of Depreciation
A. the third party for whom some level of service is provided by an agent of another party, but who is not represented by the agent
B. A concurrent form of ownership reserved for property owned by husband and wife. Right of survivorship is mandatory; making the surviving spouse owner in severalty immediately upon
the death of a spouse.
C. The easiest but least precise way to measure depreciation that uses the effective age of a building & its economic life.
D. a reduction in a property's value resulting from a decline in physical condition; repairs that are physically possible and economically feasible and will result in an increase in appraised
value. Ex: Roof replacement, painting
29. package loan
A. gives an estimate of your settlement charges and loan terms if you are approved for your loan.
B. an estate that gives the tenant the right to posses property with the consent of the landlord of a term of unspecified or uncertain duration.
C. An appraisal technique that determines assessed value for all lands in a given area by applying an overall percentage increase of decrease.
D. a loan that includes not only the real estate, but also all fixtures and appliances installed on the premises; has been used extensively in financing furnished condo units
30. Statute of Frauds
, A. 1)the promises made in the sales contract are fulfilled 2)the mortgage loans funds are distributed to the buyer for use 3)other settlement costs or funds are dispersed
B. Under this covenant, the lessor guarantees that the lessee may take possession of the leased premises and that no one, including the landlord, will interfere with the tenant's
possession or use of the property.
C. the one who usually conducts the proceedings at a closing and calculates the division of income and expenses between the parties.
D. A state law that requires that certain instruments that convey interest in real estate be in writing to be legally enforceable, such as deeds, real estate sales contracts, and certain leases.
31. Uniform Electronic Transactions Act (UETA)
A. a tax term used in exchanges; property may be exchanged for life in kind property and the tax postponed (does not refer to the physical similarity of the properties).
B. NC version of the federal E-sign legislations that allows contracts to be created by electronic means such as e-mails and faxes; the electronic signature is binding.
C. Due and payable by the buyer/principal on the signing and acceptance of an offer to purchase property found by the buyer's agent.
D. Real property uses that were legally established before adoption of current zoning plan, but have been "grandfathered".
32. Replacement cost
A. The construction cost, at current prices and using modern materials & methodology, of a property that is not necessarily an exact duplicate but serves the same purpose or function as
the original property.
B. one who represents the principal in a broad range of matters related to a particular business or activity
C. the form of foreclosure used in lien theory states; court process
D. The effort that began a chain of events that brings about the desired result. Under an open listing, the broker who is the procuring cause of the sale receives the commission.
33. frame
A. Owned by two or more parties usually not husband and wife; undivided equal interest unless stated; each owner receives share when sold can transfer without other signing; can
acquire at different times; if not stated, tenants in common; never survivorship
B. Physical or design features that are no longer considered desirable by property buyers but can be replaced or redesigned at low cost. ex: changing fixtures
C. a sale in which both the selling agent and the listing agent are from the same firm.
D. the wooden skeleton of the house consisting of the floors, walls, ceilings, and roof
34. lien theory
A. an older, traditional approach in mortgaging property where a two-party mortgage instrument is used as security for the debt; the borrower retains both legal and equitable title to the
property.
B. Caused by factors outside the subject property & is not curable. ex: proximity to a polluting plant
C. a line of credit allowing the mortgagee to make additional future advances of funds to the mortgagor, and are generally set up as home equity loans.
D. when the broker/firm represents the buyer and the seller in the same transaction
35. home equity loan
A. the practice of setting prices for products or services rather than letting competition on the open market establish them.
B. Estimating the replacement cost of a structure based on the construction cost per unit of measure of individual building components, including material, labor, overhead & builders
profit.
C. a source of funds for homeowners who wish to finance the purchase of expensive items; consolidate existing installment loans on credit card debt; or pay for medical, educational,
home improvement, or other expenses
D. Passed in 1980, established Superfund to clean up uncontrolled hazardous waste site and to respond to spills
36. Legally Competent Parties
A. the bottom of the wall frame that connects the studs to the flooring
B. People who are recognized by law as being able to contract with others; those of legal age and sound mind; a requirement of a legal enforceable contract.
C. When the cost of an asset is depreciated evenly over its useful life.
D. boards or plywood sheets nailed directly to the floor joists; made of rough boards
37. Land
A. charging interest in excess than the maximum rate established by state law.
B. rights arising from traditional property law
C. five
D. The earth's surface, extending downward o the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water
38. estate for years
A. a leasehold estate that continues for a definite period of time, whether for years, months, weeks, or days; automatically terminates at the end of the lease period.
B. The support a parcel of land receives from adjacent land; a neighbor's duty to support adjoining land in its natural state.
C. The tract that benefits from an easement.
D. An agency contract between the owner of income property and a management firm or an individual property manager that outlines the scope of the manager's authority.
39. Easement by condemnation
A. An easement acquired for a public purpose through the power of eminent domain.
B. divisions of financial responsibility between the buyer and seller for such items as loan interest, taxes, rents, and fuel or utility bills.
C. A clause in insurance policies covering real property that requires that the policyholder maintain fire insurance coverage generally equal to at least 80 percent of the property's actual
replacement cost.
D. the specific duties of the principal: loyalty, obedience, accounting, disclosure of information, and skill, care, and diligence
40. Scarcity
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