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Modern Real Estate Quiz AnswerKey 2.
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Modern Real Estate Quiz AnswerKey 2.
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Modern Real Estate QuizCircle the letter of the Answer that corresponds to the displayed Question.
1. holdover tenant
A. An official valuation of property for the purpose of establishing assessed value for tax purpose.
B. a person who retains possession of leased property after the lease has expired; the landlord may continue to accept rent
or start eviction procedures.
C. Property taxes and special assessments, then in order of time and date files (pure race), except mechanics lien, which
dates to date labor began or materials were first provided.
D. 10 day period after the auction in which the borrower can try to raise the necessary funds to redeem the property.
2. sheathing
A. written promise to repay a debt in definite installments with interest.
B. a figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property's value
C. insulating material that is applied to the wall framing; then siding is applied on top of it
D. determines the amount of the gain realized from a sale of real property
3. index lease
A. the leasing of premises by a tenant to a third party for part of the lessee's remaining term
B. The country's central banking system, which controls the nation's monetary policy by regulating the supply of money and
interest rates
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 lease that allows rent to be increased or decreased periodically, based on changes in a stipulated index, such as the
government cost-of living index or some other named index.
4. Building Permit
A. Written governmental permission for the construction, alteration, or demolition of an improvement, showing compliance
with building codes and zoning ordinances.
B. The principle that states that excess profits generate competition.
C. when principal and agent, without formally agreeing to the agency, act as if one exists.
D. Colorless, odorless poisonous gas produced as a by-product of incomplete combustion; can be dangerous if not
properly ventilate
5. deed of trust
A. the document that pledges the property to the lender as security or collateral for a debt; also called mortgage.
B. a quasi-government agency established to purchase any kind of mortgage loans in the secondary mortgage market from
the primary lenders.
C. Demand, Utility, Scarcity & Transferability (DUST)
D. NC requirements as to construction standards, with the primary purpose being safety.
6. Grating Clause
A. Words of conveyance
B. money or property given to make up any difference in value or equity between two properties in a 1031 exchange
, C. A zone created to preserve historic buildings and sites that are irreplaceable.
D. Plants that do not require annual cultivation and are considered real property.
7. Deed in lieu of Foreclosure
A. The maximum possible estate in real property; most complete and absolute ownership; indefinite in duration, freely
transferable and inheritable.
B. Deed that is used when a borrower has defaulted on the mortgage loan and wants to avoid a foreclosure action.
C. profits from assets owned for 12 months or less
D. Estimate based on the present worth of the future rights to income.
8. Bundle of Legal Rights
A. 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.
B. Federal Act that prohibited any type of discrimination based on race in the sale or rental of real property.
C. 1)Note rate 2)Index 3)Margin 4)Interest rate caps 5)Payment Cap 6)Adjustment Period 7)Conversion option
D. The concept of land ownership that includes ownership of all legal rights to the land, i.e.. Disposition, exclusion,
enjoyment, possession and control.
9. Supply
A. This type of lien affects all the property of a debtor, both real and personal, rather than a specific parcel of real property
B. a concrete support under a foundation, chimney. or column that usually rests on solid ground and is wider than the
structure being supported
C. The amount of goods available in the market to be sold at a given price. The term is often coupled with demand'
D. A map of a subdivision indicating the location and boundaries of individual properties. Generally shows lots, blocks,
easements, streets, floodplains, etc. Usually requires official approval before recordation.
10. judicial foreclosure
A. Do not own land underneath unit; can stack vertically; 7 days to cancel; own "paint to paint" or enclosed airspace;
common areas owned by all members as tenants in common
B. the form of foreclosure used in lien theory states; court process
C. Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the
purchase price if the sale is closed.
D. a quasi-government agency established to purchase any kind of mortgage loans in the secondary mortgage market from
the primary lenders.
11. Homeowner's Protection Act
A. The examination of all public records that might affect a title
B. The capacity to satisfy future owners needs and desires; how future owners can make good use of the property.
C. A zone created to preserve historic buildings and sites that are irreplaceable.
D. 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.
12. NC Coastal Area Management Act
A. a quasi-government agency established to purchase any kind of mortgage loans in the secondary mortgage market from
the primary lenders.
B. law designed to protect, preserve, and give management guidelines in coastal areas of the state and places a severe
limitation on developments
, C. The country's central banking system, which controls the nation's monetary policy by regulating the supply of money and
interest rates
D. In NC, the most common title for a real estate sales contract
13. Value
A. The power of a good or service to command other goods or services in exchange. Also, the present worth of future
benefits arising from the ownership of real property.
B. If misrepresentation, fraud, mistake of fact, undue influence or duress are absent in contract formation, good contract is
formed.
C. Has all of the elements of a valid contract; however, neither party can sue the other to force performance; valid as
between the parties.
D. cost of any physical capital improvements that add value to the property or prolong its life (added to the cost basis)
14. Deed of gift
A. Power of certain agencies to take private property for public use through a suit for condemnation.
B. A zone created to preserve historic buildings and sites that are irreplaceable.
C. Deed used when a grantor conveys property as a gift; must be recorded within two years or it becomes void.
D. 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.
15. Client or Principal
A. the person who hires and delegates to the agent through a brokerage contract the responsibility of representing that
person best interest.
B. a statement that tells the borrower whether the lender intends to service the loan or to transfer it to another lender.
C. A title that is free of liens and encumbrances, defects, and protects purchaser from hazard of litigation and is convincible
legally significant.
D. 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).
16. negative amortization
A. an increase in the loan balance.
B. 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
C. The examination of all public records that might affect a title
D. one who represents the interest of another person.
17. compensatory damages
A. Money damages awarded to the injured party to compensate them for the breach of contract, but not to punish the
breaching party.
B. Land; a portion of the earth's surface extending downward to the center of the earth and upward infinitely into space,
including all things permanently attached to it, whether naturally or artificially
C. interest paid in advance; one point equals 1% of the loan amount for the borrower and increases the yield for the
investor approximately 1/8%.
D. The personal preference of people for one location over another, not necessarily based on objective facts and
knowledge
18. listing agreement
, 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. A flexible moment in time when conversation between a licensee an a consumer begins to address confidential needs,
desires and abilities; latest moment to legally disclose agency choices to a consumer.
C. An employment contract between a property owner and a real estate firm/broker by which the broker is employed to find
a ready, willing and able buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a
commission.
D. A contract that has no legal force or effect. It is unenforceable in a court of law b/c it does not meet the essential
elements of a contract.
19. Real estate agents are obligated by licensing law and Commission rules to disclose all offers to sellers
immediately, but no later than ___ days from the date of the offer
A. five
B. a statement that tells the borrower whether the lender intends to service the loan or to transfer it to another lender.
C. Do own land underneath unit (footprint) can not stack units vertically; no cancellation period; own entire unit (and half of
party wall); Common areas owned by Homeowners association
D. The quality or state of being heterogeneous.
20. Easement in gross
A. law used to regulate underground storage tanks' discharge of any hazardous substance, including gas and oil.
B. 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
C. The state's inherent authority to create and adopt regulations necessary to protect the public health, safety and general
welfare of the citizenry.
D. A personal interest in or right to use the land of another. The right to use is not attached to any ownership. (personal or
commercial)
21. nonjudicial foreclosure
A. A loan in which only interest is paid during the term of the loan, with the entire principal due with the final interest
payment; also called a straight loan.
B. Undesirable physical or design features that can't be remedied easily are considered functionally obsolete. ex: home w/
5 bedrooms & 1 bath
C. The State law of descent that dictates distribution of the real and personal property of the deceased that died without a
will.
D. a foreclosure under power of sale in which the deed of trust does not have to be foreclosed through a court action.
22. loan-to-value ratio (LTV)
A. 1. Mutual agreement 2. Consideration 3. Capacity to Contract 4. Legal objectives
B. A Federal Act that facilitates accessibility and mobility by ramp construction, safety rails, wider doors, and other
accommodations.
C. ratio of debt to value of the property
D. Something that is not covered for loss in an insurance policy.
23. secondary mortgage market
A. The upward and downward fluctuations in business activities generally characterized by four stages: expansion,
recession, depression, and revival
B. a market for the purchase and sale of existing mortgages
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