Question 1 of 150
Question: Mrs. Smith held a life estate in a single-family residence. The estate was based upon her own life. She leased the residence to Mr. Jones for a five-year period, but died a few weeks after the lease began. The lease was:
C: Valid only during the life of the lessor;
Which of the following is not a characteristic of a fee simple title:
It is real encumbrances;
* Fee simple title is of indefinite duration; it can be transferred with or without consideration and it is transferable by a will or by intestate succession
Which of the following rights of ownership in real property do individuals normally not have:
Eminent domain rights;
As used in real property law, which of the following is most nearly correct as a meaning for the word "tenancy
The mode or method of holding title to real property by a lessee or owner;
By definition, tenancy is the method or mode of holding title.
When a broker hires a salesperson under a valid independent contractor agreement, which of the following is correct:
Broker may be held liable for the salesperson's conduct in a real estate transaction;
*Whether the salesperson is an employee or an independent contractor, the Department of Real Estate holds the broker responsible for the salesperson's conduct.
What is the meaning of a quiet title action:
Court action to remove a cloud on the title.
*Quiet title action is a court suit used to remove conditions affecting the title.
Which of the following is regarded as a personal property interest:
Leasehold estates in real property;
*Leasehold estates in real property are regarded as personal property, and laws governing personal property apply. Each of the other three items listed is a real property interest.
When the state has given permission to a nonriparian owner of a farm to use a nearby lake, the owner has received this right by:
Appropriation
The inability of a corporation to qualify as a joint tenant in the ownership of property is due to the fact that:
It has perpetual existence
*since the distinguishing characteristic of joint tenancy is the right of survivorship, it would be an unfair advantage for a corporation to hold title as a joint tenant.
If a lien has been created by court action, and it covers all properties of the debtor in that county where it is recorded, it is known as a:
General lien
A husband, who owns separate property, dies without a will. Concerning that separate property, it would be distributed in which of the following ways
One-third to wife and two-thirds to more than one child;
Title to real property can be acquired by an individual by all of the following methods, except
Escheat
When a governmental body takes private real property for necessary public use, certain legal processes must be followed. Such a taking is an exercise of the right of:
Eminent domain;
Accretion would result in the acquisition of title to real land by which of the following
An owner who acquired land by natural causes;
*Accretion is the acquisition of title by virtue of its being added to other real property by natural causes, such as soil deposited by a river
An easement may be acquired by prescription in a manner similar to acquisition of land by:
Adverse possession
*The requirements for acquiring an easement by prescription are very similar to the requirements for acquiring land by adverse possession.
Governmental land use, planning, and zoning are important examples of:
Police power
*Governmental bodies may control the use of private property in an effort to provide for the health, safety, morals, and the common welfare of the community.
Which of the following would cause a grant deed to be invalid at its inception:
Legal incompetence of the grantor
*Lack of competence on the part of the grantor makes the deed invalid, but such incompetency can only be determined by a court.
Smith executes a deed to Brown and records it. Later, Smith seeks to set the conveyance aside, claiming that there had been no delivery to Brown. Why will he probably be unsuccessful in his effort:
Delivery is presumed with recording
Recording a deed presumes that it has been delivered and accepted voluntarily. Smith would need to prove in court that the presumption was false. Because Smith recorded the deed himself, it would be rather difficult to
Which of the following would be most advantageous to a seller who sells a parcel of real property by using a conditional sales contract instead of using a grant deed and carrying back a first trust deed:
The seller retains legal ownership of the property until the buyer makes the final payment
*Under a conditional sales contract ("land contract"), legal title is retained by the seller until the buyer has fully paid for the property.
Which of the following would be least necessary for a valid deed
Acknowledgment
Which of the following would be the best and most complete definition of the term "encumbrance
Anything which affects or limits the fee simple title to property.
Which of the following statements, if any, is correct concerning the relationship between an effective interest rate and a nominal interest rate:
The effective interest rate is the rate actually paid by the borrower for the use of the money; the nominal interest rate is the rate specified in the note
*The nominal interest rate is the rate stated in the note; the effective interest rate is the rate
A lien may be created by recording:
A mortgage;
*A mortgage is a lien. It's the legal right of disposition in the event of a default (i.e., breach) by the mortgagor.
When a real estate licensee advertises properties on the Internet (world wide web), which of the following best describes the licensee's responsibilities
The licensee must exercise proper supervision over any non-licensee who responds to inquiries.
*Any non-licensee who responds to inquiries must be supervised by the licensee.
The conscious charging by a private lender of more than the maximum amount of interest allowed by law is known as
Usury
* Usury is defined as a conscious taking by a lender of more than the maximum amount of interest as allowed by law.
A straight note:
Any of the following;
1.)May be used in a real estate transaction;
2.) is a note providing that the principal owing is to be paid at one time;
3.)May be secured by a mortgage;
* A straight note may be secured by a mortgage when it is used in a real estate
An acquired legal privilege for the right of use or enjoyment, short of an estate, which one may have in the land of another is known as:
An easement
When loaning money to two or more co-borrowers on a single promissory note, the lender would be best advised to increase the security on the note by inserting which of the following phrases after the names of the co-borrowers:
Jointly and severally
*"Jointly and severally" would mean that the co-borrowers were obligated both together and individually for the repayment.
When acquiring an easement, which of the following methods would create an easement that could be most easily terminated for nonuse
Prescription;
*An easement acquired by prescription may be terminated if not used for a continuous period of five years. The other methods of creating an easement do not offer that opportunity.
Which of the following is true concerning promissory notes:
They are the evidence of the debt.
*Promissory notes are evidence that money is owed by one person to another. The trust deed is the security for the note.
Cassidy purchased one of 30 lots in a subdivision and signed a sales contract which stated, "No purchaser of a lot in this subdivision shall erect a 'for sale' sign on his lot until all of the lots owned by the subdivider are sold." If Cassidy wants to se
Erect a 'for sale' sign of reasonable dimensions because the statement in the sales contract is declared by law to be void.
After Mr. Gardner purchased his home, he discovered, by survey, that his neighbor's garage was three feet over on his newly acquired property. This disturbed him greatly. For remedy, if a friendly settlement cannot be reached, he should bring civil suit a
His neighbor;
Which of the following is the purpose of the Federal Truth-in-Lending Act:
To provide consumers information concerning the cost of credit
*The purpose of the Federal Truth-in-Lending Act is to assure consumers that they are provided information on the cost of credit.
A broker's unlicensed assistant prepares a newspaper ad. According to the Business and Professions Code, which of the following is most correct:
The broker is required to read the entire advertisement prior to publication
The right to foreclose a trust deed, under a trustee's power of sale, outlaws:
Never.
*
Unpaid real property taxes constitute a lien:
Prior to a mortgage lien
*In California, real property taxes become a specific lien on the assessed property as of March 1st, preceding the current tax (fiscal) year. Tax liens take priority over all mortgage liens, regardless of date.
Most lenders, when they are deciding whether or not to make a proposed real estate loan, try to minimize the:
Chance of a substandard loan becoming a part of their portfolio;
*A substandard loan is one that is more likely to go into default. A lender would try to reduce the possibility of any new loan being substandard.
The gross rent multiplier is arrived at by dividing
Sales price by gross monthly rental;
*To determine the gross rent multiplier, the sales price is divided by the gross monthly rental.
Property is being sold whereby the purchaser is to continue the payments of an existing amortized loan secured by a first mortgage. In order for the buyer to assume the existing mortgage without penalty, the real estate agent should check to be sure the m
An acceleration clause
*If a loan has an acceleration clause that allows the lender to call the loan upon alienation of the title, then a buyer could not assume that loan
When imposing restrictions on a new large subdivision, the procedure normally used is
To record them with the county recorder, with adequate reference made thereto in the deed to each parcel.
*The imposition of private restrictions on a new subdivision is normally achieved by recording them once and then referring to the recorded restricti
When comparing a straight note with an installment note, the straight note
Will have no principal payments during the term of the loan except on the last payment
If the trust account contains trust funds belonging to more than one beneficiary, the broker may not disburse any funds without the prior written consent of every principal who has funds in the account:
If such disbursal will reduce the balance of the total funds in the account to an amount less than the various owners have on deposit.
*The Commissioner's regulations require the broker to secure such permission.
A title company could make a title search by searching the records of the:
All of the following;
A. County clerk's office;
B: County recorder's office;
C: Federal land office;
A standard policy of title insurance protects the insured against:
Lack of capacity of a party to any transaction involving title to the land
*No insurance will cover choice "A" which represents fraud, nor choice "C" which is governmental regulations. Choice "D" is covered by extended coverage but not by a standard polic
In making the decision of whether or not to issue a title policy, the title insurance company would be most concerned with those documents that appear within the:
Chain of title
*Documents would be discovered during a title search. The documents which are most significant would appear within the chain of title
Jesse, an unlicensed employee of a real estate broker, hands out door-hanger flyers and makes telephone solicitations, seeking buyers and sellers. Under the real estate law, his activities are:
Unlawful for both Jesse and the employing broker
Typically, when leasing real property, the commission of the leasing agent is based upon a percentage of:
Total rent collected over the term of the lease
Most buyers of real property receive which of the following types of policies of title insurance
A standard policy;
*A standard policy is least expensive, and protects against most of the concerns that a buyer would have in purchasing the property
A real estate agent may legally represent all principals in the same transaction if:
All of the following;
A: He has informed all principals that he is the agent for each principal;
B: He has obtained consent of all to this agency relationship;
C: He is collecting commission from each principal with the knowledge of the others
It is proper business practice for real property managers to be compensated in all of the following ways, except:
Receipt of discounts on purchases or supplies.
When making a loan, amortization tables are used in order to determine the
Monthly payment
Under the provisions of the Federal Fair Housing Law (Title VIII of the Civil Rights Act of 1968), persons complaining of discrimination in housing are permitted an election of which of the following acts? They may file:
Any of the following;
1.) A civil action in federal courts
2.)A civil action in state or local courts
3.)A complaint with HUD
A broker presented an offer to a seller which met the terms of the listing from a financially-qualified black person. Later, his salesperson presented the seller an offer at a lower price from white prospects. The seller did not accept either offer, but i
White prospects
Discrimination in the sale or rental of residential housing accommodations based on sex, marital status, color, religion, race or national origin of the prospective tenant or buyer, is:
All of the following
1.) Unenforceable
2.) Illegal
3.)Contrary to public policy
When Williams subdivided a 40-acre parcel of land into 65 lots in 1955, he included the following in every deed: "The ownership, use, and/or occupancy of this property is limited to persons of the Caucasian race." This deed restriction is:
Unenforceable because it violates the U.S. Constitution
*Subdivision racial restrictions of this type have been found unenforceable as per a United States Supreme Court case, Shelly vs. Kraemer, which is based on the Fourteenth Amendment to the United Sta
The stated policy of the Real Estate Commissioner is to create a "color blind" industry which can help society obtain voluntary, peaceful, equal opportunities in fair housing. What does this mean
All are correct interpretations;
A.Maintain an attitude that is absolutely free from bias and "color blind";
B: That race, creed, or color is not a material fact in a real estate transaction;
C: Do unto others as you would have them do unto you
Which of the following state agencies is empowered to prevent acts of discrimination in housing accommodations in California because of race, color, sex, national origin, or ancestry
Department of Fair Employment and Housing
If a broker presents an offer to purchase real property for the listed price from a ready, willing, and able black buyer, and the offer is refused by the seller because of the buyer's race, the broker may:
Sue the seller for his commission;
B: Advise the black buyer of his right to complain to the United States Department of Housing and Urban Development;
C: Warn the seller that his refusal is a violation of the Fair Housing Act of 1968;
A dress factory is being built in an area. It will employ mostly women. The owner of a real estate office told his employees to do the following: [1] direct their advertising to appeal to women who are married and have no children; [2] charge more rent to
Both [1] and [2]
A licensed real estate broker may legally negotiate the sale of
ny registered mobile home
Broker Knorr advertised in the newspaper that anyone who bought a property listed with the broker would receive a free microwave oven valued at $500. Such action is
Legal, provided full disclosure is made to all interested parties
*Anything of value given to the buyer must be disclosed to all parties.
If a listing to sell a mobile home expires and is not extended or renewed, how long does the broker have to remove all yard signs and stop all advertising of the mobile home:
He has 48 hours from the termination
*The broker would have 48 hours to remove the yard signs and stop all advertising
According to the Seller Transfer Disclosure Act, a broker can
Visually inspect the property and reveal pertinent information
The Federal Truth-in-Lending Law (Regulation Z) gives the borrower a 3-day right of rescission when the loan is:
A loan secured by a second deed of trust on owner-occupied single-family residence when the money is borrowed subsequent to the purchase
*A first trust deed loan used to purchase owner-occupied residential property generally does not include the 3-day rig
When the real estate market changes from a buyer's market to a seller's market, which of the following results could naturally be expected
Prices would rise because of the increased demand and lagging supply
*A seller's market indicates demand greater than supply.
A lender who refers to a loan as "seasoned" is referring to the:
Record of consistent payments on the loan
When a real estate licensee negotiates the sale of a mobile home in California, written notice of transfer must be provided to the Department of Housing and Community Development within
10 calendar days
* notice of transfer must be illed within 10 days
An acknowledgment may be taken by a notary public who is:
An employee of a corporation who has executed an instrument being acknowledged, if he is not personally interested
Life insurance companies, not willing to deal directly with mortgagors/ trustors, usually pay a loan servicing and preparation fee and make real estate mortgage loans to purchase indirectly through
Mortgage companies
In computing the unspecified maturity date on a construction loan, the time for repayment of the loan starts running:
A: From the date of first disbursement of funds
From the date of the note
*The date of the note determines the maturity date on a construction loan
If an owner wanted to sell his property, extending credit himself, and retain the legal title, the instrument used would be:
A real property installment/conditional sales contract;
Smith sold a home to Jones on a land contract and recorded the contract. Jones made a $25 down payment and after the sale, made a few of the required monthly payments. One night Jones moved out and abandoned the house. Which of the following is true?
A: A
There is a cloud on the title
Under the Federal Truth-in-Lending Law, the cost of credit on certain loans is expressed as:
An annual percentage rate
A federal RESPA booklet and disclosures must be given a borrower by a real estate licensee when the federally-related loan is a first lien and the money is used to
Purchase one-to-four residential units
*RESPA applies to the purchase of one-to-four residential units
When a real estate licensee fails to renew a license before it expires, the licensee:
Has two years from the expiration to renew by paying a late fee, but will not be required to take the state exam again.
In order to secure an FHA loan, a new buyer would normally do all of the following, except:
Apply to the nearest office of the FHA for an appraisal;
When property is being purchased under the California Veterans Farm and Home Purchase Plan, title is held by the:
Department of Veteran's Affairs.
*The Department of Veterans Affairs of the state of California holds the title to the property and is selling the property to the veteran with an installment/conditional sales contract.
When a real estate agent acts exclusively as a buyer's agent, he can
Present offers to the seller and seller's agent;
Which of the following closing costs would be classified as a recurring cost
Impound account items
A contract between the seller of real property and a licensee, whereby the seller agrees to pay the licensee a commission if he produces a "ready, willing, and able" buyer and the licensee agrees to use due diligence in procuring the buyer, is called:
A bilateral executory contract;
*Bilateral indicates that both parties are bound. Executory indicates that the contract is yet to be performed
Hawkins wanted to purchase 200 acres of land for future subdivision, but did not have the necessary $65,000 cash. He persuaded his friend, Warner, to pay the $65,000 and purchase the land, and Warner then immediately signed a land contract for sale of the
A valid purchase and resale.
If a broker is an agent of a seller, he owes to the buyer:
A duty of fair and honest dealing.
If two parties want to create an enforceable broker-principal relationship concerning a right, title, or interest in real property, the most essential element to do so would be:
A written employment contract
Broker Jones had a listing to sell seller Smith's house. Broker Jones received an offer on the house and presented it to seller Smith who hesitated in accepting the offer. The broker promised Smith verbally to find Smith another suitable residence before
Seller Smith could initiate a civil suit and the broker would be responsible for damages
Escrow instructions can be executed by
All of the following;
A: The buyers;
B: The sellers;
C: Third parties
A broker who solicits and accepts a deposit on the purchase price of a parcel of real property without express written authorization from the owner to sell the property, is:
Acting as agent for the buyer and not the seller.
*For this act, he is the agent of the buyer. A broker is generally employed by the seller (i.e., seller's agent), but a broker can be employed by the buyer. In either case, a fiduciary relationship exists
Broker Sullivan delivered an offer to purchase real property to Owner Mercer at 11 a.m. on Monday. Mercer asked for 24 hours to consider the offer. At 7 p.m. that same day, Broker Sullivan received two additional offers from different buyers through one o
Simultaneously present the two additional offers to the owner as soon as the owner is available
Seller Smith employed Broker Jones under an open listing. While Broker Jones was discussing Smith's property with Prospective Buyer Ford, the broker indicated that the roof was in good condition and did not leak. In fact, Seller Smith had instructed Broke
The seller and the broker, for damages and fraud.
If a real estate licensee misrepresents a property to a buyer while he is acting as an agent, he may subject himself to:
All of the following;
A: Disciplinary action by the licensing authority;
B: Civil action;
C: Criminal action;
Broker Hays took a 90-day exclusive agency listing to sell a property that was owned by Wilson. After 30 days, Hays had not sold the property, so Wilson sent him a certified mail letter canceling the listing. One week later Wilson listed the property with
Is liable for payment of commission to Hays as well as to the selling broker.
A real estate licensee submits a license renewal application, but his name is on a list of obligors who have not complied with a court-ordered payment of child support. Which of the following is most nearly correct
A temporary renewal will be issued, but the licensee must pay the delinquent amount within 150 days;
Broker Smith took a listing on commercial acreage and also received the right to purchase the property within 30 days. On the 28th day of the listing, the broker decided to buy the property. Before buying the property, he must
All of the following:
A: Disclose any outstanding offers;
B: Give the owner any material information;
C: Obtain written consent from the owner which acknowledges any profit or anticipated profit
A broker obtained a 6% listing on a selling price of $108,000. The seller incurred additional closing costs of $1,450. Based on the preceding information, the seller's total cost of sale would amount to:
C: $7,930;
*(1) $108,000 selling price x 6% broker's commission = $6,480 selling commission (2) $6,480 commission + $1,450 closing cost = $7,930 expense of sale
A man is buying a residence. After signing a valid agreement for sale, he asks the broker for permission to move into the property before the sale closes. The broker should:
Obtain written consent from the owner.
*The property belongs to the seller until the sale closes. The seller would have to give his permission before the buyer could move in, and this consent should be in writing for the protection of all parties involved
A buyer made an offer on a property but refused to give a $500 deposit to the broker, as specified in the listing. He agreed to give the broker $500 as deposit as soon as the seller accepted the offer. Which of the following should be written in the form:
Buyer agrees to deposit $500 cash with the broker immediately upon seller's acceptance
When depreciation is taken on real property
The basis is reduced
*Depreciation reduces the cost basis of the property.
The buyers made an offer on the exact terms of the listing contract on February 1, with the condition that the offer be accepted within 72 hours. The broker was unable to contact the sellers until February 6. When the sellers accepted the offer, the broke
The buyers have grounds to demand the return of their deposit
*Buyer or seller may make an offer contingent upon certain conditions. Since the offer was not accepted within 72 hours, the passage of that time terminated the offer
Under the present method of establishing federal income tax rates, the rate
Increases as the amount to be taxed increases
*Income taxes are progressive. As a person earns more money, his tax rate increases
In determining gain or loss on real property acquired by purchase, for federal income tax purposes, the term "unadjusted basis" most nearly means
Original cost
*For federal income tax purposes in determining gain or loss on real property, the term "unadjusted basis" most nearly means the original cost.
Mr. Reynolds constructed a $500,000 income-producing building on a lot for which he paid $100,000. Mr. Reynolds financed the construction of the building by paying $100,000 cash and obtaining an 8% per annum interest rate loan for $400,000 secured by a fi
$500,000
*An owner is only permitted to take depreciation on improvements, not land.
Mr. Wall owned an apartment building with an adjusted cost basis of $220,000 and a fair market value of $330,000. He exchanged the property for an apartment house which had a fair market value of $365,000. Both properties were free and clear and no adjust
$220,000.
*On an exchange of property, the cost basis of the property being surrendered becomes the cost basis for the property being acquired if no adjustment is made for differences in value; in this case, $220,000.
The annual property taxes an owner of a home must pay are determined by
Assessing the land and improvements separately, then multiplying the total by one tax rate;
*A separate assessed value is determined for land and improvements. However, one tax rate is applied to the total assessed value of land and improvements. Assessed
Under the Subdivision Map Act, subdivision reports must be filed with the
City or county where the land is located;
*The Subdivision Map Act gives the local authorities control over the physical aspects of the subdivision as to zoning, building, and health codes.
Mr. Jones, in order to comply with the regulations of the state Housing Law, should seek the issuance of a building permit from:
The local building department
*The state Housing Law sets minimum standards; however, all building permits are issued from the local building department, be it city or county
In a city or county, compliance with the state Housing Act is usually enforced by
Building inspector.
Mr. James sold Blackacre to Mr. Woods. Before he sold it, Blackacre had an appurtenant easement across Whiteacre, which was owned by Mr. Sommers. When Mr. Woods tried to use the easement, Mr. Sommers protested. Which of the following is correct?
Mr. Sommers owns the servient tenement and must allow Mr. Woods to use the easement;
*Mr. Sommers owns the servient tenement and must allow Mr. Woods to use the easement;
Basic regulation of the housing and construction industries is accomplished by:
All of the folowing;
A. State Housing Act;
B: Local building codes;
C: The state Contractor's License Law
Any advance fee contract used in connection with a real estate or business opportunity listing must include all of the following except:
A guarantee that the sale, lease or exchange will be completed
*An advance fee contract would not normally guarantee that the sale, lease or exchange will be completed.
Which of the following, if present in the formation of a contract, would not make a contract voidable
Illegal purpose
*An illegal purpose makes a contract void, not voidable. The other barriers to genuine assent render a contract voidable.
When a lender loans a borrower 100% of the purchase price of a house, and the loan is not government-related, the lender would be best protected by
Appreciation;
*If the property appreciates in value, this would provide some money to pay any costs of foreclosure if necessary.
Which of the following would be an illustration of the government's police power:
The enactment of zoning laws limiting the use which may be made of a parcel of real property.
*Zoning regulations are one of the most common examples of the government's police power.
A voidable contract remains binding upon the parties until the contract is:
Rescinded
A developer, to avoid discrimination, instructed his sales staff to: (1) Give special preference to woman who want to purchase; and (2) Set aside the same number of homes for each ethnic group (Asian, Hispanic, African-Americans). Which answer best descri
Both policies are discriminatory, and therefore illegal.
*Quotas, preferences and set asides are discriminatory, and therefore illegal.
Under the Alquist-Priolo Special Studies Act a subdivider would be required to disclose to potential purchasers:
Earthquake fault lines
*The Alquist-Priolo Special Studies Act requires the subdivider to make certain disclosures if the property is near certain earthquake faults.
Which of the following is the legal method that a city uses to implement its general plan?
Zoning
One-half of a standard township would contain how many square miles:
18
*Since a standard township contains 36 square miles, half of a standard township would contain 18 square miles
As used in most deeds of trust, the term default refers to:
Any of the following;
A.Use of the property for an illegal purpose or activity;
B: The refusal of the borrower to see that the property is adequately maintained;
C: Delinquent loan payments;
In order to earn $75 per month, the amount one would have to invest at 5% would be:
$18,000
*(1) $75 x 12 = $900 (2) $900.00 divided by .05 = $18,000
When a borrower has defaulted on a loan, and the lender chooses judicial foreclosure, the mortgagor is given a specified period of time to redeem the property. During this redemption period, the right of possession of the property is held by the:
Mortgagor.
Of the following, which would have priority (would be a superior lien):
A 1911 Street Improvement assessment lien (bond);
*An assessment lien and property taxes generally have priority over all other liens.
Bronson owns a 24-unit apartment building. In 1997, he rented all of the units for $150 a month and had 100% occupancy. In 1998, he increased the rent by 10%, but he had a 10% vacancy factor. His annual effective gross income was approximately:
1% more in 1997.
*(1) $150 x 24 = $3,600 (2) $3,600 x 12 = $43,200 (3) $43,200 x .10 = $4,320 (4) $43,200 + $4,320 = $47,520 (5) $47,520 x .10 = $4,752 (6) $47,520 - $4,752 = $42,768 (7) $43,200 - $42,768 = $432 less in 1998 (8) $432 divided by $43,200 =
Cameron owns a 30-unit apartment building next to a loud night club. Cameron loses $400 net income per month because of the loud noise. Many appraisers suggest using a 12% capitalization rate for this type of property in that neighborhood. Cameron's prope
$40,000
*$400 x 12 = $4,800 annual loss of income; $4,800 divided by 12% = $40,000 loss of value.
A tract of land in a recreational area is measured at 395,340 square feet. A corner of the tract, 30 feet wide and 110 feet deep, is owned by the county. The privately owned land sold for $1,250 per acre. What was the total amount realized from the sale:
$11,250.
*(1) 110 x 30 = 3,300 (2) 395,340 - 3,300 = 392,040 (3) 392,040 divided by 43,560 = 9 (4) 9 x $1,250 = $11,250
Parker has fee simple title to a rectangular lot on a commercial street. It contains 16,500 square feet and is 150 feet deep. Parker wants to build a store building but needs more space. There are 2 lots available for purchase of identical size and shape
143.
A house sold for $34,500, which was 9% more than the cost of the house. The cost of the house was most nearly:
$31,650;
*(1) 109% percent of cost = $34,500 (2) $34,500 divided by 1.09 = $31,651.376 = $31,651.38 Therefore, $31,650 is the most nearly correct answer.
How many lots, each measuring 50 feet wide by 100 feet deep, could be created from an acre of land of the suitable dimensions:
8.
*An acre of land contains 43,560 square feet; each of the lots would contain 5,000 square feet (50 x 100). 43,560 divided by 5,000 = 8.71 lots.
When ordinary repairs are made to the broken equipment in a building, such repairs are appropriately classified as:
Corrective maintenance;
The effectiveness of the market data approach of appraising would be limited most by which of the following?
Economic conditions that rapidly change
*If economic conditions are rapidly changing, it is difficult to make the adjustments to the price of the comparable property.
Ms. Rodriguez received a loan application from her lender that asked her to specify her marital status and ethnic background. Legally, she can:
A: Sue the lender and the real estate broker for discrimination;
Refuse to fill out that portion of the loan application
An owner of a 20-unit apartment house is considering installing a swimming pool and asks an appraiser for his opinion. The appraiser's opinion would be based on the principle of:
Contribution
*The principle of contribution holds that maximum real property values are achieved when the improvements produce the highest net return, considering the investment.
In deciding whether or not to make a specific home loan, a lender would consider which of the following factors most important:
The degree of risk
*Ultimately, the the lenders primary concern is the degree of risk associated with the loan. The other factors would influence that concern to one degree or another.
When an appraiser relies on the principle of substitution, he assumes that one property may be substituted for another in terms of:
All of the following;
A: Income;
B: Use;
C: Structural design;
An appraiser who does not use generally accepted appraisal methods in order to influence an FSLIC or FDIC insured lender may be guilty of
A felony.
The quantity survey method, unit-in-place method, and the square foot/cubic foot methods in real estate appraisal most directly relate to:
The cost approach
*In the cost approach, an appraiser may use the quantity survey method; unit-in-place method; and/or the square foot/cubic foot methods to determine the cost to build.
According to a certain contract, the buyer will be taking the property subject to the existing loan. "Subject to" most nearly means:
The buyer will not be personally liable for the loan
In income-producing property valued by the capitalization approach, if the property taxes increase and all else remains equal, the property value will:
Decrease more than the amount of the annual tax increase;
In regard to the capitalization rate:
As it increases, value of property decreases
*Be sure to memorize the formula for the capitalization process. V = I divided by R
In appraising, which method places the greatest emphasis on the present worth of future benefits to be received by the owner:
income.
*The income (capitalization) approach estimates the present worth of the future income.
Insofar as real property is concerned, the major cause of loss of value is due to:
Obsolescence;
Functional obsolescence might be attributed to each of the following except:
The proximity of obnoxious nuisances;
*Functional obsolescence is loss of value due to style, design, or floor plan; nearby nuisances would be social obsolescence, not functional obsolescence.
If a roof slopes on all four sides, it is called a:
Hip roof;
When an air conditioning unit has a higher energy efficiency ratio (EER), it means that:
The unit is more efficient
*The energy efficiency ratio (EER) applies to appliances and air conditioning units. The higher the ratio, the more efficient the unit is.
Which of the following is the name of sheet metal which is used to protect a building from water seepage?
Flashing
*Flashing is sheet metal which is often placed on the roof of a house to prevent water seepage from getting into the building.
A "FICO" score is normally used for which of the following:
Reporting the credit history for a prospective borrower.
*The "FICO" score is a measure of the applicant's credit history or credit-worthiness.
The term "security interest" is best defined as:
The creditor's interest in the debtor's property;
*The security interest is the lender's (the creditor's) right to foreclose against the borrower's property if the loan is not repaid.
When obtaining a mortgage loan, the buyer often has to pay discount points. Those points are a percentage of:
The loan amount
*Loan points (discount points) are a percentage of the loan amount.
A trust deed note taken by a state savings and loan association on a single-family owner-occupied residence could be prepaid without penalty:
If the loan is more than 7 years old;
*Concerning prepayment penalties on single-family owner-occupied residences, one part of the civil code says they are not allowed after 5 years and another part of the civil code says they are not allowed after 7 year
Which of the following would impair the security of a trust deed recorded on real property:
The trust deed is recorded after a work of improvement was commenced and a mechanic's lien is recorded on the work;
*The priority of a trust deed is the time of recording. The priority of a mechanic's lien is the commencement of work. If the work is begun
Which of the following would be true about a lis pendens:
It may affect title to real property based on the results of the lawsuit
*A lis pendens gives notice that the property may be involved in a lawsuit.
In appraising real property by the market data approach, the appraiser often takes into account certain non-property characteristics of the two properties. All of the following would be considered a non-property characteristic, except:
The location and size of the parcel;
*The size and location of the parcel are features of the property itself; the other items are features of the transaction, not of the property.