Illinois Real Estate Practice Exam Questions and Answers

Illinois Real Estate Practice Exam Questions and Answers Objectives of Federal Reserve System - Answer- To counteract inflationary and deflationary trends, to create a favorable economic climate, to maintain sound credit conditions but NOT to control the secondary mortgage market Remainder Interest - Answer- A fee simple holder of a parcel of real estate grants a life estate to her daughter and stipulates that upon the daughters death, the property will pass to her grandson. The second estate is called A property buyer obtains a term loan to finance a home purchase. - Answer- The entire loan principal is due at the end of the loan period Best evidence of marketable title - Answer- Title Insurance Balloon Loan - Answer- A borrower has a mortgage loan that requires monthly payments of $936.25 for 10 years and a final payment of $136,287. Type of loan? Commingling - Answer- Brokers should deposit all earnest money checks they receive into an escrow account or trust account to prevent being accused. Conversion - Answer- Fancy name for theft Puffing - Answer- Exaggeration of a fact it is legal as long as it doesn't come in as a fraud In performing an appraisal of real estate, the appraiser: - Answer- Estimates the property's market value Local zoning ordinances are used to regulate - Answer- Allowable uses for buildings, building heights, population density NOT rules for the conducting open spaces After paying the brokers fee of 6%, a seller want to net $180,000 from the sale of his house. What must the property sell for to satisfy both the eh broker and the seller? - Answer- 100%-6%=94%=.94 180,000 / .94 = 191489 A property owner constructed a commercial building on the property. Three years later an ordinance was passed prohibiting commercial buildings in the owners area: - Answer- The building is a nonconforming use Servient Tenement - Answer- The owner of a parcel of land holds an easement right over an adjoining parcel of land. The parcel of land on which the easement runs is referred to as the: Dominant Tenement - Answer- Benefits from the servient tenement What is the amount of real estate tax due on a property with a market value of $140,000 if it is assessed at 30% of market value, has an equalizer of 1.5, and a tax rate of $5.00 per $100.00 of assessed value? - Answer- 140,000 x .30 = 42,000 42,000 x 1.5 = 63,000 63,000 x .05 = 3150 Easements - Answer- Are rights of way on someone else's land Easement By Necessity - Answer- A property owner subdivided a piece of property, selling the front half and retaining the back half. The back half of the property retained by the owner does not have access to any roads. The type of easement the courts might grant in this situation is