Real Estate Principles A Value Approach 4th Edition By Ling - Test Bank

Chapter 3 – Conveying Real Property Interests Multiple Choice Questions [QUESTION] 1. A deed is a special form of written contract used to convey a permanent interest in real property. Unlike most contracts, a deed requires: A. both parties to be legally competent and of legal majority age. B. only the grantee to be legally competent and of legal majority age. C. only the grantor to be legally competent and of legal majority age. D. both parties to make promises to perform. Ans: C Difficulty: Basic Learning Objective: 1 [QUESTION] 2. The type of deed offered by the grantor is communicated through a phrase such as “does herby grant, bargain, sell and convey unto . . .” This clause is referred to as the: A. recital of consideration B. words of conveyance C. covenant D. habendum clause Ans: B Difficulty: Basic Learning Objective: 2 [QUESTION] 3. The covenants in a deed are the most important differences among types of deeds. Which of the following covenants promises that the grantor truly has good title and the right to convey it? A. Covenant of seizin B. Covenant against encumbrances C. Covenant of quiet enjoyment D. Exceptions and reservation clause Ans: A Difficulty: Basic Learning Objective: 3 [QUESTION] 4. Which of the following clauses contained in a deed defines or limits the type of interest being conveyed? A. Recital of consideration B. Words of conveyance C. Covenant D. Habendum clause Ans: D 3-1 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests 3-2 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests Difficulty: Basic Learning Objective: 2 [QUESTION] 5. Although deeds can only deliver what a grantor actually owns, they can still vary in “quality.” Which of the following types of deeds is considered to be the “highest quality” because it contains the full set of legal promises the grantor can make? A. General warranty deed B. Special warranty deed C. Deed of bargain and sale D. Quitclaim deed Ans: A Difficulty: Intermediate Learning Objective: 3 [QUESTION] 6. Considered a “questionable conveyance of title” by most courts, which of the following types of deeds is worded to imply no claim of title, but rather only convey what interest the grantor actually has? (Hint: This type of deed may be used by a developer to convey certain lands of a subdivision to the local government through dedication.) A. General warranty deed B. Special warranty deed C. Deed of bargain and sale D. Quitclaim deed Ans: D Difficulty: Basic Learning Objective: 3 [QUESTION] 7. While several kinds of real property conveyances result from events beyond the control of the grantor, the majority of conveyances are voluntary through a deed. Which of the following is an example of a voluntary conveyance of real property with a deed? A. Patent B. Probate C. Condemnation D. Implied Easement Ans: A Difficulty: Basic Learning Objective: 4 [QUESTION] 8. At the death of a property owner, property will convey either in accordance with a will or without a will. If a will dictates the distribution of the decedent’s real property, the property is 3-3 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests 3-4 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests said to be: A. patented B. devised C. conveyed by the law of descent D. dedicated Ans: B Difficulty: Basic Learning Objective: 4 [QUESTION] 9. While the vast majority of conveyances of real property are private grants through a deed, there are multiple ways in which voluntary conveyance can occur without a deed. Which of the following types of easements can occur if a landowner gives an adjacent landowner permission to depend on her land? (E.g. A landowner may give a neighbor permission to rely on sewer access or drainage across his or her land.) A. Easement by prior use B. Easement of necessity C. Easement by estoppel D. Dedication Ans: C Difficulty: Intermediate Learning Objective: 5 [QUESTION] 10. When a landowner subdivides land in a way that causes a parcel to be landlocked, it is possible for property to be voluntarily conveyed without a deed. If the landlocked parcel has no prior path of access, which of the following types of easements will automatically be created to make the land useful? A. Easement by prior use B. Easement of necessity C. Easement by estoppel D. Dedication Ans: B Difficulty: Intermediate Learning Objective: 5 [QUESTION] 11. An owner of land may involuntarily and unknowingly give up the rights to land. When a fee simple interest is conveyed to a new owner without a deed and without the consent or knowledge of the original owner, this is said to be conveyed by: A. Prescription B. Adverse possession C. Accretion D. Reliction 3-5 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests 3-6 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests Ans: B Difficulty: Basic Learning Objective: 5 [QUESTION] 12. Once a document conveying an interest in real property is placed in the public records it is binding on the public, whether or not they make an effort to learn of it. Based on the common law tradition, this policy is known as the: A. Statute of Frauds B. doctrine of constructive notice C. habendum clause D. actual notice Ans: B Difficulty: Basic Learning Objective: 6 [QUESTION] 13. A contract for sale of real estate usually calls for the seller to provide evidence of title as a requisite to completing the sale. Today, the predominant medium through which a seller meets this requirement is by providing: A. only a title abstract. B. only an attorney’s opinion of title. C. only a title insurance commitment. D. only a seller’s disclosure Ans: C Difficulty: Intermediate Learning Objective: 8 [QUESTION] 14. A law requiring any contract conveying a real property interest to be in writing in order to be enforceable is a modern application of the: A. Statute of Frauds B. doctrine of constructive notice C. habendum clause D. actual notice Ans: A Difficulty: Intermediate Learning Objective: 6 [QUESTION] 15. Unlike other forms of evidence of title, title insurance guards the grantee against certain risks. However, there are a number of important limits to title insurance. Which of the following is an example of the limits to title insurance? 3-7 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests 3-8 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests A. It does not protect the grantee from the threat of physical damage to the property. B. It does not protect a grantee against the legal costs of defending the title C. It does not protect a grantee against loss of the property in case of an unsuccessful title defense. D. It does not protect against legal attack on the owner’s title arising from a claim that diminishes the owner’s rights of use. Ans: A Difficulty: Intermediate Learning Objective: 8 [QUESTION] 16. Recognizing that only recent conveyances alter the status of title, states have established laws that set limits on how far back a title search must go. These laws are commonly referred to as: A. Statute of Frauds B. recording statutes C. encroachments D. marketable title laws Ans: D Difficulty: Basic Learning Objective: 7 [QUESTION] 17. One of the most important requirements of a land description is for it to be unambiguous. Which of the following methods of property description is the most unambiguous and is appropriate for use in legal documents? A. Street Address B. Tax parcel number C. Reference to prominent features of the land (e.g. monuments, river banks, roads) D. Metes and bounds Ans: D Difficulty: Basic Learning Objective: 9 [QUESTION] 18. The most flexible method of land description, capable of describing even the most irregular of parcels, can be described as a very precise, compass-directed walk around the boundary of a parcel. This method is commonly referred to as: A. metes and bounds B. subdivision plat lot and block number C. government rectangular survey D. tax parcel number Ans: A 3-9 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests 3-10 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests Difficulty: Basic Learning Objective: 9 [QUESTION] 19. Most often used in the description of urban property, which of the following methods of land description contains information regarding the location of various easements and may even contain a list of restrictive covenants? A. metes and bounds B. subdivision plat lot and block number C. government rectangular survey D. tax parcel number Ans: B Difficulty: Intermediate Learning Objective: 9 [QUESTION] 20. Initially used to survey the Old Northwest Territory (Ohio, Indiana, Illinois, and Michigan) in 1789, which of the following methods of land description relies on townships and section numbers as essential units of identification? A. metes and bounds B. subdivision plat lot and block number C. government rectangular survey D. tax parcel number Ans: C Difficulty: Intermediate Learning Objective: 9 [QUESTION] 21. Which of the following covenants in a deed promises that the property will not be claimed by someone with a better claim to title? A. Covenant of seizin B. Covenant against encumbrances C. Covenant of quiet enjoyment D. Exceptions and reservation clause Ans: C Difficulty: Basic Learning Objective: 3 [QUESTION] 22. Consider the following excerpt from a sample deed: “The Seller is lawfully seized in fee simple of the above described property, less and except a prior reservation of all oil, gas and mineral rights in the property conveyed.” The underlined portion of the preceding statement represents which of the following basic requirements of a deed? A. Habendum clause 3-11 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests 3-12 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests B. Recital of consideration C. Covenant against encumbrances D. Exceptions and reservations clause Ans: D Difficulty: Advanced Learning Objective: 2 [QUESTION] 23. Consider the following excerpt from a sample deed: “The Seller, for itself and its heirs, hereby covenants with the Buyer, its heirs and assigns forever, that the Seller is lawfully seized in fee simple of the above described property.” The underlined portion of the preceding statement represents which of the following basic requirements of a deed? A. Habendum clause B. Recital of consideration C. Words of conveyance D. Exceptions and reservations clause Ans: A Difficulty: Advanced Learning Objective: 2 [QUESTION] 24. Consider the following excerpt from a sample deed: “The Seller covenants with The Buyer that it has a good right to convey, that the property is free from all encumbrances, and that it forever warrants to defend all of the property so granted to The Buyer against every person lawfully claiming the same.” Based on your understanding of the relation between a deed’s covenants and the type of deed being conveyed, which type of deed is being conveyed in the statement above? A. General warranty deed B. Special warranty deed C. Deed of bargain and sale D. Quitclaim deed Ans: A Difficulty: Advanced Learning Objective: 3 3-13 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 3 – Conveying Real Property Interests [QUESTION] 25. In order for a deed to be a valid conveyance of property, there must be an observable, verifiable transfer of the deed to the grantee. Typically this is accomplished when the grantor hands the deed to the grantee at closing. Which of the following basic requirements of a deed does this represent? A. Acknowledgment B. Delivery C. Words of conveyance D. Recital of consideration Ans: B Difficulty: Basic Learning Objective: 2 Chapter 1 - The Nature of Real Estate and Real Estate Markets Multiple Choice Questions [QUESTION] 1. When viewed as a tangible asset, real estate can be defined as the land and its permanent improvements. Improvements on the land include: A. fences B. walkways C. sewer systems D. streets Ans: A Difficulty: Basic Learning Objective: 1 [QUESTION] 2. Real estate is property, which can be either a tangible or an intangible asset. Which of the following would be considered an intangible asset? A. Land B. Building C. Mortgage D. Fence Ans: C Difficulty: Basic Learning Objective: 1 [QUESTION] 3. If we desire to classify land by its use, land that does not include any improvements to the land would be categorized as: A. “Raw” land B. Building site C. Developed land D. Property infrastructure Ans: A Difficulty: Basic Learning Objective: 2 [QUESTION] 4. The size of a single family residential lot is typically: A. less than one acre B. between one and two acres C. between two and three acres D. greater than three acres Ans: A Difficulty: Intermediate 1-1 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 1 - The Nature of Real Estate and Real Estate Markets Learning Objective: 2 [QUESTION] 5. As of 2011, the single largest asset category in the net worth portfolios of households is: A. government and corporate bonds B. stocks and mutual fund shares C. consumer durable goods D. housing Ans: D Difficulty: Intermediate Learning Objective: 4 [QUESTION] 6. Real estate values derive from the interaction of three different sectors in the economy. Which of the following sectors serves to allocate financial resources among households and firms requiring funds? A. User market B. Capital market C. Government D. Property market Ans: B Difficulty: Intermediate Learning Objective: 3 [QUESTION] 7. The demand for real estate derives from the need that market participants (e.g., owner occupants, tenants, renters) have for shelter and convenient access to other locations. This competition for physical location and space occurs in the: A. User Market B. Capital Market C. Government Sector D. Property Market Ans: A Difficulty: Intermediate Learning Objective: 3 [QUESTION] 8. The expected stream of rental income is capitalized into value by converting expected future cash flows into present value through a process called: A. amortization B. discounting C. compounding D. accounting Ans: B 1-2 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 1 - The Nature of Real Estate and Real Estate Markets 1-3 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 1 - The Nature of Real Estate and Real Estate Markets Difficulty: Basic Learning Objective: 3 [QUESTION] 9. Capital markets can be divided into four main categories: private equity, public equity, private debt, and public debt. An example of a real estate asset that trades in the private equity market is: A. real property B. home mortgages C. equity REITs D. mortgage backed securities Ans: A Difficulty: Intermediate Learning Objective: 3 [QUESTION] 10. Primarily through land use controls and property tax policy, which of the following branches of government has the largest influence on real estate values? A. Local government B. State government C. National government D. Foreign government Ans: A Difficulty: Intermediate Learning Objective: 3 [QUESTION] 11. Competition for the currently available supply of locations and space coupled with the existing supply of leasable space, determines: A. the current level of rental rates for each submarket and property B. the riskiness of the expected cash flows of an income-producing property C. the timing of the expected cash flows of an income-producing property D. the cost of financing the purchase of a property Ans: A Difficulty: Intermediate Learning Objective: 3 [QUESTION] 12. Each property has unique features, whether it is its age, the building design of its structures, or its location. As such, real estate markets consist of assets that are considered: A. homogeneous B. heterogeneous C. substitutes D. complements 1-4 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 1 - The Nature of Real Estate and Real Estate Markets 1-5 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 1 - The Nature of Real Estate and Real Estate Markets Ans: B Difficulty: Basic Learning Objective: 5 [QUESTION] 13. Consistently the investment target of pension funds, publicly traded real estate companies, and real estate funds, large commercial properties valued well over $10 million are often referred to as: A. segmented property B. investment-grade property C. speculative-grade property D. immobile property Ans: B Difficulty: Basic Learning Objective: 5 [QUESTION] 14. By the third quarter of 2011, U.S. households had accumulated $6.2 trillion in housing equity, which represents about 11 percent of their net worth. What proportion of U.S. households own their home? A. one-third B. one-half C. two-thirds D. three-fourths Ans: C Difficulty: Intermediate Learning Objective 4 [QUESTION] 15. The national government can have a significant impact on the value of real estate through: A. property tax policy B. income tax policy C. building Codes D. real estate licensing requirements Ans: B Difficulty: Intermediate Learning Objective: 3 [QUESTION] 16. The required rate of return that an individual demands on a real estate investment is determined in the: A. user market B. capital market C. government 1-6 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 1 - The Nature of Real Estate and Real Estate Markets 1-7 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 1 - The Nature of Real Estate and Real Estate Markets D. local market Ans: B Difficulty: Intermediate Learning Objective: 3 [QUESTION] 17. Investors in real estate can choose to hold properties directly in the private market or indirectly through publicly traded real estate securities. The market for buying selling, and leasing real estate can be characterized by all of the following EXCEPT: A. localized markets B. highly segmented markets C. privately negotiated contracts D. low transaction costs Ans: D Difficulty: Intermediate Learning Objective: 5 [QUESTION] 18. Especially in terms of retail properties, which of the following attributes is considered the most likely to result in drastic value differences between otherwise similar properties? A. Structural attributes B. Financing attributes C. Location attributes D. Land attributes Ans: C Difficulty: Intermediate Learning Objective: 5 [QUESTION] 19. Capital markets can be divided into two broad categories: equity interests and debt interests. Equity investors in real estate expect to earn a return on their investment through: A. The collection of rent and price appreciation B. The collection of interest on the borrowed funds used to purchase the property C. The receipt of property taxes D. The case of a borrower default on required mortgage payments Ans: A Difficulty: Intermediate Learning Objective: 3 [QUESTION] 20. Considered a fundamental pricing metric in commercial real estate markets, the ratio of a property’s annual net income to its market value is more commonly referred to as a(n): A. Appreciation rate B. Capitalization rate 1-8 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 1 - The Nature of Real Estate and Real Estate Markets C. Discount rate D. Internal rate of return Ans: B Difficulty: Basic Learning Objective: 3 [QUESTION] 21. Helping to constrain entry into real estate related occupations, which of the following branches of government is directly involved in establishing rules and regulations for the licensing of professionals in the field of real estate? A. Local government B. State government C. National government D. Foreign government Ans: B Difficulty: Basic Learning Objective: 3 [QUESTION] 22. A primary determinant of the feasibility of new construction is the relationship between the current level of property prices and the cost of new construction. We would expect the supply of properties to: A. increase if current property values are greater than the cost of construction B. decrease if current property values are greater than the cost of construction C. increase if current property values equal the cost of construction D. decrease if current property values equal the cost of construction Ans: A Difficulty: Intermediate Learning Objective 2 [QUESTION] 23. Real estate is defined as land and its permanent improvements. Which of the following is an example of an improvement to the land? A. Fence B. Building C. Sewer system D. Personal property Ans: C Difficulty: Intermediate Learning Objective: 1 [QUESTION] 24. Equity investors can choose to participate indirectly in real estate markets by purchasing shares in publicly traded real estate companies. In doing so, investors benefit from all of the 1-9 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 1 - The Nature of Real Estate and Real Estate Markets following EXCEPT: A. Low transaction costs B. Risk sharing amongst investors C. Highly segmented markets D. High information efficiency Ans: C Difficulty: Intermediate Learning Objective: 5 [QUESTION] 25. Real estate markets tend to be highly segmented due to the heterogeneous nature of the products. Which of the following examples depicts this issue of market segmentation? A. A couple searching for a single-family detached unit is willing to consider other residential property types such as an attached townhouse unit or condominium. B. A couple searching for a single-family detached unit has limited their search to homes in a single elementary school district C. A couple searching for a single-family detached unit has set a timeline for their search of 6 months, at which point they will renew their current apartment lease. D. A couple searching for a single-family detached unit has limited their search to be in a specific price range between $350,000 and $400,000. Ans: D Difficulty: Intermediate Learning Objective: 5 #real estate finance test banks, #real estate finance test questions, #real estate test bank, #finance real estate, quizlet, #texas real estate finance exam questions, #real estate exam, test bank, #finance real estate exam, #ca real estate finance final exam, #ca realty finance final exam, #texas real estate finance final exam, #ga real estate final exam, #texas real estate finance practice test, #bank real estate jobs, #jpmorgan real estate banking, #kentucky real estate test questions, #real estate finance questions, #ky real estate test, #qbank real estate, #real estate exam finance questions, #texas real estate finance final exam answers, #real estate u final exam reviews, #real estate u final exam questions, #va real estate test questions, #0 financing tesla, #2 test real estate, #financing real estate exam, #real estate finance test. #real estate finance test banks, real estate finance test questions, real estate test bank, finance real estate, quizlet, texas real estate finance exam questions, real estate exam, test bank, finance real estate exam, ca real estate finance final exam, ca realty finance final exam, texas real estate finance final exam, ga real estate final exam, texas real estate finance practice test, bank real estate jobs, jpmorgan real estate banking, kentucky real estate test questions, real estate finance questions, ky real estate test, qbank real estate, real estate exam finance questions, texas real estate finance final exam answers, real estate u final exam reviews, real estate u final exam questions, va real estate test questions, 0 financing tesla, 2 test real estate, financing real estate exam, real estate finance test.