Real Estate - Definition Exam

1. The earth's surface extending downward to the center of the earth and upward into space, including all things permanently attached, is known as: 1 A bundle of legal rights 2 Land 3 Real estate 4 Real property - answer-Real Estate "The correct answer to this is real estate, but the terms real property and land are often confused with the term "real estate." However, "land" is a more specific definition, since it includes the earth's surface and all things attached by nature; while "real property" actually is the "bundle of legal rights of ownership" 10. A person who has complete control over a parcel of real estate is said to own a: 1 life estate. 2 defeasible fee estate. 3 fee simple estate. 4 leasehold estate. - answer-fee simple estate. "Fee Simple, also known as fee simple absolute is known as the highest degree of ownership. The other "estate" terms are all much more limited forms of ownership - a life estate expires over time, a leasehold estate has a definite term, and a defeasible estate is limited by a certain event happening." 100. Addition to the land through natural causes, usually by a change in water flow. 1 annexation 2 accretion 3 acquisition 4 accession - answer-Accretion "Remember, accretion always has to do with natural causes, like a river or creek (think "accreektion"), while accession is the acquisition of title as a result of annexation of fixtures or accretion." 11. The law that requires real estate contracts to be in writing to be enforceable is the 1 parole evidence rule. 2 law of descent and distribution. 3 statute of limitations. 4 statute of frauds. - answer-Statute of frauds. "Under the Statute of Frauds, contracts for sale of real property must be in writing to be enforceable -- this is to prevent FRAUD from occurring. Don't confuse this with the statute of limitations, which sets limits on the time in which actions may be brought against a person; constitutional law, which is the law arising from the federal and state constitutions; or descent, a term used in conjunction with inheritances." 12. The effort that brings about the desired result in a real estate sale is known as: 1 REALTOR 2 procuring broker 3 principal 4 procuring cause - answer-procuring cause "Procuring cause of sale is the effort that brings about the desired result - in this instance, a ready, willing, and able buyer. The other terms refer to people - a principal is the person for whom the broker works, while a REALTOR is a member of the National Association of REALTORS. The term "procuring broker" isn't a term used in real estate at all." 13. A naturally occurring gas that is suspected of causing lung cancer is known as: 1 Polychlorinated biphenyls (PCBs) 2 radon 3 asbestos 4 lead based paint - answer-radon "While each of these items are environmental hazards, radon is the radioactive, odorless, tasteless gas produced by the natural decay of other radioactive substances. The rest of the items are not gas hazards, but solid ones - asbestos is a mineral, lead-based paint is paint (as the name states), and PCBs involve electrical equipment." 14. A claim or liability attached to a property is called: 1 a buyer's claim 2 an easement 3 an encumbrance 4 a lien - answer-an encumbrance. "Remember that an encumbrance is any claim against a property. Restrictions, liens, and buyer's claims (also known as a vendee's lien) are all FORMS of encumbrances." 15. In an appurtenant easement, the party that benefits is known as the: 1 dominant tenement 2 servient tenement 3 leaser 4 lessee - answer-dominant tenement "The person whose land is benefited by the easement, and therefore is the DOMINATING PARTY, is considered the dominant tenement. The servient tenement is the opposite of this. Leaser and leasee involve lease agreements, and have nothing to do with easements." 16. An encumbrance that affects the title, usually related to money, is known as: 1 an easement by prescription 2 an easement by necessity 3 an easement in gross 4 a lien - answer-a lien "A lien is a charge against a property -- a financial encumbrance. The other easements listed here do not deal with finances, but are considered usage encumbrances and affect the way in which the land may be USED." 17. A recorded legal document that gives constructive notice that an action affecting a certain property has been filed in court is called: 1 lis pendens 2 estoppel certificate 3 general warranty deed 4 habendum clause - answer-lis pendens "Lis pendens is Latin for "litigation pending," which will help you to remember that while a lis pendens isn't a lien, it is notice that litigation (a possible lien) is pending. The other terms listed deal with deeds (habendum clause and general warranty deed), or mortgages (estoppel certificate)." 18. This document that defines the relationship between the real estate firm and the seller is the: 1 disclosure statement 2 purchase contract 3 exclusive agency contract 4 listing agreement - answer-listing agreement "While disclosure statements, purchase contracts, and even exclusive agency contracts are also legal documents that the broker or salesperson enters into with the clients, but it is the listing agreement that clearly defines the relationships and agreements between the broker and principal." 19. The rights of a landowner to use waters of an adjacent stream or river are known as: 1 livery of seisin 2 littoral rights 3 zoning rights 4 riparian rights - answer-riparian rights "While both riparian and littoral rights have to do with water, remember that riparian rights have to do with FLOWING bodies of water, such as rivers. (You might keep in mind that River and Riparian both begin the same way.) Zoning and seisin both deal with land control." 2. Movable objects, which are not considered real estate, are known as: 1 Emblements 2 Fixtures 3 Personal property 4 Real property - answer-Personal property "Personal property is something that belongs to a PERSON, and that a PERSON could take with him when moving. Don't confuse this with real property, which is permanently affixed (and could be considered the opposite of personal property). Remember that a fixture is an article of personal property that has become permanently attached to land or a building, and then becomes a part of the real estate. While emblements are generally considered personal property, this term refers specifically to annual crops on a property." 20. The rights of a landowner to use waters of an adjacent lake or ocean are known as: 1 livery of seisin 2 littoral rights 3 zoning rights 4 riparian rights - answer-littoral rights "Again, while both riparian and littoral rights concern water, littoral rights specifically apply to nonmoving bodies of water, like lakes and oceans. Zoning and seisin both deal with land control." 21. A claim or interest revealed by a title search is called a: 1 lis pendens 2 judgment 3 lien 4 cloud on title - answer-cloud on title "It's easy to remember a cloud on a title as something marring the clear title, like a cloud in the sky marring an otherwise clear sky. These terms are all related, however, since lis pendens is the notification that a lien might be placed on a title, or, in other words, that there is a CLOUD on the title. (A judgment is another type of lien against a property, issued by a court.)" 22. When the amortized payment of a mortgage remains constant over the period of the loan but leaves an outstanding balance to be paid at the end, this payment is called: 1 An acceleration payment 2 A balloon payment 3 An escalation payment 4 An alienation payment - answer-A balloon payment "In a balloon loan, the interest and principal are paid on an equal basis, until the final payment (the balloon). This differs from the other payments - an acceleration payment, which makes the whole debt due if the borrower defaults; a satisfaction, in which the debt is paid in full on a mortgage; or an alienation, which provides that the lender can make the debt due, or allow the buyer to assume the loan on the sale of a property." 23. The process in which boundaries are measured and land areas determined is called: 1 an involuntary lien 2 a survey 3 an assessment 4 an appraisal - answer-a survey. "A survey is the process that measures boundaries and land areas. This is often confused with appraisal, which APPRAISES the value of something (often a property) or assessment, which imposes TAX on something. A lien is a financial encumbrance." 24. An estimate of the value of something, usually a property, is known as: 1 a lien 2 a survey 3 an assessment 4 an appraisal - answer-an appraisal "An appraisal is the process that APPRAISES the value of a property. Don't confuse this with a survey, which measures boundaries and land areas; or an assessment, which imposes TAX on something. A lien is a financial encumbrance." 25. A lien placed on the property without the consent of the owner is known as a(n): 1 mortgage lien 2 voluntary lien 3 deed of trust lien 4 involuntary lien - answer-involuntary lien "An involuntary lien is created by law without any action on the owner's part. A voluntary lien, just the opposite, is created by the owner -- this includes a mortgage lien or deed of trust lien. 26. This type of lien is created by law. It is known as: 1 a specific lien 2 an equitable lien 3 a voluntary lien 4 a statutory lien - answer-a statutory lien "A statutory lien is created by law - think "statutes" - as opposed to voluntary liens, created by choice, equitable liens, created by agreement, or specific liens, secured by specific property." 27. The type of lien that is secured by specific property and only affects that property is known as: 1 a specific lien 2 an equitable lien 3 a voluntary lien 4 a statutory lien - answer-a specific lien "A specific lien involves specific property- as opposed to voluntary liens, created by choice, equitable liens, created by agreement, or statutory liens, created by law" 28. The system established in 1785 by the U.S. government, which describes land with principal meridians and base lines, is called: 1 metes-and-bounds 2 rectangular survey system 3 lot-and-block system 4 Point of Beginning - answer-rectangular survey system "The rectangular survey system is the form of survey that uses principle meridians and base lines -- think of lines forming rectangles. Metes and bounds is another type of legal description, and a "point of beginning" is used within this type of description; the lot-and-block system refers to another description, and involved the lots and block numbers specified on a recorded subdivision plat." 29. A listing contract under which the broker's commission is contingent upon his producing a ready, willing, and able buyer before the property is sold by the seller or another broker is known as: 1 an open listing 2 an exclusive right-to-sell listing 3 a net listing 4 an exclusive listing - answer-an open listing "In an open listing, the broker only earns a commission if he provides a ready, willing, and able buyer before anyone else does. It allows the listing to be OPEN to many brokers, whereas with both exclusive listings and exclusive-agency listings, only one broker is involved. Net listings, which are illegal in many states, also involve only one broker." 3. The permanent right to use another's land for the benefit of a neighboring parcel is known as: 1 A license 2 An easement by necessity 3 An appurtenant easement 4 An easement in gross - answer-An appurtenant easement "Appurtenant easements are those for adjacent properties or neighbors, which run with the land. (Think of the A's -- Appurtenant = Adjacent (property) of another.) An easement in gross is the opposite of an appurtenant easement. A license isn't an easement at all, and an easement by necessity is, as the name states, NECESSARY (for another person to enter his own land by going through another's property). 30. A portion of a township under the rectangular survey system, which is a square with mile-long sides, is called a: 1 township 2 section 3 blocks 4 plat - answer-section "While both sections and townships are used in the rectangular survey system, a SECTION is the portion under the system that is a square with mile-long sides. A township is divided into 36 sections. Remember that the lot-and-block system refers to another description, and involves the lots and block numbers specified on a plat." 31. The type of easement that is necessary for another person to enter his own land by going through another's property is known as: 1 an appurtenant easement 2 a license 3 an easement by necessity 4 an easement in gross - answer-an easement by necessity "An easement by necessity is, as the name states, NECESSARY for another person to enter his own land by going through another's property. Appurtenant easements are those for adjacent properties or neighbors, which run with the land; an easement in gross is the opposite of an appurtenant easement; and a license isn't an easement at all. 32. A contract in which all the parties have fulfilled all their promises and performed the contract is known as: 1 a unilateral contract 2 an express contract 3 an executed contract 4 an executory contract - answer-an executed contract "If a contract is EXECUTED, that means all parties have done what they agreed to do. Don't confuse this with an executory contract, in which something remains to be done by one (or more) of the parties of the contract; or an express contract, in which the contract terms are VERBALLY expressed to one another. A unilateral contract is a one-sided contract." 33. An oral contract in which the parties state the contract's terms and express their intentions in words is known as: 1 unilateral contract 2 an express contract 3 an executed contract 4 an executory contract - answer-an express contract 34. The type of depreciation caused by outside factors, which are external to the property, is known as: 1 physical depreciation 2 functional obsolescence 3 external obsolescence 4 curable depreciation - answer-external obsolescence "External obsolescence is usually related to conditions outside of - or EXTERNAL TO - the property itself. Each of the other types of depreciation mentioned involve the property ITSELF." 35. The benefit, interest or value that induces a promise, and the glue that binds a contract, is known as: 1 novation 2 earnest money 3 consideration 4 an option - answer-consideration. "Consideration is the thing of value which induces a party to enter a contract. Don't confuse this with earnest money, which can be considered consideration -- but isn't the ONLY kind of consideration. The other terms are novation, which is about substituting parties or duties in an obligation, and option, which is an agreement to keep an offer to sell open for a set period." 36. The illegal act of a real estate broker who places his client's or customer's funds with his own funds is known as: 1 blockbusting 2 commingling 3 redlining 4 panic selling - answer-commingling "Commingling, or mixing funds, is ILLEGAL and brokers who commingle funds can be prosecuted. Each of the other terms listed here fall under the realm of Fair Housing violations." 37. The failure to perform provisions of a contract without a legal excuse is known as a(n): 1 breach of contract 2 option 3 exclusions 4 termination of contract - answer-breach of contract "A violation of any terms of the contract without a legal excuse is a breach of contract - think of BREACHING as BREAKING the terms of the contract. Termination of contract is simply the ending of the contract (but not necessarily because of any wrongdoing); exclusions, which actually deal with insurance policies; or an option, which is an agreement to keep an offer to sell open for a set period." 38. A refusal to make reasonable accommodations in rules, policies, practices, or services when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling is one definition of: 1 discrimination 2 blockbusting 3 redlining 4 Fair Housing - answer-discrimination " 39. The easement that is not created for the benefit of the land owned by the owner of the easement, but that attaches personally to the easement owner is known as an: 1 easement by prescription 2 easement by necessity 3 easement by condemnation 4 easement in gross - answer-easement in gross "An easement in gross is not created for the benefit of the land owned by the owner of the easement, but that attaches personally to the easement owner. Don't confuse this with the other types of easements - easement by condemnation, in which the property is acquired for PUBLIC purpose; an easement by prescription, which is acquired by continuous, open and hostile use of another's property over a period of years; or an easement by necessity, which is necessary for another to enter and exit his own property." 4. The ownership of property by one person only is known as: 1 tenancy by entirety 2 ten