Real Estate - Definition Exam Written With Accurate Answers 100% Pass.

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 - correct 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" 2. Movable objects, which are not considered real estate, are known as: 1 Emblements 2 Fixtures 3 Personal property 4 Real property - correct 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." 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 - correct 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). 4. The ownership of property by one person only is known as: 1 tenancy by entirety 2 tenancy in common 3 joint tenancy 4 severalty - correct answer Severalty "Severalty is the correct answer -- think of its root word, "sever." Ownership is severed or separated from any form of co-ownership, while tenancy in common, joint tenancy and tenancy by the entirety are ALL forms of co-ownership." 5. A condensed history of a title to a particular piece of real estate, including a summary of the original grant, and all subsequent conveyances and encumbrances affecting the property, is known as the: 1 chain of title 2 certificate of title 3 evidence of title 4 abstract of title - correct answer abstract of title "Again, you can remember this by remembering ANOTHER three As - An Abstract of title is a history of All recorded instruments Affecting the title to a piece of land. This can be sometimes confused with the chain of title, which only shows a record of ownership of the property. Evidence of title is the documentary proof of a good title to the property, while the certificate of title does not involve an abstract at all." 6. The illegal practice of inducing homeowners to sell their properties by making representations about the prospective entry of persons of a certain race/national origin into the neighborhood is also called: 1 steering 2 commingling 3 blockbusting 4 redlining - correct answer blockbusting "It is easy to get the three Fair Housing violations of redlining, steering, and blockbusting confused, but think of "blockbusting" as "busting up a block" by trying in induce or force people to move out of their neighborhood (or block). (Commingling isn't a Fair Housing violation at all, but a violation involving finances.)" 7. The term for something that grants the right to use another's land for a specific purpose, and is considered an incorporeal interest in land is: 1 an equitable lien 2 an encroachment 3 an easement 4 an encumbrance - correct answer an easement "An easement grants the right to use another's land for a specific purpose. Remember that an EASEMENT is one type of encumbrance, and liens are another type of encumbrance. It is easy to confuse the three terms, but try to remember that Encumbrance has the other two rights under it. Licenses are not classified within these categories because licenses are not permanent rights." 8. The clauses in a deed that limit the future uses of a property are known as: 1 deed restrictions 2 words of conveyance 3 granting clauses 4 acknowledgements - correct answer deed restrictions "Deed restrictions can impose various limitations and conditions - in other words, they RESTRICT the types of structures that may be built on the property, or the uses for which a property can be utilized. On the other hand, an acknowledgement is proof of identification (for the grantor's signature). The granting clause and words of conveyance are the same thing - they grant the intention to transfer or convey the property's ownership." 9. The loss of value in any property, regardless of the specific cause, in an appraisal, is known as: 1 depreciation 2 physical deterioration 3 functional obsolescence 4 descent - correct answer depreciation "Depreciation refers to a GENERAL loss in value, as opposed to "functional obsolescence" or "physical deterioration," which refer to specific types of depreciation, or losses in value. "Descent" is a term used in conjunction with inheritances, and is not related to the other terms at all" 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. - correct 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." 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. - correct 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct 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." 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct 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