NATIONAL Final Exam Flashcards

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Questions and Answers

What is likely to happen to a claim of ownership if possession was secretive?

declined because possession was secretive.

How is value related to price in the market system?

Value is based on the interaction of underlying economic factors; price is a quantification of value in a transaction.

What is a driveway that extends one foot onto a neighbor's property an example of?

an encroachment.

How is the order of priority among junior liens generally established?

the date of recordation. Signup and view all the answers

What do state real estate license laws set in addition to minimal levels of competence?

set ethical and professional standards. Signup and view all the answers

What is a key feature of the Torrens System?

title is conveyed only when conveyance is registered on the title certificate. Signup and view all the answers

What is an important distinction between a contract for deed and a contract for sale?

the seller retains legal title in a contract for deed transaction until fully executed. Signup and view all the answers

What is an illustration of a risk avoidance procedure that a property manager might take?

The manager closes a stairwell that is in need of repair. Signup and view all the answers

In accordance with the Statute of Frauds, what must a five-year lease have to be enforceable?

must be in writing. Signup and view all the answers

What is an illustration of the legal concept of elective share?

A widow who was excluded from a will makes a claim to a portion of the couple's principal residence. Signup and view all the answers

What can a tenant do if a landlord raises the price of a condominium after an option to buy has been exercised?

The tenant can force the sale at the original terms. Signup and view all the answers

What is an important legal characteristic of an option-to-buy agreement?

the optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so. Signup and view all the answers

What does proration refer to in the context of a closing?

apportioning an amount paid, received, or due according to the period of time that a party is responsible for the item. Signup and view all the answers

What is the term for a home in a neighborhood where homeowners have failed to maintain their properties?

incurable economic obsolescence. Signup and view all the answers

What happens to an exclusive listing if a property is taken by eminent domain?

It may be terminated against the agent's will. Signup and view all the answers

What is the likely effect on real estate prices if demand is increasing but new construction is restricted?

Prices would rise. Signup and view all the answers

What must a property owner generally do to qualify for a homestead exemption?

reside on the property. Signup and view all the answers

What is the term for the area running north and south between meridians?

range. Signup and view all the answers

What is true of a cooperative regarding owner liabilities?

A cooperative may hold an owner liable for the unpaid operating expenses of other owners. Signup and view all the answers

What is the definition of cash flow in real estate?

Net operating income minus debt service and reserves. Signup and view all the answers

What is the term for the activity when an agent informs families about minority families moving into a neighborhood?

blockbusting. Signup and view all the answers

What does an appraiser do to complete the sales comparison approach?

weights the comparables. Signup and view all the answers

When must owner agents disclose their agency relationship?

whenever substantive contact is made. Signup and view all the answers

What is the primary distinction between real estate and real property?

real property includes ownership of a bundle of rights. Signup and view all the answers

Study Notes

Legal Concepts in Real Estate

A hermit's ownership claim on a 200-acre property after 20 years may be denied due to secretive possession.
An encroachment occurs when a property feature, like a driveway, crosses onto a neighboring property.
Contracts for deed allow the seller to retain legal title until the buyer fulfills all terms, differentiating from contracts for sale.

Real Estate Transactions

Value in the market system arises from economic factors, while price quantifies that value in transactions.
Estate and property management strategies include risk avoidance, such as closing unsafe areas.
Proration in closing deals refers to dividing amounts owed or received based on the timeframe of responsibility.

Real Estate Law and Procedures

Under the Statute of Frauds, leases longer than one year must be written to be enforceable; this includes five-year leases.
An option-to-buy agreement binds the optionor to complete the sale if the optionee chooses to exercise their option.
A widow excluded from a will may claim an elective share of the couple's principal residence.

Market Trends and Economic Forces

Rising demand in real estate, especially during a construction moratorium, typically leads to increasing property prices.
Incurable economic obsolescence refers to properties in neighborhoods suffering from lack of maintenance by owners.

Agency and Disclosures

Agents with exclusive listings can have their agreements terminated if the property is taken by eminent domain.
Owner agents must disclose their agency relationships to potential buyers or tenants upon first substantial contact.

Financial Aspects and Cooperative Housing

Cash flow is calculated as net operating income minus debt obligations and reserves.
In a cooperative, members may be responsible for unpaid operating expenses of other residents.
Tax treatment for principal residences may permit exclusion from capital gains tax under certain conditions.

Property Appraisal

Appraisers finalize the sales comparison approach by weighing comparable property transactions to establish value.

Ethical Considerations

The practice of informing residents about demographic changes for potential adverse property value impacts is known as blockbusting.

Geographic Terms

Geographic areas defined by north-south lines between meridians are referred to as ranges.

Homestead Exemptions

To qualify for homestead exemptions, property owners must reside on the property they claim.

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Description

Test your knowledge with these flashcards focused on key concepts related to property ownership and market values. Each card presents a scenario or question to challenge your understanding of economic principles and legal claims. Ideal for those preparing for the NATIONAL Final Exam.