Real Estate Concepts Quiz
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Questions and Answers

What is a mechanic's lien?

  • A government tax levied on real estate transactions.
  • A claim filed by property owners against contractors.
  • A legal claim filed by contractors or suppliers for unpaid work. (correct)
  • An agreement between two parties for loan repayment.

    • What does the term 'marketable title' refer to?

  • A clear title that is free from the risk of legal challenges. (correct)
  • A title that requires governmental approval for sale.
  • A title that guarantees complete ownership of a property.
  • A title that allows leasing of property to multiple tenants.

    • What is the impact of mine subsidence?

  • It causes a downward shift of land due to underground activities. (correct)
  • It leads to the inflation of building material costs.
  • It increases property value due to underground resources.
  • It results in the creation of new lakes and waterways.

    • What does the loan-to-value (LTV) ratio represent?

    <p>The percentage of a property's value financed by a mortgage.</p> Signup and view all the answers

    What does a management agreement specify?

    <p>The contract terms between owner and property manager.</p> Signup and view all the answers

    What is defined as a month-to-month tenancy?

    <p>A rental agreement automatically renewed each month.</p> Signup and view all the answers

    What is the purpose of Megan's Law?

    <p>To establish sex offender registries for public awareness.</p> Signup and view all the answers

    What does the market data approach in real estate valuation involve?

    <p>Comparing a property to recently sold similar properties.</p> Signup and view all the answers

    Who is referred to as the mortgagee in a mortgage loan transaction?

    <p>The lender providing the loan</p> Signup and view all the answers

    What does a net lease require a tenant to pay in addition to rent?

    <p>Property maintenance costs including taxes and utilities</p> Signup and view all the answers

    What is the purpose of a multiple listing service (MLS)?

    <p>To provide brokers a platform to share listings for faster sales</p> Signup and view all the answers

    Which term refers to a substitution of a new obligation for an old obligation in a contract?

    <p>Novation</p> Signup and view all the answers

    What does the term 'nonhomogeneity' refer to in real estate?

    <p>The lack of uniformity or similarity in real estate parcels</p> Signup and view all the answers

    What is a percentage lease based on?

    <p>The tenant's gross sales, along with a base rent</p> Signup and view all the answers

    Which type of property use continues despite an ordinance prohibiting it?

    <p>Nonconforming use</p> Signup and view all the answers

    What does PITI stand for in mortgage terminology?

    <p>Principal, Interest, Taxes, and Insurance</p> Signup and view all the answers

    What is the role of a nonagent (facilitator) in a real estate transaction?

    <p>To assist without representing either buyer or seller</p> Signup and view all the answers

    What is a power of attorney?

    <p>A document allowing one person to act on another's behalf</p> Signup and view all the answers

    What is a prepayment penalty?

    <p>A charge for early loan repayment</p> Signup and view all the answers

    Which term describes maintenance that prevents larger issues?

    <p>Preventive Maintenance</p> Signup and view all the answers

    What is the primary mortgage market?

    <p>The market where loans are initially created</p> Signup and view all the answers

    What does the term 'Principal Meridian' refer to?

    <p>An imaginary line for land surveying</p> Signup and view all the answers

    What is Private Mortgage Insurance (PMI) designed for?

    <p>To protect lenders against loss in foreclosure</p> Signup and view all the answers

    Which of the following describes the Probate process?

    <p>A legal process for determining inheritance</p> Signup and view all the answers

    What does the term 'Procuring Cause' signify in real estate?

    <p>The effort leading to a desired outcome</p> Signup and view all the answers

    What is a Planned Unit Development (PUD)?

    <p>A planned community with mixed uses</p> Signup and view all the answers

    What is an action brought by a property owner seeking compensation for land taken for public use known as?

    <p>Inverse Condemnation</p> Signup and view all the answers

    What does involuntary alienation refer to?

    <p>Involuntarily transferring property to another</p> Signup and view all the answers

    Which of the following defines a joint tenancy?

    <p>Ownership shared equally among tenants with rights of survivorship</p> Signup and view all the answers

    What represents a formal decision of a court regarding parties' rights and claims?

    <p>Judgment</p> Signup and view all the answers

    What is a latent defect?

    <p>A structural defect not discovered by ordinary inspection</p> Signup and view all the answers

    What must a lease generally be to be enforceable by state law if it is longer than one year?

    <p>Written</p> Signup and view all the answers

    What type of lien is placed on a property without the owner's consent?

    <p>Involuntary Lien</p> Signup and view all the answers

    What is a life estate?

    <p>Limited interest in property for the lifetime of the owner</p> Signup and view all the answers

    What term refers to a description of a specific parcel of real estate sufficient for an independent surveyor to locate it?

    <p>Legal Description</p> Signup and view all the answers

    What is the right given by law to certain creditors to have their debts paid from a debtor's property?

    <p>Lien</p> Signup and view all the answers

    What describes the proportion of the amount being pledged in real estate?

    <p>Loan-to-Value (LTV)</p> Signup and view all the answers

    What is the measure of the price a property would attract under competitive market conditions?

    <p>Market Value</p> Signup and view all the answers

    What is the purpose of a listing agreement?

    <p>To employ a broker to find a buyer on specified terms</p> Signup and view all the answers

    What term describes the rights to the use of large navigable lakes and oceans?

    <p>Littoral Rights</p> Signup and view all the answers

    What is the primary role of a property manager?

    <p>To manage real estate for compensation</p> Signup and view all the answers

    What does the Protecting Tenants at Foreclosure Act (PTFA) of 2009 require new owners of foreclosed properties to do?

    <p>Honor existing rental agreements</p> Signup and view all the answers

    Which type of deed transfers property interest without any warranties?

    <p>Quitclaim Deed</p> Signup and view all the answers

    What is a distinct characteristic of a life estate pur autre vie?

    <p>It is measured by the life of another person</p> Signup and view all the answers

    Which of the following is an example of appraisal reconciliation?

    <p>Combining value estimates from various methods</p> Signup and view all the answers

    What does the Real Estate Settlement Procedures Act (RESPA) prohibit?

    <p>Kickbacks and referral fees</p> Signup and view all the answers

    What does the term 'redlining' refer to in real estate?

    <p>Illegal lending practices based on geography</p> Signup and view all the answers

    What is a purchase money mortgage (PMM)?

    <p>A loan secured for purchasing a property from a seller</p> Signup and view all the answers

    Which concept describes the value of a better-quality property being negatively affected by lesser-quality properties in the vicinity?

    <p>Regression</p> Signup and view all the answers

    What does the term 'real property' encompass?

    <p>Interests, rights, and benefits of real estate ownership</p> Signup and view all the answers

    What is the term for a transaction where an owner sells a property and simultaneously leases it back?

    <p>Sale and Leaseback</p> Signup and view all the answers

    What describes rights associated with property bordering a river, stream, or lake?

    <p>Riparian Rights</p> Signup and view all the answers

    What is the cancellation of a contract or agreement referred to as?

    <p>Rescission</p> Signup and view all the answers

    Which term describes the legal right in joint tenancy where ownership automatically transfers to the surviving owner(s) upon death?

    <p>Right of Survivorship</p> Signup and view all the answers

    What refers to the money paid by a tenant to a landlord in case of damages or unpaid rent?

    <p>Security Deposit</p> Signup and view all the answers

    What is the term for assessing and reducing risks associated with property ownership?

    <p>Risk Management</p> Signup and view all the answers

    What method is used for estimating property value based on comparable sales?

    <p>Sales Comparison Approach</p> Signup and view all the answers

    What is known as ownership of property by a single individual?

    <p>Severalty</p> Signup and view all the answers

    Which type of mortgage allows homeowners to receive payments based on the equity of their property?

    <p>Reverse Annuity Mortgage</p> Signup and view all the answers

    What refers to the cost to recreate a property in its original state?

    <p>Reproduction Cost</p> Signup and view all the answers

    What is the purpose of the Small Business Liability Relief and Brownfields Revitalization Act?

    <p>To relieve purchasers from liability for past contamination</p> Signup and view all the answers

    What distinguishes a Special Warranty Deed from other types of deeds?

    <p>It guarantees title only against defects during the grantor's ownership</p> Signup and view all the answers

    What do Special Flood Hazard Areas (SFHAs) categorize?

    <p>Areas at risk of flooding based on historical data</p> Signup and view all the answers

    Which of the following best describes a Sublease?

    <p>When a tenant leases their rented space to a third party</p> Signup and view all the answers

    A Statutory Lien is characterized by what?

    <p>A lien imposed by law, such as a tax lien</p> Signup and view all the answers

    What is the purpose of a Subordination Agreement?

    <p>To change the priority of existing liens on a property</p> Signup and view all the answers

    What does the term 'Stigmatized Property' refer to?

    <p>Property that has an undesirable reputation due to an event</p> Signup and view all the answers

    Which of the following correctly represents a Straight Loan?

    <p>A loan where interest is paid, and principal is paid as a lump sum</p> Signup and view all the answers

    What is the main function of the State Real Estate Commission?

    <p>To administer and supervise real estate licensees</p> Signup and view all the answers

    What does the appraisal principle of Substitution imply?

    <p>A property's value is based on the cost of a comparable property</p> Signup and view all the answers

    What best describes a trust in real estate?

    <p>A fiduciary arrangement where property is held for a beneficiary.</p> Signup and view all the answers

    Which of the following is true about unenforceable contracts?

    <p>Neither party can legally force the other to perform.</p> Signup and view all the answers

    What characterizes a unilateral contract?

    <p>Only one party makes a promise backed by performance.</p> Signup and view all the answers

    What does a vendor's lien allow?

    <p>It provides security for an unpaid purchase price without other liens.</p> Signup and view all the answers

    Which of the following describes valid contracts?

    <p>Contracts that meet all legal requirements.</p> Signup and view all the answers

    What is the primary purpose of zoning ordinances?

    <p>To regulate and manage property use by municipalities.</p> Signup and view all the answers

    What defines a void contract?

    <p>It has no legal effect due to missing elements.</p> Signup and view all the answers

    What does usury refer to in real estate?

    <p>Charging interest at a rate higher than legally allowed.</p> Signup and view all the answers

    What does the term 'Surface Rights' refer to in real estate ownership?

    <p>Ownership rights limited to the physical surface of a property</p> Signup and view all the answers

    What is a 'Tax Sale' in real estate?

    <p>A sale to recover unpaid taxes through a court order</p> Signup and view all the answers

    Who is referred to as a 'Testator' in estate planning?

    <p>A person who has created and left a valid will</p> Signup and view all the answers

    What does 'Tenancy in Common' allow for co-owners?

    <p>Individual, undivided interests in the property</p> Signup and view all the answers

    What is 'Title Insurance' designed to protect against?

    <p>Title defects or claims against ownership</p> Signup and view all the answers

    What characterizes 'Time is of the Essence' in real estate contracts?

    <p>The requirement for timely performance of obligations</p> Signup and view all the answers

    What main function does a 'Title Search' serve in real estate transactions?

    <p>Investigating the current ownership status of a property</p> Signup and view all the answers

    What is the purpose of the TILA-RESPA Integrated Disclosure Rule (TRID)?

    <p>To regulate mortgage transactions disclosures</p> Signup and view all the answers

    What is a defining feature of 'Tenancy by the Entirety'?

    <p>It allows joint ownership exclusively by married couples</p> Signup and view all the answers

    Which term refers to a charge on property due to unpaid taxes?

    <p>Tax Lien</p> Signup and view all the answers

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