Real Estate Principles Quiz
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Questions and Answers

What is the purpose of an abstract of title?

  • To summarize the history of a property’s title. (correct)
  • To disclose existing loans against a property.
  • To outline zoning laws affecting a property.
  • To provide a legal description of a property.

    • What does an acceleration clause in a mortgage do?

  • Allows partial payments to continue.
  • Waives penalties for late payments.
  • Makes the entire debt due if the borrower defaults. (correct)
  • Increases the interest rate after missed payments.

    • Which of the following describes accretion?

  • The gradual decrease of land size.
  • The loss of property value over time.
  • The increase in land due to natural deposits. (correct)
  • The division of land into smaller parcels.

    • What is an actual eviction?

    <p>A legal action to remove a tenant from a property.</p> Signup and view all the answers

    What is meant by adverse possession?

    <p>Obtaining title to land through continuous and hostile possession.</p> Signup and view all the answers

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

    <p>Rights or things belonging to a property.</p> Signup and view all the answers

    What is an adjustable-rate mortgage (ARM)?

    <p>A loan with an interest rate that fluctuates over time.</p> Signup and view all the answers

    What is the role of an appraiser?

    <p>To estimate the value of properties.</p> Signup and view all the answers

    Which clause in a mortgage would cause the full debt to be due upon property sale?

    <p>Alienation clause.</p> Signup and view all the answers

    What distinguishes an affiliated business arrangement (AfBA)?

    <p>Integration of real estate and banking services.</p> Signup and view all the answers

    What is an amendment in the context of a contract?

    <p>A change to the existing content of a contract</p> Signup and view all the answers

    Which law mandates equal access to employment and services for people with disabilities?

    <p>Americans with Disabilities Act (ADA)</p> Signup and view all the answers

    What describes an amortized loan?

    <p>A loan where principal and interest are paid in installments</p> Signup and view all the answers

    What does annexation refer to?

    <p>Converting personal property into real property</p> Signup and view all the answers

    Which term describes the expectation of future benefits or detriments affecting property value?

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

    What is the purpose of antitrust laws?

    <p>To preserve competition and prevent conspiracies</p> Signup and view all the answers

    What does an appraiser do?

    <p>Prepares a professional opinion of estimated value</p> Signup and view all the answers

    What does appurtenance refer to in real estate?

    <p>A right or privilege that belongs to the land</p> Signup and view all the answers

    Which type of deed implies that the grantor has the right to convey title but carries no warranties?

    <p>Bargain and sale deed</p> Signup and view all the answers

    What does a blanket loan cover?

    <p>More than one parcel of real estate</p> Signup and view all the answers

    What is the term for the illegal practice of inducing homeowners to sell their properties by making false representations about neighborhood demographics?

    <p>Panic selling</p> Signup and view all the answers

    What does a breach of contract refer to?

    <p>Violation of any contract terms without legal excuse</p> Signup and view all the answers

    Which of the following correctly defines a broker in real estate?

    <p>One who buys and sells for another for a commission</p> Signup and view all the answers

    What is described as the bringing together of parties interested in a real estate transaction?

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

    What does the term 'bundle of legal rights' refer to in land ownership?

    <p>All legal rights to the land including possession and enjoyment</p> Signup and view all the answers

    Which financing technique is used to reduce the monthly payments on a loan for the initial years?

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

    What defines a buyer agency agreement?

    <p>A principal-agent relationship with fidelity to the buyer</p> Signup and view all the answers

    What is a broker price opinion (BPO)?

    <p>An opinion of real estate value by a broker for a lender</p> Signup and view all the answers

    What are brownfields?

    <p>Contaminated properties from previous industrial use</p> Signup and view all the answers

    What must a building permit demonstrate?

    <p>Compliance with building codes and zoning ordinances</p> Signup and view all the answers

    What is the Chain of Title?

    <p>The sequence of ownership transfers to the current property owner.</p> Signup and view all the answers

    What does a Certificate of Occupancy signify?

    <p>It grants permission to occupy a finished building structure.</p> Signup and view all the answers

    What does the Community Reinvestment Act (CRA) require financial institutions to do?

    <p>Support low and moderate-income housing needs in their communities.</p> Signup and view all the answers

    What is the purpose of the Comparative Market Analysis (CMA)?

    <p>To estimate a property's likely sale price based on similar properties.</p> Signup and view all the answers

    What does the term 'Chattel' mean?

    <p>Personal property.</p> Signup and view all the answers

    What is the significance of the Civil Rights Act of 1866 in housing?

    <p>It prohibits racial discrimination in housing.</p> Signup and view all the answers

    What is a Broker-Agent Agreement?

    <p>A determination of the broker as an agent for a buyer.</p> Signup and view all the answers

    What does the term 'discount points' refer to in financing?

    <p>Funds given to the lender to lower the loan's effective interest rate.</p> Signup and view all the answers

    What is defined by the term 'rate of return'?

    <p>The return a property provides on an owner's investment.</p> Signup and view all the answers

    What is covered by the Coinsurance Clause in insurance policies?

    <p>A clause requiring 80% fire insurance coverage of the property's replacement value.</p> Signup and view all the answers

    What is conciliation in the context of fair housing complaints?

    <p>The resolution of a complaint by remedying violations.</p> Signup and view all the answers

    What does a condemnation proceeding involve?

    <p>An acquisition of private property for public use.</p> Signup and view all the answers

    What is a conditional-use permit?

    <p>A permission for inconsistent zoning uses for the common good.</p> Signup and view all the answers

    What does conformity refer to in real estate appraisal?

    <p>The similarity of properties enhancing overall value.</p> Signup and view all the answers

    In a contract, what is a contingency?

    <p>A provision requiring a specific event for the contract to be binding.</p> Signup and view all the answers

    What defines a cooperative in real estate?

    <p>A trust or corporation where residents own the title.</p> Signup and view all the answers

    What is a construction loan?

    <p>A short-term loan for financing building projects.</p> Signup and view all the answers

    What is constructive eviction?

    <p>Substantial landlord actions disrupting tenant enjoyment, leading to lease termination.</p> Signup and view all the answers

    What does a deed in trust enable?

    <p>Selling, mortgaging, or managing property via a trust.</p> Signup and view all the answers

    What is the purpose of covenants, conditions, and restrictions (CC&Rs)?

    <p>To establish guidelines for property maintenance and use.</p> Signup and view all the answers

    What is a deed given by the mortgagor to the mortgagee when the mortgagor is in default called?

    <p>Deed in Lieu of Foreclosure</p> Signup and view all the answers

    What is the purpose of a Defeasance Clause in a mortgage?

    <p>To cancel a specified right upon a certain condition</p> Signup and view all the answers

    What does a Deficiency Judgment refer to?

    <p>A judgment against a borrower when the property sale does not cover the debt</p> Signup and view all the answers

    What is the role of Designated Agency in real estate transactions?

    <p>To assign specific licensees to act on behalf of a principal</p> Signup and view all the answers

    What do Deed Restrictions typically impose on a property?

    <p>Limits on future use of the property</p> Signup and view all the answers

    What is the definition of an agency in real estate?

    <p>An agency arising by conduct or inference from actions.</p> Signup and view all the answers

    What characterizes an adjustable-rate mortgage?

    <p>An interest rate tied to a fluctuating index.</p> Signup and view all the answers

    What is a contract for deed?

    <p>A sale contract with periodic payments by the buyer.</p> Signup and view all the answers

    What is the primary purpose of an escrow account?

    <p>To manage funds for property taxes and insurance.</p> Signup and view all the answers

    What does the term 'conveyance' refer to?

    <p>The act of transferring ownership of real property.</p> Signup and view all the answers

    What is meant by the term 'land lease'?

    <p>The leasing of land with construction responsibilities.</p> Signup and view all the answers

    What does 'principal balance' refer to in a loan?

    <p>The initial amount before interest and fees.</p> Signup and view all the answers

    What does HOHA stand for in real estate terminology?

    <p>Housing for Older Persons Act.</p> Signup and view all the answers

    What is a General Warranty Deed?

    <p>A deed offering the most protection used in real estate transfers.</p> Signup and view all the answers

    What does Flood Insurance cover?

    <p>Physical damage from flooding.</p> Signup and view all the answers

    Which of the following describes a Fiduciary Duty?

    <p>A relationship of trust between an agent and principal.</p> Signup and view all the answers

    What is a Gross Lease?

    <p>A lease where the landlord covers property charges.</p> Signup and view all the answers

    Who is considered the Grantor in a property transaction?

    <p>The person transferring title or interest in property.</p> Signup and view all the answers

    What is a Fiduciary Relationship?

    <p>A relationship between a trustee and a beneficiary.</p> Signup and view all the answers

    What does a Good Faith Estimate (GFE) provide?

    <p>An estimate of closing costs within three days of a loan application.</p> Signup and view all the answers

    What is meant by Future Interest in real property?

    <p>A right to an interest in real property occurring in the future.</p> Signup and view all the answers

    What distinguishes an exclusive right-to-sell listing from an exclusive agency listing?

    <p>The broker has the exclusive right to sell, regardless of who sells.</p> Signup and view all the answers

    Which type of estate allows either party to terminate the possession?

    <p>Estate at Will</p> Signup and view all the answers

    What is defined as the maximum possible ownership interest in real property?

    <p>Fee Simple</p> Signup and view all the answers

    Which of the following contracts states its terms in either written or oral form?

    <p>Express Contract</p> Signup and view all the answers

    What occurs when a property reverts to the state due to a person dying without heirs?

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

    What type of account is used by brokers to hold funds until conditions are met during a transaction?

    <p>Escrow Account</p> Signup and view all the answers

    Which federal law prohibits housing discrimination based on various factors?

    <p>Fair Housing Act</p> Signup and view all the answers

    What defines a lease that continues from one period to the next without a specified end date?

    <p>Estate from Period to Period</p> Signup and view all the answers

    What is the term for the reduction in a property's value due to external factors?

    <p>External Depreciation</p> Signup and view all the answers

    Which of the following best describes a tenancy where a person occupies a property after the lease ends?

    <p>Estate at Sufferance</p> Signup and view all the answers

    What is considered unethical in real estate transactions unless both parties agree?

    <p>Dual agency</p> Signup and view all the answers

    What type of easement is created by the government's right under eminent domain?

    <p>Easement by condemnation</p> Signup and view all the answers

    What is earnest money typically used for in real estate transactions?

    <p>To be forfeited if the buyer defaults</p> Signup and view all the answers

    Which term describes a right to use another person's land for a specific purpose?

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

    What does 'economic life' refer to in real estate?

    <p>The years an improvement contributes value to land</p> Signup and view all the answers

    What does the Equal Credit Opportunity Act (ECOA) prohibit?

    <p>Discrimination in the extension of credit</p> Signup and view all the answers

    What type of estate allows possession until terminated by either party?

    <p>Estate at will</p> Signup and view all the answers

    What is encapsulation in the context of environmental contamination?

    <p>Sealing off a dangerous substance</p> Signup and view all the answers

    What represents a claim against property that may diminish its value?

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

    What type of listing gives a real estate agent exclusive representation for a property?

    <p>Exclusive right-to-sell listing</p> Signup and view all the answers

    What describes the right of a defaulted property owner to recover their property before a sale?

    <p>Equitable right of redemption</p> Signup and view all the answers

    How is an executed contract defined?

    <p>A contract fully completed by all parties</p> Signup and view all the answers

    What does 'escheat' refer to in real estate law?

    <p>Reversion of property to the state without heirs</p> Signup and view all the answers

    What is an example of emblements in agriculture?

    <p>Annual crops like corn</p> Signup and view all the answers

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