Q&A Hero

Q: A TV antenna attached to the chimney would be considered the property of the sellers and could be removed by them.

Q: Mineral rights are considered personal property.

Q: Land ownership includes improvements, air rights and subsurface rights but not personal property.

Q: Examples of improvements that have become part of the real property would include fences, roads, and pipelines.

Q: Air rights are defined as rights of the property owner extending form the center of the earth to a reasonable height above the land.

Q: Air rights may be included in the definition of real property.

Q: Any thing affixed to land with the intent of being permanent is considered real property.

Q: Most subdivision plats make use of which type of land description? a. U.S. government survey b. Rectangular survey c. Assessor's parcel number d. Lot and block

Q: Which of the following will always involve a plat? a. Lot and Block system b. U.S. Geodetic survey system c. U.S. rectangular survey d. Tax assessor's parcel numbers

Q: The number of feet of wire required to enclose 1/4 of 1/4 of a section of land with two strands of wire isa. 5,280 feet.b. 10,560 feet.c. 21,120 feet.d. 34,848 feet.

Q: How many acres does a parcel of land 660- by 660- contain?a. One-eighth acreb. One acrec. Ten acresd. One hundred acres

Q: If Mr. Howard paid $2,500 per acre for the W 1/2 of the SE 1/4 of the NW 1/4 of section 10, how much did he pay?a. $50,000b. $100,000c. $200,000d. $680,000

Q: A parcel of land measuring 1,320- x 660- would contain how much land?a. 10 acresb. 20 acresc. 30 acresd. 40 acres

Q: Which of the following contains more than one acre of land?a. 208- x 208-b. 303- x 144-c. 207- x 209-d. 435- x 100-

Q: A parcel of land contains 1,020 square yards. The front foot measurement is 80-. How deep is the parcel.a. 114.75-b. 38.25-c. 127.5-d. 816-

Q: Of the following described properties, which contains the smallest amount of land?a. 1/2 of a sectionb. One mile by one milec. 1/4 of 1/4 of a sectiond. 320 acres

Q: Within any given township, section 18 can be found a. east of section 13. b. west of section 17. c. north of section 3. d. south of section 27.

Q: Six hundred and forty acres is usually the size of a a. township. b. check. c. range. d. section.

Q: Correction lines, which occur at intervals in the rectangular survey system, are necessary a. to correct the mistakes made by surveyors. b. to allow for magnetic fields which interfere with compasses. c. because of the curvature of the earth. d. because of the gravitational pull of the moon.

Q: The primary purpose of benchmarks is to indicate a. points of beginning. b. corners. c. altitude and elevation. d. end points.

Q: A metes and bounds survey begins at the point of beginning and ends at the a. last benchmark. b. point of beginning. c. first monument used. d. datum.

Q: When would a metes and bounds survey be preferred? a. To describe irregularly shaped parcels b. For mail delivery c. To describe property in a subdivision d. When a brief description is needed

Q: All of the following are acceptable means of describing real property EXCEPT a. metes and bounds. b. lot and block. c. allodial method. d. rectangular survey method.

Q: The most accurate way to uniquely locate and bound a parcel of real property is to use a. an aerial photograph. b. a topographical map. c. a full legal description. d. latitude and longitude.

Q: When there are two valid property descriptions of a piece of real property, a. metes and bounds descriptions take precedence. b. government survey descriptions take precedence. c. older descriptions take precedence over subsequent descriptions. d. any description that adequately describes and distinguishes the property will apply.

Q: Easements, rights of way, and condominium parking stalls are examples of a. emblements. b. trade fixtures. c. riparian rights. d. appurtenances.

Q: A farm, consisting of 160 acres of cultivated land, is sold. Which of the following requires an expressed agreement, in addition to the deed, in order to transfer ownership? a. Cultivated crops b. Subsurface rights c. Farm house d. Detached garage

Q: A cultivated crop, not yet harvested, should be carefully noted on a listing agreement because a. appurtenances will not pass with the land. b. the right to harvest belongs to the owner of the land. c. emblements belong to the person who plants and cultivates them. d. growing things are affixed to the soil.

Q: The most important factor in determining whether an item has become a fixture is the a. method of attachment. b. agreement of the parties. c. adaptability of the item. d. original cost of the item.

Q: Tests of a fixture include all of the following EXCEPT a. agreement of the parties. b. adaptability of the object. c. value of the item. d. manner of attachment.

Q: To transfer ownership of personal property, which document should be used? a. Bill of sale b. Warranty deed c. Quitclaim deed d. Security agreement

Q: Which of the following is personal property? a. Utility easement b. Fixture c. Ceiling fan d. Electric fan plugged in

Q: The best determinant of whether an item is real or personal property is a. the intent of the parties. b. its size and weight. c. its value. d. the appraiser's opinion.

Q: Improvements made to real property become part of the real property because of a. reliction. b. attachment. c. devise. d. descent

Q: Regarding real property, a. mineral rights must run with the land. b. air rights can be granted by deed. c. annual crops are considered real property because they are attached to the land. d. man made buildings are not part of the real property.

Q: Which of the following is real property? a. Farm equipment b. Cotton ready to be harvested c. Swing set from Wal-Mart set in concrete d. Lawn mower

Q: Which of the following are considered to be real estate? a. Trade Fixtures b. Emblements c. Mulberry bush d. Garden hose

Q: a. accelerated depreciation k. investment strategyb. active investor l. leveragec. appreciation m. master limited partnershipd. at-risk rules n. negative cash flowe. blind pool o. negative leveragef. cash flow p. non-recourse financingg. cash-on-cash q. passive investorh. downside risk r. prospectusi. equity build-up s. straight-line depreciationj. GLITAMAD t. tax shelter1> number of dollars remaining each year after collecting rents and paying operating expenses and mortgage payments2> requires the investor to dip into her own pocket3> income tax savings that an investor can produce for its owner4> results from mortgage reduction and price appreciation5> an acronym that refers to the various phases of the life cycle of improved property6> a method of calculating depreciation that takes equal amounts of depreciation each year7> any method of depreciation that achieves a faster rate of depreciation than the straight-line method8> a limited partnership wherein properties are purchased after the limited partners have invested their money9> the possibility that an investor will lose his money in an investment10> a disclosure statement that describes an investment opportunity11> the cash flow of a property divided by the amount of cash needed to purchase it12> as defined by tax law, the amount an investor risks in an investment13> the impact that borrowed funds have on investment return14> an investor who takes an active role in property management, as defined by income tax law15> limited partnership that can be traded on a stock exchange nearly as easily as corporate stock16> financing where the borrower is not personally liable17> a limited partner who does not materially participate on a "regular, substantial, and continuous basis"18> if the borrowed funds cost more than the benefits they are producing19> increase in property value that the owner hopes will occur while owning it20> a plan to balance the returns available with the risks that must be taken to achieve those returns

Q: a. age distribution k. monetary inflationb. base industry l. monetize the debtc. buying pattern m. primary industryd. cost-push inflation n. reale. demand o. real-cost inflationf. demand-pull inflation p. secondary industryg. economic base q. service industryh. employment multiplier r. short-run demandi. Federal Reserve Board s. supplyj. long-run demand t. vulnerability1> an industry that produces goods or services for export from the region; also called primary or export industries2> an industry that produces goods or services to sell to local residents3> the ability of a region to export goods and services to other regions4> higher prices due to buyers bidding against each other5> higher prices due to greater effort needed to produce the same product today6> higher prices due to increased costs of labor and supplies7> results from increasing the money supply faster than increases in goods and services to buy8> governing board of the nation's central bank9> inflation-adjusted10> the creation of money by the Federal Reserve to purchase Treasury securities11> population distribution based on year of birth12> industries that produce goods and services for export; also called base or export industries.13> producers of goods and services that are not exported; also called service or filler industries14> dependency on the number of base industries present and the ability of those industries to continue to consistently export their products15> describes the number of people employed in local service industries as a function of the number of people employed in a base industry16> price changes for developed real property can be rapid and dramatic over short periods of time17> availability of housing in a community18> the requirement for housing in a community19> future demand for housing as seen by looking at the population and the ability of people to obtain income at various age levels20> requirement for housing based on age and income patterns

Q: a. amendment k. master planb. buffer zone l. nonconforming usec. building codes m. Phase Id. CERCLA n. Restrictive covenantse. certificate of occupancy o. Spot zoningf. conditional use permit p. takingg. downzoning q. TDRsh. EIS or EIR r. variancei. land-use-control s. windfall gainsj. mapping requirement t. zoning laws1> a broad term used to describe any legal restriction (such as zoning) that controls how a parcel of land may be used2> public regulations that control the specific use of land3> an improvement that is inconsistent with current zoning regulations4> a comprehensive guide for a community's physical growth5> clauses placed in deeds and leases to control how future owners and lessees may or may not use the property6> a government-issued document stating that a structure meets zoning and building code requirements and is ready for use7> a report that contains information regarding the effects of a proposed project on the environment8> method used to change a zoning ordinance9> allows an individual landowner to vary from a zoning ordinance without changing the ordinance10> the rezoning of a small area of land in an existing neighborhood11> local and state laws that set minimum construction standards12> a strip of land that separates one land use from another13> rezoning of land from a higher-density use to lower-density use14> state and local regulations pertaining to subdivisions that a subdivider must meet before selling lots15> allows a land use that does not conform with existing zoning, provided the use is within the limitations imposed by the permit16> a concept wherein the municipality regulates the property to where it has no value or, in some cases, has no remaining economic value17> name commonly applied to the Comprehensive Environmental Response, Compensation, and Liability Act18> minimal site assessment required to qualify for the innocent landowner defense19> a new planning idea intended to eliminate windfalls and wipe-outs20> inure to owners of land that has been authorized for development as a result of planning and zoning

Q: a. all-risks policy k. insurable interestb. actual cash value l. insurance premiumc. broad form (HO-2) m. insuredd. endorsement n. medical paymentse. flood insurance o. new for oldf. form HO-4 p. old for oldg. form HO-6 q. perilh. homeowner policy r. public liabilityi. homeowner's warranty s. tenant's policyj. inflation guard t. worker's compensation policy1> also called hazards or risks2> an endorsement that periodically increases insurance coverage3> describes combined property and liability policies designed for residential owner-occupants4> pays current cost of replacement less depreciation5> pays cost of replacing damaged property at current prices6> tenant's policy form7> condominium owner's policy form8> the financial responsibility one has toward others9> the amount of money paid for insurance coverage10> describes a policy that covers all perils, except those excluded in writing11> insurance phrase for policies that cover a large number of named perils12> an agreement by the insurance company to extend coverage to perils not covered in the basic policy13> this would pay for damage from the outflow of inland or title waters14> a financial interest that can be insured15> insurance coverage for injuries incurred by an employee on the job16> one who is covered by insurance17> pays for the treatment of injuries without the need to determine fault18> provides broad form coverage for personal property and reimbursement of any loss of use of rental property19> warrants against defects caused by faulty workmanship or materials and against major structural defects20> the new price minus accumulated depreciation and is, in effect, "old for old"

Q: a. annual meeting k. house rulesb. board of directors l. maintenance feesc. bylaws m. management companyd. covenants, conditions, and restrictions (CC&Rs) n. owner's associatione. common elements o. proprietary leasef. condominium p. planned unit development (PUD)g. condominium act q. reservesh. condominium subdivision r. resort timesharei. cooperative s. right-to-usej. cooperator t. separate property1> individual ownership of a space of air plus undivided ownership of the common elements2> ownership by a corporation that in turn leases spaces to its shareholders3> roofs, stairs, elevator, lobby, and so on, in a condominium4> an organization composed of unit owners in which membership is automatic upon purchase of a unit5> type of lease issued by a cooperative corporation to its shareholders6> a document that coverts a parcel of land into a stratified subdivision; also called a master deed7> rules that govern how the owner's association will be run8> a shareholder in a cooperative apartment9> charges levied against unit owners to cover the cost of maintaining the common areas; also called association dues10> form of community ownership where the houses and lots are privately owned but title to common areas is held by an owner's association11> state legislation that creates the legal framework for condominium subdivisions12> that portion of a condominium that is the exclusive property of an individual owner13> regulations by which a condominium owner must abide14> rules for the use of the swimming pool and recreation facilities would be found here15> a governing body elected by association members16> a once-a-year business meeting of the entire association membership17> advises the board of directors; takes care of day-to-day tasks18> the exclusive use of a property for a specified numbers of days each year19> a contractual right to occupy a unit at a timeshare resort20> money set aside from the budget for expenses that do not occur every month

Q: a. Americans with Disabilities Act (ADA) k. Jones v. Alfred H Mayer Companyb. block busting l. marital statusc. commercial facility m. minorityd. Community Reinvestment Act (CRA) n. protected classe. CRA statement o. public accommodationsf. Equal Credit Opportunity Act p. Shelley v. Kraemerg. Fair Housing Law q. steeringh. familial status r. testeri. Fourteenth Amendment s. Thirteenth Amendmentj. handicapped t. Title VIII1> applies to federal prohibitions under the Bill of Rights to the state2> federal fair housing law under the Civil Rights Act of 19683> one or more individuals being domiciled with a parent or another person having legal custody of such individual4> any group or member of a group that can be identified by race, color, religion, sex, or national origin5> the illegal practice of inducing panic selling in a neighborhood for financial gain6> the act of directing any group away from or to an integrated or minority neighborhood7> having a physical or mental impairment that substantially limits one or more major life activities8> law applying to single-family housing utilizing the services of a real estate broker9> the "badge of slavery" violates the constitutional amendment10> federal statute requiring accessibility for commercial premises11> federal statute prohibiting discrimination in lending practices12> federal statute prohibiting discrimination in credit transactions13> an individual posing as a potential purchaser to determine whether discrimination exists in a real estate transaction14> a class of people that by law are protected from discrimination15> the landmark case that established that any form of discrimination creates a "badge of slavery" and violates the Thirteenth Amendment16> the significant case in interpreting the Fourteenth Amendment as it applies to the states17> encompasses 12 categories of retail and service business, including places of lodging, food and drink establishments, places of public gathering, etc18> a facility whose operations affect commerce, that are intended for nonresidential use, and is not a facility expressly exempt from coverage under the Fair Housing Act of 196819> using the categories of married, unmarried,or separated20> calls for mandatory information and some optional information that lending institutions should make available to their customers

Q: a. agent k. price fixingb. agency by estoppel l. principalc. boycotting m. property reportd. buyer's broker n. puffinge. commingling o. sales associatef. dual agency p. special agencyg. fiduciary relationship q. subagenth. implied authority r. third partiesi. middleman s. trust accountj. ostensible authority t. universal agency1> a person who authorizes another to act2> persons who are not parties to a contract but may be affected by it3> an agency created for the performance of specific acts only4> a person who brings two or more parties together but does not assist in conducting negotiations5> one broker representing two or more parties in a transaction6> mixing of client's or customer's funds with an agent's personal funds7> two or more listing brokers agreeing to charge a 7% commission8> a licensed salesperson or broker who works for a broker9> agency authority arising from custom, common usage, and conduct of the parties involved10> a relationship that requires trust, honesty, and exercise of good business judgment11> a separate account for holding client's and customer's money12> refusing to work with another broker because of an arbitrary set of rules13> refers to the agency relationship of a broker's sales associate to the seller14> a broker employed by and therefore loyal to the buyer15> government required information that must be given to purchasers in a subdivision16> the principal gives the agent legal power to transact matters of all types17> the person empowered to act by and on behalf of the principal18> an agency relationship created by the conduct of the principal19> statements a reasonable person would recognize as non-factual or extravagant20> results when a principal fails to maintain due diligence over her agent and the agent exercises powers not granted to him

Q: a. abandonment k. exclusive authority to purchaseb. advance fee listing l. exclusive right to sellc. advanced cost listing m. flat-fee brokerd. agent n. Multiple listing service (MLS)e. bargain broker o. net listingf. broker p. open listingg. buyer's broker q. procuring causeh. discount broker r. ready willing and able buyeri. employment contract s. real estate listingj. exclusive agency listing t. REBAC1> a listing that gives a broker a nonexclusive right to find a purchaser2> a listing that gives a broker the right to collect a commission no matter who sells the property during the listing period3> a listing wherein the owner reserves the right to sell the property himself, but agrees to list with no other broker during the listing period4> a person empowered to act by and on behalf of the principal5> a listing for which the commission is the difference between the sales price and the minimum price set by the seller6> an organization of real estate brokers that exists for the purpose of exchanging listing information7> the broker who is the primary cause of a transaction8> a listing where the broker charges for time by the hour and for out-of -pocket expenses to market a property9> a broker who charges a preset brokerage fee that is collected whether the property sells or not10> a real estate listing between a property owner and a real estate broker11> a listing that covers only out-of-pocket costs incurred by the broker12> an acronym that describes a division of the National Association of REALTORS whose members specialize in buyer agency13> a broker who represents the buyer in a real estate transaction14> if a broker acts counter to the principal's best financial interests, the employment is terminated and no commission is paid15> a broker who deviates from the full-service concept of real estate brokerage and thereby charges lower commissions16> a full-service broker who charges less than the prevailing commission rates in his community17> one who, for a fee, acts as an agent for others in negotiating contracts or sales18> listing utilized by buyer's brokers19> a buyer who is ready to buy at the seller's price and terms and who has the financial capability to do so20> a contract wherein a broker is employed to find a buyer or tenant

Q: a. broker k . real estate commissionb. continuing education l. real estate salespersonc. employment contract m. REALTORd. fictitious business name n. REALTOR-Associatee. franchisee o. realty boardf. independent contractor p. recovery fundg. licensee q. revokeh. nonresident license r. sales associatei. notice of consent s. securities licensej. principal broker t. suspend1> one who holds a license2> a person who is licensed to bring about real estate transaction for a fee, but who do so only in the employment of a real estate broker3> a registered trademark owned by the National Association of REALTORS for exclusive use by its members4> broker in charge of an office5> a business operated under any name other than the owner's name6> an independent agent who negotiates transactions for a fee7> to temporarily make ineffective8> to recall and make void9> a local trade organization for real estate licensees and other persons allied with the real estate industry10> a state-operated fund that can be tapped to pay for uncollectible judgments against real estate licensees11> a salesperson or broker employed by a broker12> a state board that advises and sets policies regarding real estate licensees and real estate transaction procedures13> one who uses his own methods and is responsible only as to results14> a requirement for license renewal in many states, its purpose is to help licensees keep up to date in real estate15> required of a real estate broker in order to conduct negotiations within another state16> permits the secretary of state to receive legal summonses on behalf of a nonresident broker17> required when selling an investment contract18> formalizes the working arrangement between the broker and his salespersons19> the party holding a franchise such as a franchised brokerage office20> membership designation for salespersons and broker licensees working for REALTORS

Q: a. adjustments k. highest and best useb. appraisal l. income approachc. buyer's market m. incurable depreciationd. capitalize n. market approache. comparables o. net operating income (NOI)f. cost approach p. operating expensesg. curable depreciation q. physical deteriorationh. depreciation r. reproduction costi. functional obsolescence s. scheduled gross incomej. gross rent multiplier (GRM) t. subject property1> properties similar to the subject property that have sold recently2> cost at today's prices of constructing an exact replica of the subject improvements using the same or similar methods3> a method of valuing property based on the prices of recent sales of similar properties4> land value plus construction costs less depreciation5> the property that is being appraised6> corrections made to comparable properties to account for differences between them and the subject property7> depreciation resulting from wear and tear of the improvements8> depreciation resulting from improvements that are inadequate, overly adequate, or improperly designed for today's needs9> the estimated rent a fully occupied property can be expected to produce on an annual basis10> to convert future income to current value11> gross income less operating expenses, vacancies, and credit losses12> expenditures necessary to maintain the production of income13> to estimate the value of something14> a method of valuing property based on the monetary return it is expected to produce15> a number that is multiplied by a property's gross rents to produce an estimate of its worth16> depreciation that can be remedied at a reasonable cost17> depreciation that cannot be remedied at a reasonable cost18> a market where there are few buyers and many sellers19> that use of a parcel of land that will produce the greatest current value for the parcel20> loss in value due to deterioration and obsolescence

Q: a. actual eviction k. month-to-month leaseb. assignment l. net leasec. constructive eviction m. on-site managementd. contract rent n. participation clausee. CPM, RPA o. percentage leasef. gross lease p. rent concessiong. holdover tenant q. security deposith. landlord-tenant laws r. step-up renti. lessee s. sublesseej. lessor t. sublet1> the landlord2> the tenant3> partial transfer of rights held under a lease4> complete transfer of rights held under a lease5> one who holds a tenancy at sufferance6> example of a periodic estate7> specified rent increases at various points in time during the life of the lease8> a lease clause that allows the landlord to add to the tenants rent any increase in expenses during the life of the lease9> a lease where the amount of rent paid is related to the income the lessee obtains from the use of the premises10> describes leases wherein the tenant pays a fixed rent11> statutes that set forth the responsibilities and rights of landlords and tenants12> a lease wherein a tenant pays a base rent plus maintenance, property taxes, and insurance13> the party acquiring possession under a sublet agreement14> nonpayment of rent would be grounds for this15> the amount of rent the tenant must pay the landlord as stated in the lease agreement16> an unfit premises would be grounds for this17> an advance deposit given by a tenant to a landlord against which the landlord can deduct for unpaid rent or damage18> a premium, such as a free month's rent, given to entice a prospective tenant to sign a lease19> a resident manager would be in this category20> professional designations for property managers

Q: a. 30-day month k. HUD settlement statement (HUD-1)b. beneficiary statement l. loan escrowc. CC&Rs m. offset statementd. closing date n. outside of the closinge. closing meeting o. proratef. deed delivery p. RESPAg. dry closing q. settlement meetingh. escrow agent r. settlement statementi. escrow closing s. title closingj. good faith estimate t. walk-through1> when seller and buyer meet in person to close a real estate transaction2> statement by an owner or lienholder as to the balance due on an existing lien against the property3> conditions, covenants, and restrictions of a condominium, cooperative, or a planned unit development4> a custom in some states of using a 30-day month to simplify proration calculations5> an accounting of funds to the buyer and seller at the completion of a real estate transaction6> deposit of documents and funds with a neutral third party plus instructions as to how to conduct the closing7> the moment at which title passes from the seller to the buyer8> to divide the ongoing income and expenses of a property between the buyer and the seller9> a federal law that deals with procedures to be followed in certain types of real estate closings10> the person or firm in charge of an escrow11> an escrow for the purpose of financing a property not in connection with a sale12> refers to closing costs paid by the buyer or seller that did not go through the closing agent13> a list of anticipated closing costs given to the borrower by the lender as required by RESPA14> federally related lenders are required to use this particular closing statement format15> the day on which the closing is finalized. Also called the settlement date16> a meeting at which the buyer pays for the property and receives a deed for it; also called a settlement meeting17> a final inspection of the property just prior to the settlement date18> the process of completing a real estate transaction19> shows the unpaid balance on a loan and is provided by the lender20> a method to avoid rescheduling a closing meeting when a document, known to be on its way, has not yet arrived

Q: a. adjusted sales price k. front-foot basisb. ad valorem tax l. improvement districtc. amount realized m. installment methodd. appropriation process n. long-term capital gaine. assessed value o. mill ratef. assessment appeal board p. public improvementg. assessment roll q. special assessmentsh. basis r. tax certificatei. conveyance tax s. tax deedj. documentary tax t. tax lien1> a tax expressed in tenths of a cent per dollar of assessed valuation2> according to value3> a document issued at a tax sale that entitles the purchaser to a deed at a later date if the is not redeemed4> the enactment of a taxing body's budget and sources of money into law5> a book that contains the assessed value of each property in the taxing district6> a document conveying to property purchased at a tax sale7> a value placed on a property for the purpose of taxation8> assessments levied to provide publicly built improvements that will primarily benefit property owners within a small geographical area9> a charge or levy based directly on the measured distance that a parcel of land abuts a street10> sales price of a property less fix-up costs and sales commissions, closing and other selling costs11> a preferential income tax treatment on the sale of an appreciated asset before 198712> sale of an appreciated property structured to spread out the payment of income taxes on the gain13> hears complaints from property owners regarding their assessments14> a state or local tax charged on deeds at the time of recording15> the geographical area which will be assessed for a local improvement16> an improvement that benefits the public at large and is therefore financed by general property taxes17> a charge or hold by a government against property to ensure the payment of taxes18> the price paid for property; used in calculating income taxes19> a fee or tax on deeds and other documents payable at the time of recordation20> selling price of a home less selling expenses

Q: a. adjustment periodb. adjustable rate mortgage (ARM)c. blanket mortgaged. blended-rate loane. buy-down mortgagef. carryback financingg. contract for deedh. equity mortgagei. equity sharingj. graduated payment mortgaget. wraparound mortgagek. interest rate capl. negative amortizationm. optionn. overencumbered propertyo. package mortgagep. payment capq. reverse mortgager. sale and leasebacks. subordination1> the amount of time that elapses between interest rate changes on a loan2> a mortgage secured by two or more properties3> a mortgage secured by real and personal property4> to voluntarily give up a higher mortgage priority for a lower one5> a situation where the loans against a property exceed the value of the property6> a financing arrangement whereby an owner-occupant sells the property and then remains as a tenant7> results when monthly interest exceeds monthly payment an the difference is added to the principal8> a refinanced loan wherein the lender combines the interest rate of the existing loan with a current rate9> a mortgage wherein the lender extends a line of credit based on the amount of equity in a person's home10> a payment by the seller to the lender in order to reduce the interest for the buyer11> a loan wherein the lender makes monthly payments to the property owner who later repays in a lump sum12> the ceiling to which the interest rate on a loan can rise13> a limit on how much a borrower's payment can increase in any one year14> a note is accepted by a seller instead of cash15> an arrangement whereby a party providing financing gets a portion of the ownership16> a right, for a given period of time, to buy, sell, or lease property at present price and terms17> a method of selling and financing property whereby the buyer obtains possession but the seller retains the title18> a mortgage loan on which the rate of interest can rise and fall with changes in prevailing interest rates19> a mortgage repayment plan that allows the borrower to make smaller monthly payments at first and larger ones later20> a debt instrument that encompasses existing mortgages and in subordinate to them

Q: a. APR k. liquid assetsb. cash value l. loan-to-value ratioc. credit report m. redliningd. credit scoring n. Regulation Ze. equity o. right to rescissionf. exempt transactions p. settlement fundsg. Fair Credit Reporting Act q. subprime loansh. Federal Consumer Credit Protection Act r. Truth-in-Lending Acti. finance charge s. TILSRAj. illiquid assets t. trigger term1> federal regulations that implement the enforcement of the Truth-in-Lending Act2> a report reflecting the creditworthiness of a borrower by showing past credit history3> the market value of a property less the debt against it4> refusal to make a real estate loan based solely on the location of the property5> assets that may require months to sell and convert to cash6> assets that are in cash or are readily convertible to cash in a few days7> credit information used in advertising that requires additional credit disclosures8> a federal law that requires certain disclosures when extending or advertising credit9> the total amount the credit will cost over the life of the loan10> the annual percentage rate as calculated under the federal Truth-in-Lending Act by combining the interest rate with other costs of the loan11> federal law giving an individual the right to inspect his or her file with the credit bureau and correct any errors12> Truth-in-Lending Simplification and Reform Act13> popularly known as the Truth-in-Lending Act14> transactions that are exempt from the lending disclosure requirement15> the right that gives borrowers three days to back out after signing loan papers16> funds that are presently in the borrower's checking or savings accounts or available from the sale of the borrower's present property17> the amount of money the policyholder would receive if the policy was surrendered to the insurance company18> the ratio of the amount of the loan to the appraised value of the property19> scoring system applied to a list of subjective factors that are relative in evaluating credit risks20> loans that have risk-based pricing and are typically categorized from "A" to "F"

Q: a. Amortized loan k. Loan origination feeb. Amortization tables l. Loan-to-value ratioc. Balloon loan m. Maturityd. Budget mortgage n. Partially amortized loane. Conventional loan o. PITI paymentf. Discount point p. PMIg. Equity q. Pointh. FHA r. Principali. Impound account s. Term loanj. Loan balance table t. UFMIP1> balance owing on a loan2> a loan that requires the borrower to pay interest only until maturity, at which time the full amount of the loan must be repaid3> refers to a monthly loan payment that includes principal, interest, property taxes, and property insurance4> an escrow or reserve account into which the lender places the borrower's monthly tax and insurance payments5> one hundredth of the total amount; 1% of a loan6> a loan requiring periodic payments that include both interest and principal7> a payment that is larger than any of the previous payments8> the end of the life of a loan9> a loan with a series of amortized payments followed by a balloon payment at maturity10> shows the principal still owing during the life of a loan11> a table showing the monthly payments required to completely pay off a loan12> a one-time charge by the FHA for insuring a loan13> a private mortgage insurance source to insure lenders against foreclosure loss14> the expenses a lender incurs in processing a mortgage loan15> a mortgage wherein the borrower pays principal, interest, taxes and insurance in the same payment16> the market value of a property less the debt against it17> Federal Housing Administration18> a percentage reflecting what a lender will lend divided by the sale price or market value of the property, whichever is less19> real estate loans that are not insured by FHA or guaranteed by the VA20> a charge by a lender that will allow them to sell the loan in the secondary market at a discount

Q: a. accepted form k. no statutory redemptionb. assignment of rents l. power of salec. automatic form m. public trusteed. bare title n. reconveyance deede. beneficiary o. release deedf. deed of trust p. request for reconveyanceg. default q. trusth. foreclosure r. trusteei. junior claims s. trustee's deedj. naked title t. trustor1> a document that conveys legal title to a neutral third party as security for a debt2> one who creates a trust; the borrower under a deed of trust3> the lender4> one who holds property in trust for another5> transfers title from the trustee to the trustor6> a publicly appointed official who acts as a trustee in some states7> the trustee is named in the deed of trust but not personally notified of the appointment8> title in a legal sense only and without the usual rights of ownership9> the beneficiary's request to the trustee to deed the secured property to the trustor10> a clause in a deed of trust that gives the trustee the right to conduct a foreclosure sale without first going to court11> the lender's right to take possession and collect rents in the event of loan default12> conveys to the purchaser at foreclosure the right, title, and interest held by the trustee13> title that the borrower grants to the trustee; also known as naked title.14> any claim behind a first lien15> the trustee is notified in advance and either accepts or rejects the appointment16> what the trustee issues to the borrower; also known as a reconveyance deed17> violation of any of the terms of the deed of trust18> the process of selling the mortgaged property allowed under the deed of trust19> usually not allowed once the foreclosure sale takes place20> a three party arrangement involving a trustor, trustee, and beneficiary

Q: a. acceleration clause k. foreclosureb. alienation clause l. junior mortgagec. assumption m. mortgaged. chattel mortgage n. mortgagore. deed of trust o. partial releasef. defeasance clause p. power of saleg. deficiency judgment q. promissory noteh. equitable mortgage r. public auctioni. equity of redemption s. subject toj. first mortgage t. subordination1> a document by which property secures the repayment of the debt2> a clause in a mortgage stating that the mortgage is defeated if the borrower repays the accompanying note on time3> a lawsuit filed by a lender that asks a court to set a time limit on how long a borrower has to redeem her property4> an agreement that is considered to be a mortgage in its intent even though it may not follow the usual mortgage wording5> a document wherein personal property is used as security for a promissory note6> the evidence of debt; contains amount owed, interest rate, repayment schedule, and a promise to pay7> one who gives a mortgage; the borrower8> a clause in a mortgage that allows a lender to call the loan due if the property changes ownership; also known as a due-on-sale clause9> release of a portion of a property from a mortgage10> the buyer personally obligates himself to repay an existing mortgage loan as a condition of the sale11> the buyer of an already mortgaged property makes the payment but does not take personal responsibility for the loan12> any mortgage lower than a first mortgage in priority13> a clause in a mortgage that gives the mortgagee the right to conduct a foreclosure sale without first going to court14> a judgment against a borrower if the sale of a mortgaged property at foreclosure does not bring enough to pay the balance owing15> the right of a borrower, after a foreclosure sale, to reclaim the property by repaying the defaulted loan16> voluntary acceptance of a lower mortgage priority position than one would otherwise be entitled to17> a deed given to a trustee as security for a loan18> the mortgage loan with highest priority for repayment in the event of foreclosure19> the usual procedure by which foreclosed properties are sold20> allows the lender to declare the loan due if the borrower defaults

Q: a. "as is" k. letter of intentb. bill of sale l. loan commitmentc. binder m. optioneed. closing date n. option feee. delayed exchange o. proratingf. dry rot p. purchase contractg. earnest money deposit q. qualified intermediaryh. equitable title r. right of first refusali. installment contract s. "time is of the essence"j. lease-option t. vendee1> a written and signed agreement specifying the terms at which a buyer will purchase and an owner will sell2> a short-form purchase contract to hold a real estate transaction together until a more formal contract can be prepared an designed3> money that accompanies an offer to purchase as evidence of good faith4> property offered for sale in its present condition with no guarantee or warrant of quality provided by the seller5> rotted wood; usually the result of alternate soaking and drying over a long period of time6> the day on which the buyer pays his money and the seller delivers title7> written evidence of the sale of personal property8> a phrase meaning that all parties to a contract are expected to perform on time as a condition of the contract9> also known as a conditional sales contract, land contract, contract for deed, or agreement of sale10> the buyer under a contract for deed11> the right to demand that the title be conveyed upon payment of the purchase price12> allows the tenant to buy the property at a preset price for a given period of time13> the right to match or better an offer before the property is sold to someone else14> expresses a mutual intention to buy, sell, lease, develop, or invest without creating any firm obligation15> the party receiving an option16> an agreement by a lender to make a loan17> money paid for the privilege of having an option18> a non-simultaneous real estate trade19> a third-party escrow agent used in tax-deferred exchanges20> the process of dividing ongoing expenses and income items

Q: a. assign k. money damagesb. attorney-in-fact l. mutual agreementc. breach of contract m. novationd. competent party n. offerore. consideration o. rescindf. counteroffer p. specific performanceg. duress q. statute of fraudsh. forbear r. unilateral contracti. fraud s. void contractj. liquidated damages t. voidable contract1> a contract in which one party makes a promise or begins performance without first receiving any promise to perform from the other2> an act intended to deceive for the purpose of inducing another to part with something of value3> a person who is considered legally capable of entering into a contract4> the party who makes an offer5> a contract that is not legally binding on any of the parties that made it6> an offer made in response to an offer7> to cancel a contract and restore the parties involved to their respective positions before the contract was made8> use of force to obtain contract agreement9> not to act10> to transfer one's rights in a contract to another person11> damages that can be measured in and compensated by money12> failure, without legal excuse, to perform any promise called for in a contract13> contract performance according to the precise terms agreed upon14> a sum of money called for in a contract that is to be paid if the contract is breached15> a contract that is able to be voided by one of its parties16> the person holding a power of attorney on behalf of another17> a meeting of the minds18> an act or promise given in exchange for something19> requires all contracts for the sale of land to be in writing to be enforceable in a court of law20> the substitution of a new contract for an existing one

Q: a. abstract of title k. opinion of titleb. abstracter l. owner's policyc. actual notice m. quiet title suitd. certificates of title n. reissue ratese. constructive notice o. title cloudf. inquiry notice p. title plantg. judgment rolls q. title reporth. lender's policy r. tract indexi. lis pendens index s. vestedj. notary public t. witness1> where information on judgments against recent owners may be found2> reduced rates offered by some title companies if previous owner's policy is available3> one who signs a document stating that they have witnessed a parties signature4> a summary of all recorded documents affecting title to a given parcel of land5> a person authorized to take acknowledgements6> a report made by a title insurance company showing current title condition7> expert in the field of title search8> a system for listing recorded documents affecting a particular tract of land9> a publicly available index whereby a person can learn of any pending lawsuits that may affect title10> possessed by; owned by11> notice given by public records or by visible possession coupled with the legal presumption that all persons are thereby notified12> a title defect13> an opinion by an attorney as to who owns a parcel of land14> court-ordered hearings held to determine land ownership15> a duplicate set of public records maintained by a title company16> knowledge gained from what one has seen, heard, read, or observed17> insurance to protect a property owner against monetary loss if his title is found to be imperfect18> claims to property rights the law presumes a reasonably diligent person would find through further investigation19> a title policy written to protect a real estate lender20> a statement as to the ownership of a property that is made by an attorney after reading the abstract

Q: a. accretion k. deedb. adverse possession l. easement by prescriptionc. alienation of title m. grantd. alluvion n. grantore. bargain and sale deed o. holographic willf. cloud on the title p. intestateg. color of title q. quitclaim deedh. consideration r. special warranty deedi. covenants and warranties s. statute of fraudsj. dedication t. warranty deed1> a written document that when properly executed and delivered conveys tile to land2> requires that transfers of real estate be in writing3> the act of conveying ownership4> anything of value given to produce a contract5> promises and guarantees found in a deed6> any claim, lien, or encumbrance that impairs title to property7> a deed that contains the covenants of seizen, quiet enjoyment, encumbrances, further assurance, and warranty forever8> a deed that contains no covenants; it only implies that the grantor owns the property described in the deed9> a deed with no covenants and no implication that the grantor owns the property10> to die without a will11> a will written entirely in one's own handwriting and signed but not witnessed12> acquisition of real property through prolonged and unauthorized occupation13> some plausible but not clear-cut indication of ownership14> acquisition of an easement by prolonged use15> waterborne soil deposited to produce firm, dry ground16> person named in a deed who conveys ownership17> private land voluntarily donated for use by the public18> the process of land build-up due to the gradual accumulated of rock, sand, and soil19> a change in ownership of any kind20> grantor warrants title only against defects occurring during the grantor's ownership

Q: a. allodial system k. fee simpleb. chattel l. feudal systemc. common law m. freehold estated. community property n. homestead protectione. consequential damages o. lessorf. deed restrictions p. life estateg. easement q. periodic tenancyh. eminent domain r. police poweri. encroachment s. property taxesj. encumbrance t. severance damagesa. community property k. right of survivorshipb. concurrent ownership l. S corporationc. estate in severalty m. separate propertyd. general partnership n. tenancy by the entiretye. illiquidity o. tenants in commonf. inter vivos trust p. undivided interestg. joint tenancy q. unity of interesth. limited liability company r. unity of possessioni. limited partnership s. unity of timej. poor man's will t. unity of title1> composed of general partners who mainly organize and operate the partnership and limited partners who provide the capital2> a form of joint ownership with the right of survivorship which is reserved for married persons3> the joint tenants must enjoy the same undivided possession of the whole property4> provides the liability protection of a corporation with profit-and-loss pass-through of a partnership5> husband and wife share equally in any property purchased during marriage6> takes effect during the life of its creator7> a label given to joint tenancy because of its right of survivorship feature8> joint tenants must acquire their interests from the same source i.e., the same deed or will9> a method of combining the capital and expertise of two or more persons, each retaining financial liability10> organization of members or managers with little formal organization and limited liability11> ownership by two or more persons at the same time12> each joint tenant must acquire his or her ownership interest at the same moment13> owned by one person; sole ownership14> surviving joint tenants automatically acquire all the rights of the deceased joint tenant15> each joint tenant has exactly the same rights as all other joint tenants16> property acquired before marriage in a community property state17> the possibility that it may be difficult to sell one's partnership interest on short notice18> form of property co-ownership that features the right of survivorship19> shared ownership of a single property with no right of survivorship20> ownership by two or more persons that gives each the right to use the entire property

Q: a. allodial system k. fee simpleb. chattel l. feudal systemc. common law m. freehold estated. community property n. homestead protectione. consequential damages o. lessorf. deed restrictions p. life estateg. easement q. periodic tenancyh. eminent domain r. police poweri. encroachment s. property taxesj. encumbrance t. severance damages1> the right of government to take privately held land for fair compensation2> the conveyance of fee title for the duration of someone's life3> an award to a property owner whose land is not taken but which suffers because of a nearby public land use4> taxes levied against privately held land based on its value5> the landlord or fee owner6> an article of personal property7> the right of government to enact law and enforce them for the order, safety, health, morals, and general welfare of the public8> an estate in land that is held in fee or for life9> compensation for the loss in market value that results from splitting up a property in condemnation proceeding10> the largest, most complete bundle of rights one can hold in land, land ownership11> a tenancy that provides for continuing automatic renewal until canceled12> law that develops from custom and usage over long periods of time13> all land ownership rests in the name of the king14> one in which individuals are given the right to own land15> provisions placed in deeds to control how future landowners may or may not use the property16> state laws that protect against the forced sale of a person's home17> the right or privilege one party has to use land belonging to another for a special purpose18> any impediment to a clear title such as a lien, lease or easement19> the unauthorized intrusion of a building or other improvement onto another person's land20> spouses are treated as equal partners with each owning a one-half interest

Q: a. acre k. informal referencesb. adaptation l. nonhomogenityc. agreement m. personal propertyd. appurtenance n. quadranglee. base line o. real estatef. bench marks p. recorded platg. datum q. scarcityh. fixity r. situsi. government survey s. vertical land descriptionsj. improvements t. water table1> any form of land development, such as buildings, roads, fences, and pipelines2> fixed mark of known location and elevation3> type of measurement necessary when air rights need to be described4> a subdivision map filed in the county recorder's office5> the shortage of land in an area where there is a great demand for land6> a point, line, or surface from which a vertical height or depth is measured7> manner in which a specific item is custom made to adapt to a certain piece of real estate8> a right or interest in things of a temporary or movable nature9> a parcel of land containing 43,560 square feet10> upper limit of percolating water below the earth's surface11> the fact that no two parcels of land are exactly alike12> location preference13> the fact that land and buildings require long periods of time to pay for themselves14> land and improvements in a physical sense as well as the rights to own and use them15> right or privilege or improvement that belongs to and passes with the land16> easily understood but not precise method of land description17> possibly the most significant test of the existence of a fixture18> latitude line that intercepts a principal meridian19> also known as rectangular survey or U.S. public land survey20> 24-by-24 mile area created by the guide meridians and correction lines.

Q: The term "Gross lease" means: a) A disgusting lease. b) The tenant pays the building operating expenses. c) The landlord pays the building operating expenses. d) The property manager pays the building operating expenses.

Q: A "Step-up" provision in a commercial property lease means: a) Provides for the tenant to move to a higher floor. b) Adjusts the rental payments to changes in inflation. c) Specifies in advance the absolute dollar amounts by which the rental payments will increase, no matter what happens to inflation. d) Requires the tenant to pay specified increases in the building's operating expenses.

Q: Suppose a lease has a 75% CPI-Adjustment each year. If last year's rent was $20/SF and the CPI has increased from 155 to 161, what is the new rent this year? a) $20.50 b) $20.58 c) $20.77 d) $21.00 e) $21.20

Q: All of the following relate most directly to the benefit side of the real estate development NPV equation, except: a) The construction and absorption budget. b) The operating budget. c) The projected cap rates in the built property market. d) The rents in the built property market.

Q: All of the following distinguish the typical real option on land development from the typical financial option on securities, except: a) The land development option is perpetual. b) The underlying asset value in the land development option can only be observed with "noise". c) Exercise of the land development option adds to the supply side of the market in which the underlying asset trades. d) The underlying asset in the case of the land development option typically pays income to the former option holder only upon exercise of the option.

Q: The NPV investment decision rule is applicable even in the case of a real option, such as a real estate development investment decision, because: a) The NPV rule states that any investment with a positive NPV should be undertaken. b) The real options nature of development enables a negative NPV investment to be rational. c) The NPV rule will insure that a development project that presents a higher IRR will be chosen over one that presents a lower IRR. d) The NPV rule requires making the decision that maximizes the NPV over all mutually exclusive alternatives, and building today versus waiting are mutually exclusive alternatives on a given piece of land.

Q: The main difference between applying real option theory to real estate development and applying it to many typical industrial corporate capital budgeting problems is that: a) The typical industrial corporation is a publicly traded firm whose stock price rapidly reflects the investment value of the firm. b) The typical industrial capital budgeting question faces a "use it or lose it" finite window of opportunity for the investment. c) There is usually a reasonably well functioning market in real estate for the development option (in the land market), which allows the opportunity cost of the option exercise to be easily quantified in the NPV calculation. d) In the typical industrial corporation only the market value of the investment decision can be estimated, not the investment value, which makes it necessary to wait for an NPV substantially greater than zero.

Q: The major advantage of real option theory over the decision tree approach for analyzing land value and development decision making is: a) Option theory is simpler and less prone to making mistakes. b) Option theory allows a more detailed and realistic model of complex development staging and design alternatives. c) Option theory is a complete economic model based on the concept of market equilibrium, and therefore does not require as much prior knowledge about the opportunity cost of capital (discount rates or expected returns). d) Decision tree analysis does not allow for the time-to-build (time required for construction), and assumes that future values follow a normal (or Gaussian) distribution with no autocorrelation ("efficient markets assumption").

Q: In option valuation theory all of the following are true except: a) The "underlying asset" refers to what is obtained upon the exercise of a "call option" (or what is given up on the exercise of a "put option"). b) The "exercise price" is the value of what must be paid by the option holder when the option is exercised. c) A "European option" can be exercised anytime prior to its expiration date, while an "American option" can only be exercised at the time of its expiration. d) A "compound option" is an option on an option.

Q: It is possible conceptually to distinguish two underlying sources of option-based land value over and above the current difference between the value of the best building that could currently be built on the site and the construction cost (exclusive of land) of that building, the underlying reasons why it makes sense to wait before immediately commencing a positive-NPV construction: a) Systematic risk, and idiosyncratic risk. b) Competing demand for the site, and competing supply of other similar sites. c) Growth expectations of the value of the evolving highest and best use (HBU) for the site, and irreversibility of construction once it is begun (building today is mutually exclusive with building tomorrow on the same site. d) The time value of money, and the risk premium necessary to compensate investors for land value risk.

Q: Suppose the riskfree (i.e., Government Bond) interest rate is 5%, the current cash yield payout rate on newly built property is 7.5%, and the annual volatility of individual property total returns is 25% for built properties that are leased up and operational. Use the Samuelson-McKean formula to answer the following questions concerning a vacant but developable land parcel. (a) If built property has a 4% risk premium in its expected total return (9% total return), then what is the risk premium and expected total return for the land parcel? (hint: use the elasticity formula 8.11a and the risk premium formula 8.11c) (b) What is the value of the land parcel if a building currently worth $2,500,000 new could be built on the land for a construction cost of $2,200,000? (c) What is the "hurdle benefit/cost ratio" above which the land should be immediately developed? (d) What value of newly built property does this suggest is required before the land should be developed? (e) Under these conditions should the land be developed immediately or is it better to wait?

Q: What factors or considerations tend to make both landlords and tenants prefer longer-term leases, ceteris paribus?

Q: Based on the following information, develop a front door "Simple Financial Feasibility Analysis" (SFFA) for this project estimating the required minimum market gross rent per SF that will support development. 40,000 NRSF office building project. Acquisition & construction cost = $1,500,000; Estimated operating costs (to landlord) = $100,000/yr. Projected stabilized occupancy = 95%. Permanent loan available on completion 9% (interest-only loan) with 130% debt service coverage requirement on the net operating income, and 75% maximum loan-to-value ratio.

Q: According to the Graaskamp model, what are the four "disciplines" or professional perspectives involved in the real estate development process?

Q: An "Expense Stop" provision in a lease: a) Puts a limit on the amount of building operating expenses the tenant must pay. b) Puts a limit on the amount of building operating expenses the landlord must pay. c) Puts a limit on the amount of building operating expenses the property manager must pay. d) Puts a limit on the total operating expenses of a building.

Q: What is the Effective Rent (under 10% discount rate assumption) for a 7-year net lease with rent fixed at $20/SF, in which the landlord agrees to give the tenant one year free rent up front and to pay for $10/SF worth of tenant improvements? a) $14.40 b) $15.84 c) $16.26 d) $18.13 e) $20.00

Q: Suppose a construction project anticipates end-of-month draws of $400,000, $300,000, and $600,000 consecutively. What will be the balance owed at the end of the third month if the interest on the loan is 7% per annum (compounded monthly), and no payments of either principal or interest are required during the construction period? a) $1,306,430. b) $1,314,051. c) $1,378,960. d) Cannot be computed with the information given.

Q: In the classical construction loan: a) The developer (borrower) owes no cash payments to the bank until the loan comes due upon completion of the construction project. b) The developer pays interest only during the construction phase. c) The developer pays both interest and some principle to begin to amortize the construction loan during the construction phase. d) The developer and construction lender share equally in all payments to construction contractors during the construction phase.