National Real Estate Review

Front 1

Ownership of personal property is transferred by

Back 1

Bill of Sale

Front 2

Property that is immovable is

Back 2

Real Property

Front 3

Something attached to real estate that transfers with it is an .

Back 3

Appurtenance

Front 4

A gift of private property to a public use is a

Back 4

Dedication

Front 5

The tearing away of land due to natural causes is

Back 5

Erosion or Avulsion

Front 6

Right of government to enact laws for the health, safety and welfare of the public is the

Back 6

Police Power

Front 7

The increase in land due to natural causes is

Back 7

Accretion

Front 8

The idea that no two parcels of real estate are identical defines the concept of

Back 8

Heterogeneity

Front 9

The process of changing the character of property from real to personal or personal to real is known as

Back 9

Conversion.

Front 10

. Crops or……the right of a tenant farmer to harvest crops after lease expiration:

Back 10

Emblements

Front 11

The rights of an owner along a river or stream are

Back 11

Riparian Rights.

Front 12

. Property that is movable is

Back 12

Personal Property.

Front 13

The AZ document that causes mobile homes to be taxed as real estate:

Back 13

Affidavit of Affixture.

Front 14

The government right to take private property for public use, with compensation is

Back 14

Eminent Domain.

Front 15

The act of taking property for public use:

Back 15

Condemnation.

Front 16

. The passing of property to the state due to a lack of heirs:

Back 16

Escheat

Front 17

. The amount of footage along a street is:

Back 17

Front Footage

Front 18

. An area set aside by municipal authorities for a specific type of use:

Back 18

Zone

Front 19

An area separating two incompatibly zoned areas from each other:

Back 19

Buffer Zone

Front 20

The minimum distance from the lot line at which building can occur:

Back 20

Setback

Front 21

A use which pre‐dates the zoning ordinance:

Back 21

Non‐conforming Use

Front 22

A use granted in violation of the zoning ordinance: Variance

Back 22

Variance

Front 23

A burden on the title is an:

Back 23

Encumbrance

Front 24

A limitation on property use created by an owner or developer:

Back 24

Deed Restriction, Restrictive Covenant, CC&Rs

Front 25

A right one person has in the land of another is an:

Back 25

Easement

Front 26

Easement held by one owner across an adjacent property:

Back 26

Easement Appurtenant

Front 27

. The parcel benefiting from an easement appurtenant:

Back 27

Dominant Parcel

Front 28

The parcel encumbered by an easement appurtenant:

Back 28

Servient Parcel

Front 29

. Easement held by a third party (not an adjoining owner):

Back 29

Easement in Gross

Front 30

. An easement personal is a form of:

Back 30

License

Front 31

. The two general involuntary liens are:

Back 31

Judgments & Income Tax Liens

Front 32

. When land held by a single owner is broken down into 2 or more parcels and one of theparcels is landlocked, the type of easement that could be created to allow access is:

Back 32

Easement by Necessity

Front 33

. An easement acquired through long, continuous and hostile use:

Back 33

Prescriptive Easement

Front 34

. Acquisition of ownership by hostile use of another’s property can occur by:

Back 34

Adverse Possession

Front 35

Three ways an easement may be terminated:

Back 35

a. Merger b. Quit Claim Deed c. Quiet Title Action

Front 36

The physical trespass of a building onto another property is:

Back 36

Encroachment

Front 37

. A money encumbrance is a

Back 37

Lien

Front 38

A lien placed on real estate by operation of law is:

Back 38

Involuntary Lien

Front 39

A lien placed on property with the owner’s permission:

Back 39

Voluntary Lien

Front 40

Liens that affect individual parcels of land are:

Back 40

Specific Liens

Front 41

Three specific, involuntary liens are:

Back 41

a. Taxes b. Assessments c. Mechanic’s Liens

Front 42

Liens that affect all of a person’s real & personal property:

Back 42

General Liens

Front 43

A lien placed by the government for specific improvements such as street paving orstreet lights is:

Back 43

Assessment aka Special Assessment

Front 44

. A legally enforceable agreement to do or not do certain things is a

Back 44

Contract

Front 45

The law that requires certain contracts to be in writing to be enforceable:

Back 45

Statute of Frauds

Front 46

. Persons who have legal capacity to enter into a contract:

Back 46

Competent Parties

Front 47

An invitation to enter into a contract is an:

Back 47

Offer

Front 48

The 6 essential elements of a contract are:

Back 48

1.Competent parties

2. Consideration

3. Offer and acceptance (Meeting of the minds)

4. Lawful purpose (Lawful objective)

5. Be in writing (most real estate contracts)

6. Proper description of the property

Front 49

A contract in which all the terms are specified:

Back 49

Expressed contract

Front 50

A contract created by a party’s actions is an

Back 50

Implied contract

Front 51

A contract which has been fully performed:

Back 51

Executed contract

Front 52

A contract in which all terms have yet to be performed:

Back 52

Executory contract

Front 53

. A contract in which each party makes a promise:

Back 53

Bilateral contract

Front 54

. A contract in which only one party makes a promise:

Back 54

Unilateral contract

Front 55

. A contract giving exclusive rights to buy or lease a property within a specific time for aspecific price and terms:

Back 55

Option

Front 56

A contract requiring one person to give another the initial opportunity to buy or lease aproperty is:

Back 56

Right of First Refusal

Front 57

. A contract which contains all the essential elements:

Back 57

Valid contract

Front 58

. A contract which has no force or effect on any party:

Back 58

Void contract

Front 59

. A contract which could be overturned by one or both parties:

Back 59

Voidable contract

Front 60

A contract that is worded so loosely or vaguely that it is unenforceable:

Back 60

Illusory contract

Front 61

A listing in which the broker will be paid only if she finds a buyer:

Back 61

Open listing

Front 62

An exclusive listing in which the seller reserves the right to find a buyer and not pay thebroker: Exclusive Agency listing

Back 62

Exclusive Agency listing

Front 63

A listing in which the seller pays the broker even if the seller finds a buyer:

Back 63

Exclusive Right to Sell Listing

Front 64

A listing in which the broker keeps a portion of the sales price above an amount agreedto by the seller:

Back 64

Net listing

Front 65

A listing in which the broker also has the right to buy the property:

Back 65

Option listing

Front 66

An employment contract in which the buyer hires the broker:

Back 66

Buyer Brokerage Agreement

Front 67

This law limits monopolies and prohibits price fixing:

Back 67

Sherman Anti‐trust Act

Front 68

Someone who has reached the age of majority is an

Back 68

Adult

Front 69

A relationship created when one person hires another to act on his or her behalf:

Back 69

Agency

Front 70

The person who hires an agent:

Back 70

Principal or Client

Front 71

The person hired to represent someone else:

Back 71

Agent

Front 72

. A person who is not represented:

Back 72

Customer

Front 73

The acronym for the 6 fiduciary duties is: C A R L O D or O L D C A R

Back 73

C A R L O D

Front 74

The 6 fiduciary Duties are:

Back 74

a. Confidentiality

b. Accounting

c. Reasonable Skill and Care (Reasonable Care & Diligence)

d. Loyalty

e. Obedience

f. Disclosure

Front 75

The fiduciary duty that prohibits an agent from disclosing a client’s motivation:

Back 75

Confidentiality

Front 76

The fiduciary duty that requires an agent to place the client’s interest above all otherinterests:

Back 76

Loyalty

Front 77

The duty that requires an agent to follow a client’s instructions:

Back 77

Obedience

Front 78

The duty that requires an agent to protect a client from foreseeable harm: ReasonableSkill & Care (Reasonable Care & Diligence)

Back 78

Reasonable Skill & Care (Reasonable Care & Diligence)

Front 79

The duty that requires an agent to keep a client fully informed:

Back 79

Disclosure

Front 80

An agency created through specific instructions to the agent:

Back 80

Expressed agency

Front 81

. An agency created through the acts of an agent:

Back 81

Implied agency

Front 82

A document in which a client authorizes an agent to act and sign documents on theclient’s behalf:

Back 82

Power of Attorney

Front 83

The person authorized to act under a power of attorney:

Back 83

Attorney in Fact

Front 84

An agent with limited authority:

Back 84

Special agent (Specific agent)

Front 85

. An agent with broad authority to act in various business matters:

Back 85

General agent

Front 86

. The type of agency that occurs when one agent represents two clients in the sametransaction:

Back 86

Dual agency

Front 87

A person who contracts his or her services to another but is not an employee:

Back 87

Independent contractor

Front 88

A person whose work can be controlled on an hour‐to‐hour basis by an employer:

Back 88

Employee

Front 89

An agent’s agent is a:

Back 89

Sub‐agent

Front 90

The 7 ways by which an agency may be terminated:

Back 90

a. Performance

b. Mutual agreement

c. Expiration of term

d. Revocation by the principal or agent

e. Destruction of the property

f. Bankruptcy of the principal

g. Death or serious incapacity of principal or agent

Front 91

Does death of either party terminate a lease or purchase agreement?

Back 91

No

Front 92

The three purposes of a purchase agreement are:

Back 92

a. Copy of the offeror’s offer

b. Legally binding contract upon acceptance

c. Escrow instructions

Front 93

An invitation to enter into a contract is an

Back 93

offer.

Front 94

The parties to an offer are the

Back 94

offeror and offeree.

Front 95

. When may an offeror withdraw the offer?

Back 95

At any time.

Front 96

_________ offers must be promptly submitted to an offeree.

Back 96

All

Front 97

When licensees purchases or sells a property for themselves they must disclose their

Back 97

licensed status.

Front 98

An offer made by an offeree in response to an offer is a

Back 98

counter offer.

Front 99

Any change to an offer is considered to be

Back 99

a counter offer.

Front 100

When any change is made to an offer the original offer is

Back 100

null and void.

Front 101

. The acceptance of an offer and communication of that acceptance to the offer results ina

Back 101

binding contract.

Front 102

Once a purchase agreement becomes binding the buyer is said to have

Back 102

equitable title

Front 103

. If a buyer or seller dies an executory purchase agreement is binding on the

Back 103

heirs or estate.

Front 104

. Money given by an offeror to show good faith is

Back 104

earnest money

Front 105

Earnest money is usually held by the

Back 105

buyer’s broker.

Front 106

. The amount of earnest money is

Back 106

negotiable.

Front 107

In an Arizona purchase agreement, the form of earnest money must be

Back 107

stated in the agreement.

Front 108

In Arizona, a salesperson must turn earnest money over to the broker

Back 108

promptly.

Front 109

In Arizona, unless otherwise agreed to____________ the broker must ___________ placeearnest money is a__________ or_______.

Back 109

in writing, immediately , trust account, in escrow

Front 110

Mixing a client’s funds with a broker’s business funds is

Back 110

commingling

Front 111

The use of a client’s funds for the agent’s own use is

Back 111

conversion

Front 112

Any provision dictating that a contract is dependent on the happening of a certain eventis a

Back 112

contingency

Front 113

. A provision which makes a contract contingent upon the buyer obtaining financing iscalled a

Back 113

mortgage contingency.

Front 114

. Evidence of termite damage could be ______________ or _______________

Back 114

rotted wood or cellulose debris.

Front 115

. A neutral third party hired to close a transaction is

Back 115

escrow.

Front 116

When there is a conflict between any pre‐printed wording and wording written into acontract the ______________ prevails.

Back 116

written word

Front 117

An apportionment of funds between the parties for unpaid or pre‐paid items such astaxes, insurance or interest is a

Back 117

proration

Front 118

The phrase that specifies the importance of completing the terms of a contract on atimely basis is

Back 118

“time is of the essence.”

Front 119

The evidence to a buyer that the title is clear is a

Back 119

title insurance policy.

Front 120

An amount that was pre‐determined by the parties to be the total amount ofcompensation an injured party will receive if the other party breaches the contract isknown as

Back 120

liquidated damages.

Front 121

. A court order given to enforce the provisions of a contract is

Back 121

specific performance.

Front 122

. The risk of loss to a property prior to closing is born by the

Back 122

seller.

Front 123

Latin for “let the buyer beware” is

Back 123

caveat emptor.

Front 124

Making overstatements of personal opinion is

Back 124

puffing.

Front 125

A false statement of a material fact which a party relies on to the party’s damage is a

Back 125

misrepresentation (aka) negligent misrepresentation.

Front 126

When a misrepresentation is intentional it is known as

Back 126

fraudulent misrepresentation.

Front 127

. Real estate malpractice insurance is known as

Back 127

errors & omissions insurance.

Front 128

The legal remedy of canceling a contract and returning the parties to their originalpositions prior to entering into the contract is

Back 128

rescission.

Front 129

Using borrowed money to increase the rate of return is

Back 129

leverage.

Front 130

The document that serves as evidence of the debt is the

Back 130

promissory note.

Front 131

A promissory note________ usually recorded.

Back 131

IS NOT

Front 132

The document that ________________real property as security for a debt is the________ or_______________________.

Back 132

hypothecates, mortgage, deed of trust.

Front 133

The mortgage or deed of trust is usually recorded to establish ____________of the lien

Back 133

priority

Front 134

The document the names the property as collateral and includes the legal description isthe _________________ or ______________________.

Back 134

mortgage or deed of trust.

Front 135

A loan in which the monthly payment of principal and interest is level and constant is a

Back 135

fully amortized loan.

Front 136

The amount of money that is borrowed is the

Back 136

principal.

Front 137

The charge made to borrow money is the

Back 137

interest.

Front 138

Interest on real estate loans is usually __________ interest.

Back 138

simple

Front 139

When one payment on a loan (usually at the end of the loan term) is larger than theregular monthly payment it is known as a

Back 139

balloon payment.

Front 140

A loan in which the payment includes principal, interest, taxes and insurance is knownas a

Back 140

budget loan.

Front 141

In a budget loan the taxes and insurance a held in an __________account, aka a _________ account or _____________account.

Back 141

escrow

reserve

impound

Front 142

A loan in which the payments are interest only is a ________, aka a __________.

Back 142

straight loan, term loan

Front 143

A loan in which the payment does not even cover the interest due and which causes theprincipal balance to increase is a

Back 143

negative amortization loan.

Front 144

The pattern of payments (payment, interest rate, etc.) are found in the

Back 144

promissory note.

Front 145

Payments on real estate loans are made

Back 145

IN ARREARS

Front 146

An FHA loan is insured by the

Back 146

Federal Housing Administration.

Front 147

A VA loan is guaranteed by the

Back 147

Department of Veterans Affairs.

Front 148

A loan made with no government insurance or guarantee is a

Back 148

conventional loan.

Front 149

A loan in which the seller is the lender is a

Back 149

purchase money loan aka a seller carryback.

Front 150

A seller carryback loan in which a seller remains liable for an existing loan is a

Back 150

wraparound loan.

Front 151

A loan in which the interest rate may change is an

Back 151

adjustable rate loan.

Front 152

A loan in which the payments are lower in the early years and larger in later years is a

Back 152

graduated payment loan.

Front 153

A loan secured with more than one property is a

Back 153

blanket loan.

Front 154

. A loan that includes personal property such as a washer and dryer is a

Back 154

package loan.

Front 155

A loan which allows a borrower to borrow more money within the same loan is an

Back 155

open end loan.

Front 156

A loan in which funds are advanced as building progresses is a

Back 156

construction loan, aka interim loan.

Front 157

The normal, long term financing that pays off a construction loan is a

Back 157

take‐out loan.

Front 158

A short term loan that fills the gap between the time a construction loan expires and atake‐out loan is placed is

Back 158

a gap loan, aka swing loan or bridge loan.

Front 159

. A loan in which the lender makes payments to the borrower is a

Back 159

reverse annuity loan.

Front 160

A loan with higher priority than another loan is a

Back 160

superior loan.

Front 161

A loan with lower priority than another loan is a

Back 161

junior loan.

Front 162

A loan in which the borrower has no personal liability for the debt is a

Back 162

non‐recourse loan.

Front 163

A loan clause that allows the lender to declare the debt all due and payable is an

Back 163

acceleration clause.

Front 164

A clause that allows the lender to declare the loan all due and payable is the property issold is an

Back 164

alienation clause aka due on sale clause.

Front 165

A clause that allows a lender to make an extra charge if the loan is paid off early

Back 165

is a pre‐payment penalty clause.

Front 166

A clause in a mortgage that states the mortgage is null and void when the note is paidoff is a

Back 166

defeasance clause.

Front 167

A clause calling for individual parcels to be released from a blanket loan is a

Back 167

release clause

Front 168

A clause which calls for a higher priority loan to be placed in a lower priority position toanother loan is

Back 168

a subordination clause

Front 169

Charging more than the lawful rate of interest is known as

Back 169

usury.

Front 170

The interest rate that is specified in the note is known as the

Back 170

Contract rate aka the nominal rate or the face rate.

Front 171

The rate that would apply when no specific rate is stated in the note is known as

Back 171

the legal rate.

Front 172

FHA stands for the

Back 172

Federal Housing Administration.

Front 173

In an FHA loan the lender is

Back 173

insured against loss.

Front 174

The FHA is regulated by

Back 174

HUD, the Department of Housing & Urban Development.

Front 175

A borrower on an FHA loan pays a -__________, ____________ the lender against loss.

Back 175

MIP to insure

Front 176

An FHA appraisal is also known as a

Back 176

Conditional Commitment.

Front 177

The requirement for an FHA loan that unless the appraisal is equal to or greater than the sale price thebuyer may withdraw from the agreement is known as the

Back 177

FHA Escape Clause or FHA Amendatory Clause.

Front 178

FHA loans are for _____________ family units.

Back 178

one to four

Front 179

. FHA loans are for ________________ properties.

Back 179

owner occupied

Front 180

FHA loans _________ have pre‐payment penalties.

Back 180

do not

Front 181

VA stands for the

Back 181

Department of Veteran’s Affairs

Front 182

. In a VA loan the lender is_____________against loss.

Back 182

guaranteed

Front 183

The document issued by the VA stating that the veteran qualifies and the amount of the veteran’sguarantee or entitlement is a

Back 183

Certificate of Eligibility.

Front 184

. When a VA loan is paid off the veteran’s eligibility is

Back 184

restored.

Front 185

At the time of VA loan origination the veteran must pay a

Back 185

VA Funding Fee.

Front 186

A VA appraisal is also known as a

Back 186

Certificate of Reasonable Value, CRV.

Front 187

The typical amount of down payment on a VA loan is

Back 187

nothing down.

Front 188

. The typical loan‐to‐value ratio on a VA loan is ____%

Back 188

100%

Front 189

. VA loans are for____________properties.

Back 189

owner‐occupied

Front 190

VA loans ______ pre‐payment penalties.

Back 190

Do Not Have

Front 191

. A loan with no FHA insurance or VA guarantee is known as a

Back 191

conventional loan

Front 192

An uninsured conventional loan typically requires the down payment to be____% of the purchase price.

Back 192

20

Front 193

. On an insured conventional loan the insurance premium is abbreviated ____ or _______.

Back 193

MI or PMI.

Front 194

. Making false statements to obtain a loan is

Back 194

loan fraud.

Front 195

. Three ways in which loan fraud could occur are:

Back 195

1. Falsifying income or assets

2. Providing gift letters from a private party when it is actually a loan

3. Causing a lender to incur a higher loss than would have occurred if the lender had known all facts relating to a short sale.

Front 196

An amount charged by a lender to increase the lender’s yield and/or lower the borrower’s interest rateis known as

Back 196

discount points

Front 197

One discount point is equal to __% of the loan in dollars.

Back 197

1

Front 198

A charge made by a lender to offset the cost of originating a loan is an

Back 198

origination fee.

Front 199

Discount points are always based on the

Back 199

loan amount.

Front 200

When a buyer takes over payments and liability for an existing loan it is an

Back 200

assumption.

Front 201

The process of re‐writing an existing loan, substituting a new borrower and releasing the formerborrower of liability is

Back 201

novation

Front 202

. A document given by a lender to a buyer who is assuming an existing loan to verify the loan terms is a

Back 202

reduction certificate aka assumption letter.

Front 203

. The market place where loans are originated is the

Back 203

primary market.

Front 204

The market place where loans are bought and sold is the

Back 204

secondary market.

Front 205

. The gathering together of loans to be sold in the secondary market is

Back 205

warehousing.

Front 206

. The process of selling a loan to another lender is

Back 206

assignment.

Front 207

A document executed by a borrower to certify the terms of a loan when a loan is sold to anotherlender is an

Back 207

estoppel certificate.

Front 208

A company to whom a borrower makes payments and who processes the payments on behalf of theowner is a

Back 208

loan servicer.

Front 209

. FNMA is the

Back 209

Federal National Mortgage Association.

Front 210

. FHLMC is known as

Back 210

Federal Home Loan Mortgage Corporation or Freddie Mac.

Front 211

. The purpose of Fannie Mae and Freddie Mac is to ________________ in the secondary market.

Back 211

buy and sell

Front 212

GNMA is the

Back 212

Government National Mortgage Association.

Front 213

The federal agency that administers and enforces many laws relating to financing is the

Back 213

Consumer Financial Protection Bureau, abbreviated CFPB.

Front 214

The federal law that requires lenders to disclose all the terms of obtaining a consumer loan is_______________ abbreviated as _________ aka ________________________

Back 214

Truth in Lending Law abbreviated as TILA aka Regulation Z.

Front 215

. If _____________ terms are used in advertising a loan, full disclosure of all terms must be made.

Back 215

trigger

Front 216

Advertising only the ________ is not considered to be a trigger term.

Back 216

APR

Front 217

A borrower has a three day right to rescind a loan on what type of a loan? __________________

Back 217

Refinance of apersonal residence.

Front 218

The federal law that requires disclosure of closing costs on a real estate loan is the________________________________________, abbreviated as _________________

Back 218

Real EstateSettlement and Procedures Act, abbreviated as RESPA.

Front 219

Under RESPA a Loan Estimate must be given to the borrower within

Back 219

3 business days of loan application.

Front 220

RESPA requires that a borrower be given a publication that explains

Back 220

closing costs.

Front 221

Under RESPA, a borrower must be given a final accounting of the transaction through thedocument known as CFPB’s __________formerly known as the_______________

Back 221

Closing Disclosure

HUD‐1 Settlement Statement.

Front 222

A borrower has the right to inspect the Closing Disclosure at least

Back 222

3 days prior to closing.

Front 223

RESPA applies to 1‐4 family properties financed with a

Back 223

federally related loan.

Front 224

. RESPA does not apply to____________ loans.

Back 224

seller carry‐back

Front 225

RESPA prohibits loan servicers form holding excess money in

Back 225

escrow accounts (impound accounts).

Front 226

RESPA requires disclosure of AfBAs which stands for

Back 226

Affiliated Business Arrangements.

Front 227

. RESPA prohibits kickbacks or unearned fees from

Back 227

settlement service providers.

Front 228

Under RESPA a seller cannot require a buyer to use a specific

Back 228

title insurance company.

Front 229

The federal law that protects the public from the reporting of inaccurate credit information isthe

Back 229

Fair Credit Reporting Act (FRCA).

Front 230

Under the _________________ consumers have the right to review their credit reports andcorrect inaccurate information

Back 230

Fair Credit Reporting Act

Front 231

. The federal law that prohibits discrimination in the extension of credit is the

Back 231

Equal Credit Opportunity Act (ECOA).

Front 232

The federal law that prohibits discrimination against disabled persons by requiring equal accessto public accommodations such as parking spaces and restrooms in commercial buildings is the

Back 232

Americans with Disabilities Act (ADA).

Front 233

The federal law that regulates the sale of land across state lines is the

Back 233

Interstate Land Sales Full Disclosure Act.

Front 234

The federal registry that prohibits telemarketers from making certain types of phone calls isknown as the

Back 234

Do Not Call Registry.

Front 235

Registration of a phone number in the Do Not Call Registry lasts

Back 235

indefinitely

Front 236

The penalty for violating the Do Not Call laws can be as high as_________ dollars per call.

Back 236

16,000

Front 237

The federal laws that prohibit discrimination in the sale, rental, advertising and financing ofhousing is the

Back 237

Fair Housing Act of 1968 & Fair Housing Amendments Act of1988.

Front 238

The seven classes of people protected by the Federal Fair Housing Laws are:

Back 238

a. Race

b. Color

c. Religion (Creed)

d.. National Origin

e. Sex (Gender)

f. Handicapped Status (Disability)

g. Familial Status

Front 239

The law created in the 1800’s that prohibits discrimination based on race or color is the

Back 239

Civil Rights Act of 1866.

Front 240

Denying that housing is available for sale or rent or channeling prospects to or away fromcertain areas is known as

Back 240

Steering.

Front 241

. Encouraging owners to sell their homes because minorities are moving into the neighborhood isknown as

Back 241

Blockbusting aka Panic Pedaling.

Front 242

Discriminating by altering the terms of a loan or insurance policy because the property islocated in a certain area is known as

Back 242

Redlining.

Front 243

Although there are four exemptions in the 1968 law, fair housing laws always apply in the saleor rental of a home if a _____________ is involved in the transaction.

Back 243

real estate agent

Front 244

There are no exemptions in the

Back 244

Civil Rights Act of 1866.

Front 245

. Under the Familial Status provisions the two exemptions for older persons include:

Back 245

a. A property in which all of the residents are at least 62 years old.

b. At least 80% of the households has one person who is has minimum age of 55 years.

Front 246

Every residential real estate office must display the

Back 246

fair housing poster.

Front 247

. In advertising residential property for sale or rent, photos or illustrations should represent a

Back 247

a cross section of the entire population.

Front 248

A person who experiences discrimination may file a complaint with HUD within

Back 248

one year.

Front 249

HUD must attempt to _________________ the dispute.

Back 249

conciliate (reconcile)

Front 250

. A person who experiences discrimination may take action in federal court within

Back 250

two years.

Front 251

The maximum penalties for violating the Federal Fair Housing laws are___________ dollars for thefirst time violation and___________ dollars for subsequent violations

Back 251

50,000

100,000

Front 252

Complaints under the Civil Rights of 1866 must be resolved in

Back 252

federal court.

Front 253

. An ____________is an estimate or opinion of value.

Back 253

appraisal

Front 254

The four major elements of value are:

Back 254

DUST

a. Demand

b. Utility

c. Scarcity

d. Transferability

Front 255

The amount a willing buyer will pay and a willing seller will accept is defined as

Back 255

Market Value

Front 256

A transaction in which the parties are dealing from equal bargaining positions is knownas an

Back 256

“Arm’s Length” transaction.

Front 257

. The actual amount of money given in a transaction is

Back 257

Market Price.

Front 258

. The amount of money required to build a building at current prices is

Back 258

Cost.

Front 259

The principal of______________ states that value is affected by the scarcity of aproduct and the desire for that product.

Back 259

Supply & Demand

Front 260

The use of a property that produces the highest net return is the

Back 260

Highest & Best Use.

Front 261

Land that is not needed to accomplish the highest and best use is

Back 261

Excess Land.

Front 262

The principal of Substitution states that the most a person will pay for a product is setby what it costs to buy a

Back 262

reasonable duplicate.

Front 263

That value will tend to be more stable in an area where there is a reasonable degree ofsimilarity of property types is a statement of the principal of

Back 263

Conformity.

Front 264

The principle of _________holds that the presence of lesser properties will adverselyaffect the value of greater properties.

Back 264

Regression

Front 265

The principle of _____________holds that the value of a component part is determined byhow much that part adds to or detracts from the value of the whole.

Back 265

Contribution

Front 266

The fact that values do not remain constant is a statement of the principle of

Back 266

Change.

Front 267

The principle of ___________holds that excess profits will breed competitors which willthen reduce profits

Back 267

Competition

Front 268

The fact that value is affected by the anticipation of future events is a statement of theprinciple of

Back 268

Anticipation.

Front 269

An increase in value for any reason is defined as .

Back 269

Appreciation

Front 270

______________is an increase in value due to the owner’s efforts.

Back 270

Earned Increment

Front 271

_________________ is an increase in value due to no effort by the owner.

Back 271

Unearned Increment

Front 272

An increase in value created by joining smaller parcels into one larger parcel is

Back 272

Plottage aka Assemblage.

Front 273

A decrease in value for any reason is

Back 273

Depreciation

Front 274

A loss in value due to physical wear and tear is

Back 274

Deterioration

Front 275

A loss in value due to outdated features such as an old bathroom or kitchen is defined as

Back 275

Functional Obsolescence.

Front 276

. A loss in value created by technological advances is defined as

Back 276

Functional Obsolescence.

Front 277

A loss in value created by a poor floor plan is .

Back 277

Functional Obsolescence

Front 278

. When it is economically feasible to fix a defect that defect is said to be .

Back 278

Curable

Front 279

When it is not economically feasible to fix a defect it is

Back 279

Incurable.

Front 280

A loss in value that results from conditions outside the property is defined as

Back 280

Economic Obsolescence aka External Obsolescence

Front 281

. The three appraisal approaches are:

Back 281

a. Comparison aka Market Data

b. Cost aka Summation

c. Income aka Capitalization

Front 282

Estimating the value of a property by comparing the subject property to similarproperties that have recently sold is the _____________approach.

Back 282

Comparison

Front 283

. In the comparison approach an appraiser should use comparable properties that weresold

Back 283

“at arm’s length”.

Front 284

. A minimum of __________ comparables should be used when using the market dataapproach.

Back 284

Three

Front 285

In the comparison approach, adjustments are often made to bring the _________ properties in line with the ________ property.

Back 285

Comparable, Subject

Front 286

The property with the __________ adjustments is the most comparable.

Back 286

Fewest

Front 287

Write the math formula used to estimate value by the cost approach.

Back 287

Replacement Cost

‐ Depreciation

+ Land Value

________________________

= Appraised Value

Front 288

. The cost to build a reasonable duplicate of a building at today’s prices is the

Back 288

Replacement Cost.

Front 289

The cost to build an exact duplicate of a building at today’s prices is the

Back 289

Reproduction Cost.

Front 290

In the cost approach the land value is most often estimated by using the __________ approach.

Back 290

Comparison

Front 291

The _______________ is determined by measuring the exterior dimensionsof the exterior walls of a building.

Back 291

Square Footage of Living Area

Front 292

The process of converting income to value is called

Back 292

Capitalization.

Front 293

The _____________is the period of time over which a property will produce income andbe economically beneficial to the owner.

Back 293

Economic Life

Front 294

The formula for calculating the net income is:

Back 294

Gross Income

‐ Operating Expenses

___________________

= Net Income

Front 295

The rate of return that an investor desires and by which net income is converted tovalue is the

Back 295

Capitalization Rate (Cap Rate).

Front 296

5. The cap rate is a reflection of an investment’s

Back 296

Risk.

Front 297

The memory circle formula for the income approach to value is:

Back 297

Net Income

_____________________

Value | Cap Rate

or Net Income = Value X Cap Rate

Front 298

Using the IRV formula:

Back 298

Value = Net Income divided by Cap Rate

Front 299

Using the IRV formula:

Back 299

Cap Rate = Net Income divided by Value

Front 300

Using the IRV formula:

Back 300

Income = Value times Cap Rate

Front 301

. GRM stands for

Back 301

Gross Rent Multiplier

Front 302

The formula for calculating value using a GRM is:

Back 302

Value = Rent (Gross Income) x GRM

Front 303

The formula for calculating a GRM from a comparable sale is:

Back 303

GRM = Sale Price (of comparable) ÷ Rent (of comparable)

Front 304

The process of bringing appraisal data together to arrive at a final estimate of value isknown as .

Back 304

Reconciliation

Front 305

Arizona real estate agents may prepare property evaluations for a fee but may not callthe evaluation an

Back 305

Appraisal.

Front 306

The federal government agency that regulates environmental issues is the

Back 306

Environmental Protection Agency (EPA).

Front 307

The Arizona state agency that regulates environmental issues is the

Back 307

Arizona Department of Environmental Quality (ADEQ).

Front 308

. The Arizona state agency that regulates water law is the

Back 308

Arizona Department of Water Resources (ADWR).

Front 309

The Arizona Commissioner’s Rules require ____________of environmental problems

Back 309

Disclosure

Front 310

. A toxic substance found in the paint of buildings constructed prior to 1978 is

Back 310

Lead.

Front 311

Buyers and lessees of pre 1978 buildings must be given copies of _____________ and ____________________.

Back 311

Reports and a Lead Paint Booklet.

Front 312

Buyers of pre 1978 buildings must be given the right to _______the property prior tobecoming ________under the purchase contract.

Back 312

Inspect , Obligated

Front 313

A naturally occurring gas that is known to cause lung cancer is

Back 313

Radon.

Front 314

. ____________is a fiber that can cause respiratory diseases.

Back 314

Asbestos

Front 315

Asbestos in buildings is dangerous when it becomes

Back 315

Friable.

Front 316

The most common method of abating asbestos is

Back 316

Encapsulation.

Front 317

. Mold is often caused by____________in buildings.

Back 317

Excess Moisture

Front 318

______________ can allow mold to thrive.

Back 318

. Airtight Window

Front 319

The general process of investigating a property to determine is hazardous substancesexist is

Back 319

Discovery aka Due Diligence.

Front 320

. The process of inspecting a property, reviewing public records and interviewing formerowners and tenants to determine if contamination exists is a

Back 320

Phase 1 Assessment.

Front 321

. The process of taking and analyzing soil samples to determine if contamination exists isa

Back 321

Phase II Assessment.

Front 322

CERCLA stands for the

Back 322

Comprehensive Environmental Response, Compensation & Liability Act.

Front 323

CERCLA created

Back 323

Superfunds.

Front 324

. WQARF stands for

Back 324

Water Quality Assurance Revolving Fund.

Front 325

All ___________ owners may be liable for environmental cleanup.

Back 325

Current and Former

Front 326

The flat portion of land located along rivers and streams that often subject to flooding isa

Back 326

Floodplain

Front 327

The federal agency that has created floodplain maps is

Back 327

Federal Emergency Management Agency (FEMA).

Front 328

. Land areas where ground water is at or near the surface so as to produce a watery plantcommunity is a

Back 328

Wetland.

Front 329

. In Arizona, the ___________is required to have a septic tank or other on‐site waste waterfacility inspected within _________of transferring a property.

Back 329

Seller

6 Months

Front 330

The __________of the property must complete the waste water facility “Notice of Transfer”within____________of purchase.

Back 330

Buyer

15 days

Front 331

The degree, quantity, nature or extent of interest that a person holds in real property isan

Back 331

Estate

Front 332

The two main categories of estates in real property are

Back 332

Freehold Estates aka Ownership

Less than Freehold aka Leasehold Estates.

Front 333

The highest form of real property ownership is

Back 333

Fee Simple Absolute aka Fee Simple

Front 334

. The most common form of real property ownership is

Back 334

Fee Simple.

Front 335

If a fee simple estate has restrictions that limit the property’s use it is defined as a

Back 335

Defeasible Fee Simple Estate aka Fee Simple on Condition Subsequent.

Front 336

An ownership interest that may NOT be willed to heirs is a

Back 336

Life Estate.

Front 337

. The holder of a life estate is referred to as the

Back 337

Life Tenant.

Front 338

Deliberate damage to a property by an owner or renter is called

Back 338

Waste.

Front 339

The grantor of a life estate who will receive the granted interest at some time in thefuture holds an___________ and is a ___________

Back 339

Estate in Reversion

Reverter.

Front 340

A person who was not the grantor of a life estate who will receive a greater interest atsome future time holds an _____________and is a ______________

Back 340

Estate in Remainder and is a Remainder Person.

Front 341

. A person who holds a life estate that is dependent on someone else’s life is a

Back 341

Tenant Pur Autre Vie

Front 342

The right to possess the property of another is a

Back 342

Leasehold Estate.

Front 343

. Another name for a lease is a

Back 343

Demise.

Front 344

The parties to a lease are the

Back 344

Lessor (Landlord) and Lessee (Tenant).

Front 345

A lease in which there is a specific ending date is an

Back 345

Estate for Years.

Front 346

. Notice to terminate is NOT required in an

Back 346

Estate for Years.

Front 347

A lease that has no ending date but renews periodically is .

Back 347

Periodic Tenancy aka Estate from Period to Period aka Month to Month Tenancy

Front 348

. A leasehold interest that has no specific time and may be terminated at any time byeither party is an

Back 348

Estate at Will.

Front 349

When a lease has expired but the tenant is holding over wrongfully it is defined as an

Back 349

Estate at Sufferance.

Front 350

. A lease in which the landlord pays all expenses is a

Back 350

Gross Lease.

Front 351

A lease in which the tenant pays the expenses is a

Back 351

Net lease.

Front 352

. A net lease is sometimes called a

Back 352

Triple Net Lease aka Net, Net, Net Lease.

Front 353

. The expense that a landlord retains in a net lease is the

Back 353

Mortgage Payment.

Front 354

A lease in which the rent is a percentage of the tenant’s gross income is a

Back 354

Percentage Lease

Front 355

. A lease in which the tenant rents only the land is a

Back 355

Ground Lease.

Front 356

. A lease in which the tenant was the former owner is a

Back 356

Sale Lease‐Back.

Front 357

A lease in which the rent increases or decreases at specified times is a

Back 357

Graded Lease aka Graduated Lease.

Front 358

. The clause in a graduated lease stating the increases in rent is an

Back 358

Escalator Clause.

Front 359

A lease in which the rent is tied to consumer prices or inflation is an

Back 359

Index Lease.

Front 360

. A lease in which the tenant has the right to buy or re‐lease the property is a

Back 360

Lease‐ Option

Front 361

A lease with a sub‐lease is called a

Back 361

Sandwich Lease.

Front 362

. A lease in which the tenant is a nationally recognized company is an

Back 362

Anchor Lease.

Front 363

. A lease in which the tenant is a shareholder in a cooperative is a

Back 363

Proprietary Lease.

Front 364

Mutual agreement to terminate a lease is called

Back 364

Surrender and Acceptance.

Front 365

The clause in a lease which calls for lease termination should the property be takenunder eminent domain is a

Back 365

Condemnation Clause.

Front 366

If a tenant breaches some lease terms and the landlord forces the tenant out it is calledan

Back 366

Actual Eviction.

Front 367

The legal term for the eviction process is

Back 367

Forcible Entry & Detainer Action aka Ejectment

Front 368

If a landlord breaches lease terms resulting in the property becoming uninhabitable andcausing the tenant to terminate the lease it is referred to as

Back 368

Constructive Eviction.

Front 369

Death of the landlord or tenant

Back 369

Does Not terminate the lease.

Front 370

Sale of a leased property

Back 370

Does Not terminate the lease.

Front 371

The two rights that a landlord has under a lease are the

Back 371

right to Receive Rent and the right of Reversion.

Front 372

A tenant’s right to protection from any claim against the leasehold interest is the

Back 372

right of Quiet Enjoyment.

Front 373

. Personal property of a tenant used in the tenant’s business are

Back 373

Trade Fixtures.

Front 374

The three ways in which property ownership is transferred are:

Back 374

a. Inheritance

b. Involuntary Alienation

c. Voluntary Alienation

Front 375

The court that oversees the distribution of a deceased person’s property is

Back 375

Probate.

Front 376

When a person dies with a will he/she is said to have died

Back 376

Testate.

Front 377

. When a person dies without a will he/she is said to have died

Back 377

Intestate

Front 378

The person named in a will to carry out the decedent’s wishes is an

Back 378

Executor.

Front 379

A person appointed by the court to oversee the distribution of a deceased person’sestate is an

Back 379

Administrator.

Front 380

Will that is completely handwritten is a

Back 380

Holographic Will.

Front 381

. An oral will is a

Back 381

Nuncupative Will.

Front 382

A gift of real property through a will is a

Back 382

Devise.

Front 383

. When an heir inherits real property from a person who died intestate the heir is said tohave acquired title by

Back 383

Descent.

Front 384

. A gift of personal property through a will is a

Back 384

Bequest aka Legacy

Front 385

. The forced transfer of real property is defined as

Back 385

Involuntary Alienation.

Front 386

Three ways in which a property may be transferred involuntarily are:

Back 386

a. Eminent Domain

b. Foreclosure

c. Adverse Possession

Front 387

An uncoerced transfer of real estate is defined as

Back 387

Voluntary Alienation

Front 388

Ownership of property by one person is defined as

Back 388

Severalty Ownership aka Sole & Separate Ownership.

Front 389

When a person who owned property in severalty dies that person’s estate is distributedthrough

Back 389

Probate

Front 390

Shared ownership by two or more persons who have created the right of survivorship is

Back 390

Joint Tenancy aka Joint Tenancy with Rights of Survivorship (JTWRS).

Front 391

Creating the automatic right of survivorship in a property ownership means that uponthe death of one person, that person’s interest goes to

Back 391

Surviving Tenants without Probate.

Front 392

. The four unities of joint tenancy can be abbreviated__________ which stands for:

Back 392

TTIP

a. Time

b. Title

c. Interest

d. Possession

Front 393

Corporations, LLCs and other legal entities cannot take title as JTWRS because they

Back 393

Don’t Die.

Front 394

A joint tenant (may/may not) convey his/her interest without the permission of the other jointtenants.

Back 394

MAY

Front 395

If two people own as joint tenants and one transfers his/her interest to another partythe joint tenancy is _________ and the third party is a ____________ with the otherowner.

Back 395

Broken

Tenant in Common

Front 396

. In Arizona, real property acquired by a married couple is considered to be

Back 396

Community Property.

Front 397

In order to sell community real property______________ must sign the deed

Back 397

Both Spouses

Front 398

If property was held as community property, at the death of one spouse his/her interestpasses to

Back 398

The Deceased Spouse’s Heirs.

Front 399

The type of community property ownership that allows a deceased spouses interest topass automatically to the surviving spouse without probate is

Back 399

Community Property with Rights of Survivorship (CPWRS).

Front 400

Ownership of property by two or more legal or natural persons, which does not havethe right of survivorship is

Back 400

Tenancy in Common.

Front 401

Although the four unities required for joint tenancy may be present, the only unity ofownership required for tenancy in common is

Back 401

Possession.

Front 402

. Advising buyers on how they should take title to property could be considered to be the

Back 402

Illegal Practice of Law.

Front 403

. A court action brought to terminate a tenancy in common or joint tenancy is known as

Back 403

Suit for Partition.

Front 404

A type of ownership between spouses that does not exist in Arizona and has theautomatic right of survivorship is

Back 404

Tenancy by the Entireties.

Front 405

2. In a ________________ all partners have full liability.

Back 405

General Partnership

Front 406

In a____________________ only general partners have full liability

Back 406

Limited Partnership

Front 407

. The sale of securities is regulated by

Back 407

Blue Sky Laws.

Front 408

. If a real estate agent wants to sell interests in limited partnerships or limited liabilitycompanies the agent would probably need a

Back 408

Securities License.

Front 409

In a ____________ the owner has individual fee simple ownership of a unit plus sharedownership of common areas.

Back 409

Condominium

Front 410

In a _____________the owner owns shares in the entity that owns the real estate and ___________ the living unit from the entity.

Back 410

Cooperative

Leases (Rents)

Front 411

. In a ___________________ the owner pays property taxes on his/her unit.

Back 411

Condominium

Front 412

The rules governing a condominium are found in the

Back 412

Bylaws.

Front 413

The leases used in cooperative apartments are known as

Back 413

Proprietary leases.

Front 414

The document that transfers ownership of real property is a

Back 414

Deed.

Front 415

. The parties to a deed are the

Back 415

Grantor and Grantee.

Front 416

The four types of deeds of conveyance used in Arizona are:

Back 416

a. Warranty Deed (General Warranty Deed)

b. Special Warranty Deed

c. Bargain & Sale Deed

d. Quit Claim Deed

Front 417

The differences in the types of deeds is in the ________________ given by the grantor to thegrantee.

Back 417

Warranties

Front 418

The deed that warrants the title against all claims is the

Back 418

Warranty Deed.

Front 419

The deed that protects the grantee against all claims arising out of the grantor’s acts is the

Back 419

Special Warranty Deed.

Front 420

The deed that contains no expressed warranty but has the implied warranty that thegrantor has the authority to convey title is the

Back 420

Bargain & Sale Deed.

Front 421

The deed that provides no warranties whatsoever is the

Back 421

Quit Claim Deed.

Front 422

The instrument that originally conveys title from government ownership to privateownership is a

Back 422

Patent (Land Patent).

Front 423

. A deed that specifies who will receive ownership of the property when the grantor diesis a

Back 423

Beneficiary Deed.

Front 424

. A beneficiary deed takes effect when the

Back 424

Grantor Dies

Front 425

A document signed by a spouse to indicate that the spouse has no interest in theproperty is a

Back 425

Disclaimer Deed.

Front 426

The covenant in a deed that provides assurance that the grantor is the owner and haspower to convey title is the

Back 426

Covenant of Seizen.

Front 427

. The covenant in a deed that assures the grantee that there are no undisclosed encumbrances on the property is the

Back 427

Covenant Against Encumbrances.

Front 428

The covenant in a deed that assures the grantee that the grantee’s use will not be disturbed due to title defects is the

Back 428

Covenant of Quiet Enjoyment.

Front 429

The covenant in a deed that requires the grantor to correct title defects of defects in the deed itself is the

Back 429

Covenant of Further Assurances.

Front 430

. The covenant in a deed by which the grantor promises to compensate the grantee forlosses if the title is faulty is the

Back 430

Covenant of Warranty Forever.

Front 431

. The clause in a deed that includes the words of conveyance is the

Back 431

Granting Clause.

Front 432

The clause in a deed that defines the interest being transferred is the

Back 432

Habendum Clause aka Have and To Hold Clause.

Front 433

The clause in a deed by which the grantor may hold back some interest and which notes all the exceptions to clear title such as liens and encumbrances is the

Back 433

Reservation and Exception Clause

Front 434

The clause in a deed stating the date signed and by whom it was signed is the

Back 434

Testimonium Clause aka Witness Clause.

Front 435

The three requirements for a deed to be valid are:

Back 435

a. Signed by the Grantor (Signed)

b. Acknowledged by the Grantor (Sealed)

c. Delivery to and Acceptance by the Grantee (Delivered)

Front 436

An acknowledgement is also called a

Back 436

Notarization.

Front 437

A deed (is/is not) required to be recorded.

Back 437

IS NOT

Front 438

Recording a document gives ____________ to the world.

Back 438

Constructive Notice

Front 439

Notice obtained from an inspection of the property or by being given knowledge of a fact is

Back 439

Actual Notice.

Front 440

. In Arizona, the document that must accompany a deed in order for the deed to be recorded is an

Back 440

Affidavit of Value.

Front 441

. The purpose of an Affidavit of Value is to inform the _____________ as to the ____________.

Back 441

Assessor as to the Sales Price.

Front 442

An Affidavit of value must be signed by the

Back 442

Buyer and Seller

Front 443

Title that is without cloud or defect is

Back 443

Marketable Title (Merchantable Title or Clear Title)

Front 444

The complete history of a parcel of real estate is the

Back 444

Chain of Title.

Front 445

A summary of the chain of title is an

Back 445

Abstract of Title.

Front 446

A court action to remove claims against title is a

Back 446

Quiet Title Action.

Front 447

A standard owner’s title insurance policy protects the buyer against defects that could be determined by an inspection of the

Back 447

Public Records.

Front 448

The page of a title insurance policy that lists the items that are not covered by the policyis the

Back 448

Page of Exceptions aka Schedule B.

Front 449

The ALTA Title Policy protects the

Back 449

Lender (Mortgagee)

Front 450

The ALTA Policy insures against defects that could be determined by an inspection ofthe public records and defects discovered by

Back 450

Actual Notice (inspecting the property).

Front 451

Generally, no title insurance policy protects against:

Back 451

a. Zoning Ordinances

b. Existing Encumbrances of Record Disclosed in the Title Report

c. Defects known to the insured

Front 452

A set of public records maintained by a title insurance company is known as a

Back 452

Title Plant

Front 453

The document that is issued to a buyer prior to closing that discloses the condition ofthe title is a

Back 453

Preliminary Title Report aka Commitment for Title Insurance.

Front 454

The substitution of a third person in place of another in relation to a claim or debt is

Back 454

Subrogation.

Front 455

The body of law that governs the transfer and financing of personal property is the

Back 455

Uniform Commercial Code.

Front 456

The document that is used to secure a lien with personal property is a

Back 456

Security Agreement.

Front 457

. In the sale of a business with inventory or trade fixtures, the seller must provide thebuyer with a________________ which lists all the seller’s creditors.

Back 457

Bulk Sales Affidavit

Front 458

A complete detailed statement showing all receipts and disbursements for a transaction andrequired by the CFPB is a

Back 458

Closing Disclosure formerly known as the HUD‐1 Settlement Statement.

Front 459

A proportional division or distribution of monies between buyers and sellers or landlords andtenants is a

Back 459

Proration.

Front 460

. When prorating items in Arizona, the ________, or in a lease the ___________is the person usuallyresponsible to pay for items for the day of closing.

Back 460

Buyer, Tenant

Front 461

When prorating, items paid in arrears (that have not been paid) are a ___________ to theseller and a ___________to the buyer.

Back 461

Charge (Debit)

Credit

Front 462

When prorating, items paid in advance (that have been prepaid) are a ________to the seller and a___________ to the buyer.

Back 462

Credit

Charge (Debit)

Front 463

Unless negotiated differently, closing costs on a loan are usually paid by the

Back 463

Buyer (Borrower).

Front 464

The owner’s title insurance policy is usually paid for by the

Back 464

Seller.

Front 465

On a closing statement, earnest money that had been deposited in escrow will appear as a

Back 465

Credit to the Buyer.

Front 466

On a closing statement, a new loan will appear as a

Back 466

Credit to the Buyer.

Front 467

On a closing statement, a seller carryback loan will appear as a credit to the ___________and a debit to ________________

Back 467

Credit to the Buyer and a debit to Charge to the Seller.

Front 468

On a closing statement, a loan payoff will appear as a

Back 468

Charge to the Seller.

Front 469

On a closing statement for sale of a leased property, rents that have been pre‐paid by thetenant will be a ___________to the seller and a __________ to the buyer.

Back 469

Charge (Debit) to the seller and a Credit to the buyer.

Front 470

On a closing statement for sale of a leased property, security deposits that have been paid bythe tenant will be

Back 470

transferred to the buyer in full.

Front 471

. On a closing statement, taxes will be prorated as a_______ to the seller and a ___________tothe buyer.

Back 471

Charge (Debit) to the seller and a Credit to the buyer.

Front 472

On a closing statement, taxes that have been pre‐paid by the seller will be prorated as a ______to the seller and a__________ to the buyer.

Back 472

Credit to the seller and a Charge (Debit) to the buyer.

Front 473

On a closing statement, items such as fuel oil or propane gas that have been paid for by theseller will be prorated as a __________to the seller and a_____________ to the buyer.

Back 473

Credit to the seller and a Charge (Debit) to the buyer.

Front 474

On a closing statement, if the seller has not paid for water charges that will be billed to theproperty owner after closing, it will be prorated as a __________to the Seller and a __________________to theBuyer.

Back 474

debit to the Seller and a credit to the Buyer.

Front 475

. If a tenant takes possession of a rental on September 11th, and the next month’s rent will bedue on October 1st, the tenant will be charged for _______ rent through the end of September.

Back 475

20 days

Front 476

. The projected income on an investment property as if the property was 100% occupied is the

Back 476

Gross Scheduled Income.

Front 477

. If rent was uncollectable by a landlord it is considered to be a

Back 477

Credit Loss.

Front 478

The actual income a rental property produces is

Back 478

Effective Gross Income aka Gross Operating Income.

Front 479

. Expenses incurred in running an income property are defined as

Back 479

Operating Expenses.

Front 480

The income remaining after operating expenses are deducted from the effective gross incomeis the

Back 480

Net Operating Income.

Front 481

The principal and interest paid on a loan are defined as the_____________ on an incomeproperty

Back 481

Debt Service

Front 482

The amount remaining after paying all operating expenses and debt service is defined as the

Back 482

Cash Flow Before Income Tax.

Front 483

The two items related to owner‐occupied property that may be taken as a tax deduction are

Back 483

Mortgage Interest and Property Taxes.

Front 484

in the sale of a personal residence the maximum amount of capital gain that, under certaincircumstances, may not be taxed is ________ for a single person and_______ for a marriedcouple filing jointly

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$250,000,

$500,000

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For owners of income property the three items that are eligible for deductions on the owner’stax return are:

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Mortgage Interest,

Property Taxes and

Cost Recovery (Depreciation)

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Cost recovery may not be taken as an income tax deduction on

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Land or a Personal Residence

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The period over which an income producing property may be depreciated for tax purposes isknown as the

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Recovery Period.

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. Residential income property may be depreciated over a recovery period of

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27.5 years.

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. Non‐residential income property may be depreciated over a recovery period of

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39 years.

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When the allowable annual depreciation is the same amount each year, the depreciation isclassified as

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Straight Line Depreciation.