Ree3043 - Exam 1 Prep

Front 1

What is the single largest asset category in the portfolio of a typical U.S. household?

A. Housing.

B. Consumer durables.

C. Stocks.

D. Bonds.

Back 1

Housing

Front 2

The actions of local, state, and federal governments affect real estate values:

A. Primarily through user markets.

B. Primarily through the capital market.

C. Primarily through their taxation policies.

D. All of the above.

Back 2

All of the above

Front 3

A market where tenants negotiate rent and other terms with property owners or their managers is referred to as a:

A. Rental market.

B. User market.

C. Housing market.

D. Capital market.

Back 3

User Market

Front 4

Which of the following is not important to the location of commercial properties?

A. Access to customers.

B. Visibility.

C. Access to schools.

D. Availability of communications infrastructure.

Back 4

Access to schools

Front 5

The market in which required rates of return on available investment opportunities are determined is referred to as the:

A. Rental market.

B. User market.

C. Housing market.

D. Capital market.

Back 5

Capital Market

Front 6

Real estate markets differ from other asset classes by having all of the following characteristics except:

A. Local market.

B. High transaction costs.

C. Segmented market.

D. Homogeneous product.

Back 6

Homogenous product

Front 7

Which of the following attributes of a home are the most difficult to observe and value?

A. Land/site attributes.

B. Structural attributes.

C. Location attributes

D. Financing attributes

Back 7

Location attributes

Front 8

What portion of households own their house?

A. Approximately one-third.

B. Approximately two-thirds.

C. Approximately one-half.

D. Approximately one-quarter.

Back 8

Approximately two-thirds

Front 9

Of the following asset categories, which has the greatest aggregate market value?

A. Corporate equities.

B. Mortgage debt.

C. Government debt.

D. Nongovernment real estate.

Back 9

Nongovernmental real estate

Front 10

Storm water drainage systems are best described as:

A. Tangible assets.

B. Improvements to the land.

C. Intangible assets.

D. Improvements on the land.

Back 10

Improvements to the land

Front 11

Timeshare programs can involve which of the following claims or interests?

A. Fee simple ownership.

B. Leasehold interest.

C. License.

D. Condominium.

E. All of these are possible.

Back 11

All of these are possible

Front 12

Which of these forms of co-ownership could best be described as 'normal ownership,' except that multiple owners share identically in one bundle of rights?

A. Tenancy in common.

B. Joint tenancy.

C. Tenancy by the entirety.

D. Condominium.

E. Estate in severalty.

Back 12

Tenancy in common

Front 13

Which of these liens has the highest priority?

A. First mortgage lien.
B. Mechanics' lien.
C. Property tax lien.
D. Second mortgage lien.
E. Unable to say because it depends strictly on which was created first.

Back 13

Property tax lien

Front 14

Which of these marriage-related forms of co-ownership gives each spouse a one-half interest in any property that is 'fruits of the marriage'?

A. Dower
B. Curtesy
C. Community property
D. Effective share
E. Tenancy by the entirety

Back 14

Community property

Front 15

Which of the following is not a form of property right?

A. Lien
B. Easement
C. Leasehold
D. License
E. Mineral rights

Back 15

License

Front 16

Which of these easements is most likely to be an easement in gross?

A. Common wall easement.
B. Driveway easement.
C. Drainage easement.
D. Power line easement.
E. Sunlight easement.

Back 16

Power line easement

Front 17

Which of these is a titled estate?

A. Fee simple absolute.
B. Fee simple conditional.
C. Conventional life estate.
D. Legal life estate.
E. All of these.

Back 17

All of these

Front 18

Every condominium buyer needs to know the details of which document(s):

A. Condominium declaration.

B. Bylaws.

C. Proprietary lease.

D. a and b, but not c.

E. All three, a, b, and c.

Back 18

a and b, but not c

Front 19

Restrictive covenants for a subdivision usually can be enforced by:

A. Subdivision residents.

B. Lenders with mortgage loans in the subdivision.

C. Local government.

D. a and b, but not c.

E. All three, a, b, and c.

Back 19

a and b, but not c

Front 20

Rules used by courts to determine whether something is a fixture include all except:

A. Intention of the parties.

B. Manner of attachment.

C. Law of capture.

D. Character of the article and manner of adaptation.

E. Relation of the parties.

Back 20

Law of capture

Front 21

If a neighboring landowner drives across a person's land openly and consistently for a number of years the neighbor may acquire an easement by:

A. Estoppel.

B. Implication.

C. Accretion.

D. Prescription.

E. Necessity.

Back 21

Prescription

Front 22

A deed used mainly to clear up possible 'clouds' or encumbrances to title (conflicting interests) is the:

A. General warranty deed.

B. Special warranty deed.

C. Deed of bargain and sale.

D. Quitclaim deed.

E. Judicial deed.

Back 22

Quitclaim deed

Front 23

The 'highest-quality' form of deed is the:

A. General warranty deed.

B. Special warranty deed.

C. Deed of bargain and sale.

D. Quitclaim deed.

E. Judicial deed.

Back 23

General warranty deed.

Front 24

Factors that make it uniquely difficult to establish clear title in real estate compared to most personal property items include:

A. Size of real estate.

B. Length of the ownership history in real estate.

C. Value of real estate.

D. Land use controls.

E. Serious deficiencies of property law in the United States.

Back 24

Length in ownership history in rel estate

Front 25

The interest being conveyed by a deed is specified in the:

A. Words of conveyance.

B. Habendum clause.

C. Property description.

D. Exceptions and reservations clause.

E. Covenant of seizin.

Back 25

Habendum clause

Front 26

The most common form of legal description for urban residential property is the:

A. Street address.

B. Tax parcel number.

C. Plat lot and block number.

D. Metes and bounds description.

E. Government rectangular survey.

Back 26

Plat lot and block number

Front 27

Which of these is not a requirement of a valid deed?

A. Competent grantor.
B. Competent grantee.
C. In writing.
D. Habendum clause.
E. Delivery.

Back 27

Competent grantee

Front 28

If a landowner sells the front part of a parcel of land, retaining the back portion as a 'landlocked' parcel, and if there is an existing informal path across the front parcel to the back one, the seller is likely to retain the path as a (an):

A. Easement in gross.

B. Joint driveway easement.

C. Implied easement by prior use.

D. Easement by estoppel.

E. Prescriptive easement.

Back 28

Implied easement by prior use

Front 29

Which of these is a widely used form of 'evidence of title'?

A. Abstract of title.
B. Title insurance commitment.
C. Torrens certificate.
D. Title certificate.
E. General warranty deed.

Back 29

Title insurance comitment

Front 30

If documents conveying interests in real property are properly recorded in the public records, they are binding or enforceable on all persons, regardless of whether those persons are aware of the documents, by the:

A. Statute of Frauds.

B. Recording statutes.

C. Doctrine of constructive notice.

D. Doctrine of actual notice.

E. Evidence of title acts.

Back 30

Doctrine of constructive notice

Front 31

A comprehensive plan usually deals with which of the following elements?

A. Land uses.
B. Population.
C. Public services.
D. Natural resources.
E. All of the above.

Back 31

All of the above

Front 32

Zoning is an exercise of which type of general limitation on property rights?

A. Eminent domain.
B. Taxation.
C. Police power.
D. Escheat.
E. All of the above.

Back 32

Police power

Front 33

Radon gas is:

A. A naturally occurring result of geologic activity.

B. A relatively recent phenomenon caused by the earth's warming.

C. Important only in the western United States.

D. Controllable by soil treatment.

E. Regarded as a nuisance but not a health hazard.

Back 33

A naturally occurring result of geologic activity

Front 34

The authority for approving site plans for large projects ultimately rests with the:

A. Elected governing commission or council.

B. Mayor or city manager.

C. Planning board or commission.

D. Planning board or commission staff.

E. Zoning review board.

Back 34

Elected governing commission or council

Front 35

Externalities in land use include all except:

A. Leap-frog development.

B. Increase storm runoff from paving.

C. Traffic congestion.

D. Inability to judge the quality of a structure, once built.

E. Noise created by a land use.

Back 35

Inability to judge the quality of a structure, once built

Front 36

New urbanism is a term used to describe:

A. Growth management laws enacted by state governments.

B. Improvement of transportation systems to encourage dispersion of a city's population.

C. The requirement that infrastructure be available concurrently with new development.

D. The theory that residential and commercial uses should be integrated, streets and parking should discourage through traffic, and neighborhoods should be pedestrian oriented.

E. The trend for the construction of self-sufficient 'new towns.'

Back 36

The theory that residential and commercial uses should be integrated, streets and parking should discourage through traffic, and neighborhoods should be pedestrian oriented.

Front 37

Elements of traditional zoning include all except:

A. Performance standards.

B. Setback requirements.

C. Bulk limits.

D. Land use categories.

E. Provision for special use districts.

Back 37

Performance standards

Front 38

The most accurate conclusion about the regressivity of the property tax is that it is:

A. Regressive.

B. Not regressive.

C. Based on ability to pay.

D. Regressive, but when benefits are considered, the net result is not regressive.

E. Not regressive until the benefits are considered.

Back 38

Regressive, but when benefits are considered, the net result is not regressive.

Front 39

Property taxes are a main source of revenue for

A. The federal government.

B. School districts.

C. Local governments.

D. State governments.

E. Both local governments and school districts.

Back 39

Both local governments and school districts.

Front 40

Traditional land use controls (pre-1970) include:

A. Zoning.

B. Building codes.

C. Subdivision regulations.

D. a and b, but not c.

E. All three: a, b, and c.

Back 40

All three: a, b, and c

Front 41

User Market

Back 41

competition among users for physical locations and space. competition determines who gains use of each parcel of land and how much they must bid for its use.

Front 42

Capital Market

Back 42

Serve to allocate financial resources among households and firms requiring funds. Participants invest in stocks, bonds, mutual funds, private enterprises, mortgage contracts, real estate.

Front 43

Improvements on the land

Back 43

fixed structures (buildings, fences, walls, and decks)

Front 44

Improvements to the land

Back 44

components necessary to make land suitable for building construction or other uses (infrastructure - streets, walkways, storm water drainage & other systems, water, sewer, electric and telephone cable.)

Front 45

Real Property

Back 45

rights associated with ownership of land and all permanent attachment to land (tangible assets - synonym = rel estate)

Front 46

Personal property

Back 46

things that are moveable and not permanently affixed to land (motor home = personal property, site built home = real property) motor home may be real or personal depending how it's secured

Front 47

Homogenous product

Back 47

can not be distinguished from one to another (gasoline)

Front 48

Heterogeneous product

Back 48

product that has unique features (real estate)

Front 49

Local government influence

Back 49

largest influence on real estate - zoning/building codes, property taxes, prov. of roads, bridges, utilities, mass transit, schools, social services, and community infrastructure).

Front 50

State government influence

Back 50

least effect on real estate - building codes, disclosure and fair housing laws, land use controls

Front 51

National government influence

Back 51

income and tax policy, housing subsidy programs, flood insurance programs, fed. financial/disclosure req's, (Fannie Mae, Freddie Mac, and FDIC), consumer protection laws, laws protecting env and endangered species, nat'l fair housing laws, civil rights legislation.

Front 52

Examples of improvements to the land include
A) utility sheds and storage buildings
B) streets and curbs
C) sidewalks
D) water systems
E) b, c and d only

Back 52

b, c, and d only

Front 53

Real estate has been estimated to represent what proportion of the world's total economic wealth?
A) nearly a third
B) about one-half
C) just over two-thirds
D) just over a quarter
E) it is impossible to estimate

Back 53

about one-half

Front 54

Real property is a term that
A) is synonymous with the term 'real estate'.
B) includes intangible ownership rights.
C) includes improvements.
D) all of the above
E) c only

Back 54

all of the above

Front 55

An acre may be defined as
A) 640 square yards
B) 209 feet square
C) 43,560 square feet
D) b and c only
E) any of the above

Back 55

b and c only

Front 56

Entrepreneurial-minded individuals seeking above average income may find business opportunities in
A) brokerage
B) leasing
C) construction
D) appraisal
E) any of the above

Back 56

any of the above

Front 57

Much of the undeveloped land in the United States is divided nearly equally between all of the following categories EXCEPT
A) water areas and federal land
B) pastureland
C) cropland
D) forestland
E) all of the above are nearly equally divided between undeveloped land categories

Back 57

pastureland

Front 58

Since 1982, the amount of developed land in the United States has increased nearly
A) 19%
B) 34%
C) 48%
D) 59%
E) 67%

Back 58

48%

Front 59

Which is an example of a homogeneous product?
A) a gallon of gasoline
B) a tract home in a new development
C) vacant office space
D) a and c only
E) all of the above

Back 59

a gallon of gasoline

Front 60

The national government can influence the value of real estate by
A) regulating building codes.
B) increasing property taxes.
C) changes in income tax policies.
D) any of the above.
E) none of the above.

Back 60

changes in income tax policies

Front 61

The market for buying, selling, and leasing real estate tends to be localized and highly segmented primarily because
A) real estate is immobile.
B) financing costs are high.
C) of the need for strong negotiation skills.
D) space can be easily substituted.
E) a and b only.

Back 61

real estate is immobile

Front 62

Timeshares can involve which of the following claims or interests?
A) leasehold
B) license
C) condominium
D) fee simple
E) any of the above

Back 62

any of the above

Front 63

The lowest form of interest an individual could have in a property is
A) fee simple absolute.
B) a remainder estate.
C) tenancy at sufferance.
D) legal life estate.
E) tenancy at will.

Back 63

tenancy at sufferance

Front 64

All of the following are characteristics of property rights EXCEPT
A) the rights can be used only when permission is given.
B) the rights are claims the government is obligated to enforce.
C) the rights may not be revoked without due process or just compensation.
D) the rights are enduring.

Back 64

the rights can be used only when permission is given

Front 65

Traditionally, the right to claim oil or gas that is extracted from a parcel, even though the oil or gas may have migrated from an adjacent parcel, is known as the
A) riparian rule.
B) rule of capture.
C) right of retrieval.
D) rule of extraction.
E) rule of appurtenance.

Back 65

rule of capture

Front 66

Rules used by courts to determine whether an item is a fixture include all EXCEPT:
A) relation of the parties
B) character of the article and manner of adaptation
C) possession of the item
D) intention of the parties
E) manner of attachment

Back 66

possession of the item

Front 67

All of the following are examples of residential subdivision restrictive covenants EXCEPT:
A) No children are allowed to play in the yard
B) No freestanding garage
C) No overnight parking on the street
D) No wood stockade fences
E) Mandatory use of a professional lawn service

Back 67

no children are allowed to play in the yard

Front 68

In community property states, how much of an ownership interest in real property obtained from the fruits of the marriage will be provided to each spouse in a divorce proceeding?
A) Husband ½ & Wife ½
B) Husband ¾ & Wife ¼
C) Husband ¼ & Wife ¾
D) The interest is proportional to the net worth of each spouse prior to the marriage.
E) It depends on which spouse provided the majority of support during the marriage.

Back 68

husband 1/2 & wife 1/2

Front 69

The city public works department installed a new sewer line along Rural Road so that the property owners could tie into the municipal sewer system. Each of the property owners along Rural Road will be charged a portion of the cost of the new sewer line installation. To ensure that the fee is paid, what will automatically be created against each property owner?
A) a property tax lien
B) an assessment lien
C) a general lien
D) a mechanic's lien

Back 69

assessment lien

Front 70

assessment lien

Back 70

automatically created against properties that are charged a fair share for the cost of improvements incurred by local gov's that benefit those properties.

Front 71

Which type of lien is superior to all other liens?
A) mechanics' liens
B) mortgage liens.
C) property tax liens
D) whichever lien is the oldest
E) whichever lien was recorded in public records first

Back 71

property tax lien

Front 72

A condominium is created through
A) the condominium bylaws.
B) the articles of incorporation.
C) a master deed.
D) condominium declaration.
E) c or d.

Back 72

c or d

Front 73

required to create a condominium form of ownership

Back 73

master deed and condominium declaration

Front 74

The instrument commonly used to clear clouds or potential clouds on a title is the
A) bargain and sale deed.
B) quitclaim deed.
C) general warranty deed.
D) special warranty deed.
E) grant deed.

Back 74

quitclaim deed

Front 75

In order for a deed to be valid, it must
A) contain the property address.
B) be signed by the grantee.
C) voluntarily delivered to and accepted by the grantee.
D) be recorded in public records.
E) all of the above.

Back 75

voluntarily delivered to and accepted by the grantee.

Front 76

The part of a deed that specifies the type of interest being conveyed
A) is the habendum clause.
B) is the exceptions clause.
C) is the reservations clause.
D) is the covenant of seizin.
E) are the words of conveyance.

Back 76

is the habendum clause.

Front 77

The law requiring contracts that convey an interest in real property to be in writing is the
A) doctrine of constructive notice.
B) recording statute.
C) doctrine of stare decisis.
D) statute of frauds.
E) statute of limitations.

Back 77

statute of frauds

Front 78

In order to create a potential claim for adverse possession, the adverse possessor must
A) continuously posses and use the property.
B) not permit others to share in the use of the property.
C) ensure that they only use the property as the owner has specified.
D) a and b only
E) all of the above

Back 78

a and b only

Front 79

A person who wants the highest level of protection and assurance that a title is free of defects or clouds should obtain
A) a title insurance commitment.
B) a chain of title.
C) an attorney's opinion of title.
D) a title abstract.
E) any of the above.

Back 79

title insurance comitment

Front 80

A parcel described as 'the northeast quarter of the southeast quarter of section 14' contains how many acres?
A) 160 acres
B) 120 acres
C) 80 acres
D) 40 acres
E) 20 acres

Back 80

40 acres

Front 81

The most precise method of land description for an irregularly shaped, valuable parcel in the central business district would be the
A) subdivision lot and block method.
B) metes and bounds method.
C) government rectangular survey method.
D) plat method.
E) all of the above are equally useful.

Back 81

metes and bounds method

Front 82

Which is NOT associated with an involuntary conveyance?
A) patent
B) eminent domain
C) foreclosure
D) condemnation
E) all of the above are associated with an involuntary conveyance

Back 82

patent

Front 83

How many sq. ft in 1 acre

Back 83

43,560

Front 84

How many acres in 1 square mile

Back 84

640

Front 85

How many feet in 1 mile

Back 85

5,280

Front 86

John purchased a large parcel of land with a lake located at the rear of the property. He wants to sell the front half of the parcel and keep the lakefront parcel in the rear for himself. Since there is no other existing access to the rear parcel, what will be automatically created to provide access to the landlocked parcel?
A) an implied easement
B) an easement by prior use
C) easement by estoppel
D) a dedication
E) an easement of necessity

Back 86

an easement of necessity

Front 87

A large shopping mall has been built at a previously undeveloped intersection. Many residents are upset at the long waits they are now experiencing at traffic lights near the mall. What term best describes this result of certain types of development?
A) concurrency
B) congestion
C) conflagration
D) sprawl
E) congruency

Back 87

congestion

Front 88

Which element(s) would zoning regulations NOT cover?
A) building set-backs
B) the size of a family allowed to live on a property
C) the category of land use
D) structure height
E) zoning restrictions may be imposed on any of the above

Back 88

the size of a family allowed to live on a property

Front 89

A city's planning commission has approved a new residential development that will be characterized by narrow streets laid out in a grid pattern with houses built close to the street, include front sitting porches on each house, and locate garages in the rear of the houses, accessible by alleys. This type of planning is most accurately described as
A) the new deal.
B) traditionalism.
C) retroactivism.
D) smart growth.
E) new urbanism.

Back 89

new urbanism

Front 90

Assessed value of property (after exemptions) = $200,000
A) 1.50 %
B) 1.65 %
C) 2.35 %
D) 2.68%
E) The effective tax rate cannot be determined from the information provided.

Back 90

1.65%
(tax rate = market value/amt of taxes paid)

Front 91

Which is NOT a criticism of the property tax?
A) it varies among geographic areas
B) it is regressive
C) it is poorly administered
D) it is difficult to collect
E) Each is a legitimate criticism of the property tax.

Back 91

it is difficult to collect

Front 92

The basic powers of government to limit private property does NOT include
A) the power to restrict owners from selling land.
B) the power to acquire property for the benefit of the public.
C) the right to tax property.
D) the power to regulate land use.
E) the right to charge for infrastructure improvements that directly enhance the value of the property.

Back 92

A) the power to restrict owners from selling land

Front 93

After a recent hurricane severely damaged a number of local structures, the city temporarily stopped issuing building permits for new development projects and structures so that city officials could review and revise the building codes as they relate to wind loads. This action is called
A) a moratorium.
B) a cease and desist.
C) an injunction.
D) inverse condemnation.
E) a housing stop.

Back 93

moratorium

Front 94

Which is not a significant environmental hazard that real estate investors must be aware of?
A) hydrogen gas
B) asbestos
C) radon gas
D) leaking underground storage tanks
E) black mold

Back 94

hydrogen gas

Front 95

A local lawnmower repair shop has been in business for the past 25 years. The city recently passed a zoning ordinance prohibiting any type of business use in the neighborhood where the lawnmower repair shop is located. What is true about this situation?
A) The owner of the repair shop must relocate his business.
B) The business is a nonconforming use.
C) If the owner dies, only a blood relative would be permitted to continue the business use.
D) a and b only
E) b and c only

Back 95

The business is a nonconforming use

Front 96

After a subdivision development has been completed, the developer will often turn over ownership of the roadways and utilities in the subdivision to the local government to maintain. This is known as
A) inverse condemnation.
B) the process of escheat.
C) extraterritorial jurisdiction.
D) a dedication.
E) concurrency.

Back 96

dedication