Real Estate Practice Quiz

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| By Dodgergirl1603

Dodgergirl1603

Community Contributor

Quizzes Created: 1 | Total Attempts: 696

Questions: 10 | Attempts: 696 | Updated: Mar 21, 2023

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Questions and Answers

1.

What lien would be ahead of a lender's first mortgage?
- A.
  
  Mechanics Lien
- B.
  
  Property taxes
- C.
  
  Speciasl Assesment
- D.
  
  Judgement
Correct Answer
B. Property taxes

Explanation
Property taxes would be ahead of a lender's first mortgage lien. Property taxes are considered a priority lien, meaning they take precedence over other liens, including a lender's first mortgage. This is because property taxes are owed to the government and failure to pay them can result in the government placing a tax lien on the property. This lien takes priority over any other liens, including the lender's first mortgage, and must be paid before the property can be sold or transferred.

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2.

What would be the advantage to the Lessee in a net lease?
- A.
  
  Lessee could deduct morgage interest on his income taxes
- B.
  
  Lessee could decuct property taxes on his income taxes
- C.
  
  Lessee could deduct building depreciation on his income taxes
- D.
  
  Lessee would not pay utilities
Correct Answer
B. Lessee could decuct property taxes on his income taxes

Explanation
In a net lease, the lessee would have the advantage of being able to deduct property taxes on their income taxes. This means that the lessee can reduce their taxable income by the amount they pay in property taxes, resulting in a lower tax liability. This can provide financial savings for the lessee and potentially increase their overall cash flow.

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3.

When a deed is delivered but destroyed before recordation, who is the legal title holder?
- A.
  
  Grantor
- B.
  
  Grantee
- C.
  
  Lender
- D.
  
  Optionor
Correct Answer
B. Grantee

Explanation
If a deed is delivered but destroyed before recordation, the legal title holder would still be the grantee. Delivery of the deed is a crucial step in transferring ownership, and once the grantee receives the deed, they become the legal title holder even if the physical document is subsequently destroyed. Recordation is not necessary for the transfer to be valid. Therefore, the grantee would still hold the legal title in this scenario.

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4.

The fair housing law permits assigning a salesperson to an office based on his age, but you can't do it based on:
- A.
  
  Ability
- B.
  
  Religion
- C.
  
  Specialty
- D.
  
  Personal interests
Correct Answer
B. Religion

Explanation
The fair housing law allows assigning a salesperson to an office based on their age, as age is not considered a discriminatory factor. However, the law prohibits assigning a salesperson to an office based on their religion, as it is a protected characteristic under fair housing laws. Discrimination based on religion is not allowed as it goes against the principles of equal opportunity and fairness.

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5.

If a seller conveys property with the idead of completing a tax deferred exchange and designates the exchange property 25 days after close of escrow, which of the following is true?
- A.
  
  If the seller waits beyond 25 days, the property does not have to be like for like
- B.
  
  The seller has 45 days to identify the exchange property at close of escrow
- C.
  
  The seller must identify the exchange property of COE
- D.
  
  The first sale is fully taxable
Correct Answer
B. The seller has 45 days to identify the exchange property at close of escrow

Explanation
If a seller conveys property with the idea of completing a tax deferred exchange and designates the exchange property 25 days after close of escrow, it is true that the seller has 45 days to identify the exchange property at close of escrow. This means that the seller has a total of 45 days from the close of escrow to identify a replacement property for the exchange. If the seller waits beyond 25 days, the property does not have to be like for like, but they still have the remaining time within the 45-day period to identify the exchange property. The first sale is not fully taxable because it is part of a tax deferred exchange.

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6.

When a buyer is using 100% leverage in a transaction, they would least likely be interest in:
- A.
  
  Long term loan
- B.
  
  Short term loan
- C.
  
  Amortized loan
- D.
  
  Principal and interest loan
Correct Answer
B. Short term loan

Explanation
When a buyer is using 100% leverage in a transaction, it means they are financing the entire purchase price of the property. In this scenario, they would least likely be interested in a short term loan because it would require them to make higher monthly payments due to the shorter repayment period. Since they are already financing the entire purchase price, it would be more beneficial for them to opt for a long term loan, such as an amortized loan or a principal and interest loan, which would allow them to spread out the payments over a longer period of time and make them more manageable.

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7.

Water table is defined as:
- A.
  
  All surface water
- B.
  
  Water ina relation to sea level
- C.
  
  When potable water can be found
- D.
  
  The level at which water will be located
Correct Answer
D. The level at which water will be located

Explanation
The correct answer is "The level at which water will be located." The water table refers to the underground level at which the soil and rocks are saturated with water. It represents the upper boundary of the zone of saturation, where water fills all the available spaces in the soil or rock. The depth of the water table can vary depending on factors such as rainfall, geology, and human activities.

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8.

Which of the following is not necessary for a valid Arizona deed?
- A.
  
  Signature of grantor
- B.
  
  Acknowledgment
- C.
  
  Legal description
- D.
  
  Habendum clause
Correct Answer
D. Habendum clause

Explanation
A habendum clause is a clause in a deed that defines the type of interest being conveyed, such as fee simple or life estate. While a habendum clause is commonly included in a deed, it is not necessary for a valid Arizona deed. The signature of the grantor is required to show their intention to transfer the property, an acknowledgment is necessary to validate the deed, and a legal description is essential to identify the property being transferred. However, the presence or absence of a habendum clause does not affect the validity of the deed in Arizona.

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9.

A legal action by a court to review and distribute an estate is called:
- A.
  
  Escheat
- B.
  
  Demise
- C.
  
  Estoppel
- D.
  
  Probate
Correct Answer
D. Probate

Explanation
Probate is the correct answer because it refers to the legal process through which a court reviews and distributes the assets and property of a deceased person's estate. This process ensures that the debts and taxes are paid, and the remaining assets are distributed to the rightful beneficiaries according to the deceased person's will or state laws of intestacy. Escheat refers to the transfer of property to the state when there are no heirs or beneficiaries, Demise refers to the transfer of property by lease or conveyance, and Estoppel refers to a legal principle that prevents a person from denying their previous statements or actions.

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10.

Which of the following would not affect the basis of a property?
- A.
  
  Tax depreciation
- B.
  
  Property repairs
- C.
  
  Capital improvements
- D.
  
  Original price
Correct Answer
B. Property repairs

Explanation
Property repairs would not affect the basis of a property. Basis refers to the original cost of a property, which is used to calculate capital gains or losses when the property is sold. Property repairs are considered ordinary and necessary expenses for maintaining the property's current condition and do not increase the property's value or its basis. Therefore, property repairs would not affect the basis of a property.

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Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
Oct 27, 2011

Quiz Created by
Dodgergirl1603

Real Estate Practice Quiz

What lien would be ahead of a lender's first mortgage?

What would be the advantage to the Lessee in a net lease?

When a deed is delivered but destroyed before recordation, who is the legal title holder?

The fair housing law permits assigning a salesperson to an office based on his age, but you can't do it based on:

If a seller conveys property with the idead of completing a tax deferred exchange and designates the exchange property 25 days after close of escrow, which of the following is true?

When a buyer is using 100% leverage in a transaction, they would least likely be interest in:

Water table is defined as:

Which of the following is not necessary for a valid Arizona deed?

A legal action by a court to review and distribute an estate is called:

Which of the following would not affect the basis of a property?