Real Estate Agent Practice Exam: Quiz!

1. A BUYER DEFAULTS ON A LOAN, THEREFORE THE LENDER WOULD BE ABLE TO CAUSE THE PROMISSORY NOTE TO BECOME DUE AND PAYABLE. THIS CLAUSE IS A/AN:

Subordination clause

Escalator clause

Acceleration clause

Alienation clause

Acceleration clauses are several different types and reasons

Explanation

Acceleration clauses are several different types and reasons

2. TO MINIMIZE RISK, A LENDER LOOKS AT:

Loan-to-value ratio

Divorce, personal problems, etc

Loan portfolio

None of the above

A lender looks at the loan-to-value ratio to minimize risk. This ratio compares the amount of the loan to the appraised value of the asset being financed. A lower loan-to-value ratio indicates a lower risk for the lender, as it means the borrower has a larger equity stake in the asset. By considering this ratio, the lender can assess the borrower's ability to repay the loan and the potential for loss in the event of default.

Explanation

A lender looks at the loan-to-value ratio to minimize risk. This ratio compares the amount of the loan to the appraised value of the asset being financed. A lower loan-to-value ratio indicates a lower risk for the lender, as it means the borrower has a larger equity stake in the asset. By considering this ratio, the lender can assess the borrower's ability to repay the loan and the potential for loss in the event of default.

3. LEGALLY AND TECHNICALLY PROPERTY IS DEFINED AS:

The rights and interests which a person has in the thing owned

Freehold estate

Only personal property

Things that buyers and sellers own

Ownership of real property is legally and technically defined as their right and interests of the thing owned

Explanation

Ownership of real property is legally and technically defined as their right and interests of the thing owned

4. YOU SELL A NOTE WITH A FACE VALUE OF P500,000 FOR P400,00. YOU ARE:

Discounting the note

Amortizing the note

Committing an act requiring a real estate license

Committing fraud

Any time you sign a note or sell a note and the amount you receive is less than the account stated on the face of the note you are “discounting the note”.

Explanation

Any time you sign a note or sell a note and the amount you receive is less than the account stated on the face of the note you are “discounting the note”.

5. AN "ABLE BUYER" MEANS ONE:

Financially able

Having the ability to obtain the necessary funds to purchase real property

Having the ability to obtain necessary financing

Any of the above

Any of these would indicate an “able” buyer

Explanation

Any of these would indicate an “able” buyer

6. FEE SIMPLE ESTATE REFERS TO:

The greatest interest a person can own in land

An easy way to transfer title

A common way to hold title

An expensive way to transfer title

Fee simple estates: often defined as the greatest interest a person can own in land. The next estate would be a life-estate. Thirdly, one could own a lease hold estate which involves possession solely.

Explanation

Fee simple estates: often defined as the greatest interest a person can own in land. The next estate would be a life-estate. Thirdly, one could own a lease hold estate which involves possession solely.

7. IN PORTFOLIO RISK MANAGEMENT, A LENDER CONSIDERS:

Diversification

Liquidity

Reserves

All of the above

In portfolio risk management, a lender determines what type of loans to have in his portfolio. Factors are: How quickly can I sell these loans? What are my reserves? How diversified are these loans? Are they all business? Are they all residential? Are they a mixture of business and residential?

Explanation

In portfolio risk management, a lender determines what type of loans to have in his portfolio. Factors are: How quickly can I sell these loans? What are my reserves? How diversified are these loans? Are they all business? Are they all residential? Are they a mixture of business and residential?

8. PERSONAL PROPERTY PROVIDES DIFFICULTIES FOR REAL ESTATE BROKERS BECAUSE IS:

Could become real property

Can be hypothecated

Can be alienated

All of the above

This re-emphasizes a former question that personal property can be hypothecated, alienated and can become real property. It can be placed as security, sold and it can become a fixture when affixed to real property

Explanation

This re-emphasizes a former question that personal property can be hypothecated, alienated and can become real property. It can be placed as security, sold and it can become a fixture when affixed to real property

9. WHEN A STREAM SUDDENLY TEARS LAND AWAY FROM ITS BANK, IT IS CALLED:

Absorption

Accretion

Allusion

Avulsion

Avulsion is distinguished from erosion (the gradual removal of the soil by air or water)

Explanation

Avulsion is distinguished from erosion (the gradual removal of the soil by air or water)

10. REGARDING A MORTGAGE ON PERSONAL PROPERTY, WHAT CAN ONE DO WITH IT?

Alienate

Hypothecate

Assess

All of the above

All of the options mentioned in the question are possible actions that can be taken regarding a mortgage on personal property. "Alienate" refers to transferring ownership of the property, "Hypothecate" means using the property as collateral for a loan, and "Assess" involves determining the value of the property for taxation or other purposes. Therefore, all of these options are valid actions that can be taken with a mortgage on personal property.

Explanation

All of the options mentioned in the question are possible actions that can be taken regarding a mortgage on personal property. "Alienate" refers to transferring ownership of the property, "Hypothecate" means using the property as collateral for a loan, and "Assess" involves determining the value of the property for taxation or other purposes. Therefore, all of these options are valid actions that can be taken with a mortgage on personal property.

11. A VALID ESCROW REQUIRES W/C OF THE FFG:

Escrow instructions with no conditions

A binding contract between the buyer and seller and the condition delivery of transfer instruments to a third party

The services of a licensed real estate broker

None of the above

These are required for a valid escrow

Explanation

These are required for a valid escrow

12. PLACING TWO OR MORE CONTIGUOUS UNITS UNDER COMMON OWNERSHIP FOR THE PURPOSE OF INCREASING THE VALUE PER UNIT IS KNOWN AS:

Terminus ownership

Severalty ownership

Plottage

Disassemblage

Placing two or more contiguous units under common ownership in order to increase the units value is known as plottage.

Explanation

Placing two or more contiguous units under common ownership in order to increase the units value is known as plottage.

13. WHICH OF THE FOLLOWING PHRASES WILL BEST DESCRIBE THE NATURE OF A BROKER'S DUTY TO KEEP HIS PRICIPAL INFORMED:

Ethical conduct

Continuing responsibility

Fiduciary obligation

Business practice standards

A fiduciary obligation is a relationship of trust & confidence. The broker has loyalty to his principal and must keep him fully informed.

Explanation

A fiduciary obligation is a relationship of trust & confidence. The broker has loyalty to his principal and must keep him fully informed.

14. A SECOND OFFER RECEIVED ON A PROPERTY PRIOR TO THE SELLER'S DECISION ON THE FIRST OFFER SHOULD BE:

Evaluate by the broker against the first offer

Submitted immediately

Held pending a decision on the first offer

Turned back to the offeree if it doesn’t provide better terms

All offers must be submitted immediately.

Explanation

All offers must be submitted immediately.

15. A PRIMARY JUSTIFICATION FOR ZONING ORDINANCES IS TO:

Maintain conformity to buildings in the zoned area

Prevent an oversupply of certain types of businesses

Promote public health, safety, morals and general welfare

Control the quality of building construction

Zoning laws are exercise of the police powers w/c are for the public health, safety, morals and general welfare. No compensation need be paid in exercise of police power, as they are for public protection.

Explanation

Zoning laws are exercise of the police powers w/c are for the public health, safety, morals and general welfare. No compensation need be paid in exercise of police power, as they are for public protection.

16. WHEN A BROKER MISREPRESENTS HIS PRINCIPAL'S PROPERTY TO A BUYER, HE COULD CAUSE HIS PRINCIPAL TO BE SUBJECT TO:

A court action for damages by the buyer

A rescission of the sale by the buyer

Civil responsibility for compensating the buyer to misinterpretation of the broker

Any of the above

The principal is responsible for his agent’s actions. If misrepresentation occurs, there should be a rescission of the sale or civil court action for damages.

Explanation

The principal is responsible for his agent’s actions. If misrepresentation occurs, there should be a rescission of the sale or civil court action for damages.

17. "A" OWNS A FARM. "B" BOUGHT THE PROPERTY BEHIND THE FARM A YEAR AGO. "B" USES "A" FARM TO DRIVE ACROSS FOR INGRESS AND EGRESS. "A" CHAINED OFF THESE ROADS FOR THREE DAYS. THIS RELATED TO:

Condition

Restriction

Easement

Covenant

By chaining off the road. “A” would be preventing “B” from obtaining an easement by prescription

Explanation

By chaining off the road. “A” would be preventing “B” from obtaining an easement by prescription

18. THE OWNERSHIP OF PERSONAL PROPERTY IS TRANSFERRED BY USING A:

Grant deed

Financing statement

Trust deed

Bill of sale

A bill of sale is a legal document that transfers ownership of personal property from one party to another. It is commonly used when selling or buying items such as vehicles, furniture, or electronics. Unlike other options listed, such as a grant deed or trust deed which are primarily used for transferring real estate ownership, a bill of sale specifically applies to personal property. Therefore, it is the appropriate choice for transferring ownership of personal property.

Explanation

A bill of sale is a legal document that transfers ownership of personal property from one party to another. It is commonly used when selling or buying items such as vehicles, furniture, or electronics. Unlike other options listed, such as a grant deed or trust deed which are primarily used for transferring real estate ownership, a bill of sale specifically applies to personal property. Therefore, it is the appropriate choice for transferring ownership of personal property.

19. A BUYER DEFAULTS IN MAKING PAYMENTS ON A LOAN, THEREFORE THE LENDER'S ACTION PROBABLY WOULD RESULT IN:

Subordination

Escalation

Acceleration

Alienation

Acceleration indicates the right to declare the entire sum of a note to be due and payable immediately. Most trust deeds contains several acceleration clauses.

Explanation

Acceleration indicates the right to declare the entire sum of a note to be due and payable immediately. Most trust deeds contains several acceleration clauses.

20. THE PRINCIPAL DIFFERENCE BETWEEN REAL PROPERTY AND PERSONAL PROPERTY IS:

Mobility

Value

Permanence

Length of life

The principal difference between real property and personal property is mobility. Real property refers to land and any structures permanently attached to it, such as buildings, while personal property refers to movable items that can be easily transported, such as furniture or vehicles. The key distinction is that real property is immovable, while personal property can be moved from one location to another.

Explanation

The principal difference between real property and personal property is mobility. Real property refers to land and any structures permanently attached to it, such as buildings, while personal property refers to movable items that can be easily transported, such as furniture or vehicles. The key distinction is that real property is immovable, while personal property can be moved from one location to another.

21. A SALESMAN RECEIVES A DEPOSIT TOGETHER WITH A WRITTEN OFFER TO PURCHASE AND DELIVERS THEM TO THE EMPLOYING BROKER WHO PRESENTS IT TO THE SELLER. THE SELLER SIGNS AND ACCEPTS THE OFFER. WITHOUT THE CONSENT OF THE SALEMAN AND THROUGH NO FAULT OF HIS OWN, THE BUYER AND SELLER INSTRUCT THE SALEMAN'S EMPLOYING BROKER TO RETURN THE DEPOSIT. WHICH OF THE FOLLOWING IS TRUE?

The salesman’s employing broker may retain one-half of the deposit and must give one-half to the seller

The broker may sue the seller but must return the deposit

The broker may retain one-half of the deposit and must return only one-half to the buyer

The broker may retain the deposit to compensate him for his efforts

Once the offer has been accepted, the deposit money belongs to the seller. If the seller instruct the broker to return the deposit, the broker must do so. The broker has probably earned a commission and may sue the seller for the amount but may not hold the deposit money.

Explanation

Once the offer has been accepted, the deposit money belongs to the seller. If the seller instruct the broker to return the deposit, the broker must do so. The broker has probably earned a commission and may sue the seller for the amount but may not hold the deposit money.

22. THE LENDER'S FIRST LINE OF DEFENSE IN MAKING A LOAN IS:

Loan-to-value ratio

Borrower's income

Value of the property

None of the above

The lender's first line of defense in making a loan is the loan-to-value ratio. This ratio represents the percentage of the property's value that the lender is willing to loan to the borrower. It is a measure of the risk associated with the loan, as a higher loan-to-value ratio indicates a higher risk for the lender. By considering the loan-to-value ratio, the lender can assess the borrower's ability to repay the loan and the likelihood of default. Therefore, it is an important factor in determining whether the lender will approve the loan or not.

Explanation

The lender's first line of defense in making a loan is the loan-to-value ratio. This ratio represents the percentage of the property's value that the lender is willing to loan to the borrower. It is a measure of the risk associated with the loan, as a higher loan-to-value ratio indicates a higher risk for the lender. By considering the loan-to-value ratio, the lender can assess the borrower's ability to repay the loan and the likelihood of default. Therefore, it is an important factor in determining whether the lender will approve the loan or not.

23. Novation is most closely related to:

Realization of an unexpected profit

Creation of an existing agreement

Substitution of a new contract for an old one

Modification of a contract

Novation is a legal term to describe replacing an old contract with a new contract.

Explanation

Novation is a legal term to describe replacing an old contract with a new contract.

24. AFTER ACQUIRED TITLE IS CONVEYED IN ANY TRUST DEED FOR THE BENEFIT OF THE BENEFICIARY. IT CONVEYS:

Personal property later affixed to the real property so as to become real property

Improvement built on the land after title is acquired

Additional land acquired afterward by the trustor

All of the above

“After acquired title” refers to title to fixtures or other real property items, that become part of the land that is securing the existing trust deed. If a lot serving as security for a loan made in ten years ago has land affixed to it, that land becomes encumbered with the lien made ten years ago. If additional improvements, such as swimming pool, added bedroom, or new landscaping are added to the real property, they to become encumbered with a trust deed lien made ten years ago.

Explanation

“After acquired title” refers to title to fixtures or other real property items, that become part of the land that is securing the existing trust deed. If a lot serving as security for a loan made in ten years ago has land affixed to it, that land becomes encumbered with the lien made ten years ago. If additional improvements, such as swimming pool, added bedroom, or new landscaping are added to the real property, they to become encumbered with a trust deed lien made ten years ago.

25. THE FOLLOWING IS REAL PROPERTY:

Planted trees

Leasehold

Chattel real

Debts

The chattel real is another name for a leasehold indicating it is personal property interest in the real property. Debts such as those evidenced by a note and deed of trust are personal property. Planted tress indicate the tree has been affixed to the land, therefore, it is real property.

Explanation

The chattel real is another name for a leasehold indicating it is personal property interest in the real property. Debts such as those evidenced by a note and deed of trust are personal property. Planted tress indicate the tree has been affixed to the land, therefore, it is real property.

26. A FIXTURE WOULD BE DEFINED AS SOMETHING:

Incorporated into the land

That is made part of the chattel real

Referred to by actions but not referred to in the sales contract

Used in an extraordinary way with the land

An item or object that is incorporated into the land means that it is permanently attached or fixed to the land in a way that it cannot be easily removed without causing damage. This could include things like buildings, fences, or even trees. By being incorporated into the land, the item becomes a part of the real property and is no longer considered personal property.

Explanation

An item or object that is incorporated into the land means that it is permanently attached or fixed to the land in a way that it cannot be easily removed without causing damage. This could include things like buildings, fences, or even trees. By being incorporated into the land, the item becomes a part of the real property and is no longer considered personal property.

27. A MINORITY PURCHASER ENTERS YOUR OFFICE AND STATES THEY ARE LOOKING FOR, AND INTERESTED IN, PURCHASING A PARTICULAR PROPERTY IN A MINORITY NEIGHBORHOOD. YOU COULD LEGALLY ASSUME THAT:

This person is testing you

They are interested in that particular property

They are interested in owning a home in an all minority neighborhood

They cannot qualify to own property in a higher priced area

Should any prospective purchaser enter your office requesting to see a particular property, you would assume they were interested in that particular property.

Explanation

Should any prospective purchaser enter your office requesting to see a particular property, you would assume they were interested in that particular property.

28. WHERE A BROKER SHOW A CLIENT'S PROPERTY TO A PROSPECTIVE BUYER THAT IS LISTED WITH THE BROKER UNDER AN OPEN LISTING, THE BROKER SHOULD:

Make up an office memorandum

Confirm the showing to the buyer

Notify the seller as to the prospect’s identity

Notify the local real estate board

Notifying the seller as to the prospect’s identity establishes the broker’s right to collect a commission as “procuring cause”. It provides the only effective way of establishing that right.

Explanation

Notifying the seller as to the prospect’s identity establishes the broker’s right to collect a commission as “procuring cause”. It provides the only effective way of establishing that right.

29. AN ATTORNEY DREW UP A CONTRACT BETWEEN A BUYER AND A SELLER FOR THE PURCHASE OF A PROPERTY. THE AGREEMENT INCLUDED A LIQUIDATED DAMAGES CLAUSE CALLING FOR THE PAYMENT OF P20,000 IN THE EVENT THE BUYER SHOULD DEFAULT. PRIOR TO THE CLOSE OF ESCROW, THE BUYER DECIDED THAT THE HOME WOULD NOT SUIT HIS FAMILY AND CANCELED THE PURCHASE. IF THE SELLER WERE TO SUE FOR SPECIFIC PERFORMANCE, HE WOULD MOST LIKELY BE:

Successful because of the P20,000 is not adequate considering the value of the property

Successful because the reason for canceling by the buyer was not strong

Unsuccessful because the seller agreed to accept the P20,000 as liquidated damages in the contract

Unsuccessful because an attorney drew the contract

Since both buyer and seller agreed to the liquidated damages, the seller has agreed that if the buyer defaults, his sole claim will be to the P20,000.

Explanation

Since both buyer and seller agreed to the liquidated damages, the seller has agreed that if the buyer defaults, his sole claim will be to the P20,000.

30. A LOAN CREATED WITH MORE THAN ONE BORROWER IS USUALLY ADDED TO THE PROMISSORY NOTE FOR THE PROTECTION OF THE LENDER:

Beneficially

Jointly and severally

Universally

Unconditionally

When there is more than one borrower on the note, the promise and obligation to pay that balance is the responsibility jointly of all the co-borrowers, and also each individual is severally liable for the full debt. Severally, in law, means individually.

Explanation

When there is more than one borrower on the note, the promise and obligation to pay that balance is the responsibility jointly of all the co-borrowers, and also each individual is severally liable for the full debt. Severally, in law, means individually.

31. THE FOLLOWING IS NOT A TEST FOR A FIXTURE:

Annexation

Agreement

Cost of the item

Intention

Again, know the test of a fixture: 1. The adaptability of the item, 2. The intention of the person attaching, 3. The method of attachment or an agreement between the parties. The cost of the item is not the test of a fixture

Explanation

Again, know the test of a fixture: 1. The adaptability of the item, 2. The intention of the person attaching, 3. The method of attachment or an agreement between the parties. The cost of the item is not the test of a fixture

32. A LOAN FOR WHICH INTEREST-ONLY PAYMENT ARE MADE IS:

A straight note

Amortized

Partially amortized

A graduated payment note

A straight note has no payment of principal on the installment basis and principal is due at maturity. When interest only is paid, the no principal is paid until maturity.

Explanation

A straight note has no payment of principal on the installment basis and principal is due at maturity. When interest only is paid, the no principal is paid until maturity.

33. Which of the following best represents market value?

An appraiser’s written opinion of value.

Willing buyer and willing seller

Sales price

Listing price

This is the very core issue of market value

Explanation

This is the very core issue of market value

34. IF THE LOAN-TO-VALUE RATIO IS LOW:

The equity in property is high

The equity is not affected

The equity in the property is low

None of the above

Loan to value ratio is the ratio of the loan to the appraised value. If a 90% loan to value ratio is given by a lender, that indicates a 10% down payment, and a beginning equity of 10%. If the loan to value ratio is 60%, the down payment is 40% and the beginning equity is 40%. The lower the loan, the higher the equity.

Explanation

Loan to value ratio is the ratio of the loan to the appraised value. If a 90% loan to value ratio is given by a lender, that indicates a 10% down payment, and a beginning equity of 10%. If the loan to value ratio is 60%, the down payment is 40% and the beginning equity is 40%. The lower the loan, the higher the equity.

35. ALL OF THE FOLLOWING ARE FACTORS GENERALLY CONSIDERED WHEN DETERMINING WHETHER AN ITEM OF PERSONAL PROPERTY HAS BECOME REAL PROPERTY, EXCEPT:

Agreement between the parties

Permanence of the installation

Cost of the article

Relationship of the parties

The five tests of a fixture are: Intention of person attaching it, method of attachment. Adaptability of the item, agreement of the parties, and relationship of the parties.

Explanation

The five tests of a fixture are: Intention of person attaching it, method of attachment. Adaptability of the item, agreement of the parties, and relationship of the parties.

36. A LICENSED REAL ESTATE BROKER WORKING UNDER A TYPICAL EXCLUSIVE LISTING INCURS SEVERAL EXPENSES. HE IS NOT ENTITLED TO BE REIMBURSED FOR THESE EXPENDITURES, UNLESS:

The buyer has demanded that these expenses be incurred as a condition of continuing with the transaction

Such expenditures were authorized by the principal

It was necessary for him to incur the expenses in order to close the sale

The broker was representing the best interests of the principal in consummating the sale

A seller is not obligated to reimburse the expenses of the broker unless those expenses are authorized by the seller.

Explanation

A seller is not obligated to reimburse the expenses of the broker unless those expenses are authorized by the seller.

37. THE FOLLOWING IS REAL PROPERTY, A:

Harvested crop of wheat

Bearing wall in a single family dwelling

Built-in refrigerator in a mobile home which is not attached to a foundation

Trade fixture attached in such a way that can be remove without damage

A bearing wall is a wall that is fixed and bears the weight of the structure. It is classified as real property. Choice “C” refers to a built-in refrigerator in a mobile home. The mobile home is personal property and the refrigerator attached to it is personal property. Choice “D” states a trade fixture can be removed, such as a meat case in a meat market. Trade fixtures are classified as personal property. Choice “A” refers to a harvested crop in the soil.

Explanation

A bearing wall is a wall that is fixed and bears the weight of the structure. It is classified as real property. Choice “C” refers to a built-in refrigerator in a mobile home. The mobile home is personal property and the refrigerator attached to it is personal property. Choice “D” states a trade fixture can be removed, such as a meat case in a meat market. Trade fixtures are classified as personal property. Choice “A” refers to a harvested crop in the soil.

38. THE BENEFICIARY OF A SECOND TRUST DEED SOLD HIS INTEREST IN THE PROPERTY FOR LESS THAN THE UNPAID BALANCE OF THE NOTE. THIS IS MOST COMMONLY DESCRIBED AS:

Leveraging

Liquidating

Discounting

Subrogating

This is a definition of discounting

Explanation

This is a definition of discounting

39. A THIRD PARTY WHO TAKES A PROMISSORY NOTE THAT IS COMPLETE AND REGULAR AND HAS NO KNOWLEDGE OF ANY DEFECTS IS KNOWN AS A/AN:

Endorser

Maker

Payee

Holder in due course

The party that accepts the endorsement note from the original payee, without knowledge of any defects is known as the holder in due course.

Explanation

The party that accepts the endorsement note from the original payee, without knowledge of any defects is known as the holder in due course.

40. WHICH OF THE FOLLOWING IS A PERSONAL PROPERTY INTEREST:

Fixture

A mortgage securing a promissory note

Mineral rights

Trees in nature

A mortgage securing a promissory note is considered a personal property interest because it is a legal document that provides security for a loan. It is a contractual agreement between a borrower and a lender, where the borrower pledges their personal property (such as a house or land) as collateral for the loan. This means that if the borrower fails to repay the loan, the lender has the right to foreclose on the property and sell it to recover the debt. Therefore, a mortgage securing a promissory note is a personal property interest because it involves the rights and ownership of personal property.

Explanation

A mortgage securing a promissory note is considered a personal property interest because it is a legal document that provides security for a loan. It is a contractual agreement between a borrower and a lender, where the borrower pledges their personal property (such as a house or land) as collateral for the loan. This means that if the borrower fails to repay the loan, the lender has the right to foreclose on the property and sell it to recover the debt. Therefore, a mortgage securing a promissory note is a personal property interest because it involves the rights and ownership of personal property.

41. IN GENERAL, WHEN THE SUPPLY OF A CERTAIN COMMODITY INCREASES:

Price tends to rise

Price tends to drop

Demand for it tends to rise

Demand for it tends to drop

If demand is constant and supply increases, sellers compete with each other by lowering prices

Explanation

If demand is constant and supply increases, sellers compete with each other by lowering prices

42. WHICH OF THE FOLLOWING ITEMS WOULD MOSTLY LIKELY TO APPEAR AS A CREDIT ON THE SELLER'S CLOSING STATEMENT?

Prepaid taxes

An assumed loan

Title insurance premium

Delinquent assessment lien

If the seller has prepaid the taxes, they would expect to get the unused portion back which will be a credit. The seller usually pays for the title insurance and delinquent assessment liens. The assured loan is a debit to the seller.

Explanation

If the seller has prepaid the taxes, they would expect to get the unused portion back which will be a credit. The seller usually pays for the title insurance and delinquent assessment liens. The assured loan is a debit to the seller.

43. PRESCRIPTION IS:

Equitable title

Legal title

A grant

The right of use on the land

Prescription relates to an easement, which is a real property right acquired through court action providing for the right to use the land of another

Explanation

Prescription relates to an easement, which is a real property right acquired through court action providing for the right to use the land of another

44. WHICH OF THE FOLLOWING IS NOT A NECESSARY ELEMENT IN THE FORMATION OF A CONTRACT:

Offer

Acceptance

Consideration

Performance

Two parties may enter into a contract, but they might not fulfill (perform) their obligations.

Explanation

Two parties may enter into a contract, but they might not fulfill (perform) their obligations.

45. A CONTRACT WHICH, ACCORDING TO THE STATUTE OF FRAUDS, MUST BE IN WRITING IN ORDER TO MAINTAIN A COURT ACTION FOR ENFORCEMENT IS:

The employment of a business opportunity broker to sell the stock, fixtures and goodwill of a business

The employment of a business opportunity broker to find a business to be purchased by his principal

The employment of a broker to exchange leases on properties zoned for retail business

Any agreement which is not to be performed within one year

Statement of fact

Explanation

Statement of fact

46. A PROPERTY IS DEEDED TO JOJO LEGASPI, ET UX. THE LATIN PHRASE "ET UX" AS SO USED, MEANS

An others

Amount over and above

And wife

Without recourse

This is a definition of “ET UX”

Explanation

This is a definition of “ET UX”

47. COMPARING AN INSTALLMENT NOTE TO A STRAIGHT NOTE, THE STRAIGHT NOTE WILL HAVE:

A total effective interest rate greater that if the loan were an installment loan

Equal annual principal reduction payments

No principal payments during the term of the loan except on the last payment

None of the above

The straight note will have no principal payments during the term of the loan except on the last payment. This means that the borrower will only make interest payments throughout the loan term and will pay off the principal amount in full on the final payment. In contrast, an installment note would require the borrower to make regular principal reduction payments along with interest payments throughout the loan term. Therefore, the straight note does not involve any principal payments until the final payment, making it different from an installment note.

Explanation

The straight note will have no principal payments during the term of the loan except on the last payment. This means that the borrower will only make interest payments throughout the loan term and will pay off the principal amount in full on the final payment. In contrast, an installment note would require the borrower to make regular principal reduction payments along with interest payments throughout the loan term. Therefore, the straight note does not involve any principal payments until the final payment, making it different from an installment note.

48. WHICH OF THE FOLLOWING IS NOT ONE OF THE FOUR IMPORTANT ELEMENTS OF VALUE:

Scarcity

Appreciation

Utility

Transferability

The four elements of value are Demand Utility, Scarcity, and Transferability (DUST)

Explanation

The four elements of value are Demand Utility, Scarcity, and Transferability (DUST)

49. WHICH OF THE FOLLOWING IS PERSONAL PROPERTY?

A sub-lease

Mineral rights

Trees in nature

A fixture

A sublease is personal property (personal property interest)

Explanation

A sublease is personal property (personal property interest)

50. MR. & MRS. LEGASPI WHO HAD BEEN SHOPPING FOR A NEW HOME FOUND ONE THAT THEY LIKED VERY MUCH BUT BECAUSE THEY FELT THE PROPERTY WAS OVERPRICED, THEY DECIDED NOT TO BUY IT. THEIR REASON FOR NOT BUYING WAS PROBABLY BASED UPON THE PRINCIPLE OF:

Conformity

Substitution

Highest and best of use

Anticipation

It must be assumed that our buyer has found another home that was equally desirable but at a much lower price. This is the idea behind the Principle of Substitution.

Explanation

It must be assumed that our buyer has found another home that was equally desirable but at a much lower price. This is the idea behind the Principle of Substitution.

51. WHICH OF THE FOLLOWING NOTICES COULD BE IMPORTANT TO THE FILING OF A MECHANIC'S LIEN:

Notice of non-responsibility

Notice of cessation

Notice of completion

All of the above

These three documents are all related to a mechanic’s lien and could affect the validity of such a lien.

Explanation

These three documents are all related to a mechanic’s lien and could affect the validity of such a lien.

52. Which of the following best describes the trustor?

Same as the trustee

Same as the beneficiary

Same as the borrower on the loan

Same as the vendor in a land contract

Yes, the trustor is the borrower.

Explanation

Yes, the trustor is the borrower.

53. WHICH OF THE FOLLOWING IS CONSIDERED PERSONAL PROPERTY?

An easement

Mineral rights

An existing mortgage

Tree growing in a forest

An existing mortgage is a piece of paper, and therefore, is considered personal property. An easement and mineral rights are appurtenances, and therefore, real property. Growing trees are real property.

Explanation

An existing mortgage is a piece of paper, and therefore, is considered personal property. An easement and mineral rights are appurtenances, and therefore, real property. Growing trees are real property.

54. THE FOLLOWING IS LESS-THEN-FREEHOLD ESTATE

Fee simple defeasible estate

Leasehold estate

Life estate

Fee simple absolute estate

A less than freehold estate is a leasehold. Leases are “lesses”

Explanation

A less than freehold estate is a leasehold. Leases are “lesses”

55. WHEN RENT IS COMPUTED ON THE GROSS SALES OF A BUSINESS OCCUPYING REAL PROPERTY, THE LEASE IS CORRECTLY TERMED:

A net lease

A gross lease

A voidable lease

A percentage lease

In a percentage lease, the rent is tied to a percentage of the gross receipts of a business

Explanation

In a percentage lease, the rent is tied to a percentage of the gross receipts of a business

56. A JUDGEMENT THAT HAS BEEN RECORDED WOULD BE:

An involuntary lien

A superior lien

An equitable lien

An interior lien

A judgment lien is an involuntary lien. If you placed a judgment lien on a person’s property, he certainly did not agree to that lien.

Explanation

A judgment lien is an involuntary lien. If you placed a judgment lien on a person’s property, he certainly did not agree to that lien.

57. FROM A LENDER'S POINT OF VIEW, THE MOST SIGNIFICANT FEATURE OF PURCHASE-MONEY MORTGAGE IS THAT IT TAKES PRIORITY OVER:

Any seller’s liens

Tax liens

Any liens against purchaser which exist at time of purchase

None of the above

For example, if the purchaser has a judgment against him when he obtains the purchase-money mortgage, the purchase-money mortgage takes priority if there is a foreclosure or trustee’s sale.

Explanation

For example, if the purchaser has a judgment against him when he obtains the purchase-money mortgage, the purchase-money mortgage takes priority if there is a foreclosure or trustee’s sale.

58. All of the following are considered real property except:

Land

Fixtures

Leasehold estates

Appurtenances

Leasehold estates are considered personal property.

Explanation

Leasehold estates are considered personal property.

59. WHICH OF THE FOLLOWING IS THE CLASSIC DEFINITION OF THE BOUNDARIES OF REAL PROPERTY?

The surface area indicated on a map

A reasonable use of airspace and extended to the center or the earth

A reasonable distance down and unlimited airspace

A practical or reasonable use of the earth and unlimited airspace

The surface of the earth and the material beneath the surface to the center of the earth is part of the real property. Since airways are now public domain, the ownership of airspace is “use to an enjoyable and reasonable height”

Explanation

The surface of the earth and the material beneath the surface to the center of the earth is part of the real property. Since airways are now public domain, the ownership of airspace is “use to an enjoyable and reasonable height”

60. TO ALIENATE TITLE TO REAL PROPERTY, ONE WOULD:

Encumber it

Place a homestead on the property

Convey the title

Cloud the title

The term “alienate” means to transfer or convey. To alienate title means to convey it.

Explanation

The term “alienate” means to transfer or convey. To alienate title means to convey it.

61. MANY REAL ESTATE CONTRACTS ARE IN WRITING ON FORMS. PARTS OF THESE CONTACTS ARE WRITTEN AND PARTS ARE PRINTED. IN THE INTERPRETATION OF SUCH CONTRACTS:

Printed parts take preference over the written parts

The written parts and the printed parts are given equal consideration

The written parts take preference over the printed parts

Any parts copied from the form take preferences over those that are purely original

As regards to contracts, the written takes preference over the printed parts and oral agreements take preference only when the written contract is incomplete or ambiguous.

Explanation

As regards to contracts, the written takes preference over the printed parts and oral agreements take preference only when the written contract is incomplete or ambiguous.

62. BROKER STILES TOOK A LISTING FROM A SELLER USING THE STANDARD LISTING FORM. ONE WEEK BEFORE THE LSITING EXPIRED, THE BROKER INFORMED THE SELLER THAT HE HAD A PROSPECTIVE BUYER NAMED BENNETT. AFTER THE LISTING EXPIRED, THE SELLER LISTED WITH BROKER JOHNSON. JOHNSON SHOWED THE PROPERTY TO MR. BENNETT AND OBTAINED AN OFFER THAT WAS ACCEPTED. UNDER THESE CIRCUMSTANCES:

Broker Stiles gets a 6% commission

Broker Johnson gets a 6% commission

Both broker get a 6% commission

Broker Stiles gets a 3% commission and broker Johnson gets a 3% commission

In the safety clause of the standard listing form, Broker Stiles would agree to relinquish his safety period if the property were listed with another broker.

Explanation

In the safety clause of the standard listing form, Broker Stiles would agree to relinquish his safety period if the property were listed with another broker.

63. THE HIRING OF A SPECIALIST IN PROPERTY MANAGEMENT WOULD BE JUSTIFIED BY:

Absentee ownership

Technological advances in building concepts

Vacancy factor high than normal

Urbanization

In absentee ownership. The owner lives away from the property and is not able to adequately supervise it.

Explanation

In absentee ownership. The owner lives away from the property and is not able to adequately supervise it.

64. AN INSTRUMENT THAT TRANSFERS POSSESSION OF A REAL PROPERTY, BUT NOT TITLE, IS KNOWN AS:

A mortgage

A lease

A trust deed

An assignment

A lease transfers the possession right of real property. The remainder of the rights stays vested in the lessor.

Explanation

A lease transfers the possession right of real property. The remainder of the rights stays vested in the lessor.

65. A CONTRACT TO KEEP AN OFFER OPEN FOR A SPECIFIC PERIOD OF TIME IS:

A periodic agreement

An open-ended agreement

A trust deed

An option

An offer to purchase may be revoked or rejected at any time before communication of acceptance. In one wishes to keep an offer to sell open for a period of time, they must give consideration to the optionor (seller) thus creating a contract with consideration to the optionor and the promise of the optionor is to keep his offer open for a definite period of time.

Explanation

An offer to purchase may be revoked or rejected at any time before communication of acceptance. In one wishes to keep an offer to sell open for a period of time, they must give consideration to the optionor (seller) thus creating a contract with consideration to the optionor and the promise of the optionor is to keep his offer open for a definite period of time.

66. TO TRANSFER INTEREST IT TRADE FIXTURES UPON THE EXPIRATION OF A LEASE, THE LESSEE WOULD USE:

A bill of sale

A chattel real

A financing statement

None of the above

Trade fixtures define fixtures that have been used in a trade or a business, therefore, they are not classified as real property. Title to such trade fixtures, such as machinery, a barber chair, a shampoo bowl, etc. would be transferred by a bill of sale, when lease expires and lessor and lessee agree they will not be removed….or in the sale of a business opportunity.

Explanation

Trade fixtures define fixtures that have been used in a trade or a business, therefore, they are not classified as real property. Title to such trade fixtures, such as machinery, a barber chair, a shampoo bowl, etc. would be transferred by a bill of sale, when lease expires and lessor and lessee agree they will not be removed….or in the sale of a business opportunity.

67. WHICH OF THE FOLLOWING IS USED TO DETERMINING THE NET INCOME OF A PROPERTY USING THE CAPITALIZATION APPROACH OF APPRAISAL?

Reserves for depreciation

Income tax paid

Vacancy allowance

Payments on a mortgage loan

The only choice used to calculate net income is vacancy allowance

Explanation

The only choice used to calculate net income is vacancy allowance

68. THE FOLLOWING IS NOT CLASSIFIED AS REAL PROPERTY

Unextracted oil

Unharvested crops

Easement

Leasehold estate in residential property

A leasehold estate is NOT real property, it is personal property often called a chattel real. It is a personal property chattel interest in real property. The other choices are all classified as real property.

Explanation

A leasehold estate is NOT real property, it is personal property often called a chattel real. It is a personal property chattel interest in real property. The other choices are all classified as real property.

69. IN YOUR OPINION, THE RELATIONSHIP BETWEEN THE THING DESIRED AND THE POTENTIAL PURCHASER IS BEST DEFINED AS:

The relationship between utility and value

The relationship between demand and value

Value

The present worth as opposed to future income

This is a definition of the word “Value”

Explanation

This is a definition of the word “Value”

70. Which of the following is not necessary for a valid deed to transfer title:

It is executed

It is delivered

It is accepted

It is recorded

We record to give constructive notice, not to transfer title.

Explanation

We record to give constructive notice, not to transfer title.

71. WHICH OF THE FOLLOWING IS A LEGAL TERM USED TO DESCRIBE THE ENTIRE PARCEL OF REAL PROPERTY AND ALL STRUCTURES ON SUCH PROPERTY?

Condominium

Condominium unit

Condominium Project

All of the above

When you consider the condominium units as well as the common areas, you have a condominium project

Explanation

When you consider the condominium units as well as the common areas, you have a condominium project

72. WHICH OF THE FOLLOWING DEEDS WOULD LEAST LIKELY CONTAIN IMPLIED COVENANTS BY THE GRANTOR:

Grant deed

Warranty deed

Quitclaim deed

Gift Deed

A quitclaim deed contains no warranties, guarantees, or covenants of any type.

Explanation

A quitclaim deed contains no warranties, guarantees, or covenants of any type.

73. THE RIGHT TO FORECLOSE A TRUST DEED, UNDER A TRUSTEE'S POWER OF SALE, OUTLAWS:

In four years

In three years

In two years

Never

A trust deed is not a contract, but rather a conveyance of the naked legal title with the power of sale from the trustor to the trustee. Therefore, the trustee retains the right to sell the property under the trust deed at any time for the benefit of the beneficiary. The conveyance has been performed and thus is not under Statute of Limitations; therefore, it never “outlaws”.

Explanation

A trust deed is not a contract, but rather a conveyance of the naked legal title with the power of sale from the trustor to the trustee. Therefore, the trustee retains the right to sell the property under the trust deed at any time for the benefit of the beneficiary. The conveyance has been performed and thus is not under Statute of Limitations; therefore, it never “outlaws”.

74. IN APPRAISAL PRACTICE, ALL OF THE FOLLOWING ARE ACCEPTED METHODS OF COMPUTING THE ESTIMATE OF A BUILDING COST, EXCEPT:

The development method

The quantity survey method

The unit-in-place cost method

The cubic foot method

Choices “b”, “c” and “d” are all methods of estimating the building cost; “a” is the method used to estimate value of vacant land.

Explanation

Choices “b”, “c” and “d” are all methods of estimating the building cost; “a” is the method used to estimate value of vacant land.

75. If a listing is signed by only one spouse and the property is community property, the contract is:

Unenforceable

Enforceable

Voidable

Void

The listing contract requires only one signature for the broker to get paid if he/she performs

Explanation

The listing contract requires only one signature for the broker to get paid if he/she performs

76. AN OFFER BY ONE OF THE PARTIES TO A REAL ESTATE TRANSACTION TO CARRY OUT THAT PARTY'S PART OF THE CONTRACT IS CALLED A:

Gratuity

Satisfaction

Recourse

Tender

Usually made at the conclusion of the transaction, the tender is the offer to perform on the terms agreed to. If the other party cannot perform, then the party that made the tender can rightfully claim the other party defaulted.

Explanation

Usually made at the conclusion of the transaction, the tender is the offer to perform on the terms agreed to. If the other party cannot perform, then the party that made the tender can rightfully claim the other party defaulted.

77. AN OWNER WHO CONVEYS A PORTION OF HIS FEE ESTATE, FOR A TERM THAT IS LESS THAN HIS OWN, CREATES FOR THE RECIPIENT:

An estate in remainder

An estate at sufferance

An estate in reversion

A leasehold estate

The party has not received full title to the property but mere a leasehold. The party making the conveyance holds an estate in reversion.

Explanation

The party has not received full title to the property but mere a leasehold. The party making the conveyance holds an estate in reversion.

78. WHICH OF THE FOLLOWING ITEMS COULD NOT BE USED BY THE OWNER OF A HARDWARE STORE AS SECURITY FOR A LOAN, UNDER THE PROVISIONS OF THE UNIFORM COMMERCIAL CODE?

A personal note endorsed by him

Accounts receivable

Stock for sale

Equipment and fixtures

As the stock will be sold, it cannot be used to secure a loan

Explanation

As the stock will be sold, it cannot be used to secure a loan

79. WHICH OF THE FOLLOWING STATEMENTS ABOUT REAL ESTATE FINANCING IS INCORRECT:

A promissory note is security for a mortgage

Although a mortgage does not transfer legal title to property, it is still considered a lien

The owner of a property who borrows money and signs a mortgage is called a mortgagor

The mortgage is security for the promissory note; but the reverse is not true. Each of the other statement of correct.

Explanation

The mortgage is security for the promissory note; but the reverse is not true. Each of the other statement of correct.

80. A DISTINGUISHING FEATURE OF A FEE SIMPLE ESTATE IS THAT IT IS:

Free of encumbrances

Freely transferable

Of definite duration

None of the above

Freely transferable

Explanation

Freely transferable

81. OPTION TO RENEW A LEASE IS A:

Covenant

Restriction

Limitation

Condition

An option to renew a lease is a promise by the lessor to do so in the event the lessee desires it. A promise in a contract is a “covenant”

Explanation

An option to renew a lease is a promise by the lessor to do so in the event the lessee desires it. A promise in a contract is a “covenant”

82. IN AN ESCROW, PREPAID RENTS ARE NORMALLY:

Debited to the vendor

Credited to the vendor

Debited to the buyer

Credited to the buyer

The vendee is the buyer. The buyer normally receives the prepaid rents.

Explanation

The vendee is the buyer. The buyer normally receives the prepaid rents.

83. SELLERS ARE USUALLY RELUCTANT TO CANCEL AN EXISTING TRANSFERABLE FIRE INSURANCE POLICY IN THE EVENT OF A CASH SALE, DUE TO THE FACT THAT:

The buyer may not properly cover the property

The higher short term cancellation rate will apply

It could result in cancellation of the other policies

The elimination of a cash return in the proration

A seller on a cash sale would be reluctant to cancel an existing transferable fire insurance policy because the seller would receive a short term cancellation rate. Therefore, the seller would prefer to transfer the existing policy to the buyer.

Explanation

A seller on a cash sale would be reluctant to cancel an existing transferable fire insurance policy because the seller would receive a short term cancellation rate. Therefore, the seller would prefer to transfer the existing policy to the buyer.

84. THE BEST DEFINITION OF A STRAIGHT NOTE IS:

Sometimes secured by a trust deed

Sometimes used to finance real property

Principle is all due at one time

All of the above

A straight note has no principal payments and principal is due all at one time.

Explanation

A straight note has no principal payments and principal is due all at one time.

85. REAL PROPERTY WOULD INCLUDE:

Real property tax lien

Trust deed

Oil

None of the above

None of the possible answers to this question is real property. A tax lien and a trust deed, although having to do with real property, are not real property. Oil which has been “captured” is personal property.

Explanation

None of the possible answers to this question is real property. A tax lien and a trust deed, although having to do with real property, are not real property. Oil which has been “captured” is personal property.

86. IN REGARDS TO REAL ESTATE BROKERAGE, WHICH OF THE FOLLOWING STATEMENTS IS CORRECT

The commission a broker may change for the sale of a home is limited by law

In an exclusive agency listing, a seller may sell without being liable for a commission

All agreements to divide commissions between cooperating brokers must be in writing

Under no circumstances may a broker collect a commission if a sale is consummated after a listing has expired

An exclusive agency listing, a seller agrees to pay a commission to the listing broker. It is the listing broker’s responsibility to pay any other agent who sell the property

Explanation

An exclusive agency listing, a seller agrees to pay a commission to the listing broker. It is the listing broker’s responsibility to pay any other agent who sell the property

87. Which of the following is considered an estate of inheritance?

Life estate

Joint tenancy

Fee simple absolute

Less than freehold estate

Because the owner can leave the property to heirs.

Explanation

Because the owner can leave the property to heirs.

88. THE RECORDING OF A DEED:

Passes title

Guarantees ownership

Raises a presumption of delivery

Insures possession

When a deed is recorded, it creates a presumption that the deed has been delivered. It does not pass title, nor guarantee ownership, nor insure the new owner that he has possession of the property

Explanation

When a deed is recorded, it creates a presumption that the deed has been delivered. It does not pass title, nor guarantee ownership, nor insure the new owner that he has possession of the property

89. MORTGAGE YIELD IS BEST DESCRIBED AS:

What the lender receives when a loan secured by a mortgage is paid off

All of the money received by a lender after deducting closing costs and loan fees

The effective interest return obtained from a first trust deed by an investor

An increase in value of a property which has a mortgage

Mortgage yield refers to the effective interest return that an investor obtains from a first trust deed. It represents the amount of income generated from the mortgage investment, taking into account factors such as the interest rate, loan fees, and closing costs. This measure allows investors to assess the profitability of their mortgage investments and make informed decisions.

Explanation

Mortgage yield refers to the effective interest return that an investor obtains from a first trust deed. It represents the amount of income generated from the mortgage investment, taking into account factors such as the interest rate, loan fees, and closing costs. This measure allows investors to assess the profitability of their mortgage investments and make informed decisions.

90. All of the following are considered personal property except:

Trade fixtures.

Chose

Fruit on a tree that has been sold under contract

Covenant

A covenant is an appurtenance item, therefore real property.

Explanation

A covenant is an appurtenance item, therefore real property.

91. A PROSPECTIVE CLIENT CALLS YOU AND ASKS YOU TO TAKE A LISTING ON HIS PROPERTY. IN REVIEW HIS PAPERS YOU DISCOVER HE IS PURCHASING THE PROPERTY ON A CONTRACT OF SALE THAT HAS NO ACCELERATION CLAUSE, AND THAT HAS NO PROVISION IN THE CONTRACT PROHIBITING A RESALE OR AN ASSIGNMENT. WHICH OF THE FOLLOWING IS THE MOST NEARLY CORRECT STATEMENT? YOUR CLIENT COULD:

Sell his interest in the property, but only if he pays off the contract first

Sell or assign his rights but not his duties under the original contract unless the contract seller’s approval was obtained

A party purchasing property under a land contract of sale may sell their interest without difficulty by assigning the contract, provided there is no prohibition on the agreement. The assignee would still be secondarily liable for some of the terms of the contract unless the seller’s approval was obtained.

Explanation

A party purchasing property under a land contract of sale may sell their interest without difficulty by assigning the contract, provided there is no prohibition on the agreement. The assignee would still be secondarily liable for some of the terms of the contract unless the seller’s approval was obtained.

92. IN MAKING WHICH OF THE FOLLOWING TYPE OF LOANS WOULD THE BENEFICIARY LEAST LIKELY HAVE TO TAKE ACTION TO FORECLOSE ON A TRUST DEED LOAN.

Straight loan

Demand loan

Open-end loan

Amortized loan

An amortized loan is paid off in installments. This reduces the likelihood of foreclosure.

Explanation

An amortized loan is paid off in installments. This reduces the likelihood of foreclosure.

93. THE INSTRUMENT TO SECURE A LOAN ON PERSONAL PROPERTY IS CALLED A:

Security agreement

Bill of sale

Trust deed

Bill of exchange

A security agreement is essentially a time payment contract on e\personal property such as: equipment, appliances, store inventory, etc. The terms of repayment differ among lenders. Like when retailers or distributors borrow large amounts from lenders or when retailers or distributors borrow amounts from lenders to buy merchandise, or stock, or inventory for “flooring” displays (i.e., cars, TV sets, appliances) the lender, for public notice, generally files a copy of the loan contract ( the security agreement) with the county recorder in the country where the personal property is located.

Explanation

A security agreement is essentially a time payment contract on e\personal property such as: equipment, appliances, store inventory, etc. The terms of repayment differ among lenders. Like when retailers or distributors borrow large amounts from lenders or when retailers or distributors borrow amounts from lenders to buy merchandise, or stock, or inventory for “flooring” displays (i.e., cars, TV sets, appliances) the lender, for public notice, generally files a copy of the loan contract ( the security agreement) with the county recorder in the country where the personal property is located.

94. A VALID DEED MUST CONTAIN:

An acknowledgement

A recital of consideration

The grantee’s signature

A granting clause

The granting clause is referred to as the action clause and is considered one of the essential elements to a valid deed. Although the deed may contain the choices “A”. “B” and “C”, they are not needed to make the deed valid.

Explanation

The granting clause is referred to as the action clause and is considered one of the essential elements to a valid deed. Although the deed may contain the choices “A”. “B” and “C”, they are not needed to make the deed valid.

95. THE COVENANT OF QUIET ENJOYMENT MOST DIRECTLY RELATES TO:

Nuisances maintained on adjoining property

Title to real property

Possession of real property

All of the above

The right to “quiet enjoyment” is the tenants legal rights in rentals and leases during the occupancy (possession) of the property.

Explanation

The right to “quiet enjoyment” is the tenants legal rights in rentals and leases during the occupancy (possession) of the property.

96. ANOTHER NAME FOR AN ESTATE OF INHERITANCE IS:

Probate Estate

Fee simple defeasible

Estate is fee

Estate in Sufferance

Fee estates are of indefinite duration, can be willed, the greatest interest a person can own in land, freehold estate and not necessarily free of encumbrances.

Explanation

Fee estates are of indefinite duration, can be willed, the greatest interest a person can own in land, freehold estate and not necessarily free of encumbrances.

97. ALL OF THE STATEMENTS BELOW ARE TRUE, EXCEPT:

A quitclaim deed may convey any right or title including fee simple title

A deed is of no effect unless delivered

A reconveyance deed is used to convey title to a new purchaser in connection with a “trust deed sale

A reconveyance deed id given by a trustee to the borrower (trustor) after a loan has been paid in full. The borrower records his deed of reconveyance to clear the loan lien from the record.

Explanation

A reconveyance deed id given by a trustee to the borrower (trustor) after a loan has been paid in full. The borrower records his deed of reconveyance to clear the loan lien from the record.

98. A LEASE IS TO A LESSEE AS:

An assumption agreement is to an affiant

A trust deed is to a trustee

An agreement of sale is to an equitable owner

A fee simple estate is to an executor

An agreement of sale (land contract) gives the equitable owner the use of the property, as a lease gives the use of the premises to the lessee. An affiant is one who makes an affirmation. Know each of the terms in this question.

Explanation

An agreement of sale (land contract) gives the equitable owner the use of the property, as a lease gives the use of the premises to the lessee. An affiant is one who makes an affirmation. Know each of the terms in this question.