Real Estate Agent Practice Exam: Quiz!

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Real Estate Agent Practice Exam: Quiz! - Quiz

How much do you know about being a real estate agent? Are you studying for an exam? This quiz can help. A real estate agent assists people with the buying or selling of property. They possess the skill and expertise necessary to either market the property or sell for the best possible outcome. If you want to put your knowledge to the test, look no further than this quiz.


Questions and Answers
  • 1. 

    MORTGAGE YIELD IS BEST DESCRIBED AS:

    • A.

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

    • B.

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

    • C.

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

    • D.

      An increase in value of a property which has a mortgage

    Correct Answer
    C. The effective interest return obtained from a first trust deed by an investor
    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.

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  • 2. 

    A VALID ESCROW REQUIRES W/C OF THE FFG:

    • A.

      Escrow instructions with no conditions

    • B.

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

    • C.

      The services of a licensed real estate broker

    • D.

      None of the above

    Correct Answer
    B. A binding contract between the buyer and seller and the condition delivery of transfer instruments to a third party
    Explanation
    These are required for a valid escrow

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  • 3. 

    A REAL ESTATE BROKER IS USUALLY:

    • A.

      A fiduciary to a person interested in buying a property the broker has listed

    • B.

      An attorney-in-fact

    • C.

      An agent serving the principal under a duly executed power-of-attorney

    • D.

      None of the above

    Correct Answer
    D. None of the above
    Explanation
    The broker is usually the agent (fiduciary) of the seller and usually does not have a power-of-attorney

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  • 4. 

    THE  BEST DEFINITION OF A STRAIGHT NOTE IS:

    • A.

      Sometimes secured by a trust deed

    • B.

      Sometimes used to finance real property

    • C.

      Principle is all due at one time

    • D.

      All of the above

    Correct Answer
    C. Principle is all due at one time
    Explanation
    A straight note has no principal payments and principal is due all at one time.

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  • 5. 

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

    • A.

      A straight note

    • B.

      Amortized

    • C.

      Partially amortized

    • D.

      A graduated payment note

    Correct Answer
    A. A straight note
    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.

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  • 6. 

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

    • A.

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

    • B.

      Equal annual principal reduction payments

    • C.

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

    • D.

      None of the above

    Correct Answer
    C. No principal payments during the term of the loan except on the last payment
    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.

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  • 7. 

      AN “ABLE BUYER” MEANS ONE:

    • A.

      Financially able

    • B.

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

    • C.

      Having the ability to obtain necessary financing

    • D.

      Any of the above

    Correct Answer
    D. Any of the above
    Explanation
    Any of these would indicate an “able” buyer

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  • 8. 

    OPTION TO RENEW A LEASE IS A:

    • A.

      Covenant

    • B.

      Restriction

    • C.

      Limitation

    • D.

      Condition

    Correct Answer
    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”

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  • 9. 

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

    • A.

      Condominium

    • B.

      Condominium unit

    • C.

      Condominium Project

    • D.

      All of the above

    Correct Answer
    C. Condominium Project
    Explanation
    When you consider the condominium units as well as the common areas, you have a condominium project

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  • 10. 

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

    • A.

      Subordination

    • B.

      Escalation

    • C.

      Acceleration

    • D.

      Alienation

    Correct Answer
    C. Acceleration
    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.

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  • 11. 

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

    • A.

      The surface area indicated on a map

    • B.

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

    • C.

      A reasonable distance down and unlimited airspace

    • D.

      A practical or reasonable use of the earth and unlimited airspace

    Correct Answer
    B. A reasonable use of airspace and extended to the center or the earth
    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”

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  • 12. 

    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:

    • A.

      Gratuity

    • B.

      Satisfaction

    • C.

      Recourse

    • D.

      Tender

    Correct Answer
    D. Tender
    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.

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  • 13. 

      TO ALIENATE TITLE TO REAL PROPERTY, ONE WOULD:

    • A.

      Encumber it

    • B.

      Place a homestead on the property

    • C.

      Convey the title

    • D.

      Cloud the title

    Correct Answer
    C. Convey the title
    Explanation
    The term “alienate” means to transfer or convey. To alienate title means to convey it.

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  • 14. 

    REAL PROPERTY WOULD INCLUDE:

    • A.

      Real property tax lien

    • B.

      Trust deed

    • C.

      Oil

    • D.

      None of the above

    Correct Answer
    D. None of the above
    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.

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  • 15. 

    IN AN ESCROW, PREPAID RENTS ARE NORMALLY:

    • A.

      Debited to the vendor

    • B.

      Credited to the vendor

    • C.

      Debited to the buyer

    • D.

      Credited to the buyer

    Correct Answer
    D. Credited to the buyer
    Explanation
    The vendee is the buyer. The buyer normally receives the prepaid rents.

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  • 16. 

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

    • A.

      Absentee ownership

    • B.

      Technological advances in building concepts

    • C.

      Vacancy factor high than normal

    • D.

      Urbanization

    Correct Answer
    A. Absentee ownership
    Explanation
    In absentee ownership. The owner lives away from the property and is not able to adequately supervise it.

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  • 17. 

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

    • A.

      A periodic agreement

    • B.

      An open-ended agreement

    • C.

      A trust deed

    • D.

      An option

    Correct Answer
    D. An option
    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.

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  • 18. 

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

    • A.

      Scarcity

    • B.

      Appreciation

    • C.

      Utility

    • D.

      Transferability

    Correct Answer
    B. Appreciation
    Explanation
    The four elements of value are Demand Utility, Scarcity, and Transferability (DUST)

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  • 19. 

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

    • A.

      Terminus ownership

    • B.

      Severalty ownership

    • C.

      Plottage

    • D.

      Disassemblage

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

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  • 20. 

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

    • A.

      Prepaid taxes

    • B.

      An assumed loan

    • C.

      Title insurance premium

    • D.

      Delinquent assessment lien

    Correct Answer
    A. Prepaid taxes
    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.

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  • 21. 

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

    • A.

      Absorption

    • B.

      Accretion

    • C.

      Allusion

    • D.

      Avulsion

    Correct Answer
    D. Avulsion
    Explanation
    Avulsion is distinguished from erosion (the gradual removal of the soil by air or water)

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  • 22. 

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

    • A.

      Reserves for depreciation

    • B.

      Income tax paid

    • C.

      Vacancy allowance

    • D.

      Payments on a mortgage loan

    Correct Answer
    C. Vacancy allowance
    Explanation
    The only choice used to calculate net income is vacancy allowance

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  • 23. 

    PRESCRIPTION  IS:

    • A.

      Equitable title

    • B.

      Legal title

    • C.

      A grant

    • D.

      The right of use on the land

    Correct Answer
    D. The right of use on the land
    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

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  • 24. 

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

    • A.

      The relationship between utility and value

    • B.

      The relationship between demand and value

    • C.

      Value

    • D.

      The present worth as opposed to future income

    Correct Answer
    C. Value
    Explanation
    This is a definition of the word “Value”

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  • 25. 

    Novation is most closely related to:

    • A.

      Realization of an unexpected profit

    • B.

      Creation of an existing agreement

    • C.

      Substitution of a new contract for an old one

    • D.

      Modification of a contract

    Correct Answer
    C. Substitution of a new contract for an old one
    Explanation
    Novation is a legal term to describe replacing an old contract with a new contract.

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  • 26. 

    ANOTHER NAME FOR AN ESTATE OF INHERITANCE IS:

    • A.

      Probate Estate

    • B.

      Fee simple defeasible

    • C.

      Estate is fee

    • D.

      Estate in Sufferance

    Correct Answer
    C. Estate is fee
    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.

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  • 27. 

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

    • A.

      A net lease

    • B.

      A gross lease

    • C.

      A voidable lease

    • D.

      A percentage lease

    Correct Answer
    D. A percentage lease
    Explanation
    In a percentage lease, the rent is tied to a percentage of the gross receipts of a business

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  • 28. 

    FEE SIMPLE ESTATE REFERS TO:

    • A.

      The greatest interest a person can own in land

    • B.

      An easy way to transfer title

    • C.

      A common way to hold title

    • D.

      An expensive way to transfer title

    Correct Answer
    A. The greatest interest a person can own in land
    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.

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  • 29. 

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

    • A.

      Free of encumbrances

    • B.

      Freely transferable

    • C.

      Of definite duration

    • D.

      None of the above

    Correct Answer
    B. Freely transferable
    Explanation
    Freely transferable

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  • 30. 

    A LEASE IS TO A LESSEE AS:

    • A.

      An assumption agreement is to an affiant

    • B.

      A trust deed is to a trustee

    • C.

      An agreement of sale is to an equitable owner

    • D.

      A fee simple estate is to an executor

    Correct Answer
    C. An agreement of sale is to an equitable owner
    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.

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  • 31. 

    WHICH OF THE FOLLOWING IS CONSIDERED PERSONAL PROPERTY?  

    • A.

      An easement

    • B.

      Mineral rights

    • C.

      An existing mortgage

    • D.

      Tree growing in a forest

    Correct Answer
    C. An existing mortgage
    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.

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  • 32. 

    THE FOLLOWING IS LESS-THEN-FREEHOLD ESTATE

    • A.

      Fee simple defeasible estate

    • B.

      Leasehold estate

    • C.

      Life estate

    • D.

      Fee simple absolute estate

    Correct Answer
    B. Leasehold estate
    Explanation
    A less than freehold estate is a leasehold. Leases are “lesses”

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  • 33. 

    THE FOLLOWING IS NOT CLASSIFIED AS REAL PROPERTY

    • A.

      Unextracted oil

    • B.

      Unharvested crops

    • C.

      Easement

    • D.

      Leasehold estate in residential property

    Correct Answer
    D. Leasehold estate in residential 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.

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  • 34. 

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

    • A.

      Agreement between the parties

    • B.

      Permanence of the installation

    • C.

      Cost of the article

    • D.

      Relationship of the parties

    Correct Answer
    C. Cost of the article
    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.

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  • 35. 

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

    • A.

      An others

    • B.

      Amount over and above

    • C.

      And wife

    • D.

      Without recourse

    Correct Answer
    C. And wife
    Explanation
    This is a definition of “ET UX”

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  • 36. 

    THE RECORDING OF A DEED:

    • A.

      Passes title

    • B.

      Guarantees ownership

    • C.

      Raises a presumption of delivery

    • D.

      Insures possession

    Correct Answer
    C. Raises a presumption of delivery
    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

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  • 37. 

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

    • A.

      A mortgage

    • B.

      A lease

    • C.

      A trust deed

    • D.

      An assignment

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

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  • 38. 

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

    • A.

      An estate in remainder

    • B.

      An estate at sufferance

    • C.

      An estate in reversion

    • D.

      A leasehold estate

    Correct Answer
    D. A leasehold estate
    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.

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  • 39. 

    THE COVENANT OF QUIET ENJOYMENT MOST DIRECTLY RELATES TO:

    • A.

      Nuisances maintained on adjoining property

    • B.

      Title to real property

    • C.

      Possession of real property

    • D.

      All of the above

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

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  • 40. 

    LEGALLY AND TECHNICALLY PROPERTY IS DEFINED AS:

    • A.

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

    • B.

      Freehold estate

    • C.

      Only personal property

    • D.

      Things that buyers and sellers own

    Correct Answer
    A. The rights and interests which a person has in the thing owned
    Explanation
    Ownership of real property is legally and technically defined as their right and interests of the thing owned

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  • 41. 

    THE FOLLOWING IS REAL PROPERTY, A:

    • A.

      Harvested crop of wheat

    • B.

      Bearing wall in a single family dwelling

    • C.

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

    • D.

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

    Correct Answer
    B. Bearing wall in a single family dwelling
    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.

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  • 42. 

    A VALID DEED MUST CONTAIN:

    • A.

      An acknowledgement

    • B.

      A recital of consideration

    • C.

      The grantee’s signature

    • D.

      A granting clause

    Correct Answer
    D. A granting clause
    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.

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  • 43. 

    THE PRINCIPAL DIFFERENCE BETWEEN REAL PROPERTY AND PERSONAL PROPERTY IS:

    • A.

      Mobility

    • B.

      Value

    • C.

      Permanence

    • D.

      Length of life

    Correct Answer
    A. Mobility
    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.

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  • 44. 

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

    • A.

      Grant deed

    • B.

      Warranty deed

    • C.

      Quitclaim deed

    • D.

      Gift Deed

    Correct Answer
    C. Quitclaim deed
    Explanation
    A quitclaim deed contains no warranties, guarantees, or covenants of any type.

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  • 45. 

    THE FOLLOWING IS REAL PROPERTY:

    • A.

      Planted trees

    • B.

      Leasehold

    • C.

      Chattel real

    • D.

      Debts

    Correct Answer
    A. Planted trees
    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.

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  • 46. 

    WHICH OF THE FOLLOWING IS PERSONAL PROPERTY?

    • A.

      A sub-lease

    • B.

      Mineral rights

    • C.

      Trees in nature

    • D.

      A fixture

    Correct Answer
    A. A sub-lease
    Explanation
    A sublease is personal property (personal property interest)

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  • 47. 

    PERSONAL PROPERTY PROVIDES DIFFICULTIES FOR REAL ESTATE BROKERS BECAUSE IS:

    • A.

      Could become real property

    • B.

      Can be hypothecated

    • C.

      Can be alienated

    • D.

      All of the above

    Correct Answer
    D. All of the above
    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

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  • 48. 

    A JUDGEMENT THAT HAS BEEN RECORDED WOULD BE:

    • A.

      An involuntary lien

    • B.

      A superior lien

    • C.

      An equitable lien

    • D.

      An interior lien

    Correct Answer
    A. An involuntary 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.

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  • 49. 

    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:

    • A.

      Leveraging

    • B.

      Liquidating

    • C.

      Discounting

    • D.

      Subrogating

    Correct Answer
    C. Discounting
    Explanation
    This is a definition of discounting

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  • 50. 

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

    • A.

      Security agreement

    • B.

      Bill of sale

    • C.

      Trust deed

    • D.

      Bill of exchange

    Correct Answer
    A. Security agreement
    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.

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Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 15, 2013
    Quiz Created by
    Zaldyt
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