Real Estate Agent Practice Exam: Quiz!

Acceleration clauses are several different types and reasons

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

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.

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”.

Any of these would indicate an “able” buyer

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.

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?

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

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.

These are required for a valid escrow

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

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

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

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.

All offers must be submitted immediately.

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.

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.

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

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.

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

“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.

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.

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

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.

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.

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.

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.

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.

This is the very core issue of market value

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.

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.

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.

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

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

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

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.

This is a definition of discounting

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.

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.

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

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.

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

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

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.

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

This is a definition of “ET UX”

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

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

Statement of fact

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.