Real Estate Test + Vocabulary 2

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  • 1/50 Questions

    To use the capitalization approach to appraising you need the:

    • Gross income
    • Occupations of the tenants
    • Net income
    • Case flow
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About This Quiz

The 'Real Estate Test + Vocabulary 2' assesses key financial concepts in real estate, including capitalization, amortization, and market dynamics. It also covers legal compliance with the Americans with Disabilities Act, enhancing understanding of financial obligations and discrimination laws.

Real Estate Test + Vocabulary 2 - Quiz

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  • 2. 

    Americans with Disabilities Act:

    • Act prohibiting discrimination against individuals with disabilities in employment, public services, telecommunications, public accommodations, and commercial facilities.

    • Act prohibiting discrimination against minorities in employment, public services, telecommunications, public accommodations, and commercial facilities.

    • Act prohibiting discrimination against individuals with disabilities in employment and residential services.

    • Act permitting discrimination against individuals with disabilities in employment, public services, telecommunications, public accommodations, and commercial facilities.

    Correct Answer
    A. Act prohibiting discrimination against individuals with disabilities in employment, public services, telecommunications, public accommodations, and commercial facilities.
    Explanation
    The Americans with Disabilities Act is a law that prohibits discrimination against individuals with disabilities in various areas such as employment, public services, telecommunications, public accommodations, and commercial facilities. This means that individuals with disabilities should have equal opportunities and access to these areas without facing discrimination based on their disabilities.

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  • 3. 

    The repayment of financial obligation over a period of time in a series  of periodic installments; i.e. the payback of the principal owed to the lender. 

    • Amoritization

    • Credit

    • Proration

    • Debit

    Correct Answer
    A. Amoritization
    Explanation
    Amortization refers to the process of repaying a financial obligation, such as a loan or mortgage, through a series of periodic installments. These installments include both the principal amount borrowed and the interest accrued over time. By making regular payments, the borrower gradually reduces the outstanding balance owed to the lender. Amortization allows for the gradual repayment of the loan over a specified period, making it easier for borrowers to manage their financial obligations.

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  • 4. 

    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.

    Correct Answer
    A. Price tends to drop.
    Explanation
    If demand is constant and supply increases, sellers compete with each other by lowering prices.

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  • 5. 

    Amortization Rate is defined as:

    • One payment that is applied to the reduction of the principal.

    • Decreasing payments applied to the reduction of the principal

    • The percentage of periodic payment that is applied to the reduction to the principal.

    • The percentage of periodic payment that is applied to the reduction of one's debt.

    Correct Answer
    A. The percentage of periodic payment that is applied to the reduction to the principal.
    Explanation
    The correct answer is "The percentage of periodic payment that is applied to the reduction to the principal." This answer accurately describes the amortization rate, which refers to the portion of a periodic payment that is used to decrease the principal amount of a debt. It represents the percentage of the payment that goes towards reducing the outstanding balance, rather than being applied to interest or other fees.

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  • 6. 

    Amortization Term is defined as: 

    • The percentage of periodic payment that is applied to the reduction to the principal.

    • The time period over which the principal amount would be retired on the basis of the periodic payments.

    • Decreasing payments applied to the reduction of the principal

    • The percentage of periodic payment that is applied to the reduction of one's debt.

    Correct Answer
    A. The time period over which the principal amount would be retired on the basis of the periodic payments.
    Explanation
    The correct answer is the time period over which the principal amount would be retired on the basis of the periodic payments. This definition refers to the length of time it takes to fully pay off the principal amount of a loan or debt through regular, scheduled payments. It indicates the duration of the loan or debt repayment plan.

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  • 7. 

    A broker has two offers on the same property. The two offers are from salespeople within his office and both have given deposits. The broker decides not to present the second offer until the first offer has been accepted or rejected by the seller. The seller is not made aware of the second offer. The broker’s action is:

    • Not permissible

    • Not permissible since the agency owed fiduciary obligations to both buyers

    • Permissible only if the commission is divided equally between the two salespeople

    • Permissible if the second offer is substantially the same as the first

    Correct Answer
    A. Not permissible
    Explanation
    The broker's action is not permissible because it goes against the fiduciary obligations that the agency owes to both buyers. By withholding the second offer from the seller and not making them aware of it, the broker is not acting in the best interest of both buyers and is not being transparent in their dealings. This could potentially lead to a conflict of interest and unfair treatment of the buyers.

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  • 8. 

    A financial obligation that is repaid over a period of time by a series of periodic payments 

    • Abstract of title

    • Bilateral Contract

    • Delayed Exchange

    • Amortized Loan

    Correct Answer
    A. Amortized Loan
    Explanation
    An amortized loan refers to a financial obligation that is repaid over a period of time through a series of periodic payments. This means that the loan is gradually paid off through regular installments, which include both principal and interest. Unlike other types of loans, where the borrower may only make interest payments for a certain period of time and then repay the principal in a lump sum, an amortized loan ensures that both the principal and interest are paid off gradually over the loan term. This allows the borrower to spread out the repayment and make it more affordable over time.

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  • 9. 

    A contract for a lump sum or scheduled premiums that are paid out. 

    • Amortized Loan

    • Credit

    • Annuity

    • Appropriation

    Correct Answer
    A. Annuity
    Explanation
    An annuity is a contract where a lump sum or scheduled premiums are paid out. It is a financial product that provides a series of regular payments to an individual over a specified period of time. This can be used as a retirement income stream or to meet other long-term financial goals. Annuities are often used to ensure a steady income flow and provide financial security in the future.

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  • 10. 

    The “Statutory Dedication Process” is completed when:

    • The appointed representative of the city or county signs accepting the dedication

    • The final subdivision map is recorded

    • The dedicated area is completed

    • Local authorities deliver a signed acceptance to the subdivider

    Correct Answer
    A. The final subdivision map is recorded
    Explanation
    Upon the final subdivision may being recorded. If the subdivider has dedicated an area through a Dedication Certificate and the dedication has been accepted by the properly authorized official, then the recording of the approved map would be the final step in the Statutory Dedication process.

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  • 11. 

    The act or process of developing an opinion of value as of a specific date

    • Annuity

    • Appraisal Process

    • Appraisal

    • Ammortization

    Correct Answer
    A. Appraisal
    Explanation
    An appraisal is the act or process of developing an opinion of value as of a specific date. This involves assessing the worth or value of something, such as a property or asset, based on various factors and criteria. It is a systematic approach that requires analyzing market conditions, conducting research, and considering relevant data to determine the fair market value of the subject property. An appraisal is typically conducted by a qualified appraiser who follows specific guidelines and standards to ensure accuracy and objectivity in the valuation process.

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  • 12. 

    Appraisal Process is known as 

    • A systematic analysis of the factors that bear on the value of real estate.

    • A systematic analysis of the factors that bear on the value of land.

    • A calculation of the numbers that bear on the value of real estate.

    • Finding things right and wrong with something and placing substantial value on it.

    Correct Answer
    A. A systematic analysis of the factors that bear on the value of real estate.
    Explanation
    The appraisal process involves conducting a systematic analysis of various factors that influence the value of real estate. This analysis includes considering factors such as location, condition, size, amenities, and market trends. By evaluating these factors, appraisers can determine the fair market value of a property. This process is essential for buyers, sellers, and lenders to make informed decisions about the value of real estate.

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  • 13. 

    The best appraisal methods to be used to establish the current market value of a shopping center would be the:

    • Cost-Income

    • Market Data-Income

    • Income-Gross rent multiplier

    • Cost-Gross rent multiplier

    Correct Answer
    A. Cost-Income
    Explanation
    The best appraisal methods would be the replacement cost approach and the capitalization of the net income approach. The gross rent multiplier could be very inaccurate and there would probably by very few shopping center sales for you to use the market approach.

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  • 14. 

    An estimate of the amount of a particular value, such as market value, assessed value, or insurable value, based on the given assignment. 

    • Appraisal Report

    • Assessment Value

    • Appraisal Value

    • Annuity

    Correct Answer
    A. Appraisal Value
    Explanation
    The correct answer is "Appraisal Value". In the context of the question, an appraisal value refers to an estimate of the amount of a particular value, such as market value, assessed value, or insurable value, based on the given assignment. This means that it is a professional assessment or valuation of the worth or value of something. An appraisal report is a document that provides the details and findings of the appraisal process. Assessment value refers to the value assigned to a property for tax purposes. An annuity is a financial product that provides a series of payments over a certain period of time.

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  • 15. 

    An Appraiser is

    • Someone who engages in in the procedures of selling real property or personal property.

    • A person who engages in the procedure of estimating the value of land.

    • A person who engages in the procedure of estimation the value of real property or personal property.

    • None of the above

    Correct Answer
    A. A person who engages in the procedure of estimation the value of real property or personal property.
    Explanation
    The correct answer is "A person who engages in the procedure of estimation the value of real property or personal property." This answer accurately describes the role of an appraiser, who is responsible for determining the value of real estate or personal belongings.

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  • 16. 

    “No person acting under the Real Estate Law shall accept any purchase or loan funds or other consideration from a prospective purchaser or lender, or directly or indirectly cause such funds or other consideration to be deposited to an escrow account except as to the specific loan, or specific real property sales contract, or promissory note secured directly or collaterally by a lien on real property on which loan, contract, or note the person has a bonafide authorization to negotiate or to sell”. In the preceding quotation taken from the Real Estate Law, the term “collaterally” means:

    • A hard money note

    • A note secured by another note

    • A purchase money loan

    • A real property security

    Correct Answer
    A. A note secured by another note
    Explanation
    One of the definition of collateral from the dictionary is “property deposited as security, additional to one’s personal obligation”. In this instance a borrower used another note to secure the payment of his personal note.

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  • 17. 

    Something of value that is given to show acceptance or acknowledgement of a contract, such as money or a promise. 

    • Appraised Value

    • Assessed Value

    • Accepted Notice

    • Consideration

    Correct Answer
    A. Consideration
    Explanation
    Consideration refers to something of value that is given by one party to another in order to show acceptance or acknowledgement of a contract. This can include money, services, goods, or even a promise to do or not do something. Consideration is an essential element of a contract, as it demonstrates the mutual intention of the parties involved to be bound by the terms of the agreement. It ensures that both parties have something at stake and helps to prevent one-sided agreements. Therefore, consideration is the correct answer in this context.

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  • 18. 

    The act of recording documents and making information accessible to prospective buyers and lenders

    • Consideration

    • Appraisal process

    • Appraisal report

    • Constructive Notice

    Correct Answer
    A. Constructive Notice
    Explanation
    Constructive Notice refers to the legal concept that information or documents are considered to be publicly available and accessible to anyone who wants to inquire or investigate. In the context of the given question, the act of recording documents and making information accessible to prospective buyers and lenders is a form of Constructive Notice. This means that when documents are recorded, such as property deeds or liens, it becomes public knowledge and anyone interested in buying or lending against the property can access and rely on that information. Constructive Notice helps to protect the rights and interests of buyers and lenders by ensuring transparency and disclosure of relevant information.

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  • 19. 

    The net effect of a tight money policy by the Federal Reserve Board would be the increasing of:

    • New home sales

    • Use of new first mortgages in real estate financing

    • Use of junior loans in real estate financing

    • Supply of money available for real estate financing

    Correct Answer
    A. Use of junior loans in real estate financing
    Explanation
    A tight money policy will cause a scarcity of money for financing. This usually means that there will be an increase of junior loans in real estate financing (seller carrybacks).

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  • 20. 

    An installment contract or contract sale. A type of agreement where the seller holds the title until the buyer has paid in full. 

    • Amortization Loan

    • Debit

    • Contract for Deed

    • Credit

    Correct Answer
    A. Contract for Deed
    Explanation
    A contract for deed is a type of agreement where the seller retains the title to the property until the buyer has made full payment. This means that the buyer does not receive immediate ownership of the property, but rather pays in installments over a set period of time. Once the buyer has completed all payments, the seller transfers the title to the buyer. This type of arrangement is commonly used when a buyer is unable to obtain traditional financing or when the seller wants to maintain some control over the property until it is fully paid off.

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  • 21. 

    The money provided for materials, labor, land and profits necessary to bring a property into existence. 

    • Cost

    • Credit

    • Debit

    • Compensation

    Correct Answer
    A. Cost
    Explanation
    Cost refers to the money required to cover the expenses of materials, labor, land, and profits needed to create or develop a property. It encompasses all the financial resources needed to bring a property into existence.

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  • 22. 

    One insures title through:

    • Guarantee of Title

    • Title Insurance

    • Certificate of Title

    • All of the above

    Correct Answer
    A. Title Insurance
    Explanation
    Title insurance is the correct answer because it is a type of insurance that protects the buyer or lender against any financial loss due to defects in the title of a property. It provides coverage for issues such as undisclosed liens, errors in public records, or fraud. Guarantee of Title and Certificate of Title are not types of insurance, but rather documents that provide information about the property's title. Therefore, the most appropriate way to insure title is through title insurance.

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  • 23. 

    Cost Approach is

    • A systematic analysis of the factors that bear on the value of real estate

    • A written or oral estimate of value submitted o a client based on a specified definition function of value for the subject property as of a specified date.

    • An estimate by an appraiser of the amount of a particular value, such as market value, assessed value, or insurable value, based on the given assignment.

    • A method of appraising property based on the depreciated reproduction cost of all improvements, plus the market value of the site.

    Correct Answer
    A. A method of appraising property based on the depreciated reproduction cost of all improvements, plus the market value of the site.
    Explanation
    The Cost Approach is a method of appraising property that takes into account the depreciated reproduction cost of all improvements, such as buildings or structures, on the property, as well as the market value of the site itself. This approach involves estimating the cost to replace the improvements on the property, taking into consideration factors such as age, condition, and obsolescence. The estimated cost of the improvements is then added to the market value of the site to determine the overall value of the property. This approach is particularly useful when there are limited comparable sales or when the property is unique and does not have a well-established market value.

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  • 24. 

    The amount one pays on borrowed money; an interest rate. 

    • Cost

    • Credit

    • Cost of credit

    • Annuity

    Correct Answer
    A. Cost of credit
    Explanation
    The term "cost of credit" refers to the amount of money one has to pay when borrowing money, including the interest rate charged. It encompasses not only the principal amount borrowed but also any additional fees or charges associated with the loan. This term highlights the overall expense incurred by the borrower for utilizing credit facilities.

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  • 25. 

    Peter wants to buy his first home but doesn’t know how much he can afford to pay. He has a gross monthly income of $3,000. According to the traditional lender’s rule of thumb formula, what is the total housing expense (principal, interest, taxes, and insurance) Peter can bear?

    • 1080

    • 840

    • 648

    • 1152

    Correct Answer
    A. 840
    Explanation
    Traditionally lenders want borrowers’ “budget” mortgage payment (PITI—Principal + Interest + Taxes + Insurance) to be not more than 28% of their gross monthly income: 28% x $3,000 = $840.

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  • 26. 

    Counteroffer is:

    • An acceptance of an offer to buy or sell, with a simultaneous substitute offer.

    • A rejection of an offer to buy or sell, with a simultaneous substitute offer.

    • A change of mind of an offer to buy or sell taking everything "off the table".

    • None of the above.

    Correct Answer
    A. A rejection of an offer to buy or sell, with a simultaneous substitute offer.
    Explanation
    A counteroffer is a rejection of an offer to buy or sell, with a simultaneous substitute offer. This means that instead of accepting the original offer, the counterparty is proposing a different offer in response. It indicates a change in terms or conditions of the original offer and signifies a negotiation process between the parties involved.

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  • 27. 

    A liability or equity entered in a party's favor. 

    • Credit

    • Cost

    • Debit

    • Annuity

    Correct Answer
    A. Credit
    Explanation
    Credit refers to a liability or equity entered in a party's favor. It represents an increase in assets or a decrease in liabilities for the party receiving the credit. This entry is made on the right side of the accounting equation and is used to record increases in revenue, income, or capital. In simple terms, credit is used to show that something is owed to the party receiving the credit.

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  • 28. 

    A clause in mortgage stating that the rights of the mortgagee shall be secondary to a subsequent mortgage is called:

    • A de-escalation clause

    • An alien nation clause

    • A subordination clause

    • None of the above

    Correct Answer
    A. A subordination clause
    Explanation
    A subordination clause is a clause in a mortgage that states that the rights of the mortgagee (the lender) will be secondary to a subsequent mortgage. This means that if the borrower takes out another mortgage on the property, the lender of the subsequent mortgage will have priority in receiving payment if the property is foreclosed upon. The subordination clause ensures that the first mortgage lender is aware of and agrees to their position being subordinate to other lenders.

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  • 29. 

    An amount owed or due. 

    • Credit

    • Cost

    • Debit

    • None of the above

    Correct Answer
    A. Debit
    Explanation
    Debit refers to an amount owed or due. It is the opposite of credit, which represents an amount received or owed to someone. When a person or a company debits an account, it means they are recording an increase in the amount owed or due. Therefore, the correct answer is Debit.

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  • 30. 

    Deceptive Trade Practices Act:

    • A law prohibiting discrimination against individuals with disabilities in employment, public services, telecommunications, public accommodations, and commercial facilities.

    • Law that allows an individual to sue a provider of goods or services for fraud or misrepresentation

    • Act prohibiting discrimination in lending on the basis of race, color, religion, national origin, sex, marital status, age or on the basis of the applicant's receipt of income form a public assistance program

    • A law prohibiting discrimination on the basis of race, color, religion, sex, handicap, familial status, or national origin in the sale or rental of housing

    Correct Answer
    A. Law that allows an individual to sue a provider of goods or services for fraud or misrepresentation
    Explanation
    The Deceptive Trade Practices Act is a law that allows an individual to sue a provider of goods or services for fraud or misrepresentation. This means that if a person is deceived or misled by a business or service provider, they have the legal right to take legal action against them. This law aims to protect consumers from false advertising, deceptive practices, and dishonest business practices. It provides individuals with a way to seek compensation and hold businesses accountable for their actions.

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  • 31. 

    Property may be technically defined as:

    • Less than freehold estates

    • Things owned by buyers and sellers

    • Rights or interests which a person has in the thing owned

    • Fee simple absolute

    Correct Answer
    A. Rights or interests which a person has in the thing owned
    Explanation
    The correct answer is "Rights or interests which a person has in the thing owned." This definition refers to the various legal rights and interests that a person can have in a property they own. It encompasses things like the right to use, possess, and transfer the property, as well as any other legal entitlements associated with ownership. This definition is broader than the other options provided, as it includes both the ownership itself and the rights and interests that come with it.

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  • 32. 

    Deduction is:

    • An amount due or owed.

    • An amount of money subtracted from income when calculating federal income tax.

    • A liability or equity entered in a party's favor.

    • An amount of money added to income when calculating federal income tax.

    Correct Answer
    A. An amount of money subtracted from income when calculating federal income tax.
    Explanation
    Deduction refers to an amount of money that is subtracted from income when calculating federal income tax. It is a reduction in taxable income, which helps to lower the overall tax liability.

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  • 33. 

    A written instrument, usually under seal, that when properly delivered and executed conveys property interest from a grantor to a grantee. 

    • Contract

    • Abstract of Title

    • Deed

    • Affidavit of Title

    Correct Answer
    A. Deed
    Explanation
    A deed is a written instrument, often with a seal, that transfers property ownership from one party (the grantor) to another party (the grantee) when properly delivered and executed. It is a legally binding document that conveys a property interest and provides evidence of ownership. Unlike a contract, which is a mutual agreement between parties, a deed specifically deals with the transfer of property rights. An abstract of title is a summary of a property's ownership history, while an affidavit of title is a sworn statement regarding the ownership of a property.

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  • 34. 

    Principle characteristics of fee simple title include all of the following except:

    • It is free of encumbrances

    • It may be willed

    • It is transferable

    • It is of indefinite duration

    Correct Answer
    A. It is free of encumbrances
    Explanation
    Fee simple title is not necessarily free of loans or other encumbrances.

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  • 35. 

    Deed of Reconveyance is:

    • A special purpose deed given by lien holders, remaindermen mortgages to relinquish their claims on a property

    • A special deed that conveys interest to a neutral, third party for security on an outstanding debt.

    • A deed used to transfer title from the trustee back to the trustor (borrower) upon full payment of the loan.

    • A deed without a warranty, generally containing only the minimum standards for valid conveyance that conveys all of the grantor's interest to a grantee.

    Correct Answer
    A. A deed used to transfer title from the trustee back to the trustor (borrower) upon full payment of the loan.
    Explanation
    A Deed of Reconveyance is a legal document that is used to transfer the title of a property from the trustee back to the trustor (borrower) once the loan has been fully paid off. This deed serves as proof that the borrower has fulfilled their obligations and is now the rightful owner of the property. It is an important step in the mortgage process and provides security to the borrower that they have successfully completed their loan payments.

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  • 36. 

    An increase in the value or worth of something due to economic or related causes such as supply and demand, which may prove to be either permanent or temporary. 

    • Depriciation

    • Appreciation

    • Appropriation

    • Amortization

    Correct Answer
    A. Appreciation
    Explanation
    Appreciation refers to the increase in the value or worth of something, which can be attributed to economic factors such as supply and demand. This increase can either be permanent or temporary.

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  • 37. 

    Which “runs with the land”?

    • Stock in a mutual water company

    • Covenants made for the benefit of the land

    • Easements appurtenant to the land

    • All of these

    Correct Answer
    A. All of these
    Explanation
    All of these run with the land, including the mutual water company stock which is inseparable.

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  • 38. 

    The actual method by which a district imposes a real estate tax

    • Appraisal

    • Cost approach

    • Appropriation

    • Appreaciation

    Correct Answer
    A. Appropriation
    Explanation
    Appropriation refers to the process by which a district imposes a real estate tax. It involves the allocation of funds from the district's budget to cover the costs and expenses associated with the tax. This can include expenses related to the assessment and collection of the tax, as well as the administration and enforcement of tax laws. The appropriation method ensures that the necessary funds are available for the district to carry out its real estate tax responsibilities.

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  • 39. 

    A method of transferring the rights and obligations of a contract to a third party without canceling the contract

    • Assignment

    • Deed

    • Direct deeding

    • Deed of release

    Correct Answer
    A. Assignment
    Explanation
    Assignment is the correct answer because it refers to the act of transferring the rights and obligations of a contract to a third party without canceling the contract. This means that the original parties to the contract remain bound by their obligations, but a new party is now responsible for fulfilling the rights and obligations of one of the original parties. This transfer of rights and obligations is typically done through a written agreement called an assignment.

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  • 40. 

    Baird Exchange is:

    • A type of 3-party 1031 exchange wherein the buyer and seller swap properties and the buyer sells the property he or she has acquired to a third party

    • A type of 3-party exchange wherein the buyer purchases the property of a third party in order to exchange it with the seller

    • Exchange of like properties on a tax-deferred basis.

    • The exchanger sells the property he or she is relinquishing before buying a replacement property.

    Correct Answer
    A. A type of 3-party 1031 exchange wherein the buyer and seller swap properties and the buyer sells the property he or she has acquired to a third party
    Explanation
    Baird Exchange is a type of 3-party 1031 exchange where the buyer and seller exchange properties, and then the buyer sells the property they acquired to a third party. This means that the buyer and seller are directly involved in the exchange, but the buyer ultimately sells the property to someone else. This type of exchange allows for the tax-deferred exchange of like properties.

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  • 41. 

    Mr. Jones’ home contains 20,000 square feet of floor space. He intends to install wall-to-wall carpeting at a cost of $6.00 per square yard, but will carpet only 60%of the home. The cost of the carpeting is most nearly?

    • 10000

    • 10750

    • 12850

    • 20000

    Correct Answer
    A. 10000
    Explanation
    First take 60% x $20,000 = 12,000 sq.ft. This is the amount of floor space to be carpeted. Next convert 12,000 sq.ft. to sq. yd. 12,000 divided by 9 = 1333.33 sq. yd. Now take the amount of sq. yd. and multiply by the price per sq. yd. 1333.33 x $6.00 = $7,999.98 so the answer is closest to $10,000

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  • 42. 

    An instrument which usually transfers possession of real property, but not always ownership in the property is called a:

    • Trust deed

    • Grant deed

    • Quitclaim deed

    • Deed in lieu of foreclosure

    Correct Answer
    A. Trust deed
    Explanation
    A trust deed is an instrument that transfers possession of real property, typically from a borrower to a trustee, as security for a loan. It does not always transfer ownership in the property, as the borrower retains ownership rights. The trustee holds the property in trust until the loan is repaid, at which point the borrower regains full ownership. Therefore, a trust deed transfers possession but not always ownership of the property.

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  • 43. 

    Under the bulk sale provisions of Division 6 of the Uniform Commercial Code, the publishing and recording requirements are intended to alert which of the following about the intended transfer:

    • Broker

    • Creditor

    • Vendor

    • Vendee

    Correct Answer
    A. Creditor
    Explanation
    The creditor is intended to be protected by the protected by the publishing requirement of the Uniform Commercial code bulk sale provisions.

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  • 44. 

    A contractor obtained a construction loan, and the loan funds are to be released in a series of progress payments. Most lenders disburse the last payment when the:

    • Building is completed

    • Net sales of the lessee’s business

    • Buyer approves the construction

    • Period to file a lien has expired

    Correct Answer
    A. Period to file a lien has expired
    Explanation
    The usual waiting period for the final disbursement is 35 days after the recording of the Notice of Completion. It would be hazardous to advance the final disbursement before that time for fear that there might be subcontractors who have not been paid and will file mechanics’ liens. The subcontractors are wiped out 31 days after recording the Notice of Completion.

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  • 45. 

    If an owner pays an unlicensed person for selling his home, the one who would prosecute the unlicensed party as a violation of the Real Estate Law would be the:

    • State Attorney General

    • Real Estate Commissioner

    • Loan Sheriff

    • District Attorney at the respective county

    Correct Answer
    A. District Attorney at the respective county
    Explanation
    The District Attorney prosecutes violations of the Real Estate Law within the county where the violations occur.

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  • 46. 

    The Real Estate Law does not permit a partnership of which of the following to operate a Real Estate Office?

    • A licensed real estate broker and a licensed insurance broker

    • A licensed real estate broker and a licensed real estate salesperson

    • A licensed real estate broker and another licenced real estate broker

    • None of the above

    Correct Answer
    A. None of the above
    Explanation
    The law does not prohibit a partnership between a broker and any other person including a salesperson.

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  • 47. 

    Escrow closed May 1st with interest on a $4415 second trust deed paid to June 1st. If the interest rate is 7.2%, the debit to the buyer, if the buyer assumed the loan, would be:

    • 22.09

    • 26.49

    • 4415

    • None of the above

    Correct Answer
    A. 26.49
    Explanation
    Since the sellers paid one month's interest in advance, this must be returned to them by the buyer. This will be a debit on the buyer's statement. $4415 X .006 (7.2% divided by 12) = $26.49

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  • 48. 

    The appraisal principle that states that the highest property values are realized when improvements are proportional to one another and the land in size and type.

    • Cost approach

    • Appraisal value

    • Balance

    • Cost of credit

    Correct Answer
    A. Balance
    Explanation
    The appraisal principle that states that the highest property values are realized when improvements are proportional to one another and the land in size and type is called "Balance". This means that in order to maximize the value of a property, the improvements made on the land should be in harmony with each other and with the land itself. This principle emphasizes the importance of maintaining a balance between the various components of a property, such as the buildings, landscaping, and size/type of land, in order to achieve the highest possible value.

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  • 49. 

    A provision of Federal Law whereby a debtor surrenders his assets and is relieved of future obligation to repay his unsecured debts. 

    • Deed of release

    • Bankruptcy

    • Foreclosure

    • Forebearance

    Correct Answer
    A. Bankruptcy
    Explanation
    Bankruptcy is the correct answer because it refers to a provision in Federal Law where a debtor surrenders their assets and is relieved of the obligation to repay their unsecured debts in the future. Bankruptcy is a legal process that allows individuals or businesses to seek relief from their debts when they are unable to repay them. It provides a fresh start for debtors by allowing them to eliminate or restructure their debts under the supervision of a bankruptcy court.

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Quiz Review Timeline (Updated): Feb 4, 2024 +

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  • Current Version
  • Feb 04, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Sep 14, 2012
    Quiz Created by
    Happygirl323

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