Real Estate Principles: A Value Approach (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate) 3rd Edition Test Bank

Preview (31 of 209 Pages)

100%

Purchase to unlock

Loading page image...

11.When viewed as a tangible asset, real estate can be defined as the land and its permanent improvements.Improvementsonthe land include:A. fencesB. walkwaysC. sewer systemsD. streets2.Real estate is property, which can be either a tangible or an intangible asset. Which of the followingwould be considered an intangible asset?A. LandB. BuildingC. MortgageD. Motor home3.When the value of land is considered, it is important to distinguish between land and raw land. Raw landrefers to a(n):A. building siteB. structure on the landC. property's infrastructureD. area that does not include any improvements4.The size of a single family residential lot is typically:A. less than one acreB. between one and two acresC. between two and three acresD. greater than three acres5.As of 2008, the single largest asset category in the net worth portfolios of households is:A. government and corporate bondsB. stocks and mutual fund sharesC. consumer durable goodsD. housing6.As of December 2008, the market value of outstanding real estate mortgage debt was:A. greater than the market value of corporate equitiesB. less than the market value of U.S. Treasury securitiesC. less than the market value of corporate and foreign bondsD. greater than the market value of corporate, foreign, and U.S. Treasury debt securities combined7.Real estate values derive from the interaction of three different sectors in the economy. Which of thefollowing sectors serves to allocate financial resources among households and firms requiring funds?A. User marketB. Capital marketC. GovernmentD. Local market8.The demand for real estate derives from the need that participants in the user market have for shelterand convenient access to other locations. The primary participants in the user market include all of thefollowing EXCEPT:A. owner occupantsB. tenantsC. rentersD. pension fund managers

Loading page image...

9.In 2007, the housing market was widely viewed as:A. a resilient asset class that significantly softened the severity of the recessionB. a surging market pushing prices and new construction to unprecedented levelsC. the primary cause of a major economic downturnD. unrelated to the condition of the U.S. economy10. Capital markets can be divided into four main categories: private equity, public equity, private debt, andpublic debt. An example of a real estate asset that trades in the private equity market is:A. real propertyB. home mortgagesC. equity REITsD. mortgage backed securities11. Primarily through land use controls and property tax policy, which of the following branches ofgovernment has the largest influence on real estate values?A. Local governmentB. State governmentC. National governmentD. Foreign government12. Competition in the _________, where households and firms compete for the currently available supply oflocations and space, determines the level of rental income for each submarket and property.A. user marketB. capital marketC. governmentD. local market13. The expected stream of rental income is capitalized into value by converting expected future cash flowsinto present value through a process called:A. amortizationB. discountingC. compoundingD. accounting14. Large commercial properties valued well over $10 million are often referred to as:A. segmented propertyB. investment-grade propertyC. speculative-grade propertyD. immobile property15. Each property has unique features, whether it is its age, the building design of its structures, or itslocation. As such, real estate markets, in contrast to other goods, are considered:A. homogeneousB. heterogeneousC. substitutesD. complements16. What proportion of U.S. households own their home?A. One-thirdB. One-halfC. Two-thirdsD. Three-fourths17. The national government can have a significant impact on the value of real estate through:A. property tax policyB. income tax policyC. building codesD. real estate licensing requirements

Loading page image...

18. The required rate of return that an individual demands on a real estate investment is determined inthe:A. user marketB. capital marketC. governmentD. local market19. The market for buying, selling, and leasing real estate can be characterized by all of the followingEXCEPT:A. localized marketsB. highly segmented marketsC. privately negotiated contractsD. low transaction costs20. Especially in terms of retail properties, which of the following attributes is considered the most likely toresult in drastic value differences between otherwise similar properties?A. Structural attributesB. Financing attributesC. Location attributesD. Land attributes

Loading page image...

1 Key1.When viewed as a tangible asset, real estate can be defined as the land and its permanentimprovements. Improvementsonthe land include:A.fencesB. walkwaysC. sewer systemsD. streetsDifficulty: IntermediateLearning Objective: 1Ling - Chapter 01 #12.Real estate is property, which can be either a tangible or an intangible asset. Which of the followingwould be considered an intangible asset?A. LandB. BuildingC.MortgageD. Motor homeDifficulty: BasicLearning Objective: 1Ling - Chapter 01 #23.When the value of land is considered, it is important to distinguish between land and raw land. Rawland refers to a(n):A. building siteB. structure on the landC. property's infrastructureD.area that does not include any improvementsDifficulty: BasicLearning Objective: 1Ling - Chapter 01 #34.The size of a single family residential lot is typically:A.less than one acreB. between one and two acresC. between two and three acresD. greater than three acresDifficulty: IntermediateLearning Objective: 2Ling - Chapter 01 #45.As of 2008, the single largest asset category in the net worth portfolios of households is:A. government and corporate bondsB. stocks and mutual fund sharesC. consumer durable goodsD.housingDifficulty: IntermediateLearning Objective: 4Ling - Chapter 01 #56.As of December 2008, the market value of outstanding real estate mortgage debt was:A. greater than the market value of corporate equitiesB. less than the market value of U.S. Treasury securitiesC. less than the market value of corporate and foreign bondsD.greater than the market value of corporate, foreign, and U.S. Treasury debt securities combinedDifficulty: IntermediateLearning Objective: 3Ling - Chapter 01 #6

Loading page image...

7.Real estate values derive from the interaction of three different sectors in the economy. Which of thefollowing sectors serves to allocate financial resources among households and firms requiring funds?A. User marketB.Capital marketC. GovernmentD. Local marketDifficulty: IntermediateLearning Objective: 3Ling - Chapter 01 #78.The demand for real estate derives from the need that participants in the user market have for shelterand convenient access to other locations. The primary participants in the user market include all of thefollowing EXCEPT:A. owner occupantsB. tenantsC. rentersD.pension fund managersDifficulty: IntermediateLearning Objective: 3Ling - Chapter 01 #89.In 2007, the housing market was widely viewed as:A. a resilient asset class that significantly softened the severity of the recessionB. a surging market pushing prices and new construction to unprecedented levelsC.the primary cause of a major economic downturnD. unrelated to the condition of the U.S. economyDifficulty: BasicLearning Objective: 3Ling - Chapter 01 #910.Capital markets can be divided into four main categories: private equity, public equity, private debt,and public debt. An example of a real estate asset that trades in the private equity market is:A.real propertyB. home mortgagesC. equity REITsD. mortgage backed securitiesDifficulty: IntermediateLearning Objective: 3Ling - Chapter 01 #1011.Primarily through land use controls and property tax policy, which of the following branches ofgovernment has the largest influence on real estate values?A.Local governmentB. State governmentC. National governmentD. Foreign governmentDifficulty: IntermediateLearning Objective: 3Ling - Chapter 01 #1112.Competition in the _________, where households and firms compete for the currently availablesupply of locations and space, determines the level of rental income for each submarket andproperty.A.user marketB. capital marketC. governmentD. local marketDifficulty: IntermediateLearning Objective: 3Ling - Chapter 01 #12

Loading page image...

13.The expected stream of rental income is capitalized into value by converting expected future cashflows into present value through a process called:A. amortizationB.discountingC. compoundingD. accountingDifficulty: BasicLearning Objective: 3Ling - Chapter 01 #1314.Large commercial properties valued well over $10 million are often referred to as:A. segmented propertyB.investment-grade propertyC. speculative-grade propertyD. immobile propertyDifficulty: IntermediateLearning Objective: 5Ling - Chapter 01 #1415.Each property has unique features, whether it is its age, the building design of its structures, or itslocation. As such, real estate markets, in contrast to other goods, are considered:A. homogeneousB.heterogeneousC. substitutesD. complementsDifficulty: BasicLearning Objective: 5Ling - Chapter 01 #1516.What proportion of U.S. households own their home?A. One-thirdB. One-halfC.Two-thirdsD. Three-fourthsDifficulty: IntermediateLearning Objective: 4Ling - Chapter 01 #1617.The national government can have a significant impact on the value of real estate through:A. property tax policyB.income tax policyC. building codesD. real estate licensing requirementsDifficulty: IntermediateLearning Objective: 3Ling - Chapter 01 #1718.The required rate of return that an individual demands on a real estate investment is determined inthe:A. user marketB.capital marketC. governmentD. local marketDifficulty: IntermediateLearning Objective: 3Ling - Chapter 01 #18

Loading page image...

19.The market for buying, selling, and leasing real estate can be characterized by all of the followingEXCEPT:A. localized marketsB. highly segmented marketsC. privately negotiated contractsD.low transaction costsDifficulty: IntermediateLearning Objective: 5Ling - Chapter 01 #1920.Especially in terms of retail properties, which of the following attributes is considered the most likelyto result in drastic value differences between otherwise similar properties?A. Structural attributesB. Financing attributesC.Location attributesD. Land attributesDifficulty: IntermediateLearning Objective: 5Ling - Chapter 01 #20

Loading page image...

1 SummaryCategory# of QuestionsDifficulty: Basic5Difficulty: Intermediate15Learning Objective: 13Learning Objective: 21Learning Objective: 310Learning Objective: 42Learning Objective: 54Ling - Chapter 0120

Loading page image...

21.A principal definition of real estate is as a bundle of rights associated with the possession, use, anddisposition of property. Each of the following is a fundamental characteristic of property rightsEXCEPT:A. they are enforceable by the government.B. they apply only to tangible assets.C. they are nonrevocable.D. they are enduring.2.Property rights can be divided into two classes, real and personal. Which of the following is an exampleof real property?A. VehiclesB. Stocks and bondsC. PatentsD. Commercial building3.A fixture is an object that formerly was personal property but has become real property. Of the followingfour rules for determining whether an object has become a fixture, which is the most dominant (i.e. ifthere is a conflict, which rule prevails)?A. Manner of the attachmentB. Character of the article and manner of adaptationC. Intention of the partiesD. Relation of the parties4.Which of the following items would most likely be considered a fixture?A. Custom bookshelvesB. Refrigerator in a single-family residence being soldC. Fence installed by the tenant of a rental propertyD. Antique chandelier5.Property rights can be dismantled into lesser bundles, referred to as interests, which can then be held bydifferent individuals. Interests in real property that include possessions are referred to as:A. fixturesB. townshipsC. licensesD. estates6.Which of the following types of ownership estates is the most complete bundle of rights, and thereforecarries the greatest value?A. Fee simple absoluteB. Fee simple conditionalC. Ordinary life estateD. Legal life estate7.Suppose an older homeowner lives adjacent to an expanding university that is interested in acquiringher residence for future university use. To allow the homeowner to continue to retain all rights ofexclusive possession, use, and enjoyment during her lifetime, yet provide the university with the right ofdisposition, the university may want to purchase a:A. life estateB. reverter interestC. remainder estateD. tenancy for years

Loading page image...

8.While leasehold interests are considered estates, they differ from freehold estates in all of the followingrespects EXCEPT:A. leasehold estates are limited in time.B. the right of disposition is diminished with a leasehold estate.C. leasehold estates are not titled interests.D. leasehold estates are possessory interests.9.Nonposessory interests (i.e. bundles of real property rights that do not include possession) include all ofthe following EXCEPT:A. leasehold interestsB. easementsC. restrictive covenantsD. liens10. An easement is the right to use land for a specific and limited purpose. Which of the following easementsinvolves a relationship between two parcels of land, is a permanent feature of both parcels involved, andgives the dominant parcel some intrusive use of the servient parcel?A. Affirmative easement appurtenantB. Negative easement appurtenantC. Easement in grossD. License11. Which of the following is an example of a negative easement appurtenant?A. A driveway easement across one parcel to another.B. Rights-of-way for roads.C.A common drive easement where owners of adjoining lots must permit each other to use a drivewaylying on their shaped property line.D. A scenic easement used to restrict construction on adjacent parcels so as to preserve a valued view.12. An important distinction both practically and conceptually is the difference between an easement and alicense. In contrast to an easement, a license:A. is revocable by the grantor.B. can be granted orally.C. is enduring.D. grants permission to use another's land for a specific and limited purpose.13. A lien is an interest in real property that serves as security for an obligation. Which of the following is anexample of a general lien?A. Property tax and assessment lienB. Mortgage lienC. Lien arising from a court judgment unrelated to ownership of the propertyD. Mechanics' lien14. Which of the following types of liens is automatically superior to any other lien?A. Property tax and assessment lienB. Mortgage lienC. Lien arising from a court judgment unrelated to ownership of the propertyD. Mechanics' lien15. Co-ownership can occur in a variety of ways, with significant variation in how the bundle of rights isjointly held. All of the following entities are forms of direct co-ownership EXCEPT:A. Tenancy in commonB. Tenancy by the entiretyC. CondominiumD. Partnership

Loading page image...

16. Direct co-ownership implies that each co-owner holds a titled interest in the property, but withoutexclusive possession with respect to the other co-owners. Which of the following types of direct co-ownership is considered the closest to the fee simple absolute estate?A. Tenancy in commonB. Tenancy by the entiretyC. CondominiumD. Partnership17. Which of the following types of direct co-ownership is a form of joint tenancy for husband and wife?A. Tenancy in commonB. Tenancy by the entiretyC. CondominiumD. Partnership18. Which of the following types of direct co-ownership combines single person ownership with tenancy incommon?A. CooperativeB. Tenancy by the entiretyC. CondominiumD. Partnership19. Which of the following forms of co-ownership, historically used for apartment buildings, is notconsidered a form of true direct co-ownership, but rather qualifies as a proprietary corporation?A. CooperativeB. Tenancy by the entiretyC. CondominiumD. Partnership20. Property rights created from marriage have a clear implication for real estate transactions. Which of thefollowing marital property rights gives a spouse a one-half claim on all property acquired "from the fruitsof the marriage?"A. DowerB. CurtesyC. Elective shareD. Community property21. Restrictive covenants impose constraints on the use of the land, yet are limited in terms of theirenforcement. All of the following are true regarding the enforcement of restrictive covenantsEXCEPT:A.Courts have been reluctant to maintain restrictive covenants for an unreasonably long time and in somecases states have enacted a time limit on their applicability.B. Courts may refuse to enforce restrictive covenants due to changing neighborhood character.C. Courts may refuse to enforce restrictive covenants due to abandonment of the property.D. Restrictive covenants can be enforced by those who do not hold a legal interest in the property.22. When multiple individuals have use of a property, but their interests are not simultaneous, this type of co-ownership is referred to as a:A. CooperativeB. Tenancy by the entiretyC. CondominiumD. Timeshare

Loading page image...

23. In some states, mining companies are deemed to own not only the minerals but also the space theminerals occupied before they were removed, thereby earning the distinction of ownership states.However, when the owner of an oil or gas well is able to claim all that is pumped from it, regardless ofwhether the oil or gas migrated from adjacent property, this is referred to as a _____________ state.A. Manner of attachmentB. Law of captureC. Intention of the partiesD. Relation of the parties24. Bill and Mike go in together to purchase 342 acres of land to use for hunting and family vacations. Tenyears later, Bill dies and Bill's wife wants to sell his half of the land. Mike informs her that, unfortunately,she has no claim to the land and that upon Bill's death, his ownership interest transferred to Mike. Whattype of co-ownership did Bill and Mike have?A. Tenancy by the entiretiesB. Tenancy in commonC. Joint tenancyD. Condominium25. The City of Grand Rapids installed a new water main on Oak Street. The city then decided to charge theproperty owners along Oak Street a proportional cost of the new water main. If a property owner refusesto pay their proportional share of the cost, the city may file a(n):A. property tax lien.B. assessment lien.C. general lien.D. mechanics' lien.26. Jeff owns 150 acres between a highway and a public beach. The state would like to build a road directlyfrom the highway to the beach across Jeff's property. The space for this road would be considereda(n):A. easement appurtenant.B. easement in gross.C. negative easement appurtenant.D. positive easement appurtenant.

Loading page image...

2 Key1.A principal definition of real estate is as a bundle of rights associated with the possession, use, anddisposition of property. Each of the following is a fundamental characteristic of property rightsEXCEPT:A. they are enforceable by the government.B.they apply only to tangible assets.C. they are nonrevocable.D. they are enduring.Difficulty: BasicLearning Objective: 1Ling - Chapter 02 #12.Property rights can be divided into two classes, real and personal. Which of the following is anexample of real property?A. VehiclesB. Stocks and bondsC. PatentsD.Commercial buildingDifficulty: BasicLearning Objective: 1Ling - Chapter 02 #23.A fixture is an object that formerly was personal property but has become real property. Of thefollowing four rules for determining whether an object has become a fixture, which is the mostdominant (i.e. if there is a conflict, which rule prevails)?A. Manner of the attachmentB. Character of the article and manner of adaptationC.Intention of the partiesD. Relation of the partiesDifficulty: IntermediateLearning Objective: 1Ling - Chapter 02 #34.Which of the following items would most likely be considered a fixture?A.Custom bookshelvesB. Refrigerator in a single-family residence being soldC. Fence installed by the tenant of a rental propertyD. Antique chandelierDifficulty: IntermediateLearning Objective: 1Ling - Chapter 02 #45.Property rights can be dismantled into lesser bundles, referred to as interests, which can then be heldby different individuals. Interests in real property that include possessions are referred to as:A. fixturesB. townshipsC. licensesD.estatesDifficulty: BasicLearning Objective: 2Ling - Chapter 02 #56.Which of the following types of ownership estates is the most complete bundle of rights, and thereforecarries the greatest value?A.Fee simple absoluteB. Fee simple conditionalC. Ordinary life estateD. Legal life estateDifficulty: IntermediateLearning Objective: 2Ling - Chapter 02 #6

Loading page image...

7.Suppose an older homeowner lives adjacent to an expanding university that is interested in acquiringher residence for future university use. To allow the homeowner to continue to retain all rights ofexclusive possession, use, and enjoyment during her lifetime, yet provide the university with the rightof disposition, the university may want to purchase a:A. life estateB. reverter interestC.remainder estateD. tenancy for yearsDifficulty: AdvancedLearning Objective: 2Ling - Chapter 02 #78.While leasehold interests are considered estates, they differ from freehold estates in all of thefollowing respects EXCEPT:A. leasehold estates are limited in time.B. the right of disposition is diminished with a leasehold estate.C. leasehold estates are not titled interests.D.leasehold estates are possessory interests.Difficulty: IntermediateLearning Objective: 2Ling - Chapter 02 #89.Nonposessory interests (i.e. bundles of real property rights that do not include possession) include allof the following EXCEPT:A.leasehold interestsB. easementsC. restrictive covenantsD. liensDifficulty: IntermediateLearning Objective: 3Ling - Chapter 02 #910.An easement is the right to use land for a specific and limited purpose. Which of the followingeasements involves a relationship between two parcels of land, is a permanent feature of both parcelsinvolved, and gives the dominant parcel some intrusive use of the servient parcel?A.Affirmative easement appurtenantB. Negative easement appurtenantC. Easement in grossD. LicenseDifficulty: BasicLearning Objective: 3Ling - Chapter 02 #1011.Which of the following is an example of a negative easement appurtenant?A. A driveway easement across one parcel to another.B. Rights-of-way for roads.C.A common drive easement where owners of adjoining lots must permit each other to use a drivewaylying on their shaped property line.D.A scenic easement used to restrict construction on adjacent parcels so as to preserve a valued view.Difficulty: IntermediateLearning Objective: 3Ling - Chapter 02 #1112.An important distinction both practically and conceptually is the difference between an easement anda license. In contrast to an easement, a license:A. is revocable by the grantor.B. can be granted orally.C.is enduring.D. grants permission to use another's land for a specific and limited purpose.Difficulty: BasicLearning Objective: 3Ling - Chapter 02 #12

Loading page image...

13.A lien is an interest in real property that serves as security for an obligation. Which of the following isan example of a general lien?A. Property tax and assessment lienB. Mortgage lienC.Lien arising from a court judgment unrelated to ownership of the propertyD. Mechanics' lienDifficulty: IntermediateLearning Objective: 5Ling - Chapter 02 #1314.Which of the following types of liens is automatically superior to any other lien?A.Property tax and assessment lienB. Mortgage lienC. Lien arising from a court judgment unrelated to ownership of the propertyD. Mechanics' lienDifficulty: IntermediateLearning Objective: 5Ling - Chapter 02 #1415.Co-ownership can occur in a variety of ways, with significant variation in how the bundle of rights isjointly held. All of the following entities are forms of direct co-ownership EXCEPT:A. Tenancy in commonB. Tenancy by the entiretyC. CondominiumD.PartnershipDifficulty: BasicLearning Objective: 6Ling - Chapter 02 #1516.Direct co-ownership implies that each co-owner holds a titled interest in the property, but withoutexclusive possession with respect to the other co-owners. Which of the following types of direct co-ownership is considered the closest to the fee simple absolute estate?A.Tenancy in commonB. Tenancy by the entiretyC. CondominiumD. PartnershipDifficulty: IntermediateLearning Objective: 6Ling - Chapter 02 #1617.Which of the following types of direct co-ownership is a form of joint tenancy for husband and wife?A. Tenancy in commonB.Tenancy by the entiretyC. CondominiumD. PartnershipDifficulty: BasicLearning Objective: 6Ling - Chapter 02 #1718.Which of the following types of direct co-ownership combines single person ownership with tenancyin common?A. CooperativeB. Tenancy by the entiretyC.CondominiumD. PartnershipDifficulty: BasicLearning Objective: 6Ling - Chapter 02 #18

Loading page image...

19.Which of the following forms of co-ownership, historically used for apartment buildings, is notconsidered a form of true direct co-ownership, but rather qualifies as a proprietary corporation?A.CooperativeB. Tenancy by the entiretyC. CondominiumD. PartnershipDifficulty: BasicLearning Objective: 6Ling - Chapter 02 #1920.Property rights created from marriage have a clear implication for real estate transactions. Which ofthe following marital property rights gives a spouse a one-half claim on all property acquired "fromthe fruits of the marriage?"A. DowerB. CurtesyC. Elective shareD.Community propertyDifficulty: BasicLearning Objective: 7Ling - Chapter 02 #2021.Restrictive covenants impose constraints on the use of the land, yet are limited in terms of theirenforcement. All of the following are true regarding the enforcement of restrictive covenantsEXCEPT:A.Courts have been reluctant to maintain restrictive covenants for an unreasonably long time and insome cases states have enacted a time limit on their applicability.B. Courts may refuse to enforce restrictive covenants due to changing neighborhood character.C. Courts may refuse to enforce restrictive covenants due to abandonment of the property.D.Restrictive covenants can be enforced by those who do not hold a legal interest in the property.Difficulty: AdvancedLearning Objective: 4Ling - Chapter 02 #2122.When multiple individuals have use of a property, but their interests are not simultaneous, this type ofco-ownership is referred to as a:A. CooperativeB. Tenancy by the entiretyC. CondominiumD.TimeshareDifficulty: BasicLearning Objective: 8Ling - Chapter 02 #2223.In some states, mining companies are deemed to own not only the minerals but also the space theminerals occupied before they were removed, thereby earning the distinction of ownership states.However, when the owner of an oil or gas well is able to claim all that is pumped from it, regardlessof whether the oil or gas migrated from adjacent property, this is referred to as a _____________state.A. Manner of attachmentB.Law of captureC. Intention of the partiesD. Relation of the partiesDifficulty: AdvancedLearning Objective: 1Ling - Chapter 02 #23

Loading page image...

24.Bill and Mike go in together to purchase 342 acres of land to use for hunting and family vacations.Ten years later, Bill dies and Bill's wife wants to sell his half of the land. Mike informs her that,unfortunately, she has no claim to the land and that upon Bill's death, his ownership interesttransferred to Mike. What type of co-ownership did Bill and Mike have?A. Tenancy by the entiretiesB. Tenancy in commonC.Joint tenancyD. CondominiumDifficulty: AdvancedLearning Objective: 6Ling - Chapter 02 #2425.The City of Grand Rapids installed a new water main on Oak Street. The city then decided to chargethe property owners along Oak Street a proportional cost of the new water main. If a property ownerrefuses to pay their proportional share of the cost, the city may file a(n):A. property tax lien.B.assessment lien.C. general lien.D. mechanics' lien.Difficulty: AdvancedLearning Objective: 5Ling - Chapter 02 #2526.Jeff owns 150 acres between a highway and a public beach. The state would like to build a roaddirectly from the highway to the beach across Jeff's property. The space for this road would beconsidered a(n):A. easement appurtenant.B.easement in gross.C. negative easement appurtenant.D. positive easement appurtenant.Difficulty: AdvancedLearning Objective: 3Ling - Chapter 02 #26

Loading page image...

2 SummaryCategory# of QuestionsDifficulty: Advanced6Difficulty: Basic11Difficulty: Intermediate9Learning Objective: 15Learning Objective: 24Learning Objective: 35Learning Objective: 41Learning Objective: 53Learning Objective: 66Learning Objective: 71Learning Objective: 81Ling - Chapter 0226

Loading page image...

31.A deed is a special form of written contract used to convey a permanent interest in real property. Unlikemost contracts, a deed requires:A. both parties to be legally competent and of legal majority age.B. only the grantee to be legally competent and of legal majority age.C. only the grantor to be legally competent and of legal majority age.D. both parties to make promises to perform.2.The type of deed offered by the grantor is communicated through a phrase such as "does herby grant,bargain, sell and convey unto . . ." This clause is referred to as the:A. recital of considerationB. words of conveyanceC. covenantD. habendum clause3.The covenants in a deed are the most important differences among types of deeds. Which of the followingcovenants promises that the grantor truly has good title and the right to convey it?A. Covenant of seizinB. Covenant against encumbrancesC. Covenant of quiet enjoymentD. Exceptions and reservation clause4.Which of the following clauses contained in a deed defines or limits the type of interest being conveyed?A. Recital of considerationB. Words of conveyanceC. CovenantD. Habendum clause5.Although deeds can only deliver what a grantor actually owns, they can still vary in "quality." Which ofthe following types of deeds is considered to be the "highest quality" because it contains the full set oflegal promises the grantor can make?A. General warranty deedB. Special warranty deedC. Deed of bargain and saleD. Quitclaim deed6.Considered a "questionable conveyance of title" by most courts, which of the following types of deedsis worded to imply no claim of title, but rather only convey what interest the grantor actually has? (Hint:This type of deed may be used by a developer to convey certain lands of a subdivision to the localgovernment through dedication.)A. General warranty deedB. Special warranty deedC. Deed of bargain and saleD. Quitclaim deed7.While several kinds of real property conveyances result from events beyond the control of the grantor,the majority of conveyances are voluntary through a deed. Which of the following is an example of avoluntary conveyance of real property with a deed?A. PatentB. ProbateC. CondemnationD. Implied Easement

Loading page image...

8.At the death of a property owner, property will convey either in accordance with a will or without awill. If a will dictates the distribution of the decedent's real property, the property is said to be conveyedby:A. patentB. deviseC. the law of descentD. dedication9.While the vast majority of conveyances of real property are private grants through a deed, there aremultiple ways in which voluntary conveyance can occur without a deed. Which of the following types ofeasements can occur if a landowner gives an adjacent landowner permission to depend on her land? (E.g.A landowner may give a neighbor permission to rely on sewer access or drainage across his or her land.)A. Easement by prior useB. Easement of necessityC. Easement by estoppelD. Dedication10. When a landowner subdivides land in a way that causes a parcel to be landlocked, it is possible forproperty to be voluntarily conveyed without a deed. If the landlocked parcel has no prior path of access,which of the following types of easements will automatically be created to make the land useful?A. Easement by prior useB. Easement of necessityC. Easement by estoppelD. Dedication11. An owner of land may involuntarily and unknowingly give up the rights to land. When a fee simpleinterest is conveyed to a new owner without a deed and without the consent or knowledge of the originalowner, this is said to be conveyed by:A. PrescriptionB. Adverse possessionC. AccretionD. Reliction12. Once a document conveying an interest in real property is placed in the public records it is binding on thepublic, whether or not they make an effort to learn of it. Based on the common law tradition, this policy isknown as the:A. Statute of FraudsB. doctrine of constructive noticeC. habendum clauseD. actual notice13. A contract for sale of real estate usually calls for the seller to provide evidence of title as a requisite tocompleting the sale. Today, the predominant medium through which a seller meets this requirement is byproviding:A. only a title abstract.B. only an attorney's opinion of title.C. only a title insurance commitment.D. only a Torrens certificate.14. A law requiring any contract conveying a real property interest to be in writing in order to be enforceableis a modern application of the:A. Statute of FraudsB. doctrine of constructive noticeC. habendum clauseD. actual notice

Loading page image...

15. Unlike other forms of evidence of title, title insurance guards the grantee against certain risks. However,there are a number of important limits to title insurance. Which of the following is an example of thelimits to title insurance?A. It does not protect the grantee from the threat of physical damage to the property.B. It does not protect a grantee against the legal costs of defending the title.C. It does not protect a grantee against loss of the property in case of an unsuccessful title defense.D.It does not protect against legal attack on the owner's title arising from a claim that diminishes theowner's rights of use.16. Recognizing that only recent conveyances alter the status of title, states have established laws that setlimits on how far back a title search must go. These laws are commonly referred to as:A. Statute of FraudsB. recording statutesC. encroachmentsD. marketable title laws17. One of the most important requirements of a land description is for it to be unambiguous. Which of thefollowing methods of property description is the most unambiguous and is appropriate for use in legaldocuments?A. Street AddressB. Tax parcel numberC. Reference to prominent features of the land (e.g. monuments, river banks, roads)D. Metes and bounds18. The most flexible method of land description, capable of describing even the most irregular of parcels,can be described as a very precise, compass-directed walk around the boundary of a parcel. This methodis commonly referred to as:A. metes and boundsB. subdivision plat lot and block numberC. government rectangular surveyD. tax parcel number19. Most often used in the description of urban property, which of the following methods of land descriptioncontains information regarding the location of various easements and may even contain a list of restrictivecovenants?A. metes and boundsB. subdivision plat lot and block numberC. government rectangular surveyD. tax parcel number20. Initially used to survey the Old Northwest Territory (Ohio, Indiana, Illinois, and Michigan) in 1789,which of the following methods of land description relies on townships and section numbers as essentialunits of identification?A. metes and boundsB. subdivision plat lot and block numberC. government rectangular surveyD. tax parcel number

Loading page image...

3 Key1.A deed is a special form of written contract used to convey a permanent interest in real property.Unlike most contracts, a deed requires:A. both parties to be legally competent and of legal majority age.B. only the grantee to be legally competent and of legal majority age.C.only the grantor to be legally competent and of legal majority age.D. both parties to make promises to perform.Difficulty: BasicLearning Objective: 1Ling - Chapter 03 #12.The type of deed offered by the grantor is communicated through a phrase such as "does herby grant,bargain, sell and convey unto . . ." This clause is referred to as the:A. recital of considerationB.words of conveyanceC. covenantD. habendum clauseDifficulty: BasicLearning Objective: 2Ling - Chapter 03 #23.The covenants in a deed are the most important differences among types of deeds. Which of thefollowing covenants promises that the grantor truly has good title and the right to convey it?A.Covenant of seizinB. Covenant against encumbrancesC. Covenant of quiet enjoymentD. Exceptions and reservation clauseDifficulty: BasicLearning Objective: 3Ling - Chapter 03 #34.Which of the following clauses contained in a deed defines or limits the type of interest beingconveyed?A. Recital of considerationB. Words of conveyanceC. CovenantD.Habendum clauseDifficulty: BasicLearning Objective: 2Ling - Chapter 03 #45.Although deeds can only deliver what a grantor actually owns, they can still vary in "quality." Whichof the following types of deeds is considered to be the "highest quality" because it contains the full setof legal promises the grantor can make?A.General warranty deedB. Special warranty deedC. Deed of bargain and saleD. Quitclaim deedDifficulty: IntermediateLearning Objective: 3Ling - Chapter 03 #5

Loading page image...

6.Considered a "questionable conveyance of title" by most courts, which of the following types of deedsis worded to imply no claim of title, but rather only convey what interest the grantor actually has?(Hint: This type of deed may be used by a developer to convey certain lands of a subdivision to thelocal government through dedication.)A. General warranty deedB. Special warranty deedC. Deed of bargain and saleD.Quitclaim deedDifficulty: BasicLearning Objective: 3Ling - Chapter 03 #67.While several kinds of real property conveyances result from events beyond the control of the grantor,the majority of conveyances are voluntary through a deed. Which of the following is an example of avoluntary conveyance of real property with a deed?A.PatentB. ProbateC. CondemnationD. Implied EasementDifficulty: BasicLearning Objective: 4Ling - Chapter 03 #78.At the death of a property owner, property will convey either in accordance with a will or withouta will. If a will dictates the distribution of the decedent's real property, the property is said to beconveyed by:A. patentB.deviseC. the law of descentD. dedicationDifficulty: BasicLearning Objective: 4Ling - Chapter 03 #89.While the vast majority of conveyances of real property are private grants through a deed, there aremultiple ways in which voluntary conveyance can occur without a deed. Which of the following typesof easements can occur if a landowner gives an adjacent landowner permission to depend on her land?(E.g. A landowner may give a neighbor permission to rely on sewer access or drainage across his orher land.)A. Easement by prior useB. Easement of necessityC.Easement by estoppelD. DedicationDifficulty: IntermediateLearning Objective: 5Ling - Chapter 03 #910.When a landowner subdivides land in a way that causes a parcel to be landlocked, it is possible forproperty to be voluntarily conveyed without a deed. If the landlocked parcel has no prior path ofaccess, which of the following types of easements will automatically be created to make the landuseful?A. Easement by prior useB.Easement of necessityC. Easement by estoppelD. DedicationDifficulty: IntermediateLearning Objective: 5Ling - Chapter 03 #10

Loading page image...

11.An owner of land may involuntarily and unknowingly give up the rights to land. When a fee simpleinterest is conveyed to a new owner without a deed and without the consent or knowledge of theoriginal owner, this is said to be conveyed by:A. PrescriptionB.Adverse possessionC. AccretionD. RelictionDifficulty: BasicLearning Objective: 5Ling - Chapter 03 #1112.Once a document conveying an interest in real property is placed in the public records it is binding onthe public, whether or not they make an effort to learn of it. Based on the common law tradition, thispolicy is known as the:A. Statute of FraudsB.doctrine of constructive noticeC. habendum clauseD. actual noticeDifficulty: BasicLearning Objective: 6Ling - Chapter 03 #1213.A contract for sale of real estate usually calls for the seller to provide evidence of title as a requisite tocompleting the sale. Today, the predominant medium through which a seller meets this requirement isby providing:A. only a title abstract.B. only an attorney's opinion of title.C.only a title insurance commitment.D. only a Torrens certificate.Difficulty: IntermediateLearning Objective: 8Ling - Chapter 03 #1314.A law requiring any contract conveying a real property interest to be in writing in order to beenforceable is a modern application of the:A.Statute of FraudsB. doctrine of constructive noticeC. habendum clauseD. actual noticeDifficulty: IntermediateLearning Objective: 6Ling - Chapter 03 #1415.Unlike other forms of evidence of title, title insurance guards the grantee against certain risks.However, there are a number of important limits to title insurance. Which of the following is anexample of the limits to title insurance?A.It does not protect the grantee from the threat of physical damage to the property.B. It does not protect a grantee against the legal costs of defending the title.C. It does not protect a grantee against loss of the property in case of an unsuccessful title defense.D. It does not protect against legal attack on the owner's title arising from a claim that diminishes theowner's rights of use.Difficulty: IntermediateLearning Objective: 8Ling - Chapter 03 #1516.Recognizing that only recent conveyances alter the status of title, states have established laws that setlimits on how far back a title search must go. These laws are commonly referred to as:A. Statute of FraudsB. recording statutesC. encroachmentsD.marketable title lawsDifficulty: BasicLearning Objective: 7Ling - Chapter 03 #16

Loading page image...

17.One of the most important requirements of a land description is for it to be unambiguous. Which ofthe following methods of property description is the most unambiguous and is appropriate for use inlegal documents?A. Street AddressB. Tax parcel numberC. Reference to prominent features of the land (e.g. monuments, river banks, roads)D.Metes and boundsDifficulty: BasicLearning Objective: 9Ling - Chapter 03 #1718.The most flexible method of land description, capable of describing even the most irregular of parcels,can be described as a very precise, compass-directed walk around the boundary of a parcel. Thismethod is commonly referred to as:A.metes and boundsB. subdivision plat lot and block numberC. government rectangular surveyD. tax parcel numberDifficulty: BasicLearning Objective: 9Ling - Chapter 03 #1819.Most often used in the description of urban property, which of the following methods of landdescription contains information regarding the location of various easements and may even contain alist of restrictive covenants?A. metes and boundsB.subdivision plat lot and block numberC. government rectangular surveyD. tax parcel numberDifficulty: IntermediateLearning Objective: 9Ling - Chapter 03 #1920.Initially used to survey the Old Northwest Territory (Ohio, Indiana, Illinois, and Michigan) in 1789,which of the following methods of land description relies on townships and section numbers asessential units of identification?A. metes and boundsB. subdivision plat lot and block numberC.government rectangular surveyD. tax parcel numberDifficulty: IntermediateLearning Objective: 9Ling - Chapter 03 #20

Loading page image...

3 SummaryCategory# of QuestionsDifficulty: Basic12Difficulty: Intermediate8Learning Objective: 11Learning Objective: 22Learning Objective: 33Learning Objective: 42Learning Objective: 53Learning Objective: 62Learning Objective: 71Learning Objective: 82Learning Objective: 94Ling - Chapter 0320

Loading page image...

41.While most real property in the United States is privately owned, government regulations limit privateproperty use and therefore play an important role in the determination of property value. Proponents ofgovernment intervention argue that regulation is needed to address the unintended and unaccounted forconsequences of one land user upon others, more commonly referred to as:A. incomplete informationB. locational monopolyC. externalitiesD. urban sprawl2.Externalities can play an important role in determining a property's price, either by adding value throughpositive externalities or by diminishing value through negative externalities. Which of the following ismost likely to be considered a negative externality?A. Nearby parks and recreation facilities.B. Quality neighborhood schools.C. Public assistance facilities such as homeless shelters.D. Well-kept landscapes.3.Development taking place in rural areas well beyond the urban fringe is commonly referred to as:A. urban sprawlB. holdoutC. urban service areasD. homestead4.It was not until the late 1960's that land use controls moved to the forefront of public interest, as the beliefthat the environment was an endless and costless resource was replaced with the notion that the worldwas a closed system with limited space, air, water, and other resources. Environmentalists coined whichof the following terms to refer to this new point of view?A. Smart growthB. The Silent SpringC. Spaceship earthD. Urban sprawl5.After a structure is built, it is impractical for even a building expert to fully assess the quality of theconstruction and the safety hazards it may harbor. This is an example of which of the following problemsthat plagues private real estate markets?A. ExternalitiesB. Incomplete informationC. Locational monopolyD. Holdout6.Growth management laws at the state level require local jurisdictions to plan for and meet certainrequirements. One such requirement prohibits local development unless adequate infrastructure, schools,police/fire protection, and social services have been put in place first. This requirement is referred to asthe:A. economic and environmental impact requirementB. concurrency requirementC. affordable housing requirementD. extraterritorial jurisdiction requirement

Loading page image...

7.A contemporary planning movement that explicitly advocates a traditional grid pattern of developmentdesigned to give pedestrian life priority over motor vehicles (e.g., including narrowed streets with housesclose to the street and garage access through side alleys) is commonly referred to as:A. urban sprawlB. urban service areaC. traditional residential planningD. new urbanism8.Which of the following tools of public land use control represents the earliest method of police power toregulate land use? (Hint: Standards for energy efficiency and sustainability are the most recent trends inthe application of this land use control)A. Subdivision regulationB. ZoningC. Building CodesD. Planned Unit Developments9.When a zoning ordinance is revised, some existing land uses then fall outside the new zoningclassification. These land uses are referred to as:A. special usesB. nonconforming usesC. conforming usesD. exclusionary uses10. When land use controls impose exceptional hardship and loss of value, a relief mechanism must beprovided. This relief is referred to as a:A. building codeB. zoning ordinanceC. comprehensive planD. variance11. In order for the board of adjustment to approve a variance, all of the following conditions must be metEXCEPT:A. The owner must be unable to use the lot as zoned.B. The condition is common to other parcels of land in the vicinity.C. The variance must not materially change the character of the neighborhood.D. The condition is unique to the lot.12. A traditional zoning ordinance includes all of the following EXCEPT:A. Minimum setback requirementsB. Minimum lot dimensionsC. Provisions for special use districtsD. Performance standards13. State and federal control of land uses has increased greatly over the past 40 years due in part to anincreased awareness of environmental hazards. Which of the following federal environmental controllaws was responsible for establishing the "Superfund" to finance emergency responses and cleanups ofabandoned and unregulated waste dumps?A. Clean Water ActB. Resource Conservation and Recovery ActC. Toxic Substances Control ActD. Comprehensive Environmental Response Compensation and Liability Act14. Negative externalities can diminish a property's value by imposing costs on the community at large.In order to offset this detrimental impact, economists advocate "internalizing" these externalities byimplementing:A. performance standardsB. impact feesC. growth moratoriumsD. planned unit developments

Loading page image...

15. A major problem in buildings constructed prior to the early 1970's, which of the following environmentalhazards commonly associated with insulation has been the focus of costly cleanups at many publicbuildings, especially schools?A. AsbestosB. RadonC. PCBs (Polychlorinated biphenyls)D. LUSTs (leaking underground storage tanks)16. The right of government to acquire private property, without the owner's consent, for public use inexchange for just compensation is referred to as:A. inverse condemnationB. regulatory takingC. eminent domainD. dedication17. All of the following statements are true in describing the determination of just compensationEXCEPT:A. The value of the property is based on its highest and best use at the time.B. The value of the property is determined solely by its current use.C.The value is the amount that restores the property owner to a financial position equivalent to thatexisting before the property was taken.D.The value is the market value of the property if completely taken, or the total value of all financial lossif partially taken.18. Real estate taxes represent the largest single source of revenue for a large portion of local governments.Most property taxes are applied in relation to the value of the property, or in other words, they are:A. effective tax ratesB. ad valorem taxesC. tax-exemptD. regressive19. A developer plans to place a subdivision slightly outside the city limits in an area that is rapidlydeveloping. However, the city claims to have the right to control urban development even in the proposedarea. The right the city is attempting to invoke is referred to as:A. extraterritorial jurisdiction.B. urban service area.C. comprehensive plan.D. growth constraint.20. While most property taxes are levied in order to finance services that benefit the community, specialassessments are levied to pay for specific improvements that benefit a particular group of properties. Allof the following characteristics of special assessments are true EXCEPT:A. They are considered ad valorem taxes.B. They are applied as pro rata charges.C. They are levied directly on the properties benefited.D. They are commonly used to finance streets, storm water systems, sidewalks, and other areaimprovements.21. The right to pay unpaid taxes, plus interest and penalties, before public sale and to reclaim full title of theproperty is referred to as:A. inverse condemnationB. foreclosureC. equity right of redemptionD. regulatory taking

Loading page image...

22. One of the main criticisms of property taxes is that the property tax of lower income households is higherthan that of higher income households, as a percentage of their respective incomes. In other words, taxesare criticized for being:A. regressiveB. comprehensiveC. concurrentD. extraterritorial23. In the state of Florida, for example, homeowners may qualify for a tax exemption in which up to $50,000will be deducted from the assessed value of the property before taxes are calculated as long as theproperty owner occupies a home as the family's principal residence and has claimed residency within thestate. This exemption is better known as the:A. ad valorem exemptionB. affordable housing exemptionC. growth moratoriumD. homestead exemption24. Given the following information, compute the property tax rate for the community in percentage terms.Total budget expenditures: $108 million, Total non-property tax income: $50 million, Total assessedvalue of all properties: $2 billion, Total exemptions: $550 million.A. 2.5%B. 4.0%C. 10.0%D. 12.0%25. Tax rates are usually stated in mills. Assuming the tax rate in percentage terms is 6.5%, convert this rateto mills.A. 0.065 millsB. 6.5 millsC. 65 millsD. 650 mills26. Given the following information, compute the effective tax rate for the particular piece of propertyin percentage terms. Market value of property: $325,000, Assessed value of property: $250,000,Exemptions: $50,000, Taxes paid: $5,363.A. 1.50%B. 2.35%C. 1.65%D. 2.68%27. Given the following information, compute the taxable value for the particular piece of property in dollarterms. Market value of property: $500,000, Assessed value of property: 85 % of the market value of theproperty, Exemptions: $50,000, Taxes paid: $8,250.A. $75,000B. $375,000C. $416,750D. $425,000

Preview Mode

This document has 209 pages. Sign in to access the full document!

Report

Study Now!

Document Details

Related Documents

Real Estate Principles: A Value Approach 5th Edition Test Bank

Test Bank For Real Estate Principles: A Value Approach, 4th Edition

Commercial Law Assignment 1-1

MRL3702 Assignment 1

Quiz-No-2-Labor-ED

BLAW 202 Sample Questions Spring 2025

Employment Law Duties and Misconduct under the Lab

Obligations and Contracts

Contract and Consumer Protection Law

Sarbanes Oxley Act of 2002

Company

Explore

Study Tools