Real Estate Exam 1

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Real Estate Exam 1
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Real Estate Practice Exam 18th Edition Test Builder
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  1. Real property can become personal property by the
    process known as

    A) hypothecation 

    B) Severance

    C) Accretion
    B) Severance

    • If part of the real estate is severed from the
    • structure or the land, it becomes personal property. The process is known as
    • severance.
  2. A developer built a structure that has six stories.
    Several years later, an ordinance was passed in that area banning any building
    six stories or higher. This building is a 

    A) situation in which the structure would have to
    be demolished. 

    B) Conditional use.

    C) Violation of the zoning laws.
    B) Conditional use
  3. A man's neighbors use his driveway to reach their
    garage, which is on their property. The man's attorney explains that the
    neighbors have the right to use the driveway. The man's property is the 

    A) fee simple determinable estate.

    B) dominant tenement.

    C) servient tenement.
    C) servient tenement.

    • Because the man's property serves the neighbor,
    • it is the servient tenement (parcel).
  4. A buyer purchased a home under a land contract. Until
    the contract is paid in full, the buyer

    A) possesses a legal life estate in the
    premises.

    B) has equitable title in the property.

    C) holds legal title to the premises.
    B) has equitable title in the property.

    • The purchaser under a land (installment)
    • contract holds equitable title during life of the contract, usually until all
    • payments have been paid.
  5. If a borrower computed the interest charged for the
    previous month on a $260,000 loan balance as $1,300, what is the borrower's
    interest rate?

    A) 6 percent

    B) 7 percent

    C) 7.5 percent
    A) 6 percent
  6. A real estate Licensee does not show non-Asian clients
    any properties in several traditionally Asian neighborhoods. The licensee bases
    this practice on the need to preserve the valuable cultural integrity of Asian
    immigrant communities. Which statement is TRUE regarding the licensee's policy?

    A) The licensee's policy is steering. but it
    does not violate the fair housing laws because cultural preservation is the
    motive, not exclusion or discrimination.

    B) The licensee's policy is steering. but it
    does not violate the fair housing laws because cultural preservation is the
    motive, not exclusion or discrimination.

    C) The licensee's policy is steering and violates
    the fair housing laws regardless of motivation.
    • C) The licensee's policy is steering and violates the
    • fair housing laws regardless of motivation.

    • It is steering, regardless of the licensee's
    • motivation.
  7. A seller signed an exclusive-right-to-sell agreement
    with a licensee. If the seller finds a suitable buyer with no assistance, the
    licensee is entitled to 

    A) full compensation from the seller.

    B) full compensation from the buyer.

    C) no compensation from seller.
    A) full compensation from the seller.

    • If a seller signs an exclusive-right-to-sell
    • listing with a broker, the seller owes the broker a commission, regardless of
    • who sell the property.
  8. A borrower applies for a mortgage, and the loan
    officer suggests that the borrower consider a term mortgage loan. Which
    statement BEST explains what
    the loan officer means?

    A) the debt is partially amortized over the life
    of the loan.

    B) the length of the term is limited by state
    law.

    C) the entire principal amount is due at the end
    of the term.
    • C) the entire principal amount is due at the end of
    • the term.

    • In a term (straight) loan, the periodic payments
    • are made on interest only. The entire original principal will come due at the
    • end of the terms of the loan.
  9. Which of the following BEST describes a
    capitalization rate?

    A) Rate at which the amount of depreciation in a
    property is measured.

    B) Rate of return an income property will
    produce.

    C) Mathematical value determined by a sales
    price.
    B) Rate of return an income property will produce.

    • In the income approach to appraisal, the
    • capitalization rate is the relationship of the net annual income to the
    • appraised value, expressed by the following formula: Net annual income ÷
    • Appraised value = Capitalization rate. Therefore, it expresses the return an
    • income property will produce.
  10. A broker receives a check
    for earnest money from a buyer and deposits the money in the broker's personal
    interest-bearing checking account over the weekend. This action exposes the
    broker to a charge of 

    A) subrogation.

    B) commingling.

    C) novation.
    B) commingling.

    • The broker has commingled the deposit with the
    • broker's personal funds.
  11. Local zoning ordinances may regulate all of the following EXCEPT the

    A) density of population.

    B) market value of a property.

    C) appropriate use of buildings in an area.
    B) market value of a property.

    Zoning may have some impact on market value, but it does not regulate it.
  12. If the mortgage loan is 80 percent of the appraised value of a house and the interest rate of 6 percent amounts to $460 for the first month, what is the appraised value of the house?

    A) $92,000

    B) $73,600

    C) $115,00
    C) $115,00
  13. A seller signs a listing agreement with licensee. A second licensee obtains a buyer for the house, and the first licensee does not receive a commission. The first licensee does not sue the seller, even though the seller compensated the second licensee. The listing agreement between the seller and the first licensee was probably which type?

    A) Open

    B) Dual-agency

    C) Exclusive-agency
    A) Open

    In an open-listing contract, the seller agrees to compensate the broker only if that broker sells the property. If the owner also engages a second broker who then produces a buyer, the first broker gets nothing and the second broker is compensated. The seller apparently engaged a second licensee, who produced a buyer. The initial licensee gets nothing, having had nothing to do with the buyer.
  14. A woman grants a life estate to her son-in-law and stipulates that upon his death, the title to the property will pass to her grandson. This second estate is known as a(n)

    A) estate at sufferance.

    B) reversion.

    C) remainder.
    C) remainder.

    The grandson has received a remainder interest.
  15. On the closing statement of a typical real estate transaction, prepaid insurance and tax reserves, where the buyer assumes the mortgage, is a

    A) debit to the buyer, credit to the seller.

    B) credit to the seller only.

    C) credit to the buyer, debit to the seller.
    A) debit to the buyer, credit to the seller.

    Prepaids are items that a seller has paid in advance, and the prorated amount not used should be credited back to the seller and debited to the buyer.
  16. A licensee listed a house for $247,900 A member of a racial minority group saw the house and was interested in it. When the prospective buyer asked the licensee the price of the house, the licensee said that it was listed for $253,000 and that the seller was very firm on the price. Under the federal Fair Housing Act of 1968, such a statement is 

    A) illegal because the difference in the offering price and the quoted price was greater than 10 percent.

    B) legal because the law requires only that the buyer be given the opportunity to buy the house.

    C) illegal because the terms of the potential sale were changed for the prospective buyer.
    C) illegal because the terms of the potential sale were changed for the prospective buyer.

    Quoting different prices or terms based on the prospect's membership in a protected group is a blatant violation of the federal Fair Housing Act.
  17. Which activity is forbidden by the federal Fair Housing Act of 1968?

    A) Limitation to members only in noncommercial lodgings of a private club.

    B) Limitation by religion and nationality in the sale of a single-family home where the property is not advertised by the listing broker.

    C) Limitations against familial status and disability in the rental of a unit in an owner-occupied three-family dwelling when no discriminatory advertising is used
    B) Limitation by religion and nationality in the sale of a single-family home where the property is not advertised by the listing broker.

    Whatever the other details of the sale, when the seller of a home uses a broker, the terms of the federal Fair Housing Act of 1968, as amended, are binding.
  18. A parcel of vacant land has an assessed valuation of $274,550. If the assessment is 85 percent of market value, what is the market value?

    A) $315,732,50

    B) $320,000,00

    C) $323,000,00
    C) $323,000,00

    If the assessment, $274,550, is 85 percent of the market value, find the market value by dividing the assessment by 85 percent ($274,550÷85%=$323,000).
  19. A condominium community has a swimming pool, tennis courts, and a biking trail. These facilities are MOST likely owned by the

    A) unity owners in the form of percentage undivided interests.

    B) condominium board.

    C) unit owners in the
    A) unity owners in the form of percentage undivided interests.

    Common areas, including amenities such as swimming, biking, and tennis areas, are owned by the unit owners in undivided percentage interests as tenants in common.
  20. A man and a woman are next-door neighbors. The man gives the woman permission to park a camper in his yard for a few weeks. He does not charge her rent for the use of the yard. The man has given the woman a(n)

    A) revocable trust.

    B) permissive encroachment.

    C) license.
    C) license.

    Personal, revocable, and unassignable permission to use another's land is a license.
  21. Two men are joint tenants. One of the men sells his interest to another person. What is the remaining man's relationship to the new tenant regarding the property?

    A) Tenants by the entirety

    B) Tenants in common

    C) No relationship, because he cannot sell his joint tenancy interest
    B) Tenants in common

    When the man sold his share, that action destroyed the joint tenancy (because there were only two joint tenants to start with). The remaining tenants now each own 50 percent of the property but as tenants in common.
  22. A suburban home that lacks sufficient indoor plumbing suffers from which condition?

    A) Functional obsolescence

    B) Curable physical deterioration

    C) Incurable physical deterioration
    A) Functional obsolescence

    Because suburban homes today are expected to have ample indoor plumbing, a home that does not suffers from functional obsolescence; it is lacking in the usual amenities of properties in its class.
  23. Under the terms of a net lease, a commercial tenant would usually be directly responsible for paying all the following property expense EXCEPT 

    A) mortgage debt service. 

    B) fire and extended-coverage insurance.

    C) maintenance expenses.
    A) mortgage debt service. 

    The tenant under a net lease pays all property expenses, including taxes and insurance, utilities, maintenance, and so on, but not debt service (the landlord's mortgage payment).
  24. Whose signature is necessary for a signed offer to purchase real estate to become a contract?

    A) Buyer's only

    B) Seller's only

    C) Buyer's and seller's
    C) Buyer's and seller's

    A signed offer already has the buyer's signature, but to be a ratified contract, both buyer's and seller's signatures are necessary.
  25. Three women owned a house as joint tenants. In the year 2009, one died. Last month, another died. Based on these fact, which of the following correctly describes the remaining woman's ownership interest in the house?

    A) Partitioned tenancy by the entirety

    B) Severalty

    C) Joint tenancy with the deceased women's heirs
    B) Severalty

    When two of three original joint tenants have died the surviving party owns the entire property in severalty.
  26. In an option to purchase real estate, which statement is TRUE of the optionee?

    A) The optionee has no obligation to purchase the property during the option period.

    B) The optionee cannot obtain third-party financing on the property until after the option has expired.

    C) The optionee is limited to a refund of the option consideration if the option is exercised.
    A) The optionee has no obligation to purchase the property during the option period.

    The optionee, in an option to purchase, is the party with the right to buy during the option period. But buying is optional; the optionee is not required to buy.
  27. A village board has decided that a parking lot would enhance the beauty, safety, and vitality of its community by keeping cars from parking on the streets. Unfortunately, a house is located on land needed for the new parking lot. Based on these facts, which statement is TRUE?

    A) The homeowner's constitutional right to own property cannot be infringed by the village under any circumstances.

    B) The village may not seize the house because it has insufficient reason to do so.

    C) The village may tear down the house but must first pay the homeowner a fair amount for the home.
    C) The village may tear down the house but must first pay the homeowner a fair amount for the home.

    By paying the homeowner the amount set in a condemnation suit, the city may force the homeowner to sell the city the property. It can than be cleared for a parking lot. The city may do this under the right of eminent domain.
  28. A grantor conveys property by delivering a deed. The deed contains five covenants. This is MOST likely a 

    A) deed in trust.

    B) general warranty deed.

    C) special warranty deed.
    B) general warranty deed.

    A (general) warranty deed contains covenants of seisin, further assurance, quiet enjoyment, freedom from encumbrances, and warranty forever.
  29. All of the following will terminate an offer to purchase real estate EXCEPT 


    A) revocation by the offeror communicated to the offeree after acceptance.

    B) failure to accept the offer withing a prescribed period.

    C) a conditional acceptance of the offer by the offeree.
    A) revocation by the offeror communicated to the offeree after acceptance.

    When an offer has already been accepted and the party making the offer has been told of the acceptance, it is too late to revoke the offer without incurring possible penalties.
  30. A licensee arrives to present a purchase offer to a seller who is seriously ill and finds the seller's son and daughter-in-law also present. The son and daughter-in-law angrily urge the seller to accept the offer, even though it is mujch less than the asking price for the property. If the seller accepts the offer, she may not be bound by it because the 

    A) licensee improperly presented an offer that was less than the asking price.

    B) licensee's failure to protect the seller from the son and daughter-in-law constituted a violation of the licensee's fiduciary duties.

    C) seller was under undue influence from the son and daughter-in-law, so the contract is voidable.
    C) seller was under undue influence from the son and daughter-in-law, so the contract is voidable.

    Valid contracts are voluntary agreements. Undue means inappropriate or improper. Undue influence is a solid basis for rescinding a contract because such influence on a party to a contract prevents the party's agreement from being truly voluntary.
  31. A deed conveys ownership to the grantee "as long as the existing building is not torn down." What type of estate does this deed create?

    A) Life estate pur autre vie, with the measuring life being the building's expected structural lifetime

    B) Fee simple determinable estate

    C) Fee simple absolute estate
    B) Fee simple determinable estate

    It is an interesting type of defeasible fee estate called a determinable fee. The grantee's ownership can be terminated by the tearing down of the building. The language used creates the possibility of reverter because of the words as long as. If the building were torn down, the property would instantly revert to the ownership of the grantor, even if the grantor did not know anything about it or take any action.
  32. The form of tenancy that will expire on a specific date is a 

    A) joint tenancy.

    B) tenancy in common.

    C) tenancy for years.
    C) tenancy for years.

    A rental tenancy that will expire on a fixed date is an tenancy for years.
  33. Which of the following is a lien on real estate?

    A) Recorded mortgage

    B) Encroachment

    C) Recorded easement
    A) Recorded mortgage

    A recorded mortgage constitutes a lien on a property.
  34. On the closing statement of a typical real estate transaction, the buyer's earnest money deposit is a 

    A) credit to the seller, debit to the buyer.

    B) debit to the buyer only.

    C) credit to the buyer only.
    C) credit to the buyer only.

    Earnest money is a credit to the buyer (borrower). No notation is made for the seller.
  35. A property is sold. The deed of conveyance contained only the following guarantee: "This property was not encumbered during the time the seller owned it except as noted in this deed. "What type of deed makes such a covenant?

    A) General warranty

    B) Special warranty

    C) Quitclaim
    B) Special warranty

    This is a special warranty deed because the grantor accepts responsibility only for encumbrances that arose during the grantor's ownership.
  36. A broker took a listing and later discovered that the client had been declared incompetent by a court. What is the current status of the listing?

    A) The listing must be renegotiated between the broker and the client, based on the new information.

    B) The listing entitles the broker to collect a commission from the client's guardian or trustee if the broker produces a buyer.

    C) The listing is of now value to the broker because the contract is void.
    C) The listing is of now value to the broker because the contract is void.

    If the seller has been declared legally incompetent, the listing is void.
  37. A known defect or a cloud on title to property may be cured by 

    A) obtaining quitclaim deeds from all appropriate parties.

    B) purchasing a title insurance policy at closing.

    C) recording the title after closing.
    A) obtaining quitclaim deeds from all appropriate parties.

    If persons who hold possible claims against a property will sign quitclaim deeds extinguishing their potential claims, the cloud can be removed. Title insurance does not protect against known defects in title. Neither paying all cash nor recording a title deed after closing will remove the cloud from a title.
  38. The states in which the owner gives up legal title of mortgaged real estate are known as

    A) strict title forfeiture states.

    B) title theory states.

    C) statutory title states.
    B) title theory states.

    In a title theory state, a borrower-owner gives legal title to real estate to the mortgage lender when giving the lender a mortgage.
  39. A buyer and seller sign a contract for the sale of real property. A few days later, they decide to change many of the terms of the contract, while retaining the basic intent to by and sell. The process by which the new contract replaces the old one is called

    A) Novation

    B) assemblage

    C) assignment
    A) Novation

    When a new contract replaces an old one, the process is novation. The new contract may be between the same parties or between one of the original parties and a new party. In any event, the terminated.
  40. A borrower has just made the final payment on a mortgage loan. Regardless of this fact, the records will still show a lien on the mortgaged property until which event occurs?

    A) An estoppel of the mortgage document is filed with the clerk of the county in which the mortgagee is located.

    B) A novation of the mortgage document takes place.

    C) A mortgage satisfaction document is recorded.
    C) A mortgage satisfaction document is recorded.

    A document signed by the lender, showing that the loan is paid off, is called a certificate of satisfaction, or satisfaction piece. Until this document is recorded, the public record will continue to show that the loan is unpaid.
  41. Under a cooperative form of ownership, an owner 

    A) receives a fixed-term lease for the unit.

    B) will have to take out a new mortgage loan on a newly acquired unit.

    C) is a shareholder in the corporation.
    C) is a shareholder in the corporation.

    Cooperative owners hold shares in the cooperative corporation.
  42. A broker enters into a listing agreement with a seller in which the seller will receive $120,000 from the sale of a vacant lot and the broker will receive any sale proceeds exceeding that amount. This is what type of listing?

    A) Net 

    B) Exclusive-agency

    C) Multiple
    A) Net

    This is a net listing, which is illegal in most states
  43. A borrower takes out a mortgage loan that requires monthly payments of $875.70 for 20 years and a final payment of $24,095. This is what type of loan?

    A) Variable

    B) Balloon

    C) Wraparound
    B) Balloon

    When the payment on an amortized mortgage is larger than the previous payments, it is a balloon payment and the loan is a balloon loan.
  44. The commission rate is 7 percent on a sale of $250,000. What is the dollar amount of the commission?

    A) $17,500

    B) $35,000

    C) 1,750
    A) $17,500

    Commission is found by multiplying the sales price by the brokerage (commission) rate ($250,00 x 7% = $17,500).
  45. The Civil Rights Act of 1866 prohibits discrimination based on 

    A) familial status.

    B) religion

    C) race
    C) race

    The Civil Rights Act of 1866 protects the property right of all citizens regardless of race.
  46. Antitrust laws do NOT prohibit real estate 

    A) brokers allocating markets based on the value of homes.

    B) salespeople within the same office agreeing on a standard commission rate.

    C) companies allocating markets based on the location of commercial buildings.
    B) salespeople within the same office agreeing on a standard commission rate.

    Commission-setting agreements and allocation of markets on any basis between and among different companies violate antitrust law. However, commission setting within a company is not a violation.
  47. An appraiser has been hired to prepare an appraisal report of a property for loan purposes. The property is an elegant old mansion that is now used as a restaurant. Which approach to value should the appraiser probably give the greatest weight when making this appraisal?

    A) Reproduction cost

    B) Replacement cost

    C) Income
    C) Income

    If the property's use is to be continued as a restaurant, the appraiser will look at its income to reach an opinion of value. The appraiser will emphasize the income (capitalization) approach.
  48. A prospective buyer signs an offer to purchase a residential property. All of the following circumstances would automatically terminate the offer EXCEPT the

    A) seller received a better offer from another buyer.

    B) buyer revoked the offer between the presentation and a possible acceptance.

    C) buyer signed a written offer to buy a house and then died
    A) seller received a better offer from another buyer.

    The question is about terminating an offer, not a contract. Death of the offeror, revocation before acceptance, and a counteroffer from the seller would all terminate an offer. The seller's simply receiving a better offer from another purchaser would not terminate the original offer.
  49. A primary feature of property held in joint tenancy is that 

    A) a maximum of two people can own the real estate.

    B) the fractional interests of the owners can be different.

    C) there is always right of survivorship.
    C) there is always right of survivorship.

    Right of survivorship is the distinctive feature of joint tenancy. Any number of persons can own a property in joint tenancy-providing they all have equal shares and identical interests, come into ownership at the same moment and on the same granting document, and have equal rights of possession.
  50. A lien that arises as a result of a judgment, estate or inheritance taxes, a decedent's debts, or federal taxes is what type of lien?

    A) Voluntary

    B) General

    C) Specific
    B) General

    Each creates a general lien-a claim against all the personal and real property of the debtor.
  51. A licensee is a licensed real estate salesperson who has a written contract with his broker that specifies that he will not be treated as an employee. The licensee's entire income is from sales commissions rather than an hourly wage. Based on these facts, the licensee will be treated by the IRS as 

    A) an employee.

    B) self-employed.

    C) a subagent.
    B) self-employed.

    The licensee meets the IRS's three requirements to be treated as self-employed, which are that the licensee (1) is a real estate licensee, (2) has an agreement with the broker indicating the licensee will not be treated as an employee by broker contributions to Social Security or the withholding of income taxes, and (3) earns the preponderance of income from the firm in commissions, not wages.
  52. An unmarried couple own a parcel of real estate. Each owns an undivided interest, with one owning one-third and the other owning two-thirds. The form of ownership under which the couple own their property is 

    A) joint tenancy.

    B) tenancy at will.

    C) tenancy at common.
    C) tenancy at common.

    The unmarried couple are tenants in common because they own unequal interests. Even if they were husband and wife, as long as they owned unequal interests, they would still be tenants in common.
  53. A broker signs a contract with a buyer. Under the contract. the broker agrees to help the buyer find a suitable property and to represent the buyer in negotiations with the seller. Although the buyer may not sign an agreement with any other broker, the buyer may look for and purchase a property without the broker's assistance. The broker is entitled to payment only if the broker locates the property that is ultimately purchased. What kind of agreement has this broker signed?

    A) Exclusive-agency buyer agency agreement

    B) Open buyer agency agreement

    C) Option contract
    A) Exclusive-agency buyer agency agreement

    This describes an exclusive-agency buyer agency (representation) agreement. It allows the buyer to purchase property without broker assistance and not be required to pay compensation.
  54. A woman placed a property in a trust. When she died, her will directed the trustee to sell the property and distribute the proceeds of the sale to her heirs. The trustee sold the property in accordance with the will. What type of deed was delivered at settlement?

    A) Deed of trust

    B) Trustor's deed

    C) Trustee's deed
    C) Trustee's deed

    A deed given by a trustee to someone other than the trustor is a trustee's deed.
  55. A sales contract was signed by a minor. Which of the following describes this contract?

    A) Void

    B) Breached

    C) Voidable
    C) Voidable

    It is voidable by the party who is currently the minor it also would be enforceable by that party.
  56. On Monday, the buyer offer to purchase a vacant lot for $25,000. On Tuesday, the owner counteroffers to sell the lot for $29,000. On Friday, the owner withdraws the counteroffer and accepts the buyer's original offer of $25,000. Under these circumstances, which statement is TRUE?


    A) A valid agreement exists because the seller accepted before the buyer provided notice that the offer was withdrawn.

    B) No valid agreement exists because the seller's counteroffer was a rejection of the buyer's offer, and once rejected, it cannot be accepted later.

    C) No valid agreement exists because the buyer offer was not accepted within 72 hours of its having been made.
    B) No valid agreement exists because the seller's counteroffer was a rejection of the buyer's offer, and once rejected, it cannot be accepted later.

    A counteroffer constitutes a rejection of an offer. The buyer's original offer was rejected by the owner's counteroffer. The owner may not later accept the offer after previously rejecting it.
  57. A real estate licensee specializes in helping both buyers and sellers with necessary paperwork involved in transferring property. Although not an agent of either party, the licensee may not disclose either party's confidential information to the other. The licensee is BEST described as a(n)

    A) dual agent.

    B) transactional broker.

    C) buyer's agent.
    B) transactional broker.

    A licensee facilitates transactions and is called-depending on his state's law-a transaction broker or a facilitator. Many states prohibit brokers from offering such nonagency brokerage.
  58. Police powers include all of the following EXCEPT 

    A) zoning

    B) building codes

    C) deed restrictions
    C) deed restrictions

    Deed restrictions are an example of private land-use control. Zoning, building codes, and subdivision regulations are examples of the exercise of police power.
  59. Two friends enter into a six month oral lease. If one friend defaults, the other may

    A) not bring a court action because the statute of frauds governs six-month leases.

    B) bring a court action because six-month leases need not be in writing to be enforceable.

    C) not bring a court action because leases must be in writing for a court to review them.
    B) bring a court action because six-month leases need not be in writing to be enforceable.

    A lease of less than a year is enforceable
  60. After a borrower's default on home mortgage loan payments, the lender obtained a court order to foreclose on the property. At the foreclosure sale, the property sold for $164,000; the unpaid balance on the loan at the time of foreclosure was $14,000 that the borrower still owes?

    A) Sue for damages

    B) Seek a judgment by default

    C) Seek a deficiency judgment
    C) Seek a deficiency judgment

    To recover the deficiency of $14,000, the lender would seek a deficiency judgment. If granted, the judgment would become a general lien on all the remaining assets of the delinquent borrower.
  61. A home is the smallest in a neighborhood of large. expensive houses. The effect of the other houses on the value of the small home is known as

    A) progression.

    B) regression.

    C) contribution.
    A) progression.

    The large, expensive houses nearby raise value of the smaller house by the principle of progression. At the same time, the smaller house's effect on the more expensive is to lower their value by the principle of regression
  62. What is the difference between a general lien and a specific lien?

    A) A general lien cannot be enforced in court, while a specific lien can.

    B) A general lien is a lien against personal property, while a specific lien is a lien against real estate.

    C) A specific lien is a lien against a certain parcel of real estate, while a general lien covers all of a debtor's property.
    C) A specific lien is a lien against a certain parcel of real estate, while a general lien covers all of a debtor's property.

    A specific lien is one against a certain property, but a general lien covers all the debtor's property, both personal and real. Both are enforceable in court.
  63. A tenant leased an apartment from a property owner. Because the owner failed to perform routine maintenance, the apartment building's central heating plant broke down in the fall. The owner neglected to have the heating system repaired, and the tenant had no heat for the first six weeks of winter. The tenant had reported this problem repeatedly to the owner. Although eight months remained on his lease, the tenant moved out of the apartment and refused to pay any rent. If the owner sues to recover the outstanding rent, what would be the tenant's BEST defense?

    A) Because the tenant lived in the apartment for more than 25 percent of the lease term, he was entitled to move out at any time without penalty.

    B) The landlord's actions resulted in constructive eviction.

    C) Because the apartment was made uninhabitable, the landlord's actions resulted in actual eviction.
    B) The landlord's actions resulted in constructive eviction.

    A landlord's persistent failure to heat an apartment during the winter, even when repeatedly informed of the condition, is negligence and could result in constructive eviction-the tenant being forced to move. Actual eviction occurs as a result of a tenant's breaching a lease, when the landlord must force the tenant from the unit.
  64. A buyer is purchasing a condominium unit in a subdivision and obtains financing from a local savings and loan association. In this situation, which term BEST describes this buyer?

    A) Mortgagor 

    B) Vendor 

    C) Lessor
    A) Mortgagor 

    What is implied here is a mortgage loan. A lender (mortgagee) always receives a mortgage (document), the borrower (mortgagor) always gives one in order to get the loan.
  65. Using the services of a mortgage broker, a buyer borrowed $25,000 from a private lender. After the loan costs were deducted, the buyer received $24,255. What is the face amount of the note?

    A) $645

    B) $24,255

    C) $25,000
    C) $25,000

    If the buyer borrowed $25,000, he signed a note for $25,000, the face amount of the note.

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