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When viewed as a tangible asset, real estate can be defined as the land and its permanent improvements. Improvements on the land include:
fences
walkways
sewer systems
streets
fences
Real estate is property, which can be either a tangible or an intangible asset. Which of the following would be considered an intangible asset?
Land
Building
Mortgage
Motor home
mortgage
When the value of land is considered, it is important to distinguish between land and raw land. Raw land refers to a(n):
building site
structure on the land
property's infrastructure
area that does not include any improvements
area that does not include any improvements
The demand for real estate derives from the need that participants in the user market have for shelter and convenient access to other locations. The primary participants in the user market include all of the following EXCEPT
owner occupants
tenants
renters
pension fund managers
pension fund managers
A market where tenants negotiate rent and other terms with property owners or their managers is referred to as a:
Property Market
User Market
Housing Market
Capital Market
user market
The actions of local, state, and federal governments affect real estate values
Primarily through user markets
Primarily through capital markets
Primarily through their taxation policies
Through all the above
All of the above
What portion of households owns their house?
2/3
Of the following asset categories, which class has the greatest aggregate market value?
Corporate equities
Mortgage debt
Government debt
Nongovernment real estate
Nongovernment real estate
Storm water drainage systems are best described as:
Tangible assets
Improvements to the land
Intangible assets
Improvements on the land
improvements to the land
What is the single largest asset category in the portfolio of a typical U.S. household?
Housing
Consumer durables
Stocks
Bonds
housing
Real estate markets differ from other asset classes by having all of the following characteristics except
Local market
High transaction costs
Segmented market
homogeneous product
homogeneous product
Which of the following is the least important to the location of commercial properties?
Access to customers
Visibility
Access to schools
Availability of communications infrastructure
access to schools
Which of the following is not a form of real property right?
Lien
Easement
Leasehold
License
license
Which of these easements is most likely to be an easement in gross?
Common wall easement
Driveway easement
Drainage easement
Power line easement
power line easement
Rules used by courts to determine whether something is a fixture include all except:
Intention of the parties
Manner of attachment
Law of capture
Character of the article and manner of adaptation
Law of capture
Which of the following is a titled estate?
Fee simple absolute
Fee simple conditional
Life estate
All of these
all of these
Which of these forms of co-ownership could best be described as "normal ownership," except that multiple owners can have unequal ownership interest in the same property?
Tenancy in common
Joint tenancy
Tenancy by the entirety
Condominium
tenancy in common
Which of these marriage-related forms of co-ownership gives each spouse a one-half interest in any property that is "fruits of the marriage"?
Dower
Curtesy
Community property
Elective share
community property
Which of these liens has the highest priority?
First mortgage lien
Mechanics' lien
Property tax lien
Second mortgage lien
property tax lien
Restrictive covenants for a subdivision usually can be enforced by:
Subdivision residents
Lenders with mortgage loans in the subdivision
Local government
a and b, but not c
a and b, not c
Timeshare programs can involve which of the following claims or interests?
Fee simple ownership
Leasehold interest
License
All of these are possible
all of these
Every condominium buyer needs to know the details of which document(s):
Condominium declaration
Bylaws
Proprietary lease
a and b, but not c
a and b, not c
A principal definition of real estate is as a bundle of rights associated with the possession, use, and disposition of property. Each of the following is a fundamental characteristic of property rights EXCEPT:
they are enforceable by the government.
they apply only to tangible assets.
they are nonrevocable.
they are enduring.
they apply only to tangible assets
Property rights can be divided into two classes, real and personal. Which of the following is an example of real property?
Vehicles
Stocks and bonds
Patents
Commercial building
commercial building
A fixture is an object that formerly was personal property but has become real property. Of the following four rules for determining whether an object has become a fixture, which is the most dominant (i.e. if there is a conflict, which rule prevails)?
Manner of the attachment
Character of the article and manner of adaptation
Intention of the parties
Relation of the parties
intention of parties
Which of the following items would most likely be considered a fixture?
Custom bookshelves
Refrigerator in a single-family residence being sold
Fence installed by the tenant of a rental property
Antique table lamp
custom bookshelves
Property rights can be dismantled into lesser bundles, referred to as interests, which can then be held by different individuals. Interests in real property that include possessions are referred to as:
fixtures
townships
licenses
estates
estates
Which of the following types of ownership estates is the most complete bundle of rights, and therefore carries the greatest value?
Fee simple absolute
Fee simple conditional
Ordinary life estate
Legal life estate
fee simple absolute
An easement is the right to use land for a specific and limited purpose. Which of the following easements involves a relationship between two parcels of land, is a permanent feature of both parcels involved, and gives the dominant parcel some intrusive use of the servient parcel?
Affirmative easement appurtenant
Negative easement appurtenant
Easement in gross
License
affirmative easement appurtenant
Which of the following types of liens is automatically superior to any other lien?
Property tax and assessment lien
Mortgage lien
Lien arising from a court judgment unrelated to ownership of the property
Mechanics' lien
property tax and assessment lien
Which of the following types of direct co-ownership is a form of joint tenancy for husband and wife?
Tenancy in common
Tenancy by the entirety
Condominium
Partnership
tenancy by the entirety
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 interest transferred to Mike. What type of co-ownership did Bill and Mike have?
Tenancy by the entireties
Tenancy in common
Joint tenancy
Condominium
joint tenancy
Which of these is not a requirement of a valid deed?
Competent grantor
Competent grantee
In writing
Delivery
competent grantee
The interest being conveyed by a deed is specified in the:
Words of conveyance
Habendum clause
Property description
Exceptions and reservations clause
Habendum clause
The "highest quality" form of deed is the:
General warranty deed
Special warranty deed
Deed of bargain and sale
Quitclaim deed
general warranty deed
A deed used mainly to clear up possible "clouds" or encumbrances to title (conflicting interests) is the:
General warranty deed
Special warranty deed
Deed of bargain and sale
Quitclaim deed
quit claim deed
If a landowner sells the front part of a parcel of land, retaining the back portion as a "land-locked" parcel, and if there is an existing informal path across the front parcel to the back one, the seller is likely to retain the path as a (an):
Easement in gross
Joint driveway easement
Implied easement by prior use
Easement by estoppel
implied easement by prior use
If a neighboring land owner drives across a person's land openly and consistently for a number of years the neighbor may acquire an easement by:
Estoppel
Implication
Accretion
Prescription
prescription
If documents conveying interests in real property are properly recorded in the public records, then they are binding or enforceable on all persons, regardless of whether those persons are aware of the documents, by the:
Statute of frauds
Recording statutes
Doctrine of constructive notice
Doctrine of actual notice
doctrine of constructive notice
Which of these is a widely used form of "evidence of title
Abstract of title
Title insurance commitment
Torrens certificate
Title certificate
Title insurance commitment
The most common form of legal description for urban residential property is the:
Street address
Tax parcel number
Plat lot and block number
Title description
Plat lot and block number
Factors that make it uniquely difficult to establish clear title in real estate as compared to most personal property items include:
Size of real estate
Length of the ownership history in real estate
Value of real estate
Land use controls.
length of the ownership history in real estate
A deed is a special form of written contract used to convey a permanent interest in real property. Unlike most contracts, a deed requires:
both parties to be legally competent and of legal majority age.
only the grantee to be legally competent and of legal majority age.
only the grantor to be legally competent and of legal majority age.
both parties to make promises to perform.
only the grantor to be legally competent and of legal majority age.
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:
recital of consideration
words of conveyance
covenant
habendum clause
words of conveyance
While the vast majority of conveyances of real property are private grants through a deed, there are multiple ways in which voluntary conveyance can occur without a deed. Which of the following types of 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 or her land.)
Easement by prior use
Easement of necessity
Easement by estoppel
Dedication
easement by estoppel
When a landowner subdivides land in a way that causes a parcel to be landlocked, it is possible for property 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?
Easement by prior use
Easement of necessity
Easement by estoppel
Dedication
easement of necessity
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 the limits to title insurance?
Group of answer choices
It does not protect the grantee from the threat of physical damage to the property.
It does not protect a grantee against the legal costs of defending the title.
It does not protect a grantee against loss of the property in case of an unsuccessful title defense.
It does not protect against legal attack on the owner's title arising from a claim that diminishes the owner's rights of use.
It does not protect the grantee from the threat of physical damage to the property.
Zoning is an exercise of which type of general limitation on property rights?
Eminent domain
Taxation
Police power
Escheat
police power
A comprehensive plan usually deals with which of the following elements?
Land uses
Population
Public Services
All of the above
all of the above
Property taxes are a main source of revenue for:
The federal government
School districts
Local governments
State governments
Both local governments and school districts
Both local governments and school districts
The authority for approving site plans for large projects ultimately rests with the:
Elected governing commission or council
Mayor or city manager
Planning board or commission
Planning board or commission staff
Elected governing commission or council
The most accurate conclusion about the regessivity of the property tax is that it is:
Regressive
Not regressive
Based on ability to pay
Regressive, but when benefits are considered, the net result is not regressive.
Regressive, but when benefits are considered, the net result is not
Traditional land use controls (pre-1970) include:
Zoning
Building codes
Subdivision regulations
All three: a, b, and c.
All three
Radon gas is:
A naturally occurring result of geologic activity
A relatively recent phenomenon caused by the earth's warming
Important only in the western United States
Regarded as a nuisance but not a health hazard
A naturally occurring result of geologic activity
"New urbanism" is a term used to describe:
Growth management laws enacted by state governments.
Improvement of transportation systems to encourage dispersion of a city's population
The requirement that infrastructure be available concurrently with new development
The theory that residential and commercial uses should be integrated, streets and parking should discourage through traffic, and neighborhoods should be pedestrian-oriented.
The theory that residential and commercial uses should be integrated, streets and parking should discourage through traffic, and neighborhoods should be pedestrian-oriented.
Elements of traditional zoning include all except:
Performance standards
Setback requirements
Bulk limits
Land use categories
performance standards
Externalities in land use include all except:
Leap-frog development
Increase storm runoff from paving
Traffic congestion
Inability to judge the quality of a structure, once built
Inability to judge the quality of a structure, once built
Development taking place in rural areas well beyond the urban fringe is commonly referred to as:
urban sprawl
holdout
urban service areas
homestead
urban sprawl
Growth management laws at the state level require local jurisdictions to plan for and meet certain requirements. 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 as the:
economic and environmental impact requirement
concurrency requirement
affordable housing requirement
extraterritorial jurisdiction requirement
concurrency requirement
A contemporary planning movement that explicitly advocates a traditional grid pattern of development designed to give pedestrian life priority over motor vehicles (e.g., including narrowed streets with houses close to the street and garage access through side alleys) is commonly referred to as:
urban sprawl
urban service area
traditional residential planning
new urbanism
new urbanism
Which of the following tools of public land use control represents the earliest method of police power to regulate land use? (Hint: Standards for energy efficiency and sustainability are the most recent trends in the application of this land use control)
Subdivision regulation
Zoning
Building Codes
Planned Unit Developments
building codes
When a zoning ordinance is revised, some existing land uses then fall outside the new zoning classification. These land uses are referred to as:
special uses
nonconforming uses
conforming uses
exclusionary uses
nonconforming uses
State and federal control of land uses has increased greatly over the past 40 years due in part to an increased awareness of environmental hazards. Which of the following federal environmental control laws was responsible for establishing the "Superfund" to finance emergency responses and cleanups of abandoned and unregulated waste dumps?
Clean Water Act
Resource Conservation and Recovery Act
Toxic Substances Control Act
Comprehensive Environmental Response Compensation and Liability Act
Comprehensive Environmental Response Compensation and Liability Act
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 by implementing:
performance standards
impact fees
growth moratoriums
planned unit developments
impact fees
A major problem in buildings constructed prior to the early 1970's, which of the following environmental hazards commonly associated with insulation has been the focus of costly cleanups at many public buildings, especially schools?
Asbestos
Radon
PCBs (Polychlorinated biphenyls)
LUSTs (leaking underground storage tanks)
asbestos
The right of government to acquire private property, without the owner's consent, for public use in exchange for just compensation is referred to as:
inverse condemnation
regulatory taking
eminent domain
dedication
eminent domain
Given the following information, calculate the total annual tax liability of the homeowner. Market value of property: $311,249, Assessed value of property: 0.86 % of the market value, Exemptions: $22,866, Millage Rate: 21 mills.
NOTE:
All numeric answers on the quiz and exams must be entered as positive numbers in the following formats if numbers or percentages: If the number answer was $45,000 or -$45,000. If the percentage was 9.54% or - 9.54%. The questions are worded in a way that a positive number or positive percentage will answer them correctly.
The correct format would be: "45650" or ".0954" or "0.0954"
5140.97
physical assets that can be owned
tangible property
non-physical assets such as stocks, bonds, mortgages, leases
intangible property
structures are what?
improvements on the land
Excavation and fill
sewers and other utilities
roads and driveways
improvements to the land
-Market for the physical real estate
-"buyers" receive right to use some space
-where rental rates are determined
User Market
-RE competes for funds in market with other asset classes such as stocks and bonds
-investors select a mix of investments based on expected return and risk
capital markets
-market for ownership claims to RE assets
-buyers/owners receive rights to cash flows generated by leasing space to tenants
-market is integrated no segmented
Property (Asset) Market
-heterogenous products
-immobile products
-localized markets
-segmented markets
-privately negotiated deals with high transaction costs
Characteristics of Real Estate Markets
-freedoms guaranteed by constitution
-Supreme Court interpretations of constitution
personal rights
-exclusive possession
-enjoyment of the use or benefit: use, collect rents, harvest
-freedom to dispose as one pleases: sell, convert, rebuild
property rights
-rights in land and its permanent structures
-surface of the earth and improvements
-air, up to reserved air space or tallest structure
-beneath the earth as far as technology allows: minerals, oil, and gas, water
real property
-all other property
-personal and household goods
-intellectual property
-music
personal property
-real property that formerly was personal property
fixture
Rules to determine when something become a fixture?
-manner of attachment
-character of the article
- manner of adaptation
-intention of parties
-relation of the parties
-dominant rule
-customary assumptions of the realm
-ex: kitchen appliances in a single family residence vs appliance in apt
intention of parties
-variant of rule of intention
-trade fixtures
-fences and other agricultural improvements
-items installed by a tenant in a residence
relation to parties
any set of rights in real property
interest
a real property interest that includes the right of exclusive possession
estate
-easements
-restrictive covenants
-liens
nonpossessory interest
-for a specific period of time
-must be written if for more than one year
-written lease contract governs entirely
tenancy for years
-no definite length of time
-often by oral agreement
-state law governs notice of termination
periodic tenancy
the right to use land for a specific and limited purpose
easement
-right of use a (dominant) parcel of land "enjoys" over an adjacent (servant) parcel
-"runs with the land"
easement appurtenant
-driveway or accès right of way
-sewer line
-drainage
-common wall
affirmative easement
-light and air easement
-scenic easement
negative easement
-right to use land, unrelated to any other parcel
-extract minerals, oils, build roadway, lay pipeline, etc.
-transferable separately from land title or ownership
-no dominant parcel- only servant parcels
easement in gross
-conveys all rights of the easement
-recipient can convey access to others
exclusive easement in gross
-rights limited to one user only
-recipient cannot extend access to others
-owner can convey access to others
nonexclusive easement in gross
-similar to easement in gross
-conveys permission rather than right
-revocable
-automatically terminated at the death of the grantor or sale of the land
License
-covenants that impose restrictions on land use
--no chain link fence, no RV, boats in street view, etc.
restrictive covenants
-an interest in property as security for an obligation
-usually a debt
lien
-arise from events unrelated to the property
-court awarded damages
-federal tax liens
general liens
-arise from ownership and use of the property
-mortgage
-mechanics lien
-property tax or assessment lien
specific lien