REE 3043

EXAM 1

Which methods does the federal government use to influence the real estate market?

income tax incentives, fair housing laws, granting housing subsidies

The term "real estate" is used in three fundamental ways. These include all of the following EXCEPT :

to identify all types of property.

Which of the following statements define the role of Real Estate in our economy?

All of these statements are correct.

What two elements are involved in every real estate investment decision?

Initial cost and value of future benefit.

Approximately what portion of U.S. households owns their own home?

Approximately two-thirds

The total value of owner-occupied housing and investible commercial real estate in the United States is estimated to be approximately:

$16 Trillion

Judgment liens against an owner of real estate may be nullified or limited by:

state laws governing homesteads.

In Florida, designating a principal residence as a homestead:

usually creates automatic protection of the residence from general liens up to some limit.

Liens which arise from construction and other improvements to real estate are called:

mechanics' liens

Rules used by the courts to determine whether something is a fixture include all EXCEPT

Law of Capture.

Which of the following marriage-related forms of co-ownership gives the surviving spouse, one-third life estate in real property, but ignores personal property wealth, of the decedent?

Dower/Curtesy

The form of property ownership which involves choice of floating time intervals and resorts, has a questionable history, and should never be viewed as a financial investment is:

Timeshare

Jasmine received an inheritance, from her grandfather, of 40 acres of land. She is trying to decide if she should develop the land, sell it, or just keep it as is. Her lawyer told her she is free to do whatever she wants. This is an example of which type of ownership estate?

Fee simple absolute.

The city of Grand Rapids installed a new water main on Oak Street. The city then decided to charge the property owners along Oak Street a proportional cost of the new water main. If a property owner refuses to pay their proportional share of the cost, the city may file

an assessment lien

A legally binding promise for which the grantor becomes liable is:

a covenant.

The task of examining the evidence, regarding property ownership, in the public records is known as:

a title search.

Legal ownership of real property is evidenced by:

a deed.

The developer of a residential subdivision is usually required to file a \________ in public records which shows the location of the streets as well as the lot and block numbers of each parcel within the subdivision.

plat map

A governmental taking of private property for a public use for just compensation to the owner is possible under the governmental police power of:

eminent domain

Formula:

Rt \= (EB - Io)/(VT - VX)

\*****************************************************

Calculate the tax rate in "mills" given the following information:

Property assessed value \= $2 Billion

Property Exemptions \= $550 Million

Income from other sources other than property tax \= $71.75 Million

Budgeted expenditures \= $108 Million

25 mills

A neighborhood association was formed to improve the community. They built parks, bike paths, landscaped the entrance and invited entertainers to perform at the 4th of July celebrations. All of this has contributed to an increase in property values. What would account for this increase?

positive externalities

Property taxes are the principal source of revenue for:

local governments and school districts.

Which is NOT a basic power of government limiting private property?

The power to restrict owners from selling land.

What is the effective tax rate based on the following information:

Taxes paid \= $5,363

Market value of property \= $425,000

Assessed value of property (after exemptions) \= $325,000

1.25%

Which of the following statements is least correct regarding Government use of its power of Eminent Domain?

Eminent Domain is the inherent power of the government to seize a citizen's private property, or rights in private property, if the owners consent.

A property zoned "agriculture" is used for grazing sheep. This is considered:

a conforming use.

Three students, John, Kathryn and Michelle, upon graduation from UCF, plan to invest in Real Estate. John is going to buy shares in an Exchange-Traded, Equity, Real Estate Investment Trust (REIT). Kathryn is going to purchase a four-unit apartment building near UCF, to rent to college students. Michelle is going to purchase shares in Home Properties, Inc. a leading Apartment REIT. In light of this, which of the following statements is most correct?

John and Michelle will be indirect equity investors in real estate and Kathryn will be a direct equity investor in real estate.

Which of the following statements is (are) correct about Real Estate Investment Trusts (REITs):

All of these answers are correct.

The "gravity" that draws economic activity into clusters is:

Demand for access or proximity.

Spatial or distance relationships that are important to a land use are called its:

Linkages

Cities have tended to grow where:

Transportation modes intersect or change.

The economic base multiplier of a city tends to be greater if the city is:

Larger

The best example of a base economic activity would be a:

Regional sales office.

Important supply factors affecting a city's growth or growth potential include all except the:

Unemployment Rate

Which of these are true about agglomeration economies

All of the above

Which of these influences will decrease the level of a bid-rent curve at the center of the city?

Faster travel time

In a system of bid-rent curves, assuming that households are identical except for the feature noted, which of these prospective bidders will bid successfully for the sites nearest to the CBD?

Households with the greatest number of commuting workers.

A large university is an example of what kind of economic phenomenon?

Industry economies of scale.

A market where tenants negotiate rent and other terms with property owners or their managers is referred to as a:

-User market

Because of the heterogeneity and immobility of real estate assets, the market for evaluating, producing, buying, selling, leasing and managing real estate tends to be characterized as:

-Localized

-Highly segmented

-Having high transaction costs

-Involving privately negotiated transactions

Land without any improvements is sometimes called

-Raw land

Items that are not naturally occurring on land, such as a building, sidewalk or swimming pool are called the \____________ the land.

Improvements on

Real Estate as an industry or profession includes all of the following:

-Mortgage Finance

-Development

-Property management

-Government regulation and taxation

Real estate markets differ from other asset classes by having all of the following characteristics:

-High transaction costs

-Local market

-Segmented market

-NOT homogenous product

The total value of owner-occupied housing in the United States today is estimated to be approximately:

-$16 trillion

Judgment liens may be nullified by the direct co-ownership form of:

Tenancy by entirety

Designating a principal residence as a homestead:

Usually creates automatic protection of the residence from general liens up to some limit.

Lien Priority in real estate is significant because of:

The "all or nothing" treatment of creditors in the event of a property sale.

Real estate property taxes generate approximately \_______ of local government revenue.

-70%

The Rushing River Ranch is running out of room for their livestock. They ask the property owner adjacent to their land if they can lease 1000 acres for the next ten years. Upon signing the lease, Rushing River Ranch erects 40,000 feet of fence on the property to contain their livestock. At the end of the lease, Rushing River Ranch decides not to renew the lease. According to the four rules for fixtures, who owns the fence and why?

- The Rushing River Ranch, because all agriculture fixtures belong to the tenant.

Which of these marriage-related forms of co-ownership is a provision of common law (traditional English) giving the surviving spouse one-third life estate in real property of the decedent?

Dower Curtsey

Items that were formerly personal property but have been converted to real property are called:

Fixtures

Which type of home ownership involves the corporation owning title to all land and improvements, while each individual owner holds shares in the corporation and a proprietary lease to their respective unit?

Cooperative

Which of these is a titled estate?

estates

Which of the following is NOT a non-possessory interest in real property?

-patent

-non-possessory: restrictive covenant, lien, easement

If documents conveying interests in real property are properly recorded in the public records, they are binding or enforceable on all persons, regardless of whether those persons are aware of the documents, by the:

Doctrine of constructive notice

Title insurance is:

-Protection against the cost of defending claims against the title of the property.

The deed most commonly used by businesses to convey property because it commits the business to no additional covenants is the:

Deed of bargain and Sale

Conveyances resulting from events beyond the control of the grantor would include:

Probate proceedings to settle grantor's estate

-Sale of property in bankruptcy proceedings

-Divorce settlement

-NOT a quitclaim settlement

Zoning ordinances have the authority to restrict the:

-Height of structure

-Category of land use

-Distance of a building from property line

-NOT size of family allowed to live on the property

Roger has operated a small engine repair shop out of his garage for a number of years. Recently, the city's zoning board changed the zoning in Roger's neighborhood and no longer allows business uses in the neighborhood. However, since Roger's business existed prior to the zoning change, the city will recognize his business as a(n)\____________ and Roger will be permitted to continue the business as long as it is not modified or expanded.

-Non-conforming use

Rules used by the courts to determine whether something is a fixture include:

-Intention of the parties

-Relation of the parties

-Manner of attachment

-Character of the article and manner of adaptation

-NOT Law of Capture

Timeshares:

-Wide range in "quality" of ownership

-Industry with questionable history

-Buyer receives choice of floating time intervals & choice of resorts

-Key to success is ability of timeshare organization to deliver enduring service

-NOT great financial investment