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Real Estate Broker

Real Estate Broker Practice Test

QuestionAnswer
Ratification The confirmation or adoption of a previous act done either by the party himself or by another.
Loyalty In real estate terms, this means doing nothing that might weaken the sellers bargaining position and that responsibility ends when the sale is complete
Ostensible/ Implied agency an actual agency relationship that arises by the actions of the parties rather than by expressed written agreement
Holographic will A holographic will is a do-it-yourself handwritten will.
Chain of title the history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.
encumbrance Anything that limits a person's use of a property or a liability attached to a property is called
How many years is an attachment lien good for An attachment lien is good for three years and may be renewed
Cost Basis Capital Expenditures made for improvements to property are added to the **********of the property and then Depreciated.
general warranty it establishes the ownership trail and validity of title going back to the original recorded ownership
Sale-Leaseback the Seller becomes a Tenant, thus allowing the Seller to deduct all of his future rent payments as business expenditures
delivered and accepted The title to real estate passes when a valid deed is
Quitclaim Deed is a deed operating as a release; intended to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor.
Intestate succession occurs when someone dies without leaving a will, or leaving an invalid will so that the property of the estate passes by the laws of succession rather than by the direction of the deceased.
A progressive tax a tax structure where people who earn more are charged a higher percentage of their income
A deed the instrument by which ownership of a property is transferred from one person to another. First to possess or record gets the property.
Chain of Title links together the successive owners of a property from the most recent to the original recorded title holder. In addition, it notes other relevant information such as mortgages, judgments, liens, death of title holders, inheritors and so forth.
Writ of Execution A court order instructing an officer of the court to carry out the decision of the court, such as the selling of foreclosed property or the removal of a tenant at sufferance.
Partition a suits are typically pursued when a co-owner of a property wants to sell his or her share and the other owners are opposed.
restrictive covenants They are placed by private parties in a deed
assessment roll would produce a total assessed value, which could then be divided by the anticipated cost of government to determine the tax rate. The total value becomes the tax base for the community.
bill of sale A written instrument which passes title of personal property, such as furniture purchased as a part of a home sale, from seller to buyer.
A Quitclaim Deed has NO warranties
A deed the written form by which land is transferred from one owner to another.In order to be legal, they must be executed, delivered by the current owner and accepted by the new owner.
short rate a higher pro rata premium charged by an insurance company for early cancellation of a policy.
board of equalization a local or state government agency charged with the task of ensuring that tax assessments are applied uniformly and fairly in the area of its jurisdiction.
Riparian Rights are water rights in regard to a MOVING BODY of water like a river or a stream.
marketable title title to property that is free from exceptions or questions that pertain to validity of seller's ownership, and nature or number of encumbrances and would be readily insurable by a title insurance company and financeable by a mortgage lender
abstract of title is a written summary that traces every change of ownership and claim against a property (such as mortgages, liens, and easements
extended coverage policy of title insurance covers the possibility that some improvements on the insured property are located on adjoining land
standard form policy of title insurance will only covers those matters of record.
alienation the transfer of an ownership interest in real property.
Private Restrictions set forth by the Grantor or Developer in some form of written agreement, usually a Deed.
assignment act of transferring some property right or interest from one entity or person to another.
condemnation an administrative governmental proceeding in which private property is "taken" for public use.
dedication the gift of land by a private party to a public agency for a public purpose.
escheat the reversion of title to a decedent's real property to the state or local government in a circumstance in which no other persons are entitled to receive the property under a will or the laws of succession.
quiet title action a legal proceeding in which a property claimant forces another claimant or claimants into court to establish the true ownership of the property
constructive notice (also called legal notice) a judicial device that imputes knowledge of certain facts to certain parties based on a legal presumption that a reasonable person would have discovered the facts.
Avulsion a rapid and forceful washing away of land by water.
abstract of title give an at-a-glance history of all the recorded documents associated with a property, including changes in title, liens, mortgages taken out and paid off, transfers through death and so forth.
Boot refers to cash, or other dissimilar property that is utilized to balance out the equities of the properties being exchanged.
Lis pendens is a legal document giving notice that an action or proceeding is PENDING in the courts which affects the title to the designated property.
Turnkey Project term used for a property that is ready for occupancy, ready to be put into immediate use; equipped with, or including, everything needed to operate it.
granting clause the specific language in a deed specifying the type of estate being transferred and to whom it is transferred.
Basis is the value placed upon property for purposes of capital gains and depreciation
covenant of seisin derives from the French meaning to "sit upon or own" and gives owners the right to sell or transfer property at will.
Qualified intermediaries act as accommodators for a delayed 1031 tax-deferred exchange.
special warranty a deed, an owner transfers property guaranteeing the quality of title only during the period of his or her ownership leaving subsequent buyers vulnerable to prior claims.
standard form policy of title insurance will not include a survey or onsite inspection
capital gain is equal to the difference between the asset's cost basis and the current market value. Also known as "tax basis"
tax basis The original value of an asset for tax purposes (usually the purchase price).
Tax Shelter Income Tax
progressive tax is a tax structure where people who earn more are charged a higher percentage of their income
acceleration clause clause that proscribes that the entire unpaid balance of a loan is due immediately upon default of the loan, adding this clause does not limit the negotiability of the note
straight note no principal payments made, the entire principal amount of the loan is paid off at maturity or the end
points One point equals one percent
VA loan protects participating lenders from loss in the event of foreclosure by guaranteeing up to 50% of the loan, depending on the loan amount.
Compensating balances is the balance required to be kept on deposit at a bank by a borrower when taking out a loan.
Simple interest is the interest that is paid on the vast majority of Home Loans
Loan-to-Value Ratio ratio of the percentage of the appraised value of a property that a lender will loan.
Leverage is maximizing the use of borrowed money.
Negative amortization when the required loan payments do not cover the principal and/or interest on the loan; this causes the loan balance to increase.
subordination clause is a clause in some mortgages which allows subsequent mortgages on the same property to have higher claim than the current mortgage.
nominal loan rate the rate of interest stated on the face of the note
Novation is a term used in contract law and business law to describe the act of either replacing an obligation to perform with a new obligation, or replacing a party to an agreement with a new party
Reversion a circumstance in which the grantor has transferred less than the whole of his or her estate.
Pur autre vie for the life of anothe
easement in gross grants a company or individual limited rights to access another's property for a specific purpose--in this case, installing, maintaining and repairing telephone lines
Fee Simple Estate Also referred to as an Estate of Inheritance
tenancy in common a form of ownership
forms of rental arrangements tenancy at will, at sufferance and for years
estate at will a leasehold estate of undefined term that may be terminated at any time by either the landlord or the tenant.
Constructive eviction is when actions of a landlord happen (or third party) which interfere with a tenant's use and enjoyment of the rented premises
Fee Simple Defeasible puts conditions on the use of a property
tenancy in Common Unity of Possession is the only unity required in a
equitable title an ownership interest held by one who does not have legal title to a property
Subdivision Map Act gives certain municipalities control over subdivision design and it is enforced by the respective city or county in which it is enacted
Surrendered When a lease is terminated by the mutual agreement of the lessor and the lessee, the lease is said to be
joint tenancy types of ownership CANNOT be created by operation of law, but must be created by the parties' expressed intent
Created by: kk200013