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60 Cards in this Set
- Front
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In accordance with the Doctrine of Emblements, emblements legally belong to the: landlord state Senator tenant farmer descendant’s estate |
A: tenant farmer Emblements are crops planted by the lessee while leasing the land and are legally his, even after the lease expires |
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To the owner of the land an easement runs across, it is a/an An appurtenance An attachment An annexation An encumbrance |
A: An encumbrance An easement is an encumbrance |
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A prior agricultural water right can be converted to domestic use through: variance escheat condemnation littoral right |
A: condemnation Condemnation is the judicial or administrative proceeding used to exercise the right of eminent domain, which is the taking of private property for public use. |
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When comparing/analyzing CMA, these are the factors that would be NOT be taken into consideration: Similar size properties sold in the neighborhood Date of sale Age of the property Accrued Depreciation |
A: Accrued Depreciation Accrued Depreciation is used by businesses to reduce their taxes. It is not a factor in determining market value. For tax purposes only, a building is considered to lose value each year to reflect its reduced functional life even if real estate market values are increasing. |
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An income property has a gross annual income of $14,250 and monthly expenses of $300. It has been valued at $147,000. What is the capitalization rate? 0.072 0.096 0.061 0.054 |
A: 0.072 $14250 - ($300 X 12) $3600 = $10,650/1$147,000 = .072 or 7.2% |
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Which of the following would be the most expensive method of appraisal of large, income-producing properties? Market data approach Comparative approach Replacement cost approach Capitalization approach |
A: Replacement cost approach The replacement cost method is normally the most time consuming and expensive method. |
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Colorado was surveyed using primarily the 6th Principal Meridian. Which of the following was used as the Baseline? UTE Principal Meridian New Mexico Principal Meridian New Mexico parallel The 40th latitude |
A: The 40th latitude The 40th latitude is the base line used to survey Colorado. |
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After the construction of a building over a railroad right-of-way, trains usually can: operate as usual no longer operate on tracks under the building operate on tracks under the building only if they cause no problem for occupants of the building operate only during selected hours of the day |
A: operate as usual The railroad has sold their air rights and can continue to operate normally. Reminder, water rights, air rights, mineral rights can all be sold separately and are not necessarily included in the sale of the real estate. |
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If a property’s annual net income is $24,000, and it is valued at $300,000, what is the capitalization rate? 0.08 0.105 0.125 0.15 |
A: 0.08 $24,000 (Net Income) / $300,000 (Value) = 8% (Rate) |
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The clause in a deed of trust, mortgage or promissory note which permits the lender to declare the entire unpaid balance due and payable at once, upon default of the borrower, is a(n): acceleration clause escalator clause forfeiture clause default clause |
A: acceleration clause The acceleration clause gives the lender the right to "accelerate" the loans due date to the present, usually for nonpayment or some other form of default. |
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Misrepresentation by a party to a contract differs from fraud as to the: consideration voidability of the agreement requirement of competency requirement of intent |
A: requirement of intent Fraud is deceitful practice or material misstatement of a material fact, known to be false, and done with the intent to deceive. Misrepresentation…. actions or words that may convey a false message, may be unintentional. |
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A person seeking intervention, who believes that they have been subject to discriminatory housing practice, must: file a written complaint with HUD within 1 year file a complaint with the Real Estate Commission file a written complaint with HUD within 2 years file a written complaint with the State of Colorado |
A: file a written complaint with HUD within 1 year Person seeking intervention must file a written complaint with the Office of Fair Housing within 1 year or may file in federal court within 2 years of the alleged discrimination. |
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The primary purpose of a deed is to? Transfer title Proof of ownership Recordation Legal evidence |
A: Transfer title The primary purpose of a deed is to give validation to the transfer of title. The deed allows the transfer of ownership. |
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When ownership of real property is transferred: every right must be transferred air rights are not transferred both surface and subsurface rights must be transferred all rights owned by the grantor may be transferred |
A: all rights owned by the grantor may be transferred All rights except those specifically excluded are transferred. Some rights such as mineral or water rights can be transferred separately. |
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Instruments affecting real estate are recorded with the recorder of deeds, in the county where the property is located, to: give constructive notice to the world of the interest in a particular parcel of property the instrument purports to create satisfy the legal requirements for recording to comply with the terms of the statute of frauds to prove the validity of the instrument |
A: give constructive notice to the world of the interest in a particular parcel of property the instrument purports to create In Colorado legal documents are not required to be recorded to be valid. Recordation gives construction notice to the world that the document exists, and establishes priority in the event of foreclosure. |
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The lender computed the interest for the previous month on a $120,000 mortgage loan balance at $825. What is the rate of interest? 0.07500000000000001 0.07750000000000001 0.0825 0.085 |
A: 0.0825 $825 X 12 = $9900 (Annual Interest) / $120,000 = .0825 or 8 1/4 % |
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Which of the following would be considered community property? A gift of property to the wife during the marriage Income earned by a spouse during the marriage Property inherited by the husband during the marriage Income earned by the wife prior to the marriage |
A: Income earned by a spouse during the marriage In a community property jurisdiction, most property acquired during the marriage (except for gifts or inheritances) is owned jointly by both spouses and is divided upon divorce, annulment or death |
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Responsibility for recording a deed is that of: State County Grantor Grantee |
A: Grantee The grantee or the buyer has the responsibility for recording the deed. |
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Comparable property “A” has central air conditioning worth approximately $2,000. Comparable property “B” does not. The subject property does not have central air conditioning. To adjust, an appraiser should: add air conditioning value ($2,000) to property “B” and the subject property to make them all equal add air conditioning value ($2,000) to the subject property, but not to comparable “B” because it’s on a smaller lot anyway subtract air conditioning value ($2,000) from the subject property and comparable “B” because they don’t have it subtract air conditioning value ($2,000) from comparable “A” to make it more like the subject property |
A: subtract air conditioning value ($2,000) from comparable “A” to make it more like the subject property Adjust comps to the subject. Never adjust or change the subject property. |
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The initials P.M.I. in financing circles apply to: high loan-to-value conventional loans. construction loans FHA loans VA loans |
A: high loan-to-value conventional loans. PMI refers to Private Mortgage Insurance; it is used in connection with, 80% or greater, conventional loans. |
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What was the original purpose behind the formation of the Federal National Mortgage Association? To buy existing FHA-insured loans To provide a stimulus to the housing construction market, as well as to the mortgage market To make more funds available to purchasers buying homes All of the above |
A: All of the above The Federal National Mortgage Association (Fannie Mae) is an active participant in the secondary mortgage market. |
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The parts of the property that are necessary or convenient to the existence, maintenance and safety of a condominium and are normally in common use by all of the condo residents are known as: community property common elements conveyance covenant |
A: common elements Each condo owner has an undivided ownership interest in the common elements. |
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The broker’s obligation to use his or her skill and expertise on behalf of the principal arises under which of the common-law duties? Care Obedience Loyalty Disclosure |
A: Care In regards to COALD, C stands for Care, the broker's obligation to use his/her skill and expertise on behalf of the principal. |
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If a 17 year old signs a contract is the contract: void voidable unenforceable invalid |
A: voidable A voidable contract, unlike a void contract, is a valid contract. At most, one party to the contract is bound. The unbound party may repudiate the contract, at which time the contract is void. An option to purchase is a voidable contract as the holder (buyer) of the option can choose to execute or not execute the agreement whereas the seller of the option is bound to its terms. Another way to look at it is: an agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a Voidable Contract. A contract can become voidable when the consent of one or more of the parties to a contract is obtained by coercion, undue influence, misrepresentation or fraud an agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract. This is the reason a contract with a minor is a voidable contract by the minor or a minor's legal representatives (the minor by him/herself does not have legal capacity to enter a contract) and not a void contract. |
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Mr. Brooks has decided to offer to buy a farm. He has been told that farmland in the area is selling for $3,500 to $4,000 per acre. Mr. Brooks offers $3,750 per acre. The legal description of the farm is: The NW-1/4, of the SW-1/4 and the E-1/2, of the NW-1/4, of Sec 3 Township 37 Range 12E of the 3rd P.M. Mr. Brook's offer is $425,000 The offer is based on 160 acres of farmland The offer is $450,000 and is 120 acres The offer is based on 5 acres of farmland |
A: The offer is $450,000 and is 120 acres The word “and” in the legal description indicates there are two different parcels. You need to determine the acreage of each one separately and then add the two together. The first parcel is “The NW-1/4, of the SW-1/4 “. In simpleze this is one quarter (NW ¼) of one quarter (SW ¼) of a section. To determine one quarter of a section (SW 1/4) you divide 640 by 4 equals 160 acres. To determine one quarter of that number (NW 1/4), divide the previous 160 by 4 equals 40 acres total in the first parcel. The second parcel is “the E-1/2, of the NW-1/4” . In simpleze this is one half of one quarter of a section. To determine one quarter of a section (NW ¼) you divide 640 by 4 equals 160. To determine one-half of that (E ½), you divide the 160 by 2 equals 80 total acres in the second parcel. 40 plus 80 equals 120 total acres in this legal description times the offer of $3750 per acre equals $450,000. |
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Once a plat is approved, what step must be taken prior to the lots being sold? building permits must be issued the site must be cleared and leveled the appropriate governmental authority must approve zoning The plat map must be recorded |
A: The plat map must be recorded The plat map must entered into the public record prior to being sold by recording. Waving around a government approval is not enough. |
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When a home is hit with a assessment to pay for an improvement in the neighborhood such as sidewalk repair, or paving a road, or new lighting it is added to the Assessment Role in an Special Improvement District. What must brokers disclose to all potential buyers? General taxes are going up substantially A special assessment tax or levy has or will be applied No disclosure is necessary Disclosure is not necessary until the tax has been levied. |
A: A special assessment tax or levy has or will be applied Generally, an Assessment Role is a list of all properties in a specific area and their assessed valuation for tax purposes. It makes it possible for property owners to compared the value of their properties against others to see if they have been over assessed. In a Special Improvement District, when a property is added to the Assessment Role it means that the property has been deemed to benefit from an improvement and thus is going to be hit by a special tax or levy to pay for it. This must be disclosed to all potential buyers. Since the tax or levy is only going to be applied to specific properties it is not a general tax levy which is applied to an entire community. |
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How many 50-foot by 110-foot lots could be obtained from an acre of land? 6 7 8 9 |
A: 7 This question involves calculating square footage. Whenever you do math questions like this you need to get all the factors converted to a common measure. You've got two measures here - one is "50-foot by 110-foot" and the other is "acre". In order to calculate how many of one (the lots) can be carved out of the other (the acre), you need to convert them to the common measure of square feet.Multiply 50 x 110 to get the square footage of one lot or 5500 square feet. The acre is a little trickier; you have to just know the total square feet (for us and the state test). It is 43560. Divide 5500 into 43560 and you get 7.920 lots. The question wants to know how many 50 x 100 foot lots you can get of an acre - the answer is 7. The .920 is not a full lot. |
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Which statements are true about VA guaranteed loans? The seller cannot pay all the closings costs, the funding fee or pay off any of the veteran's debts The borrower cannot pay discount points There is a maximum loan amount VA will lend None of the above |
A: None of the above With a VA loan the seller can pay all closing costs, the funding fee and pay off the veteran's debts. The maximum amount that the VA will guarantee is varies by region of the country, but there is no maximum loan amount. |
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The person who acquires real property under the terms of a will is known as a(n): devisee administrator testator executor |
A: devisee A devise is a transfer of real property under the terms of a will. The person receiving the real property is known as the devisee. The person who is transferring the property is known as the devisor. |
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Mr. Brown and Mrs. Brown held title as Tenants in Common to the family home. Mrs. Brown wanted a niece to inherit her share of the property when she died, but did not want to tell her husband. So she made out a proper deed conveying her interest to her niece had her signature duly acknowledged (notarized) and gave it to a close friend who agreed to hand it over to the niece after Mrs. Brown's death. Mrs. Brown died, and the friend carried out the instructions. The deed was: invalid, deeds must be delivered during the lifetime of the grantor invalid, as she could not deed her interest in community property invalid, because a married couple cannot hold a property as Tenants In Common valid as the deed was delivered to a close relative after grantor's demise |
A: invalid, deeds must be delivered during the lifetime of the grantor A deed cannot be delivered after the death of the grantor. Since there was not proper delivery, Mrs. Brown's Last Will and Testament shall decide who gets her share of the property. |
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When selling real estate in municipalities that have enacted anti-discrimination laws, which have not been adopted state-wide, such as those that makes sexual orientation a probable cause: you need not comply unless your office is located within that municipality you need not comply if it is morally repulsive to you you must comply with the laws when selling property within the jurisdiction of the municipality you need only comply with Federal Fair Housing Laws |
A: you must comply with the laws when selling property within the jurisdiction of the municipality You must comply with the laws within that jurisdiction of the municipality. |
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Each unit in a duplex, rents for $400 per month, with a sales price of $96,000, the monthly gross rent multiplier would be: 10 120 240 20 |
A: 120 $400 x 2 = (duplex = $800 ); $ 96,000 sales price divided by $800 monthly rent = 120 Gross Rent Multiple (GRM) |
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The "Highest and Best Use" is a term that means the use of the property that: contributes to the best interest of the community complies with zoning and deed restrictions produces the highest monthly gross income produces the highest property value |
A: produces the highest property value Highest and best use is a concept in real estate appraisal. It states that the value of a property is directly related to the use of that property; the highest and best use is the reasonably probable use that produces the highest property value. This use, the Highest and Best Use, may or may not be the current use of the property. |
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Which statements are true of a VA loan? The original veteran is responsible for an assumption, when the new buyer is a veteran and arranges for a "substitution of entitlement" The funding fee may be financed The Government guarantees the entire loan amount All VA loans require at least a 3% down payment |
A: The funding fee may be financed The original veteran is responsible for the assumption, when the new buyer does a non-qualifying assumption. The funding fee may be financed. |
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The rights of a landowner to use waters of an adjacent lake or ocean are known as: riparian rights zoning rights littoral rights livery of seisin |
A: littoral rights Both riparian and littoral rights concern water, littoral rights specifically apply to nonmoving bodies of water, like lakes, ponds, and oceans. |
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A section: contains 680 acres is one square mile is two square miles contains 43,650 square feet |
A: is one square mile A section is one mile square |
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The appraisal principle that states that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from the whole is called: conformity anticipation competition contribution |
A: contribution Contribution says that the value of any component of a property is what its addition contributes to the value of the whole. |
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The buyer wants to make the purchase offer contingent on a complex mortgage arrangement. The buyer's agent who is drawing up the contract should: suggest the buyer ask a lawyer to furnish the wording include the provision for the mortgage as the buyer request consult the supervising broker for advice refer the matter to the seller's agent |
A: suggest the buyer ask a lawyer to furnish the wording It is important for a licensed agent to know when something has exceeded his/her expertise or are involved in an activity not permitted through a real estate license. |
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When Anthony purchased his home, the title insurance company's report included all of the following EXCEPT: a list of outstanding mortgage loans against the property a report of existing tax liens against the property a record of all previous owners of the property a list of tax districts impacting the property |
A: a record of all previous owners of the property Title insurance documents include all liens and deflects of record and easements, but not the chain of title. |
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Real estate transactions may require the services of: real estate attorneys title companies real estate agents all the above |
A: all the above Title companies, accountants, and real estate attorneys are frequently utilized in a real estate transaction. Title companies are utilized very frequently, attorneys are used quite frequently in some parts of the country but less frequently in Colorado. Accountants and attorneys are nearly always used in commercial real estate transactions. |
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When borrowing for the purchase of personal property; such as when acquiring a furnished home, The Uniform Commercial Code requires the borrower: pledge real property as chattles sign a security agreement and file a financing statement record the deed obtain an abstract of title |
A: sign a security agreement and file a financing statement The Uniform Commercial Code (UCC or the Code), first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states. The goal of harmonizing state law is important because of the prevalence of commercial transactions that extend beyond one state. For example, goods may be manufactured in State A, warehoused in State B, sold from State C and delivered in State D. The UCC therefore achieved the goal of substantial uniformity in commercial laws and, at the same time, allowed the states the flexibility to meet local circumstances by modifying the UCC's text as enacted in each state. The UCC deals primarily with transactions involving personal property (movable property), not real property (immovable property).The UCC-1 “security agreement” establishes a lien against personal property. Rather than filing the “security agreement” the UCC allows a short form called the “financing statement” to be recorded.This occurs in real estate transactions when personal property is sold with real estate; such as the sale of a furnished home or a fully equipped restaurant. |
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Ben and Dave are co-owners of a fee simple estate in a parcel of real estate. Ben dies intestate and leaves no estate to be distributed to his heirs. Dave is neither related to Ben, or a creditor of Ben. Which of the following explains how Dave acquired the interest of Ben? Adverse possession Reversionary right Joint tenancy Mortgage foreclosure |
A: Joint tenancy In estate law, joint tenancy is a special form of ownership by two or more persons of the same property. The individuals, who are called joint tenants, share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. Joint tenancy creates a Right of Survivorship. This right provides that if any one of the joint tenants dies, the remainder of the property is transferred to the survivors. |
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When the grantor (the owner) offers the grantee (the buyer) a General Warranty Deed transferring ownership; the grantor warrants that the property is free from liens and encumbrances through which Covenant? covenant of seisin covenant of further assurance covenant of quiet enjoyment covenant against encumbrances |
A: covenant against encumbrances This covenant is easy to remember, since the title is the same as what it protects against - encumbrances |
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A lien's priority is determined by: The size of the lien determines priority A mechanic's lien always has first priority The date of the lien determines priority The date the lien is recorded determines priority except mechanic's liens |
A: The date the lien is recorded determines priority except mechanic's liens The date that the lien is recorded determines it priority except for a mechanics lien which the priority is determined by the date the work commenced or materials delivered |
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Mr. Davis was assessed by the city 6 cents per square foot of his property as a special assessment, his property measured 80 feet X 135 feet. What did the special assessment cost him? 64.8 648 6480 592.75 |
A: 648 Take the length 135 times the width 80 to get the total square footage = 10800 X .06 = $648 |
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Which of the following is NOT real property? Wall-to-wall carpeting Built in dishwasher Drapes Sump pump |
A: Drapes Drapes are personal property as are all other non-attached window coverings. They can be included in the sale of a property if expressly included in the contract to buy and sell of the property. All other items listed in the answers are attached to the property and therefore, are considered real property. |
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If conditions for purchase are included in a deed and these conditions are violated, what is the penalty? Penalty charges are to be assessed An injunction against further use of the property A court order enforcing compliance can be issued The property may be returned to the original owner |
A: The property may be returned to the original owner A deed restriction is a type of private agreement restricting the use of real estate. Such restrictions are usually listed within the written deed document relating to the property, and should be noted if the property is to be sold or transferred. A deed restriction can also place limitations on the title to the property, such as when a seller wishes to sell their property according specific conditions.Although deed restrictions can often be helpful for numerous parties, there are times when they cannot be enforced. These can include situations where: The applicable term or time period for enforcement has expired A condition for enforcement is no longer valid or applicable The restrictions provisions are illegal The deed restrictions are clearly against public policy (such a restriction that encourages housing discrimination) When seeking to have a deed restriction enforced, the courts will usually draw upon state and local laws. Thus, enforcement of deed restrictions can vary by region. Legal remedies for a violation of a valid deed restriction may include a monetary damages award or other types of compensation. |
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A seller listed her home with a broker. After a few months, the seller found a buyer, and the sale closed. The seller was not obligated to pay a commission to the broker. This listing was MOST likely: net listing buyer agency agreement exclusive agency listing exclusive right to sell listing |
A: exclusive agency listing Do not confuse an exclusive agency agreement with an exclusive right to sell. An exclusive agency means that if the seller finds a buyer independent of their listing broker - the seller owes no commission. An exclusive right means that the listing agent is owed a commission regardless of who found a buyer. |
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A preliminary title report, that lists an existing mortgage on the subject parcel of real estate, indicates that there is a(n): restriction against selling the property encroachment on the property, by the rights of others easement right, extending across the property lien against the property because it was pledged as security for the debt |
A: lien against the property because it was pledged as security for the debt A mortgage creates a financial interest on behalf of the lender called a lien. |
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Just as an agent owes duties to the principal, a principal owes duties to the agent. They may include which of the following? Perform the agency contract Compensate the agent Reimburse the agent for expenses All of the above |
A: All of the above 25. The law of agency governs the duties and obligations of both the agent and the principal. |
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An owner of real estate possesses certain rights, including: possession of the property control of the property disposition of the property all of the above |
A: all of the above Possession, control and disposition of ownership are included in the bundle of rights. The "Bundle of Rights" can best be remembered by the name "C-U-P-E-D". These letters stand for control, use, possess, enjoy, and dispose. |
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The characteristic of being unique means that: identical buildings placed on two separate parcels have the same value geographically, all parcels of real estate are different two parcels of land next to each other are sometimes dissimilar all of the above |
A: all of the above No two parcels of land are exactly the same. |
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The conditions of sale will affect the: price of the subject property cost of the subject property value of the subject property utility of the subject property |
A: price of the subject property Conditions of the sale, such as a forced sale, may affect the price paid for a property but would have no effect on its cost, value, or utility. |
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A power of attorney requires: consideration written authority the agent to use an attorney-at-law a safety clause |
A: written authority A power of attorney must be in writing. |
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When is the broker obligated to advance funds on the buyer’s behalf? When buyer is short of funds When additional inspection tests are done on the property to be purchased Always Never |
A: Never The broker is never obligated to advance funds on the buyer's behalf. |
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All of the following are examples of a specific lien, EXCEPT Mortgage Mechanic's lien Judgment Property taxes |
A: Judgment All of the rest apply to a specific property, while a judgment is against an individual and all of there property |
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In the income approach to value, the net income is determined by deducting the expenses from the: operating profit gross income effective gross income none of the above |
A: effective gross income Gross income, less bad debt/vacancy factor, equals effective gross income; less operating expenses equals net operating income. |
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A defect that is described as latent is: An old defect A breach of contract by the seller A defect that a prudent buyer can see A defect that is hidden from view |
A: A defect that is hidden from view A defect that is hidden from view is considered a latent defect |
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The ownership of property by one person only is known as: severalty joint tenancy tenancy in common tenancy by entirety |
A: severalty Ownership is severed or separated from any form of co-ownership, be it tenancy in common, joint tenancy and tenancy by the entirety are ALL forms of co-ownership. |
