Real Estate - The CE Shop Questions With Complete
Solutions
"
abutting Correct Answers "Land sharing a common border
Ex. Many neighbors find that fences make abutting properties
more tolerable.
"
acceleration clause Correct Answers "Allows a lender to
demand immediate and full payment of all debt owed if a buyer
defaults
Ex. When Wendy stopped making home loan payments, her
lender told her she must pay off her entire balance or risk
foreclosure.
"
accession Correct Answers "The addition of value to property
through labor or the addition of new materials, including an
increase in land through natural processes
Ex. Jonathan's property borders a bay. The bay receded, and
Jonathan gained an extra 10 feet of property to his land through
accession.
"
accessory use Correct Answers "An incidental or subordinate
use to the primary use of the property
Ex. Andy's military bunker in his back yard constituted an
accessory use of the property.
"
,accounting Correct Answers "One of the fiduciary duties,
accounting means an agent is accountable for any funds or
properties entrusted to the agent. This is a duty that survives
termination of an agency agreement.
Ex. Cameron accepted an earnest money deposit from his buyer.
His duty of accounting means that he must safeguard the funds
and handle them according to the agreement with his client and
the policies of his firm.
"
accretion Correct Answers "Land build up over water by sand,
silt, or gravel
Ex. Jillian's property grew through accretion when a landslide
wiped out an adjacent creek.
"
accrued items Correct Answers "Expenses that are accruing but
are not yet payable (e.g., property taxes)
Ex. At closing, accrued items must be accounted for on the
settlement statement. If the seller has accrued expenses not yet
payable, the amount accrued will be a seller debit and buyer
credit.
"
acknowledgment Correct Answers "A requirement for deed
transfer; a public official must acknowledge the grantor's
signature
Ex. Gary purchased a duplex. The grantor signed the deed; a
notary public acknowledged his signature.
"
,acre Correct Answers "43,560 square feet
Ex. The Jones farmhouse was on 10 acres. Their parcel had
435,600 square feet.
"
act of waste Correct Answers "Abuse of a property by a person
who holds possession through a life estate
Ex. When Minerva inherited the historic mansion and turned it
into an illegal video gaming parlor, this was an act of waste that
caused her to lose title to the property.
"
active fraud Correct Answers "Intentional misstatement of a
material fact
Ex. ""Sure, the foundation is perfectly safe!"" Lisa said, even
though she knew full well that there was a crack the size if
Toledo in it.
"
actual notice Correct Answers "Express notice given directly to
a person
Ex. Karen told her neighbors she would be moving; this was
actual notice.
"
addendum Correct Answers "An addition to a real estate
contract that's added before contract acceptance
Ex. Steve decided to ask for the washer and dryer after all, so he
asked his broker to write up an addendum to the sales contract.
"
, adjustable rate mortgage (ARM) Correct Answers "A mortgage
with a rate that adjusts based on changes in a market index
Ex. Caleb had a 5/1 ARM. His loan had a fixed interest rate for
the first five years, and after 5 years, it could change annually
depending changes to the market index.
"
adjusted basis Correct Answers "The final basis for taxing
purposes computed by taking acquisition costs plus capital
improvements and subtracting depreciation taken
Ex. When Mark computed the adjusted basis in his property, he
had to subtract $10,000 in depreciation he had taken over the
years.
"
adjustment Correct Answers "The dollar value or percentage
added to or subtracted from the sales price of a comparable to
arrive at an indicated value for the subject
Ex. Whether the adjustment is made for a "good" or a "bad"
feature, it is made to the comparable, not to the subject.
"
adjustment (loan) Correct Answers "A debit or credit at closing
to coincide with appropriate closing costs
Ex. When the document preparation fees were more than
anticipated, both sides received an adjustment at closing.
"
adjustment date Correct Answers "The date on which the
interest rate changes on an adjustable rate mortgage.
Solutions
"
abutting Correct Answers "Land sharing a common border
Ex. Many neighbors find that fences make abutting properties
more tolerable.
"
acceleration clause Correct Answers "Allows a lender to
demand immediate and full payment of all debt owed if a buyer
defaults
Ex. When Wendy stopped making home loan payments, her
lender told her she must pay off her entire balance or risk
foreclosure.
"
accession Correct Answers "The addition of value to property
through labor or the addition of new materials, including an
increase in land through natural processes
Ex. Jonathan's property borders a bay. The bay receded, and
Jonathan gained an extra 10 feet of property to his land through
accession.
"
accessory use Correct Answers "An incidental or subordinate
use to the primary use of the property
Ex. Andy's military bunker in his back yard constituted an
accessory use of the property.
"
,accounting Correct Answers "One of the fiduciary duties,
accounting means an agent is accountable for any funds or
properties entrusted to the agent. This is a duty that survives
termination of an agency agreement.
Ex. Cameron accepted an earnest money deposit from his buyer.
His duty of accounting means that he must safeguard the funds
and handle them according to the agreement with his client and
the policies of his firm.
"
accretion Correct Answers "Land build up over water by sand,
silt, or gravel
Ex. Jillian's property grew through accretion when a landslide
wiped out an adjacent creek.
"
accrued items Correct Answers "Expenses that are accruing but
are not yet payable (e.g., property taxes)
Ex. At closing, accrued items must be accounted for on the
settlement statement. If the seller has accrued expenses not yet
payable, the amount accrued will be a seller debit and buyer
credit.
"
acknowledgment Correct Answers "A requirement for deed
transfer; a public official must acknowledge the grantor's
signature
Ex. Gary purchased a duplex. The grantor signed the deed; a
notary public acknowledged his signature.
"
,acre Correct Answers "43,560 square feet
Ex. The Jones farmhouse was on 10 acres. Their parcel had
435,600 square feet.
"
act of waste Correct Answers "Abuse of a property by a person
who holds possession through a life estate
Ex. When Minerva inherited the historic mansion and turned it
into an illegal video gaming parlor, this was an act of waste that
caused her to lose title to the property.
"
active fraud Correct Answers "Intentional misstatement of a
material fact
Ex. ""Sure, the foundation is perfectly safe!"" Lisa said, even
though she knew full well that there was a crack the size if
Toledo in it.
"
actual notice Correct Answers "Express notice given directly to
a person
Ex. Karen told her neighbors she would be moving; this was
actual notice.
"
addendum Correct Answers "An addition to a real estate
contract that's added before contract acceptance
Ex. Steve decided to ask for the washer and dryer after all, so he
asked his broker to write up an addendum to the sales contract.
"
, adjustable rate mortgage (ARM) Correct Answers "A mortgage
with a rate that adjusts based on changes in a market index
Ex. Caleb had a 5/1 ARM. His loan had a fixed interest rate for
the first five years, and after 5 years, it could change annually
depending changes to the market index.
"
adjusted basis Correct Answers "The final basis for taxing
purposes computed by taking acquisition costs plus capital
improvements and subtracting depreciation taken
Ex. When Mark computed the adjusted basis in his property, he
had to subtract $10,000 in depreciation he had taken over the
years.
"
adjustment Correct Answers "The dollar value or percentage
added to or subtracted from the sales price of a comparable to
arrive at an indicated value for the subject
Ex. Whether the adjustment is made for a "good" or a "bad"
feature, it is made to the comparable, not to the subject.
"
adjustment (loan) Correct Answers "A debit or credit at closing
to coincide with appropriate closing costs
Ex. When the document preparation fees were more than
anticipated, both sides received an adjustment at closing.
"
adjustment date Correct Answers "The date on which the
interest rate changes on an adjustable rate mortgage.
