1. What is the term for a legal process to divide a property owned by two or more people?
A. Foreclosure
B. Partition
C. Eminent Domain
D. Condemnation
2. What is `REIT` (Real Estate Investment Trust)?
A. A government agency that regulates the real estate industry.
B. A company that owns or finances income-producing real estate.
C. A type of mortgage that is guaranteed by the government.
D. A legal document that outlines the rights and responsibilities of a landlord and tenant.
3. What is a `1031 exchange`?
A. A type of mortgage that is guaranteed by the government.
B. A tax-deferred exchange of one investment property for another similar property.
C. A government program that provides subsidies to developers.
D. A legal process for resolving disputes between neighbors.
4. What is `gross lease`?
A. A lease where the tenant pays a fixed rent amount, and the landlord pays for property taxes, insurance, and maintenance.
B. A lease where the tenant pays a percentage of their gross sales as rent.
C. A lease where the tenant pays for all property expenses, including taxes, insurance, and maintenance.
D. A short-term lease agreement.
5. What is a `lien` in real estate?
A. A type of decorative molding used in interior design.
B. A legal claim or right against a property as security for a debt or obligation.
C. A government program that provides financial assistance to first-time homebuyers.
D. A clause in a lease agreement that allows the tenant to purchase the property at the end of the lease term.
6. What is a `real estate broker`?
A. A person who provides financial advice to real estate investors.
B. A licensed professional who acts as an intermediary between buyers and sellers of real estate.
C. A government official who regulates the real estate industry.
D. A person who manages rental properties on behalf of owners.
7. Which of the following terms best describes the process of determining the market value of a property?
A. Depreciation
B. Appraisal
C. Amortization
D. Escrow
8. What is the primary purpose of title insurance?
A. To protect the property owner against damage from natural disasters.
B. To protect the lender against borrower default.
C. To protect the buyer against defects in the title to the property.
D. To insure the property against fire and other hazards.
9. What is `PMI` (Private Mortgage Insurance)?
A. A type of insurance that protects the buyer against defects in the property.
B. Insurance that protects lenders if a borrower defaults on a conventional loan, typically required when the borrower makes a down payment of less than 20%.
C. Insurance that protects homeowners against damage from natural disasters.
D. Insurance that protects renters against loss of personal property.
10. Which document transfers ownership of real property from one party to another?
A. Mortgage
B. Deed
C. Lease Agreement
D. Promissory Note
11. What is `ad valorem` property tax?
A. A tax that is based on the assessed value of the property.
B. A tax that is levied on the transfer of property ownership.
C. A tax that is used to fund public schools.
D. A tax that is paid by renters.
12. Which of the following is NOT typically considered a closing cost in a real estate transaction?
A. Appraisal Fee
B. Property Taxes
C. Moving Expenses
D. Title Insurance
13. In real estate, what does `ROI` stand for?
A. Rate of Interest
B. Return on Investment
C. Real Option Income
D. Risk of Inflation
14. What is `net lease`?
A. A lease where the landlord pays all property expenses.
B. A lease where the tenant pays a base rent plus a portion of the landlord`s property taxes, insurance, and maintenance costs.
C. A lease where the rent is based on the tenant`s net income.
D. A lease with no fixed term.
15. What is the difference between `leasehold` and `freehold` ownership?
A. Leasehold is ownership for a limited period, while freehold is indefinite ownership.
B. Leasehold involves owning the building only, while freehold includes the land.
C. Leasehold is for commercial properties, while freehold is for residential properties.
D. Leasehold is a type of mortgage, while freehold is outright ownership.
16. What is `capital gain` in real estate?
A. The profit from the sale of a property, calculated as the difference between the sale price and the original purchase price, less expenses.
B. The total amount of rent collected from a property over a year.
C. The cost of renovating a property to increase its value.
D. The amount of money borrowed to purchase a property.
17. What is `depreciation` in real estate accounting?
A. The increase in the value of a property over time.
B. The decrease in the value of a property due to wear and tear or obsolescence, used for tax purposes.
C. The process of insuring a property against fire and other hazards.
D. A fee charged by a lender for processing a mortgage application.
18. What is `Eminent Domain`?
A. The right of the government to take private property for public use, with just compensation.
B. A type of loan that is guaranteed by the government.
C. A legal process for resolving disputes between neighbors.
D. A clause in a lease agreement that allows the tenant to sublet the property.
19. What is a `contingency` in a real estate contract?
A. A type of architectural design.
B. A clause that allows a party to cancel the contract if certain conditions are not met.
C. A government program that provides subsidies to developers.
D. A formal offer to purchase a property.
20. What does `HOA` stand for in real estate?
A. Home Owners Association
B. Housing Opportunity Administration
C. Homestead Ownership Act
D. Home Office Allowance
21. What does `REO` stand for in real estate?
A. Real Estate Ordinance
B. Real Estate Owned
C. Real Estate Outsource
D. Real Estate Obligation
22. What is `amortization` in the context of a mortgage?
A. The process of insuring a property against fire and other hazards.
B. The gradual repayment of a loan principal over a specified period.
C. The process of estimating the market value of a property.
D. A fee charged by a lender for processing a mortgage application.
23. What is a `fixture` in real estate?
A. A temporary decoration that is easily removed from a property.
B. An item of personal property that is permanently attached to a property and considered part of the real estate.
C. A type of loan that is used to finance the purchase of a property.
D. A legal document that outlines the rights and responsibilities of a landlord and tenant.
24. What is `due diligence` in the context of real estate transactions?
A. The process of legally evicting a tenant.
B. A formal property appraisal conducted by a licensed appraiser.
C. A comprehensive investigation of a property and related documents to verify facts and identify potential issues.
D. The process of securing a mortgage loan.
25. What does `escrow` mean in a real estate transaction?
A. A type of insurance policy that protects against property damage.
B. A neutral third party that holds funds and documents until specific conditions are met.
C. A government agency that regulates real estate brokers and agents.
D. A legal process for resolving disputes between buyers and sellers.
26. What does `zoning` refer to in real estate?
A. A type of insurance that covers damage from natural disasters.
B. The division of land into districts with specific regulations for land use, building height, and density.
C. The process of surveying a property to determine its boundaries.
D. A tax levied on real property by local governments.
27. What is `right of first refusal` in a real estate contract?
A. The right of a tenant to renew a lease at the end of the term.
B. The right of a party to match the terms of a third-party offer to purchase a property.
C. The right of a homeowner to build an addition to their property.
D. The right of a lender to foreclose on a property.
28. What is `cap rate` (capitalization rate) used for in real estate investment?
A. To measure the annual property tax rate.
B. To estimate the potential rate of return on an investment property.
C. To calculate the cost of property insurance.
D. To determine the amount of depreciation that can be claimed on a property.
29. What is a `quitclaim deed`?
A. A deed that provides the highest level of protection to the buyer.
B. A deed that transfers ownership without any guarantees or warranties about the title`s validity.
C. A deed used to transfer property to a family member.
D. A deed used to correct errors in a previous deed.
30. What is a `balloon payment` in a mortgage?
A. A large, one-time payment due at the end of a mortgage term.
B. A type of insurance that protects against property damage from balloons.
C. A small, regular payment made throughout the mortgage term.
D. A fee charged by a lender for late payments.
