1. What is ‘amortization’ in the context of a mortgage?
A. The process of insuring the mortgage
B. The process of decreasing the property value
C. The process of gradually paying off a debt through regular payments
D. The process of refinancing a mortgage
2. What is a ‘real estate agent’?
A. A person who appraises properties
B. A licensed professional who helps clients buy, sell, or rent properties
C. A person who inspects properties
D. A person who manages properties
3. What is ‘leverage’ in real estate investing?
A. The process of renovating a property
B. The use of borrowed capital to increase the potential return of an investment
C. The process of decreasing property taxes
D. The process of insuring a property
4. What is a ‘broker’ in real estate?
A. A person who manages rental properties
B. A licensed professional with more education and authority than an agent, who can employ agents
C. A person who appraises properties
D. A person who inspects properties
5. What is ‘property management’?
A. The process of buying and selling properties
B. The oversight of real estate, including maintenance, tenant relations, and rent collection
C. The process of appraising properties
D. The process of insuring properties
6. What is a ‘deed’ in real estate?
A. A document used to finance a property
B. A legal document that transfers ownership of real estate
C. A type of insurance policy
D. A document outlining property zoning regulations
7. What is a ‘contingency’ in a real estate contract?
A. A mandatory fee paid by the buyer
B. A condition that must be met for the contract to be binding
C. A type of insurance policy
D. A clause that automatically renews the contract
8. Which of the following describes a ‘lien’?
A. A type of insurance policy
B. A claim or legal right against assets, often used as collateral
C. A form of property tax
D. A type of rental agreement
9. What is a ‘leasehold’ estate?
A. Ownership of a property for an unlimited duration
B. The right to possess a property for a specified period
C. Full ownership of a property
D. A type of mortgage
10. What is ‘zoning’ in real estate?
A. A type of property tax assessment
B. A set of regulations governing land use and development
C. A method of financing real estate projects
D. A process for resolving property disputes
11. What is the main purpose of a ‘title search’?
A. To determine the property’s market value
B. To discover any claims, liens, or encumbrances on the property
C. To assess the property’s structural integrity
D. To negotiate the purchase price
12. Which term defines the legal right to ownership of a property?
A. Lien
B. Easement
C. Title
D. Deed
13. What is ‘equity’ in real estate?
A. The amount of the loan
B. The market value of the property
C. The difference between the property’s value and the outstanding mortgage balance
D. The annual property taxes
14. What is ‘escrow’ in a real estate transaction?
A. A type of mortgage insurance
B. A neutral third party holding funds or documents
C. A government tax on property sales
D. A clause in a lease agreement
15. Which of the following is NOT a type of real estate?
A. Residential
B. Commercial
C. Industrial
D. Tangible
16. Which of the following terms refers to the process of estimating the value of a property?
A. Depreciation
B. Appraisal
C. Amortization
D. Capitalization
17. What is ‘due diligence’ in real estate?
A. The process of paying property taxes
B. The process of marketing a property for sale
C. The process of thoroughly investigating a property before purchase
D. The process of obtaining a mortgage
18. What does ‘REIT’ stand for?
A. Real Estate Investment Trust
B. Residential Equity Investment Team
C. Regional Economic Investment Taskforce
D. Rental Estate Income Tax
19. What does ‘ROI’ stand for in real estate investment?
A. Rate of Interest
B. Return on Investment
C. Real Ownership Income
D. Risk of Investment
20. In real estate, what does ‘HOA’ stand for?
A. Home Owners Association
B. Housing Opportunity Agency
C. Home Operating Authority
D. Housing Oversight Administration
21. What does ‘PMI’ stand for in real estate?
A. Property Management Income
B. Private Mortgage Insurance
C. Public Market Index
D. Personal Mortgage Investment
22. What does ‘cap rate’ stand for in commercial real estate?
A. Capital Appreciation Percentage
B. Capitalization Rate
C. Cash Available Percentage
D. Construction and Planning Rate
23. What is ‘capital gain’?
A. The profit from the sale of an asset
B. The cost of maintaining a property
C. The amount of the loan
D. The annual property taxes
24. What is ‘foreclosure’?
A. The process of selling a property
B. The process of a lender taking possession of a property due to non-payment
C. The process of renovating a property
D. The process of insuring a property
25. Which of the following is a type of property valuation method?
A. Speculative analysis
B. Cost approach
C. Intuitive estimation
D. Random guessing
26. What is a ‘fixture’ in real estate?
A. A temporary structure on the property
B. An item of personal property
C. An item permanently attached to the property
D. A type of mortgage
27. What is a ‘balloon payment’ in a mortgage?
A. A large, one-time payment due at the end of the loan term
B. A small, monthly payment
C. A payment made to cover property taxes
D. A payment made to cover insurance costs
28. What is ‘escrow’ money used for during a real estate transaction?
A. To pay for renovations on the property
B. To cover property taxes and insurance
C. To pay the real estate agent’s commission
D. To fund the down payment on the property
29. What is ’eminent domain’?
A. The right of the government to take private property for public use
B. The right of a property owner to build on their land
C. The right of a lender to foreclose on a property
D. The right of a tenant to sublease a property
30. What does ‘appreciation’ mean in real estate?
A. A decrease in property value
B. An increase in property value
C. The cost of maintaining a property
D. The annual property taxes
31. What is a ‘short sale’?
A. The sale of a property for less than the outstanding mortgage balance, with the lender’s approval
B. A quick sale of a property at market value
C. The sale of a property with a very short closing period
D. The sale of a property to a close friend or family member
32. Which of the following factors is most likely to increase property value?
A. Deteriorating infrastructure in the surrounding area
B. Rising crime rates in the neighborhood
C. Improved schools and public services
D. Increased vacancy rates in nearby buildings
33. What does ‘PMI’ stand for in the context of mortgages?
A. Property Management Income
B. Private Mortgage Insurance
C. Public Market Index
D. Principal Monthly Installment
34. What is ‘home staging’?
A. The process of building a new home
B. Preparing a home for sale by making it more attractive to potential buyers
C. Inspecting a home for structural defects
D. Negotiating the price of a home
35. What is ‘leverage’ in real estate investment?
A. The process of negotiating a lower price for a property
B. Using borrowed capital to increase the potential return on an investment
C. The act of diversifying a real estate portfolio
D. A type of government subsidy for real estate developers
36. What is the difference between ‘gross lease’ and ‘net lease’?
A. A gross lease includes all expenses in the rent, while a net lease requires the tenant to pay some or all of the property expenses in addition to rent.
B. A gross lease is for residential properties, while a net lease is for commercial properties.
C. A gross lease is a short-term lease, while a net lease is a long-term lease.
D. A gross lease is for developed properties, while a net lease is for undeveloped land.
37. What does ‘ROI’ stand for in real estate investment?
A. Return on Investment
B. Rate of Interest
C. Real Opportunity Index
D. Revenue on Infrastructure
38. Which of the following terms refers to the legal process of transferring ownership of real property from one party to another?
A. Appraisal
B. Closing
C. Escrow
D. Title transfer
39. In real estate, what is ‘due diligence’?
A. The process of estimating the market value of a property.
B. A comprehensive investigation of a property and related factors before a transaction.
C. The legal document that transfers ownership of a property.
D. The initial deposit made by a buyer to show their interest in purchasing a property.
40. What is a ‘balloon payment’ in a mortgage?
A. A large lump-sum payment due at the end of the mortgage term
B. A small, optional payment made at the beginning of the mortgage term
C. A payment made to reduce the principal balance of the loan
D. A payment made to cover property taxes and insurance
41. What is ‘zoning’ in real estate?
A. A type of property insurance
B. Regulations that dictate how land can be used in specific areas
C. A government program for first-time homebuyers
D. A method of calculating property taxes
42. What is the meaning of ‘amortization’ in the context of a mortgage?
A. The total amount of interest paid over the life of the loan
B. The process of gradually paying off a loan through regular payments
C. The fee charged by the lender for processing the loan
D. The penalty for paying off the loan early
43. What is a ‘lien’ in real estate?
A. A type of insurance policy
B. A legal claim against a property
C. A government tax on property
D. A discount offered to first-time homebuyers
44. What is ‘cap rate’ in real estate?
A. The interest rate on a mortgage
B. A measure of a property’s profitability, calculated as Net Operating Income (NOI) divided by property value
C. The annual property tax rate
D. The cost of capital improvements
45. What is ’eminent domain’?
A. The right of the government to take private property for public use, with just compensation.
B. A type of mortgage insurance.
C. A legal dispute over property boundaries.
D. A historical preservation designation for a property.
46. What is ‘title insurance’?
A. Insurance that protects against physical damage to a property
B. Insurance that protects against defects in the title of a property
C. Insurance that covers the cost of property taxes
D. Insurance that protects against liability for injuries on a property
47. What is ‘fixture’ in real estate?
A. A temporary decoration
B. A personal belonging
C. An item of personal property that has become permanently attached to the real property
D. A type of mortgage
48. Which of the following is NOT typically a responsibility of a property manager?
A. Collecting rent
B. Marketing vacant properties
C. Negotiating the sale of the property
D. Handling maintenance and repairs
49. Which of the following is an example of ‘real property’?
A. A car
B. Stocks and bonds
C. Land and buildings
D. Furniture
50. What is a ‘1031 exchange’ in real estate?
A. A type of home improvement loan
B. A method of deferring capital gains taxes by exchanging one investment property for another
C. A government program for subsidizing low-income housing
D. A type of insurance policy for commercial properties
51. What is ‘capital gain’ in real estate?
A. The profit made from selling a property for more than its purchase price
B. The cost of renovating a property
C. The annual property tax rate
D. The amount of rent collected from a property
52. What does ‘MLS’ stand for in the context of real estate?
A. Mortgage Lending Service
B. Multiple Listing Service
C. Market Listing System
D. Municipal Land Survey
53. Which professional typically performs a property appraisal?
A. Real estate agent
B. Property manager
C. Licensed appraiser
D. Home inspector
54. What is ‘foreclosure’?
A. The process by which a lender takes possession of a property due to the borrower’s failure to make mortgage payments
B. The sale of a property at auction
C. The process of refinancing a mortgage
D. The process of renting out a property
55. What is a ‘contingency’ in a real estate contract?
A. A clause that allows a party to back out of the contract under certain conditions
B. A mandatory fee paid by the buyer
C. A type of government regulation
D. A type of insurance policy
56. What is ‘easement’ in real estate?
A. A legal right to use another person’s land for a specific purpose
B. A type of property tax
C. A government regulation on land use
D. A historical preservation designation
57. Which of the following best describes the role of a real estate attorney?
A. Marketing properties for sale
B. Negotiating property prices
C. Providing legal advice and representation in real estate transactions
D. Managing rental properties
58. Which of the following describes ‘depreciation’ in real estate?
A. An increase in the value of a property over time
B. A decrease in the value of a property due to wear and tear or obsolescence
C. The cost of maintaining a property
D. The process of insuring a property against damage
59. What is the purpose of an ‘escrow account’ in a real estate transaction?
A. To hold funds securely until all conditions of the sale are met
B. To provide a line of credit for the buyer
C. To pay for the appraisal of the property
D. To cover the cost of renovations
60. Which of the following is a type of real estate investment trust (REIT)?
A. Equity REIT
B. Bond REIT
C. Commodity REIT
D. Currency REIT
61. Which of the following is NOT a protected class under the Fair Housing Act?
A. Race.
B. Religion.
C. Age.
D. Familial Status.
62. Which of the following is NOT a typical closing cost for a homebuyer?
A. Appraisal fee.
B. Real estate agent’s commission (typically paid by the seller).
C. Title insurance.
D. Property taxes.
63. What is ‘Escrow’ in a real estate transaction?
A. A type of home inspection.
B. A neutral third party that holds funds and documents until specific conditions are met.
C. A government agency that regulates real estate brokers.
D. A type of property insurance.
64. What is ‘Amortization’ in the context of a mortgage?
A. The process of gradually paying off a loan through regular installments.
B. A fee charged for early repayment of a loan.
C. The total cost of borrowing money, including interest and fees.
D. A type of mortgage with a variable interest rate.
65. What is ‘Depreciation’ in real estate accounting?
A. The increase in property value over time.
B. A tax deduction that allows property owners to recover the cost of an asset over its useful life.
C. The cost of maintaining a property.
D. A fee charged by real estate agents.
66. What is ‘Seller Financing’?
A. A type of loan offered by the government to first-time homebuyers.
B. A situation where the seller provides the financing for the buyer to purchase the property.
C. A program that helps homeowners avoid foreclosure.
D. A method for calculating property taxes.
67. What is a ‘Balloon Mortgage’?
A. A mortgage with steadily increasing payments.
B. A mortgage with a large lump-sum payment due at the end of the term.
C. A mortgage with a low initial interest rate that adjusts over time.
D. A mortgage insured by the Federal Housing Administration.
68. What is the meaning of ‘encroachment’ in real estate?
A. The illegal act of trespassing on someone else’s property.
B. When a structure or portion of a structure extends over a property line.
C. The legal right to use someone else’s property for a specific purpose.
D. A government tax levied on property sales.
69. What is ‘Title Insurance’ designed to protect against?
A. Damage to the property from natural disasters.
B. Losses resulting from defects in the property title.
C. Liability for injuries occurring on the property.
D. Theft of personal property from the home.
70. What is ‘Joint Tenancy’?
A. A type of lease agreement between two tenants.
B. A form of co-ownership where owners have equal shares and the right of survivorship.
C. A legal process for resolving property disputes.
D. A government program that provides housing assistance to low-income families.
71. What is a ‘Real Estate Investment Trust (REIT)’?
A. A government agency that regulates real estate transactions.
B. A company that owns or finances income-producing real estate.
C. A type of mortgage loan with a fixed interest rate.
D. A program that provides housing assistance to low-income families.
72. What does ‘LTV’ stand for in mortgage lending?
A. Loan Transaction Value.
B. Liability to Value.
C. Loan to Value.
D. Leverage Total Value.
73. Which of the following is NOT typically a responsibility of a property manager?
A. Collecting rent.
B. Negotiating the initial sale price of the property.
C. Handling maintenance requests.
D. Screening potential tenants.
74. What is a ‘Lease Option’ in real estate?
A. A type of insurance that covers tenant liabilities.
B. An agreement that gives a tenant the right, but not the obligation, to purchase the property at a predetermined price during the lease term.
C. A short-term rental agreement for vacation properties.
D. A government program that subsidizes rent for low-income families.
75. What is ‘Debt Service Coverage Ratio (DSCR)’ used for?
A. To calculate the annual property tax rate.
B. To assess a borrower’s ability to repay a loan.
C. To determine the value of a property.
D. To measure the energy efficiency of a building.
76. What is ‘Eminent Domain’?
A. The right of the government to take private property for public use, with just compensation.
B. A legal process for evicting tenants.
C. A type of insurance that covers flood damage.
D. A government program that provides tax breaks for developers.
77. Which of the following best describes ‘Due Diligence’ in real estate?
A. A preliminary estimate of property value.
B. The process of thoroughly investigating a property and related documents before a transaction.
C. A marketing strategy for attracting potential buyers.
D. The final negotiation stage before closing a deal.
78. What is the difference between ‘Gross Lease’ and ‘Net Lease’?
A. A Gross Lease includes all operating expenses in the rent, while a Net Lease requires the tenant to pay some or all of those expenses in addition to rent.
B. A Gross Lease is for residential properties, while a Net Lease is for commercial properties.
C. A Gross Lease is a short-term lease, while a Net Lease is a long-term lease.
D. A Gross Lease is used for apartments, while a Net Lease is used for single-family homes.
79. What is a ‘Contingency’ in a real estate contract?
A. A clause that allows a party to cancel the contract under certain conditions.
B. A type of insurance that covers damages to the property.
C. A government program that subsidizes mortgage payments.
D. A fee charged by real estate agents.
80. What is ‘Zoning’ in real estate?
A. A system for classifying property taxes.
B. Local regulations that dictate how property can be used.
C. A method for calculating property insurance premiums.
D. A type of mortgage loan with a variable interest rate.
81. In real estate, what is an ‘Easement’?
A. A legal document transferring property ownership.
B. The right to use someone else’s property for a specific purpose.
C. A type of property insurance policy.
D. A government tax levied on property sales.
82. What does ‘Cap Rate’ stand for in real estate investment?
A. Capital Appreciation Percentage Rate.
B. Capital Allocation Priority Rate.
C. Capitalization Rate.
D. Cash Accumulation Potential Rate.
83. Which of these factors would most likely lead to a decrease in property value?
A. Improved local schools.
B. Increased demand for housing in the area.
C. A new highway being built nearby, increasing traffic noise.
D. Lower interest rates on mortgages.
84. What does ‘Gross Rent Multiplier (GRM)’ measure?
A. The monthly operating expenses of a property.
B. The ratio of a property’s price to its gross rental income.
C. The annual property tax rate.
D. The cost of property insurance per square foot.
85. What is ‘Capital Gain’ in real estate?
A. The profit earned from the sale of a property.
B. The amount of money borrowed to purchase a property.
C. The annual property tax rate.
D. The cost of renovating a property.
86. What is ‘Adjusted Basis’?
A. The original cost of a property.
B. The original cost of a property plus capital improvements, minus depreciation.
C. The current market value of a property.
D. The amount of money borrowed to purchase a property.
87. Which of the following is an example of ‘Real Property’?
A. A mobile home on a rented lot.
B. Furniture inside a house.
C. Land and anything permanently attached to it.
D. A car parked in the driveway.
88. What does ‘ROI’ stand for in real estate investment analysis?
A. Rate of Increase.
B. Return on Investment.
C. Real Output Index.
D. Risk Optimization Indicator.
89. What is a ‘1031 Exchange’?
A. A type of home renovation loan.
B. A tax-deferred exchange of like-kind properties.
C. A government program for first-time homebuyers.
D. A real estate investment trust (REIT).
90. What is ‘Appraisal’ in the context of real estate?
A. A legal description of a property’s boundaries.
B. An estimate of a property’s market value by a qualified professional.
C. The process of renovating a property to increase its value.
D. A type of loan used to finance property purchases.
91. What is ‘cap rate compression’ and how does it typically affect property values?
A. An increase in cap rates, leading to higher property values.
B. A decrease in cap rates, leading to higher property values.
C. An increase in cap rates, leading to lower property values.
D. A decrease in cap rates, leading to lower property values.
92. What is a ‘1031 exchange’ and what is its primary benefit?
A. A type of mortgage with a fixed interest rate; its benefit is predictable payments.
B. A legal process for resolving property disputes; its benefit is avoiding litigation.
C. A tax-deferred exchange of like-kind properties; its benefit is deferring capital gains taxes.
D. A government program for subsidizing homeownership; its benefit is lower mortgage rates.
93. Which of the following best describes ‘escrow’ in a real estate transaction?
A. A type of insurance policy protecting against property damage.
B. A neutral third party holding funds or documents until specific conditions are met.
C. A government agency regulating real estate practices.
D. A clause in a contract allowing cancellation under certain circumstances.
94. What is ‘capitalization rate’ (cap rate) primarily used for in real estate?
A. To calculate property taxes.
B. To estimate the potential rate of return on an investment property.
C. To determine the cost of property insurance.
D. To assess the depreciation of a building.
95. What is the difference between ‘gross lease’ and ‘net lease’ in commercial real estate?
A. Gross lease includes all operating expenses in the rent, while net lease requires the tenant to pay some or all of those expenses.
B. Gross lease is for residential properties, while net lease is for commercial properties.
C. Gross lease has a fixed rental rate, while net lease has a variable rate.
D. Gross lease is shorter in duration than a net lease.
96. What is ‘absorption rate’ in real estate market analysis?
A. The rate at which properties depreciate over time.
B. The rate at which available properties are sold or leased in a given market over a specific period.
C. The rate at which interest rates on mortgages increase.
D. The rate at which property taxes are assessed.
97. What is ‘due diligence’ in a real estate context?
A. The process of paying property taxes.
B. A comprehensive investigation of a property and its associated risks before purchase.
C. The negotiation of the purchase price.
D. The process of obtaining homeowner’s insurance.
98. What is the meaning of ‘brownfield’ in the context of real estate development?
A. A new residential development with green building certifications.
B. A previously developed site that may be contaminated with hazardous substances.
C. Agricultural land that is being converted for residential use.
D. A property with a history of frequent flooding.
99. Which term describes the legal right to cross someone else’s property for a specific purpose?
A. Encroachment
B. Easement
C. Eminent domain
D. Equity
100. What is the primary purpose of a ‘title search’ in real estate?
A. To estimate the property’s market value.
B. To verify the legal ownership of a property and identify any encumbrances.
C. To assess the structural integrity of a building.
D. To negotiate the purchase price of a property.
101. What is ‘triple net lease’ (NNN) and what costs are typically covered by the tenant?
A. A lease where the tenant pays only rent, with the landlord covering all other expenses.
B. A lease where the tenant pays rent, property taxes, insurance, and maintenance.
C. A lease where the tenant pays rent and utilities.
D. A lease where the tenant pays rent, property taxes, and insurance only.
102. What is a ‘fixture’ in real estate terms?
A. A temporary structure on a property.
B. An item of personal property that is permanently attached to the real property.
C. A type of mortgage with a fluctuating interest rate.
D. A legal document outlining property boundaries.
103. What does ‘HOA’ stand for in real estate?
A. Home Owners Association
B. Housing Opportunity Agency
C. Home Operating Authority
D. Historical Overlay Area
104. What is ‘FAR’ (in real estate development) and how does it affect building size?
A. Fixed Asset Ratio; it limits the amount of equipment that can be used on the property.
B. Floor Area Ratio; it regulates the maximum building size relative to the land area.
C. Financial Assessment Report; it determines the property’s tax liability.
D. Federal Acquisition Regulation; it governs government procurement of real estate.
105. In real estate, what does ‘appraisal’ primarily refer to?
A. The legal transfer of property ownership.
B. An estimate of a property’s market value.
C. A detailed inspection of a property’s structural components.
D. The process of obtaining a mortgage loan.
106. What is ‘mezzanine financing’ in real estate?
A. A type of loan secured by a property’s roof.
B. A form of debt financing that is subordinate to senior debt but senior to equity.
C. A government-backed loan program for first-time homebuyers.
D. A type of insurance policy protecting against construction defects.
107. What is a ‘contingency clause’ in a real estate purchase agreement?
A. A clause that guarantees the buyer will obtain financing.
B. A clause that allows the buyer to cancel the agreement under certain conditions.
C. A clause that sets the closing date for the transaction.
D. A clause that specifies the type of title insurance to be obtained.
108. What is ‘capital gain’ in real estate investments?
A. The total cost of purchasing a property.
B. The profit earned from selling a property for more than its purchase price.
C. The annual income generated by a rental property.
D. The amount of depreciation taken on a property.
109. What does ‘RESPA’ stand for and what is its purpose?
A. Real Estate Sales and Purchase Agreement; it outlines the terms of the sale.
B. Real Estate Settlement Procedures Act; it protects consumers during the mortgage process.
C. Residential Energy Savings Program Act; it promotes energy-efficient homes.
D. Real Estate Standards and Practices Association; it sets ethical guidelines for agents.
110. What is ‘curb appeal’ and why is it important in real estate sales?
A. The amount of property taxes owed; it is important for budgeting.
B. The attractiveness of a property’s exterior; it creates a positive first impression.
C. The proximity of a property to public transportation; it affects accessibility.
D. The size of a property’s backyard; it impacts outdoor living space.
111. What is the ‘loan-to-value ratio’ (LTV) and how is it calculated?
A. The ratio of the loan amount to the property’s appraised value or purchase price (whichever is lower).
B. The ratio of the loan amount to the borrower’s annual income.
C. The ratio of the loan amount to the property’s annual operating income.
D. The ratio of the loan amount to the total cost of the project.
112. What is ‘PMI’ (in the context of mortgages) and when is it typically required?
A. Property Maintenance Insurance; required for all properties.
B. Private Mortgage Insurance; typically required when the down payment is less than 20%.
C. Public Mortgage Investment; required for government-backed loans.
D. Personal Mortgage Investment; required for self-employed borrowers.
113. What does ‘amortization’ refer to in the context of a mortgage?
A. The process of insuring a mortgage against default.
B. The gradual repayment of a loan principal over time.
C. The initial down payment required for a mortgage.
D. The interest rate charged on a mortgage loan.
114. What is the purpose of a ‘feasibility study’ in real estate development?
A. To determine the property’s market value for tax purposes.
B. To assess the viability and potential profitability of a proposed real estate project.
C. To obtain the necessary permits for construction.
D. To design the architectural plans for a building.
115. In real estate, what does ‘REIT’ stand for?
A. Real Estate Investment Trust
B. Real Estate Interest Tax
C. Regional Economic Investment Treaty
D. Residential Energy Improvement Technology
116. What is ‘ad valorem tax’ in real estate?
A. A tax based on the assessed value of the property.
B. A tax based on the income generated by the property.
C. A tax based on the size of the property.
D. A tax based on the number of occupants in the property.
117. What is ’eminent domain’ and how does it relate to real estate?
A. The right of the government to take private property for public use, with just compensation.
B. The legal process of evicting a tenant from a property.
C. A type of insurance policy protecting against title defects.
D. A clause in a contract that allows for renegotiation of terms.
118. What is the significance of ‘zoning regulations’ in real estate?
A. They determine the property tax rate.
B. They control how land can be used in specific areas.
C. They regulate the interest rates on mortgages.
D. They dictate the architectural style of buildings.
119. Which of the following is the best definition of ‘lien’ in real estate?
A. A type of insurance policy protecting against natural disasters.
B. A legal claim against a property as security for a debt.
C. A formal offer to purchase a property.
D. A government tax levied on real estate transactions.
120. What is ‘ground lease’ and what are its typical characteristics?
A. A lease for the land only, where the tenant owns any improvements made during the lease term.
B. A lease for both land and buildings, with the landlord retaining ownership of all improvements.
C. A short-term lease for agricultural land.
D. A lease with rent tied to the price of commodities.
121. Which of the following best describes ‘zoning regulations’?
A. Rules that govern the sale and transfer of properties.
B. Local laws that control land use and development.
C. Federal regulations on mortgage lending.
D. Environmental protection standards for construction.
122. What is ‘leverage’ in real estate investing?
A. Using borrowed capital to increase the potential return on investment.
B. The process of renovating a property.
C. Negotiating a lower purchase price.
D. Diversifying a real estate portfolio.
123. What is the purpose of a ‘property survey’?
A. To assess the structural integrity of a building.
B. To determine the property boundaries and identify any easements or encroachments.
C. To estimate the property’s market value.
D. To inspect for pest infestations.
124. What does ‘Net Operating Income’ (NOI) represent?
A. The revenue a property generates after deducting all operating expenses, but before debt service and income taxes.
B. The revenue a property generates after deducting all expenses including debt service and income taxes.
C. The total revenue generated by a property before any deductions.
D. The amount of profit after selling a property.
125. What does ‘HOA’ stand for in the context of real estate?
A. Home Owners Association
B. Housing Opportunity Administration
C. Home Office Assessment
D. Historical Occupancy Agreement
126. What is ‘ground lease’?
A. A lease for the land only.
B. A lease for the building only.
C. A lease that covers both land and building but only for commercial purposes.
D. A lease that allows the tenant to purchase the property at the end of the lease term.
127. What does ‘vacancy rate’ refer to in property management?
A. The percentage of tenants who pay their rent late.
B. The percentage of available units in a property that are unoccupied.
C. The rate at which property values are increasing.
D. The cost of maintaining the property.
128. What is ‘PMI’ (in the context of mortgages) short for?
A. Property Management Insurance
B. Private Mortgage Insurance
C. Public Mortgage Investment
D. Personal Mortgage Indemnity
129. What is the meaning of ‘title insurance’?
A. Insurance that protects against damage to the property.
B. Insurance that protects the lender in case the borrower defaults.
C. Insurance that protects the buyer against defects in the title to the property.
D. Insurance that protects against natural disasters.
130. Which of the following is a key factor influencing property appraisal?
A. The buyer’s personal preferences.
B. The seller’s original purchase price.
C. Comparable sales in the area.
D. The appraiser’s commission.
131. Which professional is primarily responsible for estimating the value of a property?
A. Real estate agent
B. Property manager
C. Appraiser
D. Mortgage broker
132. Which of the following is an example of ‘real property’?
A. A car
B. A house and the land it sits on
C. Stocks and bonds
D. Furniture
133. What does ‘amortization’ mean in the context of a mortgage?
A. The process of insuring a mortgage against default.
B. The gradual repayment of a loan principal over time.
C. The initial down payment required for a mortgage.
D. The interest rate applied to a mortgage.
134. In real estate, what is ‘FAR’ stand for?
A. Fair Assessment Rate
B. Floor Area Ratio
C. Fixed Asset Return
D. Federal Acquisition Regulation
135. What is the ‘Internal Rate of Return’ (IRR) used for in real estate investment analysis?
A. To calculate the monthly mortgage payment.
B. To determine the discount rate that makes the net present value of all cash flows from a project equal to zero.
C. To estimate the property’s market value.
D. To calculate the annual property taxes.
136. What is ’eminent domain’?
A. The right of the government to take private property for public use with just compensation.
B. A type of insurance policy that protects against property damage.
C. A legal process for resolving property disputes.
D. A set of building codes and regulations.
137. What is a ‘1031 exchange’?
A. A type of mortgage with a fixed interest rate for 1031 months.
B. A tax-deferred exchange of like-kind properties.
C. A government program that provides housing assistance.
D. A legal process for evicting a tenant.
138. Which of the following terms refers to the process of determining the present value of a future payment or stream of payments, given a specified rate of return?
A. Appraisal
B. Depreciation
C. Discounting
D. Amortization
139. What is a ‘balloon payment’ in a mortgage?
A. A large lump sum payment due at the end of the mortgage term.
B. An extra payment made to reduce the principal balance.
C. A payment made to cover property taxes and insurance.
D. A late payment penalty.
140. What is the primary difference between ‘leasehold’ and ‘fee simple’ ownership?
A. Leasehold is ownership for a definite term, while fee simple is absolute ownership.
B. Leasehold is absolute ownership, while fee simple is ownership for a definite term.
C. Leasehold involves paying property taxes, while fee simple does not.
D. Leasehold allows for structural modifications, while fee simple does not.
141. Which of the following is NOT typically considered a ‘fixture’ in real estate?
A. Built-in bookshelves
B. A free-standing refrigerator
C. Attached ceiling fans
D. Custom-fitted blinds
142. What is a ‘lien’ in real estate?
A. A legal right or claim against a property.
B. A type of insurance policy.
C. A government tax on property sales.
D. A zoning regulation.
143. What is a ‘contingency’ in a real estate contract?
A. A clause that allows a party to cancel the contract under certain conditions.
B. A type of mortgage with a variable interest rate.
C. A government tax on property transfers.
D. A legal description of the property.
144. What is ‘equity’ in real estate?
A. The original purchase price of the property.
B. The difference between the property’s value and the outstanding mortgage balance.
C. The annual property taxes.
D. The cost of homeowner’s insurance.
145. What is ‘mezzanine financing’ in real estate?
A. A type of loan secured by the borrower’s personal assets.
B. A hybrid of debt and equity financing, often used to fill the gap between senior debt and equity.
C. A government subsidy for affordable housing projects.
D. A short-term loan used to finance property renovations.
146. What is a ‘real estate investment trust’ (REIT)?
A. A government agency that regulates real estate investments.
B. A company that owns or finances income-producing real estate.
C. A type of insurance policy for real estate investors.
D. A legal document that transfers property ownership.
147. What is ‘due diligence’ in a real estate transaction?
A. The process of obtaining a mortgage.
B. The investigation and verification of facts related to a property.
C. The negotiation of the purchase price.
D. The signing of the closing documents.
148. In real estate, what does ‘escrow’ generally refer to?
A. A type of mortgage insurance.
B. A method of property valuation.
C. A neutral third party that holds funds or documents until certain conditions are met.
D. A government agency that regulates real estate transactions.
149. What is ‘brownfield’ in real estate?
A. A newly developed residential area.
B. A property that has been abandoned or underutilized due to potential environmental contamination.
C. A farmland preserved for agricultural purposes.
D. A property designated for historical preservation.
150. What does ‘cap rate’ stand for in real estate investment?
A. Capital Appreciation Percentage Rate
B. Capitalization Rate
C. Cash Accumulation Premium Rate
D. Collateral Assessment Procedure Rate