#1
Which document is legally required to sell a property?
Purchase Agreement
ExplanationLegally binding contract outlining terms of property sale.
#2
What does 'closing' mean in a real estate transaction?
The finalization of the sale
ExplanationConcluding the real estate transaction, completing paperwork, and transferring ownership.
#3
What is 'zoning' in real estate?
Dividing land into zones for different uses
ExplanationRegulating land use by assigning specific purposes to different areas.
#4
Which legal document transfers property ownership from the seller to the buyer?
Deed
ExplanationLegal instrument conveying property ownership.
#5
What does 'PMI' stand for in the context of a mortgage?
Private Mortgage Insurance
ExplanationInsurance protecting lenders if borrower defaults with low down payment.
#6
What is the primary purpose of a title search in real estate transactions?
To verify the legal owner of the property
ExplanationEnsuring clear ownership history and identifying potential issues.
#7
Which term refers to a situation where a property is being sold for less than the amount owed on the mortgage?
Short Sale
ExplanationSale for less than mortgage amount; typically requires lender approval.
#8
Which type of lien has the highest priority in most jurisdictions?
Tax lien
ExplanationGovernment claim on property for unpaid taxes, usually has top priority.
#9
What does 'escrow' mean in the context of real estate transactions?
A neutral third party holds funds or documents until certain conditions are met
ExplanationNeutral entity holds assets until contract conditions are fulfilled.
#10
In real estate, what is 'due diligence'?
The process of evaluating a property before purchase
ExplanationThorough property examination to assess its condition and value.
#11
In a lease agreement, what term describes the tenant's right to purchase the property at a predetermined price?
Option to Purchase
ExplanationTenant's right to buy property at agreed-upon price during lease.
#12
Which of the following best describes 'easement' in real estate?
A non-possessory right to use and/or enter onto the real property of another without possessing it
ExplanationPermission to use another's land without ownership.
#13
What is the primary difference between 'joint tenancy' and 'tenancy in common'?
The right of survivorship
ExplanationJoint tenancy includes right of survivorship; tenancy in common does not.
#14
In real estate, what is 'cap rate'?
The rate of return on a real estate investment property based on the income that the property is expected to generate
ExplanationRate of return based on expected property income.
#15
In real estate, what is a '1031 exchange'?
A swap of one investment property for another to defer capital gains taxes
ExplanationTax-deferred exchange of investment properties.