Real Estate Pre-License Exam – Hawaii Questions and Answers Already Graded A

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Real Estate Pre-License Exam – Hawaii Questions and Answers Already Graded A What is the definition of a Broker? ✔✔A direct agent of the principal who is hired for compensation to perform a ... stated services such as procuring a customer. Define Brokerage. ✔✔The business of procuring customers on behalf of clients for the purpose of completing a real estate transaction. What is Common Law? ✔✔A body of law developed by court judgments, decrees, or case decisions. Define Property Management. ✔✔The business of managing the physical and financial condition of an investment property for an owner. What is the definition of a Salesperson? ✔✔A licensed employee, or independent contractor, hired by a broker to perform authorized activities on behalf of the broker's client. What is Severance? ✔✔The conversion of real property to personal property by detaching it from real estate. What is Affixing? ✔✔The act of converting personal property to real property by attaching it to real estate. What is the definition of Real Estate? ✔✔Land and all man-made structures permanently attached to it. What is Real Property? ✔✔Real estate and the bundle of rights associated with ownership of real estate. What are the five "Bundle of Rights"? ✔✔Possess, use, transfer, encumber, and exclude. What does the Right to Encumber mean? ✔✔The right to mortgage the property as collateral for debt. What is Curtesy? ✔✔A husband's life estate claim to portions of his deceased wife's real property. What is Dower? ✔✔A wife's life estate claim to portions of his deceased husband's real property. What is a Defeasible fee estate? ✔✔A fee estate where ownership is perpetual, provided that usage restrictions, and other conditions, are upheld. What is an Estate? ✔✔A set of rights to real property that includes the right to possession. What is a freehold estate? ✔✔An ownership estate of indeterminable duration What is a Legal life estate? ✔✔A life estate established by operation of law rather than by the actions or wishes of the property owners. What are some examples of legal life estate? ✔✔Homestead law, Dower & Curtesy What is a Life Estate? ✔✔A freehold estate that is limited in duration to the life of the owner, or other names person. What is Pur Autre Vie? ✔✔A life estate where the grantee's interests endure over the lifetime of a 3rd-party named by the grantor. What is a Remainder? ✔✔A future freehold interest in a life estate held by a third-party remainderman named by the grantor. What is Reversion? ✔✔A transfer of title from a life estate tenant back to the grantor, or the owner's heirs. What is a Homestead? ✔✔One's principal residence. What are the two types of Conventional Life Estates? ✔✔Ordinary & Pur Autre Vie What is an Ordinary life estate? ✔✔It ends with the death of the life estate owner and may pass back to the original owners, or to a named 3rd party. What is a fee simple absolute estate? ✔✔A perpetual estate that is not conditioned by stipulated or restricted uses. What is an Assessment? ✔✔Maintenance fees paid by condo owners. What are some examples of common elements? ✔✔The grounds, parking facilities, lobby, elevators, swimming pools. What is the definition of a condominium estate? ✔✔An estate distinguished by fee simple ownership of the airspace of a unit + undivided interest in the overall property's common elements. What is the difference between Co-op and Condominium owners? ✔✔Co-op owners own a share in the co-op's association and receive a proprietary lease on a unit for the duration of the ownership. Condo owners own through fee simple or leasehold ownership. What is an elective share? ✔✔The right for a surviving spouse to claim a portion of the decedent's real property in place of the provisions stated in the decedent's will. What is joint tenancy? ✔✔When co-owners share all rights and interests equally and indivisibly. What is a land trust? ✔✔A trust in which a trustor conveys a fee estate to a trustee and names himself as beneficiary. In a land trust, who controls the property and the actions of the trustee? ✔✔The beneficiary (who is also the trustor) What is a partition suit? ✔✔A lawsuit requesting the court to alter/cancel the interests of a coowner. What is one major difference between a Planned Unit Development owner and a Condominium owner? ✔✔The PUD owner owns the lot on which the house is situated, but has no ownership interest in the common areas. The condo owner owns the airspace of the unit + an undivided interest in the common elements. What is a proprietary lease? ✔✔A co-op owner's lease on a unit in the co-op building. What is sole proprietorship? ✔✔A business entity with an individual as the sole owner. The death of the owner terminates the business. What is tenancy in common? ✔✔Co-owners each own an electable share of the property and can transfer this share to any other party. What is tenancy is severalty? ✔✔An estate owned by a single property. What is adverse possession? ✔✔The use of another's property without the consent of the owner What is a dominent tenement? ✔✔The property that benefits from the existence of an easement appurtenant. Define easement. ✔✔An interest in real property giving the right to use defined portions of another's property. What is eminent domain? ✔✔A power of government to force the sale of private property for subsequent public use. Give an example of an enroachment. ✔✔A neighbor's tree branch growing into a homeowner's yard. What are the two types of easements? ✔✔Appurtenant & Gross What is the definition of a lien? ✔✔A creditor's claim against real or personal property as security for a property owner's debt. What does the Public Access Shoreline Hawaii (PASH) do? ✔✔Gives the right for people to gain access to the undeveloped land of private landowners for traditional and customary purposes. How do get the adjusted basis? ✔✔The beginning cost of a property + the cost of capital improvement - depreciation expense. What is an ad valorem tax? ✔✔A real property's annual tax levied by taxing entities according to the property's assessed value. How do calculate capital gain or loss? ✔✔Net sales proceeds of an asset - its adjusted basis Under the HARPTA act, what are buyers required to do? ✔✔Deduct 5% of seller's "amount realized" before seller's proceeds are disbursed and apply that amount to any income tax the seller owes on the proceeds of the sale What is the homestead tax exemption? ✔✔An exemption of a portion of the assessed value of a homeowner's principal residence from ad valorem taxation. What is a millage rate? ✔✔The ad valorem tax rate of a taxing district What is a tax sale? ✔✔A court-ordered sale of a property to satisfy unpaid real estate taxes. What is the current TAT rate? ✔✔9.25% What is a datum? ✔✔A standard elevation reference point used by surveyors to measure elevations of property. What does POB stand for? ✔✔Point of beginning "Metes" refers to.. ✔✔Distance and direction "Bounds" refers to.. ✔✔Fixed reference points (monuments or landmarks) What is non-conforming use? ✔✔Land use that is not consistent with the current zoning ordinance. What is police power? ✔✔A state's authority to create, regulate, tax and condemn real property in the interest of the public's health, safety and welfare. What is a Business Brokerage? ✔✔The brokerage of a business enterprise in addition to any real property it may own or lease. What is co-brokerage? ✔✔When outside agents or brokers assist with procuring a customer in exchange for a portion of the commission. What is conversion? ✔✔The illegal act of appropriating escrow funds for agency's operating expenses. What is collusion? ✔✔Undertaking in activities that violate the fair trade laws. What does MLS stand for? ✔✔Multiple Listing Service What is a syndication? ✔✔Investors provide capital and organizers provide management expertise to develop, acquire, and manage investments What is allocation of markets? ✔✔An act of collusion where two or more competitors agree to limit competitive activity in exchange for reciprocal restrictions from the others. What do antitrust laws prevent? ✔✔Unfair trade practices and monopoly, including collusion, price fixing, and allocation of markets What is an asset sale? ✔✔A sale of a business involving the transfer of assets as opposed to liabilities or stock. Define customer. ✔✔In agency law, a customer is a party outside of the fiduciary relationship of client and agent. What are the fiduciary duties of an agent? ✔✔Skill, care, diligence, loyalty, obedience, confidentiality, disclosure, and accounting What is a general agency? ✔✔A fiduciary relationship which authorizes the agent to conduct a broad range of activities for the principal What is Power of Attorney? ✔✔It is used to establish a universal agency relationship. It grants a fiduciary the power to perform specified acts on the principal's behalf What is exclusive agency? ✔✔A listing agreement which pays the listing broker a commission if anyone other than the property owner procures a customer. What is an exclusive right-to-sell agreement? ✔✔A listing agreement which pays the listing broker a commission if anyone at all procures a customer Define a listing. ✔✔A legal contract that establishes and controls the dynamics of the agency relationship between the principal and the agent. What is an open listing? ✔✔A non-exclusive listing agreement which pays an agent a commission only if the agent is procuring cause of a ready, willing and able customer. What is a contract for deed? ✔✔A contract where a seller retains legal title and gives the buyer equitable title and possession over a period of time. What is an amortizing loan? ✔✔Payments are made over time What is economic obsolescence? ✔✔Depreciation of value due to external, surrounding factors [Show More]

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