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What are the personal uses of life insurance? A. Insured protection, estate creation and cash accumulation B. Survivor protection, estate creation and conservation, cash accumulation and liquidity C. Cash accumulation, estate depletion and liquidity D. Beneficiary protection, liquidity, estate creation, and cash accumulation - CORRECT ANSWER- - B. Survivor protection, estate creation and conservation, cash accumulation and liquidity Upon the submission of a death claim under a life insurance policy, when should the insurer pay the policy benefit? A. Within 2 years pf the date of loss B. On the next anniversary of the policy C. After the estate of the insured has been settled D. Immediately after receiving written proof of loss - CORRECT ANSWER- -D. Immediately after receiving written proof of loss Which of the following is the closet term to an "authorized" insurer? A. Admitted B. Certified C. Legal D. Licensed - CORRECT ANSWER- - A. Admitted

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but their children when they reach a certain age. Which settlement option should the policyowner choose? A. Life income with period certain B. Interest only option C. Joint and survivor D. Fixed amount option - CORRECT ANSWER- - B. Interest only option When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions? A. There are no distributions B. Distributions are nontaxable C. Distributions are taxable D. Distributions can't begin prior to age 70 1/2 - CORRECT ANSWER- - C. Distributions are taxable Insurance is the transfer of A. Risk B. Peril C. Hazard D. Loss - CORRECT ANSWER- -D.Loss An insured purchases a policy in 2008 and died in 2013. The insurance company discovers at that time that the insured concealed information during the application process. What can they do? A. Pay the death benefit B. Pay a decreased death benefit C. Refuse to pay the death benefit because of the fraud D. Sue for the right to not pay the death benefit - CORRECT ANSWER- - A.Pay the death benefit

Under the incontestability clause, once the policy has been in place for at least 2 years then you can not deny any claims An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority? A. Express B. Assumed C. Implied D. Apparent - CORRECT ANSWER- -D.Apparent Agent who accepts a premium after the due date appears to the client to have authority to prevent the lapse but in fact he does not An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary , what will occur? A. The interest will continue to accumulate tax deferred B. Interest will become immediately taxable C. Premiums will increase D. Premiums will decrease - CORRECT ANSWER- - A.The interest will continue to accumulate tax deferred If contract holder dies before annuity date contracts interest is taxable. If the beneficiary is a spouse then the interest is tax deferred In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment? A. The annuitant will only receive the guaranteed minimum specified in the contract

B. The annuitant will receive the lower of either the guaranteed minimum rate or current rate C. The annuitant will receive the higher of either the guaranteed minimum rate or current rate D. The annuitant will always receive the current interest rate - CORRECT ANSWER- -C. The annuitant will receive the higher of either the guaranteed minimum rate or current rate An insured receives a monthly summary for his life insurance policy. He notices that the cash value of his policy is significantly lower this month then it was last month. What type of policy does the insured have? A. Variable B. Term C. Securities D. Stock - CORRECT ANSWER- -A.Variable Which of the following riders would not cause the Death benefit to increase? A. Guaranteed Insurability Rider B. Payor Benefit Rider C. Cost of Living Rider D. Accidental Death Rider - CORRECT ANSWER- -B. Payor Benefit Rider Which of the following is true for both equity indexed annuities and fixed annuities? A. They invest on a conservative basis B. Both tied to a equity index C. Both are considered to be more risky than variable annuities D. They have a guaranteed minimum interest rate - CORRECT ANSWER- -D.They have a guaranteed minimum interest rate Who can make a fully deductible contribution to a traditional IRA?

A. A person who contributions are funded by a return on investment B. An individual not covered by an employer-sponsored plan who has earned income C. Anybody: all IRA contributions are fully deductible regardless of income level D. Someone making contributions to an educational IRA - CORRECT ANSWER- -B.An individual not covered by an employer-sponsored plan who has earned income Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner? A. Reduced paid-up B. Cash surrender C. Paid-up options D. Extended term - CORRECT ANSWER- -B.Cash surrender Once the cash surrender value is paid the contract is over Which of the following are generally not considered when underwriting group insurance? A. Nature of Group B. Groups medical history C. Groups past claim experience D. Size of group - CORRECT ANSWER- - B.Groups medical history Because of financial obligations, John felt that he needed more insurance than the insurer was willing to issue. John's insurance procedure told him that he could maximize the death benefit without increasing the face amount by the use of a(n): A. Return of Premium B. Automatic premium loan

C. Waiver of premium rider D. Payor Rider - CORRECT ANSWER- -A.Return of Premium With the ROP rider attached, upon the insured's death, the benefit paid will be the face amount plus an amount equal to all the premiums A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy? A. Policy's cash value B. Refund of premiums C. Full death benefit D. Nothing, since the insured was killed as a result of a war - CORRECT ANSWER- - C.Full death benefit If a life insurance does not have the War or Military Clause then the benefits are paid to the beneficiary as if the insured dies of any other cause Are insurance company underwriters allowed to discriminate? A. No, higher risks pay higher premiums B. Yes, but not unfairly C. No, discrimination is an unfair practice D. Yes, but only for gender - CORRECT ANSWER- -B.Yes, but not unfairly Which of the following is true regarding the insurance amount in a credit life insurance policy? A. Creditor may insure the debtor for an unlimited amount of coverage B. Creditor can only insure the debtor for the amount owed

C. The amount of coverage can be greater than the amount owed D. Allowable amount of coverage is determined by the State Insurance Commissioner - CORRECT ANSWER- -B.Creditor can only insure the debtor for the amount owed Which of the following documents must be provided to the policyowner or applicant during policy replacement? A. Policy illustrations B. Buyer's Guide and Policy Summary C. Notice Regarding Replacement D. Disclosure Authorization Form - CORRECT ANSWER- -C. Notice Regarding Replacement During policy replacement, the replacing producer must present to the aplicant a notice regarding replacement thats signed by the applicant and producer Which of the following has the authority to issue a cease and desist order? A. Federal Insurance Regulation Board B. Department of Insurance C. State police D. Superintendent - CORRECT ANSWER- -D. Superintendent A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as A. Survivor protection B. Juvenile protection provision C. Life Planning D. Survivorship insurance - CORRECT ANSWER- -A. Survivor Protection

Which of the following is true regarding a waiver of a surrender charge on an annuity contract? A. Surrender charge can only be waived if the annuitant needs the funds for medical expenses B. The surrender charge waiver only applies to immediate annuity C. The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days D. The charge can only be waived if the annuitant needs the funds for medical expenses - CORRECT ANSWER- -C. The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days Annuitant contracts provide for a waiver of surrender charges if the annuitant is confined to a long-term care facility for at lest 30 days An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax free rollover? A. $8,000, 30 days B. $8,000, 60 days C. $10,000, 30 days D. $10,000, 60 days - CORRECT ANSWER- -B. $8,000, 60 days IRA rollovers must be completed within 60 days from the time the money is taken out for the first plan. If the distribution from the first plan is paid directly to the participant, 20% of the distribution must be withheld by the payor. A policyowner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. The nontaxable transaction is called A. Rollover B. Premature Distribution C. 1035 Exchange

D. Qualified Distribution - CORRECT ANSWER- -C. 1035 Exchange For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become A. Older B. Larger C. Smaller D. More Active - CORRECT ANSWER- -B. Larger A prospective deferred annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following? A. Nonforfeiture option guarantees that the owner will receive a surrender value of the contract B. It is not possible to surrender an annuity before the annuitzation period C. The insurance company will apply the money to another annuity or a life insurance policy, but the money cannot be returned. D. The owner will receive some of the money back, which will depend on the surrender value established by the insurer at the time the contract is terminated - CORRECT ANSWER- -A. Nonforfeiture option guarantees that the owner will receive a surrender value of the contract If a deffered annuity is surrendered prior to annuitization, the surrender value of the annuity is guaranteed due to the non forfeiture provision In which of the following situations is it legal to limit coverage based on martial status? A. Excessive number of divorces, as defined by the insurance code B. Divorce within the last 6 months of applying for the insurance C. Legal seperation during the application process D. It is never legal to limit coverage based on martial status - CORRECT ANSWER- -D. It is never legal to limit coverage based on martial status

Who makes up the Medical Information Bureau? A. Physicians and paramedics B. Insurers C. Hospitals D. Former insured - CORRECT ANSWER- -B. Insurers An insured stops making payments on a loan taken from his cash value policy. What will most likely happen? A. The insurer will not permit the policyowner to take out any more loans B. The policy will be reduced to an extended term option C. The insurer will increase the interest rate on the loan and charge a penalty D. The policy will terminate when the loan amount with interest equals or exceeds the cash value - CORRECT ANSWER- -D. The policy will terminate when the loan amount with interest equals or exceeds the cash value Which of the following statements is true concerning the Accidental Death Rider? A. It will pay double or triple the face amount B. Also known as the triple indemnity rider C. It is only available in group insurance D. The rider is only available to insureds over the age of 65 - CORRECT ANSWER- -A. It will pay double or triple the face amount Which of the following statements about a suicide clause in a life insurance policy is true? A. Suicide is excluded as long as the policy is in force B. Suicide is excluded for a specific period of years and covered thereafter C. Suicide is covered for a specific period of years and excluded thereafter

D. Suicide is covered as long as the policy is in force - CORRECT ANSWER- -B. Suicide is excluded for a specific period of years and covered thereafter Which of the following is true regarding taxation of dividends in participating policies? A. Dividends are considered income for tax purposes B. Dividends are taxable in some life insurance policies and nontaxable in others C. Dividends are nontaxable D. Dividends are taxable only after a certain amount is accumulated annually - CORRECT ANSWER- -C. Dividends are nontaxable Under the Fair Credit Reporting Act, if the consumer challenges the correctness of the information in his/her report, the reporting agency must A. Respond to the consumers complaint B. Send an actual certified copy of the entire report to the consumer C. Change the report D. Defend the report if the agency feels it is accurate - CORRECT ANSWER- -A. Respond to the consumers complaint The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? A. The death benefit cannot be decreased B. Death benefit can be increased with proof of insurability C. The death benefit can be increased only when the policy has developed a cash value D. The death benefit will be increased only by exchanging the existing policy for a new one - CORRECT ANSWER- -B. Death benefit can be increased with proof of insurability Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

A. Subrogation B. Aleatory C. Adhesion D. Warranty - CORRECT ANSWER- -B. Aleatory Which of the following is NOT a goal of risk retention? A. To reduce expenses and improve cash flow B. To fund losses that cannot be insured C. To increase control of claim reserving and claims settlements D. To minimize the insured's level of liability in the event of a loss - CORRECT ANSWER- -D. To minimize the insured's level of liability in the event of a loss The superintendent may examine books and records of all authorization insurers in Ohio. Who is responsible for paying for the exam? A. The NAIC B. The Department of Insurance C. The Insurer D. The Superintendent - CORRECT ANSWER- -C. The Insurer Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would financially be able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? A. Term Insurance only B. Any form of life insurance C. Universal Life insurance D. Permanent insurance only - CORRECT ANSWER- -B. Any form of life insurance

All of the following are rewuirements for life insurance illustrations except A. They may only be used as approved B. They must identify nonguranteed values C. They must differentiate between guaranteed and projected amounts D. They must be part of the contract - CORRECT ANSWER- -D. They must be part of the contract Julie pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. Julie has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? A. Reduction of premium option B. Cash option C. Dividend-to-premium option D. Accumulation at interest - CORRECT ANSWER- -A. Reduction of premium option ROPO allows policyowner to apply policy dividends towards the next years premium. Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premium must be paid A. For 20 years B. Until the policyowners age 65 C. Until the policyowners age 100, when the policy matures D. For 20 years or until death, whichever occurs first - CORRECT ANSWER- -D. For 20 years or until death, whichever occurs first If an agent fails to obtain an applicant's signature on the application, the agent must A. Return the application to the applicant for a signature B. Send the application to the insurer with a note explaining the absence of signature

C. Sign the application for the applicant D. Sign the application, stating it was the agent - CORRECT ANSWER- -A. Return the application to the applicant for a signature A deferred annuity is surrendered prior to annuitzation. Which of the following best describes the nonforfeiture value of the annuity? A. The surrender value will not be more than 80% of the cash value in the annuity after the time of surrender B. The surrender value should be equal to 100% of the premium paid, minus any prior withdraws and surrender charges C. A deferred annuity cannot be surrendered prior to annuitization. The owner must wait until the annuitization period begins to receive any payments. D. The surrender value will be based on current interest rates - CORRECT ANSWER- -B. The surrender value should be equal to 100% of the premium paid, minus any prior withdraws and surrender charges All of the following information about a customer must be used in determining annuity sutability except A. Financial experience B. Beneficiary's age C. Annual income D. Tax status - CORRECT ANSWER- -B. Beneficiary's age A universal life insurance policy has two types of interest rate that are called A. Guranteed and current B. Minimum and target C. Fixed and variable D. Option A and B - CORRECT ANSWER- -A. Guranteed and current

All of the following statements are true regarding installments for a fixed amount except A. The annuitant may select how big the payments will be B. Value of the account and future earnings will determine the time period for the benefits C. The payments will stop when the annuitant dies D. The option pays specific amount until the funds are exhausted - CORRECT ANSWER- -C. The payments will stop when the annuitant dies An insolvent insurer is one who is unable to pay its obligations when they are due or has fewer assets than liabilities for a period of A. 6 years B. 3 years C. 2 years D. 4 years - CORRECT ANSWER- -B. 3 Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds? A. Vacation travel expenses B. Travel expenses for family members to come to the funeral C. Day care D. Debt cancelation - CORRECT ANSWER- -A. Vacation travel expenses Nathan assisted with the purchase of a commercial building that will be used as a community center. He doesn't hold a real estate license, yet his actions didn't violate any license laws. What must be true about Nathan's situation? - CORRECT ANSWER- -Nathan is a public official whose salaried duties include real estate transactions. Which section of the Residential Contract of Purchase requires the seller of a property within a development that is subject to the Virginia Property Owners' Association Act to give the buyer a copy of the property owners' association packet? - CORRECT ANSWER- -The Property Owners' Association Disclosure section requires the seller of a property within a development that is

subject to the Virginia Property Owners' Association Act to give the buyer a copy of the property owners' association packet. In Virginia, what type of deed is used to convey property? - CORRECT ANSWER- -In Virginia, sellers convey property with a general warranty deed. Which of the following is required of property management agreements? - CORRECT ANSWER- - Agreements must be in writing, have a definite termination date (or the relationship ends automatically after 90 days), and include the services provided by the licensee (regardless of whether they are acting in a standard or limited capacity). Yolanda is selling her property in Virginia. Several buyers showed interest in the property at a recent open house. When does Yolanda need to provide a buyer with the disclosure statement?

• CORRECT ANSWER- -A property owner must provide the disclosure statement to the buyer before the contract is ratified. Providing a disclosure after this gives the buyer the opportunity to terminate the contract without penalty. In Virginia, there are specific requirements for all transactions involving the purchase or lease of residential properties constructed before 1978. Licensees are required to provide what 3 items?
• CORRECT ANSWER- -1) VA's Disclosure of Information form & Acknowledgement Lead-Based Paint &/or Lead-Based Paint Hazards doc 2) EPA lead-base paint brochure 3) all purchase agreements must allow the buyer the option to conduct a lead-based paint risk assessment or inspection Candice is selling her condo, and Dwayne, who is really interested in purchasing it, wants to see the Property Owners Association's (POA) disclosure packet. What should Candice do? - CORRECT ANSWER- -Candice (or her agent) should make a written request to her POA for the disclosure packet to be sent to Dwayne. Unfulfilled contracts are also called _______. - CORRECT ANSWER- -unconsummated contracts Cornelia just discovered that her house, which she's trying to sell, is located in a military accident-prone area. Does this fact affect her selling process? - CORRECT ANSWER- -Cornelia

does have to provide this disclosure, but it won't necessarily decrease her asking price—and it doesn't mean that buyers can cancel the transaction after closing, with or without penalties. Under which of the following circumstances can a buyer agency agreement be terminated in Virginia? - CORRECT ANSWER- -???? MAY HAVE MORE OPTIONS???The buyer agency agreement may be terminated prior to the expiration date if both parties agree to it in writing. Who usually pays Virginia's grantor tax when transferring property? - CORRECT ANSWER- -The seller or grantor usually pays the grantor transfer tax in Virginia. Sam is renting out his single-family home. He wants to rent only to white couples. Can he do this without violating fair housing law? - CORRECT ANSWER- -Sam can do this, but only if he owns fewer than three single-family homes at one time—and as long as he does NOT use a real estate licensee to help him rent the house, by the way. List exempt property types from the Virginia Residential Landlord & Tenant Act - CORRECT ANSWER- -* Apartment building with only 5 units

• Hotels/motels
• Public housing ****MAY HAVE MORE*** In Virginia, anyone who owns or operates a regulated UST must notify ______ of the UST's existence. - CORRECT ANSWER- -In Virginia, anyone who owns or operates a regulated UST must notify the DEQ of its existence. UST = Underground Storage Tank DEQ = Dept of Environmental Quality Escrow funds must be deposited within how many days? - CORRECT ANSWER- -Escrow funds must be deposited within five business days of receipt.

Which regulation establishes the VREB and gives it the authority to enforce Virginia real estate license laws? - CORRECT ANSWER- -The Code of Virginia Title 54.1, Chapter 21 establishes the VREB and gives it the authority to enforce Virginia real estate law. Which pieces of information have to include on her business cards? - CORRECT ANSWER- -* sales person name & number

• associated brokerage
• associated brokerage # MAY INCLUDE MORE What is unique about the lead-based paint inspection in Virginia? - CORRECT ANSWER- -Buyers can waive their right to an inspection. Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage's escrow account and deposits it in her account for a few days. Which answer correctly identifies the violation(s) Jill has committed? - CORRECT ANSWER- -Jill is guilty of commingling and conversion. She commingled when she mixed the funds with her own, and then she converted the funds when she used them to pay the web developer. Can be both Lora, a new licensee, has a landlord client named Gus who doesn't rent to smokers. "I'm not sure he can do that," she says. "Aren't smokers a protected class under fair housing laws?" How should you respond? - CORRECT ANSWER- -Since smokers aren't protected by federal or state fair housing laws, Gus can choose not to rent to them as long as he makes sure there are no local fair housing ordinances that protect them. In what manner can a licensee engaged as a property manager represent the owner? - CORRECT ANSWER- -Licensees can represent the owner as a seller or landlord in accordance with their brokerage agreement. Philip tells his agent, Jeff, "I know for a fact that there have been three homicides in this house. What are buyers going to think about this?" What should Jeff say? - CORRECT ANSWER- -Not

only is there no disclosure requirement for homicides on the property, but also, Jeff could be found guilty of negligence toward Philip if he even mentions it to potential buyers. List Virginia Fair Housing Law exemptions. - CORRECT ANSWER- -One does not have to follow VA Fair Housing Law when:

• Renting/selling single-family house by owner as long as owner doesn't own more than 3 single- family houses at one time
• Renting/selling rooms or units in dwellings that are occupied (or intended) by no more that four families living independently when the owner maintains residency
• Religious organization (or non-profits religious affiliates) or private memberships clubs can give preference to members
• Private or public housing can give preference to gender to maintain same sex housing in matters of personal privacy *Persons of unlawful conduct & or convictions involving harm to persons or property with a clear & present threat to health & safety of others may be denied rental agreements *Reasonable maximum occupancy is applied to applicant How often should a principal broker conduct an audit (or arrange to have one done)? - CORRECT ANSWER- -The rule is once per firm licensing term, which is a two-year period. What septic system conditions requires a written disclosure? - CORRECT ANSWER- -When a septic system is subject to repair requirements by the state board of health AND their is a waiver (wavier does not transfer to new owner) Who can manage escrow funds? - CORRECT ANSWER- -Brokerages can manage escrow accounts, however often settling agents, attorneys, or even the other party to the transaction are asked to manage escrow funds also. List the fiduciary duties of the agent in a standard principal-agent relationship. - CORRECT ANSWER- -OLD CAR

Obedience - follow client's orders (within the law) Loyalty - putting client's interest above all others including agent's own interests Disclosure - make agency relationships known & disclose material facts Confidentiality - can not disclose non-material facts even beyond ending of agreement Accounting - documents & funds are always accounted for and in a timely manner Reasonable Care - providing professional knowledge to advise & guide without harm & not to advise & guide outside expertise Who usually pays the recordation tax in Virginia? - CORRECT ANSWER- -The buyer usually pays the recordation tax in Virginia. In Virginia, a landlord must provide a copy of the written rental agreement and written report of existing damage. When are these due to the tenant? - CORRECT ANSWER- -A signed copy of the written rental agreement must be provided to the tenant within one month of the agreement's effective date. The landlord must provide a written report of existing damage to the unit within five days of the tenant's occupancy. When are disclosures statements exempt? - CORRECT ANSWER- -You do not have to provide a disclosure statement when:

• Transfers due to court proceedings
• Transfers to beneficiary of deed of trust due to foreclosure or foreclosure sale *Transfers by decedent's estate, guardianship, conservatorship, or trust
• Transfer between co-owners

• Transfer made to spouse or lineal line
• Transfer between spouses due to decree of divorce
• Transfer failure to pay taxes
• Transfer to/from gov or public housing/agency
• Transfer of 1st sale (but builder must disclose any martial defects in violation of building codes) In Virginia, how long must completed real estate forms be kept on file with the broker? - CORRECT ANSWER- -In Virginia, all completed real estate forms must be kept on file with the broker for a minimum of three years. What's an advantage of submitting a successful audit report every licencing term? - CORRECT ANSWER- -There are no discounts or other insider perks, but principal brokers do get immunity from any of the board's enforcement actions. What is the difference between the Purchase Agreement sections: The Notice to Purchaser(s) section & The Notice to Purchaser Regarding Settlement Agent & Settlement Service section? - CORRECT ANSWER- -Notice to Purchaser Regarding Settlement Agent & Settlement service sates that purchaser or buyer has the right to choose which settlement agent will handle the closing & the role of the settlement agent - VERY IMPORTANT - Virginia law requires that this section be included in any contract for the purchase of real estate that has between one and four residential dwelling units. The Notice to Purchaser(s) says that the buyer should exercise due diligence in regards to sex offenders. Characteristics of value - CORRECT ANSWER- -DUST Demand - how popular or desirable Utility - property's function Scarcity - market supply Transferability - ease in which it can be purchased (title defects can devalue property)

Types of Value - CORRECT ANSWER- -UAMII Value in use - property's worth to person using it Assessed - what the local tax authority thinks it is worth Mortgage - price property can be loaned or sold at foreclosure Insured - cost to replace or rebuild Investment - ROI a property may provide Economic Principles of Value - CORRECT ANSWER- -3CS - PAPAR Conformity - value based on how similar it is to surrounding properties Competition - value based on what else is available Contribution - value of changes is dependent on value as a whole Substitution - reasonable person will not pay more for something if something similar can be had for less Plottage - increase value by combining adjacent parcels Assemblage - PROCESS of combining parcels Progression - increase in value when neighboring properties increase Anticipation - changes in value due to an expected event not yet realized Regression - decline in value when neighboring properties decline Market Cycle & other factors affecting value - CORRECT ANSWER- -* reduced consumer confidence - new buyers wary of purchase & homeowners hesitant to trade up

• Higher unemployment - reduces# of buyers, moving prices down
• Higher taxes = decrease buying power / Lower taxes = increase buying power
• Higher interest rates = reduce affordability / Lower interest rates = increase affordability

• Supply & demand - demand > supply = higher prices (seller's market) // demand < supply = lower prices (buyer's market) Types of Ownership - CORRECT ANSWER- -1) Estate in severalty - one person (ownership is severed from everyone else) 2)Co-ownership (More than one owner) *Tenancy in common - each person entitled to whole - inheritable - doesn't nessc. pass to other owners
• Joint tenancy - =ownership w/ undivided right 4 conditions: 1) ownership transfer all at same TIME & SOURCE 2) same TYPE of interest 3) same % 4) UNDIVIDED possession --- has survivorship (joint owner survivors get the deceased portion =ly)
• Tenancy by the entirety - joint tenancy for married couples & protects debts solely of deceased being attached to property that was jointly owned by couple Types of owner termination - CORRECT ANSWER- -1) Termination of joint tenancies - joint tenant can sell their share but the new share holder can not be a joint tenant (because TIME & SOURCE was no the same as rest of joint tenants) - new tenant is a tenant in common & share is inheritable

2. By Partition - tenants in common right to whole is divided to a portion exclusively according to their share - court may order to sell if not property can not easily divide & proceeds would be divided
3. Term. of tenants by entirety - can be reduced to in common by divorce, annulment, or amended title Types of Easements - CORRECT ANSWER- -1. Easement appurtenant - permanent right to benefit neighbor - attached to the land

2. Easement in gross - right to use land (usually utility) - attached to person/entity
3. Easement by necessity - assess to roads (otherwise landlocked)
4. Easement by prescription - yrs of one-persons use & must be: hostile, open, exclusive, & notorious - not legal

Types of Freehold Estates - CORRECT ANSWER- -*Fee Simple - best - sell able & inheritable (subject to probate) - may still have easements **Defeasible fee (set on condition of an event) - (1) determinable - conveys ownership as long as a condition does or doesn't occur - a reverter is named when/if conditions are no longer met & they get them automatically (2) subject to condition subsequent - if condition is not met, original owner (or heirs/successors) must seek out to re-acquire ownership via court Types of Leasehold Estates - CORRECT ANSWER- -(1) Estate for Years - ends on specific date & must be renewed (2) Periodic Estate (Estate from Period to Period) - automatically renew @ the end of each period (3) Estate at Will - lease w/ out established ending & can be terminated by either party (4) Estate at Sufferance - tenant stays when lease expired Characteristics of Real Estate - CORRECT ANSWER- -1) Economic:

• Scarcity - can't make more land
• Improvements - making changes
• Permanence - improvements w/ stable, long term investment w/ stable returns (usually infrastructure related - sewer, utilities, roads)
• Location (area preference) - situs (where is it located in reference to desirable areas)

2. Physical:

• Immobility - geographic location is fixed
• Indestructibility - improvements can deteriorate, land itself can not be destroyed
• Uniqueness - non-homogeneity - no one parcel of land is like another Bundle of Property Rights - CORRECT ANSWER- -PCEED

1. Possession - by title holder
2. Control - use of
3. Exclusion - decide who may/may not access
4. Enjoyment - ability to use in any legal manner
5. Disposition - sell/convey