Property Ownership
The tests for determining whether an item is a fixture include all of the following EXCEPT:
AMethod of attachment
BAdaptation to the property
CIntent of the parties
DOriginal purchase price of the item✓ Correct
Explanation
The three traditional tests for determining whether an item is a fixture are: (1) method of attachment, (2) adaptation/use for the property, and (3) intent of the parties. The original purchase price is not a legal test for fixture determination.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
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