Mortgage Loan Originator (MLO) Licensing Practice Test

What defines real property?

1. Anything that is movable and tangible

2. Land and anything permanently affixed to it

3. Financial instruments tied to land ownership

4. Rental agreements associated with a property

The correct answer is: Land and anything permanently affixed to it

Real property is defined as land and anything that is permanently affixed to it. This includes structures such as buildings, homes, and any other improvements that are attached to the land in a fixed manner. The permanence of these affixations is key, as items that can be easily moved, such as furniture or vehicles, do not count as real property but rather as personal property. When considering the other options, movable and tangible items describe personal property rather than the immovable nature of real property. Financial instruments related to land ownership refer to documents like deeds or mortgages, which are important for ownership and financing but do not define the property itself. Rental agreements pertain to the contractual relationship between landlords and tenants but also do not constitute real property, as they do not define the physical characteristics of land or its permanent structures. This understanding is essential for anyone working in real estate or mortgage lending, as it impacts how properties are evaluated, sold, and financed.