Exam 1: Definitions Exam 1

Question 1

A seller listed a property at an inflated price. The seller plans to sell at that price to minorities but will sell at a lower price to non-minorities. Which statement is TRUE under these circumstances?
A)
The seller’s actions are illegal.
B)
The seller could do this if the buyer did not finance his purchase money loan through a federally regulated lender.
C)
The seller could do this since he was not asking the minority buyers to pay more than the listed price.
D)
The broker and the salesperson could be liable for damages.

Answer 1

The seller’s actions are illegal.

Question 2

What is the minimum amount of time that a broker must keep signed copies of listings, deposit receipts, et cetera?
A)
Four years
B)
One year
C)
Three years
D)
Two years

Answer 2

Three years

Question 3

A broker who is an agent of the seller becomes a gratuitous agent of the buyer with all the rules of agency in effect when he or she does which of the following?
A)
Arranges a purchase money loan for the buyer
B)
Writes up an offer to purchase for the buyer
C)
Gives the names of several appraisers to the buyer
D)
Shows property to the prospective buyer

Answer 3

Arranges a purchase money loan for the buyer

Question 4

A real estate salesperson who advertises a property must provide in the advertisement
A)
at least the salesperson's name.
B)
both the broker's name and address and the salesperson's name.
C)
the broker's name and address.
D)
the broker's name.

Answer 4

at least the salesperson’s name.

Question 5

An increase in the appraised value of property which is considered unearned increment would most probably result from
A)
increase in amenities.
B)
capital improvements.
C)
management expense.
D)
increase in population.

Answer 5

increase in population.

Question 6

Signer signed without reading the contract. The resultant contract is
A)
valid.
B)
unenforceable.
C)
void.
D)
voidable.

Answer 6

valid

Question 7

A licensee put a blind ad in a local newspaper. A blind ad does NOT
A)
disclose the selling price.
B)
give the address of the licensee.
C)
give the address of the property.
D)
identify the advertiser as an agent.

Answer 7

identify the advertiser as an agent.

Question 8

An appraiser received a $300 fee from Jones for appraising Brown's property. The appraiser may discuss the details of the appraisal with
A)
Brown.
B)
Jones.
C)
anyone.
D)
no one.

Answer 8

Jones

Question 9

Involuntary alienation of an estate means
A)
no one can be compelled to transfer title without giving consent.
B)
ownership of estates may be transferred by operation of law.
C)
aliens are forbidden to own estates in fee simple in California.
D)
the estate cannot be transferred without the consent of the owner.

Answer 9

ownership of estates may be transferred by operation of law.

Question 10

Which is NOT a specific lien?
A)
Mechanic's lien
B)
Unrecorded property tax lien delinquent from prior years
C)
Blanket mortgage
D)
Judgment lien

Answer 10

Judgment lien

Question 11

A broker legally, as well as in common usage, refers to the buyer as
A)
attorney in fact.
B)
customer.
C)
client.
D)
fiduciary.

Answer 11

customer

Question 12

All of these statements concerning the lease of a home are correct EXCEPT
A)
a leased fee, which is not subject to a mortgage indebtedness or other liens, has no involuntary encumbrances.
B)
without a written memorandum or lease, the rental is presumed to be on a month-to-month tenancy.
C)
a lease is a conveyance of an estate in land.
D)
a written lease cannot be altered in its executory provisions by an oral agreement.

Answer 12

a leased fee, which is not subject to a mortgage indebtedness or other liens, has no involuntary encumbrances.

Question 13

An appraiser, in estimating the value of a residence that is beautifully landscaped and is improved with sidewalks, fences, and curbs, would appraise the fences, sidewalks, landscaping, and curbing in which manner?
A)
Separately
B)
Include them as building value
C)
Include them as land value
D)
Disregard them

Answer 13

Separately

Question 14

A minority prospect came to you and requested to see a specific house in a minority neighborhood. You can lawfully assume the prospect is
A)
interested in a house with a particular type of architectural style.
B)
unable to qualify for VA or FHA housing and you should refuse to show prospect any houses.
C)
trying to test you.
D)
interested in a house in a minority neighborhood.

Answer 14

interested in a house with a particular type of architectural style.

Question 15

Which of the following would constitute a legitimate and lawful use of a deed restriction?
A)
That the property “could be conveyed only to a Caucasian”
B)
That the property “cannot be conveyed for 10 years”
C)
That the property “could be sold only for more than one dollar”
D)
That the property “could be used only for education or religious purposes”

Answer 15

That the property “could be used only for education or religious purposes”

Question 16

An agreement with a lender that prohibits early payoff of a loan is known as a(n)
A)
prepayment penalty.
B)
exculpatory clause.
C)
open-end mortgage.
D)
lock-in clause.

Answer 16

lock-in clause.

Question 17

In accordance with §1099 of either the transferor or agent must ensure the transferee receives a copy of a report from a certified pest control operator under which condition?
A)
Only if the report indicates infestation of wood-destroying organisms
B)
Whenever such a report is required by a lender as a condition for making a loan, or by the transferee as a condition of buying
C)
If such a report was demanded by a lender as a condition of finance
D)
If such a report was demanded by the transferee

Answer 17

Whenever such a report is required by a lender as a condition for making a loan, or by the transferee as a condition of buying

Question 18

Most real estate syndicates in California are
A)
limited partnerships.
B)
real estate investment trusts.
C)
corporations.
D)
joint ventures.

Answer 18

limited partnerships.

Question 19

An investor purchases an investment property. An appraisal of the property showed a 12% return. The broker gives the buyer a financial report on the property but fails to take into consideration vacancies and management fees. The broker is guilty of
A)
false promises.
B)
caveat emptor.
C)
fraud.
D)
misrepresentation.

Answer 19

misrepresentation.

Question 20

When the broker receives a deposit of earnest money with an offer to purchase, which of the following is TRUE as to the deposit?
A)
Broker must hand the deposit to the owner immediately.
B)
It never belongs to the broker.
C)
If the sale is canceled by either party, the broker must decide to whom the deposit will be given.
D)
Any deposit is always returnable to buyer.

Answer 20

It never belongs to the broker.

Question 21

If an apartment owner is converting the building to a condominium project, each tenant must receive advance notice of intention to convert. What is the notice time requirement for this phase of conversion?
A)
90 days
B)
30 days
C)
180 days
D)
120 days

Answer 21

180 days

Question 22

Under the Truth-in-Lending Act, a "Notice of Cancellation" could be given when the loan was
A)
more than $25,000 and was not secured.
B)
used for business expansion.
C)
secured by a commercial building.
D)
secured by the owner's residence.

Answer 22

secured by the owner’s residence.

Question 23

Commingling is the opposite of
A)
neutral escrow depository.
B)
segregate.
C)
trust fund.
D)
mingle.

Answer 23

segregate

Question 24

Membership in the IREM is limited to
A)
corporations.
B)
qualified individuals.
C)
none of these.
D)
partnerships.

Answer 24

qualified individuals.

Question 25

A broker who is not authorized to accept deposits in his listing agreement must inform the offeror that
A)
no deposits will be accepted.
B)
it is implied by law that if authorized by the seller, deposits can be accepted.
C)
the risk of loss lies solely with the buyer. The seller will not be liable in event of loss of the deposit.
D)
an agent must accept all deposits.

Answer 25

the risk of loss lies solely with the buyer. The seller will not be liable in event of loss of the deposit.