exam 1 practice Flashcards
(145 cards)
1
Q
Fee simple absolute estate would be
A
the highest interest a person can have in real property or land
2
Q
An estate is granted to “A” for the life of “X.” “A” dies while “X” is still living. The estate:
A
Vests in the heirs or devises of “A”
3
Q
Tyson owns a store building which he leased to Crown for seven years. Crown’s estate in the store building is:
A
personal property, estate for years, a chattel real
4
Q
An instrument which usually transfers possession of real property, but does not transfer ownership is:
A
A sublease
5
Q
would be considered real property?
A
A bearing wall in a single-family house.
6
Q
Personal property can become
A
real property, hypothecated, aliented
7
Q
Jones conveyed his ranch to Brown using a land contract. The ranch was serviced by a mutual water company, and Jones was a stockholder in the company. The stock which Jones owned was appurtenant to the land. Does Brown have to enter into a separate contract for the stock of the mutual water company:
A
No, because the stock was appurtenant to the land and therefore part of the real property and part of the land contract.
8
Q
The law permits a real estate licensee to act as an agent in the sale of some mobile homes. All of the following acts are grounds for discipline by the Real Estate Commissioner against a real estate salesperson’s license, except:
A
Selling, as agent, a mobile home which is greater than 8 feet in width and 40 feet in length;
9
Q
required in joint tenancy ownership of real property:
A
Equal shares of interest in the property by each of the joint tenants;
10
Q
When a pest control company discovers no evidence of infestation of termites, but discovers conditions which may lead to such infestation, the cost of correcting such conditions is paid by:
A
The buyer only if he chooses to have the condition corrected.
11
Q
To alienate title to property, one:
A
Conveys title
12
Q
When real property is sold, a copy of the structural pest control report must be given, if requested, to:
A
the buyer
13
Q
Legally and technically, property is defined as:
A
Rights or interests which a person has in the thing owned;
14
Q
A deed:
A
Does not have to be recorded to transfer title.
15
Q
Of the following types of deeds, which one would contain no warranties, expressed or implied:
A
A quitclaim deed;
16
Q
The main purpose of a deed is to:
A
Evidence the change in title or transfer of an interest in real property;
17
Q
When a valid grant deed is prepared, title passes when it is:
A
Delivered
18
Q
which of the following persons would usually be in the weakest position against loss of property due to a claim of title by an outside person:
A
The holder of an unrecorded quitclaim deed who does not occupy the property.
19
Q
An easement could be created for what length of time:
A
any length of time
20
Q
The land that is benefitted by an easement is called the:
A
Dominant tenement;
21
Q
The requisites of a grant deed when compared to a land contract of sale may differ with respect to:
A
Interest conveyed; Signatures of the principal parties; Designation of purchase price;
22
Q
Land that is subject to an easement is said to be
A
encumbered
23
Q
Mr. and Mrs. Winters hired the Superb Construction Company to install a swimming pool on their residential premises. In the event the construction company was unpaid and it was necessary for them to file a lien for payment of the contract, the encumbrance created would be:
A
a specific lien
24
Q
If there has not been an agreement to the contrary, all of the following would qualify as a negotiable instrument, except
A
A mortgage securing a promissory note;
25
A straight note, same term and interest rate, would:
Involve more interest than an installment note;
26
Which of the following is not a true statement about easements:
An easement in gross is a right in another's land created for the benefit of adjacent land;
27
An easement in gross:
Burdens servient land;
28
Easements are terminated by all of the following, except:
Revocation by the owner of the servient tenement;
29
A tenant in good standing under a valid five-year lease which makes no mention of assignment or sub-leasing, may legally do which of the following:
May sublease or assign the leasehold to anyone, since the lease made no mention of any restrictions on such action.
30
A formal declaration, not an oath, that a statement is true or that the declarer will tell the truth is:
An affirmation.
31
Following proper action by the local authorities, the zoning on a vacant lot was changed from "commercial" to "residential." Such an action is called:
Down zoning;
32
A change in a zoning ordinance could be initiated by:
A subdivider/developer; A local government agency; The owner of a property;
33
The right or power to sell a property in the event of a default under the terms of the trust deed is given by:
Trustor to the trustee.
34
Agent John has given seller Henry an offer that includes the phrase "All kitchen appliances are to be left with the house and become the personal property of the buyer." Henry accepts all of the other terms of the offer, but objects to leaving the appliances. John crosses out that item and initials it on the contract on behalf of the buyers. He does this despite the fact that the buyers are on vacation and cannot be consulted about this. Such action would most accurately be classified as:
Unlawful conduct.
35
When comparing condominiums and rented apartments, which of the following would be true:
The person who occupies each unit would have an estate in real property;
36
installment notes often include an "or more" clause. Such a clause would:
Allow an accelerated payoff;
37
When a blanket mortgage is placed upon a property and a "release schedule" is put into the mortgage showing the amount of the loan that must be paid off for each of the lots, those individual amounts would likely be proportionately larger for the first lots that are sold. The reason for this practice is:
To increase the security value of the remaining lots; To compensate for the loss of security as the lots under the blanket encumbrance are removed; To compensate for the loss of security due to the best lots being sold first;
38
Another name for an estate of inheritance is:
Estate in fee;
39
An acceleration clause is inserted in a note that is otherwise negotiable. The addition of this clause:
Does not reduce the negotiability of the note;
40
An "open-end" provision in a mortgage would benefit the borrower the most if he:
Borrowed additional money.
41
When the term "beneficiary statement" is used by those in real estate finance, it identifies a statement made:
By the lender, as to the current balance due to pay off a real estate loan;
42
Once a judgment has been obtained against real property, a plaintiff would obtain which of the following in order to cause the property to be sold:
A writ of execution; (forced sale of the property)
43
Authorization to sell a parcel of real property in the event of a default is given by:
Trustor to trustee;
44
In order to operate a competitive, yet profitable business, a real estate broker needs to be concerned with "desk cost." Which of the following most nearly represents the correct way to calculate desk cost:
Divide the total operating expenses of the firm, including salaries, rent, insurance, etc., by the number of salespersons.
45
When a title company issues a California standard policy of title insurance, the policyholder is insured against loss which occurs because of:
Forgery in the chain of recorded title;
46
Upon discovering that a salesperson in his office was receiving a referral fee from a local lender for every real estate loan the salesperson referred to the lender, the broker of record in that office took only two actions: He discharged the salesperson, and he warned all other salespersons in the office never to accept such fees. Based only on the foregoing, which of the following is most nearly correct:
Both broker and salesperson may be subject to disciplinary action by the Commissioner.
47
The listing agent for a residential property can legally complete the entire Real Property Transfer Disclosure Statement:
Under no circumstances;
48
Broker Davis has had a house listed for sale for nine months without selling it. He knows that the building needs major structural repairs, and he has listed it at 10% above its fair market value. He runs an advertisement in a newspaper that says, "Three bedroom, Victorian. You won't believe the price! Move right in. Davis - 234-5678." This advertisement is bad because:
Since Davis knows that the property needs major repairs, it is deceptive and misleading;
49
If a licensee placed the following ad in a newspaper, which of the following would describe the ad? "Three bedroom, two-bath, pool and spa, large lot -- $167,000. 555-1234."
This is blind advertising.
50
When a broker receives trust funds and places them in a trust account, which of the following statements is most nearly correct about interest earned on those funds:
The broker may not receive directly or indirectly any interest on trust funds.
51
considered a violation of fair housing laws in regards to periodic tenancy:
The requirement of a landlord of a co-signer exclusively for tenants who are single;
52
When renting residential property, the amount of a security deposit which a lessor may legally charge from a lessee is determined in part by which of the following:
Whether the unit is furnished or not;
53
Among the choices available to an investor, stocks and bonds, when compared with real property, are usually thought to be:
More liquid in the marketplace.
54
Mike Coogan, a new real estate salesperson, made strong efforts to obtain listings in a non-integrated community. He found success by insinuating to property owners that should minorities move into the area, the value of their homes would decrease. Which of the following terms best describes the activities of Salesperson Coogan:
panic peddling and blockbusting.
55
A person sold his home and took back a note secured by a purchase money deed of trust. He selected a real estate broker from the telephone book and asked him to service this loan. If the broker takes on this duty, state law requires him to:
Have a written authorization from the holder of the note;
56
A real estate broker who specializes in selling residential property in a given area may refuse to accept a listing on a property in that area for which of the following reasons:
Because the owner's required price is substantially above the market price in the area of the residences;
57
By means of the Federal Fair Housing Law, Congress established a national policy of fair housing throughout the United States. This policy applies to which of the following:
Single-family residences that are individually owned and that are offered for sale through a real estate broker; Single-family residences owned by private individuals who own more than three such residences; All type family dwellings of six units where the owner occupies one of the units;
58
The mortgage insurance on an FHA loan:
Protects the lender in the event of default;
59
When the general level of prices decreases:
The value of money increases;
60
the exercise of police power whereby land is divided into districts according to the use to which the land may be put is known as:
Zoning;
61
When the Federal Reserve Board increases the reserve requirements, it will:
Decrease loan activity;
62
When the Federal Reserve Board increases the reserve requirements, it will:
Decrease loan activity;
63
A real estate salesman went into a neighborhood to obtain listings of residential property. He made representations that because of the entry into the neighborhood of minority groups, property values would be reduced by a decline in the quality of schools and an increase in the crime rate. These practices by the salesman are:
Grounds for disciplinary action;
64
A builder needs a long-term loan of $3,000,000 to develop a new shopping center. Which of the following would usually be the best source of such funds:
Life insurance companies;
65
David gave a grant deed to John transferring title to a house. The title is subject to a condition stating that title will be forfeited if alcoholic beverages are ever sold on the property. John would have which of the following types of estates:
A fee simple defeasible;
66
true concerning the activities of mortgage companies:
They prefer negotiating loans which are salable in the secondary market;
67
A family rents a vacation home from September 1, 2002 to January 1, 2003. Their tenancy would properly be classified as:
An estate for years.
68
does not buy loans in the secondary mortgage market?
Federal Housing Administration.
69
The term used by lenders, "mortgage yield" best describes:
The effective interest return obtained from a first trust deed by an investor;
70
The basic protection of a lender on a purchase-money second trust deed would be:
Equity of the borrower;
71
In financing for new construction, the lender will usually release the final payment to the builder when the:
Lien period has expired;
72
To qualify a real property sales contract for recordation, it must:
Be signed by both buyer and seller and be acknowledged.
73
The two requirements which governmental units must observe in the exercise of the power of eminent domain are:
The proposed use must be public, and just compensation must be paid to the owner.
74
The purpose of the Truth-in-Lending Act is to:
Assure a meaningful disclosure of credit terms;
75
The real estate financing instrument which transfers equitable title to real property, but retains legal title in the seller, is called:
A real property conditional installment sales contract;
76
Most likely, the United States Attorney General would act to enforce the Federal Open Housing Law whenever:
A conspiracy exists to practice resistance to the Federal Open Housing law;
77
defines a "mortgage loan"?
A loan collateralized with real estate.
78
Who pays the points on a Cal-Vet loan:
No one.
79
When lenders use the term "debt-income ratio," they are referring to:
A loan qualifying tool;
80
When examining a properly-prepared closing statement, the broker would discover that a mortgage assumed by the buyer would appear as:
A debit to the seller;
81
true concerning escrow procedures:
When the escrow requirements have been met, the escrow agency changes from a dual agency to a separate agency;
82
essentials of each and every contract, except:
A proper writing.
83
A prospective buyer would be entitled to damages from a real estate broker in the event the broker:
Acts in excess of the authority given the broker by the seller;
84
Four months ago, a seller accepted a proper offer to purchase his real property. The contract was in writing. Later, the seller refused to complete the transaction, since he felt the value of the property would increase in the near future. Under these circumstances, the Statute of Limitations could affect the rights of the buyer to prevail in a civil action, due to a breach of a written contract, within:
4 years.
85
For more than one hundred years, the Garza family has owned and operated a gold mine on federal land. The only access to their mining claim is across an adjoining parcel. That parcel is sold to a new owner, who fences off the parcel and padlocks the gate across the access road. The Garzas would be best advised to:
File a quiet title suit against the new owner to protect their rights;
86
not essential to the creation of an agency relationship:
Agreement to pay a consideration
87
Richards agreed to list his property for sale with Broker Jackson. In using a standard listing form, Richards completed Paragraph 10 with the following words: "Delete provisions in Paragraph 3c above which says, Agency is hereby authorized to accept on my behalf a deposit toward the purchase price in any amount." If Broker Jackson produced a buyer:
If he accepts a deposit, he holds it as agent of the buyer until the offer is accepted by the seller;
88
A broker who is hired by an owner to sell his property must reveal all significant and material information to the principal. Which of the following would be considered material information and must be revealed:
The agent's knowledge that a better offer to purchase is imminent;
89
Salesperson Kingston presented to Broker Wright Buyer Kingsford's offer to purchase Seller Brightwood's real estate, accompanied by an earnest money deposit in the form of a personal note in the amount of $1,000. Broker Wright should inform Salesperson Kingston that:
Seller Brightwood should be informed prior to acceptance that the deposit is a promissory note.
90
On March 5, a prospective buyer gave a broker his personal check for $1,000 payable to the seller along with an offer to buy the property. He told the broker that the check should not be cashed until March 30. Which of the following is correct?
The broker may hold the check, but must tell the seller that it is being held uncashed before the seller accepts the offer.
91
Broker Farr is showing property that he has listed to Olson. Broker Farr knows that there are massive plumbing repairs to be made. Broker Farr:
Has to tell the buyer, because he must disclose all material facts;
92
not be legally proper for a licensee to do?
Keep the client's secret that the roof leaks.
93
When an existing contract is replaced by an entirely new contract, it is an act of:
Novation;
94
When is a broker relieved of the obligation to present an offer to purchase real property to the principal:
When the offer is patently frivolous or the broker is acting on written instructions of the principal;
95
Where a buyer withdraws his offer to purchase real property prior to acceptance by the seller, the:
Buyer is entitled to the refund of the earnest money deposit;
96
Ms. Swan listed a vacant lot with Broker Benton for $11,400. Prospective buyer Gardner submitted an offer at a purchase price of $11,000 with the offer to expire in thirty days. The next day, Ms. Swan made a counteroffer with the sales price to be $11,200, which Gardner would not accept. Three days later, Swan delivered to Benton a signed acceptance of Gardner's $11,000 offer. When Benton told Gardner of Ms. Swan's acceptance, Gardner decided not to buy the property. Based on these actions, there is:
No contract.
97
Compliance with the agency relationship law enacted as a part of the civil code would be required in which of the following transactions:
A lease for a period of longer than one year.
98
Private restrictions on real property can be written either as a condition or as a covenant. Which of the following is most correct concerning such restrictions:
Violation of a condition can result in penalties which are more severe, and can result in loss of title;
99
A developer can use the Street Improvement Act of 1911 as amended to raise funds for all of the following purposes, except:
To purchase land for subdivision;
100
A “GPAM” mortgage loan provides for:
Deferment of certain payments on the principal during the early period of the loan;
101
In May, 1996, Mr. Sanders leased a unit in his apartment house to a tenant for a two-year term. The tenant prepaid the last two months' rent at the time he entered into the lease agreement. For federal income tax purposes, that amount will be considered as income for Mr. Sanders:
In May, 1996;
102
One advantage of an installment sale for federal income tax purposes, is that:
The gain realized will be taxed in the year it was received.
103
Broker Green obtained a listing from Brown to sell his home. Brown told Green the sewers were in and connected and signed a listing to that effect. Green was of the opinion that there were no sewers installed in that street, so he checked with the city and found he was correct. Green showed the house to Jones, who did not ask about sewers, and Green made the sale without any comment. Later, Jones found that the sewers were not in. Which of the following is true:
Green had a duty to tell Jones, even though he did not ask;
104
Mr. O'Riley paid an owner $10 for an option containing this clause: "Option to be for 60 days from June 1, 1967. Upon exercise of option, holder is to purchase within 30 days thereafter for all cash consideration." On July 10, Mr. O'Riley sold and assigned his option for $1,000. On July 28, the new holder notified the owner that he would purchase on August 15. The owner claimed the option was void. The option was:
Valid, and assignee could purchase on August 15.
105
If a condominium owner lives in his condominium and pays all of the following, which of the following would be deductible for federal income tax purposes?
Any interest that he pays on a mortgage for his share of the common areas;
106
In which of the following situations would a parcel of property be reassessed?
Every time the property is sold.
107
Community apartment projects and condominiums come within the subdivision provisions of the California Real Estate Law when they contain how many units:
Five or more;
108
Where there are local minimum housing requirements, builders must:
Comply with the more stringent of the two laws in "A" and "B";
109
Under federal income tax regulations, an individual may not deduct a loss on the sale of residential property unless:
The property was bought as an investment and was rented or leased out as such.
110
A carpenter installed hardwood floors in a new house, and when he was not paid for his work, filed a mechanic's lien. The priority for his claim is:
The date construction of the new house was begun.
111
A person who held a life estate leased the property for five years and then died one month after signing the lease. The new owners ordered the lessee to move out. The lease was:
Valid only as long as the lessor was alive;
112
Georgene Creason is selling time-shares in her Wildacre subdivision. She mailed advertisements to 10,000 people, offering them the chance to win a prize, but did not reveal that in order to be eligible, the person must visit Wildacre and listen to a sales presentation. All of the prize winners had become owners in Wildacre. Is there anything wrong with this situation:
Yes; anyone offering prizes or gifts must reveal any required attendance at a sales presentation when offering the prize or gift;
113
The Uniform Commercial Code, Division 6, which pertains to bulk sale transfer of business goods, exists primarily for the protection of:
Creditors;
114
Anderson sold a farm to Barnes on May 1, 1985. The real property taxes for the 1985-1986 tax year:
Are a lien on the farm.
115
If a ranch is 36 miles square, how many townships would it contain:
36;
116
Owner Armstrong gave Broker Weeks an exclusive authorization to sell Armstrong's ranch. As part of the agreement, Broker Weeks agreed to advertise the ranch in a catalog that Weeks publishes and distributes to other real estate brokers. For this added service, Armstrong paid Broker Weeks $1,000 for this advertising service at the time Owner Armstrong signed the listing. Under current real estate law, this payment:
Must be deposited into a trust account and disbursed only to pay advertising expenditures incurred by Broker Weeks in advertising the ranch property.
117
Baylor made an offer on the purchase of a vacant residence and gave a cash deposit with the offer. The offer was presented through Broker Harris. The offer was accepted by the seller. Prior to the close of the transaction, Baylor requested permission from Harris to enter the house for the purpose of painting and making minor repairs. Which of the following is true:
Harris should obtain written approval of Baylor's request from the owner;
118
the appraisal of an income-producing property is made as of a "given date" to indicate:
The market conditions influencing the value of the property at that point in time;
119
It would be perfectly ethical for an appraiser to
Appraise a property in which the appraiser has an interest, provided the appraiser first discloses the interest.
120
A major transportation route has a single line of store buildings along one side. This is known as:
A strip commercial development.
121
An appraiser, in arriving at an estimate of value secured under each of the three approaches in appraising:
Explains why or why not the other approaches were not used, then chooses the one the appraiser believes to be the most appropriate approach.
122
In arriving at an estimate of value, an appraiser would be most interested in the date:
The purchase contract was signed;
123
The first step in the appraisal process is to:
Define the appraisal problem;
124
Definitions of market value are least concerned with:
Material cost;
125
When appraising real property, the appraiser attempts to estimate value. The value arrived at by the appraiser is:q
Based upon an analysis of facts as of a given and specified date;
126
An appraiser is using the market data approach comparing the prices of comparable properties to the subject property. If the comparable properties have a feature that is not present in the subject property, the value of that feature will be:
Subtracted from the sales price of the comparables;
127
The hardest and yet the most important part of the market data method of appraising is:
Adjusting for the differences between the comparable properties and the subject property;
128
Rental schedules for various units of space are realistically established on what basis:
Market comparison;
129
A final estimate of the value of any single-family residence is:
Limited by the replacement cost of the building, plus the value of the land;
130
A developer ordered several truckloads of soil to be used in a new housing project for backfill. His most probable intended use would be:
To fill in excavations or around foundation walls;
131
defined as a fixture in the law:
Something incorporated into the land;
132
Capitalization
Establishes the value of an asset by dividing the annual net income by the desirable rate of return;
133
To arrive at a capitalization rate in the appraisal of an income-producing property, no provision should be made for which of the following:
Federal taxes;
134
in using the capitalization process, which of the following cannot be deducted to determine the net income?
Mortgage interest;
135
considered an example of economic obsolescence?
An over-supply of like properties;
136
not contribute to obsolescence is:
Wear and tear from use;
137
Under California law, the Real Estate Commissioner has authority to do which of the following:
Promulgate rules and regulations to enforce the California real estate laws;
138
Harris and Davis, single people, owned a parcel of real property as joint tenants. Harris encumbered his interest for $10,000, borrowing the amount to pay medical bills without the knowledge or consent of Davis. Shortly thereafter, Harris died, with the debt still unpaid. Which of the following would be true:
Davis would own all of the property free and clear of the encumbrance;
139
if five people own property as joint tenants:
There is still only one title to the whole property;
140
Ames, Barnes, and Crandal are owners of a vacant lot, holding title to the parcel of real property as joint tenants. When Ames dies, and is survived by Barnes and Crandal, it would be correct to say:
Ames' interest terminates.
141
When owners of real property hold title as tenants in common:
Each of the co-owners' interest may be conveyed separately;
142
When real property is held by husband and wife as community property, an agreement to sell that property which has been signed by only one spouse would be considered to be:
Unenforceable;
143
Adams sold his house to Brooks, who did not record the deed, but took up residency there. Adams then sold the same property to Carr, who reviewed the county recorder's records, but did not examine the property. Adams gave Carr a deed, which Carr recorded. Which of the following would be true concerning title to the property:
Brooks maintains title.
144
According to the California Bureau of Real Estate regulations, it is commingling when a broker:
Deposits into the trust fund account a renter's check for the security deposit on an income property the broker owns;
145
Of the following, which would most nearly refer to loss in value due to economic obsolescence:
A: An architectural design which is declining in popularity;
A change in nearby zoning;
