exam 2 questions Flashcards
(141 cards)
1
Q
Mrs. Smith held a life estate in a single-family residence. The estate was based upon her own life. She leased the residence to Mr. Jones for a five-year period, but died a few weeks after the lease began. The lease was:
A
Valid only during the life of the lessor;
2
Q
not a characteristic of a fee simple title:
A
It is real encumbrances;
3
Q
rights of ownership in real property do individuals normally not have:
A
Eminent domain rights;
4
Q
As used in real property law, which of the following is most nearly correct as a meaning for the word “tenancy”:
A
The mode or method of holding title to real property by a lessee or owner;
5
Q
When a broker hires a salesperson under a valid independent contractor agreement, which of the following is correct:
A
Broker may be held liable for the salesperson’s conduct in a real estate transaction;
6
Q
What is the meaning of a quiet title action:
A
Court action to remove a cloud on the title.
7
Q
Which of the following is regarded as a personal property interest:
A
Leasehold estates in real property;
8
Q
When the state has given permission to a nonriparian owner of a farm to use a nearby lake, the owner has received this right by:
A
Appropriation.
9
Q
the inability of a corporation to qualify as a joint tenant in the ownership of property is due to the fact that:
A
It has perpetual existence;
10
Q
If a lien has been created by court action, and it covers all properties of the debtor in that county where it is recorded, it is known as a:
A
General lien;
11
Q
A husband, who owns separate property, dies without a will. Concerning that separate property, it would be distributed in which of the following ways:
A
One-third to wife and two-thirds to more than one child;
12
Q
Title to real property can be acquired by an individual by all of the following methods, except:
A
Escheat.
13
Q
When a governmental body takes private real property for necessary public use, certain legal processes must be followed. Such a taking is an exercise of the right of:
A
Eminent domain;
14
Q
Accretion would result in the acquisition of title to real land by which of the following:
A
An owner who acquired land by natural causes;
15
Q
An easement may be acquired by prescription in a manner similar to acquisition of land by:
A
Adverse possession;
16
Q
Governmental land use, planning, and zoning are important examples of:
A
Police power;
17
Q
Which of the following would cause a grant deed to be invalid at its inception
A
Legal incompetence of the grantor;
18
Q
Smith executes a deed to Brown and records it. Later, Smith seeks to set the conveyance aside, claiming that there had been no delivery to Brown. Why will he probably be unsuccessful in his effort:
A
Delivery is presumed with recording;
19
Q
Which of the following would be most advantageous to a seller who sells a parcel of real property by using a conditional sales contract instead of using a grant deed and carrying back a first trust deed:
A
The seller retains legal ownership of the property until the buyer makes the final payment;
20
Q
Which of the following would be least necessary for a valid deed:
A
Acknowledgment;
21
Q
Which of the following would be the best and most complete definition of the term “encumbrance”:
A
Anything which affects or limits the fee simple title to property.
22
Q
Which of the following statements, if any, is correct concerning the relationship between an effective interest rate and a nominal interest rate:
A
The effective interest rate is the rate actually paid by the borrower for the use of the money; the nominal interest rate is the rate specified in the note;
23
Q
A lien may be created by recording:
A
A mortgage;
24
Q
When a real estate licensee advertises properties on the Internet (world wide web), which of the following best describes the licensee’s responsibilities:
A
The licensee must exercise proper supervision over any non-licensee who responds to inquiries.
25
The conscious charging by a private lender of more than the maximum amount of interest allowed by law is known as:
Usury;
26
A straight note:
May be used in a real estate transaction; Is a note providing that the principal owing is to be paid at one time; May be secured by a mortgage;
27
An acquired legal privilege for the right of use or enjoyment, short of an estate, which one may have in the land of another is known as:
An easement;
28
When loaning money to two or more co-borrowers on a single promissory note, the lender would be best advised to increase the security on the note by inserting which of the following phrases after the names of the co-borrowers:
Jointly and severally.
29
When acquiring an easement, which of the following methods would create an easement that could be most easily terminated for nonuse:
Prescription;
30
Which of the following is true concerning promissory notes:
They are the evidence of the debt.
31
Cassidy purchased one of 30 lots in a subdivision and signed a sales contract which stated, "No purchaser of a lot in this subdivision shall erect a 'for sale' sign on his lot until all of the lots owned by the subdivider are sold." If Cassidy wants to sell his lot before the subdivider has sold all of his lots, he may:
Erect a 'for sale' sign of reasonable dimensions because the statement in the sales contract is declared by law to be void;
32
After Mr. Gardner purchased his home, he discovered, by survey, that his neighbor's garage was three feet over on his newly acquired property. This disturbed him greatly. For remedy, if a friendly settlement cannot be reached, he should bring civil suit against:
His neighbor;
33
Which of the following is the purpose of the Federal Truth-in-Lending Act:
To provide consumers information concerning the cost of credit;
34
A broker's unlicensed assistant prepares a newspaper ad. According to the Business and Professions Code, which of the following is most correct:
The broker is required to read the entire advertisement prior to publication;
35
The right to foreclose a trust deed, under a trustee's power of sale, outlaws:
Never
36
Unpaid real property taxes constitute a lien:
Prior to a mortgage lien;
37
Most lenders, when they are deciding whether or not to make a proposed real estate loan, try to minimize the:
Chance of a substandard loan becoming a part of their portfolio;
38
The gross rent multiplier is arrived at by dividing:
Sales price by gross monthly rental;
39
Property is being sold whereby the purchaser is to continue the payments of an existing amortized loan secured by a first mortgage. In order for the buyer to assume the existing mortgage without penalty, the real estate agent should check to be sure the mortgage does not include:
An acceleration clause;
40
When imposing restrictions on a new large subdivision, the procedure normally used is:
To record them with the county recorder, with adequate reference made thereto in the deed to each parcel.
41
When comparing a straight note with an installment note, the straight note:
Will have no principal payments during the term of the loan except on the last payment;
42
If the trust account contains trust funds belonging to more than one beneficiary, the broker may not disburse any funds without the prior written consent of every principal who has funds in the account:
If such disbursal will reduce the balance of the total funds in the account to an amount less than the various owners have on deposit;
43
A title company could make a title search by searching the records of the:
County clerk's office;
County recorder's office;
Federal land office
44
A standard policy of title insurance protects the insured against:
Lack of capacity of a party to any transaction involving title to the land;
45
In making the decision of whether or not to issue a title policy, the title insurance company would be most concerned with those documents that appear within the:
Chain of title;
46
Jesse, an unlicensed employee of a real estate broker, hands out door-hanger flyers and makes telephone solicitations, seeking buyers and sellers. Under the real estate law, his activities are:
Unlawful for both Jesse and the employing broker.
47
Typically, when leasing real property, the commission of the leasing agent is based upon a percentage of:
Total rent collected over the term of the lease;
48
Most buyers of real property receive which of the following types of policies of title insurance:
A standard policy;
49
A real estate agent may legally represent all principals in the same transaction if:
He has informed all principals that he is the agent for each principal;
He has obtained consent of all to this agency relationship;
He is collecting commission from each principal with the knowledge of the others;
50
it is proper business practice for real property managers to be compensated in all of the following ways,
Percentage of gross receipts;
Commission on new leases;
Commission on major repairs or alterations;
51
When making a loan, amortization tables are used in order to determine the:
Monthly payment;
52
Under the provisions of the Federal Fair Housing Law (Title VIII of the Civil Rights Act of 1968), persons complaining of discrimination in housing are permitted an election of which of the following ac
A civil action in federal courts;
A civil action in state or local courts;
A complaint with HUD;
53
A broker presented an offer to a seller which met the terms of the listing from a financially-qualified black person. Later, his salesperson presented the seller an offer at a lower price from white prospects. The seller did not accept either offer, but instead, sold the property to a neighbor through the same salesperson. The neighbor wanted to buy the property so as to prevent a minority person moving into the neighborhood. Which of the following parties has not violated the Civil Rights Act of 1968?
White prospects;
54
Discrimination in the sale or rental of residential housing accommodations based on sex, marital status, color, religion, race or national origin of the prospective tenant or buyer, is:
Unenforceable;
Illegal;
Contrary to public policy;
55
When Williams subdivided a 40-acre parcel of land into 65 lots in 1955, he included the following in every deed: "The ownership, use, and/or occupancy of this property is limited to persons of the Caucasian race." This deed restriction is:
Unenforceable because it violates the U.S. Constitution;
56
The stated policy of the Real Estate Commissioner is to create a "color blind" industry which can help society obtain voluntary, peaceful, equal opportunities in fair housing. What does this mean:
Maintain an attitude that is absolutely free from bias and "color blind";
That race, creed, or color is not a material fact in a real estate transaction;
Do unto others as you would have them do unto you;
57
Which of the following state agencies is empowered to prevent acts of discrimination in housing accommodations in California because of race, color, sex, national origin, or ancestry:
Department of Fair Employment and Housing;
58
If a broker presents an offer to purchase real property for the listed price from a ready, willing, and able black buyer, and the offer is refused by the seller because of the buyer's race, the broker may:
Sue the seller for his commission;
Advise the black buyer of his right to complain to the United States Department of Housing and Urban Development;
Warn the seller that his refusal is a violation of the Fair Housing Act of 1968;
59
A dress factory is being built in an area. It will employ mostly women. The owner of a real estate office told his employees to do the following: [1] direct their advertising to appeal to women who are married and have no children; [2] charge more rent to certain ethnic and religious groups than to others. Which of these instructions is in violation of the Fair Housing Laws:
C: Both [1] and [2];
60
A licensed real estate broker may legally negotiate the sale of:
Any registered mobile home;
61
Broker Knorr advertised in the newspaper that anyone who bought a property listed with the broker would receive a free microwave oven valued at $500. Such action is:
Legal, provided full disclosure is made to all interested parties;
62
If a listing to sell a mobile home expires and is not extended or renewed, how long does the broker have to remove all yard signs and stop all advertising of the mobile home:
He has 48 hours from the termination;
63
According to the Seller Transfer Disclosure Act, a broker can:
Visually inspect the property and reveal pertinent information;
64
The Federal Truth-in-Lending Law (Regulation Z) gives the borrower a 3-day right of rescission when the loan is:
A loan secured by a second deed of trust on owner-occupied single-family residence when the money is borrowed subsequent to the purchase;
65
When the real estate market changes from a buyer's market to a seller's market, which of the following results could naturally be expected:
Prices would rise because of the increased demand and lagging supply.
66
A lender who refers to a loan as "seasoned" is referring to the:
Record of consistent payments on the loan.
67
When a real estate licensee negotiates the sale of a mobile home in California, written notice of transfer must be provided to the Department of Housing and Community Development within:
10 calendar days.
68
An acknowledgment may be taken by a notary public who is:
An employee of a corporation who has executed an instrument being acknowledged, if he is not personally interested;
69
Life insurance companies, not willing to deal directly with mortgagors/ trustors, usually pay a loan servicing and preparation fee and make real estate mortgage loans to purchase indirectly through:
Mortgage companies;
70
In computing the unspecified maturity date on a construction loan, the time for repayment of the loan starts running:
From the date of the note;
71
If an owner wanted to sell his property, extending credit himself, and retain the legal title, the instrument used would be:
A real property installment/conditional sales contract;
72
Smith sold a home to Jones on a land contract and recorded the contract. Jones made a $25 down payment and after the sale, made a few of the required monthly payments. One night Jones moved out and abandoned the house. Which of the following is true?
There is a cloud on the title;
73
Under the Federal Truth-in-Lending Law, the cost of credit on certain loans is expressed as:
An annual percentage rate;
74
A federal RESPA booklet and disclosures must be given a borrower by a real estate licensee when the federally-related loan is a first lien and the money is used to:
Purchase one-to-four residential units;
75
When a real estate licensee fails to renew a license before it expires, the licensee:
Has two years from the expiration to renew by paying a late fee, but will not be required to take the state exam again.
76
In order to secure an FHA loan, a new buyer would normally do all of the following, except:
Apply to the nearest office of the FHA for an appraisal;
77
When property is being purchased under the California Veterans Farm and Home Purchase Plan, title is held by the:
Department of Veteran's Affairs.
78
When a real estate agent acts exclusively as a buyer's agent, he can:
Present offers to the seller and seller's agent;
79
Which of the following closing costs would be classified as a recurring cost:
Impound account items.
80
A contract between the seller of real property and a licensee, whereby the seller agrees to pay the licensee a commission if he produces a "ready, willing, and able" buyer and the licensee agrees to use due diligence in procuring the buyer, is called:
A bilateral executory contract;
81
Hawkins wanted to purchase 200 acres of land for future subdivision, but did not have the necessary $65,000 cash. He persuaded his friend, Warner, to pay the $65,000 and purchase the land, and Warner then immediately signed a land contract for sale of the property to Hawkins for $88,000. This transaction would be:
A valid purchase and resale.
82
If a broker is an agent of a seller, he owes to the buyer:
A duty of fair and honest dealing.
83
If two parties want to create an enforceable broker-principal relationship concerning a right, title, or interest in real property, the most essential element to do so would be:
A written employment contract;
84
Broker Jones had a listing to sell seller Smith's house. Broker Jones received an offer on the house and presented it to seller Smith who hesitated in accepting the offer. The broker promised Smith verbally to find Smith another suitable residence before escrow closed. On the basis of that, the seller accepted the offer. If broker Jones failed to perform during the time period, which of the following is most nearly correct?
Seller Smith could initiate a civil suit and the broker would be responsible for damages;
85
Escrow instructions can be executed by:
The buyers;
The sellers;
Third parties;
86
A broker who solicits and accepts a deposit on the purchase price of a parcel of real property without express written authorization from the owner to sell the property, is:
Acting as agent for the buyer and not the seller.
87
Broker Sullivan delivered an offer to purchase real property to Owner Mercer at 11 a.m. on Monday. Mercer asked for 24 hours to consider the offer. At 7 p.m. that same day, Broker Sullivan received two additional offers from different buyers through one of the broker's salespersons. Sullivan firmly believes the owner will reject all three offers. In order to comply with the law, Sullivan must:
Simultaneously present the two additional offers to the owner as soon as the owner is available;
88
Seller Smith employed Broker Jones under an open listing. While Broker Jones was discussing Smith's property with Prospective Buyer Ford, the broker indicated that the roof was in good condition and did not leak. In fact, Seller Smith had instructed Broker Jones to explain to all prospective buyers that the roof was old and would have to be replaced. After purchasing the property, Buyer Thomas discovered a severe leak in the roof. The buyer, seeking relief, would most logically sue:
The seller and the broker, for damages and fraud.
89
If a real estate licensee misrepresents a property to a buyer while he is acting as an agent, he may subject himself to:
Disciplinary action by the licensing authority;
Civil action;
Criminal action;
90
Broker Hays took a 90-day exclusive agency listing to sell a property that was owned by Wilson. After 30 days, Hays had not sold the property, so Wilson sent him a certified mail letter canceling the listing. One week later Wilson listed the property with several brokers using open listings. Two weeks later, one of the brokers who had an open listing on the property completed a sale to new owners. In this situation Wilson most likely:
Is liable for payment of commission to Hays as well as to the selling broker.
91
A real estate licensee submits a license renewal application, but his name is on a list of obligors who have not complied with a court-ordered payment of child support. Which of the following is most nearly correct:
A temporary renewal will be issued, but the licensee must pay the delinquent amount within 150 days;
92
Broker Smith took a listing on commercial acreage and also received the right to purchase the property within 30 days. On the 28th day of the listing, the broker decided to buy the property. Before buying the property, he must:
Disclose any outstanding offers;
Give the owner any material information;
Obtain written consent from the owner which acknowledges any profit or anticipated profit;
93
A man is buying a residence. After signing a valid agreement for sale, he asks the broker for permission to move into the property before the sale closes. The broker should:
Obtain written consent from the owner.
94
A buyer made an offer on a property but refused to give a $500 deposit to the broker, as specified in the listing. He agreed to give the broker $500 as deposit as soon as the seller accepted the offer. Which of the following should be written in the form:
Buyer agrees to deposit $500 cash with the broker immediately upon seller's acceptance;
95
When depreciation is taken on real property:
The basis is reduced;
96
The buyers made an offer on the exact terms of the listing contract on February 1, with the condition that the offer be accepted within 72 hours. The broker was unable to contact the sellers until February 6. When the sellers accepted the offer, the broker promptly notified the buyers. The buyers told the broker that they had changed their minds and did not want to purchase the property. The buyers demanded the return of their deposit:
The buyers have grounds to demand the return of their deposit;
97
Under the present method of establishing federal income tax rates, the rate:
Increases as the amount to be taxed increases;
98
In determining gain or loss on real property acquired by purchase, for federal income tax purposes, the term "unadjusted basis" most nearly means:
Original cost;
99
The annual property taxes an owner of a home must pay are determined by:
Assessing the land and improvements separately, then multiplying the total by one tax rate;
100
Under the Subdivision Map Act, subdivision reports must be filed with the:
City or county where the land is located;
101
Mr. Jones, in order to comply with the regulations of the state Housing Law, should seek the issuance of a building permit from:
The local building department;
102
In a city or county, compliance with the state Housing Act is usually enforced by:
Building inspector.
103
Mr. James sold Blackacre to Mr. Woods. Before he sold it, Blackacre had an appurtenant easement across Whiteacre, which was owned by Mr. Sommers. When Mr. Woods tried to use the easement, Mr. Sommers protested. Which of the following is correct?
Mr. Sommers owns the servient tenement and must allow Mr. Woods to use the easement;
104
Basic regulation of the housing and construction industries is accomplished by:
State Housing Act;
Local building codes;
The state Contractor's License Law;
105
Any advance fee contract used in connection with a real estate or business opportunity listing must include all of the following except:
A guarantee that the sale, lease or exchange will be completed;
106
Which of the following, if present in the formation of a contract, would not make a contract voidable:
Illegal purpose;
107
When a lender loans a borrower 100% of the purchase price of a house, and the loan is not government-related, the lender would be best protected by:
Appreciation;
108
Which of the following would be an illustration of the government's police power:
The enactment of zoning laws limiting the use which may be made of a parcel of real property.
109
A voidable contract remains binding upon the parties until the contract is:
Rescinded;
110
A developer, to avoid discrimination, instructed his sales staff to: (1) Give special preference to woman who want to purchase; and (2) Set aside the same number of homes for each ethnic group (Asian, Hispanic, African-Americans). Which answer best describes these policies:
Both policies are discriminatory, and therefore illegal.
111
Under the Alquist-Priolo Special Studies Act a subdivider would be required to disclose to potential purchasers:
Earthquake fault lines;
112
Which of the following is the legal method that a city uses to implement its general plan?
Zoning;
113
One-half of a standard township would contain how many square miles:
18;
114
As used in most deeds of trust, the term default refers to:
Use of the property for an illegal purpose or activity;
The refusal of the borrower to see that the property is adequately maintained;
Delinquent loan payments;
115
When a borrower has defaulted on a loan, and the lender chooses judicial foreclosure, the mortgagor is given a specified period of time to redeem the property. During this redemption period, the right of possession of the property is held by the:
Mortgagor.
116
Of the following, which would have priority (would be a superior lien):
A 1911 Street Improvement assessment lien (bond);
117
When ordinary repairs are made to the broken equipment in a building, such repairs are appropriately classified as:
Corrective maintenance;
118
The effectiveness of the market data approach of appraising would be limited most by which of the following?
Economic conditions that rapidly change;
119
Ms. Rodriguez received a loan application from her lender that asked her to specify her marital status and ethnic background. Legally, she can:
Refuse to fill out that portion of the loan application;
120
An owner of a 20-unit apartment house is considering installing a swimming pool and asks an appraiser for his opinion. The appraiser's opinion would be based on the principle of:
Contribution;
121
In deciding whether or not to make a specific home loan, a lender would consider which of the following factors most important:
The degree of risk;
122
When an appraiser relies on the principle of substitution, he assumes that one property may be substituted for another in terms of:
Income;
Use;
Structural design;
123
An appraiser who does not use generally accepted appraisal methods in order to influence an FSLIC or FDIC insured lender may be guilty of:
A felony.
124
The quantity survey method, unit-in-place method, and the square foot/cubic foot methods in real estate appraisal most directly relate to:
The cost approach;
125
According to a certain contract, the buyer will be taking the property subject to the existing loan. "Subject to" most nearly means
The buyer will not be personally liable for the loan.
126
In income-producing property valued by the capitalization approach, if the property taxes increase and all else remains equal, the property value will:
Decrease more than the amount of the annual tax increase;
127
In regard to the capitalization rate:
As it increases, value of property decreases;
128
In appraising, which method places the greatest emphasis on the present worth of future benefits to be received by the owner:
Income.
129
Insofar as real property is concerned, the major cause of loss of value is due to:
Obsolescence;
130
Functional obsolescence might be attributed to each of the following except:
The proximity of obnoxious nuisances;
131
If a roof slopes on all four sides, it is called a:
Hip roof;
132
When an air conditioning unit has a higher energy efficiency ratio (EER), it means that:
The unit is more efficient;
133
Which of the following is the name of sheet metal which is used to protect a building from water seepage?
Flashing;
134
A "FICO" score is normally used for which of the following:
Reporting the credit history for a prospective borrower.
135
The term "security interest" is best defined as:
The creditor's interest in the debtor's property;
136
When obtaining a mortgage loan, the buyer often has to pay discount points. Those points are a percentage of:
The loan amount;
137
A trust deed note taken by a state savings and loan association on a single-family owner-occupied residence could be prepaid without penalty:
If the loan is more than 7 years old;
138
Which of the following would impair the security of a trust deed recorded on real property:
The trust deed is recorded after a work of improvement was commenced and a mechanic's lien is recorded on the work;
139
Which of the following would be true about a lis pendens:
It may affect title to real property based on the results of the lawsuit;
140
In appraising real property by the market data approach, the appraiser often takes into account certain non-property characteristics of the two properties. All of the following would be considered a non-property characteristic, except:
The location and size of the parcel;
141
