exam 3 questions Flashcards
(139 cards)
1
Q
When rent is computed on the gross sales of a business occupying real property, the lease is correctly termed:
A
A percentage lease.
2
Q
If a man has a freehold estate, which of the following would result in his having a less-than-freehold estate:
A
Sale and leaseback;
3
Q
If a man leased a store for only six months, he would have an:
A
Estate for years;
4
Q
An easement differs from a license in that a license:
A
May be revoked.
5
Q
The remedy of unlawful detainer action is used by offended:
A
Lessors;
6
Q
Which of the following is considered personal property:
A
An existing mortgage;
7
Q
Which of the following would not be classified as real property:
A
Leasehold estates in residential properties.
8
Q
All of the following are factors generally considered when determining whether an item of personal property has become real property, except:
A
Cost of the article;
9
Q
Which of the following is not a test for a fixture:
A
The time of attachment.
10
Q
Which of the following loans would be most likely to qualify for FHA insurance but not for a VA loan guarantee:
A
A loan to purchase 1-4 units of residential rental property;
11
Q
Bascomb purchased a parcel of real property, and received a standard policy of title insurance. Bascomb would be protected against all of the following items except:
A
Easements and liens on the property not revealed by the public records;
12
Q
When legal title is transferred as the result of the sale of real estate encumbered by a deed of trust, it is always necessary:
A
For the grantor to deliver a deed;
13
Q
An ALTA policy of title insurance goes beyond the protection afforded by a CLTA policy in guarding against:
A
The location of property lines according to formal survey;
14
Q
Jones, who does not have a real estate license, is the owner and president of an investment firm. He advertises and sells properties for his clients. Since these transactions involve real estate, who will prosecute him for violating the real estate law:
A
The District Attorney;
15
Q
The primary purpose of city and county building codes is to establish
A
Minimum standards for public health, safety, moral, and general welfare;
16
Q
Recorded title to a parcel of real property was vested in Mary Wilson, a single woman. After her marriage to John Roberts, she executed a deed to the property only in the name of Mary Roberts, a married woman. The discrepancy in the grantor’s name is:
A
A defect which may cause a cloud on the title;
17
Q
On September 30, 1983, Daniels offered to buy Barnes’ home. The offer was accepted and escrow opened. Barnes had purchased the home in 1978, financing it by an FHA loan, on which he was then currently making payments. A preliminary title report dated September 30, 1983 will:
A
Show the particulars of a deed of trust with Barnes as trustor;
18
Q
A valid deed must contain:
A
A granting clause.
19
Q
An agreement wherein one party agrees to reimburse the other party for damages suffered in the event of a clearly defined risk, in exchange for payment of monetary consideration, is commonly known as:
A
An insurance policy;
20
Q
Which of the following deeds would least likely contain implied covenants by the grantor:
A
Quitclaim deed;
21
Q
In California, one would look in which of the following documents to find the Escrow Law:
A
The California Financial Code.
22
Q
When the buyer is given a defective Transfer Disclosure statement which contains obvious omissions about the condition of the property, the buyer can bring legal action against the seller and real estate licensee within:
A
Two years;
23
Q
Land zoned for use as the site for multi-family residential developments (such as apartment buildings) would be denoted as:
A
R-3;
24
Q
A judgment that has been recorded would be:
A
An involuntary lien;
25
The beneficiary of a second trust deed sold his interest in the property for less than the unpaid balance of the note. This action is most commonly described as:
Discounting;
26
Part of the California Civil Code requires that a disclosure statement be delivered by which of the following when transferring title to certain real property:
The transferor;
27
Which of the following is authorized to manage property for the general public:
A licensed real estate broker;
28
The seller of a dwelling containing one-to-four units, in complying with the Real Estate Transfer Disclosure Statement requirements, must:
Make a reasonable inspection before completing the report;
29
An easement on real property can be terminated by:
A release signed by the holder of the dominant tenement.
30
Under California law, a trust deed:
Encumbers the real property designated in the deed of trust;
31
The legitimacy of zoning laws rests upon:
The established right of police power of government;
32
statements about real estate financing is incorrect:
A promissory note is security for a mortgage;
33
If a lender accepts a deed in lieu of foreclosure from a trustor, the lender:
Will assume any junior liens.
34
Which of the following best describes what a landlord-owned apartment building and a condominium project have in common:
Occupants of both each have an estate in real property;
35
Betty is beneficiary of a $15,000 deed of trust on a single-family home located in Long Beach, California. Trustor Milo made $2,000 in payments, then defaulted. At a trustee's sale, the property sold for $10,000, resulting in a $3,000 deficiency. In California, a deficiency judgment cannot be obtained:
If the security is a purchase-money trust deed;
If remedy of trustee's sale is used;
If fair market value of the property exceeds the amount due on the trust deed;
36
When the required payments on a real estate loan are insufficient to pay the interest due, the result is:
Negative amortization;
37
Broker Jones, who is not a member of any trade organization, has been using a new advertising slogan: "A new breed of Realtor." Concerning this practice:
It is grounds for revocation or suspension of his real estate license;
38
The Alquist-Priolo Special Study Zone earthquake disclosure requirement applies to:
Specific types of structures located in known earthquake fault zones.
39
In making new real estate loans, institutional lenders often charge a fee for expenses incurred for such items as document preparation and related work. The fee charged is often a percentage of the face amount of the loan, and is referred to on the borrower's closing statement as a:
Loan origination fee.
40
Which of the following notices could be important to the filing of a mechanic's lien:
Notice of non-responsibility;
Notice of cessation;
Notice of completion;
41
How many years is an attachment lien good for:
3 years;
42
In a trust deed, the trustor:
Signs a note for the amount borrowed;
43
Fault zones around known earthquake fault lines must be disclosed to prospective buyers of certain properties in California. Typically, these zones are:
1/4 mile wide;
44
A title insurance company official would know that an "abstract of title clause" is a:
Written summary of documents relating to the title of the property;
45
A real estate salesperson's license has been suspended because money was paid out of the Recovery Account to a person who had a judgement against the salesperson. His license will not be reinstated until he:
Pays the Recovery Account for the money it paid plus interest;
46
A person delegated in an instrument to act legally for another, in his stead, is known as which of the following:
Attorney in fact;
47
If an agent has a listing to sell real property she must present all offers until:
The close of escrow.
48
When a buyer signs an exclusive authorization to locate a property there is usually a clause in the form which allows the broker to:
Represent other buyers during the time limits of the agreement.
49
When the public records have been examined in order to determine the chain of title to a parcel of real property, a written summary of that chain of title is known as:
An abstract of title;
50
When budgeting for a real estate office, the phrase "company dollar" means:
The income of an office after all commissions are subtracted;
51
A broker advertises the sale of "Mega Bucks Trust Deeds" in a newspaper. In the advertisement he offers a specific yield which he arrives at by looking at his yield for the past year. Which of the following is true concerning this advertisement:
It is legal if he also gives the actual interest rate specified in the note and the discount from the outstanding principal balance;
52
Although a title insurance policy does cover the risk of loss for many reasons, which of the following risks would not be so covered:
A zoning ordinance, regulation, or plan.
53
When the Real Estate Commissioner wishes to rescind approval of a new subdivision, he would likely do which of the following:
Issue a desist and refrain order.
54
A prudent investor, to hedge against the erosion of capital caused by inflation, would logically place funds in:
Equity interests;
55
By law and regulation, a real estate agent is obligated to communicate any offer to the principal:
Only if it is in writing;
56
Tenant A agrees to perform certain property repairs for owner B. Despite repeated promises, A fails to perform the repairs. B then writes up a contract, and compels A to sign it by threatening to evict him if he doesn't. Such a contract would be:
Voidable;
57
When a licensee negotiates a loan secured by real property, the licensee must deliver a mortgage loan disclosure statement to the borrower:
When it is signed by the borrower;
58
If a real estate licensee was trying to persuade people to list or to sell their property by telling them that members of another ethnic group were moving into their neighborhood, and it would be to their advantage to list or to sell, it would be an example of all of the following, except:
Legitimate conduct.
59
"The measure of goods and services produced by the nation during any one calendar year" is the definition of which of the following:
Gross national product;
60
The available supply of real estate loan funds tends to be increased by all of the following, except:
An increased demand for a more liquid type of assets;
61
Which of the following types of lenders would have the greatest percentage of, and the most funds invested in, real estate mortgages:
Savings and loan associations;
62
Which of the following defines the term "equity":
The owner's interest in real property, over and above all liens against it;
The difference between the loan amount and the value or price of the property;
the initial down payment on the property;
63
Which of the following would usually be true concerning a hard money second trust deed
It is secured by real estate and given to a third party to obtain a cash loan;
64
The real estate commissioner would not permit which of the following mortgage loan advertisements:
"Call our toll free number 1-800-FOR A LOAN";
65
The function of mortgage companies, which play an important role in present-day real estate financing, could best be described as:
Participating in the money market basically as correspondents for other lenders, originating and servicing loans but not intending to hold them in their own portfolio;
66
When processing a real estate loan application, a lender would correlate characteristics of borrower, loan, and property to make:
A loan commitment;
67
Which of the following is the most difficult for the mortgage lender to evaluate:
The degree of risk inherent in the mortgage;
68
A real estate agency relationship may be terminated in several ways, according to the California Civil Code. Which of the following is included in that list:
Termination by completion;
69
Which of the following pairs of words are synonymous:
Construction loan - interim loan;
70
Under a land contract for the sale of real property, legal title is held by the:
Vendor.
71
If a seller refuses to state on a real estate transfer disclosure statement that his property is in a slide area, when it is, the real estate agent should:
Not accept the listing;
72
Of the following items, which one would normally appear on the seller's closing statement as a credit to the seller:
The proration of prepaid taxes;
73
Interest rates on trust deed loans are primarily determined by which of the following:
Demand for supply of money;
74
When a lender on a graduated payment mortgage is making disclosures that are required under the Truth-in-Lending law concerning advertising, he must disclose the:
Different monthly payments
75
When serving as a buyer's agent, according to the Civil Code sections dealing with agency, a licensee owes a fiduciary duty:
To the buyer only;
76
Which of the following state agencies would receive complaints concerning fair housing laws?
Department of Fair Employment and Housing;
77
When a real estate agent acts as an agent for both the buyer and seller in a transaction, but does not specifically reveal this fact because he is unaware that both consider him their agent, he has become involved in:
Accidental dual agency;
78
When a real estate agent acts as an agent for both the buyer and seller in a transaction, but does not specifically reveal this fact because he is unaware that both consider him their agent, he has become involved in:
Accidental dual agency;
79
Insurance can be described as:
Transferring the risk of loss from an insured to an insurance company;
The substitution of certainty for uncertainty;
Protecting the insured against loss in accordance with the policy for the amount insured and for the period of time agreed upon;
80
When an agent took a listing she promised the seller that she would advertise the property in the newspaper until it was sold. The agent did not do the advertising that she promised. She is guilty of:
Actual fraud;
81
If a person obtains a contract through duress, that contract is:
Voidable;
82
In which of the following years did the U.S. Supreme Court prohibit all racial discrimination when real property is sold or rented:
1968;
83
The real estate disclosure law that became effective on January 1, 1988, refers to:
Agency relationships;
84
Which of the following government actions in relation to private property would not be an example of police power:
Condemnation
85
A real estate licensee has a practice that when he is approached by members of minority groups who want to be shown property, he avoids showing them property in integrated areas. This would be an example of:
Steering;
86
A broker who is acting as agent in the offering of property, may, without further authority from his principal:
Accept the signature of the buyer on an offer to purchase which would be binding on the parties if the seller accepts.
87
Bob, a real estate agent, refers buyers to Bug-B-Gone Termite Company, and the company pays him a referral fee for each inspection sold. Which of the following is correct:
This arrangement is prohibited under the Real Estate Law.
88
A man listed his property with Broker White. The listing said, “Seller to receive no more than 23% down payment.” The broker brought the owner an all cash offer which the owner rejected. Broker White is entitled to:
No commission
89
Broker Sampson has a listing to sell a property owned by Mr. Abel. Which of the following actions by Broker Sampson would be most likely to result in creating an agency relationship with a buyer:
Negotiating on behalf of a buyer;
90
If a buyer takes title to a residential property "subject to" the existing loan and does not obtain the lender's consent, which of the following best expresses the potential consequences:
The seller may incur personal liability for the amount of the loan or any deficiency suffered by the lender to the extent permitted by law;
The lender may accelerate the loan;
The buyer may lose the property to foreclosure if unable to obtain new financing;
91
Which of the following represents the minimum time period for an exclusive right to sell listing on real property:
Whatever time period is agreed to by seller and broker.
92
If a broker has a nonexclusive listing, and he wants to be legally entitled to a commission, he must be able to prove that:
He was a duly licensed broker at the time of the transaction;
He found a buyer who was ready, willing, and able to buy;
He was the procuring cause of the sale;
93
When a salesperson takes a listing which does not authorize the listing broker to accept a deposit from an offeror toward purchase of the property, the broker should advise his salesperson that:
A deposit will be accepted and retained by the broker from the offeror, but only as agent for the offeror;
94
Concerning options, which of the following is the most correct statement:
If a lease contains an option to purchase, this right ordinarily will pass with an assignment of the lease, even though such option is not specifically mentioned in the assignment of the lease;
95
The words "time is of the essence" can be found in which of the following contracts:
Real estate purchase contract and receipt for deposit;
96
Federal income tax rates on ordinary taxable income are:
Progressive;
97
Agent Flag often refers to tax shelters when discussing a property with a customer. Agent Flag is primarily referring to:
Income taxes.
98
If each of the following loans would otherwise normally require compliance with the Federal Truth-in-Lending Act, which one would be exempt on the basis of the type of loan itself
An agricultural loan by a bank;
99
Which of the following is the best example of the practice known as "puffing":
A licensee exaggerates certain features or benefits of a property;
100
Which of the following is most correct concerning delinquent taxes and redemption rights:
The important effect of a "sale to the state" by the tax collector is to start the redemption period running, but the delinquent owner's possession remains undisturbed;
101
Generally, as the employment rate and the GNP (Gross National Product) both rise:
The level of personal income rises;
New residential developments will increase in number;
Sales of existing homes will remain level or increase;
102
The owner of a hardware store who owned the real property where it was located, sold the real property and leased it back for a long term. For income tax purposes, the seller may:
Deduct 100 percent of future rents;
103
The Real Estate Commissioner has primary regulatory authority over subdivision matters involving:
Financial arrangements to assure completion of community facilities;
104
Which of the following is most vital or important in planning a subdivision:
Market analysis;
105
The fiduciary obligation to protect a client's confidential information continues:
After the term of the listing agreement.
106
A prospective purchaser is interested in buying a lot in the mountains from a subdivider who does not have a real estate license. The buyer wishes to know about sewer assessments, liens, utilities to his lot, blanket encumbrances, and maintenance of streets. The source that would provide all of this information is the:
Real Estate Commissioner;
107
If a person buys a property in a California land project and then changes his mind, he can obtain a refund of his money without a specific reason within how long:
14 calendar days.
108
title to personal property is transferred
by a bill of sale or transfer of possession.
109
To whom must a subdivider give a copy of the Commissioner's public report?
Any person, at any time, upon request;
110
Changes in which of the following would have an impact on real estate in the future:
The real estate industry;
Land use controls;
The popularity of consumerism issues;
111
Lehigh gave Cambell an option for the purchase of Lehigh's ranch. In law, such an option is regarded as:
A contract to keep the offer open.
112
Some townships are not standard townships and do not have
the same land area.
113
When, in a given transaction, the licensee acts a selling agent of the listing broker, the licensee's primary duty is:
To the seller;
114
When the term “warehousing” is used in connection with real property financing, the term would normally describe:
A mortgage banker collecting loans prior to sale.
115
The appraiser's fee would have nothing to do with a
separate site and improvement evaluation.
116
Which of the following is an acceptable termination date for an enforceable exclusive listing of residential real property:
90 days after the listing agreement is signed.
117
In your opinion, the relationship between the thing desired and the potential purchaser is best defined as:
Value;
118
The four elements of value are
utility, scarcity, demand, and transferability.
119
Placing two or more contiguous units under common ownership for the purpose of increasing the value per unit is known as:
Plottage;
120
The value of the best property in the neighborhood will be adversely affected by the presence of comparatively substandard property" is a statement relating to value and is known as the principle of:
Regression;
121
"No prudent person would pay more for a parcel of real property than the price of a reasonably close alternative which is available without undue delay" refers most nearly to the principle of:
Substitution;
122
When an appraiser wants to determine a capitalization rate, he may do so by the:
Band of investment method;
Summation method;
Market data (comparison) method;
123
Single-family home values are least protected in neighborhoods where there is:
An increasing mixture of average-quality homes with high-quality homes.
124
"When identical or highly similar properties are offered for sale, the property offered at the lower price attracts the greatest demand." That statement is an illustration of which of the following principles of appraising:
Substitution
125
The process of expressing anticipated future benefits of ownership in dollars and discounting them to a present worth at a rate which is attracting purchase capital to similar investments is called:
Capitalization
126
When a counteroffer is made:
The offeree becomes the offeror;
127
The capitalization rate to be used in the income approach to the appraisal of real property provides for a return on, and a return of, the investment in the improvements. A return of the investment is provided for by means of:
Depreciation methods;
128
Capitalization" is a process used to:
Convert income into value;
129
While appraising a residence in a hillside subdivision, the appraiser observes cracks in the foundation and notices that the doors and windows do not close properly. The appraiser would probably recommend that which of the following be ordered:
A soil engineer's report.
130
An appraiser's narrative appraisal report of a single-family residence probably would contain no reference to:
The type of financing available;
131
A contractor was building a new home. Before completion, he received several offers to rent the property. Just before completion, the city announced that it was taking 10 feet off the front of the property to widen the street to facilitate traffic. Thereafter, offers to rent were for approximately 10% less. This would be an example of which of the following types of depreciation:
Economic obsolescence.
132
Many items are subject to proration in the real property sale escrow. Buyers and sellers using escrow normally agree to a proration of which of the following:
Rent
133
If the owner of real property carries proper fire insurance coverage, that insurance policy will protect the owner in the event of loss. In such a case, the insured:
Should neither gain nor lose;
134
Which of the following is primarily responsible for disclosure to the buyer of an existing Mello-Roos tax assessment on a parcel of real property:
The seller;
135
Loans from some lenders must comply with the Real Estate Settlement Procedures Act. When the loan is secured by residential real property, and contains 1-to-4 residential units, the loan must comply with the RESPA regulations if the loan is made by:
Lenders whose deposits are insured by an agency of the federal government;
136
The Uniform Settlement Statement required by the Real Estate Settlement Procedures Act by law shall be delivered or mailed to the borrower no later than:
At, or before, the date of settlement.
137
The provisions of the Real Estate Settlement Procedures Act (RESPA) apply only to transactions involving certain types of property. Of the following, which types of property must comply with RESPA:
One-to-four family residential dwellings.
138
Both buyer and seller have signed a real property conditional sales contract, the effect of which would be:
An equitable title passes to the buyer;
139
