exam 5 questions Flashcards
(132 cards)
1
Q
A joint tenant can dispose of an interest held in real property by all of the following ways, except:
A
Will
2
Q
“Of indefinite duration” is a characteristic which is particularly descriptive of an:
A
Estate of inheritance;
3
Q
John sold a property to Sam on an installment sale for income tax purposes. The buyer assumed an existing loan which exceeded John’s basis in the property. John thus had loan relief (excess mortgage over basis). The excess amount must be:
A
Made a part of the down payment whether cash was received or not.
4
Q
When property is destroyed or taken by a governmental entity for public use, and money is paid to the owner, which of the following terms describes that event:
A
Involuntary conversion;
5
Q
A brother and sister held title to a duplex as joint tenants. Other than this property, their business and personal affairs were conducted separately. When the brother died, he was insolvent, and owed several creditors substantial unsecured amounts of money. Title to the duplex would now be held by the sister:
A
Free of the debts of the brother;
6
Q
In addition to the land and those things that are attached to the land, certain things are called appurtenances and are real property. Which of the following would not be an appurtenance:
A
Trade fixtures;
7
Q
When owners hold title as tenants in common, each person:
A
Does not own a specific part of the property;
8
Q
If two or more parties own property as tenants in common:
A
Each party may transfer their interest separately.
9
Q
Each owner in a tenancy in common:
A
Has the right to possession of all of the property;
10
Q
When a governmental body, such as a city or county, takes private land for public use, that process is governed by law. Such a taking is accomplished through the exercise of the right of:
A
Eminent domain;
11
Q
In the field of real estate, the doctrine of escheat most nearly refers to the legal process which is used to:
A
Cause title to certain real estate to revert to the state;
12
Q
When a dam broke, the flow of water cut a strip of land from the river bank. This would be known as:
A
Avulsion
13
Q
Which of the following statements concerning options is false:
A
The option binds the optionee to performance;
14
Q
In a well established residential neighborhood, government officials offered to buy the front portion of all lots on both sides of the street. The plan was to widen the street to make a highway. Ms. Clark, one of the homeowners, objected and refused to sell. The city attorney began a condemnation action and Ms. Clark was eventually ordered by the court to sell. This illustrates an exercise of:
A
Eminent domain;
15
Q
Sampson owned a triplex valued at $160,000, with an adjusted basis of $70,000. King owned a duplex valued at $155,000. Both properties were owned free and clear. They exchanged their properties, with King giving Sampson $5,000 in cash. For Federal Income Tax purposes:
A
Sampson has a recognized gain;
16
Q
When a judgment is duly recorded, subsequent buyers and innocent purchasers who are ignorant of the recording have received:
A
Constructive notice;
17
Q
Of the following, which is the best definition of a balloon payment:
A
The required payment of the entire balance due
18
Q
A purchaser of real property received a grant deed and a standard policy of title insurance. Which of the following items would be warranted by the seller, but not insured by the title policy:
A
That there were no undisclosed liens against the property suffered by the grantor;
19
Q
In a published advertisement for real estate, which of the following inclusions is considered adequate notice that the ad has been placed by a real estate licensee:
A
It would be sufficient to list the advertiser as “Bro.” (broker) or “Agt.” (agent) so that the advertisement would not be considered a “blind ad.”
20
Q
not be classified as a specific lien, even if properly recorded:
A
A judgment for punitive money damages;
21
Q
In order to negotiate the sale of an existing promissory note that is secured by real estate, working on behalf of another and for consideration, you must be
A
A licensed real estate broker or salesperson;
22
Q
Of the following, which one would be classified as a lien:
A
An attachment;
23
Q
The existence of an easement appurtenant requires
A
At least two tracts of land in separate ownership;
Transferability with the land as an incident thereto;
A benefit to one tract of land and a burden to another.
24
Q
Which of the following is an interest, but not an estate, in real property:
A
Easement
25
When using the market data approach in the appraisal process, many adjustments are often made, and any differences in the:
Comparables are adjusted to the characteristics of the subject property;
26
If a zoning law permits a use to be made of property that is restricted by construction and use limitations contained in a deed, which of the following will prevail:
Deed restrictions;
27
Deed restrictions are usually established by:
The grantor in the deed;
28
The primary justification for zoning ordinances is to:
Promote the public health, safety, morals, and general welfare;
29
In the appraisal of residential property, the cost approach is most appropriate in the case of:
New property;
30
Usefulness of the cost approach would be limited when:
Appraising an old structure with many functional deficiencies.
31
not required for obtaining an easement by prescription:
A confrontation with the owner;
32
According to subdivision laws which the California Bureau of Real Estate enforces, all of the following
Mortgages
Trust deeds;
Mechanic's liens
33
If a seller wanted to relieve himself of the primary liability for payment of a trust deed and note, he must find a buyer who is willing to:
Assume the trust deed and note liability;
34
Under the terms of the Real Estate Law, a real estate salesperson is considered to be:
An employee of the broker;
35
When a new subdivision is sold to the public, the Commissioner's public report often requires that purchase monies be impounded, because the subdivision is subject to a blanket encumbrance which does not contain an unconditional release clause. The impounding provisions, under these circumstances, are primarily for the benefit of the:
Purchaser of a lot in the subdivision;
36
A trust deed can have a provision that allows future loans on the property to have priority. This would be called:
A subordination clause;
37
A partial release clause is commonly used with which of the following:
A blanket mortgage;
38
A seller tells the listing broker that the roof leaks. The broker does not inform the buyer of that fact. Once the buyer discovers the defect, the buyer sues both the seller and the broker. The seller also files suit against the broker. The likely outcome of these lawsuits is:
The buyer would be successful in the suit against both the seller and the broker; the seller being successful in the suit against the broker.
39
The difference between judgment liens and mechanic's liens is:
Mechanic's liens may take priority earlier than the date they are recorded;
40
Which of the following is not an encumbrance:
A homestead;
41
A description of property that reads "Commencing on the south side of 'O' Street, at a point 150 feet west of 'O' and 85th Street, running in a southwesterly direction..." would be an example of which of the following land description methods:
Metes and bounds;
42
Appraiser Irvine employed the land residual technique. The unknown factor and desired result would be:
Land value;
43
In the absence of court approval, which of the following acts may legally be taken by a minor or incompetent person:
Acquire real property through gift or inheritance;
44
According to the Law of Agency, an agent is generally held to have the imputed authority of his principal when dealing with third parties. That imputed authority:
Usually binds the principal if within the scope of authority granted to the agent;
45
A broker is always required to maintain
trust records. He is not required to maintain a trust fund account.
46
may be added to the original cost basis of real property to arrive at an adjusted basis for federal income tax purposes, except:
Mortgage payments.
47
According to the Law of Agency, agents have certain legal responsibilities with regard to their clients. All of the following would be required of an agent, except:
Prepare a five-year income forecast for any income property;
48
which of the following situations would an IRS Section 1031 exchange not be allowed:
The properties are not of a like kind;
49
Concerning depreciation, which of the following statements is least correct:
Depreciation results from influences inherent within the property itself and cannot result from factors extraneous to the property.
50
A Chicano prospective purchaser asks to be shown homes but does not specify that he wants to see homes located in a neighborhood where there are no Chicanos. How should a licensee decide what properties to show him:
The licensee may select homes for showing as he would for any other prospect.
51
If an agent discloses to his principal the race, creed, or color of a prospective buyer or tenant, has he committed a discriminatory act:
Yes. An opinion of the California Attorney General states that race, creed, or color is not a material fact and should not be disclosed even though the owner requests the information.
52
In a sale situation, which of the following properties would be exempt from the Discrimination in Housing part of the Health and Safety Code:
A single-family unoccupied dwelling that is unencumbered;
53
A real estate broker, acting as agent for a landlord, has the following instructions: Instruction I. Collect a larger deposit from single men than from single women or couples; Instruction II. Advertise only by encouraging existing tenants who are predominantly white to solicit prospective tenants from among their friends. Which of these instructions would be prohibited by the Federal Fair Housing Act:
I only;
54
Of the following costs and fees involved in purchasing real property, which is considered a finance charge under the Federal Truth-in-Lending Law and must be included on the disclosure statement:
Assumption fees;
55
Which of the following would most likely provide an investor with the best hedge against inflation:
Ownership of real property;
56
When title to real property is voluntarily transferred without receipt of monetary consideration, this is generally considered to be a(n):
Gift
57
Should a tight money policy be implemented by the Federal Reserve System (the Fed), the net effect would be the increasing of:
Use of second trust deed financing in real estate transactions;
58
The decline of mortgage interest rates would occur when:
The mortgage money supply increases.
59
If the owner of a property thinks that his property has been over-assessed by the county assessor, he would contact the:
Assessment Appeals Board;
60
Which of the following must be given by the seller of a condominium to the buyer:
The CC&&R's;
The bylaws;
A copy of the most recent financial statement;
61
The type of depreciation that would be the most difficult to cure would be:
Economic obsolescence;
62
When a lender "calls" a loan, he:
Accelerates all sums owing;
63
The factor which usually has the greatest influence on mortgage interest rates is the:
Condition of the money market;
64
In the closing statements prepared by the escrow agent, the total of the debit and credit columns on the seller's closing statement, in comparison to the balances on the buyer's closing statement:
Can be different;
65
On August 1, 1991, Wilson agreed to purchase Hansen's home. Both parties agreed that possession would be transferred on September 30, 1992, and that the property taxes on the property would be prorated as of the date of possession. On November 1, 1991, Hansen paid the property taxes for the tax year 1991-1992. According to the closing escrow statement, which of the following would be true:
Hansen paid Wilson for three months taxes.
66
When an escrow is closed on the purchase of a home, the closing statements usually reveal that the seller has paid certain items in arrears or in advance as they relate to ownership of that home. These items are usually prorated or adjusted. All of the following would be included in these prorated items except:
Delinquent interest and principal applying to an unsecured home improvement loan.
67
not an example of governmental police power:
Eminent domain;
68
Is there anything wrong with using a street address (i.e., 123 Starling Way) in the legal documents pertaining to a real estate sale transaction:
A street address is not considered a legal description of the property;
69
Which of the following would be most likely to pay a premium for mutual mortgage insurance:
A homeowner who assumed an FHA loan.
70
A neighborhood apartment house would suffer economic obsolescence from each of the following, except:
Heating and cooling system is wearing out;
71
The Irwins made an offer to purchase the Greys' property. As part of the offer, the Irwins agreed to take title "subject to" an existing VA loan which the Greys obtained when they purchased the property in the approximate amount of $39,000. If the Greys sell to the Irwins under these conditions, which of the following is true concerning liability for a loss suffered by the government after a foreclosure on the VA loan:
The Greys will be primarily liable;
72
A veteran purchased a home and financed it with the aid of a Cal-Vet loan. Twenty years later, he made the final payment on the loan. Which of the documents listed below was least likely used in such a transaction:
Trust deed;
73
In appraising real property, a separate valuation for the site is considered least important
In applying gross rent multipliers;
74
A broker used the following clause in his exclusive listing contract, "In consideration of the execution of the foregoing, the undersigned broker agrees to use diligence in procuring a purchaser." This clause:
Is important to the creation of a bilateral contract;
75
Which of the following would be least likely to appear as a debit on a buyer's closing statement:
Interest on an assumed loan;
76
The consideration that is required for a valid contract could be:
A promissory note without interest;
A promise to paint a building not yet constructed;
A promise made in consideration of marriage;
77
In practice, the services of a broker on behalf of her principal are defined as all of the following, except:
An attorney in fact relationship;
78
An appraiser would most likely use a "depth table" when confronted with a valuation problem involving:
A commercial property.
79
When a lender makes a loan regulated by the Real Estate Settlement Procedures Act, the loan applicant must be provided with which of the following:
A good faith estimate;
80
According to the Real Estate Settlement Procedures Act, there are certain services which may be charged for, since they are settlement connected costs. The buyer or seller can be charged for all of the following except:
Uniform Disclosure / Settlement Statements.
81
In a condominium complex a sidewalk would be:
Part of the common area;
82
In the parts of California where wood-destroying pests are found, a structural pest control report is required:
When buying residences financed by FHA or VA loans;
83
The total positive balances due to all beneficiaries of a broker's trust fund account must at all times equal the account's:
Balance
84
Broker Stein entered into an oral listing agreement with the seller of real property, without a subsequent written verification. The payment of a commission to Broker Stein under these circumstances would be:
Permissible if the seller elects to do so;
85
ones listed his home with ABC Realty for $30,000. He agreed to carry a note secured by a trust deed for $30,000 with 9% interest. The note was to be payable over a 20-year period. Alex, a salesman with ABC Realty, received an offer on these exact terms. However, before the offer was submitted to the seller, Clair, another salesperson in the office, brought in an offer for $28,000 cash. Which of the following is true:
A: Only the offer received by Alex must be presented since it meets the terms of the listing;
Both offers must be submitted to the seller;
86
Leland purchased and took title to a residential property on 10th Street in Modesto. One week later, he employed Broker Wilder to sell the property. The listing was completed and signed. Being uncertain as to the correct address of the property, it was described in the listing as "James R. Leland's residential property on 10th Street in Modesto, California." Regarding the effect of this description on the listing, which of the following is true:
The description is adequate if Leland owns no other property on 10th Street in Modesto, California;
87
Under current federal income tax laws, which of the following are tax-deductible items for an owner-occupied single-family dwelling:
Mortgage interest payments, property taxes, and mortgage prepayment penalty;
88
statements regarding options are true, except:
The option binds the optionee to performance;
89
When the circumstances are such that an award of money damages would not provide an adequate remedy for default in a contract, a suit for specific performance could be successfully brought by all of the following except:
licensed real estate broker acting as agent for the principals;
90
Ms. Wilson made an offer to purchase real property. However, she died of a heart attack before the listing broker could notify her of an unqualified, signed acceptance by the seller. Based on these facts, which of the following is true:
The death of Wilson constituted a revocation of the offer;
C: The offer and acceptance constitute an enforceable contra
91
Morgan wanted to obtain a 60-day option so that he could purchase a parcel of real property for $18,000. However, he wanted to pay only $1 for it. If this option were drawn and duly signed by the parties, it would be:
Valid if the $1 was actually delivered;
92
terms refers to types of soil conditions except
Deciduous
93
A real estate broker sent all of his title business to Wonderful Title Co. In appreciation of the business, the title company paid the broker $10 for each transaction. According to the Real Estate Settlement Procedures Act, "RESPA," this practice is:
Forbidden
94
The purchaser of a sale-leaseback transaction would be least concerned with:
Depreciated book value of the building;
95
A lessee renting a business office often attaches certain items to the real property. These items may, prior to the expiration of the lease, be removed provided no substantial damage to the property results. Of the following, which best exemplifies such items:
Trade fixtures;
96
Daniel has purchased an 18-unit apartment building. If he reports his income on a cash basis, he can deduct all of the following on his next income tax return, except:
Loss of rental because of vacancies suffered by two units;
97
California's disclosure requirements for energy conservation include a provision that buyers of newly-built homes must receive a disclosure concerning:
R-value of insulation;
98
A city's master plan would include:
Access to water, drainage and sewage;
Recreational and commercial areas, as well as subdivision design;
Flow of intercity traffic on freeways;
99
Which of the following is not an example of police power:
Declaration of Restrictions;
100
The term that describes the action by which a local building authority permits an inconsistency to the construction, systems or standards within applicable building codes is best known as:
A variance.
101
The instrument used to transfer title to personal property is the
Bill of sale;
102
A person who owns an undivided interest, in common, in a parcel of real property, together with a separate interest, in space, in a residential, industrial, or commercial building on such real property, is said to have an interest in a:
Condominium project;
103
The general purpose of local building codes is to accomplish which of the following:
To provide minimum requirements and standards for the protection of the public safety, health, welfare and general well-being;
104
In reference to the listing agreement, the "hold harmless" clause protects the agent from liability for:
Misinformation given by the seller concerning the property;
105
All of the following are common ways of measuring land, except:
Metes and bounds.
106
Federal income tax rates on ordinary taxable income are:
Progressive
107
When you, as agent, are certain that the seller will not accept a specific offer from the buyer, you should never:
Change the buyer's offer to what you believe the seller will accept, initial the changes, and then present the offer to the seller.
108
In order to be enforceable, a contract for the sale of real estate must:
Be in writing;
109
Which of the following would be an example of "boot," for income tax purposes:
Debt relief from a mortgage in the exchange;
110
When showing a listed property to third persons, what is the listing broker required to disclose:
All known material facts about the property;
111
Real property is "sold to the state by operation of law" immediately after real property taxes become delinquent. The owner-occupant:
Remains in undisturbed possession;
112
To an appraiser, a definition of value is:
A relationship between desirous persons and things desired;
The ability of one commodity to command other commodities in exchange;
The present worth of future benefits arising out of ownership of a property;
113
An appraiser usually uses which of the following approaches in estimating the value of unimproved property:
Comparison
114
Local government has, under law, the right to regulate and control land use. This right may include:
Regulations relating to repair;
Provisions for building removal;
Zoning ordinances;
115
In the appraising process, the term "highest and best use" often comes into play. This can best be defined as:
Producing the greatest net return on the investment over a period of time;
116
Why is the replacement cost approach easier to apply to a new building than an old building:
Because of depreciation estimates;
117
The vacancy rate of an apartment building under normal competitive conditions is basically the result of:
Housing supply and demand in the area.
118
When appraising property using the capitalization approach, as you determine the net income, which of the following would you use:
Vacancy allowance;
119
The value of an apartment building is being determined by the income approach. Under which of the following circumstances would the appraiser make a deduction from effective gross income for the cost of management:
The owner manages the property;
One of the tenants manages the property and is excused from making rent payments for his unit;
One of the tenants who lives in a nearby building owned by the owner manages both properties, free of cost to the owner;
120
A licensed real estate broker, representing his client to third persons in the sale, lease or exchange of real estate, is said to be operating under the law of:
Agency
121
An example of functional obsolescence could be:
A one-car garage.
122
some cities encourage "infill" development. By doing so, they want developers to:
Build new affordable housing on vacant lots in an urban area.
123
The impairment of desirability and usefulness in real property brought about by economic changes is known as:
Obsolescence
124
A "footing" is which of the following:
A heavy concrete course placed in the ground upon which the concrete foundation is set.
125
Certified copies of inspection reports filed by structural pest control operators with the Structural Pest Control Board within the preceding two years can be obtained upon request and the payment of a fee by:
Any person.
126
During a sales escrow, the escrow officer receives two structural pest control reports. The escrow officer should:
Notify the broker and obtain written instructions from buyer and seller concerning the reports;
127
Concerning tax liens on real property in California, which of the following statements is most incorrect:
A lien for real property taxes has priority over liens for assessments undertaken for public purposes regardless of time of the creation of the respective lien;
128
The assessment roll for real property taxes is the listing of all taxable properties in the assessor's jurisdiction with the assigned assessed value for the properties. The purpose of the assessment roll is for:
Establishment of the tax base;
129
The county tax rate is set annually by the:
Board of supervisors;
130
Concerning the second installment of real property taxes in California, the due date and delinquent date are respectively:
February 1 and April 10;
131
Which of the following would create a dual agency situation:
A broker representing both buyer and seller in the same transaction.
132
