exam 6 questions Flashcards
(129 cards)
1
Q
Ownership rights and interest in real estate are called:
A
Estates or fees;
2
Q
One of the main differences between real and personal property is that real property:
A
Is immovable;
3
Q
A lessee rents a building from May 1 to July 1. His tenancy is:
A
Estate for years.
4
Q
A broker’s authority to accept a deposit on behalf of the seller (or to hold a deposit check pending acceptance of an offer) comes from which of the following:
A
Listing agreement;
5
Q
Economic rent is the rent:
A
Received for comparable space in the economic open market;
6
Q
be classed as real property, except:
A
Leasehold estates in residential properties;
7
Q
Riparian rights:
A
Include the right to reasonably appropriate water as needed.
8
Q
In tenancy in common, there is always a unity of:
A
Possession
9
Q
A real estate broker may have difficulty with personal property because its ownership rights and identification may be difficult to determine. This is because personal property can:
A
Be alienated;
Be hypothecated;
Become real property;
10
Q
When the law finds that an owner has riparian rights, it means he has rights relating to the use and ownership of water from which of the following sources:
A
Rivers, streams, and watercourses;
11
Q
Mr. Brown was hired by a prospective purchaser to appraise a commercial lot with some improvements. It was difficult to determine the legal status of the improvements because of their nature. In the appraisal report Brown should:
A
Estimate the legal significance of any attached items that he is uncertain about and give his reasons;
12
Q
Which of the following federal laws requires public accommodations to be made accessible:
A
The Americans with Disabilities Act;
13
Q
Holmes gave Broker King a listing to sell a parcel of real property, promising the broker a 6% commission if King found a suitable buyer. King’s contract obligated him to use his best efforts in seeking a purchaser. The foregoing describes a:
A
Bilateral executory contract;
14
Q
In relation to deeds on real property, which of the following is not true:
A
A reconveyance deed is issued by the trustee to convey title to a new purchaser in connection with a “trust deed sale”;
15
Q
When depreciation is taken on real property:
A
The basis is reduced;
16
Q
An appraiser is appraising a single-family residence, and notices an abandoned gas station next door. The appraiser would logically recommend which of the following:
A
A toxic waste report from the EPA;
17
Q
A grant deed is deemed by law to be executed at the time it is:
A
Signed by the grantor;
18
Q
Regarding deed restrictions, mortgages, easements, and leases:
A
They are all contractual limitations on ownership;
19
Q
Of the following, which answer best expresses why it is crucially important, in a real estate transaction, to disclose who represents whom:
A
Because of the legal effect of such disclosure;
Because of the professional and ethical responsibility to do so;
Because of the doctrine of imputed notice;
20
Q
considered a lien against real property except:
A
Private restrictions which have been recorded;
21
Q
You purchase a negotiable note and have no knowledge of any defects. You are known as:
A
The holder in due course.
22
Q
A balloon loan could also be described as a:
A
Partially-amortized loan;
23
Q
Which of the following is not a characteristic of an easement:
A
It is an interest that can be terminated at will by the possessor of the land.
24
Q
An interest in real property can be acquired through “adverse possession” or by “prescription.” The interest acquired by prescription is:
A
The right to use the land of another;
25
Deed restrictions are appropriately classified as:
Encumbrances
26
Under the police power of the government, a city's general plan can be implemented by all of the following except:
Adopting a retroactive zoning ordinance;
27
As to zoning codes, "M" most often relates to which of the following:
Industrial
28
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;
29
A subordination clause in a trust deed benefits:
Trustor
30
When using a purchase money trust deed, the trustor:
Signs the trust deed which is used as security for the loan.
31
If there is no special agreement to the contrary, the mortgage usually having priority is the one:
That is recorded first;
32
Saunders purchased a home from Barnes and agreed to assume an existing conventional loan.
Barnes is relieved from further duties under the obligation;
33
A mortgage that was executed two years ago provided for a prepayment penalty. The mortgagee is most likely to waive this penalty when:
A new loan can be made on the property at a higher rate;
34
A trustor defaults on his loan and refuses to reinstate the deed of trust. The most expedient thing for the beneficiary to do is to institute a:
Trustee's sale;
35
A mortgage which by its terms provides that it secures the amount of the initial loan together with any sums later loaned to the mortgagor by the mortgagee is known as:
An open-ended mortgage;
36
When leasing commercial property that is merely a "shell" space, the landlord often agrees to spend a specific amount for a qualified tenant. This amount is property designated as:
A tenant improvement allowance;
37
When duly recorded in the county where the property of the judgment debtor is located, an abstract of judgment for money awarded by a court becomes:
An involuntary lien;
38
Which of the following would define a fee appraiser:
A person who is self-employed and charges a fee.
39
Which of the following best describes the period of time in which a lis pendens action is effective:
In any of the above situations.
40
A standard title insurance policy insures against:
A recorded deed in the chain of title that was not properly delivered;
41
When an appraiser is appraising a property he usually considers all of the following except:
The assessed value.
42
Collecting rents, fixing up the property, and showing vacant units are the types of responsibilities that would be assumed by:
A resident property manager;
43
One of the following actions, taken in relation to advertising the sale of real property, is considered prima facie evidence by the Real Estate Commissioner in California as being misleading or deceptive advertising. Which one is so regarded:
A misleading map directing prospective purchasers to the site of a property for sale.
44
Which of the following represents a fraudulent misrepresentation by an agent:
His representation is an obvious falsehood;
His representation is made with a knowledge of the falsehood;
His representation caused the aggrieved party to enter into the contract;
45
When a broker deposits his own personal or business funds in a client trust fund account, that act is termed:
Commingling
46
In estimating the value of a parcel of real property, an appraiser considers the value of which of the following:
Bundle of rights;
Utility;
Physical land and the improvements thereon;
47
When real property increases in value because of an increase in population, this would be classified as:
An unearned increment;
48
Of the following approaches to value used by appraisers, which is the one most readily adaptable for use by real estate licensees:
The market approach;
49
An appraisal report has the three major subheadings of (I) Introduction, (II) Description of the area, neighborhood and property, and (III) Analysis, conclusions and opinions of value. This appraisal report is most likely a:
Narrative report;
50
The ultimate test of functional utility is the:
Marketability;
51
Listing a home at an inflated price requiring minority prospects to pay that price, but accepting a lower price from other prospects:
Could cause the listing salesperson and broker to be liable for money damages in a Fair Housing suit;
52
A real estate licensee may lawfully refuse to show a home to a minority prospect who has requested to see it in which of the following situations:
When the owner is out of town and has instructed the licensee that no showing may be made in his absence;
53
In addition to the duties of diligence, care, and skill, a real estate agent owes the principal a full disclosure of all facts material to the subject of the agency. Any intentional concealment of such facts by the agent would probably be regarded as:
Fraud
54
The most effective way for the Federal Reserve Board to create a tight money market would be to:
Raise the discount rate and sell government bonds;
55
An inner city neighborhood is well integrated with civic groups working well to maintain social harmony. However, mounting problems with schools and with increasing crime have caused several white families to move out. In which of the following statements is Broker Brown in violation of the law: 1. He is actively soliciting listings in the area with the slogan, "sell now, save equity"; 2. He is offering lower commission rates to whites who patronize his business:
Both
56
Inasmuch as real property requires more time to market than listed securities, requires more care, and comes in larger denominations, its return should be:
Higher than that of bonds or first mortgages.
57
A borrower would apply for an FHA loan to
The mortgagee.
58
A primary source of funds for residential mortgage financing is:
Federal savings and loan associations;
59
What actions can the Federal Reserve Board take to increase the supply of money and credit in the national economy:
Lower the cash reserves required by banks which are members of the Federal Reserve Bank System;
60
When a licensee is appraising an improved parcel of property using the market data method, that person must make adjustments to the estimates of value because:
Any two properties are rarely similar concerning everything;
61
The security of a loan made on real property depends upon:
The value of the property being liened;
62
Which of the following items is a cost of home ownership:
Loss of interest on owner's equity.
63
Which of the following does not directly affect the level and movement of mortgage interest rates:
The rate of unemployment;
64
When using the market data method of appraising for a single-family residence, the unit of comparison is the:
Entire property;
65
When considering portfolio risk management, the lender needs to be concerned with which of the following:
Reserves;
Diversification;
Liquidity
66
The phrase "the secondary mortgage market" refers to:
A resale marketplace for existing trust deed loans.
67
Ellis purchased a home with a low down payment and a long repayment term. This would most likely result in:
Increasing the financing cost;
68
Conventional loans are distinguished from FHA insured loans by all of the following, except:
Conventional loans always permit a deficiency judgment, while FHA loans never allow them;
69
If an appraiser is appraising a special purpose property he would probably use the:
Cost approach;
70
The terms of some real estate loans provide that the interest rate may be increased or decreased depending on money market conditions. We call this type of loan:
A variable interest rate loan;
71
Mr. Gomez took out a loan for improvements to his real property that was fully amortized. If the loan provides that there are equal monthly payments, the amount credited to the principal will:
Increase while the interest payment decreases;
72
When used in relationship to real estate loans, the term "impounds" most nearly means:
Reserves
73
The value of a parcel of real property is best measured by which of the following groups of characteristics:
Demand, scarcity, transferability, and utility.
74
Which of the following is not a necessary element in the formation of a contract:
Performance
75
Mr. Wilson sold a home to Mrs. Hawkins, not knowing that she had been judicially determined to be incompetent. In such a situation, the contract would be:
Void
76
A contract which, according to the Statute of Frauds, must be in writing in order to maintain a court action for enforcement is:
Any agreement which is not to be performed within one year.
77
A licensed real estate broker working under a typical exclusive listing incurs several expenses. He is not entitled to be reimbursed for these expenditures, unless:
Such expenditures were authorized by the principal;
78
Which of the following phrases will best describe the nature of a broker's duty to keep his principal informed:
Fiduciary obligation;
79
Normally, a structure used primarily as a warehouse would be rented by:
The square foot;
80
A single family residence, which had an assessed value much lower than the current market value, was sold on October 1 at its current market value. The new owners will be obligated to pay:
A supplemental tax based on the difference between the old assessed value and the new assessed value for the remaining months of the fiscal year.
81
When an appraiser contrasts the phrase "reproduction cost" and the phrase "replacement cost," replacement would be more closely associated with which of the following concepts?
The present cost to replace the building with another building having the same utility.
82
When a broker misrepresents his principal's property to a buyer, he could cause his principal to be subject to:
A court action for damages by the buyer;
A rescission of the sale by the buyer;
Civil responsibility for compensating the buyer for misrepresentations of the broker;
83
If an appraiser was appraising a restaurant building, he would probably use the:
Income approach;
84
During Broker Shaw's preparation of the Exclusive Authorization and Right to Sell on Seller Norman's property, Norman asked that a clause be included which would require the buyer to accept primary liability in connection with the existing first trust deed loan on the property. To best protect Seller Norman regarding his liability if the existing loan is transferred to the buyer, Shaw should enter which of the following in Paragraph 2 of the Exclusive Authorization and Right to Sell form:
Buyer to "assume" existing loan;
85
in regards to real estate brokerage, which of the following statements is correct:
In an exclusive agency listing, a seller may sell without being liable for a commission;
86
When gross income is changed into value in one operation, which of the following describes this occurrence?
Rent multiplier;
87
An offer to purchase real property was signed by a prospective buyer on October 2. The terms of the offer allowed five days for acceptance by the seller. Because of an illness in the seller's family, the seller did not accept the offer until October 10. Which of the following statements is correct:
The buyer may demand the return of his deposit;
88
true concerning an option:
Title acquired by exercising an option usually dates back to the time of the option and cuts off intervening rights acquired with knowledge of the existence of the option;
Only the optionor is bound to a sale;
The optionee has no interest or estate in the land;
89
When an appraiser is considering the economic life and the physical life of a building, the economic life is usually:
Shorter
90
An apartment owner was figuring his net income for income tax purposes. He took the gross income and deducted certain expenses. Of the ones listed below, which could he not deduct:
Cost of a fence.
91
An appraiser would define depreciation as:
Loss in value from any cause;
92
A substantial difference in value between two properties that were built concurrently on adjoining lots of equally valuable land with construction and maintenance costs the same, would most likely be caused by:
Functional obsolescence within one of the properties.
93
The California state sales tax:
Applies to the sale of taxable personal property;
94
The primary purpose that an appraiser would use a site analysis is to determine the:
Highest and best use;
95
A kiosk is the term used to identify:
An information booth in a mall;
96
Prior to the sale of a subdivision, a subdivider must show proof to the Real Estate Commissioner that:
Parcels of land can be used for the purpose stated;
97
In addition to certain municipal or county regulations which apply to the construction of a subdivision, such as zoning laws and the State Map Act, other government regulations may be imposed upon the subdivision by:
Health, fire, and building safety laws;
The California Bureau of Real Estate;
Governmental lending agencies, such as FHA and VA;
98
If the following events occurred after the Real Estate Commissioner issued his final public report on Green Acres Subdivision located in California, which one would be a material change in the subdivision as originally filed:
Increasing the basic sizes of the lots;
99
The Commissioner's public report on a subdivision is designed to protect the purchasers of lots. No subdivider may enter into a legally binding contract with a purchaser unless and until:
The prospective purchaser has had the opportunity to read and has acknowledged, in writing, the receipt of the copy of the final public report;
100
An architect often draws a plot plan for the purpose of:
Guiding placement of construction and related land improvements.
101
Which of the following items would not be included in a bill of sale transferring a retail merchandising business:
Assignment of leasehold;
102
An agreement between party A granting party B the right to offer, sell, or distribute goods or services under a marketing plan described by party A is commonly known as:
A franchise agreement.
103
When purchasing a business, the buyer should be sure that a certificate of clearance, or clearance receipt, has been issued by the:
Board of Equalization;
104
If a broker wants to find out if sales tax will be due on the proposed sale of a business, he should contact the:
Board of Equalization;
105
When a legal description uses only sections, townships, and ranges, the lines relate to the
Government survey lines;
106
An appraiser was hired by Mr. Jones to appraise Mr. Thomas' property. With whom should the appraiser discuss his findings:
Mr. Jones;
107
During the winter time, an appraiser finds that the inside of an exterior wall of a building is about the same temperature as the other interior walls. The appraiser would come to the conclusion that:
The wall insulation is adequate;
108
The method which is used most often to value land or sites is:
The comparative method.
109
An unearned increment to the value of real property does not result from:
Over-improvement to real estate by the owner;
110
important in making an appraisal on improved real property:
The assessed property value;
111
Which of the following techniques would an appraiser mainly rely on to appraise a lot on which the buyer intends to build a single-family residence:
Market approach;
112
Which of the following approaches to value estimate tends to set the upper limits of value:
Replacement
113
If an appraiser determines the value of a property by considering the income that it produces and the percentage return which can reasonably be expected to be earned on the investment, he is using a process which is called:
Capitalization
114
The value of a property purchased for investment purposes is usually:
Based on the capitalization of future net income;
115
Agent Brown is appraising real property by estimating the quantity, quality and durability of its net income expectancy. This procedure in the appraisal process is called:
Capitalization of income.
116
Which of the following conditions would not cause a building to be declared substandard?
The electrical wiring does not comply with present code, but it did when it was installed and it is now safe and is working properly;
117
Whenever possible, an appraiser would estimate the value of land on the basis of:
The selling prices of comparable sites.
118
The one particular area that appraisers find most difficult to measure accurately is:
Accrued depreciation;
119
The age of a house can be determined most accurately by inspecting which of the following:
Tax assessor's records;
120
Restoring a property to a satisfactory condition without changing the plan, form, or style of the building is known as:
Rehabilitation;
121
The type of depreciation which is socially oriented and from which we derive the saying "more buildings are torn down than fall down," would be known as:
Economic obsolescence;
122
An elevation sheet which is used in a subdivision shows which of the following:
Drawings of the front and side views of the finished homes;
123
Soil pipe is commonly used in:
Sewer lines.
124
When changes are made in the plan, form, or the styling of a residence in order to correct functional obsolescence or economic obsolescence, this is termed:
Remodeling
125
Which of the following normally installs conduit:
Electricians
126
A listing must comply with all the legal requirements for a valid contract, including:
Offer and acceptance;
127
When the investigation of a discrimination complaint against a broker finds that he has violated the Real Estate Commissioner's Regulations concerning Fair Housing, which of the following remedies are available to the Commissioner with regard to that licensee:
Suspension or revocation of the broker's real estate license;
128
Ownership rights and interests in real property are determined by:
Quiet title action;
129
When is it legally permissible in California to sell property with an "as is" provision in the purchase agreement:
When the buyer is provided with a Transfer Disclosure Statement and informed of all known property defects prior to making an offer;
