Real Estate Exam Practice QnA Spreadsheet Flashcards
(183 cards)
1
Q
- Under which of the following conditions may a licensed real estate broker refuse to show a home that is available for sale to an individual of a minority group?
A. The real estate agent determined that the home would not be suitable for the buyers
B. The licensee was able to discover that the buyer might not financially qualify for a loan to purchase the property.
C. The owners specifically instructed the agent to forbid any person from a minority group from entering their home to preview it.
D. The sellers were out of town on vacation and instructed that no showings take place until they returned home.
A
- D (Under federal housing laws, an owner cannot discriminate towards a buyer. The seller’s absence and inability to provide access to the home to all buyers is not considered discrimination.)
2
Q
- If the real estate commissioner needs legal advice, who will they go to for this assistance?
A. The secretary of state
B. The governor of CA
C. The state attorney general
D. The legal department of affairs
A
- C
3
Q
- A new men’s suit factory is being built in the city and it will employ mostly men. T/re owner of the real estate development office directed the sales staff to do the following: (1) direct their advertising to appeal to men who are single and have no children and (2) charge more rent to people of certain ethnic and religious groups than they do to others. Which of these is a violation of the Fair Housing Laws
A. (2) only
B. neither (1) and (2)
C. (1) only
D. both (1) and (2)
A
- D (Both of these activities violate the Fair Housing Act.)
4
Q
- A prospective Latin homebuyer wants to be shown homes and does not give any particular location that they prefer. How should the real estate agent proceed?
A. Show properties in white neighborhoods only
B. Select homes for showing as they would with any prospective buyer
C. Only show homes in locations based upon the appearance of the buyer
D. Do not show them any homes
A
- B (The Fair Housing Laws and The Real Estate Commissioner’s regulations emphasize that all real estate licensees must treat everyone in an equally.)
5
Q
- In California, which one of the following agencies is tasked with preventing acts of discrimination in housing that are based on race, sex, ethnicity, heritage?
A. Department of Fair Employment and Housing
B. Department of Labor Commission
C. Department of Veterans Affairs
D. Department Interior Affairs
A
- A (Violations and complaints are directed to the Department of Fair Employment and Housing.)
6
Q
- A real estate licensee presents an offer for an Asian buyer who is ready, willing, and able to purchase a real property in Santa Monica. The seller of the real property refused to accept the buyer’s full price offer due the buyer’s race. The real estate licensee may do which of the following?
A. Advise the Asian buyer of their right to place a complaint with the Department of Housing and Urban Development
B. Warn the seller that their action violates the Fair Housing Act of 1968
C. all of these
D. Take legal action against the seller for commission owed
A
- C (This violates the Federal Housing Laws and the real estate licensee may do all of the above.)
7
Q
- If a broker holds an “option” on a real property and plans on exercising their option by selling the property to a buyer, they should inform the buyer that the broker is acting as:
A. an optionor
B. a salesperson
C. a principal
D. a beneficiary
A
- C (In this particular situation, the agent is acting as a seller, not an agent. Therefore the agent must inform the purchaser of their position as principal.)
8
Q
- A broker is taking a listing on a home and the sellers have indicated to the broker that the home is not to be shown to any buyers of a minority group. The acceptable and reasonable response by the broker should be which of the following?
A. Advise the seller that this owner’s instruction might help obtain a higher offer.
B. Inform the seller that they have the right to make such demand and the broker will follow their instruction.
C. Inform the seller that the broker will show the property to anyone that has interest in the property, although they have been instructed not to.
D. Inform the seller that they cannot accept the listing under those limiting conditions because it is considered discrimination.
A
- D (Brokers should avoid any type of transaction that involves seller instructions to discriminate.)
9
Q
- The federal fair housing law passed by Congress established a fair housing policy throughout the USA. This policy applies to which of the following:
A. all of these
B. Multi-family homes with minority owners
C. Single family homes owned by private individuals who own more than 4 properties
D. Single family residences with 8 units or more
A
- A (The Civil Rights Act of 1968 applies to all of the examples above.)
10
Q
- On June 1st a prospective buyer gave a check for $5,000 payable to the seller along with a purchase agreement to buy a piece of real property. The buyer asked that the check not be cashed until June 15th. Of the following, which is correct?
A. The check cannot be accepted. Refuse the check and ask for cash
B. Checks cannot be held and must be deposited immediately
C. The agent can hold the check and must inform the seller that the check is being held uncashed before the seller is to accept the offer from the prospective buyer
D. Checks must be delivered to the escrow company. The escrow company will make a decision.
A
- C (When a buyer requests that an agent hold a check and not cash it until a future date, the agent may do so. However, they must make the seller aware of the situation before the seller accepts the offer.)
11
Q
- If a property has a tax lien attached to it, the lien would typically be disclosed in the:
A. None of these
B. preliminary title report
C. transfer disclosure statement
D. escrow instructions
A
- B
12
Q
- Which of the following points must be stated on an exclusive listing agreement for the listing to be valid?
A. A commission amount
B. Items included with the sale
C. The signature dates
D. A definite termination date of the contract
A
- D
13
Q
- A buyer made an offer for the exact terms on the seller’s listing contract on January 1 with the condition that the offer is to be accepted within 48 hours. The broker was not able to contact the sellers until January 7th. The sellers accepted the offer and the broker informed the buyers. Upon receiving the news the buyers thanked the seller’s agent, yet expressed that they have changed their minds and no longer wanted the property and requested for the return of their deposit. Which of the following statements is correct?
A. The broker will not get any commission
B. The buyers are well within their rights to ask for their deposit to be returned
C. The broker will get 25% of their commission
D. The broker will receive their commission
A
- B (The seller’s acceptance of the offer was not made within the 48 hour timeframe, as per buyer’s condition. Therefore, the passing of time terminated the agreement to purchase.)
14
Q
- The American with Disabilities Act prohibits discrimination against individuals with disabilities in all areas of public life such as schools, employment, transportation, and all other areas used by the general public. In what year did this act become law?
A. 1990
B. 1985
C. 1975
D. 1980
A
- A
15
Q
- The lead based paint disclosure is concerned with small children ingesting paint chips and applies to sales and rentals of 1-4 dwelling units built prior to:
A. 1978
B. 1979
C. 1975
D. 1970
A
- A
16
Q
- When does a broker not have to present an offer to purchase real property to the seller?
A. When there are more than two contingencies in the contract
B. As long as the agent gives notice in writing that their offer will not be presented
C. When the offer is frivolous, or the agent is acting on written instructions by the principal
D. Never, the broker has to present all offers per real estate law
A
- C (Per real state law, all offers must be presented to the seller. However, if the principal (seller) gives written instruction to their agent that the agent need not present any offers to the seller under X amount, then the agent need not present those offers less than X amount. Typically, all offers are presented and sellers typically do not provide written instruction excluding any offers.)
17
Q
- A developer of new single family homes instructed the sales staff to (1) give special preference to women who want to purchase and (2) set aside the same number of single family homes for each ethnic group. All of this to avoid being dormitory. Which of the following best describes both policy ideas?
A. the second policy is legal
B. both policies are discriminatory, therefore illegal
C. the first policy is not illegal
D. both policies are non-discriminatory
A
- B (Preferential treatment and quotas are discriminatory and illegal.)
18
Q
- In which year did the U.S. Supreme Court prohibit racial discrimination in dealings with the sale or purchase of real property?
A. 1950
B. 1981
C. 1969
D. 1968
A
- D
19
Q
- The process of the Agency Relationship Disclosure Act is to disclose, elect, and confirm. When did this act become effective?
A. 1998
B. 2008
C. 1988
D. 1978
A
- C
20
Q
- Adam made an offer to buy a piece of real property and put down a cash deposit. The offer and deposit were presented by agent Smith to the seller and the seller accepted the offer. Just before the close of escrow, Adam received permission to gain access to the property to refinish the floors and paint the walls. Of the following, which is true?
A. Adam can do whatever he wants since it will be his property soon
B. Agent Smith should receive written permission from the sellers to allow Adam into the property to make upgrades
C. this is not allowed
D. Adam should sign a rental agreement from the agent Smith to have access to the house
A
- B (Until the escrow is closed and recorded, the seller remains the owner. The seller’s written permission is required before anything is to be done to the property.)
21
Q
- A real estate agent informs her broker that she wants to terminate her employment with that brokerage and requests that the broker return her license. The broker should:
A. return the license to the real estate agent and notify the Commissioner in writing immediately
B. mark the license as cancelled, return it to the agent, and notify the Real Estate Commissioner in writing
C. destroy the license and inform the Real Estate Commissioner of the termination
D. return the license to the Real Estate Commissioner for cancellation
A
- A
22
Q
- A seller and a broker enter into an Exclusive Authorization and Right to Sell listing. If the seller decides to revoke the contract, which of the following is correct?
A. The seller may revoke the contract with a certified letter, however the seller may be liable for broker damages and broker commission
B. The seller may revoke the contract with a phone call and a verbal agreement
C. The seller cannot revoke the contract without the broker’s consent
D. The seller cannot revoke the contract
A
- A
23
Q
- In 1988, a significant California law was implemented and continues to affect real estate agents. What does it relate to?
A. Broker and salesperson relationships
B. Mandatory agency disclosures
C. Unemployment insurance
D. Minimum age for licensees
A
- B (The Agency Disclosure Act was created in 1988.)
24
Q
- A licensee acts as agent for an individual without authority or consent. If the agent’s actions are later approved by the principal, an agency has been created by:
A. Agreement
B. Dual Agency
C. Ratification
D. Implication
A
- C
25
25. Agent Chris took a 60-day exclusive agency listing agreement on a property owned by owner Greg. Thirty days has passed and agent Chris has yet to sell the property. Owner Greg sent a certified letter to agent Chris canceling the listing contract. Three days later owner Greg listed the property with two new brokers using an open listing. 11 days passed and one of the brokers who had the open listing presented an offer from buyers and the offer was accepted, escrow opened, and the transaction closed. With the details provided, owner Greg will mostly likely:
A. have the right to relist the property with someone else due to the expiration of the listing
B. have the right to do what he did and only owes a commission to the selling broker
C. be liable for payment of commission to agent Chris and to the selling broker
D. not have the right to give and open listing to the other brokers
25. C (The owner has the right to cancel the exclusive agency agreement before the termination date. However, if this is done the owner is liable for damages suffered by the original agent Chris if the property was sold within the 60-day period. The owner could be responsible for paying a commission to both the original agent (Chris) and the new selling agent.)
26
26. If a real estate broker violates an antidiscrimination law which prohibits several types of discrimination, a court of law may do all of the following, except:
A. award actual costs and expenses to the plaintiff
B. award punitive damages
C. revoke or suspend the broker's license
D. award financial damages due to humiliation and embarrassment
26. C (Under the terms of the Real Estate Law and Regulations, the only one who can revoke or suspend a real estate license is the Real Estate Commissioner.)
27
27. A real estate broker advertises that he is offering a microwave oven valued at $400 to anyone that purchases a listing with his office. This advertising tactic is considered:
A. legal if the buyer provides a copy of the advertisement
B. Illegal, regardless of the disclosures that are made
C. legal only if the valued gift is $100 or less
D. legal if he provides the proper disclosures to all parties involved (buyer and seller)
27. D
28
28. When real estate agents are involved as a principal in a real estate transaction, such as buying property for their own account, the agent:
A. None of these
B. need not inform anyone that they are a licensed agent
C. must disclose to all parties that they are a licensed agent
D. should disclose to all that they are a licensed agent, but are not legally obligated
28. C
29
29. Listing a home at a higher price and having minorities pay the inflated price while accepting a lower price from others is:
A. reasonable
B. not acceptable and the real estate agent could be on the hook for money damages for violating the Fair Housing rules
C. not a violation because people have choice to accept what they pay
D. unethical, however no rules have been broken
29. B (It is discriminatory to have minorities pay more for something than others. This is a violation of state and federal laws and the real estate agent could be responsible for money damages.)
30
30. Maverick listed his vacation home with agent Juan for $750,000. Donald, the prospective buyer, submitted an offer on the property of $740,000. The next day Maverick made a counteroffer to the sales price at $745,000, which Donald refused.Four days later Maverick signed the acceptance of the $740,000 offer and sent it to agent Juan to send the offer to buyer Donald. Donald decided not to go forward with the purchase of the vacation home. Based on these actions, there is:
A. no contract
B. a void contract
C. a voidable contract
D. a contract and it is enforceable
30. A (A counter offer terminates the original offer, therefore there is no contract.)
31
31. A buyer made an offer for a piece of real property, however the buyer would not place a deposit for it. The buyer would only provide the deposit once the seller accepted their offer. In this case, the agent should:
A. do nothing. No deposit, no deal.
B. none of these
C. remind the buyer that the offer to buy is void since there is no consideration
D. get it in writing from the buyer and place the following verbiage on the offer, "buyer agrees to pay the deposit immediately upon seller's acceptance"
31. D (This is an example of how to create a specific instruction within a contract.)
32
32. An agent is found to have violated the Real Estates Commissioner's regulation concerning Fair Housing dealing with discrimination. Of the following, what are the sanctions that can be placed on the agent?
A. High punitive damages to teach them a lesson
B. Revocation or suspension of real estate license
C. A fine and community service
D. nothing, it's a local issue
32. B (The Commissioner can revoke or suspend a license. They cannot levy damages. Only a court of law can pass down money damages.)
33
33. The direction "East" on a map is:
A. toward the bottom
B. toward the top
C. to the right
D. to the left
33. C
34
34. Which of the following properties is exempt from the federal Fair Housing Act in a sales situation?
A. A single family, unoccupied property that is purchased using a VA loan program
B. A 20 unit complex financed with a conventional loan
C. An owner occupied triplex bought with the help of FHA financing
D. A single family dwelling that where the owner does not own more than 3 properties at one time, a broker is not used, and the property is not advertised.
34. D
35
35. A seller is signing a listing agreement and deletes (removes/strikes out) the following verbiage, "Agency is hereby authorized to accept on my behalf a deposit toward the purchase price in any amount." If the real estate agent finds a buyer, what will occur next?
A. The agent must get permission in writing from the seller to take a deposit for purchase
B. If the agent accepts a deposit, they hold it as an agent of the buyer until the offer is accepted by the seller (they do not hold it as an agent of the seller)
C. The agent cannot accept a deposit at anytime
D. The agent can accept the deposit from anyone at any time for the purchase of real property
35. B (If a real estate agent is not allowed to accept deposits and they do, they become the agent for the buyer for that one and only act.)
36
36. Under real estate law, the relationship between the broker and salesperson is that of:
A. Employer to agent
B. Broker to Realtor
C. Broker to employee
D. Employer to employee
36. D
37
37. Several Asians have moved from their predominantly Asian neighborhood due to rising crime rates and lack of proper schooling. The local agent Julie is jumping on this opportunity. Which of the following is a violation of law: (1) an advertisement saying "sell now while you can" (2) charging more for her services for different ethnicities other than Asian?
A. 1 only
B. both
C. neither
D. 2 only
37. B (Both of these are clear violations of fair housing laws.)
38
38. When a broker is approached by a buyer who is of a minority group and the broker avoids showing them property in integrated areas, this would be an example of:
A. a legal activity
B. redlining
C. blockbusting
D. steering
38. D (Steering is when you guide people to certain areas and not to others based on their race, ethnicity, sex, etc.)
39
39. What must an agent do if asked by the seller, "What is the racial background of the buyer?"
A. The agent must answer truthfully
B. The agent should report the seller to the BRE
C. The agent cannot answer that question
D. The agent should ignore the question
39. C
40
40. An individual who has invested in a commercial property is most interested in the property's:
A. net income
B. depreciation rate
C. monthly expenses
D. vacancy rate
40. A
41
41. Of the following situations, which one would not place a real estate agent in violation of the real estate law?
A. Having access to government confidential files and using that information for personal gain
B. Receiving a commission on an exclusive listing without a definite termination date
C. Unauthorized use of the term "Realtor"
D. Not informing a prospective buyer that the agent's principal would sell below the list price
41. D
42
42. If a buyer offers a promissory note as an earnest money deposit on an offer that has been submitted, the broker:
A. must advise the seller of this material fact
B. can accept it only if it has monetary value
C. must reject it and accept "cash only"
D. does not need to inform the seller of such deposit
42. A
43
43. While a real estate agent is attempting to renew his license, the Bureau of Real Estate is informed by the Department of Child Support Services that the licensee has failed to make required child support payments. What will happen to the agent's real estate license due to his lack of payments?
A. It can be renewed for a 4 year term
B. It is automatically revoked
C. It cannot be renewed
D. It can be issued temporarily for 150 days
43. D (During an agent's renewal process, they will be given a 150 day temporary license if they have failed to make required child support payments.)
44
44. Which of the following statements would be correct? An escrow cannot be completed or cancelled:
A. All of these
B. by the broker contacting the escrow officer and recommending that they cancel the escrow
C. by mutual agreement of the parties involved in the escrow
D. when all of the escrow instruction terms have been met
44. B
45
45. If a pest control company does not find any termite issues in a home, yet observes conditions that could possibly lead to an infestation in the future, who pays the cost of taking corrective actions?
A. The seller and buyer split the cost and everything is paid through escrow
B. The seller always
C. The buyer always
D. The buyer if the buyer wants the corrective work to be complete.
45. D (Conditions that could possibly lead to an infestation in the future are not the seller's responsibility when there is currently no termite damage or infestation on the property.)
46
46. Licensing information can be obtained online at the following website?
A. www.dre.ca.gov
B. www.cabroker.ca.com
C. www.dmv.ca.gov
D. www.calicense.ca.gov
46. A
47
47. When an agent makes misrepresentations towards a third party, this is a serious wrongdoing and is referred to as:
A. due diligence
B. Steering
C. blockbusting
D. a tort
47. D (A tort is a wrongful act for which a civil action may be brought by the person being affected by the misrepresentation.)
48
48. A Homeowner's Guide to Earthquake Safety must be provided on 1-4 dwelling unit properties for sale with a wood frame that is built before:
A. 1980
B. 1970
C. 1990
D. 1960
48. D
49
49. Of the following, which one is not considered real property?
A. A leasehold estate
B. A field of apple trees that are unpicked
C. A chandelier hanging in a dining room
D. An easement
49. A
50
50. Which act prohibits discrimination by businesspersons?
A. The CA Dept. of Fair Employment and Housing Act
B. The Unruh Civil Rights Act
C. The Rumford Act
D. The Civil Rights Act of 1968
50. B
51
51. It is statutory requirement for a broker and a salesperson to have a written agreement for employment and a copy to be kept by both for how many years?
A. 1 year
B. 4 year
C. 2 years
D. 3 years
51. D
52
52. Which of the following is considered a violation of the fair housing laws in regards to a periodic tenancy?
A. The landlord requires a cosigner for any tenant who is single
B. The landlord requires each potential tenant to have references
C. The landlord requires everyone to pay two months' rent and security deposit in advance
D. The landlord requires each tenant to have good credit
52. A (It's a violation of fair housing to single out a certain class of people. In this case, single people were discriminated against by requiring that they have a cosigner.)
53
53. The Agency Relationship Disclosure Act is found in Civil Code section 2079 and went into effect in:
A. 1990
B. 1988
C. 1986
D. 1978
53. B
54
54. Under which of the following listings must a seller pay the broker commission even though the seller sold the property through his own efforts?
A. Net Listing
B. Exclusive Agency
C. Exclusive Authorization and Right to Sell
D. Open Listing
54. C
55
55. If a seller's real estate agent chooses to offer some of their commission to the buyer of the property during a real property sales transaction, the agent:
A. is subject to disciplinary action by the Real Estate Commissioner
B. must notify the seller of such payment to the buyer
C. need not inform the seller of where the commission is being spent
D. may face criminal charges
55. B (The most important duties that an agent owes to their principal is to present them with their due diligence and uphold their fiduciary duties towards their principal. In this case, it is required that the seller's agent disclose any and all information related to the transaction to their principal, the seller.)
56
56. Tim works as an unlicensed employee at a real estate brokerage. The broker pays Tim hourly to distribute door hanger fliers in the nearby neighborhood and to make cold calls to solicit buyers and sellers. This activity by Tim is:
A. acceptable
B. unlawful for the broker, but not Tim
C. only unethical by the broker but not by Tim
D. unlawful for the broker and Tim
56. D
57
57. If an unlicensed assistant prepares an advertisement, it requires prior written approval by the:
A. the owner of the brokerage
B. the property owner
C. the employing broker
D. escrow company
57. C
58
58. Agent Mandy is working with owner Tim to sell his house. Tim told real estate agent Mandy that the house is attached to city sewer and water, but Mandy could have sworn there was no city sewer and water in the neighborhood. She decided to confirm with the city and it turns out that she was correct, the property is not on a public sewer and does not use public utility water. Mandy showed the property to buyer Kim and Kim did not ask about the water and sewer, therefore Mandy did not make any comments regarding them. The sale went through and Kim bought the property. Kim found out that there is no city sewer or water on the property after the sale. Which of the following is true?
A. Agent Mandy had a duty to tell the buyer Kim, even though Kim did not ask
B. Seller Tim has a duty to tell the buyer Kim that there is city sewer and water
C. Kim owns the house and has to deal with the fact that the property does not have city water and sewer
D. Nothing happens to anyone. Buyer beware
58. A (The fact that there is no city water or sewer is a material fact and must be disclosed to all prospective buyers. Agent Mandy knew this information and had a duty to disclose it.))
59
59. A neighborhood that is populated with mostly owner-occupied residences tends to:
A. stabilize values
B. negatively affect the local economy
C. attract businesses to the area
D. decrease in value compared to areas with mostly rental properties
59. A
60
60. Which of the following describes a broker's duty to keep their principal informed?
A. Continuing responsibility
B. Ethical responsibility
C. Fiduciary responsibility
D. Moral responsibility
60. C (The broker has a duty of loyalty to their principal and must always keep them informed throughout the transaction.)
61
61. How are members of the National Association of Real Estate Brokers referred to?
A. Realty Brokers
B. Realtists
C. Realtors
D. Realty Associates
61. B (Members of the National Association of Realtors are referred to as Realtors, while members of the National Association of Real Estate Brokers are referred to as Realtists.)
62
62. What do we call an individual who has been given a power of attorney to sign documents on behalf of a principal?
A. Attorney-in-fact
B. Lawyer-by-representation
C. Principal-in-piace
D. Attorney-by- law
62. A
63
63. When dealing with the sale of a residential income property, the maximum amount of commission a broker may charge a seller is:
A. set by the Real Estate Commissioner
B. determined by the local real estate board
C. negotiable between the broker and the seller
D. not more than 10% of the sales price
63. C
64
64. After the expiration of a real estate license, a licensee will be given a grace period in which the license can be renewed by the agent without taking the real estate examination again. What is that grace period?
A. 6 months
B. 1 year
C. 2 years
D. 18 months
64. C
65
65. At a brokerage office, the real estate licenses of the licensees:
A. must be kept at the main office of the employing broker
B. must be mailed to the Real Estate Commissioner
C. must be held by the broker for a minimum of one year
D. must be displayed on the company wall
65. A
66
66. The Agency Relationship Disclosure solidifies the relationship between an agent and a principal. What is the three step process for this disclosure?
A. confirm, disclose, elect
B. elect, confirm, disclose
C. disclose, elect, confirm
D. either order is acceptable
66. C
67
67. A broker was talking to homeowners and persuading them to sell based upon the fact that people from a different ethnicity are moving into the neighborhood and it would be best to sell now. This would be an example of all of the following, except:
A. Blockbusting
B. Panic selling
C. Legitimate conduct
D. Illegal conduct
67. C (Both panic selling and blockbusting are illegal activities.)
68
68. Which of the following terms explains the termination of an agency relationship?
A. Estoppel
B. Eminent Domain
C. Completion
D. Ingress
68. C
69
69. A fee in real estate is:
A. a reversion to the state
B. the same as commission
C. an estate of inheritance
D. an estate limited to certain heirs
69. C (A fee estate is also considered an estate of inheritance and may be passed on to the owner's heirs.)
70
70. If a real estate agent illegally uses the term REALTOR, it:
A. is a violation of California real estate law
B. can lead to the loss of a real estate license
C. both can lead to the loss of a real estate license and is a violation of California real estate law
D. will require the agent to complete an agency disclosure
70. C (Using the term Realtor illegally can lead to a revocation of license and is a violation of real estate law.)
71
71. The policy of the Real Estate Commissioner is to create an industry that is "color blind" and that will help reach peaceful, voluntary, equal opportunities in fair housing. What does this all mean?
A. all of these are correct interpretations
B. Treat other people with the concern and kindness you would like them to show towards you
C. Race, creed, and color are not a material fact in a transaction of real estate
D. An industry that is free of bias and "color blind"
71. A (All of these are correct and should be implemented in the real estate industry.)
72
72. A broker meets with a seller to list the home and the seller refuses to disclose on the Real Estate Transfer Disclosure Statement that the home is in a mudslide area which the seller clearly is aware of. The broker should:
A. advise the seller to do a "for sale by owner"
B. accept the listing
C. not accept the listing
D. only accept the listing verbally
72. C
73
73. How many years does an injured party have to file legal action on the Transfer Disclosure Statement?
A. 1 year
B. 5 years
C. 4 years
D. 2 years
73. D
74
74. Which type of bonds are typically used to finance street improvements, gutters, and sidewalks and must be disclosed by the seller of a 1-4 dwelling unit?
A. Neighborhood Enhancement Projects
B. Gentrification Vision
C. State Improvement Site
D. Mello-Roos
74. D
75
75. When dealing with residential income properties, the maximum commission a broker may charge a seller for their real estate services is:
A. set by Real Estate Law
B. always 6% per REALTOR code
C. determined by the local real estate board
D. negotiable between the seller and the broker
75. D
76
76. A salesperson cannot receive any commissions or referral fees as compensation from any other source, except:
A. the seller's agent
B. the escrow agency
C. the title company
D. the licensee's broker
76. D
77
77. Which of the following activities is considered discriminatory by a licensee and a violation of the law?
A. "Steering" only
B. Both "panic selling" and "steering"
C. Commingling
D. "Panic selling" only
77. B (By definition, both "panic selling" (also referred to as "blockbusting") and "steering" are considered discriminatory as both activities involve the discrimination of a specific population.)
78
78. Which of the following parties is required to report the sale of a single family residence to the Internal Revenue Service?
A. The lender
B. The seller
C. The buyer
D. The Escrow Company
78. D (The settlement agent (typically the escrow company) is responsible for this action.)
79
79. Which of the following is required for all real estate licensees, even though they are considered an independent contractor for taxation purposes?
A. Car insurance
B. A private cubicle
C. Worker's compensation
D. Health insurance
79. C
80
80. What agency receives complaints about fair housing laws?
A. Department of Fair Employment and Housing
B. Department of water and safety
C. Department of the interior
D. All of these
80. A
81
81. Of the following documents, which would include the piers, footing, subfloors, and columns of a building?
A. A master plan
B. A construction plan
C. A developer's plan
D. A foundation plan
81. D
82
82. A seller was presented with a reasonable offer and accepted it by signing it. The acceptance was communicated to the buyer. Prior to opening escrow, the seller found another buyer willing to pay more and canceled the original contract by notifying the broker. Under these circumstances, which of the following is most likely correct?
A. The broker has an excellent legal basis to collect a commission for having a buyer and seller agree to terms on a contract.
B. The broker is not entitled to commission
C. All of these
D. The deposit must be returned to the original buyer and their will be no legal claim against the seller by the buyer.
82. A (By placing the seller and buyer into contract, the broker has fulfilled the duty of finding a buyer that is ready, willing, and able to purchase the property and may be owed a commission.)
83
83. In a contract between a buyer and seller, the term "consideration' can refer to which of the following?
A. money
B. Services
C. Any of these
D. Anything of value exchanged between both parties
83. C
84
84. In which of the following ways can an agency relationship be terminated?
A. Estoppel
B. Amendment
C. Completion
D. Lis Pendens
84. C (Once the purpose of the agency is completed, then the agency relationship is terminated.)
85
85. A broker who helps the government sell their property is referred to as:
A. a government agent
B. a land locator
C. a public broker
D. a property defender
85. B
86
86. If a broker decides to use a fictitious business name, the broker must complete which of the following?
A. Have a notice published in a newspaper once a week for four weeks
B. Apply to the Real Estate Commissioner for approval
C. File a fictitious business name statement with the county clerk
D. All of these
86. D
87
87. If a qualified license applicant appears on a delinquent child support payment list, what would occur with the licensee's status as an agent?
A. None of these
B. The application will be denied until the arrears is paid in full
C. The agent can request a court appeal against the BRE
D. A temporary 150 day real estate license may be issued
87. D
88
88. What occurs when a buyer withdraws their offer to purchase real property prior to the seller accepting the offer?
A. The seller is within their right to take legal action against the buyer for backing out of the deal
B. The licensee may take legal action for specific performance
C. Any earnest money deposit is refunded to the buyer if one was submitted
D. Since a purchase agreement (offer) was submitted, the buyer must continue with the purchase
88. C (The meeting of the minds is a three step process. 1. The offer 2. Offer is received and accepted 3. Acceptance must be communicated back to the offeror. Until these steps take place, the contract may be withdrawn at any time without a reason or consequence.)
89
89. The laws of agency will be found in the:
A. Office of the Real Estate Commissioner
B. Broker's Binder
C. Civil Code
D. Curriculum of the BRE
89. C
90
90. When taking a listing it is recommended business practice for a real estate agent to:
A. accept overpriced listings with a plan of later dropping the price to where it should be priced
B. price listings at market value plus commission
C. place online ads that read "listings wanted"
D. question an owner regarding the motives of selling the property
90. D (Knowing the reasons why an owner is selling a home may assist the agent with disclosing items to the buyer, such as the owner going through a foreclosure process, a recent incident in the neighborhood, etc.)
91
91. Someone who is employed by another to act on their behalf may be referred to as:
A. an employee
B. an agent
C. an independent contractor
D. any of these
91. D
92
92. In which of the following documents is there a clause that gives the broker the authority to receive a deposit from a prospective buyer?
A. Escrow instructions
B. Listing Agreement
C. Deposit receipt
D. Closing statement
92. B
93
93. Which of the following disclosures are required from the seller to the buyer on all types of property?
A. The Dual Agency disclosure
B. The Natural Hazard Disclosure
C. Both The Mello-Roos Tax Lien disclosure and The Natural Hazard Disclosure
D. The Mello-Roos Tax Lien disclosure
93. C
94
94. The district's attorney's office prosecutes law violations within:
A. Its own city
B. None of these
C. Its own region
D. Its own county
94. D
95
95. If a decision by the commissioner is unfavorable to a licensee, the licensee:
A. may have the charge dismissed if it is a first offense
B. may appeal to the court
C. must accept the decision of the commissioner
D. may pay a fine to dismiss the decision and have it removed from their real estate file
95. B
96
96. The real estate agent that has earned a commission on a transaction is typically the agent that performed which of the following real estate acts?
A. Informs the seller of the offer from the buyer
B. Informs the offeror that their offer has been accepted by the seller
C. Receives a large down payment on an offer
D. Receives an offer from a buyer
96. B (Explanation: The real estate agent has sold the home and has earned the commission if the offer was submitted by the agent,, the offer was accepted by the seller, and the agent informs the buyer of the acceptance.)
97
97. A licensee received an offer on a listing and was on her way to present it to the seller. While on her way to present the offer, she received a phone call from another agent stating she also had an offer for the same property. That second offer was $2,000 less than the first offer, but it was "all cash". In this scenario, what should the agent do?
A. Present the first offer and disregard the second one
B. Only present the second offer since it was an "all cash" offer
C. Present the first offer, and if rejected, present the second one
D. Present both offers at the same time
97. D
98
98. A real estate salesperson presented an offer to the seller from a fully qualified Asian buyer who met all of the terms of the listing agreement (price, financing etc.). A day later, the real estate agent presented the seller an offer from a fully qualified caucasian buyer, however it was for $20,000 less than the asking price. Ultimately, the seller refused both offers and sold the property to the neighbor using the same real estate salesperson because the neighbor wanted to keep minorities from owning property in his neighborhood. Of the following, who has not violated the Civil Rights Act of 1968?
A. seller
B. caucasian buyers
C. neighbor
D. salesperson
98. B (The seller violated the Federal Civil Rights Act because they collaborated with selling the property to the neighbor. The neighbor violated the act because they wanted to keep minorities from owning property. The real estate sales person violated the act because they helped the neighbor purchase the seller's home. The caucasian buyers did not violate the act by offering an offer less than the list price.)
99
99. In a single agency agreement, a broker represents:
A. the buyer or seller only
B. a single person
C. the buyer and seller
D. the seller only
99. A
100
100. Of the following individuals, which one is required to hold a California Real Estate License?
A. A real estate advertising agency
B. An investor who buys more than 4 properties in one year
C. A property owner who sells more than 3 homes in one year
D. A mortgage loan broker
100. D
101
101. The term Realtor is owned by which of the following organizations, and only members of this organization can use the term?
A. The American Association of Realtors
B. The American Group of Agents
C. The National Association of Realtors
D. The National Group for Realtors
101. C
102
102. Agent Debbie delivered an offer to purchase a piece of real property to her principal, seller Billy, on Tuesday morning at 9am. Billy asked for 24 hours to review the offer. On the same day at 4pm, agent Debbie received three additional offers from 3 different buyers. Agent Debbie has a feeling that her principal, seller Billy, will reject the additional offers. What should agent Debbie do next?
A. Present each offer on different days since the principal asked for 24 hours to review the first contract
B. none of these
C. Hold the new offers until agent Debbie is informed of what the principal wants to do about the first offer
D. Present all three offers to principal and seller Billy as soon as possible
102. D (When this situation arises, the agent has a fiduciary duty to present all offers immediately. It is the seller's decision as to which offer to accept.)
103
103. Which of the following disclosures mandates that the seller and the agent must make full disclosure of material facts that may be known or unknown to a potential buyer?
A. Escrow Instructions
B. Dual Agency
C. Transfer Disclosure Statement
D. Natural Hazard Disclosure
103. C (When selling a residential property of one to four units, a seller and the listing agent must disclose all mechanical and structural conditions on the Real Estate Transfer Disclosure Statement to the buyer.)
104
104. Which of the following is best described as "of indefinite duration"?
A. A periodic tenancy
B. An estate of inheritance
C. An estate at from period to period
D. An estate for years
104. B ("Of indefinite duration" is the primary characteristic of fee simple estate, also known as an estate of inheritance.)
105
105. Jim paid an owner $5,000 for an option which included the following clause: "Option to be effective for 60 days from June 1. Upon exercise of the option, the option holder is to purchase within 30 days thereafter which must be in the form of all cash." On July 10, Jim sold and assigned his option for $10,000. On July 28, the new holder notified the owner that he would complete the purchase on August 15th. The owner claimed the option was void. Based on the information provided, the option was:
A. valid and the assignee would be able to purchase on August 15th
B. void, since the purchase date was not within the agreed upon option period
C. void because the original holder sold it
D. valid, even though Jim was the person that sold it, however August 15 was too late for the sale date
105. A (Although the terms of the option require an all cash consideration and there is no unsecured promissory note that exists, the option can be sold or assigned. Since the new holder exercised the option within the 60-day period (prior to July 30) and purchased the property within 30 days of the exercise date (prior to August 30), the option is valid.)
106
106. In 1951, Mark took 100 acres that he owned and subdivided them into 50 individual 2 acre lots. Mark placed a deed restriction saying the lots could only be bought, sold, or occupied by people of the Caucasian race. This deed restriction is:
A. legal
B. prohibited by local law
C. valid so long as Mark is still alive
D. unenforceable. It violates the United States Constitution
106. D (Racial restrictions on subdivisions is a violation of the 14th Amendment of the U.S. Constitution per the U.S. Supreme Court Case, Shelly vs Kraemer. The deed is valid, however the restriction is not.)
107
107. Upon passing the state exam, how much time does the applicant have in which to mail the application for the license?
A. 2 years
B. 1 year
C. 1 month
D. 18 months
107. B
108
108. When dealing with an "open listing", a broker is entitled to a commission if there is proof that the broker:
A. found a buyer who was ready, willing, and able to purchase the property
B. all of these
C. was duly licensed at the time of the transaction
D. was the procuring cause of the sale
108. B
109
109. When a real estate agent signs a residential listing agreement with the owner of a home, a fiduciary relationship is created between the broker and the:
A. buyer
B. general public
C. seller
D. both buyer and seller
109. C
110
110. In order for a real estate office to be both competitive and profitable, the broker should be highly concerned with "desk cost". This is calculated by dividing the:
A. annual gross commissions earned by the number of desks
B. total costs of all office furniture by the number of agents in that office
C. net profit of the brokerage by the number of desks available
D. total costs of the broker's rent, utilities, telephone, advertising and other operating expenses by the number of salespersons in the brokerage.
110. D
111
111. When an existing contract is replaced with a completely new contract, it is considered a/an:
A. Subrogation
B. Recission
C. Novation
D. Assignment
111. C (The word "novo" means new, therefore novation would be the answer.)
112
112. To gain more listings, a real estate broker went door to door and informed home owners that due to the high population of minorities in their neighborhood, their property value would decline, the school quality would suffer, and there would be a rise in crime. The broker's actions are:
A. unethical, however there are no rules within the California Bureau of Real Estate (BRE) to manage such activity
B. grounds for disciplinary action
C. reasonable, as long as the broker's actions did not decrease property values
D. acceptable if the broker is providing truthful information
112. B (The actions taken by the broker are seen as promoting panic selling which is against fair housing laws. The Real Estate Commissioner could revoke or suspend the broker's license.)
113
113. When referring to single agency, the licensee is representing:
A. both a buyer and a seller in one transaction
B. one buyer or seller
C. one broker
D. only the property owner
113. B
114
114. A real estate license is required to act in matters of real estate for compensation, including:
A. mortgage lending
B. a stock broker
C. property management
D. both property management and mortgage lending
114. D
115
115. If a broker hires an unlicensed person to practice real estate, the broker and the unlicensed person may be individually fined up to:
A. $25,000
B. $10,000
C. $20,000
D. $50,000
115. C
116
116. A real estate owner acquires a listing in which the previous owner died from AIDS. When the agent is showing the property to interested buyers, the agent is not required to disclose that the previous owner was afflicted with or died from AIDS since it is not considered a material fact. However, they must disclose this fact if they receive a direct inquiry from:
A. the escrow officer
B. the buyer
C. the appraiser
D. the lender
116. B (This type of information need not be disclosed to a buyer, unless there is a direct inquiry from the buyer. The seller and listing agent must then disclose.)
117
117. An offer to purchase a piece of real property was received with an earnest money deposit in the form of a personal note in the amount of $2,200. Which of the following is true?
A. Accept the deposit only if the offer is accepted
B. The seller should be informed that the deposit is in the form of a promissory note
C. Without expressed permission, a deposit cannot be accepted
D. The note will have to be deposited within 3 business days for cash
117. B (A promissory note is a form of legal consideration and can be used for a earnest money deposit, however the seller (principal) should be made aware of this.)
118
118. A licensed real estate broker has been accused of violating the Unruh Act for refusing to rent a property to individuals from a minority group. If this accusation is correct and the agent is found guilty he:
A. is subject to only actual damages suffered by a person infringed upon
B. will be ordered to pay $250.00 to the individual infringed upon
C. neither will be ordered to pay $25,0000 to the individual infringed upon nor is subject to actual damages
D. will be ordered to pay $25,000 to the individual infringed upon and is subject to actual damages
118. D
119
119. Real estate agents are not permitted to use "blind" ads when advertising. A "blind" ad would be one that does not identify which of the following?
A. Square footage
B. List price
C. Broker
D. Location of the property
119. C (A "blind ad" does not identify if the ad is placed by a homeowner or an agent.)
120
120. A licensed real estate agent had an oral listing agreement with the owner of a home and successfully sold it. If there was no written verification of the oral agreement, the broker's commission is:
A. prohibited under the law of the Commissioner
B. allowed if the seller decides to do so
C. enforceable in a court of law
D. illegal
120. B (Although an oral listing is not illegal, according to the Statute of Frauds it must be in writing for it to be enforceable in a court of law. Because it is an oral agreement, the seller can elect to pay the broker a commission.)
121
121. What term is used when the original contract is replaced with a new one?
A. counter
B. do over
C. rescission
D. novation
121. D (Nova is the root word of novation. The Latin word "nova" means new.)
122
122. The provisions of the Federal Fair Housing Law (Title VIlI of the Civil Rights Act of 1968) allow for plaintiffs of discrimination to file:
A. a complaint with HUD
B. all of these
C. civil action in state or local courts
D. civil action in federal court
122. B (The Federal Fair Housing Law permits a person who has been discriminated against to bring such action to state or local courts as well as federal courts. They can also file a complaint with HUD.)
123
123. If a salesperson leaves a brokerage to join another one, the new broker must advise the BRE in Sacramento of this action within how many days of the new employment?
A. 5 days
B. 1 week
C. 2 weeks
D. 1 month
123. A
124
124. While presenting offers to her principal, the real estate agent discloses the race, sex, creed, color of the buyers. Has the agent committed a discriminatory act?
A. No because there is a fiduciary duty to work in the best interest of the principal
B. Yes, this is a discriminatory act. Race, creed, color, sex are not material facts and should not be disclosed
C. Yes, but it only violates local law
D. No because race, color, creed, sex is a material fact
124. B (Race, creed, color, and sex are not material facts and should not be disclosed per the California Attorney General.)
125
125. Which of the following acts is most likely to be committed by a salesperson?
A. Constructive fraud
B. Fraudulent misrepresentation
C. Innocent misrepresentation
D. Actual fraud
125. C (Due to lack of knowledge or misinformation from the seller, some agents will not intentionally misinform and commit actual fraud.)
126
126. Sales that are "as is" requires which of the following from the seller?
A. Commission Instruction
B. Both Agent Visual Inspection Disclosure and Commission Instruction
C. Agent Visual Inspection Disclosure
D. Transfer Disclosure Statement
126. D
127
127. If an owner of a property sells the home under his own efforts after hiring an agent, under which type of listing will the owner of the property still be contractually liable to pay a commission to the broker?
A. None of these
B. Exclusive Agency Listing
C. Open Listing
D. Exclusive Authorization and Right to Sell Listing
127. D (Explanation: An Exclusive Authorization and Right to Sell listing provides the broker with a commission regardless of who brings a buyer, including the owner.)
128
128. In the Residential Listing Agreement, the purpose of the "hold harmless" clause is to protect the broker from any liability or claims resulting from:
A. incorrect information supplied by the seller
B. false information from the buyer regarding their lending qualifications
C. misrepresentations made by the broker's agents
D. misrepresentation made by the appraiser
128. A
129
129. A contractor's license is not needed when construction work is being done and is valued at less than:
A. $2,500
B. All construction work requires a contractor's license
C. $500
D. $1,000
129. C
130
130. In which of the following documents does the seller give the broker written authority to accept a deposit from a prospective buyer?
A. Listing Agreement
B. Deposit Receipt
C. Transfer Disclosure Statement
D. Escrow Instructions
130. A
131
131. A buyer who is interested in purchasing a business would be most concerned with:
A. gross sales
B. accounts payable
C. turnover rate
D. net profit
131. D
132
132. Which of the following 2 activities are grounds for suspension or revocation of a real estate license when it comes to discrimination? (1) blockbusting, (2) hiring people from only one ethnic group.
A. only 1
B. only 2
C. neither 1 and 2
D. both 1 and 2
132. D (Real estate is an industry that is "color blind", and per the real estate law the Real Estate Commissioner can revoke or suspend a real estate license if the agent is involved in any of these activities.)
133
133. When a broker represents a seller during a transaction, he has a fiduciary responsibility to the principal. In regards to the third party, the broker:
A. need only disclose material fact if the third party requests it
B. owes absolutely no duty to the buyer
C. also has a fiduciary responsibility to the third party
D. must disclose all material facts associated with the property
133. D
134
134. When a salesperson wishes to advertise their real estate services, the advertisement must include:
A. both the name of the broker and the salesperson's license number
B. the salesperson's name only
C. the name of the broker
D. the name and address of the broker
134. A
135
135. A listing contract to sell real property is considered to be enforceable if it is:
A. recorded
B. all of these
C. acknowledged
D. in writing
135. D
136
136. The provision that reads "The Realtor shall not publicly disparage the business practice of a competitor" can be found in the:
A. Commissioner's Rules and Regulations
B. NAR Code of Ethics
C. Business and Professions Code
D. Real Estate Law
136. B
137
137. Once the required BRE courses are completed, what is the minimum age that an individual must be to apply for a license?
A. 25 years
B. No age minimum
C. 18 years
D. 21 years
137. C
138
138. Failure to disclose a dual agency situation can lead to :
A. suspension or revocation of license
B. loss of commission
C. All of these
D. Civil action by the injured party
138. C
139
139. The term "kiosk" is used to identify:
A. a form of a key box
B. a cabinet where licenses are kept
C. an information booth in a shopping center
D. a construction crane
139. C
140
140. In order to take more listings, agent Steve Smith started telling property owners that minorities were moving into the area and it would drive down the property owner's home value. This is an example of:
A. conversion
B. blockbusting
C. panic peddling
D. Both panic peddling and blockbusting
140. D (In this example, agent Steve Smith is panic peddling and blockbusting. Both actions are violations of fair housing.)
141
141. When real property is sold, who receives a copy of the termite report from the seller?
A. the title company
B. the tax assessor's office
C. the buyer
D. the home inspector
141. C (Per California law, if the buyer asks for a copy of the termite report they are able to receive it from the seller.)
142
142. Which instrument is used to test for the toxic gas, carbon monoxide?
A. An air supply traction
B. A fuel proctor
C. A carbon monoxide detector
D. A spectrometer
142. C
143
143. Properties (1-4 unit dwellings) that were built before 1978 require a lead based paint disclosure and are referred to as:
A. target housing
B. paint targets
C. lead base targets
D. poison housing
143. A
144
144. In order to create more real estate business, a real estate broker advertises that he will provide a seller who lists their property with him a $50 credit from his commission during escrow. He also advertises that he will offer any buyer $50 if they purchase a home through him. This advertising tactic is considered:
A. legal if it is disclosed to all parties involved in the transaction
B. legal since the amount offered is less than $100
C. Illegal. An agent may not provide any credit to a principal during the escrow period.
D. prohibited if it is a RESPA transaction
144. A
145
145. The maximum commission amount that an owner of real estate property is allowed to pay a broker for providing the service of negotiating a lease agreement is limited by:
A. the agreement of the parties
B. the rate allowed by the local real estate board
C. law if the the lease term is more than one year
D. The Realtor's Code of Ethics
145. A (The commission amounts are negotiable for these real estate services provided by a brokerage.)
146
146. Of the following listings, which one enables the broker to represent the seller as an agent or allows the broker to purchase the property if they are interested?
A. Exclusive Agency
B. Exclusive Right to Sell
C. Open Listing
D. Option Listing
146. D
147
147. John has a 20 unit building and plans to rent the units out to tenants. On the lease form, there is a question about race. Since John only wants to lease to Asians, which of the following is true?
A. As long as he shows the property to everyone, this is acceptable
B. As long as he asks everyone the same question, this is acceptable
C. Permitted
D. A question like this is a violation of part 5 of the Discrimination in Housing of the Health and Safety Code
147. D (Part 5 of the Discrimination in Housing of the Health and Safety Code is the Rumford Act.)
148
148. An unlicensed person who violates any real estate laws is prosecuted by the:
A. Real Estate Commissioner
B. District Attorney
C. State Compliance Officer
D. RESPA
148. B
149
149. The "Jones vs. Mayer" landmark decision in 1968 by the Supreme Court bars which of the following property matters in the U.S.?
A. Age discrimination
B. Handicap status
C. Gender equality
D. Racial discrimination
149. D
150
150. Of the following, which would be the best explanation of "riparian rights"?
A. None of these
B. The right to use as much water as needed
C. Right of a tenant farmer to harvest his own crops
D. Absolute water ownership flowing past an landowner's property
150. A (An owner who has land that adjoins a river has riparian rights to take a reasonable amount for his own use.)
151
151. Of the following, an agent cannot answer any questions regarding:
A. the age of a home
B. the death on a property
C. the employment of a principal
D. someone's race
151. D (Race, creed, and color are not a material fact in a transaction of real estate and cannot be discussed.)
152
152. The net operating income minus debt service equals an income property's:
A. cash flow
B. capital rate
C. annual profit
D. total monthly income
152. A
153
153. Once an escrow has closed, what is the minimum amount of time a broker must keep all records pertaining to that transaction?
A. 2 years
B. 5 years
C. 3 years
D. 1 year
153. C
154
154. If a broker does not disclose license status or company name in an advertisement, this is considered a/an:
A. unethical practice
B. blind ad
C. hidden form
D. Illegal
154. B
155
155. Real estate agent Janice, specializes in selling single family dwellings in Santa Monica. Janice can refuse to accept a property listing for which following reason?
A. All of these
B. The majority of homeowners are minorities in that particular neighborhood
C. The minority status of the resident
D. The owner wishes to price the home $20,000 higher than the most expensive house for sale
155. D (If the agent refused to take a listing due to their race, that agent would be discriminating. An agent refusing to take an overpriced listing is acceptable.)
156
156. Discrimination in the lease or sale of real property based on sex, marital status, religion, color, race or nationality towards a prospective buyer or tenant is:
A. against public policy
B. unenforceable
C. all of these
D. illegal
156. C (Discrimination is illegal, therefore it is unenforceable (not allowed). In addition, it is against public policy and there are penalties for violators on the federal and state level.)
157
157. A California real estate license allows an agent to negotiate real estate transactions in:
A. the county of residence
B. None of these
C. the entire state
D. the specified areas selected and paid for by the agent
157. C
158
158. Which of the following reports would state whether or not a particular property is located in an earthquake zone?
A. Natural Hazard Disclosure
B. Preliminary Title Report
C. The Seller Property Questionnaire
D. Appraisal Report
158. A
159
159. Trust funds received by a broker should be placed into a neutral escrow depository, given to the principal, or placed into the broker's trust account within how many days of receiving it?
A. 3 business days
B. 1 business day
C. 1 calendar week
D. 5 business days
159. A
160
160. When a real estate agent advises homeowners that they should sell their property by informing them that a minority group is moving into their neighborhood and it would be advantageous for them to list and sell their homes, the agent would be guilty of:
A. blockbusting only
B. blockbusting and panic selling
C. neither blockbusting nor panic selling
D. panic selling only
160. B (Panic selling and blockbusting is an agent's intent to persuade a homeowner to sell their property by informing them that a particular population is moving into their neighborhood which may cause negative results such as lowered home values or increased crime rate.)
161
161. Real estate brokers must maintain valid real estate licenses from their agents and keep their licenses filed at the:
A. agent's home office
B. broker's branch office
C. office where the salesperson is working
D. broker's main office
161. D
162
162. When would the United States Attorney General step in to enforce the Federal Open Housing Laws?
A. When the secretary for Housing and Urban Development requests help
B. They cannot get involved. These are overseen by the local governments
C. Noncompliance of the Federal Open Housing Law
D. None of these
162. C (The US Attorney General enforces the Federal Open Housing Law and would step in if there is evidence that noncompliance of the Federal Open Housing Law exists.)
163
163. If a property manager is employed by a real estate company under a written contract and is completing the activities of a property manager on behalf of the brokerage, the property manager must have:
A. a valid real estate license
B. 5 years managerial experience
C. an assistant if the complex has 10+ units
D. none of these
163. A
164
164. The trade name "Realtor" can only be used by the members of which of the following organizations?
A. National Association of Realty Boards
B. American Association of Real Estate
C. National Association of Realtors
D. Real Estate Commission Board of America
164. C
165
165. During a transaction, the buyer's agent and the seller's agent must render a diligent visual inspection of accessible areas of the subject property. This disclosure is referred to as the:
A. Agent Visual Inspection Disclosure
B. None of these
C. Agent Sight Home Inspection
D. Broker Inspection Scope Disclosure
165. A
166
166. How does a brokerage calculate company dollar?
A. Gross income minus staff expenses
B. Gross income minus desk fees
C. Gross income minus commissions
D. Gross income minus operating expenses
166. C
167
167. After signing a purchase agreement, Ericka asked the broker if she could move onto the property prior to the close of escrow. What should the broker do?
A. Say yes
B. Get written permission from the seller to do so
C. Say no
D. Not allowed at all
167. B (The property belongs to the seller until escrow closes. Written permission should be obtained before allowing the new buyer access to the property before escrow closes.)
168
168. A minor is not allowed to enter into an exclusive authorization and right to sell contract with an agent because a minor:
A. would need the consent and approval of the court
B. is incapable of making an adult decision
C. is legally incapable
D. can disaffirm the agreement at their discretion
168. C (It is illegal for a minor to enter into a contract, unless the minor has been legally emancipated.)
169
169. When there is a Buyer-Broker Representation Agreement in place, the agreement:
A. requires an earnest money deposit from the buyer
B. is enforceable only on commercial properties
C. must be in writing
D. need not be in writing
169. C
170
170. If there was no prior agreement and the escrow period is complete and recorded, when must a seller surrender possession of a property to the buyer?
A. Within 30 days after close of escrow
B. Within 5 days after closing escrow
C. Within 48 hours after close of escrow
D. Upon close of escrow
170. D
171
171. A broker may refuse to show a home to a minority buyer who has asked to see it in the following situation:
A. Showing this property to a minority could cause panic in the neighborhood
B. An owner of a single family home that is exempt from the 1968 Fair Housing Law asked their home not to be shown to minorities
C. The agent cannot refuse to show property and must treat everyone the same
D. When the owner specifically states that there are no showings permitted while they are out of town
171. D (If the instructions are not to show the property, the agent must listen to the principal's instruction regarding their home.)
172
172. What should a broker do if they discover that they have an overage in their company trust account and are not certain who the extra monies belong to?
A. Have the overage money remain in the trust account and try to find the owner
B. Transfer the money into their personal business account
C. Open a new and separate trust account and leave it in there for up to 3 years while the owner of the money is located
D. Send the overage to the Real Estate Commissioner as soon as possible
172. A
173
173. A real estate licensee has instructions from their principal to (1) collect a larger deposit from single women than from single men (2) encourage referrals from tenants (who are mostly white) to refer tenants from their circle of friends. Which of these is a violation of the Federal Fair Housing Act?
A. none of them
B. 2
C. both of them
D. 1
173. D (It's illegal to collect varying amount of deposits based upon marital status. The referrals is fine because it does not state the race of the friends.)
174
174. A broker signed an Exclusive Authorization Right to Sell listing with an owner. The broker has earned a commission when:
A. the deed is recorded
B. escrow instructions have been executed
C. the deed is signed
D. both buyer and seller have signed the purchase contract and the buyer has been notified of acceptance
174. D (Once the broker finds a buyer that is ready, willing, and able to purchase the seller's property and is informed of the seller's ácceptance, the broker has earned the commission.)
175
175. Before applying for a real estate license, an applicant must pass Real Estate Principles, Real Estate Practice, and which other real estate course/s?
A. Any one additional qualified elective course
B. Finance
C. Escrow Studies
D. Both Finance and Escrow Studies
175. A (It is mandatory by the BRE for an applicant to have completed Practice, Principles, and one qualified elective course.)
176
176. When representing a principal, a real estate broker will generally act:
A. as a fiduciary
B. by ratification
C. as a dual agent
D. as an ostensible agent
176. A
177
177. When a prospective buyer of real property signs a properly prepared Residential Purchase Agreement which is to be submitted to the seller, this constitutes:
A. a valid contract
B. an offer
C. all of these
D. a binding and enforceable contract
177. B
178
178. A property that has been levied by a court order judgement ordering the sale of the property by a county sheriff or other official to satisfy a debt, which of the following would have taken place?
A. A writ of execution
B. Eminent domain
C. Probate
D. A foreclosure proceeding
178. A (Pg 88 of Principles textbook)
179
179. When is it appropriate for a real estate agent to complete the Real Property Transfer Disclosure Statement on behalf of their principal?
A. Anytime, it's a part of their responsibility
B. Never! Under no circumstance can a real estate agent complete this for their principal
C. When the buyer allows it and puts it in writing
D. When instructed to do so by the principal
179. B (Civil codes prohibit a real estate agent from completing this for the seller.)
180
180. Of the required 45 hours of continuing education, eighteen of those hours must be about:
A. consumer protection
B. commercial agency
C. customer loyalty
D. escrow legalities
180. A
181
181. If a buyer for a property decides to hand deliver an earnest money deposit check to an escrow clerk instead of handing it to their broker, how should the broker handle this situation?
A. Advise the buyer to retrieve the check and deliver it to the broker.
B. Contact escrow immediately and request they send the check to the broker.
C. Have the buyer bring another check for the same amount to the broker with "void" written on it.
D. Reflect it in the broker's files and make a note of the check's disposition.
181. D
182
182. The primary purpose of the Federal Truth in Lending Act was to:
A. regulate federally chartered lending institutions
B. regulate loans on commercial and industrial properties
C. require lenders and creditors to disclose complete and thorough credit terms to prospective borrowers
D. limit costs and expenses for borrowers seeking loans on 1-4 family dwelling units
182. C
183
183. Although a real estate agent is employed by the broker as an independent contractor, the broker should still provide the agent with:
A. worker's compensation coverage
B. leads on a daily basis
C. a life insurance policy
D. automobile insurance
183. A
