Simulated Exam 2 Flashcards
(150 cards)
1
Q
The property taxes for a condominium unit are paid by the:
A. Board of governors.
B. Homeowners association (HOA).
C. Owner of the condominium.
D. Subdividers who constructed the property.
A
C. In the condominium form of ownership, each individual unit is owned separately and the taxes are paid by the individual owner.
2
Q
Which of the following action does not constitute constructive evection under a lease?
A. The owner fails to make necessary repairs to the property.
B. The owner makes extensive and unnecessary changes to the building, making it no longer usable for it original purpose.
C. The owner shows the property to a new prospective tenant and enters into lease negotiations with the new tenant.
D. The owner evicts the tenant after proper service of a three day notice to quit.
A
D. A constructive eviction occurs when the landlord substantially interferes with the tenants use and enjoyment of the premises during the term of a tenancy, and the tenant vacates the premises due to the interference.
3
Q
What are the three steps of the agency disclosure in proper chronological order?
A. Elect, confirm, disclose.
B. Confirm, elect, disclose.
C. Disclose, confirm, disclose.
D. Disclose, elect, confirm.
A
D. There are three chronological steps of the agency law disclosure. Disclosure of the agency law is the first step. Then the agent elects the role they will play in the relationship. Finally, the agent confirms that role with each of the participants in the transaction.
4
Q
A broker who simultaneously represents the best interests of both opposing parties in a transaction is known as a(n):
A. Finder.
B. Dual agent.
C. Subagent.
D. Unlawful agent.
A
B. A dual agent represents both principles in a transaction, buyer/seller or lessee/lessor.
5
Q
Barnard made an offer to buy a vacant residence. The offer was excepted by the seller. Prior to the close of escrow, barnard requested permission from the broker to enter and make minor repairs to the house. Which of the following is true?
A. The broker is to get a signed rental agreement from barnard before allowing him to enter.
B. Barnard doesn’t need permission from anyone since he is the equitable owner of the property.
C. The broker needs to get the sellers permission.
D. Barnard may only enter to conduct repairs that correct material defects in the property.
A
C. A seller needs to provide approval to a buyer who intends to enter a vacant house prior to the close of escrow oh. Until escrow closes, the property still belongs to the seller. When the buyer is given permission to enter and make repairs, it creates liability if something happens prior to the close of escrow, such as an injury on the property.
6
Q
Broker Sarah delivered an offer to purchase real property to owner Martha. Owner Martha asked for 24 hours to consider the offer. Later that same day, broker Sarah received two additional offers through the other brokers. Broker Sarah believe the owner will reject all three offers. In order to comply with the law, broker Sarah is to:
A. Hold the new offers until owner Martha has made a decision on the first offer, then present the other offers.
B. Present the two additional offers in the order they arrived.
C. Simultaneously present the two additional offers to owner Martha as soon as possible.
D. Refused to receive the offers until owner Martha decides not to except the original offer.
A
C. The decision regarding any offer is for the seller to make. The broker in this question is required to notify the seller and present both additional offers as soon as possible.
7
Q
What contributes to the value of a well-planned neighborhood versus a poorly planned neighborhood?
A. Non-conforming improvements.
B. Inconsistent improvements.
C. Improper orientation.
D. Conformity of size and style.
A
D. A well-planned neighborhood will contain residences with a high degree of conformity, similar size, quality and amenities. This is a hallmark of modern subdivisions, especially those with recorded conditions, covenants and restrictions (CC&Rs) and a homeowners association (HOA) to enforce these requirements.
8
Q
And appraiser reviews the addition of an amenity to an apartment building under which appraisal principle?
A. Substitution.
B. Contribution.
C. Anticipation.
D. Progression.
A
B. The principle of contribution states that improvements to property are only worth what they add to value, not what they cost to construct. Most improvements contribute less than their cost. The alternative answer choices are all fellow principles of value. Substitution is the basic principle of appraisal. Anticipation has to do with the future. Progression represents under improved properties within a neighborhood.
9
Q
What type of depreciation is the most challenging to correct?
A. Functional.
B. Economic obsolescence.
C. Physical.
D. Where in tear.
A
B. Economic obsolescence is the most challenging type of depreciation to correct. Economic obsolescence exists off the property and it is out of the direct control of the property owner. Examples of economic obsolescence include reduced employment opportunities in the area or changed aircraft landing patterns at a local airport. Physical obsolescence and wear and tear are one in the same. Functional obsolescence can require replacing outdated equipment.
10
Q
Return of an investors investment is provided for through:
A. Sinking funds.
B. Depreciation.
C. A reserve for replacement.
D. Profit.
A
B. Depreciation, as an income tax deduction, is the means by which investors have their investment returned.
11
Q
The maximum number of properties that can be covered by a trust deed without a blanket encumbrance is:
A. Three.
B. Two.
C. One.
D. There is no limit.
A
C. Only one property may be covered by a single trust deed without a blanket encumbrance. Alternatively, a blanket trust deed covers more than one property.
12
Q
Heather, a single mother, is able to get down payment assistance as well as a below market rate of interest on her mortgage. What type of mortgage did she receive?
A. CalVet.
B. US department of Veterans Affairs (VA)-guaranteed loan
C. Federal housing administration (FHA)-insured loan.
D. California housing finance an agency(CalHFA).
A
D. The California housing financing agency (CalHFA) program offers first time homebuyers special consideration. CalVet is not a mortgage program, and US department of Veterans Affairs and Federal housing administration are insured and guaranteed loans arranged through mortgage brokers and banks.
13
Q
Deficiency judgments can only be granted when:
A. A property has been judicially forclosed.
B. The value of the property equals or exceeds the underlined balance due on the loan.
C. The mortgage is classified as a purchase money mortgage.
D. A property has been foreclosed under a trustees sale.
A
A. Only judicial foreclosure’s handled through the courts can demand a deficiency judgment if the price received for a property is less than the outstanding mortgage balance.
14
Q
Sally applied for a real estate loan. The lender can lawfully require her to answer questions in regards to her:
A. Marital status.
B. Race.
C. Gender.
D. Income.
A
D. A lender cannot ask a borrower about marital status, gender or religion under discrimination law.
15
Q
A husband nominates his wife to manage his will. Thus, she will function as an:
A. Executrix.
B. Administratrix.
C. Administrator.
D. Executor.
A
A. The term for manager of the will is executor. As the wife is managing the will, the correct answer is the feminine form of this word: executrix.
16
Q
If a buyer and seller decided to rescind a deal after the deed has been recorded, the buyer is to:
A. Record a deed of reconveyance.
B. Return the deed to the seller in exchange for consideration.
C. Record a cancellation of the transaction.
D. Provide a new grant deed to the seller.
A
D. Once the deed is recorded, a new deed is needed to transfer the property to anyone else.
17
Q
Broker fees deposited with the broker before they are earned are called:
A. Kickbacks.
B. Advance fees.
C. Referral fees.
D. Duplicate charges.
A
B. Advance fees are monies received before they are earned. Note that answer choice A. Kickbacks is illegal. Choices that are illegal or unethical will only be right if they are expressed as such.
18
Q
An exception in a grant deed:
A. Is the same as a reservation in a grant deed.
B. Voids the deed entirely.
C. Excludes part of the property from the grant.
D. Makes certain provisions of the deed voidable.
A
C. Grant deeds transfer title to property. When an exception is stated, a portion of the property is not transferred with the grant deed. For example, consider an easement being retained by the owner, or a specific space such as highway frontage or beach frontage to be held for other purposes.
19
Q
To be valid, restrictions in a grant deed need to:
A. Be contained in a deed or a written agreement.
B. Be less restrictive than existing zoning requirements.
C. Run with the land.
D. Be posted on a sign in a conspicuous spot on the property.
A
A. Restrictions, such as conditions, covenants and restrictions (CC&Rs) for a subdivision need to be recorded as a statement on the deed or as a reference to another recorded document such as the subdivision restrictions.
20
Q
The maximum commission a loan broker may charge to negotiate an $8000 hard money first trust deed that is due in two years is:
A. $400.
B. $500.
C. $1000.
D. $1500.
A
A. The commission for hard money lender‘s is set by law within the business and professions code. The size of the loan, the length of the loan term and whether it is a first trust deed or junior mortgage affect the commission that may be charged. A commission on first trust deed with the term of less than three years is limited to 5%. The commission is limited to 10% for those with the term of three years or longer. For Junior trust deeds, the commission limits are 5% for a term of less than two years, 10% for a term of less than three years, and 15% for three years or longer.
21
Q
A seller carryback note is classified as a ________ lien.
A. Specific
B. General
C. Involuntary
D. Equitable.
A
A. As a specific lien , a seller carryback note will stipulate the specific property that is securing the loan. If this is an income tax lien, it will be attached to everything the person owns and be classified as a general lien.
22
Q
The real estate commissioners rules:
A. Are administrative agency regulations.
B. Have the effect of law.
C. Both a. and b.
D. Neither a. nor b.
A
D. The real estate commissioner overseas and administers real estate law, the subdivided land law, and the regulations of the real estate commissioner. Note these elements are categorized as laws and regulations, not rules, which carry less effect then either regulations or laws.
23
Q
A motivated seller in a seller’s market is least likely to except an offer contingent on the:
A. Buyer obtaining an 80% loan within 30 days. B. Buyers approval of the preliminary title report.
C. Sale of the buyers current residence.
D. Results of a termite inspection.
A
C. The least favorable contingency to a seller in a sellers market is the sale of the buyers home, which could create lengthy delays in the closing of the subject transaction. The alternatives are all common contingencies in a sale.
24
Q
Seller Sally lists her property with agent Fred and receives an offer. Agent Fred convinces seller Sally to except the offer by verbally promising her he will find her an ideal replacement home before the close of escrow. Agent Fred is unable to find an acceptable replacement home for seller Sally before the close of escrow. Which of the following is most correct?
A. Seller Sally can recover damages against agent Fred in a civil lawsuit as a result of her reliance on his false promise.
B. Seller Sally has no legal recourse against the agent Fred since the promise wasn’t in writing. C. Seller Sally may cancel the sale of her home without liability.
D. Seller Sally can bring a criminal action against agent Fred for fraud.
A
A. Seller sally may Sue agent Fred in a civil suit for the false promise made by agent Fred. The alternative answer choices all contain weaknesses which prevent them from being the best answer selection. Canceling the sale will create a possible liability to the buyer who had no part in Fred’s promise. Criminal action for fraud is challenging and has little benefit for Sally.
25
A flood hazard report will note that flooding is frequent when it is described as:
A. A 50 year flood zone.
B. A 100 year flood zone.
C. Occurring at least twice every 10 years.
D. Occurring no less than three times every 20 years.
C. Twice in 10 years is the critical number for determining the frequency of floods.
26
Valid contracts require all of the following, except:
A. Written documentation.
B. Offer and exceptance.
C. Legal object.
D. Consideration.
A. A contract need not be in writing to be valid. There are four conditions for the formation of a valid contract. The missing condition that is not provided as an answer selection is capable parties.
27
```
If present at the formation of a contract, which of the following does not make a contract voidable?
A. Fraud.
B. Duress.
C. Undue influence.
D. Illegal purpose.
```
D. An illegal purpose makes the contract inherently void, not voidable purely at the discretion of the parties. Alternatively, voidable contract is one that can be enforced by the party who has the option to perform for not.
28
If a lease requires the tenant to pay certain expenses such as taxes, maintenance or insurance in addition to the rent, the lease is classified as a(n):
A. Gross lease.
B. Net lease.
C. Percentage lease.
D. Estate for Will.
B. A net lease causes the lessee (tenant) to pay certain expenses such as taxes and maintenance in addition to the rent. This question refers to how the rent is calculated on a commercial property. There are three basic forms: a gross lease requires the lesser (landlord) to pay all expenses. In a percentage lease arrangement, the rental amount is set as a percent of the sales of the business.
29
When rent is computed based on the gross sales of the business occupying the property, the lease is classified as a(n):
A. Valid lease.
B. Voidable lease.
C. Net lease.
D. Percentage lease.
D. A percentage lease establishes the rental charge based on the sales of the business tenant.
30
On which type of listing contract is a broker required to state the amount of their commission is negotiable and not fixed by law?
A. Multi family residential listing agreements.
B. Retail commercial center listing agreements. C. Single use industrial property listing agreement.
D. 1 to 4 unit residential property listing agreements.
D. On listings for 1 to 4 unit residential properties, the broker is required to state that commission rates are negotiable and not fixed by law. This is a public policy requirement under federal law written to protect the less experienced buyer. The property type is the way this targeted group of buyers is distinguished.
31
If a 16-year-old emancipated minor wishes to sell real property, the broker mat:
A. Not except the listing.
B. Except the listing.
C. Except the listing only with a guarantee from an adult.
D. Except the listing, but it will be avoidable.
B. The broker may except the listing of an emancipated minor. A 16-year-old emancipated minor maybe treated as an adult who has the right to buy and sell real estate.
32
If a strip of land is washed away by flood, this action is known as: A. Alluvium.
B. Accretion.
C. Avulsion.
D. Reversion.
C. Answer choice is A, B, and C are all terms related to riparian rights.
33
Which of these is a direct building cost?
A. Building permits.
B. Finance charges.
C. Lumber.
D. Legal services.
C. Direct building costs are the construction cost incurred for the labor and materials. All other expenses are indirect.
34
A residence that has 6”x 6” posts set 4 feet apart instead of 2”x 4” studs is an example of _____________ construction.
A. Post and beam
B. Modular
C. Native American
D. Unsafe
A. Post and beam construction is the correct answer choice. Note the use of the word “posts” in the question as it matches the correct answer choice.
35
Which of the following is not a soil condition?
A. Alkaline.
B. Adobe.
C. Deciduous.
D. Expansive.
C. Deciduous refers to trees that lose their leaves in the winter, and is this not a soil condition.
36
What is a “gore”?
A. A triangular shaped parcel of land.
B. A parcel that cannot be developed.
C. Stigmatized property on which a murder was committed.
D. Damaged property.
A. A “gore” is a triangular piece of land.
37
A broker provides services to both a buyer and a seller in a transaction without disclosing their dual agency status. This is an example of:
A. Deniable agency.
B. Ostensible agency.
C. Voidable agency.
D. Ratified agency.
B. Without disclosure of the dual agency, the actions of the agent will create an ostensible agency relationship due to the appearance of acting as agent.
38
Which of these actions does not create an agency relationship?
A. Subordination.
B. Implication.
C. Ratification.
D. Verbal agreement.
A. Subordination is a legal matter, to induce someone to form an illegal act such as perjury. It does not create an agency relationship. The alternative answer selections are all possible ways to create an agency relationship.
39
A listing broker sells an office building to a syndicate of which of the broker is a member without informing the seller of this interest. Before closing, the seller discovers the brokers interest and refuses to sell. What would happen in a civil suit to collect a commission?
A. The case would be transferred to the real estate commissioner.
B. No commission would be due.
C. The broker would be awarded their full commission.
D. The court would demand a mitigation hearing.
B. The broker’s failure to disclose their interest in the syndication allows the seller to deny the commission to the broker.
40
Which of the following is an illegal activity for a broker under agency law?
A. Accepting commissions from both the buyer and the seller.
B. Acting as an escrow.
C. Selling their own property without disclosing their license status.
D. Depositing additional personal funds into a clients trust account.
D. Depositing personal funds into a clients trust account is an example of improper commingling
41
An agency relationship in real estate is terminated in multiple ways. Which of these is not likely to be the cause of termination of an agency relationship?
A. The incapacity or death of either the seller or broker.
B. Revocation of the agency by the owner.
C. Destruction of the property.
D. Estoppel.
D. Estoppel is a legal theory barring a person from later asserting or denying a condition based on the person’s previous acts or statements, and thus will not terminate an agency relationship. The alternative answer selections are ways in which an agency relationship is terminated.
42
A broker who fails to promptly disclose their dual agency status is subject to:
A. A $10,000 penalty.
B. Liability for their clients many losses.
C. Disciplinary action by the internal revenue service
D. Frequent auditing by the Federal Bureau of investigation.
B. Failure to disclose a dual agency status can lead to liability for any losses experienced by the client.
43
In which appraisal approach to value would the value for the land be calculated separately?
A. Capitalization.
B. Gross rent multiplier.
C. Market comparison
D. Cost.
D. In the cost approach, the cost of constructing the property improvements and the cost of the land are handled separately and then combined to arrive at a final value for the complete property. The two other appraisal approaches are: sales comparison, comparing the subject property to similar properties recently sold, and the income approach, developing a properties value by comparing the income generated by similar properties that have recently sold to the income generated by the subject property.
44
To determine the accrued depreciation of a property, a buyers best resource is a(n):
A. County recorder representative.
B. Accountant.
C. Appraiser.
D. Real estate broker.
C. And appraiser is the individual who is most helpful in estimating accrued depreciation.
45
An important economic factor in real estate is:
A. It’s beneficial use.
B. Whether the property is mobile or immobile. C. It’s permanence.
D. The size of the structure.
A. The beneficial use of a property is the best choice as an economic factor. Of the alternative answer choices, B and C are unusual since real estate is considered a immobile (versus personal property which is mobile). Answer selection D has merit, yet if the building is empty or of little practical use, the size of the structure itself is not an important economic factor for the property.
46
A lender must notify a borrower when a final/balloon payment is due:
A. 90 to 150 days prior to the due date.
B. 30 to 90 days prior to the due date.
C. Four weeks prior to the due date.
D. Six months prior to the due date.
A. The required notice for a final/balloon payment due date is 3 to 5 months (90 to 150 days) prior to the due date. The nature of a final/balloon payment, which can be quite large compared to the preceding regular monthly payments, necessitates a significant amount of advance notice.
47
Acquisition is the opposite of:
A. Ad Valorem.
B. Amortization.
C. Alienation.
D. Avulsion.
C. Alienation is a transfer of property, such as a sale. Thus, it is the opposite of acquisition, which is a purchase of a property.
48
A properties cost basis is most affected by an owners:
A. Debt service.
B. Interest expense.
C. Costs of operation.
D. Costs of improvements.
D. Operating costs, interest expenses and debt service have no effect on a properties cost basis. The cost basis equals the purchase price plus improvements minus depreciation.
49
When the administrator of an estate sells a parcel:
A. It needs to be sold at public auction.
B. It can only be sold “as is”.
C. Court approval is required.
D. The sale cannot legally involve a real estate broker.
C. A sale from an estate involves the court and therefore requires court approval.
50
When a broker employs a sales person, the broker needs to:
A. Provide annual pay increases in an amount no less than 3%.
B. Exercise reasonable supervision over the activities performed by the agent.
C. Establish a retirement program for the agent.
D. Provide minimal health and dental insurance coverage for the agent.
B. The broker needs to exercise reasonable supervision over their sales staff, including independent contractors. Real estate sales persons are classified as employees for legal purposes and independent contractors for income tax purposes. Answer selection A does not apply and C and D are rare exceptions.
51
```
Real estate brokers are required to have written employment contracts with:
A. All clerical staff they employ.
B. Non-licensees they employ.
C. Sales persons they employ.
D. All of the above.
```
C. Written contracts are required to properly document a brokers employment of a sales person. The contract will state the duties of the broker and agent and who is responsible for a variety of issues such as risk management maintenance, insurance requirements and the split of the commissions.
52
A real estate broker is subject to disciplinary action from the California Bureau of real estate if they:
A. Extract secret profits that are not disclosed. B. Commingle trust funds.
C. Fail to supervise the sales people they employ.
D. Any of the above.
D. A broker may be disciplined by the California Bureau of real estate for secret profits, commingling of client funds and failing to supervise their sales staff.
53
Without being licensed as an escrow office, a broker may handle escrow activities when they:
A. Represent the buyer.
B. Represent the seller.
C. Act as the principal.
D. Are not otherwise involved in a transaction.
D. The broker needs to be involved in the transaction representing one of the principles for themselves in order to act as the escrow officer.
54
A licensed real estate sales person is primarily responsible to:
A. The buyer.
B. The seller.
C. The principal who pays the commission.
D. Their employing broker.
D. The sales person is an employee of the broker and primarily responsible to the broker. The broker represents the principal.
55
A buyer is obligated to disclose to the seller:
A. That the listing price is too low.
B. That the seller is mistaken regarding their representations about the zoning of the property.
C. Both A. and B.
D. Neither A. and B.
D. The buyer has no obligation to disclose facts to the seller.
56
Which of the following does not affect real estate values in subsequent years?
A. Land use controls.
B. Monetary policy.
C. Construction techniques.
D. The purchase price paid for property.
D. Purchase price previously paid for a property has no bearing on the property future value.
57
Before soliciting business for a brokerage office operating under a fictitious business name, the broker is not required to:
A. Record the fictitious name with the recorders office in the county where their main office is located.
B. Publish the “doing business as” in a newspaper of general circulation.
C. Have a brokers license issued by the California Bureau of real estate with that name. D. Publish an office policy manual under the fictitious business name.
D. In order to establish a fictitious business name, a broker is required to record the name with the County recorder, publish the name in a newspaper of general circulation and have a brokers license issued by the CalBRE in that name.
58
Appraiser licensing in California is controlled by what entity?
A. The California Bureau of real estate
B. The California Bureau of real estate appraisers.
C. The department of business oversight.
D. The California department of insurance.
B. California Bureau of real estate appraisers is the entity that controls appraiser licensing in California. The name should make this an easy point.
59
When an agent modifies a document after it is signed by one or both of the parties, this is referred to as:
A. Correction.
B. Defacing.
C. Notarization.
D. Amanuensis.
B. Defacing occurs when a document is improperly modified on its face, usually by striking copy and interlineation, after it is signed by one or both parties.
60
A broker receives a full price offer on a house they are listing. Before they present the offer to the seller, another broker brings in an all cash offer for $5000 less. The listing broker is to:
A. Present both offers at the same time.
B. Refuse to present the second offer.
C. Tell the other broker the property has been sold.
D. Present the first offer in the morning and the second offer in the evening.
A. The broker’s fiduciary duty owed to their client requires that all offers be presented so that the seller is allowed to make a decision as to which is best for them.
61
A prospective buyer gave their broker a personal check for $1000 payable to the seller along with an offer to buy the property. The buyer told the broker the check was not to be cashed until the end of the month. Which of the following is correct?
A. The broker is to refuse to except the check. B. The broker is to except the check, but deposited into their trust account within 24 hours.
C. The broker needs to deliver the check either to the seller or escrow upon acceptance.
D. The broker may hold the check, but needs to tell the seller it is being held I’m cashed before the seller excepts the offer.
D. Proper disclosure practice requires that the seller be aware of the nature and condition of the deposit. The sellers acceptance of the offer, in part, is an acceptance of the condition of the deposit. This is a material fact regarding the offer.
62
When comparing a small house with a large house of similar quality, which of the following is true?
A. A small house costs more per square foot.
B. A large house costs more per square foot.
C. Large homes sell better.
D. Size doesn’t matter.
A. The overall value of the property includes the land it is situated on. Thus, when the house is smaller, the price per square foot will be higher since the cost of the underlying land is divided into few were square feet.
63
When a comparable sale used in an appraisal was not an arms length transaction, this affects the:
A. Demand for the subject property.
B. Value of the subject property.
C. Highest and best use of the subject property.
D. Scarcity of the subject property.
And arms length transaction represents the fair market value of a property uninfluenced by external sources, such as business or familial relations. When a comparable is not arms length, it’s sale price may be higher or lower than market and this will affect the subject accordingly.
64
While appraising a single family residence, an appraiser observes cracks in the walls and floor. In response, the appraiser best recommends which of the following?
A. A structural pest control report.
B. A soil engineers report.
C. And environmental impact report
D. A home warranty policy.
B. The cracks in walls or floors are more likely to be a soil stability concern rather than a pest issue, and thus our best addressed with a soil engineers report. The environmental impact report will have no value nor will the home warranty insurance.
65
Which of the following is not one of the four important elements of value:
A. Transferability.
B. Appreciation.
C. Utility.
D. Demand.
B. Appreciation is an increase in property value, not an element of value. The four elements of value are: demand, utility, scarcity and transferability. (DUST)
66
A trustor is not considered to be in default when they:
A. Fail to upgrade their property in anticipation of future trends.
B. Commit waste to a property.
C. Are delinquent in their property taxes.
D. Failed to maintain property insurance.
A. Committing waste to a property, failing to properly maintain the property or being delinquent in the payment of property taxes is considered a default
67
The maker of a negotiable instrument is able to defend against a holder in due course in the event of:
A. Forgery.
B. Incapacity.
C. Both a. and b.
D. Neither a. nor b.
C. Both forgery and incapacity are a suitable defense against a holder in due course. A holder in due course is one who has taken note, check or bill of exchange in due course: 1. Before it was overdue; 2. In good faith and fair value; and 3. Without knowledge that it has been previously dishonored and without notice of any defect at the time it was negotiated.
68
If there is no specific closing date named in the escrow instructions, escrow is to close:
A. Within a reasonable period of time.
B. Within 30 days.
C. Within 60 days.
D. Within 90 days.
A. An escrow is to close within a reasonable time. In some instances this maybe shorter than 30 days or longer than 90, and thus there is no specific time prescribed. A prudent person is able to adjust the closing of escrow in accordance with a specific type of property, location or market condition.
69
The closing statements the buyer and seller get from escrow:
A. Are always different from one another.
B. Are acknowledge before a notary public.
C. Are always identical to one another.
D. Are approved by the title company.
A. The buyers and sellers closing statements will always be different. The two principles will have opposite positions on a number of entries. For example, the sales price is a credit to the seller and a debit for the buyer.
70
Department of housing and urban development (HUD) advertising guidelines are violated by which of these phrases:
A. Seeking a female roommate.
B. Good neighborhood.
C. Retirees dream home.
D. Great location.
C. The suggestion that a property is more suitable to one group of people, retirees, is viewed as discrimination. Alternatively, it is acceptable to have requirements for a roommate and state an opinion such as a good neighborhood.
71
To be eligible for a California real estate agent license, and applicant does not need to:
A. Pass the qualifying state licensing exam.
B. Be honest and truthful.
C. Be at least 18 years old.
D. Have at least two years of real estate related experience.
D. The requirements for a real estate license include passing the state exam, being at least 18 years of age, and being honest and truthful.
72
A buyer of a single-family residence is entitled to certification for everything except:
A. The home is in compliance with smoke detector laws.
B. The home has properly functioning solar panels installed on the roof.
C. The home is in compliance with carbon monoxide gas detector laws.
D. The water heater is properly braced, anchored and strapped.
B. Residential transfer requirements include compliance with smoke detector and carbon monoxide gas detector laws, as well as water heater bracing, anchoring or strapping.
73
A sellers broker receives and presents a purchase offer that is excepted by the seller. The seller then requests the broker give them the buyers deposit check. The broker needs to:
A. First deposit the check into the brokers trust account before getting the deposit funds to the seller.
B. Write a counter offer requesting a release of the deposit funds to the seller.
C. Obtain the written consent of the buyer before releasing the check to the seller.
D. Obtain written in the knowledge meant from the seller they have received the five.
C. The broker must seek the written consent from the buyer before releasing the deposit check to the seller. As the offer has already been excepted, a counter offer is not possible.
74
When a real estate licensee misrepresents the property to a buyer, they are least likely to be subject to:
A. Disciplinary action by the California Secretary of State.
B. Civil action.
C. Criminal action.
D. Disciplinary action by the California Bureau of real estate.
A. When the sales person is found guilty of misrepresenting the property to the buyer, they (and their broker) are subject to disciplinary and civil action. There may also be criminal action if the misrepresentation rises to the level of fraud or there is sufficient harm. They are not likely subject to action from the California Secretary of State.
75
Negative physical elements of a property such as mold or disclosed in the:
A. Transfer disclosure statement.
B. Listing agreement.
C. Advertisements referencing property.
D. Preliminary title report.
A. The transfer disclosure statement (TDS) discloses the physical elements of a property, both positive and negative. The alternative answer selections are easily refused, no advertising speaks to specific negative, a preliminary title report has no way to recognize mold unless a document or recorded with the county, and there is a little likelihood of a comment on the listing (employment) contract.
76
A subdivider needs to get a copy of the real estate commissioners public report to:
A. Anyone who is likely to purchase one or more lots.
B. Anyone upon request.
C. Only bona fide purchasers who have signed a purchase contract.
D. The sales people they employ.
B. A public report issued by the real estate commissioner has to be made available to anyone who requested it. The report contains all material facts regarding the subdivision, including financial matters and items of record such as CC&Rs.
77
When a broker wants to store documents electronically, the storage method may not allow the final documents to be altered. What method of electronic document storage is required by the California Bureau of real estate?
A. Disk operating system (DOS)
B. Safe now, always and keep electronic (SNAKE).
C. Right once read many(WORM).
D. Random access memory(RAM).
C. To store documents electronically, the method of storage needs to allow for the document to be written once and read many times (WORM). Answer selections A, B and D are not related to document storage.
78
When taking a listing, it is appropriate for the broker to:
A. Take the listing at whatever price the owner requires without discussion.
B. Raise the owners asking price to include the commission and an additional amount for negotiation.
C. Take a listing at a price that is significantly higher than suggested by a competitor.
D. Ask questions to determine the sellers reason for listing.
D. Asking questions as to why the seller wants to list their property is always appropriate. The alternative answers will not serve the client well and do not fulfill the brokers fiduciary responsibility to their client.
79
Brokerage fee provisions which may be included in a sellers exclusive right to sell listing agreement include:
A. A fee on any sale provision.
B. A termination provision.
C. A safety clause.
D. Any of the above.
D. All of these answer selections are appropriate and enforceable clauses to include in a sellers exclusive listing agreement.
80
A brokers fiduciary obligation to protect a sellers confidential information continues:
A. After the term of the listing agreement.
B. For the term of the listing agreement.
C. Until the close of escrow.
D. For two years after the close of escrow.
A. Confidential financial information needs to be protected indefinitely.
81
The sale of real estate under a conditional installment sale gives the borrower (vendee):
A. Possession of the property.
B. A freehold estate.
C. And estate of inheritance.
D. And estate for years.
A. The vendees right under an installment sale, possession of the property, are called an equitable interest. None of the other answer choices are conferred under an installment sale.
82
A listing contract contains a clause stating that the seller agrees to pay a commission in exchange for the brokers agreement to use diligence in procuring a buyer. This clause:
A. Is redundant and unenforceable.
B. Is necessary for the creation of a unilateral contract.
C. Is important for the creation of a bilateral contract.
D. Requires the broker to advertise the property in numerous formats.
C. This is a promise for a promise, the basis of any bilateral contract.
83
For a buyer‘s broker to have the ability to negotiate their fee, the buyer’s broker needs to enter into an employment agreement with their buyer, called and:
A. Buyers listing.
B. Affiliated business arrangement.
C. Cooperating broker arrangement.
D. Controlled business arrangement.
A. A buyer’s listing is the appropriate contract for the purpose of negotiating fees as the buyer’s broker.
84
A landlord is required to provide a copy of the written lease to the tenant within:
A. One week.
B. 10 calendar days.
C. 10 business days.
D. 15 calendar days.
D. A landlord is required to provide a signed copy of the lease to the tenant within 15 calendar days of its execution by the tenant.
85
An individual unit in a multi story rental apartment complex that occupies only one floor is known as:
A. Penthouse.
B. Studio.
C. Flat.
D. Duplex.
C. A flat best describes an individual unit in a multi story apartment building. Answer selection D. Duplex is a two-story apartment in a multi story residential building. Answer selection A. Penthouse has to be the top floor and is thus to limited. Answer selection B. Studio is a specific style of apartment.
86
Which of the following pieces of lumber contains exactly one board foot?
A. 6“ x 2“ x 12“
B. 6“ x 1“ x 12“
C. 6“ x 6“ x 6“
D. 6“ x 1‘ x 1‘
A. One board foot is the volume of a piece of lumber that measures 12“ x 12“ x 1“ only answer selection A contains the same amount of volume.
87
Blake sold his home to Frank and remained in possession and negotiated a two-year lease back. Frank did not record the deed. During this two year period, Blake sold the home to Sam who then recorded the deed. Who owns the home?
A. Sam, because he recorded his deed.
B. Blake, because he still has possession of the property.
C. Blake, because both sales were fraudulent. D. Frank, because he received the first deed.
A. Sam is the owner since he recorded the deed. Constructive notice can be either the recorded deed or possession. Since Blake retained possession, Sam had no way of knowing that Frank previously purchased the house. This makes Sam a bona fide buyer.
88
Real estate investments are generally funded through a combination of:
A. Mortgage and investor funds.
B. The supply and demand of investor funds.
C. Liquid and non-liquid investment funds.
D. Guaranteed returns and speculative investments.
A. Most real estate investments are funded by both borrowed monies, mortgages and cash down payments, investor funds.
89
A commercial development consisting of a single line of storefronts constructed a long and busy thoroughfare is described as a(n):
A. Neighborhood center.
B. Small mall.
C. Strip commercial building.
D. Big box store.
C. A single line of stores can be seen as a strip commercial building. A neighborhood center includes a supermarket and possibly another anchor such as a drugstore, that is not necessarily organized in a line. A small mall and big box store are similarly not organized in a line.
90
Property is best defined as:
A. Things which buyers and sellers own.
B. Only real property.
C. Rights or interests which a person has in the thing owned.
D. Only personal property.
C. Both personal and real property are owned and convey to the owner certain rights and interests.
91
Conrad wills the family estate to Michael with the provision that if Conrad were to divorce in the future, title will revert back to Conrad. This is an example of a(n):
A. Covenant
B. Restriction
C. Condition precident.
D. Condition subsequent.
D. A future divorce is a condition subsequent. The two conditions, precedent and subsequent, refer to actions that alienate title. A condition precedent is how one gains title unless and until completion of a specified act or event; a condition subsequent is how one loses title, the failure or non performance of the condition.
92
A property owner has been doing car repairs on their driveway in violation of the conditions, covenants and restrictions of their subdivision. The homeowners association files a lawsuit and receives a court order requiring the owner to stop. The court order is called a(n):
A. Attachment lien.
B. Lid pendants
C. Injunction.
D. Mechanics lien.
C. A court ordered injunction requires someone to cease and desist an inappropriate activity. Both choices A. Attachment lien and D. Mechanics lien are liens that state a specific amount of money, which is not being sought by the HOA in this scenario. Answer selection B. Lis pendent is recorded document to deliver instruction notice of a pending lawsuit.
93
A seller of the property tells their broker that the house is connected to the sewer. The broker relays this information to a buyer, he later find that the house has a septic system in need of repair. The buyer would sue:
A. The broker and the seller.
B. No one, as they should have kept.
C. The broker only.
D. The owner only.
A. When a failure to disclose a material fact is later discovered, the appropriate action by the buyer is to sue both the seller and broker.
94
A broker acting as an agent for a principal has as much authority as:
A. The principal actually or ostensibly confers upon them.
B. An attorney in fact.
C. The broker chooses to take.
D. They choose to except as limited by the statute of fraud‘s.
A. It is the client who grants the broker the authority to act on the clients behalf. The authority granted by the client is limited to what they actually or ostensibly confer to the broker.
95
A real estate agent is obligated to communicate any offer to the principal:
A. Unless the offer is patently frivolous or the agent is acting on written instructions of their seller.
B. Only if it is in writing.
C. Whether the offer is verbal or written until the agency is terminated.
D. Unless the offer is terminated.
A. The agents fiduciary duty requires them to present every offer received, allowing the seller to decide how to respond. However, if the offer is clearly frivolous or the agent receives specific instructions from their seller, the agent is not required to submit the offer.
96
All of the following statements are true concerning an in house sale, except:
A. The listing broker can buy the property themselves.
B. The listing broker can act as an agent for the seller only.
C. The listing broker can act as an agent for the buyer only.
D. The listing broker can act as a dual agent.
C. An in house sale is one where the listing is sold by an agent within the same firm. Since the listing broker represented the seller, the only condition that cannot occur is for the broker to represent only the buyer.
97
When showing a listed property to potential buyers, the listing broker is required to disclose:
A. All known material facts about the property. B. Anything they have been authorized by the seller to disclose.
C. Any facts about the sellers motivation that might induce the buyer to make an offer.
D. Anything that comes to mind at the time.
A. The sellers listing broker is required to disclose all material facts about the property. The listing broker has a general duty to the buyer to be fair and honest.
98
Before closing, a buyer asks the broker for permission to enter the vacant house they will be purchasing in order to paint the kitchen. The broker is to:
A. Seek approval from the seller.
B. Ask the buyer to deposit the balance of their down payment into escrow first.
C. Give the buyer access and approval but supervise their entry.
D. Refuse to give the buyer access and approval.
A. The seller, being the legal owner of the property, needs to decide whether to allow the buyer to make repairs to the property prior to the close of escrow. Allowing the buyer to enter the property prior to the close of escrow present to primary concerns: liability for something that goes wrong when the buyer is on the property, such as personal injury or damage to the property, and the possibility that escrow may fail to close after the buyer has altered the property.
99
“Agency” includes relationships between licensed sales agents and their brokers and:
A. Brokers and members of the public.
B. Finders and their brokers or principles.
C. Escrow officers.
D. Both A. And B.
D. Agency is the relationship between a licensed agent and principles as well as other brokers and finders.
100
Which of the following does not terminate an agency relationship?
A. Disttuction of the subject property.
B. Death or incapacity of the agent or principal.
C. Refusal to perform by the agent or principal.
D. completion of the purpose of the employment.
C. An agency relationship cannot be terminated by a refusal to perform.
101
A lessee rents an apartment from May 1 to July 1 of the same year. The Lessee’s tenancy is this classified as a(n):
A. Periodic tenancy.
B. Estate at sufferance.
C. Estate at will.
D. Estate for years.
D. The estate for years need not be an extended period of time or even a full year. However, it must be for a specific period of time, as occurs under a lease.
102
A gross lease is least likely to be found in:
A. Condo rentals.
B. Vacation properties.
C. Motels.
D. Retail spaces.
D. A gross lease refers to the form of a rental payment. Under a gross lease, the landlord retains the responsibility for payment of all costs of care and maintenance. Only the retail property may be the exception because it is a business and typically subject to a net lease, which requires the tenant to pay all maintenance and operating costs. The property types given in the alternative answer selections use gross leases.
103
A statement disclosing the presence of various environmental hazards does not need to reference which of the following substances?
A. Asbestos.
B. Smoke detectors.
C. Radon gas.
D. Lead based paint.
B. A smoke detector is not an environmental hazard.
104
A seller is required to deliver earthquake safety guidelines to buyers of most masonry building with a wood frame floors or roof built prior to:
A. 2000.
B. 1990.
C. 1980.
D. 1975.
D. Note that this question refers to a specific form of construction, masonry buildings with a wood frame floors or roofs. Otherwise, the earthquake safety guide needs to be delivered to buyers of all homes built prior to 1960.
105
A real estate sales person employed as an independent contractor:
A. Passes no liability for their actions on to their employing broker.
B. Does not need to be supervised by the broker.
C. Needs to pay income taxes and Social Security taxes
D. Is not eligible for Worker’s Compensation insurance coverage.
C. The independent contractor status of real estate sales person is for the purposes of tax reporting. Under labor laws, independent contractors are classified as employees. They are always subject to broker supervision.
106
Any individual may contact the real estate commissioner to:
A. Determine commission rates allowable by law.
B. Negotiate a settlement dispute between principles.
C. Report fraud by a real estate licensee.
D. Determine the zoning regulations which pertain to their property.
C. Any individual may contact the real estate commissioner to report potential fraud by a licensee. The commissioner is empowered to investigate and disciplined licensees for inappropriate behavior.
107
In a deed, the claide that defines the nature of the estate being granted is the:
A. Seisin.
B. Habendum.
C. Subrogation.
D. Due on.
B. Habendum is the clause that defines the nature of the estate been granted. This reiterates the importance of terminology. Answer selection A. Seisin is the ownership and possession of property. Answer selection C. Subrogation is the substitution of one person for another in a legal matter. Answer selection D. Due on is a trust deed provision used by lenders to call the loan immediately due and payable on an owners transfer of any interest in the real estate.
108
Under the_____________, and employer may not discriminate against a disabled person who seeks employment due to that person’s disability.
A. Americans With Disabilities Act
B. Civil rights acts of 1866 and 1870
C. Home affordable modification program
D. Unruh law
A. The Americans with disability act prohibits employers from discriminating against persons with disabilities. Note the question states disabled, a term which appears in the correct answer.
109
Which of the following statements is least applicable to depreciation?
A. Depreciation is defined as the difference between the value of the improvements and the cost of the replacement as of the appraisal date.
B. Depreciation is a loss of value from any cause.
C. Depreciation can be computed for the future or from the past.
D. Depreciation is always concerned with the intrinsic factors of property, never with the extraneous factors.
D. Each answer has merit, but to suggest external factors never apply makes this answer selection the least likely to apply.
110
The period of time a structure continues to earn sufficient income to continue operations is referred to as the structures:
A. Productive use.
B. Self earning.
C. Economic life.
D. Physical life.
C. Economic life refers to the period of time a structure continues to earn income from its operations. The use of “earn sufficient income” in the question should help lead to this term.
111
Which of the following is the least important factor used to determine the market value of a property?
A. The tax assessor’s Appraisal.
B. Any special amenities that exist on the property.
C. The neighborhood on which the property is located.
D. The physical condition of the property.
A. The tax assessors Appraisal has little to do with the property’s market value.
112
Which of the following is of least interest to an appraiser?
A. Value in exchange.
B. The original cost of the property.
C. The objective value of the property.
D. The sales price received for comparable properties.
B. The original Cost of a property has no significance in an appraisal to determine current value.
113
Which of the following is conveyed incident and appurtenant to the land?
A. Easements and restrictions.
B. Water rights.
C. Mineral rights.
D. All of the above.
D. Easements, water and mineral rights all go with the land.
114
Randy recently bought a 12-unit apartment building. What is the minimum number of years in which he may depreciate the building for federal income tax purposes?
A. 27.5
B. 39
C. 40.5
D. 50
A. The depreciation minimum is 27.5 years regardless of the number of units or property usage, as long as it is held as rental property for investment purposes.
115
Compared to other appraisal factors, appraisers generally find the ________ the most difficult calculation to measure precisely.
A. Capitalization rate (cap rate)
B. Cost to rebuild today with modern methods and materials.
C. Gross rent multiplier (GRM)
D. Accrued depreciation
D. Accrued depreciation can be a difficult Number to calculate since it requires estimating the effective age of the property. The alternative answer choices are all numbers that are readily available in the industry.
116
The seller does after an offer to purchase the property has been excepted. The sellers grand child inherits the real estate. What happens to the sale?
A. The offer is voidable.
D. The grandchild is compelled to sell under the terms of the excepted offer.
C. The offer is terminated.
D. The grand child and they choose whether or not to honor the sale.
B. Once the offer is accepted and the buyer has been notified of the acceptance, the estate is required to honor the sale in the event the seller does.
117
In a 1031 exchange, a person is most likely to be taxed for a gain when:
A. Giving cash boot.
B. Trading up.
C. Trading down.
D. Trading residential apartments for commercial property.
C. Trading down suggests either cash or another form of balancing compensation was received. The taxable gain occurs when anything other than like-kind real estate is received on the exchange.
118
After escrow instructions have been signed, the seller asks escrow to return the grant deed to them so they can have an attorney check it. What is the result of this activity?
A. The return of the deed constitutes a rescission of the contract by the seller.
B. The escrow officer needs to return to deed if so instructed by one of the principles.
C. Escrow needs to close promptly before the attorney gets a chance to review the deed.
D. The escrow officer cannot return the deed based on the sellers request.
D. The neutral escrow agent cannot unilaterally make a decision that affects either principal. Once the buyer has deposited money or the seller has deposited documents, approval by both parties is required before either can be released.
119
An agent needs to disclose a conflict of interest to the affected parties when a principle or service provider in the transaction is the agents:
A. Relative or relative of a fellow employee.
B. Employee or fellow employee.
C. Brother or sister.
D. Any of the above.
D. All relationships that create a potential conflict need to be disclosed.
120
The annual percentage yield (APY) applies to:
A. Savings accounts.
B. Appraisal reports.
C. Escrow instructions.
D. Title insurance policies.
A. The savings account is the only answer choice where an annual percentage yield applies.
121
Who generally benefits the most from an assignment of rent clause contained in a trust deed?
A. The trustor.
B. The trustee.
C. The beneficiary.
D. The purchaser.
C. The person who benefits the most from and assignment of rents clause is the beneficiary (lender). The assignment of rents allows the lender to receive the rents tendered by tenants when the borrower is in default.
122
Consider a prepaid rental listing service that intends to relocate. When is the listing service required to provide notice of the new address and telephone number to its clients?
A. As soon as practicable after the listing service get settled in its new location.
B. No later than seven calendar days after the move has occurred.
C. Before the move is to occur.
D. 60 days prior to the move.
C. The customers of a prepaid rental listing service need to be aware of the companies location at all times. Therefore, if they move, the company is required to inform customers and clients in advance of the move.
123
A broker repeats information they received from their seller to a potential buyer. On finding the information is false, the broker is to:
A. Inform the seller of the error.
B. Inform the buyer of the error.
C. Inform the escrow officer of the error.
D. Make a note of the misrepresentation in the client file.
B. The broker needs to inform the buyer of any information the broker previously relayed from the seller which they have discovered to be false.
124
A plot plan is drawn by an architect to show:
A. The materials the subcontractors used to construct the property.
B. Elevations and soil quality.
C. When construction is scheduled to begin.
D. The placement of construction and related land improvements.
D. A plot plan shows where a building and other site improvements will be located. Alternatively a plat map shows the shape and size of a parcel of land and how it relates to other parcels in the immediate area.
125
And elevation sheet used in a subdivision plan shows:
A. The topography of the land, including the slope, elevation of the site, streets, sidewalks and curbs.
B. And interior view of the homes showing their framing.
C. An aerial view of the subdivision.
D. Drawings of the front and side views of the finished homes.
D. And elevation sheet is a drawing that depicts the appearance of the front and side of the home to be built. It is used in advertisements, brochures and other point of sale renderings.
126
Broker check listed a duplex for sale from a corporate owner. After entering into the listing, the officers of the corporation die in a plane crash. What happens to the listing?
A. It is suspended until new officers acknowledge the agreement.
B. It is unaffected.
C. It is automatically terminated.
D. It converts to a debt obligation against the corporation.
B. The employment contract is unaffected by the death of corporate officers as the client is the corporation. New officers will be named need to honor the terms of the listing.
127
A valid agency requires a(n):
A. Written agreement.
B. Express agreement.
C. Attorney-in-fact.
D. None of the above.
D. None of these are necessary for creating an agency relationship. An agency relationship need not be in writing nor expressed. Agency can be created by emergency or implication.
128
At a trustee’s foreclosure sale, the buyer receives a _______ deed.
A. Sheriffs
B. Tax
C. Trustee’s
D. Quitclaim
C. At a trustees sale, the buyer receives a trustees deed. Here the answer is given in the question.
129
County records show that Frank owns a property. Chad deeds that property to Melody. Chad‘s deed is considered:
A. Voidable.
B. A conversion.
C. A forgery.
D. A wild document.
D. A wild document is one that does not fit into the chain of title. Since the county records show Frank as the owner, it will require a deed from Frank to transfer the property.
130
Megan’s law is:
A. A local improvement bond.
B. A law prohibiting loitering in public spaces. C. A public database of a registered sex offender‘s.
D. Uniform water quality legislation.
C. Megan’s law is a database of registered sex offender‘s.
131
A disclosure which warns a buyer they may be liable for additional tax obligations after the close of escrow is the:
A. Supplemental tax bill disclosure.
B. Title insurance notice.
C. Military airport expansion disclosure.
D. Methamphetamine contamination notice.
A. Supplemental taxes are those which cover the remaining portion of the year after escrow closes. Property taxes are levied from July to June of the following year if an escrow closed on April 1, the buyer is obligated for the final quarter of the year. If the transfer price is higher than the assessed value, the supplemental bill will be 1/4 of the annual tax expense for the additional value.
132
A broker has an exclusive agency listing on the property. If the owner sells the property, the broker is entitled to:
A. A full commission.
B. Half the commission.
C. An amount agreed to with the seller.
D. Nothing.
D. Read the question carefully. Under an exclusive agency listing, the seller is not required to pay any commission to the broker when the seller personally sells the property. Payment of the fee would be required under a sellers exclusive right to sell listing.
133
A vacant lot is listed for $250,000. The broker finds a buyer who is willing to purchase it for $220,000. The seller states they will except the buyers offer if the broker lowers their 6% commission by 25%. If the broker excepts, they will receive:
A. $15,000.
B. $13,200.
C. $9900.
D. $8600.
C. 6% multiplied by $220,000 equals $13,200 commission. This amount multiplied by 75% equals 9900 as a net brokerage fee.
134
The appraisal process which allocates a percentage of the properties total value to the land and a percentage to the improvements is known as:
A. The ratio of the total value to cite value.
B. The allocation approach.
C. Both A. And B.
D. Neither A. Nor B.
C. The appraisal process that allocates a percentage of the properties total value to land and a percentage to the improvements is known as the allocation method. It is the ratio of total value to the site value.
135
A capital improvement to real property will always:
A. Increase the book value of the property by the amount the appraised value is increased.
B. Increase the book value of the property by the cost of the improvement.
C. Increase the properties market value by the cost of the improvement.
D. Be fully depreciated in the year the improvement is made.
B. The book value of a property is based on cost. Therefore, a capital improvement cost is always added to the current book value, so it does not necessarily increase the market value accordingly.
136
If a deed provides for an easement granting ingress and egress over a neighboring property but fails to locate the easement, the:
A. Deed is void.
B. Deed is voidable.
C. Servient tenement holder can specify a particular area so long as it is reasonable.
D. Dominant tenement holder can choose any area for access.
C. Servient tenement, the owner of the neighboring property burdened by the easement, can define the location of the easement provided it is reasonable.
137
When one broker authorizes another broker to act as their sub agent on the approval of the seller, the sub agent is primarily responsible to the:
A. Seller.
B. Original broker.
C. California Bureau of real estate.
D. Buyer’s broker.
A. Unlike a sales agent, the sub agent broker becomes primarily responsible to the seller and not the original broker when they have the sellers approval.
138
The placement of a house upon the lot is referred to as its:
A. Preference.
B. Zoning classification.
C. Orientation.
D. Location.
C. The placement of the house on it’s lot is called it’s orientation. This is also used to describe a direction such as oriented toward the southern exposure. Other than location, the alternative answer selections can be easily eliminated.
139
A deed restriction prohibits a subdivision from using a residential property as a business. A buyer interested in purchasing a property in the subdivision tells the broker they intend to use one room of the house as a dog grooming service. Can the buyer do so?
A. Yes, so long as none of the neighbors notice.
B. Yes, if the homeowners association grants them explicit permission.
C. Yes, so long as they only groom dogs from with in the subdivision.
D. No, the deed restriction prohibits the use of a residential property to conduct business.
D. A deed restriction against commercial use is valid. Therefore, the answer is no, the buyer cannot use the property for business purposes.
140
Which of the following is insufficient to transfer an interest in real estate?
A. A lease.
B. A deed.
C. A bill of sale.
D. A contract of sale.
C. The question asks which cannot transfer real estate. A bill of sale is used for personal property and thus cannot be used to transfer real estate.
141
The term “realtor” denotes:
A. Authorization to conduct real estate transactions.
B. Authorization to provide real estate settlement services.
C. A higher legal standard of ethical conduct.
D. Membership in a real estate trade organization.
D. The term realtor is a trademark term which denotes membership in a real estate trade union.
142
Under the replacement cost approach of appraisal, an appraiser is least interested in:
A. Depreciation.
B. The original cost to build.
C. Effective age of the property.
D. The value of the land.
B. The original cost to build a property has no bearing on a current appraisal. The alternative answer selections are all necessary to complete a cost approach appraisal.
143
An “as is” clause in a general purchase contract:
A. Applies only to matters of record.
B. Applies only to things that have been properly disclosed or are visible and observable conditions.
C. Is valid under the caveat emptor (“let the buyer beware”) theory.
D. Invalidate the whole contract.
B. An as is clause in a residential purchase agreement tends to create problems and questions. An as is clause only applies to material facts that have been disclosed or which are visually observable.
144
An individual who is not employed by the client, but has been delegated agency duties by an agent of the client, is referred to as a(n):
A. Subcontractor.
B. Subaccount.
C. Subagent.
D. Tandem agent.
C. A subagent is delegated agency duties by an agent of the client.
145
Which of these does not have a specific dollar value?
A. An attachment.
B. A judgment.
C. A mechanics lien.
D. An easement.
D. An easement has no specific value. The alternative answer selections are all court related and have concrete dollar values.
146
When a dual agency is established in a targeted sales transaction, the broker and their agents may not pass on any information from one party to the other relating to:
A. The price the buyer may be willing to pay.
B. The terms of payment the seller may be willing to except.
C. Both A. And B.
D. Neither A. Nor B.
C. In a dual agency situation, financial information, such as a price acceptable to the seller terms the buyer is willing to offer, and a principles personal information cannot be shared with the other client.
147
Which of the following real estate types cannot be depreciated?
A. Single-family residences.
B. Land used to raise crops.
C. Commercial buildings.
D. Single use industrial buildings.
B. Land is not depreciable. Any structure is depreciable so long as it is used for business or investment purposes.
148
If a seller refuses to pay an earned commission to a broker, the broker may:
A. File a vendors lien against the sellers property.
B. File a formal complaint with the California Bureau of real estate.
C. File a court action against the seller to recover their fee.
D. Invalidate the sale and have it set aside.
C. Filing a lawsuit against the seller is the only means for a broker to recover and earned commission.
149
A sellers broker needs to disclose:
A. The brokers acquisition of any direct or in direct interest in the sellers property.
B. Whether any person holding a special relationship with the broker will acquire an interest in the sellers property.
C. Both A. And B.
D. Neither A. Nor B.
C. Relationships that may affect loyalty or fiduciary responsibilities need to be disclosed as they constitute a conflict of interest.
150
Broker Juan lists the house for 11 months without selling it. Broker Juan is aware the building needs major structural repairs and is listed at 10% above its fair market value. Broker Juan runs an advertisement in the newspaper stating, “three bedroom, Adobe. The price will amaze! Move-in ready and turnkey condition. Call broker Juan today!” This advertisement is improper since:
A. The property is overpriced.
B. The advertisement is not also published online.
C. Broker Juan knows the property needs major repairs and thus, phrases like move in ready and turkey are deceptive and misleading. D. The advertisement miss states significant financial facts about the property.
C. Such intentional misrepresentation regarding the condition of the property may lead to disciplinary action by the California Bureau of real estate or even civil and criminal penalties if the buyer excepted these misleading statements as fact.
