exam prep

An ALTA title insurance policy guards against all of the follwing Exept a. an unrecorded mechanic's lien b. an unrecorded easement c. zoning regulations d. rights of parties in possession

Neither the standard policy or ALTA protect against zoning

a lien that covers all real property of debtor in the country where it is recorded is called a lis pendens b a general lien c. a specific lien d none of the above

c none of the above

A fire insurance policy for $500,000 was issued March 1 st 2012, for three years at a premium of $2,851.20. What was the prorated value of the unused portion of the policy when the escrow closed on Nov 16th 2012? a. $2,098.80 b. $2,217.00 c. $2178.00 d. none of the above

1. $2,851.20 divided by 36 months =$79,20 per month 2. The seller had the property from March 1, 2012, until November 16th, 2012 (8.5 months) 3. 36 months -8.5 months =27.5 months to be reimbursed to the seller 4. 27.5 months x $79.20 per month =$2,178

Which of the following would have priority a. first deed of trust recorder March 14/ 2010 b. a homestead recorded April 1 /2010 c. an assessment lien for street improvement, recorded April 5th/2011 d. an unrecorded mechanic's lien

C. government liens (assessment, property taxes. etc) have priority over all other liens

The oldest, easiest to learn, most adaptable and quickest method of appraising residences and land, is which of the following a. the cost approach b. the capitalization approach c. the income approach d. the market approach

N/A

97.Who may brokers open trust fund accounts a. to commingle funds b. to avoid regulation c. to separate clients money from the brokers money d. to get free toasters the bank gives

c

The first step of the appraisal process is to a. define the problem b. set the appraisal fee c. plan the appraisal d. look up comparable sales

a. an appraise must first define the problem

An elevation sheet for a subdivision shows a. Front and side view of the homes as the will appear when finished b. Topgraphy of the land c. Interior views of hte homes as they will appear when finished d. Aerial views of hte homes as they will appear when finished

a. elevations sheets show the outside of the homes as they will appear when finished.

the recording of a deed gives what type of notice a actual notice b positive notice c .constructive notice d negative notice

c

When a tenant voluntarily moves out of his apartment with the intention to never return, it would be described as a. abandonment b. notice to quit c. eviction d. adverse possession

When a tenant voluntary moves out of his apartment with the intention to never return, it would be described as abandonment

Which of the following may a minor be able to undertake without court approval? a. acquisition of real property through gift or inheritance b. give valid power of attorney to encumber property c. sell real estate through a guardian d. all of the above

a .A minor may acquire real proeprty by gift or inheritance without court approval

Which of the following programs will a borrower pay for insurance on a loan? a. FHA or PMI b. Fannie Mae , Ginnie Mae, and Freddie Mac approved loans c. VA loans d. only FHA loan

a FHA or PMI

A brother and sister held title to s 2 unit apartment building as joint tenants . other than this apartment building , their business and personal affairs were conducted separately . at the time of the brothers death , he was insolvent and owned several creditors substantial unsecured amounts of money , title to the apartment building would now be held by the sister. a subject to the processes of a probate sale b subject tot he claims of the unsecured creditors c free and clear of the debts of her brother d as tenant in common with the creditors of the deceased brother

c

A seller is required to deliver the Homeowner's Guide to Earthquake Safety to the buyer of any one-to-four unit residential properties built prior to a. 1952 b 1960 c. 1969 d. 1975

c

Escrow can legally prepare which of the following? a. a wraparound trust deed b. lease with an option to buy c. escrow instructions and grant deed d. all of the above

c

What is it called when one party is substituted for another party in a contract? a. redaction b. recession c. novation d. waiver

c

When would the cost approach to appraisal be least appropriate? a. new homes in a subdivision b. middle aged property c. old buildings d. multifamily property

c .The cost approach is least appropriate for appraising old buildings, because depreciation becomes difficult to calculate as the building gets older

The construction terminology, the studs of an interior wall are supported by and rest on the a. I-beam b. joist c. soleplate d. sheeting

c. the studs rest on the soleplate.

Life insurance companies normally deal with borrowers through the services of a. banks b. savings and loans c. mortgage companies d. all of the above

c.Life insurance companies usually work through mortgage companies to arrange and service their loans.

The verification and recordation of a document is required to create a valid a. notice of default b. trust deed c. judgment attaching real property d. mechanics lien

d mechanics lien

When appraising real property by the income approach, the money invested in the improvements is recaptured by a. the unit in place method b. the cost to cure method c. a tax deduction in the year incurred d. accruals for depreciation

d. Depreciation compensate the investor with a 'return on' and 'return of' money invested in improvements

The effect of a tight money policy implemented by the Federal Reserve Board would have a net effect of increasing a. sales volume of single family homes b the supply of founds available for asking real estate loans c. the use of new first trust deed financing in real estate transactions d. the use of second trust deed in creating real estate transactions

d. in a tight money market, there is a shortage of funds for a real estate loans high interest rates. Many buyers to short term second trust deeds, often carried back by the seller at attractive terms

Which if the following describes the practice of single agency a. the single agency broker is client oriented b. the single agency broker represents both the seller and the buyer in the same time c. in a single agency transaction, the buyer cannot choose his own broker or represent himself d. in single agency transaction, the agent serves two principals

a A single agency broker represents a buyer only or a seller only, not both. Therefore a single agency broker can be more client orientated. The single agency broker is client oriented.

The effective date of a deposit receipt is the date that a. the deposit was received by the buyers agent b. the contract was drafted c. the buyer signed the contract d. the seller's acceptance was properly communicated to the buyer

99. d. The effective date of the deposit receipt would be the date te seller's acceptance was communicated to the buyer.

the title company conducts a title search by searching the records of the a. county recorders office b. county clerks office c. federal land office d. all of the above

All of the offices are searched by a title company when conducting a title search

When comparing the value of property and the price of the property, changes in financing terms will affect: a. value only b. price, not value c. only properties that have been sold d. both value and prices

b. Changes in financing terms will affect the price , but not the value of the property.

Depreciation, when taken, is subtracted from a. the salvage value b. the appraised value c. the cost basis d. none of the above

c. Depreciation is subtracts from the cost of the property when taken. Depreciation is a loss of value from any cause. Cost basis is the original cost of the property before adjustments, such as depreciation.

When leasing an unfurnished apartment, a lessor may not take a security deposit exceeding a. $1000 b. one months rent c. two months rent d. three months rent

c. Security deposits on residential property may not exceed two months rent on unfurnished dwellings or three months rent on furnished dwellings

A license who misrepresents property to a buyer while acting as an agent of a seller is subject to a, discipline b. civil lawsuits c. criminal penalties d. all of he above

c. the agent may accept a postdated check from a buyer as deposit, but he must disclose this to the seller when representing the offer d. licensees who make misrepresentations are subject to discipline, civil lawsuit and or criminal

An 'abstract of title" is a. standard form b. an exact duplicate of the standard title policy c. not available to the owner of the property d. a written summary of the chain of title

d

a lender would like not enforce the 'due on sale' clause in a promissory note under which of the following circumstances? a. when a new loan could be made at a higher rate of interest than the existing loan b. when inflation causes the value of real estate to rise rapidly c. when there are more buyers than sellers d. when deflation occurs and there are more houses for sale than there are buyers

d. A lender would likely not enforce the 'due on sale' clause in a promissory note when deflation occors and there are more houses for sale than there are buyers. the lender might be unable to re-loan the money to another borrower.

The time period when a lis pendens is effective is a. before the trial is held b. until the lawsuit is dismissed c. until the final judgment is rendered d, in any of the above situations

d. A lis pendens is effective once it is recorded. this includes the time before trial is held, until the lawsuit is dismissed, or until final judgment is rendered

In making an offer to a purchase Lincoln's property the Sherman's insert the following clause" Purchase price to be $100,000. Offer conditioned upon buyers ' obtaining a VA loan to be secured by the property in the amount of $100,000 for 30 years payable approximately $805 per month including interest at 9% per annum plus taxes and insurance" which of the following most nearby represents the buyers ' possibilities in this purchase transaction? a. if the $100,000 loan cannot be obtained, the buyers may require a return of their deposit and cancel the transaction b. if the $100,000 loan cannot be obtained, the parties may renegotiate the terms of the purchase if mutually agreeable c. if the maximum loan obtainable on the property is $90,000 the buyers could complete the purchase by making a $10,000 cash down payment d. the buyers may choose any of the above

d. All of the choices are possibilities.

An easement may be created a. for the life of the grantor b. for a stated period of time c. for perpetuity d. for any of the above

d. An easement may be created for the life of the grantor, for a stated period of time, or for perpetuity. Perpetuity means an easement may be created such a way as to sun for an indefinite period of time, possibilily forever.

If a classified ad is placed in a newspaper advertising a house for sale, and only the Annual Percentage Rate is stated a. the total finance charge must also be included b. the total number of payments must be included c. the amount of the down payment must be included d. additional disclosures are not required

d. If an ad discloses the Annual Percentage Rate (APR) additional disclosures of financing are not required

Robert sold a ranch to Smith on May 1st 2012. The property taxes for the 2012 -2013 tax year a. become a personal obligation of Smith b. attach to the purchase price received c. would normally be prorated at close of escrow d. are a lien on the ranch

d. In such a transaction taxes, for 2012-2013 are not yet due and payable, since the tax year starts July 1st, 2012. They are not considered a personal obligation but are regarded as a lien on the ranch

All of the following contribute to the stability of a residential neighborhood except a. location in the path of city growth b. many families with school children in the neighborhood. c. conformity in uses, and occupations in the area d. increreasing the population density and home sale turnover rate

d. Increase the population density and home sale turnover rate would tend to destabilize a residential neighborhood.

When a licensee places an ad in the newspaper without the broker 's name that reads in total '3br 2ba, den & spa giant lot $160,000-555-121 ' this is a. violation of the truth in lending law b. misleading advertising c. false advertising d. a blind ad

d. a blind ad is an ad that does not identify the broker

The conversation of gross rent into value estimate is done on one operation by which of the following means ? a rent multiplier b. fixed factor c. rick rate d. net reciprocal

a Gross multiplier, rent multiplier, gross rent multiplier, converts income into value in one operation

How many square miles does a section contain? a. 1 b. 6 c 36 d. 180

a.a section is one mile by one mile, one mile square and contains one square mile 640 acres.

In estimating replacement cost of a commercial warehouse, an appraiser would be most likely to use which of the following units of comparison a cost per square foot b cost per cubic foot c . cost per front foot d depth table comparison

b

John and Martha husband and wife own a home as community property. If only one spouse signed the agreement to sell the property , the agreement is a. an illegal contract d an unenforceable contract c a binding contract d a violation of the statute of frauds

b

The capitalization approach which of the following express is not deducted from gross income to determine annual net income? a electricity b, cost of capital c. cost of management d. replacement reserves

b

In order to purchase a home for $300.000 a buyer borrowed $250,000 through the services of a loan broker. Each discount point charged on this loan will cost the borrower how much? a. $250 b. $350 c. $2,500 d. $3,000

c

When a debt has been paid in full, the trustee will recor what legal instrument to remove the lien of a trust deed from the public record? a. satisfaction of payment b. complete release statement c. deed of reconveyance d. redemption certificate

c. when a debt has been paid in full, he trustee will record a deed of reconveyance, reconveyance deed, to remove the lien of a trust deed from the public record.

When an escrow is closed on the purchase of a home, the closing statements usually reveal that the seller has paid for certain items in advance, or may be in arrears in his payments on items which relate to ownership of that home. These items are usually prorated in escrow. All of the following would be included in the prorated items except: a. homeowners and fire insurance premiums b. property taxes and assessments c. interest and impounds on an existing loan which will be assumed by the buyer d. the title insurance fees and nonrecurring fees

d. title insurance fees and nonrecurring fees are not prorated in escrow.

The Real Estate Commissioner views the salesperson employed by a real estate broker as a independent contractor b. a spacial agent c a subagent d. an employee

d. under the California Real Estate Law, a salesperson is considered to be an employee of a broker

Which of the follwing represents an example of police power? a, condemnation action on property for construction of a freeway b. CC&R placed in a deed by a developer c. enforcement of contracts by equitable civil proceedings in court d. zoning laws which which restrcit and limit the house of land

d. zoning laws are one example of the police power

When the highest and best use of a property is expected to change, the current use is called: a. the temporary use b. the interim use c. the transitional use f. the possible use

. b When the highest and best use is expected to change, the current use is called the interim use

An owner signed an exclusive authorization and right to sell listing. Later, the owner cancelled the agreement. Under these circumstances a. the owner acted illegally because the owner cannot cancel the listing agreement until its term expires b. the owner can cancel the listing, but may be liable for the payment of damages under the agreement c. the bureau of Real Estate can order the owner to honor the listing agreement d. the district attorney of the country in which the property is situate d could file criminal charges against the property owner

. b. The owner can cancel an exclusive listing at any time, but may be liable for the payment of damages under the agreement

When one party agrees to indemnify another for a named loss in return for periodic payments, it is called a. fidelity bond b. insurance c. performance agreement d. none of the above

. b. When one party agrees to indemnify another for a named loss in return for a periodic payments, it is called insurance

Mr Gonzales sold ten previously unencumbered properties to Mr Long. Part of the purchase price vs a loan made by Mr Gonzales that was secured by a trust deed on the ten properties. this trust deed may be described as a. a reconveyance deed b. all inclusive trust deed c. a blanket encumbrance d. a quit claim deed

. c. the blanket encumbarance covers more than one property

Copies of termite reports filed with the structural Pest Control Board within the proceeding two years can be obtained upon request and the payment of a fee by a. the seller involved in the transaction b. the buyer involved in the transaction c. any unlicensed person d. any of the above

. d. Anybody can obtain a copy of a structural pest control report filed within the last two years by paying a small fee.

Which of the following parties would be most likely to file an unlawful detainer court action a. real estate broker, enforcing a listing contract b. a defaulting trustor c. a sub agent of the selling agent d. an offended lessor

. d. an 'offended lessor' describes an angry landlord. a landlord evicts a tenant with an aunlawful detainer court action

The added protection of an ALTA title insurance policy over a CLTA policy is guarding against a. existing liens and encumbrances of record b. an invalid deed in the chain of title c. an error on the sequence of recording trust deed loans d. a dispute over property lines which would be disclosed by a survey

An ALTA policy includes a survey and would protect against a property line dispute,

31. the primary concerns when analysing a purposed residential subdivision is a marketability and acceptability b. cost per square foot of improvement c comparable sales in the area d. topography

a marketability and acceptability are most important in analysing a residential subdivision, since they have a high influence on hte value

N gent who pays part of the commission tot he buyer a. must inform the seller b. is subject to criminal proscecution c. is subject to discipline by the real estate commissioner d. is subject to a civil lawsuit by the seller, even if they disclosed

a must inform the seller

A riparian owner owns land which borders on a. a stream b. a lake c. the ocean d. any of the above

a. A riparian owner owns land touching moving water ( a stream, watercourse or river) The water rights of a land owner adjacent tp a lake or ocean are called littoral rights

In real estate transaction where the seller uses a land contract instead of a trust deed the land contract may be described as a identical to a mortgage b. a security device c. just like an option d . a third party instrument

b. in real estate transactions where the seller uses a land contract instead of a trust deed, the land contract may be described as a security device,

In appraisal, the term 'market value' is most nearly synonymous with a. assessed value b utility value c. market price d. asking price

c 'market value' is most nearly synonymous with 'market price'

which of the items listed below would an appraiser subtract from scheduled gross income to arrive at annual net income when using the capitalization approach to appraisal? a. cost of loans against the property b. allowance for rent loss and vacancies c. federal income tax d. reserve for appreciation of buildings

c . the appraiser subtracts allowance for rent loss and vacancies when calculating annual net income in the capitalization approach to appraisal.

A clause in a real estate loan which permits the borrower to re-borrow additional funds, at a future date is called a,. an adjustable mortgage b. a junior mortgage c. an open end mortgage d. an extendable mortgage

c An open end mortgage allows a borrower to re borrow principal previously repaid on a loan

When a project of improvement on real property has been completed and the owner has not filed a 'notice of completion' how many days do claimants have to file mechanic's liens a. 30 days b. 60 days c. 90 days d. untitled

c If a notice of completion has not been filed, the claimant has 90 days after completion of the work of improvement to file a mechanic's lien

Martha offers to purchase Peter's property $239,00. Martha , who is not a veteran, takes title subject to Peter's VA loan. What is the effect on liability? a. Martha is primarily liable for the loan. b. Peter and Martha are both liable for the loan c. Peter is liable for the loan d. neither Martha nor Peter is liable for the loan

c Peter is liable for the loan

Under no circumstances may a real estate broker a. receive commissions from both the buyer and the seller b. appoint a sub agent to perform some of his duties c. misrepresent material facts d. sell property he has listed to one of his relatives

c. A real estate broker is never allowed to misrepresent material facts.

A subordination clause in a loan works to the benefit of the a trustor b. beneficiary c. trustee d. mortgagee

a. A subordination clause in a loan allows the borrowers (trustor) to get additional financing. the holder of the loan (beneficiary or mortgagee) the subordination clause allows a later loan tp take priority over his loan. This works to the borrower's advantage, not the lender's

Which of the following is necessary for a deed to be valid ? a. a granting clause b. consideration c. an acknowledgement d. the grantee is of legal age.

a. The granting clause is also called the action clause and is considered one of the essential to valid deed

An interest in real property may be taken by either prescription or adverse possession. The interest taken by prescription is a. the right to use land which belongs to another person b. a possessory interest c. an equitable title d. a private grant

a. The interest taken by prescription, an easement, is the right to use land which belongs to another person

All of the following statements regarding options are true except a. the option binds the optionee to perform b. some valuable consideration must pass from optionee to optionor c. in the lease /option, the provisions of the terms of the lease is sufficient consideration to support the option d. an option does not give the optinee the right to use the land

a. The option binds the optionor, not the optionee

When two parties are identical or highly similar, most buyers focus on lower price. This principle is called a. substitution b. highest and best use c. productivity d. diminished use

a. The principle of substitution says the buyer will not pay more for a property than other similar properties sell for in the area. Where two properties are similar, most buyers focus on the lower price.

Gross leases are most often with a. residential property b. retail space c. office space d. shopping malls

a. residential property is normally leased on gross lease, with the tenant paying a fixed amount each month

Which of the following do appraisers find most difficult to measure accurately? a. capitalized income b. accrued depreciation c. comparable sales data. d. new replacement cost.

b. accrued depreciation is most difficult to measure because it always require an appraiser to use her objective opinion. the other choices may be ascertained by objective data.

A lender must notify a borrower when a balloon payment is due a. 28 days or earlier period to the due date b. 30 to 90 days prior to the date c. 90 to 150 days prior to the due date d. 6 months or earlier prior tot he due date

c. a lender must notify a borrower when a balloon apymeny is due, not less than 90 nor more than 150 days prior to the due date

. in usual percentage lease, rent is calculates as a percentage of a. the assets of the lessees business b. the net sales of the leases business c. the gross sales of the lessees business d the nest taxable income of the lessees business

c. a percentage lease is based on the percentage of the gross receipts of he tenants business

A court order to sell property after the final judgment in a lawsuit has been rendered is a. a foreclosure b. a deficiency judgment c, a writ execution d, an attachment

c. a writ of execution is the court order to sell property after final judgment in a lawsuit has been made

When title to real property passes by accession, the recipient receives as the result of a. a valid deed b. a valid will or intestate succession c. the principal action of natural waters though accretion d. none of the above

c. accession is the movement of a land by the natural action of water or wind, resulting in the acquisition of title.

When four people own one piece of real estate in joint tenancy, they a. do not have equal shares b. allow their heirs to obtain their shares by will c. have one title d. each have co-ownership with separate title

c. all joint tenants share one title

A real estate broker must hold all real estate documents for how long? a. one year b. two years c. three years d. four years

c. all real estate documents must be kept three years. If the question had asked about 'loan documents' they must be kept four years

an ALTA policy of title insurance gives insurance protection to a. the buyer of a piece of real property b. the select of the home c. the beneficiary d. none of the above

c. an ALTA policy insurance the beneficiary (lender)

An attachment lien is good for a. 6 months b. 2 years c. 3 years d. 6 years

c. an attachment lien is good for three years

My Hayward has been burning leaves on his front lawn, in violation of the CC&Rs of his subdivision. His neighbors have filed a lawsuit and have received a court order, ordering Mr Hayward to stop burning the leaves. That court order would be called a a lis pendens b. an attachment lien c. an injunction c. a writ of habeas corpus

c. an injunction is a court order saying 'stop that "

In the capitalization approach to appraisal, the appraiser arrives at an effective gross income figure, but making a deduction for a. interest payments on the loan b. repairs c. vacancy d. depreciation

c. apraiser subtracts vacancy from the schedules of gross income to arrive at the effective gross income

23. when the owner of a property believes that her property has been over -assessed by the county assessor, she should contact the a. state controller's office b. county board of supervisors c. assessment appeals bard d. county tax collector's office

c. assessment appeals board is the correct agency to contact

Fee schedules setting forth the cost of title policies and other services performed by title companies are set by the a. Department of Insurance b. Bureau of Real Estate c. title insurance companies d. Department of Corporations

c. Fee schedules setting forth the cost of title policies and other services performed by title companies are set by the insurance companies, not by state agencies.

The major diffence between mechanic's liens and judgment liens is a. judgement liens must be recorded b. judgement liens are voluntary liens c. mechanic's liens may take priority d. mechanic's liens are statutory liens

c. Mechanic's liens take priority as of the day the work began or materials were first furnished. This date is usually earlier than the date of recording

No title insurance policy offers protection against a. legal expenses insured in defending a title b. defect in the chain of title c. lack of capacity of grantor d. zoning

c. No title policy offers protection against governmental regulations, such as zoning

When an existing contract is placed by an new contract, it is called a. assignment b rescission c. novation d. rehabilitation

c. Novation is when the parties mutually agree to replace an existing contract with a new contract

A broker who keeps a buyers cash deposit in his office safe and who refuses to release the money tp escrow, the seller, the buyer is a. acting properly b. is wrong in refusing to release the money to the seller, but acting properly when keeping the buyer's cash in his safe c. is probably going to be subject to discipline bu the Commissioner d. none of the above

c. Once an offer is accepted, if the seller demands his deposit the broker must give it to him, The broker also violated the law by placing the buyers cash deposit in his safe. This practice is call commingling.

The seller of a home has paid the annual property taxes of $1,380; escrow will close on May 1st. if the buyer and seller agree to prorate the property taxes as of the sale date, the buyer 's proportion of the taxes would be a. $115 b. $230 c. $345 d. $1,380

c. Only VA loans use the CRV to determine the amount of the down payment

When comparing VA loans to most other loan programs, the unique feature about the required down payment in BA loans is a. they vary according to the amount borrowed b. they are never more than 3% of the purchase price c. the down payment is determined by the CRV d. there is no required down payment

c. Only VA loans use the CRV to determine the amount of the down payment

Private restrictions on land be created. a. by deed only b. by deed or zoning ordinance c. by deed or written agreement d. by deed, written agreement, or zoning ordinance.

c. Private restrictions may be created by deed or written agreement. They cannot be created by zoning. Zoning is a from of public restriction.

The best way for the Federal Reserve Board to create a tight money market would be to a. sell government bonds b. lower the discount rate c. raise the discount rate and sell government bonds d. lower the discount rate and buy government bonds

c. Raising the discount rate and selling government bonds both act to tighten the money market supply. Lowering the discount are and buying government bonds act to increase th e money supply.

All of the following tend to increase the available supply of real estate loan funds, except a. an increase in the national income b. an increase in deposits in savings and loans c. an increased demand for investment liquidity d. an increased desire to provide for old age

c. Real estate loans are not very liquid. and increase in the demand for liquidity decreases the money available for real estate loans.

A loan which calls for a regular periodic payment of both principal and interest to completely repay the loan is called a a. straight loan b. balloon payment loan c. fully amortized loan d. variable rate mortgage loan

c. a fully amortized loan calls for regular periodic payment of both principal and interest to completely repay the loan

a valid deed can be a. transferred fro grantee to grantee b. assigned to a beneficiary to hypothecate real property c. signed by a witnessed mark d. reassigned to another grantor

c. a grantor who does not know how to sign her name can 'sign' the deed wit ha mark (x) in the presence of a witness

The square foot, cubic foot, and unit in place methods of real estate appraisal are most commonly used in what approach a. the market data approach b. the income approach c. the cost approach d. none of the above

c. the first step of the cost approach is to determine replacement cost of improvements .This is done by the square foot, cubic foot, unit-in-place, or quantity survey methods.

A quitclaim deed conveys only the present right, title and interest of a. the grantee b. the servient tenant, c the grantor d. the lessee

c. the grantor. a quitclaim deed conveyes only the present right, title and interest of the person signing the quitclaim deed,grantor

Usually, the holder of a life estate based on the holder's own life may do any of the following, except a. lease the property to someone b. borrow against the property c. devise the property to his relative d. sell the property to someone

c. the holder of the life estate based on the holder's own life may not devise,leave by will, the property to anyone

the law requires the country recorder to index deeds by a. a street address, and by a legal description b. a street address and by the parcel number c. the names of the grantor and the grantee d. the date and time of recording

c. the law requires the county recorder to index deeds by the names of the grantor and the grantee

. Which of the following is true concerning a lis pendens a. a kis pendens can only be removed by a court order b. a lis pendens can be recorded against real property no matter what type of lawsuit is pendings c. a lis pendens may affect title to real property based on the results of the lawsuit d. none of the above

c. the lis pendens is a notice of pending litigation concerning title or possession of real property. A lis pendens must be recorded, Once recorded, it clouds the title pending the outcome of the lawsuit. One recorded, a lis pendens is effective as long as litigation i pending.

The marginal tax rate a. is the total income tax a person must pay b. in the minimum income tax rate a person must pay c. determines the tax rate applied to the next dollar earned d. none of the above

c. the marginal tax rate is the tax rate applied to the next dollar earned

Which type of appraisal report has the following headings. introduction, site and improvement analysis, supporting data, opinion value a. letter report b. form report c. narrative report d. oral report

c. the narrative report has heading such as introduction, site improvement analysis, supporting data and opinion value

Which of the following is a true statement regarding fair housing and discrimination? a. a real estate licensee is not liable in a fair housing lawsuit if he/she had no internet to discriminate b. the landlord renting a single family \dwelling can discriminate without liability c. the owner renting out one room in a home where he/she resides can discriminate d. apartment complexes must be built to accommodate people with physical disabilities or handicaps

c. the owner renting out one room in a home where he/she resides can discriminate without violating the law

The primary purpose of city building codes is to establish minimum a. ceiling heights b. fees which must be paid to the city c. construction standards for buildings within the city d. sewer pipe diameters

c. the primary purpose of the city building codes is to establish minimum construction standards.

What is the primary tool used by planning commissions to implement a general plan? a. eminent domain b. adverse possession c. zoning d. master plan

c. the primary tool used by the planning commission is zoning (police power)

Which of the following statements is most correct? a. property is deeded to the state on July 1st, if the property taxes for the prior year were not paid b. the deliquent property tax payer must make monthly payments to the state during the statutory redemption period c. the real effort of a 'sale to the state ' by the tax collection is to start the redemption period running, but the deliquent owner remains in possession for five years d. the property is automatically deeded to the state if the property is not redeemed within the first three years

c. the real effect of a 'sale to the state' by the tax collector is to start the redemption period running, however, the owner can remain in possession for five years.

Which of the following is not covered by the standard coverage (CLTA) title insurance policy? a lawsuits challenging marketable title at the date of the transfer b. matters of record c. rights of parties in possession d. transfers by an incompetent grantor

c. the standard coverage (CLTA) title insurance policy does not protect against right of parties in possession

A trust deed was recorded against a property on 1-15-12. Work started on remodeling the property's kitchen on 2-1-12. A mechanic;s lien was recorded on 3-15-12. Which h lien has priority? a. mechanic's liens always have priority b. the mechanics lien has priority if the lender was notified of the remodeling project c, the trust deed has priority because it was recorded before the work began d. none of the above

c. the trust deed has priority because it was recorded before the work began

When real estate increases in value because of an increase in population and/or inflation, this would be classified as a. social valuation b. economic obsolescence c. an unearned increment d. effective value

c. unearned increment describes when property gains in value due to inflation or increase in population because the increase of value is due to no effort on the part of the property owner

Which of the following does not directly affect mortgage interest rates? a. demand for funds b. tights money market c. unemployment d. inflation rate

c. unemployment does not directly affect mortgage interest rates

In real property sales contract, the seller who is also acting as the seller is usually referred to as the a. trustor b. trustee b vendor d. vendee

c. vendor. the seller in and contract is called vendor

Mrs Smith sold a home to <r Jones on installment sales contract. Mr. Jones recorded the contract. Mr Jones made a $1,000 down payment and after the sale and made a few of the required monthly payments. One night Mr Jones moved out and abandonded the house. Which of the following is true? a. a deficiency judgment could be obtained by MR Jones. b. a buyer who later bought the property for cash would have no concern about Mr Jones c. There is cloud on the title d. Mrs Smith now has a marketable title which can be sold with no doubt in law

c. when a]the land contract was recorded, it became part of the public record. There is a cloud on the title until something is done to have it removed.

The purpose of Regulation Z ,Truth in Lending Law is to a. control interest rates b. limit the annual percentage rate c. assure meaningful disclose of credit terms d. limit consumer credit

c.Regulation Z, truth in lending law, requires lenders to disclose of credit in terms of annual percentage rate,APR in order to assure a meaningful disclosure of credit terms.

A farm measures one-half mile by one -half mile. How many acres does the farm contain? a. 20 acres b. 40 acres c. 160 acres d. 320 acres

c.The farm is 1/4 of a section. A section contains 640 acres. 1/4 of 640 acres is 160 acres

Accession takes place when real property is acquired by a. will b. adverse posession' c. quiet title action d. imperceptible addition of land by action of water through accreation

d. accession is when title to land is acquired by accretion. accession gaining title when property is added to a property by another or a natural action. Accretion an addition to a land from natural causes.

which of these notices is important for a mechanic's lien a. notice of nonresponsibility b. notice of cessations c. notice of completion d, all of the above

d. all of the above

49. under respa the uniform settlement must be delivered a. 5 calendar days after the loan commitment is made b. 3 business days prior to the close of the transaction c. 1 calendar day prior to the settlement date d. at or before the settlement date.

d. although the lender must allow the borrower to inspect the uniform settlement one day prior to the close of the transaction, the statement must be delivered at or before the date of settlement.

The agency of a real estate broker may be established by a. express agreement b. implied agreement c. ratification or estoppel d, any of the above

d. an agency may be created by express agreement, implied agreement, ratification, or estoppel.

When representing a principal under a written listing agreement, what type of authority may an agent have? a. actual authority b. specific authority c. ostensible authority d. all of the above

d. an agent has authority which the principal actually, specifically or ostensibly, apparently confers upon him.

Which of the follwing best describes an estate of indefinite duration? a. a life estate b. an estate for years c. an estate of periodic tenancy d. an estate of inheritance

d. an estate of inheritance is another term for a fee simple estate. A fee simple estate is of an indefinite duration. The other choices have some fixed duration.

A lender may require an impound account for some real estate loans. Who benefits from this impound account? a. the beneficiary only b. the trustee only c. the trustor only d. both A and C

d. an impound account works to the benefit of the beneficiary, lender, and the trustor, borrower

economics or social obsolescence could result from each of the following except a. new zoning laws b a city 's leading industry moving out c. misplaced of improvement d. an outdated heating system

d. an outdated heating system would result in functional obsolescence

which of the following is a possible agency relationship under cal law? a. agent for seller b. agent for buyer c. dual agent d any of the above

d. any of the above

Which of the following cost and fees are considered a finance charge on the disclosure statement under the Federal Truth in Lending Law? a. document preparation fees b. appraisal fees c. cost of title insurance d. assumption fees

d. assumption fees are included in the finance charge. The other choices are not included.

. Escrow instructions are commonly executed by a. buyers b. sellers c. third parties c. all of the above

d. buyers, sellers, and third parties all 'execute' escrow instructions

For appraisal purposes 'capitalization ' is a process used to a. establish current market value b. determine annual net income c. find interest rate d. convert income into value

d. capitalization is the process used to convert income into value. value of the income property = annual net income/cap rate. value=estimate or appraised worth of any subject property, calculated in money

the California state housing law regulates and controls a demolition and /or relocation of existing buildings b construction of new buildings or alteration of existing buildings c. advertising and financial terms for new subdivisions d . both a and b

d. demolition and relocation of existing buildings as well as construction of new buildings or alteration.

Real property includes a. fixtures b. anything incidential or appurtenant to the land c. most things which are immovable by law d. all of the above

d. fixtures, anything incidential or appurtenant to the land and most things which are immovable by law are real property.

all of the following significantly impact the physical use of real property except a an increase in the front yard setback requirement b. cc&R c. deed restrictions d specific lien

d. specific lien is which attach to a a certain parcel of land, or piece of the property.

Some corporations may elect to be classified as an 'S corporation' for income tax purposes. An advantage of the 'S corporation' is a. the 's corp.' is taxed at rate that is lower than the rate charged a regular corporation b. the income of the 's corporation' is totally tax free c. the s.corp pays all the profits go to the individual shareholders tax free d. the 's corp' pays no income tax and any gains or losses are passed through to the individual shareholders.

d. the 's corp' (subchapter s) is exempt from corporate income taxes. All gains and losses pass directly to the individual shareholders.

an agent who acts exclusively as the agent for the buyer may a. present offers acts exclusively as the agent for the buyer may b. present offers to the seller and /or seller s agent c. present offers to the seller's agent only d. is acting illegally

d. the broker may not seek specific performance from the principal, The broker 's remedy is to sue for damages

a home sold for $200.000. the buyer assumed an existing loan against the property for $160.000. the documentary transfer tax fro this county is .55 per $500 of consideration. the transfer tax is a. $11 b. 22 c. $33 4. $44

d. the documentary transfer tax is based upon consideration. 1. $200.000-$16.000=$40.000 2. $40.000 divided by $500+80 taxable units 80X.55= $44.00

The relationship between the parties to a real estate transaction and the escrow officer is usually described as which of the following a. independent contractor b. employee c. mediator d. agent

d. the escrow officer is an agent for the buyer and seller

The formula to calculate net operating income of an apartment building is a. gross income minus loan express and income taxes. b. gross rent multiplier minus vacancies and operating expenses c. gross income minus operating expenses and depreciation d. scheduled gross income minus vacancies and collection losses minus operating expenses

d. the formula to calculate net operating income of an apartment building is schedules gross income minus vacancies and collection losses, minus operating expenses

Unlike joint tenancy, the tenancy in common requires only one unity, the unity of a. time b. title c. interest d. possession

d. the only unity required for a tenancy in common is the unity of possession

All of the following are used to determine the gain or loss of real property for income tax purposes except a. miscellaneous cost of sale b. brokerage commission c. purchase price d. mortgage payment

d. the owners mortgage payment is not considered in the formula used to determine the gain loss from the sale of real property.

59. in home construction, the parallel wooden beams used to support ceiling loads and floors are called a. rafters b. studs . c. headers d. joists

d. the parallel wooden beams used to support ceiling loads and floors are called joists

The placement of a structure on a lot and its relationship to the surrounding environment is described as a. exposure b. elevation sheet c. plottage d. orientation

d. the position of a building on land in its relationship to exposure the the sun, privacy for the street, prevailing winds, views, etc, is called orientation.

Property can be described in all of the following ways, except a. court order b. public grant or dedication c. eminent domain d. executive sale

d. there is no such thing as an executive sale

'economic rent' is defined as the a. rent necessary to allow the owner to break even b. rent the property would produce in a perfectly informed marketplace c. rent received under a contract d. rent received for comparable space in the current economic marketplace

d. this is a definition of economic rent. No marketplace is perfectly informed.

Which of the following investments would provide the best hedge against inflation? a. a risk free investment b. an income producing investment that will maintain its value c. an annuity d. an investment that will afford a great degree of liquidity

d. this is a definition of economic rent. No marketplace is perfectly informed.

Valuable consideration in a contract consist of a. services to be provided by one or both parties b. whatever the parties consider to be of value c. one dollar or more d. any of the above

d. valuable consideration in a contract consist of services to be provided by one or both parties, whatever the parties consider to be of value, one dollar or more

an agent advertises that she will give a $1,000 credit in escrow to any seller who list with her and that she will pay one-half of her commission to any buyer who purchases a property through her. This type of advertising is a. illegal as it restraint of trade b. prohibited under RESPA c. legal, since the amount offered is less than $5,000 d. legal if the disclosure is made to all parties to the transaction

. It is illegal for an agent to advertise that she will give a $1,000 credit in escrow to any seller who lists with her and that she will pay one-half of her commission to any buyer who purchases a property through her., if the disclosures is made to all parties to the transaction.

When city laws require that property comply with minimum energy conservation standards when sold, who would normally pay the cost to bring the insulation up to the proper rating during escrow? a. seller, only if the laws allows him to have escrow credit the buyer for the cost of the work \ b. seller, no matter who wants the work done c. the buyer no matter who wants the work done d. buyer, only if he chooses to have the work done

. b. Normally, the seller would have to pay to bring the property up to applicable city codes.

The United States Attorney General would likely act to enforce the Federal Fair Housing Law when a. state officials fail to act b. a conspiracy exist to practice resistance to the Federal Fair Housing Law. c. a complaint is filed with the Supreme Court d. the commission involves more than ten units

. b. The Unites States Attorney General would likely act to enforce the Federal Fair Housing Law when there is evidence of a conspiracy to resist it.

The primary purpose of a site analysis by an appraiser is to terminate the a. applicable zoning laws b. highest and best use c. soil condition d. available amenities

. b. the primary purpose of a site analysis by an appraise is to determine the highest and best use of the land.

Which of the following items may be short rated a. real estate taxes b. interest c. title insurance d. fire insurance

. d. Fire insurance on the property may be short rated in escrow

222Government land use, planning and zoning laws are important examples of a. exercise of eminent domain b use of police power c. deed restrictions d. escheatement

2222b. government land use, planning and zoning laws are all examples of police power

The FHA will allow, but VA and Cal Vet will not allow, which of the following loans? a. a loan for the purpose of buying farm equipment b. a loan for the purchase of farm or agricultural land c. loan on a residential property which is to be rented out d. a business opportunity

34 . c. FHA will loan on rental property but VA and CAL-Vet will not

A contract entered into under duress would be a. voidable b. valid c. void d illusory

60 a. a contract entered into under duress is voidable by the injured party

Which of the following formula would an appraiser use to calculate the cubic footage of an attic with a gable roof. a. width x length x height =cubic feet b. width x length divided by 5 x height x 3 =cubic feet c. width x length divided by 4 x height =cubic feet d. width x length divided by 2 x height =cubic feet

A gable roof is an A shaped roof width two sloping sides rising to a point (ridge board). Memorize the formula to find cubic footage: Width x Length divided by 2 x Height =cubic feet

Larry sold his house to Mel, who did not recorded the deed, but moved in. Larry then sold the same property to Jane, who reviewed the county recorders records, but did not look at the property. Larry gave Jane a deed, which she recorded. Which of the following would be true concerning title to the property? a. Mel an Jane are co-owners of the property b. Jane now owns the property c. Jane has recourse against Mel for failure to record d. Mel maintains title

Although Mel did no record his deed, he took possession by moving in . Possession of the property by Mel give constructive notice. Since Jane recorded after Mel took possession, she had constructive notice of Mel's rights

A real estate broker wrote an offer for his buyers .The offer was made contingent on the approval of the home by the buyers uncle. the buyers informed the broker that their uncle was currently in Europe and they were unsure when he would return. The broker replied that the uncles' being out of the country would not be a problem. The broker then presented the offer to the seller without disclosing that the buyer's uncle was out of town. The seller accepted the offer. Under these circumstances, the broker 's conduct was a .lawful b. unlawful c. ethical d. unethical

D unethical (?)...

A valid written lease must include a. agreement to let and take delivery and acceptance b. term, consideration and description of the premises c. a landlord and tenant with the legal capacity to enter a binding contract d. all of the above

Each of the choises describes a necessary element of a valid lease

A buyer and seller initial the liquidated damages clause is a deposit receipt and then the buyer defaults . the deposit is a. given to the seller when escrow opens b. limited to 3% of the selling price c. divided equally between the seller and listing agent d. used to pay any cost incurred and then returned to the buyer

The standard deposit receipt provides that if buyer defaults, the seller and the agent split whatever the seller actually recovers from the buyer, but never to exceed the agreed upon commission, Since the buyer initialed liquidated damages seller should recover the deposit and split it with the agent.

Who signs the promissory note a. mortgagor b mortgagee c. lender d. beneficiary ------

a the mortgagor, borrower, signs the promissory note and mortgage

In describing the relationship between a seller and a salesperson employed by the listing broker, the salesperson is considered a. an agent of the seller b. a sub agent of the seller c. an employee of the seller d. an independent contractor , employed by the seller

a

Lenders may require a reserve or impound accounts for some loans, Included within those accounts are borrowers funds which are held to assume payment for all of the following recurring items except a. monthly mortgage interest payments b insurance premiums c property taxes d. special improvement assessement

a

Linda applied for a real estate loan. The loan application requested her to disclose her race and marital status a. refuse to fill out that portion of the loan application b .sue the lender and the real estate broker c nothing d completely fill out the loan application if she wants to get a loan

a

Mr Han wants to purchase 300 acres of land for the purpose of creating a subdivision , but did not have at the $1,000,000 cash needed for the purchase. He convinced hos friend , Mr Wu to pay the $1,000,000 for the land. Mr Wu did not have a real estate license, but immediately bought the land and then signs a land contract for the sale of the property to Han for $1,500,000. Th transaction would be a a valid purchase and resale b a violation of the cal real estate law c voidable by Wu d a discounted purchase money loan

a

34. rental schedules for income property are established by a. market comparison b. cost of construction c. gross multiplier d. capitalization of annual income

a. market comparison would be the best method of establishing rental schedules

Usually the buyer and or the lender will rehire a termite inspection when a home is sold. The best time for the seller to have the termite report issued is a before putting the home on the market b. after the parties have agreed to the price b. before opening an escrow d only after the lender has received the appraisal

a

When an applicant passes the real estate exam, how much time does he/she have to apply for the license? a one year from the date of the exam b. one year from the date they received the results of the exam c two years from the date of the exam d two years of the they received the results of the exam

a

When appraising income property with the capitalization approach , which of the following items is not a component of net operation income? a personal income taxes b potential gross rental income c cash flow d operating expense.

a

Loss of title results from a erosion b. prescription c. accretion d. certiorari

a erosion results in loss of title. Accretion is the addition of land by depositing due to action of water. Certiorari is writ for superior court, calling for records. Prescription is a method of obtaining an easement, not title

an appraiser 's primary concern when analyzing real property is a marketability and acceptability b. functionality c. supply and demand d. none of the above

a

broker Martinez takes a listing on a home from seller Kim and works day and night to find a buyer. After much effort, he secures a buyer , Mr Anderson , who makes an offer to purchase the property using FHA financing. Buyer Anderson;s officer is accepted by the Seller Kim , and escrow is opened . Buyer Anderson ovestates his financial position when applying for the FHA loan, At eh close of escrow , Buyer Anderson discovers that he is short $500 and asks Broker Marines to help him out, Broker Martinez to advance the money to the buyer so that Mr Anderson can complete the purchase of the property, and broker Martinez agrees to take a second trust the loan, In this transaction , which of the following is correct. a .both the buyer and broker may be prosecuted for violation of federal law b. only the broker may be prosecuted for violation of federal law c. the note may be voided , but only the buyer may be prosecuted for violation of the federal law. d, the note and trust deed are valid and the broker has not violated the law because he must do his utmost to see that the transaction is completed.

a

real estate licensees who originate loans provide borrowers with the federal RESPA booklet and disclosures when a federally related real estate loan is secured by a first lien and the proceeds are used for financing? a the purchase of four or less residential units b a room addition to the borrowers home c the purchase of 40 or more acres of raw land d ,the construction of 5 or more residential units

a

someone who has been granted a power of attorney' may not do which of the following a deed a property to himself b pay himself a commission c deed the property to another d sign the name of hos principal to legal documents

a

the method by which a local planning commission permits an inconsistency to the construction permits an inconsistency to the construction, systems, or standards within applicable building code is best known as a a variance b. an exemption c. a permit d .spot zoning

a

the sale of real property by a conditional installment sales contract gives the buyer (vendee) a the right of possession b an estate of inheritance c a freehold estate d all of the above

a

the seller is required to deliver the Homeowner 's and /or Commercial Guide to Earthquake Safety to the buyer of most masnry buildings with wood frame floors or roofs built prior to a 1975 b 1980 c 1985 d 2000

a

when a broker delivers his buyers loan application to the lender the broker has a fiduciary duty to a. the buyer only b. the lender only c c. both the lender and buyer equally d. primarily to the buyer and secondary to the lender

a

In real estate transaction, the term 'reversion' would most nearly mean a. the interest held by the landlord in property which has been leased b. the interest held by the life tenant in a life estate c. the interest of a beneficiary under a trust deed d. the right of the state to acquire property by condemnation

a 'Riversion' indicates that one party's interest will revert, go back, to another The right to future possession will revert to the landlord.

in the definition of 'highest and best use' one would likely find the phrase a. net return b gross income c. depreciation d. integration

a net return

A shared appreciation mortgage (SAM) is most beneficial when a. prices of homes are steadily appreciating b. there is a tight money marker c. financing is readily available d. prices of homes are declining

a prices of homes are steadily appreciating

30. why are warranty deeds are rarely used in California, but commonly used in other states a. the buyer may recover double damages when a grant deed is used b. warranty deeds are illegal in California c. recourse against a title company works better that trying collect from the grantor d. the law favors the use to the grant deed because the express covenants run with the land, while covenants of the warranty deed are personal to one particular buyer.

a problem with a warranty deed results in a claim against a seller who may lack ability to pay. a claim against a title insurance company to enforce a title policy is far more likely to be enforceable.

Who is responsible for the disclosure of Mello Roos bonds against the property? a seller b. sellers' agent c. buyers agent d both buyers and sellers agents

a the seller of the property subject to a Mello-Ross lien must make a good faith effort to obtain a disclosure notice concerning the special tax and give the notice to a prospective buyer.

. Water that is suitable for drinking and is not contaminated is said to be a. potable water b. privy water c. alluvium water d. avulsion water

a water that is suitable for drinking and is not contaminated is called potable water.

5. when a landowner explains to the planning commission that exceptional circumstances exist which will not be determined to the public and he should therefore be allowed to use his land in a manner prohibited by current zoning, he is seeking: a. variance b. an exception c. rezoning d. redevelopment

a when the owner of one piece of land permission to use hi land in a manner prohibited by current zoning, he is seeking a variance. If several lots were involved, it would be rezoning.

An agency relationship may not be created by a. subornation b, oral agreement c. ratification d. necessity or emergency

a, 'subornation' means doing something by lie, trickery or deceit. An agency relationship may not be created by subornation.

. Broker Bob and Broker Bill agreed to divide a 4-1/2 commission equally on the sale of a home, which sold for $162,500. Mary, the listing agent works for Broker Bob on a 50-50 commission split. Mary would receive approximately how must commission as a result of the sale? a. $1,828 b. $2,828 c. $3,656 d. $7,312

a, 1. $162,500 x 4 1/2%=$7,312.50 total commission 2. $7,312.50 / 2 = $3,656.25 commission to Broker Bob's office 3. $3,625.25 /2 =$1,828.13

Kiosk Is a term used to identify a, an information booth in a mall b. a storage warehouse c. a bridge linking two parts of a shopping center d. a special type of crane, used in a very tall construction

a, A kiosk describes the typical information booth in a mall

When determining the value of the property, which of the following dates is the most important to an appraiser? a. the date the contact was signed b. the date the loan was funded c. the date the transaction was recorded d. the date the escrow closed

a, the date the contract was signed by the buyer and seller would normally be the date on which a 'willing buyer'and a 'willing seller' mutually agreed on the sale price,value, of that property.

Which of the following loans will require a balloon payment? a. $22,500 with interest at 14.25% per year payable $320 a month for 10 years, the total interest is $19,827.60 b. $40,000 with interest at 10% per year payable $429.85 a month for 15 years, the total interest is $37,373 c. $100,000 with interest at 9,5% per year payable $840.85 a month for 30 years, the total interest is $202.709, d. none of the above

a. 1. $320 x 12= $38,400 total payments

One joint tenant may dispose of his interest by all of the following except a. will b. sale c. gift d. lease

a. A joint tenant may not will his interest.

Capitalization a. establishes the value of an asset by dividing the annual net income by the desirable rate of return b. is the effective interest return of and on an investment in a first trust deed. c. id based on gross income only d. results in net asset value

a. Capitalization arrives at he value of an asset by dividing the annual net income by th desirable rate of return

Which of the following would most likely provide an investor with the best hedge against inflation a. ownership of real estate b. United States savings bonds c. passbook savings account at a bank d. trust deeds and mortgages held as an investment

a. Historically, real estate is the best hedge against inflation

A seller entered into an oral listing agreement to sell real property with the broker, without a subsequent written verification. The payment of a commission to the broker under these circumstances would be a. permissible if the seller elects to so so, b. a violation of the regulations of the Real Estate Commissioner c. regarded as contrary to public policy d. a violation of criminal law.

a. If a seller wants to pay a commission to a broker under an oral listing, it is permissible for the real estate broker to accept the commission.

A real estate broker, acting as the agent for a seller, handed the buyer an amendment to the TDS The buyer has the right to a. terminate the sale within three days b. sue for criminal and civil damages c. do nothong, because he is still oblidated to proceed with the transaction d. terminate the sale within five days and bring a criminal action against the broker

a. If the TDS or amended TDS is delivered after the execution of an offer, the buyer has three days after delivery in person, or five days after delivery by mail, to terminate the offer in writing.

The word 'tenancy' in real property law, most nearly means a . the method or mode of holding title to real property by lessee or owner b . the interest in the property held by a life tenant c. the landlord tenant relationship d. none of the above

a. In real property law 'tenancy' is the method or mode of holding title to real property.

29. If the current highest and best use of a parcel is expected to change, the current use is referred to as a. the interim use b. the temporary use c. the transitional use d. the possible use

a. Interim use describes the current use, when the highest and best use is expected to change

A large airport changes the flight pattern, extending the runway and creation excessible noise which made Mrs Chang's home unusable . The legal proceeding by which Mrs Chang force the authorities to purchase her property is called a. inverse condemnation b. eminent domain c, police power d. quite title action

a. Inverse condemnation occurs when a public work, airport, freeway, etc. results in damage to property, making the property uninhabitable. The property owner may bring an inverse condemnation court action to force the government to purchase the property.

Prepaid rent received by a landlord is treated as taxable income a. in the year collected b. only if it is actually applied toward rent in the later year c. only if it is for trade or business property d. none of the above

a. Prepaid rent is reported as ordinary income in the year collected .

A home warranty company is offering referral fees to any real estate salesperson fees to any real estate salesperson who refers a customer to them. These referral fees are a. illegal kickbacks and prohibited b. standard business practice in the real estate industry c. legal if the referral fee does not exceed $50 d. legal if disclosed to everyone

a. Referral fees from companies offering settlement services, such as an escrow company, title company, and /or home warranty company, are illegal

the law which gives cities and counties control over the physical design of subdivisions is a Subdivision Map Act b Architecture Control Act c The City and County Act d. Subdivided Lands Law

a. The Subdivision Map Act is the law which gives cities and countries control over the physical design of subdivisions

When a notice of default has been recorded on a trust deed, the borrower is given a period of time to reinstate the loan, During this time, the right of possession belong to the a. trustor b. trustee c. beneficiary d. mortgage

a. The borrower (trustor) has the right to possess the property during the reinstatement period.

A real estate broker was helping his brother find a home. The broker, representing hos brother negotiated a lease with an option to buy from the owner/seller of a home. The real estate broker must disclose that he is the brother of the tenant /optionee to a. the owner/seller of the home b. the seller's broker or agent c. the multiple listing service d. nobody

a. The broker must disclose any special relationship with the buyer /tenant /optionee when representing his brother in negotiations with a seller/landlord/optionor

The impounding of purchase money, commonly required by the Commissioner when approving new subdivisions for sale, is primary for the protection of a. the buyer of a lot in the subdivision b. the construction lender c. the builder d. the Real Estate Commissioner

a. The buyer of a lot in the subdivision benefits, because a unethical builder might take the buyers's money without removing the lot from the blanket encumbrance

The position of trust assumed by a real estate broker as an agent for a seller or buyer is described legally as a. a fiduciary relationship b. a gratuitous relationship c. an independent contractor relationship d. a subcontractor relationship

a. The position of trust assumed by hte real estate broker as an eagent for the seller is or buyer is described legally as a fiduciary relationship

Who typically signs the grant deed when a nonprofit, unincorporated association sells real property? a. the president and recording secretary b. only the president v. any two officers of the association d. all officers of the association

a. The president and recording secretary typically sign the grant deed when a non profit, unincorporated association sells real property.

A seller or agent for the seller must give the buyer a 'natural hazard disclosure statement if the property is within which of the following areas? a special flood hazard area b. very high hazard severity zone c .earthquake fault zone d all of hte above

a. sellers agent must disclose the flood hazard zone in which the property is located.

A landlord and tenant mutually agreed to terminate a 2 year lease before the two year term had expired. The tenant has moved out and the landlord taken possession of hte premoses. This called a. surrender b. abandonment c. release d. accord and satisfaction

a. surrender occurs when the landlord and tenant mutually agree to terminate a lease. surrender is not the same as 'accord and satisfaction'

when real estate is sold, property taxes are set at a. 1% of the assessor's appraised value b. 100% of the tax assessors appraised value c. 1-1/2 % of full cash value plus an amount for the existing bonded indebtedness d. 1% of full cash value plus an amount for the existing bonded debt.

a. the property taxes are set at 1% of the full cash value plus an amount to cover any bonded debt approved by taxpayers.

The item that would appear as a debit on the buyers closing statement is a. the purchase price b. prepaid rents c. prepaid property taxes d. none of the above

a. the purchase price is a debit on the buyers closing statement

All property is either real property or personal property. Which of the following would normally be considered real property? a. natural growing vegetation b. trade fixtures c. lumper in a lumper yard d. crops which have been sold prior to harvest

a. vegetation is a real property

. a cause in e condominiums CC&R prohibits all 'for sale' signs on the property. this clause is a void because it is an unreasonable prohibition on hypothecation b. void because it is an unreasonable restraint on the right of alienation. c valid as a proper exercise of police power d. valid because it is represents an agreement

b

A real estate broker who has been appointed as a sub agent for a seller, with the seller's approval, has which of the following duties? a. A fiduciary duty equally to both the buyer and seller b. a fiduciary duty to the seller only c. a fiduciary duty to the seller and the broker who appointed him as the sub agent d. a duty tot be hones and fair to the seller and fiduciary duty to the broker who appointed him as the sub agent.

b

Adam sold home to Tim, but negotiated a two year leaseback and remained in possession. Tim immediately placed the deed he received in a safe deposit box for safe keeping. Adam then sold this same home t o Sally .Sally recorded the deed home owns the home? a Tim , because he received the first deed b Sally , because she recorded the deed c. Adam , because he still has three more deeds ready to be sold d Adam , because both sales were improper

b

All of the following are real property securities except a a guaranteed note b. a promotional note created 37 months ago c. an out of sate subdivision d. a guaranteed real property sales contract, offer for sale through a real estate broker

b

the grant of an unlocated easement in a transfer of real property is a. void for lack of certainty b. valid c. invalid because an easement must be specifically located d. voidable because a deed cannot be used to create an easement

b

In the sale of real property which is part of the estate of a deceased person, which of the following normally determines the amount of the commission paid to the real estate broker ? a the local multiple listing service b. the administrator or executor of the estate c. a court order d. the California Bureau of Real Estate

b

Mr Yamaguchi bought a parcel of vacant land . He then spent $450,000 to construct a home. Other homes in the area sell for $150,000 to %180, 000. Mr Yamaguchi's home has suffered what type of obscolescence ? a. functional obscolesce b. economic obscolesce c. physical obscolesce d. there is no obscolesce

b

Which of the following is often used in a commercial lease to adjust the rent over time for inflation? a. average commercial rental amounts in the area b. the Consumer Price Index (CPI) c. latest economic short term indicators d. the Standard and Poors's Index

b

Which of the following would usually be considered real property a. landfill dirt in a dump truck b. airspace above the surface of the land c. unharvested corps which have already been sold d. lumber to used to build a home

b

a home owner needed $9,000 to pay for his child's college education. A loan broker arranged a home equity loan for $9,600. the broker must provided the borrower with which of the following? a. broker closing statement b mortgage loan disclosure statement c. loan balance statement d. beneficiary statement

b

a release whose duration is greater than one year, what is not required a. writing b. signatures from both the lessor and lessee c. termination date d ,amount of rent and the method of payment

b

in the capitalization approach appraisal, which of the following expenses is subtracted from the scheduled gross income to arrive at the effective gross income? a. taxes b. vacancies c. loan payments d. depreciation of improvement

b

special assessement levied under the Street Improvement Act of 1911 may be used for any of the following purposes except a new drainage and sewer systems b to purchase vacant land c. build off-site local improvement s d improve street lighting

b

the Cal Real Estate Commissioner has the authority to a assess damages against real estate licensees who engage in fraudulent activities b promulgate rules and regulations to promote the enforcement of the California real estate laws c. issue non residents real estate licenses to states which prohibit their residents from holding Cal real estate licensees d all of the above

b

28. Building that is an improper improvement to its site would exemplify a. curable social obsolescence b. incurable functional obsolescence c. curable functional obsolescence c. incurable physical deterioration

b. when a building is an improper improvement to its site, it is functionally obsolete. It is incurable because it would not make economic sense to try to cure if it is not physically obsolescence because physical obsolescence results from decay, dry rot, wear and tear, and different maintenance.

When a leaseholder (tenant) signs a valid and enforceable contact with an assignee, the the assignee who acquires the leasehold becomes a a grantor b. tenant c. sublease d. landlord

b. when a leaseholder (tenant) assigns a lease, the assignee becomes the tenant

Carol a licensed real estate broker presented an offer to a seller which met the term of the listing. the offer was from a financially qualified African American. Later one of the salespersons presented the seller an offer at a lower prices for Caucasian buyers. The seller did nor accept either offer, but instead, sold the property to a neighbor through the same salesperson. The neighbor wanted to buy the property to prevent a minority person moving into the neighborhood. Which of the following parties has not violated the Civil Rights Act of 1968. a seller b. neighbor c. Caucasian buyers d. salesperson

c

FHA will, but VA and CAL Vet will not provide loans for a agricultural land b farming equipment c duplex purchased for rental d business

c

Lenders in the 'prime' mortgage market generally prefer that not more than what percent of an applicant's gross income be spent for housing? a. 20% b. 21-24% c. 25-28% d. 33%

c

Linda sold a home for $250,000 . she made a 20% profit What did the home cost? a $183,333 b. $200,000 c. $208,333.333 d. $272.50

c

Loan to value ration (LTV) may be defined as a mortgage as percent of capitalization rate b mortgage loans as a percent of interest c mortgage loans as a percent of appraised value d mortgage loans as a percent of assessed value

c

The court case of Easton v, Strassburg expanded which of the following real estate procedures a. disclosures of economic obsolescence b. selling properties 'as is' c. disclose of all known material fact regarding the phyisical condition of the property, d. advising buyers of their right to have own inspections

c

The fair employment and housing act established a the Federal Housing Administration b the Department of Housing and Urban Development c. the Department of Fair Employment Housing d the Unruh civil rights act

c

The liquidation of a financial obligation on an installment basis is known as a conveyancing b. accelerated c. amortization d. conversion

c

The process of calculating the present worth of a property on the basis of its capacity to continue to produce an income stream is called a. depreciation b .capitalization c. market data d. recapture

c

When a real estate broker advertises real estate and/or real estate loans through the internet , the broker is required to do which of the following? a return all messages promptly and correctly within 24 hours of receipt b employ only real estate licensees to respond to queries about properties and loan terms c exercise proper supervision over licensees and non licensees responding to queries d. report all international inquiries to the BRE

c

When a tenant moves out, a landlord can retain as much of the security deposit as it reasonable necessary to cover all of the following expenses except a unpaid rent b. reasonable cleaning of the premises c. storage cost for items of personal property left in the premised s by the tenant d. repair of damages to the premises , exclusive of ordinary wear and tear , caused by the tenant

c

When an agent withholds a new listing from other agents and /or the MLS in order tot attempt to sell the listing herself, it is considered unethical and described as a commingling b a pocket listing c making a secret profit d the fiduciary duty of the agent

c

Which of the following should be considered as expense item when arriving at net operation income for a 50 unit apartment building a income tax b depreciation c salary for a part time gardener d addition of a clubhouse

c

Withdrawals from the brokers trust account may be made by a. any employee of the broker b. any officer and director of the brokers' corporation c. an unlicensed employee of the broker who is authorized by the broker and fidelity bonded d. any of the above.

c

a commercial property was appraised at $800,000 using a 9% cap rate. The annual net income was $72,000. what would be the value of the property if the appraiser used a 12 % cap rate ? a. $300,000 b $420,000 c. $600,000 d. $840,000

c

a real estate broker must keep records of all money received by him and /or anyone working for him in a book called a profit and loss statement b a closing record book c a trust ledger d. a reconciliation book

c

after a broker reconciles his client trust account , the brokers client liabilities should match the trust account a overages b shortages c balance d fidelity bond

c

an agent licensed as a salesperson is considered an independent contractor of the broker for the purpose of a .no broker supervisor or interference by the broker b. broker taking liability for the salesperson 's errors c. paying income taxes and social security taxes an d unemployment insurance d. eligibility for workers compensation insurance coverage

c

an agent promised his buyer a 7.5% loan , but at close of escrow pressured the buyer to accept an 8% loan. The buyer gave in to the agent 's pressure and accepted the 8% loan. the agent 's conduct was a . legal b. illegal c. usual d. unusula

c

an exclusive right to sell listing on a probate sale of a real property may not ecceed a. 30 days b 45 days c 90 days d 180 days

c

broker Bob just listed a home for sale which is currently in probate. What is ht maximum period of time which the executor of the estate may grant Bob to sell the property in an exclusive authorization and right to sell probate listing ? a 30 days b 45 days c 90 days d any length of time determined by mutual agreement of Bob and the executor of the estate

c

each of the following deeds will contain at least some implied covenants from the grantor except a grant deed b warranty deed c. quitclaim deed d gift deed

c

every lease has an implied covenant to place the tenant in a quiet enjoyment of the property for the purpose for which it was released. This mean tenant has a right to be free from disturbances. a nuisances inflicted by adjoining property owners b. a loud air conditioning unit c. the landlord or another who has paramount title d all of the above

c

how long does the owner have to return a copy of the written lease or rental agreement to the tenant ? a 5 days b. 10 days c 15 days d 21 days

c

in times when the business cycle is rapidly changing , the environment for long term investment is a expanded b highly favorable c unattractive d unaffected

c

some loans must comply with the REASPA (real estate settlement procedures Act) when the loan is secured by residential real property and contains four or less residential units the loan must comply with the respa regulations if the loan is made by a the seller of the property who carries back a note secured by a purchase money first trust deed. b. a private lender who loans her own money through a licensed real estate broker c . lenders whose deposits are insured by an agency of the federal government d any of the above

c

the only person who can pay compensation tot a real estate ssalesperson for real estate actoivities is a the seller b the buyer c his or her employing broker d the escrow company only when escrow closes

c

the words et al on deed mean a and wife b the end c. and others d. with receuse

c and others

'depression' 'recession' 'expansion' and 'prosperity' represent the four phases of a. the investment cycle b. the secondary mortgage market cycle c. the business cycle d. the real estate cycle

c. 'depression' 'recession' 'expansion' and 'prosperity ' represent the four phases of the business cycle

The most common method used an appraiser in the appraisal of an amenity property would be a. gross multiplier b. capitalization approach c. market comparison d. cost approach

c. an amenity property is a home and is appraised by the market data approach, also called market comparison

a subdivider is selling new homes, using land contracts fro financing. the subdivider places into the contract a clause whereby the purchaser agrees not to prepay any part of the debt. which of the following statements is true? a. the vendee is bound by the clause b. the clause is binding on subsequent purchases c. the vendee can disregard the clause d. the entire contract would be void because of the clause

c. the vendee can disregard the clause

A real estate broker handles both real estate sales and property management. How are the buyers earnest money deposits , and the rent collected a=on apartments owned by the broker , along with apartments managed for others handles as they relate to the client trust account? a all money received by the broker may be put in his trust account if he is fidelity bonded for the full account balance b all money may be placed in the trust account if the broker keeps proper records of each deposit and withdrawal in the trust account ledger c. it is illegal only if the broker maintains two separate trust accounts , one for the earned money deposits and one for the rent he collects for his own property and the property he manages for the clients d it is illegal for the broker to place any rent he collects on property he owns in the client trust account

d

A real estate option becomes a mutually binding contract , when a the option contract is signed by both the optionor and the optionee b consideration passes from optionee to optinor c the optionee takes possession of the real property. d the optionee exercises the right to purchase the property, using the option

d

A sales person Kack is enticed to use an in house escrow and mortgage company by receiving extra compensation for the broker .which of the following is true? a. he must use the in house escrow and mortgage company b. he can use in-house escrow and mortgage company only if he discloses the business relationship with the in-house services and the full amount of additional compensation he will receive from the broker c. he can use in house escrow and mortgage only if he offers another outside choice d. the broker is prohibited from paying any extra compensation to salespeople who have clients use in house escrow services.

d

A tenant may be justified in abandoning a leased property if the landlord has constructively evicted the tenant. Which of the following acts would be an example of constructive eviction? a. the landlord has shown the property to a new prospective tenant and has entered into lease negotiations with the new tenant. b. the landlord has failed to make necessary repairs tot he premises c. the landlord has made extensive and unwarranted alterations to the premises, making it no longer usable for its original purpose d. all of the above

d

All of the following will terminate an agency relationship except a the death of the agent or seller b the mutual consent of agent and seller c the destruction of the subject property d estoppel

d

Joe is a licensed real estate broker , has just written up an exclusive listing on Fred's home. at this time , Joe's listing may be described as a bilateral contract b an executory contract c an express contract d all of the above

d

Mr Ferguson tells Broker Bryant that he wants to rent warehouse space and hires Broker Bryan to represent him as his agent. Stevenson has warehouse space for rent and is contacted by Broker Bryant. Stevenson hires Broker Bryant to be his agent in renting the warehouse space. Mr Ferguson rents Stevenson's warehouse space through the services of broker Bryant . Mr Ferguson and Stevenson, however Stevenson did not know Broker Bryant wan acting as an agent for Ferguson in the transaction which of the following true? a only fergerson is liab;e to pay a commssion b. only Stevenson is liable t o pay a commission c. both Stevenson and Ferguson are liable for the commission d neither fergerson or Stevenson are liable for a commission

d

Mr Gonzales purchased a home , securing the loan wit ha purchase money trust deed. Several years later he sold the home to Mrs Mendelez for all cash. assuming all appropriate documents were properly recorded, which of the following would not be found by searching the public records/ a a grant deed to Mr Monzales b the trust deed naming Mr Gonzales as trustor, used in purchasing the property c. reconveyance deed to Mr Gomez d reconveyance deed to Mr Menlendez

d

Mr Johnson sold his home on an installment sales contract to Mr Ogata. At a later time, Mr Johnson decided to sell the installment sales contract to Mr Ramos. To do this , he must a. assign the contract to Mr Ramos if he transfers the title b. transfers the title to Mr Ramos if he assigns the contract. c. if the contract is unrecorded, he must obtain the vendee's permission to create a new encumbrance if the payment on his existing encumbrance will require increased monthly payments which exceed the payments on the contract . d. all of the above

d

Mr Nguyen does not have a real estate license . he runs a n investment firm, advertising and selling properties for his clients. Since theses transaction require a real estate license, who will proscecute him for this criminal violation of a real estate law? a the local police b the real estate commissioner c the state attorney general d district attorney of the county in which the activity occurred

d

Mr and Mrs Nasar were denied a home loan due to a very negative credit report. they obtained a copy of the report and found that the critical information contained in the report was false. They sent the credit reporting agency all he information necessary to disprove the false information and requested that the agency correct their records. If the credit reporting agency fails to correct the information in their files, the Nasrs could file a court action and seek a. actual damages b attorney fees and court cost c punitive damages d any of the above

d

The fastest and easiest method of estimating the replacement cost of improvements is the a reproduction cost b unit in place cost method c quantity survey method d comparative method

d

The government national mortgage association guarantees with principal and interest payments which of of following? a pass through securities b. all loans by any federally related lender c. on loans on the owners occupied single farm dwellings d only on loans on...

d

Under the Federal Fair Housing Law (title VIII of the civil rights act of 1968) , persons complaining of discrimination are permitted to enforce their rights by bringing which of the following actions ? a civil action filed in federal court b civil action in state or local court c complaint filed with HUD \d any of the above

d

What is the definition of value to an appraiser? a relationship of desitous person and things desired b ability of one commodity to command other commodities c. present worth of future benefits arising out of ownership of property. d. all of the above

d

When a broker, while acting as an agent for the seller in a sale of real property , misrepresents the property to a buyer the broker may cause the seller to be subjected to a rescission of the contact by the buyer b a court action for damages by the buyer c tort liability for damages d any of the above

d

When a real estate broker decides to operate an office using a fictitious business name, before soliciting business under the fictitious business name the broker must a file the at the county recorders; office in the county where his office is located. b. publish the fictitious business name in the newspaper as required by law c. have a brokers licensed issued by the Bureau of Real Estate after the name has been approved by the real Estate Commissioner d. do all of the above

d

When selling a business opportunity , the seller must collect sales tax from the buyer on which of the following items ? a the inventory which is included in the sale b the fixtures and furniture included with the business c goodwill value d none of the above

d

Which indicator would best define the purchasing power of the US dollar? a interest rate b. gold standards c discount rate / d. price indexes

d

Which is least satisfactory in providing a legal description? a the escrow instructions b the standard title insurance in providing a legal description c a recorded grant deed d a property tax bill for real property

d

Which listing must contain this statement 'the amount of our rate of commission is not fixed by law. It is set by each broker individually and may be negotiable between the seller and broker" a a listing on a 50 unit apartment building b a listing on a commercial building c a listing on a building used for manufacturing d listing on one-to four residential listing

d

Which of the following would usually be true concerning a hard money second trust deed? a. it always has a lower than normal interest rate b. it must always be repaid in 4 years c. it is seller financing d it is secured by the real estate and given to a third party to obtain a cash loan

d

Why do some clients prefer'single agency' representation? a. a 'single agency' broker may have one of his salespersons become the agent for the seller and have another salesperson in his office become the agent for the buyer. b. the 'single agency' broker provided better service because he represents both the seller and buyer in the same transaction. c. in a 'single agency' transaction, the seller cannot choose his own broker or represent himself d. the 'single agency' broker is more client oriented

d

a buyer and seller entered into a contract for the sale of the sellers home. the buyer backed out, the seller exercised his right of rescission. which of the following is true. a. the seller can use the buyer b. the seller must return the deposit to the buyer c. the seller can try to sell the property to someone else in order to limit the damage d. all of the above

d

a salesperson had two listings and decided to change employing brokers . How will the commission from the two listings be handled when they eventually sell.? a she may be paid by either broker b she must be paid by her new broker c she must be paid by her old broker d she is not entitled to any commission

d

an owner orally agreed to sell a home to the tenant currently living in the home. The owner was aware that after the creation of their oral sales agreement and in reliance upon the agreement , the tenant made a large number of improvements to the property, which increased the value of the property. The owner then changed his mind and decided not to sell. Must the owner go through with the sale? a no, the statute of frauds requires the contact to be in writing to be enforceable b no, but the tenant has a good lawsuit for damages c .es, because there is an ostensible contract d yes, the doctrine of estoppel will prevent the owner from using the state of frauds to deny the contract

d

bob is beneficiary of a $150,000 deed of trust on a single family home located in Costa Measa , CAL, Mike the trustor made a $20,000 in principal payment, then defaulted. At a trustees sale , the property sold for $100,000 resulting in a $30,000 deficiency , in cal ,a deficiency judgement cannot be obtained, a if the loan was secured with a purchase -money trust deed b if foreclosed through a trustee's sale c if the fair market value of the property exceeds the loan balance d any of the above situations

d

title to real property can be acquired by an individual by all of the following ways except a prescription b patent c intestate succession d escheat

d

When a real estate broker arranges a loan originated by a federally related lender, the broker must provide the borrower with the federal RESPA booklet and disclosures when the loan is secured by a first deed and the process are used for financing a. the purchase of a personal residence by a family who owns three or more similar units b. the purchase of one individual unit in a complex on the same block c, the purchase of a single family dwelling by an individual buyer d. all of the above

d. when a real estate broker arranges a loan originated by a federal related lender, the broker must provide the borrower with the federal RESPA booklet and disclosures when the loan is secured by a first trust deed and the process are used for financing four or less residential units.

the maximum commission which can be charged by a real estate broker in the sale of residential income property is a. limited by California real estate law b. negotiable between the principal and broker c. limited to no more than 9 percent of the total sales price d. set by local custom

the amount of commission is most real estate transaction is not set by local custom or limited by law. the commission is set by negotiation between principal and broker.

36. The law of intestate succession is applied to the distribution of an estate when a. there is a holographic will b there is no will c. some heirs are omitted from the will d. in any of these cases

the law of intestate succession is applied to the distribution of an estate when there is no will

. A buyer agreed to buy a home for $10,00. She deposited $6,000 into escrow. A lender agreed tp lend 80% of hte appraiser value of $200,000 additionally, the settlement cost to be charged the buyer amount to 3% of hte purchase price. How much additional money must be buyer deposit into escrow prior to closing? a. $25,000 b. $40,000 c. $50,000 d. there is insufficient information to arrive at an answer

1. $200,000 x 80% =$160,000 loan amount 2. $210,000 x $160,000 =$50,000 total downpayment 3. $210,000 x 3% = $6,300 settlement cost 4. $50,000 / $6,300 = $56,300 total of down payment and settlement cost $56,300 -$6,000 (already in escrow)-$50,300

Which of the following notices would affect the filing date of a mechanic's lien? a, notice of non-responsibility b. notice of cessation c. notice of completion d. all of the above

22d. The notice of a non responsibility, notice of cessation, and notice of completion all affect the filing of a mechanic's lien.

How many townships are in a ranch which is 35 miles square? a. 12 b. 18 c. 24 d. 36

36 miles square means a square that is 36 miles =on each side. Since a township is 6 miles on each side there would be a 6 township on each side of the ranch 6 x 6 =36 township.

When a buyer withdraws an offer before the offer was legally accepted by the seller a. the seller may be entitled to one half of the deposit b. the broker may sue the buyer fro specific performance c. the buyer is entitled to receive his deposit back d. the buyer may not legally withdraw an offer

A buyer may withdraw his offer before acceptance by the seller. The broker must return the deposit to the buyer

The usual listing contract authorizes a broker to a. find a purchaser and bind the seller to contract to sell b. find a purchaser and accept a deposit with an offer to purchase c. guarantee prospective purchasers that the home is defect free d. convey the real property upon the receipt of a perfect offer

A listing is an employment contract which usually authorizes the broker to find a purchaser and accept a deposit as the seller's agent. The broker is not authorized to do the acts described in the other choices,

A trust deed in the County Recorders Office, refers to standard clauses contained in a previously recorded trust deed . The previously recorded trust deed is called a a. short form trust deed b. invisible trust deed c. fictitious trust deed d. primary deed of trust

A recorded trust deed or mortgage containing details which may be incorporated by reference and apply to later loan documents is call a fictitious trust deed.

The proper method to enforce private property restrictions on real property is a. an attachment lien b. an injunction c. an execution lien d. a desist and refrain order

An injunction is a court order restraining a party from violating private restrictions. An attachment lien is the holding of property pending the outcome of lawsuit. An execution lien is a method of collecting a monetary judgment. A desist and refrain order can be used by the Real Estate Commissioner to halt a violation of the real estate.

A prospective buyer obtained a three month option on parcel of real property by paying $300 to the owner . All of the following are true, except a. The option is a unilateral contract b. the optionor is totally restricted by having received 'valuable' consideration with the option c. the option imposes no obligation on the optionee to buy the property; d. the optionee has created a legal interest in the property

An option does not create a legal interest in the property for the optionee Option is a right given for a consideration to purchase or lease a property upon specified terms withing specified time

When an eligible veteran purchases a home under the Cal Vet program, the seller executes a grant deed in favor of a. the veteran b. the California Department of Veterans Affairs c. the veteran who the executes a grant deed in favor of the California Department of Veteran Affairs, until the debt is paid in full d. the bank that made the Cal-Vet loan

In he CAL-Vet program, the seller deeds the property to the California Department of Veteran Affairs. The California Department of Veteran Affairs then deeds the property to the veteran when the debt is paid in full.

The major cause of loss of value in real property is due to a. wear and tear b. obsolescence c. deferred maintenance d. old age

Obsolescence includes both economic and functional obsolescence. Obsolescence causes more loss in value than the physical deterioration described in choices A, B, and D.

The homeowner can deduct all of the following cost for his primary residence each year on his primary residence each year on his federal tax return except a. an uninsured casualty loss b. local real property taxes c. painting the living room d. the portion of his monthly mortgage payment attributable to the payment of interest.

The homeowner may deduct some uninsured casualty losses, property taxes, and interest payments on the home's mortgage. The homeowner cannot deduct maintenance expenses such as painting.

which of the following statements is incorrect regarding the ownership of real property that includes riparian rights? a .riparian right may not be served from the voluntary transfer or recommendation b, an owner may sell any apart of the land without transferring the riparian rights provided the part being sold is not adjacent to the water c. an owner of real property with riparian rights may convey title to a portion of the real property together with riparian rights d. an owner of real property may transfer riparian rights together wit h title to the real property by express agreement when the land is contigous to the water.

a

When an appraiser applies the land residual technique, the unknown factor is the a. value of the land b. value of the building c. value of the cash flow d. value of the land and building together

a .the unknown factor in the land residual techniques is the value of the land.

When the facts of lawsuit suggest that an award of money damages would not provided and adequate remedy for breach of contract, the person bringing the suit may seek specific performance. Each of the following people should be able to get a specific performance judgment from the court except a a licensed real estate broker in his capacity as agent for the principal. b. a buyer who is purchasing a single family residence c. an attorney in fact acting for a buyer who resides in another state d. the buyer of vacant land

a A broker may not use a buyer or a seller for a specific performance of a real estate contract, instead, the broker sues fro money damages.

Which of the following leans is exempt from the Federal Truth-in Lending Law on the basis of the type of loan itself? a. an agricultural loan b. FHA loan to buy a home c. a VA loan to refinance a veteran's home d. $25,000 loan from a credit union for home improvement purposes

a Business loans and agricultural loans are exempt from the Federal Truth in Lending Law

Elizabeth, a licensed California real estate broker, received a referral of a buyer form an out of state broker. Elizabeth sold this buyer a home and wants to split the commission with the out out of state broker. Under the California Real Estate Law a. Elizabeth may split the commission with another broker of another state b. Elizabeth cannot divide a commission with a broker of another state c, Elizabeth can pay a commission to a broker of another state only if that broker is also licensed in California d. none of the above

a California real estate broker can share her commission with an out of state broker

Mr Winters owned an apartment building with an adjusted cost basis of $440,000 and a fair market values of $700,000. He exchanged the property for an apartment house which had a fair market value of $730,000. Both parties were free and clear, and no adjustment was made for the difference in value. For federal income tax purposes, the new property will be a cost basis for Mr Winters of a. $440,000 b. $700,000 c. $730,000 d. $1,430,000

a In a 1031 exchange, the adjusted cost basis of the property being traded becomes the cost basis for the property being acquires of no adjustment is made for differences in value

27. who has primary regulatory responsibility for approvals under the subdivision map act a. local city and /or county agencies b. the bureau of real estate c. the department of labor d. the federal housing administration

a Local city and or county agencies have the primary regulatory responsibility for approvals under the subdivision map act.

An owner of a parcel of real property gave his neighbor a deed, granting his neighbor a deed, granting his neighbor an easement to cross his land. The easement was not specifically located. The neighbor's right to use the easement is a. valid because the location of the easement need not be specified b. enforceable only if the easement is an easement in gross c. invalid because an easement must be specifically located. d. unenforceable because easements may not be created by a deed.

a The specific location of an easement is not required for the easement to be valid

Under an exclusive agency listing, broker David diligently advertised and marketed a $650,000 home owned by Mr Marquez. Before the listing expired, Mt Marquez found is own buyer and sold the home directly to the buyer without using broker David or any other agent. Mr Marquez refused to pay broker David any commission. Broker David is entitled to a. no commission b. half of the commission c. reimbursement for all expenses incurred in advertising the home d. a full commission

a Under an exclusive agency listing, the seller has retained the right to sell the property himself directly to a buyer without using any agent. When the seller in an exclusive agency listing sells the property himself, no commission is paid

8. A subdivision new homes is encumbered by a blanket construction loan. as each of these encumbered homes are sold, the beneficiary should issue which of the following? a. request for partial reconveyance b. reconveyance deed c. partial reconveyance deed d. all of the above

a as each parcel is sold, the beneficiary (lender) will issue a 'request for partial reconveyance' to the trustee. the trustee then records a 'partial reconveyance deed' which removes that home from the construction loan encumbrance.

what contributes most to the maintenance of the value in a well planned community? a conformity to proper land use objectives b. prevention of major street construction c nonconforming d .omproper orientation

a conformity to proper land use objectives

John and Debbi, husband and wife , own a home as community property. If only one spouse signed a listing contract to sell the property, the listing is a enforceable contract b an unenforceable contract c an unbinding contract a violation of the Staute of Frauds

a enforceable contract

under cal law, real property is sold to the state on June 30 if the property taxes have not been paid. The most important aspect of this sale is that it a/ starts the running of the redemption period b. gives notice to the owner that he must vacate the property within 180 days c. allows anyone to buy the property at that time by paying the back taxes plus interest d. all of the above

a the 'sale to the state' merely starts the running of a five year redemption period. The owner gets to remain in possession for five years and can redeem it by paying the back taxes interest and penalties.

the capitalization approach to appraisal is a process whereby an appraiser a. converts annual net income into capitalized value b. determines accrued depreciation c. establishes cost of capital investment d. finds based upon gross income

a the capitalization approach to appraisal converts annual net income into capitalization value.

Mr Buyer is considering purchasing an apartment property. He is given the following information by the agent. listing prive $948,00, gross income $143,00, expenses $57,200 net income $85,800. He wants an overall return of at least 8%. His agent should advise him in which of the following ways a. buy the property since the capitalization rate is approximately 1% greater than required. b. buy the property since the capitalization rate is approximately 7% greater that required. c. do not buy the property since the capitalization rate is approximately 5% less than required. d. do not buy the property since the capitalization rate is approximately 1% less than required.

a. $85,000 divided by $948,000=9.0% If he buys for the listed price he would have a return of 9.05%. Since he will settle for a 8% return, he should buy the property because the cap rate is approximately 1% greater than he is asking for.

. A mortgage loan disclosure statement must be given to the borrower. a. within three days of receipt of a completed loan application or before the borrower is obligated to take a loan, whichever is earlier b. within two days of the time the borrower signs it c. within one week of the time the borrower signs it. d. before the close escrow

a. A mortgage loan disclosure statement must be given to the borrower within three days of receipt of a completed loan application or before the borrower is obligated to take the loan.

When someone who has passed the real estate exam pays the fee to obtain a real estate license, there is a certain amount that is credited tot he Real Estate Education, Research, and Recovery Account (REERRA) A portion of that money is allocated for recovery purposes and is used a. to help offset damages caused by licensees against the general public b. so a salesperson can recover lost commission due to the broker/s negligence c .for research projects only d. for none of the above

a. A portion of hte license fee is places in a real estate fund which contains a Real Estate Education, Research, and Recovery Account designes to help offset damages cause by licensees against the general public

An uncle bought a home two years ago and purchased a standard title insurance policy. The uncle died and wills the home to his nephew. During probate it was discovered there was a defect in the title to the home because the grantor who sold the home to the uncle had been legally incompetent at the time of the sale. The title company denied any liability under the title policy. the probable outcome of the lawsuit will be a. the title company was liable because its obligation under the policy is not terminated by the death of the uncle b. the title company was not liable because the standard title insurance policy does not cover damage resulting from an incompetent grantor c. the title company was liable if the nephew files his lawsuit withing one year of the uncles' death d. The title company was not liable bacause the death of the policy holder terminated the obligation to defend the title

a. A title insurance policy insures title as of the date or transfer of title. The death of the policy holder (buyer) does not terminate the title insurance company's obligation to insure marketable title was present at the time of the transfer.

An appraiser determines an estimate of value based upon what date? a. the date the purchase contract is signed. b. the data escrow was opened c. the date the loan was founded d. the date the deed is recorded

a. An appraiser determines an estimate of value based upon the date the purchase contract is signed

Mr Daniels made a written offer to purchase a home through Broker Starr. However, Daniels died in a car accident before Broker Starr could notify him of an unqualified, signed acceptance by hte seller. Which of the following statenets is most correct,? a. the death of Daniels constituted a revocation of the offer, b. the acceptance does not have to be communicated to the buyer c. notification of acceptance to the executor would bind the daniels estate d. the contract would not be binding because the deed had not been delivered into escrow

a. Death of the offerror constitutes a revocation of the offer. Legally, if the acceptance had been communicated to the buyer before the accident, the contract have been binding on his estate.

. A high efficiency ratio (EER) on an air conditioning unit means a. the unit is more efficient b. the unit is less efficient c the unit needs more electricity per BTU produced d. air conditioners do not use energy efficiency ratios

a. The energy efficiency (EER) measures the efficiency of the air conditioner. the higher the EER, the more efficient the unit

Definitions 1. A sudden and dramatic loss of land by the action of water. . The addition of soil, by gradual deposit, through natural causes 3. The gradual loss of a land by the operation of water or wind 4. Soils deposited on the sphere or bank of a river or ocean by action of the water . Which answer arranges the words in the same order as the definitions? a. avulsion, accretion, erosion., alluvion b. accretion, erosion, avulsion, alluvion c. erosion, avulsion, accretion, alluvion d. erosion, alluvion, avulsion, accretion

a. These define avulsion, accretion, erosion, alluvion. The key is to recognize the definition for avulsion, only one choice offers it as the first definition

How is title perfect by someone who has met the requirements to take property by adverse possession? a. by a quiet title action in court b. by recording a writ of execution c. by prescription d. by paying the current year;s property taxes.

a. Title is perfect by someone who has met the requirements to take property adverse possession by a quiet title action in court.

When a broker is also providing escrow services, the broker must record the trust deed. a. within one week of the closing b. before closing c. within one months of the closing d. none of the above

a. When a broker is also providing escrow services, the broker must record the trust deed within one week of the closing

When a broker receives an advance fee for publishing a special pamphlet advertising properties which he has not listed for sale, he must a. give an accounting to the seller upon demand for any funds he has collected for the advertising b. hold the money until the property is sold c. only spend his advance fee before putting the left over money is hos client trust account d. return all the money if the property is not sold.

a. When a broker receives an advance fee for publishing a special pamplet advertising properties which he has not listed for sale, he must give an accounting to the seller upon demand for any funds he has collected for the advertising

What appraisal license is required to appraise a strip mall valued $500,000? a, certified general real estate appraiser b. certified residential real estate license c. residential license d. trainee license

a. a certified general real estate appraisers' license is required to appraise a nonresidential property valued over $250,000

A grant deed is deemed by law to be executed when it is a. signed by the grantor b. accepted by the grantee c. delivered to escrow d. recorded

a. a grant deed is deemed by law to be executed when it is signed by the grantor.

Which of the following loans may be described as a 'balloon loan'? a. a partially amortized loan b. a fully amortized loan c. a non-assumable loan d. an adjustable rate loan

a. a loan is a balloon loan when it calls for a payment that is more than twice the amount of the smallest installment. A partially amortized loan would always call for a balloon payment.

When a vendee in a land contract is paying the vendor impounds for taxes and insurance, those payments may not be disbursed for any other purpose without the consent of the a. trustee b. beneficiary c. vendor d. payor

a. a residential neighborhood comprised of mostly owner occupied residential properties tends to stabilize values

A real estate licensee who shows minority buyers homes located in segregated neighborhoods only, is guilty of a. steering b. redlining c. blockbusting d. panic buying

a. a showing minority buyers homes that are in segregated areas only violates fair housing laws and is called steering

To have a binding contract between a buyer and seller, it must a. have been offered and accepted b. be recorded c. contain acknowledgement d. all of the above

a. all contracts must have been offered and accepted in order to be binding

When an appraiser uses the market data approach to appraisal, she would be most interested in the date a, the price was agreed upon b. escrow was opened c. recording occurred d. escrow closed

a. an appraiser is most interested in the date 'the price was agreed upon'

In real estate contracts, the consideration must be sufficient relative to have in value in order to win a lawsuit seeking a. lis pendens b. specific performance c. an attachment d. damages

a. lis pendens

During normal economic times. investors who make long term investments are said to have a. more risk than those who make short term investments b. less risk than those who make short term investments c. a temporary solution to their money problems d. a problem, because they are wasting their money

a. long term investments normally have more risk than short term investments. Investors do not like long term investments during periods of high inflation and rapidly changing business cycles .

Mike owns a 20-unit apartment building. he reports his income on a cash basis; therefore he can deduct all of the following for tax purposes. except a. loss of income due to vacancies b. depreciation of improvement c. interest payments on the third trust deed d. the cost of painting three units

a. loss of income due to vacancies

Promissory notes often include an 'or more' clause an 'or more' clause would a. allow the borrower to make accelerated payments if he wishes b. indicate that the note has several borrowers c. provide the lender with the choice of raising the interest at will d. allow the borrower to borrow additional money on the same promissory note and trust deed

a. the 'or more' clause permits the borrower to prepay the loan without penalty

when a real estate is sold, if requested, a copy of the structural pest control report must be given, if requested, to a the buyer as soon as possible b. the title insurance company c the broker d the escrow company

a. the buyer as soon as possible

Buyer wants to buy a home whereby she is to continue the payments of an existing amortized loan secured by a first trust deed. For her to assume the existing loan without penalty, the real estate agent should check to be sure the promissory note does not include a. an alienation clause b. a release clause c. subordination clause d. a partial release clause

a. the buyer cannot assume a loan with an alienation, due on sale, clause

33. In arriving at an estimate of value, an appraiser is most interested i nhte date a. the purchase price was agreed upon b. the escrow was open c. the escrow was close d the loan application was submitted

a. the date the purchase price was agreed upon typically the date of the purchase contract most closely relates to the value agreed upon by the parties

What gives a broker the authority to hold a buyer's deposit for three business days, or until the offer is accepted? a. the deposit receipt b. the listing c. the transfer disclosure statement d. the agency disclosure statement

a. the deposit receipt (residential purchase agreement) gives the broker the authority to hold a buyers deposit for three business days, or until the offer is accepted

A developer intended to subdivide land for a sale as single -family residential lots and sell the lots for cash. The developer needed to raise money to put in streets, curb, gutters, sidewalks, etc. He wanted to pass on the cost of these improvements to the lot purchasers in such a way the when title policies were issued to future lot owners, the policies would contain no references to assessement liens. The developer's best choice to finance these improvements to the lots without creating assessement liens would be. a. interim loans from institutional lenders b. street improvement bonds c. land contracts d. a corporate stock offering

a. the developer 's best choice to finance these improvements to the lots without creating assessement liens would be interim loans from instructional lenders. interim loan is a short term loan until long term financing is available.

In a new subdivision, who is responsible for assuring completion of a paved streets, utilities ,and curbs? a. the developer b. the city c, the county d. the federal government

a. the developer usually has responsibility for completing the streets, utilities and curbs in a new subdivision

when comparing the economic life and physical life of an improvement, the economic life is usually a. shorter than the physical life b. the same as the physical life c. longer than the physical life d. none of the above

a. the economic life of an improvement is length of time that it can be used profitability, a building may be able to stand for fifty years(physical life), but it may be more economical to knock it down after thirty years (economical)

The annual property taxes a property owner must pay are determined by a. assessing the land and improvements separately, then multiplying the total by one tax rate b. assessing the land and improvements together, then multiplying them each by different tax rates c. assessing the land and improvements separately, then multiplying by different tax rates d. none of the above

a. the land and improvements are assessed separately, however, one tax rate is applied to the total assessed value

A real estate agent wrote up an offer for a buyer. the buyer was primarily interested in this particular home because it was located in a very good school district. the seller honestly believed and verbally assures the buyer that the home was in the school district desired by the buyer. The written contract made no mention of the school district. The offer was accepted and escrow was opened. During escrow the buyer will probably be able to get out of the transaction because a. there was a lack of mutual consent b. there was a lack of capable parties c . there was a lack of lawful object d. there was a lack of consideration

a. the mistake about the school district means there was a lack of mutual consent about a material fact involves in the contract

The appraiser techique in which land and improvements are valued as a single unit and the annual net income is divided by one overall capitalisarion rate is called a. property residual technique b. land residual technique c. building residual technique d. improvement residual technique.

a. the property residual technique is the simple capitalization method. the land and improvements are valued as a a single unit. The property's total net income is divided by one overall capitalization rate

When creating a legal description using the township and section method, the intersection of north and south and west lines respectively are known as a. meridian and base lines b. lines of demarcation c . metes and bounds d, lot and blocks

a. the township and section method describes based upon its distance from the intersection of north and south and east and west as meridian lines and base lines.

when a buyer buys property 'subject to' an existing loan, rather than 'assuming' the loan, the buyer will a. have any loss limits to his equity in the property should it go into foreclosure b. become a substitute trustor, in place of the seller c. eliminate the possibility of a trustee's sale d. will not lose the property if the debt goes unpaid

a. when a buyer takes a 'subject to' an existing loans, the seller as original borrower remains on the loan documents. the buyer would not have any personal liability. his loss would be limited to any equity he had in the property, should it go into foreclosure.

what listing requires an owner to pay a commission if she sells the property herself? a, exclusive right to sell b. exclusive agency listing b. open listing c. net listing

a.The broker gets the commission no matter who sells the property, if it sells during the term of exclusive right to sell listing.

which of the following would have the least impact on property taxes ? a new development b compacted population density c recorded homestead d tax deferment

c

In sale leaseback transaction, the seller does all of the following except a. retains possession of the property being sold b. guarantees the mortgage payments c. receives an infusion of cash d. becomes a tenant

b .In a sale leaseback , the seller retains possession of the property, receives an infusion of cash, becomes a tenant, but does not guarantee the mortgage payments.

Which of the following would be least likely to include a legal description of a parcel of real estate? a. a grant deed b. a property tax bill c. escrow instructions d. a preliminary title report

b .Property tax bills use an assessor parcel number, not a legal description, The other documents will contact a legal description.

each of he following is an essential element of value except a. demand b. appreciation c. scarcity d. utility

b .appreciation is not the essential elements of value

A contract which is voidable remains binding upon the buyer and seller until the contract is a invalidated b rescinded c discovered d qualified

b

A real estate broker manages a large number of rental units and receives a percentage of the rents he collects as his fee. Since California law prohibits the broker from keeping more than $200 of his own money in the client trust account, how does the broker avoid violating the law? a have the tenants issue two checks each month, one to the owner, and one to the broker as his fee b. withdraw his fees within 25 days of their deposit in the trust account c . withdraw his fee quarterly d. withdraw his fee annually

b

Bunky purchased a property for 20% less than the listed price and later, he sold the property for the original listed price. what percentage profit did he make? a. 20% b. 25% c. 35% d. 45%

b

the main purpose of a deed is to a identify grantor and grantee b provide evidence of the change of title or transfer of interest c . provide evidence of terms d provide a written instrument that can be recorded

b

the term warehousing as it used in real estate financing would probably refer to a securities registered with the Corporations Commissioner b mortgage banker collecting loans prior to resale \c large storage buildings used to secure some real estate loans c. none of the above

b

the word 'ethics' used in a discussion of a real estate agents , most nearly means a trust and honesty b the values that guide an agent ' relationship with customers other agents and general public c knowledge of the law d held in highest esteem by other agents

b

transfer of possession of real property , but not ownership is called a mortgage b sublease c security agreement d an easement

b

what type of depreciation is most difficult to correct a internal obsolescence b economic obsolescence c physical obsolescence d waer and tear

b

when looking into the purchase of a business opportunity, one factor a buyer would consider is the liquidity of the business, to evaluate the liquidity of a business, a buyer would compare a deferred assets to contingent liabilities b current assets to current liabilities c future assets to future liabilities d cash on hand to accounts receivable

b

when two parties attempt to form a contract, but fail to include one or more of the four essential elements of contracts, this attempt contract is probably called a an enforceable contract b a void contract c an express contract d a unilateral contract

b

which h of the following would be considered a 'target house' under the lead based paint disclosure law? a. home built for the elderly in 1976 b single family residence built in 1975 c home built for handicapped in 1970 d single residence built in 1980

b

which of the following would usually be considered real property a landfill dirt in a dump truck b airspace above the surface of the land c unharvested crops which have already been sold d lumber to be used to build a home

b

Ron owns a single farm home which rents fro $600 per month. a home across the street rents for $600 per month and recently sold for $78,000. If Ron applied the same gross rent multiplier to his home as was used o n the home across the street, what would be the value of Ron's home ? a. $50,000 b. $67,800 c. $69,000 d . $70,909

b $67,800

Which of the following is commingling and also violates law regulating trust funds? a. A broker put tenants security deposit in his client trust account for tenant, and the broker owns the apartment building being managed b. a broker put a buyers' deposit in the brokers' general account c. a broker put the tenant's security deposit in his client trust account and the brokers client owes the apartment building being managed d. a broker put the rent collected in his client trust account and the broker 's client owes the apartment building being managed

b . a broker put a buyers' deposit in the brokers' general account

When analysing a real estate loan application, a lender would correlate characteristics of the borrower, the loan, and the property securing the debt to make a. a real property appraisal b. a loan commitment c. a credit rating for the borrower d. a statement of liability

b A lender would correlate characteristics of the borrower, the loan, and the property security the debt to make a loan commitment

26. Some real estate loans provide that the interest rate may be increased or decreased depending on money market conditions. this type of loan is called a. interim loan b. variable interest rate loan c. loan secured by a land contract d. fluctuating market condition adjustable loan

b A loan which provides tha the interest rate may be increased or decreased depending on money market conditions is called a variable rate loan

The alquist-priolo earthquake Special Studies Act is applicable to a. all cities in cal b ,igning another 's name without authorization c all regions in Northern CAL d. all regions in Southern CAL

b All Counties

With regard to the practice of real esate, which of the following statements is correct? a. real estate agents commission is limited by law in all transactions b. in all exclusive agency listing, a seller may sell directly to a buyer without being liable for a commission. c. an agreement to divide commissions between cooperating brokers must be in writing to be enforceable d. a broker may never collect a commission if a sale is consummated after a lising has expired

b An exclusive agency listing is a contract in which a seller agrees to pay a commission to the listing agent of his property sells though the listing agent or any other agent., but the seller retains the right to seller directly to a buyer and not be liable for a commission.

Generally, when the government forces the sale of private land for public use it is governed by due process of law and is accomplished through a. exercise of police power b. eminent domain c. estate in reversion d. escheat

b Eminent domain is the right of government to take private property for public use, with payment of a fair compensation

In real estate finance, the terms 'impounds' refers to a. moratorium b. reserves c. attachments d. penalties

b In real estate finance term 'impounds ' refers to 'reserves' trust type account for future expenses such as taxes

Should a tight money policy be implemented by the Federal Reserve Board, the net effect would be an increase in a. the use of new first deed financing in real estate transactions b. the use of second trust deed financing in real estate transactions c, the volume of sales of single family homes d, the supply of lendeable funds for housing constructions

b In tight maney market there is usually a decrease in real estate sales and an increased use of second trust deeds

14. recording a judgment gives what type of notice? a. actual notice b. constructive notice c. incomplete notice d. no notice

b Recording gives constructive notice

A prospective purchaser is interest in buying a lot in the desert from a subdivider, the buyer wishes to know about sewer assessments, liens, utilities to his lot, blanket encumbrances and maintenance of streets, The best source of this information is the a. County Engineer b. Real Estate Commissioner s. County Planning Commissioner d. Title insurance company

b The final public report issued by the Real Estate Commissioner would be the best source for information of this type.

When a real estate licensee acts as an agent for a principal without authority or color of authority and the acts are later approved by the principal, an agency relationship was created by a. implication b. ratification c. express authorization d. estoppel

b When a real agent estate licensee acts as an agent for a principal without authority or color of authority and the acts are later approved by the principal, the agency relationship was created by ratification

When a real estate broker has been authorized by another real estate broker to act as a sub agent for a seller and the seller has approved the appointment of the sub agent, the sub agent is primarily responsible to a the broker who appointed him b. the seller c. both the broker and seller equally d. neither the broker nor the seller

b When a real estate broker has been authorized by another real estate broker to act as a sub agent for a seller and the seller has approved the appointment of the sub agent, the sub agent is primarily responsible to a seller

According to California law, all of the following could be created as blanket encumbrances except a. trust deeds b. real property taxes c. mortgages d. mechanical liens

b a real property tax lien must specifically attach to one particular parcel. If one person owns several parcels of real property with overdue property taxes, the government will record a real property tax lien separately against each parcel.

All of the following are considered an estate in real property except a. reversion b. deed of trust c. fee simple d. leasehold

b a trust deed does not create an estate i n a real property

Accretion would result in the acquisition of land by a. prescriptive easement b. a neighbor who acquired land by natural causes c. the city government following a condemnation action d. none of the above

b accretion is the acquisition of title to land when soil builds up along a river bank.

When the appraiser has collected all the date and applied the appropriate appraisal method(s), what is the next step in the appraisal process a. simply average out the value estimates b. reconcile or correlate the values found in the different approaches c. assign appropriate value to individual estimates and average the total number d. give an opinion value

b after the appraiser has collected al lthe data and applied different appraisal approaches, the next step (or fianl) step is to reconcile (correlate) the values found in the different approaches

When a buyer gives an agent a postdated check to accompany an offer, it a, may not be accepted by the agent b . must be cashed immediately c. must be delivered to the seller d. may be retained but must be discloses to the seller

b an agent who is the exclusive agent for the buyer may present offers tot he seller and /or the sellers agent

When preparing an appraisal of a home, how does the appraisal of a home, how does the appraiser calculate the square footage of the improvements? a. measure the interior dimension of each room b. measure the exterior dimensions of the structure c. multiply the length x the width x the height of the improvement d. appraisers never measure, but rely instead totally upon the tax assessor records

b appraisers measure the exterior dimensions of the structure to calculate square footage of the improvement

Ann acquires title as a single female. Ann subsequently marries. Ann then sells the property signing her married name to the grant deed. This is a immaterial b. creates a cloud on the title c. is automatically cure after 90 days d. has no impact because this was her separate property .

b assuming she changed her name upon marriage, the different name on the deed would create a cloud on title

Broker John has a n open listing on a home. one day he shows the home to Buyer Bud. Buyer Bud says he does not like the real home and leaves, One week later Buyer Bud goes to Broker Joan, Broker Joan has an open listing on the exact same home and shows it to buyer Bud. This time Buyer Bud says he loves the home. He has Broker Joan write and present an offer, which is accepted by the seller. Who is entitled to the commission? a. broker John b, broker Loan c. Broker Lohn and Broker Loan split the commission d. none of the above

b b. In an open listing, the broker must be the 'procuring cause' responsible for the consumnation of the transaction to be entitled to a commission. broker Loan was the procuring cause and is entitled to the commission

when using the cap approach to appraisal , if the cap rate increases, the value of property a increase b. decreases c. stays the same d. moves proportional in the same direction, but at slower rate

b decreases

All of the following are included in the laws government power of eminent domain except a. fair compensation at fair market value to the owner b. the exercise of zoning authority c. the right of the government to take property from the owner for a legitimate public use d. condemnation action in court

b eminent domain is not part of police power or zoning. eminent domain is the right of the government to acquire property for public use.

clauses in a rental agreement for residential real estate which make a security deposit nonrefundable are a. permitted only of the contract includes a provision that the deposit may be used only to offset damages to the property b. enforceable if t he security deposit does not exceed $1,000 c. valid if printed in 10 print typeface and initialed by the parties d, prohibited by law

b enforceable if the security deposit does not exceed $1,000

Bob made an offer to purchase a house fro n Sam. Sam made a counter offer to Bob. Which of the following statement is true concerning the counter offer? a in the counter offer the offeror remains the offeror b,, in he counter offer the offeree becomes the offeror c. Sam cannot make a counter offer is void unless it includes a deposit

b in he counter offer the offeree becomes the offeror

'depreciation ' used in the cost approach to appraisal may be defined as a. a realized recapture of occurred income b. a loss in value from any cause c. wear and tear on the improvements d a loss in the value of the land

b loss in value

The right of 'quiet enjoyment and possession' means the landlord must protect the tenant from a. all nuisance b. possession without disturbance from someone calming paramount title c. all encumbrances d. all of the above

b possession without disturbance from someone claiming paramount title

The value of the best property in a neighborhood is adversely affected by a substandard property nearby as the principle of a . balance b. regression c. contribution d. progression

b regression

the 'standard coverage' title insurance policy on real property insures the policy holder against loss occasioned by a. unrecorded liens or encumbrances b. a forgery in the chain of recorded title c. rights of parties in possession of the property d. governmental action, such as zoning

b the 'standard coverage' title insurance policy (CLTA) protects against matters of record, such as forgery in the chain of recorded title

As used in re finance , the term 'beneficiary statement ' identifies a statement which a. designated the one who will receive a property in the event of a borrower's death b. the lender makes a s to the current balance requires to payoff a real estate loan c. the insurer makes stating the amount that will be paid to the policy holder if the improvement s are destroyed by fire d. the homeowner makes , listing the beneficial features of an assumable loan

b the lender makes as to the current balance requires to payoff a real estate loan

When a lender uses the term 'mortgage yield' it is describing a. all of the money received by the lender from the borrower b. the interest paid on the debt by the borrower on a mortgage loan c. the discounted yield to the lender after the loan has been sold on the primary mortgage market d. the total of up-front money received from the borrower when the loan is created

b the mortgage yields is the interest, not the principal, paid by the borrower for the use of the money

7. 'the degree, quality, nature and extend of interest a person has in the property' defines an 'estate' in real property. an estate a. is never held in perpetuity b. can be held with another estate in the same property c. can only be created by deed d. must always be received by a grant

b there can be more the one estate in real property. For example, a landlord holds a fee simple estate and at the same time the tenant holds a less than freehold estate.

Many real estate contracts contain preprintes caluses and spaces for information to be handwritten. In a legal dispute when there is a conflict between the preprinted caluses and the handwritten information, which will control? a. preprinted clauses take precedence over handwritten information b. the handwritten information takes precendence over the priprinted clauses c. the preprinted clauses and handwritten information are considered equally d. handwtitten information is illegal on preprinted contracts

b when there is a conflict between portions of a contract which are handwritten and preprints clauses a contract, the handwritten information takes over the preprints clauses.

The 'R-value' of insulation stands for its a. texture b. resistance to heat flow c. cost d. none of the above

b. 'R-value' measures the insulation's resistance to heat flow

The ownership rights and interest in real property are called a. executory contracts b. estates o fees c. land sales contracts d. liens

b. 'estates or fees' describe the degree, quantity, nature and extent of interest or ownership one has in real peperty.

Which of the following phases in an ad would violate HUD guidelines for advertising a. good neighborhood b. retiree's dream home c. wedding chapel on site d. seeking female roommate

b. 'retiree dream home' violates HUD guidelines for advertising

A 'water table' is defined as a. chart showing water quality b. the dept at which water is found c. the speed of moving water d. a measurement of moving water

b. 'water table' indicates the dept at which water is found beneath land

Investors want to build an apartment house which will have a gross income of $,500 per month and annual expenses of $6,000. The investors require a 1% capitalization rate on the investment. If the improvements cost is $150,000, how much can the investors pay for the land a. $24,000 b. $50,000 c.$ 150.000 d. $200,000

b. 1, $2,500 x12=$30,000 gross annual income 2. $30,000-$6,000(expenses)=$24,000 annual net income 3. $24,000 divided by 1%(cap rate) = $200,000 total property value (land /improvements) 4. $200,000-$150,000(cost of improvements)+$50,000 available to pay for the land

Bruce bought a parcel of raw land in 2003 and subdivided it into four separate lots. Five years later, he sold each lot for $100,000. The adjusted basis for each lot was $20,000. Bruce's long term capital gain on these transactions is a. $80,000 b. $320,000 c. $400,000 d. $500,000

b. 1, $20,000 x 4 lots =$80,000 adjusted basis 2. $100,000 x 4 lots =$400,000 total selling price 3. $400,000 -$80,000 = $320,000

Mr. Jones purchased a home for $72,000 with a $20,000 cash down payment and a $52,000 loan. This loan was interest free and required no payments of principal for five years. One year later. he sold the home for double its purchase price. Each dollar of his original cash investment now equals a. $2.00 b. $4.60 c. $7.30 d. 9.20

b. 1. $72,000 x 2 = $144,000 2. $144,000-$52,000=$92,000 3. $92,000 divided by $20,000=$4,60

A 'blind ad' placed in a newspaper by a licensed real estate salesperson does not properly a. identify the asking price of the property b. identify the broker c. identify the address of the property d. identify the seller

b. A 'blind ad' does not identify the broker

A real estate broker negotiated a hard money loan secured by a second trust deed. As used in this context, 'hard money ' means a. a loan for no more than four years b. a cash loan c. a junior loan d. a loan obtained in a tight money market

b. A 'hard money' loan is a cash loan where the borrower receives cash using a new note secured by trust deed

Which of the following professions commonly use a benchmark? a. an appraiser b. a surveyor c. a carpenter d. an assessor

b. A benchmark is a monument used by a surveyor to establish the elevation at a particular point on land

A real estate broker included the following clause in her standard listing contract. 'In consideration of execution of the foregoing, the undersigned broker agrees to us diligence in producing a purchaser. ' This is a. superfluous and unnecessary in current contracts b. important to the creation of a bilateral contract c. important to the creation of a unilateral contract d. important according to the Statute of limitations

b. A bilateral contract requires a promise given in exchange for another promise . This clause is the brokers exchanged promise to the seller.

If a broker delegates specific authority to a salesperson to survive, review, and initial real estate contracts prepared by other salespersons, the delegated salesperson must have a. accumulated at least two years experience as a full time salesperson during the preceding 10 years b. accumulated at least 2 years full time experience as a real estate sales person during the proceedings 5 years c. been employed by the same broker for at least 5 years d. accumulated 2 years experience as a real estate salesperson and completed 2 years of college courses related to real estate

b. A broker can designate a salesperson to a supervise, review, initial, and date contracts, if that salesperson has at least 2 years full time experience during the proceeding 5 years.

When a real estate broker is acting as a sub agent for the seller, her fiduciary duty is owed and primary responsibility is to a. the buyer only b. the seller only c. the buyer and seller equally, d. neither the buyer and seller

b. A broker who is the sub agent for the seller owes a fiduciary duty to the seller only.

A commercial development that has a single line of store buildings constructed along a major transportation route is described as a. a cluster development site b. a strip commercial development c. a neighborhood shopping center. d. a street commercial zone development

b. A commercial development that has a single line of store buildings constructed along a major transportation route is described as a strip commercial development.

A contract based on an unlawful consideration is a. valid, until voided b. void c. legal d. enforceable, if writing

b. A contract based on unlawful consideration is void

Broker Jones represented a young man in the sale of his home. Broker Jones did not considered the age of the young man when he listed and sold the home. After the grant deed had been signed and delivered into escrow, the title company discovered the young man who signed the deed was not yet 18 years old and was not emancipated. The grant deed would be a. illegal b. void c. binding d. valid.

b. A deed signed by a minor who is not emancipated is void.

The roof of a rectangular building with sides that rise at inclined planes on all sides is called a a. gable roof b. hip roof c. mansard roof d. baroque roof

b. A hip roof slopes or inclines on all four sides

A farmer deeded his farm to his sons, Able, Baker, and Charley as joint tenants.Shortly thereafter, Baker sold his interest to William. Able died and willed his interest to Sally. Ownership of the property would be a. William and Charlie as joint tenants b. Charley and William as tenants in common, Charley holding 2/3 interest. William 1/3 interest c. William and Sally as joint tenants d. Sally, William and Charley as tenants in common, each with a 1/3 interest.

b. A joint tenant may sell his interest, with the new owner usually becoming a tenant in common. When Baker sold his interest to William, Able and Charlie remained joint tenants holding 2/3 of the property with William, a tenant in common, holding 1/3 of the property. Since a joint tenant cannot will the property, when Able died his interest went to Charley by the right of survivorship.

An 'estate ' in real property is held by which of the following? a. a trustee b. a life tenant c. a beneficiary d. none of the above

b. A life tenant holds a freehold estate. A trustee receives the right to sell property in the event of a default on a trust deed, but does not have an 'estate' in the property. The beneficiary, lender, has no estate in the property. Estate means quantity of interest, share, right, equity.

When real property suffers an impairment in value due to economic changes, it would be described as a. incurable physical destruction b. obsolescence c. over improvement d. social deterioration

b. A loss or impairment in value due to economics changes would be described as economic obsolescence that is social obsolescence

A mechanic's lien filed today would usually take priority over which of the following? a. a tax lien filed tomorrow b. a trust deed loan recorded against the property before any work was done or any materials were furnished c. an unrecorded deed delivered last week d. a judgment lien recorded against the property before ant work was done or any materials were furnished

b. A mechanic's lien takes as of the day work began or materials were first furnished. An unrecorded deed delivered last week would most probably be subordinate to a mechanics lien filed today.

Dolores is owner od a home which she has agreed to sell to David. A preliminary title report prepared during escrow shows a. exactly the same information as found in Davids future standard title policy b. information about a deed of trust with Dolores as trustor c. the new trust deed with Davis as trustor

b. A preliminary title report will show the existing loan with Dolores as trustor

Upon moving into the home he just purchased, Mr Jones discovered that his neighbors garage was four feet over on his property line. If a friendly settlement cannot be negotiated, Mr Jones should a. sue the Real Estate Commissioner b. sue the neighbor c. cue the agent, for failure to disclose the encroachment d. sue the title company that had issued a standard CLTA title insurance policy

b. A property owner would sue the neighbor to have an enroachment removed. The agent and Commissioner should not be liable. The standard CLTA title policy does not include a survey and does mot protect an encroachment.

Who is authorized to manage real property for the general public? a. certified property manager b. a licensed real estate broker c. an affiliate member of the California Association of Realtors d. any responsible adult

b. A real estate broker's licence is required to manage real property

The real estate licensee may handle the sale of a mobile home when the mobile home a. is new b. has been registered c. is 32 feet long d. is sold with a deed

b. A real estate licensee may handle the sale of a mobile home once it has been initially sold and registered wit the Department of Housing and Community Development

Henry is a tenant with a 5 year lease on a ranch belonging tp Jack. Fred is the owner of an adjacent piece of land. One day, Fred asked Henry to grant him ab easement to cross the ranch land, Henry grants Fred an easement in writing, granting Fred permission ot cross the land. Is the easement valid under theses circumstances? a. no, because a tenant cannot grant a easement. An easement may only be granted by the owner of the property b. yes, but the easement may not extend beyond the term of the Henry's lease c. no unless the lease has been fully recorded d. yes, subject to the ratification of the easement by Jack

b. A tenant may grant an easement, but only for the term of the lease.

The action by which the city or county permits an owner to use property in violation of zoning or building coded is known as a. an exemption b. a variance c. an exemption d. a permit

b. A variance is granted when the city or county allows an owner to build something and /or use the land in a manner which is inconsistent with the existing laws.

Davidson, the licensed real estate broker, listed a home for sale for nine months without any success. He new that it needed some major structural repair and that it was overpriced by 10%. He wrote the following ad in a local newspaper. 'Charming cute Victorian home, move right in, you will not believe the price. Call Davidson 323-xxxx" What was wrong with this advertisement? a. it doesn't specify the asking price and therefore violated the truth in lending law b. the ad was misleading and deceptive because Davidson knew the home needed major repair. c. it is unethical to overprice and advertise a home for sale d. the newspaper will be held liable if someone purchases the home and relies on advertisement.

b. An ad saying 'move right in' is misrepresentation when the home needs major repair.

A broker acting as agent for a principal has a much authority as a. other parties believe the agent to possess b. the principal actually or ostensibly confers to accept d. he chooses to accept as limited by the State of Limitations

b. An agent has as much authority as his principal actually or ostensibly confers upon him. ostensible =acting on behalf of the principal

An agreement to sell community real property signed by only one spouse is a. enforceable b. unenforceable c. binding d. void

b. An agreement signed by only one spouse is unenforseable, It could voided within one year by the non-consenting spouse

In an exclusive listing must contain a. a minimum five percent commission b. a definite termination date c. a unilatereal agreement t operform d. an authorization to accept a deposit

b. Any exclusive listing must contain a definite termination date.

When a buyer initially purchases a home with CAL-Vet financing, the buyer receives a. bill of sale b. a contract of sale c. a trust deed d. a lease with an option to buy

b. Cal-Vet purchases homes and farms by paying the seller all cash. CAL-Vet receives a grant deed from the seller. Cal Vet then sells the property to the veteran using a contract of sale (land contract)

In the appraisal of an income -producing property, to arrive at a capitalization rate, not provision should be made for which of the following a. depreciation b. federal taxes c. return of the investment d. return on the investment

b. Capitalization rate includes a return on the investment, interest, and return of the investment, depreciation. It does not include federal taxes

Which of the following statements about escrow procedures is true? a. a broker can never escrow a transaction b. when the escrow requirements have been met, the escrow agency changes from a dual agency to a separate agency c. when the escrow holder receives signed instructions, it is said to be a 'complete escrow' d. the purpose of escrow is to have the escrow officer act as an arbitrator of disputes between the buyer and the seller

b. Escrow agents are dual agents both buyer and seller until the close of escrow. After close, they may become the agent of either party.

Under the Federal Truth in Lending Law, which of the following does not need to be included in the 'finance charge' portion of the disclosure statement? a. loan arranger's commission b. the cost of a credit report and appraisal fee c. credit life insurance premiums d. the loan origination fees for FHA or VA loans

b. Fees for a credit report or appraisal need not be included in the finance charge portion of the disclosure statement

. The availability of rental space to meet demand is stimulated most by fluctuation of a. flexibility of demand b. prices and rent c. the business cycle d. desire of a home ownership

b. Fluctuations of prices and rents will control the availability of rental space. This is simply an application of supply and demand.

A licensee must keep a record of contracts and commissions received for the three years from what date a. date of the offer b. close of escrow c. date of receipt of the commission check d. date the commission check cleared.

b. Generally, real estate licensees must keep copies of all documents for three years from the date of the listing or close escrow, whichever occurred last .

If a contingency in a contract fails, which of the following is true? a. buyer is obligates to perform as per the terms of the contract b. buyer is not obligated to perform c. buyer must perform or is in breach of contract d. buyer must pay damages to the seller

b. If a contingency in a contract fails the buyer is not obligated to perform.

On Jan 2nd, a buyer called a real estate agent to find out if the buyer's offer had been accepted. The agent informed the buyer that the seller was out of town and wouldn't be back until January 14th, after she would make a decision as to whether the buyer's offer would be accepted. Under theses circumstances, which of the following is true? a. the buyer can exercise the liquidated damages provision on the contract b. the buyer can exercise the arbitration clause in the contract c. if the buyer decides not to wait for the seller to return, the buyer can rescind the offer and secure the return of the full amount of the deposit d. the buyer must wait until the seller returns

b. If the buyer decides no to wait for the seller to return, the buyer can rescind the offer and secure the return of the full amount of the deposit. A buyer can revoke an offer at any time prior to communication of seller's acceptance of the offer.

a voidable contract remains binding until it has been a. invalidated b. rescinded c. discovered d. qualified

b. a voidable contract is valid until it is rescinded voided

In construction lending, the lender will usually release the final payment to the builder when the: a. owner has recorded the notice of completion b. lien period has expired c. job has been completed d. mechanic's lien has been recorded

b. In construction loans, the lender holds the final payment until the lien period has expired to be sure that there will be no mechanic's liens filed against the property.

'In fill' is a kind of real estate development which consist of a. older, lower density housing, targeted for newer, higher density housing b. vacant parcels or dipilated parcels in an urban area targeted for new construction c. underdeveloped suburban fringe property targeted for small scale commercial development d. industrial toxic waste area scheduled to be cleaned up for recreational use.

b. In fill is a kind of real estate development which consists of vacant parcels or dipilates structures in an urban area targeted for new construction

21 Mrs Johnson owned an income property with an adjusted cost basis of $150,000 and fair market value of $200,000. Both properties had no loans against them and no adjustment was made for the differences in value. For federal income tax purposes, the new property will have a basis for Mrs. Johnson of a. $100.000 b. $150.000 c. $200.000 d. $210.000

b. In tax deferred exchange, the cost basis of the property being traded becomes the cost basis for the property being acquired if no adjustment in make for differences in value, in this case $150.000.

All of the follwing are common types of misrepresentation exept a. innocent misrepresentation b. malicious misrepresentation c. negligent misrepresentation d. fraudulent misrepresentation

b. Innocent misrepresentation, negligent misrepresentation, and fraudulent misrepresentation are common types of misrepresentation. Malicious misrepresentation is relatively rare.

Which of the following is an appraiser's primary concern in the appraisal of a residential subdivision a square foot of each home b. marketability and acceptability c. functional utility d. the adjoining neighborhood.

b. Marketability and acceptability are the primary concern when appraising residential property

Reference to a monument in a legal description is usually considered to be less desirable because a. monuments are difficult to describe in writing b. monuments may be destroyed c. monuments may be hypothecated d. monuments are may not be mentioned in a recorded document

b. Monuments are not desirable in a legal description or a land because monuments may be destroyed

The term used by lenders 'mortgage yields' refers to a. the total amount of the lender receives when a mortgage is paid off b. the effective interest return obtained from a first trust deed c. all of the money received by the seller after deducting closing cost and loan fees d. an increase in the value of a property which has a mortgage

b. Mortgage yield can be described as the lender 's effective interest return from a real estate loan

If a house has a 'crawl space' beneath it, most building codes require a minimum of at least a. 12 inches b. 18 inches c. 24 inches d. 26 inches

b. Most building codes require at least 18 inches.

A 'turnkey project' describes a. a planned unit development b. new construction which is ready for immediate occupancy c. a subdivision at the end of a long road d. a subdivision with high security standards

b. New construction projects which are ready for immediate occupancy are called turnkey projects because once the tenant has the key, he can move right in

Each of the following is an example of functional obsolescence except a. no air conditioning in a commercial building in a desert community b. the proximity of noxious fumes from an adjoining property c, obsolete or outlandish design d. improvements which have lost their functionality

b. Noxious fumes coming from adjoining property describes a loss in value from an external cause and is an example of economic obsolescence

Which of the following forms of ownership would commonly be subject to double taxation? a. a partnership b. a corporation c. a joint tenancy d. community property

b. Ownership by a corporation be subject to a double transaction

When homes in an area represent the highest and best use of the land and are similar in architectural design, this would best exemplify which of the following principles of appraisal? a. change b. conformity c. contribution d. progression and regression

b. Principle of conformity -holds that maximum value is found when land uses are compatible and have a reasonable degree of architectureal harmony

Scott executes a deed to bob and records it. Later, Scott seeks to void the sale, claiming that there had been no delivery to bob. Why will Scott lose? a. bob is in possession of the property. b. delivery presumed with recording c. a recorded deed is always valid d. recording establishes the priority of the deed.

b. Recording a deed creates a legal presumption of delivery and acceptance. Scott will lose the argument unless he can overcome this presumption.

Broker Wilson cheated clients in several real estate transactions and then disappeared . As a result of a lawsuit filed on one transaction a client was awarded a $25,000 judgement against Broker Wilson. What is the maximum amount that client will be able to recover from the Real Estate Education, Research and Recovery Account(REERRA) a. a. $20,000 b. $25,000 c. $50,000 d. $250,000

b. Recovery form the Real Estae Education, Reserch and Recovery Account is limites to the amount of the judgment ($25,000), but not to exceed $50,000 per transaction

Which of the following laws exert the greatest control over the California housing and construction industries? a. Uniform Building Code , National Electrical Cosr, Uniform Plumbing Code b. State Housing Law, Local Building codes and Contractors License Law c. Subdivision Map Act, local building coded, city's master plan d. eminent domain, zoning ordianances, State Housing Law

b. State Housing Law, Local building codes and Contractors License Law exert the greatest control over the housing and construction industries in California

a real estate salesman tried to obtain listings by warning owners that minority groups were moving into the area and values would decline. this behavior is a . not a violations of any legal or ethical standard b. grounds for discipline by the Real Estate Commissioner c. unethical, but not grounds for discipline by the Real Estate Commissioner d. standard practice and acceptable behavior

b. Such behavior is called panic selling or block busting. It violates fair housing laws and would subject the license to discipline by the Commissioner.

The name of the California court decision which held that both the seller and the real estate agent must disclose all facts materially effecting the value or desirability of the property and lead to the creation of the Seller Transfer Disclosure law is a. Marbury v Madison b. Easton v. Strassburger c. Brown v Board of Education d. Marvin v Marvin

b. The California Appellate Court decision Easton v Strassburger held that both the seller and real estate agent must disclose all facts materially effecting the value or desirability of the property and lead to the creation of the Seller Disclosure law.

The Foreign Investment in Real Property Tax Act requires that a buyer of a real property must withhold and send to the Internal revenue Service (IRS)10% of the gross sale prices if the seller of the real property is a foreign person. When Bob is buying a home from a foreign seller, he will not have to withhold any funds if a. ge provides the IRS with tax payer ID number b. the home is purchase for %200,000 and he plans to reside in the home, c. the home is purchased for less than $500,000 d. Bob provides the IRS with an affidavit proving that Bob is a US citizen.

b. The Foreign Investment in Real Property Tax (FIRPTA) requires that a buyer of a real property withhold and send to the Internal Revenue Service (IRS) 10% of the gross sale price if the seller of the real property is a foreign person. There i a n exemption to this requirement when the sale price does not exceed $300,000 and the buyer intends to reside in the property

In order to avoid 'successor liability' for unpaid sales tax, the buyer of a business should require the seller to provide escrow with a 'certificate of clearance' issued from what agency a. Internal revenue Service b. State Board of Equalization c. Secretary of State d. Alcoholic Beverage control Board

b. The State Board of Equalization issues an certificate of clearance, clearance receipt to show that the seller of a business opportunity has paid all sales taxes which were due.

. Under the Federal Truth in lending Law the cost of credit is expressed as a. the annual interest rate b. the annual percentage rate c. the annual premium rate d. the monthly percentage rate

b. The Truth in Lending Law Regulation Z requires lenders to state interest rates in annual percentage rate APR

The appraisal of real property is made as of a 'given date' to indicate a. the true age of the improvement b. the market conditions influencing the value of the property at the point of time c. the date when the appraiser looked at the property d. the loan balance as of a given date

b. The appraiser of real property is as of a given date to indicate the market conditions influencing the property at that particular point of time

When a real estate auction is held, the auctioneer usually is acting as the agent for a. the buyer b. the seller c. the trustee d. none of the above

b. The auctioner in a real estate auction is the agent for the seller

Mr Johnson told broker BOB 'while I will not sign a listing for my home, if you can find a buyer who will pay at least $250,000 for it, I'll pay you a commission ' three weeks later, broker Bob found a buyer who gave him a $1,000 deposit on the purchase price of $255,00 along with a signed offer to purchase. when the offer was presented to Mrs Johnson, she accepted it and then demanded that the deposit be given to her. Which of the following is true? a. Once the offer is accepted, the deposit belong to the seller, broker Bob must give it to her upon demand. b. Broker Bob may not give the buyer 's deposit to the seller without the buyers written consent c. because the listing was not in writing, broker Bob is not obligated to follow the sellers's orders d. Brokers Bob should deposit the money into escrow and then let the escrow officer worry about it.

b. The broker must get the consent of the buyer before releasing the check to the seller.

An appraiser would use the building residual technique to establish the a. replacement cost of a new building b. present value of the building c. annual net income d. value of the land

b. The building residual technique is used to establish the value of the building

When a buyer has recently purchased a home wit ha valid land sale contract, what type of title does the buyer have? a. sole title b. equitable title c. pending title d. legal title

b. The buyer in a land contract (vender) becomes an equitable owner holding equitable title

In financing of a real estate, the cash provided by the buyer as part of the purchase price, or by a tenant in real estate as an acquisition cost, is commonly known as a. commercial equity loans b. equity funds c. highly leveredged funds d. borrowed funds

b. The cash provided by the buyer or by a tenant can be called 'equity funds'

The property taxes on homes are determined annually by the a. county treasurer b. county assessor c. county board supervisors d. state board of equalization

b. The county tax assessor determines the assessed value of homes and therefore determine the amount of the property tax.

Clyde purchased one of 40 lots in a subdivion and signed a contract which stated. 'No owner of a lot in this subdivision shall put a 'for sale 'sign on his lot until all of the lots owned by hte subdivider are sold'. If Clyde wants to sell his lot before the subdivider has sold all of his lots, he may a. not use the 'for slae' sign because of the statement in hte contract b. use a reasonable sized 'for sale' sign because the statement is the contract is illegal c. use a 'for sale' sign of any size if he pays a fee to the developer d. may be sent to jail for violating of the contract

b. The courts have held that a prohibition of 'for sale' signs is unconstitutional. However, the signs must be a reasonable size.

All of the following are required for the existence of an appurtenant easement except a. two parcels of land owned by two different persons b. the dominant tenement and the servient tenement must physically about each other c. the easement is transferred with the transfer of hte dominant tenement d. the easement benefits the one tenement and burdens the other.

b. The dominant tenement and the servient tenement are not required to physically abut,touch, each other in an appurtenant easement

During escrow, an escrow officer received two structural pest control reports/ The escrow officer should a. contact the inspection company to ask which report is best. b. notify the buyer and seller and obtain written instructions as which report to use c. use the report which found the most infestation and damage d. use the reports which found the most infestation and damage

b. The escrow officer must let the buyer and seller decide which termite report to use

a broker must file a fictitious business name statement at the county recorders office, publish the name in the newspaper as required by law and then have a brokers license with that name issued by the BRE after the name has been approved by the Real Estate Commissioner. The fictitious business name statement expires and must be renewed on /or before. a. four years from the date of publication b. five years from date of filing c. the end of five years from Dec 31st of the year of filing d. never, unless withdrawn

b. The fictitious business name statement expires and must be renewed on /or before five years from the date of filing at the county recorders office

contract obtained through duress is a. good b. voidable c. void d valid

b. The injured party has the option to void the contract, therefore, it is voidable

When leasing industrial space, a landlord and/or property manager is required to make sure the property a. complies with the Americans With Disabilities Act (ADA) b. complies with all applicable building codes c. is in perfect shape d. has no encumbrances

b. The lessor has an obligation to make sure the property is suitable for the purpose for which it is leased, including compliance with all applicable building codes.

'The measure of goods and services produced by hte nation during any one calendar year ' is called a. national income b. gross national product (gross domestic product) c. cost of living index d. national economic cycle

b. The measure of goods and services produced by the nation during any one calendar year used to be called Gross National Product (GNP) It is now called Gross Domestic Product (GDP)

'The measure of goods and services produced by the nation during any one calendar year ' is called a. national income b. gross national product, now called gross domestic product c. cost of living index d. national economic cycle

b. The measure of goods and services produced by the nation during any one calendar year used to be called Gross National Product (GNP) It is now called Gross Domestic Product (GDP)

Under the Federal Truth Lending Law, two of hte most critical facts which must be disclosed to buyers or borrowers are a. term of the loan and discount rate b. finance charge and annual percentage rate c. discount points and advertising expenses d. credit report fee and appraisal fee

b. The most important part of the disclosure statement under the Federal Truth in Lending Law is the disclosure of the finance charge and the annual percentage rate (APR)

The normal relationship between an escrow officer and the principals in a real estate transaction is that of a. an independent contractor b. a neutral agent c an employee d. an advocate for both the buyer and the seller.

b. The normal relationship between an escrow officer and the principals in a real estate transaction is that of a neutral third party (neutral agent)

. The primary difference between real and personal property is that real property a. can be transferred by will b. is generally not movable c. can be depreciated but personal property cannot d. can be held in joint tenancy

b. The primary difference between real and personal property is that real property is generally not movable.

The purpose of the property tax assessment roll is to a. set the tax rate b. establish the tax base c. establish the actual tax amount d. average out the assessed valued

b. The purpose of the tax assessment roll is to establish the tax base.

A tenant leased a building from an owner. the owner then sold the building to a new owner. the tenants financial situation changed after the building was sold. Which of the following is true? a. the new owner can make the lessee pay-off the lease b. the change is lessees financial situation is none of the new owner's business c. the new owner can increase the security deposit required for the tenant d. the new owner can raise the rent

b. The sale of a property does not usually terminate a lease. The new owner of the property has no more rights than the prior owner

A buyer gave a salesperson a $1,000 personal note to act as the earnest money deposit in an offer to buy a home, The salesperson a. should not tell the seller form of earnest accompanies the offer b. should inform the seller that the earnest money deposit is a personal note, prior to as an earnest money deposit, c. should not have accepted a personal note as an earnest money deposit. d. should refuse to present the offer until the buyer replaces the $1,000 personal note with cash

b. The salesperson should inform the seller that the earnest money deposit is a personal note, prior to the seller's acceptance of the offer

The terms 'index, net net net, and flat' are used to describe a. linkages b. leases c. rural land use d. freehold estates

b. The terms 'index, net net net, and flat' are used to describe leases.

The relationship between the desired and the potential purchaser is best defined as a. supply and demand b. value c. depreciation d. the present worth amortized.

b. This is a definition of 'value'

which of the following would not be considered an appurtenance? a trees b. a trade fix c. a house d. swimming pool

b. Trade fixtures are personal property of an owner of a business and are therefore not appurtenances

When a condition in a deed will cause title to revert back to the grantor if certain acts in the future, the condition may be described as a a. condition precedent b. condition subsequent c null condition d. none of the above

b. When a condition in a deed will cause title to revert to the grantor if certain acts occur in the future (subsequent to the transfer of title ) the condition may be described as a conditions subsequent.

when appraiser determines a 'loss from any cause' he is determining a. economic obsolescence b. depreciation c. principle of contribution d. adverse possession

b. in appraisal 'loss in value from any cause' is a definition of 'depreciation'

When a real estate broker becomes an agent for a seller or a buyer in a real estate transaction, what type of relationship has been established? a. a gratuitous relationship b. fiduciary relationship c. an independent contractor relationship d. a subcontractor relationship

b. When a real estae broker becomes an agent for the selelr or buyer in real estate transaction, a fiduciary relationship has beed established

When a real estate agent lets her license expire how long is hte grace period for her tp renew the license without being required to retake the state exam? a. 1 year b. 2 years c. 3 years d. there is no grace period., if you let your license expire you must retake the state exam.

b. When a real estate agent lets his license expire there is a two year grace period for him/her renew the license without being required to retake the state exam.

Henry, the holder of a $90,000 promissory note secured by a first trust deed, desires to borrow $60,000 a house. If the note is used as security for that loan, the agreement would be regarded as a. a subordinary first trust deed b. a pledge agreement c. chattel mortgage d. illegal real property security agreement

b. When an existing note is used as the security for another loan, it is called a pledge agreement , the note is held by the lender as security for repayment of the new loan. the new borrower pledges the loan.

The value arrived at by an appraisal of real property is a. based upon the reproduction cost b. based upon an analysis of facts as of specific date c. based upon income data from the last five years d. based upon income data from the last five years d. based on replacement cost new

b. When appraising real property, the appraiser determines the values of the property as of a given date.

Mary owns a parcel of land is trying to show the exceptional circumstances exist which is prohibits by current zoning laws. Her intended use would not be detrimental to the public. She would probably petition the planning commission for a a. rezoning agreement b. variance c. building permit d. redevelopment permit

b. When seeking an exception to the current zoning paws for one parcel of land, the owner must petition the planning commission for a variance.

During the site inspection of a home, an appraiser finds that the inside of an exterior wall of a building is about the same temperature as the other interior walls . What does this tell the appraiser? a. The heater is doing a great job b. the wall insulation is adequate c. heat is leaking out through the exterior walls d. the heated duct system is inadequate

b. When the appraiser finds that the inside of an exterior wall of a building is about the same temperature as the other interior walls, it tells the appraiser that the wall insulation is adequate.

What will the Bureau of Real Estate do of someone is attempting to a renew a real estate license and his name appears on a list of persons (obligors) who have not complied wot ha court order to provide child support a. renew a s a suspended license until paid b. renew as a temporary license, but the debt must be paid withing 150 days c. renew for only one year, unless the licensee submits a letter from the district attorney confirming the debt has been paid. d. the licensee cannot be renewed until the debt is paid

b. a 150 day temporary license may be issued to an otherwise qualified applicant who is on the state's list of child support obligors. if the applicant fails to submit an appropriate release from the District Attorney's office to the BRE within 150 day period, the licensee is suspended

When a real estate broker negotiates a loan secured by a trust deed on real property, he must see that the trust deed is recorded for deliver a written recommendation to record within a. 7 days b. 10 days c. 14 days d. 21 days

b. a broker must record a trust deed or give a written recommendation to record within 10 days.

Sheriffs sale results from enforcement is which of the following? a, adverse possession b. judgment lien c. lis pendens c. injunction

b. a judgment lien is enforced by a sheriff' sale

Conditions affecting interest rates and the availability of loan funds vary over time, When would if be advantagous for a lender to waive a prepayment penalty clause contained in a promissory note? a. when the Federal Reserve Boards lower the discount rate b. in a tight money market where there is a lack of funds available for real estate loans c. in a deflationary economy where home prices are falling d. when money is readily available for real estate loans

b. a lender might waive a prepayment penalty clause contained in a promissory note in a tight money market where is a lack of funds available for real estate loans. By waiving the prepayment penalty, the lender incourages the borrower to pay off an older low interest rate loan and would receive funds which the lender could then lend out at a higher of interest.

When a real estate broker hires an unlicensed person for purpose of creating advertising material the broker must a. allow the unlicensed person to create the advertising materials as he/she sees fit b. read and approve all material before it is used c. approve the material in writing before it is used d. create the material him/herself and only use the unlicensed person to fine tune the material.

b. a real estate broker may hire an unlicensed person for the purpose of creating advertising material, but the broker must read and approve all material before it is used.

A real estate licensee generally acts as a. an ostensible agent b. a fiduciary c. a subcontractor for the seller d. a dual agent

b. a real estate licensees act as a fiduciary for the principal

A seller of real property is bound by the acts and representations of all of the followings., except a. listing broker b. buyers broker c. sub agents d. listing brokers sales agents

b. a seller of real property is not bound by the acts and representations of the buyers broker. a buyers broker is the agent of the buyer, not the seller.

A subcontractor was hired to install hardwood floors on a home under construction. If the subcontractor had to file a mechanic's lien to get paid, the mechanic's lien would take priority as of the date a. the installation of the hardwood floors began b. the entire project began c. work was completed on the entire project d. work was completed on the hardwood

b. a subcontractor's mechanics lien would take priority as of the date the entire project began

After an appraiser has collected all the data, what is the next step in the appraisal process? a. simply average out the value estimates b. reconcile or correlate the adjusted sales price of the comparables c. assign appropriate value to individual estimates and average the total number d. give an opinion of value

b. after the appraiser has collected all the data, the next step in hte appraiser process is to reconcile or correlate the adjusted sales prices of the comparables and use the moat influental data for the final valuation

Alienable title means that the title a. encumbered b. can be conveyed c. cannot be conveyed d. cannot be legally encumbered

b. alienable title describes title that can be transferred

The opposite of 'alienation' is which of the following? a. accretion b. acquisition c. ad valorem d. amortization

b. alienation means 'to transfer or convey' . the opposite is acquisition

11. Before a title insurance policy is issued, the title insurance company examines various records affecting the title to the parcel, called the chain of title. It then develops a summary of the chain of title called. a. title guarantee b. an abstract of title c. title insurance policy d. an aknowlegement of title

b. an abstract of title is a summary of the records relating tothe title of that particular property.

An agreement by the lender to make a long term loan on real estate at some future date upon the borrower's request, is known as a. an interim loan commitment b. a standby loan commitment c. a backup loan commitment d. a staged incremental loan commitment

b. an agreement by the lender to make a long term loan on real estate at some future date upon th borrower's request is known as a standby loan commitment

Which of the following agreements is required to be in writing in order to be enforceable? a. a partnership agreement b. an agreement by a buyer to assume an existing real estate loan c. a lease of real property for one year d. a listing to sell a personal property mobile home

b. an agreement to pay the debt of another must be in writing to be enforceable

22. The owner of a parcel of land granted a easement to the local telephone company to erect telephone poles across his land. This would create an: a. encroachment b. encumbrance c. appurtenance d. estate of sufferance

b. an easement is an encumbrance, encumbrance means limitation, encroachment is trespass, appurtenant is attachment, estate of sufferance is when term expired

An offer which is made contingent upon the buyers first obtaining a satisfactory lease on another property is a. an illusory offer b. a valid offer c. a unilateral contingent offer d. unenforceable

b. an offer made contingent upon the happening of a certain event (obtaining a lease) is a valid offer. It is quite common for an offer to have contingencies.

An option to buy real estate becomes a mutually binding contract, when a. the option is given to the optionee by the optionor b. the optionee exercises the right to purchase c. the consideration for the option is given d. any of the above

b. an option to purchase becomes a mutually binding contract when the optionee (buyer) exercises the right to buy.

When authorized by a broker, withdrawals from the real estate brokers' client's trust account can be made by the broker or by which of the following people ? a. only sales people in the brokers employ b. anyone employed by the broker c. only corporate officers d. anyone authorized by the broker

b. anyone employed by broker who has authorization from broker can make withdrawals from the trust account. If the employee does not have a license, the employee must also be bonded .

Mr Johnson executed a grant deed to Mr Green and recorded it. Later, Mr Johnson changed his mind and sought to set the conveyance aside, claiming that there had been no delivery to Mr Green. Why was Mr Johnson unsuccessful in his effort a. he was unsuccessful only id Mr Green can provide he also took possession of the property b. delivery and acceptance is presumed with recording c. the recording validates the deed d. recording establishes the priority of lien

b. delivery and acceptance of a deed is presumed with recording

32. all of the following would be considered economic obsolescence except a. community business closing b. old kitchen c. incompatible zoning laws d. a new sewage treatment plan next to the property

b. economic or social obsolescence results from events occurring outside the property lines. such as the choice in a, c, d an old kitchen is considered functional obsolescence

When making real estate loans , the lower the loan-to value ratio , the higher the a loan amount b equity c likelihood of a default d. appraised value

b. equity.

Which of the following would most likely result in the termination of a real estate sales escrow a. revocation of the escrow by the broker for the buyer b. the mutual consent of the buyer and seller c. the cancellation of the escrow by the seller d, the death of the seller

b. escrow can be terminates by the mutual consent of both the buyer and he seller

If prices rise 20% what happens to the purchasing power of the dollar? a. it goes down 10% b. it goes down 16-2/3% c. it goes down 20% d. nothing, the purchasing power of the dollar is unchanged

b. example: six apples that used to sell for $1.00 now sell for $1.20 (20 cents each)The dollar which used to buy six apples now only buys five apples, a decrease in purchasing power of 1/6 or 16-/3%

when a probate case is filed , how do creditors with claims against the estate of the deceased person have to file their 'creditor claims'? a . one month b. four month c. six month d. one year

b. four months

In a land contract the buyer, vendee gets a .possession b. a freehold estate c. all estate in fee d. all of the above

b. freehold estate is for indeterminable duration, e.g. fee simple or life estate

All of the following are essential to create a valid contract exept a. lawful object b. writing c . mutual consent d. consideration

b. most contracts do not require 'writing'

When four people own property as joint tenants a. they may hold unequal interests in the property b. tthere is still only one title to the whole proeprty c. if one of the owners dies, her heirs become tenants in common with the surviving co-owners as tenants in common d. each owner has a separate leagal title to his undivided interest in the property

b. multiple joint tenants share one title to the whole property

When an appraiser is attempting to establish the value of a commercial building, in which of the following examples would changing economic conditions have the least impact on value? a. plastics manufacturing plant b. medical building c. computer electronics store d. automobile dealership

b. people get sick even when the economy slows down

When a judgment has been recorded, it provides a. voidable notice b. constructive notice c. actual notice d. contingent notice

b. recording a judgment gives constructive notice

A seller must provide a buyer with a real estate transfer disclosure statement in which of the following transactions? a. a sale of a four unit residential building b. a bankruptcy sale c. a trustee sale d. a husband to wife transfer

b. recording pf real estate related doscuments is a method of giving construction notice, not actual notice, of the content of the documents

The recording of documents related to real estate transaction will accomplish all of the following except a. give constructive notice of the contents of the documents to persons who have not searched the records b. give actual notice to third parties who may be effected by the documents c. help title insurance companies maintain their plants d. create a presumption of delivery of the transfer instrument

b. recording pf real estate related doscuments is a method of giving construction notice, not actual notice, of the content of the documents

when comparing the physical life of an improvement with the economic life of an improvement, the economic life of the improvement is usually a. longer b . shorter c the same d impossible to determine unless we know which type of improvement is being referred to

b. shorter

When developers select land for a residential subdivision they consider topography. Many developers believe that a. subdivisions which are built on rolling hills are less attractive aestatically than those located on flat land b. some limits irregularity in topography is generally desirable for residential subdivisions c. flat land is more aesthtically desirable than rolling hills d. none of the above

b. some irregularity in contour is best for residential proeprty

Saving bank charges a 1/8% higher interest rate on loans to non-English speaking borrowers. this fee is a. permitted if the fee is included in the finance charge required tp be disclosed under the Federal Truth in Lending Law b' in violation of the Holden Act c. not in violation of the Housing Financial Discrimination Act d. prohibits by he statute of frauds

b. the Holden Act, Housing Financial Discrimination Act, prohibits lending institutions from charging an extra annual fee, per annum, on loans to non English speaking borrowers.

John made an offer which the seller accepted; however, the seller changed a term of the offer as he made his acceptance. This can be described as a, purchase contract b. counter -offer c. addendum d. amendment

b. the acceptance must be absolute and unqualified (mint image of the offer); if it modifies the terms of the offer in any material fact. it becomes a counter -offer

A typical economic times, investors who make a long term investments a. have less risk than those who make short term investments b. have the same amount of risk as those who make short term investments c. gave more risk than those who make short term investments d. gave the best answer to worries about inflation

b. the best hedge against inflation is an income producing property that will maintain its value, such as income property.

who is usually responsible for providing streets, utilities, sidewalks and curbs in a new subdivision? a. the country b. the city c. the builder d. the local office of building and safety

b. the builder is usually responsible for installing these items in a new subdivision.

An advertisement placed by a loan broker offering 'secured' loans on real property for sales to investors would be regarded as misleading unless a. the loan broker offered to personally guarantee each investors investment b. the advertisement fully explained how the funds would be secured c. the loan broker secured the borrower's signature on hte loan disclosure statement d. each investor was furnished a standard policy of title insurance covering the encumbered properties

b. the commissioner requires the broker to fully explain to what extent the loans are secured.

. All of the following statements about transfer of title to personal property are correct, except a. title to personal property usually passes by delivery of possession b. the condition of the title to personal property may generally be determined by looking at the public records with the same accurancy as with real property c. a written document may be used in connection with the transfer of personal property, may not be requires by law for a valid transfer d. personal property is usually regarded as located at the domicile of the owner, regardless of the actual location, and is governed by the laws of the owners domicile

b. the condition of title to personal property may not generally be determined by looking at the public records with the same accurancy as with real property.

The owner of an apartment building could deduct all of the following as an expense each year on his income taxes , except a. the depreciation of the improvements b. the cost of constructing wall on the property c. the resident property manager's salary d. the interest expense on the loans on the property

b. the cost of construction a wall on the property would be a capital improvement, and would not be used as an income tax deduction. Instead, it would be added to the cost basis and depreciated over the life of the improvement.

24. Who sets the county property tax rate? a. the state board equalization b. the county board of supervisors c. the county tax assessor d. the governor

b. the county property tax rate is set each year by the county bord of supervisors

39. while appraising a home an appraiser observes cracks in the foundation and notices that the doors and windows do not close properly. the appraiser would probably recommend that which of the following be ordered? a. termite report b. soil engineer's report c. special studies zone report d. home warranty proportion policy

b. the cracking in the foundation and the shifting of the house would probably be caused by improperly compacted sol. the appraiser should get a soil engineer's report.

The unspecified maturity date on a construction loan begins from what date a. from the date of construction begins b. from the date of the note c. when money is placed in escrow d. from the date the escrow is formally closed

b. the date of the note determines the maturity date on the construction loans

Which of the following statements would be permitted under the Federal Truth-in-Lending Law? a. 'assume a 7-1/2 % annual interest mortgage ' b. 'assume a 7-1/% annual percentage rate mortgage' c. 'assume a 7-1/2 % interest mortgage ' d. 'assume a 7-1/2 % annual rate mortgage'

b. the federal Truth-in-Lending Law requires interest rates to be quotes as an annual percentage rate

The impairment of desirability and usefulness in real estate brought about by economic changes in the community is known as a. over-improvement b. obsolescence c. economic life d. private restrictions

b. the impairment of desirability and usefulness in real estate bought about by economic changes the community is known as obsolescence.

When a married person dies intestate, his separate property is divided a. all to the spouse and nothing to the surviving children b. one third to the spouse, two thirds to the surviving children c. equally between surviving spouse and the surviving children d. none of the above

b. the law of intestate succession requires the separate property be divided one third to the spouse and two thirds divided equally among the surviving children

4. In creating commercial lease agreement, an attorney drawing the contract should be certain to include which of the following for the lease to be valid? a. the signature of the tenant who is already in possession of the property and paying rent on it b. the term ,consideration and an adequate description of the premises c. the words 'let' and 'demise' d. all of the above

b. the lease must include the term, consideration, and an adequate description of the premises. It does not need the words 'let' and 'demise' as long as the intention to rent the property appears. The signature of the tenant already on possession and paying rent is not required.

When a salesperson takes a listing, the listing is the property of a. the salesperson who took the listing b. the broker who employs the salesperson c. both the employing broker and the ,listing salesperson d. the multiply listing service

b. the listing belongs to the broker, not the salesperson who took the listing

The maximum commission a loan broker may charge to negotiate an $8,000 hard money first deed, due in 2 years is a. $200 b. $400 c .$ 800 d. 1,000

b. the maximum commission a loan broker may charge to negotiate an $8,000 hard money first trust deed, due in two years is 5%. $8,000 x 5%=$400

What is the name of the agreement whereby the agent has the right to represent the seller in the sale of the property or purchase the property himself? a. open listing b. option listing c. exclusive listing d. exclusive right to sale listing

b. the name of the agreement whereby the agent has the right to represent the seller in the sale of the property or purchase the property himself is 'option listing'

If a lease requires the tenant to pay certain expenses, such as taxes or insurance, in addition t o rent, the lease may be called a. gross lease b. net lease c. percentage lease d. a net net lease

b. the net lease requires the tenant to pay certain expenses such as taxes, insurance, or maintenance. The terms 'net net ' or 'net net net ' lease are commonly used in the business, but are considered to be slang and will be marked as wrong answers on state exam questions.

What is shown on the plot map a. views of exteriors of homes b. location of the improvement on the lot and relationship to surrounding structures c . topography d. all of the above

b. the plot map shows the location of the improvement on the lot.

What is the basis of the market data approach to appraisal? a. the principle of highest and best use b. the principle of substitution c. the principle of supply and demand d. the principle of conformity

b. the principle of substitution is the basis of all appraisal theory to some extent. The market data approach applies this principle directly .

the purpose of Federal Fair Housing Law is a. to eliminate discrimination through the united states b. to prohibit discrimination in housing transactions c. specifically to eliminate the practice of redlining by lenders d. none of the above

b. the purpose of the Federal Fair Housing Law is to prohibit discrimination in housing transactions.

Implied covenants are not normally included in a a. grant deed b. quitclaim deed c. warranty deed d. all deeds include implied warranties

b. the quitclaim deed contains no implied covenants. Covenants are agreements written into deeds of a promising performance or non performance of certain act/ uses, non uses of the property.

An occupant violated the CC&Rs of the homeowners association. The remedy for breach of condition is. a. less severe than the violation of a covenant b. more severe than the violation of a covenant c. the same as the breach of covenant d. not related to the CC&Rs

b. the remedy for the breach of a condition is considered to be more serious (stringent) than a breach of a covenant

On May 1, 2010 Dick offered to buy Bob's home. The offer was accepted and escrow opened. Bob purchased the home in 2001 using FHA loan, on which he is currently making payments. A preliminary title report dated May 6, 2010 will a. include exactly the same information as a future CLTA policy if title insurance issued on the close of escrow b. show a deed of trust with Bob as the trustor c. obligate the title company for insurance in an amount equal to the purchase price, d. show title veste in Dick

b. the seller of a home with an existing trust deed recorded against it appears as the trustor, borrower, in a prelliminary title report

.California law controls the timing of a trustee's sale. what must the trustee do at least three weeks before conducting a trustee's sale? a. publish a notice of revonveyance b. publish a notice of trustee's sale c. record a notice of redemption d. evict the trustor

b. the trustee must advertise (publish ) a notice of trustee's sale at least once a week for three weeks before the trustee's sale

The most expedient thing for a beneficiary to do when a trustor goes default on a trust deed is to institute a a. execution sale b. trustee's sale c. sheriffs sale d. judicial foreclosure

b. the trustee's sale is the most expedient way to foreclose, The process takes about four months.

13. the usual ceiling height in a home purchased with FHA financing is: a. 7-1/2 feet b. 8 feet c. 8-1/2 feet d. 10 feet

b. the usual ceiling height in a home purchased with FHA financing is 8 feet.

37. in the capitalization approach, when capitalization rates go up a. values go up b. values go down c. values are unchanged d. the money supply increases

b. values go in the opposite direction of capitalization rates

when two or more contiuose parcels owned by one person have an increased value, above the value of the individual lots, this is called a value increase b. dual ownership c plottage d severalty ownership

c

which of the following i not essential to a valid deed ? a the parties are competent to convey and capable of receiving title b a granting clause c the deed must be acknowledged d the deed must be in writing

c

'housing accommodation ' as defined in the fair Employment and Housing Act i improved or unimproved real property used or intended to be used as a residence by the owner and which consists of not more than a one dwelling unit b three dwelling units c four dwelling units d. ten dwelling units

c

Advance fee contract used in connection with a real estate transaction or when listing a business opportunity must include all of the following except a. description of the services to be performed b. the total amount of the advance fee to be charged to the client c. a guarantee that sale, lease or exchange will be competed d . the date the fee is to be paid.

c

For a seller of one-to-four units to comply with the Real Estate Transfer Disclosure Law, the seller must a. designate the real estate agent representing him to perform the inspection and fill out the entire disclosure statement for him b. hire a licensed home inspector to examine the property before completing the disclosure statement c. make a reasonable inspection before completing the disclosure statement d. confirm his disclosures matches the agent 's disclosures when completing the disclosure statement

c

Upon moving into the home they had recently purchased, Mr and Mrs Katz discovered that their neighbor had built a wall which encroached onto their home by htree fee. When they purchased the home, they received a standards coverage title insurance policy. If a friendly settlement cannot be negotiated, who will Mr and Mr Katz sue? a the title company b. the previous owner in the chain of title c the neighbor d. the neighbor if the encroachment has been in place less than five years

c

the inability of a corporation to hold title is a joint tenant in the ownership on property with a real person is due to the fact that a. the corporation is controlled by a board of directors b. the corporation may be a foreign corporation c. the corporation may have perpetual existence while a real person will eventually diw d. only community property can be held in joint tenancy

c

the selling agent, Jones prepared an offer for a buyer of a home. At the very latest, when should agent Jones give the buyer the Agency Disclosure form? a as soon as he meets the buyer b before showing the buyer the house c before preparing the offer for the buyer d at opening of escrow

c

what is the highest structural member of a frame house ? a header b I-beam c ridgeboard d mudsill

c

when may a landlord enter rented premises a. never b anytime after giving one hour notice c. to show the premises to a potential buyer of the building after giving reasonable notice d at any time when the tenant is not home

c

The interest acquired in real property through 'adverse possession' is different from the interest acquired by 'prescription' in that the interest acquired by prescription is a. a legal title to the property b. an equitable title to the property c. the right to use land which belongs to someone else d. acquired by payment of taxes

c Prescription creates an easement, which is the right to use the land of another, but does not transfer title. Adverse possession acquires title to the property.

When looking at the closing statements prepared by the escrow, the total of the debit and credit columns on the seller's closing statement, in comparison to the total of the debit and credit columns on the buyers closing statement a. must be the same b. must be different c. can be different d, any of the above

c When comparing the total of the debit and credit columns on the seller's closing statement, they can be different. In fact, they are usually different because the buyer and seller usually pay for different expenses

two similar building are released on long term basis . one for a post office and the other for a hardware store. Using the capitalization approach to appraise the properties, the post office would demand a. a lower capitalization rate b. the same capitalization rate as the hardware store c. a higher capitalization rate d. the two capitalization rates could not be compared because the properties involve different uses

c a higher capitalization rate

The rem 'estoppel' describes a. an architectural element b. a plumbing fixture c. a document confirming the terms of a lease and that tenant has no claims against the landlord d. a trade fixture

c an 'estoppel cerificate' is a document from a tenant confirming the terms of the lease and that the tenant has no claims against the landlord

according to the Statue of Frauds, all of the followings contracts are required to be in writing contracts to be enforceable except a. a listing to sell real property b. a contact selling real property c. an agreement between real estate broker to share commission d. non e of the above

c an agreement between real estate broker to share commission

2. Nancy is running a business out od her home, in violation of the deed restrictions for her subdivision. if another owner wishes to stop her from proceeding, he should obtain: a. a writ of attachment b. a lis pendens c. an injunction d. a desist and refrain order

c an injunction is a court order saying to stop that. it could be used to stop a neighbor from violating private restrictions.

In the purchase of a home, when would a buyer take possession of a property? a. midnight of the day of closing of escrow b. morning of the day of closing of escrow c. at the time agreed upon by the buyer and the seller d. when the loan is funded

c at the time agreed upon by the buyer and the seller

A broker is trying to list real estate owned by a non-profit unincorporated association. To be sure that the proper party sings the listing, he should a. as the lending institution that lent the money to build the church . b ask the past officers of the association c. check the bylaws or the charter to see who has the authority to sell the property d. examine the minutes of the last Board of Directors ' meeting

c check the bylaws or the charter to see who has the authority to sell the property

A listing to sell community real property signed by a husband only is a. void b. voidable c. enforceable d. unenforceable

c enforceable. The listing is merely an employment contract, it is enforceable even if only one spouse signed it.

the due date and delinquent date of the second installment of real property taxes in California are respectively a nov 1 and Dec 10 b. july 1 and nov 1 c febr 1 and apr 10 d jan 1 and march 10

c febr 1 and apr 10

Mr Carson bought 10 acres of vacant land for $20,000 per acre, mailing a down payment of $20,000 and executing a straight note and blanket trust deed for the balance. A provision of the note states that when Mr Carson made a principal payment of $20,000, the trustee would issue a partial reconveyance for one acre. Mr Carson has paid a total of $40,000 of the principal on the note and now owns two acres free and clear. The percentage of his equity in the encumbered property a. has been eliminated. b. remains unchanged c. has increased d. has decreased

c has increased When a the developer paid to have several lots released from the beneath the blanket encumbrance, his percentage of equity in the remaining encumbered lots increased

All of the following are essential to the validity of a contract except a. meeting of the minds b. the adequate capacity of the parties to the contract the payment of money d. legal purpose

c payment of money is not required for the validity of a contract. Promises can be the consideration.

When a developer purchases two or more continuous lots, thus placing them under common ownership for the purpose of increasing the value per lot, it is known as a. co-ownership b. cooperative ownership c. plottage d. disassemblage

c plottage is an added increase in a value when two or more lots are joined together, above and beyond the value of the individual lots.

Theft as it relates to real property, includes all of the following except a. carrying away any portion of the security of mortgage with the intent to defraud the mortgagee b. defrauding by a misrepresentation in a real estate transaction c. signing another 's name without authorization d. entering and removing part of the realty

c signing another 's name without authorization

In the cost approach t o appraisal, the phrase 'reproduction cost' is different from 'replacement cost' in that 'replacement cost' measures a. the original cost to replace the building b. the original cost c. the present cost using utility d. the present cost to build an exact replica

c the 'replacement cost' of a a building is the present cost to build a comparable structure in terms of utility (comparable usefulness)

When attempting to determine current market value, real estate appraisers are least concerned with a objective value b. value exchange c. original cost c. an open marketplace

c the market value of real property is least affected by the original cost

the sublease is a same as an assignment of lease b, a transfer of the entire leasehold to the sublease c. transfer of less than the entire leasehold sublease d limited term of ten years

c transfer of less than the entire leasehold sublease

95. The meaning of the word 'waiver ' as it is applicable to a real estate transaction most nearly means a detrimental reliance upon the representation of another b the justifiable reliance by one party upon the intention; act or omission of another c. a unilateral act and its legal consequences d. estoppel

c unilateral act and its legal consequences, one party waive the other party's obligation to perform a portion of contract .

a negative declaration i n a discussion of environment impact means that the proposed subdivision a. has been disapproved by the Real Estate Commissioner for the issuance of public report, and the developer may not proceed with the construction. b will have a negative impact on the environment and create an environmental hazard c. will have an insignificant effect upon the environment and the developer will not have to pay for a full environmental impact report d. has been dispproved because of other environmental hazards in the neighborhood

c will have an insignificant effect upon the environment and the developer will not have to pay for a full environmental impact report

Buyer purchase a home for $80,000 with a good down payment of 21.25% of hte purchase price, and financing the balance on a 30 year amortized loan with interest at 10.25 per annum. The lender requires monthly impounds for property taxes of $800 per year and casualty insurance costing $978 for a three year policy. Assuming that the first monthly payment on the principal is $119, the total amount the buyer will have to pay the first month will be approximately: a. 250 b. 357 c. 751 d. 827

c. $80.000 x 21.25+$17,000 cash down payment $80,000 -$17,000=$63,000 loan amount $63,000x10.25%=$6,457 annual interest 4. $6,457.50 divided by 12= $538.13 monthly interest 5. %978 divided by 36 =$27.17 monthly insurance 6. $800 divided by 12 =$66.67 monthly taxes 7. $538.13 + $27.17 + $66.67+$119 principal + $750.97 total first month payment

What is another name for social, economic, environmental and government influences on value ? a. factors b. laws c. forces. d. powers

c. 'forces ' is another name for the social, economic, environmental and governmental influences on value.

Broker Sam took a listing providing for a 6% commission on the sale price of $300,000. A buyer offered the listed price, but failed to complete the transaction. The seller declared a forfeiture of the 3% deposit. A provision in the deposit receipt provides that the broker will receive half of the buyers deposit in the event of the buyer 's default. Under theses circumstances, the broker is entitled to a. $1,125 b. $2,250 c. $4,500 d. $9,000

c. 1, $300,000 x 3%=$9,000 2. $9,000 divided by 2=$4,500

Joyce purchased a home for $125,000. She received a loan from the bank for 88% of the purchase price, payable at $1,549 per month including 12% interest. She then sold the home for $139,750 before she even made the first payment on the loan. What was her equity at the time of the sale? a. $12,000 b. $14,750 c. $29,750 d. $125,000

c. 1. $125,000 x 88% = $110,000 loan amount 2. $139,750 -$110,000=$29,750

The principal balance on a loan is currently $56,500. The scheduled monthly payment on the loan, including principal and interest, is $550. All of the payment goes toward interest, except for $43.85. What is the interest rate? a. 9% b. 9-1/2% c. 10-3/4% d. 12-3/4%

c. 1. $550 =$43.85 principal payment =$506.15 interest payment 2. $506.15 x 12 months = $6,073.80 annual interest 3. $6,073.80 divided by $56,500 loan balance =.1075=10-3/4%

The placement of a corporate seal on a deed is an implies a. the document is recordable b. the consideration is sufficient relative to value c. that the person signing the deed is authorized to sign for the corporation d. the corporation had clear title at the time of the signing

c. A 'corporate seal' on a deed implies that the person signing the deed is authorized to sign for the corporation

Title to personal property is transferred with a bill of sale. A valid bill of sale must a. be dated b. contain an acknowledgement c. have the seller's signature d. be verified and recorded

c. A bill of sale must have the signature of the seller

A bone fide listing to sell real property must contain a consideration, mutual consent, competent parties and writing b. consideration, natural consent, capable parties expressed time element in writing c. capable parties, mutual consent, lawful object, consideration and be in writing d. consideration, price, lawful object, competent parties, and legally sufficient writing

c. A bone fide listing to sell real property must contain capable parties, mutual consent, lawful object, consideration and be in writing

. A contract has been executed when it has been a. signed, notarized and recorded b. entered into under the jurisdiction of the probate court c. completely and fully performed d. signed under threat of death

c. A contract has been executed when it has been completely and fully executed.

the statute of frauds requires which of the following contracts to be in writing? a. an employment contract to represent the seller of a business opportunity b. a contract selling a business opportunity c. a contract which is not to be performed within one year of its making d. a nine month lease

c. A contract which is not to ne performed withon one year of its making must be in wrting in order to be enforceable under the Statute of Frauds

Which of the following items would be warranted by a seller in a grant deed, but not covered by a standard policy of title insurance ? a. that there are no defects in the chain of title b. that the grantor actually signed the deed c. that there are no undisclosed liens against the property placed there by the grantor d. that the grantor is legally competent to convey title

c. A grant deed contains two implied warranties. One of them is that there are no undisclosed liens against the property placed by the grantor. The standard title insurance policy carries no such protection

In order to create a valid joint tenancy, there is a requirement for a. the clause 'with right of survivorship b. a husband and wife relationship c. equal ownership interest d. all of the above

c. A joint tenancy requires equal ownership interest.

Which of the followings is an example of a freehold estate a. the interested created by a trust deed b. an estate at will c. a life estate d. a leasehold estate

c. A life estate is a freehold estate which is limits to someone's life

All of the following statements about a lis pedens are false, except a. only a court order may remove it b. it can be used in any law suit c. it may affect title to real property based on hte outcome of the lawsuit d. 'lis pendens' means listen patiently

c. A lis pendens means litigation is pending concerning title of possession of real property.

A percolation test is used to determine a. the topography of the land b. whether or not the house is an earthquake zone c. capacity of soil to absorb water d. the quality of a coffer maker

c. A percolation test is used to determine the capacity of soil to absorb water. You should certainly do this before installing a septic tank

A 'plot plan' is used by a builder for the purpose of a. showing the subcontractors what materials to use b. showing the details of the electrical wiring inside a structure c. showing placement of construction and related land improvements d. showing front and side views of homes in a subdivision

c. A plot plan shows the location of improvements, parking areas, and landscaping on the site.

Jack Russell, a real estate broker, who is not a Realtor, uses a sign which says 'Realtor " at his office located in hos home. He pays a 17 year old high school student $10 for each listing the student brings into the office. He keeps his clients money in his safe at home. Which of the followings is not a violation of the real estate law? a. hiring an unlicensed person to solicit listings b. improper sign, using the term 'Realtor' when he is not a member of the National Association of Realtors c. Improper office location d. commingling the clients money with his own money in the home safe.

c. A real estate broker may work out of his home, The other choices violate the law.

The type of real estate financing instrument which transfers equitable title to real property to the buyer, but retains legal title in the name of the seller, is called a. a mortgage b. a security deposit c. a real property conditional installment sales contract d. a conditional trust deed

c. A real property conditional installment sales contract, is one of the many names for the land contract. The buyer, (vendee) receives equitable title and the seller (vendor) retains legal title

An abstract of judgment, once recorded, creates a. an attachment lien b. a voluntary lien c. an involuntary lien d. an abstract lien

c. A recorded abstract of judgment creates an involuntary lien (money encumbarance) upon all real property of debtor located in that county

When a real estate broker is employed to represent a seller in the sale of a property, the broker is usually employed to act as a. a limits agent b, a privileged agent c. a general agent d. a special agent

c. A special agent is an agent who is authorized by a principal to perform a particular act or transaction, without the continuity of service of a general agent, A real estate broker is usually employed as a special agent by a seller to find a buyer for a particular property.

In a standard title policy, what is not considered as one of the normal procedures? a. the determination of the amount of insurance coverage b. investigation of title c. a survey of the property d. a review of prior deeds

c. A survey of the property is not one of the normal procedures when using a standard coverage policy,

In making a decision to issue a standard title insurance policy, a title insurance company is most concerned with a. the trustor b. the grantee c. the chain of title d. the boundary lines of the property

c. A title company would be most interested in the chain of title when issuing a standard title insurance policy.

The most essential element to create an enforceable broker -principal relationship concerning a transfer of interest in real property is a. a written offer from a ready. willing and able buyer b. the written authority for the seller for the broker to accept a deposit c. a written employment contract d. an agreement setting the commission

c. A written employment contract is the most essential element to create an enforceable broker -principal relationship

According to the Seller Transfer Disclosure Law, the real estate licensed, a. must inspect all the common areas in a condominium subdivision b. must inspect the inaccessible areas and report her findings to the buyer and seller c. has a responsibility to visually inspect the property and revel pertinent information which the seller has failed to disclose d. must pay for the termite inspection

c. According to the Seller Transfer Disclosure law, the real estate licensee has a responsibility to visually inspect the property and reveal pertinent information which the seller has failed to disclose

After publication of intent to sell a property for non-payment property taxes, the owner has how long to redeem the property a. 1 year b. 3 years c. 5 years d. 7 years

c. After publication of intent to sell a property for a non -payment of property taxes, the owner has 5 years to redeem the property.

An 'advance fee ' contract must be approved in advance by the BRE and must include all of the following except a. a complete description or the services to be rendered b. the total amount of the advance fee c. guarantees that the sale, lease or exchange will be completed d. the date the fee is to be paid

c. An 'advance fee' contract may not include any guarantees that the sale, lease or exchange will be completed.

The term 'express contract' describes a contract which is expressed a. only orally b. only in writing c. in words, either oral or written d. none of the above

c. An 'express contract ' is expressed in words, either oral or written

Which of the followings best describes an 'open end' loan a. one in which personal property is held for added collateral b. a soft -money loan c. one in which additional financing could be obtained without rewriting the contract d. one under which many parcels of land are included under one trust deed.

c. An 'open end' loan allows the borrower to re-borrow money previously paid back to the lender without rewriting the contract.

An acceleration clause is inserted into a note that is otherwise negotiable. Adding this clause a. makes the note nonnegotiable b. is required to be negotiable c. does not limit the negotiability of the note d. has no effect on negotiability, but is of no benefit to the holder of the note

c. An acceleration clause allows the lender to call the loan upon the happening of a certain event. This benefits the holder of the note and does not limit negotiability. The loan can still be sold to another lender.

What actually considered to be the most crucial factor in planning a subdivision? a. an accurate site analysis b. an accurate analysis of the community facilities c. an accurate market analysis d. an accurate construction analysis

c. An accurate market analysis is critical if a profit is to be made

An appraiser who uses improper methods to appraise a property for a government backed loan may be guilty of a. violating appraisal ethics b. violating real estate licensing law c. a felony d. misdemeanor

c. An appraiser using improper methods on a government appraisal is committing a felony

The acknowledgment of a deed can be taken by a. the person granting the deed b. a notary who is also the mortgagee c. an employee of corporation buying property d. the grantor only

c. An employee of a corporation which is buying a real estate may take an aknowledgement from the grantor, as the employee is a notary and does not have a personal interest in the transaction

An estate of inheritance is also called a. intestate estate b. estate at will c. fee simple estate d. probate estate

c. An estate of inheritance is also called a fee simple estate

A broker took an exclusive loan listing to negotiate a loan of $3,000 for a borrower. The listing was for 90 days. Under these circumstances, the listing would be a. a valid, enforceable loan listing b. all right because loans below $6,000 are not regulated c. illegal for the broker to take an exclusive listing for that period of time d. illegal unless the broker was also a real property security dealer

c. An exclusive loan listing may not exceed 45 days

When the government has granted permission to a nonriparian owner of a eanch to use a near -by-lake, the owner has received this right by a. eminent domain, b. presecription c. appropriation d. percolation

c. Appropriation describes when the government gives permission to a nonriparian owner to take water from another landowner or a public waterway

When a loan is fully amortized by equal monthly payments of principal and interest, the amount applied to principal reduction a. remains constant through the term of the loan b. decreases while the amount applied to interest payment c. decreases as the loan gets older d. increases by a constant amount

c. As the loan gets older, the amount applied to principal reduction inreases while the amount applied to interest payments decreases

When the river suddenly changed course, it tore away a strip of land from the river bank. Such an event is called a. alluvium b. erosion c. avulsion d. accretion

c. Avulsion is the sudden violent tearing away of land by the action of water.

When a piece of land is washed away by flood or dam giving way, this called a. accretion b. alluvion c. avulsion d. erosion

c. Avulsion. The sudden violent tearing away of land by water is called avulsion. Accretion is when land slowly builds -up along a river. Alluvion is the dirt that builds -up, Erosion is the gradual wearing away of land.

Mr Baker sold his country home to Mr Jones, but reserved a life estate and remained in possession of the property. Later, Mr Baker sold the life estate to Mrs Conner and surrounded possession of the property. Mr Jones then demanded immediate possession of the property. Bases on these fact, which of the following is most correct? a. Mr Baker is liable for damages to Mr Jones b. Mrs Conner should seek return of her purchase price c. Mrs Conner may remain in possession d. Mr Jones is entitled to possession

c. Baker, as owner of a life estate, had the right to transfer the interest to Mrs Conner, In this case, Mrs Conner would remain in possession as long as the designated person, Mr Jones, remained alive.

If broker wants to operate his business under the name fictitious of ABC Realty, he must do which of the following before conducting business under that name? a. file the fictitious business name with city where he has the main branch of his brokerage b. publish the fictitious business name in any newspaper of general circulation c. register the fictitious business name with the BRE d. obtain a license from the BRE under the fictitious business name

c. Before a broker may conduct business under a fictitious business name he must 1. register the fictitious business name with the county recorder's office (not the secretary of state) 2. publish the fictitious business name statement in a paper of general circulation within the county where his office is located (not just any paper) apply to the BRE for a new broker's license under fictitious business name (not register the fictitious business name with the BRE) The broker may operate under the fictitious business name after he obtains a license from the BRE under the fictitious business name

How long must a real estate salesperson keep a copy of his employment contract with a broker after quitting the office? a. one year b. two years c. three years d. four years

c. Both broker and salesperson must keep a copy of the employment contract for three years from the termination of employment

When appraising the value of an older building using replacement cost method and appraiser would calculate all of the following except a.cost to build new improvements b. the value of the land c. an appropriate capitalization rate d. accrued depreciation

c. Capitalization rate is not part of the replacement cost method.

1. When Carr conveyed to Jim a portion of his fee estate for a term less than his own, Carr's interest would be identified as a a. fee defeasible b. vested severance c. reversionary interest d. leasehold

c. Carr (lessor) has granted a leasehold interest to Jim (lessee). Carr hold a reversionary interest in that the possession will revert to Carr upon termination of the lease.

The seller in a real estate transaction decided not to pay the commission to his real estate agent. Which of the following should the real estate agent do? a. file a vendor's lien on the seller's property. b. file a complaint with the real estate commission c. file an action in civil court d. all of the above

c. Commission disputes are settled by civil lawsuits

Concurrent ownership of real property by two or more parties, each of whom has an undivided interest (not necessarily equal) without right of survivorship would be described as a. community proeprty b. joint tenancy c. tenancy in common d. ownership in severalty

c. Concurrent ownership of a real property by two or more parties, each of whom has an undivided interest,not necessarly equal,without right of survivorship, is decribed as tenancy in common

Who establishes a deed restrictions? a. the Master Plan of the city b. the planning commission c. the grantor in a deed d. zoning laws

c. Deed restrictions are private restrictions placed ina deed by the grantor

During escrow, if an dispute should arise between the buyer and seller preventing the close of escrow, the escrow holder may legally a. arbitrate the dispute as a neutral party b. cancel the escrow and return all documents and monies tot he respective parties c. file an interpleader action in court d. do all of the above

c. Escrow may file an interpleader action in court to settle an unresolved dispute between the buyer and seller

Excessive wear and tear on bearing walls would be normally be considered what type of depreciation? a. economic obsolescence -curable b. social obsolescence -incurable c. physical deterioration -incurable d. physical deterioration -curable

c. Excessive wear and tear refers to a physical deterioration. Excessive physical deterioration of a bearing walls would be impossible and /or impractical to fix. Therefore, the answer is physical deterioration -incurable

In order to legally transfer fee estate to parcel of real property encumbered by a trust deed, it is always necessary to do which of the following? a. secure the consent of all lenders b. completely pay off all existing loans c. deliver a valid deed from teh grantor to the grantee d. record a reconveyance deed from the trustee

c. Fee title can only be transferred with a valid deed. A valid deed must bedelivered to be effective. The other choices are sometimes necessary, but not always. Fee= An estate of inheritance of real property.

All of the follwing concerning appraisal reports are true exept a. appraisal reports must be dated b. the property being appraised must be clearly and sufficiently described c. licensed appraisers charge standardized fees for all appraisal reports d. appraisal reports often apply the principle of substitution

c. Fees for appraisal reports vary, even among licensed appraisers

Mr Brown purchased an apartment building for $1,000,000. The listed price was $1,200,000. Mr Brown put $200,000 down and acquired a new first trust deed for the difference. Mr Brown's cost basis for income tax purposes would be a. $ 200,000 b. $800,000 c. $1,000,000 d. $1,200,000

c. For income tax purposes, the cost basis is the purchase price of the property.

Capital improvements made to residential income property after 1986 may be depreciated a. by whatever type of depreciation the owner used on the original property b. by the 175% declining balance method c. over estimated life of 27-1/2 years d. using accelerated depreciation

c. For residential income property, any property purchased or capital improvements made after 1986 must be depreciated by the straight line method over minimum of 28.5 years.

The gross rent multiplyer is arrived at by divideing a. net monthly rental by market value b. gross monthly rental by marker value c. sales price by gross monhtly rental d. sales price by annual net income

c. Gross rent multiplier = sale price divided by the gross monthly rental

In appraising real property, separate site analysis is considered least important a. for calculating depreciation b. for applying the income approach c. when applying gross rent multiplier d. when applying the cost approach

c. Gross rent multiplier determines value by multiplying gross income by a commonly accepted number. A separate site analysis would not be used. Gross rent multiplier, times the gross income of property, produces an estimate of value of the property.

Which of the following state agencies acts to prevent discrimination in housing accommodations because of race, color, sex, national origin, or ancestry? a. Department of Housing b. Labor Commission c. Department og FAir Emplyment and Housing d. Real Estate Commission

c. Housing complaints are submitted to the Department of Fair Employment and Housing under the Rumford Act.

when a lender takes a deed in lieu of foreclosure from the borrower, the lender a. must get court approval b. must first obtain the written consent of all other lien holders c. will assume any junior liens d. none of the above

c. If a lender accepts a deed from the borrower in lieu of foreclosure, existing liens would stay against the property.

Capitalization rates must provide for a return on, and a return of the investment in an improvement. This is provided for by means of. a. interest rates b. monthly savings c. depreciation methods d. principal investments

c. In calculating capitalization rates, a factor for the depreciation of the improvement is figures into the return given the investor. This allows for a 'return of' in addition to a 'return on' the investment.

When using the market data approach, if the comparable property has a feature that is not present in hte subject propwert, the value of that feature will be a. ignored since no two proeprties have identical features. b. identified in hte report and adjusted for inflation c. substacted from hte sales price of the comparable d. added to the sale price of hte subject property

c. In the market data approach to appraising when the comparable has a feature missing in the subject property, the appraiser subtracts the value of the feature from the sales price of the comparable.

The most detailed and accurate method of estimating the replacement cost new of an improvement is a. unit of comparison method b. cost per square foot method c. quantity survey method d. unit -in-place method

c. In the quantity survey method, an appraiser computes the cost of each component of a building and adds in the cost labor, overhead, and profit.

Each of the following would be subject to property taxes exept a. prossessory interest of the lessee in oil and gas rights in real property owned by the government b. a mobile home installed on a permanent foundation system c. intangible personal property d. vacant land in an unincorporated section of the country

c. Intangible personal property, such as the good will of a business opportunity, is not subject to property taxes

Joe owned a grocery store and wanted to raise some money. He decided to sell his land and building to an investor and leased it back to himself in order to continue running his grocery store there. Which of the following would be a tax benefit to Joe? a. all capital gains for Joe are deferred b. Joe has a new tax base for his future depreciation of the building c. Joe's rent payments to the investor will be fully deductable for income tax purposes as a business expense. d. none of the above

c. Joe's rent payments to the investor will be fully deductible for income tax purposes as a business expense

In what year did the US Supreme Court prohibit racial discrimination when real property is sold or rented and upon which amendment to the US Constitution did they base their decision? a. 1968 and the Fifth Amendment b. 1988 and the First Amendment c. 1968 and the Thirteenth Amendment d. 1868 and the First Amendment

c. Jones v Mayer was decided in 1968 upon the basis of the Thirteen Amendment to the United States Constitution

A real estate investor who wished to utilize the principle of leverage, would do which of the following? a. use his own funds as much as possible b. use borrowed money and his own personal money on an equal basis c. use borrowed money to the maximum extend possible d. invest in rental properties with declining values

c. Leverage involves using borrowed money to the maximum extent possible

the document used to transfer title to a business opportunity (personal property) is which of the following? a. a trust deed b. a chattel mortgage c. a bill of sale d. a security agreement

c. the document used to transfer title to a business opportunity (personal property) is a bill of sale

The cause of depreciation which gives us the phrase 'more buildings are torn down than fall down' would describe as a. wear and tear b. physical deterioration c. social obsolescence d. deferred maintenance

c. Social and economic obsolescence refers to the fact that neighborhoods change and buildings become socially or economically unaccaptable. Therefore, a building is commonly torn down before it has used its physical life

An offering 'secured' loans for sale would be regarded as misleading unless a. the ad was placed by a licensed loan broker b. each purchaser were offered a standards title insurance policy covering the encumbered properties c. the broker secured the borrower's signature on the loan broker statement d. the ad fully expired how and to what extent the funds would be secured

c. Social and economic obsolescence refers to the fact that neighborhoods change and buildings become socially or economically unacceptable. Therefore, a building is commonly torn down before it has used its physical life.

Each of the following is considered personal property, except a. a corn crop prior to harvest b. oranges that have not yet been picked, but which have been sold under contract c. stock in a mutual water company d. Minerals

c. Stock in a mutual water company is always real property. Crops before harvest may be either real or personal property, Corn crops must be planted annually and are usually personal property. All corps mortgaged or sold prior to harvest, they become personal property. Minerals such as gold, when removed from the ground, become personal property.

All of the following CC&R contained in a deed are unenforceable except a. property may not be conveyed for more than $1 b. property may not be sold for 10 years c. property can only be used for religious or charitable purposes d. property cannot be sold to minority buyers

c. The CC&R in a deed may limit use of the property for religious or charitable purposes, The other limitations are prohibited by law

Which of the following federal entities would most likely be involved in a buying and selling government securities in the open market? a. the Securities and Exchange Commission b. the Federal Housing Administration c. the Federal Open Market Committee d. the Federal Open Market Committee

c. The Federal Open Market Committee of the Federal Reserve Board buys and sells existing government securities to control the money supply and inflation

A broker advertises the sale of 'big time money trust deeds' in the newspaper. The ad offers a specific yield arrived at by looking at the yiels for the past year. this ad is a. not subject to regulation under the law. b. is legal only if the BRE has confirmed the yiels c. is illegal only if the ad gives the actual interest rate specified in the note and the discount from the outstanding principal balance. d. illegal according to the truth in lending law

c. The ad if it also discloses the interest rate stated in the note and the amount of discount.

A residential purchase agreement says 'the seller will provide and pay for a structural pest control report on improvements and pay for corrective work, if any'. The agent must be certain that the buyers receive a copy of the structural pest control report. a. within 5 days of the date of the termite report b. within 10 days of opening escrow c. as soon as practicable before the close of escrow. d. none of the above

c. The agent must be certain that the buyers receive a copy of the structural pest control report as soon s possible before the close of escrow.

A real estate appraisal is valid for what period of time? a. for the term of the loan b. a year c. as of a given date d. for any period of time

c. The appraisal is valid as of the date of the appraisal only.

Broker Jane sold a home. The seller carried back a second trust deed. Broker Jane recorded a 'request for notice of default' Who normally benefits for a ;request for notice of default'? a. the trustee b. the trustor c. the beneficiary in the second trust deed d. the mortgagor

c. The beneficiary of a junior loan normally benefits from recording a 'request for notice of default' because they will receive quicker notification of a default on prior liens against the property.

When a broker takes an exclusive authorization and right to locate property listing with a buyer, the broker is authorized to a. act as the exclusive agent to work for that buyer only and agreens to work with no other buyers during the term of the listing b. incure expenses which the buyer is the obligated to reimburse c. represent other buyers at the same time d. receive a commission for the buyer regardless of whether or not he finds a property

c. The broker in an exclusive authorization and right to locate property, buyers listing, is authorized to represent other buyers

On April 2, a buyer gave a broker a personal check as a deposit to accompany an offer. The buyer told the broker to hold the check until after Apr 15th . What should the broker do, a. The broker cannot legally accept the check b. the broker should present the offer and hope the seller does not ask about the check c. the broker should present the offer to the seller, but must tell the seller about buyer's instruction to hold the check until after Apr 15 d. the broker should immediately deposit the check in his trust account

c. The broker must present the offer and disclose the hold on the check because it is a material fact.

When prospective buyers of a home request a real estate broker's assistance in obtaining an FHA loan, the broker would most likely contact a. the Federal Housing Administration b. an FHA appraiser c. an institutional lender, such as a bank or savings and loan d. the Federal Reserve Board.

c. The broker should contact the lender, not the FHA

A real estate broker showed a property to a prospective buyer which was not currently listed for sale and without the seller's knowledge or consent. The broker then wrote up and represented an offer to the seller. In this situation, the broker acted a. unethically, b. illegally, c. as a single agent d. as a dual agent

c. The broker was acting as a 'single agent' representing the buyer only in the transaction

When an appraiser arrives at the value of an income property by considering the income produced and the percentage rate of return which can reasonable be expected to be earned on the investment, she is applying a process called a. market data approach b. gross multiplier method c. capitalization approach d. cost approach

c. The capitalization approach divides the annual net income of the property by the expected rate of return on the investment (capitalization rate ) to determine value.

What happens to the value of a parcel of land when the dept of that parcel increases beyond the depth of other lots in the area? a. the value per front foot remains the same b. the value per square foot increases c. the value per front foot increases d. the total value of the lot decreases

c. The deeper the lot, the greater the front foot value. Each front foot extending the depth of the lot. The value per square foot usually goes down.

When making a new real estate loan lenders often charge the borrower a fee for expenses incurred for things such as documents preparation and relates work The fee charged is usually a percentage of the face amount of the loan and is referred to on the borrower's closing statement as a a. prepayment penalty b. mortgage loan disclosure fee c. loan origination fee d. loan discount fee

c. The fee charged by lenders for expenses incurred for things such as documents preparation and related work is called the loan origination fee.

In home construction a 'footing' refers to a. a masonry beam found under the floorboard b. a steel grinder to which the floorboard are fixed c. the spreading part at the base of a foundation wall or pier d. a slab of concrete upon which asphalt is usually laid

c. The footing is the spreading concrete base or bottom of a foundation wall.

A roof which slopes or inclines on all four sides is called a. a gable roof b. a mansard roof c. a hip roof d . a gambrel roof

c. The hip roof slopes or inclines all four sides

Property is technically defined as a. less than freehold estates b. things owned by buyers and sellers c. rights or interests which a person has in the thing owned d. fee simple absolute

c. The legal definition of property is the rights that a person has in the thing owned, called the 'bundle of rights' theory

The maximum commission a loan broker may charge to negotiate a $4,000 hard money second trust deed, due in 3 years a. $200 b. $400 c. $600 c. $800

c. The maximum commission a loan broker may charge to negotiate a $4,000 hard money second trust deed, due in 3 years id 15% ($600) $4,000 x 15 = $600

Comparing a trust deed and note, which of the following statement is true? a. the trust deed has a shorter statue of limitations than the note b. when there is a conflict in the provisions of the note and the provisions of the trust deed, the provisions of the trust deed will prevail c.the lien of the trust deed is merely incidental to the debt d. the note is less significant than the trust deed

c. The note is the evidence of the debt . The trust deed is simply the security for the debt. Therefore, the lien of the trust deed is merely incidental to the debt.

Mr Smith is the vendor is a land contract selling his home. One day, shortly after entering into the contract, he noticed that a plumber was installing new plumbing in the home., To protect himself, he should a. post a notice of completion b. record a notice of non responsibility once the job has been completed, c. post and record a notice of non responsibility withing ten days d. do nothing, since he has already sold the home

c. The owner has 10 days to record and post a notice of a non responsibility from the time he has knowledge of the work.

The position of a building on a lot in relationship to exposure to the rays of the sun, prevailing wind, view, privacy from the street, etc, is known as a. elevation b. plottage c. orientation' d. assemple

c. The placement of a building on its lot in relation to exposure to sun, prevailing wind, traffic, and privacy from the streets is called orientation

The primary purpose od RESPA ( Real Estate Settlement Procedure Act) id to a. set standards for home improvement procedures b. control which lenders may process real estate loan applications c. require lenders to make special disclosures without cost to the borrower, for loans involving the sale or trnasfer or four or less residential dwellings d. regulate non -federallly relates mortgage loans

c. The primary purpose of RESPA ( Real Estate Settlement Procedures Act) is to require federally regulated lenders to make special disclosures, without cost to the borrower, for or less residential dwellings.

Broker Bob has a 'restricted' real estate license. The Real Estate Commissioner believes Broker Bob is now, once again, violating the real estate law. What can the Real Estate Commissioner do? a. immediately revoke Brokers Bob's license b. immediately cancel Brokers Bob's license c. immediately suspend Brokers' Bob's license, until a hearing can be held d. nothing, until a formal hearing has been held

c. The real estate commissioner can immediately suspend a 'restricted ' license, pending the results of a future hearing

A 'safety clause' is usually found in a which of the following contracts? a. deposit receipt b. lease c. listing d. option

c. The safety clause is found in the listing

Michael is selling his business 'Mikes Pies" Michael must collect sales tax form the buyer on which of the following items? a. the inventory which is included in the sale b. 'good will' value c. the fixtures and furniture included with the business d. none of the above

c. The seller of a business must collect sales tax on the fixtures and furniture included wit the business. the buyer should request a receipt from the State Board of Equalization, called a 'clearance receipt' to avoid successors' liability for the sales tax

When commercial banks consider 'liquidity' and 'marketability' of loans, they are referring to: a. commercial property loans b. the discount rate c. the secondary mortgage market d. regulation by the Federal Reserve Board

c. The terms 'liquidity' and 'marketability' refer to the ability to sell the loans on the secondary mortgage market

The California Civil Code requires a transfer disclosure statement be delivered by the a. probate court b. trustee to trustor c. transferor to trasferee d. husband to wife

c. The transferor, seller, of four or less residential units must deliver the 'deliver disclosure statement' to the transferee, buyer,

When using a trust deed to purchase a home, the buyer borrowing the money is called the trustor. The trustor a. receives a promissory note that is borrowed b. receives a less than freehold estate c. signs a promissory note d. holds the trust deed which is used as security for the loan

c. The trustor (borrower ) signs the promissory note and hte trust deed

A licensed real estate salesperson is directly responsible to the a. seller b. buyer c. employing broker d. none of the above

c. the employing broker is directly responsible to his/her employing broker.

Usually, an escrow officer is authorized to a. determine which financing is best for the buyer b. change the escrow instructions when asked to the selling agent c. call for the funding of buyers loan d. choose the pest control company.

c. Typical escrow instructions authorize escrow officers to call for the funding of the buyers loan in order to close escrow. Escrow. officers are not authorized to do the other choices.

A real estate broker must retain copies of all listings, deposit receipts, cancelled checks, loan documents, and trust records for a. one year b. two years. c. three years d. four years

c. Under current law, all real estate documents must be retained by the real estate broker or three years .

Under the California Environmental Quality Act, if a city or county agency determines that a proposed project has no significant effect on the environment and that a full environmental impact report is not required, the public agency will issue a a. declaration of approval b. positive declaration c. negative declaration d. declaration of support

c. Under the California Environmental Quality Act, any city or county agency having jurisdiction under the law would issue a negative declaration in the event that a subdivision proposes no significant effect on the environment.

On an FHA loan, the interest rate is set by a. FHA b. the lender c. agreement between the buyer and the lender d. the Federal Reserve Board

c. Under the FHA program, the interest rate on FHA loans is set by agreement between the buyer and the lender.

Valuations of single family dwellings are ususally based on a. gross multiplier of annual income b. asking prices of comparable houses c. sales prices comparable properties d. the assessed values of comparable homes

c. Valuations of single family dwellings are usually based on sales prices of comparable properties

Real property includes a. chattel mortgages b. trust deeds c. vegetation d. chose

c. Vegetation is a real property

When a lender in a trust deed takes a deed in lieu of foreclosure, who becomes the owner of the property? a. vendor b. trustor c. beneficiary d. trustee

c. Whe a lender, beneficiary, takes a deed in lieu of foreclosure, the lender becomes the owner and is required to assume the junior liens

The purpose of a 'release clause' in a mortgage is to a. allow a borrower to be released from liability b. release the title company from liability c. allow the release of some properties upon partial payment, when more than one property is used as security for the debt. d. release the lender from liability

c. When a blanket mortgage is used to secure a debt, there is a clause which will release some of the properties upon partial payment of the debt

When a real estate licensee negotiate a loan secured by real property, he must deliver the mortgage loan disclosure statement to the borrower a. within 2 days of the real time the borrower signs it b. within three days of receipt of a completed loan application or before the borrower is obligated he borrower is obligated to take the loan, whichever is earlier c. within 36 hours of the time the borrower signs it d. before escrow closes

c. When a real estate licensee negotiates a loan secured by a real propeprty, he must deliver the mortgage loan disclosure statement to the borrower within three days of receipt of a completed loan application or before the borrower is obligated to take the loan, whichever is earlier.

When land is valued by its highest and best use, and there is a building on the land that has a little or no value, the appraiser should a. ignore the building in his valuation b. add the salvage value of the building to his valuation c . deduct the demolition cost of the building from his highest and best value by means of the cost d. establish a value by means of the cost approach to appraisal, instead of highest and best use

c. When appraisers use highest and best use on parcel with an existing structure of little value, the appraiser subtracts the demolition cost of the structure from the value of the land

As interest rates increase, the capitalized value of an apartment complex with long term leases a. remains the same b. increases faster than interest rates increase c. decreases d. increases slowly over the long run

c. When interest rates go up, capitalization rates usually go up. When capitalization rates go up, the capitalized value of income property goes down. When income is constant

A buyer selected an expert to inspect the septic tank of the home he was about to purchase. The inspector damaged the home's sprinkler system during the inspection. Who is liable for the cost of repairing the sprinkler system? a. the seller will be liable b. the seller will be liable only if defects in the septic tank were found c. buyer will be liable for the damages, regardless of what was found during during the inspection d. buyer will be liable for the damages, only if no defects were found

c. When the buyer hires an inspector, he is liable for any damages caused by his inspector

The zoning for a subdivision said that each lot must contain a minimum of 15,000 square feet. The deed restrictions said that each lot must contain a minimum of 10,000 square feet. Which would control? a. the most recent restriction b. the deed restriction c. zoning d. whichever restriction was created first

c. Whichever restriction is most restrictive will control. In this case, the zoning is more restrictive because larger lot sizes restrict the number of homes which can be built.

When may a real estate broker, acting as agent for a seller., refuse to submit a buyers offer? a. when the owner has already accepted an offer. b. when the owner has already accepted a better offer c. when the owner has given broker express instructions not to submit any further offers d. never, all offers must be presented

c. a broker must present all offers unless they aer frivolous or unless seller has expressly instructed broker to submit no further offers

If a real estate broker fails to obey all lawful instructions given by his principal, the broker could be a. subjected to fine and or imprisonment under the law b. prohibited by a court from working as a real estate broker c. liable in damages fro any injuries suffered by the principal as a result d, all of the above

c. a broker would be liable in damages for any inquiries suffered by the principal as a result of his failure to be obey the principal 's lawful instruction

a developer ordered several truckloads of soil to be used in a new housing project for backfill. the most probable use of this backfill will be a. as topsoil for landscaping and beautification purposes. b. to fill in the old septic tank c. to fill in excavations or to brace around foundation walls d. to supplement the result of the percolation test.

c. backfill is dirt used to fill excavations or brace foundations

33. 'Backfill' used in construction can be described as a. soil to be used for planting b. cement used to cover a patio c. soil used to fill in excavations or brace foundation walls d. dirt used to regrate a lot

c. backfill is soil used to fill an excavations and to brace foundations.

New employment contract between the seller of a new home and a broker , whereby the seller commission fi she produces a 'ready willing and able ' buyer and in return, the broker agrees to use due diligence in producing the buyer is called a . unilateral executory contract b .a unilateral executed contract c. a bilateral executory contract d. a bilateral executed contract

c. bilateral executory contract

a dual agency is legal if a all the parties are told after they sign the purchase agreement b all parties are told before the close of escrow c. both the buyer and the seller have been informed of dual agency and have consented to it d. the broker and escrow company agree to it

c. both buyer and the seller have been informed of a dual agency and have consented to it.

25. how frequently must the real estate broker reconcile his trust a. daily b. weekly. c. monthly d. annually

c. broker must reconcile his trust account monthly

Conversion of apartments to community apartment projects and condominiums come within the provisions of the California Real Estate Subdivided Lands Law when they contains how many units a. two or more b. three or more c. five or more d. all subdivisions come within that law.

c. conversion of apartments to community apartment projects and condominiums comes within the provisions of the California real estate Subdivided Lands when it contains five or more units.

Each of the following terms is a type of soil condition except a. sandy b. adobe c. deciduous d. expansive

c. deciduous refers to trees which lose their leaves in autumn or winter

the hot water heater in an apartment breaks the tenant has a $1,250 month to month rental agreement. the tenant may a. deduct up to $312.50 to pay fro the repair b deduct up to $625 to pay the repair c . deduct up to $1250 to pay for the repair d. deduct up to $370 to pay for the repair

c. deduct up to $1,250

With promissory note and trust deed signed by two or more co borrowers defaults, what is the liability? a. personal and corporate liability b. all are together liable as individual borrowers c. each is jointly and severally liable d. each is individually and severely liable

c. each of the co borrowers on a loan will be held jointly and severally liable

38. sheet metal used to protect a building from water seepage is called a. sheeting b. gutter c. flashing d. none of the above

c. flashing is the name of this sheet metal

The Government National Mortgage Association (Ginnie Mae) supports pass-through securities. The phrase 'pass-through' means that all principal and interest payments pass through Ginnie Mae to the investors. Ginnie Mae;s role in 'pass -through ' securities is to a. act as a go -between and verify that transactions are properly documented b. bring buyer and sellers together c. guarantee timely payment of principal and intererest on the mortgages d. qualify the properties that are used as security for the loans

c. ginnie Mae's role in 'pass-through' securities is to guarantee timely payment of principal and interest on the mortgages

Which of the following can be considered as a hidden cost of home ownership? a. depreciation of land b. loss of value as a result of adverse zoning c. loss of interest on the owners equity d. improvement appreciation

c. hidden cost of home ownership is loss on any interest income which could have earned on the owners's equity

Which of the following would be classified as a lien ? a notice to pay or quit b an attachment c a recorded declaration of homestead d. all of the above

c. homestead is a recorded declaration by the owner and it can protect the property against judgments up to certain amount

When rent is based on a portion of gross receipts of a business, the lease is called a. a gross lease b. a net lease c. a percentage lease d. fixed lease

c. in a percentage lease, the rent is a percentage of the gross receipts of a business

In real estate loan, when the required loan payments are insufficient to pay the interest due, the result is a. an increase in the amount applied principal reduction payments b. a reduction in the term of the loan c. negative amortization d. an increase in the term of the loan.

c. in a real estate loan, when the required loan payments are insufficient to pay the interest due, the result is negative amortization, the loan balance goes up instead of down.

1. Laura currently has a freehold estate. which of the following would result in her having a less than freehold estate? a. leasing a property for 5 years b. selling the mineral rights to a third party c. sale -leaseback; d. granting her father a life estate

c. in a sale lease -back the owner sells the property to an investor. the investor then leases the property back to the prior owner. the prior owner stays in possession and becomes a tenant holding a less than freehold estate.

All of the following items are normally prorated at eh close of escrow except a. home -owner's insurance b. property taxes and assessments c. delinquent interest on unsecured loans d. interest and impounds

c. interest on unsecured loans will not be prorated at close of escrow.

Standard policy of title insurance protects insured against a. defects known to the buyer , but undisclosed to the insurance company b. the power of eminent domain c. lack of capacity of a party in the transaction d. zoning

c. lack of capacity of a party in the transaction. Lack of capacity is covered by all title policies. Known defects which are undiscovered, eminent domain and zoning are not covered by any policy.

Which of the following is a violation of fair housing laws? a. the landlord requires every tenant have a good credit rating and a steady source of income b. the landlord requires all tenants to furnishes references from their previous landlords c. the requirement of a landlord or a co-signer exclusively for tenants who are single d. a landlord that requires all tenants pay first and last months rent in advance

c. landlords may not require a co signer for a single tenants only

a contract for the sale of rural property requires a a rural PO box number b parcel number c legal description d amount of acreage

c. legal description

all of the following are less-then-freehold estates except a. leasehold estate b. an estate for years c. life estate d. all of the above are less-than -freehold estates

c. life estate is a freehold estate limited in duration to someone's life the choices are less than freehold estates

35. In the capitalization approach to appraisal, which of the following is not deducted to determine the annual net income? a. maintenance expense b. management expense c. interest expenses on the loan d. vacancies

c. loan expenses, such as interest, are not deducted when calculating annual net income in the capitalization approach.

all of the follwing terminate easements except a. destruction of servient tenenment b. merger of hte dominant and servient tenenmetn c. non use for five years of an easement created by express grant d. express release by hte owner of hte dominant tenenment

c. non use for 5 years of an easement would only terminate ab easement created by prescription, not an easement created by express grant

A broker provided agency services for both a buyer and seller without the proper disclosures because he was unaware that both the seller and the buyer considered him to be their agent. Consequently, the broker was involved in which of the following a. voidable agency d. accidental agency c. ostensible agency d. deniable agency

c. ostensible agency may result from the conduct of the parties. if a broker provided agency services for both a buyer and the seller without the property disclosures (because he was unaware that both the buyer and the seller considered him their agent), he become an ostensible agent.

the mortgage insurance paid on an FHA loan a. protects the borrower from a loss due to fire b. protects the lender in the event of the borrower 's death c protects that lender in the event of of default by borrower d. is paid for the lender

c. protects that lender in the event of of default by borrower

the Alquist-Priolo Special studies Act discloses the location of earthquake fault lines on maps for properties located a only within five miles of an active fault line b. in designated California counties c. in all counties within California d. only in desiganted specila study zones

c. the Alquist -Priolo Special Studies Act applies to all counties in California

A licensee must make an adjustment between the comparable and the subject property because a. property eventually must increase in value b. property depreciates c. two properties are rarely similar concerning everything d. property eventually decreases in value

c. the appraiser adjusts the comparable to the subject property because two properties are rarely identical

an owner of an income property deducted $6,000 from the gross income for the proration on his federal income tax return. his basis for the property is therefore; a. raised by $6,000 b. unchanged c. lowered by $6,000 d. adjusted only when the property is sold

c. the basis is adjusted each year to reflect the depreciation claimed on the income tax return

The Truth in Lending Law allows borrowers a limited right of rescission. The time which is allowed for rescission begins when the a. credit application is submitted to the lender b. lender gives loan approval c. loan documents aer signed by the borrower d. loan funded by the lender

c. the borrower usually has until midnight of the third business day after the promissory note is signed to rescind the agreement

What provides the most important proportion for a lender on a junior trust deed? a. the borrower's income b. the borrower's credit rating c. the borrower's equity in the property d. none of the above

c. the borrowers equity in the property is the most important concern to a lender making a junior loan

3. Who is more likely to earn a sales commission, the broker who: a. attempted to bind the principal to the contract b. secured an offer with a deposit c. secured acceptance to an offer d. communicates acceptance of the offer by the seller to the buyer

c. the broker most likely to earn commission is the boker who earned a binding contract between the seller and buyer. the contract becomes binding once acceptance has been communicated back to the buyer

Which of the following items in preliminary title report would the buyer insist be removed from title before the close of the escrow? a CC&R b. quitclaim deed c. mechanic;s lien d. property tax lien for the upcoming property tax year

c. the buyer who discovers a mechanic;s lien in a preliminary title report would the buyer insist it be removed before close of ecrow

The developer of a large time -share subdivision sent advertising offering prices to over 100,000 potential buyers, but did not disclose that they were required to attend a sales presentation to be eligible to receive the prizes. which of the following is true a. this is legal so long as the offer is made to all interested parties b. this is illegal because a developer can give prices if he wants to without limitation c. this is illegal because the developer failed to disclose the requirement that buyers must attend a sales presentation in order to receive a prize d. this is illegal because in addition to prize, buyers were also awarded a partial ownership in the property.

c. the developer must disclose that attendance at a sales presentation is required

determining the appropriate capitalization rate is the most difficult step in capitalization approach to appraisal. In order to calculate capitalization rate , the appraisers can utilize which of the following methods a a market comparison b band of investment c summation d any of the above

d

the contact date of a deposit receipt is the date in that a the earns t money was received b the contract has been pre payed by the agent c. buyer signed the contract d final acceptance was properly communicates back to the offerror.

d

what type of title insurance policy covers everything ? a. ALTA b extend ed c. standard d no title insurance policy covers everything

d

when a real estate is purchased under the cal vet farm and home purchase plan , payment are made to and legal title to the property is held by a trustee b the cal vet c the veterans administration d the department of veterans affairs

d

which h of the following building codes controls construction when they are in conflict a local building codes b state housing laws c uniform building code d whichever code sets the highest construction standard

d

which of the following is a unique characteristic of a FHA loan program? a it is easy to qualify for b it has a low to value ration c it requires a low down payment d fha insures the lender agains loss

d

which of the following would be an example of functional obsolescence ? a. new zoning law b incompatible land use in the neighborhood c deteriorated driveway d one car garage

d

which of the following would not terminate a joint tenancy between two owners? a foreclosure on one of the joint tenancy between two owners ? b the sale of the joint tenants interest c one of the joint tenants deeding his interest to a third party d one joint tenant having a trust deed or mortgage recorded against his or her interest in the property .

d

who pays the points on Cl Vet loan? a buyer b seller c agent d none of the above

d

If a property with a $2,400 gross monthly income sold at an annual GRM of 10.72 what did the property sell for ? a. $250,650 b, $280,000 c. $295,640 d. $308,736

d $308,736

The escrow for the sale of a home was scheduled to close Nov 16th 2012 , the owner had a 3 year fire insurance policy with an n effective date of March 1 2012 . if the three year premium of $950.40 was prepaid by the seller and the buyer assumed the policy , the closing statement would show a $11.20 credit to the buyer b. $211.30 credit to the seller c. $726.00 credit to the buyer d. $726.00 credit to the seller

d $726.00 credit to the seller

None of the following persons may lawfully enter into a valid contract to purchase real property except a. unemancipated minors b. minors who are wards of the court c. convicts in prison d. aliens

d .aliens may lawfully enter into a valid contract

6. Attorney -in-fact is which of the following a. lawyer acting as the administrator of an estate b. principal who has been given implied powers of agency c. an agent performing a dual agency d. a legally competent person who has been given a power of attorney

d .attorney-in -fact is a legally competent person who has been given a power of attorney

A promotional note will no longer be regulated as a real property security when the note is a 17 months old b .24 months old c. 30 months old d. 37 months old

d 37 months old

All of the following are negotiable instruments except a. an installment note b. a personal check c. a bank draft d. a trust deed

d Mortgages and trust deeds are not negotiable instruments, they are security devices.

A home was sold and the escrow closed Oct 1 201 . How would the property taxes for the 2012-2013 TAX YEAR TYPICALLY BE PRORATED BETWEEN THE SELLER AND THE BUYER? a. the seller pays for the entire year b. the buyer pays for the entire year c. the property taxes are divided equally between the buyer and seller d. the seller would pay for the first three months of the tax year (July, August, September) by proration in escrow. The buyer would pay for the remainder of the tax year plus supplemental tax based upon the reassesseemnt that was triggered by he reassesses

d Property taxes are usually prorated based upon the months each party occupied the property. Escrow closed Oct 1 2012, therefore the seller would pay for the first three months of the property tax year. ( July, august, September) by proration in escrow. The buyer would pay for the remainder of the tax year plus supplemental taxes based upon the re assessement that was triggered by the sale.

Buyer must bring a lawsuit for a breach of written contracts against a seller within a. 6 months b. 1 year c. 3 years d. 4 years

d The Statute of limitations requires for breach of written contract to be filed within four years of the breach.

Which of he following is appropriate termination date an exclusive right to sell listing of residential real property? a, 3 days after notice of rescission by either the seller or the listing broker b. 60 days after a buyer approves the home inspection c. 90 days after a buyer has submitted the loan application d. 90 days after the listing is signed

d an exclusive listing must have a definite termination date

Under what circumstances will cost be equal to value? a. cost always equals the value b. when the improvements to the property are new c. when the improvements represent the highest and best use of the property d. both b and c

d both b and c

When a broker obtains confidential financial information about hos principal during a real estate transaction, that information must kept confidential for how long? a. only until close of escrow b. 30 days after close of escrow c, three years after closing of the transaction d. forever

d forever

the effective gross income found in the capitalization approach to appraisal requires a deduction to be made for a. real property taxes b repairs c deferral income taxes d vacancies

d gross Income multiplier = divide the sales price with the gross annual rental income

An advance fee collected by a mortgage broker to pay for the processing of the loan is a. illegal under RESPA b. legal, if it is under flat fee c. legal, if under $200 d. legal, only if the advance fee agreement has been approved by the BRE and the money is held in the brokers trust account until used

d legal, only if the advance fee agreement has been approved by the BRE and the money is held in the brokers trust account until used

an owner of a n apartment building is considering an extensive modernization program, in making his decision he should put most emphasis on a .cost b. history of vacancy c. potential increase in real property taxes d . net effect of income

d net effect of income

Which of the following is warranted in a grant deed by the seller , but not insured by a standard title insurance policy? a. that all deeds in the chain of title are valid b. that the grantor is not a minor c. that the grantor executes the deed d. that there were no undisclosed liens against the property placed there by the grantor

d that there were no undisclosed liens against the property placed there by the grantor

which of the following is true when a broker takes an oral listing to sell real property a, the broker has right to sue for the commission b. the broker has the same limits rights to enforce the payment of the commission c. the broker has some limited rights to enforce the payment of the commission d. the broker has no legal right to enforce payment of commission on an oral listing to sell real property.

d the broker has no legal right to enforce payment of commission on an oral listing to sell real property.

------ 41. When does the cost of real property most likely equal its value? a. in a neighborhood where there is a supply and demand in balance b. when the improvements are new c. when improvements on the property represents the current highest and best use of the land d. when both B and C are true

d the cost of real property will most likely equal the value, only when the improvements are new and they represent the highest and best use of the land

The fact that real estate salespersons do not have to be covered under the California unemployment insurance system is due to a. the nature of the work b the number of hours worked c. the fact that workers are closely supervised d the fact that there is a contract between broker and salesperson describing the independent nature of the work.

d the fact that there is a contract between broker and salesperson describing the independent nature of the work.

Sanitation , sewage and occupancy reguation s are enforced by a. the city engineer b, local heath officers c. the city planning commission d the local building inspector

d the local building inspector

A borrower 's loan application for an FHA loan , is properly submitted to a. the FHA b. the arranger of credit c. the licensed real estate broker d. the mortgagee

d the mortgagee

When a broker exercises an option to purchase a land, the broker must disclose to the buyer that he or she is a the optioner b. the mortgagor c. the beneficiary d. the principal

d the principal

The real property in the State of California is assessed at a. 1% of the assessed value b. 10% of the taxable value c. 25% of the assessed value d. 100% of the taxable value

d. Property is assessed at 100% of the taxable value or fair market value.

Property taxes are described as 'ad valorem' taxes. 'ad valorem most nearly means a. market value b. replacement value c. reproduction value d. according to the value

d. 'ad valorem is the Latin phrase for 'according to value'

what percentage profit would an investor make if he purchase two lots for $18,000 each, then divided them into three lots and sold then for $15,000 each? a. 5% b. 21% c. 15% d. 25%

d. 1. $18,000 x 2=$36,000 cost of lots 2. $15,000 x 3 = $45,000 selling price 3. $45,000-$36,000= $9,000 profit 4. $9,000 divided by $36,000=25% profit

A lender required a borrower to pay two point to get a $52,000 loan. How much did the points cost the borrower? a. $130 b. $260 c. $520 d. none of the above

d. 1. Each point cost 1% of the loan amount $52,000 x 2% =$1,040 3. Choise D 'none of hte above ' is the best answer

A ranch fronts on two roads running at right angles to each other. The ranch touches one road for 3,960 feet and on the second road for 1,980 feet. A third property line is parallel to the shorter of the two roads and runs for 3,960 feet, The fourth boundary is a straight line connecting the open ends. How many acres does the ranch contain? a. 180 b. 200 c. 225 d. 270

d. 270. This ranch in the shape of a trapezoid. to find the area of a trapezoid , 1. add base 1 and base 2. 2. divide by 2. then multiply by the height 3. the two parallel roads are the bases 4. add base 1 (3,960) and base 2 (1,980)=5,940 divide 5,040 by 2=2,970 5. multiply by the height (3,960)=11,761.200 sq ft 6. divide the square footage (11,761.200) by 43,560

A real estate license may do any of the following except a. claim compensation on a loan arranged, but did not negotiate b. clain compensation on an open listing without a definite termination date c. sell his own property and clain a commission expense on taxes d. claim compensation on an exclusive listing without a definite termination date

d. A broker may not claim compensation on an exclusive listing without a definite termination date.

Broker John took a listing on a commercial office complex and also received an option to purchase the property within 30 days. On the 28th day of the listing, John decided to buy the property. Before buying the property, he was required to a. disclose any outstanding offers b. disclose all material information to the seller c. obtain written consent from the owner which acknowledges any profit or anticipated profit d. all of the above

d. A broker who has an option to a purchase his own listing must disclose any outstanding offers, disclose all material information to the seller and obtain a written consent from the owner which acknowledges any profit or anticipated profit

A clause in a loan that declares the total unpaid balance due and payable upon default is called a. a fortfeiture clause b. an escalator clause c. an elevation clause d. none of the above

d. A clause in a loan that declares the total unpaid balance due and payable upon default is called an 'acceleration' clause

What is a commercial acre? a. Any combination of 43,560 square feet b. any acre in an are zoned for commercial use c. an acre plus the space taken up by streets, alleys, sidewalks, etc. d. an acre minus deduction for streets alleys, sidewalks, etc.

d. A commercial acre is the space left over after subtracting the area taken up by streets, alleys, sidewalk, etc. from an acre. Therefore, a commercial acre is always less than 43.560 sq ft

Mr Smith listed a house with Broker Bob for $250,000. Mr Jones submitted an offer of $210,000 with the offer to expire in three days. The next day, Mr Smith made a counter offer with the sale price to be $230.000. When informed of the counter offer, Mr Jones would not accept it. Three days later, Mr Smith delivered to Broker Bob a signed acceptance of Jones original $210,000 offer, When a Broker Bob told Mr Jones of Mrs Smith 's acceptance, Mr Jones told him he had decided not to buy the property. Which off the following is true? a. there is a valid contract b. there is a voidable contract c. there is a void contract d. there is no contract

d. A counter offer terminates the original offer, so there is no contract.

A grant deed, when compared to a land contract of sale, may be different with respect to a. the interest conveyed to the buyer b. the signatures of all parties c. the designation of purchase price d. all of the above

d. A grant deed, when compared to a land contract of sale, may be different with respect to the interest conveyed to the buyer, the signatures of the parties and the designation of purchase price

A deed requires which of the following in order to be valid? a. the grantee's signature b. a recital c. an acknowledgement d. a granting clause

d. A granting clause is one of the requirements of a valid deed

A hard money loan secured by a note and trust deed most nearly means a. a purchase money first trust deed b. A purchase money second trust deed c. a signature loan d. a cash loan

d. A hard money loan is a loan where the borrower receives cash using a new note, secured by a trust deed. Typically when a home owner borrowers against the equity in his home, he receives 'cash in his hand' There are limits on thee commission and costs loan brokers can charge to negotiate such loan.

A joint tenancy may be created by a. joint tenants, deeding their property to themselves and another person as joint tenants b. tenants in common deeding their property to themselves as joint tenants c. husband and wife, deeding their property to themselves as joint tenants d. all of the above

d. A joint tenancy may be created by joint tenants, deeding their property to themselves and another person, as joint tenants, or tenants in common, deeding their property to themselves as joint tenants,

Which of the following can be considered a disadvantage of joint tenancy? a. it cannot be created by will b. it may exist only between husband and wife c. it is always the assumed vesting if no other vesting is specified d. it may be severed by a voluntary transfer or by operation of law

d. A joint tenant may sell or transfer her interest without the knowledge or consent of the other joint tenants. Joint tenancy is never an assumed vesting. It can be created by will, and can exist between ant two or more people Joint Tenancy A type of ownership of real or Personal Property by two or more persons in which each owns an undivided interest in the whole.In estate law, joint tenancy is a special form of ownership by two or more persons of the same property. The individuals, who are called joint tenants, share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. Joint tenancy creates a Right of Survivorship. This right provides that if any one of the joint tenants dies, the remainder of the property is transferred to the survivors. Descended from common-law tradition, joint tenancy is closely related to two other forms of concurrent property ownership: Tenancy in Common, a less restrictive form of ownership that sometimes results when joint tenancies cease to exist, and Tenancy by the Entirety, a special form of joint tenancy for married couples.Joint tenants usually share ownership of land, but the property may instead be money or other items. Four main features mark this type of ownership: (1) The joint tenants own an undivided interest in the property as a whole; each share is equal, and no one joint tenant can ever have a larger share. (2) The estates of the joint tenants are vested (meaning fixed and unalterable by any condition) for exactly the same period of time—in this case, the tenants' lifetime. (3) The joint tenants hold their property under the same title. (4) The joint tenants all enjoy the same rights until one of them dies. Under the right of survivorship, the death of one joint tenant automatically transfers the remainder of the property in equal parts to the survivors. When only one joint tenant is left alive, he or she receives the entire estate.If the joint tenants mutually agree to sell the property, they must equally divide the proceeds of the sale. Because disagreement over the disposition of property is common, courts sometimes intervene to divide the property equally among the owners. If one joint tenant decides to convey her or his interest in the property to a new owner, the joint tenancy is broken and the new owner has a tenancy in common. Tenancy in common is a form of concurrent ownership that can be created by deed, will, or operation of law. Several features distinguish it from joint tenancy: A tenant in common may have a larger share of property than the other tenants. The tenant is also free to dispose of his or her share without the restrictive conditions placed on a joint tenancy. Unlike joint tenancy, tenancy in common has no right of survivorship. Thus, no other tenant in common is entitled to receive a share of the property upon a tenant in common's death; instead, the property goes to the deceased's heirs. Tenancy by the entirety is a form of joint tenancy that is available only to a Husband and Wife. It can be created only by will or by deed. As a form of joint tenancy that also creates a right of survivorship, it allows the property to pass automatically to the surviving spouse when a spouse dies. In addition, tenancy by the entirety protects a spouse's interest in the property from the other spouse's creditors. It differs from joint tenancy in one major respect: neither party can voluntarily dispose of her or his interest in the property. In the event of Divorce, the tenancy by the entirety becomes a tenancy in common, and the right of survivorship is lost.

'Joist' is a construction term which means a. foundation b. conduit c. footing d parallel beam

d. A joist is one of several parallel beams used to support ceilings and floors.

The correct method for a landlord to evict a delinquent tenant is by a. giving him three days notice b. giving him thirty days notice c. calling the police d. bringing a court action

d. A landlord would bring an unlawful detainer action is court

The Federal Truth-in Lending Law (Reg Z) gives the borrower a 3 day right of rescission with which of the following loans? a. a loan to purchase a duplex b. a loan to purchase a land c. A loan to purchase a commercial building d. a loan to refinance the borrowers personal residence

d. A loan used to refinance owners occupied residential property does include the 3 day right of rescission.

The security of a trust deed may be impaired if a. the trust deed is ercorded after homestead. b. a lis pendens is recorded after the trust deed is recorded c. a judgment lien is recorded after the trust deed is recorded d. it is recorded after work on hte improvement had commenced on hte property

d. A mechanic's lien takes priority as of the time work first began or the materials were first furnished. Therefore, the security of a trust deed recorded after work had commenced would be impaired if a mechanic;s lien were filed.

It is unlawful for someone to sell any franchise that is regulated by the Franchise Investment Law unless such a person has made application to the Corporations Commissioner or is licensed by the a. Real Estate Commissioner b. Franchise Tax Board c. Corporations Commissioner d. either A or C

d. A person licensed by either the Real Estate Commissioner or the Corporations Commissioner may sell a franchise

When you, as real estate agent, know that the seller will not accept an offer from the buyer, you should not do which of the following a. write new terms on the back of the offer and go back to the buyer for approval b. present the offer tot the seller anyway c. upon rejection of the offer by the seller, induce the seller to make a counter-offer d. change the buyers; offer to what you believe the seller will accept, initial the changes, and then present the offer to the seller

d. A real estate agent may never change the terms of the buyers offer without the buyers approval

If a real estate licensee advised buyers about how to take title when preparing a deposit receipt, she may be a. giving tax advise b. givings legal advise c. providing a basis for a possible claim of discrimination d. all of the above

d. A real estate licensee should never advise buyers how to take title, A licensee who advises buyers how to take title may be subject to claims of giving tax advise, legal advise and discrimination

A real estate broker would be subject to discipline by the Real Estate Commissioner and in violation of fair housing laws if he did which of the followings? a. steering b. blockbusting c. hired salespersons from only specific ethnic group d. all of the above

d. A real estsate broker would be subject to discipline by the Real Estate Commissioner and in violation of fair housong laws if he practiced steering., blockbusting and or/ hired salespersons from onlyu one specific ethnic group

Ace Escrow offers a $100 'referral fee' to any real estate agent who opens escrow during the month of May. Under the REal Estate Settlement Procedures Act (RESPA), such offer is a. always permissible b. permissible, only if both buyer and seller are informed c. not legal unless it is disclosed in the settlement statement d. not allowed under any circumstances

d. According to RESPA, kickbacks for referral of service are not allowed.

According to bankruptcy law, the debts that are discharged are those that exist as of a. the day when the bankruptcy was filed b. the day of the publication of notice of bankruptcy c. the day of the discharge d. the day when the bankruptcy case is closed

d. According to bankruptcy law, the debts that exist on th day when the bankruptcy petition was filed are the debts that are subject to discharge, unless exempt .

Which of the following is not essential to the creation of an agency relationship? a. consent of the principal b. competency of the principal c a fiduciary relationship d. agreement to pay consideration

d. Agency does not require consideration. A broker could act as an agent without getting paid.

In order to exist, an easement must a. be visible b. be recorded c. have dominant tenement d. have a servient tenement

d. All easements must have a servient tenement

Which of the following is an encumbrance? a. a freehold estate b. fee simple absolute c. a recorded homestead d. an estate for years

d. An estate for years is a lease, A lease effects and burdens the title of the property.

An estate of inheritance or perpetual estate could also be described as a a. fee simple defeasible b. life estate c. less than freehold estate d. estate in fee

d. An estate in fee is another name for the fee simple estate, estate of inheritance, or perpetual estate

An appraiser's narrative appraisal report of a single-family residence would probably contain no reference to a. the appraiser's qualifications b. the neighborhood amenities c. a special studies zone map d. a buyers financing

d. Appraiser reports do not normally include information about financing

Puffing is when an agent a. convinces the seller to pay a greater commission than is typical for the area b. convinces an appraiser to report a greater appraised value to the lender c. convinces the seller during his listing presentation that the he is well connected in the neighborhood d. exaggerates the features or condition of the property

d. Puffing is when an agent exaggerates the features or condition of the property.

the agency disclosure form must be given to the parties in the following transaction a sale of the theater b. sale of an office building c. sale of vacant land d. sale of a residential triplex

d. California 's Agency Disclosure law requires agents to disclose the possible agency relationship in transactions concerning the sale or lease for more than one year of four or less residential units. A triplex is a three unit residential building and requires the agency disclosure form

The real Estate Commissioner would most likely issue a final public report even if the subdivision plan lacked a. copies of contracts used in the purchase of the lots b. subdivision maps c. finance documents d. proof of completions of community recreational facilities, even though financial arrangements to assure completion were provided.

d. Contracts, maps, and fiance documents must be submitted. The Commissioner would issue a final report even though community recreational facilities had not been completed, as long as there was proof that financial arrangements had been made assure completion

Discrimination in housing transactions based race, religion, color, marital status, national origin or sex of the buyer, seller, landlord, tenant and or neighborhood is a. unenforceable b. contrary to public policy c. illegal d. all of the above

d. Discrimination in housing transactions based upon race, religion, color, marital status, national origin or sex of the buyer, seller, landlord, tenant and /or neighborhood, is unenforceable, contrary to public policy, and illegal.

Equity can be described as a. the difference between the value and the loans b. the owners share of the total property value c.the initial down payment on the property d. any of the above

d. Equity can be described any ofthe answers

the unit of comparison used when appraising land is a. frontage b. front foot value c. cost per square foot or cost per acre d. any of the above

d. Frontage, front foot value, and cost per square foot or cost per acre are all appropriate units of comparison when appraising land

Generally as the employment rate and the GNP, Gross National Product or GDP-Gross Domestic Product, rise a. the personal income rises b. new residential developments will c. sales of existing homes will increase d. all of the above will probably occur

d. Generally, increase in these factors indicate an improving economy. All of the choices should occur.

The best investment hedge against inflation would be in a. savings account b. government bonds c. certificates of deposits d. equity assets such as real estate

d. Historically, equity producing assets, such as real estate, are the best hedge against inflation.

In the market data approach to appraisal any differences between the comparables and the subject property are handled in which of the following ways? a. subject property is adjusted to the standards set by the comparables b. the subject property values are averaged to form a price range. c. the comparables are adjusted to a market average d. the comparables are adjusted to the characteristics of the subject property

d. In the market data approach, the comparable are adjusted to the characteristics of the subject property.

which of the following contracts must be in writing in order to be enforceable? a. a listing to sell a business opportunity b. a lease of real property for six months c. a listing to lease real property for one year d. an agreement which is not to be performed within one year of the making

d. Included in the state of frauds is 'an agreement which is not to be performed within one year' the other agreements would be enforceable even if oral

Which of the following factors is not considered when calculating annual net income for the capitalization approach to appraisal? a. vacancy an collection losses b. maintenance expenses c. property management fees d. mortgage interest cost

d. Interest payments on the mortgage are not considered when calculating annual net income for the capitalization approach

Which of the following factors will the lender usually consider to be most important when making a decision whether or not to make a home loan? a. the availability of mortgage loan funds b. the general economic outlook of the nation c. federal and state and local laws d. the degree of risk

d. Lenders usually consider the degree of risk to be the most important factor when making the decision whether or not to make a home loan.

An investor paid $300.000 for an apartment building, making a $30.000 cash down payment. One year later, the property increased 10% in value. This resulted in a $30.000 or 100% gain on the $30.000 equity. This is an example of a. contribution b. escalation c. substitution d. leverage

d. Leverage is the use of borrowed money tot he maximum extent possible. In this case, a 10% increase in value resulted in a 100% increase in equity

Which of the following statements is most accurate concerning mortgage bankers? a. they are regulates solely by federal law. b. they never lend their own money c. they never make a government backed security loan d. they negotiate loans which are readily sellable in the secondary mortgage market.

d. Mortgage bankers are regulated by state law, sometimes lend their own money, and commonly make government backed loans. They typically structure loans for resale in the secondary market,

Most buyers get what type of title insurance a. certificate of title b. leasehold c. ALTA d. standard title insurance policy

d. Most buyers of homes get a standard title insurance policy

A contractor obtains a construction loan, and the loan funds are to be released in a series of progress payments. Most lenders disburse the last payment when the a. building is completed b. notice of completion is filed c. buyer approves teh construction d. period to file a mechanic's lien has expired.

d. Most lenders wait until the period to file a mechanic's lien has expired before disbursing the final loan proceeds to be builder.

Each of the following elements must be established to obtain an easement by prescription except a. use of the property which is hostile and adverse tot he true owner b. existence of chain of right or color of title c. Open an notorious use which is continuous and uninterrupted for a period of 5 years d. confrontation with the true owner

d. No confrontation with the true owner is necessary to obtain an easement by prescription

Which type of the policy insures against all risk to title? a. American Land Title Association policy b. extended coverage policy c. standard coverage policy d. no title policy covers all risks

d. No title policy covers all risks.

Which of the following is the most important reason for a broker to maintain a client trust fund account in addition to his regular business account? a. to provide a means of control over the density of transactions being negotiated b. it is easier from an accounting point of view c. the ban is responsible for any loss to the trust fund account resulting from embezzlement d. the consequence which could occur should legal action be taken against the broker.

d. Putting client's funds in a client trust account, protects that money from creditors who may bring legal actions taken against the broker

If an investor were to restore a property to a former or improved condition without changing the plan, form, or style of the building, this would be described as a. remodeling b. replacement c. reproduction d. rehabilitation

d. Rehabilitation occurs when the building is restored to a former or improved condition, usually without changing the plan, form or style of the building. Remodeling involves changing the design. Reproduction involves reproducing a duplicate building, not restoring the old building.

Seller Jane was represented by Agnet Able. Able convinced Jane to accept an offer verbally promising her he would find the 'great replacement home' for her before the close of escrow. Assuming Agnet Able was unable to find an acceptable replacement home for Jane, which of the following is most correct? a. Jane has no legal recourse against the agent, because the promise was oral b. Jane can get out of the obligation to sell her home without liability c. Jane can bring a criminal action through the bureau of Real Estate d. Jane can recover damages in a civil lawsuit against Agent Able resulting from a false promise

d. Seller can recover damages in a civil lawsuit against Agent Able resulting a false promise.

Which of the following does not buy loans in the secondary mortgage market? a. Federal Home Loan Mortgage Corporation b. Ginnie MAe c. Federal National Mortgage Association d. Federal Housing Administration

d. The Federal Housing Administration (FHA) does not buy loans on the secondary market. FHA loans in the primary mortgage market.

The monetary tools used by the Federal Reserve Board to control the money supply would include all of the above except a. raising and lowering the discount rates to the member banks b. adjusting the minimum reserve requirement for banks c. expanding open market and selling US government bonds d. changing interest rates on government insured mortgages

d. The Federal Reserve Board does not have authority to raise or lower interest rates on government insured mortgages

What type of background check does the Real Estate Commssioner, Corporations Commissioner and the Office of Real Esatte Appraisers use on applicants for their licenses? a. financial statements b. real estate holding c. credit rating d. late child support obligations

d. The Real Estate Commissioner, Corporations, Commissioner and the Office of Real Estate Appraisers check all applicants for licensees against a list of late child support obligations

The Real Estate Settlement Procedures Act (RESPA) prohibits all of following activities except a. unearned fees b. seller requiring the use of a specific title insurer c. kickbacks paid to licensees by providers of settlement services d. buyer requiring specific lender

d. The Real Estate Settlement Procedures Act (RESPA) allows the buyer to require the use of a specific lender in the transaction. Respa specifically prohibits the other choices

A statement that discloses the presence of various environmental hazards includes disclosures for which of the following substances? a. asbestos b. lead based paint c. radon gas, d. all of the above

d. The TDS must disclose environmental hazards of which the seller is aware (including, lead-based paint, asbestos, radon gas, etc.

9. Jack sells his home to Barry who sets up his residency but fails to record the deed. Jack then gives a deed to Diane for the same home. What is the outcome? a. Diane owns the property b. Barry and Diane are co-owners c. Diane has recourse over Barry d. Barry has title

d. The The act of Barry's taking possession gives constructive notice of his rights

Broker Smidt presented a write offer to seller Burs from buyer Taylor The offer stated that upon acceptance buyer Taylor would deposit $15,000 in escrow. the seller Burns made some amendments by innerlining changes, but did not change the amount of deposit. Buyer Taylor agreed to all the changes and changed the amount of the deposit to $1,000. Broker Smith should be aware that a. Buyer Taylor has created a counter offer because the changed deposit b. Broker Smith must get Seller Burn's acceptance of the counteroffer d. no contract has yet been formed d. all of the above

d. The acceptance must be unqualified to have mutual consent to the contract. When buyer Taylor changed the amount of the deposit, buyer Taylor was making a counter-offer to seller Burns. There is no contract until Seller Burns accepts this counteroffer

The annual percentage rate (APR) is defined by the Federal Truth in Lending Laws as a the total of all cost which the borrower must pay to get the loan b. The total of only the direct cost of credit paid by the borrower c. the total of only the indirect cost of credit which the borrower must pay d. relative cost of credit expressed in percentage terms

d. The annual percentage rate (APR) is the relative cost of the credit expressed in percentage terms. The total of the direct costs of credit which the borrower must pay is the definition of the finance charge.

Bob, a licensed real estate broker, showed buyer William an apartment building he had fro sale. Bob told William 'this apartment building is as good as gold and will double in value in two years. ' William purchased the property but after two years, found that he had originally paid for it. If William were to take legal action against the broker a. William would be successful in a civil suit for damages based on misrepresentation. b. the brokers's license could be subject to suspension or revocation c. he would be unsuccessful in a civil suit for damages because the broker's claim are merely 'puffing' and not misrepresentation d. both a and b correct

d. The broker made a misrepresentation when he said the property 'will double in value in two years' The broker may lose a civil lawsuit for damages and or be subject yo discipline by the Real Estate Commissioner. This goes beyond statements which may be described as puffing.

when there is a conflict between different building codes, which code has precedence? a. local building codes, b. state building codes c. the uniform building code d. whichever code sets the highest standards for construction and safety

d. The code which sets the highest standards for construction and safety is the code the builder must follow. remember 'the most restrictive restriction restrict you'

A buyer executes a real estate purchase contract and receipt for deposit on Jan 10 and gave the broker a check for $5,000 as a deposit. The buyer instructed the broker to hold the check, uncashed, until Jan 30, regardless of when the offer was accepted. Under these circumstances the broker should a. deposit the check in escrow the next business day following the acceptance of the offer b. refuse to accept the check and offer under these circumstances c. give the check to the seller when the offer is accepted regardless of the date d. present the offer, but inform the seller that the check is to be held uncashed, until Jan 30

d. The deposit may be in for form of cash, check, promissory note, and /or almost anything of value agreeable to the parties.

The document used to encumber a personal property mobile home is a a. trust deed b. mobile home deed c. promissory note d. certificate of title

d. The document used to transfer and /or encumber a personal property mobile home is a certificate of title

The employment agreement between the broker and a salesperson must be retained a. by the broker for 3 years from the date of the execution of the contract b. by the salesperson for 3 years from the date of the execution of the contract c. by the broker for 3 years from the date of the termination of the salesperson's employment d. by both broker and salesperson for 3 years from the termination of the salesperson's contract

d. The employment agreement between the broker and a salesperson must be retained by both broker and salesperson for 3 years from the date of hte termination of the salesperson's employment

The first thing to do when appraising vacant land is to determine a. soil conditions b. the original purchase price c. prices of recent sales in the area d. highest and best use of that land

d. The first thing to do when appraising vacant land is to determine its highest and best use. the other choices would be done later.

A short from appraisal report includes all of the following information except a. description of the site improvements b. an accurate market analysis c. a site analysis d. loans and financing terms

d. The loans and financing terms are not usually included on the short form appraisal, while the other items are

A real estate appraiser reduced his opinion of the value of the home because the local sewer system was in poor condition and in need of repair. This loss in value would be classified as a. physical obsolescence b. functional obsolescence c. physical deterioration d. economic obsolescence

d. The loss in value due to the poor sewer system is an external cause and is considered econimic obsolescence

None of the following would pay the mortgage insurance premium a. the buyer with a conventional loan b. the buyer wit a VA loan c. a homeowner with a CAL Vet loan d. homeowner who assumed an FHA loan

d. The mortgage Insurance Premium pays for the FHA loan insurance program, It is not a part of the others.

Who has the right of possession of a home during the redemption period following a judicial foreclosure sale on mortgage? a. mortgagee b. beneficiary c. court appointed trustee d. mortgagor

d. The mortgagor, borrower remains in possession for one year after the court foreclosure sale on a mortgage.

The most essential document to establish the relationship between a property management company and property owner is a; a lease b. a maintenance agreement c. a broker license d. written property management agreement

d. The most essential document to establish the relationship between a property management company and the property owner is a written property management agreement

Certain sides of business streets are preferred by merchants because pedestrian traffic seeks the shady side of the street. The least desirable sides of the street are a. south and east b. south and west c. north and west d. north and east

d. The north and east sides of the street are the least desirable sides

The shape of the building is most relevant tot an appraiser's analysis in which of the following situations? a. when the appraiser is using data approach b. when the appraise is attempting to determine the placement cost of the improvement c. when the appraise is attempting to determine the duplication or reproduction cost of the improvements 'd. all of the above

d. The physical shape of design of a structure has the most impact on the reproduction cost of the improvement

The purpose of the Equal Credit Opportunity Act is to a. standardize the methods for obtaining credit b. regulate the total amount of credit to the borrower c. disclosure discrimination in lending based on age, sex, race, marital status, color, religion or national origin d. all of the above

d. The purpose of the Equal Credit Opportunity Act is to standardize the methods for obtaining credit, regulate the total amount of credit given tp the borrower and discourage discrimination in lending bases on age, race, sex, marital status, color, religion and national origin

The regulation of the housing and construction industries is accomplished by a. local building codes b. State Housing Act c. the Contractors' State License Law d. all of the above

d. The regualtion of the housing and construction industries is accomplished by local building codes, the State Housing Act, and hte Contractors State License Law

Upon inspection, a pest control company finds no evidence of termite infestation. However, they do find conditions which may lead to infestation. Whose responsibility is it to pay for correcting these conditions? a. the seller in all cases b. the buyer in all cases c. the seller and buyer, each paying half. d. the buyer, only if he chooses to have the condition corrected. -------

d. The seller is responsible only for termite damage present at the time of inspection. Any preventative action is the responsibility of the buyer.

When a lender makes a loan without a down payment and without a government guarantee, the lender would be best protected by a. a high unemployment rate b. low monthly payments c. a poor economy d. appreciation

d. When property appreciates in value, the lender would then have some value in excess of the loan balance to cover foreclosure expenses

John gave Mary a grant deed transferring title to Mary 'upon condition that' the title would be forfeited and revert back to consumed on the premises. the title held by Mary can be described as a. an estate in jeopardy b. a fee simple estate c. a less than freehold estate d. a fee simple defeasable

d. When the deed contains a clause which may cause title to be lost if something happens , the ownership by the grantee may be defeated, fee simple defeasable.

Broker John took a 60 -day exclusive agency listing to sell a property owned by Jones. After 30 days, Broker John had not sold the property, so Jones sent him a certified mail letter cancelling the listing. One week later Jones listed the property with Broker Bob using an open listing. Two weeks later, Broker Bob sold the property under the open listing. In this situation how will the commission be handled? a. Broker Bob is the only agent to get a commission b. Jones had no legal ability to cancel the listing with Broker John, therefore Broker John gets a commission and Broker Bob gets nothing c. One commission will be split between Broker John and Broker Bob d. Seller Jones will be liable for two full commissions

d. The seller will have to pay two full commissions. One to Broker Bob as the procuring cause of the successful offer under an open listing and one to Broker John, because the property sold during the term of his 60 day exclusive agency listing.

Buyer Baker bought a farm. At the time of the purchase, the seller Sampson was growing corn an the north 40 acres of the farm. Sampson intended to harvest the corn before the close escrow, but never got around to it. No mention was made of the corn in hte sales agreement and/or escrow instructions. Escrow has now closed, Buyer Baker is in possession and it is time to harvest the corn, Who gets to harvest the corn? a. the buyer would have the right to harvest the corn because he always intended to do so. b. the buyer would get to harvest the corn because it goes with the land and is considered real property. c. the buyer would get to harvest the corn because of his equity in the corn d. the seller would get to harvest the corn because the corn is his personal property and was not mentioned in the sales contract.

d. The seller would get to harvest the corn because the corn is hos personal property and was not mentioned in the sales agreement

A standard policy insures against a. encroachments b. claims of person in possession c. prescriptive easements d. a recorded deed the twas not properly delivered and accepted

d. The standard title policy insures against a recorded deed the twas not properly delivered and/or accepted. The other choices are only covered by an extended title policy.

Which cycle has the phases of 'depression, expansion, prosperity, and recession" a. life b. mortgage c. real estate d. business

d. These terms describe the business cycle.

Broker Bob has just taken an exclusive right to sell listing to sell a home. This brand new listing may be described as a. an implied, bilateral, executed, employment contract b. an express, unilateral, executed, employment contract c. an oral, unilateral, executory, employment contract d. an express, bilateral, executory , employment contract

d. This exclusive right to sell listing would be described as an express, in words, bilateral, promise for a promise, executory, sometimes remains to be done, employment contract, employing the broker to represent the seller in the future sale of the property.

Under federal income tax law, the 'basis' of real property is the property's a. purchase price minus any existing assumed loans b. assessed value prior to sale c. fair market value d. cost

d. Under Federal income tax law, the basis of a real property would be what the current owner paid for it, the cost.

19. when commercial real estate is purchased today, the minimum period of time over which the owner can depreciate the improvement is a. 15 years b. 27 1/2 years c. 30 years d. 39 years

d. Under current law, commercial real estate can be depreciated over a min of 39 years

Which of the following factors are not considered a cause of obsolescence? a. misplaced improvements b. obsolete equipment c. change of flight pattern at an airport d. wear and tear

d. Wear and tear is a cause of physical deterioration. Misplaces improvements, obsolete equipment, and the change of flight pattern at an airport are causes of obsolescence.

Both the seller and broker were sued by the buyer because the broker failed to disclose the leaky roof to the buyer. the broker knew of the problem but forgot the disclose it tot the buyer, the probate result of the lawsuit would be a. buyer was not entitled to recover from either the broker or the seller b. buyer recovered from the broker, but not he seller c. buyer recovered for the seller, but not the broker d. buyer would be successful in the suit against both seller and broker and the seller would be successful in the suit against the broker.

d. When a broker violates his duty to disclose material facts , the buyer will usually be successful in the suit against both seller and broker and the seller would be successful in the suit against the broker

When a deed includes the racial identity of the parties, it can be rewritten under which of the following circumstances a. it was created prior to 1978 b. the title company says it is okay to rewrite it c. it is offensive of discriminatory d. by the court order

d. When a deed includes the racial identity of the parties, it can be rewritten by court order.

When a lender accepts a deed in lieu of foreclosure, the lender a. must also have the power of sale b. must take ownership of the property free and clear of all liens c. must go to court and get a deficiency judgment d. assumes junior loans

d. When a seller accepts a deed in lieu foreclosure, the lender assumes a junior liens against the property. There can be a problem as to Junior Liens. Deed in lieu of foreclosure is when the mortgagor gives a quit claim deed to mortgagee.

When an appraiser analyses rent using the income approach, she will base her appraisal on which of the following characteristics of the income a. quantity b. quality c. durability d. all of the above

d. When an appraiser analyses rent using the income approach, she will base her appraisal on the characteristics of the quantity, quality and durability of the income.

When a buyer buys a home 'subject to' the seller's existing loan on the property a. both the buyer and seller will then be equally liable for the debt b. the seller is completely relieved from liability on the loan c. the buyer will not be personally liable for the loan and seller remains the borrower of record.

d. When buyer takes property 'subject to' an existing loan, the lender will keep the seller on the loans as the borrower. Seller would be liable for a deficiency,benefit is to the buyer. the buyers los is limits to his equity if foreclosed

In appraising income producing property by the capitalization approach, if the property taxes go up $1,000 and all else remains equal, the property value will a. increase exactly $1,000 b. increase more than $1,000 c. decrease exactly $1,000 d.decrease more than $1,000

d. When expenses, taxes, go up, annual net income is reduced. A small reduction is annual net income creates a large reduction in value.

When a real estate agent acts exclusively as a buyers's agent, he can do all of the following, except a. present offers directly to the seller b. present offers to the seller's agent c. withhold confidential information about the buyer from the seller d. act as an exclusive agent of the seller

d. When the licensee is the exclusive agent of the buyer, he may not be the exclusive agent for the seller .

When the buyer of a home wants to move in before close of escrow, what should the broker do? a. deny the buyer permission to move in b. grant the buyer permission to move in c. make the buyer sigh a lease before granting buyer permission to move in d. prepare an interim occupancy agreement, and get the seller's consent before allowing the buyer to move in.

d. When transfer of a title and transfer of possession happen at different times (such as a seller giving a buyer permission to move in before close escrow) the real estate agent should have both buyer and seller sign an interim occupancy agreement.

A subordination clause placed in trust deed a . permits the obligation to be pain off ahead of schedule b. prohibits the trustor from making an additional loan against the property before the entire loan is paid off c. allows for the periodic re negotiations and adjustments in the terms of the obligation d. gives priority to liens subsequently recorded against the property

d. a a subordination clause placed in a trust deed gives priority to liens subsequently recorded against the property

For a broker with an exclusive listing to be legally entitled to a commission, she must first prove that a. she was duly licensed at the time of the sale b. she found a buyer ready, willing and able to buy c. she was the procuring cause of the transaction d. all of the above

d. a broker must have an active license, produce a ready, willing and able buyer, and show that she was procuring cause of the transaction

Why do brokers have client trust accounts a. in order to earn interest on client money b. in order to impress clients c. in order to comingle cleints funds d. in order to separate trust fung money from the brokers money

d. a broker uses a client trust funds account to separate client's money from the brokers money.

To be competitive, yet profitable in business, a real estate broker needs to be concerned wit h'desk cost' Which of the following most nearly represents the correct way to calculate 'desk cost' a. add the total cost of all the furniture for each salesperson b. calculate the gross annual profit for the firm, less the expenses, divided by the number of salespersons c. divide the annual gross commission earned by the number of desks d. divide the total operating expenses of the office including salaries, rent, insurance etc, by the number of salespersons

d. a brokers desk cost is calculated by dividing the total operating expenses of the office including salaries, rent, insurance, etc. by the number of salespersons.

Title to real property is transferred with a deed. a valid deed must contain all of the following, except a. signature of the competent grantor b. a granting clause c. an adequate description of the property d. the acknowledgement of the grantor's signature

d. a deed does not have to be aknowledged to be a valid deed

Which of the following would be defined as a fixture in the law a. a built in stove in a mobile home b. area rugs in the home c. crops after harvest d. something incorporated into the land

d. a fixture is something which has become attached or incorporated into the land and is now real property.

. A joint tenancy in real property can legally be created with the execution of a deed by a. a husband and wife to themselves as joint tenants b. existing joint tenant to themselves and others as joint tenants d. any of the above

d. a joint tenancy in real property can legally be created with the execution of a deed by a husband and wife to themselves as joint tenants, existing joint tenants to themselves and others as joint tenants , or existing tenants in common to themselves as joint tenants

When a lessee assigned his lease to someone else, the lessee a. is no longer obligated for the rent only b. is no longer obligated under the lease c. is no longer obligated fro the maintenance fee d. may be obligated for the maintenance fee d. may be obligated to pay the rent and maintenance

d. a lease does not relive the original tenant from possible liability under the lease

12. an easement differs from a license in that a license a. must be in writing b. is assignable c. is an estate in the land of another

d. a license is the revocable non assignable permission to do something on hte land of another.

A listing contract is a. an employment contract b. a bilateral contract c. a promise for a promise d. all of the above

d. a listing contract is an employment contract which may be bilateral or unilateral. If it is bilateral, it is also a promise for a promise, therefore 'all of the above' is the best answer.

As used in real estate practices, the land of a riparian owner borders on a. river b. stream c. watercourse d. any of the above

d. a riparian owner owns land bordering on moving water, such as river, stream and /or watercourse

When a lender agrees to make a construction loan to a builder at some future date, at an agreed upon interest rate, to ne used for the future development of a parcel, such an agreement would best be termed a. an obligatory commitment b. an interim commitment c. a bach up commitment d. a standby commitment

d. a standby commitment is when a lender agrees to make a loan at some future date, typically for a future construction project

Whe n deciding whether or not to make a proposed real estate loan. most institutional lenders , tey to minimize the a lenders overall net yield b. loan to value ratio c. the borrower 's difficylties which may arise in the future, such as a divorce or illness d. likelihood od a asubstandrds loan becoming a part of their loan portfolio

d. a substandard loan is one that is more likely to go into default. A lender would try to reduce the possibility of any new loan being substandard.

during escrow, a serious dispute erupts between a buyer and the seller. Despite the efforts of the real estate agent and the escrow officer, they are no able to resolve the dispute amicably. In the deposit receipt, the parties did not initial the arbitration clause. the buyer and the seller would most likely resolve their differences by a. using an independent third party arbitrator b. doing nothing, since the escrow cannot return the money because of the third party arbitration c. the buyer requires to forfeit the entire $30,000 deposit d. filing a court action

d. in the absence of an arbitration clause, the parties will probably end up in a court by their own actions or an interplader action brought by the escrow.

16. in its broadest definition, the authority of local, state, and federal governments to regulate the use of or to purchase private to archive planning goals is derived from a. escheet b. zoning c. condemnation power d. police power

d. in the broadest definition of the 'police power' of goverment, local, state, and federal goverments can regulate the use of or purchase private property for the health, welfare, and safety of the general public

In trust deed, the power of sale is given from a. trustor to beneficiary b,. beneficiary to trustor c. beneficiary tot trustee d. trustor to trustee

d. in trust deed, the power of sale is given from the trustor to the trustee.

the term 'tax shelter' means a mortgage relief b real property taxes c interest income d income taxes

d. income taxes

Mc Allister and Ramorez own adjacement parcels of real estate. McAllister tells Ramirez 'You may cross my property whenever you want until I tell you to stop" what type of interest does Ramieazhave in McAllistar 's property a. a. appurtenant easement b an easement at will c a right of way easement d license

d. license

In real appraiser 'marker value' is primarily based upon which of the following? a. the asking price on the listing b. the reproduction cost of the property c. whatever a buyer is willing to pay d. the willing buyer and willing seller concept

d. market is primarily based upon the willing buyer and willing seller concept

when a legal description begins with the phrase 'beginning at a point on the sotherley edge of john street 200 feet easterley of the SE corner of the intersection of John Street and Main Street and running thence ' which of the following methods of land description is being used ? a recorded tract map system b us government geographical survey system c. us gov rectangular survey system d meter and bounds

d. meter and bonds

Of the following, who would most likely pay the mortgage insurance premium? a. a purchaser of a home with a conventional loan from a saving and loan association b. a purchaser of a large commercial building c. a veteran who buys a four plex using VA financing d. a home owner who assumed an FHA loan

d. mortgage insurance premium is found in the fha loan program.

which of the following is conveyed incident and appurtenant to the land? a. natural rights b. easements and restrictions c. servitudes d. all of the above

d. natural rights, easements and restrictions and servitudes are all conveyed and appurtenant to the land .

On the local level, compliance with the State Housing Law and minimum construction standards will usually be enforced by a. the city engineer b. the local district attorney c. the city planning commission d. the local building inspector

d. on the local level, compaince with the State Housing LAw will usually be enforced by the local building inspector

Once recorded a lis pendens is effective a. before the trial is held b. until the lawsuit is dismissed c. until a final judgment is rendered d. in any of the above situations

d. once recorded, a lis pendens is effective as long as the litigation is pending

A person holding title to real property in severalty would have a title with several other owners b. an estate for years c. title with his or her spouse d. sole ownership

d. ownership is severally describes ownership by one person, an individual, the ownership has been severed from anyone else

Personal property is most commonly distinguished from real property in that personal property is a. always less valuable b. can become real property, but real property can never become personal property. c. generally immovable d. generally movable

d. personal property is generally movable, real property is generally immovable

"Dry wall" construction, uses all of the following except a. fiberboard b. plywood c. gypsum board D. plaster

d. plaster is applied wet, the other materials are dry plaster is a pasty material consisting water, sand, fiber, etc, that dries. Used for coating walls and ceilings.

Private restrictions on the use of land may be created by a. private land use controls b. written agreement c. a developer's general plan restrictions a subdivision d. all of the above

d. private restrictions are created by private land use controls, written agreements and by a developers general plan

10. what is a quiet title action? a. purchasing property for a secret buyer b. court action to remove a loud neighbor c foreclosure lawsuit d court suit to remove a cloud on the title

d. quiet title action is a court suit to clear up defects in or challenge to title, such as cloud on title

Broker Bob presented an offer to purchase real property for the full listed price from a ready, willing, and able, African American buyer. The offer was refused by the seller because of the buyer's race. Broker Bob may a. sue the seller for his commission b. advise the African American buyer of his right to complain to the Department of Housing and Urban Development c. warn the seller that this refusal is a violation of the Fair Housing Act of 1968 d. do all of the above

d. real estate licenses may not be involved in discrimination

Real estate brokers are prohibited from commingling their funds with the funds of their clients. Commingle means the opposite of a. trust account b. mingle c. escrow d. segregate

d. segregate means separate and setting apart

For a seller to relive herself of primary liability when allowing the buyer to 'talk over' her existing loan, she must find a buyer who will: a. assume the trust deed and note b. sign a lease agreement c. buy the property 'subject to' the existing loan d. the seller is never relieved from primary liability

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When a residential neighborhood is comprised mostly of owner occupied residential properties it tend to a. stabilize values b. attract commercial shopping centers to the neighborhood c. deteriorate faster than areas with many rental properties d. lower property values

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