Real Estate Practice
Which of the following statements could indicate a price fixing violation? "I base my price on my services." "My price is non-negotiable." "This is the price my brokerage requires me to charge." "This is the standard price for a full-service listing."
"This is the standard price for a full-service listing." Discussing or even implying that there is a standard commission in the industry alludes to price fixing, which is an antitrust violation.
This statute allows a public agency to issue bonds for the improvement of subdivision street surfaces. Mello-Roos Street Improvement Act of 1911 The Improvement Bond Act of 1915 Vrooman Street Act
The Improvement Bond Act of 1915
This statute allows a public agency to issue bonds for the improvement of subdivision street surfaces. Bonds under the 1915 act can carry up to 6% interest.
The Improvement Bond Act of 1915
Mello-Roos assessments pay for services and general improvements, such as schools and parks, in a specified area. Mello-Roos projects must be approved by voters and are funded with bonds. The amount each property owner pays is an equal part of the assessment, not based on property value.
The Mello-Roos Community Facilities Act of 1982
The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this? The Clayton Act of 1914 The Federal Trade Commission Act of 1914 The Restraint of Trade Act of 1894 The Sherman Antitrust Act of 1890
The Sherman Antitrust Act of 1890 The Sherman Antitrust Act of 1890 expressly prohibits collusive acts that result in an unreasonable restraint of trade or reduced competition.
Who will be responsible for paying use tax if a boat is purchased from a seller who doesn't hold a seller's permit? The Board of Equalization The buyer There is no use tax on boat sales The seller
The buyer
What's required in order for a homeowner to receive a $7,000 exemption on property tax? The property may not be secured by a mortgage lien. The property owner may not own other real property in the state. The property owner must be a veteran. The property owner must reside in the home.
The property owner must reside in the home.
The Lanham Act
The right to sue your competitor for making deceptive claims
How can privacy tools available on most social networking sites protect your personal safety? They can allow you to control what pictures and information other people see. They can allow you to upload your photos faster. They can help you to avoid posting provocative pictures of yourself. They can make your online information completely private.
They can allow you to control what pictures and information other people see.
If buyer customers initially contact you because they saw your number on a yard sign, what could this mean? The buyers are not serious about buying a home. The buyers do not want to commit to becoming your clients. This could end up being a dual agency situation. You cannot answer any questions since you represent the seller.
This could end up being a dual agency situation.
What's floor time? Overtime Time spent at an open house that is vacant, without chairs Time spent evaluating carpeting and linoleum for possible upgrades Time spent in the office instead of the field
Time spent in the office instead of the field
Karen, a new licensee, is interviewing at a brokerage and asks to see its policies and procedures manual. Why might she do this? To determine whether there are systems in place for her success To find out if the brokerage has a policy of promoting from within To look like she knows what she's doing to the broker To see if the brokerage pays overtime
To determine whether there are systems in place for her success
What's the purpose of the financing contingency? To make sure the seller's interests are protected To obligate the seller to lower the price if interest rates rise To protect the buyer in case the buyer cannot obtain financing To provide for seller financing in case the buyer's financing falls through
To protect the buyer in case the buyer cannot obtain financing
A property's base value can increase by as much as 2% each year under Proposition 13. True False
True
It's possible for a property to have two different base value years. True False
True This is true. If a property were improved with, say, a swimming pool added to the backyard, then the house will have one base value year, but the pool will have another.
Erica presented an offer to her seller client, and after a bit of negotiating with the buyer and buyer's agent, the offer was accepted. Which one of these activities will Erica be taking care of at this point in the sales process? Arrange a showing of the property. Prepare a comparative market analysis. Sign a listing agreement with her client. Verify progression of the loan through the buyer's agent.
Verify progression of the loan through the buyer's agent.
This statute was enacted in 1885 and had provisions for the addition of sewers and finishing of street surfaces.
Vrooman Street Act
Dani is in love with the ranch-style home on Cardinal Avenue, says she simply must have it, and is willing to pay cash. The seller is concerned about an appraisal. Which of the following would be a good strategy for structuring her offer? Include an escalation clause. Offer a quick close. Waive the appraisal. Waive the inspection.
Waive the appraisal.
Often referred to as "specials", these tax assessments are levied for the purpose of raising funds for local improvements. Projects that could benefit from specials include roads or schools.
special tax assessments
Mobile home taxes are calculated based on the value of the __________. land it sits on mobile home community neighborhood structure
structure
When is the Documentary Transfer Tax collected? 30 days after closing As soon as the documents are filed At closing On the first tax bill after the property has been sold
At closing
The real estate cycle is affected primarily by __________________. Availability and affordability Immigration Marriages and family size Population growth
Availability and affordability
This assessment is not a special, but is closely related. Cities and counties can create improvement areas and levy this assessment against any property within those areas. A benefit assessment is used most often for improvements in emergency services coverage, lighting, transit, and flood control.
Benefit assessments
Which of the following is an example of an escalator offer with a cap? Buyer offers $750,000. Seller accepts. Buyer offers $750,000. Seller counters at $775,000. Buyer accepts. Buyer offers $750,000. Seller counters at $775,000. Buyer counters back at $765,000. Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000 up to $775,000.
Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000 up to $775,000. An escalator offer will contain a clause similar to this: "Buyer to beat all competing offers by $XX, up to a price of $XXX,XXX. Seller to provide copies of competing offer to buyer on acceptance."
Which of the following is an example of an escalator offer without a cap? Buyer offers $750,000. Seller counters at $775,000. Buyer accepts. Buyer offers $750,000. Seller counters at $775,000. Buyer counters back at $765,000. Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000. Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000 up to $775,000.
Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000. An escalator offer will contain information about how much it will beat competing offers by, but it won't list a maximum bid, as there is no cap in this example.
Which of the following is a way a buyer's agent can find off-market listings? Check out For Sale by Owner sites. Contact sellers who are under contract to see if they'll terminate their contract. Search the MLS. Visit real estate brokerage websites to see what properties they are advertising.
Check out For Sale by Owner sites. Off-market listings can be found via new construction, spheres of influence, expired listings, letters to homeowners in a neighborhood, a list of foreclosure sales, pre-foreclosures, and For Sale by Owner sites.
Furthered other acts by prohibiting mergers that create monopolies or reduce competition Sherman Act Clayton Act FTC Act
Clayton Act
What's the difference between commingling and conversion? Commingling involves client funds; conversion involves your own funds. Commingling is mixing client funds with your own; conversion is using them. Only commingling is illegal. They're essentially the same thing.
Commingling is mixing client funds with your own; conversion is using them.
This worker is classified by the common understanding of the profession, such as a food server. Statutory non-employee Common law employee Statutory employee Independent contractor
Common law employee
Interest rates are at an all-time low, but there is also a slow-down in new construction. Supply up, demand down Demand up, supply down
Demand up, supply down Low interest rates means better affordability for buyers, so demand will be up; but a slow-down in construction means the supply will be down.
Three high-tech companies are moving operations into a new area of the country, bringing new jobs with good salaries. Supply up, demand down Demand up, supply down
Demand up, supply down New jobs and higher salaries will increase demand for housing; until construction catches up, supply will be low.
Your buyer clients Jen and Tony really like the patio set and bedroom furniture in the house you've just shown them. Because the market is hot, what would you advise they do? Ask for the one thing they like best as part of their offer but not the other. Ask for those items and more as part of their offer. Ask for those items as part of their offer. Don't include those items in their offer.
Don't include those items in their offer. When working in a hot market, many real estate professionals suggest that buyers not ask for personal items.
Licensee Bonita has just submitted an MLS listing with photos for her client. Which of the following steps will she need to complete next? Expose the property to prospective buyers using a tailored marketing plan. Meet with the client for a listing presentation. Prepare the seller's net sheet. Verify the progression of the buyer's loan.
Expose the property to prospective buyers using a tailored marketing plan.
Created an agency to investigate and stop unfair competitive practices Sherman Act Clayton Act FTC Act
FTC Act
An addition, such as a garage, will result in a change in the base year for the entire property. True False
False This is false. In fact, it may result in the main structure having one base value year, and the new garage having a different base value year.
The maximum annual tax on real property Proposition 13 sets is capped at 1% of the property's market value each year. True False
False This is false The maximum annual tax is capped at 1% of the property's base value, which can't increase by more than 2% each year, regardless of the current market value.
The duty of honesty to your customer trumps your duty of confidentiality to your client. True False
False confidentiality trumps over honesty
Mello-Roos was enacted in 1982 to provide for non-specific _____________ improvements. General Power Sewer Street
General
They're guilty, so what do we need to prove? It's all a matter of per se. What does per se mean? Guilt is established on the face of the circumstances. Guilt is established upon justification of the actions. Guilt is determined after a full review of the entire situation.
Guilt is established on the face of the circumstances.
Which of these actions could make a buyer's offer more competitive? Below-list-price offer Full-price offer, with seller paying buyer closing costs Higher-than-full-price offer Include terms favorable to the buyer
Higher-than-full-price offer
You represent Ember as her listing agent. Ashley is the buyer, and Trinity represents her. What duties do you owe Trinity? Honesty and fairness The duty of confidentiality The duty of loyalty The same duties you owe Ember
Honesty and fairness Licensees owe the other licensee in a transaction the duty of cooperating to arrange showings as well as the duties of fairness, honesty, and disclosure.
Which of these two items identify the primary reasons that workers are categorized by federal law? Determines whether the worker is eligible for a property tax exemption. Impacts how the worker is treated for employment tax law purposes. Determines whether the worker is exempt or non-exempt for purposes of the FLSA. Impacts the tax bracket the worker is in for the purpose of income tax reporting.
Impacts how the worker is treated for employment tax law purposes. Determines whether the worker is exempt or non-exempt for purposes of the FLSA.
A mobile home attached to a foundation is considered an _____________ to the real property. Addition Asset Attachment Improvement
Improvement
Because of the lack of control over the individual by the "employing party," this worker is not classified as an employee, such as a doctor. Statutory non-employee Common law employee Statutory employee Independent contractor
Independent contractor
What is the buyer benefit of including a cap on an escalator offer? It could cause the buyer to lose out on a property by as little as $1. It helps ensure the buyer stays within an affordable price range. It helps the buyer avoid a default. It tells the seller the maximum the buyer is willing to pay.
It helps ensure the buyer stays within an affordable price range. Placing a cap on an escalator offer has some benefits and disadvantages. The cap can help ensure the buyer doesn't bid above a certain price range, but also means that the buyer could get outbid by $1. It also gives the seller a clear indication of how much the buyer is willing to pay.
You've assisted the Juarez family with the purchase of a beautiful home in an established neighborhood. The sellers had owned the home since 1980. What's true about the amount of property tax the Juarezes will pay for their new home? It will be reassessed because of the transfer, and the Juarezes will be taxed at 1% of the home's current market value. It will be reassessed because of the transfer, and the Juarezes will be taxed no more than 2% of the home's current market value. It will be the same as the tax the seller paid annually, according to Proposition 13 limits. It will no longer be covered under Proposition 13 property tax limits due to the transfer, so the Juarezes may be assessed as much as 35% of the home's current market value.
It will be reassessed because of the transfer, and the Juarezes will be taxed at 1% of the home's current market value.
The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______. Letters of apology to all affected consumers New ads to correct previous misinformation Notification to consumers about deceptive ad claims Specific disclosures to consumers
Letters of apology to all affected consumers
Where is required information included on your website? On a page marked required information only On every page On the contact page only On the home page only
On every page
UETA supports the use of electronic documents and leaves the decision whether to use an electronic medium for agreements up to the _______. Broker Customers Parties Seller client
Parties
What types of misrepresentation exist? Blatant and hidden Blatant and unintentional Intentional and accidental Positive and unintentional
Positive and unintentional
At which point in the residential selling process does scheduling a photographer take place? Listing and marketing Managing the transaction Obtaining the listing Preparing for listing
Preparing for listing
One of the actions that landed the Consolidated Multiple Listing service of South Carolina in court was prohibiting members from offering home sellers the opportunity to avoid paying a broker's commission if the seller located a buyer on their own. What type of antitrust violation does this exemplify? Group boycotting Market allocation Price fixing Tie-in arrangement
Price fixing
If a lien is released because the tax debt has been satisfied prior to further action being taken, the property owner will receive a certificate of _____________. Achievement Disposition Redemption Transfer
Redemption
A tax lien remains in effect until the tax debt is ____________ by either being paid or the property being sold. Assumed Forgiven Satisfied Sold
Satisfied
What form do independent contractors file with the IRS to deduct business expenses? Schedule C Schedule D Schedule E Schedule for Independent Contractor Expenses
Schedule C
When information is stolen from online real estate listings, what is it known as? Partitioning Scraping Scrounging Slicing
Scraping
Michelle always volunteers for floor time. Why might she do this? She doesn't like being in the office. She needs the overtime pay. She really likes flooring and interior design. She's hoping for leads.
She's hoping for leads.
Prohibits monopolies and actions that cause an unreasonable restraint of trade Sherman Act Clayton Act FTC Act
Sherman Act
An independent contractor who's treated as an employee for employment tax purposes, such as a delivery driver paid on commission. Statutory non-employee Common law employee Statutory employee Independent contractor
Statutory employee
This worker is treated as self-employed by statute for all federal tax purposes, such as a licensed real estate agent. Statutory non-employee Common law employee Statutory employee Independent contractor
Statutory non-employee
This statute provides bonds for street improvements. The amount levied is applied to the property owner's tax bill.
Street Improvement Act of 1911
A new subdivision is completing construction, but one of the major employers in the area is cutting jobs and filing for bankruptcy. Supply up, demand down Demand up, supply down
Supply up, demand down A poor employment outlook means fewer buyers, even though the supply of available homes is up.
A mid-sized city that is home to several military bases learns that half of the bases will be closed soon. Supply up, demand down Demand up, supply down
Supply up, demand down The reduction in population due to the military closing bases means more homes will be available, and demand will be down.
