Real Estate Practice Final Exam

The amount that a seller takes away from a sale is termed ? A) Net sale price B) Seller's proceeds C) Gross sales price D) Profit Margin

B) seller's proceeds

which of the following best describes prospecting ? A. Seeking buyers for your listing B. Seeking listing C. Seeking both buyers and sellers D. Seeking buyers for others agents listing

C. Seeking both Buyers and sellers

the second installment of property takes comes due on a. 1-feb b. 30- April c. 1-nov d. 31- dec

a. 1-feb

according to the law governing mortgages loan brokers, what is the maximum commission broker Claire can charge for securing a 50,000 first mortgages for a second of 2 years? a. 5% b. 10% c. 15% d. 20%

a. 5%

Alice is planning her career and setting her goals. which of the following would be considered an intermediate goal ? a. I will complete the GRI certification in the next four year b. I will do two practice listing presentation per week with an experienced agents for the next two months c. I will open my own office within nine years d. I will distribute 200 business cards every month for the next six month

a. I will complete the GRI certification in the next four year

when dealing with the sale of the business, which is not a true statement? a. a bill of sale gives title to the business equipment b. goodwill is an intangible assets that results from the reputation of the business c. tangible assets transferred in the sale include inventory, pictures and equipment d. the bcc is a body of the law that standardizes a number of business practice

a. a bill of sale gives tittle to the business equipment

which of the following would not be an essential component when researching the purchases of an apartment building ? a. analyzing neighboring cities b. studying population trends in the area c. analyzing the income potential of the property d. understanding characteristics of the rental market

a. analyzing neighboring cities

which of the following is an example of commingling ? a. broker John puts $500 into his trust account b. broker Alice holds an uncashed check until the office is accepted c. broker harry deposits $1000 into his brokerage business account d. broker gina puts $150 into her trust account

a. broker John puts $500 into his trust account

who is liable for the withholding on the sale of a property owned by a foreigner ? a. buyer b. seller c. broker d. escrow office

a. buyer

what information can you gather from the newspaper to help develop a prospecting plan ? a. death notice and building permits b. deeds and property inspection c. land titles and home warrants d. servies ads and display ads

a. death notices and building permits

what does the real estate disclosure law refer to? a. disclosure of agency relationships b. disclosure of financing terms c. disclosure of natural hazard d. disclosure of natural hazards

a. disclosure of agency relationship

karen and Al obtained a 30year fixed rate, fully amortized loan when they purchased their home. Which statement is true ? a. each of their payments is for the same amount b. they will owe a ballon payment at the end of the loan term c. the same amount will go towards the principal every month d. the interest payments is always smaller than the amount allocated to the principle

a. each of their payments is for the same amount

mortgages lender are prohibited from discriminating in giving credit to prospective borrowers based on race, color, religion, national origin sex, martial status, age or dependency on public assistance u under which law or regulation ? a. equal credit opportunity act b. truth in. lending c. real estate settlement and procedures act d. community reinvestment act

a. equal credit opportunity act

Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice's home. What kind of agreement is this? a. exclusive agency b. net listing c. right-to-sell agreement d. open listing

a. exclusive agency

four years ago, sam purchased a vacant lot for $10,000. he just sold it for $13,000. during the time same owned the property he paid $350 per year in taxes, $150 per year on maintenance like grass cutting and 90$ per year on miscellaneous expenses. how much did sam gain or lose on the sale ? a. gained $640 b. gained $2360 c. lost $640 d. lost $2360

a. gained $640

tom and Mary want to purchase their first home. which of the following would be the least likely place for the them to obtain a loan? a. insurance company b. credit union c. mortgages company d. savings and loan association

a. insurance company

Sarah is an employee and ken is an independent contractor at kerns realty. which of the following statements is true ? a. ken is responsible for his own taxes, while the broker pays Sarahs b. ken must obtain his own training. the broker will not provide any. c. neither Sarah nor ken can get employer-provide health insurance d. ken and Sarah both must be at the office from 9 a.m to 5 p.m

a. ken is responsible for his own taxes, while the broker pays Sarahs

which of the following duties is not a permitted activity for an unlicensed personal assistant ? a. negotiable agreement regarding commission structuring b. secure documents that are public Information from the courthouse and other sources available to the public c. have keys made for company listings d. write advertisements and promotional materials with the approval of the licensee and supervising broker

a. negotiable agreement regarding commission structuring

Jim owns a gift shop in a commercial building. he pays rent for occupancy, plus maintenance and operating expenses. what kind of lease does Jim have ? a. net lease b. percentage lease c. gross lease d. graduated lease

a. net lease

Hannah is a real estate assistance. her broker has asked her to be available for tasks in the field rather than in the office. what would we call Hannah? a. on-call assistant b. field staff c. part-time worker d. commission-only assistant

a. on-call assistant

mr and mrs Haley are purchasing beachfront property in an upscale development. the home comes equipped with all furnishing. the Haleys want to get a mortgage that will cover the purchases price plus all the furnishings. what kind of mortgage are they looking for ? a. package b. blanket c. wraparound bully down

a. package

Who selects the escrow company? a. the buyer and seller b. the broker c. the seller agents d. the seller alone

a. the buyer and seller

which of the following is not a good direct mail technique ? a. use a self-folding mailer b. hand address the mailers c. use an attractive first-class stamp d. offer something valuable to the reader

a. use a self-folding mailer

Sally and Dan must pay 2 points on their new $65,000 loan. What will they have to pay at closing for the points? a. $650 b. $1,300 c. $1,950 d. $2,600

b. 1,300

mark believes he has been discriminated against during his home search. how long does he have to file a compliant with the department of housing and urban development ? a. 6 months b. 12 months c. 18 months d. 24 months

b. 12 months

what is the minimum period of time over which the owner of an apartment building can depreciate the improvement ? a. 18 years b. 27.5 years c. 30 years d. 32 years

b. 27.5 years

bill and sue secured a mortgage loan that is tied to an index which fluctuates over the life of loan . what kind of loan do they have ? a. amortized b. ARM c. ballon d. growing equity

b. ARM

when agent Jane meets with her sellers to offer suggestions, she most likely would not give them; a. cleaning tips b. advice to be home during showings c. landscaping instruction d. suggestions for improvement

b. advice to be home during showings

Kirk wants to get an FHA loan. which of the following is Kirk himself not likely to do during the applicantion process ? a. find a home that meets FHA requirements b. agree to pay mortgages insurance c. find a lender who is willing to do FHA loans d. all the above

b. agree to pay mortgages insurance

harry has some buyer that he believes are ready to make an offer. he says to them, " would you prefer to take possession on September 1 or October 1? what kind of closing technique is harry using ? a. assumptive b. alternative c. ownership d. standing-room-only

b. alternative

when doing a listing presentation, which of the following items would you not describe to the owner as being a benefit of listing with an agent ? a. availability of multiple listing services b. amount of commission chargers c. broker-paid advertising and promotion d. assistance with filling out disclosure

b. amount of commission chargers

In the initial meetings with the prospects the agent should do all of the following except which? A. Give the prospects a black copy of a purchases agreement to look over B. Ask the buyer to sign a real estate transfer disclosure statement C. discuss alternative properties that may be interest D. have the prospects sign the disclosure about agency relationship

b. ask the buyer to sign a real estate transfer disclosure statement

which of the following phrases should salesperson Brenda avoid when writing an advertisement for one of her listing ? a. kosher meals available b. christian home c. fourth floor walk up d. walk to bus stop

b. christian home

all exclusive listing agreement must have; a. compensation defined b. definiate terminativo date c. a list of personal property included in the sale d. escrow company named

b. definite termination date

the public report that a developer must provide when offering subdivided lands for sale is provided by which agency ? a. department of housing and urban development b. department of real estate c. recorded office in the county where the land is located d. the county planning commission

b. department of real estate

which of the following is a seller request that an agent cannot honor ? a. please remove your shoes before entering the home b. do not show to Mexicans c. always call before showing d. do not show the home between 10a.m and noon on Sundays

b. do not show to Mexicans

Grant moves into his new office space while he awaits the completion of the negotiations of the lease terms. During this interim period, Grant makes monthly rent payments and the owner accepts them. How would Grant's lease at this time be classified? a. estate for years b. estate from period to period c. estate at will d. estate at sufferance

b. estate from period to period

A property manger can refuse to rent to applicant Mike for any of the following reasons except which ? A. Mike has changed jobs six time in the past six months B. He is married with two kids C. Mike has been late with his rent payments seven times in the past year D. He has a serious physical altercation with his downstairs neighbor

b. he is married with two kids

When using the straight-line depreciation method of deprecation, each year of economic age is given a rate that a. varies each year according to a table provided by the IRS b. is equal for each year over the life of the property c. is high during the first five year of the ownership period, then reduces gradually over the life of the property d. varies according to the expired life of the improvement made to the property

b. is equal for each year over the life of the property

which statement is not true about an agency relationship? a. it is based on authorization b. it is determined by who pays the compensation c. it is based on mutual consent d. it can exist without compensation

b. it is determined by who pays the compensation

According to California real estate law, how often must a broker balance his or her trust accounts ? A. Weekly B. Monthly C. Quarterly D. Annually

b. monthly

which form advertising is considered the most cost-effective method for selling a home ? a. radio b. newspaper c. magazine d. television

b. newspaper

buyer randy makes an offer to purchase one of broker toms listing in June 15. randy gives tom an earnest money check for $1000 and asks tom to hold it until June 30, regardless of the date the seller accepts the offer. what should tom do ? a. deposits the check into his trust fund account on the next business day b. present the offer and tell the seller that the check needs to be held until June 30 c. refuse to accept the offer and check d. give the check to the seller

b. present the offer and teller the seller that the check needs to be held until June 30

according to RESPA, a buyer or seller cannot legally be charged at closing for which of the following items? a. loan origination fee b. referral fee to a homeowner's insurance agent c. title insurance d. attorney fees

b. referral fee to a homeowner's insurance agent

Which California Fair Housing law prohibits discrimination based on sexual orientation of source of income ? A. civil rights act of 1964 B. rumored fair housing act c. holden act d. california civil rights act

b. rumford fair housing act

Jim has created a nice property flier for the James' home. Jim should not use this flier as a: a. handout at open houses b. substitute for advertising c. handout for others agents d. mailer for telephone inquires

b. substitute for advertising

under federal income tax law the "basis " for a personal residence is which of the following a. the purchases price, plus depreciation b. the purchases price, plus improvements c. the fair market value at the time of sales d. the appraised value prior to sale

b. the purchase price, plus improvement

which of the following items is usually not prorated at disclosing ? a. real estate taxes b. title insurance c. mortgages interest d. homeowners

b. title insurance

being prepared to handle incoming phone calls means all of the following except which ? a. knowing your inventory b. understanding the kind of responses your advertising generates c. knowing the community d. being able to anticipates the caller requirements

b. understanding the kind of responses your advertising generates

Jenny's home appraised for $550,000. Her asking price was $560,000 and the property sold for $575,000. What will the new owners pay in property taxes? a. 5,000 the first year, plus a maximum 2% increase in market value per year b. 5,600 every year with no increase c. 5,750 the first year, plus a maximum 2% increase in market value per year d. 5,750 plus a maximum 1% increase in market value per year

c. 5,750 the first year, plus a maximum 2% increase in market value per year

greg sold an apartment building he owned for 20 years. he paid 100,000 for it, and made 300,000 worth of improvements. his deprecation was 2,500 per year. he sold the building for 1,000,000 and paid 60,000 in commission to the broker. what is Gregs capital gain on the apartment ? a. 450,000 b. 540,000 c. 590,000 d. 600,000

c. 590,000

which of these is not a buyer signal ? a. buyer Jim ask if he can visit the property for a second time b. buyer Amanda asks if she can measure the windows to see if her current drapes will fit c. Jim and Amanda whisper and frown when they see the basement d. Amanda smilies at Jim when she sees the whirlpool tub

c. Jim and amanda whisper and frown when they see the basement

which is true about listings ? a. a net listing is illegal in all states b. an open listing is an exclusive contract c. a seller can sell his or own home and owe home and owe no commission if he or she signs an exclusive agency listing d. an exclusive listing must always be at least 30 days long

c. a seller can sell his or own home and owe home and owe no commission if he or she signs an exclusive agency listing

when agent Hal shows a home he should never; a. ask questions of the prospects children b. start in the room with the best features c. allow indoor pets to leave their designated area d. avoid negative comments while he's inside the home

c. allow indoor pets to leave their designated area

Patrick has a written independent contractor agreement with his broker Tami. Last year, about 25% of his income came from sales commissions. The other 75% came from an hourly wage paid by Tami. For income tax purposes, the IRS would probably classify Patrick as a. an independent contractor b. a self-employment c. an employee d. a real estate assistant

c. an employee

all but which of the following is NOT an AIDA feature ? a. action b. desire c. aspiration d. interest

c. aspiration

which paragraph of the purchase agreement states that the balance of the purchases price will be deposited into escrow prior to closing ? a. fiancé terms b. offer c. closing and occupancy d. allocation of cost

c. closing and occupancy

the equal credit opportunity act requires lenders to a. give credit to all potential borrowers b. give a discount to families with kids c. consider child support payments in the decision d. specialize by geographic area

c. consider child support payments in the decision

greg is approved for a cal-vet loan. who will pay the points ? a. the seller b. the state c. greg d. no one - there are no points

c. greg

which is not a true statement about the agency disclosure? a. the listing agent must provide the disclosure to the seller prior to securing the listing agreement b. the selling agent must provide the disclosure to the seller as soon as practicable prior to presenting a purchase offer c. is the selling agent does not deal directly with the seller, the selling agent is not required to provide the disclosure d. the selling agent must provide the disclosure to the buyer as soon as practicable prior ti the exection of the buyer offer to purchchase

c. if the selling agent does not deal directly with seller, the selling agent is not required to provide the disclosure

according to ECOA, lender cannot discriminate against potential borrowers on the basis of all but which of the following ? a. marital status b. age c. income d. religion

c. income

when talking to his investment clients, broker Adam often to tax shelters. this term typically refers to a. montages b. interest income c. income taxes d. property taxes

c. income taxes

which statement is not true about a listing contract ? a. it must be in writing to be enforceable b. it can be considered an employment contract c. it is a unilateral contract d. it creates an agency relationship

c. it is a unilateral contract

which of these items would be a credit to the buyer on the settlement statement ? a. sales price b. loan origination fee c. loan amount recording d. recording fee

c. loan amount

matt is Computing the adjusted cost basis of his apartment building for income tax purpose . which of the following items can Matt not add to the original cost when doing the computation ? a. cost of a new parking lot b. installation of central air conditions c. mortgages payments on the property d. addition of a tenant laundry facility

c. mortgages payments on the property

which of the following is not a form of personal advertising ? a. car signs b. business cards c. multiple listing service d. name tags

c. multiple listing services

which statement is true about a homeowner's exemption ? a. it must be filed every year. b. certain homeowners may qualify for a 10,000 exemption c. once filed, it remains until terminated d. none of the above

c. once filed, it remains until terminated

Seller Tom has an agreement with Broker Bill, Broker Jim and Broker Joe. Whoever brings the buyer will get the commission. What kind of agreement is this? a. exclusive agency b. net listing c. open listing d. exclusive-authorization-and-right-tosell agreement

c. open listing

agricultural land includes all of the following EXCEPT which ? a. orchards b. pasturelands c. parks d. farms

c. parks

which statement is true about a loan that has a negative amortization? a. at the end of the term, the loan balance will be negative b. the borrower makes payment of the interest only over the term of the loan c. payments will not be enough to retire the loan d. all adjustable rate mortgages have negative amortization

c. payments will not be enough to retire the loan

Jim and Jane are buying a home for $120,000. They have $20,000 for a down payment and assumed the seller's mortgage of $75,000. Jim and Jane financed the remaining $25,000 through the seller. What kind of a mortgage do they have? a. buy down loan b. ballon rate c. purchase-money mortgage d. wraparound - wrap around loan

c. purchase-money mortgage

which of the following is not considered a benefit of investing in real estate ? a. having a monthly income b. reducing taxes c. realizing a quick profit d. hedging against inflation

c. realizing a quick profit

which of the following situation is not exempt from the seller disclosure requirement ? a. greg burns is selling his interest in his home to his wife Melanie as part of their divorce settlement b. Jim sharp is purchasing his father home c. the court has ordered the transfer of sally green home to her penny Jacobs as part of the settlement of Sallys estate d. all the above

c. the court has ordered the transfer of Sallys green home to her friend penny Jacobs as part of the settlement of Sallys estate

abby applies for a federally-related loan to purchases a home. the lender must furnish a copy of the CFPB booklet to abby no later than the third business day from which date? a. the date abby receives the good faith estimate b. the date escrow is opened c. the date the lender receives her application d. the date abby makes the request to receive the booklet

c. the date the lender receives her application

Greg and Joyce have an adjustable rate mortgage on their home. What is the key feature of this type of loan? a. the principal never amortize b. the term of the loan can be shortened c. the interest rate can vary d. the monthly payments increase overtime

c. the interest rate can vary

Sharon and Steve have just taken a second mortgage on their home. Which is a true statement ? A. The second mortgage has now became the primary loan. B. This mortgage is not negotiable C. They're probably paying a higher interest rate on the second mortgage D. The first and second mortgage will be rolled into one

c. they're probably paying a higher interest rate on the second mortgage

Dave and Nadine have decided that they want to become property investors. What is most likely their main motivational for investing ? a. to plan for retirement b. to save on taxes c. to make money d. to have a second home to enjoy

c. to make money

Nancy bought her home last year for 425,000. her property taxes would be assessed at; a. $425 b. $1,500 c. $2,250 d. $4,250

d. $4,250

seller Jim tells his agent branda that he does not want his home marketed to families with children. Brenda refuses. Which statement is true ? a. Brenda must follow all of Jims instructions b. branda has violated the fiduciary duty of obedience to Jim c. Brenda could be liable for a breach of the listing terms d. Brenda has not violated any fiduciary duty

d. Brenda has not violated any fiduciary duty

Jane sold her personal home for $148,000. Two months later she purchased and moved into a new home that cost $145,000. The adjusted cost basis of the first home was $140,000. For purposes of federal income tax, which statement is true? a. a basis of 148,000 and no taxable gain b. a basis of 145,000 and a taxable gain of 3,000 c. a basis of 130,000 and a table gain of 18,000 d. a basis of 140,000 and mo taxable gain

d. a basis of 140,000 and no taxable gain

marsha has been keeping track of the effectiveness of her adverting campaigns. she is probably using all but which of the following tools? a. code in a print ad b. telephone log c. designated telephone number d. advertising budget

d. advertising budget

the general law of agency applies to a. brokers dealing with the seller b. salesperson dealing with buyers c. insurance agents dealing with customers d. all business transactions

d. all business transaction

value includes which of the following aspects ? a. desire b. ability to pay c. usefulness d. all of the above

d. all of the above

which statement is true about a listing contract ? a. it must be in writing to be enforceable b. it can be considered an employment contract c. it creates an agency relationship d. all the above

d. all of the above

which of the following is not an advantage of hosting an open house? a. generates leads for new listings b. please the seller by increasing activity c. identifies buyers for other properties d. allows viewing access to strangers

d. allows viewing access to strangers

broker Eric secures a loan for buyer Paul. the fees that Eric chargers Paul for making the loan could be any but which of the following amounts ? a. $390 b. 5% of the principal c. actual costs under $700 d. any of the above

d. any of the above

in a transaction that involves the purchase of a business, what document functions in the same way as the deed in a personal real-estate transaction? a. mortgage b. deed of trust c. warranty deed d. bill of sale

d. bill of sale

agent dan tells his buyer that he seller will leave the washer and dryer if the buyer make an offer now. what kind of the closing technique is Jim using ? a. standing-room only b. alternative c. ownership d. bonus

d. bonus

this paragraph of the purchase agreement informs the seller of the buyer's right to inspect the property and can cancel or request maintenance based on findings. a. repairs b. buyer indemnity c. dispute resolution d. conditions affecting property

d. conditions affecting property

which of the following internet pages might not be of particular interest to buyer ? a. mortgages loan calculation b. information on current loan programs c. definition of financing terms d. curb appeal in formation

d. curb appeal information

Which law extended discrimination to include handicap and familial status? A. jones v. mayer B. Housing and community development act C. civil rights acts of 1968 D. fair housing amendment act

d. fair housing amendment act

a life insurance company would most likely invest in all but which of the following properties? a. shopping mall b. apartments complex c. industrial complex d. local beauty salon

d. local beauty salon

Broker Alice has a listing agreement with Jack. If Broker Tom procures a buyer for Jack, Tom will get the commission and Alice will not. What kind of listing agreement does Alice have with Jack? a. exclusive agency b. net c. exclusive - authorization and rights to sell d. open

d. open

seller agent pam was unaware of the fact that the heating systems of a home she had listed was defective. she sold the property and several months later the buyer sued pam for not disclosing the problem. which statement is true ? a. the buyer was responsible for making the discovery, so pam is therefor liable b. pam is not liable since it was summer and the heating problem was not obvious c. the seller did not disclose the problem on a seller disclosure form so pam is off the hook d. pam is has no duty to investigate and may rely on the opinion of a heating professional or home inspector

d. pam is has no duty to investigate and may rely on the opinion of a heating professional or home inspector

when doing a competitive market analysis, an agent looks at all but which of the following factors ? a. prices of properties currently on the market b. prices of sold properties c. properties that were listed but did not sell d. recently renovated properties

d. recently renovated properties

Jonestown community bank refuses to lend money to potential homeowners trying to purchases property in the predominantly Asian neighborhood on the west end of town. this practice is a. steering b. blockbusting c. panic-selling d. redlining

d. redlining

Jake has decided to specialize in working with clients who purchases schools. what property type will he be dealing with? a. commercial b. industrial c. recreational d. special-purpose

d. special-purpose

which of the following prospecting techniques do you have to use carefully because it has tended to upset people in recent years? a. Facebook and twitter advertising b. direct mail c. placing ads d. telephone calls

d. telephone calls

who benefits from private mortgage insurance? a. the borrowers family in case of his or her death b. the lender in case of the borrowers death c. the lender against delinquent payments d. the lender in case of the borrowers

d. the lender in case of the borrowers

When considering making a loan to a borrower, which of the following factors would probably exert the least amount of influence on the lender ? A. the borrowers income B. the value of the property the borrower wants to purchase C. the borrower's job stability D. the neighborhood in which the property is located

d. the neighborhood in which the property is located