Real Estate Principles | Exam #1

All real estate brokers and agents need to complete at least __________ of continuing education (CE) every four years to renew a license issued by the California Department of Real Estate (DRE).

45 hours

A residential mortgage primarily for personal, family or household use and secured by a deed of trust on a dwelling is known as a:

A consumer purpose mortgage

A property defect which would likely affect the price a buyer would be willing to pay is referred to as:

A material Fact

The Agency Law Disclosure needs to be attached to which of the following documents and signed by all parties in targeted transactions?

A purchase agreement, A sellers listing agreement, and a counteroffer. (ALL of the above)

____________ refers to a method of acquiring title to real estate owned by another by openly maintaining exclusive possession of the property for a period of five years and paying all property taxes.

Adverse possession

At the time of signing the deed, a capable grantor needs to: a. possess their civil rights. b. be of sound mind. c. be an adult at least 18 years of age. d. All of the above.

All of the above

The first component of real estate is land, which includes: a. soil. b. rocks. c. reasonable airspace above the earth. d. All of the above.

All of the above

The broker analyzes the suitability of an income property which is for sale by preparing a(n) ____________ and reviewing it with the buyer.

Annual Property Operating Data Sheet (APOD)

A residential landlord may not induce or attempt to induce an individual to offer, or abstain from offering, a dwelling to prevent the entry of certain classes of people into the neighborhood, known as:

Blockbusting

California's Unruh Civil Rights Act specifically prohibits discrimination on behalf of:

Businesses

The California Legislature created the __________ to oversee, regulate, administer and enforce the real estate law.

California Department of Real Estate (DRE)

The _____________ insures against all encumbrances affecting title which can be discovered by a search of public records prior to issuance of the policy, but does not cover against unrecorded encumbrances.

California Land Title Association (CLTA) standard policY

Regardless of race, all citizens of the United States have the right to rent residential and commercial real estate under the federal:

Civil Rights Act

A(n) __________ is a broker who simultaneously represents the best interest of opposing parties in a transaction, e.g., both the buyer and the seller.

Dual Agent

The __________ is a 1974 federal enactment prohibiting lenders from discriminating against borrowers from a protected class.

Equal Credit Opportunity Act

The Department of Housing and Urban Development (HUD) issues guidelines that require real estate brokers selling or renting single family residences (SFRs) display a(n):

Fair housing poster

he printing or publishing of an advertisement for the sale or rental of residential property that indicates a wrongful discriminatory preference is a violation of the:

Federal Fair Housing Act (FFHA)

______________ are exempt from federal lead-based paint (LBP) disclosure requirements.

Foreclosure sales of residential property

The __________ requires lenders to compile and submit their home loan origination data to their respective supervisory agencies.

Home Mortgage Disclosure Act (HMDA)

__________ are interests in real estate which secure payment or performance of a debt or other monetary obligation, such as a trust deed lien or a local property tax lien

Liens

A(n) ___________ is an estimate of the buyer's settlement charges and mortgage terms delivered to the buyer within three business days following the lender's receipt of the mortgage application.

Loan Estimate

To unify and streamline the disclosure made by a seller and their agent about natural hazards affecting a property, the California legislature created a statutory form called the:

Natural Hazard Disclosure Statement (NHD).

Lis pendens means:

Notice of Pending Action.

A broker is required to regularly account to an owner on the status, expenditure and location of negotiable trust funds, called a(n):

Owner's Statement

To be eligible for a broker or agent license, the applicant needs to be honest and truthful, complete mandatory education and:

Pass the qualifying exam.

A statement by a structural pest control (SPC) company indicating the property is free of infestation in the visible and accessible areas is referred to as a:

Pest Control Certification.

Agency in real estate related transactions includes relationships between brokers and their:

Principles & Agents (Both a & c)

A ________ is a nuisance which affects an entire segment of the population.

Public nuisance

The chief officer of the California Department of Real Estate (DRE) is the:

Real Estate Commissioner

The __________ is available to individuals who have obtained a judgment against a licensee and are unable to recover the judgment from the licensee for losses caused while acting as an agent.

Real Estate Recovery Fund

Failing to provide financing in certain communities is called:

Redlining

___________ levied by a homeowners' association (HOA) fund the operating budget to pay for the cost of maintaining the common areas

Regular assessments

The right to use water is called a:

Riparian right

A(n) ___________ is housing intended for and solely occupied by persons 62 years of age or older, or intended and operated for occupancy by persons of 55 years of age or older.

Senior Citizen Housing Project

________ easements restrict an owner's ability to maintain or construct improvements which interfere with a neighbor's solar energy system

Solar

California established the __________ to act as a referee for all disputes over water rights.

State Water Resources Control Board

_________ involves the restriction of a person seeking to buy or rent a dwelling in a community in a manner that perpetuates segregated housing patterns.

Steering

Failure of the seller's agent to provide the seller with the Agency Law Disclosure prior to entering into the listing agreement may result in:

The loss of their fee

A seller of a one-to-four unit residential property needs to complete and deliver to a prospective buyer a statutory form called a(n):

Transfer Disclosure Statement (TDS)

A __________ is any wrongful and unauthorized entry onto real estate in the possession of another.

Trespass

Funds belonging to others which a broker and their agents handle when acting in a transaction are called:

Trust Funds

The __________ program assists qualified veterans or their surviving spouses to buy a home with a zero down payment.

U.S. Department of Veterans Affairs (VA) mortgage guarantee

A lender may lawfully consider ___________ when determining the applicant's creditworthiness.

a mortgage applicant's age

A(n) ________ is a written statement which presents an accurate, factual representation of title to the property being acquired, encumbered or leased.

abstract of title

A(n) ________ is a recorded restriction which requires a property to be used for a specific purpose.

affirmative covenant

The _________________, contained in all purchase agreements, states the existence or nonexistence of each broker's fiduciary agency with the various parties to the transaction.

agency confirmation provision

Under the ___________, owners of adjacent properties uncertain over the true boundary agree to establish the location of their common lot line and acquiesce to the boundary line for at least five years.

agreed-boundary doctrine

A(n) ____________ is an individual's opinion or estimate of a property's value on a specific date.

appraisal

Incidental rights to real estate which are not located on the real estate nor reflected on its title are called:

appurtenant rights.

Improvements that become part of the real estate include walls, central air conditioning and:

attached flooring.

The location of a common property line that is represented by an improvement which acts as a demarcation of the property line is called a:

common boundary improvement.

All property acquired jointly by a married couple during the marriage, no matter how vested, is presumed to be:

community property.

A(n) _________ arises when a broker or their agent, acting on behalf of a client, has a competing professional or personal bias which hinders their ability to fulfill the fiduciary duties they have undertaken on behalf of their client.

conflict of interest

An Agency Law Disclosure is provided each time any broker prepares a purchase agreement or:

counteroffer

The property which benefits from an easement is referred to as the:

dominant tenement

Brokers owe a fiduciary duty to the client to use __________ in a continuous effort to meet the objective of the employment.

due diligence

If a property is landlocked, the owner of the property will most likely be able to acquire a(n):

easement by necessity

A(n) ___________ belongs to an individual and is their personal right.

easement in gross

The right of the government to take private property for public use is referred to as:

eminent domain.

A(n) ________ is an improvement on real estate which extends onto real estate belonging to another person without their consent.

encroachment

Radon gas concentrations in enclosed, unventilated spaces located within a building where the underlying rock contains uranium is an example of a(n):

environmental hazard located on a property.

The Natural Hazard Disclosure Statement (NHD) handed to a prospective buyer does not disclose:

environmental hazards and physical deficiencies in the soil or property improvements.

A process employing an independent agent to manage the closing of a real estate transaction through the exchange of documents and money between two parties is referred to as:

escrow

The specific duties of the escrow officer in a particular transaction are documented in:

escrow instructions.

The __________ of a property is the highest price on the date of valuation a willing seller and buyer would agree to, both having full knowledge of the property's various uses.

fair market value

Until __________ was added to the anti-discrimination laws in 1992, it was legal to exclude minors under the age of 18 from housing accommodations

familial status

A seller's broker and their agents have a ___________, owed solely to the seller who has employed the broker, to diligently market the listed property for sale.

fiduciary agency duty

The function of a __________ is limited to soliciting, identifying, and referring potential real estate clients to brokers, agents, or principals in exchange for a fee.

finder

A(n) ________ lasts for a specific length of time as stated in a lease agreement entered into by a landlord and tenant.

fixed-term tenancy

An easement is terminated by ___________ if the easement holder places an excessive burden on the property encumbered by the easement.

forfeiture

To properly record a lis pendens, the lis pendens is required to identify the parties to the lawsuit and:

give an adequate description of the real estate.

A(n) __________ is used to pass a fee simple interest in real estate from the grantor to another individual, unless a lesser interest is stated in the deed.

grant deed

The individual conveying real estate is called the ________ and the individual acquiring title is called the ________.

grantor; grantee

On expiration of a lease, a tenant who remains in possession of a property without an agreement or acceptance of rent by the landlord for the extended occupancy becomes a:

holdover tenant.

Any individual who holds themselves out as being in the business of preparing a home inspection report on a one-to-four unit residential property is referred to as a(n):

home inspector

A(n) _______ is the dollar amount of the equity in a homeowner's dwelling that the homeowner qualifies to hold which has priority on title over most judgment liens and some government liens.

homestead

__________ practices are those which are not openly discriminatory, but result in discriminatory effects.

implicit discriminatory

For delivery of a deed to occur, the grantor needs to _______ and the grantee needs to __________.

intend to convey title; accept the deed as immediately effective

The Natural Hazard Disclosure Statement (NHD) requires the seller's agent to disclose to a prospective buyer whether they have knowledge the property:

is located in a fault zone.

A(n) ______________ vesting is characterized by an ownership interest in property concurrently received by two or more individuals who share equally and have the right of survivorship.

joint tenancy

(n) ___________ is any condition that causes exposure to lead from lead-contaminated dust, soil or paint which has deteriorated to the point of causing adverse human health effects.

lead-based paint hazard

A(n) __________ is a written employment contract between a client and a licensed real estate broker.

listing agreement

The submission of a(n) ____________ to a private or institutional lender is the catalyst which sets the machinery of the mortgage industry in motion.

mortgage application

The illegal sale of a controlled substance is considered a(n):

nuisance per se.

A broker's representation of a client, such as a buyer or seller, is best undertaken:

on a written employment agreement signed by both the (24) client and the broker.

Consumers may request a free copy of their credit report _________ to review it for errors.

once every year

Under a(n) __________, a client can enter into listings with as many brokers as they want without becoming obligated to pay more than one fee.

open listing

When a dual agency is established in a one-to-four unit residential sales transaction, the broker may not:

pass on confidential pricing information to the opposing parties.

A(n) ____________ exists when the nuisance cannot be abated at a reasonable cost and by reasonable means.

permanent nuisance

The federal lead-based paint (LBP) disclosure is required on all __________ residential construction.

pre-1978

The primary document used to negotiate the transaction between a buyer and seller is a:

purchase agreement

To simply convey any interest in real estate without an assurance the individual holds that interest conveyed, a(n) __________ deed is used.

quitclaim deed

On expiration of a lease, the passage of real estate fixtures from the tenant to landlord is a conveyance called:

reversion

California anti-discrimination law is enforced by:

the Department of Fair Employment and Housing.

Ownership of a unit in a condominium project includes compulsory membership in:

the homeowners' association (HOA).

A real estate agent has no affirmative duty to voluntarily disclose information to a potential buyer regarding a prior occupant whose death occurred on the real estate more than __________ years prior to the purchase offer.

three

All records of an agent's activities on behalf of a buyer or seller during the listing period are to be retained by the agent's broker for:

three years

Natural hazards such as __________ come with the location of a parcel of real estate, not with the man-made aspects of the property.

very high fire hazard severity zones

A(n) ________ is valid and enforceable after delivery until it is challenged due to a defect and declared invalid by court order.

voidable deed

Environmental hazards not itemized in the Transfer Disclosure Statement (TDS) include:

whether the property is located in a special flood hazard area.