Real Estate Salesperson California State Exam 3 Preparation Q&A ONLY- 2015

A buyer has agreed to purchase a house for $77,000. He has deposited $1,200 into escrow. A lender has agreed to loan 80% of the appraised value which is $75,000 and the closing costs which will be charged to the buyer amount to 3% of the purchase price. What is the additional amount which the buyer will be required to deposit into escrow upon closing:

$18,110 $75,000 x 80% = $60,000 loaned $77,000 - $60,000 = $17,000 down payment $77,000 x 3% = $2,310 $17,000 + $2,310 = $19,310 $19,310 - $1,200 = $18,110

Which of the following advertisements would violate the Truth-in-Lending Law:

$22,500 - Nothing down If the ad makes reference to amount of down payment, the terms or time of repayment, then the ad must include the cash price or the amount of the loan, amount of down payment or statement that no down payment is required, number, amount, and due date of all payments.

A man purchased a commercial property for $193,600 which was equal to $4,40 per square foot. The lot, which was rectangular, was 200 feet deep. What was the cost per front foot:

$880 per front foot $193,600 ÷ $4.40 = 44,000 square feet 44,000 ÷ 200 foot depth = 220 front feet $193,600 ÷ 220 = $880 per front foot

Taylor was injured while swimming in Smith's new pool. He obtained a $2,500 judgment against Smith and recorded an abstract of judgment with the county recorder. This amounted to:

A general lien

A "footlong" is which of the following:

A heavy concrete course place in the ground upon which the concrete foundation is set

FHA will allow but Cal-Vet will not allow which of the following loans:

A home which is to be rented out

Which of the following would be most likely to pay a premium for mutual mortgage insurance:

A homeowner who assumed an FHA loan

When the circumstances are such that an award of money damages would not provide an adequate remedy for default in a contract, a suit for specific performance could be successfully brought by all of the following except:

A licensed real estate broker acting as agent for the principals

Collecting rents, fixing up the property, and showing vacant units are the types of responsibilities that would be assumed by:

A resident property manager

A trust deed can have a provision that allows future loans on the property to have priority. This would be called:

A subordination

The term that describes the action by which a local building authority permits an inconsistency to the construction, systems or standards within applicable building codes is best known as:

A variance

The particular area that appraisers find most difficult to measure accurately is:

Accrued depreciation

The opposite of "alienation" is which of the following?

Acquisition

Many lenders consider the liquidity and marketability of loans to be very important when they make a loan secured by a mortgage. The importance of liquidity and marketability relates to:

Activities of the secondary mortgage markets

A city's master plan would include:

All of the below: -Access to water, drainage, and sewage -Recreational and commercial areas, as well as subdivision design -Flow of intercity traffic on freeways

In addition to certain municipal or county regulations which apply to the construction of a subdivision, such as zoning laws and the State Map Act, other government regulations may be imposed upon the subdivision by:

All of the below: -Health, fire, and building safety laws -Department of Real Estate -Governmental lending agencies, such as FHA and VA

The value of an apartment building is being determined by the income approach. Under which of the following circumstances would the appraiser make a deduction from effective gross income for the cost of management:

All of the below: -The owner manages the property -One of the tenants manages the property and is excused from making rent payments for his unit -One of the tenants who lives in a nearby building owned by the owner manages both properties, free of cost to the owner

In practice, the services of a broker on behalf of her principal are defined as all of the following, EXCEPT:

An attorney in fact relationship

Certified copies of inspection reports filed by structural pest control operators with the Structural Pest Control Board within the preceding two years can be obtained upon request and the payment of a fee by:

Any person

Usefulness of the cost approach would be limited when:

Appraising an old structure with many functional deficiencies

When a dam broke the flow of water cut a strip of land from the river bank. This would be known as:

Avulsion

The value of a property purchased for investment purposes is usually:

Based on the capitalization of future net income

Jones listed his home with ABC Realty for $30,000. He agreed to carry a note secured by a trust deed for $30,000 with 9% interest. The note was to be payable over a 20-year period. Alex, a salesman with ABC Realty, received an offer on these exact terms. However, before the offer was submitted to the seller, Clair, another salesperson in the office, brought in an offer for $28,000 cash. Whic of the following is TRUE:

Both offers must be submitted to the seller

Mortgage loan correspondents may be licensed by the:

Both: -Department of Corporations -Department of Real Estate

When using the market data approach in the appraisal process, many adjustments are often made, and any differences in the:

Comparables are adjusted to the characteristics of the subject property

The factor which usually has the greatest influence on mortgage interest rates is the:

Condition of the money market

When a buyer initially purchases a home with Cal-Vet financing, the buyer receives a:

Contract of sale

When the debt has been paid in full, the trustee will record what legal instrument to remove the lien of a trust deed from the public record?

Deed of reconveyance

When an escrow is closed on the purchase of a home, the closing statements usually reveal that the seller has paid certain items in arrears or in advance as they relate to ownership of that home. These items are usually prorated or adjusted. All of the following would be included in these prorated items except:

Delinquent interest and principal applying to an existing mortgage loan of the sellers

An elevation sheet which is used in a subdivision shows which of the following:

Drawings of the front and side views of the finished homes

If two or more parties own property as tenants in common:

Each party may transfer their interest separately

Whicf of the following is an interest, but not an estate, in real property:

Easement

When a governmental body, such as a city or county, takes private land for public use, that process is governed by law. Such a taking is accomplished through the exercise of the right of:

Eminent domain

When the buyer has recently purchased a home with a value land sales contract, what type of title does the buyer have?

Equitable title

A real estate broker sent all of his title business to Wonderful Title Co. In appreciation of the business, the title company paid the broker $10 for each transaction. According to the Real Estate Settlement Procedures Act, "RESPA," this practice is:

Forbidden

When a legal description uses only sections, townships, and ranges, the lines relate to the:

Government survey lines

A typical subordination clause contained in a mortgage:

Grants the mortgagor authority to issue additional security devices on the property which automatically receive higher classification over the mortgage

When calculating the Consumer Price Index (CPI), housing expenses is one of the largest denominators because:

Housing is one of the largest expenses for consumers

A real estate broker, acting as agent for a landlord, has the following instructions: Instruction I- Collect a larger deposit from single men than from single women or couples Instruction II- Advertise only by encouraging existing tenants who are predominantly white to solicit prospective tenants from among their friends Which of these instructions would be prohibited by the Federal Fair Housing Act:

I only

Conditions affecting interest rates and the availability of loan funds vary over time. When would it be advantageous for a lender to waive a prepayment penalty clause contained in a promissory note?

In a tight money market where there is a lack of funds available for real estate loans

In regards to real estate brokerage, which of the following statements is correct?

In an exclusive agency listing, a seller may sell without being liable for a commission

In appraising real property, a separate valuation for the site is considered least important:

In applying gross rent multipliers

Ellis purchased a home with a low down payment and a long repayment term. THis would most likely result in:

Increasing the financing cost

Elizabeth purchased a home with a low down payment and long-term loan. This financing would most likely result in:

Increasing the total financing cost

One of the main differences between real and personal property is that real property:

Is immovable

Prices have RISEN 20%. What has happened to the value of the dollar:

It has gone down 16 2/3% Ex. An item that used to sell for $1 now sells for $1.20 the dollar now buys 5/6 of what is used to buy. Its value has gone down 1/6 or 16 2/3%

Which of the following does a prepayment penalty clause in a trust deed accomplish:

It provides for a certain sum to be paid by the trustor if the loan is paid off before it matures

When lending money to two or more joint tenants using a single promissory note, the lender would be best advised to increase the security on the note by inserting which of the following phrases after the names of the joint tenants?

Jointly and severally

All of the following would be classed as real property, except:

Leasehold estates in residential properties

When a borrower (receiver) obtains a loan, he often pays a fee which is a percentage of the face amount of the loan. This usually referred to on the borrower's closing statement as a:

Loan origination fee

FHA loans generally differ from conventional loans in which of the following ways?

Lower interest rate

What actions can the Federal Reserve Board take to increase the supply of money and credit in the nation economy:

Lower the cash reserves required by banks which are members of the Federal Reserve Bank System

What is NOT common way of measuring land?

Metes and bounds

Under current federal income tax laws, which of the following are tax-deductible items for an owner-occupied single-family dwelling:

Mortgage interest payments, property taxes, and mortgage prepayment penalty

A broker would not be required to maintain trust records in which of the following transactions:

NONE of the below: -A check promptly delivered to escrow -A check promptly delivered to seller -A check promptly delivered to the seller that was given as the deposit in an offer to purchase containing a contingency clause

In the appraisal of residential property, the cost approach is most appropriate in the case of:

New property

What type of title insurance policy covers everything?

No title insurance policy covers everything

When existing contract is replaced by an entirely new contract, it is an example of:

Novation

Which of the following would most likely provide an investor with the best hedge against inflation:

Ownership of real property

What is NOT a necessary element in the formation of a contract?

Performance

What would NOT be considered a lien against real property:

Private restrictions which have been recorded

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?

Publish a notice of trustee's sale

When a vendee is buying a home with a land sales contract, what should he or she do to protect his or her interests?

Record the land sales contract at the county recorder's office

Which of the following approaches to value estimate tends to set the upper limits of value:

Replacement

When a man purchases a business he should be sure that a certificate of clearance, or clearance receipt, has been issued by the:

State Controller

Broker Young, as an agent, showed a property to James. James signed a deposit receipt which contained the following words: "Buyer to accept the property in an "as is" condition." Broker Young knew that the plumbing in the property was in a major state of disrepair with parts missing, but he did not tell James. The problem with the plumbing would not be apparent to an ordinary, prudent person. If James sued the seller for damages for fraud, the court would probably be:

Successful because of the duty to disclose a material fact cannot be avoided by an "as is" provision under the stated circumstances

The Irwins made an offer to purchase the Greys' property. As part of the offer, the Irwins agreed to take title "subject to" an existing VA loan which the Greys obtained when they purchased the property in the approximate amount of $39,000. If the Greys sell to the Irwins under these conditions, which of the following is true concerning liability for a loss suffered by the government after a foreclosure on the VA loan:

The Greys will be primarily liable

What is LEAST IMPORTANT in making an appraisal on improved real property:

The assessed property value

Mr. & Mrs. Bart listed their home with Broker Carter for a 90-day period. Mr. Bart advertised the Broker at that time that the roof was quite old. It leaked and needed repair. Later, during the listing period, the broker showed the property to Mr. Daniels, a prospective buyer, and assured Mr. Daniels that the roof was in good condition and that he would have no trouble for many years to come. Mr. Daniels purchased the property, and, the first rain storm, suffered a loss due to water damage as a result of the old rood. Mr. Daniels takes legal action, he would probably sue:

The broker and seller for fraud

An offer to purchase real property was signed by a prospective buyer on October 2, 1977. The terms of the offer allowed five days for acceptance by the seller. Because of an illness in the seller's family, the seller did not accept the offer until October 10, 1977. Which of the following statements is correct:

The buyer may demand the return of his deposit

The method which is used most often to value land or sites is:

The comparative method

Deed restrictions are usually established by:

The grantor in the deed

A Chicano prospective purchaser asks to be shown homes but dues not specify that he wants to see homes located in a neighborhood where there are no Chicanos. How should a licensee decide what properties what properties to show him:

The licensee may select homes for showing as he would for any other prospect

The decline of mortgage interest rates would occur when:

The mortgage money supply increases

Who usually pays the 1% FHA loan fee?

The seller

The security of a loan made on real property depends upon:

The value of the property being liened

Morgan wanted to obtain a 60-day option so that he could purchase a parcel of real property for $18,000. However, he wanted to pay only $1 for it. If this option were drawn and duly signed by the parties, it would be:

Valid if the $1 was actually delivered

State law requires that every city or county create a planning commission:

Without exception

If an agent discloses to his principal the race, creed, or color of a prospective buyer or tenant, has he committed a discriminatory act:

Yes. An option of the California Attorney General states that race, creed, or color is not a material fact and should not be disclosed even though the owner requests the information