California: Real Estate Principles Practice Exam 1-B

41 of 50 - When is it permissible for a broker to possess an out-of-state trust account? A. It is only permitted if the FDIC insures the account, and the account is used only for specific first loans. B. It is never permitted; all trust accounts must be maintained with a bank or recognized depository located in California. C. It is always permissible to hold an out-of-state trust account. D. None of the Above.

A. It is only permitted if the FDIC insures the account, and the account is used only for specific first loans.

40 of 50 - When an appraiser assumes that no one is being forced to sell at a reduced price because of an impending divorce or similar situation; and that both buyer and seller are well-informed customers, he is more than likely hired to determine: A. Market Value B. Insurance Value C. Salvage Value D. All of the Above

A. Market Value

47 of 50 - Katie and Rich own a rental home they have put up FSBO. They've noticed the same woman has accompanied several potential buyers viewing the home. Katie and Rich discover she is a broker that has been "showing" the home on the sly without their permission. Instead of fighting this aggressive salesperson, the couple just go along. In which manner was agency created? A. Ostensible Agency B. Ratification C. Implied Agency D. Written or Expressed

A. Ostensible Agency

49 of 50 - Wallace and Melissa live in a small rural community of just over 15,000. They want to purchase a home and start a small home-based business. At the current time, they have a very limited income and need their own home. Where is the best place for Wallace and Melissa to turn for a home loan? A. Rural Economic and Community Development (RECD) B. VA C. FHA D. Cal-Vet

A. Rural Economic and Community Development (RECD)

39 of 50 - Shivaram and Kiran are buying a home in a new subdivision. Due to all of the subdivisions in the area, a new elementary school is being built. Additionally, a new area park is planned. Shivaram and Kiran have been informed the taxes on their new home are substantially higher than their previous property. Why? A. The Mello-Roos Community Facilities Act of 1982 B. The Street Improvement Act of 1911 C. Proposition 13 D. Proposition 60

A. The Mello-Roos Community Facilities Act of 1982

30 of 50 - Karen and Jay need a larger home. They have two large dogs and a baby on the way. One day in the real estate section, they see their dream home. The couple view the home that very day, make an offer and it's accepted. There's only one problem: They haven't even put their home on the market. Which type of loan gives Karen and Jay their best option of paying two mortgages until their current home sells? A. A Participation Mortgage B. A Bridge Loan C. A Sale-Leaseback D. A Contract for Deed

B. A Bridge Loan

29 of 50 - Marcus wants to have the deed to his new home recorded to protect his ownership rights. In order to record the deed, it must be notarized. Marcus must go before a notary public and verify the signing of the deed. The notary then signs the deed. The verification of Marcus' signature in the signing of the deed is known as: A. Autograph B. Attestation C. Recording D. Caveat Emptor

B. Attestation

50 of 50 - Calvin is buying his first home. He has been saving and saving for years. The home he is buying has a price of $300,000 and Calvin has a down payment of $75,000. Calvin's loan is considered: A. Highly Secured B. Low Risk C. Simple Interest D. Highly Leveraged

B. Low Risk

33 of 50 - Drew is leasing his apartment from Reggie. The lease is for one year and they have agreed on all areas of the contract. The lease is in written form, and Reggie is the only party that has signed. Without Drew's signature, is the lease now invalid? A. Yes, a lease in written form, must have both parties' signatures to be validated. B. No, the lessee is not required to sign, only the lessor. The lessee's occupation of the property is proof the lease agreement was accepted. C. No, neither party needs to sign the written lease for validity. As long as a consensus exists between the two parties, the lease is valid. D. None of the Above.

B. No, the lessee is not required to sign, only the lessor. The lessee's occupation of the property is proof the lease agreement was accepted.

26 of 50 - Brian and Leslie have made an offer on Rudy and Judith's home. The first offer was rejected by the sellers. Brian and Leslie made another offer; Rudy and Judith rejected that offer. Never quitters, Brian and Leslie decided to try one last time and present their last and best offer. Rudy and Judith decide the prospective buyers are close, and make a counteroffer. What's the situation after a counteroffer is made by the sellers? A. The sellers cannot make a counteroffer to the buyer. They can either accept the buyer's offer or reject it. B. Once the counteroffer is made by the seller, the buyer's original offer becomes invalid. If the buyers accepts the offer the seller has made, the same process takes place as with a regular offer. C. The process will basically start completely from scratch. If the buyers reject the seller's counteroffer, the sellers can go back to the buyer's previous offer and accept. D. None of the Above.

B. Once the counteroffer is made by the seller, the buyer's original offer becomes invalid. If the buyers accepts the offer the seller has made, the same process takes place as with a regular offer.

43 of 50 - Which of the following is not a requirement for an FHA loan? A. The mortgaged real estate must be appraised by an approved FHA appraiser. B. Prepayment penalties are optional. C. Points can be charged by the lender and paid by either buyer or seller, or both. D. A buyer may pay more than the appraised value, if he pays the difference in cash.

B. Prepayment penalties are optional.

48 of 50 - The Western Acres neighborhood is a highly desirable area in which homes very seldom go on the market. The Western Acres properties placed on the market sell very quickly and usually for or above asking price. Which principal of real estate applies to the homes in Western Acres? A. Highest and Best Use B. The Law of Supply and Demand C. Anticipation D. Competition

B. The Law of Supply and Demand

42 of 50 - What is the major difference between an Estate for Years and an Estate from Period to Period? A. The major difference is: in an Estate for Year, the tenant must give notice to vacate whereas in an Estate from Period to Period, there is no need to give any notice. B. The major difference is: in an Estate from Period to Period, the tenant must give notice to vacate whereas in an Estate for Years, there is no need to give any notice. C. The major difference is: in an Estate for Years, it is used exclusively for commercial leases. D. There are no major differences between the two.

B. The major difference is: in an Estate from Period to Period, the tenant must give notice to vacate whereas in an Estate for Years, there is no need to give any notice.

32 of 50 - Tamara and her children live in a subdivision with a tennis court and swimming pool. Her children are thrilled to be able to use these wonderful amenities. Who actually owns the tennis court and swimming pool? Tamara and her children reside in which type of common interest development? A. The tennis court and swimming pool are owned by the investors in the subdivision development. It is a Planned Unit Development. B. The tennis court and swimming pool are owned in common by all the property owners. It is a Planned Unit Development. C. The tennis court and swimming pool are owned in common by all the property owners. It is a subdivision. D. None of the Above.

B. The tennis court and swimming pool are owned in common by all the property owners. It is a Planned Unit Development.

35 of 50 - In a general warranty deed, the implied promise: "If there is a defect, I promise to take care of any problems" is referred to as: A. A Covenant of Seisin B. A Covenant of a Warranty Forever C. A Covenant of Further Assurance D. A Covenant Against Encumbrances

C. A Covenant of Further Assurance

27 of 50 - Anthony is adding a new deck to his home. He has obtained all the necessary building permits to construct his new deck. Anthony's neighbor, Steve, informed him he has to have a California State Contractor's License to even work on his own property. Anthony says that Steve is wrong. Who is right in this situation? A. Anthony is correct, anyone who does the business of a contractor must be licensed. B. Steve is correct, any major work conducted on real property must be done by a licensed state contractor. C. Anthony is correct. Anyone who does the business of a contractor must be licensed. Unless, the property owner is planning to sell the finished real estate project, he does not need a license to work on his own property. D. None of the Above.

C. Anthony is correct. Anyone who does the business of a contractor must be licensed. Unless, the property owner is planning to sell the finished real estate project, he does not need a license to work on his own property.

36 of 50 - Brett lost his job last year. He has only been able to find temporary work and fell behind on his mortgage. His home is currently in foreclosure. He is confused as to what will happen and how the debts are paid. What is the order of payments in foreclosure? A. Equitable Right of Redemption; Foreclosure; and Statutory Redemption B. Special Assessment Taxes and General Taxes; the First Mortgage which is determined by the order of recording; whatever is recorded next would be paid; and the Cost of the Sale. C. Cost of Sale; Special Assessment Taxes and General Taxes; the First Mortgage which is determined by the order of recording; and whatever is recoded next would be paid. D. Statutory Redemption; Equitable Redemption; and Foreclosure

C. Cost of Sale; Special Assessment Taxes and General Taxes; the First Mortgage which is determined by the order of recording; and whatever is recoded next would be paid.

44 of 50 - This step of the general plan, sometimes known as the master plan, should encompass all aspects of the projected growth, including the social, economic, and physical features. Due to this step, while considered long-range, the plan must allow for short-range flexibility. Which step is described? A. Resource Analysis B. Plan Implementation C. Formulation of Community Goals D. Adaptation of Zoning Ordinances

C. Formulation of Community Goals

37 of 50 - Timothy has been hired by the estate of Tyler Wilbanks, who is recently deceased. Timothy has Power of Attorney and will be handling all the real estate affairs of the deceased estate. Which type of agent is Timothy? A. Special Agent B. Single Agent C. Universal Agent D. Agency Coupled with Interest

C. Universal Agent

28 of 50 - What is the mill rate of .017? A. 0.0017 B. 1.07 C. 1.7 D. 17

D. 17

45 of 50 - Zoning ordinances have changed in the area adjacent to a residential neighborhood. The residents are incensed a retail shopping area is being developed one block from their subdivision. They are concerned about the traffic, noise, and what this will do to their property values. The new zoning ordinances must ensure: A. The power be exercised in a reasonable manner. B. The provisions be clear and specific. C. Freedom from discrimination. D. All of the Above

D. All of the Above

46 of 50 - Which of the following statements referring to general taxes is true? A. General taxes are Ad Valorem taxes. B. General taxes are used for the general operation of the governmental agency authorized to impose the taxes. C. Real property tax (general taxes) are based on the assessed valuation of the property. D. All of the Above

D. All of the Above

31 of 50 - Lois is selling her needlework shop to Simon. Simon is also purchasing the name of the business from Lois, all of the fixtures, and the inventory. Lois is essentially handing over the entire business, from top to bottom, to Simon, who is planning continuing what she had started. What are the essential elements of this business opportunity sale? A. A Bill of Sale B. Financial Statements C. Goodwill D. Both A and B

D. Both A and B

38 of 50 - Although 16-year-old Tameka's goal is to be a licensed real estate salesperson in the State of California, she is currently living in Canada. Her long-term goal is to be a successful salesperson, manager, and to own a brokerage. She has been studying the Real Estate Principles Course for next week's exam. However, if she passes, she cannot apply for her 4 year salesperson's license. Why? A. Tameka cannot apply for a 4-year salesperson because she has not completed three college-level real estate courses. B. Tameka is only sixteen and a licensee must be eighteen years old. C. Tameka cannot provide proof of legal presence in the United States. D. Both A and B

D. Both A and B

34 of 50 - Janet is a broker who negotiates a number of loans to specific subdivisions. Last year, she took part in 27 loans to homeowners in one subdivision. Due to this large number of loans to a subdivision, Janet has to report loan activities to the California BRE. What is the name of this reporting process, how often must the reports be made, and what is an additional requirement for making these reports? A. The annual and quarterly process is Uniform Reporting. Additionally, if a broker negotiates more than $5,000,000.00 in loans annually, he must take part in Uniform Reporting. B. The annual and quarterly process is Threshold Reporting. Additionally, if a broker negotiates more than $2,000,000.00 in loans annually, he must take part in Threshold Reporting. C. The annual and quarterly process is Trust Reporting. Additionally, if a broker negotiates more than $2,000,000.00 in loans annually, he must take part in Threshold Reporting. D. The annual and quarterly process is Threshold Reporting. Additionally, if a broker negotiates more than $1,000,000.00 in loans annually, he must take part in Threshold Reporting.

D. The annual and quarterly process is Threshold Reporting. Additionally, if a broker negotiates more than $1,000,000.00 in loans annually, he must take part in Threshold Reporting.