PPP 24: CA Real Estate Broker Exam Prep

Under the mortgage loan broker law, the maximum commission which may be charged for negotiating a second or other junior trust deed or mortgage of $4,500 to run for a period of 2 years is:

10%

Of the following, the method which allows the most depreciation to be taken during the first year would be:

200% declining balance method

A real estate broker is collecting payments on a promissory note on behalf of the lender as part of the servicing agreement. The maximum amount of time that the broker may retain these funds is:

25 days

The purchaser of a lot which is subject to a lien for street improvements under the Street Improvement Act of 1911, may prevent the assessment from going to bond if he pays the assessment in full within how many days after the completion of the work:

30 Days

The following is the largest parcel of land: • 1/10th of a township • 1 mile x 2 miles • 4 square miles • 5,280 feet x 10,560 feet

4 square miles

A population needed to support a neighborhood shopping center is:

5,000 to 10,000

Under FHA standards, the minimum ceiling height for a single family residential construction is:

7 feet

If the market value of a home were to exceed the amount of the homestead exemption and existing liens:

A creditor who holds a judgment could have the property sold by the court and obtain the amount due above the exemption.

When an Abstract of Judgment is recorded it becomes:

A general lien on all non-exempt real property in the county where recorded

The difference between an easement and a license is:

A license can be revoked

Roberts, the holder of a $70,000 first trust deed and note, wishes to borrow $25,000 to build a house. If the note is used as security for the $25,000 loan, the arrangement would be regarded as:

A pledge

A covenant may be defined as:

A promise.

After the economic life of a multiple dwelling structure has been exhausted, the owner is said to retain:

A residual value

A lender would be exempt from the requirement of providing the borrower with a Federal Right to Rescind Notice except:

A second trust deed for the new construction of the borrower's primary residence, that is secured by the same property.

The owner of an undivided interest in land with no right of survivorship owns the land as:

A tenant-in-common

Three of the following real estate terms are closely associated. Which term does not belong with the group? • Erosion • Abstract • Alluvium • Accretion

Abstract

Under which of the following circumstances would a broker be liable to a buyer? When the broker:

Accepts a deposit from the buyer and loses it but is not authorized to accept a deposit under the listing agreement

Under which of the following circumstances would a broker be liable to a buyer? When the broker:

Accepts a deposit from the buyer and loses it but is not authorized to accept a deposit under the listing agreement.

A declaration by a person who is adverse to taking an oath is known as:

An affirmation

A person unable to take an oath, would take or do which of the following?

An affirmation.

A form that is usually prepared to allow a real estate licensee to act as an agent for all principle parties to the transaction involved is:

An exchange agreement

When a broker misrepresents his principals property to a buyer, he could cause his principal to be subject to: • A rescission of the sale by the buyer. • Civil responsibility for compensating the buyer for misrepresentation of the broker. • A court action for damages by the buyer. • Any of the answers are true.

Any of the answers are true

Which of the following effectively terminates a power of attorney? • The principals death. • The attorney-in-facts inability to complete the agency. • Refusal by the attorney-in-fact to fulfill the terms of the agreement. • Any of the answers are true.

Any of the answers are true

A true statement regarding floor waters is that flood waters:

Are deemed the enemy of every affected owner and owner may protect their property by employment any reasonable protective measures

A person delegated in an instrument to act legally for another, in his stead, is known as which of the following:

Attorney in fact

The term used to describe the agreement by a tenant who agrees to recognize a new owner of the property and promise to pay rent to the new owner is:

Attornment

Commissions of a licenses real estate broker specializing in property management are:

Based on a percentage of the gross rents collected

When a loan is obtained to purchase real property and a note and trust deed is executed the party that furnishes the funds is the:

Beneficiary

Able sold six unencumbered properties to Baker. Part of the purchase price is a loan made by Able that is secured by a deed of trust on the six properties. This document is a/an:

Blanket encumbrance

An individual purchased a 9 acre parcel of unimproved property. He then subdivided the 9 acres into 1 acre parcels. If the subdivider plans to sell only 3 one acre parcels per year over the next 3 years, he must comply with: • The State Subdivision Map Act • The State Subdivided Lands Act • Both a and b • Neither a and b

Both a and b

Which of the following describes an executed contract?

Both parties have completely performed

Federal regulation of lending practices as provided in the Truth in Lending legislation applies to real estate loans to natural persons for all these purposes, except:

Business or agricultural use

When real property is sold, a copy of the structural pest control report must be given to the:

Buyer

To alienate title to real property, one would:

Convey the title

The following is not a test for a fixture:

Cost of the item

Two people entered into a land contract for the purchase of a home and the contract was recorded. A few months later, the vendee abandons the property and defaults on the contract. If the vendee refuses to execute a quitclaim deed, it will:

Create a cloud on the title

The liquidity of a business refers to the ratio between:

Current assets to current liabilities.

The acronym that represents the element of value is:

DUST (Demand, Utility, Scarcity and Transferability)

Which of the following statements concerning acknowledgement is true:

Deeds drawn and acknowledged out of state are valid

Upon starting an assignment what is the first thing an appraiser does?

Define the problem

A standard title insurance policy represents the final results of three successive processes. Which of the following would not be considered as one of those processes?

Determination of the correct boundary lines through a survey of the property being insured.

The case of Easton v. Strassburger expanded which of the following real estate policies?

Disclosure of all known material facts regarding the physical condition of the property

The form of depreciation that is the hardest to correct is:

Economic Obsolescence

A developer wanted to subdivide a parcel of land into several residential lots. The city planning commission has decided to increase the setback requirements for the front yards by 10 feet. The resulting loss in buildable space caused a loss in value of the lots. This loss in value was the result of the following:

Economic obsolescence

During escrow, if an unresolved dispute should arise between the seller an buyer preventing the close of escrow, the escrow holder may legally:

File an interpleader action in court

In California, the standard form (or standard coverage) policy of title insurance for real property insures against loss from:

Forgery in the chain of recorded title

In real estate financing, the initials GPAM stand for:

Graduated payment adjustable mortgage

Effective gross income is the:

Gross income minus all allowance for vacancies.

Agent Flag often refers to tax shelters when discussing a property with a customer. Agent Flat is primarily referring to:

Income taxes

When a loan is fully amortized by equal monthly payments of principle and interest, the amount applied to the principal:

Increases while the interest payment decreases by a constant amount

Stock in a mutual water Company.

Is appurtenant to the land and thus automatically transfers to the buyer

A contract is non-assignable when:

It is a personal service contract

Jones is the owner of an apartment in a cooperative apartment building. He makes monthly payments, which covers principal and interest due on a note secured by a trust deed, taxes and insurance. Which of the following is correct?

Jones could lose his equity if other owners default in their payments on the note

Broker Angela uses a "standard" form of listing agreement that is sold by real estate publishing companies. On each form, Angela crosses out the mediation and arbitration clauses. This conduct is:

Lawful

All of the following would be classed as real property, except: • Uncultivated grove of trees • Easements appurtenant • Leasehold estates in residential properties • Unextracted crude oil

Leasehold estates in residential properties

A broker offers to rebate the buyer a portion of his commission if he purchases a certain property. This is:

Legal if disclosed to the seller

Foreclosure on a deed of trust:

Legal under the terms of a valid trust deed

An unlicensed friend negotiates the sale of Irons home and is paid a portion of the selling price for his help. The party that would prosecute Irons friend is the:

Local District Attorney

Definitions of market value are least concerned with:

Material cost

Anderson was purchasing a home using F.H.A. financing. When completing the loan application, Anderson overstated his financial position and was short $500.00 to cover the closing costs. The broker agrees to loan him the money and had the buyer sign a note and second trust deed for that amount. Under these circumstances, the note:

May be void and the broker and buyer are subject to the penalties set forth in the law

In California, an appraiser:

May display a certificate of membership in a private organization of appraisers, without being a member of the National Association of Realtors

The prospective buyer of a business would be most interested in:

Net profit

The trustees who are designated by lenders and borrowers in creating loans secured by trust deeds, come under the supervisory jurisdiction of: • The Secretary of State of California • The California Corporations Commissioner • The Real Estate Commissioner • None of the answers are true

None of the answers are true

"Section" describes an area of land equal to

One Square Mile

In the event of an improvement contract which of the following would apply to a Oil & Gas subdivision:

Only the county in which the property is located has any control

Insofar as a residential neighborhood is concerned, which of the following would offer the least protection against blighting influences on future development:

Partially built-up neighborhood

When a purchaser under a land contract is paying the seller impounds for taxes and insurance, those payments may not be disbursed for any other purpose without the consent of the:

Payor

"Prescription" differs from "adverse possession" in the following way:

Prescription creates a non-possesory interest.

What is the proper form that gives managers the authority to manage apartments?

Property management agreement

RESPA applies to a federally regulated loan which is a first loan where the proceeds are used to finance the:

Purchase of a vacant residential lot

The recording of a deed:

Raises a presumption of delivery

A prospective purchaser is interested in buying a lot in the mountains from a subdivider who is not a real estate licensee. The buyer wishes to know about sewer assessments, liens, utilities to his lot, blanket encumbrances and maintenance of streets. The source that would provide all of this information is the:

Real Estate Commissioner

The main difference between a trust deed and a mortgage is:

Redemption

Contracts are voidable for some reasons. However, a voidable contract is binding on the parties until it is:

Rescinded

An easement CANNOT be terminated by:

Revocation by the owner of the servient tenement

On September 30, 1983, Daniels offered to buy Barness home. The offer was accepted and escrow opened. Barnes had purchased the home 1978, financing it by an FHA loan, on which he then currently making payments. A preliminary title report dated September 30, 1983 will:

Show the particulars of a deed of trust with Barnes as trustor

The method of calculating interest on real estate mortgages that is used by most large conventional lenders is:

Simple interest

A buyer agrees to sell alcoholic beverages on the property being acquired. This fact is noted in the deed granting buyer title to the property. The buyer has:

Taken title to the property as fee simple with condition subsequent.

A Real Estate Transfer Disclosure Statement need not be prepared for a:

Ten unit apartment complex

If a buyer take the property subject to the existing loan, subject to most nearly means:

The buyer will not be personally liable for the loan

The city acquires land for public use by public dedication. The grantor may have the land returned to him if:

The city sells a portion of the land to a developer.

Sherman gives a quitclaim deed to Warner for a parcel of real property. Warner does not record the deed. In this situation:

The deed is valid as between Sherman and Warner but invalid as to subsequent recorded interests without notice.

A land owner may have riparian rights if:

The land borders on a river or stream

The ALTA Lenders Policy of title insurance goes beyond the protection afforded by a CLTA policy guarding against:

The location of property lines according to a formal survey

An alienation clause provides that:

The principal amount of the loan, plus accrued interest, is due in the event of the sale of the property

Which of the following would represent the nominal rate of interest?

The rate stated

Mortgage interest rates usually decrease when:

The supply of mortgage money increase substantially

Which of the following is generally not recognized as a test for a fixture:

The time when it was installed on the property

Of the following, which statement explains why warranty deeds are rarely used in California, although they are common in other parts of the country: • Damages under a grant deed are more liberal than under a warranty deed. • Title insurance, with its recourse against the title company, has largely supplanted the warranty deed with its recourse against the grantor. • The grant deed, with its two implied covenants, was statutorily created to take the place of the warranty deed. • The law favors the use of the grant deed because the implied covenants run with the land, while all other covenants of the warranty deed are personal to the grantee.

Title insurance, with its recourse against the title company, has largely supplanted the warranty deed with its recourse against the grantor.

Which of the following is most like an abstract of title:

Title search

What is the function of the Real Estate Advisory Commission?

To advise the Real Estate Commissioner regarding functions and policies of the Department of Real Estate.

A sheriff's deed is used to:

To convey title of property which has been foreclosed upon.

A real estate broker hired a salesperson and entered into a written contract of employment, designating him/her as an Independent Contractor. Such status permits the salesperson:

To perform his services only through his employing broker

A single man sells real property which he owns. After the contract is signed, escrow has closed and the deed is recorded, the title company discovers that the man is under 18 years of age. The transaction is:

Void