RE Final 2 Study Guide

Which of these is also called a contract for deed?

Installment land sales contract

Which kind of advertising aims at increasing sales by informing the public of a company's capabilities?

Institutional

Which of these items on a resume accompanying an application for an assistant's position should be kept brief?

Interests

Prospecting:

Is critical to your success in real estate.

Which is true of an exclusive-authorization-to-acquire-property agreement?

It must specify a definite termination date.

Which of the following would be an example of a licensee specializing in business type?

Jim specializes in clients who want to buy restaurants.

Which of the following circumstances would concern you about working for Broker John?

John expects his agents to spend 5 hours a week on unsupervised telephone duty.

If someone shows up at the sellers' door unexpectedly to see the home, the sellers should:

Take their names and call your office.

Which of the following statements is not true?

Knocking on doors never requires special permits.

Paul is filling out the Natural Hazard Disclosure Statement. Which of the following conditions is Paul not required to report on this form?

Lead-based paint was used in the home.

A presentation manual:

Lends good visual support to what the agent is saying.

Which of these lenders would be most likely to finance a large shopping mall?

Life insurance company

Which paragraph of the purchase agreement must be initialed by both buyers and sellers for it to apply?

Liquidated damages

Which of the following is not a possible benefit of investing in real property?

Liquidity

Which of these Internet pages might not be of particular interest to sellers?

List of properties for sale

Who typically presents an offer to the sellers?

Listing agent

All of the following are good approaches for handling objections except which?

Tell the buyer it's not an issue.

Which paragraph of the purchase agreement states that if the buyer defaults after acceptance, he or she may be liable for the broker's commission?

Terms and conditions of offer

Which of these marketing tools is not considered a traditional tool?

Video tour

All of these statements are true except which one?

Virtual tours are an expensive marketing tool to use.

Broker Tami has a very low advertising budget. Which of these forms of advertising is she most likely to avoid?

Magazine ad

Assistants who are asked to be available for tasks in the field rather than in the office are referred to as:

On-call assistants

Assistants who are hired to work part time:

Should get workmen's compensation.

Which of these is an emotional reason that buyers buy property?

Status

In which of the following types of loans is the payment allocated only to interest?

Straight

Which of the following statements is not true about the Federal Reserve?

Supervises the Federal Housing Authority.

Which of the following economic characteristics is true?

Supply cannot be moved to a high demand area.

Lenders can charge all of the following except which fee when a borrower gets a loan?

Survey fee

A reference list of alternative comparable properties is sometimes referred to as the:

Switch sheet.

Who is FNMA?

Fannie Mae

Which of the following is not an item that a buyer usually pays at closing?

Fee for clearing the title

RESPA applies to:

First mortgage on a single-family home

When is the first installment of property taxes due?

First of November

When all members have unlimited liability for debts and obligations of the group, the organization is a:

General Partnership

Which of the following would be the least desirable phone handling technique?

Give as much detailed information about the property as you can.

When you receive an offer on a listing for less than asking price, you should not:

Give the sellers the price over the phone so that they can think about it before you meet with them.

Which of these is not an important aspect of selling?

Giving buyers your opinion of what works best for them

Which of the following represents an intangible business asset?

Goodwill

Which of the following is NOT a condition of the safe harbor test?

Gross income must be based on hours worked.

Which of the following is a good direct mail technique?

Hand address the envelopes.

All of the following are primary mortgage market lenders except which?

Holding warehouse agencies

Which Fair Housing Law added sex to the list of protected classes?

Housing and Community Development Act

All of these questions could help you determine a prospect's capacity to make a purchase except which one?

How much do you have in your savings account?

Which of these statements about counteroffers is not true?

If the buyer rejects the first counteroffer, the seller can accept the first offer.

Which of these statements is true about a CalVet loan?

If the loan is VA guaranteed, no down payment is required.

Which of the following statements is not true about a net listing?

Sets a limit on the commission a broker can earn.

If there is no interest in the property on a given week, the agent should:

Share that information with the sellers.

Mike bought his home last year for $150,000. His property taxes would be assessed at:

$1,500

A totally disabled veteran could be eligible for a property tax exemption of up to what amount?

$191,266

Mark gets a home loan and the lender will charge him 3 points at closing. If the loan is for $68,000, what will Mark be assessed in points?

$2,040

The maximum commission amount a mortgage loan broker can charge on a second mortgage loan of 3 years for $18,000 is what?

$2,700.00

California allows a property manager to charge a non-refundable screening fee of how much?

$46.67

Regulation Z applies to:

$75,000 condominium loan

If a person believes he or she has been discriminated against, how long does he or she have to file a HUD complaint?

1 year

A person who believes he or she has been discriminated against has how long from the time of the alleged violation to file a suit in a state or federal court?

24 months

California law requires that a licensee acting as a loan broker keep the Mortgage Loan Disclosure Statement on file for how long?

3 years

ECOA requires that a lender send a denial notice within:

30 days

Timeshare buyers have the right to rescind a transaction within what timeframe after signing the purchase contract?

7 days

How long must buyers and brokers keep the documentation on a foreign sale?

5 years

Which statement is not true?

An assistant should never be left with the task of taking photos of a new listing.

Which statement is true?

A borrower can request the cancellation of PMI payments when the equity reaches 20% of the appraised value.

Which of the following statements is not true?

A broker is not responsible for the acts of independent contractors.

Which of the following statements is NOT true regarding a broker acting as an escrow agent?

A broker may advertise that he or she is an escrow agent.

What is a good method for an assistant to keep track of the various types of files a real estate broker must have?

A cross-referencing system

Which is not a true statement about the Americans with Disabilities Act?

A duplex owner might need to remodel the kitchen in the rental unit to accommodate persons with disabilities.

A listing presentation can be compared to:

An employment interview

Which of these is not a true statement?

A purchase offer is a binding contract between the buyer, the seller and their agents.

An association of two or more people who combine financial resources to achieve investment objectives is:

A syndicate.

Greg grew up in and lives in a rural area. He's very comfortable selling that type of property and knows he can work well with clients in that area. What property type will be his specialty? Special-purpose

Agricultural

Which of these is not an AIDA characteristic?

Activity

Fannie Mae does all of the following activities except which?

Administers special assistance programs

Which of these is not a tool to help evaluate advertising effectiveness?

Advertising budget

What does the paragraph on repairs state?

All repairs must be in compliance with existing building codes.

A growing equity mortgage:

Allows quick repayment of the loan through accelerated payments.

Offering a buyer more than one option and having him or her choose is using what kind of closing technique?

Alternative

Which of the following is a possible benefit of investing in real property?

Appreciation

What would be the least effective way to get to know your buyers' needs?

Ask closed-ended questions.

An agent must give a copy of the listing agreement to the sellers:

At the time the agreement is signed.

Alice is an employee of Mid-State Realty Services. She would likely be required to do which of the following?

Attend weekly staff meetings at the office.

A real estate assistant:

Needs a license to perform activities that are not strictly administrative in nature.

Which document shows the assets and liabilities of a business?

Balance sheet

The Lead-Based Paint Disclosure is required for homes built:

Before 1978

Veteran Bill has applied and been approved for a non-VA-guaranteed CalVet loan. Which of the following statements is not true?

Bill is purchasing a 6-family apartment building.

Which of these statements is not true about qualifying buyers?

Collecting information and pre-qualifying buyers yourself is the easiest and best approach.

Agent Jim tells his buyers that the seller will leave the riding lawn mower if the buyers make an offer now. What kind of closing technique is Jim using?

Bonus

Which loan covers the period of time between the end of one mortgage and the beginning of another?

Bridge

In the listing agreement, a seller can choose to decline/disapprove all but which of the following items?

Broker compensation to other brokers

What is one way the Federal Reserve System regulates the money supply?

Buying government bonds.

The IREM designation reserved for individuals who meet a certain level of education and experience is:

CPM

Prospects Jim and Linda arrive with agent Bill at the first showing. When Bill pulls in front of the home, Linda decides immediately that she doesn't want to see the inside. What should Bill do?

Call the sellers immediately and let them know you won't be coming by.

Most buyers who see a newspaper ad that interests them:

Call your office.

Which lender typically deals in interim financing?

Commercial bank

Accepting referral fees:

Could be a violation of state licensing laws.

Which of these words or phrases might be considered discriminatory when used in advertising?

Couples only

A blanket mortgage:

Covers more than one piece of property.

Which of the following forms is non-standard and should be prepared by a broker to give to sellers?

Defective Furnaces in California

If a broker receives a deposit check with a purchase contract, which of these is he not allowed to do?

Deposit into the brokerage business account.

Homeowners can deduct all but which of the following from their income taxes?

Depreciation

All of these activities are appropriate to do within the first few days of obtaining a listing except which?

Discuss modifying the listing price.

What kind of ad usually combines both institutional and product advertising?

Display

Which of these is not a helpful homeowner tip?

Display lots of family photos to impress potential buyers.

How can a seller lessen the tax impact of selling a home for enough profit that he or she will be boosted to a much higher tax bracket?

Do an installment sale.

When can a landlord enter a tenant's property to make repairs or show it?

During business hours and only after giving the tenant 24 hours notice.

Which statement is not true about a Real Estate Investment Trust?

Easy to qualify for.

When a lender is evaluating a buyer's ability to repay a loan, the lender looks at all of these items except which one?

Educational history

Sara just bought her first new home. She put 20% down and got a mortgage for the remainder. The difference between what Sara owes and what her home is worth is known as what?

Equity

Who is responsible for ordering the preliminary title report?

Escrow officer

A lease that has no time limit is an:

Estate at will

Proof of ownership of a property is called:

Evidence of title

Which kind of listing gives one broker the right to sell, but allows the owner to sell the property and not owe a commission to the broker?

Exclusive agency

Which of these is not a good thing to do when writing a counteroffer?

Exert pressure on the sellers to include something the other party wants.

Which statement is true about a real estate assistant?

May be an independent contractor.

Once an offer has been accepted, the agent should do all of the following except which?

Meet with the buyers' lender to ensure they're getting a good deal.

Which of these forms is not filled out by the seller?

Modification of Terms

Which statement is not true?

Mortgage bankers bring borrowers and lenders together.

Residential property includes all of the following EXCEPT which?

Motel

Which of the following will give you comparative market data the fastest?

Multiple listing service

When a tenant agrees to pay all taxes, insurance, maintenance and repairs, that tenant has what kind of lease?

Net

Which figure represents the amount of income available as a return to an investor?

Net operating income

All of the following are valid listing agreements. Which one is illegal in many states?

Net.

When setting up a rent schedule, a property manager should analyze all but which of the following?

New home sales

All of these items are important to include on your weekly activity report except which?

Number of hits on the company website

Which of these is not a good technique to get the name of a caller who is reluctant to give you that information?

Offer to show the caller a newly-listed, not-yet-advertised property, even if one doesn't exist.

Most sellers object to offers based on:

Offering price

A buyer calls your office to inquire about a property he saw advertised. He sounds really excited about this property. Where is it that he likely found out the property was for sale?

On the Internet

All of the following are true statements about goals except which one?

Once you set a goal you should never change it.

Tim thinks his buyers are ready to make an offer. He asks, "Which one of the children gets the basement bedroom with the private entrance?" What kind of closing technique is Tim using?

Ownership

What kind of lease contains a recapture clause?

Percentage

Janet is an unlicensed assistant. She can do all of the following except which?

Prepare a listing contract.

Jake has received two offers on one of his listings. The home is listed at $210,000. One offer is for $208,000; the other is for $200,000. What should Jake do?

Present the $208,000 offer and the $200,000 offer together at the same presentation meeting.

Which of these is a free form of advertising?

Press release

The amount of debt, time and method of payment, interest rate and other loan terms are part of the:

Promissory note

Which of the following actions by an agent would most probably upset the sellers?

Sharing all visitor comments two weeks before the listing ends.

Which proposition limited the maximum amount of tax on real property?

Proposition 13

How might probate information help in prospecting?

Provides the names of individuals who may want to sell inherited property.

Which of these statements is not true?

Radio advertising is not as effective as other methods because listeners can be distracted by their activities and not hear the ads.

Which of these individuals could not act as an escrow agent without an escrow license?

Real estate salesperson

Which of the following is not a source of information for professional ethics codes?

Real estate schools

A competitive market analysis contains information about all of the following items except which?

Recently remodeled homes

Examining the economic soundness of a property means looking at all of the following except which?

Refinancing

Which of the following is not an advantage of home ownership?

Repairs and maintenance

Which of the following is a low loan-to-value ratio?

Sandy and Bill are putting 30% down on their home purchase.

Which of these documents is for sellers only and not for buyers?

Residential Listing Agreement

When the broker and seller agree that the broker can receive commission for a specified number of days after the listing expires if selling to a "named" party on a list, it's referred to by what term?

Safety clause

RESPA applies to all of the following EXCEPT which?

Seller-financed loan

Agent Will has had a listing with the Bryants for 6 weeks. They called Will's office and told the secretary they are upset and need to speak with Will. Which of these actions might have caused their upset?

The Bryants have not received any feedback from any showings in the past month.

An unlicensed person engages in advertising that conveys the clear impression that he is a licensed real estate broker or is an officer or employee of a corporation who knowingly advertises a false statement concerning any land or subdivision. In this scenario, which of the following is not true?

The advertiser must prove he was grandfathered in as a licensee.

Which statement is not true about opening escrows?

The buyer's and seller's agents will sign the escrow instructions

When presenting information about the buyers to the sellers, which piece of information might not be useful in helping the sellers make a decision?

The buyers' family is pressuring them to purchase this home.

When a person acquires new property, which is true?

The owner has 45 days to file a change in ownership statement.

The cost of doing direct mail advertising depends on all of these things except which?

The date of the mailing

Which of the following is not true about reverse annuity mortgages?

The loan must be repaid before the borrower's death.

Agent Paul is bound to inform his client of all facts that might affect the client's interests -- both what Paul knows and what he "should have known." Which of these situations would not be something Paul "should know"?

The owner of the property is HIV positive.

Which of these is not an exemption to fair housing law?

The sale of a single-family home by an owner who owns five residences

Tim and Sue have obtained a buydown loan on their newly built home. Which of the following statements is not true?

They will have to make a large down payment.

RESPA gives the buyer the right to review the completed closing disclosure how long before closing?

Three days

What is the foremost reason people invest in property?

To make money

Which of the following would not be a reason to choose to be an assistant?

To make more money than a real estate agent

How often can a tenant call his or her own professional to make repairs and then deduct the amount from the next month's rent?

Twice in a 12-month period

All of these would be effective at capturing a reader's attention except which?

Use as little white space as possible.

All of these might be a buying signal except which?

Walking through the home quickly.

When you believe an offer is both fair and reasonable but it does not meet the sellers' asking price, you should:

Work toward acceptance.

Gail is a licensed real estate assistant. Which of the following activities would she not be authorized to perform?

Write and sign commission checks to salespersons.

You should try to attach a rider strip to your For Sale sign that has:

Your cell phone number.

Which item is not covered by CLTA, ALTA or ALTA-R insurance policies?

Zoning ordinances

Jane has been working with some buyers for several weeks. She thinks they are really interested in one particular property, but when she approaches them about it, the buyer says, "The price is too high." What would be a good response to that comment?

"What do you think would be a fair price?"

Sal bought a personal residence for $150,000. He made $150,000 of improvements during the three years he lived in it before he sold it. He sold the home for $750,000 and paid $50,000 in selling expenses, including the broker's commission. On what amount will he pay capital gains tax?

$150,000

Jake and Janet are required to pay 4 points on the $80,000 loan they are getting. What will they have to pay the lender?

$3,200

If an agent does not comply with the requirement of conducting a visual inspection of a property, how long after possession does the buyer have to file a suit?

24 months

How long must trust account records be kept?

3 years

Which of the following items would not usually be included in a presentation manual for buyers?

A list of former client references

How many properties should be included for comparison in a competitive market analysis?

A minimum of three properties in the recently sold category

Which of the following would not qualify as a 1031 exchange?

A rental condominium for a recreational vehicle

At a community meeting, Broker Amanda tells a group of families in an established neighborhood that several Indian families are planning to buy homes in their neighborhood. She tells them that this action could decrease their property values. Which statement is true?

Amanda is guilty of blockbusting.

Which of the following is not a fiduciary duty an agent owes to his or her principal?

Blind obedience

All of the following are good newspaper sections to read for prospecting except wh

Business section

Which of the following is not a national real estate trade organization?

CAR

Prospects Mike and Marge arrive with agent Elaine at a showing. Elaine parks across the street from the home and Mike is disappointed by what he sees. He's no longer interested in seeing the inside and Marge agrees. What should Elaine do?

Call the sellers immediately and let them know you won't be coming by.

Which of the following AIDA characteristics is the most critical in the ad?

Capturing attention

A shopping center would be primarily categorized as what type of property?

Commercial

Which of these lenders would be the least likely to lend money for an investor to purchase an apartment building?

Commercial bank

The principles of an agency relationship include all of these factors except which one?

Compensation

Which booklet is not part of the Combined Hazards Book?

Consumer Guide to Disclosure for Buyers

Which of the following Internet pages might not be of particular interest to buyers?

Curb appeal information

Which of the following types of agency is not allowed in California?

Designated agency

What was the important ruling in Jones v. Mayer?

Discrimination on the basis of race is strictly prohibited, meaning no exceptions whatsoever.

Which of the following newspaper information is not helpful in developing a Prospecting Plan?

Editorials and Bid Proposals

Eric is acting as a disclosed dual agent in a transaction. Which statement is true?

Eric may not represent the seller's interests to the detriment of the buyer.

A competitive market analysis is an attempt to:

Establish a home's fair market value.

Developing a prospecting plan is similar to:

Establishing goals.

What form can an agent use to show a seller what he or she will net on the sale of the property?

Estimated Seller Proceeds

The listing type that assures a broker that he or she will receive compensation no matter who procures the buyer is what kind of agreement?

Exclusive-authorization-and-right-to-sell agreement

Which of the following is not a true statement?

FSBO sellers who list with an agent will pay their own advertising costs.

After six months time, manager Tim wants to terminate the lease of one of his month-to-month tenants. What must Tim do?

Give the tenant a 30-day notice.

Kathy is a personal assistant at Action Realty. She doesn't need a license to perform many activities at the firm, but which of the following would require her to have a license?

Giving information about a listing to prospective buyers.

Which disclosure is required by the Real Estate Settlement Procedures Act?

Good faith estimate

Seller Kim tells her agent Greg that she would be willing to accept $185,000 on her $205,000 listed home. There are no offers on the property during the 6-month listing period and the listing expires. Several weeks later when showing another home to a buyer, Greg mentions that Kim would have accepted less for her home. Which is true?

Greg has violated the duty of confidentiality to Kim.

Which one of these statements would not be considered a measurable goal?

I will practice my listing presentations.

All of these are true of prospecting except:

It guarantees sales.

Buyer Kirk submits an offer to seller Larry. Later that day, Kirk finds a home he likes better; so he withdraws his offer to Larry. Which is a true statement?

Kirk's offer to Larry is legally cancelled.

What is one of the major objectives of professional property management?

Minimize expenses while maximizing profits for the owner.

Once signed, escrow instructions can be changed only by:

Mutual consent of both parties

Agent John just listed a home in a mid-range priced neighborhood. Which of these ad headlines would probably be the least effective for this home?

Needs Paint

Seller Patsy wants to net $150,000 from the sale of her home. She tells Broker Al that he can list the property for whatever price he wants and anything he gets above the $150,000 he can keep as his commission. What is this agreement called?

Net listing

Prospecting ends:

Never

Which of the following is not a probable reason for a listing to expire without selling?

No open houses

Agent Pam receives an offer on one of her listings for less than the asking price. The home has been listed for several months; so Pam does a CMA and determines that the offer is more than reasonable in today's market. However, she believes the sellers will not be willing to accept the offering price. What would be a good approach for Pam to take?

Pam should recommend that they counteroffer with a price halfway between asking and offering price.

A broker induces an owner to sell by telling him that Hispanics are moving into the neighborhood. This broker is guilty of what prohibited activity?

Panic selling

When doing a competitive market analysis, the recently sold properties you include should have sold within what timeframe?

Past three to six months

Glenna and Amanda just bought their first home. They will have a number of new expenses as a result of this purchase. Which of these expenses is not associated with owning a home?

Personal property tax

All of the following are benefits of listing with an agent except which?

Preparation of an appraisal of the property

Alex makes an offer to purchase one of Bill's listings. Bill cannot contact the seller. In the meantime, Bill gets another offer on the property from another buyer at a higher price. What should Bill do?

Present both offers to the seller.

When must a listing agent present the Disclosure Regarding Real Estate Agency Relationships to the seller?

Prior to accepting the listing.

Fair Housing laws are designed to:

Prohibit discrimination.

Which disclosure form gives detailed information about the property's condition?

Real Estate Transfer Disclosure Statement

Greg and Wanda Sandler purchased their home 35 years ago and it was paid off at the end of thirty years. In order to supplement their fixed income, the Sandlers receive monthly checks from their bank. Most likely, what did they get?

Reverse annuity mortgage

Which of the following is a credit to the seller on the settlement statement?

Sales price

Which of these statements is true?

Salespersons must perform all of their activities on behalf of their employing broker.

The title report on a property shows there is a lien on the property. Who is responsible for removing the lien to clear the title?

Seller

When doing research to recommend a reasonable listing price for a home, the most critical part of the research deals with analyzing:

Selling prices of recently sold homes

There has been very little interest in the Bowers' home this past week. What should agent Phil do?

Send the weekly report as usual, emphasizing what your upcoming plans are for the week.

Which of the following statements best describes what happens in a mortgage loan transaction?

The borrower gives the lender a note and a mortgage in exchange for the funds.

What is the Federal Housing Administrations primary role in the mortgage market?

To insure loans made by approved lenders

What is the primary role of Fannie Mae?

To purchase conventional, FHA and VA loans

What is the most common reason that owners try to sell their homes themselves?

To save on commission

Mortgage lenders are required to disclose financing costs and annual percentage rate to the borrower under which law or regulation?

Truth in Lending

Alice has decided that she will specialize in selling farm land. Which area of specialization would she fall into?

Type of property

The manager of a large hotel refuses to rent a room to a blind person with a guide dog. What California Fair Housing law has the manager violated?

Unruh Civil Rights Act

Which California Fair Housing law provides protection from discrimination by business establishments?

Unruh Civil Rights Act

Which of the following is not a legal notice that can provide a listing lead?

Vacancy

Broker Alice has hired several independent contractors in her firm. Which of the these activities does she have control over?

What percent of commission the licensees can charge.