Real Estate Exam Quizzes

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

$150,000

Sania and her mother own property on a river. The water has carried part of their bank to another property. Which method of property transfer applies?

By Accession (adding property to your existing real estate) and through Avulsion (occurrence of a river carrying away part of a bank). It must be reclaimed within one year of the occurrence.

Which lender typically deals in interim (temporary) financing?

Commercial bank

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

Depreciation

A lease that has no time limit is an:

Estate at will

Which of the following represents an intangible business asset?

Goodwill

Roy owns a large piece of land in the Sonoma Valley. He is planning to subdivide the land into five lots for the construction of luxury homes. If Roy carries through with this project, what are his roles and his next steps?

Roy is considered a Subdivider. His first step should be a development plan; however, this plan must include all state and local government regulations, the Subdivided Lands Law, the Subdivision Map Act, the California Environmental Quality Act, zoning, and local general and specific plans.

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

Sales price

A family is clearing many trees to build a guest house. They plan on selling the wood to the neighbors. What process applies?

Severance- Changes real property to personal property.

A California licensee has been advertising on the Internet. She has been violating the Business and Professions Code, Sections 10235.5 and 10140.6. What has she done?

She failed to indicate her license status in the ad.

Which of the following elements is necessary for a valid contract?

Offer and Acceptance, Legality of Object, and Consideration

Which portion of the California Business and Professions Code consists of the subdivided lands law?

Part 2, Sections 11000 to 11200 of the Business and Professions Code

What is the primary role of Fannie Mae?

To purchase conventional, FHA loans and VA loans

According to FIRPTA, what percent would a buyer need to withhold when purchasing a $200,000 home from a foreigner?

0%

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

Where can Mike find the exam's purpose and requirements?

California Business and Professions Code Section 10153

John pays rent for his apartment and is also considered a stockholder in his building and owns property. In what type of apartment does John live?

Cooperative- the cooperative owns property and owns stock. They have long-term leases (proprietary leases)

Upon the sale of the property, the grantor in a written agreement established that the lake may never be touched and the property may only be used for commercial purposes. Which type of private deed restriction is in place for the property?

Covenant (also known as Conditions and Restrictions and CC&Rs). A covenant is a promise by the person who accepts an agreement to not do certain things.

Who is responsible for ordering the preliminary title report?

Escrow officer

What is the major difference between a VA loan and a FHA loan?

FHA insures repayment of the loan. VA guarantees repayment of the loan.

When is the first installment of property taxes due?

First of November

Which level of government is in charge of all planning controls?

Although all levels of government have laws, regulations, and ordinances that must be recognized and followed, the state housing law is a uniform law that must be adopted by ALL cites and counties in California.

The beach has disappeared from John's property after a violent storm. Which term describes the damage?

Avulsion- The sudden loss of land by an act of nature.

Lily, a licensee, has been referring her first-time homebuyers to an insurance company for all their insurance needs. The insurance company has been providing Lily cash to keep the referrals coming. Which law or act prohibits this type of violation?

RESPA

In some counties, certain funds are collected and then distributed to be used only for the exclusive purpose of deterring, investigating, and prosecuting real estate fraud crimes. This fund is the:

Real Estate Fraud Prosecution Trust Fund.

Greg purchased his home 35 years and it was paid off at the end of 30 yrs. In order to supplement their fixed income, he receive monthly checks from their bank. What did they get?

Reverse annuity mortgage

Katrina had her license suspended for making false promises to clients. She could never follow through with her statements and several complaints were filed. Which guidelines constitute most suspensions?

Sections 10176 and 10177 of Business and Professions Code

Regulation Z applies to:

$75,000 condominium loan

Alex and Mary have formed a REIT. They have their investors and resources and are ready for business. The REIT will be investing in an assorted portfolio of real estate and mortgage investments. What type of REIT have Alex and Mary formed?

A Combination Trust: Both equity AND mortgage trust investments.

Every California dwelling unit is required to have a Carbon Monoxide Detector by:

January 1, 2013

Which are water rights?

Littoral Right (beaches), Doctrine of Prior Appropriation (irrigation), and Riparian Right (River).

A mortgage company accepts a bribe from a licensee in exchange for approving mortgages for all of his clients. Which Penal Code Section addresses this crime?

PC 639-639a (Bribery of a lender to obtain credit).

California licensing laws define which of the following:

Real Estate Brokerage, Handling Trust Funds, Managing Escrow Account

Assistants who are hired to work part time:

Should get workmen's compensation

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

Easy to quality for.

Under Article 7, what is the maximum amount that may be charged to the borrower for loan costs and expenses? Also, under Article 7, under what circumstance is the loan exempt from a balloon payment?

The maximum amount that may be charged to the borrower for loan costs and expenses is 5% of the loan. If the loan term is less than three years, and the home is not occupied by the owner, the loan is exempt from balloon payments.

What does the term "turnover" reference in a business opportunity?

The number of times the inventory is sold per year.

Public notice must be given of a bulk transfer of inventory in a business sale. What is this notice known as and where must the notice be published?

The public notice is known as Notice of Intent to Sell Bulk and must be published in a general circulation newspaper.

The Hannekes are selling their pharmacy to a small investor. They have decided not to follow the regulations set forth by the bulk sale law. Is the sale considered valid between the two parties?

The sale is considered valid between the two parties; it is void against creditors; they are legally permitted to attach inventory for any debt.

XYZ Escrow has been turned down in its application for an escrow license. What could be the reasoning behind the denial of the license?

XYZ Escrow could not prove it was financially solvent (to be able to pay all financial obligations in a timely manner and still have spending money left) and was unable to furnish a surety bond (defined as a contract among at least three parties) of at least $25,000 or more, based upon the yearly average trust obligations.

What terms can be used to describe the owner and the renter?

The owners own the condo in freehold (means "I own the property") and rent it to the renter in leasehold (means "I rent the property").

Claire and Fry have heard that it is unnecessary to record a deed. Is this accurate?

Yes, it is not necessary for a deed to be recorded. However, recording is advisable to protect the ownership interests of the grantee (buyer), establish priority, provide a record, and convey the transfer of title.

Martin is purchasing a personnel agency from Warren and his partner. The agency has been very successful over its twenty years in business, and Warren is ready to retire. What elements should Martin expect from Warren as part of the business sale?

A bill of sale; a balance sheet; the profit and loss statement; and a bulk transfer of any inventory.

Which of the following statements concerning California Trust Account Requirements is true?

A salesperson, licensed to the broker, may under certain conditions, make a withdrawal from the broker's trust account. An out-of-state trust account is permitted under certain conditions.

Melinda's mother recently passed away. She is thinking of selling her belongings in an estate sale. What are the legal differences between real and personal property?

An agreement for a sale of real property must be in writing and signed by buyer. If the amount or value is $500 or more in the sale of personal property, it must be in writing.

The SIGNATURE of a notary public is known as:

Attestation (in notarized deeds, the person must go before a notary public and acknowledge that the signing of the deed was a voluntary act.

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

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

$1,500

What is included in the APR?

The total finance charge to the total amount to be financed. you vs them

The cost approach to value may be derived by:

Total Land Valuation + Depreciated Value of Building = Value of Property Cost Approach

RESPA applies to all of the following:

Condo purchase, loan involving a second mortgage, federally-insured loan

What are the steps set forth for a real property securities dealer? Which Article do the regulations fall under?

Obtaining a Commissioner's Permit; an RPSD endorsement on a broker license; and proof of a $10,000 surety bond. The regulations fall under Article 6.

Which of the following are levels of licensing for real estate appraisers?

Residential Licensed appraiser- may appraise any non-complex, one-to-four unit residential property with a transaction value up to $1 million, and nonresidential property with a transaction value up to $250,000. Certified Residential Real Estate Appraiser - Certified residential appraisers may appraise any one-to-four unit residential property, and non-residential property with a transaction value up to $250,000. Certified General Real Estate Appraiser - Certified general appraisers may appraise any type of real property.

Mary tells Alex they must obtain their broker-dealer license from the Department of Corporations to engage in the sale of real estate syndicate security interests. Alex disagrees with Mary, explaining they both have their broker licenses and that is sufficient. Who is correct?

Section 25206 was added to the Corporations Code making obtaining a broker-dealer license optional.

There has been very little interest in the Bower's 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 are actions taken by a Mineral, Oil, and Gas specialist on behalf of others?

Solicit borrowers or lenders for loans on mineral, oil, or gas property. Negotiate the sale, purchase, or exchange of leases on mineral, oil, or gas property. Assist another in filing an application for the purchase or lease of, or to locate or enter upon mineral, oil, or gas property owned by the state or federal government.

Jackson, a broker, is accused of commingling his money with trust account funds. His broker's trust account is a non-interest-bearing account. The current balance of the trust account is $420,000. The earnest deposit funds portion of the account totals $415,000; the broker's initial deposit totals $5,000. Is Jackson guilty of commingling?

Yes, Jackson's initial deposit to open the account should have only totaled about $200. The $5,000 he deposited of his own money to open the account is considered the excessive.

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

Attend weekly staff meetings at the office

Johanna is selling her restaurant, J's Cafe. Matt, a licensee, is assisting Johanna in the sale of the cafe. She wants to sell both the real property, the restaurant itself, and all of the personal property inside to one buyer. How will Matt handle the sale of both the real property and the business itself?

Matt must treat the sale of the business and the sale of the real property as two separate and concurrent transactions with two concurrent and contingent escrows.

Conchita is applying for a VA loan. She has served in the military, on active service for ninety days. She is trying to buy a town home, which has qualified with an appraisal and has been issued a Certificate of Reasonable Value. Will Conchita be considered for a VA loan?

No, she has not served the 181 days of active service required.

Tim thinks his buyers are ready to make an offer. He asks "which of the children will get the basement bedroom with the private entrance?" Which closing technique is he using?

Ownership

Greg decides to sign his client's name. Which Penal Code Section addresses this crime.

PC 470, 473 (to forge)

Jason tries to blackmail Sam into selling his property. Which Penal Code Section addresses this crime?

PC 518, 519- Obtaining property from another by threatening to accuse that person of a crime or exposing their secrets.

What kind of lease contains a recapture clause?

Percentage. Intended to protect a landlord by making sure that tenants maintain a certain amount of revenue (retail).

What category of borrowers sees Syndicate Equity Financing as a good opportunity?

Small investors. Syndicate Equity Financing offers small investors the opportunities to invest in high-yield real estate.

What is the largest area of Standards and Practices?

Article 16 - Ethics and Agency Relationships

John is trying to learn about "Professional Code". What sources have input on this topic?

General and state legislation, industry self-regulation through trade associations and institutes, state real estate licensing regulation

Gerald, a sergeant in the Marine Corps, is getting married and wants to purchase a home. How does he begin the process of getting a VA loan? What follows?

Gerald must first apply for a Certificate of Eligibility to obtain a VA loan. The home must qualify with an appraisal and be issued a Certificate of Reasonable Valule.

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

Editorial and Bid Proposals

John rents a house where the sewage leaks in the basement floor. He has fruitlessly tried to contact the landlords. What are John's options?

John may spend up to one month's rent in repairs or abandon the premises. If he abandons the premises, John is relieved from paying additional rent and other conditions of the lease.

John, of ABC Escrow, is working on the escrow (escrow generally refers to money held by a third-party on behalf of transacting parties). Which procedure is prohibited?

John should not be negotiating the fee due to ABC Escrow. The buyer and seller negotiate between themselves who is responsible for paying the escrow holder's fee.

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

Net Operating Income

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

On call assistants

What is the correct order of regulatory agency jurisdiction changes to non-corporate California real estate syndicates since The Real Estate Syndicate Act's inception of 1970?

The Department of Corporations, The Bureau of Real Estate, The Department of Corporations

Serena and Lucy want to make an offer on their dream home. The seller is requesting a very large earnest money deposit with serious offers on the home. Serena and Lucy have some cash set aside for this purpose, but are short of the amount the sellers are requesting. Do they have any other options?

A check made payable to the broker or to an escrow or title company is an option. A personal note made payable to the seller or a pink slip on an automobile given as a deposit is acceptable.

What are the types of leasehold estates?

An Estate for Years (definite beginning and ending date), An Estate from period to period (also known as a periodic tenancy, or a month-to-month lease), an Estate at Will (tenancy for an indefinite period, terminable by one or both parties at will)

Price fixing, group boycotts, bid rigging, market allocation and division of markets by location or price are all examples of ______ and are punishable by _________.

Antitrust violations; fines of up to $10 million for corporations and up to $350,000 for individuals and/or prison time.

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

Giving information about a listing to prospective buyers

The Smiths have decided to move to Antigua. They are transferring the ownership of their $950,000 home in Oakland to their daughter, Renee. Renee has heard about Proposition 13 and is nervous about not being able to afford the increase in property taxes. Does she need to worry?

In the state of California, transferring a principal residence of $1 million or less from a parent to a child is considered a transfer exclusion. The property will not be reappraised nor the taxes increased.

MTH Bank has given the McKelvey's a written pledge to lend $250,000 on a new construction home, for 30 years, at 6.53%. The McKelvey's will now present this pledge to the subdivision's sales agent to continue with their new home's construction. Which loan definition applies?

Conditional Approval (conditional or qualified commitment) - A written pledge by a lender to lend a certain amount of money to a qualified borrower on a particular piece of real estate for a specified time under specific terms. It is more formal than a preliminary loan approval. This application contains such information as the name and address of the borrower, place of employment, salary, bank accounts, credit references, and the like.

Under California Finance Code, what is defined as consumer credit transaction that is secured by real property located in California, which is used, or intended to be used or occupied, as the principal dwelling of the consumer?

Consumer loan

A family has signed a contract to buy a home. However, the contract states that they must first close on the sale of their current home within thirty days. If this closing does not occur, the contract is no longer binding for either party. Which contract term applies?

Contingency- Term or condition in a contract that requires a certain act/event to occur before the contract becomes binding.

The judge has just issued a decision for ethical violations of a real estate salesperson. What is the role of the California Real Estate Commissioner in the proceeding?

Dismiss the findings if the charges are not sustained at the hearing, as well as to reduce the proposed penalty and make an official decision.

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

Mary and Alex set up a Limited Partnership. Mary is named General Partner and Alex is named Limited Partner. Mary embezzles funds from the investors. Is Alex liable for Mary's indescretion?

Alex is only liable if he was named as a general partner in the certificate or if he participates in control of the business.

Put the following foreclosure actions in order:

Equitable Right of Redemption, Foreclosure, Statutory Redemption

Matilda is buying a condo from Tom Ries. She has given her agent, Manuel, earnest deposit funds in the amount of $10,000. Matilda has post-dated the check to coincide with the expiration date of offer acceptance on the contract. Do the basic trust fund regulations apply to Matilda's earnest deposit?

No, California law has held that post-dated checks are the equivalent of a promissory note and are non-negotiable. The broker must not accept a post-dated check from a buyer without adequate disclosure to the seller.

Bruce, a private in the army, has applied for his Certificate of Eligibility and has been approved. He wants to purchase a condo for himself. What's the maximum amount lenders will loan Bruce, based on his veteran status?

A veteran's basic entitlement is $104,250. Lenders generally lend up to four times the available entitlement without a down payment. There is no maximum amount, but generally lenders limit VA loans to $417,000.

Which statement is true about opening escrows?

The escrow holder will need information about the broker's commission; the escrow holder will use the purchase agreement as the basis for writing the escrow instructions; once escrow instructions are signed, changes can only be made with the written agreement of all parties

Who is FNMA?

Fannie Mae- Federal National Mortgage Association

RESPA applies to:

First mortgage on a single-family home

Certain disclosures must be made within the Subdivided Lands Public Report Notice of Intention. Recently, an amendment to these disclosures has added which of the following to the required disclosure under this notice?

Supplemental Property Tax Notice

This form of syndication avoids double taxation but has a lack of centralized management. Which form fits the description?

The General Partnership, or Joint Venture, which avoids the double taxation (which a "regular" corporation would incur), but, on the negative side, there is an unlimited liability provision, as well as a lack of centralized management.

Alex and Mary are forming a real estate syndicate. They have their initial investments and are ready to proceed. What happens next?

Origination - planning and buying the property, following registration and disclosure mandates, Operation - in which the sponsor generally manages BOTH the syndicate and the actual property, Completion or Liquidation - the property's resale

Which of the following statements is true about the Federal Reserve?

Regulates reserve requirements for all institutions that offer checking accounts. Supervises the Truth in Lending Act. Engages in open market operations.

The Logans are in their seventies with a very nice home. They paid off their mortgage 25 years ago. Now they need money for healthcare costs. He has turned to his home to supplement his monthly income in order to keep his wife at home. Which type of loan applies to the Logan's situation?

Reverse Annuity Mortgage (RAM): Homeowner receives monthly payments based on accumulated equity rather than a lump sum. Loan must be repaid upon the death of the owner or sale of the property. Most advantageous for senior citizens who own their own home- house rich/cash poor.

Sam is selling one of his rental homes. His advertisements read: "For Sale By Owner - Owner Will Finance - No Down Payment!" What are the criteria for being considered a creditor under Truth in Lending?

A lender must lend funds 25 times a year and/or must lend the funds for at least five housing loans annually.

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

Promissory note

Which are real estate deeds are used in an open-market transaction?

Special Warranty deed (seller warrants or guarantees only against defects arising during the period of his tenure, but makes no warranty against defects existing before the time of ownership), Bargain and Sale deed (I own it, but that's about it. I'm not going to make any promises), General Warranty deed (contains each of the five "covenants" or promises of the seller: 1. Covenant of Seisin, 2. Convenant of Quiet Enjoyment 3. Covenant Against Encumbrances 4. Covenant of Further Assurance 5. Covenant of a Warranty Forever)

Which of the following statements are true in reference to a balance sheet?

The balance sheet shows the assets of a business as of a particular date. It also shows the net worth of a business. It also shows the business's liabilities.

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

Which of the following are a required disclosure?

Agency Relationship Disclosure: The disclosure regarding Real Estate Agency Relationships form states that both the listing broker and the selling broker provide written declaration of which party - buyer, seller, or both - they represent. Megan's Law Asbestos

A shopping/restaurant company is the sole owner of the property. Which form of ownership does this property fall under?

Severalty (sole ownership)

The sewers in Mary's neighborhood need replacing. The city has imposed a tax that will pay for all of the sewer updates in the area. What type of real estate tax applies?

Special Assessment Tax: A tax or levy imposed on a city, county, or state only on those specific parcels of real estate that will benefit from a proposed public improvement. These taxes are usually assessed by frontage foot and are always paid before general taxes and first deed of trust in case of a foreclosure. These taxes must also be paid before the property can be transferred, unless there is an agreement in writing otherwise.

Jan is moving into a new home. Her husband recently died during military service. She cannot afford a very large down payment at this time.. What are Jan's options?

Jan qualifies for an FHA loan, if her income is adequate. There is usually a small down payment required. OR Jan qualifies for a VA loan due to her status as a veteran's unmarried widow. The VA loan does not require a down payment.

Jane has filed her complaint of discrimination. She also wants to seek punitive damages. What are her options?

Jane may file suit within two years of the violation. She may seek a restraining order, actual damages, and punitive damages of up to $1,000.

The Subdivision Map Act, the Subdivided Lands Law, and Land Projects all have a minimum number of lots required to meet requirements. Which of the following is correct?

The Subdivision Map Act regulates the division of two or more lots; The Subdivided Lands Law defines a subdivision as a division of land into five or more lots; and a Land Project must have fifty or more vacant lots.

Maria is selling their grocery store to a large corporation. There will be a bulk transfer of the store's inventory in the sale to the corporation. Public notice must be given of this transfer. Who must give the public notice? How many days public notice must they give and why?

The buyers must give the public notice. They must give a public notice 12 business days before the transfer occurs. It gives the seller's creditors an opportunity to file a claim if trade credit is still owed on the inventory.

A couple with excellent credit and good careers are denied a loan. What's the violation?

The couple has been denied the full protection of the Equal Credit Opportunity Act (ECOA). The ECOA is a part of the Fair Financing Laws.

A couple are in the process of refinancing their townhouse, and find they have a lien on their home for non-payment of the previous year's property taxes. What type of lien is on their property, and what do they need to do?

The couple have an involuntary lien placed on their home for delinquent property taxes. The couple needs to pay the taxes, any interest and/or late fees, and have the lien removed.

Why would a Contract for Deed (Installment Sale Contract) be attractive to certain buyers?

Buyers who can only make a small down payment with monthly installments. Usually they must meet certain conditions, and the Contract for Deed does not require conveyance (transfer) within the same year.

Tina and James have made an offer on a four-bedroom home that will be much more costly than their present mortgage. The day after making the offer, James learns his company is being sold and he will probably lose his job. Are Tina and James contractually obligated to the offer they have made on the new home?

It depends. If Tina and James have not received notification of the seller's accepting the offer, they may legally withdraw the offer and not be held liable on the contract. However, if the offer has been accepted, and communication of this offer has been received by the buyer, it is legally binding.

Louis recently turned 65, retired, and is downsizing to a smaller home. She was concerned about moving from the home she owned for 40 years with its low assessment to a smaller home, but with a much larger assessment. Which proposition eases her worries?

Proposition 60 allows homeowners 55 years and older to transfer their base-year property tax values to another home of equal or lesser value.

Sydney has inherited her grandmother's estate worth approximately $4.5 million. She is worried about paying taxes on the estate and the inheritance. How will these taxes affect her new estate and inheritance?

While the federal government sometimes taxes the estates of deceased persons, California has eliminated inheritance taxes altogether.

Maya just purchased her first home at a foreclosure sale. She was given a deed at the sale. What type of deed was that?

Trustee's Deed (Given to the purchaser of property at a trust deed foreclosure sale).

A corporation is found guilty of charging purchasers advanced fees for securing mortgage loans on homes they have listed. What is the punishment for the violation?

A fine up to a maximum of $50,000.

If a person purchases a historical home, it must be on the condition the original architectural features are never removed. If she sells the home, the same condition must be in the sales contract. What type of freehold estate is this historic home?

Fee Simple Defeasible (based on occurrence or a non-occurance of something). An estate that dictates,"on the condition that...".

Tucker, a licensee, has been instrumental in the sale of a nightclub to a group of investors. He has guided the buyers every step of the way in obtaining this new business opportunity. What government agencies are also in need of notification by the investors concerning their new business?

IRS. State Board of Equalization.

The following is true:

Mortgage brokers do not lend money. Mortgage bankers are a large source of residential loans in California. Mortgage bankers originate loans.

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

Net

Which of the following are part of a property management agreement?

Property Description and Term of Agreement. Definition of Responsibilities and Extent of Authority. Management Fee and Allocation of Costs.

John and Tom purchased a home that only had one previous owner. The previous owner built the home in 1964 and recently passed away. John and Tom had looked at the previous owner's property taxes and found them to be manageable. When they received their first assessment, they were shocked. Which proposition is attributed to this dramatic increase in property taxes?

Proposition 13: Even adding improvements to an existing home will affect the tax bill, because even though the person's home keeps its present full cash value as shown on the tax records, the NEW improvements are then valued separately as of the date of completion. Again, BOTH of these figures are adjusted by the 2% inflation factor/value increase, and the total of these amounts equals the full cash value of the property for tax purposes.

Which of the following is considered the six distinct forms of ownership in California?

Severalty (sole ownership). Tenancy in Common and Joint Tenancy (both concurrent ownership)

The owner wants all of the restaurants beachside with customer access to the beach from the restaurant. Which of the following ordinances or acts could govern the planning of the beachfront restaurants?

The California Conservation Act, the California Environmental Quality Act of 1970 (CEQA) the Clean Air Act, the National Environmental Policy Act

Sheldon purchased property from Ian under early English common law. Which were acceptable methods of property transfer?

The transfer of a rock, some dirt, or a branch of tree (feoffment). Livery of Seisin (the delivery of possession of the property). A statement made in front of witnesses in sight of the land, and the new owner's entry onto that land.

Which of the following are considered a type of common interest ownership?

There are 4 basic types of common interest ownership, defined as "subdivisions". These are as follows: 1) Planned development (PD) 2) Community Apartment Project 3) Condominium 4) Stock Cooperatives ( also known as "co-ops")

Who is required to develop a general plan? What are the primary steps, in order, to achieve the desired general plan?

There are three primary steps that must be taken to achieve the general plan. Under California Code, every city and county is required to develop a general plan. The steps are as follows. A Resource Analysis, Formulation of Community Goals, and The Plan Implementation.

The Escrow Act, found in the California Financial Code, establishes two essential mandates (authority to carry out a policy) for escrow validity. What are these mandates?

There must be a binding contract between buyer (grantee) and the seller (grantor), and there must be a conditional delivery of transfer instruments and funds to a neutral third party.

Alex and Mary's company has qualified as a trust. It distributed 96% of its income to its shareholders. Which earnings require the payment of federal taxes?

The company only pays federal taxes on the retained earnings, which are taxed corporate rates.

Which of the following statements in reference to a deed is true?

The deed transfers ownership only one time. In a deed, alienation is another term for transfer. The primary variation in the different types of deeds are the promises made by the grantor.

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

3 years

Which regulation apply to the use of the internet for advertising in California?

Commission's Regulation 2770

Which of the following equations is the correct application of the capitalization rate?

Net Operating Income divided by Capitalization Rate = Value

Which of the following would not qualify as a 1031 exchange? (protect from taxes and maximizes return)

A rental condo for a recreational vehicle

What is required by a notary of the person signing the notarized document?

A right thumbprint of the person signing the deed, quitclaim deed, or deed of trust affecting real property.

An association of 2 or more people who combine financial resources to achieve investment objectives is:

A syndicate

Which of the following are environmental hazards the seller and agent are obligated to disclose?

Earthquake Information, Lead-Based Paint, Electromagnetic Fields

Jonathan decides to sell his home and transfer all of his property ownership rights to the new buyer. This bundling and selling of rights is known as:

Livery of Seisin- when you sell the entire bundle of rights.

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 (15%)

A taxing jurisdiction has a mill rate of 14.7 What is an owner's tax bill if his taxable value is $250,000?

$3,675.00 .0147 x 250,000 = 3,675

Who enforces the codes of the California State Housing Law?

Local Building Inspectors

Who benefits from a long-term lease?

The tenant - 100% of rent is deductible as an expense. The tenant - The total debt load of the tenant remains the same.

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

Past three to six months

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

Proposition 13

Which of the following economic characteristics is true?

Supply cannot be moved to a high demand area

The manager of a large hotel refuses to rent a room to a blind person with a guide dog. Who is responsible for removing the lien to clear the title?

Unruh Civil Rights Act

Which document shows the assets and liabilities of a business?

Balance Sheet

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

May be adjusted annually

Who is the largest private mortgage insurer?

Mortgage Guarantee Insurance Corporation

Prospecting ends:

Never

Where does a person go with a complaint regarding discrimination?

The Office of Fair Housing and Equal Opportunity (OFHEO)

How is goodwill protected in business opportunity transactions?

The goodwill of a business has monetary value, which is protected by law.

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

All of the following are primary mortgage market lenders:

investment groups, credit unions, mortgage bankers

The 1943 case People V. Sipper held what decision?

The selection of a mortgage/deed by a broker, in which a fee is charged, is unlawful

Assembly Bill 1099 does not require a property tax reassessment for the construction or addition of

an active "solar energy system" in a new subdivision

Which of the following are functions of the Federal Reserve?

"The Fed" is buying or selling securities or bonds. When they are buying bonds, there is more money in the market, interest rates lower, and the economy is stimulated. When they are selling bonds, there is less money available in the market, interest rates rise, and the economy is slowed. This could take from 6 months to a year to have an effect on the economy. and Discount Rates- To tighten the economy (The Feds constrict spending in an economy that is seen to be growing too quickly, or to curb inflation when it is rising too fast), the Federal Reserve would increase discount rates. The discount rate allows the federal reserve to control the supply of money.

Each of the following types of housing falls under the heading of Common Interest Development.

A condominium project, a community apartment project, a stock cooperative

Residential property includes all of the following except which?

Motel

A Nevada real estate licensee has been advertising his services online to California citizens. Is this permissible?

It is not permissible to solicit California residents if you don't have a California real estate license.

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

Refinancing

When a person acquires new property, which is true?

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

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.

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

Renata has a home loan for $150,000 at 7.5% interest for 30 years and her payment is $987 month (including principal and interest). What is the principal balance after Renata has made one payment on her loan? After two payments?

$150,000 x 7.5% interest = $11,250 annual interest amount $11,250/12= $937.50 interest this month $987 (payment) - $937.50 = $49.50 principal paid $150,000 - $49.50 = 149,950.50 (principal balance after 1st month) 149,950.50 (new principal balance) x .075 interest=11,246.29 annual interest amount 11,246.29/12 = 937.19 interest this month $987 (payment) - 937.19 = 49.81 principal paid 149,950.50 - 49.81 = 149,900.70 (principal balance after 2nd month)

Naomi has a home loan amount of $120,000. Her monthly principal and interest payment is $679 for thirty years. How much interest will Naomi pay over the term of her loan?

679 x 12 months x 30 years= 244,440 Then subtract the loan amount (120,000) from that. 244,440 - 120,000 = 124,440

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

A small group of investors are in the initial stages of putting together a real estate investment trust (REIT). Which of the following are qualifications?

A REIT must be beneficially owned by at least 100 investors. Each share of certificate of interest must carry with it an equivalent vote. No five, or fewer, persons may hold more than 50% of the beneficial interests.

What is the Federal Housing Authority's primary role in the mortgage market?

To insure loans made by approved lenders

Lot 19, Block 8, Western Acres Subdivision, City of Sacramento, County of Sacramento, State of California. Which method of legal description applies?

Lot and Block System: This legal description lists the lot, block, subdivision, county, city, and state.

Jerry has been approved for a home loan in the amount of $250,000 with two points. If one point equals 1% of the loan balance, what will the points cost Jerilyn? How are the points shown at closing?

$5,000 - The points are shown as a debit to the buyer

The Commissioner discovers in an audit commingling of trust accounts by a licensee. At what amount does the court issue a restraining order against the licensee?

In excess of $10,000

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

General Partnership

Once signed, escrow instructions can be changed only by:

Mutual consent of both parties

Alex, a Nevada developer, has a very large development of attached retirement villas. He is interested in advertising this development in California. Alex has previously advertised and sold condos in his Arizona development to citizens of California. What must Alex do to promote and sell his Nevada development in California?

According to the interstate Sales Full-Disclosure Act, Alex must obtain a public report from HUD and deliver a copy of this report to each prospective buyer.

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

Life insurance company

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

buying government bonds

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

Commercial bank

Fannie Mae does all of the following activities:

Buys conventional, FHA, and VA loans. Buys pools of mortgages in exchange for mortgage-backed securities. Guarantees payment of all interest and principal on mortgage-backed securities.

Bill bought his home for $150,000. They made $50,000 of improvements. They sold the home for $450,000 and paid $30,000 in selling expenses, including the broker's commission. On what amount will they pay capital gains tax?

$0

Max, a licensee, accepts a bribe from ABC Title Company for referring clients. What is Max's possible punishment?

Max could go to prison and/or be fined $10,000 for each illegal transaction.

Glenn 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

This form of syndication allows limited liability for the investors but has negative tax features. Which form fits the description?

The Corporate Form, which allows for both centralized management and limited liability for the investors, but on the downside, has negative tax features that make it unappealing for modern syndicates.

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

She lost her business and now she has lost her home in foreclosure. The proceeds from the foreclosure sale were not sufficient to cover his debt, and NOW the lender has taken him to court to obtain more money. Which of the following applies to Sara's situation?

Deficiency Judgement- A deficiency judgement against the borrower. This is a general lien and would apply to all of the borrower's assets.

Why are sales contracts no longer a popular financing instrument in California?

It is very difficult for the seller to remove a buyer that is in default. The buyer is at risk because he holds no immediate title to the property. Court battles involving both the seller and buyer could be lengthy and costly.

The McMillan Development Corporation is in the preliminary stages of building a commercial office development. They have received the building permit and all of the necessary approvals to break ground. Where do they go for guidance on the types of materials approved for construction, electrical wiring, etc.?

The Building Codes & Building Officials Conference of America

ECOA requires that a lender send a denial notice within

30 days in writing

Civil Code Section 1365.1 states that the homeowner association must distribute a written notice entitled, "NOTICE ASSESSMENTS AND FORECLOSURE" to EACH member of the common interest development association. How long immediately preceding the beginning of the association's fiscal year must this notice be distributed?

60 days

Under the amended Davis-Stirling Common Interest Development Act, in order to grant the exclusive use of a common area to one or more owner, there must be a passing affirmative vote of what percentage of the owners of that common interest development?

67%

If a person believes that her property has been placed under an unlawful restriction, covenant, or other provision, based on an arbitrary reason as defined in the Government Code, she may:

Record a Restrictive Covenant Modification document.

The Juarez family are moving into a new home and are having the home tested for Radon. They have young children and are worried about the possible effects the gas could have on their health and development. What is the interior reading that should concern the family?

4 pCi/L Radon and above

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

5 years

Beth has been informed a convenience store is going to be built on the corner across from their residence. She has been furious and want some answers as to how this could be happening in their neighborhood. Who should they go to for answers and the final word on the decision?

The city council or board of supervisors

Which of the major warehousing agencies in the Secondary Market are regulated by a government agency?

Federal National Mortgage Association (Fannie Mae), Government National Mortgage Association (Ginnie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac)

Gordon makes a trip to his financial institution one morning. He has conducted all of his banking transactions at the institution for more than twenty years. Today he walks out with a loan on his new home and one for a new boat. What method of financing has Gordon secured?

Commercial Loan: A straight bank loan (aka term loan, in which only interest is paid during the term of the loan with the entire principal amount due with the final interest payment) that the borrower obtains based either on good credit or some NON-real property collateral.

Veronica needs a residence that is very low maintenance due to her schedule. Condos and Stock Cooperatives (co-ops) have both been high on her list. Help Veronica differentiate between these two residential options.

A condominium buyer receives a fee interest, or deed, to her unit. A stock cooperative is a corporation formed to own the land. Veronica would not receive a grant deed, but does share in the corporation and the right to occupy a specific unit.

Jamison, a broker, has been fined $10,000 and is being sentenced to four months' prison time for violations he has committed through his brokerage. Which type of violation did he possibly commit?

Advance Fees for a Loan secured by Lien on Real Property: Under Section 10085.5 it is illegal for anyone to demand an advance fee for either: a) soliciting lenders on behalf of borrowers in connection with any loan to be secured, before the borrower becomes obligated to complete the loan OR b) Performing any other activities for which a license is required unless the person is a licensed real estate broker

Serena is studying for her California real estate license. She is very confused about base lines, meridians, townships, and ranges. Can you help?

Base lines are horizonal and run east/west; meridians are vertical and run north/south; township lines are horizontal running east/west from a principal base line; and ranges are vertical running north/south on either side of a principal meridian.

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

CPM- Certified Property Manager

Jeff is selling his loft to Carry. He is using a General Warranty Deed in the transfer of property. Which of the following covenants are requirements?

Covenant of Seisin ("I guarantee that I own it and have the right to sell it"), Covenant Against Encumbrances ("I promise there are no hidden liens or encroachments other than those stated in the deed"), Covenant of Further Assurance ("If there is a defect, I promise to take care of any problems")

What are methods of involuntary alienation?

Escheat- the decedent died intestate (without a will) and without heirs, and the property becomes owned by the government. Adverse Possession - continuous possession, similar to easement by prescription, Eminent Domain- the right of the government to take private property for NECESSARY public use

Jerry is interested in purchasing a lot for new construction in a new subdivision. The Commissioner has issued a preliminary public report in this case, allowing the subdivider to take reservations for lot purchases. Does Jerry have any recourse to change his mind?

Jerry may change his mind on the lot he has reserved. He is not committed simply because of the reservation. He may legally back out and receive a full refund, up until the time the final report is issued.

Howard decides to use a real estate professional, Jose. Howard tells Jose that he wants him to only represent his purchasing interest, and a contract is signed. Who is the agent? Who is the principal? What is their relationship? What is Jose's role?

Jose is the agent; Howard is the principal; they have an agency relationship; Jose is a special agent (when one person is empowered by another to represent him in any type of transaction). Also, they have a fiduciary relationship (one of utmost trust).

Juanita is in the process of buying Amir's home. She made an offer that was accepted by Amir and both are happy with the financial terms. Juanita has found serious structural and electrical issues with Amir's home. In the contract, she has requested these items be rectified at Amir's expense within thirty days. At the end of thirty days, Amir is unwilling to spend the money to correct the items. What are Juanita's options?

Juanita may simply proceed with the contract, despite Amir's unwillingness to correct the problems. Juanita may cancel the contract altogether.

Maurice is a builder of new residential housing in the San Fernando Valley. He builds high-end homes in various subdivisions in the area. Maurice has been paying into a fund that is used by the government for low-to-moderate-income housing. Is Maurice required to pay into this fund and, if so, why? Does he have any other options?

Maurice is required to pay into this fund due to the Inclusionary Zoning Ordinance. He must either set aside a designated number of units for low-to-moderate-income housing; or, in certain cases, like Maurice's, he may pay into the fund. If he refuses, his building permit will be denied.

There are shutters installed throughout the home, and the owner wants to take them with him to his new home. Which of the five tests for real and personal property applies?

Method of attachment, adaptability (built-in vs. not), and intent (agents should write into the offer items that may lead to misunderstandings, such as a ceiling fan).

Michelle has rented to Luis for four years. Through eminent domain, Michelle must sell her home. What is the required length of notice Luis must receive from Michelle in terminating the lease?

Michelle must give Luis a sixty-day written notice of the lease termination because he has lived in the property for more than one year.

Miram is a real estate salesperson. She has just been handed a $100,000 earnest money deposit certified check from buyers who are interested in a new home. What does she do with the money?

Miriam must hand over the check to only her own broker. At that point, the broker might direct her to put the funds into the hands of the broker's principal; place the funds into a neutral escrow depository; or deposit the funds into the broker's trust fund bank account.

Earnest money was deposited into the broker's account at the bank on the seventh business day after receiving the funds. Has the realty company followed all trust account regulations with the earnest money?

No, not only should the broker have deposited the earnest money within three business days of receipt of the funds, the earnest money should have been deposited into the broker's Trust Fund, not the broker's account.

Shanta, a property manager, is using the Income Capitalization Approach in trying to project future earnings for the partners who own the center. She first estimates the annual potential gross income, deducts operating expenses (including debt service and mortgage payments). Did she use the correct steps?

No, when Shanta was deducting operating expenses, she included debt service and mortgage payments when they shouldn't have been included.

Jim and Kim have been working with a mortgage broker to assist them in finding the best loan. They complete the application, are approved for a loan, and are now obligated to complete the loan. A week before they are due to close, they receive the Mortgage Disclosure Statement, outlining all the costs and terms associated with the loan. The costs and terms are not what they had previously understood. Are they stuck with this loan?

No. The Mortgage Disclosure Statement should have been presented to them within three days of the broker's receipt of their written loan application, or before the couple were obligated to take the loan.

What are the steps to convert a mobile home into real property?

Obtain a building permit; place the mobile home on a permanent foundation and obtain a Certificate of Occupancy. Also, a document stating the mobile home has been attached to a permanent foundation must be recorded.

Sally, a licensee, has been asked to be the sales agent for a company selling new mobile homes. Can she sell these new mobile homes? If not, what sort of mobile homes can she sell?

Sally may not sell new mobile homes, but she may sell used mobile homes, if they have been registered with the State of California and are on a lot. She would have to become licensed by the California Department of Housing and Community Development to sell new mobile homes.

Bill the broker received a very high offer on a piece of property from a buyer. Bill makes a low offer through a dummy purchase, or an accomplice who is not a buyer at all. Bill sells the property for the higher price. What's the violation?

Secret Profit

Which of the following statements concerning California's three sets of base lines and meridians is true?

The Humboldt Base Line and Meridian in the northwestern part of the State; The Mt. Diablo Base Line and Meridian in the central part of the State; and the San Bernardino Base Line and Meridian in the southern part of the State.

This is the most frequently used organization form for real estate syndicates..

The Limited Partnership offers many of the advantages found in BOTH syndicates: the corporate advantages of limited liability and centralized management, and the tax advantages of a partnership. Because of this, the limited partnership form is one of the most frequently used organizational forms for real estate syndicates.

Ernesto is a developer who is building low-to-moderate-income, federally funded homes. He is building multi-family town homes that will help those graduating from welfare education programs get a new start off of public assistance and into the job market. Which of the following federal laws plays a major role in Ernesto's development?

The National Environmental Policy Act- requires an environmental impact report on all projects that use federal funding. The Clean Air Act makes it mandatory for all businesses, including real estate developers, to meet air quality standards.

Real Estate Brokerage delegates some of the responsibility of their listing to another real estate company. Unfortunately, the brokerage company failed to get the principal's agreement to the delegation. What is the relationship between the brokerage company and the real estate company?

The Real estate company becomes the agent of the Brokerage company due to the appointment without the consent of the principal.

Upon completion of this course, you should understand:

The facts regarding disclosure of commissions earned to all parties in a transaction, real estate taxes and special assessments, encumbrances (a claim against a property by another party. Encumbrance usually impacts the transferability of the property and can restrict its free use until the encumberance is removed), liens, easements (non-possessory right to use and/or enter onto the real property of another without possessing it), and encroachments (property owner violates the property rights of his neighbor by building something on the neighbor's land)

What is the major difference between the real estate business in general and a real estate brokerage?

The general real estate business consists of production, marketing, and financing of real property; a brokerage is directed primarily toward the sale, exchange, lease, rental, and financing for compensation.

If a conventional loan interest rate is at 16% and the VA loan interest rate is at 15%, the lender will want to charge how many points to increase the yield on investment?

The lender would charge eight points, since it is a 1% loan difference. If the conventional loan interest rate was 15 3/4%, with VA loan interest rate at 15%, it would be 6 points. If the conv. loan interest rate was 15 1/2%, it would be 4 pts. At 15 1/4%, the lender will want to charge 2 points.

The escrow instructions in the buyer/seller transaction are deemed unavailable to the seller. If instructions are confidential, and ABC Escrow is a dual agency representing both parties, why are the instructions only known to the buyer, the real estate agent, and ABC Escrow?

The process of dividing funds between parties is proration. It includes both expenses that are prepaid by the seller and paid after closing by the buyer.

Oliver dies without a will. She has many decendents and owned a lot of property. What will happen to the property?

The property will be transferred according to the Statute of Descent and Distribution

Which of the following statements is true concerning Earthquake Hazards Disclosure?

The seller and agent must provide the Homeowner's Guide to Earthquake Safety booklet and also disclose that a property is in an earthquake zone.

Peter has been offered the position of property manager for a large apartment complex. His contract has a clause that states, "If at any time during our agreement the property has a vacancy rate of more than 12%, our agreement is cancelled." Does this type of clause have a name?

This type of clause is an Allowable Vacancy Rate.

Which deed is not really a deed at all?

Trust Deed (a 3-party security device that pledges real property as security for the payments of a loan)

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

Twice in a 12 month period.

How many, if any, escrow or trust accounts must a property manager maintain?

Two - One is for security deposits and one for current rents and management.

The McColls have made an offer on a new home. The home is new construction and scheduled to be completed by the end of the year. They provide a purchase deposit - a check in the amount of $40,000 - to their agent, Suzette. Suzette, at the broker's direction, deposits the earnest money in the broker's trust fund account within two business days of receipt of the funds. Did Suzette follow the proper procedures?

Yes, Suzette deposited the check within three business days of receipt. Unless there were written instructions to hold the check until acceptance of the offer, the check may be cashed.

Jacinda makes collections on real estate loans. Last year, she made approximately 20 collections and collected $38,000. Must Jacinda be licensed?

Yes, if a collector makes more than ten annual collections, or collects more than $40,000, he/she must be licensed as a california real estate broker.

Kimberly is the property manager of Pelican Bay, which consists of 80 units. She does not reside at Pelican Bay. She is also pursuing her California real estate license as she manages the property. Is anything wrong with this scenario?

Yes, in California any apartment complex that has sixteen or more rental units must have a manager that lives on-site. Kimberly, as an off-site manager, must hold a real estate broker license. If she decides to hire a residential manager, who lives on the property, she does not need a broker's license.

Deanna is thinking of taking the step from renter to homeowner. She has a very stable position as a surgical nurse and excellent credit. She doesn't, however, have a large sum of cash handy for the down payment. She notices advertising for new condos where "no down payment is required." Should she look for any other information in the ad?

Yes, she should make sure the amount or percentage of down payment is there; terms of repayment; annual percentage rate and if an increase is possible; total finance charge; and total number of payments and due dates.

Larry and Carlos are purchasing a 1930s bungalow in the Hollywood Hills. Is a lead-based paint disclosure necessary on this lovely, historic bungalow?

Yes, the seller of any residential structure built before 1978 is obligated to provide a lead-based paint disclosure.

Which of these individuals could act as an escrow agent without an escrow license?

attorney, banker, broker (NOT a real estate salesperson)

Which items are covered by CLTA (California Land Title Association), ALTA, or ALTA-R insurance policies?

claims of persons in possession of the property, mining claims, unrecorded federal real estate liens

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

one business day

The owners own all rights to the property and the property is always inherited by the oldest child. Which type of estate is the family vineyard?

Fee Simple Absolute (Owns the bundle of rights). Highest degree of ownership, has unlimited duration, is inheritable, and is subject to only the government powers.

Ramon, a salesperson licensed to Richard, a broker, has been given specific written authorization to make a withdrawal from the broker's trust account. Ramon is uncertain this is permissible under California Law. Which California Law, if any, references Ramon's concern?

California Business and Profession Code Section 10145. Commissioner's Regulation 2832.

Which are requirements of a will?

Legal age, proper wording, and witnesses

Jeanne and Mark are buying a home. They've been told their mortgage payment will be $1,072 per month. There's also an additional amount of $336.72 being added to the monthly payment, bringing their total to $1,407.62. It was explained the additional $336.72 is to cover insurance and property taxes. Which loan definition applies?

Most lenders require an impound account using the buyer's money to cover future payments of insurance and taxes. Sometimes this is referred to as the buyer's escrow.

A local school has been destroyed by fire. Nothing has been salvaged and the school will have to be completely rebuilt. What are the three methods of determining the cost of rebuilding?

Square Foot Cost: Using outside measurement, how many square feet times a cost for either replacement and reproduction. Unit in Place: The replacement cost of a structure is estimated based on the construction cost per unit of measure of individual building components, including material, labor, overhead and builder's profit. Most components are measured in square feet, although items such as plumbing fixtures are estimated by cost. Quantity Survey Method: The quantity and quality of all materials (such as lumber and brick) and the labor are estimated on a unit cost basis. These factors are added to indirect costs (building permit, survey, payroll, taxes) to arrive at the total cost of the structure. Because of the detail and time consumed, this method is usually used only in appraising historical properties.

Which of the following is an item that a buyer usually pays at closing?

mortgage recording fee, homeowner's insurance, ALTA policy (title insurance that protects real property owners and mortgage lenders against losses from defects in titles.)