Real Estate Principles Quizzes

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

A deed must be recorded in order to be valid.

John and Jane Van Horn are buying their first home from the Simpson family. ABC Escrow will be the closing agent for both the Van Horns and Simpsons. Which of the three is considered the neutral party in this real estate transaction?

ABC Escrow is the neutral party; the Van Horns are the buyers; the Simpsons are the sellers.

Which of the following elements is not necessary for a valid contract?

Accession

While waiting in the lobby of the Fair Real Estate Company's office, Samir and Rhadika overhear an agent tell clients, "You wouldn't be happy in THAT neighborhood. It's very "colorful," if you know what I mean." Which ruling by the Supreme Court dealt with this issue?

All discrimination and appearances of discrimination in selling or renting residential property based on race and color is prohibited under the provisions of the Civil Rights Act of 1866, Jones v. Mayer.

California licensing laws define which of the following:

All of the Above

The law judge has just issued a decision based upon the findings in a formal hearing of a real estate salesperson for various ethical violations. What could the California Real Estate Commissioner do at this point in the proceeding?

All of the above

Gary and Paul have wooden shutters installed throughout their home. A few years later, Paul is promoted by his employer and transferred to another city. Gary wants to take the wooden shutters to their new home. Paul insists they must remain with the home. Which of the five tests for real and personal property applies?

All of the above.

Jan failed to renew her license prior to its expiration. In order to renew her license now Jan must:

All of the above.

Shamus McManus purchased property from Sir Ian Wainwright under early English common law. Which of the following were acceptable methods of property transfer?

All of the above.

Upon completion of this course, you should understand:

All of the above.

All property in the United States falls under which system of land ownership?

Allodial System

Which of the following is not a water right?

Alluvial Right

Melinda's mother recently passed away. She is thinking of selling her belongings in an estate sale. During her research, she came across real and personal property regulations and laws. Please help Melinda understand the legal difference(s) between real and personal property.

An agreement for a sale of real property must be in writing and signed by the party to be charged. If the amount or value is $500 or more, an agreement for the sale of personal property must be in writing. Tax laws often distinguish between real and personal property.

John is trying to keep things straight while he studies. He's having a rough time distinguishing federal and state legislation. Help John with the primary focus of federal legislation.

Anti-discrimination laws and fair trade practices

John is still studying for his California real estate license. Once again, he is having a difficult time keeping areas straight. Help John with the largest area of the NAR Code of Ethics Standards and Practices.

Article 16 - Ethics and Agency Relationships

The signature of a notary public is known as:

Attestation

A violent storm comes in from the ocean, hitting the beachfront properties with destructive force. When the Meyers return to their home, they find the beach has disappeared from their property. Which term describes the damage?

Avulsion

Dan, a real estate agent, suggests an escrow holder to the Snyder family for their real estate transaction. Is this a prohibited activity in California?

Both A and B

The Ritchie family has put their home on the market. The Sampsons make an offer on the Ritchies' home. Suddenly, the Ritchies decide not to sell their home. They explain to Sara, their agent, that the Sampsons "aren't quite right" for the neighborhood. What should Sara do?

Both B and C

The Van Horns (buyers) and the Simpsons (sellers) have closed escrow on their real estate transaction. Who handles the completion of the transaction and both parties' separate paperwork?

Both parties close the transaction with ABC Escrow, the dual agency, in which both parties are represented. ABC Escrow then changes to separate agency and also handles each parties separate paperwork.

Sania and her mother own property on a river. The water has carried part of their bank downstream to another property. They want their bank back and are prepared to have it returned. Which method of property transfer applies?

By Accession and through Avulsion (It must be reclaimed within one year of the occurrence.)

Mikela wants to research and study the requirements for the California Real Estate Examination Test. Where can she find the exam's purpose and requirements?

California Business and Professions Code Section 10153

Which regulation or section(s) apply to the use of the Internet for advertising in California?

Commission's Regulation 2770

The Ahmed family have signed a contract to buy the Miller family's home. However, the contract states the Ahmeds 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

John lives in an apartment and each month pays his rental payments. He is also considered a stockholder in his building and owns property. In what type of apartment does John live?

Cooperative

Jack is buying the Padillas' home. He makes his offer and in his terms states he wants all the window treatments, refrigerator, and microwave to be part of the sale. The Padillas accept his offer on the condition that the refrigerator is the only item that stays in the home. Which contract term applies?

Counteroffer

HEH, Inc. owns a large parcel of land which will be used for commercial development. Upon the sale of the property to HEH, Inc., the grantor in a written agreement established 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 HEH, Inc.'s property?

Covenant

Jeffrey is selling his loft to Caroline. He is using a General Warranty Deed in the transfer of property. Which of the following covenants is not a requirement?

Covenant of Exceptions and Reservations

John is studying for his California real estate license. He is studying federal law, state law, and local law. Now, he is trying to get a handle on something called "Professional Code." What source has input on the topic John is currently studying?

Federal and state legislation Industry self-regulation through trade associations and institutes State real estate licensing regulation

The Moltasanto family has owned a vineyard in Sonoma for over one hundred years. They have owned all rights to the property since the first day of ownership. The property is always inherited by the oldest child after the death of the previous owner. Which type of estate is the Moltasanto family vineyard?

Fee Simple Absolute

Penelope is interested in buying a 150-year-old historical home in San Francisco. If Penelope decides to purchase the home, it must be on the condition the original architectural features are never removed from the home. Additionally, if Penelope buys the home and then sells it at some point, the same condition must be in the sales contract, and so on. What type of freehold estate is this historic home?

Fee Simple Defeasible

Lydia has decided to actually spend a considerable amount of time STUDYING for the exam this time, in hope of earning a passing score. Her application has expired in the two years of fruitless reexaminations. What does she need to do to reapply?

File the Salesperson Examination Application (RE400A)along with the appropriate fee.

Hannah is a newly licensed California real estate salesperson. She has aspirations of one day being the California Real Estate Commissioner. How does she get there and what does she do once she's there?

Hannah would need the appointment of the Governor of California. Her primary duty as Commissioner would be to enforce the laws in a manner in which maximum protection for real estate consumers is achieved.

Which of the following will not be covered in this course?

How to advertise on the Internet in other states

Miranda helps her friend Lupe purchase a home. She researches the neighborhood, assists her with a mortgage -- she essentially acts as Lupe's real estate agent. There is only one issue, Miranda does not have a California license and Lupe has paid Miranda for her help. Is this acceptable?

It is certainly not acceptable. Miranda is accepting compensation for representing another person in a real estate transaction and she does not hold a California real estate license.

Gerard, a Nevada real estate licensee, has been advertising his services online to California citizens. He sells resort property outside Las Vegas and believes the California market could be very lucrative. Is it permissible for Gerard to advertise in this manner? Why or why not?

It is not permissible for Gerard to solicit California residents. He must hold a California real estate license in addition to his Nevada license.

Jane has filed her complaint of discrimination. She also wants to seek some sort of punitive damages. What are her options, if any?

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.

Johnel, of ABC Escrow, is beginning to work on the escrow procedures of the Van Horn - Simpson file. She prepares the instructions; orders the title search and report; requests new loan instructions and documents; negotiates the fee due ABC Escrow from the parties involved; and accepts the pest control report and other reports. Which of these procedures is prohibited?

Johnel should not be negotiating the fee due ABC Escrow as part of escrow procedures. The buyer and seller negotiate between themselves who is responsible for paying the escrow holder's fee.

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

Lydia applied for the salesperson examination in January 2014. She sat for the exam three times in 2014 and four times in 2015. Each time, Lydia did not receive a passing score. How many times may Lydia sit through the examination in 2016?

Lydia may re-take the examination as many times as it takes to earn a passing score, but her application will expire in January and she must reapply first.

Marc needs to score 12 points higher on the California State Licensing exam this time to earn a passing score. What was his initial exam score?

Marc's initial exam score was 58% based on the required passing score of 70%.

Ted and Jack are selling their home to Duncan and Gary. Upon the title search, the title company discovers Ted and Jack's home is free of any liens or problems and can be easily sold. Ted and Jack's property holds which type of title?

Marketable Title

Marta and Sean acquire notes from a previous California State Licensing Exam through a friend. This friend had previously taken the exam and managed to record the questions on his scratch piece of paper. Marta and Sean score passing grades on their exams, but are denied licenses. Why would they be denied a license?

Marta and Sean were guilty of subversion by using improperly obtained test questions to prepare for the examination. This is considered a dishonest practice. Marta and Sean had an unfair advantage over the other applicants taking the examination. It was basically old fashioned cheating, and was not tolerated.

Martha and Liz have applied for a mortgage. They both have excellent credit and very successful careers and they are perfect on paper. Martha and Liz are partners and are expecting the birth of their first child together. They are denied a loan. What's the violation here?

Martha and Liz have been denied the full protection of the Equal Credit Opportunity Act (ECOA). The ECOA is a part of the Fair Financing Laws.

Melinda is selling her home to Trevion. The deed, conveying the property, will be a general warranty deed. Who is the Grantor? Who is the Grantee in the transaction?

Melinda is the Grantor. Trevion is the Grantee.

Jeremy opened a coffeehouse in a space leased from Maria and Renaldo. A week before his lease expired, Jeremy moved to a new location without his commercial microwave which was attached to the counter. Eighteen days following notice of Jeremy's right to reclaim the microwave, Maria and Renaldo sold the microwave at auction. Jeremy is furious and threatening legal action. Does he have a suit?

No, Jeremy does not have a case. Since the microwave was not reclaimed during the period allowed by law.

Christine and Scott have been married for fifteen years. They have three children, a home, and a vacation home. The couple purchased their home together after their marriage, but Scott owned the vacation property prior to the union. Christine and Scott are now getting divorced. Christine wants half of their residence and half of the ownership of the vacation property. At times they have rented the vacation home and the proceeds have gone to their joint bank account. Does Christine have any legal right to the ownership of the vacation home?

No, Scott came to the marriage with the vacation property, therefore it may remain a separate property. However, due to the commingling of the rental proceeds from the property in the joint account, she does have a right to half the proceeds.

Victoria, the lessee is negotiating to lease a condo from Sanchez, the lessor. They have agreed on the monthly lease payment, term of lease, security deposit, and so forth. Victoria plans to start moving in on the first day of next month. Which of the following applies to this situation?

Offer

John completes the Salesperson Examination Application and submits it to the California Department of Real Estate. Driving home from work, he realizes he used his old address and not his new one on the application. What should he do?

Once a completed Salesperson Examination Application is submitted to the DRE, no changes of any kind may be made to the application.

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

Patrice and Michael are in the process of refinancing their townhouse. The mortgage company calls and gives the couple the news 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? What do they need to do to remedy their situation?

Patrice and Michael 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.

Penny, a California licensee, has been advertising on the Internet. She specializes in the sale of upscale homes in the Hollywood Hills area. Penny has been violating the Business and Professions Code, Sections 10235.5 and 10140.6. What has she done?

Penny failed to indicate in the advertisement her license status.

Raj is stressed. He is getting ready to take the salesperson examination and doesn't know where to begin studying. Help Raj by telling him the examination topic(s) with the largest concentration of questions.

Practice of Real Estate and Mandated Disclosures

Sam, a broker, thought the postage meter stamp was sufficient evidence of a U.S. Postal Service postmark. He was wrong and his broker's license expired. What happened next?

Sam must immediately stop his licensed activity. His salespersons are all placed immediately in non-working status, and his branch office licenses are cancelled. He must then take all necessary steps to re-activate his license, his salespersons' licenses and the branch office licenses.

Sara waited and waited and waited for what she thought was a lifetime. Finally, Thursday morning the results of her California real estate examination arrived. What was the maximum length of "the lifetime" Sara waited and could she have gotten her results by another method?

Sara's lifetime wasn't too long. The results are normally mailed out in five days. She could have also received her results online through the eLicensing system and through the Interactive Voice Response system.

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

Secret Profit

Katrina had her license suspended for making false promises to clients. She had a habit of telling clients what they wanted to hear and never being able to state the facts. Of course, she could never follow through with her statements and several complaints were filed. Which guidelines constitute most suspensions?

Sections 10176 and 10177 of the Business and Professions Code.

TBH, Inc. owns land for development adjacent to their corporate headquarters. TBH, Inc. is the sole owner of the property. The land will be developed as a shopping and restaurant area. Which form of ownership does this property fall under?

Severalty

The Percy family have purchased a heavily wooded property in Northern California. They are planning to build a guest house off the main house for entertaining. In the process, many trees will need to be cleared. The family is planning to sell the wood to the neighbors as firewood. Which process applies?

Severance

Lydia feared she did not pass the California State Licensing Exam AGAIN. As she nervously opened the envelope that held the results, what was the first clue to the outcome of her reexamination?

She did NOT receive an actual score this time in the mail. This means she finally passed the licensing exam, and her license application is included in the envelope.

Which of the following is not considered a basic real estate deed??

Sheriff's deed

Chandra is selling her condo to Fabian. Chandra's deed explains the property has been clear since her ownership. However, she cannot guarantee that is the case prior to buying the condo. Which deed covers this situation?

Special Warranty

Agent Smith tells the Jacob family the Fernwood neighborhood is beautiful, attractive, and highly desirable. The next day, Agent Smith tells the Miller family that Fernwood is deteriorating, values are falling, and the school district is less than stellar. Name the form of illegal discrimination.

Steering

Susan is thinking of putting her home up for sale but doesn't want to use a real estate agent. What are her options?

Susan may sell her property herself without obtaining a real estate license. Although she will be compensated for the sale of her home, she is not representing another person.

Which of the following is not a method of involuntary alienation?

Tacking On

As an examinee, or a new licensee, where is the best, most accurate source for current California Department of Real Estate information?

The DRE website

Sam has successfully completed the Real Estate Principles course, the Real Estate Practices course, an additional college level course, and passed the salesperson licensing examination. Which license is available to Sam?

The Four-Year Salesperson License

Suzette is leasing a condo from the Garcias. She has been renting the condo for over three years. She renews the lease each year and, because of her loyalty and exemplarily rental history, the Garcia's allow her to make any décor changes she wishes. Which of the following statements is true about the relationship between the Garcias and Suzette?

The Garcias own the condo in freehold but rent it to Suzette in leasehold.

Jane feels she has been discriminated against in her search for a new home. She's a single mother of two who works full time. Where does she go with a complaint?

The Office of Fair Housing and Equal Opportunity (OFHEO)

The Van Horns deposit funds with ABC Escrow as a requirement for the purchase of their new home. Who is the grantee and the third party, and what is the type of transaction?

The Van Horns are the grantees; and ABC Escrow the third party. This transaction constitutes escrow.

Ginny, a licensee, uses a preprinted contract in Tim's purchase of a new loft apartment. There is a discrepancy in the contract between a preprinted clause and a handwritten addition. Which clause supersedes?

The handwritten clause generally supersedes the preprinted clause.

The escrow instructions in the Van Horn - Simpson transaction are deemed unavailable to the Simpsons. If instructions are confidential, and ABC Escrow is a dual agency representing both parties, why are the instructions only known to the Van Horns, their real estate agent, and ABC Escrow?

The instructions are considered unilateral and apply only to the Van Horns; therefore they may be known only to the Van Horns, their agent and ABC Escrow.

At the close of escrow, ABC Escrow divides up funds proportionately between the Van Horns and Simpsons. What is the process and what expenses does it include?

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.

Miguel sits down, ready and prepared to take the examination. He neatly places his slide rule, programmable calculator, single piece of scratch paper, answer sheet, pencil and pocket-size electronic calculator on the desk and he is ready to begin. Although extremely prepared, which item of Miguel's is NOT permitted in the testing site?

The programmable calculator

To take private property through eminent domain, three steps must be taken by the state or local government. What are they?

The property owner must be paid compensation for the property. The property must be for public good or use. The owner must have due process in the court system.

Olive Maccones dies without a will. She has three sons and seven grandchildren. She owned a substantial amount of property. What happens to the property?

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

The Escrow Act, found in the California Financial Code, establishes two essential mandates 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.

The main purpose of the California Department of Real Estate (DRE):

To protect the public.

Which of the following deeds are not really deeds at all?

Trust Deed

Maya, who lives in California, just purchased her first home at a Trustee's foreclosure sale. She was given a deed at the sale. What type of deed was she given?

Trustee's Deed

Victoria decides not to lease the condo from Sanchez. (They have an oral agreement.) She tells him she has changed her mind the day before she had agreed to move in. He has spent time and money getting the property ready for Victoria and is thinking of suing. Which type of contract applies to the situation?

Unenforceable

Allodial system

United states system

Which of the following is not considered one of the six distinct forms of ownership in California?

Voluntary Tenancy

Which of the following is not a requirement of a will?

Written in testator's handwriting

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

XYZ Escrow could not prove it was financially solvent and was unable to furnish a surety bond of at least $25,000, or more, based upon the yearly average trust obligations.

XYZ Escrow has gone out of business. They committed one of THE violations of all violations of escrow holder regulations. What is the violation?

XYZ Escrow did not maintain the records and files of its clients. Due to poor record keeping, several escrow accounts at XYZ were overdrawn.

Is it permissible to advertise real estate associated services or products in California without a California real estate license?

Yes, as long as the products or services do not include any actions for which a California real estate license is required.

Chandra and Fabian 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, establish priority, provide a record, and convey the transfer of title.

Jennifer is a single mother looking for a place to live. She sees an ad on Facebook by a private owner which states "No young children because of pool". Would this be a Fair Housing Violation?

Yes. Private owners cannot advertise against a protected class.

An examinee or licensee may perform what transactions on the DRE website?

all of the above