Examination 4

If a person buys property in a California land project and then changes his mind, he can obtain a refund of his money without a specific reason within how long?

14 calendar days (A land project is a special type of California subdivision in which the buyer has a 14 day rescission period)

If the owner of an apartment building does not reside on the premises, he is required to have a resident manager or responsible person on the premises where the number of units is:

16 or more ( California law requires the owner, a resident property manager, or some other responsible person, to live on the premises if there are 16 or more units

How many years is an attachment lien good for:

3 years (attachment lien is good for 3 years and may be renewed)

The purchaser of a lot which is subject to a lien for street improvement under the street improvement act of 1911. may prevent the assessment form going to bond if he pays the assessment in full within how many days after the completion of the work:

30 days

Under FHA, the usual ceiling height in a single-family residence is:

8 feet

On January 3, 1968, Richards bought a residence for $15,000 which he sold in August for $20,500. On April 8, 1969, Richards bought a new home for $22,000. Effective August 2, 1971 he sold this residence for $20,000. His Federal income tax return for 1971, based on these transactions, would show:

A $3,500 gain ($5,500 gain, second transaction realize a $2,000 loss)

In Real Estate transaction consummated by a salesperson, who is considered the agent:

A broker (broker is the agent of the principal since the listing his taken in the broker's name the salesperson is a subagent)

A listing agreement is essentially a/an:

A employment contract

Which of the following will prevent the Real Estate Commissioner from proceeding with formal action against the license of a real estate broker:

A lapse of three years from the occurrence of the grounds of the complaint ( The accusation must be filed within three years of the occurrence of the act which is considered grounds for revocation or suspension of the license.

When processing a real estate loan application, a lender would correlate characteristics of borrower, loan, and property to make:

A loan commitment

A homestead recorded under California law may be invalidated by:

A prior homestead on another property ( A person can only homestead one property at a time, destroying the home and building does to abandon the homestead)

Which of the following statements about real estate financing is incorrect?

A promissory note is security for a mortgage

An easement on real property can be terminated by:

A release signed by tree holder of the dominant tenement ( termination of an easement results from express release which may be a quitclaim deed, signed by the holder of the dominant tenement, or by mutual agreement of the parties involved)

Which of the following loans are permitted by the FHA, but is not available through the VA?

A residence for rental purposes

Although a title insurance policy does cover the risk of loss for many reasons, which of the following risks would not be so covered:

A zoning ordinance, regulation or plan ( title insurance does not normally cover governmental regulations such as zoning matters

Insurances can be described as:

All of the above ( Transferring the risk of loss from an insured to an insurance company, the substitution of certainty for uncertainty, protecting the insured against loss in accordance with the policy for the amount insured and for the period of time agreed upon)

If a broker misrepresented his principal's property to a buyer, the broker could cause his principal to be subject to:

All of the above (A rescission of the sale by the buyer, a court action for damages by the buyer, A civil suit compensating the buyer for misrepresentations of the broker)

If a broker has a nonexclusive listing, and he wants to be legally entitled to a commission, he must be able to prove that:

All of the above (He was a duly licensed broker at the time of the transaction, He found a buyer who was ready , willing, and able to buy. He was the procuring cause of the sale)

Which of the following is a disadvantage for the buyer under a land contract:

All of the above (In the event seller dies during the contract term, buyer may have to litigate to obtain clear title, financial institutions consider land contracts poor collateral, transfer of vendee's interest may be restricted

Which of the following notices could be important to the filing of mechanic's lien:

All of the above (Notice of non responsibility, Notice of cessation, notice of completion)

The health and safety code of the state of California contains a statement which opposes the practice of discrimination due to race, color, religion, national origin, or ancestry in publicly assisted housing accommodations. Property considered to be included in th term " publicly-assisted housing" would be:

All the above ( housing granted tax exemptions, except for the veteran's exemption, housing built on land sold at low cost by a state or local agency pursuant to the federal housing act of 1949, housing located in a multiple dwelling on which there is a loan insured by a government agency)

In making which of the following type loans would be the beneficiary least likely have to take action to foreclose on a trust deed loan:

Amortized loan (is paid off in installments. reduces the likelihood of foreclosure)

When the public records have been examined in order to determine the chain of title to a parcel of real property, a written summary of that chain of title is known as:

An abstract of title ( is a summary or digest of information, hence the summary concerning then chain of title is known as a n abstract of title)

A lease is to a lessee as:

An agreement of sale is to an equitable owner

If each of the following loans would otherwise normally require compliance with the Federal Truth-in-Lending Act, which one would be exempt on the basis of the type of loan itself:

An agricultural loan by a bank (agricultural loans are not normally regulated by the truth-in-lending act)

Which of the following is considered personal property:

An existing Mortgage

The available supply of real estate loan funds tends to be increased by all of the following, except:

An increased demand for a more liquid type of assets

A policy manual used in a real estate broker's office is primarily:

An outline of the procedures under which an office will operate

A property is deeded to John Jones, et ux. The Latin phrase "ex ux," as so used. Means:

And wife

From a lender's point of view, the most significant feature of a purchase-money mortgage is that it takes priority over:

Any liens against purchaser which exist at time of purchase (purchase-money mortgage takes priority if there is a foreclosure or trustee's sale)

Johnson agreed to purchase Smiths's property. he wanted to use the existing conventional loan of record on the property as part of the purchase price. Johnson agreed to take primary liability for the loan. the loan balance was $14,000 and was payable $131 or more per month, including interest at 9% per annum. Which of the following is the correct insertion on lines 47 and 48 of the deposit receipt which reads, " Other terms and conditions. See forth any terms or conditions of a factual nature applicable to this sale such as financing ,prior sale of other property, the matter of structural pest control inspection, repairs and personal property to be included in the sale. "Buyer agrees to:

Assume the existing first trust deed

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

Attorney in fact

Baker sold 640 acres of land to Garcia by agreement and deed which provided, " seller retains right tall minerals and materials of the earth under this land, " shortly thereafter while Garcia was preparing his land of cultivation, baker sued Garcia, based on the foregoing information, the judge's decision should be:

Baker has the right to enter on Garcia's land to drill for oil ( baker has an implied grant of an easement)

Mr. long purchased a mobile home new from a dealer two months ago. It is now located in a mobile home park. Broker Sam has taken a listing to sell it. Which of the following is true:

Broker Sam cannot sell it, because it has not been registered with the Department of Motor Vehicles for period of one year.

Smith owns a single-family residence in which he resides. he trades with Brown for another residence, which Brown is renting to a tenant. Both parties intend to use their newly acquired properties for rental income. Which of the following is true:

Brown can negotiate a tax free exchange ( Brown's former property and new property were both income property. That was not true for Smith.

A buyer, who knew what he was signing, entered into a contract to purchase real property. However, his consent was induced by fraud on the part of the real estate broker. This frauds made the deposit receipt:

Capable of being accepted by the seller but can be avoided by the buyer( a voidable contract which will be valid until voided by the injured party, the buyer)

Which of the following government actions in relation to private property would not be sn example pf police power:

Condemnation. (condemnation is part of the government's right of eminent domain. It is not part of the police power)

Which of the following pairs of words are synonymous:

Construction loan-interim loan

All of the following are factors generally considered when determining whether an item of personal property has become real property, except:

Cost of the article

Interest rates on trust deed loans are primarily determined by which of the following:

Demand for supply of money (interest rates fluctuate according to the laws of supply and demand)

The beneficiary of a second trust deed sold his interest in the property for less than the paid balance of the note. The action is most commonly described as:

Discounting

"A" owns a farm, "B" bought the property behind the farm a year ago. "B" uses "A's Farm to drive across, for ingress and egress. "A" chained off these roads for three days. This related to:

Easement

A prudent investor, to hedge against the erosion of capital caused by inflation, would logically place funds in:

Equity interest ( due to the susceptibility of the loss of value of the dollar due to Hugh inflation, it is wise for the investor to keep his money in an equity interest investment

The ultimate recipient of the .005 Mutual Mortgage insurance premium paid with an FHA loan is the:

FHA

Federally chartered savings and loan associations, doing business in California, are regulated by:

Federal Home Loan bank Board

The Real Estate Commissioner has primarily regulatory authority over subdivision matters involving:

Financial arrangements to assure completion of community facilities

When legal title is transferred as the result of the sale of real estate encumbered by a deed of trust, it is always necessary:

For the grantor to deliver a deed

The measure of goods and services produced by the nation during any one calendar year is the definition of which of the following:

Gross national product

Concerning options, which of the following is the most correct statement:

If a lease contains an option to purchase, this right ordinarily will pass with an assignment of the lease, even though such option is not specifically mentioned in the assignment of the lease

Which of the following closing costs would be classified as a recurring cost:

Impound account items

Betty is beneficiary of a $15,000 deed of trust on a single- family home located in Long Beach, California. Trustor Milo made $2000 in payments, then defaulted. A a trustee's sale, the property sold for $10,000, resulting in a $3,000 deficiency, In California. a deficiency judgment cannot be obtained:

In any of the above situations( If the security is a purchase-money trust deed, if remedy of trustee's sale is used, if fair market value of the property exceeds the amount due on the trust deed)

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

Income taxes (the term "tax shelter" is used primarily in referring to being able to reduce an individual's income tax liability)

Any citizen injured by discrimination in housing practices may, under the Fair Housing Act of 1968

Institute a private action in a state or federal court for injunctive relief or actual damages

A judgment that has been recorded would be:

Involuntary lien(a judgment lien is a involuntary lien, if you place a judgement lien on a person's property her certainty did not agree to it)

if a real estate licensee was trying to persuade people to list or to sell their property by telling them that members of another ethnic group were moving into their neighborhood, and it would be to their advantage to list or to sell. It would be an example of all of the following except:

Legitimate conduct

The remedy of unlawful detainer action is used by offended:

Lessors

The Truth-in-Lending Law allows certain borrowers a limited right of rescission if each of the following events occurs in sequence. Even if on different days. The time which is allowed for rescission begins when the:

Loan is funded by the the Lender

In making new real estate loans, institutional lenders often charge a fee for expenses incurred for such items as document preparation and related work. The fee charged is often a percentage of the face amount of the loan , and is referred to on the borrower's closing satement as a :

Loan origination fee

Which of the following is most vital or important in planning a subdivision:

Market analysis

An easement differs from a license in that a license:

May be revoked

A man listed his property with Broker White. The listing said, "Seller to receive non ore than 23% cash down payment. " the broker brought the owner an all cash offer which the owner rejected. broker White was entitled to:

No commission (since the offer was not on the exact terms of the listing, the broker was entitled to no commission)

Deed restrictions on a piece of land are not permissible:

None of the above

In order for a deed of trust to be valid and enforceable, it must contain a clause regarding the truster to:

None of the above

Which of the following facts distinguishes an exclusive agency listing from an exclusive right to sell listing:

None of the above

The function of mortgage companies, which play an important role in present day real estate financing, could best be described as:

Participating in the money market basically as correspondents for other lenders, originating and servicing loans but not intending to hold them in their own portfolio

When rent is computed on the gross sales of a business occupying real property, the lease is correctly termed:

Percentage lease

In California the use of an abstract of title has been superseded almost entirely by the:

Policy of Title insurance (insures that the property owner will not suffer the loss if the title is imperfect)

Federal income tax rates on ordinary taxable income are:

Progressive (Income taxes are progressive. As a person earns more and more money, his tax rate increases.

Land zoned for use as the site for multi-family residential developments(such as apartment buildings) would be denoted as:

R-3

The recording of a deed:

Raises a presumption of delivery

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

Real Estate Commissioner (the real estate commissioner's public report would be the best source for information of this type.

The words " time is of the essence" can be found in which of the following contract:

Real Estate purchase contract and receipt for deposit( however, it is implied in all contracts whether stated or not)

The members of the National Association of Real Estate Brokers (predominantly black) are known as:

Realists (do not confuse the National Association of Real Estate Brokers with National Association of Realtors (NAR))

Which of the following is not covered by the standard policy of title insurance:

Rights of parties in possession ( Extended coverage will protect against rights of parties in possession, but the standard policy of title insurance does not)

If a man has a freehold estate, which of the following would result in his having a less-than-freehold estate:

Sale and leaseback

Which of the following types of lenders would have the greatest percentage of, and the most funds invested in, real estate mortgages:

Saving a loan associations

Which of the following would be true in the planning and development of a subdivision:

Short block are economical

When a black prospect calls or visits a real estate office and makes a general inquiry as to the availability of homes in a certain price range, the person servicing the prospect is required by federal law to:

Show him the same homes that would be shown to any other prospect making similar inquiry

The 1968 Civil Rights Act, title VIII is called:

The Federal Fair Housing Act

Loans which are approved under the Federal Land Bank System are originated and serviced by:

The Federal land Bank System

"A" sells a property to "B" by grant deed for an all cash purchase price of $5,000. There was no other written memorandum of the transaction. Six months later, "B" attempts to rescind the sale on the basis of the Statute of Frauds. Concerning the legal basis of "B's" claim:

The Statue of Frauds does not apply here( the statue of frauds would be satisfied by the written deed)

Mr Miller agreed in writing to purchase owner Morgan's property through the brokerage agency of gold properties. Miller deposited with broker Gold a personal check, in the amount $500, which was to be used to pay closing cost on a purchase price of $65,000. The offer to purchase contained the following clause: "Conditioned upon the purchaser being able to obtain a VA loan to be secured by the subject property in the amount of $65,000 for a period of 30 years, payable at approximately $679 per month including interest at the rate of 11-1/2% per annum plus taxes and insurance. " Of the following, which most nearly represents Buyer Miller's option under this purchase transaction:

The buyer could select any of the above (If the $65,000 VA loan is not obtainable, the buyer may renegotiate the terms of the purchase contract if mutually agreeable between buyer and seller. if the Certified Real Value (CRV) is less than $65,000, buyer Miller would be entitled to cancel the transaction. If the certificate of Real Value on the property is $63,000, the buyer could complete the purchase by making an additional $2,000 down payment.

Under the Federal Truth-in-Lending Law, which of the following need not be included in the total "finance charge" required as a part of the disclosure statement:

The cost of a credit report and appraisal fee necessary to make the loan

Which of the following is the most difficult of the mortgage lender to evaluate:

The degree. of risk inherent in the mortgage

There is a conflict between the signed escrow instructions and the signed deposit receipt. Which of the following would be binding:

The escrow instructions

The legitimacy of zoning laws rests upon:

The established right of police power of government

Which of the following is most correct concerning delinquent taxes and redemption rights:

The important effect of a "sale to the state" by the tax collector is to start the redemption period running, but the delinquent owner's possession remains undisturbed for five years:

A brother and sister purchased property as Joint tenants. Later, the sister married and deeded her interest to herself and her husband:

The joint tenancy is terminated

Of the following situations, which would be exempt from the discrimination in housing provisions of the government:

The leasing of a room to one person in an owner occupied single family home that is unencumbered

After the buyer's offer was accepted by the seller, the broker cashed the buyer's deposit check and put the money in his office safe pending the close of escrow. The seller demanded the deposit money but the broker refused to give it to him. Assuming only the above facts:

This consult would probably subject the broker to disciplinary action by the Real Estate commissioner

A "promotional note" is defined as a "promissory note secured by a trust deed executed on unimproved real property, or executed after the construction of an improvement on the property but before the first sale of the property so improved is made. and which is subordinated. "The term " promotional note" does not include a "seasoned" note which was executed at a time more than:

Three years prior to being offered for sale

Of the following, which statement explains why warranty deeds are rarely used in California, although they are common in other parts of the country:

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

When mortgage money is borrowed at a rate that is less than that of the net return on the property unmortgaged, such borrowing raises the rate of return on the owners investment. The principle is known as:

Trading on equity

A real estate contract entered into by a married couple under the age of 18 is:

Valid

Under a conditional/installment sale contract for the sale of real property, legal title is held by the:

Vendor ( the vendor is the seller of the property who holds on the grant deed until the vendee (buyer) fulfills the sale contract)

Salesman Burke showed several properties to Carl and Wilma Strong. They did not make any offers to purchase. Subsequently, while Mr. Strong was away on business, Mr. Burke showed Mrs. Strong a property which she liked. She gave Burke a cash deposit of $500 with a written offer to purchase, signed by Mrs. Strong only. To be a legally complete offer, which of the following should be inserted on line 2 of the deposit receipt, which reads, "Received from _________, herein called buyer."

Wilma Strong,

Able made full payments on a note secured by a deed of trust on his property, and he demanded the beneficiary clear the records the Beneficiary must move for a reconveyance:

Within 30 days ( he is liable for damages and penalty of $300)

A broker who is acting as agent in the offering of property, may without further authority from his principal:

accept the signatures of the buyer on an offer to purchase which would be binding on the parties if the seller accepts

A clause in a mortgage stating that the rights of the mortgage shall be secondary to a subsequent mortgage is called :

none of the above ( defines a subordination clause)

Which of the following choices would be the quickest and easiest method for a corporation to raise additional funds:

sell more common stock