PRINCIPLES OF REAL ESTATE QUESTIONS
What is the maximum amount that could be recovered from the Recovery Fund for one salesperson?
(a)$50,000 (b)$40,000 (c)$80,000 (d)$250,000 D The question is asking for the maximum amount that may be recovered, which is for any one licensee's conduct. $50,000 for a single transaction, but $250,000 maximum for any one licensee.
The S 1/2 of the NW 1/4 of the SE 1/4 contains:
(a)40 acres. (b)20 acres. (c)10 acres. (d)5 acres 640 x 1/2 = 320 320 x 1/4 = 80 80 x 1/4 = 20 B) 20 ACRES
A section contains ____ acres.
(a)80 (b)160 (c)320 (d)640 D) One standard section is one square mile, which contains 640 acres.
The process through which disciplinary action is taken by the Department of Real Estate starts with an audit or an investigation of the licensee's activities or alleged misconduct. What is the next step in the disciplinary process?
(a)A hearing is held before an Administrative Law Judge to examine evidence and hear testimony. (b)The commissioner makes a decision to impose a penalty or dismiss the charges. (c)The licensee can elect to appeal the findings of the investigation or audit. (d)If warranted, an accusation is filed against the licensee. D An accusation is the next administrative step toward disciplinary action once the investigation has been conducted.
Which of the following individuals are exempt from the real estate licensing requirements?
(a)A person selling his or her own property. (b)An attorney-at-law rendering services in the performance of his or her duties as attorney. (c)Anyone holding a duly executed power of attorney from the owner of property. (d)All of the above. D
Which of the following is required to operate as a Prepaid Rental Listing Service (PRLS) agent?
(a)A real estate broker's license. (b)A written contract with prospective tenants. (c)A real estate salesperson's license. B) An advance-fee rental agent collects a fee in advance from prospective tenants to find them suitable rental properties. An advance-fee rental agent must have a Prepaid Rental Listing Service license (PRLS), but real estate brokers are exempt from this license requirement. PRLS contracts must be in writing and approved by the Real Estate Commissioner.
A licensee must take 45 hours of continuing education in order to renew the license. The 45 hours must include
(a)Agency and Trust Fund Handling. (b)Ethics and Fair Housing. (c)Risk Management and Management & Supervision. (d)All of the above D Every four years licensees must complete 45 hours of continuing education. Part of the 45 hours must include 18 hours in the category of consumer protection, plus coverage of Agency, Ethics, Fair Housing, Trust Fund Handling, Risk Management, and Management & Supervision.
According to the Real Estate Commissioner's suggestions for professional conduct, which of the following would be considered "desirable conduct?"
(a)Attempting to settle disputes with other licensees through mediation or arbitration. (b)Submitting all written offers in a prompt and timely manner. (c)Never claiming to be an expert in an area of specialization when in fact you are not. (d)All of the above. D
Among the principles involved in the "Bundle of Rights" is the right to
(a)Build, tax, destroy, and rebuild. (b)Design, plan, implement, and profit. (c)Possession, use, enjoy, exclude others, dispose. (d)All of the above C) The five major rights, which can be remembered by the acronym PUEED, are: 1. Right of Possession 2. Right to control the property's Use 3. Right to Enjoyment of the property 4. Right to Exclude others from the property 5. Right to Dispose of the property
California real estate law originated from
(a)Calbre regulations. (b)Spanish law. (c)English common law. (d)European law. C) In general, California's laws relating to real estate originated from English common law.
The letters CMBA stand for
(a)California Monetary Bankers Association. (b)California Metropolitan Brokers Association. (c)California Mortgage Bankers Association. (d)California Managers & Brokers Association. C
A licensee cannot lead an owner of real property, during listing negotiations, to believe that the licensee is precluded from charging less than the commission or fee quoted
(a)Due to the law (b)As a result of DRE regulations (c)Because of the (d)All of the above D The law requires licensees to inform prospective clients that real estate commissions are negotiable. Licensees cannot imply that the law, DRE regulations, or the rules of an organization, such as an association of real estate licensees requires a certain amount of commission to be charged. of an organization
Which of the following is NOT appurtenant to real estate?
(a)Growing trees (b)Buildings (c)Fences (d)Trade fixtures D) Appurtenant means belonging to; adjunctive; appended or annexed to. For example, the garage is appurtenant to the house, and the common interest in the common elements of a condominium is appurtenant to each apartment. Appurtenant items run with the land when the property is transferred. Trade fixtures do not transfer with the property.
Commingling is one of the greatest single causes for loss of license. Which of the following would NOT be considered commingling?
(a)Holding an uncashed deposit check after acceptance of an offer when directed to do so by the seller. (b)Cashing a deposit check (made out to the broker) and placing the money in the broker's safe, properly identified as being the deposit received from the buyer. (c)Depositing either cash or a check received as a deposit in the broker's personal account to be held until called for by the escrow officer. (d)Depositing money received by his/her client in the broker's personal account to pay miscellaneous expenses. A An exception to this rule is when a check is received from an offeror in connection with an offer to purchase or lease. In this case, the deposit check may be held uncashed by the broker until acceptance of the offer if the following conditions are met: 1) The check by its terms expressly provides that it is not to be negotiated by the broker, or if the offeror has given written instructions to the broker that the check shall not be deposited or cashed until acceptance of the offer; and, 2) The offeree is informed, before or at the time the offer is presented for acceptance, that the check is being so held.
The diversity of California's population and economy makes the state unique compared to the rest of the country. Which statistic shows the greatest disparity between the state and the nation?
(a)Home values (b)Household income (c)Population (d)Growth A) Home value statistics show the greatest disparity between the state and the nation.
What type of background check does the Real Estate Commissioner and Appraisal Commissioner use?
(a)Late rental payments (b)Personal habits (c)Credit history (d)Late child support D In accordance with Section 17520 of the Family Code, DRE is precluded from issuing or renewing a full-term license if the applicant is on a list of persons (obligors) who have not complied with a court order to provide child support payments. The Department of Child Support Services compiles the list from information provided by the District Attorney of each county in California.DRE will issue a 150-day license to an otherwise qualified applicant who is on the list of child support obligors. DRE will advise the applicant that the license applied for cannot be issued unless a release is furnished to DRE from the District Attorney's office during the 150 days. DRE also receives a supplemental list of obligors who are over four months delinquent in child support payments. DRE compares this list to the total real estate licensee population. If there is a match of an existing licensee and the license is not due for renewal for at least six months, the licensee will be advised that the license will be suspended if the delinquency is not cleared within 150 days. The suspension will remain in effect until the delinquency is cleared.
Spanish settlement of California began with the establishment of
(a)Military forts. (b)Maritime ports. (c)Missions. (d)Indian reservations. C) The major impetus to Spanish settlement of California was the establishment of missions.
Which of the following has had the LEAST influence on California history and the real estate market?
(a)Natural hazards (b)Cultural forces (c)Political forces (d)Economic forces A) Nature provides an abundance of both benefits and hazards, but cultural, political, and economic forces often have brought about more changes than even the most severe earthquake or fire.
The most heavily weighted subject matter on the salesperson and broker examination is
(a)Property Ownership and Land Use Controls and Regulations. (b)Practice of Real Estate and Mandated Disclosures. (c)Valuation and Market Analysis. (d)Contracts. B Practice of Real Estate and Mandated Disclosures: Approximately 25% of salesperson and broker exam examination.
Which of the following events is arguably the most important single event with respect to the exploration and settlement of the western frontier and California?
(a)The Mexican/American war (b)The Treaty of Guadalupe Hidalgo (c)The discovery of gold at Sutter's Mill (d)The creation and upholding of Mexican land grants C) In the midst of the postwar land problems, gold was discovered at Sutter's Mill in 1848. This discovery, coming within weeks of the end of the war, gave new importance to America's westernmost frontier.
All of the following are true about professional trade organizations EXCEPT
(a)They help shape the law and the industry by establishing and enforcing standards of practice. (b)They enforce the real estate law much like the real estate commissioner. (c)They provide sources of information, training, and contact with other professionals. (d)They provide an effective lobbying voice for their members. B Professional trade organizations have nothing to do with enforcing real estate laws.
Before taking the licensing examination, the applicant must successfully complete
(a)a 3 hour course in Ethics. (b)three college-level courses. (c)a course in office administration. (d)a course in fair housing. B Before taking the licensing examination, the applicant must successfully complete three college-level courses in Real Estate Principles, Real Estate Practice, and one course from a designated list.
All of the following are factors considered when determining whether an item of personal property has become real property, EXCEPT
(a)agreement between the parties. (b)method of attachment. (c)cost of the article. (d)relationship of the parties. C) Fixtures are items of personal property which have become attached to real property, thus becoming real property. The five tests of a fixture are: Method of attachment, Agreement of the parties, Relationship of the parties, Intention of the person attaching it, Adaptability of the item. Study Aid: MARIA
Something that is used with the land for its benefit, such as a roadway or a waterway, is known as
(a)an appurtenance (b)personal property (c)a fixture (d)an encumbrance A
A large, densely populated metropolitan area, consisting of a number of major urban areas is referred to as a(n)
(a)apex statistical area. (b)county. (c)urban region. (d)megalopolis. D) Urban development generally has been concentrated in coastal and central valley areas. Eventually, Los Angeles and San Diego will form one continuous urban area, or megalopolis.
The sale or lease of a business, including all or most of the assets or stock of the business is termed a
(a)bankruptcy. (b)acquisition. (c)business opportunity. (d)discount sale. C Any type of business that is for sale (also called business chance brokerage, or simply business brokerage). The sale or lease of the business and goodwill of an existing business, enterprise or opportunity, including a sale of all or substantially all of the assets or stock of a corporation, or assets or a partnership or sole proprietorship.
In addition to the prelicense education requirements to become a real estate broker, an applicant must also
(a)be an attorney and a member of the California state bar. (b)show proof of a master's degree in a related field. (c)have been actively engaged as a real estate salesperson for at least two of the preceding five years, or equivalent. (d)show proof of at least two years experience as a CEO, manager, or small business owner. C In addition to the education requirements to qualify for the real estate broker's exam, an applicant must have two years experience within the preceding five years, or a 4-year college degree with a major or minor in real estate...one or the other.
The real estate commissioner is appointed by the Governor and charged with
(a)creating and interpreting the real estate law. (b)enforcing the real estate law. (c)advising the governor on changing the real estate law. (d)All of the above. B
In the sale of a business, bulk transfer laws pertain to
(a)fixtures. (b)goodwill. (c)inventory. (d)All of the above C: any transfer in bulk (not a transfer in the ordinary course of the seller's business) of a major part of the materials, inventory or supplies of an enterprise (stock-in-trade).
All of the following are grounds for revocation or suspension of a real estate license EXCEPT
(a)knowingly participating in the sale of a stolen mobile home. (b)knowingly concealing a material fact in an application for registration of a mobile home. (c)accidentally overpaying taxes on a mobile home. (d)failing to deliver a properly endorsed certificate of title from the seller to the buyer. C Accidentally overpaying taxes on a mobile home is not under the jurisdiction of the real estate commissioner.
Real Property includes
(a)land (b)appurtenances to land (c)fixtures (d)all of these. D
While ownership of real property is usually transferred by deed, ownership of personal property usually is transferred by
(a)land contract. (b)bill of sale. (c)trust deed. (d)voucher. B) Transfer of personal property is accomplished with a bill of sale.
The rectangular survey system is also known as the
(a)metes and bounds system (b)Torrens system (c)lot, block, and tract system (d)U.S. government survey system. D
Under Spanish rule, land was owned primarly by the
(a)missions (b)peasants (c)king (d)conquistadors C
There are three principal baselines and meridians in California. The intersection of the Humboldt Baseline and Meridian is in
(a)northern California (b)central California (c)southern California (d)a state other than California A
6: A salesperson tells his broker that he is quitting and plans to go to work for another broker. His present employing broker should
(a)notify the Real Estate Commissioner and hold the license until further notice from the Commissioner. (b)give the salesperson his license and notify the Real Estate Commissioner immediately in writing. (c)request cancellation of the salesperson's license. (d)call the other broker to confirm the change. B - The Commissioner's Regulations state that upon termination of employment of a salesperson, the broker shall immediately return the license certificate to the salesperson and immediately notify the commissioner thereof in writing.
The test for a fixture does NOT include
(a)origin of manufacture (b)method of attachment (c)intent of the parties (d)relationship of the parties A
A method of land description where each parcel in a subdivision is identified by tract, lot, and block numbers is called
(a)plat map. (b)lot and block. (c)metes and bounds. (d)government survey. B) Lot and Block is a description of real property that identifies a parcel of land by reference to lot and block numbers appearing on maps and plats of recorded subdivided land.
Today, more than 50% of CA is owned by
(a)private sector (b)federal government (c)municipalities (d)state government A
A broker wanted to operate a real estate office under the fictitious name MLB Realty. Before operating under a fictitious name, the broker must
(a)publish the fictitious name in a newspaper of general circulation. (b)file under the Secretary of State. (c)obtain a DRE license bearing the fictitious business name. (d)file with the city as a fictitious business. C
Any individual who, for compensation or gain, takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan application, must be licensed as a
(a)real estate salesperson. (b)real estate broker. (c)bank employee. (d)Mortgage Loan Originator (MLO). D As of January of 2011, Federal law established by the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) now states that any individual who, for compensation or gain, takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan application, must be licensed as a Mortgage Loan Originator (MLO) through the Nationwide Mortgage Licensing System (NMLS). This new law applies to:1) Individuals licensed under the California Department of Real Estate (salesperson or broker).2) Individuals licensed under the Department of Business Oversight (CFL or CRMLA).
A system providing for surveying and describing land by reference to principal meridians and base lines is known as the
(a)rectangular survey system. (b)metes and bounds system. (c)property address system. (d)lot and block system. A) The Rectangular Survey System was established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines. Also known as the government survey system.
Using only a street address to identify real estate can be problematic because
(a)rural, undeveloped land may not have a street address. (b)street names may change. (c)a driveway may be moved. (d)All of the above D) Physical characteristics of land and streets can be a problem when identifying real estate. Street names can change; driveways and access points can move; undeveloped land may not even have a physical address.
A licensee was farming a non-integrated neighborhood which was next to an integrated neighborhood by telling the owners that if minority people moved into their neighborhood, their property values would go down. This is an example of:
(a)steering. (b)panic selling. (c)blockbusting. (d)both (b) and (c). D Blockbusting or panic selling (or panic peddling) violates federal fair housing laws.
The rights of a landowner whose property line touches on a river or other flowing stream are called
(a)sub-surface rights. (b)correlative user rights. (c)high-low water rights. (d)riparian rights. D) Riparian rights are the rights of an abutting owner to his/her fair share of water flowing past the land.
4: According to the real estate law, a real estate salesperson must work under the supervision of
(a)the city council. (b)the Department of Business Oversight. (c)his/her employing broker. (d)the Department of Consumer Affairs. C
7: The Real Estate Law DOES NOT require licensing for
(a)the resident manager of an apartment building or complex. (b)the manager of a hotel. (c)a real estate assistant who does not perform acts that require a real estate license. (d)all of the above. D
The classical definition of property ownership is ownership of
(a)the surface only. (b)horizontal and vertical areas above and below the property. (c)everything below the property in the shape of an inverted pyramid with its apex at the center of the earth and infinite airspace. (d)all that one can perceive. C) This is the classical definition of ownership of land. Modern day practical theory prohibits exercising absolute control beyond a reasonable distance above and below the surface of the land.
California exercises its police power to promote the public
(a)trust. (b)image. (c)tax base. (d)health, safety, and general welfare. D
Agent Jones has an offer on a listing contingent on the buyer's uncle approving the property since he will be financing the loan. Agent Jones hasn't discussed this with the buyers, but assures the seller that there will be no problems regarding the uncle. After the seller accepts the offer, the buyers tell the agent that the uncle is out of town and they don't know when he will return. By failing to explain the meaning and probable significance of the contingency in the offer, the agent has engaged in:
(a)unethical conduct. (b)unlawful conduct. (c)practical conduct. (d)proper conduct. B By failing to explain the potential risks concerning the contingency in the offer, the listing agent has engaged in "unlawful conduct" according to the Real Estate Commissioner. An agent must explain the meaning and probable significance of any contingency in an offer that he/she knows or reasonably believes may affect the closing date of the transaction, or the timing of the vacating of the property by the seller or its occupancy by the seller.
Personal property is usually transferred by a
(a)will (b)deed (c)bill of sale (d)purchase contract C
How many sections are in a township?
a) 6 b) 18 c) 24 d) v36 D
The term real estate means the same thing as
a) personal property b) real property c) ownership d) intangible personal property B