Real Estate Practice
Which of the following phrases are permitted in advertising per HUD guidelines? • "Great bachelor pad!" • "Near the Mormon temple." • "A large lot ideal for the physically fit." • "Large living room."
(ANSWER: "Large living room."
How many sales would a licensee have to make per year to gross $105,000 Per year under the following fact situation? An average sales price of $500,000, with an average gross commission on each sale of 6%, a commission split between listing and selling brokerage of 50% each, and the licensee has a 70/30 split with the brokerage: • 8 • 9 • 10 • 11
(ANSWER: 10)
A section 1031 tax-deferred exchange is NOT: • A method for the exchange or to defer capital gains taxes on the sale of a primary residence • A transfer of a property for a like kind property • Considered a professional real estate activity for the licensee
(ANSWER: A method for the exchange or to defer capital gains taxes on the sale of a primary residence)
In formulating an effective business plan, a licensee should: • Establish checkpoints within the plan in order to be able to measure the success or failure of achieving the plan • clearly and specifically defined each objective • set realistic business objectives • all of the above
(ANSWER: All of the above)
The professional organization comprised primarily of African-American real estate licensees is known as the: • Real Estate Brokers Institute • National Association of REALTORS • National Association of Real Estate Brokers • Association of African American Brokers
(ANSWER: National Association of Real Estate Brokers)
Which of the following is NOT a natural resource property? • Forest lands • Rock quarries • Properties abutting the sea • Ranches
(ANSWER: Properties abutting the sea)
This course is largely about one particular area of real estate but introduces "specialized areas of real estate." These specialized areas require additional training and knowledge beyond the scope of this course. Which is the area of real estate do we not consider to be a specialized area? • Business opportunity • Commercial • Natural resource properties • Residential
(ANSWER: Residential)
Which of the following would hinder the success of a new licensee? • Taking advantage of clients • Being a good listener • Being a problem solver • Being willing to accept rejection and keep trying
(ANSWER: Taking advantage of clients)
Individual states: • can enact laws that provide protection for class is not included in the federal law • cannot enact anti-discrimination laws that are more restrictive than federal law • cannot suspend or revoke the license of any real estate licensee who violates any federal or state anti-discrimination law
(ANSWER: can an act laws that provide protection for class is not included in the federal law)
The Department of Housing and Urban Development (HUD): • establishes and enforces laws to protect the environment • establishes criteria for residential property loans insured or guaranteed by the government • establishes and regulates VA loans • is a secondary market for lenders to sell mortgage loans
(ANSWER: establishes criteria for residential property loans insured are guaranteed by the government)
When dealing with a manufactured home, a real estate licensee can sell a manufactured structure that is: • Permanently attached to the land • Still attached to a mobile trailer • Brand new and not attached to anything yet • Registered with the California Department of Real Estate
(ANSWER: permanently attached to the land)
Regulation Z applies to which of the following credit situations? 1. Purchase of a penthouse condominium 2. Purchase of a 10 acre tract of land that will be subdivided in each lot individually sold 3. Purchase of a single-family dwelling 4. Purchase of an 8-Plex apartment building • 3 only • 1, 2, 3 and 4 • 1 and 3 only • neither 1, 2, 3 or 4
ANSWER: 1 and 3 only
Lead-based paint disclosure must be made in which of the following transactions? 1. The purchase of a single-family residential structure 2. A property sold at foreclosure 3. Rental property certified under a federal program as "lead-based paint free" 4. The purchase of a duplex • 1 only • 1, 2, 3, and 4 • 1 and 4 only • 1 and 3 only
ANSWER: 1 and 4 only
Licensee is can be disciplined regarding disclosure or non-disclosure based upon which of the following? 1. Negligence 2. Actual fraud 3. Constructive fraud 4. Puffing • 1, 2 and 3 • 2 and 3 only • 1 and 2 only • all of the above
ANSWER: 1, 2 and 3
Which are conflict of interest situations? 1. Only showing your buyer properties with commission amounts over a certain percentage 2. Making an offer on a property before showing the property to your client, who is looking for the same type of property 3. Excepting a referral fee from your buyers lender 4. Your mother makes an offer to purchase one of your listings through a different buyers agent, and you do not disclose to the seller that the buyer is your mother • 1, 2, 3 and 4 • 4 only • 3 only • 1 and 2 only
ANSWER: 1, 2, 3 and 4
Which type of transaction requires the use of an agency disclosure form? 1. The sale of a mobile home that is permanently attached to land 2. The sale of commercial real estate 3. The sale of a four Plex 4. The sale of a single-family residence • 1, 3 and 4 only • 1 and 4 only • 1, 2, 3, and 4 • 2, 3, and 4 only
ANSWER: 1, 2, 3 and 4
Which of the following types of sales or transfers requires the execution of a TDS? 1. A mobile home 2. Between spouses resulting from a divorce decree 3. A duplex 4. Property sold as-is • 1, 3, and 4 only • 3 only • 1 and 2 only • all of the above
ANSWER: 1,3 and 4 only
For a loan used to purchase the following owner occupied properties, which of them would the Holden act not apply to? • A four-unit condominium • a 150-unit apartment building • a single family residence • a duplex
ANSWER: A 150-unit apartment building
In California, a licensee is required to disclose: A. If any occupant of a listed property died in the property within the past three years B. If asked by a buyer if any occupant of a property being considered had died of AIDS • B only • A only • Both A and B • Neither A nor B
ANSWER: A only
Which of the following might stand in the way of achieving a well defined business plan? • The lack of proper clothing or automobile to give the proper image • The lack of sales experience • The lack of personal funds in order to survive more than 2 months without recieving a commission • All of the above
ANSWER: All of the above
California's Fair Employment and Housing Act (FEHA) prohibits which of the following? A. For any owner of housing to discriminate against any person because of one of the covered protected statuses in all aspects of housing including sales and rentals, evictions, terms and conditions, mortgage loans, insurance, land-use, and zoning B. For any owner of housing to harass, evict, or otherwise retaliate against anyone who has filed a FEHA complaint, participated in a FEHA investigation or oppose any activity prohibited by the FEHA • both A and B • B only • A only • neither A nor B
ANSWER: Both A and B
The majority of CA laws impacting the practice of real estate are found in: A. Title 10 of the California Code of Regulations B. The California Business and Professions Code sections 10000 to 11288 • A only • Both A and B • B only • Neither A nor B
ANSWER: Both A and B
Which of the following is NOT one of the five common-law fiduciary duties? • Humility • Loyalty • Obedience • Disclosure • Accounting • Care
ANSWER: Humility
Licensees whose only real estate experience has been in residential sales can competently represent clients in which of the following areas? • commercial and industrial brokerage • Real estate syndications • real estate auctions • none of the above
ANSWER: None of the above
Which of the following characteristics is NOT critical to receiving recommendations? • timely communication and response to any client complaint • Sharing details of prior clients transactions • being a good listener and responding to the needs and wishes of the client • regular, meaningful post transaction communication • A thorough and ongoing explanation and education of the client as the transaction progresses
ANSWER: Sharing details of prior clients transactions
Which statement is FALSE regarding the Realtor Code of Ethics? • The code is based upon what is fair and right • The code is a recommendation only with no consequences for violating any portion • The code is the basis of many regulations • The code is a roadmap to good business
ANSWER: The code is a recommendation only with no consequences for violating any portion
Which statement is FALSE regarding delivery of the agency disclosure form? • The pamphlet must be given to a purchaser of a mobile home and the land upon which it sits • A verbal explanation of the agency relationship that will be in force should be given along with the form • The pamphlet must be given prior to the signing of a listing agreement • The pamphlet does NOT have to be given to potential sellers of a 50 unit apartment building
ANSWER: The pamphlet does not have to be given to potential sellers of a 50 unit apartment building
Which is NOT a requirement for establishing an interest-bearing trust account? • The funds must be kept separate from any funds belonging to the broker or any other person for whom the broker holds funds in the trust • The principal must specify that the interest earned will be paid to the broker at closing • The account must be in the name of the broker as trustee for a specified beneficiary or a specified principle of a transaction or series of transactions • The funds must be placed in a federally insured depository
ANSWER: The principal must specify that the interest earned will be paid to the broker at closing
Which of the following is FALSE regarding the public report issued by the DRE? • A copy of the report must be delivered to any member of the public who requests one • The public report must be posted in a conspicuous place in any office where sales of a subdivision interest are conducted • The report is optional material to be given to each prospective purchaser
ANSWER: The report is optional material to be given to each prospective purchaser
Which type of transaction does the seller carry back disclosure requirement NOT apply to? • residential dwellings of one to four units where the seller extends credit to the buyer under a contract that provides for a finance charge • A transaction where the seller extends credit to the buyer under a contract that requires more than four payments, not including the down payment • The sale of an eight Plex in which the purchaser will occupy one of the units
ANSWER: The sale of an eight Plex in which the purchaser will occupy one of the units
Regarding contingencies inserted into a purchase agreement for the benefit of the buyer, which one of the following statements is FALSE? • The buyer may need assistance in evaluating the loan estimates presented to the buyer by competing lenders • The buyers agent has a duty to monitor and assist the buyer in performing the requirements needed to satisfy the contingency • The buyers agent must always work in the best interest of the buyer to do all that is necessary to protect the interests of the buyer • The seller is legally permitted to act in bad faith to prevent a buyer from satisfying the contingency
ANSWER: The seller is legally permitted to act in bad faith to prevent a buyer from satisfying the contingency
Which statement regarding a professional home inspection is FALSE? • The buyer may terminate the contract with no penalty based on the findings of the inspections • The seller must perform all repairs requested by the buyer, or be in breach of contract • The seller and buyer may openly negotiate the responsibility of any repairs revealed by the inspection • The seller may refuse to perform any or all of the repairs discovered in the home inspection
ANSWER: The seller must perform all repairs requested by the buyer or be in breach of contract
Which is NOT accomplished by maintaining a trust account for funds received? • each client in a trust account receives $250,000 FDIC insurance protection • funds cannot be frozen pending litigation against the broker • A trust account protects a client from a dishonest broker • A trust account provides the DRE with easy audit access to client trust funds being held
ANSWER: a trust account protects a client from a dishonest broker
In recent years, the most effective means of increasing licensee productivity has been: • to require accountability • more effective systems for bulk mailing • advances in technology • personal assistants
ANSWER: advances in technology
Which one of the following statements about advertising is FALSE? • A licensee cannot advertise a mobile home that is not in an established mobile home park or is not being sold with the land • A person who is not a licensee, but is advertising that he/she is, can be fined up to $20,000 and/or imprisoned for up to six months • advertising violations by a licensee are not subject to license suspension or revocation • A licensee found guilty of a false advertising for land or a subdivision is subject to a fine up to $1000 and/or one year imprisonment
ANSWER: advertising violations by a licensee are not subject to license suspension or revocation
A buyer filing a lawsuit against a licensee alleging fraud must contain which elements? • Proof that the licensee had knowledge or should have known of the material fact and that the fact was beyond the reach of the buyer • non-disclosure of facts or misinformation must materially affect the value or desirability of the property • The intent of the licensee was to induce action on the part of the buyer • all of the above
ANSWER: all of the above
A real estate licensee must do which of the following with respect to agency relationship disclosure? • deliver an agency disclosure to a buyer as soon as practical, but in all cases prior to the execution of an offer • give an agency disclosure form to a seller before the seller has signed a listing agreement • have the buyer and seller confirm in writing in the contract to purchase and sell real property or in a separate document acknowledging the agency relationships involved in the transaction • all of the above
ANSWER: all of the above
An acceptable accounting system must show: • A chronological listing of all trust funds received and disbursed • The balance owing to each beneficiary or on each transaction based upon recorded entries • an accurate balance remaining in the trust account • all of the above
ANSWER: all of the above
And effective listing presentation includes: • A comprehensive marketing plan • A recommendation of listing price based upon a market analysis • all of the above
ANSWER: all of the above
California real estate law requires that: • any branch offices must have an identifying sign on or near the offices main entrance • A real estate brokerage must be identified with a sign on or near the offices main entrance • all brokers maintain a main office located within the state • all of the above
ANSWER: all of the above
Fair housing laws prohibit advertising that: • States a religious preference or limitation • States a preference based on race, color, or national origin • excludes or limits based on handicap • all of the above
ANSWER: all of the above
If a licensee is found guilty of conversion of trust funds: • The DRE will most certainly revoke the license of the licensee • A receivership may be imposed on the licensee's assets in order to find and recover that converted funds • assets of the licensee may be sold to recover the converted funds • all of the above
ANSWER: all of the above
New licensee is who want to maximize their knowledge and professionalism should pursue which of the following? • take advantage of mentoring or coaching programs • affiliate with a brokerage that provides additional training • commit to continuing and meaningful self education of industry practices and changing laws • all of the above
ANSWER: all of the above
The federal Truth in Lending Act: • is commonly referred to as regulation Z • applies to advertising loan or financing terms to prospective borrowers • is enforced by the Federal Trade Commission • all of the above
ANSWER: all of the above
The seller and licensees have the legal responsibility to make the natural hazards disclosures for properties located in which of the following zones? 1. Special flood hazard zone 2. Seismic hazard zone 3. Wild land fire area 4. Dam failure inundation • 2 and 3 only • 1 and 2 only • 1 and 3 only • all of the above
ANSWER: all of the above
When advertising the listings of other brokerages, a licensee must: • not alter or modify any informational part of the listing • include the name and telephone number of the listing brokerage and listing agent • have permission from the broker whose listing is being displayed • all of the above
ANSWER: all of the above
When developing an effective business plan, which of the following factors should be taken into consideration? • establishing monthly goals • establishing a means to monitor goals • establishing annual goals • all of the above
ANSWER: all of the above
Which of the following are red flags? 1. A smell of dampness in structure 2. Soft floors in the area around a bathroom tub 3. The use of certain brands of manufactured siding 4. Water stains on ceiling • 1 and 4 only • 1, 2, and 4 only • none of the above • all of the above
ANSWER: all of the above
Which of the following are required disclosures when selling an interest in a subdivision? • blanket encumbrance disclosure • annual association disclosure in common-interest ownership subdivisions • a seven calender day right of rescission, if the sale is a subdivision with undivided interest or timeshare • all of the above
ANSWER: all of the above
Which of the following documents or records must be made available to the DRE when requested? A. Broker-salesperson contracts B. Trust fund account records C. All unaccepted offers D. Property Management Agreements • B, C, and D only • B only • B and C only • all of the above
ANSWER: all of the above
Which of the following must be given to a borrower buying a home with an adjustable rate mortgage? • subsequent disclosures each month an interest rate adjustment takes place • The consumer handbook on adjustable rate mortgages • A loan program disclosure for each variable rate program in which the borrower expresses an interest • all of the above
ANSWER: all of the above
Which of the following situations are unethical? 1. Intentional under estimating of closing costs to a buyer 2. Intentional over estimating of closing costs to a seller 3. Careless guesses as to closing costs to either seller or buyer 4. Intentionally not addressing the issue of closing costs with a buyer • 1 only • 1 and 4 only • 1, 2 and 4 only • all of the above
ANSWER: all of the above
While assisting a buyer to determine an offering price, a buyer agent should: • take into consideration the length of time the property has been on the market compared to average time on market for similar properties • prepare a CMA for each property the buyer is considering purchasing • advise the buyer of possible seller responses to an offer that is unreasonably low • all of the above
ANSWER: all of the above
With respect to the Estimated Sellers Proceeds statement, which of the following is/are true? • adjusted statements should be given if the listing price is reduced or if an offer is presented for a price less than the listed price • The initial statement is based on the established listing price • The California Association of Realtors makes available to its members and estimated sellers proceeds form • all of the above
ANSWER: all of the above
Which one of the following statements about the conduct outlined in the Realtor Code of Ethics is NOT TRUE? • A realtor can send mass millions to neighborhoods where there are listed properties, even when the intent of the mailer is to solicit for those listings once their current contract expires • A realtor can contact another realtor's seller to solicit for a property management contract • all real estate licensees can freely use the term "Realtor" in their advertisements • A realtor can contact another realtors seller for the listing contracts expiration date when the listing realtor does not give the date to the inquiring realtor
ANSWER: all real estate licensees can freely use the term "realtor" in their advertisements
A modification to a signed document by real estate licensee is: • always prohibited • not a violation of the Realtor Code of Ethics • permitted, as long as it does not change the intent of the contract • permitted, but only when it is in the best interest of the licensees client
ANSWER: always prohibited
Which of the following loan transactions does RESPA not apply to? • an 8-plex purchase • residential purchase • residential refinance • residential lender approved assumptions
ANSWER: an 8-plex purchase
A listing agreement that permits the listing licensee to receive a commission for any sale of the property that occurs during the listing., No matter who procures the buyer, is: • an exclusive right to sell listing • an exclusive agency listing • an open listing • a net listing
ANSWER: an exclusive right to sell listing
A type of listing agreement that allows the seller to employ multiple licensees at the same time with a commission owed only to the licensee procuring the buyer is known as? • an exclusive right to sell listing • an exclusive agency listing • a net listing • an open listing
ANSWER: an open listing
Which of the following falls within the definition of subdivided lands and subdivisions as set forth in the business and professions code? • Any time share project containing five or more timeshare Estates have terms of five years or more • any condominium project containing four or more units • any community apartment project containing five or more apartments • any planned development containing one or more lots
ANSWER: any community apartment projects containing five or more apartments
In California, the law requires disclosure if: • any occupant of a residence being offered for sale died in the home within the past 3 years • a buyer asks if the owner or another resident had aids • the buyer inquired if the property seller was a member of a specific ethnic group • an occupant of the residence died from aids-related illness
ANSWER: any occupant of a residence being offered for sale died in the home within the past 3 years
California requires delivery of the agency disclosure form by the listing agent for: • Mobile homes not yet placed upon a lot when sold by a real estate licensee • Business opportunities • any sale of 1 to 4 residential units and commercial properties
ANSWER: any sale of 1 to 4 residential units and commercial properties
The subdivided lands act disclosure requirements applies to: • any licensee acting as a buyers agent for a principal purchasing in a subdivision • The purchaser of the subdivided land • any lender of a subdivision • any subdivider working with or for the property owner
ANSWER: any subdivider working with or for the property owner
Constructive fraud occurs: A. In any breach of duty, without fraudulent intent, wherein an individual gains an advantage by misleading another B. In any such act as the law specifically declares to be fraudulent, without respect to actual fraud • B only • A only • both A and B • neither A nor B
ANSWER: both A and B
Following the successful closing of a transaction, it is important for a licensee: A. To incorporate a system for following up and maintaining an ongoing relationship with the represented client B. To ask the client for referrals • B only • both A and B • A only • neither A nor B
ANSWER: both A and B
Which of the following is NOT a neutral depository? • brokerage business account • attorney • title company • escrow company
ANSWER: brokerage business account
Which one of the following examples is the most cost effective form of advertising available to a brokerage? • newspaper • brokerage signs placed on listed properties • billboard • REALTOR magazine
ANSWER: brokerage signs placed on listed properties
The most weight when assisting a seller to determine a listing price should be given to: • expired listings • current active listings • pending sales • closed sales
ANSWER: closed sales
Which one of the following is NOT a duty owed by a buyer agent to a seller? • disclosure of all material facts • diligent exercise of reasonable care and skill • confidentiality • honest and fair dealing and good faith
ANSWER: confidentiality
The duty to preserve the confidential information of a client obtains during an agency relationship: • maybe shared with others after the transaction closes and there is no longer an agency relationship • continues even under a subpoena or court order • continues after the completion of the transaction for which the agency relationship was formed • includes materials facts about the conditions of a property if those conditions are not visible
ANSWER: continues after the completion of the transaction for which the agency relationship was formed
Which one of the following is NOT a fiduciary duty required of an agent? • accounting • loyalty • obedience • disclosure • contrition • care • confidentiality
ANSWER: contrition
The unauthorized use of trust funds for personal use is known as: • negligence • conversion • commingling • misrepresentation
ANSWER: conversion
Which one of the following is not a violation of fair housing laws? • falsely stating that housing is not available for sale or rental when answering an inquiry from an Hispanic family • limiting a blind tenant access to housing services or facilities within an apartment complex • processing an application for financing more slowly or requesting more information when the applicant is from Iran • denying a rental property to a single mother with children based on a series of evictions for nonpayment of rent
ANSWER: denying a rental property to a single mother with children based on a series of evictions for nonpayment of rent
Which definition best describes steering? • telling prospective homeowners about the racial, ethnic, or religious composition of any neighborhood • refusing to make a mortgage loan for reasons other than the qualifications of the applicant • circulating rumors of an infusion of a particular ethnic group moving into a neighborhood to induce homeowners to sell • discouraging buyers from considering certain neighborhoods
ANSWER: discouraging buyers from considering certain neighborhoods
Content-rich continuing education for the licensee does NOT: • have an impact on risk management issues for the brokerage • help the licensee stay abreast of changes in the law • hinder the licensee and the brokerage in the long run because of time spent • result in higher productivity for both the licensee and the brokerage
ANSWER: hinder the licensee and the brokerage in the long run because of time spent
Which one of the following statements is FALSE? • if it is in the best interest of the client, the agent should reject the reports from the professionals hired to perform the inspections • when the agent refers just one company, the agent could be at risk for liability if the referral makes a mistake • if a buyer select an inspector that the agent knows has a reputation for poor performance, the agent should disclose this information to the buyer • when asked for referrals, the agent should recommend more than one inspection company
ANSWER: if it is in the best interest of the client, the agent should reject the reports from the professionals hired to perform the inspections
Of the following, which one would create the greatest challenge for a new licensee? • fewer licensees competing in a shrinking market • decreasing interest rates • more liberal qualifying requirements for first time homebuyers • increasing number of foreclosures
ANSWER: increasing number of foreclosures
A brokerage business model that offers ongoing overrides on dollars generated by agents recruited by associated agents is known as: • a 100% brokerage model • house brokerage model • a traditional brokerage model • interdependent brokerage model
ANSWER: interdependent brokerage model
Which is NOT true regarding the decision in Easton v. Strassburger? • it held that only the seller would be liable if the seller had knowledge of a material fact and failed to disclose that fact • it established a nationwide industry standard with respect to a licensee's duty to disclose • it held that a licensee had the duty to disclose not only that which was known, but that which could have been known in the exercise of due diligence
ANSWER: it held that only the seller would be liable if the seller had knowledge of a material fact and failed to disclose that fact
Which statement is TRUE regarding a Comparative Market Analysis (CMA)? • it relieves the licensee of any liability if the buyer over pays for the property, as long as the sales price is within the suggested range of the CMA • it should never be prepared by a licensee wanting to list a property • it is an informal assessment of establishing a suggested listing price by comparing the property to similar properties currently on the market, expired listings, pending sales, and closed sales • it is a substitute for an appraisal to establish market value of a listed property
ANSWER: it is an informal assessment of establishing a suggested listing price by comparing the property to similar properties currently on the market, expired listings, pending sales, and closed sales
Which one of the following does NOT apply to the enforceability of a listing contract? • it must state a definite expiration date • it must be in writing under the statute of frauds • it must contain an automatic renewal provision • it must be signed by the seller and the licensee
ANSWER: it must contain an automatic renewal provision
Which of the following is NOT true regarding material facts? • it relates only to structural defects • it may be evaluated in terms of objective of subjective standards • it would have altered the decision of a party to enter into a contract at the price and terms offered • if known or could be discovered by observation, the material fact must be disclosed
ANSWER: it relates only to structural defects
Which fiduciary duty requires licensee is to put the interest of their principal a head of their own? • loyalty • obedience • accounting • disclosure
ANSWER: loyalty
When renting a dwelling to a handicapped individual, a landlord CAN: • refuse to make reasonable modifications for those persons with disabilities, thereby requiring them to have equal opportunity to use the housing available • make reasonable accommodations to a unit to facilitate the needs of the handicapped individual • restrict persons with a disability to a specific part of an apartment complex • charge a deposit for an assistance animal for those people requiring one
ANSWER: make reasonable accommodations to a unit to facilitate the needs of the handicapped individual
Commissions or other fees owed to the broker from the trust account: • must be withdrawn within 25 days of being earned • May be withdrawn from the trust account prior to the deposit of funds for which the fee was earned as long as the trust account can cover the withdrawal • must remain in the account until the trust account is no longer active • can remain in the account for 30 days after they have been earned
ANSWER: must be withdrawn within 25 days of being earned
When preparing a comparative market analysis(CMA), appraisers and real estate licensees: • should consider how the racial composition of the area will affect property value • must comply with fair housing guidelines • May consider such factors as racial composition of a neighborhood and determining market value • can choose to use fair housing guidelines if the client is a member of a protected class
ANSWER: must comply with fair housing guidelines
California law requires that any person using the Internet to advertise their services for which a real estate license is required: • can only do so if he or she has earned the Internet realtor designation • Will need to register their personal website address with the California Department of Real Estate • has to restrict the advertisement to appear to only residents of California • must hold a California real estate license and identify the licensees employing brokerage on the advertisement
ANSWER: must hold a California real estate license and identify the licensees employing brokerage on the advertisement
Which one of the following statements about advertising is FALSE? • negative imaging is used to define the market segment the company does not want to do business with • market branding is a crucial element to market success • if a brokerage elects to use a fictitious business name, the name must be registered in the county in which the business is located • A company signature is defined as the identity of a company in words, colors, and graphics
ANSWER: negative imaging is used to defined the market segment the company does not want to do business with
Title VIII of the Civil Rights Act of 1968: • allowed private covenants that restricted the racial composition of individual subdivisions • corrected the problems that emerged after the passing of the ADA • prohibited discrimination in housing based on race, color, religion, or national origin • was passed before the Kerner commission report
ANSWER: prohibited discrimination in housing based on race, color, religion, or national origin
After the seller and buyer have successfully entered into a contract, which of the following is NOT a duty of the licensees? • helping schedule professional inspections • providing legal advice if legal issues arise • negotiating repair issues if applicable • accommodating the removal of any contingencies
ANSWER: providing legal advice if legal issues arise
" this home has one of the most beautiful views in the city" is an example of sales speak, which is also known as: • puffing • misrepresentation • fraud • exaggeration
ANSWER: puffing
Which of the following is NOT a function of prospecting for listings? • contacting sellers of expired listings • locating and developing FSBOs into listings • qualifying buyers • farming
ANSWER: qualifying buyers
Which group of people would a real estate agent NOT want to include in their client base? • relatives • first time home buyers • real estate licensees • close friends
ANSWER: real estate licensees
A buyer has no recourse against their agent when their agent: • shares with the listing agent that the buyer has recently won the state lottery • refuses to hire a lawyer to resolve legal problems for the client • disclose his confidential information about the buyer without the written consent of the buyer • advises the listing agent that the buyer will pay more for the property then the offer indicates
ANSWER: refuses to hire a lawyer to resolve legal problems for the client
Which statement is FALSE regarding listing contracts? • A seller can revoke the authority given in the listing contract anytime prior to a sale of the property • Death, incompetence, or bankruptcy of either principal or agent terminates a listing contract • A listing contract is automatically terminated if an impossibility of performance occurs • specific performance is a remedy if one of the parties to a listing contract unilaterally terminates the agreement
ANSWER: specific performance is a remedy if one of the parties to a listing contract to unilaterally terminate the agreement
While preparing an offer to purchase, Sally's client executed a promissory note for $5000 as a promise to pay earnest money. Sally must: • specify on the offer that a promissory note has been received and in what form it is in • advise the client that sellers prefer the earnest money be in cash • deposit the earnest money into her business account • all of the above
ANSWER: specify on the offer that a promissory note has been received and in what form it is in
Which one of the following statements is TRUE regarding open houses? • they have been proven to be the most effective way of selling an individual property • they are in new and recent means of marketing properties • they are in effective tool for the agent holding the open house to network and gain future business • sellers who want single agency representation should insist upon the listing agent holding an open house on their property
ANSWER: they are an effective tool for the agent holding the open house to Netwerk and gain future business
Trust funds must be deposited into a neutral escrow depository or brokerage trust account within: • ten business days • five business days • seven business days • three business days
ANSWER: three business days
Under which circumstance should a licensee prepare a CMA? • to establish market value for an attorney in preparation for a divorce settlement • to assist an individual injured in an auto accident to file a lawsuit for injuries against the property owner • to assist a seller to establish a realistic listing price • to assist a lender in establishing market value when the property is pledged as collateral for a loan
ANSWER: to assist a seller to establish a realistic listing price
It is considered commingling when: • trust funds are first deposited into the general brokerage account and then transferred to the trust account • disputed earned fees are left in the trust account until the dispute is settled • The broker deposits $200 company money into the trust account to cover service fees or other bank charges
ANSWER: trust funds are first deposited into the general brokerage account and then transferred to the trust account
