California 8-Hour Survey
A landlord refused to rent to Adam Tufluck Adam was middle-aged, single, employed, able, and of sound mind. He was also the only applicant with a job. When Adam asked the landlord what the problem was, the landlord said he didn't "like" Adam and that he didn't have to rent to him since he didn't belong to one of those "protected classes". What best applies?
Adam may legitimately pursue a discrimination complaint against the landlord.
When does the CalBRE audit a broker's trust fund records?
At random or when there is a written complaint
Lee Chen, a residential developer, has just constructed a condominium building in his Asian neighborhood to address the housing shortage for incoming relatives and friends from Taiwan. He intends to market the properties specifically to those groups. Lee's son, Michael, is a new licensee and eager to help with the listing and selling. What is the best advice to Michael to avoid discrimination liability?
Avoid taking his father's listing
What is the primary distinction between commingling and conversion?
Commingling may result from accident or carelessness, while conversion is the result of an intent to steal
Which ethical violation is one of the MOST common causes of license suspensions and revocations?
Conflict of interest
Two individuals each bought an undivided half-interest in an apartment building. One of the individuals later encumbered his half-interest by obtaining a loan from a private lender that was also a real estate broker. This lender sold the promissory note to a bank and undertook a service contract to service the loan for the bank. When the borrower defaulted, the bank gave the agent power of attorney to pursue remedies. The bank purchased the borrower's half-interest at the foreclosure sale of $320,000. During the foreclosure proceedings and reinstatement period, the individual who owned the other half-interest attempted to buy the first individual interest. He made an offer to the bank, through the agent who had the bank's power of attorney, of $330,000, but the agent rejected this offer without passing it on to the bank. The agent then purchased the bank's interest himself for $325,000. In addition to the apparent conflict of interest and double-dealing, what other violation is apparent?
Failing to present an offer
What is an example of blind advertising?
Failure to indicate that the advertiser is an agent
True or False: A buyer's broker convinces the buyer to place an offer on one of her listings. Since the broker has fully informed her client that the property is her listing, she is no longer acting in a dual agency capacity.
False
True or false" The laws of agency apply exclusively to real estate licenses.
False
True or false: A "waterfront specialist" listed a home on the Sacramento River with a 20-foot river wall. There were vertical cracks in the wall, which a prospective buyer was quick to ask about. The agent told the buyers that vertical cracks were common and that horizontal cracks were the ones to look out for - a well known fact. After the closing, a flood caused six panels of the river wall to collapse. The buyers sued, but they had no real argument because the agent had openly discussed the cracks prior to closing.
False
True or false: A discrimination complain is better under state rather than federal fair housing laws because the complainant may NOT seek redress in court if HUD fails to find merit in the complaint.
False
True or false: A discrimination complaint is better handled under state rather than federal fair housing laws because the complainant may NOT seek redress in court if HUD fails to find merit in the complaint.
False
True or false: A licensee wants his buyer to make an offer on a home, but the buyer is concerned about the closing costs. The licensee knows the buyer will be able to afford the home, so the licensee tells the buyer that closing costs will be lower than they will actually be. This is okay because the licensee is positive that the buyer can afford it.
False
True or false: A real estate licensee is permitted to encourage a homebuyer to make an offer to purchase by telling him that his broker will get him a loan through the local bank, even through the broker knows nothing about this buyer's qualifications.
False
True or false: A salesperson is showing a country home to a prospective buyer. The buyer is attracted by the country setting and the fact that there are no strip malls anywhere within sight. The agent knows that the village has just granted a permit to a developer to put in a strip mall at a nearby intersection. The agent is under no obligation to give this information to the buyer.
False
True or false: A salesperson who represents the buyer of a home is under no obligation to explain to the buyer that a contingency requiring the issuance of a certificate of occupancy could mean that the buyer may not move into the home on the scheduled date.
False
True or false: A trust fund ALWAYS consists of funds received in the form of cash or a check.
False
True or false: An agent is eagerly trying to gain a buyer's loyalty before showing homes. He does not want to do a lot of work only to have the prospect run off with another agent. The buyer isn't sure about the agent's qualifications and ability to find the right home. The agent responds that his area of specialization is buyer brokerage. In addition, he says, "I am a member of an MLS, so I can access any available property in the market for you." This agent has violated his subagency duty to the sellers in the MLS.
False
True or false: An individual Jewish homeowner places an ad through a real estate periodical to rent his home. The ad states that Jewish couples with no kids and no pets are preferred. Since the owner owns only one home, he has NOT violated any laws.
False
True or false: An owner is thoroughly unsatisfied with an agent's performance and decides to list with another brokerage. The owner cancels the agreement and refuses to pay for the agent's advertising and promotional expenses. Since the agent performed unsatisfactorily, the agent's only recourse is to comply and absorb the marketing expenses.
False
True or false: Both of the monthly reconciliations in the columnar system require comparing various records with the bank statement.
False
True or false: Broker Adams is licensed in both California and Nevada. When he receives trust funds from clients, he generally deposits them in his Nevada trust fund account. This practice will not get him in trouble in California unless he has failed to obtain written permission from the commissioner of real estate.
False
True or false: Broker commissions are NOT negotiable.
False
True or false: It is all right for agents to act for their own benefit in an agency relationship as long as the principals share in the agents' profits.
False
True or false: Ms. Collins's offer to purchase a home is rejected by the seller. She asks the broker to return her deposit check immediately. Before he can do this, however, the broker must obtain the seller's authorization to release the funds.
False
True or false: The California Association of REALTORS is primarily concerned about violations of the multiple listing service.
False
True or false: The Civil Rights Act of 1866 effectively put an end to housing discrimination between whites and blacks in America.
False
true or false: A broker has a duty to disclose material facts that are known to him, but does not have the duty to disclose facts that should be known to him through reasonable diligence.
False
True or false: A trust fund is always cash held by a principal.
False IT can be cash, a check, a personal note, or a tangible or intangible personal property.
True or false: One who is employed by a principal as an agent for a particular transaction or purpose is a general agent.
False. An agent for a particular transaction or purpose is a special agent. All other agents are general agent.
True or false: The Federal Fair Housing Act was enacted to protect homeowners from unfair and costly practices that stripped homeowners of their equity and often resulted in foreclosures.
False. Predatory lending laws were enacted to protect homeowners from unfair and costly practices that stripped homeowners of their equity and often resulted in foreclosures.
A certain property is listed for sale at $350,500. A comparative market analysis indicates that its market value is about $300,000. The wiring and plumbing in the house are substandard, and the lot, supposedly 150 feet deep, has not been surveyed. Which representation could a listing agent make a prospective buyer without a violation?
He could say that house has "charm".
A broker made a practice of buying homes on his own account from highly motivated sellers who were willing to take back an unrecorded trust deed. After acquiring many properties in this way, the broker applied to institutional and other lenders for loans on these properties buy failed to disclose the unrecorded trust deeds. After receiving loan funds, the broker intentionally defaulted on both the new senior liens given the lenders and the junior liens given the sellers. What do you feel BEST describes the broker's actions and liabilities.
He has clearly broken the law has not violated the regulation against misrepresenting lien priority.
A licensee is at his desk wondering how to generate some listings. On this desk is a photograph of his own house, which he is thinking of selling but which has not been listed. A homebuying couple comes in with their own agent and asks to look at listings. The wife notices the photograph of the agent's home and asks if the property is for sale. The agent answers that it is for sale. Which statement BEST describes the agent's obligation to disclose his ownership of the house to the buyers?
He should immediately inform the buyers that he is the owner and that he will not represent them in a transaction on his property.
A listing agent in San Mateo County was trying to sell a property to an out-of-state buyer. Observing two cracks in the foundation, the buyer asked whether the cause was earthquakes and where the San Andreas Fault was located. The agent replied that the cracks were due to foundation settling, which was common. As to the fault, the agent "wasn't sure" where it was. What BEST characterizes the agent's situation concerning disclosure?
He's risking trouble on both counts.
What is FALSE about option listing ?
If a property fails to sell, the broker must exercise the purchase option.
At four o'clock on a Friday afternoon, Ms. Collins hands agent Apfelbaum a check as an earnest money deposit with her signed offer to purchase a house. In the absence of further instructions, which action must Apfelbaum take?
Immediately deliver the check to the broker
An agent's ad for a home listing reads: "Had it with downtown crime? Tired of kids screaming next door? Want to be where the preferred transportation is a golf cart, and the talk of the neighborhood is about grandchildren? Don't miss the golden opportunity of the ages!"
It discriminates against people who are not elderly.
In an actual case, a seller wanted to list his property for sale at $13,000. His broker advised him to list it al $12,000, stating that this was the appraised value. Later, the broker advised the seller to reduce the price to $10,000, explaining that he couldn't find buyers at the listed price. Meanwhile, the broker produced an offer of $10,000 from a buyer with whom he was associated and negotiated a sale to a third party for $13,500, without telling the original seller, his client. The seller compromised at a price of $10,250, and the broker consummated both sales concurrently. The real estate commissioner revoked the broker's license. Which action of the broker was a violation of the misrepresentation regulation?
Leading the seller to believe in a falsely reduced market value while personally profiting from a resale transaction
What should you do if you find a discrepancy between the bank account record, the bank statement, and the separate beneficiary records?
Locate the cause immediately and correct it
A broker sold an apartment building to a syndicate of which the broker was a member without informing the seller of this interest. Before closing, the owner discovered the broker's interest and refused to sell. Which is the MOST likely result of a suit to collect a commission?
No commission is paid
Which broker would meet the definition of a "threshold" broker?
One who collects more than $250,000 in loan payments in a 12-month period
What is TRUE about option listing?
Prior to exercising the option, the broker must reveal all offers received. The broker must reveal the amount of profit if any, to the owner to exercise the option. The owner must consent in writing to the agent's profit should the options be exercised.
What action would Most likely violate the real estate law on loan transactions?
Telling the prospective lender that the collateral property has been professionally remodeled when it hasn't been
Can a real estate licensee legally respond to a client's question regarding the ethnic makeup of a neighborhood?
The California attorney general's opinion is not to disclose
To maintain trust account integrity, what must the broker ALWAYS keep equal?
The aggregate trust fund liability and the total positive balance due to all the beneficiaries of the account at the time they are to be paid.
What is true about net listings?
The broker must disclose the amount of commission to be received
What is a feature of the broker trust fund account?
The funds remain available to owners even if the broker dies or is being sued.
What is false about net listings?
They are illegal in California. The broker's best interests would be served by setting as high a net price as possible.
What is the minimum length of time that documents must be kept by a broker?
Three years from the date of closing or from the date of listing if there is no closing
True or False: A flood zone code prohibits ground-floor improvement of newly constructed homes. Numerous residents in the area improve these areas anyway in violation of the code. One such resident lists his property with the advertisement that the home contains 2,000 square feet of living area, inclusive of the ground-floor recreation room. The listing agent represents to a buyer that the home has wonderful extra room for the kids- which is why the listing price is a little higher than that of other similar homes. In this case, the agent has committed fraud.
True
True or false: A Hispanic person asks an agent which neighborhoods in the city have the best appreciation. The agent responds that the best Hispanic neighborhood is the Alta Vista area, which is appreciating because of the good reputation of the schools. The agent then informs the prospect that there are other find neighborhoods, but they are not "on top of the list. I have to mention these so people won't think I'm steering you." But he has, in fact, been steering the prospect.
True
True or false: A Hispanic person asks an agent which neighborhoods in the city have the best appreciation. The agent responds that the best Hispanic neighborhood is the Alta Vista area, which is appreciating because of the good reputation of the schools. The agent then informs the prospect that there are other fine neighborhoods, but they are not "on top of the list. I have to mention these so people won't think I'm steering you." But he has, in fact, been steering the prospect.
True
True or false: A borrower applied for a purchase-money loan from a federally insured lender to buy a personal residence. On his loan application, he stated that he earned $8,000 a month from a named employer. Relying on the borrower's financial statements, the lender approved the loan to the borrower, who purchased and occupied the subject dwelling. When the borrower defaulted on loan payments, the bank learned that the financial statements were false and reported the incident to the appropriate deferral agencies. The real estate licensee who assisted the borrower in filing in the application could be in major trouble.
True
True or false: A broker must give the owner of an advance fee trust fund a quarterly accounting of trust fund activity, as well as an accounting at the end of the contract between broker and principal.
True
True or false: A buyer's broker is trying to complete a buyer representation agreement with a prospect. One of the broker's sales pitches is, "You can have someone on your side, working for your interests, and it usually doesn't cost you anything since the seller pays commission." This statement is NOT in violation of the laws of agency.
True
True or false: A couple listed their house for sale with the branch office of a brokerage. In preparing the listing agreement, the salesperson included a commitment to "subordination" on the sale of the property but was unable to explain to the sellers what it meant. Another salesperson for the brokerage reported the listing to his brother, a builder, and procured an offer to buy for $47,500, with the terms "purchase money encumbrance would be subordinated to a construction loan of not more than $300,000." The two salespeople advised the sellers to accept the offer. For a sale involving subordination of this type, a reasonable price would have been at least $70,000. The sellers determined that they were being cheated and refused to sign the escrow documents. The builder sued for specific performance, and the sellers had to pay $7,500. In this case, the broker and the two salespeople adequately fulfilled their obligations to their client and have no cause for concern about legal or ethical liability.
True
True or false: A listing agent and the seller are trying to pin down the listing price. The seller asks the agent what a fair listing price would be, and the agent says that, while a lot of the "beginners" in the brokerage community run CMAs to estimate value, he has all the confidence in the world that $209,000 is a good number, given current market conditions. They list at the price, and the property sells in less than three days. The seller is delighted until the buyer inform her that they stole the property! Comparable properties, it turns out, are going for at least $255,000. At this point, the listing agent is exposed to liability for negligence.
True
True or false: A real estate licensee works full time for a fast-food franchise. The agent maintains regular office hours at the company and must follow the company's methods for analyzing potential restaurant sites. The licensee is paid a commission for every site she puts under lease. This person would MOST likely be considered an employee of the franchise.
True
True or false: A salesperson tells a prospective renter that there will be no problem with operating the renter's mail order business from the rental house the salesperson is managing the owner. The salesperson neglected to mention that local zoning prohibits at-home businesses in this neighborhood. If the renter signs the lease and then finds he cannot conduct his business as he intended, he may have grounds for a complaint to the California Bureau of Real Estate about the salesperson's behavior.
True
True or false: Broker Jefferson has some personal funds from earned property management fees in a trust fund account. The funds were deposited two weeks ago, and the checks have cleared. Jefferson wants to pay service personnel who work for him on the property he manages. Even though the service people actually work for the benefit of the property owner, Jefferson may NOT pay them with a check drawn against the trust fund account without violating a regulation.
True
True or false: Commingling is failure to separate trust funds from personal and business funds.
True
True or false: If you are arranging a loan for a homebuyer, good professional conduct requires that you answer the borrower's questions about the amount of the loan proceeds.
True
True or false: If you follow the former commissioner's suggestions for professional conduct, you will answer client questions and report transaction problems quickly.
True
True or false: Licensees may be held to a higher standard of care when dealing with unsophisticated buyers.
True
True or false: Purchase E&O insurance permits the broker to transfer financial risk to the insurance company.
True
True or false: The primary thrusts of federal and state legislation for people with disabilities are to prohibit discrimination and provide equal access to public facilities.
True
True or false: The purpose of the Rumford Act is to prohibit discrimination in the area of employment as well as housing.
True
Ture or false: It would be perfectly acceptable and ethical to obtain an exclusive listing to sell from the property owner.
True
true or false: An agency relationship does not depend on the existence of a written contract.
True
True or false: It is illegal for a group of brokers to agree on minimum commissions that they will change.
True. It's called price-fixing
A salesperson knows that the buyer's closing costs ona certain sales transaction are likely to be about $6,000. The byer wants to make an offer but is concerned about coming up with enough cash for the down payment and the closing costs. To help the buyer decide to make the offer, the sales person states that the seller usually pays all the closing costs. Comforted, the buyer makes the offer, only to learn about the $6,000 in closing costs that he is going to have to pay. What ethical or legal violation, if any, has the salesperson most likely committed?
Underestimating closing costs to induce the buyer to make an offer
The Civil Rights Act of 1968, as amended, does NOT prohibit
age discrimination
Real estate professionals are prohibited from discriminating in the sale of which properties?
all properties
Real estate licensees must present
any written offer received before closing, unless instructed not to by the owner
If a broker of record appoints a branch manager and fulfills the conditions of the law in the appointment
both the broker of record and the branch manager will have liability for the actions of the sales persons
During the term of an escrow, a listing broker discovered that an addition to the building had been made without building permit and that the addition was in violation of the building code. The broker should notify
both the buyer and the seller
When a buyer storms into the office complaining loudly about a problem in the house that the buyer just purchase, the
broker or manager should listen quietly and respectfully and gather information before offering any advise
When a broker's trust account is levied, one of the first steps the broker should take is to
contact expert legal counsel to provide advice.
Agents need NOT disclose to an owner that they have received an offer when
escrow has already closed
Actual fraud may include
false suggestion, false assertion, and false promises.
Intentional deceit is MOST closely associated with
fraud
Ona, wishing to sell her house, grants her brother a general power of attorney. The brother
has full authority to seek buyers for the property.
A property manager was tired of evicting marginally qualified tenants who subsequently could not make rent payments to improve matters, he instructed his leasing employees to obtain recommendations from previous landlords on all black and Hispanic applicants were not employed, or who had been employed for less than a year. In this instance, the manger
has instituted discriminatory rental procedures.
A 20-unit apartment building was constructed in San Jose in 1998. The complex had only limited access for mobility-disabled persons. Under California law, the owner
has violated California Code Section 54.
A group of brokers in an area meet and agree that they will all charge a minimum commission of 5 percent. This is an example of
illegal price-fixing
In presenting two identical offers requiring seller financing to an owner, which act of the broker would be wrong?
mentioning that one buyer was black
The Easton decision about required disclosures does NOT apply to
nonresidential property
The amin purpose of E&O insurance is to
protect against business-threatening lawsuits from dissatisfied clients
A broker told prospective purchasers, "You will love living in this neighborhood." After purchase, the buyers experienced problems with their neighbors. They sued the broker for the false statement. A court would likely determine the statement was
puffing
One way to show CalBRE that a broker of record is reasonably supervising his sales people is to
require regular reporting by the sales people to the broker is significant events report.
An agent knew that a property would be coming on the market, since the homeowner had told the agent about an upcoming job transfer. When the agent produced a full-price buyer for the property, a completely surprised seller informed the agent that he would consider the offer but was not liable for any commission since there was no listing agreement. In this case, the
seller could become liable for the commission if he accepts the offer that includes the commission.
A dual agent must NOT
tell the seller that the buyer will pay more, require compensation from both buyer and seller, and tell the buyer that the seller will accept less.
A license can be restricted by the real estate commissioner by
term, employment by a particular broker, or by conditions
In a previous scenario, management employees were instructed to obtain leasing recommendations for any black or Hispanic applicant with a marginal employment status. One of the rental agents, however, was Hispanic and didn't like the policy. Ignoring it, she leased an apartment to a Hispanic person without calling previous landlords. Six months later, the tenant defaulted and was evicted. The irritated manager placed a letter of reprimand in the agent's personnel file and subsequently fired her after things had quieted down somewhat. In this case,
the manager is liable for punishing an agent's refusal to discriminate
A listing broker may NOT inform a prospective purchaser that
the owner will accept less than the list price
A team name must include
the surname of at least one of the licensee members of the team
The standard to which brokers will be held is
to exercise reasonable supervision over the activites of their salesperson
Guilty knowledge is sometimes also called
willful blindness