RE Studying

What's the estimated value by cost approach for a property if the site value is $25,000, the new cost of improvements is $100,000, and the total depreciation estimate is $15,000?

$110,000

An appraiser used the cost approach to estimate a property's value at $220,000. The site value was $50,000, and the total depreciation estimate was $4,000. What was the estimated cost of improvements?

$174,000

What is true about an extended title insurance policy?

- it covers some items that aren't part of public record, such as unrecorded liens - its typically purchased for the lender - the buyer will most likely pay for this policy

Gary, your investor client, has an annual net income of $50,000. His annual debt service is $12,500. What is his debt coverage ratio?

4

Francine's landlord never returned her security deposit after she moved, even though it was in writing that she would get it back within three weeks. How long after the deadline for returning the deposit does Francine have to sue, according to California's statute of limitations?

4 Years

Which of these statements best represents what happens after a federal fair housing complaint is made?

A fair housing specialist will review the complaint

Which of the following is a true statement regarding a licensee's role in preparing a real estate contract?

A licensee must use standardized language when writing an addendum.

covenant of the right to convey

A promise in a deed that the grantor has the legal capacity to convey the title

covenant of warranty

A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.

Albert wants to sell his house to his cousin, who's willing to assume his FHA loan. What clause in Albert's mortgage requires him to obtain the lender's permission to do this?

Alienation Clause

What does the Federal Trade Commission consider to be an unfair ad?

Any ad or business practice that causes or is likely to cause injury

Clark works for Acme Bank and asks for your assistance. He wants you to look at a property that's about to go into foreclosure and provide him with a report on its current marketability and an approximate market value. What's Clark most likely asking you to provide?

BPO

Marty, a licensee, has a listing agreement with Becca, the seller. Whenever anyone tries to show Becca's property, Becca says it's not convenient. What is true about this situation?

Becca is in violation of the listing agreement.

Which of the following is the most serious consequence of treating a customer as a client?

Breaching your duty to your actual client

This is the legal agreement between a buyer and a broker hired to represent the buyer's interest.

Buyer representation agreement

Appraiser Joel has been tasked with developing an opinion of value for an office building that his client may purchase. He'll base the value he arrives at primarily on the income approach, because it ______.

Calculates the present value of any future benefits of owning the property

Joan is representing the buyer, Carlton, and Reggie is representing the sellers, Zeb and Teresa Martin. Carlton's Great Aunt Matilda has agreed to pay any portion of Joan's commission the sellers don't cover. Teresa's father, Teddy, has agreed to pay half of the sales commission that will be owed to the listing agent. Which of these statements is true?

Carlton and the Martins are the agents' principals in this transaction.

In California, an estate for years is known as ______.

Chattel Real

Which of the following is a benefit of home ownership, according to research studies?

Community Stability

Which of the following describes a universal agent?

Conservator

A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of closing, has already paid annual property taxes of $1,949. How will the closing statement reflect the proration for the seller? Use a calendar year proration, and round to the nearest dollar.

Credited $1,207

A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of closing, has already paid annual property taxes of $1,949. How will the closing statement reflect the proration for the seller? Use a calendar year proration, and round to the nearest dollar.

Credited 1207

Jared is your client who is selling his four-bedroom home. When you ask him if he is aware of any physical defects with the property, he states that the property is "in fine shape." Yet you've noticed several issues with rotted doorsills, crumbling masonry, and a suspicious moisture stain on the ceiling. If Jared won't come clean about issues of property condition, what should you do?

Decline the listing

Which term is used to describe when an owner gives or donates land or an easement for public use?

Dedication by deed

Bob is the grantor of a deed, and is in the final stages of transferring a deed to the new owner, Frank. What must Bob do in order to satisfy delivery and acceptance of the deed to Frank?

Deliver the deed to Frank, his agent or attorney, or the title company issuing the title

You're working with a client, Donny, who's found his dream home in the neighborhood where he grew up. Unfortunately, the title search finds some issues and the title company refuses to issue a policy. Donny still wants to go forward with the purchase, and since he's paying cash, he doesn't have to worry about obstacles from a lender. In California, what is one thing that has to happen in this situation?

Donny must receive written notice that no title insurance will be provided.

The Town of Petersville has just decided to restrict density in one area of town that previously allowed a higher density. This is known as ______.

Downzoning

Eloise is interested in buying a bungalow on the outskirts of the city. Her agent is reviewing the property details and informs her that there are several easements on the property. In particular, the gas company has a right of way because the natural gas line for the neighborhood runs through the back of the lot. What type of easement would this be?

Easement in gross

Which individual has a limited agency relationship with both a buyer and seller in a real estate transaction?

Escrow agent

To what type of estate does pur autre vie apply?

Freehold estate

covenant of seisin

Gives the assurance that the grantor has the exact estate in the quantity and quality which is being conveyed. "I own and I have the right to sell it."

Bradley provided his clients with a dual agency disclosure. He obtained his clients' signatures and provided copies to his clients. What step did he miss?

He did not make sure his clients understood the form before signing it.

Shana received a devise from her mother. What might this be?

Her mother's farm

Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building?

In severalty

Which of the following statements about an easement appurtenant is TRUE?

It's a permanent right that runs with the land.

Which of these statements is NOT true about an option contract?

It's the optionee's promise to buy property from an optionor.

Which of these statements is NOT true about an extended title insurance policy?

It's typically used when the property is paid in cash

Which ownership type is defined by four unities: time, title, interest, and possession?

Joint Tenancy

Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?

Joint tenancy

Melissa signed a six-month listing agreement with Greg on February 12. Her property is very specialized, and Melissa was adamant about the sales price. By September, the property still hadn't sold. Melissa expressed her displeasure with Greg for his inability to sell the property. What's the status of the listing agreement?

Melissa and Greg's agreement expired in August.

You have a seller client who hasn't had any offers and wants to extend the listing period. Which C.A.R. form would come in handy now?

Modification of terms

Many supplementary statutory disclosures will be included in the ____________ when provided by a third-party company.

Natural Hazards Disclosure Statement

The best way to start comparative market analysis data collection is to use properties that sold within which timeframe?

No later than three to six months ago

Mardee represented condo owner Carol, and they signed an exclusive agency listing agreement. If Carol found her own buyer, would she owe Mardee a commission?

No, because Carol procured the buyer

Hank, a 32-year-old parolee, signs a lease with Dee, his 54-year-old landlady. The lease is in writing and says Hank will provide Dee with a specific amount of methamphetamines each month as rent. They both sign the contract. Is this a valid contract?

No. The contract isn't for a legal purpose.

Bo's real estate ad states: "Custom homes for sale with scenic mountain views. Easy financing and low down payments." What else must be included in the ad in order for it to comply with TILA?

Nothing

Kendra made an offer on Sam's property. Sam rejected Kendra's offer, but made a counter-offer. Kendra is now considering the counter. What role does Kendra currently have in this scenario?

Offeree

Which of these properties are exempt from the FIRREA federal appraisal guidelines?

Properties valued at $400,000 or less

Todd conveyed title to his out-of-state property to Brad using a general warranty deed. A few months later, Brad discovered that the legal description of the property on the deed was incorrect, and his property was only half the size he thought he'd purchased. He sued Todd based on Todd's promises of ______ in the deed.

Quiet enjoyment and further assurances

Which clause in the deed of trust is the equivalent of the defeasance clause in the mortgage?

Reconveyance

Which of these statements about alien residents and non-residents of California is true?

Resident and non-resident aliens have the same property ownership rights as citizens in California.

Capital gains fall into which stage of the property ownership life cycle?

Reversion

Which of these situations represents a unilateral contract?

Sherry promises to give Brent a ride home from work, and then doesn't show up.

Rhonda purchased an existing pet store in her neighborhood, and she's so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won't be able to visit the store in her wheelchair, as the aisles are narrow and there isn't enough room to move around. What is true about Rhonda's responsibilities to her aunt and other people with disabilities?

Since Rhonda purchased an existing building and business, the ADA requirements aren't as strict as with new construction and vary by building.

When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent?

Special

Stacey, a buyer, is working with Rebecca, a licensee, in a state that doesn't recognize or permit implied agency. Rebecca doesn't represent Stacey, however, and is performing only ministerial tasks for her. Which of the following statements about this situation is correct?

Stacey is Rebecca's customer

Eva, Stella, and Lynn owned a vacation home two blocks from the beach. Sadly, Stella passed away over the winter, so when summer arrived, Eva and Lynn shared the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?

Tenancy in common

Two real estate firms in one small town, Vineyard Realty and Homestead Homes, agreed to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this?

The Sherman Antitrust Act of 1890

The appraisal finally came in and it's lower than the sales price the parties have contracted; an appraisal contingency was in place, but the lender failed to meet the appraisal deadline. What happens now?

The buyer's earnest money is at risk.

what is the defeasance clause

The clause that states that when the debt is paid, the lien must be removed.

When a city is determining zones, what should be followed?

The comprehensive plan

California has established a tax lien date when a tax lien attaches to a property. Which of these statements accurately describes the tax lien date?

The date is January 1 following the fiscal year for which the property tax is delinquent.

Homeowners Daryl and Stella, who are both in their 70s, paid off their mortgage during good times, but recent medical bills have overcome them and their creditors have a judgment lien against their property. They decide to sell their home and downsize to pay off their bills. Which of these is NOT true about the homestead exemption for Daryl and Stella?

The holder of the judgment lien will be paid before they receive their exemption.

When calculating loan-to-value ratios, which of the following will be used by the lender?

The lesser of the sales price or appraisal value

The Siegels are purchasing a commercial investment property and plan to use straight-line depreciation on their financial statements and tax calculations. Which of the following would NOT be included in the Siegels' depreciation basis calculations?

The loan origination and lender fees that they paid at closing

what is escheat

The process by which ownership of real estate reverts to the state when there are no legal owners.

Which of the following is true about net listings?

They often involve a conflict of interest.

You're talking to a co-worker at lunch, and she mentions she has a box of baby clothes her kids have outgrown that she needs to get rid of. You have a baby on the way, so you offer to pay her $25, and she agrees to bring the box to work the next day and give it to you. Which of the following is true in this situation?

This is an express contract because you defined in words the specific terms of the agreement and consideration to be exchanged.

What is the trustee's role when a deed of trust is used to secure property for a loan?

To hold legal title to the property on behalf of the beneficiary until the loan is repaid

Tom is acting as the listing agent for a property that has had a bit of a troubled past. Neighbors tell him gleefully that it's famous for being haunted. He feels that buyers don't need to know this, since he doesn't believe in ghosts. Which of the following is true?

Tom should disclose the possibility that the home is haunted.

Which type of accounting record shows a chronological record of all the deposits to and disbursements from the trust account?

Trust account journal

Don and Becky realized too late that the contract they signed for the sale of their home didn't include any language about a rent-back if the home they're building isn't ready in time. What can their listing agent do?

Use a contract amendment to add the necessary language, and have all parties sign it.

Which one of the following is a substance found in air fresheners, cleansers, paint, and building materials that at high levels can make indoor air quality toxic?

VOC

Which of the following types of consideration can be an exchange of money for a promise, an exchange of an item of value for money, or an agreement between the parties to do or not do something?

Valuable

what is a unilateral contract

a contract that includes the exchange of a promise for an act

covenant against encumbrances

a promise that the property is not encumbered with liens, easements, or other such limitations except as noted in the deed

Devise

gift of real property by will

Shelly is an escrow agent in a transaction in which Bill is buying Jose's property. Who does Shelly represent?

neither bill nor jose

Colleen and Judy purchased a dilapidated townhome in an estate sale. Due to their fix-up work and the current economy, the property value has skyrocketed. They decide to sell it to get their equity out of it. After they list it, a woman comes forward, saying she is an heir to the previous owner and lays claim to the property. Which general warranty deed covenant protects Colleen and Judy?

the covenant of warranty

Easement in gross

the right (of a specific individual/ company) to use land for a specific, limited purpose unrelated to any adjacent parcel

VOCs

volatile organic compounds which can make indoor air quality toxic at high levels

What is accession?

when you receive land through human causes