CAS 45-Hour Real Estate Principles Course - Practice Final

Which of the following is a valid reason for a tenant to refuse to allow a landlord to enter the property?

"I take it back. I don't want the repairs done today anymore. I'm sleepy." "The water dripping through the ceiling of the unit below isn't mine." -"You didn't provide notice that you wanted to show the property to a buyer today." "You shall not pass!"

Which one of the following is true about ownership or title to a property?

-Constructive notice to the public of real property ownership occurs when the deed is recorded. The last party to record has priority. The seller is responsible for paying for owner's and lender's title insurance. Title isn't finalized until the deed has been recorded.

This is a legal written agreement between a buyer and seller that states the purchase price and other terms of understanding by which real property will be transferred.

-Contract for sale Covenant Listing agreement Options

In order to convey real property, which one of the following documents would you use?

-Deed Mortgage Promissory note Title insurance

Non-lawful possession after the expiration of a lease is called ______.

-Estate at sufferance Estate at will Estate for years Leasehold estate

If a seller fails to install a smoke detector and also fails to provide a smoke detector disclosure to the buyer, what damages may apply?

-Up to $100, plus court costs Up to $100 total Up to $500, plus court costs Up to $500 total

In which form of price determination does the real estate professional often just drive by the property and take photos, then complete paperwork for the lender?

Appraisal -Broker's price opinion Comparative market analysis Competitive market analysis

Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?

Area preference Immobility -Permanence of investment Scarcity

Which of these circumstances does NOT require agent disclosure?

As part of his corporation, Sean, a licensee, owns several investment properties. He's selling one. Gary represents the buyer. He's a shareholder in the title insurance company the buyer has selected. -Marty is representing Dwayne in both the sale of his current home and the purchase of his new home. Megan has listed her brother's townhome for sale.

Improving a credit score can help a buyer ______________.

Avoid financing Decrease debt Increase savings -Qualify for better interest rates

Lead is a highly toxic metal that may cause a range of health problems, especially in young children. Which one of the following is a true statement about lead hazards?

Lead causes blindness on contact with the eyes. Lead is a confounding factor in diabetes. Lead is associated with coronary heart disease. -Lead may cause behavioral problems, learning disabilities, seizures, and, in extreme cases, death.

What is the goal of real estate law?

Limit activities real estate professionals can perform Limit the services consumers can obtain from real estate professions Promote the interests of real estate professionals -Protect and promote public safety, health, order, and welfare

Which of the following means a legal section in a contract or law?

Listing agreement Option -Provision Tender

Marsten is the personal representative for his grandmother's estate. After her death, he learns that he can't distribute the estate's property until after the will goes through probate. What does this mean?

Marsten must apply through the courts to manage his grandmother's estate. -The court must determine the will's validity and supervise distribution of the estate. The courts must contact all potential heirs to learn of their wishes regarding distribution of the estate. The courts must review Marsten's ability and knowledge related to distribution of the estate.

Micah's client often tells him to do things that Micah doesn't necessarily agree with and that create a lot more work for him. Micah has multiple clients and can't spend all of his time doing the bidding of just one demanding woman. Micah decides to pick and choose which of his client's instructions he is going to follow. What might be the consequence if Micah doesn't fulfill his duty of obedience to his client?

Micah may be forced to send the client a written apology. -Micah may lose the client's business. Micah may receive a slap on the wrist from his broker, and be told to shape up or ship out. Micah's commission may be at risk.

What is the maximum amount that will be paid out of the Recovery Account for a transaction?

$10,000 $100,000 $25,000 -$50,000

A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the first monthly payment is interest?

$10,869.57 $3,500.93 -$3,593.75 $3,750.27

A rundown home, overgrown with weeds and in desperate need of repairs, is driving down property values on the block. What economic principle is at work here?

Anticipation Contribution Progression -Regression

Jeffersontown has a zoning ordinance that requires all properties in a designated historic district to have brick or wood plank facades. No aluminum, cement board, or vinyl siding is allowed. What type of zoning is this?

-Aesthetic zoning Downzoning Incentive zoning Spot zoning

The GRM for Sunny Hills is 147. If a three-bedroom, one-bath house in Sunny Hills rents for $820 monthly and sold for $125,000, what is the suggested value of a house that leases for $1,000 monthly based on the GRM?

$120,540 -$147,000 $152,439 $198,540

The daily property tax rate is $1.23 and closing is August 31. Assuming the buyer owns the property on closing day, and the seller hasn't made any payments, what will the seller owe at closing using the calendar year proration method? Round to the nearest whole dollar.

$151 $242 -$298 $449

Your buyer client, Max, just signed a purchase agreement for a $520,000 home. He has a 60% LTV ratio, and his lender's charging a 1.5% loan origination fee. What loan origination fee can Max expect to pay at closing?

$2,200 $3,120 $4,200 -$4,680

Jeffrey has accepted an offer of $310,000 for his house. The buyer is making a $50,000 down payment, and the buyer's appraisal came in at $300,000. On what number will the buyer's lender base the loan-to-value ratio?

$249,000 $299,000 -$300,000 There's no way to tell given the data provided.

The Simpsons are buying the Martins' house for $415,000, and closing is set for March 15. The Martins have a loan balance of $230,000 at a rate of 4.7% and have prepaid property taxes ($2,506) and insurance ($1,400), and they also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Simpsons will owe the Martins at closing. Assume February has 28 days this year. The sellers own the day of closing.

-$1,997.62 $3,113.46 $604.95 $792.54

Rental properties that are less than ______ are exempt from the Tenant Protection Act of 2019.

-15 years old 20 years old 25 years old 30 years old

Homes built in which one of the following years are more likely to have asbestos present?

-1960 1990 2000 2010

The first step in the subdivision development process is the market study. This step includes ______.

-A feasibility study Fair housing interviews Raising venture capital Underwriting financing

seller/homeowner will be handled between those two parties. Question 36 Newt's buyer client isn't happy with him. The buyer has accused Newt of breaching his duty of ______ by mishandling the earnest money.

-Accounting Confidentiality Disclosure Obedience

A comparable property sold one month ago for $400,000. That property has a three-car garage, whereas the subject property you're preparing to list only has a two-car garage. What should you do to determine the subject property's market value?

-Adjust the comparable's price down Adjust the comparable's price up Adjust the subject's price down Adjust the subject's price up

Which of the following questions can an agent in a dual agency transaction answer without breaching her duties to either client?

-Are you aware of any structural issues with the property? How much should my counter-offer to the buyer be? What repairs or concessions should I ask for from the home inspection? What should I agree to fix from this list the buyer sent?

______ is called the "silent killer" because it's odorless, tasteless, and deadly.

-Carbon monoxide Formaldehyde Radon VOCs

Carmen is a builder. Which of the following is true about construction codes as they apply to her next project?

-Carmen must adhere to all federal, state, and local building codes, which are enforced at the local level. Carmen must adhere to local, but not state or federal, building codes. Carmen must adhere to local, state, and federal building codes, but only if her project is a commercial (non-residential) project. If Carmen builds four or fewer homes, building codes don't apply at the local level.

You have a listing agreement with Sam. Because of this, what is Sam's relationship to you?

-Client Confidante Customer Friend

When licensees follow through on what prospects have asked, arrive for meetings on time, and come prepared, what trait are they exhibiting?

-Competence Documentation Effective communication Empathy

In which type of common interest subdivision do the owners have exclusive rights to a unit, as well as a shared interest in the common areas?

-Condominium project Planned development Stock cooperative project Timeshare

Rancher Ross was thrilled to learn he could sell his property's mineral rights to a company that's looking for oil. He didn't realize he'd also created an ______, allowing them to bring drilling equipment onto his land.

-Easement by implication Easement by necessity Easement by prescription Easement by right

A licensee must perform which of the following tasks for a buyer client?

-Ensure the buyer understands the importance of due diligence, including a professional inspection of the property. Review the seller's property disclosures and show the buyer the ones that you believe are important. Show the buyer properties that you are listing for other sellers. Tell the buyer how much earnest money she should put down to ensure the deal goes through.

What type of lien is defined as an involuntary lien placed on all of the property received by a deceased person's heirs?

-Estate/inheritance lien Income tax lien Judgment lien Mortgage lien

Peter is a tenant in a single-family home owned by Cheyenne. What type of interest does Cheyenne have in the property?

-Freehold Homestead Leasehold Lifelong

What's one measure a builder would likely take to improve a site's drainage?

-Grade the lot Install a moat Install concrete walls Pave the lot

Which of the following is true about zoning?

-Proposed zoning ordinances are examined for fairness before being enacted. While zoning may impact a community, it does not impact individual property owners. Zoning changes are enacted by local governments without public input. Zoning does not impact property value.

Select the correct definition for "reformation of a contract."

-Redrafting a contract Releasing one party from a contract Renewing a contract Suing another party to a contract

A square room has an area of 144 square feet. How long is each side?

10 feet -12 feet 24 feet 72 feet

Your buyer client is following your advice and has obtained title insurance. The policy is from ______ and shows the legal description of the property and the standard items it covers, such as encumbrances of record.

American Land Title Association (ALTA) -California Land Title Association (CLTA) General Land Title Association (GLTA) Standard Land Title Association (SLTA)

Individuals who experience housing discrimination are provided the opportunity to file a complaint based on the provisions of which act?

Americans with Disabilities Act of 1990 Civil Rights of 1866 -Fair Housing Act of 1968 Fair Housing Amendments Act of 1988

Select the statement that accurately reflects the type of deed used for the transfer.

A bargain and sale deed conveys property in a foreclosure proceeding. -A deed of trust conveys real estate to a trustee for the beneficiary named in the deed. A referee's deed conveys property from one spouse to another in a divorce proceeding. A warranty deed conveys REO property from the lender.

Under which of the following circumstances would the client and agent most likely mutually agree to terminate a listing?

A buyer approached the seller with a much higher offer than the current listing price. -The agent and client don't agree on the best way to price, maintain, and market the property. The client has found a buyer and wants to avoid paying a commission. The client's cousin just became licensed and needs her first listing.

David is an active duty member of the U.S. Air Force. Assuming he and the property meet the qualifications, which type of mortgage may be the best option for him?

A conventional loan A Ginnie Mae-originated loan An FHA loan -A VA-guaranteed loan

Mrs. Blanchard cut down a tree growing on her property. Which of the following has occurred?

A fixture has become real property. Personal property has become real property. Real property has become a trade fixture. -Real property has become personal property.

Sherman, who owns property in a life estate, neglects the property, significantly diminishing its value. This is called ______.

A lease option -An act of waste An estate at sufferance A possessional prerogative

Which of these statements about mobile home tenancies is true?

A mobile home license is required to serve as a mobile home rental agent in California. -Mobile home landlord and tenant rights and responsibilities are spelled out by the Mobilehome Residency Law. Mobile home tenancies are exempt from residential landlord-tenant laws. Mobile home tenancies are subject to the same laws as commercial rentals.

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

A written message Her mother's car -Her mother's farm Her mother's jewelry

What's one of the most fundamental of all fiduciary duties, and is the one that underlies all other duties?

Accounting Disclosure -Loyalty Obedience

If an item is permanently attached to a property, a court would most likely consider it a fixture if it passes which of the following tests?

Adaptability of the item to the land's use Agreement of the parties -Method of annexation Relationship of the parties

If your license is suspended, it's only temporary. If your license is revoked, it is permanently removed and requires ______.

Additional education -A new license application after the penalty period A small fee A verbal reprimand

A comparable residential property sold one month ago for $300,000. That property is on a busy street, whereas the subject property you're preparing to list is a corner lot on a quiet street. What should you do to determine the subject property's market value?

Adjust the comparable's price down -Adjust the comparable's price up Adjust the subject's price down Adjust the subject's price up

Generally, there are covenants between the borrower and the lender within a mortgage document. Which of the following is a mortgage covenant?

Agree to refinance only with the current lender. Give the lender first right of refusal. Move all checking and savings account to the lender's institution. -Pay any charges and assessments against the property.

Which of the following best indicates that Harold is Kelsey's seller client?

At an open house, Harold asked Kelsey about her commission rate and sales track record. Harold and Kelsey talked at a local elementary school event about the real estate market and the possibility of Harold selling his house. -Kelsey and Harold have a signed agency agreement. Kelsey cold-called Harold, and he mentioned that he had been thinking of selling his house.

Zack enters into a contract to buy Olivia's home. Per the terms of the contract, Zack must put down a $10,000 earnest money deposit and have the property inspected within five days. In reality, he puts down a $12,000 deposit and has the property inspected within two days. Of what is this an example?

Buyer misrepresentation Partial performance of the contract -Performance of the contract Voiding of the contract

Which of these phrases is used to describe the act of correcting a contract that contains a mistake?

Disclosing of a contract error -Reformation of a contract Release of a contract Renewal of a contract

What must you do to convert a decimal to a percentage?

Divide the larger number by the smaller number. Divide the top number by the bottom number. Move the decimal point two places to the left and remove the percent symbol. -Move the decimal point two spots to the right and add a percent symbol.

Lenders look at a HELOC balance of less than $50,000 as if ________________.

It were a credit card It were an asset It were a paid mortgage It were cash

Appraiser Victor is determining the insured value of a property. What is he evaluating?

Items of great importance to a lender to replace or rebuild -The cost to replace or rebuild a property The price at which the property can be loaned on or sold at a foreclosure sale The return on investment the property may provide

Which of these situations represents a unilateral contract?

Cain sells Trenton his bike. Maurice promises Shelton $100 if Shelton will sell his painting. Shelton agrees, but Maurice doesn't pay Shelton. Nathan and Sue exchange vows at their wedding. -Sherry promises to give Brent a ride home from work, and then doesn't show up.

A commercial landlord in California could find answers to questions about commercial landlords' rights and responsibilities in which of these resources?

California Commercial Landlords handbook -----California DRE Reference Book California Tenants handbook Commercial Property handbook

The Arbor Heights community passed a zoning ordinance that requires group homes designated for disabled citizens to be situated outside of city limits. This is a violation of the ______.

City Charter Act -Fair Housing Act Municipality Zoning Act Zoning Disability Act

Consumers may use Roth IRA funds to obtain the down payment for their home purchase. Which of the following scenarios is allowed?

Clayton, who has had his IRA for 10 years, withdraws $15,000 as part of his down payment on a vacation home. Desiree, who has held her Roth IRA for three years, withdraws $7,000 to help fund a down payment on her third home. Mary borrows $5,000 from her brother Jack's Roth IRA for her home purchase. -Nevil, who has held his Roth IRA for five years, withdraws $8,000 to go toward a down payment on his first home.

If you fail to notify your client of a conflict of interest, in addition to the duty of loyalty, what other duty have you breached?

Confidentiality Disclosure Obedience Reasonable skill and care

What well-known economic principle says that a property's value is determined by what it would cost to purchase a similar property?

Conforming value Regression Similar cost principle -Substitution

______ determines who the heir or heirs will be if a person dies without a will.

Court appointment Escheat Intestate bequest -Intestate succession

Which agency applies the "target" designation to a dwelling and has set specific requirements for lead abatement and remodeling of these homes?

DARPA The DEC -The EPA The Local Lead Standards Designation Board

Jerome has four grown children. When he dies, he leaves his home to all four children, making them tenants in common with equal shares. One child wants to live in the house, another wants to use it as investment property, and two others want to sell it and take the cash. When they can't agree on a solution, they end up in court and the property is ______.

Deeded by appointment Foreclosed -Partitioned Transferred via intestate succession

There are a lot more sellers than buyers in the current market. How does this demand influence value? Demand doesn't influence value. Value is pushed downward. Value is pushed upward. Value remains the same.

Demand doesn't influence value. -Value is pushed downward. Value is pushed upward. Value remains the same.

Roberta worked with an attorney to prepare her will. What kind of will is this?

Descent Functional Holographic -Statutory

What is it called when a tenant repays past-due rent to retain possession?

Due process -Relief from forfeiture Unlawful detainer Writ of possession

Deirdre is receiving a lot of advice about how to respond to the breach of contract by one of her tenants. Which of these statements is bad advice because it is blatantly false?

Even if you terminate the lease and kick her out, you can sue for the rest of the rent, because she agreed to pay it by signing the lease. If you're thinking of going the route of eviction, you'll need to terminate the lease first. Keeping the lease in effect means you can sue for rent owed for the remainder of the lease term. Terminating the lease means the tenant won't be obligated to pay any more rent.

What type of requirements must a contractor applicant meet in order to obtain a license?

Pay a fee and post a bond -Pay a fee, post a bond, meet educational and experience requirements Perform a 30-hour practicum with a licensed contractor, pay a fee, and post a bond Post a bond and pass an exam

f a landlord refuses to rent an apartment to two single women who live together, this is discrimination on the basis of what federally protected class?

Familial status Lifestyle Same sex relationship -Sex

Any financial institution with deposits that are insured by a federal government agency can sell mortgages to which institution?

Fannie Mae (FNMA) Farmer Mac -Freddie Mac (FHLMC) Ginnie Mae (GNMA)

What can a property owner do to stop contractors performing unauthorized work from filing mechanic's liens later?

File a lien release File a notice of completion -Post and file a notice of nonresponsibility Require the contractor obtain a payment bond

Commercial lease escalation clauses typically do not take effect until after what period of time?

Five years One week Six months -The "base year," or first year

Which covenant term means that the grantor both has legal capacity to convey the title and also has the title to convey?

Further assurances Quiet enjoyment -Right to convey Warranty forever

You've just learned that your buyer, Kirk, can't obtain a qualified mortgage for his dream home because his debt-to-income ratio would be above the threshold. What is Kirk's best option?

Get a sub-prime loan. No options here; Kirk will need to wait until his debt-to-income ratio meets qualified lending standards. Offer a shared equity situation with the lender. -Pay off his other debt and/or increase monthly income.

Martin is a tenant. His lease has a fixed rent but also requires that he pay for insurance and other expenses for the property. What type of lease does he have?

Gross Ground -Net Variable

Shannon is moving to California in seven months to attend college and has already signed a nine-month lease agreement. Which of these statements about her lease agreement is true?

Her lease does not need to be in writing because California allows oral lease agreements. Her lease does not need to be in writing because the lease term is only for nine months. Her lease needs to be put in writing because California requires that all leases be put in writing, regardless of the term. -Her lease needs to be put in writing in because the entire agreement will cover a period of 16 months.

With a triple net lease, the tenant pays ______ separately from the base rent.

Insurance, utilities, and maintenance Maintenance, insurance, and debt service Taxes, debt service, and lease payment -Taxes, insurance, and maintenance

Anthony owns a new commercial strip mall with several units. He's hired Jillian as his agent to find tenants to rent each unit. Is Jillian required to provide Anthony with an agency disclosure form?

It depends on how many units are for lease. No, agency disclosure is only required for residential transactions. No, agency disclosure is only required on sales of commercial properties. -Yes, Jillian is required to provide Anthony with an agency disclosure form.

What recourse does a subdivision developer have to a D&R order?

Nothing. D&Rs are immediate and irreversible once issued Refund purchasers' deposit money Sue the commissioner for improper use of authority -They can write a request to have a hearing and contest the order

Which of the following is an example of a prime lender, as compared to a subprime lender?

Offers higher interest rates -Offers lower fees Refuses to work with minorities Targets low credit scores

Limited liability companies and limited liability partnerships are favorable forms of business because ______.

Owners of the LLC or LLP are personally liable for LLC/LLP obligations. They aren't taxed as partnerships. -They don't require a general partner. They're considered temporary and can be quickly dissolved.

Which of the following is a mortgage where the consumer cannot later claim that the lender did not comply with the ability to repay requirements?

Qualified mortgage with ability to repay -Qualified mortgage with a safe harbor status Qualified mortgage with cash payment option Qualified mortgage with the rebuttable presumption

What's the difference between reversionary interest and remainder interest in a property?

Remainder interest applies only to heirs. Reversionary interest only applies to spouses. With remainder interest, the property remains with the owner, even when a life tenant possesses the property. -With reversionary interest, the property reverts to the owner after the death of the life tenant.

What does Susanna do as an appraiser?

She determines what a buyer may pay for a property. She provides an estimate of value that the consumer may influence. -She provides an unbiased estimate of value. She's usually hired by the buyer or seller.

Trinity has been named executor of her uncle's will. What does this mean?

She receives all her uncle's possessions and property. -She's responsible for carrying out the will's provisions. She's responsible for taking care of her uncle until his death. She's responsible for the probate of her uncle's will.

Which act prohibits housing financial discrimination on the basis of protected class make-up or location of a property?

The DFEH Act -The Holden Act The HUD Act The Unruh Act

A client terminates a listing agreement before its expiration date. What happens now?

The agent must send the client a notice of release form. The agent must sue. -The client may owe a commission anyway. The listing is cancelled.

Norman, the seller's agent, notices a significant crack in the foundation that the inspector failed to note in the inspection report. Norman decides to keep this information to himself. He really needs to close this deal. Which fiduciary duty has Norman breached?

The duty of accounting -The duty of disclosure The duty of obedience The duty of reasonable skill and care

Who's responsible for a person's injury that was sustained on the premises depends on ______.

The landlord The tenant Whether the premises are commercial or residential -Who's at fault

Elizabeth's property is encumbered by an easement in gross with which of these entities?

The neighbor who constructed his new backyard fence six inches across Elizabeth's property line The owner of the empty lot down the street that Elizabeth uses as a vegetable garden with the owner's permission The resident of the adjoining property to whom Elizabeth has given permission to store some items in her gardening shed -The utility company that needs to access the power line that crosses a corner of Elizabeth's land