RE Practice (Quiz Questions and Terms)

(6) By attaching and signing an arbitration agreement to the Exclusive Authorization and Right to Sell, the seller and broker agree to (a) binding arbitration of disputes (b) arbitrate disputes if directed by the court (c) nonbinding arbitration of disputes (d) waive their rights to arbitrate

binding arbitration of disputes

(14) A married couple sells their principal residence of 30 years for $650,000.00. Their adjusted cost basis is $80,000.00. How much of their gain would be taxable?

$70,000 (They have a gain of $570,000 and a $500,000 exclusion)

(13) Escrow costs are prorated based on a:

both 30-day month AND 360-day year

(14) Generally, nonresidential real estate purchased since 1987 is depreciated using:

both 39 years for the property life AND the straight-line method

(13) The purchase price would be:

both a debit on the buyer's closing statement AND a credit on the seller's closing statement

(5) Serious buyers contact real estate agents because (a) both agents have inventory AND they want to quickly locate property that meets their needs (b) agents have inventory (c) none of these (d) they want to quickly locate property that meets their needs

both agents have inventory AND they want to quickly locate property that meets their needs

(3) The earthquake safety disclosure statement (a) applies to 1-4 residential units (b) both applies to 1-4 units and must be signed by the buyer and seller (c) must be signed by buyer and seller (d) is voluntary

both applies to 1-4 units and must be signed by the buyer and seller

(2) The Civil Rights Act of 1968 prohibits (a) neither blockbusting nor steering (b) both blockbusting and steering (c) steering (d) blockbusting

both blockbusting and steering

(12) RESPA applies to (a) None of these (b) 1 to 4 residential units only (c) first loans only. (d) both first loans only AND 1 to 4 residential units only

both first loans only AND 1 to 4 residential units only

(9) When you receive For Sale sign inquiries you can assume that the caller

both is satisfied with the general appearance of the home and is satisfied with the area.

(6) What would be a word or words to use in a listing presentation that denotes a benefit to the seller? (a) Commission (b) Cost (c) Agency representation (d) Listing

Agency representation

(13) Which of the following are exempt from licensing under the escrow law? Quiz Question (a) Banks (b) Attorneys (c) All of these (d) Savings associations

All of these

(13) When a change is required to escrow instructions, both buyer and seller must agree to

amend the escrow instruction

(12) The margin on an adjustable-rate loan refers to the:

amount over the index the lender charges as interest.

(15) A lease that needs no notice for termination, would be

an estate for years

(6) A listing where the selling agent is subject to disciplinary action for demanding a fee would be (a) an exclusive listing without a termination date (b) an open listing (c) a listing where the agent was not authorized to accept a deposit (d) a listing having a safety clause

an exclusive listing without a termination date

(14) The California Homeowner's Exemption for property taxes is

$7,000

(11) In making an appointment to present an offer, the agent should: (a) none of these (b) let the buyer know the price so they can consider it before the agent arrives. (c) both let the buyer know the price so they can consider it before the agent arrives AND arrange to have all owners present for the presentation. (d) arrange to have all owners present for the presentation.

arrange to have all owners present for the presentation.

(3) A selling agent must comply with agency disclosures to they buyer (a) upon deliver of the seller's acceptance (b) prior to qualifying the buyer (c) prior to showing property (d) before the buyer executes an offer

before the buyer executes an offer

(4) Prospecting from legal notices can be effective. Which of the following is NOT a legal notice? (a) Probate (b) For Sale By Owner (c) Code violations (d) Eviction

For Sale By Owner

(7) 3 advantages of holding open houses

1. locating prospective buyers 2. obtaining listings from visitors 3. showing owners you are working on their behalf

(14) Tax benefits of a principal residence include all of the following EXCEPT (a) deductibility of taxes. (b) 1031 exchange. (c) universal exclusion. (d) deductibility of interest.

1031 exchange

(12) Which of the following loans is MOST likely to have the highest initial interest rate? (a) 30-year loan due in 5 years (b) Adjustable-rate mortgage (c) 30-year-term amortized loan (d) 15-year amortized loan

30-year-term amortized loan

(4) The fine for making a single unauthorized solicitation call to a residential number listed on the do-not-call registry can be up to _________ adjusted for inflation.

43, 792

(8) Which of the following statements regarding the truth-in-lending law is true? (a) If the agent advertises the APR, the agent must include all credit terms. (b) Agents must advertise their names and license status. (c) None of these (d) Bait-and-switch advertising is a federal offense.

Bait-and-switch advertising is a federal offense.

The process of inducing panic selling by representing that prices will drop or crime will increase because of the possible entrance of minority group members to the area

Blockbusting

(12) An escrow licensee is prohibited from

Both paying a referral fee to anyone other than his or her own employees AND accepting escrow instructions having blanks that are to be filled in after the instructions are signed.

(12) A loan whereby the borrower buys under a land contract would be a

Cal Vet loan.

(2) The Civil Rights Act that applied only to race was the (a) Rumford Act (b) Unruh Act (c) Civil Rights Act of 1968 (d) Civil Rights Act of 1866

Civil Rights Act of 1866

(6) What type of listing is seldom used in CA but is considered illegal in a number of other states?

Net

(5) Which of the following statements regarding selling time is TRUE? (a) None of these (b) Because buyers seldom offer the list price, the list price has no effect on time to sell (c) Properties listed above market value tend to sell faster than properties listed at prices closer to market value (d) Properties listed below market value tend to take longer to sell than properties listed at market value

None of these

(14) Which proposition makes it possible for taxpayers 55 years or older to transfer the current base-year value of their principal residence to a replacement home anywhere in California?

Proposition 19

Refusal to loan within an area

Redlining

(11) For listing agents, selling real estate involves three separate sales. Which of the following is NOT one of the three? (a) Selling the lender on making the loan (b) Selling the buyer on making an offer (c) Selling the owner on giving a listing (d) Selling the seller on an acceptance

Selling the lender on making the loan

(12) A rescission right until midnight of the third day after signing is provided for by

The Truth-In-Lending Act

(9) Which of the following is an example of a tie-down? (a) This is an exceptionally large kitchen, isn't it? (b) Can you afford this house? (c) Would you prefer to buy now or think it over? (d) What would you use this pantry for?

This is an exceptionally large kitchen, isn't it?

(3) A Transfer Disclosure Statement must be provided to the buyer when the sale involves (a) a vacant lot (b) all of these (c) commercial building (d) a 3-unit residential building

a 3-unit residential building

(7) The owner should understand the broker's advertising policy, including the fact that a(n): (a) broker that fails to advertise a property every week is not doing a proper job of advertising. (b) ad will cover every major feature of a house. (c) display ad should be used daily to impress home-seekers. (d) ad within a price range or area creates prospects for other homes in the price range or area.

ad within a price range or area creates prospects for other homes in the price range or area

(10) In meeting a buyer's objections the agent should consider (a) conceding before answering. (b) welcoming the objections. (c) meeting objections half-way. (d) all of these.

all of these

(10) Which of the following should an agent regard as a buying signal? (a) An inquiry as to when possession would be possible (b) All of these (c) The statement, "The price seems a little high." (d) A reluctance to leave a property

all of these

(13) The term "good funds" refers to: (a) all of these (b) cashier's checks (c) cash (d) checks that have cleared

all of these

(14) Proposition 13 provided for (a) property taxes to be increased up to 2% each year. (b) All of these (c) assessed value of property acquired before 1978 to be reduced to the amount shown in the 1975 tax roll. (d) newly acquired property to have a maximum basic tax levy of 1%.

all of these

(3) An agent's inspection under Easton vs Strassburger applies to (a) accessible areas only (b) 1-4 residential units (c) all of these (d) visual inspections and known or should-have-known defects

all of these

(3) The Seller Financing Disclosure Statement provided both buyer and seller provides (a) all of these (b) credit terms (c) warning as to balloon payments (d) disclosure of deferred interest

all of these

(8) Which of the following statements regarding display ads is TRUE? (a) Ads in an outside column will generate more interest than ads in an inside column. (b) Lowercase letters are easier to read than capital letters. (c) All of these (d) Inclusion of white space serves to emphasize a message.

all of these

(5) In preparing estimated seller proceeds, you should remember that (a) both owners who get less than they expected to receive from a sale are likely to be unhappy with you AND it is better to estimate costs a little on the high side than the low side (b) owners who get less than they expected to receive from a sale are likely to be unhappy with you (c) because owners want to get as much as possible, you should underestimate costs so the net will be greater. (d) it is better to estimate costs a little on the high side than the low side

both owners who get less than they expected to receive from a sale are likely to be unhappy with you AND it is better to estimate costs a little on the high side than the low side

(14) Requirements for a valid 1031 exchange include

both property must been held for productive use in a trade, business, or for investment purposes AND exchange property must be of like-kind.

(12) Mortgage companies differ from mortgage loan brokers in that mortgage companies

both use their own funds to make loans AND service loans they make.

(11) The sales price is really set by the

buyer

(13) A standard policy of title insurance protects the purchaser from all EXCEPT (a) changes in the zoning. (b) an unknown spousal interest. (c) forgery in the chain of title. (d) lack of capacity of a grantor.

changes in the zoning

(15) A common fee arrangement for commercial property managers would be a

combination of percentage of the gross AND minimum fee.

(12) Loans that meet the underwriting standards of Fannie Mae or Freddie Mac are known as:

conforming loans

(10) If a prospective buyer intends to occupy a single-family home as a residence, the agent should realize this fact could have a direct bearing on

damages should the buyer default

(6) A broker never saw, talked to, or corresponded with a buyer by another agent, yet earned a commission. What type of listing did the broker have? (a) Exclusive agency listing (b) Exclusive authorization to acquire real property listing (c) either exclusive authorization to acquire real property listing or exclusive agency listing (d) open listing

either exclusive authorization to acquire real property listing or exclusive agency listing

(2) A broker may not discriminate against a tenant who (a) either has AIDS or has a guide dog (b) has AIDS and has a guide dog (c) has AIDS (d) has a guide dog

either has AIDS or has a guide dog

(13) The extended coverage policy offers protection covering all of the following EXCEPT (a) unrecorded loans. (b) rights of parties in possession. (c) eminent domain. (d) claims that a correct survey would have revealed.

eminent domain

(4) Non-geographic farms include (a) a particular mobile home park. (b) a particular subdivision. (c) properties in close proximity. (d) ethnic groups.

ethnic groups

(15) A lease stipulating that the tenant pays a fixed monthly rental and the landlord pays all other property expenses would be a

gross lease

(3) A fiduciary relationship applies to real estate licensee and to (a) buyers only (b) the Department of Real Estate (c) all parties the agent has dealings with (d) his or her principle

his or her principal

(13) The Preliminary Title Report (a) is merely an offer to insure. (b) provides insurance coverage until the title insurance policy is issued. (c) provides extended coverage for lenders. (d) None of these

is merely an offer to insure.

(11) When presenting multiple offers the agent should

keep in mind their first duty is to the owners, not to themselves or their firm.

(6) Written notice that the amount of commission is negotiable is required in (a) every nonresidential listing (b) every residential listing (c) every listing (d) listing of 1 to 4 residential unites

listing of 1 to 4 residential unites

(12) Which of the following statements is TRUE? (a) Both primary financing refers to loans made directly by the lender to the borrower and secondary financing refers to the resale of existing loans. (b) None of these (c) Secondary financing refers to the resale of existing loans. (d) Primary financing refers to loans made directly by the lender to the borrower.

none of these

(15) Which of the following statements BEST descries a sublease? (a) None of these (b) The entire leasehold must be transferred. (c) The sublessor is a tenant of the original lessee. (d) The original lessee is secondarily liable and the person in possession is primarily liable under the original lease.

none of these

(4) A reverse directory allows an agent to have the (a) owner's name from the tax number (b) legal description from the address (c) address from the occupant's name (d) occupant's name from the address

occupant's name from the address

(12) A loan that can be increased to an agreed-upon limit would be a

open-end loan.

(4) A geographic farm could be a (a) special interest of buyers (b) type of property (c) particular subdivision (d) particular ethnic group

particular subdivision

(14) The dates November 1st, December 10th, February 1st, and April 10th relate to

real property taxes

(15) A clause in a percentage lease whereby the landlord has a right to regain the premises if the tenant fails to achieve a stated gross would be a:

recapture clause

(9) When a caller won't give a name, the best approach would be to

say, "I will give you the address if you give me your name."

(9) When showing a property to a prospective buyer, the agent should (a) show unoccupied property first to give the owner-occupants a chance to prepare for the showing. (b) show the prospective buyers homes they have listings for in order to please the owners of those listings. (c) have a hard and fast rule to never show more than three properties. (d) show buyers homes they cannot afford to impress them with the caliber of homes to which the agent has access.

show unoccupied property first to give the owner-occupants a chance to prepare for the showing.

(13) An escrow would NOT prorate

title insurance costs

(14) To have a valid delayed exchange both the exchange property must be identified within _____ days and the exchange must be completed no more than ____ days after transfer of exchanged property.

within 45 days and no more than 180 days