Real Estate Final Review #3

All of the following contracts must be in writing to be enforceable, except: a. A listing for personal property or at lease for one year or less. b. A listing for real property. c. A contract to purchase real property. d. Leasing real property from more than one year.

a. A listing for personal property or at least for one year or less.

When comparing a small house with a large house of similar quality, which of the following is true? a. A small house costs more per square foot. b. A large house costs more per square foot. c. Large homes sell better. d. Size doesn't matter.

a. A small house costs more per square foot.

Under the ___________________, an employer may not discriminate against a disabled person who seeks employment due to that person's disability. a. Americans with Disabilities Act (ADA) b. Civil Rights Acts of 1866 and 1870 c. Home Affordable Modification Program (HAMP) d. Unruh Law

a. Americans with Disabilities Act (ADA)

Leo, a licensed real estate broker, advertised the sale of a mobile home and stated that no down payment was required. In fact, a down payment was required, but the broker had a lender lined up to make a loan for this purpose. What is the status of this ad? a. It is illegal and deceptive advertising. b. It is okay if the broker makes available a source to borrow the down payment. c. It complies with the Truth in Lending Act. d. As long as the purchase can be completed with no money out of pocket, the ad is truthful regarding no down payment.

a. It is illegal and deceptive advertising.

In which of the following contracts does a broker obtain the authority to get paid. a. Listing. b. Purchase contract. c. Agency disclosure. d. Deposit receipt.

a. Listing.

Which of these actions does not create an agency relationship? a. Subornation. b. Ratification. c. Implication. d. A verbal agreement.

a. Subornation.

Negative physical elements of a property such as mold are disclosed in the: a. Transfer Disclosure Statement (TDS). b. listing agreement. c. advertisements referencing the property. d. preliminary title report.

a. Transfer Disclosure Statement (TDS).

Deficiency judgments can only be granted when: a. a property has been judicially foreclosed. b. the value of the property equals or exceeds the underlying balance due on the loan. c. the mortgage is classified as a purchase-money mortgage. d. a property has been foreclosed under a trustee's sale.

a. a property has been judicially foreclosed.

A broker's fiduciary obligation to protect a seller's confidential information continues: a. after the term of the listing agreement. b. for the term of the listing agreement. c. until the close of escrow. d. for two years after the close of escrow.

a. after the term of the listing agreement.

When showing a listed property to potential buyers, the listing broker is required to disclose: a. all known material facts about the property. b. anything they have been authorized by the seller to disclose. c. any facts about the seller's motivation that might induce the buyer to make an offer. d. anything that comes to mind at the time.

a. all known material facts about the property.

For a buyer's broker to have the ability to negotiate their fee, the buyer's broker needs to enter into an employment agreement with their buyer, called a(n): a. buyer's listing. b. cooperating broker arrangement. c. affiliated business arrangement. d. controlled business arrangement.

a. buyer's listing.

Compared to other appraisal factors, appraisers generally find the ____________________ the most difficult calculation to measure precisely. a. capitalization rate (cap rate) b. cost to rebuild today with modern methods and materials c. gross rent multiplier (GRM) d. accrued depreciation

a. capitalization rate (cap rate)

The sale of real estate under a conditional installment sale gives the buyer (vendee): a. possession of the property. b. an estate of inheritance. c. a freehold estate. d. an estate for years.

a. possession of the property.

A broker receives a full price offer on a house they are listing. Before they present the offer to the seller, another broker brings in an all cash offer for $5,000 less. The listing broker is to: a. present both offers at the same time. b. refuse to present the second offer. c. tell the other broker the property has been sold. d. present the first offer in the morning and the second offer in the evening.

a. present both offers at the same time.

Before closing, a buyer asks their broker for permission to enter the vacant house they will be purchasing in order to paint the kitchen. The broker is to: a. seek approval from the seller. b. ask the buyer to deposit the balance of the down payment into escrow first. c. give the buyer access and approval but supervise their entry. d. refuse to give the buyer access and approval.

a. seek approval from the seller.

When one broker authorizes another broker to act as their subagent on the approval of the seller, the subagent is primarily responsible to the: a. seller. b. Department of Real Estate (DRE). c. original broker. d. buyer's broker.

a. seller.

A seller of property tells their broker the house is connected to the sewer. The broker relays this information to a buyer, who later finds that the house has a septic system in need of repair. The buyer would sue: a. the broker and the seller. b. no one, as they should have checked. c. the broker only. d. the owner only.

a. the broker and the seller.

When the highest and best use of a property is expected to change, the current use is called: a. the interim use b. the temporary use c. the transitional use d. the possible use

a. the interim use

A broker acting as an agent for a principal has as much authority as: a. the principal actually or ostensibly confers upon them. b. an attorney-in-fact. c. the broker chooses to take. d. they choose to accept as limited by the statute of frauds.

a. the principal actually or ostensibly confers upon them.

An unwritten lease that is for longer than one year is: a. unenforceable. b. enforceable. c. void. d. illegal.

a. unenforceable.

A real estate agent is obligated to communicate any offer to the principal: a. unless the offer is patently frivolous or the agent is acting on written instructions of their seller. b. only if it is in writing. c. whether the offer is verbal or written until the agency is terminated. d. unless the offer is terminated.

a. unless the offer is patently frivolous or the agent is acting on written instructions of their seller.

If there is no specific closing date named in the escrow instructions, escrow is to close: a. within a reasonable period of time. b. within 30 days. c. within 60 days. d. within 90 days.

a. within a reasonable period of time.

Valid contracts require all of the following, except: a. written documentation. b. offer and acceptance. c. a legal object. d. consideration.

a. written documentation.

If the sale of a property resulting from a judgment is to guarantee the claimant a certain amount of money, what type of listing with the broker likely offer? a. An exclusive agency listing. b. A net listing. c. An exclusive authorization and right to sell listing. d. An open listing.

b. A net listing.

Normally a broker earn a commission only if he or she creates a binding contract during the term of the listing. What clause in a listing contract provides an exception to the rule? a. A hold harmless clause. b. A protection period clause. c. An exculpatory clause. d. An acceleration clause.

b. A protection period clause.

While appraising a single family residence (SFR), an appraiser observes cracks in the walls and floor. In response, the appraiser best recommends which of the following? a. A structural pest control report. b. A soil engineer's report. c. An environmental impact report (EIR). d. A home warranty policy.

b. A soil engineer's report.

A tenant obligated on a lease vacates the house early with no intention of fulfilling the terms of the lease. What kind of termination is this? a. Amendment. b. Abandonment. c. Surrender. d. Accord and satisfaction.

b. Abandonment.

An appraiser views the addition of an amenity to an apartment building under which appraisal principle? a. Substitution. b. Contribution. c. Anticipation. d. Progression.

b. Contribution.

Which of the following best defines an exclusive agency listing: a. The broker is dealing with a single client and has a shirred of being paid a commission when the property sells. b. If the owner sells his property to his own customer on his own efforts, he does not owe the listing broker a commission. c. If the owner has attempted to sell the property on his own for a certain period of time, and has one of his previous contacts buy the property, the broker is entitled to only half of the commission. d. The listing is not between just the seller and the broker, but between the brokers entire agency of licensees.

b. If the owner sells his property to his own customer on his own efforts, he does not owe the listing broker a commission.

A listing broker sells an office building to a syndicate of which the broker is a member without informing the seller of this interest. Before closing, the seller discovers the broker's interest and refuses to sell. What would happen in a civil suit to collect a commission? a. The case would be transferred to the Real Estate Commissioner. b. No commission would be due. c. The broker would be awarded their full commission. d. The court would demand a mitigation hearing.

b. No commission would be due.

A tenant rents an apartment under a one year lease. And the third month, she notify the landlord of a break in a water pipe. The landlord does nothing to fix the problem. The tenant abandons the lease and vacated the property. Is the tenant still liable for the lease? a. Yes, because she signed a one-year lease. b. No, because the landlord is required to maintain a habitable property, and if he does not, it is considered constructive eviction. c. Not enough information is given to determine an answer. d. None of the above.

b. No, because the landlord is required to maintain a habitable property, and if he does not, it is considered constructive eviction.

Mutual consent in real estate contract is normally evidenced by which of the following. a. Offer in compromise. b. Offer and acceptance. c. Offer and counter offer. d. Offer and deposit.

b. Offer and acceptance.

Appraiser licensing in California is controlled by what entity? a. The Department of Real Estate (DRE). b. The California Bureau of Real Estate Appraisers (CalBREA). c. The Department of Business Oversight (DBO). d. The California Department of Insurance (CDI).

b. The California Bureau of Real Estate Appraisers (CalBREA).

Which of the following is of least interest to an appraiser? a. Value in exchange. b. The original cost of the property. c. The objective value of the property. d. The sales price received for comparable properties.

b. The original cost of the property.

A subdivider needs to give a copy of the Real Estate Commissioner's public report to: a. anyone who is likely purchase one or more lots. b. anyone upon request. c. only bona fide purchasers who have signed a purchase contract. d. the salespeople they employ.

b. anyone upon request.

Which of the following is not one of the four important elements of value: a. transferability. b. appreciation. c. utility. d. demand.

b. appreciation.

A broker who simultaneously represents both parties in a transaction is known as a(n): a. finder. b. dual agent. c. subagent. d. unlawful agent.

b. dual agent.

When a broker employs a salesperson, the broker needs to: a. provide annual pay increases in an amount no less than 3%. b. exercise reasonable supervision over the activities performed by the agent. c. establish a retirement program for the agent. d. provide minimal health and dental insurance coverage for the agent.

b. exercise reasonable supervision over the activities performed by the agent.

A capital improvement to real property will always: a. increase the book value of the property by the amount the appraised value is increased. b. increase the book value of the property by the cost of the improvement. c. increase the property's market value by the cost of the improvement. d. be fully depreciated in the year the improvement is made.

b. increase the book value of the property by the cost of the improvement.

A broker who fails to promptly disclose their dual agency status is subject to: a. a $10,000 penalty. b. liability for their clients' money losses. c. disciplinary action by the Internal Revenue Service (IRS). d. frequent auditing by the Federal Bureau of Investigation (FBI).

b. liability for their clients' money losses.

If a lease requires the tenant to pay certain expenses such as taxes, maintenance or insurance in addition to the rent, the lease is classified as a(n): a. gross lease. b. net lease. c. percentage lease. d. estate for will.

b. net lease.

The placement of a house upon the lot is referred to as its: a. preference. b. orientation. c. zoning classification. d. location.

b. orientation.

Which of the following would be an example of a definite termination date in a listing. a. 90 days from the completion of construction. b. 90 days from obtaining a permit for the proposed changes and construction. c. 90 days from the date the listing with sign. d. 90 days from the date the mechanics lien will be removed.

c. 90 days from the date the listing with sign.

Which of the following represents a valid contract: a. Anything that two people have agreed to as long as it is not illegal. b. Any contract executed in writing. c. A contract that is binding and enforceable, and has all of the essential elements required by law. d. Any agreement between two capable parties.

c. A contract that is binding and enforceable, and has all of the essential elements required by law.

Which document is used to convey titled to a mobile home that is considered real property? a. A certificate of occupancy. b. A certificate of ownership. c. A grant deed. d. A writ of execution.

c. A grant deed.

A licensed real estate broker can sell all of the following types of mobile homes, except: a. A mobile home on leased land inside a mobile home park. b. A mobile home on land owned in fee simple. c. A new mobile home without land. d. An entire mobile home park.

c. A new mobile home without land.

A definite termination date must be present in which of the following kinds of listings: a. An open listing. b. A net listing. c. An exclusive listing. d. An oral listing.

c. An exclusive listing.

Words like valuable, sufficient, good, and adequate refer to which of the following: a. Performance. b. Compensation. c. Consideration. d. Bilateral contracts.

c. Consideration.

Which of the following is not a soil condition? a. Alkaline. b. Adobe. c. Deciduous. d. Expansive.

c. Deciduous.

What type of depreciation is the most challenging to correct? a. Functional. b. Physical. c. Economic obsolescence. d. Wear and tear.

c. Economic obsolescence.

Which of the following parties is capable of entering into a contract. a. Minor. b. Conservatee. c. Emancipated minor. d. Person of unsound mind.

c. Emancipated minor.

A listing signed by only one spouse regarding community property is which of the following: a. Void. b. Voidable. c. Enforceable. d. Unenforceable.

c. Enforceable.

If a contract is missing one of the legal essentials, what is the status of the contract? a. It can still be valid by special estoppel. b. It is voidable. c. It is void. d. It is an enforceable.

c. It is void.

When one party is substituted for another in a contract, this is called which of the following: a. Levi b. Subordination c. Novation d. Curtilage.

c. Novation

When HUD sells it's repossessed properties, all interested brokers sign a certain type of listing. All the brokers seek a buyer, but the only broker to get paid is the one who brings the winning bid and closes the sale. What kind of listing is so described? a. Exclusive agency listing. b. Exclusive right to sell listing. c. Open listing. d. Net listing.

c. Open listing.

Broker Brown entered into an oral listing agreement with the seller without a subsequent written verification. As to the payment of a commission to Brown, it would be: a. Contrary to public policy. b. Prohibited by Commissioner rules and regulations. c. Permissible if the seller elects to do so, but not enforceable. d. Against the law.

c. Permissible if the seller elects to do so, but not enforceable.

Which of the following does not terminate an agency relationship? a. Destruction of the subject property. b. Death or incapacity of the agent or principal. c. Refusal to perform by the agent or principal. d. Completion of the purpose of the employment.

c. Refusal to perform by the agent or principal.

A tenant had an apartment lease for five years. During the term of the lease, landlord and tenant agree to terminate the lease two years early. What kind of termination is this? a. Reformation. b. Amendment. c. Surrender. d. Accord and satisfaction.

c. Surrender.

If a broker wants to have a listing in which the payment of a commission is enforceable, which of the following is required: a. That be created by ratification. b. That would be created by estoppel. c. That it be in writing. d. That it be oral, if affirmed.

c. That it be in writing.

The agent is not normally liable for wrongful acts of the principal, unless: a. Her license is already restricted. b. The agent was unaware of the wrongful acts of the principal. c. The agent acquiesces in the sellers wrongful act. d. The agent mishandled the buyers deposit.

c. The agent acquiesces in the sellers wrongful act.

Owner Dean wanted to sell his duplex in order to purchase a fourplex. He was concerned that he might not net enough from the sale of the duplex to complete the purchase of his next property. Broker Ward offered a net listing. How does and that listing work? a. The broker would receive only a predetermined discounted commission to help the seller. b. The broker would offer his services as a gratuitous agent. c. The broker would receive a commission only after the seller netted the predetermined amount stipulated in the agreement. d. The broker would be paid up a certain minimum amount and does not risk being paid no commission.

c. The broker would receive a commission only after the seller needed the predetermined amount stipulated in the agreement.

When a broker wants to store documents electronically, the storage method may not allow the final documents to be altered. What method of electronic document storage is required by the Department of Real Estate (DRE)? a. Disc Operating System (DOS). b. Save Now, Always and Keep Electronic (SNAKE). c. Write Once Read Many (WORM). d. Random Access Memory (RAM).

c. Write Once Read Many (WORM).

Brokers fees deposited with the broker before they are earned are called: a. kickbacks. b. referral fees. c. advance fees. d. duplicate charges.

c. advance fees.

Acquisition is the opposite of: a. ad valorem. b. amortization. c. alienation. d. avulsion.

c. alienation.

To determine the accrued depreciation for a property, a buyer's best resource is a(n): a. county recorder representative. b. accountant. c. appraiser. d. real estate broker.

c. appraiser.

The period of time a structure continues to earn sufficient income to continue operations is referred to as the structure's: a. productive use. b. self-earning. c. economic life. d. physical life.

c. economic life.

A listing contract contains a clause stating that the seller agrees to pay a commission in exchange for the broker's agreement to use diligence in procuring a buyer. This clause: a. is redundant and unenforceable. b. is necessary for the creation of a unilateral contract. c. is important for the creation of a bilateral contract. d. requires the broker to advertise the property in numerous formats.

c. is important for the creation of a bilateral contract.

A real estate salesperson employed as an independent contractor: a. passes no liability for their actions on to their employing broker. b. does not need to be supervised by the broker. c. needs to pay income taxes and social security taxes. d. is not eligible for workers' compensation insurance coverage.

c. needs to pay income taxes and social security taxes.

A seller's broker receives and presents a purchase offer that is accepted by the seller. The seller then requests the broker give them the buyer's deposit check. The broker needs to: a. first deposit the check into the broker's trust account before giving the deposit funds to the seller. b. write a counteroffer requesting the release of the deposit funds to the seller. c. obtain the written consent of the buyer before releasing the check to the seller. d. obtain written acknowledgement from the seller they have received the funds.

c. obtain the written consent of the buyer before releasing the check to the seller.

A flood hazard report will note that flooding is frequent when it is described as: a. a fifty year flood zone. b. a 100 year flood zone. c. occurring at least twice every ten years. d. occurring no less than three times every twenty years.

c. occurring at least twice every ten years.

Property is best defined as: a. things which buyers and sellers own. b. only real property. c. rights or interests which a person has in the thing owned. d. only personal property.

c. rights or interests which a person has in the thing owned.

Broker Sarah delivered an offer to purchase real property to Owner Martha. Owner Martha asked for 24 hours to consider the offer. Later that same day, Broker Sarah received two additional offers through other brokers. Broker Sarah believes the owner will reject all three offers. In order to comply with the law, Broker Sarah is to: a. hold the new offers until Owner Martha has made a decision on the first offer, then present the other offers. b. present the two additional offers in the order they arrived. c. simultaneously present the two additional offers to Owner Martha as soon as possible. d. refuse to receive the offers until Owner Martha decides not to accept the original offer.

c. simultaneously present the two additional offers to Owner Martha as soon as possible.

An appraiser uses which of the following to determine the highest and best use for a property? a. cost approach. b. quantity survey method. c. site analysis. d. None of the above.

c. site analysis.

A fee simple absolute estate is defined as: a. an estate based on a condition precedent. b. an estate for years. c. the highest interest one can have in real property. d. a life estate.

c. the highest interest one can have in real property.

Under the replacement cost approach of appraisal, an appraiser is least interested in: a. depreciation. b. the effective age of the property. c. the original cost to build. d. the value of the land.

c. the original cost to build.

At a trustee's foreclosure sale, the buyer receives a: a. sheriff's deed b. tax deed c. trustee's deed d. quitclaim deed

c. trustee's

A definition of value to an appraiser is: a. the ability of one commodity to command other commodities in exchange b. the present worth of future benefits arising out of ownership of a property c. a relationship between desirous persons and things desired d. All of the above are correct

d. All of the above are correct

If the contingency is put into a contract, it is important to be specific about which of the following. a.. The nature of the contingency b. The duration of the contingency c. The method by which it is removed. d. All of the above.

d. All of the above.

To convert a mobile home to real property, and owner must do which of the following: a. Obtain a building permit. b. Attach the mobile home to an approved foundation and record a document stating that. c. Obtain a certificate of occupancy. d. All of the above.

d. All of the above.

Which of the following is conveyed incident and appurtenant to the land? a. Easements and restrictions. b. Water rights. c. Mineral rights. d. All of the above.

d. All of the above.

A real estate broker is subject to disciplinary action from the Department of Real Estate (DRE) if they: a. extract secret profits that are not disclosed. b. commingle trust funds. c. fail to supervise the salespeople they employ. d. Any of the above.

d. Any of the above.

Heather, a single mother, is able to get down payment assistance as well as a below market rate of interest on her mortgage. What type of mortgage did she receive? a. CalVET. b. U.S. Department of Veterans Affairs (VA)-guaranteed loan. c. Federal Housing Administration (FHA)-insured loan. d. California Housing Financing Agency (CalHFA).

d. California Housing Financing Agency (CalHFA).

What contributes to the value of a well planned neighborhood versus a poorly planned neighborhood? a. Nonconforming improvements. b. Improper orientation. c. Inconsistent improvements. d. Conformity of size and style.

d. Conformity of size and style.

In which appraisal approach to value would the value for the land be calculated separately? a. Capitalization. b. Market comparison. c. Gross rent multiplier. d. Cost.

d. Cost.

What are the three steps of the agency disclosure in proper chronological order? a. Elect, confirm, disclose. b. Confirm, elect, disclose c. Disclose, confirm, disclose. d. Disclose, elect, confirm.

d. Disclose, elect, confirm.

An agency relationship in real estate is terminated in multiple ways. Which of these is NOT likely to be the cause of termination of an agency relationship? a. The incapacity or death of either the seller or broker. b. Revocation of the agency by the owner. c. Destruction of the property. d. Estoppel.

d. Estoppel.

If present at the formation of a contract, which of the following does not make a contract voidable? a. Fraud. b. Duress. c. Undue influence. d. Illegal purpose.

d. Illegal purpose.

A deed restriction prohibits a subdivision from using a residential property as a business. A buyer interested in purchasing a property in the subdivision tells their broker they intend to use one room of their house as a dog grooming service. Can the buyer do so? a. Yes, so long as none of the neighbor notice. b. Yes, if the homeowners' association (HOA) grants them explicit permission. c. Yes, so long as they only groom dogs from within the subdivision. d. No, the deed restriction prohibits the use of a residential property to conduct business.

d. No, the deed restriction prohibits the use of a residential property to conduct business.

A prospective buyer gave their broker a personal check for $1,000 payable to the seller along with an offer to buy the property. The buyer told the broker the check was not to be cashed until the end of the month. Which of the following is correct? a. The broker is to refuse to accept the check. b. The broker is to accept the check, but deposit into their trust account within 24 hours. c. The broker needs to deliver the check either to the seller or escrow upon acceptance. d. The broker may hold the check, but needs to tell the seller it is being held uncashed before the seller accepts the offer.

d. The broker may hold the check, but needs to tell the seller it is being held uncashed before the seller accepts the offer.

An apartment building owner is considering adding a swimming pool to his property. She asks an appraiser for his opinion, his answer would be based upon the appraisal principle of: a. substitution b. highest and best use c. regression d. contribution

d. contribution

A property's cost basis is most affected by an owner's: a. debt service. b. costs of operation. c. interest expense. d. costs of improvements.

d. costs of improvements.

An elevation sheet used in a subdivision plan shows: a. the topography of the land, including the slope, elevation of the site, streets, sidewalks and curbs. b. an interior view of the homes showing their framing. c. an aerial view of the subdivision. d. drawings of the front and side views of the finished homes.

d. drawings of the front and side views of the finished homes.

A lessee rents an apartment from May 1st to July 1st of the same year. The lessee's tenancy is thus classified as a(n): a. periodic tenancy. b. estate at sufferance. c. estate at will. d. estate for years.

d. estate for years.

Sally applied for a real estate loan. The lender can lawfully require her to answer questions in regards to her: a. marital status. b. gender. c. race. d. income.

d. income.

A broker has an exclusive agency listing on a property. If the owner sells the property, the broker is entitled to: a. a full commission. b. half the commission. c. an amount agreed to with seller. d. nothing.

d. nothing.

When rent is computed based on the gross sales of a business occupying the property, the lease is classified as a(n): a. valid lease. b. voidable lease. c. net lease. d. percentage lease.

d. percentage lease.

If a buyer and seller decide to rescind a deal after the deed has been recorded, the buyer is to: a. record a deed of reconveyance. b. return the deed to the seller in exchange for consideration. c. record a cancellation of the transaction. d. provide a new grant deed to the seller.

d. provide a new grant deed to the seller.

When two properties are perceived as comparable, buyers tend to concentrate on price. This principle is called: a. contribution. b. balance. c. anticipation. d. substitution.

d. substitution.

A plot plan is drawn by an architect to show: a. the materials the subcontractors used to construct the property. b. elevations and soil quality. c. when construction is scheduled to begin. d. the placement of construction and related land improvements.

d. the placement of construction and related land improvements.

A licensed real estate salesperson is primarily responsible to: a. the buyer. b. the seller. c. the principal who pays their commission. d. their employing broker.

d. their employing broker.