Real Estate Practice Exam 2
The holding of real property is: A. tenancy. B. tender. C. taken for granted. D. tenement.
A.
A person has a lot that he purchased for $20,000. He has been asked to build an apartment house with a projected income of $18,000 per year. His accountant estimates all expenses, including proper management, repairs, etc., to be $10,000 per year. The man wants an 8% return on his investment. Which of the following is nearest to the amount he can afford to pay for the erection of the building? A. $90,000 B. $100,000 C. $110,000 D. $120,000
A. $18,000 (annual gross income) - $10,000 (expenses) = $8,000 (annual net income);|$8 000 divided by .08 = $100,000. (value of building and land);|$100,000 - $20,000 = $80,000 (for erection of the building).| (Closest answer available is (a)).
The entire stock of a retail store was sold for $8,400 to Sam Jones. Mr. Jones then sold the stock for 25% more than he paid for it, but due to some debts he lost 15% of the selling price. The net profit on Mr. Jones' investment was: A. $525 B. $2,100 C. $8925 D. 15%.
A. $8,400 x 25% = $2,100 (profit);|$8,400 + $2,100 = $10,500 x 15% (loss) = $1,575 loss;|$10,500 - $1,575 = $8,925 (sales price less 15% loss);|$8,925 - $8,400 (purchase price) = $525 (net profit).
Inventory in a store cost $9,200 net. It was sold for 25% profit; however, 15% of the gross profit was lost due to bad credit risks over a period of one year. How much profit did the store owner make that year? A. $1955 B. $920 C. $345 D. None of the above
A. $9,200 x 0.25 = $2,300 x 0.15 = $345; $2,300 - $345 = $1,955.
Mr. Bill pays $152,400 for a home. If it costs 12% to sell his home before he could sell it at a profit, how much would it have to appreciate? A. $20,780 B. 100% C. 34% D. $2828
A. 152,400 = 88% (100%-12%)|$152,400 divided by 88% = $173,181.81|$173,181.18 - $152,400 = $20,781.81.
An affirmed statement sworn to is: A. an affidavit. B. an acknowledgment. C. an affirmation. D. delivered.
A. An affidavit is a sworn statement written down and made under oath before a notary public or other official authorized by law to administer an oath. Its purpose is to help establish or prove a fact, and it is a complete instrument within itself.
Which of the following is an estate for an indefinite period of time? A. An estate at will B. Holdover tenancy C. An estate for years D. An estate at sufferance
A. An estate at will is the only less-than-freehold estate that is for an indefinite period of time.
Which of the following loans is exempt from the Truth in Lending Act on the basis of the type of loan itself? A. An agricultural loan B. FHA loan to buy a home C.. A VA loan to refinance a veteran's home D. $25,000 loan from a credit union for home improvement purposes
A. Business loans and agricultural loans are exempt from the Truth in Lending Act.
In describing an agency contract, which is most nearly correct? A. Most multiple listings are exclusive listings B. An open listing without a termination date is unenforceable C. Often multiple listings are net listings D. An exclusive agency need not contain a termination date
A. Choice (a) is the most nearly correct answer because most multiple listing groups require exclusive right to sell listings, which is a type of exclusive listing.
Of the following, the largest number of home loans are made by: A. savings banks. B. the Department of Veterans Affairs. C. FHA. D. commercial banks.
A. Currently savings banks are the largest single resource for residential mortgage credit.
Will needs $2,000 to close an escrow. He holds a $6,000 promissory note secured by a second mortgage on a farm. Manny agrees to lend him the necessary amount if Will puts up the note as security. This type of security is known as a: A. pledge. B. chattel mortgage. C. purchase money mortgage. D. subordination clause.
A. Pledge is the depositing of personal property by a debtor with a creditor as security for a debt.
Real estate syndicates have recently come under the jurisdiction of the Real Estate Commission. A real estate syndicate can operate as: A. all of the following. B. a real estate investment trust. C. a partnership. D. a corporation
A. Real estate syndicates may operate as partnerships, corporations, or real estate investment trusts.
Subordinate is most opposite to: A. superior. B. inferior. C. subrogation. D. novation.
A. Subordinated loan will come second. Opposite would be superior or first.
An estate of inheritance or perpetual estates are referred to as a(n): A. estate in fee. B. life estate. C. estate at will. D. estate for years.
A. The most complete form of ownership is an estate in fee, Since an owner may dispose of an estate in fee during his/her lifetime or after death by will, it is also known as an estate of inheritance or a perpetual estate.
Which of the following is the least enforceable requirement of a subdivision improvement? A. A minimum dollar value B. A minimum lot size C. A minimum area requirement D. A maximum height restriction
A. The other choices are common and enforceable. It would be very difficult to enforce a requirement stating one had to spend a certain amount of money in the improvements as one may be able to build just as beautiful and big a house as someone else and for less money.
Which of the following would be a freehold estate? A. Estate in fee B. Estate at will C. Periodic tenancy D. Leasehold estate
A. The others are less-than-freehold estates.
A certain easement lies outside of and adjoins the land which it benefits. The land benefited would be the: A. dominant tenement. B. servient tenement. C. encumbered fee. D. property subject to the easement.
A. The owner of the easement controls the use of the adjoining land and dominates its use. The property subject to the easement serves the easement holder.
Which of the following is not legally required of a lease? A. The legal expression "to let and demise" B. Signature of lessor C Description of property D Term of lease
A. To let and demise is a legal term but not legally required in a lease.
Which of the following "runs with the land?" A. An appurtenance B. An encumbrance C. A lien D. A lis pendens
A. Upon the sale of a property, the appurtenances, usually an easement, go with the sale.
When a lease is assigned, the assignee becomes a(n): A. tenant. B. lessor. C. landlord. D. assignor.
A. When a lease is assigned, the primary liability shifts to the assignee and he becomes a tenant. When a leased property is sublet, the primary liability remains with the original lessee and the person to whom the property is sublet becomes the sublessee.
Several years ago, Mr. Moss bought property for $10,000, paying $1,000 in cash with the seller taking back a trust deed for the balance of the purchase price. Before any payments had been made on the trust deed note, he sold the property several months later for $20,000. His invested dollar in these circumstances is worth: A. $100.10. B. $11.00. C. $10.10. D. $1.10.
B. $10,000 (purchase price) - $9,000 (trust deed) = $1,000 (cash paid); $20,000 (sales price) - $9,000 (trust deed) = $11,000 (cash from sale); $11,000 divided by $1,000 = $11.00.
Assume Mr. Kelly owns his home and borrowed money to buy it with a loan payable at $114.63 per month. The balance on the loan for the last month was $16,500. $32.13 was applied on his principle on his last payment. What was the interest rate on the note in these circumstances? A. 16.6% B. 6% C. 5.25% D. 9.2%
B. $114.63 (monthly payment) - $32.13 (principal part of payment) = $82.50 (interest);|$82.50 x 12 months = $990 interest per 1 year;|$990 divided by $16,500 (loan balance) = 6%.
Property is valued at $240,000 using a capitalization rate of 10%. What would the value of the same property be using a capitalization rate of 12%? A. $210,000 B. $200,000 C. $240,000 D. $220,000
B. $240,000 x 0.10 = $24,000 divided by 0.12.= $200,000.
Mortgages and deeds of trust are considered: A. real property. B. personal property. C. chattels real. D. estates.
B. A "chattels real" is a lease.
A broker who is employed by the seller is liable to the buyer if: A. he acts under a power of attorney for seller. B. he acts in excess of the terms of his contract. C. the offer is accepted but the contract is not performed. D. the listing agreement has no termination date.
B. A broker's contract ordinarily makes him the agent of the seller. If he performs an act which his contract does not authorize him to do, he is the agent of the other party, the buyer.
Which of the following would identify a rider? A. People B. Amendment C.Encroachment D.Donee
B. A rider is an addition or an amendment to an existing document.
How long must a structural termite report be held on file by the Structural Pest Control Board in Sacramento? A. One year B. Two years C. Three years D. Four years
B. A termite report is not demanded by law, but if one is issued, it must be filed in Sacramento and kept on file for two years
The number of linear feet on each side of an acre of land that is almost square would be approximately: A. 150 B. 209 C. 320 D 410
B. Actually 208.7 feet. Take the square root of 43, 560 (square feet in an acre) to get 208.7 (use square root symbol on calculator).
Any complaint as to the violation of the United States Civil Rights Act of 1968 should be filed within how many days of its occurrence? A. 180 days B. 365 days C. 30 days D. 90 days
B. An aggrieved person may file a complaint directly to a U.S. District Court within one year of the alleged discriminatory practice, whether or not a verified complaint has been filed with the Secretary of HUD.
An agreement to sell community property, signed by the husband alone, is: A. void. B. voidable. C. valid. D. legal.
B. Both husband and wife must sign any transfer or encumbrance of community property. CC Section 1102(a).
A lessor and lessee agree to the terms and the lessor draws up a 5-year lease, signs it, and mails it to the lessee. The lessee does not sign it, but moves in and pays 2 months' rent. After 2 months, the lessee decides to move out and informs the lessor. Which of the following is true? A. There is a valid lease as only the lessor has to sign B. There is a valid lease as lessee had moved in and paid 2 months' rent C. The lease is invalid, as the Statute of Frauds states that a lease for more than 1 year must be in writing and signed by both the lessor and lessee D. The lease is invalid as there is no contract to enforce
B. Lessee does not have to sign the lease to be bound to it as long as he either takes possession or pays rent in advance.
Mortgage companies, which operate primarily as mortgage loan correspondents of life insurance companies, mutual savings banks, and others, are usually regulated by: A. federal law. B. state law. C. county ordinances. D. Federal Housing Administration.
B. Mortgage companies operating primarily as mortgage loan correspondents are not considered to be institutional lenders and are not subject to the same controls. Organized under state laws, they are subject to minimum supervision.
The phrase, prima facie, means: A. first in priority. B. primary evidence. C. front of the house. D. principal.
B. Prima facie means at first sight, or on first appearance but subject to further evidence or information. Of the answers given, "primary evidence" is the best choice.
The Real Estate Settlement Procedures Act pertains to federally related loans used to purchase 1-4 single-family property used as a personal residence. RESPA regulates: A. credit practices. B. disclosures regarding settlement costs. C. interest rate disclosures. D. all closing practices for real property sales.
B. RESPA covers loans secured with a mortgage placed on a one-to-four family residential property. When borrowers apply for a mortgage loan, mortgage brokers and/or lenders must give the borrowers certain disclosures regarding settlement procedures and costs. This helps consumers understand settlement services.
Who signs a deed of reconveyance? A. Trustor B. Trustee C. Beneficiary D. Mortgagee
B. Reconveying legal title back to the trustor.
How many square feet of cement would be needed for a 7-foot wide continual sidewalk around the OUTSIDE EDGE of a 60 foot by 90 foot corner lot? Side A is 60' long and Side B is 90' long. A. 1,050 square feet B. 1,099 square feet C. 420 square feet D. 630 square feet
B. Remember,the sidewalk is on the outside edge. Side A: 60' x 7' = 420SF. Side B: 90' x 7' = 630SF. Don't forget the corner which is 7'x7' or 49SF. Add the 3 parts: 420SF + 630SF + 49SF = 1,099 square feet.
Joint tenancy and community property have which of the following in common? A. Right of survivorship B. Equal interest C. Both (a) and (b) D. Neither (a) nor (b)
B. Right of survivorship means you cannot will your share. In community property, both spouses have a right to will 1/2 of the community property.
A federal act that provides protection against foreclosures of real property owned by a person in the service is: A. Serviceman's Readjustment Act of 1944. B. Servicemembers Civil Relief Act. C. Moratorium Relief Act of 1968. D. Release of Obligation Act of 1947.
B. The SCRA (Servicemembers Civil Relief Act) is a federal law designed to protect persons who enter military service with mortgaged property from losing their property. If they are unable to pay their loan obligations due to the down-scaling of pay after entering the military service, the court has wide discretionary powers to protect the defaulting military service person.
In new construction financing, the lender will usually release the final payment to the borrower when the: A. owner has accepted the property. B. lien period has expired. C. work has been completed. D. notice of completion has been recorded.
B. The lender does not usually release the final payment until the mechanic's lien period expires.
Real property which houses a business constitutes for the lessee a(n): A. freehold estate. B. less than freehold estate. C. freehold business. D. interest in the property, but not an estate.
B. The lessee holds a leasehold or less-than-freehold estate.
Which of the following would you associate with unlawful detainer? A. Trustor B. Lessor C. Grantor D. Mortgagor
B. This is used in removing someone from a less-than-freehold estate. Trustor, grantor, and mortgagor are all terms used in freehold estates.
A telephone company places poles and strings wire across privately owned land. This would be an example of a(n): A. specific lien. B. encumbrance. C. appurtenant easement. D. general lien.
B. This would be an example of an easement in gross, which is an encumbrance.
An appurtenance is: A. an easement in gross. B. stock in a mutual water company. C. an attachment. D. all of the above
B. Transfers with the land. Stock in a mutual water company would be the water rights of the land and must transfer with the land.
In a bankruptcy, which of the following debts would be dischargeable? A. Debts or creditors not listed on the schedules filed at the outset of the case B. Child support and alimony C. Gambling debts D. Most student loans
C.
Ms. Pat purchased a house in a run-down condition and spent an amount equal to 10% of the purchase to fix it up and bring it to its present value. The house is now worth $165,000. The cost of the house is equal to the existing loan of the property. The amount of the loan is: A. $158,000 B. $148,500 C. $150,000 D. $164,500
C. $165,000 = 100% purchase price + 10% fix-up money;|$165,000 divided by 110% (1.10) = $150,000.
A loan was made for $14,000 at an interest rate of 6% per year for a 20-year period. The total interest that would be paid over the entire loan period if the monthly payment for this fully amortized loan is $7.17 per $1,000, would be approximately: A. $18,000 B. $16,000 C. $10,000 D. $14,000
C. $7.17 per $1,000 x 14 thousands = $100.38 monthly payment;|20 years x 12 months = 240 monthly payments;|$100.38 x 240 = $24,091.20;|$24,091.20 - $14,000 (money borrowed) = $10,091.20 total interest paid.
A master plan may also be described as a(n): A. elevation plan. B. environmental plan. C. general plan. D. specific plan.
C. A comprehensive or master plan, known as a General Plan is adopted for long-term physical development in seven major categories: land use, circulation, housing, conservation, open space, noise, and safety.
A lease to a lessee is comparable to that of: A. a deed of trust to a trustee. B. an affiant to a deponent. C. a land contract to the vendee. D. a mortgage to a mortgagee.
C. A lease gives the lessee the right of possession and use of the property. Under a land contract the buyer also receives use and possession together with an additional right of future title.
Which of the following documents is not a negotiable instrument? A. Check B. Draft C. Mortgage D. Promissory note
C. A mortgage is a security instrument, not a negotiable instrument.
Which of the following would not create an estate in property? A. Grant deed B. Contract of sale C. Security instrument D. Gift deed
C. A security instrument (deed of trust or mortgage) does not create an estate in property.
A solemn declaration by a person whose religious beliefs forbid the taking of an oath is: A. an affidavit. B. an acknowledgment. C. an affirmation. D. none of the above
C. An affirmation is a declaration as to the truth of a statement, and is used in lieu of an oath by a person who objects for personal or religious reasons.
Property is: A. real if an estate. B. personal if a fixture. C. personal if not real. D. all of the above
C. An estate of real and personal property can exist. A fixture is real property. If it is not real property then it would have to be personal property.
A person designated in a written power-of-attorney, to legally act for another in his stead is typically called a(n): A fiduciary. B principal. C attorney-in-fact. D agent.
C. Any person may give another the authority to act on his or her behalf. The legal document that does this is called a power of attorney. The person holding the power of attorney is an attorney-in-fact.
Bill Jones and Sally Jones, husband and wife, would most likely indicate title held as: A. joint tenancy. B. tenants in common. C. community property. D. tenants in partnership.
C. Any property acquired during marriage is presumed community property.
Of the following, a primary source of funds for residential financing is: A. the Federal Home Loan Bank. B. Freddie Mac. C. mortgage companies. D. the Federal Housing Administration.
C. By far, one of the largest sources.
Which of the following must be recorded to be valid? A. Easement B. Real estate sales contract C. Homestead D. Lease
C. California has two types of homesteads: automatic and declared. A declared homestead must be recorded to be valid. Of the choices listed, the homestead may have to be recorded to be valid. The other choices do NOT have to be recorded to be valid.
A real estate licensee under federal law should not take restrictive listings or advertise dwellings which suggest discrimination because of the: A. Code of Ethics. B. Rumford Act. C. Title VIII of the Civil Rights Act of 1968. D. Unruh Civil Rights Act.
C. Definition: Title VIII of the Civil Rights Act of 1968 and the Fair Housing Amendments Act of 1988, taken together constitute the Fair Housing Act, which prohibits discrimination based on rate, national origin, color, religion, age, sex, and handicap status.
Discount points paid for a loan would affect the: A. principal amount. B. taxes. C. interest paid on the loan. D. impounds.
C. Discount points paid for a loan are considered interest that is paid in advance.
Which of the following would have priority? A. A first deed of trust recorded March 14, 1992 B. A homestead recorded April 1, 1992 C. An assessment lien for street improvement, recorded April 5, 1992 D. An unrecorded mechanic's lien
C. Government liens (assessment, property tax, etc.) have priority over all other liens.
When there is a case involving discriminatory practices taken against a principal and his agent, which U. S. Supreme Court decision is often cited as a precedent? A. Wilson vs. Shaeffer B. Smith vs. Bonnheim C. Jones vs. Mayer D. Title VIII
C. In 1968, the Civil Rights Act of 1866, was upheld by the United States Supreme Court in Jones v. Alfred H. Mayer Company, when the court ruled that the 1866 federal law "prohibits all racial discrimination, private and public, in the sale and rental of property."
The Real Estate Commissioner's Subdivision Final Public Report expires: A. one year from the date of the report. B. never, unless a material change occurs. C. five years from the date of the issuance of the report. D. three years from the date of the issuance of the report.
C. Matter of law, unless there is a material change. The term of a final public report shall be limited to 5 years. [B&P Code §11228]. If during the life (5 years) of a final public report, the subdivision offering undergoes a "material change" (e.g., change of ownership, change in purchase money handling procedure, change in use, etc.), the subdivider must apply for an amended public report. [Material change-C.Reg. 2800 (a) through (r)]. The developer shall amend or supplement its disclosure documents and registration information, to reflect any material change in any information and notify the commissioner within 20 calendar days of the material change. [B&P Code §11226(f)(1)].
Which of the following statements is true with respect to planning commissions? A. All members are elected. B. Members must have had real estate or subdivision experience. C. They are authorized to give advice to the city council on subdivisions. D. Members must be real estate brokers.
C. Members of the planning commission should be knowledgeable in the field of real estate and city planning, but this is not a prerequisite for being a member. The members are appointed and it is their job to develop a master plan and advise the city council in this area.
Elements of time, relationship, and interest are most relevant to: A. joint tenancy. B. tenants in common. C. community property. D. all of the above
C. No relationship required in joint tenancy or tenants in common. Elements of joint tenancy are possession, interest, time, and title. The only element required in a tenancy in common is possession.
A homestead may be filed on real property wherever there are "structural improvements." Which of the following properties would not be eligible for a homestead? A. An apartment house in which the declarant owns and lives in one of the units B. A dwelling with an adjacent vacant lot on which the owner later plans to build and rent the new addition C. A home that is presently under construction D. A single family residence owned as a tenant in common with another
C. One of the requirements of a homestead is that you live on the property. A homestead may be filed on all of the other types of property listed in choices (a), (b), and (d).
Unless specified otherwise, a husband and wife take title to property: A. as joint tenants. B. as tenants in common. C. in community property. D. any of the above
C. Property acquired by a married couple during marriage, if not specified otherwise, is presumed community property.
A long term loan to be issued by one lender upon completion of the interim construction financing by another lender is known as a: A. discount loan. B. redemption loan. C. takeout loan. D. renewal loan.
C. Takeout loan takes out the construction loan.
Brokers are required to retain a copy of the Mortgage Loan Disclosure Statement in their office files for a period not less than: A. 1 year. B. 2 years. C. 3 years. D. 4 years
C. The Mortgage Loan Disclosure Statement (RE Form 882) states, "A copy of the form signed by the borrower must be retained by the broker for a period of three (3) years."
The California State Housing Act, which contains minimum code requirements, is found in the: A. State Contractor's Code. B. Uniform Commercial Code. C. Health and Safety Code. D. Fair Housing Act.
C. The State Housing Law outlines minimum construction and occupancy requirements. Local building inspectors enforce the construction regulations and local health officers enforce the occupancy and sanitation regulations (Health and Safety Code Section 17910, et seq.).
Which of the following is a true statement? A. Since a broker is an agent, he may discriminate if his principal authorized it B. As of this date, there is no law against discrimination by an agent C. Businesses are precluded from discrimination against customers by the Unruh Civil Rights Act, and since a real estate office is a business, the broker cannot discriminate D. Discrimination is most effectively prohibited by N.A.R.'s Code of Ethics
C. The Unruh Civil Rights Act covers discrimination in business. It is against the law for anyone to deny a person the right to business products and services. The Unruh Act applies to a real estate brokerage because it is a business and may not discriminate against clients or customers.
The least complicated loan to assume would be: A. institutional. B. Cal-Vet. C. FHA. D. savings bank.
C. There are two federal agencies and one state agency that help make it possible for people to buy homes they would never be able to purchase without government involvement (the FHA and the VA, and the Cal-Vet loans). Ease of assumption by the FHA is described in "Loans" chapter.
The remedy of unlawful detainer would be used by the offended: A. holder of a note in default. B. tenant. C. lessor. D. lessee.
C. Unlawful detainer action is the legal remedy by a landlord (lessor) to remove a tenant (lessee) who is in default under the terms of the lease. It is also known as an action in ejectment.
Of the following agencies mentioned, which has the authority to hear complaints of discrimination in housing? A. Real Estate Board B. Fair Relations Commission Board C. Department of Fair Employment and Housing D. Real Estate Commissioner
C. Violations of discrimination in the sale, rental or financing of practically all types of housing are reported to the state Department of Fair Employment and Housing.
A farm measures one-half mile by one-half mile. How many acres does the farm contain? A. 20 acres B. 40 acres C. 160 acres D. 320 acres
C.The farm is 1/4 of a section. 1/4 of 640 acres is 160 acres.
Tom buys a piece of property as an investment for $10,000. Tom's capital investment is $1,000. He pays 6% interest on a loan of $9,000, and the property appreciates 8%. After one year the property is sold. What percent of profit did he realize on his initial invested capital? A. 12% B. 10% C. None of the above D. 26%
D. $10,000 x 8% = $800; $9,000 x 6% = $540; $800 - $540 = $260 (profit involved);| $260 divided by $1,000 (investment) = 26%.
Mr. Smith sells a piece of land. It is free of all encumbrances. The broker will receive a 6% commission and Mr. Smith's total escrow charges are $215.30. Mr. Smith received a check at the close of escrow for $15,290. The selling price was approximately: A. $17,200 B. $17,000 C. $16,270 D. $16,495
D. $15,290 (check received by Mr. Smith) + $215.30 (escrow fees) = $15,505.30 (94% of sales price); 100% sales price - 6% broker's commission = 94% to owner; $15,505.30 divided by 94% = $16,495 (approximate gross selling price).
Which security instrument is most valuable to a buyer who may fall on temporary hard times or default on payments? A. First deed of trust B. Second deed of trust C. Financing agreement D. Mortgage
D. A mortgage would give the buyer more time to redeem himself.
In real estate financing, reference is sometimes made to take out loans. This refers to: A. net amount after points and prepaid interest are deducted. B. a blanket encumbrance. C. a construction loan. D. long term loan taken out after construction.
D. A take out loan is the long term financing that replaces the interim construction loan. It takes the construction lender out of the financing picture.
Three of the four following real estate terms are closely associated. Which of the four terms does not belong with the group? A. Deed of trust B. Lien C. Judgment D. Claim
D. Individuals claim many things, but they are not necessarily liens. A deed of trust and judgment would be liens.
Which term or terms would most completely commit the signers? A. Individually B. Jointly C. Severally D. Jointly and severally
D. Jointly as a group and severally as individuals.
In 1968, the United States Supreme Court handed down a decision in a case involving the matter of fair and open housing. The Supreme Court's decision upheld the Civil Rights Act passed by Congress in the year: A. 1942 B. 1948 C. 1868 D. 1866
D. Jones vs. Mayer prohibits discrimination based on race by upholding the 1866 Civil Rights Act and the 13th Amendment to the U.S. Constitution prohibiting slavery.
Which of the following is correct? A. Maximum lease on city property is 51 years B. Maximum lease on agriculture property is 99 years C. Maximum lease on non-agriculture is 51 years D. None of the above
D. Just the opposite: Agriculture-51, city and non-agriculture-99.
What is the maximum loan available on a VA loan? A. 80% of appraisal B. 90% of appraisal C. $45,000 D. Amount on CRV
D. Means Certificate of Reasonable Value. This is the appraised value.
With permissive use, an easement by prescription can be created within: A. 2 years. B. 10 years. C. 20 years. D. none of the above
D. Must be hostile use, not permissive use.
When a deed of trust is properly prepared and executed, the power of sale of the secured property is given by the: A. beneficiary to the seller. B. buyer to the trustor. C. trustor to the lender. D. trustor to the trustee.
D. Naked or legal title, along with power of sale, is conveyed through the deed of trust by trustor to trustee.
A lender's fee required of a buyer to obtain an FHA loan is called an: A. accommodation fee. B. originating fee. C. acceptance fee. D. application fee.
D. One of the costs in setting up a home equity line of credit is similar to that which a borrower pays when he or she buys a home. It is an application fee (or lender's fee).
Mr. Land owned two pieces of property and sold one parcel bordering on the road to Ms. Crow, reserving in the deed an easement for ingress and egress to and from the remaining real property for himself. After 5 years of non-use, Land attempted to use the easement, but was prohibited from doing so by Crow. A court would rule in this case that: A. the easement was forfeited because it was not used for 5 years. B. the easement was still valid because non-use never terminates any type of easement. C. Ms. Crow could institute a quiet title action on the easement and probably be successful. D. the easement was still valid since it had been created by deed.
D. Only an easement acquired by prescription may be lost through non-use.
A preliminary subdivision report terminates: A. upon receiving the final subdivision report. B. at the end of one year. C. upon a material change. D. all of the above
D. Preliminary public reports allow taking reservations for the subdivision, but not accepting any non-refundable money or entering into any binding contracts until receipt of the final report from the commissioner. Preliminary public reports have a one-year term and may be renewed.
A man had a promissory note in the amount of $200,000 secured by a second mortgage. He sold it to a friend for $150,000. This would be known as: A. a prepayment. B. hypothecation. C. usury. D. discounting.
D. Promissory notes sold for less than the unpaid balance are said to be sold at discount.
Informing a person that he should sell his property because non-whites are moving into the area, decreasing property values, can be expressed by all of the following except: A. blockbusting. B. panic selling. C. illegal conduct. D. legal conduct.
D. Situation describes blockbusting which causes panic selling and is illegal.
Who enforces anti-discrimination and assures housing accommodations regardless of race, creed, or color? A. Real Estate Commissioner B. State Department of Housing C. State Department of Labor D. Department of Fair Employment and Housing
D. The California Fair Employment and Housing Act (formerly the Rumford Act) prohibits discrimination in the sale, rental, or financing of practically all types of housing. Violations are reported to the state Department of Fiar Employment and Housing.
Which of the following covers Federal Fair Housing laws? A. Rumford Act B. 13th Amendment to the U. S. Constitution C. Unruh Civil Rights Act D. Title VIII, Civil Rights Act of 196
D. The Rumford Act is the State Fair Housing Law.
Mr. Small sells his house for $100,000 and takes back a trust deed and note for $50,000. Needing cash, he immediately sells the trust deed and note at a discount to Mr. Big for $35,000, assigning the trust deed and endorsing the note "without recourse." If the trustor defaults before making any principal payments (disregarding costs of collection), by which method would Mr. Big get the greatest amount in the shortest period of time? A. Foreclosure by trustee's sale to collect $35,000 B. Sue for specific performance C. Recover from Mr. Small because the transaction was usurious D. Foreclosure by trustee's sale to recover $50,000
D. The fact that Mr. Small sold this purchase money encumbrance at a discount in order to obtain ready cash does not change the face value of the note.
If a lease is to be recorded, it must be acknowledged before a proper official by the: A. county recorder. B. notary public. C. lessee. D. lessor.
D. The lessor (landlord)owns the property and signs the lease to give possession and use to the lessee (tenant). Leases for longer than one year (1 year plus 1 day) must be in writing and must be signed by the lessor, but not necessarily by the lessee.
Which of the following is true about the Real Estate Law? A. It is enforced in a court of law B. It is enforced by local real estate boards C. It is enforced by the California Association of Realtors D. It is enforced by the Real Estate Commissioner
D. The license law is only effective if it can be enforced. The Commissioner can only investigate non-licensed persons, but can discipline licensed persons.
When seeking a variance, an owner would petition the local: A. police force. B. Board of REALTORS. C. building department. D. planning commission.
D. The owner may ask the city or county (local planning commission) for a waiver or zoning variance.
You, as an agent, have sold a home for which you negotiated a first loan with a bank and a second loan to be taken back by the seller. You have been requested to record a Request for Notice of Default on the first loan. This is usually to protect: A. trustee of the first loan. B. trustee of the second loan. C. trustor of the second loan. D. beneficiary of the second loan.
D. The purpose of a request for notice of default is if the trustor (borrower) defaults on the first loan, the trustee of the first loan must notify the beneficiary (lender) of the second loan of the trustor's default. In this case the lender of the 2nd loan is the seller.
The trustor under a deed of trust is the party who: A. lends the money. B. receives the note. C. holds the property in trust. D. signs the note as maker.
D. The trustor is the one who borrows the money and therefore, promises to repay the loan.
In real estate financing, lenders will sometimes find it necessary to refer to nominal rate when granting a loan. This means: A. that the rate of interest in the final granting of the loan will be greater than the commitment. B. points will be required because the rate required by the lender would exceed the legal rate of interest. C. the term used by lenders when the maximum rate of interest allowed by law is obtainable on financing a property. D. it is the rate of interest specified in the promissory note.
D. The word nominal stems from the word name and is the rate named in the note.
You agree to lease a property for 10 years for $12,000 total rent, at $100 per month. You pay the first and last months' rent of $200. Which of the following terms would be inappropriate in the lease? A. Condemnation conditions B. Compliance with the federal laws C. Third party liabilities D. Escalator clause geared to the cost of living
D. This would be a straight lease, which has no need for an escalator clause. The escalator clause would be found in a graduated lease.
A joint tenancy interest in real property would be changed to a tenancy in common interest by: A. death of one of three joint tenants. B. death of one of two joint tenants. C. one of two joint tenants giving his interest to the other. D. one of two joint tenants selling his interest to a third party.
D. When there are two joint tenants, the sale of an interest to a third party terminates the joint tenancy because the third party is coming into the tenancy at a different time.