Real Estate Practice

The seller and the broker agree to exercise reasonable effort and cooperation in the sale of the property. Deposit Seller representations Broker's and seller's duties Agency relationships

Broker's and seller's duties

John and Amy purchased a builder's home warranty when they bought their home. They have found structural damage that could be a detriment to their home. On average, how many years does a home warranty cover structural damage? 10 years Five years One year Three years

10 years

The Business and Professions Code requires that transactional records be kept for how long? 1 year 3 years 7 years

3 years

The option agreement is designed to be used with a purchase agreement or a lease agreement. True or False

True

Which of these agreements needs to be signed before all of the others? Agency disclosure Keysafe/lockbox authorization Listing agreement Seller's instructions to the broker

Agency disclosure

A client must have received an agency disclosure form before entering into the listing agreement. Deposit Seller representations Broker's and seller's duties Agency relationships

Agency relationships

What is an interpleader action? A case between family members who are dividing property A legal action to settle an escrow dispute in court A property purchase plead to the courts for a ruling Introduction of a neutral third party to negotiate a transaction

A legal action to settle an escrow dispute in court

What makes a non-exclusive buyer representation agreement different from an exclusive buyer representation agreement? An exclusive agreement is used when the buyer has already made an offer on a single property. A non-exclusive agreement allows the broker to present a listing to multiple buyers. A non-exclusive agreement allows the buyer to work with other brokers, any one of whom may end up representing the buyer in the transaction. A non-exclusive agreement is used when the buyer is willing to consider the purchase of multiple properties.

A non-exclusive agreement allows the buyer to work with other brokers, any one of whom may end up representing the buyer in the transaction.

Cynthia loves her apartment and would like to have the option to buy it once her lease is up. Who's the best person to help Cynthia prepare a lease option? A real estate attorney A real estate investor A real estate licensee Her landlord

A real estate attorney

A brief history of the title and its current status.

Abstract title

The _____________ section of the purchase agreement is not for the buyer to fill out. It is where the seller indicates whether the offer is accepted or countered. Acceptance of Offer Accepted or Countered Expiration of Offer

Acceptance of Offer

Marsha's brokerage is due for an audit from BRE. She doesn't worry, though, because she has _____________. Accurate records A smart accountant Audit insurance Friends at BRE

Accurate records

Knowledge of a fact given to a person by being presented with notice.

Actual Notice

An addition to an existing document Amendment Addendum

Addendum

May be added without changing the other terms already agreed to in the sales contract Amendment Addendum

Addendum

A change to an existing document Amendment Addendum

Amendment

Changes the original terms of the sales contract Amendment Addendum

Amendment

Can you define an option contract? Another name for a sales contract An offer to purchase a specific piece of real estate but without the obligation to buy it An agreement in which the seller has the option to withdraw the offer to sell at any time An agency agreement that gives the client the option of terminating without a written notice

An offer to purchase a specific piece of real estate but without the obligation to buy it

Which type of analysis performed by a property manager is similar to a highest and best use analysis that an appraiser would use? Analysis of alternatives Competitive analysis Market analysis Property analysis

Analysis of alternatives

Shane's buyers learned during the inspection that there was water damage around the fireplace and that the chimney needed new flashing and to be repointed. To whom must Shane disclose that information? Any party to the transaction Only the listing agent Only the sellers Only the sellers and the lender

Any party to the transaction

If the property does not appraise at or more than the sales price, the buyer can terminate. Sales contingency Appraisal contingency Mortgage contingency

Appraisal contingency

This is the value used by government tax assessment offices. Assessed value Investment value List price Market value

Assessed value

A levy against a property, often used with condominiums.

Assessments

Your client, a seller in a residential transaction, is completing the seller's information sections of the TDS. He has marked some "yes" responses in Section C, and needs to explain the issues, but complains to you that there is not enough space on the form. What do you tell your client? Attach additional sheets to the form Don't bother with that, because it's not required Provide the client with the TDS - Expanded version of the form Write smaller and abbreviate

Attach additional sheets to the form

Compensation paragraph establishes that buyer will owe the broker commission. BRNE BRE BRNN

BRE

Compensation is payable only if the broker acts on the buyer's behalf. BRNE BRE BRNN

BRNE

Does not contain a section regarding broker compensation. BRNE BRE BRNN

BRNN

Marty, a licensee, has a listing agreement with Becca, the seller. Whenever anyone tries to show Becca's property, Becca says it's not convenient. What is true about this situation? Becca is in violation of the listing agreement. Becca is within her rights, but isn't being very fair to Marty. Marty must terminate the listing agreement. Marty will have to procure the buyer.

Becca is in violation of the listing agreement.

A broker is required to keep a __________ to keep track of all beneficiary accounts. Beneficiary ledger Checkbook General accounting book Rent roll

Beneficiary ledger

Protects the listing broker from implied agency by notifying the buyer that the listing broker is not the buyer's agent. Cancellation of Listing Buyer Non-agency Agreement Modification of Terms

Buyer Non-agency Agreement

Your clients have made an offer to purchase on a beautiful home that is in a perfect location for their family. The offer is accepted. A week later, the seller's agent finally provides the TDS and other required disclosures. To everyone's dismay, the disclosures show that there are some serious issues that were not apparent in your visual inspection. What can your buyers do? Buyers have seven days after delivery of the TDS to rescind the purchase agreement. Buyers have three days after delivery of the TDS to rescind the purchase agreement. They can back out of the contract, but will have to give up their earnest money. They must continue with the purchase, but they can sue the seller for breach of contract.

Buyers have three days after delivery of the TDS to rescind the purchase agreement.

Identifies the parties to the agreement and when it begins and ends Items excluded and included Compensation to broker Listing price and terms Exclusive right to sell

Exclusive right to sell

Specifies information to exclude from Internet advertising, such as the property address C.A.R. form SELI C.A.R. form SELM

C.A.R. form SELI

Instructs the broker to exclude the listing from the MLS C.A.R. form SELI C.A.R. form SELM

C.A.R. form SELM

Amount of money that remains after debt service is subtracted from net operating income

Cash flow

The amount of money that remains after debt service is subtracted from net operating income equals what? Bottom line Cash flow Effective gross income Net gross income

Cash flow

An accounting of the debits and credits to the buyer and seller at the close of a transaction.

Closing statement

One under an agency contract (such as a property management agreement) in whom trust is placed by another

fiduciary

Marcus puts his initials at the bottom of the Acceptance of Offer section on a purchase agreement and declares it is time to celebrate. Assuming he put his initials on a C.A.R. residential purchase agreement, what did he just do? Confirmed receipt of a buyer's offer to purchase his property Confirmed receipt of a seller's acceptance of his offer to buy a house Countered a buyer's offer to buy his property Rejected a buyer's offer to purchase his property

Confirmed receipt of a seller's acceptance of his offer to buy a house

Notice by matter of fact which binds the parties, even if the parties have not been specifically notified of the fact.

Constructive Notice

Protects vacancy decontrol; exempts units built after 1995 and single-family housing from local rent control ordinances Costa-Hawkins Act Tenant Protection Act of 2019

Costa-Hawkins Act

Money to be received by buyer or seller (or conversely, reimbursed) as listed on a closing statement.

Credits

Money to be paid by buyer or seller as listed on a closing statement.

Debits

Interest and principal payments for loans on the property

Debt service

Mortgage and interest payments are called this

Debt service

Net operating income ‒ ______ = cash flow Debt services Mortgage rate Operating expenses Vacancies and credit loss

Debt services

The broker may accept deposits on behalf of the seller. Deposit Seller representations Broker's and seller's duties Agency relationships

Deposit

The ______ affects a property's income tax basis. Assessed value Depreciated value Investment value Market value

Depreciated value

Gross potential income plus expense reimbursements plus miscellaneous income, minus vacancy and credit loss

Effective gross income

This term refers to the amount of income that remains after miscellaneous expenses and expense reimbursements are added to gross potential rental income, then vacancies and credit loss are subtracted. Cash flow Effective gross income Net operating income Operating expenses

Effective gross income Effective gross income has a wordy explanation. Take a look at the equation, which is sure to jog your memory: Effective gross income = gross potential rental income + miscellaneous income + expense reimbursements ‒ vacancies and credit loss

You're working with a new buyer, Caleb, who is nervous about the earnest money you've placed in escrow on his behalf. What can you tell Caleb to reassure him? Escrow can't disburse the money without your signature Escrow is bonded Escrow is FDIC insured. My company will cover any losses

Escrow can't disburse the money without your signature

Income received when tenants pay for some or all of the property's operating expenses

Expense reimbursements

Certain expenses of home ownership will be prorated at closing, with the seller paying up through the closing date, and the buyer responsible for ______. All items that are now liens Expenses incurred after close of escrow Sending future supplemental tax bills to the seller The full amount of property taxes from date of offer

Expenses incurred after close of escrow

If you know the seller will be out of town when your buyer client wishes to make an offer, you can extend the deadline to accept in the _______________ of Offer section. Deadline Expiration Extension Rescission

Expiration

The funds placed in trust accounts are insured by the ______. AARP FDIC NAIC WNBA

FDIC

Holding non-trust funds doesn't create ______ responsibility to other parties unless the non-trust funds are commingled with trust funds. Actuarial Fiduciary Legal Moral

Fiduciary

The California real estate commissioner's regulations stipulate that any method chosen for trust fund recordkeeping must be in accordance with _________________. Federal law Generally accepted accounting practices IRS tax code U.S. banking regulations

Generally accepted accounting practices

Income before expenses are deducted

Gross income

The maximum amount of income a property can generate from all sources when fully occupied and when rents are fully collected

Gross potential rental income

What information is a property owner likely to gather from the effective gross income? How much money is actually coming in Whether or not the property is paying for itself How much money is left over to spend

How much money is actually coming in

When finding listings, which statement describes the owner sales approach? Choosing a neighborhood and concentrating real estate activities there Contacting homeowners whose listing contracts have ended without a sale Contacting prospective clients through previous clients, co-workers, networks, etc. Identifying properties being sold by owners and persuading them to list with a licensee

Identifying properties being sold by owners and persuading them to list with a licensee

Which of the following statements about the seller's acceptance of the buyer's offer is true? If the seller does not accept the buyer's offer by the date and time specified in the purchase agreement, the offer is null and void. If the seller does not provide acceptance by the date and time specified in the contract, the offer is assumed to be accepted. Once the seller accepts the buyer's offer, no changes can be made to the contract. The seller can verbally accept the offer.

If the seller does not accept the buyer's offer by the date and time specified in the purchase agreement, the offer is null and void.

As a property manager for several residential landlords, Tomas must provide critical reports to each of the property owners for whom he works. Which of the following information points needs to be updated and issued monthly? Days late for tenant rental payments Fair market value of each property Income and expenses for each property Number of vacation days taken by property employees

Income and expenses for each property

The Time Periods section of the sample purchase agreement you reviewed gives the buyer a deadline for removing the ___________________. Funds from escrow Inspection contingency Notice to perform Title insurance

Inspection contingency

Property manager Dawson was reviewing a property management agreement and was happy to learn that he would be indemnified for any losses due to tenant negligence. Where is this likely found in the property management agreement? Description of duties Insurance provision Owner's covenants Signature of the parties

Insurance provision

Which term is defined as a legal action used to force a resolution to a dispute between escrow principals through the court? Impartiality Interpleader Limited agency Material facts

Interpleader

Applying a capitalization rate to the net operating income is one way to determine the ___________ value. Assessed Depreciated Investment Market

Investment

Calculating the return on investment can be a part of determining the ______. Assessed value Investment value List price Market value

Investment value

Which of the following is true regarding the BRNN? It informs the consumer of the benefits of dual agency. It requires the buyer to compensate the licensee in the event the licensee procures a property for the buyer. It safeguards the licensee from claims of undisclosed dual agency. It safeguards the licensee's compensation.

It safeguards the licensee from claims of undisclosed dual agency.

What is the purpose of the C.A.R. Sales Disclosure Chart? It provides examples of case studies in disclosure law. It's a checklist for items you must complete when presenting an agency disclosure form to your clients It's a reference guide for disclosure law. It's a template for creating your own disclosure forms.

It's a reference guide for disclosure law.

Specifies which items will be included with the sale and which will not Items excluded and included Compensation to broker Listing price and terms Exclusive right to sell

Items excluded and included

The C.A.R. Option Agreement form is designed to be used as an amendment to which two types of contracts? Amendments and addenda Disclosures and settlement statements Environmental assessments and surveys Leases and purchase agreements

Leases and purchase agreements

When the property is financed, who is named as an additional insured entity on the homeowner's insurance policy? Buyer's agent Buyer's attorney Lender Title insurance company

Lender

You have a seller client who hasn't had any offers and wants to extend the listing period. Which C.A.R. form would come in handy now? Additional Agent Acknowledgement (AAA) Expiration Date Extension (EDE) Modification of Terms (MT) Notice to Buyer to Perform (NBP)

Modification of Terms (MT)

A reconstruction of an income and expense statement projecting variable amounts

Pro forma

Which of the following advance fees is legal? Bart, a licensee, receives an advance fee directly from his principal after having the advance fee agreement approved by California DRE. Homer, a licensee, receives an advance fee from his client, Edna Krabapple. He does not report this to his broker. Lisa, a licensee, receives approval for her advance fee agreement from California DRE and is paid through her broker. Marge, a licensee, uses an advance fee agreement obtained through a stationery form and does not submit it to California DRE for approval, but is paid through her broker.

Lisa, a licensee, receives approval for her advance fee agreement from California DRE and is paid through her broker.

Which option is a sale that occurs through an administrator or executor of a will with court supervision? Foreclosure Probate REO Short sale

Probate

Can be used to indicate the seller is willing to finance the buyer Items excluded and included Compensation to broker Listing price and terms Exclusive right to sell

Listing price and terms

According to RESPA, what must the lender give to the borrower at either the time of loan application or within three days following application? Closing Disclosure Freddie Mac borrower disclosure Loan Estimate TIL statement

Loan Estimate

Which of these refers to the agreed-upon price between a buyer and a seller? Market value List price Appraised value Depreciated value

Market value

Examples include coin-operated laundry equipment, vending machines, pay phones, and late fees

Miscellaneous income

Used to modify the terms of a listing agreement, such as price and expiration date. Cancellation of Listing Buyer Non-agency Agreement Modification of Terms

Modification of Terms

Julie accepts an offer at 2 p.m. on Wednesday, August 5, and is relieved when the buyer produces verification of the funds for down payment and closing, on the final day of the three days allowed after acceptance. The buyer produced verification of funds on ___________________. Friday, August 7 Monday, August 10 Saturday, August 8 Tuesday, August 11

Monday, August 10

You're a California broker. That means you must reconcile your trust fund accounts ____________. Monthly Quarterly Weekly Yearly

Monthly

Protects the buyer's earnest money in the event the buyer is unable to obtain financing. Sales contingency Appraisal contingency Mortgage contingency

Mortgage contingency

What organization's mission is to promote democracy in housing? Asian Real Estate Association of America (AREAA) Minority Real Estate Professionals of America (MREPA) National Association of Hispanic Real Estate Professionals (NAHREP) National Association of Real Estate Brokers (NAREB)

National Association of Real Estate Brokers (NAREB)

All the following reports may be your responsibility as a property manager EXCEPT ______. Monthly and annual financial reports Neighborhood sales Tenant roll Vacancy report

Neighborhood sales

Income that remains after operating expenses are subtracted from effective gross income (this is a measure of the property's ability to pay its bills)

Net operating income

What's left after deducting operating expenses from effective gross income

Net operating income

Which of these real estate contracts would not include a section on broker compensation? Exclusive listing agreement Non-exclusive buyer representation agreement Non-exclusive, not for compensation buyer representation agreement Open listing agreement

Non-exclusive, not for compensation buyer representation agreement

What is the purpose of the preliminary title report? Documents the title's legal description to be used in the contract Identifies all title issues that cloud the title Offers to issue a title insurance policy Serves as a promise from the seller to the buyer that the property title is clear

Offers to issue a title insurance policy

A potential investor has inherited $250,000 and wants to use that as a down payment on an investment property. What additional information do you need to calculate ROI for each potential investment? Initial cash investment Mortgage rate Principal payment and interest Projected cash flow

Projected cash flow

At what point does an option contract become binding for both parties? Once the optionee pays the option fee Once the optionor agrees to sell the property to the optionee As soon as both parties sign the option contract Once the optionee exercises the option

Once the optionee exercises the option A binding contract is created between the two parties once the optionee exercises the option according to its terms and conditions. Thereafter, both parties are obligated to fulfill their contractual obligations

What kind of budget serves two primary purposes: to help property managers maximize profitability and to avoid unforeseen major expenses? Cash reserve Expense Operating Stabilized

Operating

Costs associated with running and maintaining a property

Operating expenses

When this value is negative, it is a sign that the investment property cannot bring in enough money to cover its costs to maintain. Mortgage rate Net operating income Operating expenses Vacancies and credit loss

Operating expenses A negative net operating income means that the operating expenses are greater than the effective gross income.

Who can enforce an option contract—the optionee or the optionor? Optionee Optionor

Optionee Only an optionee (buyer) can enforce an option contract. Because an option contract is a unilateral contract, only the optionor (seller) is bound by it.

Income a property could bring in if leased at its full capacity

Potential gross income

What document should detail the typical reports a property manager needs to provide for a property owner? Employee policies and procedures manual Lease agreements Property management agreement Property management proposal

Property management agreement

Property expense reimbursements are paid to the ______. Landlord Property manager Property owner Tenant

Property owner

The calculation of shared costs between buyer and seller and based on amounts actually owed.

Proration

According to the sample purchase agreement you reviewed, what must the buyer or seller do before cancelling a sales contract for failure of the other party to close escrow? File an affidavit with the county clerk Have a notarized copy of the sales contract entered into the public record Provide a demand to close escrow Provide a notice to perform

Provide a demand to close escrow

Federal law regulating mortgage lending which prohibits kickbacks and undisclosed fees.

RESPA

What's an REO property? Ransom E. Olds Rome State Airport Real Estate Owned

Real Estate Owned A real estate owned property is a class of property owned by a lender, which has specific disclosure requirements that are covered in the C.A.R. REO Advisory Listing Form.

The balancing of credits and debits on a closing statement.

Reconciliation

California law requires owners of rental buildings with 16 or more units to hire a property manager. What is this type of property manager called? Individual building manager Investor Owner Resident manager

Resident manager

RLA meaning

Residential Listing Agreement

Rose, represented by Sandy, and Tina, represented by Julie, entered into a sales contract for Rose to purchase Tina's home. Rose intended to ask Tina to repair the water heater, but the inspection deadline came and went. Now Rose has to buy the property as-is. Whose responsibility was it to convey Rose's wishes to Tina? Julie Rose Rose and Sandy Sandy and Julie

Rose and Sandy It's the buyer's and buyer's agent's responsibility to keep track of all buyer contingency deadlines and ensure they're not missed.

Which of the following is provided at the time of a buyer's offer and shows what the seller's proceeds will be if the seller accepts the offer? Closing Disclosure Credit Debit Seller net sheet

Seller net sheet

Which of the following requires that contracts transferring ownership of real property be in writing to be enforceable? Code of ethics Fair Housing Act Statute of frauds Statute of limitations

Statute of frauds

A buyer who discovers after closing that a seller wasn't honest about the property condition on the required disclosures can _____. Cancel the agreement and locate another property File a claim with the state commission Get a refund of the earnest money Sue the seller

Sue the seller

Prohibits annual rent increases of more than 5% plus the cost of living; requires "just cause" for removing tenants Costa-Hawkins Act Tenant Protection Act of 2019

Tenant Protection Act of 2019

Who closes on the cooperative brokerage agreement? The agents for the buyer and seller The buyer and the title insurance representative The lender's attorney and the seller's agent brokerage The seller and the seller's agent

The agents for the buyer and seller

Data regarding Mello-Roos fees disclosed to a prospective buyer should include the amount of the fees as well as _______. Requirements for waiving the fee The assessment's purpose The history of the Mello-Roos district The text of the Mello-Roos Community Facilities Act

The assessment's purpose

Who closes on the mortgage loan commitment at closing? The buyer and the lender's attorney The buyer and the seller The buyer and the title insurance rep The lender's attorney and the broker for the buyer

The buyer and the lender's attorney

When explaining the buyer representation agreement to a client, you will mention which advisories found in the other terms and conditions section? The agency advisory and the statewide buyer and seller advisory The agency disclosure and buyer's inspection advisory The buyer's inspection advisory and the statewide buyer and seller advisory

The buyer's inspection advisory and the statewide buyer and seller advisory

When does the buyer's agent, attorney, or lender contact the buyer to tell them the exact amount to bring to closing? After receiving title At the closing The day of signing, or just prior to it The week prior to closing

The day of signing, or just prior to it The buyer will be told a very close amount in the Closing Disclosure, provided three days prior. The exact amount isn't known until just prior to closing, and usually must be paid by wire transfer.

Which of the following information in a report would NOT help your owner assess whether your rental rates are competitive? The number of occupants in each of your units The number of unit applications accepted in the past six months The number of vacancies in the property The vacancy rate of your property compared to a similar, nearby property

The number of occupants in each of your units

What are the two contractual promises of an option contract? The optionee will purchase the property within the option period. The optionor will not sell the property to anyone else during the option period. The optionor will sell the property to the optionee, if the optionee so chooses, under the contract terms and conditions. The optionee will not offer less than the sales price stated in the contract.

The optionor will not sell the property to anyone else during the option period. The optionor will sell the property to the optionee, if the optionee so chooses, under the contract terms and conditions.

Within how many days following the acceptance must escrow receive a copy of the purchase agreement, according to Section 20 of the sample sales contract you reviewed? One Seven Three Two

Three

A tenant has just voluntarily moved out of a rental unit in a multi-unit apartment building in a California city without local rent control ordinances. How much can the owner raise the rent before signing a lease with a new tenant? The owner may raise the rate to any desired level. The owner may raise the rent, but not higher than market rate for the area. The owner may raise the rent by no more than 10% above the previous tenant's rate. The owner may raise the rent by up to 5% plus the cost of living.

The owner may raise the rate to any desired level. Although California has rent control laws that limit the amount the rent can be raised for an existing tenant, when the landlord signs a lease with a new tenant of an unoccupied unit, the landlord is allowed to raise the rent to any desired level.

How is procuring cause related to a protection clause? The protection clause is invalidated if the licensee is the procuring cause. The protection period can be lengthened or shortened if the licensee is the procuring cause. The period of time in the protection clause is only applicable if the licensee is the procuring cause.

The period of time in the protection clause is only applicable if the licensee is the procuring cause. Commission is due during the protection period if the licensee is the procuring cause.

What should you make sure your clients understand about the scope of the preliminary title report? The preliminary report identifies all potential title issues that must be resolved by a lawyer The preliminary report may not include all potential title issues

The preliminary report may not include all potential title issues

Wanda is a buyer and waited until the last day of her inspection period to try to schedule an inspector. She then had to ask for an extension of the inspection period, which the seller signed. On what part of the sales contract you reviewed did Wanda fail to deliver? As long as the addendum is signed, she did nothing wrong The inspection period section The liquidated damages section The requirement to not unduly delay

The requirement to not unduly delay

Who is responsible for requesting a loan payoff statement before closing? The buyer The lender The seller The title insurance representative

The seller

Who retains the right to cancel if the buyer doesn't respond to a notice to buyer to perform? Both buyer and seller Escrow The buyer The seller

The seller

California law places an obligation on _____ to disclose all known material facts to the buyer in a residential transaction. The seller only The seller's agent only The seller's and buyer's agents only The seller, the seller's agent, and the buyer's agent

The seller, the seller's agent, and the buyer's agent

Your client just accepted an offer from a buyer for a property in northern California. What information will NOT be provided to the escrow agent as part of the escrow instructions? Buyer's loan commitment Date of possession Purchase price Title insurance policy number

Title insurance policy number

Why does the closing agent review the purchase contract? To check for contract errors To ensure that all contract signatures are in place To ensure that both parties are protected by clauses in the contract To gather closing-related information agreed to in the contract

To gather closing-related information agreed to in the contract The closing agent uses the purchase contract to be sure that the closing process and prorations follow the parties' wishes as agreed to in the contract.

In the Easton v. Strassburger case, the seller's agent noticed some uneven flooring on the property. What did the court determine was his responsibility in that situation? To decline the listing, citing seller fraud To have the seller fix the issue To inspect and disclose the issue To request that his broker fix the issue

To inspect and disclose the issue

In an offer that's contingent on the sale of the buyer's current home, even if their home doesn't sell by the agreed-upon deadline, the buyer has the option to remove the contingency and proceed with the sale. True False

True

RESPA, the Real Estate Settlement Procedures Act, ensures that a buyer in a residential real estate transaction financed by a federally related mortgage loan has knowledge of all settlement costs. True or False

True

The Closing Disclosure is used for conventional and government residential loans. True or false

True

Vacancy decontrol allows owners, or a property manager on behalf of an owner, to raise rent to the market rate when a lease terminates. This right is protected under the Costa-Hawkins Act where local jurisdictions True False

True

With an appraisal contingency, the buyer can use the fact that the property hasn't appraised to terminate and receive a refund of the earnest money. True False

True

In general, a single-family home or condo is exempt from rent control. True False

True This is generally true under both the Tenant Protection Act and for local ordinances, which are limited in scope by the Costa-Hawkins Act.

Your buyer gave the seller a notice to perform. According to the sample purchase agreement you reviewed, how many days does the seller have to respond? One day Seven days Three days Two days

Two days

Gross potential rental income ‒ ______ = effective gross income Expense reimbursements Late rent Net operating income Vacancies and credit loss

Vacancies and credit loss Gross potential rental income ‒ vacancies and credit loss = effective gross income

Actual gross potential income is offset by this, which occurs when units are not rented or tenants do not pay their full obligation

Vacancy and credit loss

The Costa-Hawkins Rental Housing Act allows owners to raise the rent when a tenant moves out, even in areas subject to local ordinances. This is known as: Exemptions Market correction Rent control Vacancy decontrol

Vacancy decontrol Vacancy decontrol simply means that when the unit becomes vacant, the rent control can be abandoned.

When you represent a seller in a residential transaction, you will complete a ______________ as part of the disclosure process. Crime statistics report Local schools search Title search Visual inspection of the property

Visual inspection of the property

Are immigrants to the United States covered under federal fair housing laws? No, never Yes, if they have a green card Yes, if they have a work or student visa Yes, regardless of immigration or resident status

Yes, regardless of immigration or resident status

A large retailer that draws in traffic for other stores

anchor store

The history of ownership of a property.

chain of title

One authorized to act for a principal in a specific range of matters

general agent

One who leases from another

lessee

One who leases to another

lessor

Employment contract between a property manager and a building owner

management agreement

A document given by the property manager to the building owner detailing plans for supervising the property

management proposal

A title that is free from reasonable doubt as to property ownership.

marketable title

A property manager's detailed plan for expenses

operating budget

The measurement of the boundaries and size of a property.

survey

A document granting right of ownership and possession.

title

The meeting in which title changes hands from seller to buyer.

title closing

You're getting ready to write up an offer for your client, Bill. Before you complete the deadline for seller's response, what might be a good way to make sure it doesn't expire before the seller has a chance to sign it? Call the seller's agent to find out if the client will be in town to sign it. Write it for plenty of time, such as a month or longer. Write "offer does not expire" in the expiration section. Write two offers: one that expires in two days and one that expires in a week, and send them both to the listing agent.

Call the seller's agent to find out if the client will be in town to sign it.

Documents the agreement between a seller and a listing broker to cease marketing a property and specifies the terms for doing so. Cancellation of Listing Buyer Non-agency Agreement Modification of Terms

Cancellation of Listing

You're showing a house when you notice piles of what looks like sawdust outside near the basement windows. This may be evidence of which pest? Carpenter ants Fire ants Ladybugs Powder post beetles

Carpenter ants

Tiffany just obtained a list of all of the homeowners in an area. She checks the numbers to make sure they're not on the Do Not Call Registry, then starts making calls to see if they or anyone they know is interested in selling their home. What method is this? Cold calling Farming Owner sales Referral

Cold calling

Contains a notice that real estate commission is not fixed by law Items excluded and included Compensation to broker Listing price and terms Exclusive right to sell

Compensation to broker

Andy has decided to drop the price on his townhome. His listing agreement states the list price as $650,000. How can he account for the price drop? Ask his agent to change it on the MLS Complete a Modification of Terms form before changing it on the MLS He cannot change it, but may accept a lower offer Once the listing term expires, he may relist it at the new price

Complete a Modification of Terms form before changing it on the MLS

Which of these statements accurately describes the purpose of a real estate option agreement? Creates the option to buy a property in the future, within a specific time frame and at a particular price Obligates the buyer to enter into a purchase agreement by a specific date Provides a lessee, or renter, with the option to purchase the rented property at any time during the tenancy Used by an investor to open a stock options account with an investment broker

Creates the option to buy a property in the future, within a specific time frame and at a particular price

Amira's seller Tom just received the news that his buyers are walking away from the sale. They weren't willing to proceed after they saw the inspection report. Neither Amira nor Tom has requested a copy of the report. What's the most likely reason for that? Amira doesn't trust this particular inspection company. If they see the report, they'll be required to disclose any adverse findings. They are unwilling to pay for the report as the buyer requires. Tom wants to pay for his own inspector so that he can question the inspector.

If they see the report, they'll be required to disclose any adverse findings.

Imagine you're preparing an exclusive buyer representation agreement with a client and need to explain the options available for agency relationship. Which of these is accurate? Because our brokerage lists properties as well as assists buyers, dual agency is required. If we find a property you like that is listed by my broker, I may need to act as a dual agent. Under an exclusive agency agreement, I will never represent anyone but you. With the exclusive agency agreement, you are my exclusive client, but I may not be your exclusive broker.

If we find a property you like that is listed by my broker, I may need to act as a dual agent. Always give the buyer the option of not permitting dual agency, but let the buyer know that this will mean you cannot show the client properties listed by your brokerage.

Who may unilaterally cancel a listing agreement? No one The broker The listing agent The seller

No one Listing agreements are binding upon both parties—the broker and the seller. They may not be cancelled unilaterally.

The buyer has made the offer to purchase based on the buyer's current property selling. Sales contingency Appraisal contingency Mortgage contingency

Sales contingency

Della wants to help her seller client properly meet her obligations for disclosure, so she asks the client to complete the ______________ prior to filling out the TDS. Agent Visual Inspection Disclosure Property Condition Review Seller Property Questionnaire Seller Visual Inspection Disclosure

Seller Property Questionnaire

Sellers must notify the broker if they receive a notice of default on the property, are delinquent in payments, or file bankruptcy. Deposit Seller representations Broker's and seller's duties Agency relationships

Seller representations

Which party or parties in a residential transaction must sign the Real Estate Transfer Disclosure Statement? Buyer and buyer's agent Seller and buyer Seller and seller's agent Seller, buyer, seller's agent, buyer's agent

Seller, buyer, seller's agent, buyer's agent

What factor is a primary concern to the fix-and-flip investor? Finding quality renters Generating long-term positive cash flow Obtaining top dollar when selling Selling quickly for fair market value

Selling quickly for fair market value

Calli is a buyer who just learned that the price she offered on a house was $10,000 more than it actually appraised for. Calli doesn't want to pay more than the house is worth, and the seller won't budge on price. What is Calli's best option? She can back out due to the appraisal contingency. She can reduce the amount of her down payment by $10,000. She can take out a second loan for $10,000. She can terminate, but she will lose her earnest money.

She can back out due to the appraisal contingency.

This time, you CAN find the answer in your job aid, by looking at page 4 of the same contract in the back. What does the SS stand for in "C.A.R. Form SSIA"? Short sale Short stuff Secret service

Short sale

What does the SSIA stand for in C.A.R. Form SSIA? Shoe Service Institute of America Short sale ill advised Short sale information and advisory Short sale inspection advisory

Short sale information and advisory

If a minor enters into a contract with an adult, which of the following is true? The adult may legally hold the minor to the contract, but the minor cannot legally hold the adult to the contract. The contract is valid, and both the minor and the adult may legally hold the other party to the contract. The contract is void, and neither the minor nor the adult may legally hold the other party to the contract. The minor may legally hold the adult to the contract, but the adult cannot legally hold the minor to the contract.

The minor may legally hold the adult to the contract, but the adult cannot legally hold the minor to the contract. If a minor enters into a contract with an adult, the minor may legally hold the adult to the contract, but the adult cannot legally hold the minor to the contract.

Which of these is a likely reason for a listing agent to use a Modification of Terms form? A buyer has made an offer below list price and the seller is willing to take that offer. The seller wants to move up the expiration date because the property sold right away. The seller wants to raise the list price after receiving no offers. The seller wishes to lower the list price to encourage more offers.

The seller wishes to lower the list price to encourage more offers. Modifying the terms of a listing agreement is typically done as an effort to get more offers—by lowering the price or extending the listing period.

How may escrow be terminated? Through default by the buyer Through default by the buyer or failure of the seller to meet a condition Through written instructions by the listing agent Through written instructions signed by the parties

Through written instructions signed by the parties

If a buyer must deliver notice to the seller no earlier than two days prior to Monday, August 5, when may the notice be delivered? Friday, August 2 Saturday, August 3 Thursday, August 1 Wednesday, July 31

Thursday, August 1

Sellers are often reluctant to accept offers contingent on the sale of another property, and when they do, they usually reserve the right to market and show the property to other buyers. True False

True