QuestionAnswer California’s economy is so large that it actually competes with: countries. The most populous state in the country is: California A large, densely populated metropolitan area consisting of a number of major urban areas and smaller surrounding cities is called a: megalopolis. An economic system in which most of the economy’s resources are privately owned and managed is called: capitalism. The increase in market value of real estate defines: appreciation. A decrease in purchasing power of the dollar describes: inflation. The real estate housing market is influenced by: all of the above. The best housing market would be created by all of the following, except: a low affordability index. The price that is middle value of a sample of sales, with one-half of the sales below and one-half of the sales above is called: median home price. In California, to work as a real estate salesperson or broker you must have: a real estate license issued by the California Bureau of Real Estate. Five homes in the same neighborhood sold within the last three months for $425,000, $450,000, $400,000, $395,000, and $405,000. What is the median price for these sales? $405,000 The number of households that will be able to afford a median-priced home in California is indicated by the: affordability index. California has been the number one agricultural producing state in the country for more than 50 years. Of the following, which is not one of California's main commercially grown products? Potatoes California's oil wells are known as "_____ gold." black Because people come to California from other states and from around the world, it is considered: ethnically diverse. According to the U.S. Census, approximately what percentage of the U.S. population lives in California? 12% What is the name for a large, densely populated metropolitan area consisting of a number of major urban areas and smaller surrounding cities? Megalopolis Which county is the most populous county in the United States? Los Angeles County, California Which state is the most populous in the country? California What is the name of the economic system in which most of the economy's resources are privately owned and managed? Capitalism In order to work as a real estate salesperson or broker in California, a person must have: a real estate license issued by the California Bureau of Real Estate. California's inventory of _____ units is not enough to meet the demand because our population increases faster than our supply of housing. housing C.A.R. stands for: California Association of REALTORS®. Which of the following does not help to create a strong housing market? Low affordability index Which of the following is not considered one of California's top industries? Textiles A megalopolis is a: large, densely populated metropolitan area consisting of a number of major urban areas and smaller surrounding cities. Forty percent of people in California speak languages other than English at home. Which language is the second-most common language spoken? Spanish Which statement regarding California is incorrect? California's basic climate is called continental. What are the two types of real estate licenses? Salesperson license and broker license. The _____ rate is the percentage of the people classified as unemployed as compared to the total labor force. unemployment The price that is midway between the least expensive and most expensive home sold in an area during a given period of time is called the _____ home price. median What is the name of the economic system in which most of the economy's resources are privately owned and managed? Capitalism What is the name for a large, densely populated metropolitan area consisting of a number of major urban areas and smaller surrounding cities? Megalopolis Because people come to California from other states and from around the world, it is considered: ethnically diverse In a technical sense, the term “property” refers to: rights or interests in the thing owned. Why do disputes arise regarding ownership of personal property? Personal property can become real property. Which of the following is considered real property? Airspace above the land Which of the following is considered personal property? Leases A running stream is considered: real property. Which of the following statements concerning riparian rights is not correct? Riparian property owners own the water and may use as much as they want. Which of the following is considered personal property? An existing mortgage Which of the following is considered appurtenant to land? All of the above Of the following, which is not one of five general tests of a fixture? Time of attachment Which of the following is considered real property? Bearing wall in a single-family residence “Of indefinite duration” is a phrase that describes an: estate of inheritance. John conveys a portion of his fee estate to Fred that is for a term less than his own, John’s own interest would be: reversion. Which of the following is a non-freehold estate? Tenancy for years David left his son 2/3 interest and left his son’s wife 1/3 interest in real property jointly and without the right of survivorship. They will take title as: tenancy in common. Ownership in severalty would most likely involve: sole ownership. Baker, Cook, and Turner own equal interests in a parcel of land as tenants in common. Without the consent of the others, Turner leased the entire parcel to Hunter for agricultural purposes. Such a lease would be: valid, but Hunter takes the property subject to Baker and Cooks right to share in the enjoyment and possession of the property. The words “time, title, interest, and possession” are most closely related to: survivorship. How are a joint tenancy interest and a community property interest alike? Ownership interests are equal Chris, Bell, and Lyn took title to a property as joint tenants. Chris sold her share to Pat, and then Bell died. Who owns the property now? Lyn owns 2/3 and Pat owns 1/3 as tenants in common. A contract to sell community real property made by one spouse only is: unenforceable Naturally occurring plant growth, such as grasses, trees, and shrubs and are considered: part of the real property. Anything used with land for its benefit is known as a(n): appurtenance. Which of the following is considered real property? Airspace The holder of a life estate may not: will the property. An undivided interest is defined as the: interest a co-owner has in property which carries with it a right to possession of the whole property along with the co-owners. Two brothers, Alex and Chris, wanted to buy a house together, but wanted to make sure that if one brother died, the other would automatically become sole owner of the house. How should they take the title? Joint tenancy Two friends contributed equal amounts to purchase a vacation home. There was no mention of the ownership interest of each person or how title was to be taken. Under these circumstances, each person would hold a(n): divided 1/2 interest as ownership in severalty. Ownership in severalty would most likely involve: sole ownership. Which statement is correct regarding recording a grant deed? A deed must be acknowledged to be recorded. A leasehold is also known as a(n): less-than-freehold estate. Of the following, which is not a right included in the bundle of rights? Right to tax Another name for an estate of inheritance is: fee simple. An owner builds an expensive oak bookcase and places it in his den, affixing it permanently to wall for stability. When the home is sold, if no special arrangements are made: it has become a fixture and belongs to the buyer. The property rights that someone has in something are known collectively as: the bundle of rights. Whenever an interest in real property is transferred voluntarily or involuntarily, why should the new owner record the transfer instrument? Recording the transfer instrument protects his or her legal interests. Emblements are: personal property What is the commonality of the terms, measuring life, pur autre vie, and life tenant? They are associated with life estates. A renter holds a: less-than-freehold estate. Annual crops produced by human labor, such as fruits, nuts, vegetables, and grains are: fructus industriales. Which of the following is not real property? Gas and oil Which type of ownership is not concurrent ownership? Ownership in severalty Which of the following is the best definition of encumbrance? Anything that affects or limits the fee simple title to or value of property The form of encumbrance that makes specific property the security for the payment of a debt or discharge of an obligation is called a: lien. A recorded abstract of judgment is classified as a(n)_______________lien. involuntary Recording a lis pendens: clouds the title and affects marketability. The owner of an apartment building does not declare the income from the rental units. The IRS filed a government tax lien, which would be a general lien. The personal, revocable, unassignable permission to use the property of another without a possessory interest in it is called a(n): license. Roger, who owns a ranch, gave Sam who owns no property, a non-revocable right to cross his ranch to fish in the stream. Sam has a(n): easement in gross. Private restrictions on land can be created by deed: or written agreement. Alienation of title to real property most nearly means to: convey or transfer title and possession. To be binding on a buyer and a seller, a deed to transfer real property must be: delivered and accepted. A grant deed is considered executed when it is: signed by the grantor. Effective delivery of a deed depends on: the intention of the grantor Dana sold a property to Kim, who did not record the deed but did occupy the premises. Dana then sold the same property to Lee, who did not inspect the property but did record the deed. After the second sale, who would have legal title to the property? The title would remain with Kim. An owner of a parcel of real property gave his neighbor a deed conveying an easement for ingress and egress. The easement was not specifically located in the deed. Under the circumstances, the neighbor’s right to use the easement is: enforceable because the location of the easement does not need to be specified. Which of the following actions is a quiet title action? Court action to remove a cloud on title What is the court proceeding that clears a cloud on the title of real property. Quiet title action Which statement is correct regarding encumbrances? Financial encumbrances affect the title. In order for a grant deed to be effective: the deed must be delivered to and accepted by the grantee. Regarding liens, which statement is incorrect? All encumbrances are liens. A(n) __________ is a person who makes a will. testator. The difference between an easement and a license to use property is: a license may be canceled. What type of easement is created when a parcel is completely land locked and has no access? Easement by necessity What is created when a garage, driveway, or fence extends beyond the land of its owner and covers the land of an adjoining property? An encroachmen As part of the mechanic's lien process, what notice must be given to the owner within 20 days of first furnishing labor or materials for a job by anyone eligible to file a mechanic's lien. Preliminary notice When someone dies, without leaving a will, he or she is known to have died: intestate. All of the following are financial encumbrances with the exception of a(n): easement. Real property can be transferred by __________ grant, which is the transfer of title by the government to a private individual. public An encumbrance is a non-possessory interest in real property that is held by someone who is not the: owner. A court action to divide a property held by co-owners is called: partition action. Encumbrances fall into two categories: financial and non-financial encumbrances. A forced sale of property in order to satisfy a judgment for money or foreclosure of a mortgage is a(n): sheriff's sale. How is constructive notice of a sale given? By recording a deed or by taking possession of the premises California recognizes three types of wills. Which will is written entirely in the handwriting of the testator (maker) and is dated and signed by the testator? Holographic will A(n) _____ is a court order forcing a person to do or not to do an act, such as violating a private restriction. injunction Why is it important to determine the starting date for a mechanic's lien? Mechanic's liens have priority as of the date work began or materials were first furnished for the job. All of the following are non-financial encumbrances except: a lien. When a promise is given by both parties with the expectation of performance by the other party, it is known as a(n) ¬¬¬¬¬_____ contract bilateral A contract signed under duress is: voidable. A minor cannot hire a real estate broker using a listing agreement because a minor: is legally incapable. All of the following are necessary for a valid contract, except: sufficient writing. All of the following are necessary for a valid contract except payment of money. The following are necessary elements to create a valid contract, except: performance. The essential element needed to create a binding employment contract for the sale of any right, title, or interest in real property is a(n): written instrument. A written contract takes precedence over oral agreements. This principle is expressed by the: parol evidence rule. The relinquishment or refusal to accept a right is known as: waiver. The substitution of an obligation or contract with a new one is called: novation. A bilateral contract is: A contract in which a party promises to perform without expectation of performance by the other party. Of the following, who would not be considered a legally competent party? Alice, a 17-year old who is engaged to be married The listing agreement was standard preprinted form, which Barb typed the listing info. listing meeting, Tom chngd the term of listing agree. from 90 to 60 days which he wrote in the contrct, ini. the change, & signed. Aftr 60 days, Tom told Barb he was Tom - handwritten clauses and insertions take precedence over any type- written content, attached addenda, and preprinted material. What is the commonality of unilateral rescission, performance, and breach? They are methods of discharging contracts. How long is the statute of limitations for a contract to purchase a condominium? 4 years What is the time limit under the statute of limitations to bring an action on most real estate contracts? 4 years Which of the following is not a remedy for breach of contract? Lateral Rescission A contract in which a party promises to perform without expectation of performance by the other party is called a(n): unilateral contract. Which of the following takes precedence in a contract? Handwritten clauses and insertions Which of the following is not one of the four requirements needed for a contract to be legally binding and enforceable? Written agreement The forgiveness of a debt or obligation, or giving up an interest or a right, qualifies as valuable consideration. It is called: forbearance. A(n) _____ could not enter into a contract. 6 year old child A valid contract between buyer and seller exists when the: buyer is notified of the seller's acceptance. When force is used to get agreement in accepting a contract, it is called: duress. In California, the __________ requires that certain contracts be in writing to prevent fraud in the sale of land or an interest in land. statute of frauds A contract in which all the parties have performed completely is called a(n): executed contract. What is the most common way to discharge a contract? Full performance A person who has been harmed by another person's breach of contract has all of the following remedies, except: attaching the breaching party's bank account. A contract in which the parties declare the terms and put their intentions in words, either oral or written is known as a(n): express contract. Which contract is binding and enforceable has all the basic elements required by law? Valid contract What is the commonality of full performance, release, assignment, novation, and breach? Ways to discharge a contract A minor is: someone under 18 years of age. The Statute of Frauds requires that leases for longer than _____ must be in writing. one year Terry and Ben made an offer to buy a duplex. The seller did not accept their offer, but did make a counteroffer. Meanwhile, Terry and Ben found a triplex they liked better and decided to make an offer on it, which was accepted. Which of the following is t Terry and Ben were released from their original offer by the seller's counteroffer. Which of the following could not enter into a contract? 6 year old child Under California law, any person seeking relief for a breach of contract must do so within the time limits of the: Statute of Limitations Every agency relationship has a principal, an agent, and a third party. In a real estate transaction the agent is the: broker. An enforceable listing contract for the sale of real property must be: in writing. The usual listing contract authorizes a broker to: find a purchaser and receive an offer to purchase accompanied by a deposit. Seller Sam signed a listing contract with broker Baker. If Baker brings the seller a full price offer: Sam does not have to accept the offer. An agency relationship may be terminated by all of the following, except: the principal’s refusal of an offer to purchase that was presented in the name of a third party Broker Davis signed an exclusive right-to-sell listing to sell John’s $365,000 house. Davis diligently advertised the sale of the house. One week before the listing was to expire, the house was sold through John’s own efforts to a friend. Under current ru the commission stated in the listing agreement. In an exclusive listing, as a matter of law, a listing between the broker and seller: must have a definite termination date. Wes hired Horn to sell a property through a 90-day exclusive agency listing. Thirty (30) days later the house had not sold, so Wes sent Horn a certified letter ending the agency listing which Horn accepted. A few days later, another broker sold the house only the open agent is owed a commission. Seller Janet signs a memorandum for an open listing with a broker authorizing the sale of her house for $165,000. The broker expends considerable time and money advertising and showing the house and obtains several offers. However, Janet rejects the offer is not entitled to a commission because of the open listing. To be entitled to a commission, a broker must show that he or she was the procuring cause of the sale under all of the following types of listing agreements, except a(n) ____________ listing. exclusive right-to-sell An agent receives an offer. The agent gives the offer to the seller, who asks to consider it for 24 hours. At 6 p.m. the same day, the agent receives two more offers. The agent believes the seller will not accept any of the three offers. The agent should: convey the two new offers at the same time. A listing broker received a bona fide offer and a personal check as a deposit. The prospective buyer asked the listing broker to hold the check uncashed until the end of the week. The listing broker must: inform the seller. A listing broker is relieved of the obligation to present an offer to purchase real property to his or her principal when the: broker is acting on written instructions from the principal or the offer is patently frivolous. If a listing broker acts as an agent, the broker owes to the seller a fiduciary duty. What does the broker owe to the buyer? A duty of fair and honest dealing A broker is most likely to earn a commission when the broker: communicates the seller’s acceptance to the buyer The term, __________, refers to a broker who produces a buyer "ready, willing, and able" to purchase the property for the sale price and on the terms specified by the seller, regardless of whether the sale is completed procuring cause Every agency relationship has a principal, an agent, and a third party. In a real estate transaction the agent is the: broker An agent receives an offer. The agent gives the offer to the seller, who asks to consider it for 24 hours. At 6 p.m. the same day, the agent receives two more offers. The agent believes the seller will not accept any of the three offers. The agent should convey the two new offers at the same time. Which of the following is not true regarding dual agency? Dual agency is a violation of real estate law Seller Jordan signs a memorandum for an open listing with a broker authorizing the sale of her house for $65,000. The broker expends considerable time and money advertising and showing the house and obtains several offers. However, Jordan rejects the offe is not entitled to a commission because of the open listing. Which of the following is true of a listing agreement? It allows a broker to complete a specific task Which of the following is not a listing agreement typically used in California? Exclusive net agency listing An agency relationship may be terminated by all of the following, except the principal's refusal of an offer to purchase that was presented in the name of a third party. Which of the following is a way to create an agency relationship? Estoppel A licensed broker obtained an exclusive right-to-sell listing from an owner. During the listing period, the broker found a buyer who made an offer on the property that was accepted by the seller. Neither the offer nor the escrow instructions mentioned: (a is legally entitled to a commission. An agent must supply a written Agency Disclosure: to a seller before listing a property or to a buyer before writing an offer. In an exclusive listing, as a matter of law, a listing between the broker and seller: must have a definite termination date. In a real estate transaction the customer is considered the third party. Statements not known to be false at the time they are made are called _____ misrepresentations. innocent A person who authorizes another to act in his or her place in regard to relations with third persons is the: principal An agent who represents both the buyer and the seller in a transaction is known as a: dual agent. Which of the following is not a way to create an agency? Act of law An enforceable listing contract for the sale of real property must be: in writing. A broker receives a commission in a(n) __________ listing regardless of who sells the property. exclusive right-to-sell What must occur before a broker decides to exercise an option during an option listing? The seller must agree to it in writing A listing broker is relieved of the obligation to present an offer to purchase real property to his or her principal when the: broker is acting on written instructions from the principal or the offer is patently frivolous The statute of frauds requires that contracts for the sale of real estate must: be in writing. What is the status of a contract during the period of time after a real estate sales contract is signed by both parties but before title actually passes? The contract is: executory. Buyer Baker presented an offer to Seller Sam for the purchase of a 10-year-old home in a quiet neighborhood. Seller Sam made a counteroffer to buyer Baker. Under these circumstances, buyer Baker: has no obligation under his original offer. Seller Chris listed a vacant lot with a broker at $111,400. Prospective buyer Jordan submitted an offer of $111,000 that was to expire in three days. The next day, Chris made a counteroffer of $111,200. When Jordan did not respond within the three-day per no contract. Which of the following statements is correct regarding an option contract to purchase real estate? The optionee is not obligated to purchase the property. As used in real estate law, the term tenancy is best described as: the interest of a person holding property by any right or title If an owner grants possession of real property to another person for less than the owner’s interest, it is known as a: lease The maximum amount of security deposit a landlord may demand from a prospective tenant depends upon the: term of the lease and whether the unit is furnished or unfurnished. An unlawful detainer proceeding is most often taken by a: lessor A tenant may abandon a leased property and refuse to pay further rent if the landlord carries out a constructive eviction. Which of the following is considered to be a constructive eviction? After multiple requests by the tenant, the landlord failed to make needed major repairs and to maintain the property in the agreed-upon manner. When purchasing property, the amount of the buyer’s earnest money deposit is determined by agreement between buyer and seller. A prospective buyer made an offer and gave the seller’s broker a $500 check as a deposit for the sale of a residence. Before the offer was given to the seller, the buyer contacted the broker and withdrew the offer. What should the broker do with the $500 Return it immediately Mary’s broker presented a full-price offer to purchase to Susan’s home with a 45-day closing. Susan accepted the offer but changed the closing date from 45 days to 90 days because she needed more time. In this situation, buyer Mary is: not bound by the original offer she sent to Susan. Pat gives an option to James to purchase Pat’s ranch. This option most clearly constitutes a(n): contract to keep an offer open. If real property is subleased, the interest held by the sublessor is known as a(n): sandwich lease Mary's broker presented a full-price offer to purchase to Susan's home with a 45-day closing. Susan accepted the offer but changed the closing date from 45 days to 90 days because she needed more time. In this situation, buyer Mary is: not bound by the original offer she sent to Susan. If a buyer wants early possession of the property before escrow closes, which document should be used? Interim Occupancy Agreement Which of the following statements is correct regarding an option contract to purchase real estate? The optionee is not obligated to purchase the property. The primary document used to make an offer on real estate is called a(n): purchase agreement. Unlawful acts by a landlord (lessor) to evict a tenant include all of the following except: using the eviction process to remove the tenant. A(n) __________ commands a tenant to vacate the a property within five days. writ of possession A tenant failed to pay rent, so the owner gave the tenant a 3-Day Notice to Pay Rent or Quit. This notice: gives the tenant 3 days to pay the rent or cure the breach of the rental agreement. The statute of frauds requires that contracts for the sale of real estate must: be in writing. The offeror in a purchase agreement is usually the: buyer. When a buyer reserves the right to buy a property at an agreed upon price, within a stated period of time, without being obligated to do so, it is known as a(n): option. A prospective buyer made an offer and gave the seller's broker a $500 check as a deposit for the sale of a residence. Before the offer was given to the seller, the buyer contacted the broker and withdrew the offer. What should the broker do with the $500 Return it immediately When purchasing property, the amount of the buyer's earnest money deposit is determined by: agreement between buyer and seller. Legally, when is rent due if there is no specific agreement? End of the month What is a lawsuit that removes an unlawful holdover tenant? An unlawful detainer action In a listing, the seller agrees to pay a commission if the broker: uses due diligence to procure a buyer. Which of the following is true regarding a buyer representation agreement? It is a single agency agreement. Real estate contracts must: be in writing, be signed by the parties, and have the elements of a valid contract. Seller Chris listed a vacant lot with a broker at $111,400. Prospective buyer Jordan submitted an offer of $111,000 that was to expire in three days. The next day, Chris made a counteroffer of $111,200. When Jordan did not respond within the three-day per no contract. When agreed upon in advance, what is the compensation to the seller if the buyer does not keep his agreement to purchase? Liquidated damages A listing is a contract by which a principle, or seller, employs a broker to: sell real estate Which of the following is not necessary for a lease to be valid? Signature of the tenant The phrase “as is” in real estate refers to _________conditions. observable A private seller advertises a single-family home for sale “as is”. Since the seller is not using the services of a real estate broker, the seller: must give a Real Estate Transfer Disclosure Statement to prospective buyers. All listing brokers must conduct a reasonably competent and diligent visual inspection of the property. Which items must be visually inspected? Condominium unit A Real Estate Transfer Disclosure Statement is required in the ______ of one-to- four residential units. sale During negotiations for the purchase of a house, the seller never informed the buyer that the house was served by a septic tank with a failed drain field. Escrow closed and the buyer moved in. What recourse does the buyer have? Rescind the contract with the seller based on fraud. Regarding environmental hazards on the property, what is the seller required to do? The seller should do all of the above. Seller Sam listed his newer ranch-style home built in 2002 with broker Bob. do none of the above. Broker Logan took a listing on a home. When filling out the NHD, which of the following would Logan not include? Mold hazard When a condominium is sold, the seller must, upon request, provide to the buyer: all of the above A broker took a listing on a property where a person died from AIDS. Does the broker have to disclose this information? No, the broker does not have to voluntarily disclose this information. Which state law protects buyers from fraud, misrepresentation, or deceit in the marketing of subdivided lots, and undivided interests in new subdivisions? Subdivided Lands Law The Interstate Land Sales Full Disclosure Act regulates land sales of: 25 or more lots. In the sale of real property, a copy of the structural pest control certification report, if requested, must be given to the: buyer. A pest-control company discovered no evidence of termite in a house offered for sale. But it did discover conditions that are likely to lead to infestation. The cost of correcting such conditions is: paid by the buyer only if he or she wishes to have these conditions corrected. All homes with a fossil fuel burning fireplace or an attached garage must: install carbon monoxide detectors. The document used by a seller to describe the condition of his property to a buyer is the: Transfer Disclosure Statement. Which items must listing brokers visually inspect when conducting a reasonably competent and diligent visual inspection of the property? Condominium unit The National Association of REALTORS® defines a _____ property as "a property that has been psychologically impacted by an event which occurred, or was suspected to have occurred, on the property, such event being one that has no physical impact of any ki stigmatized A broker must inform both buyer and seller, in writing, of the sale price on a property within _____ month(s) of close of escrow. one A document disclosing all important facts about a property, its marketing, and the financing of the subdivision is called a(n) _____ report. public What must occur in order to comply with laws regarding braced water heaters? The seller must provide certification of having the water heater(s) braced, anchored, or strapped in place. The Interstate Land Sales Full Disclosure Act regulates land sales of: 25 or more lots. Anyone who is found guilty of violating the Subdivided Lands Law is punishable by a maximum fine of _____ $1,000 If a repair is required as a result of infestation found during a structural pest control inspection, who usually pays for the repair? The seller The state law that protects buyers from fraud, misrepresentation, or deceit in the marketing of subdivided lots, and undivided interests in new subdivisions is called the: Subdivided Lands Law. Federal law requires that a buyer of real property must withhold and send to the Internal Revenue Service (IRS) _____ of the gross sales price if the seller of the real property is a foreign person 15% If a broker takes a listing on a property where a person died from AIDS, the broker: does not have to disclose this information. Susan is trying to sell her house without using a real estate broker and advertises her home for sale "as is". Since Susan is not using a real estate broker, she: must give a Real Estate Transfer Disclosure Statement to prospective buyers. The Mello-Roos Disclosure requires notice concerning: special taxes for public facilities and services. In which of the following documents would a seller most likely reveal the existence of air traffic noise above property that is being sold? Real estate transfer disclosure statement The Subdivided Lands Law protects buyer from all of the following, except: stigmatized property. Which of the following is true regarding a pest control inspection? The law does not require a structural pest control inspection to be performed prior to transfer. Disclosures included on the Natural Hazard Disclosure Statement include all of the following except: High Population Zone. Which disclosure shows that a broker discussed market conditions with a buyer? Market Conditions Advisory What did the Carbon Monoxide Poisoning Prevention Act of 2010 require? CO detectors must be installed in all dwelling units with a fossil fuel burning heater, appliance, or fireplace; or that have an attached garage. Which of the following is a "red flag?" Cracks in the cement leading to and around a swimming pool The state law that protects buyers from fraud, misrepresentation, or deceit in the marketing of subdivided lots, and undivided interests in new subdivisions is called the: Subdivided Lands Law. Escrow instructions must be: executed. The reason for using an escrow when a deed of trust is conveyed is to: ensure that the conditions and instructions of the agreement are satisfied. Which of the following best describes completed escrow? All escrow instructions have been carried out. Which of the following statements concerning escrow is correct? In order for the escrow to be able to close, the buyer may be required to pay more than the amount stated in the escrow instructions. Which of the following statements regarding escrow procedures is correct? When the escrow requirements have been met, the escrow agency changes from being agent of both parties to an agent of each party. An escrow agent is authorized to: call for funding of the buyer’s loan. If an escrow holder receives pest control reports from two different companies, the escrow officer should: contact the brokers to ask for instructions from the buyer and seller. Which of the following items would most likely appear as a credit in the seller’s closing statement? Prepaid taxes If a buyer assumes an existing loan when purchasing a single-family residence, the settlement statement at close of escrow would show the assumption of the loan as: a debit to the seller. How would a loan for the purchase of a residence appear on the buyer’s closing statement? Credit to buyer Which of the following is regarded as a recurring cost in a closing statement? Impound accounts A buyer who wishes to insure title to real property when it is purchased should secure a(n): title insurance policy. Which of the following title insurance policies protects against all risks? No policy insures against all risks. When buying a home, a purchaser was given a grant deed and a standard policy of title insurance. Which of the following is warranted by the seller but is not covered by the standard policy of title insurance? The grantor has placed no undisclosed liens against the property. Which of the following is not covered by title insurance? A zoning ordinance, regulation, or plan Which system of land description employs meridians and baselines? Public Land Survey system County governments levy taxes through: all of the above. An example of an ad valorem tax would be: property tax. How do special property tax assessments differ from annual property tax assessments? Special assessments provide for local improvements. After a property is declared tax-defaulted for failure to pay property taxes, the occupant of the property: may continue to reside on the property unhindered. A new roof, swimming pool, or other cosmetic addition to property is known as: capital improvements. Which of the following is the escrow holder? Escrow officer A special assessment would be imposed to pay for which of the following? Neighborhood street lights Lenders require escrow holders to verify the presence of: fire insurance. Landmarks, such as trees and fences are known as: monuments Which of the following may license an escrow company? Real Estate Commission Of the following, which is not used as a legal description when conveying real property? Geodetic Survey System. An extended coverage title insurance policy covers all of the following, except: unpaid credit card payments. The escrow holder is the agent of which of the following? Buyer and seller The terms "range lines" and "township lines" are associated with which legal description? Public Land Survey System Who licenses an escrow company? Commissioner of Business Oversight For property tax purposes, how much is the California homeowner's exemption? $7,000 Who must sign escrow instructions? Buyer and seller For income tax purposes, which expense is deductible to a homeowner for a primary residence? Property taxes Which of the following is not a title insurance policy? Preliminary report Documentary transfer tax is usually based on _____ per $1,000 of the purchase price. $1.10 Which of the following became the measure for assessing property in California? Proposition 13 A lot, block, and tract system can be called all of the following, except a: landmarks and unique identifier system. For income tax purposes, which expense is deductible to a homeowner for a primary residence? Property taxes The buyer's and seller's agreement is indicated in the: escrow instructions. A unilateral change in escrow instructions may be made by: neither the buyer nor the seller. An escrow may be directed by real estate brokers: only as a part of their normal business operations if they represent the principals. A promissory note: is evidence of a debt. All of the following are negotiable instruments except a(n): Trust deed securing a promissory note Which of the following statements is correct regarding effective interest rate and nominal interest rate? The effective interest rate is the rate actually paid by the borrower; the nominal interest rate is the rate named in the note. If the payments on a loan financing a real estate purchase are insufficient to service the debt, the result will be: negative amortization Which of the following will necessarily involve a balloon payment? Partially amortized loan When compared to a 25-year amortized loan, a 30-year amortized loan has: lower monthly payments of principal and interest Which of the following statements best defines a mortgage loan? A loan secured by a mortgage on real estate In a deed of trust, the power of sale in the event of default is given from the: trustor to the trustee. A power of sale or trustee’s sale foreclosure of a deed of trust: prohibits a deficiency judgment. Mortgages and trust deeds are different in all of the following respects, except: security. In the case of a contract of sale, the best analogy for the financial relationship of the parties is: beneficiary-trustor. Adding an acceleration clause to a note would: not make the note less negotiable. Foreclosure of a deed of trust may be accomplished either by court action or by power of sale. Foreclosure by court action: usually establishes a right-of-redemption period. When real property subject to a mortgage is foreclosed judicially, the mortgagor may remain in possession of the property for what maximum amount of time after the foreclosure of the sale? one year A broker sells a property and negotiates a first loan from a bank and a second loan from a seller. The broker would record a Request for Notice of Default for the protection of the __________ loan. beneficiary of the second Buyer Taylor purchases a home from seller Sanders and agrees to assume an existing conventional loan. The lender agrees to the assumption and signs a substitution of liability. Under these circumstances: Sanders is relieved from all liability The main purpose of the FHA was to: promote homeownership by insuring home loans. For an FHA insured loan, the interest rate is: determined by agreement between the borrower and lender. Rose, a prospective home buyer, asked Steve at ABC Real Estate Brokerage Company to help her get FHA financing. The broker would most likely contact: an approved mortgagee. One of the special features of VA financing is that: there is no down payment if the selling price does not exceed the CRV. Which of the following statements is not correct regarding land contracts? The seller is known as the vendee. A deed of trust and note are given to a seller to finance the purchase of vacant land. The buyer intends to place a short-term construction loan on the land. Such a deed of trust is most likely to include a(n) __________clause. subordination Which of the following is true regarding a hard-money second deed of trust? Through this type of deed, equity in real property is the collateral for a cash loan. Mike borrowed money from Robert. As security for the loan, Mike gave Robert a trust deed covering six separate parcels of previously unencumbered real property that Mike owned. Such a trust deed would be regarded as a(n) _______ trust deed. blanket Which of the following terms are most nearly identical? Construction loan/interim loan Which of the following is not one of the functions of the FHA? Making discounted loans to qualified borrowers What is the clause in a loan document describing certain events that would cause the entire loan to be due? Acceleration clause How is priority determined when recording a trust deed? By a timestamp on the county recorder's document The cost of borrowing money is: interest. A home equity loan: gives the borrower the entire loan balance at one time. Financing for new construction contains all of the following, except: one loan that finances the construction and completion phase A loan which wraps an existing loan with a new loan allowing the borrower to make one payment is called a(n): all-inclusive trust deed (AITD). A loan that has no security for payment of the debt is a(n): unsecured mortgage. Which of the following is not a characteristic of a promissory note? It requires a mortgage for validity The evidence of a debt that is recorded after a first trust deed is a(n): junior trust deed In the loan business, a beneficiary is: the lender under a deed of trust. When borrowing under a Cal-Vet loan, the buyer: receives title after completely paying off the loan. Mutual mortgage insurance on F.H.A. loans: protects the lender in the event of default. A foreclosure's reinstatement period is until _____ business days before the date of the trustee's sale. 5 A borrower was making payments on a loan that had a balloon payment at the end of the term. What kind of loan did he probably have? Partially amortized loan If a buyer needs funds to close a transaction while his or her present home is unsold, a __________ loan can be used swing Under which government financing program are approved applicants required to apply for life insurance? CalVet A nontraditional mortgage is a mortgage that is: a loan other than a fixed, 30-year, fully amortized loan. What is the principal in a loan? The amount borrowed When is a blanket loan typically used? For housing tracts or construction loans Which of the following is a feature of a home equity line of credit (HELOC)? The borrower can take any amount up to the credit limit The most effective method for the Federal Reserve to create a “tight” money market is to: sell government bonds and raise the discount rate. What federal agency insures deposits in all federally chartered banks and savings institutions? FDIC The process of gradually relaxing regulatory restraints is called: deregulation. The type of lenders having the greatest percentage of its assets invested in residential real estate mortgages are: thrifts. Which of the following lenders frequently uses a warehouse line to make loans to borrowers? Mortgage companies In the field of real estate financing, the term “secondary mortgage market” usually refers to: the resale or transfer of existing trust deed loans. The original purpose of Fannie Mae was: buying and selling FHA and VA loans in the secondary market. What shows the borrower’s payment history, balance of outstanding debt, credit history, number of credit inquiries, and types of credit held? Credit report The underlying security for the mortgage loan is the: property. If only the annual percentage rate (APR) is disclosed in an advertisement for property, which additional disclosures must be made? No other disclosures are required For a real estate loan, which of the following fees may not be included in the finance charge according to the federal Truth in Lending Act? Appraisal fees Which of the following statements violates the federal Truth in Lending Act? 3-bedroom, 2 bath, large lot, with 10% down; total price $225,000 The Federal Real Estate Settlement Procedure Act of 1974 (RESPA) pertains to: residential properties with 1-to-4 units. The Housing Financial Discrimination Act of 1977 prohibits the discriminatory practice known as: redlining. The maximum commission that can be charged by a licensee for negotiating a second trust deed of $7,500 for a period of five (5) years is: 15%. __________ occurred when people moved money from savings and loans into investments paying a higher rate of interest. Disintermediation The use of property's location to deny financing is known as: redlining Which institutional lender commonly makes short-term construction loans? Commercial banks _____ is a federal law that requires disclosure to borrowers of closing costs and procedures by means of a pamphlet and forms approved by the United States Department of Housing and Urban Development (HUD). RESPA The secondary mortgage market is for buying and selling existing mortgages from the primary mortgage market or from each other. Which of the following is not a major participant in the secondary mortgage market? Carlie Mac Since the security for a mortgage loan is the property, a lender will want to ensure fair market value for the property by requiring an appraisal. Which of the following is not one of the credit reporting agencies used by lenders to research a borrower's credit record? TransAmerica What regulation implements the Federal Truth in Lending Act? Regulation Z Which of the following activities is not commonly performed by a mortgage broker? Mortgage brokers underwrite loans and fund them at closing. All consumers are given an equal chance to obtain credit through the: Equal Credit Opportunity Act. Which Act established the Consumer Financial Protection Bureau and authorized it to regulate consumer financial products and enforce several consumer protection laws? Dodd-Frank Act The Seller Financing Disclosure Statement only applies to a(n): arranger of credit. An economic situation in which the supply of money is limited and the demand for money is high, as evidenced by high interest rates is: tight money. Which of the following statements is true regarding the mortgage market? The primary mortgage market is where lenders make mortgages to borrowers The __________ market is the market that does not originate loans. secondary mortgage _____ is the process of evaluating a borrower's risk factors before the lender will make a loan. Underwriting The broker negotiating the loan must keep a signed copy of the Mortgage Loan Disclosure Statement for how many years? Three The Real Estate Settlement Procedures Act (RESPA) applies to which of the following? A loan secured by a first trust deed securing real estate upon which there is one-to-four family residential dwelling The Truth-In-Lending Act (Regulation Z) requires creditors to disclose credit terms so consumers can make comparisons. All of the following are risk factors that the lender assesses during the underwriting process, except the borrower's highest level of education completed. Which economic stimulation tool of the Federal Reserve involves purchasing and selling government securities? Open market operations The “present and future anticipated enjoyment or profit from the ownership of property” is one definition of: value. Market value of improved real property is least affectedby: the original cost of materials. What four elements that must be present for a property to have market value? Demand, scarcity, transferability, and utility. The ultimate test of functional utilityis: marketability. The term unearned increment most nearly means: an increase in value due to population increase. The commonality of blighted areas, inflation, and the business climate is that they are _______________ forces the influence value. social Which of the following appraisal approaches is based primarily on the principle of substitution? Income capitalization approach In a well-planned residential community, which of the following contributes most to the maintenance of value? Conformity to proper land-use objectives More than anything else, what determines the value of a property? Highest and best use In the sales comparison approach to appraisal, what is the most important as well as the most difficult step? Adjustment of data to reflect differences between subject and comparable properties The sales comparison approach to appraisal would be least reliable: in an inactive market. An appraiser is using the sales comparison approach. A comparable property has an amenity that is not present in the subject property. The appraiser would therefore: subtract the value of the amenity from the comparable property’svalue. Functional obsolescence would not include: a proximity to nuisances The major cause of loss of value of real property is usually due to: obsolescence. A building that is an improper improvement to its site is an example of: incurable functionalobsolescence. A 12-year-old building that has been maintained in excellent condition is given an age of 6 years by an appraiser. This would be known as its: effective age. When comparing the economic and physical life of abuilding,the economiclifeisusually: shorter. Economic rent isbest defined as therent: received for comparable spacein the competitive open market. The capitalization approach is based primarily on the appraisal concepts of: anticipation The effective annual gross income of a property is the difference between the annual gross income and: vacancy factor and rent collectionlosses. When calculating the NOI, which of the following is not deducted from gross income? Mortgage interest To calculate accurately a gross rent multiplier, the appraiser needs _________from comparable properties. annual rent and the sellingprice Usually, an appraiser estimates the value of a property by using all three major approaches. To obtain a final estimate of value, the appraiser _________the three indications of value. reconciles When is the appraisal reportvalid? The date the appraiser signs the appraisal report. A person with a trainee license: must work under the supervision of a certified appraiser licensee. The actual sales price of the property is called the: market price. All of the following are forces that influence value, except: ethics based on religion. Which of the below is not one of the four levels of real estate appraiser licensing in California? Certified Trainee License Which of the following causes real estate prices to go up? Demand is greater than supply. The income approach bases a property's value on its ability to: produce income. Which is not one of the steps in the appraisal process? Determining the stage of the neighborhood life cycle Appreciation means: an increase in value. One of the methods not used to estimate the cost of a building is the: fractal geometry method. The sales comparison approach is one of the most commonly used appraisal approaches and is best for: single-family homes. The effective age of a property is determined by the: condition and usefulness of the property. A higher value house among less expensive homes will lose value. This illustrates the principle of: regression. Which type of property uses a depth table to estimate property value? Commercial building An appraisal is usually prepared for: a specific property's value on a given date. What is the commonality of demand, utility, scarcity, and transferability? They are the four elements that create market value. Which of the following is not one of the four changes in the neighborhood life cycle? Stagnation The principle of _____ may be illustrated by a higher value house among less expensive homes losing its value. regression Using the cost approach, an appraiser uses all of the following information except the: capitalization rate. When using the cost approach, improvements and land are valued: separately, by more than one approach. Demand must be coupled with _____ to be effective. ability to purchase Under normal market conditions, if an apartment were vacant and available for rent, the amount for which it would be expected to rent is called: economic rent. Carter is using a gross rent multiplier to get a rough estimate of the value of a duplex he wants to buy. If the gross annual income is $36,000, expenses are $12,000, and the gross rent multiplier is 8, what is the estimated value of the duplex? $288,000 What is the power of the government to take private property for public use? Eminent domain A grandfather clause: permits continuation of a nonconforming use. A builder is allowed to make a change in construction that does not conform to the local building code. This is an example of: a variance. The intersection of the land with the water at the mean high-water line describes: a shoreline. The division of land into 5 or more lots for the purpose of sale, lease, or financing is called a: subdivision. The law giving the city or county authority to control the orderly and proper development of the community is called the: Subdivision Map Act. Under the Subdivided Lands Law, property can be subdivided into a minimum of����������interest(s). five Waters that seep from the ground, arising from an indeterminable source, are known as ���������� water. percolating The purpose of a percolation test is to determine the: capacity of the soil to absorb water. Which of the following statements is incorrect? State building inspectors enforce the construction regulations. The main purpose of the Uniform Building Code is to: provide for the health, safety, and property rights of the public. The restrictions for a subdivision state that the minimum lot size is 10,000 square feet. Local zoning ordinances state that the minimum is 13,000 square feet. In this case, if the developer is subdividing one acre, which would prevail? Zoning ordinances If a local building code is more stringent than a state code or the UBC the stricter code prevails. The R-value is a rating that measures: how well insulation resists heat. The soil that is used to fill in holes or support a foundation is called: backfill. For FHA loans, the minimum crawlspace is ���������� inches. 18 Which of the following is not part of the foundation? Ridge board A freestanding small booth, such as a jewelry stand or a newsstand is known as a: kiosk. Drawing that shows front and side exterior views of a building as it will be when finished is called: an elevation sheet. The words, gambrel, hip, gable, and flat refer to: types of roofs. Subdivisions laws were created to protect: consumers. Under the Subdivided Lands Law: the Real Estate Commissioner regulates conditions surrounding the sale or lease of subdivided real property. A duplex would be zoned: R2. All of the following are common facilities in a common interest development (CID), except: private dwellings. Eminent domain gives government the power to take private property by paying: just compensation or fair market value. In California, the minimum construction and occupancy requirements for dwellings are outlined in the: State Housing Law Which term refers to the incline of a roof? Pitch Many homebuyers express common concerns about the energy efficiency of their homes. Of the following, which is a measurement of the efficiency of energy; used to determine the effectiveness of appliances? EER The Takings Clause of the Fifth Amendment to the Federal Constitution deals with: the power of eminent domain. Which of the following characteristics is not typical of a condominium? Each owner of a unit does not pay property taxes For long-term physical development, every city and county must adopt a comprehensive: General Plan. What type of subdivision is typically associated with a tract of single-family homes on individual lots? A standard subdivision An exception granted to existing zoning regulations is known as a(n): variance. The Subdivision Map Act is primarily concerned with: the physical aspects of a development. What measures how well insulation resists heat loss? R-value The State Housing Law is designed to: set minimum construction and occupancy standards. Most cities and counties have ordinances that create land use districts or zones. Usually every district is zoned for different types of uses, known as: permitted uses and conditional uses. The ability to pass laws for the general good of citizens is known as: police power. A planned development involves land that is: not subject to conventional zoning requirements. The type of subdivision that consists of a tract of single-family homes on individual lots is known as a: standard subdivision. The term potable means: Water suitable for drinking. Which statement is correct regarding a real estate brokerage business? A real estate broker may open a real estate brokerage in his or her name. All of the following businesses can get a California real estate broker license, except a(n): partnership. Which of the following business entities would be subject to double taxation? Corporation The amount a broker has left after all commissions have been paid is called the: company dollar. Which of the following statements is incorrect? For federal income tax purposes, the salesperson is considered an employee. Which of the following statements is correct regarding the basic tests used to determine statutory nonemployee status? All of the statements are correct. Which statement is incorrect regarding the broker/salesperson employment agreement? The employment agreement must be on a form approved by the Commissioner. Even though sales associates are considered self-employed for federal and state income tax purposes, a broker must provide Workers’ Compensation insurance for: both (a) and (b). When a salesperson transfers his or her license to another broker, the listings obtained by the salesperson: will remain with the original broker. Ben just took a listing on a three-bedroom fixer-upper home located in an area with very good schools. Although it is a mixed neighborhood, it is primarily Malaysian. He’s eager to sell the home and wrote the following ads. Which of the ads best follows a “Nice fixer, located by parks and good schools with three-bedrooms for the family.” A commercial e-mail message is an e-mail sent to: offer the real estate agent’s services to an unknown person. Which of the following items must be included in a commercial e-mail message? All of the above Under the do-not-call rules, when may a real estate licensee make cold calls? Only between 8:00 a.m. and 9:00 p.m. Which of the following statements regarding advertising is correct? All of the statements are correct. Real estate ads should not have words that state or imply a preference with regard to race, color, religion, handicap, sex, familial status, or national origin. Of the following phrases, which would be unacceptable? No Scientologists or Hare Krishnas Which of the following statements is incorrect regarding real estate signs? A homeowners’ association can prohibit private owners from displaying real estate signs on their own property. Which of the following would not be considered trust funds? Commission A broker may keep up to __________ of personal funds in the trust fund account to pay for bank charges or service fees related to the trust account. $200 The illegal practice of telling people that property values in a neighborhood will decline because of a specific event, such as the purchase of homes by minorities is called: blockbusting. The California law that prohibits discrimination in the sale, rental or financing of practically all types of housing is called the: California Fair Employment and Housing Act. All of the following are activities of a brokerage, except: making real estate investments. How does the IRS determine whether someone is an independent contractor? Control and direction of the work performed Who regulates real estate advertising? State and federal agencies Commingling is strictly prohibited by real estate law and occurs when: trust funds are mixed with personal funds. Causing panic selling by telling people that value in a neighborhood will decline because of a specific event, such as the purchase of homes by minorities is illegal and is called: blockbusting. A licensed broker must keep real estate records for: 3 years. In a real estate brokerage, the negotiator is the: agent. The reason a listing must remain with the broker when the listing agent moves to a new broker is the seller's contract is with the: broker. Section 54-55.1 of the California Civil Code prohibits discrimination in the rental, leasing, or sale of housing accommodations to all of the following except the: elderly. The time allowed for the deposit of trust funds is three business days following the receipt of the fund. Which of the following statements is correct regarding real estate advertising? A broker must disclose its license status in all advertising. Which of the following is not an operation of real estate brokerage? Paying non-licensees for assisting in the sale of real property Real estate salespeople are paid: by the broker. It is imperative to choose a brokerage that: implements a high standard of ethics. Real estate ads should not state or imply a preference or limitation with regard to all of the following, except: credit history. Broker Bill wanted to keep some money in his trust account to cover any bank charges or unexpected fees. What is the maximum amount he can keep in his trust account without being in violation of the law? $200 It is imperative to choose a brokerage that: implements a high standard of ethics. When an agent receives funds on behalf of someone else, he or she is known as a(n): fiduciary. A real estate brokerage can be set up in all of the following ways, except a(n): township Salesperson Sally listed seller Sam's home. According to the Do-Not-Call Rules, when can Sally call Sam? Anytime. The compensation earned by a licensee depends on his or her: employment status. A real estate licensee can sell: any mobilehome with a deed. Which of the following documents is used to transfer ownership of a mobilehome? Certificate of Title Timeshare properties are primarily designed for buyers looking for: vacation property. In a security transaction in personal property, the document used to perfect the security interest is called the: financing statement. In the sale of business opportunity, the Notice to Creditors of Bulk Transfer must be recorded at least how many days before the auction is to commence? 12 business days Which government agency issues liquor licenses to businesses? Department of Alcoholic Beverage Control (ABC) Which of the following provides an investor with the best hedge against inflation? An income property that will maintain its value When considering investment opportunities in real estate, a real estate investor would probably devote least attention to: liquidity of any capital invested. Value that increases with the passage of time iscalled: appreciation. Which of the followingis the best example of leverage? Investing primarily borrowed funds An appreciation in value of a mortgaged home generally accrues to the benefit of the: trustor. All of the following would be considered boot, except: vacant land in the outskirts of a large city. In a probate sale, the amount of a commission to be paid a real estate agent is set by the: court. As more cities and counties regulate development and restrict growth to preserve greenbelts and avoid suburban sprawl,developers are encouraged to develop vacant parcels in existing urban and suburban areas. This is called: infill development. A property manager should: all of the above Manufactured housing is another term for mobile homes. Another name for goodwill is: reputation. The instrument used to secure the financing when personal property is sold is the: security agreement. For federal income tax purposes, what deduction can an owner of a fourplex claim that a homeowner cannot? Depreciation The laws in some communities that limit or prohibit rent increases are referred to as: rent control. Investing in real estate allows a buyer to invest a small down payment and finance the rest with a lender's capital. This is known as: leverage When a business is sold a tax clearance receipt should be obtained from the: Board of Equalization. In the sale of a business, an agent must deal with all of the following, except: a grant deed. A tract of land where two or more mobile home lots are rented or leased to accommodate manufactured homes is called: a mobile home park. Which of the following is an example of agricultural property? Land used for grazing livestock Bulk transfers apply to which of the following? Business inventory Which benefit of investing in real estate refers to an increase in property value with the passage of time? Appreciation All of the following are necessary core competencies for property managers, except knowledge of: labor laws. __________ is the legal process that validates or invalidates a will. Probate An application for a liquor license is filed with: A.B.C. Which of the following is not true regarding a timeshare? It is a permanent housing alternative. All of the following are true regarding a business opportunity, except: it excludes goodwill. The Uniform Commercial Code regulates which of the following? Sale of a business What is the name for the development of vacant lots and parcels in existing urban and suburban areas? Infill development Regarding "For Sale" signs in a mobile home park: all of the choices are correct. Broker Larwin held an open listing to sell a house that provided for Larwin to receive a 6% commission. Larwin orally agreed to split the commission with Broker Porter if Porter found the buyer. Porter did so, but at close of escrow Larwin kept the entire has recourse by means of a civil suit. CalBRE regards a salesperson’s relationship with a broker as a(n): employee. Someone places an advertisement for real estate services without listing a real estate license number. In fact, the person does not have a real estate license. Such an individual could be liable for prosecution by the: local district attorney. Which of the following must have a current and valid California real estate license? A mortgage loan broker A broker must have a written contract with which of the following employees? Brokers acting as salespeople who do not have their own office If a real estate licensee is listed as an obligor by the California Department of Child Support Services, can he or she renew his or her real estate license? Yes, the licensee may be issued a 150-day temporary license. A licensed salesperson gave notice of leaving the real estate brokerage office to the salesperson’s employing broker. What, if anything, must the broker do with the salesperson’s license? The broker returns the license to the salesperson and notifies the Real Estate Commissioner. In the course of his or her duties, a real estate salesperson might prepare or sign documents or legal instruments that may have a material effect on the rights or obligations of those entering the transaction. The supervising broker must review, initial, at least two years full-time experience as a real estate salesperson within the past five years. A broker holding an unrestricted license negotiated the sale of real estate. The broker defrauded the buyer during the sales transaction. The defrauded buyer brought a civil suit against the broker on grounds of fraud and was awarded a final judgment. The may hold a hearing but may not suspend or revoke the license until the hearing is concluded. A broker assured a client that a loan could be found at 5% even though there were no such loans available. When it came time to sign the agreement, the rate offered was 7%. The buyer felt he had to accept the loan because he had already given notice at hi The broker acted illegally. By law, a broker must keep a copy of the deposit receipt for at least three years from: the closing of the transaction. Davis did not have a real estate license but negotiated a contract with Taylor to buy Taylor’s 20-acre lot for $5,000/acre. Taylor accepted Davis’ offer. During negotiations, Davis himself was offered $20,000/acre by a third party for the same 20 acres. D Taylor has no recourse against Davis. A licensed real estate salesperson regularly accepted a fee for every client she referred to a lender who signed up for a new mortgage loan. When her employing broker discovered this arrangement, the broker took two steps: (1) The broker fired the salespe Both the salesperson and broker can be disciplined. If an employing broker discharges a salesperson for violating a provision of the Real Estate Law, the broker: must notify the Commissioner immediately by mailing a certified written statement of the facts. Broker Kim, who is not a member of any trade organization, has been trying out a new advertising slogan: “A new breed of Realtor.” This practice is: grounds for revocation or suspension of her real estate license. What must a newly licensed salesperson include on his or her business cards? Eight digit license identification number Broker Pat has a property listed for nine months without success. He believes the property is 10% overpriced, and he knows that major structural repairs are required. Pat writes and pays for the following advertisement to run in a local newspaper: “Charmi It was unlawful because Pat knew structural work was required and the ad did not state this. A complaint that involves simple disputes or minor issues between consumers and licensees is usually handled by: involving the Advocacy Program. A broker who holds a valid listing on a property places the following classified advertisement in the local newspaper: “FOR SALE: 3 bedroom, 2 bath home, swimming pool. $129,000. Phone 555-1234.” What needs to be included in the ad? Broker or “bro” After close of escrow, the actual selling price of the property must be disclosed to both buyer and seller within: 1 month. An investigation of a licensee's actions is typically initiated by: receipt of a verified written complaint. Who enforces the provisions of the Real Estate Law? The Real Estate Commissioner When engaging in acts for which a license is required, what must a real estate licensee disclose on all solicitation materials, such as business cards? His or her eight digit license identification number Who many times can a person retake a real estate license examination? An unlimited amount The Real Estate Law is that law that governs: the licensing and conduct of real estate licensees What type of license is issued when a license has been suspended, revoked or denied after a hearing? Restricted license Which fund assures the payment of otherwise non-collectable court judgments against licensees who have committed fraud, misrepresentation, deceit, or conversion of trust funds in a transaction? Consumer Recovery Account The Bureau of Real Estate issues real estate licenses for a ___________-year period. four As of January 1, 2011 a Mortgage Loan Originator License Endorsement must be obtained before a real estate licensee can solicit or originate a loan application, or negotiate or offer to negotiate any residential mortgage loans in accordance with the: SAFE Act. The Real Estate Law is upheld and enforced by: the Real Estate Commissioner at special hearings. To qualify for the real estate salesperson license a person must complete: Real Estate Principles and Real Estate Practice. An employing broker who discharges a salesperson for violating the Real Estate Law must provide: a certified written statement of the facts to the Commissioner. What is the grace period for the renewal of a salesperson's or broker's license? Two years The Commissioner can issue citations and fines to both licensees and unlicensed persons for minor violations of the Real Estate Law. The Commissioner may assess an administrative fine not to exceed __________ per citation $2,500 A prospective real estate licensee must __________ before getting a license. fulfill education requirements and pass an examination If an agent misappropriates his or her principal's money, he or she is guilty of: conversion. Which of the following activities violates Section 10177 of the Business and Professions Code? Salesperson Smith only had 1 sale in the previous 6 months and did not have enough money to pay for his NAR membership. Since he still had a full box of business cards, he continued to use them even though the card indicated a REALTOR membership. Complaints involving minor disputes between consumers and licensees is handled by the Advocacy Program. When applying for the actual real estate license, what must a prospective licensee do after passing the examination? Submit one set of classifiable fingerprints Which of the following is not a job of the Real Estate Commissioner? Settling commission disputes A prospective real estate licensee must __________ before getting a license. fulfill education requirements and pass an examination The Bureau of Real Estate does not issue: licenses to partnerships.
