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Area 5 Exam

Terms in this set (145)

Accurate and detailed methods to estimate the cost of a new improvement is the:
quantity survey method.
When grant deeds, land contracts, and policies of title insurance are being either sold or insured, they:
do not require an inventory or listing of structures.
A minor can acquire real property by:
gift or inheritance.
What are the stages or cycles of a neighborhood?
growth, stability, decline, and revitalization (renewal)
The amount of down payment on a VA loan is determined by:
The CRV
If a real estate broker dies after a listing has been signed but before the property is sold:
the listing terminates
If a listing broker informs a buyer that the seller will take less money for the property, she has:
violated her fiduciary obligation to the seller because he acted in excess of his authority
If a broker and his salespersons own an investment company and decide to buy one of their listed properties, they are required by law to:
disclose to the seller the true identity of the purchaser
Which of the following would be discriminatory or illegal for a broker (leasing an apartment for a landlord) to ask on a credit application?
Are you single or married?
Which of the following is true?
An owners death terminates a listing contract
An unlicensed employee of a broker who is authorized in writing can make withdrawals from the brokers trust account provided the employee:
is covered by a fidelity bond for at least the amount of the funds to which the employee has access at any given time
Trust deed beneficiaries would insist that they give approval for:
-Restriction agreements.
-Boundary line adjustment agreements
-Consolidation agreements
An offer is made, acceptance is not communicated back to the offeror and then the offeror dies. The:
contract has not been formed.
Which of the following deeds is least likely to have implied covenants?
quitclaim deed.
A broker discloses to his principal the race, creed, or color of a prospective buyer or tenant. Has he committed a discriminating act?
Yes, the purchaser or tenants race, creed, and color are not material facts and should not be disclosed.
Broker Charles operates a real estate sales office as well as a property management firm. Charles also owns an apartment building which he manages himself. Which of the following is most correct?
it is illegal for Charles to place rents collected on his apartment building into the clients trust account
Gross income changed to value in one operation describes a:
Rent multiplier
If prior knowledge of the fact would have prevented a third party from entering into the contract, this would be:
a material fact
If a person buys a property for $100,000 with $10,000 as down payment, and the property increases in value to $110,000, the value of equity has increased by 100%. This is called:
leverage.
Soils report would not be used in which of the following:
determining whether there is a superfund site located on the property
When a landlord of a periodic tenancy requires a co-signor exclusively for tenants who are single, this is:
a violation of the fair housings laws
An individual may acquire title to real property in all of the following ways except:
by escheat.
If market value is an objective estimate of value, the subjective estimate of value would be:
beauty is in the eye of the beholder.
An agent is required to comply with the agency relationship law as provided in the Civil Code if he is:
handling a lease transaction for a period longer than one year
Deregulation of the financial institutions most nearly means:
there is no limit on the interest rate financial institutions can pay on deposits
Rent that is received for a comparable space in an open market is called:
Economic rent
At close of escrow the seller decided not to pay the commission. The broker/agent can:
file civil action in court
When the owner of real property dies without executing a will, the typical disposition of property is made according to the:
law of intestate succession.
Which of the following is most vital or important in planning a subdivision?
market analysis
A valid contract requires all of the following, except:
A deed
Unearned increments include all of the following, except:
over-improvement of real estate by an owner
The seller is selling the property "as is." The seller and broker are aware of significant water pipe damage. Which of the following is most correct?
The seller and broker must disclose the water pipe damage even if it is sold "as is."
A lessees interest is:
-grant to use the property for a specified period of time, that reverts back to the grantor at the expiration of the term.
-personal property
-chattel real
When a person dies intestate:
the property is distributed to his heirs
If two parties wanted to create an enforceable broker-principal relationship concerning a right, title, or interest in real property, they would use:
a written employment contract
The measure of goods and services produced by the nation during any one calendar year is called:
Gross National Product
A depth table would be used by an appraiser for a:
retail commercial property.
What is the proper way to write an advertisement selling a home?
-Attention and Interest
-Desire
-Action
What is a broker supposed to do with money received by a seller that is specifically paid to him for advertising costs, and the seller cancels the listing?
Keep the money to pay for advertising
When a property changes from C-1 zoning to R-1 zoning, this is called:
downzoning.
When a person fails to perform any of the terms and conditions of a contract, this is called:
a breach
When calculating net income for appraisal purposes:
management expenses must be deducted from effective gross income even if the owner is managing the property himself
Members of a multiple listing service (MLS) generally use a(n):
exclusive right to sell
An architect is designing a plot plan. What does it show?
Foundation
If there is a dispute in escrow, the escrow holder may:
file an interpleader action.
What is the best appraisal method for an older home?
cost approach
A salesperson takes a listing that does not authorize him to accept a deposit on the seller's behalf. The broker should advise the salesperson that:
the broker will accept the deposit as the agent of the offeror, but only as agent of the offeror.
How is the commission determined if a person dies during an escrow closing?
courts
Dick and Jane, brother and sister, own an apartment building in joint tenancy. Dick needs $10,000 to cover unexpected medical expenses, so he borrows the money from a lender signing a trust deed on the property which was soon recorded in the public records. 45 days later Dick dies. Which of the following is most correct?
Jane now owns the apartment building free and clear of the brothers $10,000 debt
If a 17 year old inherits a parcel of real property and deeds it to another party. After he turns 18 years old, he decided he wants the parcel back. He would:
be able to get his property back
When a lender advanced part of the construction funds immediately and will release more as each home is completed, this is called:
a loan for obligatory advances.
An appraiser would most likely use the cost approach to evaluate:
newer buildings.
When inspecting a sellers home the agent discovers several physical defects which the agent fails to disclose to the buyer. The buyer can file civil action against the agent for up to:
2 years
Buyer and seller enter into a legally binding agreement to purchase a parcel of real property. Before close of escrow buyer and seller mutually agree to terminate the contract. The buyer wants his $500 earnest money deposit back. Which of the following is most correct?
Broker should return the earnest money deposit immediately, and has the option of court action
A real estate broker referred a buyer to a seller. The buyer did not purchase the home. However, sometime later the home sold to another buyer. The seller owes the broker:
nothing
The key difference between the property residual and land residual techniques is that the:
property residual technique uses the capitalization method based upon net income.
A completion bond protects the:
lender
An offer comes in for a certain amount. A second offer comes in also. What is the agent's responsibilities?
show or present both offers simultaneously
An earthquake hazards disclosure must be provided:
to a purchaser even if the property is not in an earthquake fault zone
A real estate broker must obey all lawful instructions of his principal. If the broker fails to do so, he could:
be liable for any damages or injuries caused as a result of his actions.
Which of the following may legally make a secret profit on the purchase of real property?
unlicensed person
A Uniform Residential Appraisal Report (URAR) form is required to be used when single-family loans are sold to the Federal National Mortgage Corporation (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC) and would include all of the following, except:
available financing
The warranty of authority is invalid when the broker:
Will not disclose the name of the principal to a buyer until an offer is made
Able decides to sell an income property and enlists the services of Broker Baker to list the property for sale. In this case, who will most likely distribute the security deposits?
the escrow company
Daniel, who owned two pieces of adjacent land, sold one of them to Charles reserving an easement for himself at the time. Daniel soon left the state for 21 years during which time he did not use the easement. When Daniel finally returned to the state he discovered that:
the easement was still valid and enforceable
Which of the following activities would require a real estate license?
Services rendered by an attorney at law operating as a real estate broker
Which of the following violates truth-in-lending:
$22,500 loan, $2,000 down.
A power-of-attorney can be terminated by:
-incapacity of the parties to the power of attorney
-revocation by the principal
-death of the attorney-in-fact
When can a real estate broker who is an agent of the seller, refuse to present an offer to his principal?
When the broker is acting under express instructions by the principal not to present such offer.
A developer who is not a real estate licensee, is selling tract homes and conditions each sale upon an agreement whereby the buyer must pay for the title insurance from a specific title company selected by the seller. The reason for this is that the seller receives a rebate of part of the insurance premium. This practice is:
A violation of RESPA and the seller could be liable for treble damages.
A condominium subdivision must be at least:
5 units.
A property sold which had been used by the owner as his personal residence, and partially as a business location. For federal income tax purposes the sale of the property will be treated as a single sale:
in proportion to which the property was used during the ownership period.
The most complete appraisal report is:
the narrative report.
Broker has an agreement with a seller to list a property for sale. He represents a buyer in the purchase of the same listed property. Which of the following types of listings would the broker possibly not be paid a commission?
Net listing
Express or implied agency would be called:
actual authority.
Able, who does not have a real estate license, places an advertisement for real estate brokerage services in the newspaper. Able would be prosecuted by the:
District Attorney.
A reassessment of real property for property tax purposes would be triggered by all of the following, except:
if one party grants property to himself and another party as joint tenants.
A written or oral public report on a subdivision must be given to:
anyone who asks for it.
How many days does a seller have to disclose the existence of lead-based paint in a residence?
10 days
A broker receives rental payments on several units that he owns. He also receives an earnest money deposit along with an offer to purchase one of them. He should:
since he is a principal, he is not required to place either the rental payments or earnest money deposit in a trust account.
The Real Estate Commissioner will suspend or revoke a real estate license if the licensee is:
found to have violated the anti-discrimination laws.
Real estate broker Brown, acting as a subagent of the seller, has a fiduciary duty to:
the seller and the agent who appointed him as subagent
A purchaser of a sale-leaseback property will be least concerned with:
depreciated book value of the property.
Zoning, planning and governmental land use are important examples of:
Exercise of police power
Seller Able, the owner of Blackacre, lists the property for sale with Broker Baker. Able fails to authorize the agent to accept the deposit on his behalf. Buyer Charlie makes an offer on Blackacre and gives Broker Baker a check for $5,000 as a deposit. Under these circumstances, Broker Baker:
can accept the deposit as agent for buyer Charlie and place the monies in the brokers trust fund.
If a buyer takes title to a property subject to an existing loan:
-the seller may incur personal liability for the amount of the loan or any deficiency suffered by the lender
-the buyer may lose the property to foreclosure if unable to obtain new financing
-the lender may accelerate the loan
A broker may have liability if he does not provide Worker's Compensation insurance to which of the following?
-salespersons
-brokers
-office staff
When a residence is located next to an abandoned gas station, an appraiser would recommend that the owner obtain:
a toxic waste report.
Mello-Roos bonds are used to improve real property. If an investor purchases the property, who pays for it?
investor
If a tenant is made aware of a release of hazardous substances on or under a property, he must notify whom in writing?
owner or lessor
The Real Estate Commissioner:
-reviews, approves, and disapproves subdivision public reports
-investigates complaints made against licensees by the general public
-screens and qualifies applicants for licensing
Each of the following can terminate a typical agency, except:
estoppel
During the one-year redemption period of a mortgagor who is in default, the mortgagee:
is not entitled to possession of the property and the mortgagee can sue for rent
Cracks in the corner of a basement are probably caused by:
property settling.
Using a note as a deposit from a buyer in making an offer:
the agent should inform the seller that the deposit is in the form of a note before the seller accepts the offer.
To establish the value of the land, an appraiser will capitalize the net income of a property and then deduct:
the replacement cost of the improvements
An escrow officer receives two pest control reports, prepared on different dates and with one requiring more corrective action than the other. The escrow officer should:
notify the buyer and seller that they need to agree which one to use.
A deed of reconveyance is signed by:
trustee
The term ad valorem means:
according to value.
The seizure of property before a judgment is called:
an attachment
When a salesperson terminates his or her employment with his or her broker, the license should be:
given to the salesperson and notice given to the Commissioner of the termination
When an owner sells the property, extends credit, and then retains legal title to the property, the security device used is called:
a real property installment contract.
Which of the following would not allow an owner to file an unlawful detainer action?
tenant has a lease-option agreement and has defaulted on two trust deed payments
A person must have a real estate license if:
he sells 8 or more promissory notes each year.
Broker includes the following clause in the exclusive listing contract, In consideration of the execution of the foregoing, the undersigned broker agrees to use diligence in procuring a purchaser. This clause is:
important to the creation of a bilateral contract.
Able buys Blackacre from Baker, taking title to the property subject to the existing loan. The person primarily responsible for the repayment of the loan would be:
Baker.
An attached garage measures 20 feet by 26 feet. Who sets forth the restriction on the size of the garage?
zoning
You are a California real estate broker. A prospect is referred to you by an out-of-state broker and a sale is consummated by you. You want to split your commission with the cooperating broker. Under California Real Estate Law, you:
may pay a commission to a broker of another state.
An agent is given the authority to accept a deposit in the:
listing agreement.
An appraiser measures which of the following when making an appraisal:
outside of the house and the garage.
A condominiums CC&Rs prohibit for sale signs. The owner may:
Place a reasonably sized "for sale" sign on the property
When an appraiser estimates the cost of construction using the __________, this is the cost to build an exact replica of the building using actual materials used and the present design of the building.
reproduction cost
A fiduciary duty can be terminated by:
-revocation
-agreement
-death
When a broker has a non-exclusive listing, to be legally entitled to a commission, he must prove:
-he is a licensed broker
-he has found a ready, willing, and able buyer
-he is the procuring cause
A real estate license is required for:
a secretary in a real estate office who sells tract homes on the weekends.
The correct statement regarding an encumbrance on real property is that:
it is not unusual for a buyer to accept a deed on a property with previous encumbrances.
A percolation test determines:
capacity of soil to absorb water.
Which appraisal approach requires a separate value of the land?
cost approach
A real estate license is required for:
negotiators of mortgage loans.
A real estate broker must disclose any type of material fact about a property. Which of the following would be considered a material fact?
Another offer is imminent
A homestead exemption protects against all of the following except:
mechanics liens.
A real estate broker only has a right to earn a commission when the property sells during the listing period unless the following is included in the listing agreement:
a brokers protection clause.
The duty to disclose material facts is:
a fiduciary obligation.
A broker indicates he will give a $500 microwave oven if a person buys one of his listed properties. This is:
legal if all required disclosures are made.
Special assessments provide for:
local improvements.
When loan interest rates increase, the capitalization rates on income properties tend to:
increase as well
In a sale-leaseback for a commercial property, the buyer would be least concerned with:
seller's depreciated book value of the property
What would an appraiser use to project gross income for an apartment property?
economic rent
Broker Charlie listed a property owned by Seller Able. The listing agreement stated, No more than a 20% down payment. The broker brought in an all cash offer. Broker Charlie is entitled to:
no commission.
A third party who takes a promissory note that is complete and regular and has no knowledge of any defects is known as a/an:
holder in due course.
A broker has two offers on the same property. The two offers are from salespeople within his office and both have given deposits. The broker decides not to present the second offer until the first offer has been accepted or rejected by the seller. The seller is not made aware of the second offer. The brokers action is:
not permissible.
The largest problem encountered when using the cost approach to appraise an older building is:
estimating accrued depreciation
To manage property for the general public, you must be a:
licensed real estate broker.
Which of the following is true?
-Fraud is a deliberate attempt to deceive someone
-Misrepresentation is not deliberate
Able purchased Baker's property under the following terms: Able to pay $40,000 as purchase price. Cash down payment of $5,000 and assume an existing first deed of trust in the amount of $28,000. Able to execute a second deed of trust in favor of Baker for the balance of the purchase price, payable at 1% or more per month, all due in five years. The note has an alienation clause. Which of the following is true?
The principal balance of the second deed of trust is $7,000 and Able has a balloon payment.
Purchase price is $40,000 - $28,000 loan assumption - $5,000 down payment = $7,000 due in five years.
Which of the following would have priority?
1911 Street Improvement Act assessment lien
Broker Charlie took a listing on a commercial property and also received a right to purchase it within thirty days. On the 28th day Broker Charlie decides to purchase the property, he must:
-obtain a written consent from the seller acknowledging any profits or anticipated
profits that Broker Charlie may acquire.
-give the seller any material information
-disclose any outstanding offers
The most important date on an appraisal when used to value another property through the sales comparison approach will be the:
Date of recording
The usual listing contract authorizes a broker to:
find a purchaser and accept a deposit with an offer to purchase.
The broker, as agent of the seller, owes the buyer:
the duty of honesty and fair dealing
Among the costs of home ownership are:
loss of interest on equity.
An individual who wishes to offer his/her services for a fee to various owners as a manager of their apartment community is required to have a:
real estate brokers license.
The age of a house can be determined most accurately by inspecting the:
Tax assessor's records
Under the principle of contribution, an improvement to property is valued according to:
its contribution to net return.
There are numerous ways for people to join together for the purpose of real estate investment. In a syndicate venture, called a blind pool, the limited partners:
have no property descriptions or financial data concerning the property to be acquired at the time of the investment.
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