On September 30, 2013 Able offered to buy Bakers home. The offer was accepted an escrow immediately opened. Baker had financed the home purchase in 2005 using an FHA insured loan, which he was currently making payments. A preliminary title report on September 20, 2013 will show a deed of trust with Baker as the:
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On September 30, 2013 Able offered to buy Bakers home. The offer was accepted an escrow immediately opened. Baker had financed the home purchase in 2005 using an FHA insured loan, which he was currently making payments. A preliminary title report on September 20, 2013 will show a deed of trust with Baker as the:
The covenant of quiet enjoyment relates to:possession of real property.A lender may elect to make an FHA insured or VA guaranteed loan because of:Lower riskThe capitalization approach:considers the income a property produces in light of the percentage return it is reasonably expected to provide to the investor in determining the appraised value of the propertyA lender advertises a 70% loan-to-value loan for the purchase of a property. Another smaller lender places an advertisement for the additional 30% of the loan-to-value. What disclosures are required?Annual Percentage RateAppraisals of single-family dwellings are usually based on:sales prices of comparable propertiesIf Able grants property to Able and Baker as joint tenants, this:would not trigger a reappraisal for property tax purposes.Under the Truth-in-Lending Act, a Notice of Right to Rescind, need not be given by the creditor on a loan that is to be secured by the principal residence of the borrower, if the loan proceeds are to be used for:The purchase of the borrowers principal residence.Broker Charlie, who is not a member of any trade organization, has been using a new advertising slogan: A new breed of Realtors. Concerning this practice, it is:grounds for revocation or suspension of his real estate license.For appraisal purposes, "capitalization" is a process used to:convert income into value.Real estate loan advertisement with a crazy advertisement. $4500 back, 6 1/2 %, APPLY FOR A LOAN ** SEE ME.This is illegal under Regulation Z and the real estate lawUnder RESPA, a lender must:provide the loan estimate form to consumers within three business days after they submit a loan applicationAn investor can use a 1031 like-kind exchange for:an unlimited number of properties.Usually a broker has a right to a commission only on the basis of negotiations which he completes during the term of the listing agreement, unless:a protection period clause is contained in the listing agreement.When Able lets Baker think that Charlie is his agent, this is called:ostensible authorityRESPA applies to all of the following, except:buyer requiring a specific lenderAfter the appraiser has collected all the data and applied the appropriate appraisal method(s), what is the next step in the appraisal process?Reconcile or correlate the adjusted sales price of the comparables.A real estate broker undertakes to canvas a neighborhood area that is very near to a section into which minorities have recently moved. He tells the people to whom he talks that they should sell now as their property might suffer a loss in value in the future. This is illegal and unethical, and that broker is guilty of:blockbusting and panic peddling.If three people purchase a property in joint tenancy, there would be:one deedIf a real estate broker shows a property under an open listing, she should:write a memorandum to the seller notifying him that the broker showed the propertyReal estate agent must disclose an agency disclosure in:residential triplexThe owner of an unimproved parcel of land, which is held by the taxpayer for investment purposes, would be permitted to deduct:a loss suffered in the sale of the property.When commercial downzoning occurs in an area of residential properties, what happens when the values of the residential properties drop?economic obsolescenceWhen he is approached by members of a minority group, a real estate licensee avoids showing them property in integrated areas. This is called:SteeringWhen the Federal Reserve wants to obtain a tight money market:it raises the discount rate and sells government bonds.If an escrow is holding all documents during an escrow, it is acting as:agent of the buyer and seller.A lis pendens may affect the title to real property based upon the:Results of the lawsuitIn portfolio risk management, a lender considers:-liquidity -reserves -diversificationCertain sides of business streets are not preferred by merchants because they know that pedestrians like to walk the shady side of the street and merchandise displayed in windows is subject to more damage. The least desirable sides of the street are:north and eastWhen processing a real estate loan application, a lender would correlate characteristics of the borrower, loan, and property to make:A loan commitmentExcluding the down payment, a home purchaser would pay the lowest closing costs with:a Cal-Vet loan.Under the compliance guidelines for agency disclosure, the sequence for the process is:disclosure, election, confirmationFunds can be legally withdrawn from a brokers trust fund by:a bonded employee specifically authorized, in writing, to do so.An appraiser is appraising an income property. The appraiser knows that the higher the capitalization rate used, the greater is the:RiskIf an individual, who is not a licensee, closes escrow on the purchase of a property for $5,000, knowing that he had a buyer for $20,000. Which of the following is true:the individual has done nothing wrong.Who has primary responsibility for inspecting a rental property?OwnerRecords are searched by the title company through the:-county recorder -county clerk -federal court clerkA hard money loan means:A cash loanA lis pendens:-will have no effect on the title to a property if the owner is not involved in the lawsuit. -may affect a change of title depending on the outcome of the lawsuit. -may be removed by court action or posting of a bond.Which of the following loans occurs when a lender agrees to loan a prearranged amount of funds in the future?Standby loanIf an owner placed money each year for several years to pay for the replacement of a roof, this is called:Sinking fundWhich of the following forms are not required to be approved by the Department of Real Estate?Broker-Salesperson AgreementIf a mortgage is executed two years ago with a prepayment penalty, the mortgagee will most likely waive the penalty if:a new loan can be made at a higher rate.Which of the following are under the Terms of sale section of a listing agreement?-price -method of payment -identification of personal propertyWhich of the following are under the Terms of sale section of a listing agreement?agent to sellerWhen using the market data method, the unit of comparison is:the entire property.What type of title insurance policy is most often used?CLTACalifornia brokers must have an employment contract with each of the licensed employees in their offices. This contract:must be in writingWhich of the following laws exert the greatest control over the California housing and construction industries?State Housing Law, local building codes, Contractor License LawRESPA applies to:one-to-four unit, owner-occupied residential properties.Usually a broker has a right to a commission only on the basis of negotiations which he completes during the term of the listing agreement, unless:a protection period clause is contained in the listing agreement.In the market data approach, the most important and most difficult step is:adjustment of data to reflect differences between the subject and comparable properties.Able obtained a 60 day option to purchase a parcel of real property for $20,000. He paid $1 for the option:the option is valid if the $1 was actually delivered.Broker Able defrauded a buyer. The Real Estate Commissioner can:hold a hearing, but not suspend the license until after the hearing.A security deposit for a single-family residential rental:belongs to the renter.There is not a land project if:-lots sold to developers. -lots sold to subdividers. -no direct mail solicitation.A security deposit for a single-family residential rental may be used to pay:-damages -unpaid rent -cleaningAssessment rolls reflect a California policy of basing property taxation on:100% of a propertys true market value.RESPA applies to:-FHA and VA loans. -a lender who makes a purchase money loan on a one-to-four unit residential property. -loans made through federally insured savings institutions.After termination of employment, a real estate broker must retain the employment agreement he/she has with each salesperson in the broker office for:3 years.A real estate broker obtains an exclusive listing on a property owned by three different individuals. The broker meets with each individual to get a signature. The broker must:give each person a copy of the exclusive listing when they sign itAccording to the Truth-In-Lender law, annual percentage rate (APR) is:the relative cost of credit paid by the borrower.When using the market data appraisal approach, adjustments are made to:comparables that are adjusted to the characteristics of the subject property.A murder happened in a property four years ago. What the licensee have to do?The licensee does not have to disclose it due to it not being a material factThe maximum deposit that can be collected and held for an unfurnished apartment is:2 monthsThe maximum deposit that can be collected and held for a furnished apartment is:3 monthsA property is being sold where the buyer will continue to pay the existing amortized loan secured by a first mortgage. In order for the buyer to assume the first mortgage without penalty, the real estate broker should:check to make sure the mortgage does not contain an acceleration clauseThe function of the Truth-In-Lending Law is:to promote the informed use of consumer credit by requiring creditors to disclose credit terms in order to enable consumers to make comparisons between various credit sources.The term "tax free exchange" means:taxes are deferred.The right to foreclose a trust deed under a trustees power of attorney:never outlawsIn the capitalization approach, to arrive at net income an appraiser would deduct for:vacancy allowance.When a legally competent person has been given the power to perform certain acts for another legally competent person, this is known as:Power of attorneyIf a property owner wants to build an addition to his home, he should consult:-the CC&Rs existing on the property -zoning ordinances -local building codesWhich of the following groups contain only general liens?Inheritance taxes, corporate franchise taxes, income tax, judgment, and decedent's debts.An agency relationship can be terminated by:-an act of one or both of the parties -an operation of law -an agency expiringAre agent referral fees set by law?NoIf there is a blanket encumbrance on a subdivision and a subdivider agrees to pay back the loan as certain lots are sold, the beneficiary would execute:a deed of partial reconveyanceIf a seller refuses to fill out the sellers section of the Real Estate Transfer Disclosure Statement, the sellers agent should:complete the listing agents portion of the statement and deliver it to the buyerAble grants Baker an easement for right-of-way over Able's land. If Baker owns no property, what type of easement was it?easement in grossComparing an installment note to a straight note, the straight note will have:no principal payments during the term of the loan, except on the last paymentHow many days are in a real estate year?360 daysA real estate broker introduces a client to a seller who is selling a ranch. Nothing happens. Two months later the property sells. What is the real estate broker entitled to?NothingAfter the completion of a trustees sale, if there is any money left over after paying the beneficiary on the first deed of trust, this money would go to:the beneficiary on the second deed of trustA tenant verbally agrees to rent a house for six months. One month later the tenant decides to move out. Which of the following is correct?It is an enforceable contractMr. Brown hired a broker to find a warehouse for lease and agreed to pay a commission for the services. Several days later, Mr. Green tells the broker he has a warehouse for lease and agrees to pay a commission if he finds a tenant. The broker writes the lease that is signed by both parties. Mr. Brown knows that the broker was representing Mr. Green, but Green did not know that the broker was representing Mr. Brown. Which of the following is a correct statement?Neither is liable to pay a commission.An agent may legally represent all principals in the same transaction if:-he discloses that he is collecting a commission from each of the principals with the knowledge of the others. -he obtains the consent of all the parties in the agency relationship. -he has informed all principals that he is the agent for each principal.All of the following are essential elements of each and every contract except:WritingThree investors take title to an industrial property called Reliable Engineering Company. They are Able, Baker and Charlie and it is a joint venture. The title to this property vests in:the Reliable Engineering Company.The first step a mortgagee would take to foreclose on a property is:to start court actionHow much of the broker's own money can he keep in his trust fund?$200The type of socially-oriented depreciation that more buildings are torn down than fall down is called:Economic obsolescenceAble purchased a home on October 1st. The first installment of property taxes were paid in escrow. On November 1st, Able received a property tax bill from the county tax collector. This tax bill was the result of a/an:supplemental assessment.Can a broker's trust account earn interest? If so, who sets the amount?Yes, but it must be paid to the client.When a real estate broker compares two or more sets of records to see if they agree, this is called:ReconciliationAble negotiated the right to purchase Blackacre for $12,000. Existing loans were a $7,000 first and $2,000 second deeds of trust. Able paid Baker $5,000 to assume the existing first deed of trust. When escrow closes, the documents would be recorded in which order?Deed of reconveyance of the second deed of trust and the grant deed.If a person fails to do something in the required period of time, this is called:LachesMarket value will most likely be greater than:-book value -loan value -assessors tax valueIf a grantor records a deed and then claims that it was never delivered to the grantee:the deed would be valid because recording presumes delivery.A joint tenancy can be created by a deed from:-a husband to himself and his wife as joint tenants. -joint tenants to themselves and others as joint tenants. -tenants in common to themselves as joint tenants.A real estate broker who receives funds in connection with a transaction must place them:-in his trust account -in the hands of the offeree -in a neutral escrow depositoryWhat terminology would you use in a purchase agreement if Able bought Baker's property and Seller Baker carried a second deed of trust for three years with a maximum 10% down payment?subordination clauseA real estate broker is selling a property for a seller. He informs the buyer that the seller must sell right away because he is going into foreclosure. This is:Illegal.The effect of depreciation is that it:decreases cost basis.An implied agency is created by:conduct of the parties.The acknowledgement of a signature on a deed before a notary public would normally be done in order to:enable the deed to be recorded.A real estate commission is usually based upon:the selling price of the propertyThe buyer under a real property sales contract is paying pro rata real property taxes and insurance to the seller:the seller must keep these funds in a separate account.A verbal lease for a year or less would be:enforceableWhen a private residence adds a swimming pool this is called:principle of diminishing returns.In a percentage lease, who pays the highest percentage of profits?discount storesWhen there is a substantial difference between the close of escrow date and the date the buyers will move into the property, the broker would use:an interim occupancy agreementWhen a real estate agent acts as an agent for both the buyer and the seller in a transaction, but does not specifically reveal this fact because he is unaware that both consider him their agent, has become involved in:accidental dual agencyIn a trust deed, bare naked legal title is held by:The trusteeWith regard to contracts:handwritten items take precedence over printed items.When a borrower assumes an existing loan:the buyer becomes primarily liable for the note and thereby relieves the seller of liability; however, seller remains secondarily liable unless there is an assumption with novation.A transfer disclosure statement is required for:Mobile homeWhich of the following is a warranty found in a grant deed which is not covered by a CLTA, standard coverage title policy?there are no undisclosed encumbrances on the propertyA real estate broker wrote up an offer for his buyers. The offer was made contingent upon the approval of the home by the buyer's uncle. The buyers informed the broker that their uncle was currently in Europe and they were unsure when he would return. The broker replied that the uncle's being out of the country would be "no problem." The broker then presented the offer to the seller without disclosing that the buyer's uncle was out of the country. The seller accepted the offer. Under these circumstances, the broker's conduct was:unlawfulAble purchased a property from Baker for $20,000. The property is encumbered by a $12,000 first trust deed and a $4,000 second trust deed. Able pays $8,000 cash and assumes the first trust deed. The order of recordation is:reconveyance of second trust deed and grant deed.When the Federal Reserve Bank (FED) lowers cash reserves required by member banks it tends to:increase the supply of money and credit in the U.S. economyStock in a mutual water company:is appurtenant to the land and thus automatically transfers to the buyer,If there is a disagreement between the buyer and seller during escrow, the escrow officer may disburse funds:-as a result of a judgment between the buyer and seller -if the parties to the escrow agree -if a binding arbitrator settles the matterWhen listing her farm for sale with Broker Ed, Daisy informed the broker that she would not consider any offer with more than a 23% down payment. The broker presented a full price, all cash offer to the seller which Daisy rejected. Which of the following is more correct?the seller can reject the offer without liability since the offer did not meet the exact terms of the listingA real estate licensee has inspected a home for sale and has discovered some problems in the property. How long does the buyer have to sue for the failure of the licensee to disclose problems in the property?2 yearsA broker who solicits and accepts a deposit on the purchase of a parcel of real property without express written authorization from the owner to sell the property is:acting as agent for the buyer and not the sellerAble made an offer to purchase a parcel of real property. He died before the listing broker could notify him of an unqualified acceptance by the seller. Which of the following is true?the death of Able constituted a revocation of the offer.To transfer interest in trade fixtures upon the expiration of a lease, the lessee would use:A bill of saleTitle insurance does not protect against:zoning ordinances, regulations, or plans.When an apartment building adds a swimming pool this is called:ContributionA broker has his receptionist (who doesn't have a license) to schedule an appraisal for a property, which of the following can she not do?Give the appraiser information concerning the propertyWhich is incorrect?A promissory note is security for a mortgage.None of the following would automatically terminate an offer to purchase real property except:rejection of the offer by the offeree.A straight note has no payments of principal during the term of the loan until when?the last payment.Able sold his home to Baker who decided not to record the deed, but took possession of the property as his residence. Able sold the same property to Charlie, who examined the county recorder's files, but did not inspect the property. Charlie received a deed from Able and recorded it. Concerning title to the property, which of the following is correct?Baker remains the owner.If a real estate licensee misrepresents a property to a buyer while he is acting as an agent, he may subject himself to:-disciplinary action by the licensing authority -civil action -criminal actionThe maximum commission which can be charged by a real estate broker in the sale of residential income property is:negotiable between the principal and brokerA subordination clause in a trust deed may:give priority to liens subsequently recorded against the property.When is a broker relieved of the obligation to present an offer?When the offer is patently frivolous.Changes in the real estate industry do not affect:the market value of a property.