California Principles questions Final Test1

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California Principles Real Estate › FINAL TEST 1 (50-example questions)

1 of 50 – Brian and Leslie have made an offer on Rudy and Judith’s home. The first offer was rejected by the sellers. Brian and Leslie made another offer; Rudy and Judith rejected that offer. Never quitters, Brian and Leslie decided to try one last time and present their last and best offer. Rudy and Judith decide the prospective buyers are close, and make a counteroffer. What’s the situation after a counteroffer is made by the sellers?

A.      The sellers cannot make a counteroffer to the buyer. They can either accept the buyer’s offer or reject it.

B.      Once the counteroffer is made by the seller, the buyer’s original offer becomes invalid. If the buyers accepts the offer the seller has made, the same process takes place as with a regular offer.

C.      The process will basically start completely from scratch. If the buyers reject the seller’s counteroffer, the sellers can go back to the buyer’s previous offer and accept.

D.      None of the Above.

Principles

2 of 50 – Ross, a newly licensed residential real estate appraiser, is on his way to appraise his very first piece of property. He is nervous on the way to the property and is going through the appraisal process in his head. Please help Ross put the appraisal steps in order.

A.      State the problem. Gather, record and verify the necessary data. Analyze and interpret. Neighborhood analysis. Neighborhood cycle. Site analysis.

B.      Gather, record and verify the necessary data. Analyze and interpret. State the problem. Neighborhood analysis. Neighborhood cycle. Site analysis.

C.      Gather, record and verify the necessary data. State the problem. Analyze and interpret. Neighborhood analysis. Neighborhood cycle. Site analysis.

D.      None of the Above.

3 of 50 – Although 16-year-old Tameka’s goal is to be a licensed real estate salesperson in the State of California, she is currently living in Canada. Her long-term goal is to be a successful salesperson, manager, and to own a brokerage. She has been studying the Real Estate Principles Course for next week’s exam. However, if she passes, she cannot apply for her 4 year salesperson’s license. Why?

A.      Tameka cannot apply for a 4-year salesperson because she has not completed three college-level real estate courses.

B.      Tameka is only sixteen and a licensee must be eighteen years old.

C.      Tameka cannot provide proof of legal presence in the United States.

D.      Both A and B

4 of 50 – Which of the following is exempt from the Natural Hazards Disclosure?

A.      A special flood area.

B.      A geological hazard.

C.      A wildland high fire severity area.

D.      A seismic hazard zone.

5 of 50 – Janet is a broker who negotiates a number of loans to specific subdivisions. Last year, she took part in 27 loans to homeowners in one subdivision. Due to this large number of loans to a subdivision, Janet has to report loan activities to the California BRE. What is the name of this reporting process, how often must the reports be made, and what is an additional requirement for making these reports?

A.      The annual and quarterly process is Uniform Reporting. Additionally, if a broker negotiates more than $5,000,000.00 in loans annually, he must take part in Uniform Reporting.

B.      The annual and quarterly process is Threshold Reporting. Additionally, if a broker negotiates more than $2,000,000.00 in loans annually, he must take part in Threshold Reporting.

C.      The annual and quarterly process is Trust Reporting. Additionally, if a broker negotiates more than $2,000,000.00 in loans annually, he must take part in Threshold Reporting.

D.      The annual and quarterly process is Threshold Reporting. Additionally, if a broker negotiates more than $1,000,000.00 in loans annually, he must take part in Threshold Reporting.

6 of 50 – Lillian is buying Julia’s home in Malibu. Julia, after selling her home to Lillian, is buying Anne Marie’s condo in San Francisco. In these transactions, who is the grantor and who is the grantee?

A.      Lillian is the grantor and Julia is the grantee. Julia is the grantor and Anne Marie is the grantor.

B.      Lillian is the grantee and Julia is the grantor. Julia is the grantee and Anne Marie is the grantor.

C.      Lillian is the grantor and Julia is the grantee. Julia is the grantor and Anne Marie is the grantee.

D.      None of the Above.

7 of 50 – Chip is a veteran who fought in Desert Storm. He has just retired from the military. He has been told he qualifies for a property tax exemption based on his military service during wartime. Which exemption applies to Chip?

A.      Section 218

B.      Proposition 13

C.      Section 205

D.      Proposition 60

8 of 50 – This step of the general plan, sometimes known as the master plan, should encompass all aspects of the projected growth, including the social, economic, and physical features. Due to this step, while considered long-range, the plan must allow for short-range flexibility. Which step is described?

A.      Resource Analysis

B.      Plan Implementation

C.      Formulation of Community Goals

D.      Adaptation of Zoning Ordinances

9 of 50 – Marcus wants to have the deed to his new home recorded to protect his ownership rights. In order to record the deed, it must be notarized. Marcus must go before a notary public and verify the signing of the deed. The notary then signs the deed. The verification of Marcus’ signature in the signing of the deed is known as:

A.      Autograph

B.      Attestation

C.      Recording

D.      Caveat Emptor

10 of 50 – Which of the following is not a characteristic of the California mortgage market?

A.      California has a large amount of the country’s biggest commercial and savings banks.

B.      California has a high population; therefore more people means more homes are needed.

C.      Mortgages are used instead of Deeds of Trust, which allows borrowers greater flexibility and protection.

D.      California has a very active secondary mortgage market.

11 of 50 – Missy, a licensee, desperately wants to be appointed the next California Real Estate Commissioner. For the three years she has held her California real estate license, she has been ranked in the top five in new home sales in her office. Missy has never had her license suspended or revoked, and prides herself on being ethical in every transaction and interaction. Does Missy have a chance?

A.      Yes, she has a chance to be appointed to the post of California Real Estate Commissioner. The only requirements are to hold a California real estate license and be actively involved in the profession.

B.      No, not at this point in her career. In order to be appointed to the post by the governor, she must have a minimum of five years’ experience as a real estate broker.

C.      No, not at this point in her career. In order to be appointed to the post by the governor, she must have a minimum of ten years’ experience as a real estate broker.

D.      No, not at this point in her career. In order to be elected to the office by her peers, she must have a minimum of five years’ experience as a real estate broker.

12 of 50 – Brett lost his job last year. He has only been able to find temporary work and fell behind on his mortgage. His home is currently in foreclosure. He is confused as to what will happen and how the debts are paid. What is the order of payments in foreclosure?

A.      Equitable Right of Redemption; Foreclosure; and Statutory Redemption

B.      Special Assessment Taxes and General Taxes; the First Mortgage which is determined by the order of recording; whatever is recorded next would be paid; and the Cost of the Sale.

C.      Cost of Sale; Special Assessment Taxes and General Taxes; the First Mortgage which is determined by the order of recording; and whatever is recoded next would be paid.

D.      Statutory Redemption; Equitable Redemption; and Foreclosure

13 of 50 – When an appraiser assumes that no one is being forced to sell at a reduced price because of an impending divorce or similar situation; and that both buyer and seller are well-informed customers, he is more than likely hired to determine:

A.      Market Value

B.      Insurance Value

C.      Salvage Value

D.      All of the Above

14 of 50 – Is a broker allowed (permitted) to accept lender funds unless that broker owns the loan? Which requirement under the California Business and Professions Code addresses the question?

A.      Yes, it is permissible for a broker to accept those funds. They will eventually be used for a loan or to buy a specific note. The requirement is outlined in Article 5.

B.      Yes, it is permissible for a broker to accept those funds. They will eventually be used for a loan or to buy a specific note. The requirement is outlined in Article 6.

C.      No, it is not permissible for a broker to accept those funds. The requirement is outlined in Article 17.

D.      No, it is not permissible for a broker to accept those funds. The requirement is outlined in Article 5.

15 of 50 – Which of the following statements referring to general taxes is true?

A.      General taxes are Ad Valorem taxes.

B.      General taxes are used for the general operation of the governmental agency authorized to impose the taxes.

C.      Real property tax (general taxes) are based on the assessed valuation of the property.

D.      All of the Above

16 of 50 – In early common law, transfers of land were only made when:

A.      The transfer of land from husband to wife, upon the husband’s death.

B.      The transfer of land from father to child, upon the father’s death.

C.      The transfer of land from father to son, upon the father’s death.

D.      Both A and B

17 of 50 – Calvin is buying his first home. He has been saving and saving for years. The home he is buying has a price of $300,000 and Calvin has a down payment of $75,000. Calvin’s loan is considered:

A.      Highly Secured

B.      Low Risk

C.      Simple Interest

D.      Highly Leveraged

18 of 50 – Bob leased an apartment for three years from the Steiners. He was never late on his rent in those three years, kept the apartment immaculate, and never caused a moment of trouble. He has recently purchased his first home and moved out of the apartment. As expected, Bob gave the Steiners sixty days’ notice he would be moving and left the apartment in perfect condition. It has been 45 days since he moved out and he’s been watching for his security deposit refund to purchase a new sofa. When should he expect his security deposit refunded?

A.      If there had been no damage or cleaning required, which seemed highly likely in Bob’s case, the landlord should have refunded his security deposit within 21 days of Bob’s vacating the property.

B.      If there had been no damage or cleaning required, which seemed highly unlikely in Bob’s case, the landlord should have refunded his security deposit within 30 days of Bob’s vacating the property.

C.      If there had been no damage or cleaning required, which seemed highly unlikely in Bob’s case, the landlord should have refunded his security deposit within 14 days of Bob’s vacating the property.

D.      None of the Above.

19 of 50 – Thad and Pierre made an appointment to view a condo for lease advertised in the newspaper. Thad phoned the landlord and set up a viewing for two hours later in the day. The couple thought the condo was perfect and informed the landlord they wanted to start the application process to lease the condo. The landlord then explained the condo had just been leased. The next Sunday in the classifieds, the condo was again advertised for lease. A friend of the couple phoned the landlord, pretending to be interested in the property. When asked if it had been leased, the landlord replied “No”. What is going on in this situation?

A.      Probably nothing at all. The condo was probably leased in the two hours between the couple’s phone call and their viewing. Chances are the lease fell through for various reasons.

B.      It seems the landlord did not like the idea of leasing his condo to a same sex couple. This is not permissible. A landlord must live by federal and state fair housing laws.

C.      More than likely the landlord was not happy with the sexual orientation of Thad and Pierre. He owns the condo and may lease it out to whomever he sees fit.

D.      None of the Above.

20 of 50 – Which of the following does NOT belong in listing agreement provisions?

A.      Placement of the “For Sale” sign on the property.

B.      Equal Housing Opportunity Clause

C.      California Statute of Frauds

D.      Arbitration

21 of 50 – Shakeel and Shaheen have sold their home, made an offer on Derek and Kamisha’s home, and the offer was accepted. All the details of the sale have been worked out, agreed upon and signatures obtained. Now, Shakeel and Shaheen must obtain a loan for the property. What is the best term to describe their position in the transaction’s timeline?

A.      In Contract

B.      Chain of Title

C.      Abstract and Opinion

D.      Both B and C

22 of 50 – Mobile homes manufactured ___________ are required to have tags guaranteeing proper construction. Who issues this tag?

A.      Before June 15, 1976; HUD

B.      After June 1, 1976; HUD

C.      After June 15, 1976; HUD

D.      After June 1, 1976; California BRE

23 of 50 – Which form of payment is most common for a property manager?

A.      A percentage of income.

B.      A salary.

C.      A flat fee.

D.      All of the Above

24 of 50 – What is the mill rate of .017?

A.      0.0017

B.      1.07

C.      1.7

D.      17

25 of 50 – Zoning ordinances have changed in the area adjacent to a residential neighborhood. The residents are incensed a retail shopping area is being developed one block from their subdivision. They are concerned about the traffic, noise, and what this will do to their property values. The new zoning ordinances must ensure:

A.      The power be exercised in a reasonable manner.

B.      The provisions be clear and specific.

C.      Freedom from discrimination.

D.      All of the Above

26 of 50 – The Western Acres neighborhood is a highly desirable area in which homes very seldom go on the market. The Western Acres properties placed on the market sell very quickly and usually for or above asking price. Which principal of real estate applies to the homes in Western Acres?

A.      Highest and Best Use

B.      The Law of Supply and Demand

C.      Anticipation

D.      Competition

27 of 50 – A developer wants to build a sprawling two-story office complex. The developer’s and architect’s vision is something low, modern, and new. They are planning the complex in an urban area of town, replacing ten blocks of old high-rise buildings. Unfortunately, the zoning commission’s vision does not coincide with either the developer’s or the architect’s. Which type of zoning regulation applies?

A.      Directive Zoning

B.      Aesthetic Zoning

C.      Bulk Zoning

D.      None of the above

28 of 50 – In a general warranty deed, the implied promise: “If there is a defect, I promise to take care of any problems” is referred to as:

A.      A Covenant of Seisin

B.      A Covenant of a Warranty Forever

C.      A Covenant of Further Assurance

D.      A Covenant Against Encumbrances

29 of 50 – Which of the following parties are not exempt from the real estate licensing requirements in California?

A.      Cemetery Authorities

B.      Licensed Personal Property Brokers

C.      Off-Site Property Managers

D.      Short-Term Vacation Rental Agents

30 of 50 – Which of the following is not a goal of a real estate appraiser?

A.      To determine the market value of a property.

B.      To determine the insurance value of a property.

C.      To determine the marketability of a property.

D.      To determine the tax value of a property.

31 of 50 – Janice has given her broker an earnest money deposit check with written instructions to hold the check until the seller has accepted her offer. Her broker follows instructions and informs the seller, through a telephone conversation with the seller’s agent after the initial offer was presented, the buyer’s check is being held awaiting offer acceptance. Did Janice’s broker handle this situation correctly?

A.      No, the broker must inform the seller in writing the buyer’s check is being held until acceptance of the offer.

B.      Yes, the broker informed the seller of the stipulation on the negotiation of the check until offer acceptance.

C.      No, the broker must inform the seller of the buyer’s check being held at the exact time the actual offer is presented.

D.      Both A and C

32 of 50 – Timothy has been hired by the estate of Tyler Wilbanks, who is recently deceased. Timothy has Power of Attorney and will be handling all the real estate affairs of the deceased estate. Which type of agent is Timothy?

A.      Special Agent

B.      Single Agent

C.      Universal Agent

D.      Agency Coupled with Interest

33 of 50 – Drew is leasing his apartment from Reggie. The lease is for one year and they have agreed on all areas of the contract. The lease is in written form, and Reggie is the only party that has signed. Without Drew’s signature, is the lease now invalid?

A.      Yes, a lease in written form, must have both parties’ signatures to be validated.

B.      No, the lessee is not required to sign, only the lessor. The lessee’s occupation of the property is proof the lease agreement was accepted.

C.      No, neither party needs to sign the written lease for validity. As long as a consensus exists between the two parties, the lease is valid.

D.      None of the Above.

34 of 50 – Ted and Lisa are selling their home and have signed a listing agreement. Client or customer? Steven visits Ted and Lisa’s open house, and he is interested in purchasing their home. What happens next? Is Steven a client or customer?

A.      Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven that Ted and Lisa are customers.

B.      Ted and Lisa are clients, as is Steven. The listing agent must disclose to Steven that Ted and Lisa are also clients.

C.      Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven that he/she represents Ted and Lisa and explain customer relationships

D.      Ted and Lisa are clients, and Steven is a customer. The listing agent must disclose to Steven that he/she represents Ted and Lisa and explain customer relationships.

35 of 50 – Katie and Rich own a rental home they have put up FSBO. They’ve noticed the same woman has accompanied several potential buyers viewing the home. Katie and Rich discover she is a broker that has been “showing” the home on the sly without their permission. Instead of fighting this aggressive salesperson, the couple just go along. In which manner was agency created?

A.      Ostensible Agency

B.      Ratification

C.      Implied Agency

D.      Written or Expressed

36 of 50 – In order to equalize business in their area, ABC Realty and RMH Realty have an unwritten agreement. They have agreed to split up their area with ABC taking everything north of the highway and RMH everything south. Under this agreement, the real estate agents licensed to each respective brokerage will not be competing and all will profit. Is this a violation? If it is a violation, what is it called and what is it violating?

A.      Division of markets is not a violation. It is merely cooperation between brokerages.

B.      Division of markets is a violation of the Sherman Antitrust Act.

C.      Bid rigging is a violation of the Clayton Antitrust Act.

D.      Division of markets is a violation of the Clayton Antitrust Act.

37 of 50 – Anthony is adding a new deck to his home. He has obtained all the necessary building permits to construct his new deck. Anthony’s neighbor, Steve, informed him he has to have a California State Contractor’s License to even work on his own property. Anthony says that Steve is wrong. Who is right in this situation?

A.      Anthony is correct, anyone who does the business of a contractor must be licensed.

B.      Steve is correct, any major work conducted on real property must be done by a licensed state contractor.

C.      Anthony is correct. Anyone who does the business of a contractor must be licensed. Unless, the property owner is planning to sell the finished real estate project, he does not need a license to work on his own property.

D.      None of the Above.

38 of 50 – What is the major difference between an Estate for Years and an Estate from Period to Period?

A.      The major difference is: in an Estate for Year, the tenant must give notice to vacate whereas in an Estate from Period to Period, there is no need to give any notice.

B.      The major difference is: in an Estate from Period to Period, the tenant must give notice to vacate whereas in an Estate for Years, there is no need to give any notice.

C.      The major difference is: in an Estate for Years, it is used exclusively for commercial leases.

D.      There are no major differences between the two.

39 of 50 – Which of the following is not a requirement for an FHA loan?

A.      The mortgaged real estate must be appraised by an approved FHA appraiser.

B.      Prepayment penalties are optional.

C.      Points can be charged by the lender and paid by either buyer or seller, or both.

D.      A buyer may pay more than the appraised value, if he pays the difference in cash.

40 of 50 – Wallace and Melissa live in a small rural community of just over 15,000. They want to purchase a home and start a small home-based business. At the current time, they have a very limited income and need their own home. Where is the best place for Wallace and Melissa to turn for a home loan?

A.      Rural Economic and Community Development (RECD)

B.      VA

C.      FHA

D.      Cal-Vet

41 of 50 – When is it permissible for a broker to possess an out-of-state trust account?

A.      It is only permitted if the FDIC insures the account, and the account is used only for specific first loans.

B.      It is never permitted; all trust accounts must be maintained with a bank or recognized depository located in California.

C.      It is always permissible to hold an out-of-state trust account.

D.      None of the Above.

42 of 50 – Jack is leasing a home from Justin for a year. He has decided to lease until he gets a good feel for the area and knows where he wants to buy. In this relationship, who has the reversionary right and who has the possessory right ?

A.      Jack has the possessory right and Justin the reversionary right.

B.      Jack has the reversionary right and Justin the possessory right.

C.      Jack and Justin both have the possessory right.

D.      Jack and Justin both share the reversionary right.

43 of 50 – Lois is selling her needlework shop to Simon. Simon is also purchasing the name of the business from Lois, all of the fixtures, and the inventory. Lois is essentially handing over the entire business, from top to bottom, to Simon, who is planning continuing what she had started. What are the essential elements of this business opportunity sale?

A.      A Bill of Sale

B.      Financial Statements

C.      Goodwill

D.      Both A and B

44 of 50 – Karen and Jay need a larger home. They have two large dogs and a baby on the way. One day in the real estate section, they see their dream home. The couple view the home that very day, make an offer and it’s accepted. There’s only one problem: They haven’t even put their home on the market. Which type of loan gives Karen and Jay their best option of paying two mortgages until their current home sells?

A.      A Participation Mortgage

B.      A Bridge Loan

C.      A Sale-Leaseback

D.      A Contract for Deed

45 of 50 – Adeeb has listed his condo with Maria’s broker and she is his listing agent. The listing agreement is signed and the day to begin showing his property is nearing. Adeeb decides the day before the open house to raise his asking price by $20,000. Maria disagrees with the decision but goes along with Adeeb’s wishes. How must Maria take care of this contractual change in price?

A.      Maria must change the listing price on a price change or extension form.

B.      Maria may make the change on the original contract due to the fact the condo has not been professionally shown by licensees.

C.      The listing price change does not need to be changed on the contract. The price that will be paid for the condo does not have to be the listing price; therefore, it is just a guide, not set in stone.

D.      None of the Above.

46 of 50 – A Point of Beginning refers to:

A.      A description starting at a designated place on a parcel using the Metes and Bounds System.

B.      A fixed object used to establish real estate boundaries using the Metes and Bounds System.

C.      Lines on either side of a principal meridian using the Rectangular Survey System.

D.      Lines running east and west parallel to a major base line using the Government Survey System.

47 of 50 – Shivaram and Kiran are buying a home in a new subdivision. Due to all of the subdivisions in the area, a new elementary school is being built. Additionally, a new area park is planned. Shivaram and Kiran have been informed the taxes on their new home are substantially higher than their previous property. Why?

A.      The Mello-Roos Community Facilities Act of 1982

B.      The Street Improvement Act of 1911

C.      Proposition 13

D.      Proposition 60

48 of 50 – Tamara and her children live in a subdivision with a tennis court and swimming pool. Her children are thrilled to be able to use these wonderful amenities. Who actually owns the tennis court and swimming pool? Tamara and her children reside in which type of common interest development?

A.      The tennis court and swimming pool are owned by the investors in the subdivision development. It is a Planned Unit Development.

B.      The tennis court and swimming pool are owned in common by all the property owners. It is a Planned Unit Development.

C.      The tennis court and swimming pool are owned in common by all the property owners. It is a subdivision.

D.      None of the Above.

49 of 50 – Derek’s new office is undergoing a minor renovation and he cannot conduct business in the location for approximately six months. He decided to lease a temporary office in Samantha’s building from June 1 to December 30. Which type of lease has Derek signed?

A.      An Estate for Years

B.      An Estate at Sufferance

C.      An Estate at Will

D.      None of the above

50 of 50 – What are the parts of a mortgage loan? What purpose does each part serve?

A.      A Pledge and Collateral. A Pledge is a promise to pay; and Collateral allows a lender the right to foreclose if the borrower does not pay.

B.      A Promissory Note, a Deed of Trust, and Collateral. A Promissory Note is an I.O.U. to pay; a Deed of Trust secures the interest in a borrower’s real property; and Collateral allows a lender the right to foreclose if the borrower does not pay.

C.      A Pledge and Collateral. A Pledge allows a lender the right to foreclose if the borrower does not pay; and Collateral is a promise to pay.

D.      None of the Above.

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