>Principles Questions with no Answers for Preview (ALL PRINCIPLE QUESTIONS)

California Principles questions (ALL PRINCIPLE QUESTIONS)

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Principles Ch1 questions

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1 of 10 Is it permissible to advertise real estate associated services or products in California without a California real estate license?

A.    No. All real estate related services or products must only be advertised by a licensed California real estate salesperson.

B.     Yes, the Internet is a free commerce site. Any person may advertise whatever services or products they choose, as long as they are legal.

C.     Yes, as long as the products or services do not include any actions for which a California real estate license is required.

D.    None of the above.

2 of 10 California licensing laws define which of the following:

A.    Real Estate Brokerage

B.     Handling Trust Funds

C.     Managing Escrow Accounts

D.    All of the Above

3 of 10 As an examinee, or a new licensee, where is the best, most accurate source for current California Department of Real Estate information?

A.    Your Educator

B.     Your Broker

C.     The DRE website

D.    All of the Above

4 of 10 Gerard, a Nevada real estate licensee, has been advertising his services online to California citizens. He sells resort property outside Las Vegas and believes the California market could be very lucrative. Is it permissible for Gerard to advertise in this manner? Why or why not?

A.    It is not permissible for Gerard to solicit California residents. He must hold a California real estate license in addition to his Nevada license.

B.     It is not permissible for Gerard to solicit California residents. State-to-state real estate transactions must be approved by the DRE.

C.     Yes, it is permissible for Gerard to advertise his services to California residents. He is only advertising his services, not offering any advice. Therefore a California license is not needed.

D.    None of the above

5 of 10 Penny, a California licensee, has been advertising on the Internet. She specializes in the sale of upscale homes in the Hollywood Hills area. Penny has been violating the Business and Professions Code, Sections 10235.5 and 10140.6. What has she done?

A.    Penny should not be soliciting her services to the residents of California.

B.     Penny failed to indicate in the advertisement her license status.

C.     The services she advertises do not include any actions for which a license is required.

D.    None of the above.

6 of 10 Which regulation or section(s) apply to the use of the Internet for advertising in California?

A.    Commission’s Regulation 2770

B.     Commission’s Regulation 007

C.     Business and Professions Code, Sections 10235.5 and 10140.6

D.    Both A and B

7 of 10 An examinee or licensee may perform what transactions on the DRE website?

A.    Check test results.

B.     Renew salesperson and broker license.

C.     Obtain the current testing schedule.

D.    All of the above.

8 of 10 Which of the following will not be covered in this course?

A.    How to advertise on the Internet in other states

B.     The mortgage market in California

C.     Environmental issues and regulations in California

D.    Voluntary and involuntary alienation

9 of 10 Upon completion of this course, you should understand:

A.    The facts regarding disclosure of commissions earned to all parties in a transaction.

B.     Real estate taxes and special assessments.

C.     Encumbrances, liens, easements and encroachments.

D.    All of the above.

10 of 10 Which portion of the California Business and Professions Code consists of the Subdivided Lands Law?

A.    Part 1, Sections 10000 to 10580 of the Business and Professions Code

B.     Part 2, Sections 11000 to 11200 of the Business and Professions Code

C.     California Civil Code, Section 2985 of the Business and Professions Code

D.    None of the Above

Principles Ch2 quiz

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1 of 10 Sam, a broker, thought the postage meter stamp was sufficient evidence of a U.S. Postal Service postmark. He was wrong and his broker’s license expired. What happened next?

A.    Sam’s broker’s license expired; so he had to cease all of his licensed activities. However, his salespersons still possess active licenses and may continue with business while Sam is temporarily unlicensed.

B.     Sam must immediately stop his licensed activity and his salespersons all lose their licenses as well. All must re-take the state license examination to re-activate their licenses.

C.     Sam must immediately stop his licensed activity. His salespersons are all placed immediately in non-working status, and his branch office licenses are cancelled. He must then take all necessary steps to re-activate his license, his salespersons’ licenses and the branch office licenses.

D.    Sam must stop his licensed activity until he re-activates his license. The only salespersons affected are those with conditional salesperson licenses. They may not re-activate their status and must complete the required courses to obtain a four-year salesperson license.

2 of 10 Sam has successfully completed the Real Estate Principles course, the Real Estate Practices course, an additional college level course, and passed the salesperson licensing examination. Which license is available to Sam?

A.    The Four-Year Salesperson License

B.     An Original Salesperson License

C.     A Restricted Salesperson License

D.    A Conditional Salesperson License

3 of 10 Hannah is a newly licensed California real estate salesperson. She has aspirations of one day being the California Real Estate Commissioner. How does she get there and what does she do once she’s there?

A.    Hannah must become an attorney as well as a licensed real estate agent. She would need to have the appointment of the Governor of California. Her primary duty would be the qualification of applicants and issuance of real estate licenses.

B.     Hannah would have to be appointed by the California Real Estate Commission. Her primary duty as Commissioner would be regulation of the sale of subdivision interests.

C.     Hannah would need to be elected the California Real Estate Commissioner in a state-wide election. Her primary responsibilities as Commissioner would be to enforce the Real Estate Law and Subdivided Lands Law.

D.    Hannah would need the appointment of the Governor of California. Her primary duty as Commissioner would be to enforce the laws in a manner in which maximum protection for real estate consumers is achieved.

4 of 10 Susan is thinking of putting her home up for sale but doesn’t want to use a real estate agent. What are her options?

A.    Susan must obtain her real estate license or use a licensed real estate agent to sell her property. She cannot be compensated for the sale of her property unless she is representing another person.

B.     Susan may sell her property herself without obtaining a real estate license. Although she will be compensated for the sale of her home, she is not representing another person.

C.     Susan will be negotiating the purchase price of her home and must be licensed to do so.

D.    Both A and C

5 of 10 Katrina had her license suspended for making false promises to clients. She had a habit of telling clients what they wanted to hear and never being able to state the facts. Of course, she could never follow through with her statements and several complaints were filed. Which guidelines constitute most suspensions?

A.    Sections 10176 and 10177 of the Business and Professions Code.

B.     Sections 10176 and 10177 of the Regulations of the Commissioner.

C.     Section 11350.6 of the Welfare and Institutions Code.

D.    Section 17910 of the California Code.

6 of 10 Bill the broker received a very high offer on a piece of property from a buyer. Bill makes a low offer through a “dummy” purchaser, or an accomplice who is not a buyer at all. Bill then sells the property to the buyer for the higher price, with the difference being profit. What’s the violation?

A.    Commingling

B.     Secret Profit

C.     False Promise

D.    Dishonest Dealing

7 of 10 Jan failed to renew her license prior to its expiration. In order to renew her license now Jan must:

A.    Submit a proper application within 2 years of her license expiration.

B.     Providing evidence of the completion of current required continuing education.

C.     Pay the appropriate late renewal fee.

D.    All of the above.

8 of 10 Miranda helps her friend Lupe purchase a home. She researches the neighborhood, assists her with a mortgage — she essentially acts as Lupe’s real estate agent. There is only one issue, Miranda does not have a California license and Lupe has paid Miranda for her help. Is this acceptable?

A.    Yes, it is acceptable. Miranda is a lender who makes federally-insured or guaranteed loans. She has helped Lupe with her knowledge and experience and Lupe has compensated her time.

B.     Miranda is simply helping her busy friend make good choices. She just wanted to put her knowledge of the real estate industry to work. Although she has never passed the licensing examination, she knows everything an agent does.

C.     It is certainly not acceptable. Miranda is accepting compensation for representing another person in a real estate transaction and she does not hold a California real estate license.

D.    Miranda is in the process of studying for her license. She will be taking the examination before Lupe’s real estate purchase closes. Miranda WILL be a licensed real estate agent at the close of escrow; so, yes, it is acceptable.

9 of 10 The main purpose of the California Department of Real Estate (DRE):

A.    To protect the public.

B.     To ensure the qualification of applicants and issuance of real estate licenses.

C.     The regulation of the sale or lease of subdivision interests.

D.    To advise the California Real Estate Commissioner on real estate matters that are important to the real estate industry and the public.

10 of 10 The law judge has just issued a decision based upon the findings in a formal hearing of a real estate salesperson for various ethical violations. What could the California Real Estate Commissioner do at this point in the proceeding?

A.    Reject the proposed decision

B.     Accept the proposed decision

C.     Reduce the proposed penalty and make an official decision.

D.    All of the above

Principles Ch3 quiz

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1 of 10 Lydia has decided to actually spend a considerable amount of time STUDYING for the exam this time, in hope of earning a passing score. Her application has expired in the two years of fruitless reexaminations. What does she need to do to reapply?

A.    File the Examination Result Notification (RE 418), along with the appropriate fee.

B.     File an Examination Change Application (RE 415), along with the appropriate fee.

C.     Submit the Salesperson Examination Schedule Notice (RE 401A), along with the appropriate fee.

D.    File the Salesperson Examination Application (RE400A) along with the appropriate fee.

2 of 10 Lydia applied for the salesperson examination in January 2014. She sat for the exam three times in 2014 and four times in 2015. Each time, Lydia did not receive a passing score. How many times may Lydia sit through the examination in 2016?

A.    Lydia may re-take the exam as many times as it takes to earn a passing score in 2016.

B.     Lydia may re-take the exam a maximum of three times in 2016. The total number of times she has taken the exam will then equal ten, the maximum allowed in a three-year period.

C.     Lydia may re-take the examination as many times as it takes to earn a passing score, but her application will expire in January and she must reapply first.

D.    Lydia may possibly want to reconsider her dream of becoming a California real estate agent.

3 of 10 Sara waited and waited and waited for what she thought was a lifetime. Finally, Thursday morning the results of her California real estate examination arrived. What was the maximum length of “the lifetime” Sara waited and could she have gotten her results by another method?

A.    Sara’s lifetime wasn’t too long. The results are normally mailed out in five days. She could have also received her results online through the eLicensing system and through the Interactive Voice Response system.

B.     Sara was exaggerating her lifetime. The results are guaranteed to be in her hands in five days. She could have also received her results online through the eLicensing system and the Interactive Voice Response system.

C.     Instead of waiting the five-plus days for the mailed results, Sara could have called the DRE, Sacramento Office, and received her results over the telephone. She could have also used the eLicensing system online to view her score.

D.    Instead of waiting a “lifetime,” Sara could have hastened the process using the online eLicensing and the Interactive Voice Response telephone system. This would have cut down on the usual wait time of thirty days.

4 of 10 Marta and Sean acquire notes from a previous California State Licensing Exam through a friend. This friend had previously taken the exam and managed to record the questions on his scratch piece of paper. Marta and Sean score passing grades on their exams, but are denied licenses. Why would they be denied a license?

A.    Marta and Sean were guilty of subversion by using improperly obtained test questions to prepare for the examination. This is considered a dishonest practice.

B.     Marta and Sean had an unfair advantage over the other applicants taking the examination. It was basically old fashioned cheating, and was not tolerated.

C.     Marta and Sean were denied licenses due to their inability to completely and correctly fill out their examination applications.

D.    Both A and B

5 of 10 Lydia feared she did not pass the California State Licensing Exam AGAIN. As she nervously opened the envelope that held the results, what was the first clue to the outcome of her reexamination?

A.    She received an actual score and nothing else, which meant, once again, she hadn’t earned a passing score.

B.     She did NOT receive an actual score this time in the mail. This means she finally passed the licensing exam, and her license application is included in the envelope.

C.     She received a card that gave congratulations and telephone number with code to order her license.

D.    Lydia passed. She received an application for her license along with the results of her examination.

6 of 10 Mikela wants to research and study the requirements for the California Real Estate Examination Test. Where can she find the exam’s purpose and requirements?

A.    California Business and Professions Code Section 10153

B.     California Business and Professions Code Section 16600

C.     Civil Code Section 1798.24

D.    California Civil Code Section 1798.40

7 of 10 Marc needs to score 12 points higher on the California State Licensing exam this time to earn a passing score. What was his initial exam score?

A.    Marc’s initial score was 68% based on the required passing score of 80%.

B.     Marc’s initial score was 63% based on a required passing score of 75%.

C.     Marc’s initial exam score was 58% based on the required passing score of 70%.

D.    Marc’s initial exam score was 53% based on the required passing score of 65%.

8 of 10 John completes the Salesperson Examination Application and submits it to the California Department of Real Estate. Driving home from work, he realizes he used his old address and not his new one on the application. What should he do?

A.    Contact the DRE and tell the story of how he used the incorrect address and request his application sent back in order to make the change.

B.     Once a completed Salesperson Examination Application is submitted to the DRE, no changes of any kind may be made to the application.

C.     John may fill out the portion of the Salesperson Examination Application that needs changing and send it to the DRE. He must also submit in writing the situation and the reason for the alteration of the original application.

D.    John can submit an Error Correction form by email.

9 of 10 Miguel sits down, ready and prepared to take the examination. He neatly places his slide rule, programmable calculator, single piece of scratch paper, answer sheet, pencil and pocket-size electronic calculator on the desk and he is ready to begin. Although extremely prepared, which item of Miguel’s is NOT permitted in the testing site?

A.    The slide rule

B.     The programmable calculator

C.     The single piece of scratch paper

D.    The pocket-size, electronic calculator

10 of 10 Raj is stressed. He is getting ready to take the salesperson examination and doesn’t know where to begin studying. Help Raj by telling him the examination topic(s) with the largest concentration of questions.

A.    Contracts

B.     Laws of Agency

C.     Practice of Real Estate and Mandated Disclosures

D.    Transfer of Property

Principles Ch4 quiz

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1 of 10 Miguel and Maria have found a wonderful condo to lease. They call the owner and express their interest. The owner tells the couple it is no longer available for lease. Two weeks later, Maria sees the “FOR LEASE” sign outside the condo. Which act or law has been violated by the owner?

A.    The Civil Rights Act of 1866

B.     Executive Order 11063

C.     The Clayton Antitrust Act

D.    The American Housing Act of 1949

2 of 10 Martha and Liz have applied for a mortgage. They both have excellent credit and very successful careers and they are perfect on paper. Martha and Liz are partners and are expecting the birth of their first child together. They are denied a loan. What’s the violation here?

A.    Martha and Liz have been denied full protection under the Equal Opportunity in Housing Act.

B.     Martha and Liz have been denied the full protection of the Equal Credit Opportunity Act (ECOA). The ECOA is a part of the Fair Financing Laws.

C.     Martha and Liz have been denied the full protection of the Fair Housing Act of 1968; an integral part of the Fair Financing Laws.

D.    None of the above

3 of 10 Jane has filed her complaint of discrimination. She also wants to seek some sort of punitive damages. What are her options, if any?

A.    Jane has one year from the date of the violation to bring suit. She may seek actual damages and a court order to allow her to buy or lease the original property she was denied.

B.     Jane has three years from the date of the violation. She may seek a restraining order, actual damages, and punitive damages of up to $10,000.

C.     Jane may only file a complaint. The law does not allow any litigation in fair housing matters due to the extremely difficult nature of the cases

D.    Jane may file suit within two years of the violation. She may seek a restraining order, actual damages, and punitive damages of up to $1,000.

4 of 10 While waiting in the lobby of the Fair Real Estate Company’s office, Samir and Rhadika overhear an agent tell clients, “You wouldn’t be happy in THAT neighborhood. It’s very “colorful,” if you know what I mean.” Which ruling by the Supreme Court dealt with this issue?

A.    The prohibition of discrimination based on race and color was created by the 1968 Fair Housing Act.

B.     Fair housing laws apply to home sellers as well as to agents. If an agent goes along with a client’s discriminatory act, the agent is equally liable for the violation, Mayer v. Johnson.

C.     All discrimination and appearances of discrimination in selling or renting residential property based on race and color is prohibited under the provisions of the Civil Rights Act of 1866, Jones v. Mayer.

D.    All brokers must prominently display a HUD standard Fair Housing poster affirming the broker’s compliance with fair housing laws in selling, renting, advertising, and financing residential properties, Jones v. Smith.

5 of 10 John is still studying for his California real estate license. Once again, he is having a difficult time keeping areas straight. Help John with the largest area of the NAR Code of Ethics Standards and Practices.

A.    Article 16 – Ethics and Agency Relationships

B.     Article 12 – Truth in Advertising

C.     Article 9 – Disclosure

D.    Article 1 -Protecting the Best Interest of the Client

6 of 10 Jane feels she has been discriminated against in her search for a new home. She’s a single mother of two who works full time. Where does she go with a complaint?

A.    The Office of Fair Housing and Equal Opportunity (OFHEO)

B.     Her real estate agent and HUD

C.     Her real estate agent, HUD and MLS

D.    The Attorney General’s Office

7 of 10 Agent Smith tells the Jacob family the Fernwood neighborhood is beautiful, attractive, and highly desirable. The next day, Agent Smith tells the Miller family that Fernwood is deteriorating, values are falling, and the school district is less than stellar. Name the form of illegal discrimination.

A.    Discriminatory misrepresentation

B.     Steering

C.     It is not a form of illegal discrimination.

D.    Blockbusting

8 of 10 John is trying to keep things straight while he studies. He’s having a rough time distinguishing federal and state legislation. Help John with the primary focus of federal legislation.

A.    Anti-discrimination laws and fair trade practices

B.     Agency and disclosure requirements

C.     Anti-discrimination and disclosure requirements

D.    Fair trade practices and agency disclosures

9 of 10 John is studying for his California real estate license. He is studying federal law, state law, and local law. Now, he is trying to get a handle on something called “Professional Code.” What source has no input on the topic John is currently studying?

A.    Federal and state legislation

B.     Industry self-regulation through trade associations and institutes

C.     The Better Business Bureau®

D.    State real estate licensing regulation

10 of 10 The Ritchie family has put their home on the market. The Sampsons make an offer on the Ritchies’ home. Suddenly, the Ritchies decide not to sell their home. They explain to Sara, their agent, that the Sampsons “aren’t quite right” for the neighborhood. What should Sara do?

A.    The Ritchies are her clients. Sara must honor their wishes and remove the home from the market.

B.     Sara must explain to the Richies that she cannot ethically remove a property from the market, after an offer has been made, to sidestep a purchase by a party.

C.     Sara must withdraw herself from the relationship with the Ritchies or from any situation where client discrimination occurs.

D.    Both B and C

Principles Ch5 quiz

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1 of 10 Which of the following is not a water right?

A.    Riparian Right

B.     Doctrine of Prior Appropriation

C.     Littoral Right

D.    Alluvial Right

2 of 10 Melinda’s mother recently passed away. She is thinking of selling her belongings in an estate sale. During her research, she came across real and personal property regulations and laws. Please help Melinda understand the legal difference(s) between real and personal property.

A.    For the most part, the rules of the situs state govern the transfer of personal property from seller to buyer.

B.     Tax laws often distinguish between real and personal property.

C.     An agreement for a sale of real property must be in writing and signed by the party to be charged. If the amount or value is $500 or more, an agreement for the sale of personal property must be in writing.

D.    Both B and C

3 of 10 Gary and Paul have wooden shutters installed throughout their home. A few years later, Paul is promoted by his employer and transferred to another city. Gary wants to take the wooden shutters to their new home. Paul insists they must remain with the home. Which of the five tests for real and personal property applies?

A.    Method of Attachment

B.     Adaptability

C.     Intent

D.    All of the above.

4 of 10 The Percy family have purchased a heavily wooded property in Northern California. They are planning to build a guest house off the main house for entertaining. In the process, many trees will need to be cleared. The family is planning to sell the wood to the neighbors as firewood. Which process applies?

A.    Annexation

B.     Severance

C.     Appurtenance

D.    Livery of Seisin

5 of 10 John lives in an apartment and each month pays his rental payments. He is also considered a stockholder in his building and owns property. In what type of apartment does John live?

A.    Condominium

B.     Timeshare

C.     Cooperative

D.    Common Element

6 of 10 To take private property through eminent domain, three steps must be taken by the state or local government. What are they?

A.    The property owner must be paid compensation for the property. The property must be zoned for business use or public use. The owner must have due process in the court system.

B.     The property owner must agree to voluntarily transfer the property. The property must be for public good or use. The owner must have due process in the court system.

C.     The property owner must be paid compensation for the property. The property must be for public good or use. The owner must have due process in the court system.

D.    The property owner must be paid compensation for the property. The property must be for public good or use. The process of condemnation must be executed to ensure taking of the property.

7 of 10 Which of the following is not considered one of the five economic characteristics of land?

A.    The more demand for a particular property, the more valuable the property. The more demand there is for a particular property, the more valuable it is to consumers looking for real estate.

B.     Each parcel of land has its own nonhomogeneous characteristics. No two properties are the same.

C.     One property will sell quickly if only a few properties in a particular area are on the market.

D.    The three most important economic characteristics of real estate are location, location, and location.

8 of 10 Jeremy opened a coffeehouse in a space leased from Maria and Renaldo. A week before his lease expired, Jeremy moved to a new location without his commercial microwave which was attached to the counter. Eighteen days following notice of Jeremy’s right to reclaim the microwave, Maria and Renaldo sold the microwave at auction. Jeremy is furious and threatening legal action. Does he have a suit?

A.    No, Jeremy does not have a case. Since the microwave was not reclaimed during the period allowed by law.

B.     Yes, Jeremy does have a possible suit. The trade fixture, the installed microwave, is considered personal property and was merely forgotten and not legally Maria and Renaldo’s to sell.

C.     No, Jeremy does not have a possible suit. If he left it in the property, it automatically becomes property of the owners.

D.    Both A and C

9 of 10 Jonathan decides to sell his home and transfer all of his property ownership rights to the new buyer. This bundling and selling of rights is known as:

A.    Livery of Seisin

B.     Transfer of Appurtenances

C.     Nonhomogeneous Situs

D.    Transfer of Chattels

10 of 10 A violent storm comes in from the ocean, hitting the beachfront properties with destructive force. When the Meyers return to their home, they find the beach has disappeared from their property. Which term describes the damage?

A.    Reliction

B.     Avulsion

C.     Erosion

D.    Alluvion

Principles Ch6 quiz

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1 of 10 All property in the United States falls under which system of land ownership?

A.    Feudal System

B.     Allodial System

C.     Freehold System

D.    Dower System

2 of 10 TBH, Inc. owns land for development adjacent to their corporate headquarters. TBH, Inc. is the sole owner of the property. The land will be developed as a shopping and restaurant area. Which form of ownership does this property fall under?

A.    Severalty

B.     Unity of Possession

C.     Joint Tenancy

D.    All of the above

3 of 10 Penelope is interested in buying a 150-year-old historical home in San Francisco. If Penelope decides to purchase the home, it must be on the condition the original architectural features are never removed from the home. Additionally, if Penelope buys the home and then sells it at some point, the same condition must be in the sales contract, and so on. What type of freehold estate is this historic home?

A.    Fee Simple Defeasible

B.     Estate in Reversion

C.     Fee Simple Absolute

D.    Curtesy Estate

4 of 10 Which of the following is not considered one of the six distinct forms of ownership in California?

A.    Tenancy in Common

B.     Severalty

C.     Joint Tenancy

D.    Voluntary Tenancy

5 of 10 HEH, Inc. owns a large parcel of land which will be used for commercial development. Upon the sale of the property to HEH, Inc., the grantor in a written agreement established the lake may never be touched and the property may only be used for commercial purposes. Which type of private deed restriction is in place for HEH, Inc.’s property?

A.    Affirmative

B.     Covenant

C.     Public

D.    Building

6 of 10 The Moltasanto family has owned a vineyard in Sonoma for over one hundred years. They have owned all rights to the property since the first day of ownership. The property is always inherited by the oldest child after the death of the previous owner. Which type of estate is the Moltasanto family vineyard?

A.    Fee Simple Defeasible

B.     Fee Simple Absolute

C.     Estate in Reversion

D.    A Leasehold Estate

7 of 10 Suzette is leasing a condo from the Garcias. She has been renting the condo for over three years. She renews the lease each year and, because of her loyalty and exemplarily rental history, the Garcia’s allow her to make any décor changes she wishes. Which of the following statements is true about the relationship between the Garcias and Suzette?

A.    The Garcias own the condo in leasehold but rent it to Suzette in freehold.

B.     The Garcias have entered into a Pur Autre Vie lease relationship with Suzette.

C.     The Garcias own the condo in freehold but rent it to Suzette in leasehold.

D.    The Garcias and Suzette have a tenants in common relationship.

8 of 10 Patrice and Michael are in the process of refinancing their townhouse. The mortgage company calls and gives the couple the news they have a lien on their home for non-payment of the previous year’s property taxes. What type of lien is on their property? What do they need to do to remedy their situation?

A.    Patrice and Michael have an involuntary lien placed on their home for delinquent property taxes. The couple needs to pay the taxes, any interest and/or late fees, and have the lien removed.

B.     Patrice and Michael have a voluntary lien placed on their home for delinquent property taxes. The couple must pay the back taxes to have the lien removed

C.     Patrice and Michael have an equitable lien placed on their home for delinquent property taxes. The couple must pay the back taxes to have the lien removed.

D.    Patrice and Michael have a judgment lien placed on their home for delinquent property taxes. The couple must pay the back taxes and petition the court to have the lien removed.

9 of 10 Ted and Jack are selling their home to Duncan and Gary. Upon the title search, the title company discovers Ted and Jack’s home is free of any liens or problems and can be easily sold. Ted and Jack’s property holds which type of title?

A.    Certificate of Title

B.     Abstract

C.     Marketable Title

D.    Chain of Title

10 of 10 Christine and Scott have been married for fifteen years. They have three children, a home, and a vacation home. The couple purchased their home together after their marriage, but Scott owned the vacation property prior to the union. Christine and Scott are now getting divorced. Christine wants half of their residence and half of the ownership of the vacation property. At times they have rented the vacation home and the proceeds have gone to their joint bank account. Does Christine have any legal right to the ownership of the vacation home?

A.    Yes, due to the commingling of the funds gained from rental proceeds, Christine will be allowed shared ownership of the vacation property.

B.     Yes, although Scott came to the marriage with the vacation property, all property owned by each partner in a marriage is thus shared by the spouse.

C.     No, Scott came to the marriage with the vacation property, therefore it may remain a separate property. However, due to the commingling of the rental proceeds from the property in the joint account, she does have a right to half the proceeds.

D.    Both A and B

Principles Ch7 quiz

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1 of 10 Sania and her mother own property on a river. The water has carried part of their bank downstream to another property. They want their bank back and are prepared to have it returned. Which method of property transfer applies?

A.    By Accession and through Accretion

B.     By Accession and through Avulsion (It must be reclaimed within one year of the occurrence.)

C.     By Accession and through Avulsion (It must be reclaimed within two years of the occurrence.)

D.    By Succession and through Avulsion

2 of 10 The Ahmed family have signed a contract to buy the Miller family’s home. However, the contract states the Ahmeds must first close on the sale of their current home within thirty days. If this closing does not occur, the contract is no longer binding for either party. Which contract term applies?

A.    Novation

B.     Option

C.     Contingency

D.    Assignment

3 of 10 Which of the following is not a method of involuntary alienation?

A.    Tacking On

B.     Escheat

C.     Adverse Possession

D.    Eminent Domain

4 of 10 Ginny, a licensee, uses a preprinted contract in Tim’s purchase of a new loft apartment. There is a discrepancy in the contract between a preprinted clause and a handwritten addition. Which clause supersedes?

A.    The preprinted clause always supersedes a handwritten clause.

B.     The handwritten clause generally supersedes the preprinted clause.

C.     The handwritten clause always supersedes a preprinted clause.

D.    The grantor and grantee must resolve the contractual issues or the contract will be void.

5 of 10 Jack is buying the Padillas’ home. He makes his offer and in his terms states he wants all the window treatments, refrigerator, and microwave to be part of the sale. The Padillas accept his offer on the condition that the refrigerator is the only item that stays in the home. Which contract term applies?

A.    Implied Agreement

B.     Novation

C.     Counteroffer

D.    Option

6 of 10 Victoria, the lessee is negotiating to lease a condo from Sanchez, the lessor. They have agreed on the monthly lease payment, term of lease, security deposit, and so forth. Victoria plans to start moving in on the first day of next month. Which of the following applies to this situation?

A.    Offer

B.     Contract

C.     Title

D.    Executed

7 of 10 Olive Maccones dies without a will. She has three sons and seven grandchildren. She owned a substantial amount of property. What happens to the property?

A.    The property escheats back to the state.

B.     The property will be intestate and distributed by the state to the heirs.

C.     The property will be transferred according to the Statute of Descent and Distribution.

D.    Both A and C

8 of 10 Which of the following is not a requirement of a will?

A.    Legal age

B.     Proper wording

C.     Witnesses

D.    Written in testator’s handwriting

9 of 10 Which of the following elements is not necessary for a valid contract?

A.    Offer and Acceptance

B.     Accession

C.     Legality of Object

D.    Consideration

10 of 10 Victoria decides not to lease the condo from Sanchez. (They have an oral agreement.) She tells him she has changed her mind the day before she had agreed to move in. He has spent time and money getting the property ready for Victoria and is thinking of suing. Which type of contract applies to the situation?

A.    Valid

B.     Unenforceable

C.     Voidable

D.    Void

Principles Ch8 quiz

(correct answers will be revealed with correct subscription)

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1 of 10 Melinda is selling her home to Trevion. The deed, conveying the property, will be a general warranty deed. Who is the Grantor? Who is the Grantee in the transaction?

A.    Trevion is the Grantor. Melinda is the Grantee.

B.     Melinda is the Grantor. Trevion is the Grantee.

C.     Melinda is the Grantor. The home is the Grantee.

D.    Trevion is the Grantee. The home is the Grantor.

2 of 10 Which of the following deeds are not really deeds at all?

A.    Trustee’s Deed

B.     Land Patent

C.     Trust Deed

D.    Both A and B

3 of 10 Chandra and Fabian have heard that it is unnecessary to record a deed. Is this accurate?

A.    No, it is necessary and required to record a deed. The deed will not be valid unless it is signed, recorded, and notarized by a notary public.

B.     Yes, it is not necessary for a deed to be recorded. It is still valid and presumed to have been delivered without such recording.

C.     Yes, it is not necessary for a deed to be recorded. However, recording is advisable to protect the ownership interests of the grantee, establish priority, provide a record, and convey the transfer of title.

D.    No, it is necessary and required to record a deed. If it is not recorded, the first to record the deed is considered the first in right to the property.

4 of 10 Which of the following statements in reference to a deed is untrue?

A.    The deed transfers ownership only one time.

B.     In a deed, alienation is another term for transfer or convey.

C.     A deed must be recorded in order to be valid.

D.    The primary variation in the different types of deeds are the promises made by the grantor.

5 of 10 Jeffrey is selling his loft to Caroline. He is using a General Warranty Deed in the transfer of property. Which of the following covenants is not a requirement?

A.    Covenant of Seisin

B.     Covenant Against Encumbrances

C.     Covenant of Exceptions and Reservations

D.    Covenant of Further Assurance

6 of 10 Shamus McManus purchased property from Sir Ian Wainwright under early English common law. Which of the following were acceptable methods of property transfer?

A.    The transfer of a rock, some dirt, or a branch of a tree (feoffment).

B.     Livery of Seisin, the actual delivery of possession of the property.

C.     A statement made in front of witnesses in sight of the land, and the new owner’s entry onto that land.

D.    All of the above.

7 of 10 Maya, who lives in California, just purchased her first home at a Trustee’s foreclosure sale. She was given a deed at the sale. What type of deed was she given?

A.    Tax Deed

B.     Grant Deed

C.     Sheriff’s Deed

D.    Trustee’s Deed

8 of 10 Chandra is selling her condo to Fabian. Chandra’s deed explains the property has been clear since her ownership. However, she cannot guarantee that is the case prior to buying the condo. Which deed covers this situation?

A.    Bargain and Sale

B.     Special Warranty

C.     General Warranty

D.    Tax

9 of 10 Which of the following is not considered a basic real estate deed?‎

A.    General Warranty deed

B.     Bargain and Sale deed

C.     Special Warranty deed

D.    Sheriff’s deed

10 of 10 The signature of a notary public is known as:

A.    Attestation

B.     Acknowledgment

C.     Alienation

D.    Testimonium

Principles Ch9 quiz

(correct answers will be revealed with correct subscription)

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1 of 10 Johnel, of ABC Escrow, is beginning to work on the escrow procedures of the Van Horn – Simpson file. She prepares the instructions; orders the title search and report; requests new loan instructions and documents; negotiates the fee due ABC Escrow from the parties involved; and accepts the pest control report and other reports. Which of these procedures is prohibited?

A.    Johnel should not be requesting new loan instructions and documents. That is confidential information not applicable to closing escrow.

B.     The ordering of the title search and report is prohibited of an escrow company. It is a procedure that is handled by the sellers’ closing representation.

C.     Johnel should only be preparing the instructions and ordering the title search and report. All of the other procedures are not requirements of the escrow holder.

D.    Johnel should not be negotiating the fee due ABC Escrow as part of escrow procedures. The buyer and seller negotiate between themselves who is responsible for paying the escrow holder’s fee.

2 of 10 Dan, a real estate agent, suggests an escrow holder to the Snyder family for their real estate transaction. Is this a prohibited activity in California?

A.    If the Snyder family requests the information from Dan, and he has disclosed any interest he may have in the escrow company, then it is not prohibited.

B.     If Dan has made his suggested escrow company a condition of the transaction, it is a prohibited activity.

C.     If Dan has made the suggestion of an escrow company without a request of his client, it is not prohibited, just good customer service.

D.    Both A and B

3 of 10 XYZ Escrow has been turned down in its application for an escrow license. What could be the reasoning behind the denial of the license to XYZ?

A.    XYZ Escrow could not prove it was financially solvent and was unable to furnish a surety bond of at least $100,000.

B.     XYZ Escrow could not prove it was financially solvent and was unable to furnish a surety bond of at least $25,000, or more, based upon the yearly average trust obligations.

C.     XYZ Escrow placed funds in a trust account that was exempt from execution or attachment.

D.    XYZ Escrow could not prove it was financially solvent and furnish bonds of indemnification for all employees of at least $25,000.

4 of 10 The Escrow Act, found in the California Financial Code, establishes two essential mandates for escrow validity. What are these mandates?

A.    There must be a binding contract between buyer (grantor) and the seller (grantee); and there must be a conditional delivery of transfer instruments and funds to separate agencies.

B.     There must be a binding contract between buyer (neutral party) and the seller (grantee); and there must be a conditional delivery of transfer instruments and funds to a grantor.

C.     There must be a binding contract between buyer (grantee) and the seller (neutral party); and there must be a conditional delivery of transfer instruments and funds to a dual agency.

D.    There must be a binding contract between buyer (grantee) and the seller (grantor); and there must be a conditional delivery of transfer instruments and funds to a neutral third party.

5 of 10 The escrow instructions in the Van Horn – Simpson transaction are deemed unavailable to the Simpsons. If instructions are confidential, and ABC Escrow is a dual agency representing both parties, why are the instructions only known to the Van Horns, their real estate agent, and ABC Escrow?

A.    The instructions are considered bilateral and only apply to the Van Horns.

B.     The instructions are always only available to the buyer (grantee) and are of no consequence to the seller (grantor).

C.     The bilateral instructions apply only to the Van Horns and therefore may be known only to the Van Horns, their agent and ABC Escrow.

D.    The instructions are considered unilateral and apply only to the Van Horns; therefore they may be known only to the Van Horns, their agent and ABC Escrow.

6 of 10 The Van Horns (buyers) and the Simpsons (sellers) have closed escrow on their real estate transaction. Who handles the completion of the transaction and both parties’ separate paperwork?

A.    Both parties close the transaction with ABC Escrow, the dual agency, in which both parties are represented. ABC Escrow then changes to separate agency and also handles each parties separate paperwork.

B.     Although ABC Escrow served as the dual agency representing both parties until escrow closed, the Van Horns and Simpsons change to separate agencies for the handling of final paperwork.

C.     ABC Escrow closes escrow for the Van Horn family. The real estate listing agent closes escrow for the Simpson family. Both parties use an agreed upon title company, acting as a dual agency, to complete the transaction and final paperwork.

D.    None of the above.

7 of 10 The Van Horns deposit funds with ABC Escrow as a requirement for the purchase of their new home. Who is the grantee and the third party, and what is the type of transaction?

A.    The Van Horns are the grantees; and ABC Escrow the third party. This transaction constitutes appropriated closing funds.

B.     The Van Horns are the grantees; and ABC Escrow the third party. This transaction constitutes escrow.

C.     The Van Horns are the third party; and ABC Escrow the grantee. The transaction constitutes escrow.

D.    The Van Horns are the grantees; and ABC Escrow the third party. This transaction constitutes proration.

E.      

8 of 10 At the close of escrow, ABC Escrow divides up funds proportionately between the Van Horns and Simpsons. What is the process and what expenses does it include?

A.    The process of dividing funds between parties is the rescinding of escrow. It includes both expenses that are prepaid by the seller and paid after closing by the buyer.

B.     The process of dividing funds between parties is termination of escrow. It includes the expenses that both parties prepaid to the escrow holder.

C.     The process of dividing funds between parties is proration. It includes both expenses that are prepaid by the seller and paid after closing by the buyer.

D.    The process of dividing funds between parties is auditing escrow. It includes expenses of both parties granted to the escrow holder to secure the real estate transaction.

9 of 10 John and Jane Van Horn are buying their first home from the Simpson family. ABC Escrow will be the closing agent for both the Van Horns and Simpsons. Which of the three is considered the neutral party in this real estate transaction?

A.    The Van Horns are the neutral party; the Simpsons are the sellers; ABC Escrow is the lender.

B.     The Simpsons are the neutral party; the Van Horns are the buyers; ABC Escrow is the lender.

C.     ABC Escrow is the neutral party; the Van Horns are the buyers; the Simpsons are the sellers.

D.    Both the Van Horns and the Simpsons are the neutral parties in the transaction. ABC Escrow is the lender.

10 of 10 XYZ Escrow has gone out of business. They committed one of THE violations of all violations of escrow holder regulations. What is the violation?

A.    XYZ Escrow charged a fee for its services.

B.     XYZ Escrow did not maintain the records and files of its clients. Due to poor record keeping, several escrow accounts at XYZ were overdrawn.

C.     XYZ Escrow used forms at closing that were neither simple nor clear. In several instances, the closing of escrow was behind schedule and held up the completion of the real estate transaction.

D.    XYZ Escrow Company submitted the required annual audit late to their CPA for an additional audit.

Principles Ch10 quiz

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1 of 10 Jonathan rents a two bedroom house from Samantha and Gerald. The plumbing keeps backing up into the basement, leaving water and sewage on the basement floor. Jonathan has repeatedly reported this issue to Samantha and Gerald. He has made telephone calls and spoken to each landlord; he has also sent a written request with proof of delivery. It has been two months and not only has nothing been done, they have not even responded to his calls or requests. What are Jonathan’s options, if any?

A.    Jonathan may file suit in civil court to force Samantha and Gerald to either make the repairs or refund his rent, with interest, and any damages and costs.

B.     Jonathan has a couple of options available to resolve this issue. He may spend up to one month’s rent in repairs or abandon the premises. If he abandons the premises, Jonathan is relieved from paying additional rent and other conditions of the lease.

C.     Jonathan’s only option is to abandon the premises. If he does so, he is relieved of any rent or other conditions of the lease.

D.    Jonathan may surrender the lease and end any further obligations to the contract.

2 of 10 Jeff and Ryan rent a house from Mike and Yolanda Reynolds. They are three months behind in their rent and neighbors have been complaining about the noise coming from the home. Mike and Yolanda have tried to work with Jeff and Ryan to help them get back on track with the tardy rent, but the guys are not cooperating. Mike and Yolanda have decided they have no choice but to start the eviction process. Mike wants to just go in and remove the possessions, shut off all the utilities, and change the locks. Yolanda believes Mike’s idea may be illegal and thinks there are other options. Is she correct and, if so, what are the options?

A.    No, Yolanda is not correct on both points. Mike’s idea is not illegal. Jeff and Ryan are behind by three months in their rent payments. Mike has every right to remove the guys and their possessions from the property.

B.     Yes, Yolanda is correct. It is illegal for Mike to take such actions. The landlords may serve the tenants with either a seven-day or fifteen-day notice of eviction.

C.     Yes, Yolanda is correct. It is illegal for Mike to take such actions. The landlords may serve the tenants with a three-day notice of eviction.

D.    Yes, Yolanda is correct. It is illegal for Mike to take such actions. They must file an unlawful detainer in court, and the tenants can be forcibly removed by the sheriff.

3 of 10 Dr. Mullins owns a home he leases to college students. The tenants have been complaining to Dr. Mullins of bats in the attic. At times, the bats have flown downstairs into the living areas of the home. Recently in the area, a man was bitten by a rabid bat. The students are worried and are unsure of their rights. Which guarantee covers the tenants’ right that the property meets the minimum health and housing codes?

A.    Implied Right of Habitability

B.     Reversionary Right

C.     Leasehold Interest Right

D.    Possessory Right

4 of 10 What circumstances require a lease to be in writing?

A.    California’s Statute of Frauds requires a lease to be in writing if it has a term of more than one year, or has a term of less than one year, which expires more than one year after the agreement is reached.

B.     The California Department of Real Estate requires a lease to be in writing if it has a term of one year or longer; or has a term of less than one year, which expires more than one year after the agreement is reached.

C.     California Civil Code Section 1942 requires a lease to be in writing if it has a term or one year or longer; or has a term of less than two years, which expires more than one year after the agreement is reached.

D.    The Commissioner of Real Estate requires a lease to be in writing if it has a term or two years or longer; or has a term of less than one year, which expires more than one year after the agreement is reached.

5 of 10 Max owns a townhouse in Sacramento. He is in the process of leasing it to Hannah. The contractual lease states Hannah Scott will be leasing Max Thomas’ townhouse for two years beginning July 1. She will be paying $1,000 per month due by the first of each month. The lease clearly states Max will be the landlord of the townhouse and Hannah the tenant. Is there a minimum requirement for a California lease missing?

A.    No, the lease has met all of the minimum lease requirements of the state of California.

B.     Yes, the missing minimum requirement is the absence of the issue of a security deposit.

C.     Yes, the missing minimum requirement is the absence of any assignment and subleasing options.

D.    Yes, the missing minimum requirement is the absence of a sufficient description of the property, such as an address and/or a legal description.

6 of 10 Which of the following is not a type of leasehold estates?

A.    An Estate for Years

B.     An Estate from Period to Period

C.     Tenancy in Common

D.    Estate at Will

7 of 10 Michelle owns a rental property in San Diego that she has rented to Luis for four years. The street on which the house is located is going through a major widening and most of the homes are going to be leveled for the project. Through eminent domain, Michelle must sell her home to the city for the construction. What is the required length of notice Luis must receive from Michelle in terminating the lease?

A.    Michelle must give Luis a thirty-day written notice of the lease termination.

B.     Michelle must give Luis a sixty-day written notice of the lease termination because he has lived in the property for more than one year.

C.     Michelle does not have to give Luis any sort of notice due to the eminent domain. He must vacate the premises within the week of the sale to the city.

D.    None of the above.

8 of 10 Samir Shah is a landlord leasing apartments for residential use. He will be updating the lighting fixtures in his units during the month of January. He has been having his maintenance crew enter the units at will to make the changes. Several of the tenants have been surprised, frightened, and inconvenienced. Is it acceptable for Samir’s employees to enter unannounced?

A.    Yes, the landlord may enter the rental property at any time to make necessary or agreed repairs, decorations, alterations, or improvements.

B.     No, although it is an acceptable reason for the landlord to enter the units, they must give the tenant at least a 24-hour notice and enter between normal business hours.

C.     No, the landlord may only enter the rental property in case of emergency; to supply necessary or agreed services; when the tenant has abandoned or surrendered the premises; or under a court order.

D.    Yes. Because the landlord has okayed the entrance by his representatives for work to improve the rental properties, it is acceptable for the unannounced entrances.

9 of 10 Shanta is renting beachfront property in Malibu. The unfurnished bungalow has two bedrooms, one bathroom, and is right on the beach. Shanta’s monthly rent is $1,600. Her landlord, Harold, is requiring a $6,400 nonrefundable security deposit. This amount includes her first month’s rent. Is this an acceptable amount for a security deposit?

A.    No, the maximum security deposit allowed in California for an unfurnished property is two months’ rent. The correct amount would be $4,800, including the first month’s rent. Additionally, security deposits cannot be labeled as nonrefundable.

B.     No, the maximum security deposit allowed in California for an unfurnished property is one month’s rent. The correct amount would be $3,200, including the first month’s rent and the security deposit. Additionally, security deposits cannot be labeled as nonrefundable.

C.     Yes, the maximum security deposit allowed in California for an unfurnished property is three months’ rent. The amount of $6,400 includes the first month’s rent. However, the security deposit cannot be labeled as nonrefundable.

D.    No, there is not a maximum security deposit regulation in California. Landlords may decide on the amount based on the property’s value.

10 of 10 Renee is leasing her condo in San Francisco from Brad. For the first six months of the lease, her rent will be $1,200 per month. Every six months her rent will increase $100 per month based on the increases to Brad in taxes, insurance, and other operating costs. What type of lease has Renee signed?

A.    Index Lease

B.     Graduated Lease

C.     Escalator Clause Lease

D.    Economic Rent Lease

Principles Ch11 quiz

(correct answers will be revealed with correct subscription)

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1 of 10 The Lemps have been looking at new homes for weeks and have not found anything worthy of an offer. Mikel, their agent, has invested a large amount of time in showing homes with no luck. Today, he calls Mr. Lemp and says, “I have found you the perfect home! The home is amazing! The yard is perfect and lush. The school district is the best in the state. This home and area are the most prestigious in the city!” Are these types of statements legal?

A.    No, this is intentional misrepresentation and cannot be substantiated.

B.     Yes, this is legal as long as Mikel does not violate the Federal Fair Housing Laws. These statements are considered “Puffing” in the real estate world. “Puffing” can be unethical if the statements are not true, but it is not illegal.

C.     No, this is unintentional misrepresentation. By exaggerating, Mikel is making promises about the property and surrounding areas that are purely subjective.

D.    No, this is merely good salesmanship. Describing a home and the surrounding area in glowing terms is just that and nothing more.

2 of 10 Howard wants to purchase a vacation property. He decides to use the expertise of a real estate professional. One of his business associates recommends Jose. Howard explains to Jose that he wants Jose to only represent his purchasing interest, and a contract is signed. Who is the agent? Who is the principal? What is their relationship? What is Jose’s role?

A.    Jose is the agent; Howard is the principal; they have an agency relationship; Jose is a special agent.

B.     Jose is the principal; Howard is the agent; they have a third party relationship; Jose is a broker.

C.     Jose is the agent; Howard is the principal; they have a fiduciary relationship; Jose is a special agent.

D.    Both A and C

3 of 10 The Marinos are selling their home to the Snyders. Tim is representing both the Marinos and the Snyders in the transaction. He had initially listed the Marinos’ home and realized their home would be perfect for his buyer clients, the Snyders. After making all the necessary disclosures to both parties, he showed the Snyders the Marinos’ home and they are buying it. The Marinos are paying commission on the transaction to Tim’s broker, who in turn, will compensate Tim. Since the Marinos are paying Tim’s commission, does this constitute an agency relationship, and, if so, what kind of an agency relationship?

A.    The fact that one party (the Marinos/sellers) or another party (the Snyders/buyers) pays a commission does not create an agency relationship.

B.     Yes, this constitutes an agency relationship. Due to the Marinos’ paying the commission, the relationship would be between Tim, a special agent to the Marinos, and the Marinos (sellers).

C.     Yes, this constitutes an agency relationship between the Marinos, the Synders and Tim. The payment of commission by the sellers produces a single agency relationship between the parties.

D.    None of the above.

4 of 10 Price fixing, group boycotts, bid rigging, market allocation and division of markets by location or price are all examples of ________________ and are punishable by ___________________.

A.    Estoppels; suspension of one’s license

B.     Intentional misrepresentation; fines of up to $10 million for corporations and up to $350,0000 for individuals and/or prison time

C.     Antitrust violations; fines of up to $100 million for corporations and up to $1 million for individuals and/or prison time

D.    Conversion; prison time and up to $1 million in fines

5 of 10 Perry is listing his home with Extra Real Estate Company, a brokerage. He wants the listing as follows: He must receive $250,000 from the sale of the home, anything above that price is the broker’s commission. Which type of listing agreement is Perry demanding?

A.    Exclusive Agency

B.     Open Listing Agreement

C.     Exclusive Right to Sell with Automatic Extender

D.    Net Listing

6 of 10 RSS Real Estate Brokerage is the listing broker for the Pratte property. RSS delegates some of the responsibility of the listing to Helpful Real Estate Company. The two brokers cooperate on listings frequently and have a good working relationship. Unfortunately, RSS failed to get the principal’s (Pratte’s) agreement to the delegation. What is the relationship between RSS Real Estate Brokerage and Helpful Real Estate Company?

A.    Helpful Real Estate Company becomes the agent of RSS Real Estate Brokerage due to the appointment without the consent of the principal.

B.     Helpful Real Estate Company is now the assigned agent of the listing broker, RSS Real Estate Brokerage.

C.     Helpful Real Estate Company becomes the cooperating agent to RSS Real Estate Brokerage’s listing broker’s representation of the Pratte property.

D.    Helpful Real Estate Company becomes the dual agent to RSS Real Estate Brokerage’s listing broker’s representation of the Pratte property.

7 of 10 TBH Realty Company is handling the sale of the Lopez (seller) home to the Bright (buyer) family. The buyers give an earnest money deposit to the brokerage in the amount of $5,000. The money is then deposited into the broker’s account at the bank on the seventh business day after receiving the funds. Has TBH Realty Company followed all trust account regulations with the earnest money?

A.    Yes, the money was received and deposited into the broker’s account by the seventh business day after receiving the funds.

B.     No, the broker should have deposited the earnest money into the broker’s account within three business days of receiving the funds.

C.     No, not only should the broker have deposited the earnest money within three business days of receipt of the funds, the money was to have been deposited into the broker’s trust fund not the broker’s account.

D.    No, the broker should have deposited the earnest money into the broker’s trust fund not the broker’s account within the seven days allotted after receipt of funds.

8 of 10 Hassan is not happy with the listing agreement on his home through REE Realty Company. He has not been pleased with the showings without notice, the agents showing his home have been rude, and he doesn’t feel the property has received the advertising or exposure promised when he signed the listing contract. What is his best option for terminating the listing with REE Realty Company?

A.    Hassan could wait for himself or the broker to pass away.

B.     Hassan could wait for the expiration of the agreement term to pass.

C.     Hassan could speak with the broker and possibly come to a mutual agreement that it is in both parties’ best interest to cancel the listing.

D.    Hassan could cancel the agreement; however, since it is contractual, the broker could decide to sue for damages.

9 of 10 What is the difference between commingling and conversion? Which, if either, is considered a more serious violation?

A.    Commingling is the practice of mixing a client’s money with the agent’s personal funds. Conversion is the unlawful misappropriation and use of a client’s funds by a licensee. Commingling is the more serious of the two violations.

B.     Commingling is the unlawful misappropriation and use of a client’s funds by a licensee. Conversion is the practice of mixing a client’s money with the agent’s personal funds. Conversion is the more serious of the two violations.

C.     Commingling is the practice of mixing a client’s money with the agent’s personal funds. Conversion is the unlawful misappropriation and use of a client’s funds by a licensee. Neither violation is considered more serious than the other; they both have heavy criminal penalties.

D.    Commingling is the practice of mixing a client’s money with the agent’s personal funds. Conversion is the unlawful misappropriation and use of a client’s funds by a licensee. Conversion is the more serious violation.

10 of 10 Scott is trying to sell his home FSBO. The Bartells believe Scott’s home could be their dream home, but they have been working with Melinda, a licensee, to find a new home. Melinda shows the Bartells the home, failing to disclose her status as an agent. They love Scott’s home and want to buy it. Scott is not interested in any way, shape, or form in working with an agent. However, the Bartells have made an offer above his asking price and he can’t refuse it over the Melinda issue. Which of the following describes the creation of this agency relationship?

A.    Written or expressed

B.     Ostensible Agency

C.     Ratification

D.    Implied

Principles Ch12 quiz

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1 of 10 Max, a licensee, accepts a bribe from ABC Title Company for referring clients. What is Max’s possible punishment?

A.    Max could be fined up to $50,000 and up to six months of prison time.

B.     Max could be fined a maximum of $10,000.

C.     Max could go to prison and/or be fined $10,000 for each illegal transaction.

D.    Max may have to pay restitution to those who provided the bribe.

2 of 10 Greg, a licensee, fails to have his client sign off on the purchaser’s counteroffer. Greg’s client verbally approves the new terms, but Greg failed to obtain his signature. The deadline for signing the counteroffer is in one hour. Greg decides to sign his client’s name. Which Penal Code Section addresses this crime, if it is a crime?

A.    PC 470, 473

B.     PC 532a

C.     PC504b

D.    It is not a crime.

3 of 10 A corporation is found guilty of charging purchasers advanced fees for securing mortgage loans on homes they have listed. What is the punishment for the violation?

A.    A fine up to a maximum of $50,000.

B.     A fine up to a maximum of $10,000, with up to six months of prison time, or a combination of both.

C.     A restraining order issued against the corporation protecting clients and restitution and/or damages paid.

D.    None of the above.

4 of 10 The 1943 case People v. Sipper held what decision?

A.    The selection and preparation of a mortgage or deed by a broker, in which a fee was charged, constituted the unlawful practice of law.

B.     The real estate agent should guard well the privilege of practicing real estate while avoiding stepping over the line of practicing law.

C.     A real estate profession has limited legal authority as a licensee.

D.    The real estate licensee could face losing his real estate license for improper behavior.

5 of 10 The Commissioner discovers in an audit commingling of trust accounts by a licensee. At what amount does the court issue a restraining order against the licensee?

A.    In excess of $50,000

B.     In excess of $100,000

C.     In excess of $30,000

D.    In excess of $10,000

6 of 10 The Real Estate Commissioner has the authority to perform all of the following actions except:

A.    Hold formal hearings to decide issues involving a licensee or licensee applicant.

B.     Hold interest in a real estate company or brokerage firm.

C.     Regulate and control the issuance and revocation of all licenses issued under California law.

D.    Adopt, amend, or repeal rules and regulations for the enforcement of the laws.

7 of 10 Jason has approached Sam about purchasing an acre of property that adjoins Jason’s backyard. Sam has explained to Jason on numerous occasions that he is not interested in selling. Jason has resorted to telling Sam if he doesn’t sell the land, he’ll contact the authorities and accuse him of dealing drugs out of his home. Which Penal Code Section addresses this crime?

A.    PC 502.5

B.     PC 518, 519

C.     PC 532a

D.    PC 484b-c

8 of 10 Jeremy, a licensee, witnesses Patti, another licensee, involved in behavior that is questionable. Jeremy learns Patti’s client is also willfully involved in the indiscretions. What action, if any, should Jeremy take?

A.    Jeremy need not take any action. As long as he is not involved in the questionable behavior, he is not obligated to do a thing.

B.     Jeremy is obligated to speak to the authorities and report what he has witnessed. If he is unsure a crime has been committed, he should obtain legal advice.

C.     Jeremy must report all indiscretions to the Department of Real Estate. He is not obligated to report the client’s behavior.

D.    None of the above.

9 of 10 ABC Mortgage Company accepts a bribe from a licensee in exchange for approving mortgages for all of his clients. Which Penal Code Section addresses this crime?

A.    PC 556-556.2

B.     PC 639-639a

C.     PC 830.1

D.    It is not a crime.

10 of 10 The designation “grand theft” is used in relation to the theft of:

A.    Certain farm crops or animals, personal and real property with value of less than $950.

B.     Automobiles and other personal property valued over $950.

C.     Money, labor, real and personal property that exceeds a value of $950.

D.    Both B and C

Principles Ch13 quiz

(correct answers will be revealed with correct subscription)

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1 of 10 Jonathan is in the process of refinancing his home loan. Due to the lowering of interest rates and Jonathan’s credit score improvement, he has been able to secure a conventional loan with an excellent annual percentage rate. Unfortunately, his current loan contract contains a stipulation that if he repays the loan before three years, he will owe the lender a fee of two percent of the loan balance. Which clause applies to Jonathan’s situation?

A.    Subordination Clause

B.     Subrogation

C.     Prepayment Penalty Clause

D.    Alienation Clause

2 of 10 Renata has a home loan for $150,000 at 7.5% interest for 30 years and her payment is $987.00 per month (including principal and interest). What is the principal balance after Renata has made one payment on her loan? After two payments?

A.    $148,950.50, $148,900.70

B.     $149,950.50, $149,900.70

C.     $149,990.50, $149,980.20

D.    $149,920.50, $149,873.80

3 of 10 The Logans are in their seventies with a very nice home. They paid off their mortgage twenty-five years ago. Mrs. Logan has been having serious medical issues and Mr. Logan wants to hire home healthcare professionals to care for her. His retirement savings will not withstand these healthcare costs. He has turned to his home to supplement his monthly income in order to keep his wife at home. Which type of loan applies to the Logan’s situation?

A.    Package Mortgage

B.     Wraparound

C.     Buydown

D.    Reverse Annuity

4 of 10 What are the major differences between a mortgage and a deed of trust?

A.    The amount of interest that may be charged and the method of foreclosure on default.

B.     The number of parties involved and the method of foreclosure on default.

C.     The collaterized form of the loan and the method of foreclosure on default.

D.    None of the above.

5 of 10 Jerilyn has been approved for a home loan in the amount of $250,000 with two points. If one point equals one percent (1%) of the loan balance, what will the points cost Jerilyn? How are the points shown at closing?

A.    $5,000 – The points are shown as a debit to the buyer.

B.     $10,000 – The points are shown as a debit to the buyer.

C.     $5,000 – The points are shown as a credit to the buyer.

D.    $500 – The points are shown as a debit to the buyer.

6 of 10 David has been laid off from his job. Carey, his spouse, only works part time and has been trying to pick up extra shifts. They have missed their third home loan payment this month. Their lender has called the entire balance due and payable immediately. Which clause applies to their situation?

A.    Alienation Clause

B.     Acceleration Clause

C.     Satisfaction of Mortgage Clause

D.    Satisfaction Clause

7 of 10 Naomi has a home loan amount of $120,000. Her monthly principal and interest payment is $679.00 for thirty years. How much interest will Naomi pay over the term of her loan?

A.    $244,440

B.     $224,440

C.     $124,440

D.    $144,440

8 of 10 Sumatra has had a terrible year. He lost his business and now he has lost his home in foreclosure. The proceeds from the foreclosure sale were not sufficient to cover his debt, and NOW the lender has taken him to court to obtain more money. Which of the following applies to Sumatra’s situation?

A.    Deficiency Judgment

B.     Deed in Lieu of Foreclosure

C.     Equitable Right of Redemption

D.    Non-Judicial Foreclosure Judgment

9 of 10 If a conventional loan is at 16% and the VA loan is at 15%, the lender will want to charge how many points to increase the yield on investment?

A.    Six Points

B.     Eight Points

C.     Four Points

D.    Two Points

10 of 10 Put the following foreclosure actions in order:

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

B.     Statutory Redemption, Equitable Right of Redemption, and Foreclosure

C.     Equitable Right of Redemption, Foreclosure, and Statutory Redemption

D.    Statutory Redemption, Foreclosure, and Equitable Right of Redemption

Principles Ch14 quiz

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1 of 10 Which of the major warehousing agencies in the Secondary Market are not regulated by a government agency?

A.    Federal National Mortgage Association (Fannie Mae)

B.     Government National Mortgage Association (Ginnie Mae)

C.     Federal Home Loan Mortgage Corporation (Freddie Mac)

D.    None of the Above

2 of 10 Bruce, a private in the US Army, has applied for his Certificate of Eligibility and been approved. He wants to purchase a condo for himself. What’s the maximum amount lenders will loan Bruce, based on his veteran status?

A.    A veteran’s basic entitlement is $100,000. Lenders generally lend up to four times the available entitlement without a down payment. There is no maximum amount, but generally lenders limit VA loans to $400,000.

B.     A veteran’s basic entitlement is $104,250. Lenders generally lend up to four times the available entitlement without a down payment. There is no maximum amount, but generally lenders limit VA loans to $417,000.

C.     A veteran’s basic entitlement is $104,250. Lenders generally lend up to four times the available entitlement without a down payment. There is no maximum amount, but generally lenders limit VA loans to $425,000.

D.    A veteran’s basic entitlement is $104,250. Lenders generally lend up to four times the available entitlement without a down payment. There is no maximum amount, but generally lenders limit VA loans to $550,000.

3 of 10 Gerald, a sergeant in the Marine Corps, is getting married and wants to purchase a home. How does he begin the process of getting a VA loan? What follows?

A.    Gerald must have the home appraised and be issued a Certificate of Reasonable Value. He then must apply for the loan through the financial institution of his choice.

B.     Gerald must first apply for a Certificate of Eligibility to obtain a VA loan. The home must qualify with an appraisal and be issued a Certificate of Reasonable Value.

C.     Gerald only need to fill out the necessary paperwork through the Veteran’s Administration Office in his area.

D.    None of the Above

4 of 10 What is the major difference between a VA Loan and a FHA Loan?

A.    FHA insures repayment of the loan; VA guarantees repayment of the loan.

B.     FHA guarantees repayment of the loan; VA insures repayment of the loan.

C.     FHA lends the money for the actual loan; VA guarantees repayment of the loan.

D.    FHA insures repayment of the loan; VA lends the money for the actual loan.

5 of 10 At the present time, funds are limited for CalVet Program mortgage loans. A decision must be made to give one veteran a loan over another. Veteran A has been in the military service for 20 years and is a four-time decorated hero. He wants to buy an Oregon farm with the loan. Veteran B has been in the military four years. He lost his right leg in a battle in Afghanistan. He wants to buy a small home in Las Vegas for himself and his mother, who will live with him. Which veteran will they choose and why?

A.    Veteran A will be chosen based on his years of service, his decoration, and his desire to buy a farm.

B.     Veteran A will be chosen because he is still on active duty; Veteran B has received a discharge from service, making him less desirable for the program’s loan.

C.     Veteran B will be chosen because his family members will take priority due to his injury.

D.    Neither will be chosen for the loan because both are planning on buying homes outside the state.

6 of 10 Which of the following are functions of the Federal Reserve?

A.    Buying/Selling of Securities and Discount Rates

B.     Participation Financing

C.     Debt Coverage

D.    Oversees Lending Laws

7 of 10 Jeanne and Mark are buying a home. They’ve been told their mortgage payment will be $1,072 per month. There’s also an additional amount of $335.62 being added to the monthly payment, bringing their total to $1,407.62. It was explained the additional $335.62 is to cover insurance and property taxes. Which loan definition applies?

A.    Estoppel

B.     Disintermediation

C.     Impounds

D.    In Contract

8 of 10 Conchita is applying for a VA loan. She has served in the military, on active service, for ninety days. She is trying to buy a town home near her base for easier commuting. The town home has qualified with an appraisal and has been issued a Certificate of Reasonable Value. Will Conchita be considered for a VA loan?

A.    Yes, she has met all of the criteria for a Certificate of Eligibility.

B.     No, she has not served the 181 days of active service required.

C.     No, she has not been approved for a Certificate of Eligibility.

D.    None of the Above

9 of 10 MTH Bank has given the McKelvey’s a written pledge to lend $250,000 on a new construction home, for 30 years, at 6.53%. The McKelvey’s will now present this pledge to the subdivision’s sales agent to continue with their new home’s construction. Which loan definition applies?

A.    Conditional Approval

B.     Underwriting

C.     Exculpatory Clause

D.    Non-Recourse Clause

10 of 10 Jan is moving into a new home. Her husband recently died during military service in the Middle East. She cannot afford a very large down payment at this time, but wants to get her children into their first home to provide some stability after the loss of their father. What are Jan’s options?

A.    Jan qualifies for an FHA loan, if her income is adequate. There is usually a small down payment required.

B.     Jan qualifies for a VA loan due to her status as a veteran’s unmarried widow. The VA loan does not require a down payment.

C.     Jan cannot qualify for both types of loans.

D.    Both A and B

Principles Ch15 quiz

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Tip: to find a certain word or key term,  press at the same time, the buttons:

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1 of 10 A first-time buyer has applied for a large mortgage loan at ABC Bank. The first-timer has good credit, good debt-to-income ratio, a stable position and adequate income. The lender still has concerns. Which of the following is not one of the lender’s concerns?

A.    The current and future value of the property.

B.     The attractiveness of other investments that could be made for a better return.

C.     The income and income potential of the loan applicant.

D.    The loan applicant’s need of financial assistance.

2 of 10 Patrice and Jacque have secured a mortgage loan. They must provide at least a 20% down payment, but are not required to have a government guarantee or private mortgage insurance. What type of mortgage loan have they obtained?

A.    A Conventional Insured Loan

B.     An Exchange

C.     Conventional Loan

D.    Syndicate Financing

3 of 10 Why are sales contracts no longer a popular financing instrument in California?

A.    It is very difficult for the seller to remove a buyer that is in default.

B.     The buyer is at risk because he holds no immediate title to the property.

C.     Court battles involving both the seller and buyer could be lengthy and costly.

D.    All of the Above

4 of 10 Why would a Contract for Deed (Installment Sale Contract) be attractive to certain buyers?

A.    Buyers who cannot come up with a down payment may lease to own for a period of time, usually five years.

B.     Buyers who can only make a small down payment with monthly installments. Usually they must meet certain conditions and the contract does not require conveyance within six months.

C.     Buyers who can only make a small down payment with monthly installments. Usually they must meet certain conditions, and the Contract for Deed does not require conveyance (transfer) within the same year.

D.    Buyers have the title conveyed to them, usually after two years, when certain conditions are met and monthly installments are made toward the down payment.

5 of 10 Gordon makes a trip to his financial institution one morning. He has conducted all of his banking transactions at the institution for more than twenty years. Today he walks out with a loan on his new home and one for a new boat. What method of financing has Gordon secured?

A.    Exchange

B.     Commercial

C.     Conforming loan

D.    Bonds or Stocks

6 of 10 Who benefits from a long-term lease?

A.    The tenant – 100% of rent is deductible as an expense.

B.     The landlord – The property is leased for a long period of time, guaranteeing a return on investment.

C.     The tenant – The total debt load of the tenant remains the same.

D.    Both A and C

7 of 10 Jack owns a small home near a school. He doesn’t have any children, and doesn’t plan on having any in the future. Jack is a writer and works out of his home. All of the noise from the playground during the day interrupts Jack while he is trying to work. Tina, a friend of Jack’s, also owns a small home. Her home is in a quiet, little secluded neighborhood. She has a child that will be entering first grade in the fall and wishes she lived closer to a school. One day, Jack asked Tina if she would want to exchange homes. Is this a possibility?

A.    Yes, a trade of properties (Exchange) is possible if the trade involves no financing and the properties are not mortgaged.

B.     Yes, a trade of properties (Exchange) is possible if the trade involves no financing.

C.     No, it is not a possibility. Simply “trading” real estate is not recognized under California Real Estate Law.

D.    None of the Above

8 of 10 What category of investors sees Syndicate Equity Financing as a good opportunity?

A.    Consumers with damaged credit.

B.     Consumers with more than one home loan.

C.     Small investors.

D.    Borrowers who have previously declared bankruptcy.

9 of 10 Tyoka has a small retail store in San Diego. He sells imported items such as clothing, arts, and crafts. He has recently sold the store to a group of investors. In the arrangement with the investors, Tyoka now leases his former store from the new investors. What type of financing applies to Tyoka’s new arrangement?

A.    Exchange

B.     Long-Term Lease

C.     Sale-Leaseback

D.    Straight Lease

10 of 10 Who is the largest private mortgage insurer?

A.    Mortgage Guarantee Insurance Corporation

B.     Fannie Mae

C.     Freddie Mac

D.    VA

Principles Ch16 quiz

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1 of 10 Sam is selling one of his rental homes. His advertisement reads: “For Sale By Owner – Owner Will Finance – No Down Payment!” What are the criteria for being considered a creditor under Truth in Lending?

A.    A lender must lend funds 25 times a year and/or must lend the funds for at least five housing loans annually.

B.     A lender must lend funds five times a year and/or must lend the funds for at least 25 housing loans annually.

C.     A lender must lend funds 20 times a year and/or must lend the funds for at least five housing loans annually.

D.    Every lender is considered a Truth in Lending creditor and must follow all of the law’s regulations.

2 of 10 What are the steps set forth for a real property securities dealer? Which Article do the regulations fall under?

A.    Obtaining a Commissioner’s Permit; an RPSD endorsement on a broker license; and proof of a $10,000 surety bond. The regulations fall under Article 6.

B.     Obtaining a Commissioner’s Permit and proof of a $10,000 surety bond. The regulations fall under Article 5.

C.     Obtaining a Commissioner’s Permit; an RPSD endorsement on a broker license; and proof of a $10,000 surety bond. The regulations fall under Article 4.

D.    None of the Above

3 of 10 Lily, a licensee, has been referring her first-time home buyers to Safe Insurance Company for all of their insurance needs. The insurance company has been providing Lily with “motivation” in the form of cash to keep the referrals coming. Which law or act prohibits this type of violation?

A.    Fair Lending Laws

B.     RESPA

C.     Equal Credit Opportunity Act

D.    Both A and C

4 of 10 Jacinda makes collections on real estate loans. Last year, she made approximately 20 collections and collected $38,000. Must Jacinda be licensed?

A.    Yes, if a collector makes more than ten annual collections, or collects more than $40,000, he/she must be licensed as a California real estate broker.

B.     No, if a collector makes more than forty annual collections, or collects more than $10,000, he/she must be licensed as a California real estate broker.

C.     Yes, if a collector makes more than fifteen annual collections, or collects more than $40,000, he/she must be licensed as a California real estate broker.

D.    Yes, if a collector makes more than twenty annual collections, or collects more than $30,000, he/she must be licensed as a California real estate broker.

5 of 10 What is the true purpose of Truth in Lending Law?

A.    Closing Costs

B.     Controlling Interest Rates

C.     Disclosure

D.    APR

6 of 10 Beverly, an African-American woman, has applied for a mortgage on a new home. She has a reliable job as a court reporter and has been employed for ten years. Her income is substantial enough to pay a mortgage, in her budget, and still have seventy percent of her income remaining. She has, however, been at least ninety days late on several bills one year ago. Beverly has since caught up on her credit card bills, paid them on time, and reduced their balances by half. She has just been turned down for a mortgage by her bank. Has she been discriminated against?

A.    Perhaps. She may have been turned down because she is an African -American woman. She has a steady job with a decent income. Her small brush with delinquency should not have led to a refusal.

B.     No. Beverly’s brush with delinquency is too fresh on her record for the bank to issue a mortgage. Although she has taken the steps to correct the issues, ninety days late on several debts is substantial. She more than likely did not meet the bank’s financial requirements.

C.     No. Beverly’s income must not be substantial enough for the home she is wanting to buy.

D.    None of the Above

7 of 10 Jim and Kim Scott have been working very hard to rebuild their credit. They are now in good financial shape to buy their first home. The couple has been working with a mortgage broker, Ted, to assist them in finding the best loan. They complete the application, are approved for a loan, complete other paperwork, and are now obligated to complete the loan. A week before they are due to close, they receive the Mortgage Disclosure Statement, outlining all of the costs and terms associated with the loan. The costs and terms are not what they had previously understood. Are they stuck with this loan?

A.    Yes, they have had several opportunities to fully question and understand the terms and costs associated with their loan.

B.     No, the Mortgage Disclosure Statement should have been presented to them within three days of the broker’s receipt of their written loan application, or before the Scotts were obligated to take the loan.

C.     No, the Mortgage Disclosure Statement should have been presented to them within seven days of the broker’s receipt of their written loan application, or before the Scotts were obligated to take the loan.

D.    Yes, unfortunately they are stuck with the loan. It was the Scotts’ responsibility to ask for the Mortgage Disclosure Statement so they were clear on the terms and costs associated with the loan.

8 of 10 Deanna is thinking of taking the step from renter to homeowner. She has a very stable position as a surgical nurse and excellent credit. She doesn’t, however, have a large sum of cash handy for the down payment. One Sunday morning, she notices advertising for new condos where “no down payment is required.” Should she look for any other information in the ad?

A.    No, the “no down payment required” gives her the initial information to peak her interest and take a look at the condos. After taking a look at the property, they can fill her in on all the details.

B.     Yes, she should make sure the amount or percentage of down payment is there; annual percentage rate and if an increase is possible; total finance charge; and total number of payments and due dates.

C.     Yes, she should make sure the amount or percentage of down payment is there; terms of repayment; annual percentage rate and if an increase is possible; total finance charge; and total number of payments and due dates.

D.    Yes, she should make sure the amount or percentage of down payment is there; terms of repayment; annual percentage rate and if an increase is possible; and total number of payments and due dates.

9 of 10 Under Article 7, what is the maximum amount that may be charged to the borrower for loan costs and expenses? Also, under Article 7, if the home is not occupied by the owner, under what circumstance is the loan exempt from a balloon payment?

A.    The maximum amount that may be charged to the borrower for loan costs and expenses is 5% of the loan, or $490.00, to a maximum of $800.00. If the loan term is less than three years, and the home is not occupied by the owner, the loan is exempt from balloon payments.

B.     The maximum amount that may be charged to the borrower for loan costs and expenses is 3% of the loan, or $390.00, to a maximum of $700.00. If the loan term is less than three years, and the home is not occupied by the owner, the loan is exempt from balloon payments.

C.     The maximum amount that may be charged to the borrower for loan costs and expenses is 5% of the loan, or $390.00, to a maximum of $700.00. If the loan term is less than three years, and the home is not occupied by the owner, the loan is exempt from balloon payments.

D.    The maximum amount that may be charged to the borrower for loan costs and expenses is 5% of the loan, or $390.00, to a maximum of $700.00. If the loan term is six or more years, and the home is not occupied by the owner, the loan is exempt from balloon payments.

10 of 10 What is included in the APR?

A.    The total cost of the loan including: the finance charge, all legal fees, survey fees, recording fees, broker’s fees, and title insurance premiums.

B.     The total finance charge to the total amount to be financed.

C.     The total finance charge (including a computation of unearned finance charges) to the total amount to be financed.

D.    None of the Above

Principles Ch17 quiz

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1 of 10 Marita and Alexandra set up a Limited Partnership. Marita is named General Partner and Alexandra is named Limited Partner. Marita embezzles funds from the investors. Is Alexandra liable for Marita’s indiscretion?

A.    Alexandra is only liable if she is named as a general partner in the certificate or if she participates in control of the business.

B.     Alexandra is as liable to the investors as Marita. However, unless she was involved in the crime, she is only financially liable.

C.     Alexandra is liable and a partner, whether it be a general or limited partner.

D.    Both B and C

2 of 10 Alexandra and Marita have formed a REIT. They have their investors and resources and are ready for business. The REIT will be investing in an assorted portfolio of real estate and mortgage investments. What type of REIT have Alexandra and Marita formed?

A.    An Equity Trust

B.     A Mortgage Trust

C.     A Combination Trust

D.    A Joint Venture Trust

3 of 10 This is the most frequently used organizational form for real estate syndicates. Which form fits the description?

A.    The General Partnership or Joint Venture

B.     The Corporate Form

C.     The Limited Partnership

D.    The Combination

4 of 10 This form of syndication allows limited liability for the investors but has negative tax features. Which form fits the description?

A.    The General Partnership

B.     The Joint Venture

C.     The Limited Liability Company

D.    The Corporate Form

5 of 10 Alexandra and Marita’s company has qualified as a trust. It has distributed 96% of its income to its shareholders. Which earnings require the payment of federal taxes?

A.    The company only pays federal taxes on the retained earnings.

B.     The company only pays federal taxes on the retained earnings, which are taxed at corporate rates.

C.     The company only pays federal taxes on the distribution to its shareholders.

D.    The company is exempt from federal taxes due to its trust qualification. It is required only to pay state and local taxes.

6 of 10 A small group of investors are in the initial stages of putting together a real estate investment trust (REIT). Which of the following is not a qualification?

A.    A REIT must be beneficially owned by at least 100 investors.

B.     The company must distribute at least 85% or more of its income to its shareholders.

C.     Each share of certificate of interest must carry with it an equivalent vote.

D.    No five, or fewer, persons may hold more than 50 percent of the beneficial interests.

7 of 10 Marita tells Alexandra they must obtain their broker-dealer license from the Department of Corporations to engage in the sale of real estate syndicate security interests. Alexandra disagrees with Marita, explaining they both have their broker licenses and that is sufficient. Who is correct and why?

A.    Marita is correct. Section 15632 was added to The Real Estate Syndicate Act requiring real estate brokers to obtain a broker-dealer license.

B.     Alexandra is correct. Section 25206 was added to the Corporations Code making obtaining a broker-dealer license optional.

C.     Marita is correct. Section 25206 has an added provision dealing with brokers violating the Corporations Code and requiring the broker-dealer license.

D.    None of the above

8 of 10 What is the correct order of regulatory agency jurisdiction changes to non-corporate California real estate syndicates since The Real Estate Syndicate Act’s inception in 1970?

A.    The Department of Corporations, The California Department of Real Estate, The Department of Corporations

B.     The California Department of Real Estate, The Department of Corporations, Real Estate Commissioner

C.     Real Estate Commissioner, The California Department of Real Estate, The Department of Corrections

D.    Real Estate Commissioner, The California Department of Real Estate, The Department of Corporations

9 of 10 This form of syndication avoids double taxation but has a lack of centralized management. Which form fits the description?

A.    The Corporate

B.     The General Partnership

C.     The Joint Venture

D.    Both B and C

10 of 10 Alexandra and Marita are forming a real estate syndicate. They have their initial investments and are ready to proceed. What happens next?

A.    Operation, Origination, Completion or Liquidation

B.     Syndication, General Partnership, REIT

C.     Origination, Operation, Completion or Liquidation

D.    Origination, Exemption, Corporation

Principles Ch18 quiz

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1 of 10 The cost approach to value may be derived by:

A.    Total Land Valuation + Depreciated Value of Building = Value of Property Cost Approach

B.     Total Land Valuation + Undepreciated Value of Building = Value of Property Cost Approach

C.     Total Land Valuation – Building Valuation = Value of Property Cost Approach

D.    Total Land Valuation + Building Valuation = Value of Property Cost Approach

2 of 10 Mrs. Jenkins has lived in her little 1940s cottage for forty years. Her home is immaculately maintained; it has a beautiful, well-manicured garden, and is just as lovely inside as outside. Unfortunately, the same cannot be said for the rest of her neighborhood. Other neighbors have let their properties go downhill. There is absolutely no curb appeal to any of the other homes in her neighborhood. Mrs. Jenkins’ neighborhood is definitely in decline. Which type/types of depreciation applies/apply?

A.    Economic, Environmental, or External Obsolescence

B.     Physical Deterioration

C.     Functional Obsolescence

D.    Physical Deterioration and Functional Obsolescence

3 of 10 An appraiser is appraising a property that was built 65 years ago. The home has wonderful architectural charm, hardwood floors, and beautiful original molding, but it also has tiny bathrooms, and the closet space is nonexistent. Which type/types of depreciation applies/apply?

A.    Physical Deterioration and Functional Obsolescence

B.     Economic and Functional Obsolescence

C.     Economic, Environmental, and Internal Obsolescence

D.    Functional Obsolescence

4 of 10 Which of the following equations is the correct application of the capitalization rate?

A.    Net Operating Income divided by Capitalization Rate = Value Memory Tool – IRV = Value.

B.     Capitalization Rate divided by Net Operating Income = Value Memory Tool – IRV = Value.

C.     Net Operating Income divided by Capitalization Rate = Value

D.    Value divided by Net Operating Income = Capitalization Rate

5 of 10 Shanta, a property manager of a retail center, is using the Income Capitalization Approach in trying to project future earnings for the partners who own the center. She first estimates the annual potential gross income, subtracts an appropriate allowance for vacancy and collection losses to arrive at a gross income, deducts operating expenses (including debt service and mortgage payments). This gives her the Net Operating Income. She then applies a capitalization rate to the net income to determine the value. Did she use the correct steps?

A.    Yes, Shanta went through all four steps correctly, debt service and mortgage payments may be included.

B.     No, when Shanta was deducting operating expenses, she included debt service and mortgage payments when they shouldn’t have been included.

C.     No, Shanta should have added an appropriate allowance for vacancy and collection losses instead of subtracting these items.

D.    None of the Above.

6 of 10 A local school has been destroyed by fire. Nothing has been salvaged and the school will have to completely rebuilt. What are the three methods of determining the cost of rebuilding?

A.    Estimate the value of the land; Determine the replacement or reproduction cost; and Deduct all accrued depreciation.

B.     Square Foot Cost; Unit in Place; and Quantity Survey Method

C.     Square Foot Cost; Value of Land Estimation; and Quantity Survey Method

D.    Value of Land Estimation; Unit in Place; and Deduct all accrued depreciation.

7 of 10 Which of the following is not a level of licensing for real estate appraisers?

A.    Residential License

B.     Certified Residential Real Estate Appraiser

C.     Certified General Real Estate Appraiser

D.    Certified Specialized Real Estate Appraiser

8 of 10 Jose has heard rumors that a zoning change will be taking place involving a piece of undeveloped sale property. Jose buys the property in hope the zoning change will take place, making the property much more valuable on the market. Which principle of value applies?

A.    Regression and Progression

B.     Anticipation

C.     Contribution

D.    Conformity

9 of 10 Maria, a single mother of three, has been saving to buy the family’s first home. Her budget is limited, but there is a home she can easily afford on the market. Unfortunately, there have been zoning changes in the area, and a twenty-four hour convenience store is located across the street. Is this deterioration curable or incurable?

A.    Curable

B.     Incurable

C.     It may be curable if the surrounding neighborhood is well-maintained and the upkeep is good. If the remainder of the area is on the decline, it is probably incurable.

D.    Both A and C

10 of 10 Judy and Xavier are planning a very large addition to their home. The kitchen will be doubled in size with a new hearth room, and a large new master suite will complete the renovation. They live in a neighborhood of houses in the $500,000 range. This addition will change the appraisal value of their home substantially. Which principle of value applies?

A.    Assemblage

B.     Competition

C.     Contribution

D.    Regression and Progression

Principles Ch19 quiz

(correct answers will be revealed with correct subscription)

1 of 10 A taxing jurisdiction has a mill rate of 14.7. What is an owner’s tax bill if his taxable value is $250,000?

A.    $36.75

B.     $367.50

C.     $3,675.00

D.    The tax bill is based on assessed value, not taxable value.

2 of 10 John and Thom purchased a home that only had one previous owner. It is a simple three-bedroom, two-bath ranch. The previous owner built the home in 1964 and recently passed away. John and Thom had looked at the previous owner’s property taxes and found them to be quite manageable. When they received their first assessment, they were shocked. Which proposition is attributed to this dramatic increase in property taxes?

A.    Proposition 60

B.     Proposition 13

C.     Proposition 218

D.    Proposition 90

3 of 10 The sewers in Mary’s neighborhood need replacing. In fact, the entire sewage system for her city needs replacing. The city has imposed a tax that will pay for all of the sewer updates in the area. What type of real estate tax applies?

A.    General Tax

B.     Special Assessment Tax

C.     Ad Valorem

D.    Both A and C

4 of 10 Ken has fallen behind on his property taxes. He has received the “intent to sell” notice and is terrified of losing his home. Ken lost his job and cannot immediately repay the back taxes. How can Ken keep from losing his residence?

A.    Ken has already lost the title to his home by falling behind in his taxes.

B.     After the “intent to sell” notice, a three-year period of redemption begins. Ken can redeem his property from delinquency by paying all back taxes, interest, penalties, and any other applicable fees.

C.     After the “intent to sell” notice, a five-year period of redemption begins. Ken can redeem his property from delinquency by paying all back taxes, interest, penalties, and any other applicable fees.

D.    After the “intent to sell” notice, Ken must repay all back taxes, interest, penalties, and any other applicable fees within one year, and pay the current taxes on time to avoid losing the title to his home.

5 of 10 Sydney has inherited her grandmother’s estate worth approximately $4.5 million. She is worried about paying taxes on the estate and the inheritance. How will these taxes affect her new estate and inheritance?

A.    While the federal government sometimes taxes the estates of deceased persons, California has eliminated inheritance taxes altogether.

B.     California has eliminated all estate and inheritance taxes. Due to the elimination, federal estate taxes do not apply in California.

C.     Sydney will have to pay the applicable estate and inheritance taxes on her grandmother’s estate based on her particular taxable situation.

D.    None of the above

6 of 10 The Smiths have decided to move to Antigua. They are transferring the ownership of their $950,000 home in Oakland to their daughter, Renee. Renee has heard about Proposition 13 and is nervous about not being able to afford the increase in property taxes. Does she need to worry?

A.    In the state of California, transferring a principal residence of $2 million or less from a parent to a child is considered a transfer exclusion. The property will not be reappraised and the taxes increased.

B.     When the property is transferred from the Smiths to Renee, the full cash value for tax purposes will be adjusted to the current market value of the property. This will increase the property taxes considerably.

C.     In the state of California, transferring a principal residence of $1 million or less from a parent to a child is considered a transfer exclusion. The property will not be reappraised nor the taxes increased.

D.    None of the Above

7 of 10 A mill rate is used in real estate

A.    appraisal, to determine market value.

B.     finance, to determine the points charge on a loan.

C.     taxation, to determine the owner’s tax bill.

D.    assessment to determine the jurisdiction’s budget.

8 of 10 Which of the following is the dollar value of the mill rate 86.5?

A.    86.5

B.     0.865

C.     0.0865

D.    8.065

9 of 10 Louise recently turned 65, retired, and is downsizing to a smaller home. She was concerned about moving from the home she owned for 40 years with its low assessment to a smaller home, but with a much larger assessment. Which proposition eases her worries?

A.    Proposition 60 allows homeowners 55 years and older to transfer their base-year property tax value to another home of equal or lesser value.

B.     Proposition 60 allows homeowners 65 years and older to transfer their base-year tax value to another home of equal or lesser value.

C.     Proposition 90 allows homeowners 55 years and older to transfer their base-year property tax value to another home of equal or lesser value.

D.    Proposition 60 allows homeowners 55 years and older to transfer their base-tax value to another home of lesser value.

10 of 10 Tim owns a mobile home he wants to transform into real property. He attaches the mobile home to an approved foundation; records a document reflecting that the mobile home has been affixed to an approved foundation system; and obtains a certificate of occupancy. Which step, if any, did Tim leave out?

A.    Tim forgot to ensure the axles are attached to the frame.

B.     Tim forgot to obtain a building permit.

C.     Tim forgot to have the piece of property on which the mobile home is located mapped and recorded.

D.    Tim fulfilled every prerequisite for transforming his mobile home into real property.

Principles Ch20 quiz

(correct answers will be revealed with correct subscription)

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Tip: to find a certain word or key term,  press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

1 of 10 Which of the following is not considered a type of common interest ownership?

A.    Community Apartment Project

B.     Condominiums

C.     Stock Cooperatives

D.    None of the Above

2 of 10 The Subdivision Map Act, the Subdivided Lands Law, and Land Projects all have a minimum number of lots required to meet requirements. Which of the following is correct?

A.    The Subdivision Map Act and the Subdivided Lands Law both require a minimum of five lots for regulation and to be defined as a subdivision. To qualify as a Land Project, there must be fifty or more vacant lots.

B.     The Subdivision Map Act regulates the division of five or more lots; The Subdivided Lands Law defines a subdivision as a division of land into two or more lots; and a Land Project must have fifty or more vacant lots.

C.     The Subdivision Map Act regulates the division of two or more lots; The Subdivided Lands Law defines a subdivision as a division of land into five or more lots; and a Land Project must have fifty or more vacant lots.

D.    None of the Above

3 of 10 Lot 19, Block 8, Western Acres Subdivision, City of Sacramento, County of Sacramento, State of California. Which method of legal description applies?

A.    Lot and Block System

B.     Metes and Bounds System

C.     Rectangular Survey System

D.    Government Survey System

4 of 10 Serena is studying for her California real estate license. She is very confused about base lines, meridians, townships, and ranges. Keeping these sets of intersecting lines straight has Serena stumped. Can you help?

A.    Base lines are vertical and run east/west; meridians are horizontal and run north/south; township lines are vertical running east/west from a principal base line; and ranges are horizontal running north/south on either side of a principal meridian.

B.     Base lines are horizontal and run north/south; meridians are vertical and run east/west; township lines are horizontal running north/south from a principal base line; and ranges are vertical running in any direction on either side of a principal meridian.

C.     Base lines are horizontal and run east/ west; meridians are vertical and run north/south; township lines are horizontal running east/west from a principal base line; and ranges are vertical running north/south on either side of a principal meridian.

D.    Base lines are horizontal and run east/ west; meridians are vertical and run north/south; township lines are horizontal running east/west from a principal meridian; and ranges can be either horizontal or vertical running in any direction on either side of a principal base line.

5 of 10 Veronica has recently completed her surgical residency and is tired of paying rent. She needs a residence that is very low maintenance due to her grueling surgical schedule. Condos and Stock Cooperatives (co-ops) have both been high on her list. Help Veronica differentiate between these two residential options.

A.    A stock cooperative buyer receives a fee interest, or deed, to her unit. A condominium is a corporation formed to own the land. Veronica would not receive a grant deed, but does share in the corporation and the right to occupy a specific unit.

B.     A condominium buyer receives a fee interest, or deed, to her unit. A stock cooperative is a corporation formed to own the land. Veronica would not receive a grant deed, but does share in the corporation and the right to occupy a specific unit.

C.     A condominium buyer receives a fee interest, or deed, to her unit. A stock cooperative is a form of ownership in which each of the investors holds a specific unit and owns the right to occupy that unit for a specified period of time.

D.    A condominium is a form of ownership in which each of the investors holds a specific unit and owns the right to occupy that unit for a specified period of time. A stock cooperative is a corporation formed to own the land. Veronica would not receive a grant deed, but does share in the corporation and the right to occupy a specific unit

6 of 10 Alex, a Nevada developer, has a very large development of attached retirement villas. He is interested in advertising this development in California. Alex has previously advertised and sold condos in his Arizona development to citizens of California. What must Alex do to promote and sell his Nevada development in California?

A.    Alex, due to his previous experience selling to the citizens of California, is exempt from any regulations or reports required before advertising.

B.     According to the Interstate Sales Full-Disclosure Act, Alex must obtain a public report from HUD and deliver a copy of this report to each prospective buyer.

C.     According to the Interstate Sales Full-Disclosure Act, Alex must obtain a public report from the California Commissioner of Real Estate and keep a copy of this report for his own records.

D.    According to California State subdivision regulations, Alex must obtain a public report from HUD and deliver a copy of this report to each prospective buyer.

7 of 10 Which of the following statements concerning California’s three sets of base lines and meridians is true?

A.    The Humboldt Base Line and Meridian in the southwestern part of the State; The Mt. Diablo Base Line and Meridian in the central part of the State; and The San Bernardino Base Line and Meridian in the northwestern part of the State.

B.     The Humboldt Base Line and Meridian in the northwestern part of the State; The Mt. Diablo Base Line and Meridian in the central part of the State; and The San Bernardino Base Line and Meridian in the southern part of the State.

C.     The Humboldt Base Line and Meridian in the northwestern part of the State; The Mt. Diablo Base Line and Meridian in the southern part of the State; and The San Bernardino Base Line and Meridian in the central part of the State.

D.    The Humboldt Base Line and Meridian in the central part of the State; The Mt. Diablo Base Line and Meridian in the northwestern part of the State; and The San Bernardino Base Line and Meridian in the southern part of the State.

8 of 10 Jerry is interested in purchasing a lot for new construction in a new subdivision. The Commissioner has issued a preliminary public report in this case, allowing the subdivider to take reservations for lot purchases. Does Jerry have any recourse to change his mind?

A.    Jerry may change his mind on the lot he has reserved. However, he will not receive a full refund. His refund will be prorated for the amount of time he had reserved the lot.

B.     Jerry is under no obligation due to the preliminary public report. His reservation is one in name only and is not legally binding.

C.     Jerry may change his mind on the lot he has reserved. He is not committed simply because of the reservation. He may legally back out and receive a full refund, up until the time the final report is issued.

D.    None of the Above

9 of 10 Roy Malone owns a large piece of land in the Sonoma Valley. He is planning to subdivide the land into five lots for the construction of luxury homes. If Roy carries through with this project, what are his roles and his next steps?

A.    Roy is considered a Subdivider. His first step should be a development plan; however, this plan must include all state and local government regulations, the Subdivided Lands Law, the Subdivision Map Act, the California Environmental Quality Act, zoning, and local general and specific plans.

B.     Roy is considered a developer. He must contact local officials, follow the Subdivided Map Act, and have his subdivided land mapped into lots.

C.     Roy is considered a developer. He must first file a public report for the subdivision. Then local officials, following the Subdivided Map Act, have his subdivided land mapped into legal lots.

D.    None of the Above

10 of 10 Merle has a rural piece of land in the northern part of the state. He is in the process of selling it to a developer. The property has a pair of one-hundred-year-old trees that mark the entrance to the property. A stream and a bluff mark the end of Merle’s property. What method of real estate description would best suit Merle’s land?

A.    Lot and Block System

B.     Metes and Bounds System

C.     Rectangular Survey System

D.    Both A and C

Principles Ch21 quiz

(correct answers will be revealed with correct subscription)

1 of 10 Beth and Brian have been informed a convenience store is going to be built on the corner across from their residence. They are furious and want some answers as to how this could be happening in their neighborhood. Who should they go to for answers and the final word on the decision?

A.    The city or county planning department

B.     The city council or board of supervisors

C.     The owners of the new property

D.    Their city alderman

2 of 10 How many primary steps must be taken to develop a general plan? Who is required to develop a general plan? What are the primary steps, in order, to achieve the desired general plan?

A.    There are three primary steps that must be taken to achieve the general plan. Under California Code, every city and county is required to develop a general plan. The steps are as follows: A Resource Analysis, Formulation of Community Goals, and The Plan Implementation.

B.     There are five primary steps that must be taken to achieve the general plan. Under California Code, every city and county is required to develop a general plan. The steps are as follows: A Resource Analysis, Formulation of Community Goals, and The Plan Implementation.

C.     There are three primary steps that must be taken to achieve the general plan. Under California Code, every city is required to develop a general plan. The steps are as follows: A Resource Analysis, The Plan Implementation and Formulation of Community Goals.

D.    There are three primary steps that must be taken to achieve the general plan. Under California Code, every city and county is required to develop a general plan. The steps are as follows: Formulation of Community Goals, A Resource Analysis, and The Plan Implementation.

3 of 10 Patrice has purchased a century-old townhouse in San Francisco. She wants to make some changes and updates to both the exterior and interior. She isn’t happy with the historic pediments outside the townhouse. Patrice’s vision is of a minimalist, clean, modern home that reflects her personal style. Which type of zoning regulation, if any, may affect Patrice’s vision of a minimalist town home?

A.    Enabling Acts

B.     Aesthetic Zoning

C.     Directive Zoning

D.    Patrice may make any changes she would like to her townhouse.

4 of 10 Maurice is a builder of new residential housing in the San Fernando Valley. He builds high-end homes in various subdivisions in the area. Maurice has been paying into a fund that is used by the government for low-to-moderate-income housing. Is Maurice required to pay into this fund and, if so, why? Does he have any other options?

A.    Maurice is NOT required to pay into this fund. He pays into the fund to ensure he is given special treatment in receiving building permits. He does have the option not to pay into the fund or voluntarily set aside a few units for low-to-moderate-income housing.

B.     Maurice IS required to pay into this fund due to the Building Codes Ordinance. He must either set aside a designated number of units for low-to-moderate-income housing; or, in certain cases like Maurice’s, he may pay into the fund. If he refuses, his building permit will be denied.

C.     Maurice IS required to pay into this fund due to the Police Power Action. He must either set aside a designated number of units for low-to-moderate-income housing; or, in certain cases like Maurice’s, he may pay into the fund. If he refuses, his building permit will be denied.

D.    Maurice IS required to pay into this fund due to the Inclusionary Zoning Ordinance. He must either set aside a designated number of units for low-to-moderate-income housing; or, in certain cases, like Maurice’s, he may pay into the fund. If he refuses his building permit will be denied.

5 of 10 Which level of government is in charge of all planning controls?

A.    The federal government has the final say in all planning matters.

B.     The state government has the final say in all planning matters.

C.     Although all levels of government have laws, regulations, and ordinances that must be recognized and followed, the state housing law is a uniform law that must be adopted by ALL cities and counties in California.

D.    All levels of government: city, county, state, and federal have the final say in all planning matters.

6 of 10 Who enforces the codes of the California State Housing Law?

A.    State Building Inspectors

B.     Federal Building Inspectors

C.     Local Building Inspectors.

D.    None of the Above.

7 of 10 The McMillan Development Corporation is in the preliminary stages of building a commercial office development. They have received the building permit and all of the necessary approvals to break ground. Where do they go for guidance on the types of materials approved for construction, electrical wiring, etc.?

A.    The City Planning Commission

B.     The Building Codes

C.     Building Officials Conference of America

D.    Both B and C

8 of 10 A chain of restaurants would like to begin opening new sites along the Pacific Coastline. The owner wants all of the restaurants beachside with customer access to the beach and water from the restaurant. Which of the following ordinances or acts could govern the planning and opening of the beachfront restaurants?

A.    The California Conservation Act and The California Environmental Quality Act of 1970 (CEQA)

B.     The Clean Air Act

C.     The National Environmental Policy Act

D.    All of the Above.

9 of 10 Ernesto is a developer who is building low-to-moderate-income, federally funded homes. He is building multi-family town homes that will help those graduating from welfare education programs get a new start off of public assistance and into the job market. Which of the following federal laws plays a major role in Ernesto’s development?

A.    The National Environmental Policy Act

B.     The Clean Air Act

C.     The Contractor’s License Law

D.    Both A and B

10 of 10 Ricardo’s Restaurant is currently located between two subdivisions. The restaurant has been in business for over forty years. Currently, the area no longer allows any commercial activity. The zoning board ruled Ricardo’s may continue to operate unless it is sold, destroyed, or used for any other commercial purpose. Which zoning exception applies to Ricardo’s?

A.    Nonconforming Use (Illegal)

B.     Spot Zoning

C.     Nonconforming Use (Legal)

D.    A Buffer Zone

Principles Ch22 quiz

(correct answers will be revealed with correct subscription)

1 of 10 What are the steps to convert a mobile home into real property, if it is possible?

A.    Obtain a building permit and place the mobile home on a permanent foundation. Also, a document stating the mobile home has been attached to a permanent foundation must be recorded.

B.     It is not possible to convert a mobile home into real property.

C.     Obtain a building permit; place the mobile home on a permanent foundation and obtain a Certificate of Occupancy. Also, a document stating the mobile home has been attached to a permanent foundation must be recorded.

D.    Place the mobile home on a permanent foundation and obtain a Certificate of Occupancy. Also, a document stating the mobile home has been attached to a permanent foundation must be recorded.

2 of 10 Saffron and Serge have a mobile home in which they travel from city to city, town to town, selling pottery and playing music. One week they may be in Berkeley, the next Sacramento. The couple travel wherever their mobile home will take them. Which of the following is true?

A.    By the definition of the California Health and Safety Code, this couple’s ‘mobile home’ is not, in fact, a mobile home.

B.     The mobile home can be sold by a real estate licensee as real property, since it constitutes a dwelling unit.

C.     To become real property, their mobile home must have a permanent foundation.

D.    Saffron and Serge cannot legally occupy the mobile home without a Certificate of Occupancy.

3 of 10 Cheryl and Troy are closing on their home on Tuesday. Their brokerage represents the GoodHome Insurance Company. The couple have not yet decided what company will be handling their homeowner’s insurance. Are they obligated to use GoodHome due to its affiliation with the brokerage?

A.    They are not exactly obligated to use the insurance company represented by the brokerage; however, it would make all of the paperwork and closing more efficient.

B.     No, they are not obligated to use any services recommended by the broker or agents licensed to the broker. Choosing a source of insurance is ONLY the client’s choice.

C.     Yes, if they are going to use the brokerage they must use the broker’s affiliates.

D.    None of the Above

4 of 10 Samantha and Todd live in a mobile home park. They have lived in the park for five years and have never been late on their rent, utilities, or any other bills. Today the mobile home park landlord has terminated their tenancy. Which of the following is not a justifiable legal reason why this couple might have been evicted?

A.    The park had become overcrowded.

B.     They did not follow rules and regulations.

C.     They had become a substantial annoyance to other tenants.

D.    They failed to sufficiently maintain their property to meet management’s standards.

5 of 10 Which of the following is an action taken by a Mineral, Oil, and Gas specialist on behalf of others?

A.    Solicit borrowers or lenders for or negotiate loans on mineral, oil, or gas property

B.     Lease or offer to lease or negotiate the sale, purchase, or exchange of leases on mineral, oil, or gas property

C.     Assist another in filing an application for the purchase or lease of, or to locate or enter upon mineral, oil, or gas property owned by the state or federal government.

D.    All of the Above

6 of 10 Lisa has had her California real estate license suspended for violations involving mobile homes under the California Business and Professions Code. What could she have possibly done?

A.    Submitted a check to the State of California for mobile home fees and the check was not honored.

B.     Knowingly participated in the sale of a stolen mobile home.

C.     Unknowingly participated in the purchase of a stolen mobile home.

D.    Both A and B

7 of 10 What is required by a notary of the person signing the notarized document?

A.    A thumbprint of the person signing the document.

B.     A right thumbprint of the person signing the document.

C.     A right thumbprint of the person signing the deed, quitclaim deed, or deed of trust affecting real property.

D.    A thumbprint of the person signing the deed, quitclaim deed, or deed of trust affecting real property.

8 of 10 What is the major difference between the real estate business in general and a real estate brokerage?

A.    The general real estate business consists of production, marketing, and financing of real property; a brokerage is directed primarily toward the sale, exchange, lease, rental, and financing for compensation.

B.     The brokerage business consists of production, marketing, and financing of real property; the general real estate business is directed primarily toward the sale, exchange, lease, rental, and financing for compensation.

C.     Both A and B

D.    None of the Above

9 of 10 Howard, a licensee, has heard about a specialized area of real estate brokerage–the mineral, oil, and gas brokerage. Howard is trying to find his niche in the industry and believes this is the direction in which he needs to head. What specialized license does Howard need to work with mineral, oil, and gas transactions?

A.    He must obtain a Mineral, Oil, and Gas brokerage certification in addition to his real estate salesperson license.

B.     He must obtain a securities license to work with Mineral, Oil, and Gas transactions in addition to his real estate salesperson license.

C.     Howard does not need a specialized license to work with Mineral, Oil, and Gas transactions.

D.    Both A and B

10 of 10 Sally, a licensee, has been asked to be the sales agent for a company selling new mobile homes. Can she sell these new mobile homes? If not, what sort of mobile homes can she sell?

A.    Sally may not sell new mobile homes, but she may sell used mobile homes. She would have to become licensed by the California Department of Housing and Community Development to sell new mobile homes.

B.     Sally may not sell new mobile homes, but she may sell used mobile homes, if they have been registered with the State of California and are on a lot. She would have to become licensed by the California Department of Housing and Community Development to sell new mobile homes.

C.     Sally is a licensed real estate salesperson in the state of California. She may sell any real property she is assigned to sell.

D.    None of the Above

Principles Ch23 quiz

(correct answers will be revealed with correct subscription)

1 of 10 Larry and Carlos are purchasing a 1930s bungalow in the Hollywood Hills. It is their dream home and once belonged to a silent film star. Is a lead-based paint disclosure necessary on this lovely, historic bungalow?

A.    No, only if encapsulation or abatement have been conducted on the property and the seller is aware of these processes.

B.     Yes, the seller of any residential structure built before 1978 is obligated to provide a lead-based paint disclosure.

C.     Yes, the seller of any residential structure built before 1988 is obligated to provide a lead-based paint disclosure.

D.    Yes, the seller of any property purchased prior to 1978 is obligated to provide a lead-based paint disclosure.

2 of 10 Every California dwelling unit was required to have a Carbon Monoxide Detector by:

A.    January 1, 2001

B.     May 7, 2010

C.     July 1, 2011

D.    January 1, 2013

3 of 10 The Browns have a real estate agreement with Sell Fast Real Estate Company. A couple makes a ridiculously low offer on their home, which is five-bedrooms, five-baths in Malibu. The offer is $200,000 less than the Browns’ asking price. Does the broker have to present the offer to the Browns, even if it is obviously going to be rejected and waste everyone’s time?

A.    No, if an offer is clearly not going to be accepted, the broker, acting in the seller’s best interest, does not have to present the offer.

B.     Yes, according to the regulations of the Real Estate Purchase Agreements in California, all offers received by the broker must be presented to the seller, no matter how out of line with expectations.

C.     Yes, the agent, acting in the seller’s best interest, must present the offer. In discussing the property with other prospective buyers, there is a record of an offer having been extended, making the property appear desirable.

D.    None of the Above

4 of 10 Which of the following is not a required disclosure?

A.    Agency Relationship Disclosure

B.     The owner’s motivation to sell

C.     Megan’s Law

D.    Asbestos

5 of 10 Which of the following statements is true concerning Earthquake Hazards Disclosure?

A.    The seller and agent must supply the Homeowner’s Guide to Earthquake Safety booklet and provide any information requested to the buyer regarding geological or seismic hazards.

B.     The seller’s and agent’s only responsibility is to supply the Homeowner’s Guide to Earthquake Safety booklet. Nothing else pertaining to the property of any seismic or geological nature need be disclosed.

C.     The seller and agent must provide the Homeowner’s Guide to Earthquake Safety booklet and also disclose that a property is in an earthquake zone.

D.    Both A and B

6 of 10 Tina and James have made an offer on a four-bedroom home that will be much more costly than their present mortgage. The day after making the offer, James learns his company is being sold and he will probably lose his job. Are Tina and James contractually obligated to the offer they have made on the new home?

A.    Yes, an offer is put onto a purchase contract form and is legally binding.

B.     No, an offer is just an offer until it is accepted by the seller. Once the owner has accepted the offer, the offeror is legally bound to the contract.

C.     It depends. If Tina and James have not received notification of the seller’s accepting the offer, they may legally withdraw the offer and not be held liable on the contract. However, if the offer has been accepted, and communication of this offer has been received by the buyer, it is legally binding.

D.    None of the Above

7 of 10 The Juarez family are moving into a new home and are having the home tested for Radon. They have young children and are worried about the possible effects the gas could have on their health and development. What is the interior reading that should concern the family?

A.    4 pCi/L Radon and above

B.     2.73 pCi/L Radon and above

C.     3.52 pCi/L Radon and above

D.    They should be concerned at the presence of any level of Radon in their new home.

8 of 10 Lizette is buying her first home today. She is overwhelmed with all of the information that is being disclosed. Sex offender disclosures, smoke detector compliance, title insurance–the list goes on and on. Which of the following are environmental hazards the seller and agent are obligated to disclose?

A.    Earthquake Information

B.     Lead-Based Paint

C.     Mold

D.    All of the Above

9 of 10 Gary and Paul have signed the Exclusive Authorization and Right to Sell listing contract with Meyer’s Real Estate. The term of the agreement was sixty days. After the expiration of the agreement, Gary and Paul sold their home to a couple who were shown the home by a salesperson licensed to Meyer’s Real Estate. Does the real estate company have any claim to compensation from the sale?

A.    Yes, under the listing’s “safety clause,” there is a period of time set forth after the expiration of the listing contract, during which the broker is entitled to compensation if the owner sells to anyone who was shown the property or who made an offer on the property during the agreement–as long as the broker notified the owner in writing of the names of the prospective buyers with whom they negotiated during the listing term.

B.     No, if the broker could not sell the home during the listing term, Gary and Paul have every right to sell their home themselves to whomever they choose, without owing Meyer’s Real Estate Company compensation.

C.     Yes, Meyer’s is entitled to both compensation and damages if Gary and Paul sell to a prospective buyer that was gained through Meyer’s Real Estate Company.

D.    None of the above

10 of 10 Juanita is in the process of buying Amir’s home. She made an offer that was accepted by Amir and both are happy with the financial terms. After paying for several inspections, Juanita has found serious structural and electrical issues with Amir’s home. In the contract, she has requested these items be rectified at Amir’s expense within thirty days. At the end of thirty days, Amir is unwilling to spend the money to correct the items. What are Juanita’s options?

A.    Juanita may simply proceed with the contract, despite Amir’s unwillingness to correct the problems.

B.     Juanita may cancel the contract altogether.

C.     Juanita could possibly sue to have Amir take care of the issues and then continue with the transaction.

D.    Both A and B

Principles Ch24 quiz

(correct answers will be revealed with correct subscription)

1 of 10 Ramon, a salesperson licensed to Richard, a broker, has been given specific written authorization to make a withdrawal from the broker’s trust account. Ramon is uncertain this is permissible under California Law. Which California Law, if any, references Ramon’s concern?

A.    California Business and Professions Code Section 10145

B.     Commissioner’s Regulation 2832

C.     California Business and Professions Code Section 10085.5

D.    Both A and B

2 of 10 Serena and Lucy want to make an offer on their dream home. The seller is requesting a very large earnest money deposit with serious offers on the home. Serena and Lucy have some cash set aside for this purpose, but are short of the amount the sellers are requesting. Do they have any other options?

A.    Cash is the only acceptable trust fund item accepted by brokers.

B.     A check made payable to the broker or to an escrow or title company is an option.

C.     A personal note made payable to the seller or a pink slip on an automobile given as a deposit is acceptable.

D.    Both B and C

3 of 10 Jackson, a broker, is accused of commingling his money with trust account funds. His broker’s trust account is a non-interest-bearing account. The current balance of the trust account is $430,000. The earnest deposit funds portion of the account totals $415,000; the broker’s initial deposit totals $15,000. Is Jackson guilty of commingling?

A.    No, he can clearly show through well-kept records his initial deposit of $15,000 and the trust fund money of $430,000. He is not earning interest from any part of this account, including his initial deposit of personal funds.

B.     Yes, he should not have any money of his own ever mixed with clients’ earnest money deposits.

C.     Yes, Jackson’s initial deposit to open the account should have only totaled about $1,000. The $15,000 he deposited of his own money to open the account is considered excessive.

D.    Yes, Jackson’s initial deposit to open the account should have only totaled about $200.00. The $15,000 he deposited of his own money to open the account is considered excessive.

4 of 10 Jason, a broker, has been accused of conversion. His partner, Justin, has been accused of commingling. Which has been accused of a more serious offense?

A.    Jason, conversion is considered a much more serious violation than commingling and has heavy criminal penalties.

B.     Justin, commingling is considered a much more serious violation than conversion and has heavy criminal penalties.

C.     Both Jason and Justin have been accused of very serious crimes and it will be up to the court system to decide who has committed a more serious offense.

D.    None of the Above.

5 of 10 Miriam is a real estate salesperson. She has just been handed a $100,000 earnest money deposit certified check from buyers who are interested in a new home. What does she do with the money?

A.    Miriam must turn the money over to the broker listing the home the buyers are interested in purchasing. The broker may then deposit the funds in the broker’s trust account.

B.     Miriam must hand the check over to her own broker. At that point, the broker might direct her to put the funds into the hands of the broker’s principal; hand the funds over to another broker involved in the transaction; or place the funds into the broker’s bank account.

C.     Miriam must hand over the check to only her own broker. At that point, the broker might direct her to put the funds into the hands of the broker’s principal; place the funds into a neutral escrow depository; or deposit the funds into the broker’s trust fund bank account.

D.    Miriam must simply deposit the check into the broker’s account within three business days of receipt of funds. She need not consult her broker on procedure, only follow the trust fund regulations.

6 of 10 Matilda is buying a condo from Tom and Alex Ries. She has given her agent, Manuel, earnest deposit funds in the amount of $10,000. Matilda has post-dated the check to coincide with the expiration date of offer acceptance on the contract. Do the basic trust fund regulations apply to Matilda’s earnest deposit?

Yes, handling a post-dated check should be the same as a check with written instructions to be cashed upon offer acceptance. All of the basic regulations apply to the post-dated check.

No, a post-dated check is illegal tender in the state of California and may result in the mischaracterization of the form of earnest deposit money made by the buyer.

No, California law has held that post-dated checks are the equivalent of a promissory note and are non-negotiable. The broker must not accept a post-dated check from a buyer without adequate disclosure to the seller.

Yes, a post-dated check should be treated the same as a promissory note. As long as the seller has full disclosure, the basic regulations of trust funds apply to the post-dated check.

7 of 10 The McColls have made an offer on a new home. The home is new construction and scheduled to be completed by the end of the year. They provide a purchase deposit–a check in the amount of $40,000–to their agent, Suzette. Suzette, at the broker’s direction, deposits the earnest money in the broker’s trust fund account within two business days of receipt of the funds. Did Suzette follow the proper procedures?

A.    No, the check should not have been cashed. If a check is used as an earnest money deposit, it is to be held until acceptance of the offer. The seller must also be informed the buyer’s check is being held and not negotiated.

B.     Yes, Suzette deposited the earnest money in the broker’s trust fund account as directed. She also deposited the check within three business days of receipt. Unless there were written instructions to hold the check until acceptance of the offer, the check may be cashed.

C.     No, Suzette needed to deposit the earnest money in the broker’s trust fund account within two days of receipt, not necessarily two business days.

D.    Both A and C

8 of 10 Jamison, a broker, has been fined $10,000 and is being sentenced to four months’ prison time for violations he has committed through his brokerage. Which type of violation did he possibly commit?

A.    Commingling

B.     Restitution

C.     Advance Fees for a Loan secured by Lien on Real Property

D.    Account Fraud

9 of 10 Which of the following statements concerning California Trust Account Requirements is false?

A.    A trust account may be an interest-bearing account.

B.     A salesperson, licensed to the broker, may, under certain conditions, make a withdrawal from the broker’s trust account.

C.     An out-of-state trust account is permitted under certain conditions.

D.    Both A and C

10 of 10 When a buyer hands over earnest deposit money to a salesperson licensed to a broker, or to the broker themselves, what type of relationship does this create?

A.    A Client Relationship, with the broker obligated to give full disclosure to the funds’ owners.

B.     A Fiduciary Relationship with the broker having a fiduciary responsibility to the funds’ owners.

C.     A Buyer Relationship with the broker obligated to give full disclosure to the funds’ owners.

D.    Both A and C

Principles Ch25 quiz

(correct answers will be revealed with correct subscription)

—–

Tip: to find a certain word or key term,  press at the same time, the buttons:

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1 of 10 How many, if any, escrow or trust accounts must a property manager maintain?

A.    Three – One is for security deposits; one for current rents and management; and one for maintenance funds.

B.     Two – One is for security deposits and one for current rents and management.

C.     One for security deposits.

D.    None of the above

2 of 10 The duties of a property manager to an owner include which of the following?

A.    Obtaining maximum profit on the property.

B.     Evaluating the Rental Market

C.     Handling Tenant Complaints and Conflicts

D.    All of the above

3 of 10 Rafe is an assistant property manager of a large residential community. He wants someday to be promoted to property manager. Rafe needs to consistently learn his duties and responsibilities to the owner and demonstrate them accordingly. What duties/responsibilities should he focus on?

A.    Fiduciary Responsibility to the Owner

B.     Achieving the Highest Rate of Return for the Owner

C.     Disclosure of Material Facts

D.    Both A and B

4 of 10 Sam is the owner of a ten-unit apartment complex. He has just hired a new property manager to run the property. Serena, the new property manager, has been drawing up a new set of management plans for the property. What should be the deciding factors in the adoption of the new plans?

A.    The Owner’s Objectives

B.     The Fair Housing Laws

C.     The Management Agreement

D.    Both A and B

5 of 10 Peter has been offered the position of property manager for a large apartment complex. These apartments are upscale with impeccable maintenance programs and beautiful amenities for its residents. His contract has a clause that states, “If at any time during our agreement the property has a vacancy rate of more than 12%, our agreement is cancelled.” Should this clause give Peter pause in accepting the position? Does this type of clause have a name?

A.    Yes, Peter should be giving this position a second thought based on the clause. This type of clause is an Allowable Vacancy Rate.

B.     No, Peter shouldn’t worry about the clause. He needs to have faith in his abilities. The property is upscale and very desirable and shouldn’t have a vacancy issue. This type of clause is an Allowable Vacancy Rate

C.     No, Peter shouldn’t worry about the clause. There are ways to work around such a statement. If necessary, he can rent to anyone, regardless of their qualifications, to fulfill the required vacancy rate. This type of clause is a Maximum Profit Clause.

D.    Yes, Peter should be giving this position a second thought based on the clause. This type of clause is a Rate of Return for Owner Clause.

6 of 10 Amy suffered a spinal cord injury. She is partially paralyzed and confined to a wheel chair. She is self-sufficient in day-to-day living, has a career, and is looking for a new apartment. She decides to take a tour of Golden Gate Gables apartments. She was very happy with the two-bedroom unit and wants to put in an application for the unit. She has a special van—to accommodate her wheelchair–that requires an extra-wide disabled parking space. The Golden Gate Gables does not provide any special parking for the disabled. If Amy’s application is approved for the apartment, does the apartment complex have to install a special parking spot for Amy?

A.    Yes, according to the ADA, the first priority is the “get to the door standard” that includes installing ramps, widening entrances, and providing accessible parking spaces.

B.     No, as long as Amy has received full disclosure of the absence of any special parking for her needs, if she decides to pursue the application further, that is her decision.

C.     No, Amy cannot expect special accommodations for herself because she decides she would like to live in the complex. It would take time and money to make the necessary changes. The complex is not obligated to make those changes for her.

D.    Both B and C

7 of 10 XYZ Development, Inc. leases commercial space to businesses. Most of the leases are long-term, from five to fifteen years in length and have fixed rents. XYZ’s contracts contain a clause in which both parties agree to annual adjustments of rent based on tax increases and other operating costs. If the previous year did not see more than a five percent increase in these costs, there is no change in the rent. What is the clause?

A.    Allowable Vacancy Rate Clause

B.     Escalator Clause

C.     Operating Costs Adjustment Clause

D.    Periodic Tenancy Clause

8 of 10 Pelican Bay Apartments is a complex consisting of 80 units. The units are available in studio and one-, two-, and three-bedroom apartments. Kimberly Bracco is the property manager of Pelican Bay. She has decided to stay in her condo and not reside at Pelican Bay. She is also pursuing her California real estate license as she manages the property. Is anything wrong with this scenario?

A.    No, Kimberly does not have to reside on the property she manages. Pursuing her real estate license is additionally optional.

B.     Yes, in California any apartment complex that has sixteen or more rental units must have a manager that lives on-site. In addition, Kimberly, as an off-site manager, must hold a real estate broker license. If she decides to hire a residential manager, who lives on the property, they do not need a broker’s license.

C.     Yes, Kimberly is required to live on-site if the complex has more than ten rental units.

D.    None of the above.

9 of 10 Penny and Joe rent an apartment in the Trade Winds apartment complex. They moved in one month earlier and signed a one year lease. Today the couple received a notice stating the complex has been sold and their lease will terminate at the end of thirty days. Is this a violation?

A.    No, if the complex has been sold, the new owners may do with the apartments as they wish. A thirty day notice to vacate is more than sufficient.

B.     Yes, it is a violation. Penny and Joe must have sixty days from the sales transaction to vacate their apartment and terminate the lease.

C.     Yes, it is a violation. Leases do not terminate because a property is sold.

D.    None of the above

10 of 10 Which of the following is not a part of a property management agreement?

A.    Property Description and Term of Agreement

B.     Definition of Responsibilities and Extent of Authority

C.     Americans with Disabilities Act (ADA)

D.    Management Fee and Allocation of Costs

Principles Ch26 quiz

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1 of 10 Public notice must be given of a bulk transfer of inventory in a business sale. What is this notice known as and where must the notice be published?

A.    The public notice is known as Notice of Intent to Transfer Inventory and must be published in a general circulation newspaper.

B.     The public notice is known as Notice of Intent to Sell and must be published in a trade newspaper.

C.     The public notice is known as Notice of Intent to Sell Bulk and must be published in a general circulation newspaper.

D.    The public notice is known as Notice of Intent to Sell Bulk and must be published in a trade newspaper.

2 of 10 Martin is purchasing a personnel agency from Warren and his partner. The agency has been very successful over its twenty years in business, and Warren is ready to retire. What elements should Martin expect from Warren as part of the business sale?

A.    A bill of sale and specific financial statements.

B.     A bill of sale and a bulk transfer of any inventory.

C.     A bill of sale; a balance sheet; the profit and loss statement; and a bulk transfer of any inventory.

D.    None of the above

3 of 10 How is goodwill protected in business opportunity transactions?

A.    Goodwill is not tangible property and, therefore, cannot be protected.

B.     The goodwill of a business has monetary value, which is protected by law.

C.     Goodwill is the expectation of continued public patronage.

D.    Goodwill is protected by Sherman Anti-trust laws.

4 of 10 Johanna is selling her restaurant, J’s Café. She has decided restaurant hours are too long for her and is changing careers. Matt, a licensee, is assisting Johanna in the sale of the café. She wants to sell both the real property, the restaurant itself, and all of the personal property inside to one buyer. A buyer is interested in the physical restaurant, the business itself, and all of the personal property inside the restaurant. How will Matt handle the sale of both the real property and the business itself?

A.    Matt, as a licensee, is not authorized to conduct the sale of a business. He may assist Johanna in the real property transaction, but not the personal property that represents the business.

B.     Matt must treat the sale of the business and the sale of the real property as two separate and concurrent transactions with two concurrent and contingent escrows.

C.     Matt may sell the entire business opportunity in one sales transaction. Due to its encompassing the real property, the business, and the personal property of the restaurant, it is a single sale.

D.    None of the above

5 of 10 Tucker, a licensee, has been instrumental in the sale of a nightclub to a group of investors. He has guided the buyers every step of the way in obtaining this new business opportunity. What government agencies are also in need of notification by the investors concerning their new business?

A.    IRS

B.     State Board of Equalization

C.     California BRE

D.    Both A and B

6 of 10 The Hannekes are selling their pharmacy to a small investor. They have decided not to follow the regulations set forth by the bulk sale law. Is the sale considered valid between the two parties?

A.    The sale is considered valid between the two parties; it is void against creditors; they are legally permitted to attach inventory for any debt.

B.     The sale is considered invalid between the two parties due to not following the regulations set forth by the bulk sale law.

C.     The sale is considered valid between the two parties and all creditors. The bulk sale law is set up to ease the transfer of inventory in a business sale.

D.    None of the above

7 of 10 Maria and Carlos are selling their grocery store to a large corporation. There will be a bulk transfer of the store’s inventory in the sale to the corporation. Public notice must be given of this transfer. Who must give the public notice? How many days public notice must they give and why?

A.    The sellers must give the public notice. They must give a public notice 12 business days before the transfer occurs. It gives the buyers’ creditors an opportunity to file a claim if trade credit is still owed on the inventory.

B.     The buyers must give the public notice. They must give a public notice 12 business days before the transfer occurs. It gives the seller’s creditors an opportunity to file a claim if trade credit is still owed on the inventory.

C.     The buyers must give the public notice. They must give a public notice 15 days before the transfer occurs. It gives the seller’s creditors an opportunity to file a claim if trade credit is still owed on the inventory.

D.    The buyers must give the public notice. They must give a public notice 10 business days before the transfer occurs. It gives the seller’s creditors an opportunity to file a claim if trade credit is still owed on the inventory.

8 of 10 Which of the following statements is false in reference to a balance sheet?

A.    The balance sheet shows the business’s profits for the last 3 years.

B.     The balance sheet shows the assets of a business as of a particular date.

C.     The balance sheet shows the net worth of a business as of a particular date.

D.    The balance sheet shows the business’s liabilities as of a certain date.

9 of 10 Damon has a string of misdemeanor convictions. He was just cleared of felony fraud. Damon is now opening a restaurant and wants to serve alcohol. What are Damon’s chances of being issued a liquor license?

A.    Not very good at all. According to the Alcoholic Beverage Control Act, the person must be of good moral character. All of Damon’s convictions probably won’t bode well with his receiving a license.

B.     The same as others. Damon only has misdemeanor convictions. He was acquitted of the felony charge.

C.     Damon may be issued a probationary liquor license due to his previous convictions.

D.    None of the above

10 of 10 What does the term “turnover” reference in a business opportunity?

A.    The amount of employees being employed and leaving employment of a business.

B.     The number of times the inventory is sold per year.

C.     The number of times a business has been sold.

D.    None of the above

Principles Ch27 quiz

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1 of 10 Civil Code Section 1365.1 states that the homeowner association must distribute a written notice entitled, “NOTICE ASSESSMENTS AND FORECLOSURE” to EACH member of the common interest development association. How long immediately preceding the beginning of the association’s fiscal year must this notice be distributed?

A.    60 days

B.     90 days

C.     3 months

D.    4 months

2 of 10 Certain disclosures must be made within the Subdivided Lands Public Report Notice of Intention. Recently, an amendment to these disclosures has added which of the following to the required disclosures under this notice?

A.    Supplemental Property Tax Notice

B.     Automatic Stay Disclosures

C.     Brownfield Disclosures

D.    All of the above

3 of 10 Under California Finance Code, what is defined as a consumer credit transaction that is secured by real property located in California, which is used, or intended to be used or occupied, as the principal dwelling of the consumer?

A.    Vacant land loan

B.     Consumer loan

C.     Commercial loan

D.    Land development loan

4 of 10 Assembly Bill 1099 does not require a property tax reassessment for the construction or addition of

A.    a beachfront home.

B.     a separate building such as a guest home or workshop measuring less than 1,500 square feet.

C.     an active “solar energy system” in a new subdivision.

D.    a barn or horse corral built on a parcel of land two acres or larger.

5 of 10 Each of the following types of housing, with one exception, falls under the heading of Common Interest Development. Which is the exception to this?

A.    A manufactured housing community.

B.     A condominium project.

C.     A community apartment project.

D.    A stock cooperative.

6 of 10 Under the amended Davis-Stirling Common Interest Development Act, in order to grant the exclusive use of a common area to one or more owner, there must be a passing affirmative vote of what percentage of the owners of that common interest development?

A.    51%

B.     67%

C.     69%

D.    75%

7 of 10 San Diego tenant Jack Stone is a full-time slacker. The guy has not paid rent in months and refuses to give up possession of the property. After many attempts to solve the problem outside of a courtroom, landlord Tom Crick gives up, files an eviction notice, and obtains a judgment to obtain possession of the property. Three weeks later, however, Jack tells Tom that just that morning he’s filed for bankruptcy–so the eviction is off. Which of the following statements is true of this situation?

A.    Tom is out of luck and should get in line behind Jack’s other creditors. As for the apartment, Jack cannot be forced out of it when he’s in bankruptcy.

B.     Tom is in luck. Since he has already taken the appropriate actions and obtained a judgment to obtain possession of the property before Jack filed his bankruptcy petition, the previously filed eviction remains in effect.

C.     Tom and Jack must retain lawyers to sort out this mess, because there is no set way of handling this type of situation.

D.    Because Jack was able to successfully file a bankruptcy petition, he may not have to move out yet. He must attempt to file a Retroactive Petition for Bankruptcy, with the required documentation from that time period. If he obtains a judgment stating that.

8 of 10 In some counties, certain funds are collected and then distributed to be used only for the exclusive purpose of deterring, investigating, and prosecuting real estate fraud crimes. This fund is the:

A.    Real Estate Advisory Commission Fund.

B.     Real Estate Recovery Account.

C.     Real Estate Fraud Prosecution Trust Fund.

D.    Real Estate Fraud Investigation Fund.

9 of 10 If a person believes that her property has been placed under an unlawful restriction, covenant, or other provision, based on an arbitrary reason as defined in the Government Code, she may:

A.    Refuse to pay her rent or mortgage.

B.     File suit against the parties that sold her or rented her the property.

C.     File a civil suit against the party/parties that so placed this unlawful restriction.

D.    Record a Restrictive Covenant Modification document.

10 of 10 Formerly, the Unruh Civil Rights Act protected people from being discriminated against because of their sex, race, color, religion, ancestry, national origin, disability, or medical condition. However, recent changes have added two new bases for discrimination that are illegal in California. These are:

A.    Marital status and legal source of income.

B.     Marital status and source of income.

C.     Marital status and sexual orientation.

D.    Legal source of income and sexual orientation.

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

(correct answers with explanation will be revealed with correct subscription)

Tip: to find a certain word or key term, press at the same time, the buttons:

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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.

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.

California Principles Real Estate › FINAL TEST 2 (50-example questions)

(correct answers with explanation will be revealed with correct subscription)

Tip: to find a certain word or key term, press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

1 of 50 An undeveloped acre of land sits in the middle of a secluded rural community. How many separate owners could this acre have?

A.    As many as possible if they were partners in the ownership of the land.

B.     Three owners: One could own the subsurface rights, one the surface rights, and another the air rights.

C.     Two owners: One could own the surface rights, and another the air rights.

D.    Two owners: One could own the subsurface rights, and another the surface rights.

2 of 50 Deanna is buying one of Kay’s fur coats and several handbags. They are old friends and sometimes purchase each other’s items instead of selling to a consignment shop. Deanna agrees to pay Kay $650.00 for the items, writes a check, and collects her purchased items. Is this transaction legitimate?

A.    Yes, it is a private transaction between two adults where both are in agreement of the terms.

B.     No, in the State of California, an agreement for the sale of real property must be in writing if the amount or value of the property exceeds $500.00.

C.     No, in the State of California, an agreement for the sale of personal property must be in writing if the amount or value of the property exceeds $500.00.

D.    No, in the State of California, an agreement for the sale of personal property must be in writing if the amount or value of the property exceeds $600.00.

3 of 50 Ensuring consumers are fully informed of all finance changes and aware of the true annual interest rate are requirements of which regulation?

A.    Article 7

B.     RESPA

C.     Truth in Lending

D.    Uniform Settlement Statement

4 of 50 What is the form of California State Real Estate licensing examinations?

A.    True or False Tests

B.     Essay Tests

C.     Multiple-Choice Tests

D.    All of the Above

5 of 50 Due to the subdividing of lots on the lake, Jim’s property is surrounded on three sides by Louise’s property. The only other boundary is the lake. Jim can only get to his home by driving up Andrea’s driveway and behind her lake home to get to his own. How was the easement in this situation created?

A.    Implication

B.     Reservation

C.     Necessity

D.    Expressed

6 of 50 Which are the four elements required for a valid contract?

A.    Legally Competent Parties; Offer and Acceptance; Consideration; and Legality of Object

B.     Legally Competent Parties; Offer and Acceptance; Consideration; and Terms

C.     Legally Competent Parties; Offer and Acceptance; Assignment; and Legality of Object

D.    Legally Competent Parties; Offer and Acceptance; Contingency; and Legality of Object

7 of 50 Tracy and Darnell are buying a home. They have a 15% down payment and have qualified for a thirty year fixed conventional rate mortgage. Will Tracy and Darnell have to pay PMI?

A.    Yes, private mortgage insurance is required for all loans with less than 25% down payment.

B.     No, private mortgage insurance is only required for all loans with less than 15% down payment.

C.     No, this is Tracy and Darnell’s second mortgage for the purchase of a new home. Private mortgage insurance is only for first-time buyers with less than a 20% down payment.

D.    Yes, private mortgage insurance is required for all loans with less than 20% down payment.

8 of 50 Agent Green is faced with an ethical dilemma. He was present when two brokers were having an unethical discussion that could be considered collusion. He doesn’t know if he should act as if it never happened, or report the incident to his broker. What steps should he employ when making this decision?

A.    Concentrate on the pertinent facts of the case.

B.     Think about who stands to gain and lose by his decision.

C.     Explore different solutions to the problem.

D.    All of the Above

9 of 50 When is a real estate licensee considered a creditor?

A.    If the licensee routinely assists sellers in determining whether a proposed buyer in a land contract or purchase-money mortgage is creditworthy.

B.     A licensee may always be considered a creditor based on the financial information and qualification of prospective buyers.

C.     A licensee is never considered a creditor under any circumstance.

D.    None of the above

10 of 50 Appraiser Jones appraises one-to-four unit residential properties, and non-residential properties with a transaction value up to $250,000. What is this appraiser’s level? How many hours of appraiser education were completed?

A.    Residential License, 150 hours

B.     Certified Residential Real Estate Appraiser, 200 hours

C.     Certified Residential Real Estate Appraiser, 180 hours

D.    Certified General Real Estate Appraiser, 300 hours

11 of 50 Molly, a successful real estate salesperson, took some time off to stay at home with her first child. Days turned into weeks, weeks into months, months into years, until Molly’s child was starting school. She decided she needed to head back to her profession and pick up where she left off. During her at-home time, Molly hadn’t kept up with any CE requirements, nor had she renewed her license after its expiration almost three years earlier. Can Molly simply pick up where she left off?

A.    No, two years after the license expires, all license rights lapse. Molly must re-qualify through the examination process before being licensed in real estate once again.

B.     Yes, due to Molly’s experience, she may petition the DRE for special dispensation for her work-related experience in order to reapply for her license.

C.     Yes, all license rights lapse after four years of non-renewal.

D.    None of the Above.

12 of 50 Which of the following listing agreements is illegal in most states?

A.    Open Listing

B.     Exclusive Agency Listing

C.     Net Listing

D.    Agency Coupled with Interest

13 of 50 The Statute of Limitations is:

A.    An action that bars recovery by the plaintiff because of the plaintiff’s undue delay in seeking relief.

B.     Prevents action from being taken against an individual after a prescribed period of time

C.     An action that the purchaser agreed to do or not to do when they purchased the property

D.    A principle which precludes a person from asserting something contrary to what is implied by a previous action

14 of 50 XYZ Corporation is interested in a piece of land for development. They are selling off a bit of company stock to buy the property without any debt. Is XYZ’s sale of stock considered a form of financing?

A.    It is actually considered a mortgage financing alternative.

B.     NO, it is not considered a form of financing.

C.     No, it is simply paying for land with cash proceeds.

D.    None of the Above.

15 of 50 Kim, Chris, and Beth are all partners in a cosmetics firm. Kim is leaving the partnership and wants to sell her shares of the business, including the property owned by the partnership, to Chris and Beth. The three partners own the property with the right of survivorship should one or more of them die. The remaining partners are not interested in buying Kim’s interests. Kim has been unable to find a buyer for her share of the partnership. She has now resorted to asking the court to either sell her shares or sell the entire property. What form of concurrent ownership applies?

A.    Partition

B.     Tenants in Common

C.     Joint Tenancy

D.    Separate Ownership

16 of 50 What is the California Statute of Limitations on bringing a court foreclosure to enforce a mechanic’s lien? To bring action for removal of encroachments?

A.    120 days after filing the lien; Four years

B.     190 days after filing the lien; Three years

C.     90 days after filing the lien; Three years

D.    120 days after filing the lien; Five years

17 of 50 Georgina sat for the examination about two weeks ago. She believes she passed with flying colors and checks her mail immediately upon arrival home for her results. Today, they arrived and, as she opened the envelope, she saw her test score. Did Georgina pass or fail?

A.    Georgina passed the examination. Failing scores are not revealed; only the information the examinee failed.

B.     Georgina failed the exam. The exam is qualifying by nature and if you pass, you pass; your score is irrelevant and is not revealed.

C.     There is no way to tell if Georgina passed or failed without knowing her actual score.

D.    None of the Above.

18 of 50 Which of following are not considered trust funds?

A.    Real Estate Commissions

B.     General Operating Funds

C.     Rents and Deposits from Broker-Owned Real Estate

D.    All of the Above

19 of 50 Agent Sims needs one more new home sale this month to receive a bonus. She has one more that could possibly close and help her meet the goal. However, today she was informed the financing fell through for the buyer. Agent Sims has a lender friend that owes her a favor. She calls the lender, offers the friend one-quarter of her bonus if he will finance the buyers who were turned down. Which penal code section addresses this crime?

A.    PC 534

B.     PC 639-639a

C.     PC 641.4

D.    PC 532c

20 of 50 John and Thom are purchasing their dream home. Due to the expiration of escrow instructions, the escrow has been terminated. Have they lost the contract on the house of their dreams?

A.    Yes, once the escrow is terminated all contracts associated are also terminated.

B.     No, the termination of an escrow does not terminate the associated contract.

C.     No, if the escrow is terminated the contract can remain valid; however, if the escrow is cancelled, the contract is cancelled.

D.    None of the above

21 of 50 Dan has recently been transferred to San Diego, and only has a month to find a home, sell his condo, pack, move, close, and get to work. His agent shows him the Walsh home and it’s perfect. He offers the asking price, along with all the kitchen appliances and window treatments to remain with the property. The Walsh’s accept his offer exactly as it is written. Which contract term applies to this situation?

A.    Time is of the Essence

B.     Mirror Image

C.     Contingency

D.    Novation

22 of 50 Which of the following is not a prohibited escrow-related activity?

1.      An escrow agent cannot disburse a real estate broker’s commission prior to closing of the escrow.

2.      Escrow licensees may not solicit or accept escrow instructions containing any blank to be filled in after signing or initialing.

3.      They may not permit, under any condition, any person to make any addition, deletion, or alteration of an escrow instruction.

4.      None of the Above.

23 of 50 Agent Peters has qualified buyers to purchase a new home. Now he needs to qualify the property they wish to buy. He understands the human qualification process. Can you help Agent Peters with steps to qualify the property?

1.      Type of property and area zoning

2.      Location and Diversity of Neighborhood

3.      Value range and condition

4.      Both A and C

24 of 50 Agent Simpson tells residents of a neighborhood that minorities are moving into the neighborhood, and property values are sure to plummet. Simpson goes on to say, “resale values will suffer, the neighborhood will deteriorate, and if they don’t sell their homes now, they will lose money.” What form of illegal discrimination is Agent Simpson practicing?

1.      Blockbusting

2.      Redlining

3.      Steering

4.      Discriminatory Misrepresentation

25 of 50 Christina is planning on getting married in the next year. She is a very successful business owner and is planning on buying some vacation property on the coast. She asks her agent, Martina, for advice on how she should take title to this new property. Should she hold the title alone, or jointly with her fiance? How should Martina advise?

1.      Martina should advise Christina to protect her future assets and hold title separately due to California’s community property laws.

2.      Martina should simply tell Christina to consult her attorney on this matter.

3.      Martina should discuss with Christina what she knows in reference to how title can be vested but give no advice except to consult an attorney for advice.

4.      None of the Above.

26 of 50 Elliot has misrepresented himself by acting in the capacity of a real estate salesperson without being licensed by the State of California. Elliot had his license revoked three years ago for unethical actions. Elliot is guilty of what level of violation?

A.    Misdemeanor

B.     Felony

C.     Held accountable in a possible civil suit.

D.    Both B and C

27 of 50 Which of the following conditions does not apply in converting a mobile home into real property?

A.    The homeowner must obtain a building permit.

B.     The home must be placed on a permanent foundation.

C.     The homeowner must obtain a Certificate of Occupancy.

D.    The homeowner is required to have a tag guaranteeing the mobile home’s proper construction.

28 of 50 Ken has just passed his licensing examination. However, he has been notified the DRE will not issue a full-term license. Ken is behind on child support payments and therefore has not complied with a court order to provide these payments. Will Ken ever be able to obtain his license?

A.    Ken will not be eligible for a license until he has been current on all child support payments for a minimum of 150 days.

B.     Ken may be issued a 150-day temporary license while he is on the list of child support obligors. Only one 150-day temporary license may be issued. His full-term license may be issued if a release is obtained from the district attorney’s office during the 150-day temporary period.

C.     Ken must clear his name and pay his support on time for a minimum of six months to be eligible to receive a full-term license.

D.    None of the Above.

29 of 50 Which act is known as the original fair housing statute?

A.    Executive Order 11063

B.     Civil Rights Act Title VIII

C.     Fair Housing Act

D.    Civil Rights Act of 1866

30 of 50 Along a non-navigable stream, does an owner own the land, the water, both, neither? What is this right?

A.    The owner owns the land to the center of the stream and the government owns the water. It is a Riparian Right.

B.     The owner owns to the water’s edge. It is a Riparian Right.

C.     The owner owns to the average high water mark. It is a Littoral Right.

D.    The owner owns the land and the water to the center of the stream. It is a Riparian Right.

31 of 50 Which of the following liens is both general, involuntary, and statutory? Which lien is specific, voluntary, and equitable?

A.    Judgment Lien; Property Tax Lien

B.     Income Tax Lien; Property Tax Lien

C.     Judgment Lien; Mechanic’s Lien

D.    Income Tax Lien; Mortgage Lien

32 of 50 When an owner dies without a will or heirs, what happens to the property and why?

A.    The property is abandoned until it can be sold by the state. If there is not an owner, the state takes ownership.

B.     There is an auction with the proceeds going to the state. If there is not an owner, the state takes ownership.

C.     The property is transferred to the nearest living relative. Property must have an owner.

D.    The property is transferred to the state. Property cannot be without an owner.

33 of 50 Mr. Manning has owned a restaurant for forty years. He is in the process of selling his business to a group of investors who plan on revamping the restaurant and turning it into a destination. In the negotiation of the sale, Mr. Manning has stipulated he is willing to accept their offer on two conditions: There may never be any alcohol served on the property and there can never be dancing of any kind. Mr. Manning is insistent on these conditions due to his religious beliefs. If either of these activities ever takes place, Mr. Manning would have the right to take back the property. Which type of estate applies?

A.    Fee Simple Absolute

B.     Pur Autre Vie

C.     Estate in Reversion

D.    Fee Simple Defeasible

34 of 50 In studying for her real estate license, Elise is reading about police power. She is confused and doesn’t understand why law enforcement would have any role in real estate sales, transactions, and regulations. What does the term “police power” refer to in real estate?

A.    The constitutional right of the government to regulate private activity to promote the general safety, health, and welfare of society.

B.     Police power allows the government to seize land at their discretion or in reaction to zoning ordinance changes.

C.     Police power controls and directs land use regarding subdivisions.

D.    Both A and C

35 of 50 Patrice and Cornell are completing a sales contract with Mary, their agent. The sales contract used at Mary’s brokerage is preprinted. Mary, as a senior agent, has the authority to waive one of the brokerage’s fees. The fee is explained and preprinted on the contract. Mary simply crosses it out, writes “waived,” and both parties initial. Which overrules the other? The preprinted or handwritten portions of the contract?

A.    The preprinted portions of a contract always take precedence over handwritten.

B.     It depends on the portion of the contract and the language involved.

C.     Handwritten portions of real estate contracts always supersede preprinted forms.

D.    None of the Above.

36 of 50 The continuing education requirement in California is —?—  hours every —?—_years.

A.    45, six

B.     40, five

C.     45, four

D.    6, four

37 of 50 Judy is the listing agent for the Brandts’ home. In the inspection of their home, she discovers a few issues of concern. The basement is very damp and smells of mildew. Judy noticed what appeared to be mold on the interior walls of the lower level. She also saw what she believed to be their main line overflowing in the utility area of the basement. State the case that is responsible for broker’s conducting a diligent inspection of properties they are listing or selling.

A.    Sherman v. Clayton

B.     Easton v. Strassburger

C.     Mello v. Roos

D.    Jones v. Mayer

38 of 50 Which is not a form of syndication?

A.    The Corporate Form

B.     The General Partnership

C.     The Limited Liability

D.    An Equity Trust

39 of 50 Ben and Amanda are interested in a vacant, undeveloped lot. They are going to continue to live in their current home, pay off the lot’s loan, and then build a new home on the lot. Before closing on the purchase of the lot, they discover the zoning regulations permit nightclubs to be built in the immediate area. They specifically asked the broker about this issue and were told there was no reason to worry. What are Ben and Amanda’s options, if any?

A.    They do not have any options and must go forward with the sales contract or face a possible suit for breach of contract.

B.     It is the word of the broker against theirs. If they did not get the broker’s assurance in writing, they have to proceed with the contract or face a suit.

C.     They may rescind the transaction based on the misrepresentation of the broker.

D.    Both A and B

40 of 50 Broker Burns is negotiating a first trust deed loan for buyers. The buyers have signed a contract for a fifteen-year loan. What is the maximum commission for Broker Burns?

A.    Five percent of the principal of the loan.

B.     Ten percent of the principal of the loan.

C.     Fifteen percent of the principal of the loan.

D.    Two percent of the principal of the loan.

41 of 50 Ramon did not pass his licensing examination. He didn’t think it was a possibility to fail and doesn’t know what to do to re-take the test. Ramon is not even sure he is allowed to take the examination a second time. What are Ramon’s options?

A.    Ramon may take the examination as many times as he needs. He need only reapply to re-take the examination.

B.     Ramon must pay the examination fee if he is to re-take the examination.

C.     Ramon cannot take the examination for a period of two years after failing. At that time, he must reapply and pay the examination fee.

D.    Both A and B

42 of 50 Carol is studying for the California real estate license examination. She knows she has to know all areas covered in the examination extremely well to pass. Which portion of the examination, approximately, makes up the largest portion of the test?

A.    Practice of Real Estate and Mandated Disclosures

B.     Contracts

C.     Transfer of Property

D.    Financing

43 of 50 Which of the following is not an exemption to the federal fair housing laws concerning age and family status?

A.    In a government-designated retirement housing.

B.     In a retirement community if 70% of the dwellings have one person who is 55 years of age or older, provided there are amenities for elderly residents.

C.     In residential dwellings of two to four units if one of the units is occupied by the owner.

D.    None of the Above.

44 of 50 What are the types of legal life estates?

A.    Dower, a husband’s interest in his wife’s property; Curtesy, a wife’s interest in the husband’s property; and Homestead, protection against unsecured debts for the party that did not sign the loan.

B.     Dower, a wife’s interest in the husband’s property; Curtesy, a husband’s interest in a wife’s property; and Homestead, protection against all debts for the party who did not sign for the loan.

C.     Dower, a wife’s interest in the husband’s property; Curtesy, a husband’s interest in a wife’s property; and Homestead, protection against unsecured debts for the party who did not sign for the loan.

D.    Marital rights, both a husband’s and a wife’s interest in the spouse’s property; and Homestead, protection against unsecured debts for the party who did not sign for the loan.

45 of 50 What is the difference between Southern California and Northern California in reference to escrow accounts?

A.    In Northern California, the bilateral escrow instructions are signed by the buyer and seller shortly after they’ve signed their purchase agreement, just after the start of escrow, which is approximately 30 to 60 days prior to the close of escrow. In Southern California, the instructions are usually not signed until one or two days before the close of escrow.

B.     In Southern California, the bilateral escrow instructions are signed by the buyer and seller shortly after they’ve signed their purchase agreement, just after the start of escrow, which is approximately 30 to 60 days prior to the close of escrow. In Northern California, the instructions are usually not signed until one or two days before the close of escrow.

C.     In Southern California, escrow services are usually performed by independent escrow companies or financial institutions. In Northern California, the escrow services are usually performed by title insurance companies.

D.    Both B and C

46 of 50 Which of the following is not a fourfold unity?

A.    Time

B.     Title

C.     Possession

D.    Vesting

47 of 50 Which of the following statements concerning real and personal property is true?

A.    Annexation changes real property to personal property; severance changes personal property to real property.

B.     A trade fixture is personal property and can be removed by the tenant any time before the end of the lease term.

C.     Annexation changes personal property to real property; severance changes real property to personal property.

D.    Both B and C

48 of 50 Caroline has been paying her mortgage steadily for fifteen years. She has just received a notice from her lender that the loan due date is approaching and she will owe a lump sum of $11,257 to pay off her mortgage loan. Which type of promissory note has Caroline NOT been paying?

A.    A straight note

B.     A fully amortized loan

C.     A Balloon Note

D.    An Interest-Only Note

49 of 50 The Brights are buying a home from the Stones. They are splitting the escrow service fees 50-50. Do they live in Northern or Southern California? How does the other region usually handle the escrow service fees?

A.    They live in Southern California. In Northern California the seller usually pays the escrow service fees.

B.     They live in Southern California. In Northern California the buyer usually pays the escrow service fees.

C.     They live in Northern California. In Southern California the buyer usually pays the escrow service fees.

D.    They live in Northern California. In Southern California the seller usually pays the escrow service fees.

50 of 50 When can a violation that hasn’t happened yet be a violation?

A.    If the Commissioner believes that a person has or is about to commit a violation of law, order, license, permit, etc., the Commissioner has the authority to bring action against the person.

B.     It can never be a violation. A person has to commit, past or present tense, a violation to have actions filed. You cannot punish someone for something they have yet to do.

C.     The Commissioner can command in the name of the people of the State of California in the Superior court of the State of California, that the individual not continue with the violation or not move to commit the violation.

D.    Both A and C

California Principles Real Estate › FINAL TEST 3 (100-example questions)

(correct answers with will be revealed with correct subscription)

Tip: to find a certain word or key term, press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer to bring up the in-page search box

1 out 100

Sacramento artist S.C. Heet has transferred a portion of her property, via a grant deed, to Cameron Dulle. However, this deed did not set forth in writing the two primary warranties Cameron should have on the property: first, that S. C. has not already transferred the title to another person; and, second, that the estate is free of any encumbrances, other than what has been disclosed to the grantor. Which of the following is true of this situation?

A- Cameron must file a quiet the title lawsuit in order to alter the transfer to include these warranties.

B- Cameron must accept the situation as is, unless he can convince S.C. to alter the transfer willingly.

C- Because this transfer has occurred with a grant deed, the two necessary warranties, as explained, are implied in the deed. However, under the Statute of Limitations, contracts must be in writing to be enforceable; so Cameron’s coverage in this situation will not stand up in court.

D- Under a grant deed, the two warranties — that S. C. has not already transferred the title to another person, and that the estate is free of any encumbrances, other than which has been disclosed — are implied within the grant. These implied warranties do not need to be stated in the deed, but are still present.

2 out of 100

The regulations regarding both advertising and doing real estate business over the Internet have been set forth in:

A- The NAR Code of Ethics.

B- The Commission’s Regulations.

C- ARELLO regulations.

D- The Federal Fair Housing Administration.

3 OUT OF 100

Any false or misleading advertising, whether on the Internet or via any other medium, can result in which of the following type of penalties?

A- Civil.

B- Administrative.

C- Criminal.

D- Any of the above.

4 OUT OF 100

San Diego broker Cal Abrams has avoided the technological trend of the past 20 years. Finally, he’s jumped online and realized what the buzz is about: He can potentially reach MILLIONS of customers just by running one little advertisement! When he talks to his salespeople, they tell him it’s not as easy as that. In California, there are regulations to follow. He’s ashamed to admit it, but since he was never interested in the Internet or “that new Web thing,” he’s not paid much attention to these regulations, and in fact, he had forgotten all about them until his salespeople reminded him. What must Cal do if he wants to advertise on the Internet?

A- He must first send the advertisement to the California BRE for approval, and then use it once it’s approved.

B- Cal must file the Approval of Electronic Advertisement Form (AEAF), along with the appropriate filing fee, for the CalBRE’s approval. Once the approval is received, the advertising may begin. If the AEAF is not approved, he may submit a new advertisement within 30 days without paying an additional fee.

C- Cal must be sure to indicate his licensed status on his advertisements.

D- None of the Above

5 OUT OF 100

The account that holds all the money collected from license and exam fees, and is used for the operating expenses of the CalBRE, is known as:

A- The Real Estate Education Fund.

B- The Real Estate General Fund.

C- The Real Estate Recovery Fund.

D- The Real Estate Operations Fund.

6 OUT OF 100

Two years after Elicia Jolie moves into her first home, a cozy two-bedroom near Lake Tahoe, she decides to buy all new kitchen appliances. Her brother, Jake Jolie, is the owner of JJ’s Appliances and More, and he gets her some great deals on beautiful stainless-steel floor models. The appliances themselves are free-standing and movable, with the exception of the built-in microwave over her new stove. She has new cabinets built around the appliances to accent the new look. When it comes time for Elicia to move, which of the following will be considered her personal property, which she may move with her?

A- All the appliances, the cabinets, and the microwave.

B- Only the unattached appliances that are free-standing.

C- Only the unattached appliances that are freestanding, plus the microwave.

D- None of the appliances, the microwave, or the cabinets.

7 OUT OF 100

Under WHICH of the following circumstances could a homeowner take his microwave with him when he moves?

A- If it is unattached, because it would still be considered the current homeowner’s personal property.

B- If it is so dictated in the contract and all parties agree to this in writing.

C- Under any circumstance.

D- Either A or B.

8 OUT OF 100

Examinees and twin brothers George and Grover Gripenstein would argue over the color of the sky on a sunny day. Surprisingly, they’ve both chosen to pursue a career in real estate and have completed their respective pre-license educational requirements. They decide to study for the exam together, but this causes more disagreements. Their current argument is over the characteristics of land. Which of the following is correct?

A- George’s statement that land has five economic characteristics, which are demand, utility, situs, uniqueness, and transferability.

B- Grover’s insistence that land has three physical characteristics, which are utility, situs, and transferability.

C- George’s insistence that there are five economic characteristics of land, and they are demand, situs, scarcity, transferability, and utility.

D- Both A and B, because the five characteristics the brothers named are considered BOTH economic and/or physical characteristics. The terms “economic” and “physical,” in this situation, mean the same thing.

9 OUT OF 100

California residents Kate and Jennifer decide to make a “deal”: Kate will sell Jennifer her new Dell laptop for $600, a steal since she paid over $1,000 for it. They both feel they’ve gotten a great deal. Does this agreement need to be in writing, under California law?

A- Yes, because under California law, an agreement for the sale of personal property must be in writing if the amount or value of the property exceeds $200.00.

B- Yes, because under California law, an agreement for the sale of personal property must be in writing if the amount or value of the property exceeds $500.00.

C- No, because this is personal property, and written agreements are not required for personal property sales.

D- No, because the value of this computer was under $2,000.00. California law ONLY requires that an agreement for the sale of personal property with a price or value of more than $2,000.00 be in writing.

10 OUT OF 100

Under Section 761 of the California Civil Code, enacted in 1872, estates in real property are classified, with respect to duration, into which of the following categories:

A- 1. Estates of inheritance or perpetual estates; 2. Estates for life; or 3. Estates for years.

B- 1. Estates of inheritance or perpetual estates; 2. Estates for life; 3. Estates for years; or 4. Estates at will.

C- 1. Freehold estates; 2. Leasehold Estates; and 3. Less-than-freehold estates.

D- 1. Fee Simple Estate; 2. Fee Defeasible Estate; 3. Life Estate; and 4. Fee Tail Estate.

11 OUT OF 100

Which of the following is NOT a type of water rights?

A- Riparian rights, which relate to rivers.

B- Littoral rights, which relate to seashores and beaches.

C- Alluvial plain, which relate to delta areas along rivers.

D- Doctrine of Prior Appropriation, which relate to irrigation and “first in time equals first in rights” theory.

12 OUT OF 100

Captain Canguro’s father was a teetotaler to the nth degree; so Canguro was not surprised when his father said he would sell Canguro one of the three properties he owned, provided that Canguro followed the condition set forth in the contract, stating that “no alcohol can be served on the premises at any time.” Canguro agreed with this provision and the sale was made. Which of the following statements is most accurate regarding this situation?

A- This type of provision is not legal and therefore the sale is voidable by Captain Canguro.

B- Captain Canguro holds the estate in fee simple defeasible.

C- Captain Canguro has a less-than-freehold interest in the property.

D- Captain Canguro holds the estate Pur Autre Vie, or for the life of another, which means that while he has possessory and some ownership rights, the seller (his father, in this case) may still dictate some of the activities that occur on the property.

13 OUT OF 100

San Bernardino seller Craig Watkins has just signed a contract to sell his home of 13 years to buyer Ivedale Bosch, who has recently moved to California from Montana. The contract has met all the necessary requirements, and all inspections and other mandates have gone along as expected and as agreed to until one week before closing, when Craig decides to back out. However, he understands that he could face legal action by Ivy; so he offers to sell her another house he owns and has rented out for the past few years, in lieu of the San Bernardino one promised. The second home is worth $15,000 more than the originally contracted one, and has an extra bedroom. However, Ivy isn’t interested, because she wants to be close to her elderly mother, who lives in a San Bernardino retirement complex. Craig refuses to complete the sale on the original home. Which of the following statements is true of this situation?

A- Ivy may sue Craig for specific performance, because no two properties are exactly the same and he hasn’t fulfilled his end of the contractual agreement.

B- Craig has the right to refuse to sell to Ivy within up to 3 business days prior to the closing date for the sale. No penalties are to be paid from either party to the other.

C- Craig has the right to refuse to sell to Ivy within up to 3 business days prior to the closing date for the sale. Any charges incurred by Ivy in the contractual process must be refunded to her by Craig within 24 hours after the original time set for closing.

D- Craig cannot force Ivy to accept his offer of the other property. However, under California Civil Code, if the seller in this type of situation (Craig) offers the prospective buyer a home of equal or greater value, with an equal or greater number of bedrooms and square footage, the buyer may not bring legal action against that seller.

14 OUT OF 100

In California, property is generally owned in one of six distinct forms of ownership. Which of the following is NOT one of these six forms?

A- Severalty

B- Tenancy in Partnership

C- Community Property

D- Life Estate.

15 OUT OF 100

In which of the following capacities does the Commissioner serve in California?

A- As the chairperson of State Department of Justice

B- As the chief executive of the Bureau of Real Estate.

C- The Commissioner serves as both the chairperson of the State Department of Justice, and the chief executive of the Bureau of Real Estate.

D- The Commissioner serves in neither of these capacities. Instead, the Commissioner strictly serves in an advisory position over the real estate industry.

16 OUT OF 100

When Jim, Jill, and Jeri take ownership to a Bakersfield home, they hold their ownership concurrently. Jim has the greatest proportion, with 45%, while Jill holds 30% and Jeri the last 25%. They each have the right to individually possess, will, or sell their interest. This is known as:

A- Community property with the right of survivorship.

B- Tenancy in Severalty.

C- Tenancy in Common.

D- Joint Tenancy.

17 OUT OF 100

When two or more people have identical interests in the whole property, with the same rights of possession and the right of survivorship this form of ownership is considered:

A- Community Property.

B- Tenancy in Severalty.

C- Tenancy in Common.

D- Joint Tenancy.

18 OUT OF 100

The legal process of making an instrument or legal document an official part of the records of a county, once it has been acknowledged, there by giving constructive notice of the exsistence and content of these instruments to the public, is known as:

A- Acknowledgement

B- Recording

C- Actual Notice

D- Encumbering

19 out of 100

Johnson Bailey and Kailey Clark’s corporation, Bailey-Clark Financial, is branching out into the field of escrow handling. They know the corporation must be licensed by the State of California. There are a total of 5 officers, trustees, and other employees who will have access to the money or negotiable securities in the possession of the corporate license, and have furnished a bond of indemnification against loss. Has the corporation fulfilled all necessary licensing requirements to work in escrow handling?

A- No, they must also make sure that all monies deposited in escrow be placed in a trust account that is exempt from execution or attachment.

B- No, they must also be able to show that the company is financially solvent.

C- No, they must also meet the requirements in Answers A and B. In addition, the corporation must furnish a surety bond in the amount of $25,000.00, or more, based upon yearly average trust fund obligations.

D- Yes, the corporation has filled all necessary obligations to be licensed.

20 OUT OF 100

If ABC Title Insurance Company wants to get in the business of handling escrows what licenses would it have to obtain?

A- A title company does not need to obtain a special license to handle escrows.

B- A title company is not permitted to handle escrows in any capacity.

C- If the title company has been in business for a minimum of 5 years, it may handle escrows without a special license.

D- If the title company has been in business for a minimum of 10 years, with annual audits for review by the State of California, it does not need to be specially licensed to handle escrows in California.

21 out of 100

By California statute, a joint tenancy may be created in which of the following ways?

A- By transfer from a sole owner to himself or herself and others as joint tenants.

B- By transfer from tenants in common to themselves or to themselves, or any of them, and others as joint tenants.

C- By transfer from joint tenants to themselves, or any of them, and others as joint tenants.

D- Any of the above.

22 OUT OF 100

What is the real estate regulatory body in California?

A- The California Association of REALTORS

B- California Bureau of Real Estate

C- ARELLO

D- The National Association of REALTORs or NAR

23 OUT OF 100

Long Beach salesperson Eric Janey is providing sellers Julie and Zach Roberts with the necessary disclosures they must be given upon the sale of real property. Which of the following is NOT a disclosure that is given upon the sale of real property?

A- Mold Disclosure.

B- Illegal Controlled Substances.

C- Natural Hazards Disclosure.

D- The Radon Detection Test Disclosure.

24 OUT OF 100

Co-authors and sisters, Mary and Perry Corrigan, have just written their fourth bestseller, even though Mary lives on the East Coast, while Perry resides in Calistoga. When the home next door to Perry is sold, Perry buys it and then gift deeds it to her sister so that they can live side-by-side for the several months of the year they spend writing together. In this situation, what consideration is necessary for this deed to be considered valid and legal?

A- Love and affection is the only consideration necessary.

B- Love and affection is necessary, but the consideration must also include something (another real property, an automobile, or monetary payment) that is worth at least 10% of the value of the property.

C- An agreement that Perry actually “owns” the property, and as such, may take it back without giving notice or a reason.

D- Both A and C.

25 OUT OF 100

What percentage of the California Real Estate General Fund is set aside to go into the Real Estate Education and Research Fund?

A- 5%

B- 8%

C- 10%

D- 12%

26 OUT OF 100

Which of the following are not really deeds?

A- Gift Deeds.

B- Grant Deeds.

C- Reconveyance Deeds.

D- Tax Deeds

27 OUT OF 100

Which of the following statements about the county fiscal year in California is factual?

A- The county fiscal year begins on January 1 and ends on December 31.

B- The county fiscal year begins on June 1, and ends on May 31.

C- The county fiscal year begins on July 1, and ends on June 30.

D- The country fiscal year begins on October 1 and ends on September 30.

28 OUT OF 100

The newest employee at Edwards Escrow Co., Adam Riley, is handling the escrow paperwork for the sellers and the buyers on an Anaheim property sale. When Adam goes to figure out the prorations for the month of February, for which some of the expenses have already been paid by the sellers, Adam cannot remember what number to use to figure out the proration. Which of the following should he use?

A- 28 days (or 29, if it’s a leap year), since that is the actual number of days in February, the month for which the prorations are being calculated.

B- 30 days, which escrow companies use as their base month in figuring out prorations.

C- 31 days, which escrow companies use as their base month in figuring out prorations.

D- 52, because there are 52 weeks in every year, and all escrow companies in California are required to use this base figure in proration calculations.

29 OUT OF 100

Escrow cannot be terminated in which of the following ways?

A- By the completion of escrow.

B- Because of the death of one of the principals.

C- By mutual agreement.

D- By a court or interpleader action.

30 OUT OF 100

When grantor, Emilie Richards, delivers the deed to the Cloverdale property to the grantee, Jane Curless, she drives it over to Curless’s current residence, where they read through the grant together. There is a condition included in the grant, but it is straightforward and agreeable to both. This type of delivery is known as:

A- Manual delivery.

B- Conditional delivery.

C- Delivery through recording.

D- Delivery through mutual acceptance.

31 out of 100

Kathy Bates has just moved into a condominium complex of 60 units. The complex has a swimming pool, and a management company takes care of the upkeep of the outside of the property. The monthly cost for pool maintenance, grass cutting, tree trimming, private street maintenance, and the newly-updated clubhouse is currently $400.00 a month. Each year, the cost of such services increases, as do the costs for necessary repairs as the buildings get older. This year, new roofs are in order for all of the buildings. The condominium association, which is made up of the owners of the property, decides that, in order to cover the increase in costs, and to replace the roofs on the property, they must pass a(n):

A- Ad valorem tax.

B- Special assessment.

C- General real estate tax.

D- Any of the above.

32 OUT OF 100

Pauline Chasse has just signed a lease agreement with landlord, Wayne Godbrey to rent a house he owns in Delano. The lease states definite beginning (January 1, 2016) and ending (October 30, 2016) dates, and sets forth the rent amount and due dates and all additional property and personal information required in such a lease. Wayne hands a copy to Pauline, but she notices that he has not signed it. When she comments about this to him, he tells her that signatures are not necessary since the lease is for less than a year. Which of the following is true of this situation?

A- Wayne is correct. Under the Statute of Frauds in California, leases of less than one year are not even required to be in writing, and therefore, signatures are not required.

B- Leases of less than one year are not required to be in writing. However, if a lease IS in writing, then it must be signed by the lessor (in this case, Wayne).

C- Leases of less than one year are not required to be in writing; but if there is a written lease, then it must be signed by both the lessee and lessor.

D- Because the property being leased is located in Northern California, a lease agreement is required to be both written and signed by the lessor if the lease period is for 6 months or more. Therefore, Wayne was incorrect and he must sign the lease. If he does NOT sign the lease, then it will remain valid, but will not be court-enforced, should Pauline default on any of the related provisions.

33 OUT OF 100

The type of estate that has a definite beginning and ending date is known as what?

A- Estate at will

B- Estate from year to year

C- Life estate

D- Estate for years

34 OUT OF 100

The right of the state to enact and enforce laws for the order, safety, health, morals, and general welfare of the public is known as:

A- Eminent domain.

B- Conversion.

C- Subversion.

D- Police power.

35 OUT OF 100

Which of the following is not a way of creating agency in California?

A- By agreement.

B- By ratification.

C- By mutual action.

D- By estoppel.

36 OUT OF 100

When potential customers, Grace and Leo Adams sit down with real estate broker, Sam Slama, they tell him they’ve just begun interviewing brokers before they sign with one to help them buy their first home. He assures them he understands, and that he will answer their questions to the best of his abilities. When they ask what his commission rate is, he responds, “It’s seven percent, just like all the other guys in town, as you’ll find. We all charge the same; so it makes for a fair deal for our wonderful customers.” Leo thinks the guy sounds great, but Grace is a bit suspicious of his uber-charm. Which of the following is true of this situation?

A- Grace is right: Sam is too good to be true. Commissions are negotiable, not set by law.

B- Grace has a good head on her shoulders. Sam is more than overly slick; he’s a law-breaker. It is a violation of the Sherman Anti-trust Law to price-fix in this way.

C- While he may sound too good to be true, Slick Sam hasn’t broken any laws, or lied. He’s just trying to gain their trust in the hopes of earning their business, and there’s no crime in that.

D- Both A and B.

37 OUT OF 100

Jeff Kase and his wife, Caren, have spent two months looking at apartments in Los Angeles. But every apartment they’ve seen has been too expensive, or too tiny, or too rodent-infested. When Jeff is driving home from work one day, he sees a “For Rent” sign in front of an apartment complex in a nice neighborhood. He uses his cell to call the number on the sign, and the landlord happens to live upstairs, and can show Jeff the apartment immediately. The good news is, Jeff loves it and the landlord says he can hold it with a deposit until Jeff’s wife can see it. The bad news is that Caren is out of town until the next evening, so that’s the earliest she can see it. The landlord tells Jeff that, unfortunately, the lease agreements for all his properties specify that lease deposits are “nonrefundable.” Which of the following statements is true of this situation?

A- It is the choice of the property owner/landlord regarding whether a lease deposit is refundable or not; so this is within the landlord’s authority.

B- It is illegal for rental security deposits in California to be labeled as “nonrefundable,” under any circumstances.

C- The regulations vary regarding furnished and unfurnished apartments in California: If the apartment is furnished, then the landlord has the right to keep the deposit and mark it as nonrefundable. If the apartment is unfurnished, the deposit may be refunded at the landlord’s discretion.

D- In California, prospective tenants have a 48-hour period in which they may back out of a lease agreement and receive their FULL deposit returned. They must receive this deposit in the same form in which it was given (check, cash, or as a credit to their credit card) at the time of the cancellation.

38 OUT OF 100

In 2013, Jack and Shirley Wright moved from Riverside, in Southern California, up to Santa Clara, in Northern California, when Jack’s company opened a new branch office there. They decided to rent for a while so they could get to know the area before buying a home. Three weeks ago, they finally found and put a contract on a lovely 3-bedroom ranch, and the sellers accepted the first offer. They took that as a good sign, but now it’s only 5 days until the close of escrow and they still haven’t signed the escrow papers yet. In fact, they aren’t due to sign the escrow papers until the day before the actual close of escrow. The Wrights are under the impression that something is wrong, because when they sold their last home, the escrow instructions had to be signed by both parties to the transaction immediately after they all signed the purchase agreement–about 60 days ahead of the actual close of escrow date. Which of the following is true of this situation?

A- Their current agent has violated his fiduciary duties to them because he is mishandling their finances, and putting off handling the escrow until the last minute, thereby risking their new home and monies.

B- Their agent in Riverside was simply being cautious by handling the escrow so early in the game, because in California, escrow signing generally takes place in the last 2 weeks prior to the actual close of escrow.

C- The escrow practices in Southern California differ from those in Northern California. In Southern California, the escrow instructions are signed by the buyer and seller shortly after they’ve signed the purchase agreement, just after the start of escrow, which is about 60 days prior to the actual close of escrow. In Northern California, the escrow instructions are usually not signed until one or two days just before the close of escrow.

D- As of December 2014, the escrow practices have been changed from what they were in 2013 (when the Wrights sold their previous home), to stipulate that the escrow signing date and location are to be determined by both the buyer and the seller, as well as to the broker who is in charge of handling the escrow proceedings. Therefore, there is no specific regulation that sets forth the date or time for such proceedings. However, their agent was negligent in not explaining this to them, as well as not asking for their input into the signing date.

39 OUT OF 100

Which of the following statements is NOT accurate about the California Disclosure Regarding Real Estate Agency Relationship Form?
A- It must be signed before the seller signs any listing agreement with the agent, or, in the case of the buyer, before that buyer signs the purchase contract.

B- This form is required for leases of residential property for more than one year and for the sale of a mobile home, IF the mobile home is offered for sale or sold through a real estate agent.

C- California law does NOT require that all real estate agents provide a written disclosure to the buyer OR the seller.

D- California law requires that all real estate agents provide a written disclosure to the buyer AND the seller, regardless of which party to the transaction the agent represents.

40 OUT OF 100

San Luis Obispo broker Gail Hayden is finally doing some long-overdue office cleaning. She comes across records dated all the way back to 8 years ago. Which of the following applies to this situation?

A- She can destroy them, since the law in California states that all brokers’ records must only be kept for a period of 3 years.

B- She can destroy them, since the law in California states that all brokers’ records must only be kept for a period of 5 years.

C- She must still keep them, because the law in California requires that brokers’ records be kept for a minimum of 8 years.

D- She must still keep them for another couple of years, because the California law requires that all brokers’ records be maintained for a minimum of 10 years.

41 OUT OF 100

In California, which of the following is considered the same as cash when provided in business transactions?

A- A check.

B- A promissory note.

C- A post-dated check.

D- All of the above.

42 OUT OF 100

Each of the following actions, except for one, is considered subversion. Which of these answers is not a form of subversion?

A- Reproducing exam material without authorization.

B- Bringing a calculator into the examination room.

C- Using paid examinees for the purpose of reconstructing an examination.

D- Buying exam material.

43 OUT OF 100

Both the federal and California governments have the right to take private property for a necessary use, IF they pay the owner “just compensation” for doing so. In addition to the payment of just compensation, if the government takes a property in this way, which of the following rules apply?

A- The property must be for the public good or use.

B- The owner must have due process in court.

C- The property must be taken to be used for the public good or use, and the owner must have due process in court.

D- No other regulations apply; this is a government-given right of the government to take a property, and the owner only need to be paid the appropriate compensation to fulfill the requirements.

44 OUT OF 100

Which of the following is not considered one of the five economic characteristics of land?

A- The more demand for a particular property, the more valuable the property.

B- Each parcel of land has its own nonhomogeneous characteristics. No two properties are the same.

C- When loans are available and rates are low, real estate is easily transferable from seller to buyer.

D- Location, or situs, is the most important economic characteristic of all.

45 OUT OF 100

Which of these private properties might be exempt from the governmental use of Eminent Domain?

A- A home with a chronological age of 30 years or greater.

B- A property worth in excess of $1 million.

C- A home with a chronological age of 50 years or greater.

D- No private property is exempt from this government power.

46 OUT OF 100

Which of the following statements is most accurate?

A- In California, escrow is only used in real estate transactions.

B- Escrow is known as a small and short-lived trust arrangement.

C- The Escrow Act is found in the California Business and Professions Code.

D- All of the above.

47 OUT OF 100

Which of the following statements is NOT applicable to the Transfer Disclosure Statement, set forth under Civil Code Section 1102.3?

A- It identifies items of value on the property and whether these items are operational.

B- It applies to residential dwelling of 1-4 dwellings.

C- It must be given to the prospective buyer 7 days after the deposit receipt is signed.

D- It ask seller to identify any structural or material defects.

48 OUT OF 100

After receiving the seller’s transfer disclosure statement, buyer Clark Rivers is not satisfied that ALL has been revealed. He’s heard rumors that a previous tenant died of AIDS inside the very home he would like to buy. Clark demands to know if this is true, since it was not mentioned on the disclosure statement. Which of the following is the appropriate legal response the broker must give to Clark’s query?

A- “Yes, this is true. A previous tenant, who lived and died here two years ago, did have AIDS.”

B- “I’m sorry, but the Transfer Disclosure Statement covers all material facts that must be disclosed, and a person having AIDS is NOT a material fact, whether or not it would be applicable in this situation.”

C- “I’m sorry, but I am not permitted to answer this question, as it could be a potential civil rights violation, under the Federal and State fair housing laws.”

D- Both B and C.

49 OUT OF 100

Which of the following statements is true regarding security instruments used in California?

A- Mortgages are rare in California, because they tend to favor the borrower over the lender.

B- Mortgages are the most common financing instrument used in California, because they tend to favor the lender over the borrower.

C- Most lenders in California insist on mortgages as security in the borrower’s property.

D- Both B and C.

50 OUT OF 100

When Chloe Armstrong pays off the 30-year conventional loan on her Oceanside home in less than 20 years, she is thrilled. However, she is not nearly as happy when she reads the fine print on the contract, which permits her lender to charge her EXTRA interest just for paying off the loan early. This is known as:

A- Subrogation.

B- A prepayment penalty.

C- A subordination clause.

D- An acceleration clause.

51 OUT OF 100

On Kyle Thomason’s $400,000.00 loan, the lender charges a 2-point service charge. In this situation, how much will Kyle have to pay for this service charge at closing, and how would such a charge appear on the statement?

A- $800.00, as a debit to the buyer.

B- $8,000.00 as a credit to the buyer.

C- $8,000.00 as a debit to the buyer.

D- $80,000.00 debit to the buyer.

52 OUT OF 100

Ollie and Molly Overton have just taken out a 30-year straight term loan on their new “starter home” in Bellflower. This means that:

A- They will make payments of interest only, with the principal due on the loan due date in 30 years.

B- They will make payments of principal only, with the accumulated interest due on the loan due date in 30 years.

C- They will make payments of interest and principal on an equal basis until the final payment, which will be larger than the rest, is made at the end of the loan term.

D- They will make regular payments of principal and interest, and the entire loan will be paid off by the end of the term.

53 OUT OF 100

When new college graduate Sami Hensen goes to visit her Great-Aunt Gertrude, she is surprised when the older relative tells her she is soon leaving on a cruise with friends. Sami cannot imagine how her great-aunt can afford such luxury, while living in a nice house in a peaceful neighborhood, and wonders if her aunt’s mental capacities are failing her. At her gentle inquiry about the costs, her Great-Aunt Gertrude laughs away her concern, telling her that she has been receiving monthly checks out of the equity she has in the home. Now Sami really thinks her old aunt is off her rocker! If Great-Aunt Gertrude is correct, which of the following statements is true of this situation?

A- Gertrude has a Package Mortgage, which is commonly used in situations of people who are “house rich, cash poor.” This type of loan is common for senior citizens.

B- Gertrude has a Wraparound Mortgage, which provides for extra cash-in-hand.

C- Gertrude has a fully-amortized loan, so she receives a monthly dividend.

D- Gertrude has a Reverse Annuity Mortgage, which is a loan that must be repaid upon the owner’s death, if she moves elsewhere, or upon the sale of the property.

54 out of 100

Newlyweds Andrew and Kimmie Briggs enjoy sparring over the details of life. They squabble good-naturedly over a game of Scrabble, the pronunciation of French words, and now, over the type of home loan they’re getting on their first home. They know it’s FHA, but neither is sure WHAT the FHA has to do with the loan. An FHA loan means:

A- The money is loaned by the Federal Housing Administration.

B- The money is insured by the Federal Housing Administration.

C- The money is guaranteed by the Federal Housing Administration.

D- The Federal Housing Administration builds homes and loans money.

55 OUT OF 100

Barney Dinesh has served two years of active duty for the United States Army in the Middle East. He is still on active duty, though he is now stationed stateside in California. He and his new wife, Alma, have found a home they both love, and their agent tells them about the Cal-Vet loan, saying that he believes Barney would qualify for this. What are the main requirements for such a loan, and does Barney (from the information given here) seem to qualify for the Cal-Vet program?

A- The Cal-Vet loan requires that the veteran have served a minimum of 120 days’ active duty; provide an affidavit if on active duty (or an honorable discharge if not active); and a $500.00 deposit. Provided Barney can procure this affidavit, and the deposit money, it appears that he would qualify.

B- The Cal-Vet loan program requires that the veteran have served a minimum of 120 days’ active duty; provide Statement of Service if on active duty (or an honorable discharge if he is no longer active); and be willing to buy a California home or farm. Based on the information provided herein, Barney should qualify for the program.

C- The Cal-Vet loan program requires that the veteran have served a minimum of 90 days’ active duty; provide Statement of Service if on active duty (or an honorable discharge if he is no longer active); and be willing to buy a California home or farm. Barney would appear to qualify, based on the given information.

D- The Cal-Vet loan requires four essentials: (1) The veteran must have served a minimum of 30 days’ active duty; (2) The veteran must provide a Statement of Service if on active duty (or an honorable discharge if he is no longer active); (3) The veteran must be willing to buy a California home or farm; and (4) Most importantly, the veteran must meet the requirements for a Veterans Administration (VA) loan before he can be approved for a Cal-Vet loan before he can be approved for a Cal-Vet loan (This doesn’t mean he is going to take out a VA loan, but merely that he meets the federal VA standards). There is not enough information given in the question to determine whether or not he’d meet the federal VA qualifications; so the second part of this question cannot be answered.

56 out of 100

A full summary of all consecutive grants, conveyances, wills, records, and judicial proceedings affecting title to a specific parcel of real estate, together with a statement of all recorded liens and encumbrances affecting the property and their present status, but NOT including encroachments and forgeries, is known as a(n):

A- Chain of title.

B- Disintermediation.

C- Abstract and opinion.

D- Quitclaim deed.

57 OUT OF 100

California real estate lenders are divided into 3 major categories. Which of the following is NOT one of these categories?

A- Institutional lenders.

B- Non-institutional lenders.

C- Depository institutions.

D- Government-backed programs.

58 OUT OF 100

A contract in which the vendor (seller) agrees to convey the title to the real property after the vendee (buyer) has met certain named conditions, and which does not require conveyance within one year, is ordinarily used in the case of a buyer who can only make a small down payment and monthly installments. This type of contract, because it holds disadvantages for both the seller and the buyer, is no longer a popular financing instrument in California. This is known as a(n):

A- Mortgage.

B- Installment land contract, also known as an installment sales contract.

C- Open-end mortgage.

D- Secondary mortgage market loan, such as Fannie Mae, Ginnie Mae, or Freddie Mac.

59 OUT OF 100

Lancaster salesperson Jamie Dafe has begun to branch out into mortgage brokering. She continues to show homes to clients, but hasn’t been actively seeking out new listings. Instead, she acts as a loan broker by buying, selling, or exchanging loans. Which of the following statements applies to Jamie’s current situation?

A- Jamie may not act as a loan broker unless she is properly licensed as one, under the Mortgage Loan Broker Law, set forth under the California Business and Professions Code, Article 7.

B- Jamie may act as a loan broker without receiving any special license, other than her active California real estate broker’s license, as long as she follows the stipulations set forth under the Mortgage Loan Broker Law, under Article 7 of the California Business and Professions Code.

C- In California, a licensed real estate broker MAY assist the buyer in filling out the loan application for a financial institution, but may NOT arrange for financing for the buyer, or broker loans herself. In Jamie’s situation, she is acting out of the realm of her real estate broker’s license, and can face monetary damages and/or prison time for violating the California Financial Code AND the California Business and Professions Code, Article 5.

D- In California, anyone who wishes to sell, buy, or exchange loans, must meet two requirements: (1) The person must be licensed as a real estate salesperson or broker in California; and (2) The person must first obtain a Commissioner’s Permit to Broker Loans. Jamie needs to fulfill this second requirement before she may legally broker loans in California, under Article 5 of the California Business and Professions Code, which is known as the Mortgage Loan Broker Law.

60 OUT OF 100

Credit union president Bill Bradley has just refused a loan for 25-year-old LaDawna Kingston, an African-American woman and, in his opinion, the very definition of a “religious zealot.” Bill refused the loan based on her credit rating and lack of job stability. When LaDawna learns of his refusal, she tells him she’s calling an attorney, because she’s been discriminated against. Which of the following statements is true in this situation?

A- Bill could be in big trouble, since it is illegal for a real estate licensee to discriminate against a person seeking a loan based on racial, religious, or economic reasons.

B- Bill could be in big trouble, since it is illegal for a real estate licensee to discriminate against a person who is of any “protected class,” even if that person does not meet the financial loan qualifications that every applicant must face.

C- Bill could face serious penalties if LaDawna files suit against him. It is illegal for a real estate licensee to decline financing to a person of another race, even though that person does not meet the financial loan qualifications set forth for every applicant.

D- As long as Bill refused the financing based solely on economic reasons (lack of job stability, poor credit rating, income, or net worth), he has acted lawfully and will not face any disciplinary action.

61 OUT OF 100

Real estate syndication is accomplished through three phases. Which of the following answers correctly names these steps in their proper chronological order?

A- (1) Origination; (2) Operation; (3) Liquidation.

B- (1) Outlay; (2) Operation; (3) Completion.

C- (1) Outline; (2) Origination; (3) Completion.

D- (1) Origination; (2) Investment; (3) Liquidation.

62 OUT OF 100

The type of company that sells securities specializing in real estate ventures, and requires a minimum of 100 investors, is known as:

A- A real estate syndicate.

B- A real estate investment syndicate.

C- A real estate investment trust.

D- An equity trust.

63 OUT OF 100

Stockton broker Dustin Giles has been asked by super-cautious sellers Frank and Carole Bellacera to find out the comparable sales for a seller’s property, since that seller isn’t sure at which price to list his property. When he gives the information to them, they insist this is NOT what they want. Their lender needs the actual value upon which that lender will determine the loan amount. Someone is confused here, but which someone?

A- The Bellaceras are confused, since what they originally described was an appraisal, which Dustin provided. What their LENDER actually needed to establish the loan amount was a competitive market analysis, or CMA.

B- The Bellaceras mislead Dustin because what they originally described was a CMA, or Competitive Market Analysis, which real estate licensees perform often in order to help sellers arrive at a listing price for their home. However, what the lender needs is an appraisal, which would establish the market value. An appraisal must only be performed by an independent licensed fee appraiser.

C- Dustin should have known from the start to perform an appraisal, which is used to estimate value — both for the listing price AND for the loan value, since these two amounts are going to be very close, dollar-wise.

D- The Bellaceras didn’t really know what they were talking about, but Dustin SHOULD HAVE recognized it, and didn’t. What they requested originally was a CMA, or competitive market analysis, which Dustin is NOT legally authorized to perform unless he is licensed, under the California Business and Professions Code as a Competitive Market Analyst.

64 OUT OF 100

One appraisal principle of value is based on the concept that the more a property or its components are in harmony with the surrounding properties or components, the greater the contributory value. In other words, the more the properties are alike, the more they retain value. This is known as:

A- Substitution.

B- Regression and progression.

C- Conformity.

D- Competition.

65 OUT OF 100

Which of the following is a type of functional obsolescence?

A- Outmoded plumbing fixtures or inadequate closet space.

B- Installing siding on a building which also needs major interior repairs.

C- A residence when an industrial plant is built next to it.

D- None of the above.

66 OUT OF 100

For income-generating properties, a value based on the present value of the rights to future income is called the:

A- Economic Life.

B- Cost Approach.

C- Sales Comparison Approach.

D- Income Capitalization Approach

67 OUT OF 100

One way to figure out taxes is through the use of a mill. Which of the following is the dollar value of a mill?

A- 1.0

B- 0.1

C- 0.001

D- 0.0001

                                     

68 OUT OF 100

California property taxes are now levied using:

A- A pure ad valorem system.

B- A system that is based on the date of acquisition.

C- A special assessment system.

D- None of the above.

69 OUT OF 100

Appraiser Louis finds a property located in the same neighborhood as the appraised property, and wants to use it as a comparable sale. The comparable has more bedrooms than the subject, one less bath, and one less garage. The appraiser will have to subtract the extra bedrooms from the comparable, add a bathroom to the comparable, and add a garage to make the properties equal. What type of approach to value has Louis utilized?

A- Market data approach.

B- Cost approach.

C- Summation approach.

D- Reproduction cost.

70 OUT OF 100

A law used to finance public services, such as waste treatment plants, parks, and schools, in newly developed areas, can result in extra-high taxes, in addition to the normal property taxes, and MUST be made known to any buyer before a purchase takes place. This law is:

A- The Street Improvement Act of 1911.

B- The Mello-Roos Community Facilities Act of 1982.

C- Proposition 60.

D- Proposition 90.

71 OUT OF 100

There are four principal prerequisites for transforming a mobile home into real property: (1) Obtaining a building permit; (2) Attaching the mobile home to an approved foundation; (3) Recording a document reflecting that the mobile home has been affixed to an approved foundation system; and:

A- (4) Obtaining a certificate of occupancy.

B- (4) Canceling the registration.

C- (4) Notification by the mobile home owner of both the HCD AND the local assessor about the mobile home’s transformation into real property.

D- (4) Obtaining the written approval of the California Bureau of Real Estate Commissioner.

72 OUT OF 100

Which of the following is NOT one of California’s sets of base lines and meridians?

A- The Humboldt Base Line and Meridian.

B- The Mt. Diablo Base Line and Meridian.

C- The San Bernardino Base Line and Meridian.

D- The Los Angeles Base Line and Meridian.

73 OUT OF 100

The law that regulates the division of 2 or more lots for the purpose of selling, leasing, or financing said lots, either at that time or in the future, is the:

A- Subdivision Map Act.

B- Subdivided Lands Act.

C- Interstate Land Sales Disclosure Act

D- All of the above.

74 OUT OF 100

The law used by cities and counties for street improvements, in which a typical example would be that the local government hires a contractor to improve streets, and then each owner along that street is liable for paying a pro rata share of that cost, is known as:

A- The Street Improvement Act of 1911.

B- The Mello-Roos Community Facilities Act of 1982.

C- Documentary Transfer Tax.

D- Proposition 60.

75 OUT OF 100

Under which of the following is a subdivision defined as “a division of land into 5 or more lots for the purpose of selling, leasing, or financing, whether now or in the future”?

A- The Subdivision Map Act.

B- The Subdivided Lands Act.

C- The Interstate Land Sales Disclosure Act.

D- All of the above.

76 OUT OF 100

Which of the following is NOT considered one of the basic types of Common Interest Developments?

A- Condominiums.

B- Cooperatives.

C- Mobile home parks.

D- Planned developments.

77 OUT OF 100

Which level of government is currently “in charge” of planning controls for California property?

A- Federal.

B- State.

C- County.

D- Local.

78 OUT OF 100

The main purpose of this law is to provide procedures and information to ensure that governmental agencies will consider and respond to the environmental effects of their proposed decisions. This is known as the:

A- California Environmental Quality Act of 1970.

B- California Conservation Act.

C- National Environmental Policy Act.

D- Clean Air Act.

79 OUT OF 100

Throughout California, there are agencies within the city/county government whose employees include professionally trained planners. These agencies are known as:

A- Planning commissions.

B- Planning departments.

C- Planning boards of supervisors.

D- Building Officials Conference of America commissions.

80 OUT OF 100

La Mesa real estate broker Michael Hagans plans to begin listing or selling mobile homes. He must comply with all but one of the following statements. Which of these is NOT a requirement for Michael to list or sell mobile homes?

A- He must only sell new mobile homes.

B- He must only sell used mobile homes if they’ve been licensed by the California Department of Housing and Community Development.

C- The mobile home must be capable of being transported over a road, with a hitch attached to the unit (or stored underneath it) and the axles attached to the frame.

D- It is Michael’s responsibility to ensure the proper completion and delivery of the title to the buyer of the mobile home.

81 OUT OF 100

Regarding a broker’s commission, the California Business and Professions Code requires that in the sale of residential property (of not more than four units) the listing contain the following provision before the compensation clause: “Notice: The amount or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between the seller and broker.” This clause must be printed:

A- In not less than 8-point boldface type.

B- In not less than 10-point boldface type.

C- In not less than 11-point boldface type.

D- In not less than 12-point boldface type.

82 OUT OF 100

The MAIN purpose of the California Bureau of Real Estate is to:

A- Explain the laws to REALTORS.

B- Protect the public.

C- Protect the real estate licensees.

D- Both B and C.

83 OUT OF 100

Modesto broker Killian Johnson has just received a money deposit and the related instructions from the buyer, Luis Alverez. Which of the following does NOT describe how Killian should handle this deposit?

A- Give the money to the principal to the transaction.

B- Deposit into Killian’s account, then figure out his commission, deduct that number to arrive at the final amount (due to the principal) and then write a check to the principal for the monies due to him, within 3 business days.

C- Put it into a neutral escrow depository.

D- Put it into the broker’s trust fund account at a bank or other financial institution.

84 OUT OF 100

A house sold for $265,000.00, and the total commission received by the broker was $22,525.00. What was the rate of commission?

A- 6.7%

B- 7.5%

C- 8%

D- 8.5%

85 OUT OF 100

In California, any apartment building with this many units must have an onsite manager, who is also known as a residential manager. What is the number of units to which this statement refers?

A- Ten or more.

B- Twelve or more.

C- Sixteen or more.

D- Twenty or more.

86 OUT OF 100

Palo Alto buyer Mitch deposited $2,250.00 with the listing broker as earnest money. How is this earnest money going to be recorded on Mitch’s closing statement?

A- Credit $2,250.00 to both buyer and seller.

B- Credit $2,250.00 to the buyer; debit the seller $2,250.00.

C- Credit the buyer only $2,250.00.

D- Debit the seller only $2,250.00.

87 OUT OF 100

A land project is a speculative subdivision development of 50 or more vacant lots that are located:

A- In a rural area that has fewer than 1,000 registered voters within 2 miles.

B- In a rural area that has fewer than 1,500 registered voters within 2 miles.

C- In a rural area that has fewer than 2,000 registered voters within 2 miles.

D- In a rural area that has fewer than 2,000 registered voters within 3 miles.

88 OUT OF 100

If a mobile home is real property, then the California Business and Professions Code Section 10131 (a) is a real estate broker’s authorization to negotiate a sale of the real property/mobile home, transferring the mobile home by use of:

A- A quitclaim deed.

B- A grant deed.

C- Laches.

D- Any deed, other than a trust deed or deed of trust.

89 OUT OF 100

Napa resident Maria Gonzales, a newly-licensed real estate broker, has just negotiated her first trust deed loan for her client, Isaac Mahrsan. The loan’s term is 5 years, and it is Isaac’s first loan. Under Article 7 of the Mortgage Broker Law in California, Maria knows that certain regulations have been set forth regarding her commission in such a transaction. What is the maximum commission for loans subject to Article 7, for first loans?

A- Maria’s maximum commission on this loan is 5 percent of the principal, which applies to loans of 5 years or less.

B- Maria’s maximum commission on this loan is 5 percent of the principal, which applies to loans of 10 years or less.

C- Maria’s maximum commission on this loan is 5 percent of the principal of a loan, which applies to loans of 3 years or more.

D- Maria’s maximum commission on this loan is 10 percent of the principal of a loan, which applies to loans of 3 years or more.

90 OUT OF 100

Under Article 7 on “hard money loans” (cash) of $30,000.00 and over for first trust deed loans, and $20,000.00 and over for junior deeds of trust, except where the new usury laws apply, the loan broker’s commission maximum is:

A- 10%.

B- 12%

C- 20%

D- As much commission as her borrower will agree to pay her.

91 OUT OF 100

The legal phrase that describes the right to recover money or other personal property through a judicial proceeding, including the right to recover something under a contract, such as money owed on a note, as well as the right to recover damages for a tort or private wrong, is known as:

A- Choses in action

B- Chattels

C- Chattels real

D- Judicial action.

92 OUT OF 100

Which of the following statements is NOT accurate regarding Cal-Vet loans?

A- The required down payment is 1%-2% of the sales price or appraisal value, whichever is higher.

B- Monthly payments on a Cal-Vet loan include all of the following items (but nothing additional): principal and interest; 1/12 of the annual property taxes; hazard insurance; disability; and life insurance premiums.

C- CalVet requires a structural pest control report and a roof inspection on properties it finances.

D- The loan is made directly from the state to the veteran.

93 OUT OF 100

The Federal Reserve needs to tighten the economy. Which of the following actions would NOT act to achieve this purpose?

A- Increasing discount rates.

B- Raising the reserve requirement.

C- Increasing discount rates OR Buying securities.

D- Selling securities.

94 OUT OF 100

In 1980, an important piece of environmental legislation was passed. This legislation established a fund called the Superfund, to clean up uncontrolled hazardous waste sites and to respond to spills, and it also created a process for identifying potential responsible parties (PRPs) and ordering them to take responsibility for the cleanup action. What was the name of this law?

A- The Environmental Responsibility Act, or ERA.

B- The Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA.

C- The California Environmental Protection Agency Act, or CEPAA.

D- The Uniform Commercial Code Act, or UCCA.

95 OUT OF 100

Which of the following statements is accurate regarding escrow services in California?

A- In Northern California, the escrow services are usually performed by independent escrow companies or financial institutions.

B- In Southern California, the escrow services are usually performed by title insurance companies that have extensive escrow departments and many branch offices.

C- In Southern California, the escrow service fees are usually split 50-50 between the buyer and the seller.

D- In Northern California, the escrow service fees are usually paid by the seller.

96 OUT OF 100

In California, there is a requirement to report annual and quarterly loan activities to the California BRE, IF, within the past 12 months, a broker has negotiated any combination of 10 or more loans to a subdivision OR a total of more than $1,000,000.00 in loans. This mandate is known as:

A- Threshold Reporting.

B- “Big Lending” Reporting.

C- The Mortgage Loan Broker Law.

D- Regulation Z.

97 OUT OF 100

The main purpose of the Truth in Lending Law is:

A- Disclosure, because it requires lenders to disclose to buyers the true cost of obtaining credit.

B- Disclosure, because it requires borrowers to disclose to lenders any and all financial and material facts that could influence their ability to qualify for a loan.

C- To prevent any Federal or State Fair Lending Violation.

D- To ensure that the buyer and seller in a residential real estate transaction involving a new first mortgage loan have knowledge of all settlement costs.

98 OUT OF 100

When Christopher cuts down a tree in his backyard and sells it as firewood, the firewood then becomes personal property. This process is known as:

A- Annexation.

B- Severance.

C- Choses in action.

D- Emblementation.

99 OUT OF 100

In which of the following situations would Pasadena real estate salesperson Connie Lopez, who makes collections on real estate loans, be required to be licensed as a California real estate broker?

A- If Connie makes more than 8 collections per year, or collects more than $30,000.00.

B- If Connie makes more than 12 collections per year, or collects more than $30,000.00.

C- If Connie makes more than 10 collections per year, or collects more than $40,000.00.

D- If Connie makes more than 12 collections per year, or collects more than $40,000.00.

100 OUT OF 100

Alison Skateland, a real estate broker in Yuba City, California, has recently become interested in the sale of business opportunities — particularly restaurants and bakeries. The authority to conduct such business is covered under her real estate license, but Alison does need to know the proper way to handle such transactions. Which of the following is not an accurate statement about the handling of business opportunities?

A- If real property is involved in the sale, the broker (Alison, in this case) usually treats the sale of the business and sale of the land/building as two separate and concurrent transactions with two concurrent and contingent escrows.

B- The sale of business opportunities may involve the sale of only personal property.

C- Alison, in dealing with the sale of business opportunities, must remember to inform the purchaser of the various governmental agencies that the purchaser should contact for required permits, licenses, and clearances. These agencies include the IRS, State Board of Equalization, State Department of Benefit Payments, State Department of Industrial Relations, and various other county and municipal agencies.

D- The sale of a business opportunity includes the business’s stock, trade fixtures, and trade name, a non-competition agreement, and lease assignment. While such a sale also includes the goodwill of a business, a monetary value cannot be placed on the goodwill.

— ++—0ceshop0 principles—5.3.23—

1)      What is the California Department of Real Estate responsible for?Top of Form

a.       Advertising listings in California

b.      Connecting consumers with real estate licensees

c.       Regulating the real estate industry

d.      Valuing real property in California

2)      Where can California real estate law be found?

a.       Code of Civil Procedure

b.       Family Code

c.       In the Business and Professions Code

d.       Revenue and Tax Code

3)      How many members make up the Real Estate Advisory Commission?

a.       10

b.       12

c.       Four

d.       Six

4)      What does the Real Estate Advisory Commission do?

a.       Determines real estate policy and issues regulations to enforce law

b.       Discusses real estate policy and makes recommendations to the Commissioner

c.       Issues real estate licenses

d.       Values real property in California

5)      Which of these describes the composition of the California Department of Real Estate Advisory Commission?

a.       Top of Form

b.       Eight members, seven of whom are unlicensed consumers and one who is a licensed real estate broker

c.       Six members, all of whom must be real estate brokers with at least five years of experience

d.       Ten members, six of whom are real estate brokers and four who are unlicensed consumers

6)      What is the role of the Real Estate Commissioner?

a.       Act as chief executive officer of the California DRE

b.       Advise the governor on personal real estate dealings

c.       Preside over real estate cases in court

d.       Value properties listing for sale or rent in California

7)      What is the goal of real estate law?

a.       Limit activities real estate professionals can perform

b.       Limit the services consumers can obtain from real estate professions

c.       Promote the interests of real estate professionals

d.       Protect and promote public safety, health, order, and welfare

8)      What is the difference between real estate law and Regulations of the Real Estate Commissioner?

a.       Real estate licensees only need to follow the law, not the regulations.

b.       Real estate licensees only need to follow the regulations, not the law.

c.       Regulations are used to enforce and clarify the law. Real estate licensees must abide by both.

d.       The law governs real estate licensees, whereas the regulations govern California DRE activities.

9)      How many members on the Real Estate Advisory Commission are unlicensed consumers?

a.       Eight

b.       Four

c.       Six

d.       Ten

10)   How is an individual selected to act as Real Estate Commissioner?

a.       A public vote

b.       The individual is appointed by the governor

c.       The individual is selected by the attorney general

d.       The Real Estate Advisory Commission holds a vote

11)   How are members selected to serve on the Real Estate Advisory Commission?

a.       They are appointed by the governor

b.       They are appointed by the Real Estate Commissioner

c.       They are elected by former Real Estate Advisory Commission members

d.       They are elected in a public election

12)   Which of the following actions can an individual holding only a prepaid rental listing service (PRLS) license perform?

a.       Listing properties for rent

b.       Negotiating lease agreements on behalf of the landlord

c.       Negotiating lease agreements on behalf of the tenant

d.       Providing listings of residential properties available for rent to prospective tenants for a fee

13)   Jim would like to sell his own home. What is the minimum real estate license he must possess?

a.       Associate broker

b.       Broker

c.       None

d.       Salesperson

14)   Which of the following properties is considered a manufactured home?

a.       A structure transported in three units and built in 1975 on a permanent foundation

b.       A structure transported in two units and built in 1975 on a permanent chassis

c.       A structure transported in two units and built in 2005 on a permanent chassis

d.       A structure transported in two units and built in 2005 on a permanent foundation

15)   What must be true for a corporation to conduct real estate activities?

a.       All officers must hold a broker license

b.       All officers must hold a salesperson license

c.       At least one officer must hold a broker license

d.       At least one officer must hold a salesperson license

16)   Consuela is a real estate licensee, and she has three other licensees working under her supervision. What type of license does Consuela hold?

a.       Associate broker

b.       Broker

c.       Office manager

d.       Salesperson

17)   Jimbo doesn’t yet have a real estate license. Which activity is he legally allowed to perform without one?

a.       Give advice to a friend who is negotiating the purchase of a house.

b.       List a friend or family member’s home for sale for a fee.

c.       Negotiate the sale of a house for two friends and receive a tip as thanks.

d.       Receive payment for managing real estate.

18)   Edwina has a California salesperson license. Which of these statements is true?

a.       She must associate with a broker in order to perform any real estate activities.

b.       She must obtain a broker’s license before she can perform any real estate activities.

c.       She’s allowed to perform a limited set of real estate activities with this license.

d.       She’s allowed to perform all real estate activities, and may choose to work as an individual licensee or to associate with a broker.

19)   Edwina has a California salesperson license. Which of these statements is true?

a.       She must associate with a broker in order to perform any real estate activities.

b.       She must obtain a broker’s license before she can perform any real estate activities.

c.       She’s allowed to perform a limited set of real estate activities with this license.

d.       She’s allowed to perform all real estate activities, and may choose to work as an individual licensee or to associate with a broker.

20)   In which of these scenarios does the consumer need a real estate license?

a.       Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.

b.       Mickey is selling his own home and isn’t using the services of a listing agent.

c.       Peter is helping his sister, Kristen, find a new apartment and will not be compensated in any way.

d.       Ronald is acting as executor of his uncle’s estate, which includes selling the property his uncle owned.

21)   Which real estate brokerage ownership types may do business under a fictitious name?

a.       Partnerships only

b.       Sole proprietorships and partnerships only

c.       Sole proprietorships only

d.       Sole proprietorships, partnerships, and corporations

22)   When is a real estate license required?

a.       When performing maintenance work for one property owner

b.       When performing real estate activities for others, for compensation of any kind

c.       When performing real estate activities for others, without compensation

d.       When performing real estate activities for yourself

23)   Which of the following tasks would require a real estate license in California?

a.       Assemble closing documents

b.       Calculate a commission check

c.       Host an open house

d.       Place a for sale sign in a front yard

24)   What must be true for a partnership to conduct real estate activities?

a.       All partners must hold a broker license

b.       All partners must hold a salesperson license

c.       At least one partner must hold a broker license

d.       At least one partner must hold a salesperson license

25)   Which of the following tasks is an unlicensed assistant at a California brokerage permitted to perform?

a.       Interpret contract information for a client.

b.       Negotiate a commission.

c.       Show property.

d.       Write advertisements for broker approval.

26)   Amy acts like a salesperson and is supervised by a broker, but she holds her broker’s license. What is her job title?

a.       Associate broker

b.       Broker of record

c.       Confused

d.       Salesperson

27)   Which of the following properties is considered a mobile home?

a.       A structure transported in three units and built in 1975 on a permanent foundation

b.       A structure transported in two units and built in 1975 on a permanent chassis

c.       A structure transported in two units and built in 2005 on a permanent chassis

d.       A structure transported in two units and built in 2005 on a permanent foundation

28)   Which of the following statements best describes a sole proprietor?

a.       A brokerage owned by a single person

b.       A brokerage owned by at least two people

c.       An entity owned by one or more parties

d.       An individual who holds a real estate license

29)   Lynnette works for a regional bank. Her role is to gather information from buyers looking to obtain a home loan and make a recommendation as to whether the loan should be approved. Does she need a real estate license?

a.       If her compensation is tied to the transaction being completed, she needs a real estate license.

b.       No, bank employees are exempt from licensure.

c.       Yes, any individual, including lenders, involved in the purchase of real property must have a license.

d.       Yes, employees of banks, credit unions, and lending institutions must obtain a real estate license.

30)   You’ve been studying real estate in California for a while and are a few weeks from taking the exam and getting your real estate license. Which activities are you able to do?

a.       Charge your friends for real estate advice.

b.       Go to auctions and buy real estate on a friend’s behalf and split the profit when he flips the house.

c.       Negotiate and buy your own property.

d.       Sell your friend’s property for a small percent of the profit.

31)   Which of these parties must obtain a real estate license before performing real estate activities?

a.       Apartment resident managers or their employees

b.       Attorneys-at-law performing legal services for a client

c.       Persons holding a duly executed power of attorney from the real property’s owner

d.       Persons representing buyers or sellers who will receive compensation for their services

32)   River is an unlicensed assistant at a brokerage. Which of the following tasks is she permitted to perform for her broker?

a.       Assemble closing documents.

b.       Host an open house.

c.       Negotiate on a client’s behalf.

d.       Suggest a sale price for a client’s listing.

33)   You decide to help negotiate the sales price of a buddy’s place even though you don’t yet have a California real estate license. After the sale he pays you $50 in appreciation of your efforts. Why would this be considered an illegal activity?

a.       Because anything over $25 is considered to be an illegal form of compensation to anyone without a license.

b.       Because you can’t accept any amount of compensation for negotiating the sales price of a home that isn’t your own if you don’t have a license.

c.       Because you didn’t have the compensation agreement written down before the sale, the compensation is illegal.

d.       Because you offered advice negotiating the sales price when you shouldn’t have.

34)   What must be true for a business to perform real estate activities?

a.       All employees of the business must have a real estate license

b.       At least one employee must have a broker license

c.       At least one employee must have a salesperson license

d.       At least one employee must have a salesperson license and another employee must have a broker license

35)   Which real estate brokerage ownership types require a separate license?

a.       Corporations only

b.       Partnerships and corporations only

c.       Partnerships only

d.       Sole proprietorships only

36)   Adam is an unlicensed assistant working with Sarah, a licensed salesperson. The following tasks are on their plates. Which of these actions can only Sarah performed?

a.       Placing a for sale sign on a property

b.       Preparing marketing materials for the property

c.       Providing factual information about the property

d.       Showing the property to prospective buyers

37)   Amanda helps her neighbor sell his home by assisting with negotiations. She receives no compensation for her assistance. Based on this one transaction, Amanda ______.

a.       Doesn’t need a real estate license

b.       Must have a broker license

c.       Must have at least an associate broker license

d.       Must have at least a salesperson license

38)   What types of real estate licenses are issued in California?

a.       Broker and salesperson licenses

b.       Broker, salesperson, and associate broker licenses

c.       Only broker licenses

d.       Only salesperson licenses

39)   Angela is an unlicensed assistant working with Sam, a licensed salesperson. The following tasks are on their plates. Which of these actions can only Sam perform?

a.       Draft the buyer’s offer to the seller

b.       Negotiate on the client’s behalf

c.       Provide factual information about a property

d.       Schedule showings for a buyer

40)   Tom is an unlicensed individual helping his sister, Katie, find a new house, in return for a trip to Europe. Which of the following activities can Tom legally perform?

a.       He can negotiate the sale of her old house.

b.       He can purchase a new property for Katie at an auction.

c.       He can receive compensation from Katie for assisting in the purchase of her new house.

d.       He can search real estate sites and resources to find available homes in the area.

41)   June has worked with buyers and sellers for years. When homeowners default on their mortgage, June acts as trustee for the deed of trust. Under the deed of trust, June has the authority to sell the property. Does June have a real estate license?

a.       If she receives compensation for performing this activity, she must have a real estate license.

b.       No, trustees selling properties under a deed of trust are exempt from licensure.

c.       She only needs a real estate license if she is selling her own property.

d.       Yes, she is selling property for others. She must have a real estate license.

42)   Which activity can you perform without a license in California?

a.       Negotiate rent for another tenant in the office building where you work.

b.       Negotiate rent of an office building for the nonprofit where you work.

c.       Negotiate the sale price of a friend’s office building for a fee.

d.       Sell your neighbor’s house for a fee.

43)   In California, an individual performing real estate activities under the judgment or order of a court, such as a trustee in a bankruptcy, is ______.

a.       An exception to the real estate licensing requirement

b.       Required to have a broker license

c.       Required to have at least an associate broker license

d.       Required to have at least a salesperson license

44)   Which of the following statements best describes a real estate partnership?

a.       A brokerage owned by a single person

b.       A brokerage owned by at least two people

c.       An entity owned by one or more parties

d.       A team of two individuals who each hold a real estate license.

45)   Which of the following describes a prepaid rental listing service (PRLS)?

a.       A PRLS is a group of real estate licensees who only deal with residential property rentals.

b.       A PRLS is a type of real estate brokerage.

c.       A PRLS provides listings of residential properties available for rent to prospective tenants for a fee.

d.       A PRLS represents landlords by marketing their properties to prospective tenants for a commission.

46)   Which of the following statements best describes a real estate corporation?

a.       A brokerage owned by a single person

b.       A brokerage owned by at least two people

c.       A group of individuals who each hold a real estate license

d.       An entity owned by one or more parties

47)   What are common ownership structures for real estate brokerages?

a.       Partnerships only

b.       Sole proprietorships and partnerships only

c.       Sole proprietorships only

d.       Sole proprietorships, partnerships, and corporations

48)   California licensee Donald has a new listing for the house next door to his. He’s never had problems with these neighbors and hopes to keep it this way by making sure the “right” people move in. He doesn’t show the property to any prospective buyers with children. These actions soon bring complaints of a fair housing violation. What effect does this have on Robert (Donald’s sponsoring broker)?

a.       Neither Robert nor Donald will be affected by the fair housing violation.

b.       Only Robert is liable for Donald’s actions, and he alone will be sanctioned as a result of Donald’s fair housing violation.

c.       Robert is liable for Donald’s actions and could be sanctioned along with Donald as a result of Donald’s fair housing violation.

d.       Robert is not liable for Donald’s actions and is not affected by the fair housing violation.

49)   Sally just obtained her salesperson license. How long is the license valid?

a.       Four years

b.       One year

c.       Three years

d.       Two years

50)   Jackson holds a real estate broker license with an MLO endorsement. How many hours of continuing education must he complete each year to renew this endorsement?

a.       10 hours

b.       20 hours

c.       45 hours

d.       Eight hours

51)   To best prevent risk associated with licensee non-compliance with real estate-related federal regulations, brokerage firms should do which of the following?

a.       Encourage licensees to obtain outside training on real estate-related federal regulations.

b.       Include a review of related federal legislation in the policies and procedures manual and provide appropriate training.

c.       Rely on licensees to make themselves aware of all federal regulations related to real estate.

d.       Require licensees to keep a tracking journal of all activities as proof that they’ve not violated federal regulations.

52)   What is the minimum amount of full-time real estate industry experience that an individual must have to qualify for a broker’s license?

a.       Four years

b.       One year

c.       Three years

d.       Two years

53)   Brenda is a real estate salesperson. Jim is her sponsoring broker. Brenda is moving to a different area in the state and will no longer be able to work with Jim. Her new sponsoring broker will be Cindy. What must take place for Brenda to transfer her license to Cindy?

a.       Brenda completes a change application.

b.       Brenda must complete a new license application.

c.       Cindy completes a new license application for Brenda.

d.       Jim must notify the California DRE and give Brenda her license certificate. Brenda and Cindy complete a change application.

54)   Which agency issues the MLO endorsement?

a.       California Department of Real Estate

b.       Department of Finance

c.       Department of Licensing

d.       Nationwide Mortgage Licensing System and Registry (NMLS&R)

55)   Which of these does a sponsoring broker owe their associate brokers and salespersons?

a.       Free desk and office support

b.       Passing along leads

c.       Paying for marketing materials

d.       Supervision of activities

56)   What is vicarious liability as it applies to real estate?

a.       A broker commits an illegal act.

b.       A broker directs a licensee to commit an illegal act

c.       A broker is held responsible for the actions or omissions of the broker’s licensees.

d.       One licensee witnesses another licensee’s misconduct.

57)   How old must an individual be to qualify for a real estate broker license in California?

a.       18

b.       19

c.       20

d.       21

58)   Sally is a real estate salesperson. How many hours of continuing education must she complete before the license expiration date in order to renew it for another four years?

a.       25 hours

b.       30 hours

c.       45 hours

d.       8 hours

59)   How long is an MLO endorsement valid?

a.       Four years

b.       One year

c.       Three years

d.       Two years

60)   Maura is a real estate salesperson who does not have an MLO endorsement. Which of these actions can she perform for her client, who is financing the purchase of a single-family home?

a.       Offer to negotiate the terms of the client’s loan application.

b.       Offer to provide the client with a list of lenders they could consider working with to obtain the loan.

c.       Service the client’s loan.

d.       Take the client’s residential mortgage loan application.

61)   How many hours of continuing education must a California licensee complete in order to renew a real estate license?

a.       135 hours

b.       30 hours

c.       45 hours

d.       8 hours

62)   Jackson holds a real estate broker license with an MLO endorsement. How often must he renew his MLO endorsement?

a.       Every four years

b.       Every three years

c.       Every two years

d.       Every year

63)   Bradley has a real estate salesperson’s license. He’s done some traveling recently and missed the deadline to renew his license. It’s now 30 days past the expiration date. What must he do to renew his license?

a.       Complete the continuing education requirements and submit a renewal and late fee.

b.       File an appeal with the Real estate Commissioner.

c.       Re-qualify for a real estate license by completing pre-licensing courses and passing the state licensing exam.

d.       Retake the state licensing exam.

64)   What must take place if a real estate salesperson wants to transfer their license to a new sponsoring broker?

a.       The existing sponsoring broker must notify the California DRE and give the salesperson their license certificate. The salesperson and new sponsoring broker complete a change application.

b.       The new sponsoring broker completes a new license application for the salesperson.

c.       The salesperson completes a change application.

d.       The salesperson must complete a new license application.

65)   Al is 70 years old and has held his real estate broker license in good standing for 30 consecutive years. His license is up for renewal soon. How many continuing education hours must he complete?

a.       0 hours

b.       30 hours

c.       45 hours

d.       8 hours

66)   Years ago, Rachel held a real estate license. She took some time off to travel and start a family. Now she’s ready to get back in the saddle. Her license expired three years ago. What must she do to renew her license and start practicing real estate again?

a.       Complete the continuing education requirements and submit a renewal and late fee.

b.       File an appeal with the Real Estate Commissioner.

c.       Requalify for a real estate license by completing pre-licensing courses and passing the state licensing exam.

d.       Retake the state licensing exam.

67)   Which federal act requires states to pass laws relating to mortgage loan originator (MLO) endorsements?

a.       Consumer Financial Responsibility Act

b.       Regulation Z

c.       SAFE Act

d.       Senate Bill 36

68)   How many hours of continuing education must real estate licensees complete each year to renew their MLO endorsement?

a.       10 hours

b.       20 hours

c.       Eight hours

d.       Four hours

69)   What is the relationship between a policies and procedures manual and the broker’s obligation to supervise agents?

a.       Brokers who can prove that all agents have access to the PPM won’t be cited for failure to adequately supervise agents.

b.       Brokers who enforce policies and procedures outlined in an effective PPM have proof of efforts to properly train and supervise agents.

c.       The PPM may be used in place of face-to-face orientation training for new licensees.

d.       The PPM outlines the broker’s responsibility to supervise and provides detailed proof of scheduled one-on-one meetings and group training sessions.

70)   Karla is a sponsoring broker who owns her own brokerage. She has two associate brokers and two salespersons, who all work as independent contractors. She also has an unlicensed assistant on payroll as an employee. Which of the following is true of Karla’s liability?

a.       Karla is liable for the actions of all members of her firm, both the independent contractors and the employee.

b.       Karla is only liable for the actions of her associate brokers.

c.       Karla is only liable for the actions of her associate brokers and salespersons.

d.       Karla is only liable for the actions of her salespersons.

71)   As a managing broker, you’re responsible for your associate brokers’ actions. Which of the following risk management techniques helps prevent the risk associated with vicarious liability?

a.       Equipping your office with fire alarms and sprinklers

b.       Prohibiting licensees from recommending third party vendors to clients

c.       Providing training and policies/procedures documentation to staff

d.       Purchasing a general liability insurance policy

72)   Which of these real estate licensees may be exempt from the continuing education requirements for license renewal?

a.       Al is 70 years old and has been licensed in good standing for 30 consecutive years.

b.       Candice is 55 years old and has been licensed in good standing for 30 consecutive years.

c.       Savannah is the broker of record responsible for supervising five salespeople.

d.       Willard is 70 years old and has been licensed in good standing for 20 consecutive years.

73)   What must real estate licensees who obtain the MLO endorsement do?

a.       They must complete 20 hours of education, pass an examination, submit fingerprints to NMLS&R, and authorize a credit report pull.

b.       They only need to complete 20 hours of education.

c.       They only need to complete 20 hours of education and pass an examination.

d.       They only need to pass an MLO exam containing national and state-specific content.

74)   Steve holds a real estate license in Oregon but would also like to perform real estate activities in California. What must he do?

a.       As long as Steve holds an active license in a neighboring state, he can practice real estate in California.

b.       California does not have reciprocity agreements with any other states. Individuals licensed in other states must complete all of the requirements that an unlicensed individual completes.

c.       California has a reciprocity agreement with Oregon. Steve can complete a California application to receive a license.

d.       Steven cannot hold licenses and perform real estate activities in multiple states.

75)   How old must an individual be to qualify for a real estate salesperson license in California?

a.       18

b.       19

c.       20

d.       21

76)   Seamus sent a letter to the residents of Maywood Park, stating, “The Mormons are moving in! Sell your houses before property values plummet.” This is a fair housing violation, and also ______.

a.       A license law violation

b.       A strong business practice

c.       Creative advertising

d.       Morally ambiguous

77)   If your license is suspended, it’s only temporary. If your license is revoked, it is permanently removed and requires ______.

a.       Additional education

b.       A new license application after the penalty period

c.       A small fee

d.       A verbal reprimand

78)   What happens to a California real estate licensee if they are involved in a case and cannot pay the judgment amount, and the consumer is awarded money from the real estate Recovery Account?

a.       Nothing! That is what the fund is for!

b.       Their commissions will be garnished until the amount paid out to the victim is repaid.

c.       Their license will be suspended until they pay back the amount paid to the victim, plus interest.

d.       They can continue to practice real estate, but must pay back the amount paid out, plus interest.

79)   In most states, which of the following situations would most likely be grounds for suspension or revocation of a real estate license?

a.       Failure to determine the correct list price in a comparative market analysis

b.       Failure to find a buyer for a listed property

c.       Failure to include a broker protection clause in a listing agreement

d.       Failure to specify a definite termination date in a listing contract

80)   Bobby is representing his fiancé in a real estate transaction. Does he have any special disclosure requirements?

a.       No, because they are not married yet

b.       Only if the wedding will occur before the closing date

c.       Yes, because all special relationships must be disclosed

d.       Yes; licensees must always disclose their marital plans

81)   Serious violations of the real estate license laws typically result in which disciplinary action or actions?

a.       Additional education

b.       A small fine

c.       License suspension or revocation

d.       Reprimand

82)   Shana has a former conviction for petty theft, and one for armed robbery—two events that occurred more than five years ago. When she applies for her real estate license, what should she do with regard to these convictions?

a.       Disclose both, because any criminal conviction must be disclosed.

b.       Disclose only the armed robbery.

c.       Disclose only the petty theft, because armed robbery is not a reportable offense.

d.       Not disclose either, because they occurred more than three years ago.

83)   James represented a client who believes James was guilty of misrepresentation. The client files a complaint against James. Which entity will investigate?

a.       A private investigator

b.       California DRE

c.       James’ broker

d.       The state attorney general

84)   If a licensee commits a violation and it’s found the broker didn’t adequately supervise the licensee, whose license in jeopardy?

a.       Both the broker’s and licensee’s

b.       The broker’s

c.       The licensee’s

d.       The license of any future licensee of the firm

85)   Rita missed an important deadline for her client. This is an example of a(n) ______.

a.       Conversion

b.       Negligence

c.       Ordinary mistake

d.       Personal dealing

86)   When a complaint is filed against a real estate licensee in California, who is responsible for investigating the complaint?

a.       An arbitrator

b.       A private investigator

c.       California DRE

d.       The state attorney general

87)   If Jan is using the designation GRI (Graduate of the Real Estate Institute), but she has not paid her annual membership dues, is this a violation?

a.       No, because failure to pay dues does not constitute non-membership

b.       No, because GRI is not covered in real estate law

c.       Yes, because failure to pay dues is considered petty theft

d.       Yes, because it is dishonest

88)   James is a California licensee accused of serious license law violations. Which of these will NOT be part of the process of investigation by the DRE?

a.       It will hold a formal hearing before a judge to determine if the charges should be dismissed or are proven.

b.       It will impose disciplinary actions against James as deemed appropriate based on the violations he committed.

c.       It will issue a warrant for James’s arrest, and James will be held while the DRE completes its investigation.

d.       It will obtain statements and records related to the inquiry from James, the complainant, and any witnesses.

89)   What is the maximum amount that will be paid out of the Recovery Account for a transaction?

a.       $10,000

b.       $100,000

c.       $25,000

d.       $50,000

90)   The DRE investigated Sheila and has imposed a license suspension. What does this mean for Sheila?

a.       Her license is void. She’s not allowed to practice real estate anymore, and can’t reactivate her license.

b.       She may perform all her normal licensed activities, but she’s on probation so she better mind her Ps and Qs.

c.       She must pay a fine to have the suspension removed, and may not perform real estate activities until she does so.

d.       She’s not allowed to practice real estate during the term of the suspension, but after that time she can continue performing licensed activities.

91)   What is the maximum amount that will be paid out of the Recovery Account per licensee?

a.       $100,000

b.       $250,000

c.       $50,000

d.       $500,000

92)   Requiring a licensee to submit detailed reports related to trust fund accounting is an example of a condition that may be placed on a licensee with a ______ license.

a.       Restricted

b.       Retracted

c.       Revoked

d.       Suspended

93)   If Sima entered a plea of no contest in a criminal case she ______.

a.       Must not report this; as it would be a violation of confidential information

b.       Must report this to California DRE only if the charge is related to theft

c.       Must report this to California DRE under all circumstances

d.       Need not report this to California DRE because it is not a guilty verdict

94)   Gina received an earnest money check from her buyer on Friday, after the office had closed and her broker had gone home for the day. For safekeeping, Gina should ______.

a.       Cash the check and write a new check Monday for the same amount

b.       Deposit the money into her savings account so her client can earn interest over the weekend

c.       Hold onto the check until Monday, and give it to her broker then

d.       Return the check to her client

95)   Tabor’s uncle hired him as a listing agent. Because of their relationship, what may Tabor do with regard to the termination date of the agreement?

a.       Include an automatic renewal clause.

b.       Include a reasonable termination date.

c.       Leave it out.

d.       Write “family member” in the termination date field.

96)   A cabin has 120 feet of lake frontage. The cabin owner’s ability to access the lake is based on ______.

a.       An aquifer

b.       An easement

c.       Littoral rights

d.       Riparian rights

97)   Which economic characteristic of land contains the concept that a land’s value can be affected by the changes made to it, such as construction of buildings or fences?

a.       Improvements

b.       Permanence of investment

c.       Scarcity

d.       Uniqueness

98)   Property owners who live on or next to water have certain rights. An example of one of these rights includes ______.

a.       Contamination

b.       Hazardous waste

c.       Littoral

d.       Reversionary

99)   A river runs adjacent to a rancher’s property. The rancher’s ability to use the water from the river is based on ______.

a.       Aquifer rights

b.       Encroachment rights

c.       Littoral rights

d.       Riparian rights

100)                       Which of these is the best definition of real estate?

a.       Everything that’s not real property

b.       Land, plus all things permanently attached to it naturally or artificially

c.       Real property, plus all of the interests, benefits, and rights included in ownership

d.       The earth’s surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

101)                       Annette really wants to move to San Francisco, but she’s unsure whether she’ll be able to afford to live there. Housing is very expensive because there simply is no room to build any new housing units. Which economic characteristic does this reflect?

a.       Area preference

b.       Improvements

c.       Permanence

d.       Scarcity

102)                       The right to access non-navigable rivers, streams, and other flowing bodies of water adjacent to a property is called ______ rights.

a.       Land

b.       Littoral

c.       Mineral

d.       Riparian

103)                       California resident George has purchased a property with riparian rights. What does this mean?

a.       He has the right to use, divert, store, or sell the water that’s on or under his land.

b.       He has the right to use the percolating ground water, but only for growing crops.

c.       He has the right to use the water that flows across his land.

d.       The water rights have been separated from the land he now owns.

104)                       What’s the best definition of land?

a.       Everything that’s not real property

b.       Land, plus all things permanently attached to it, naturally or artificially

c.       Real estate, plus all of the interests, benefits, and rights included in ownership

d.       The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

105)                       Littoral rights allow property owners to take which of these actions?

a.       Construct a dock to moor their boat.

b.       Irrigate from a stream running through the property.

c.       Navigate the river running through the property.

d.       Use the water from the lake bordering the property.

106)                       Over time, a river running through Farmer Jones’ ranch deposits sediment along the banks of the river and adds half an acre of land to the ranch. This is an example of what process?

a.       Accretion

b.       Avulsion

c.       Erosion

d.       Riparian buffering

107)                       Physical characteristics of land include its immobility, indestructibility, and ______.

a.       Location

b.       Permanence of investment

c.       Scarcity

d.       Uniqueness

108)                       In many areas of the country, Marcellus Shale has become a hot commodity. This type of rock produces gas, which can be mined, stored, and sold. Abe learned that his family farmstead sat over a rich deposit of Marcellus Shale. What type of rights does Abe have relative to this shale?

a.       Air rights

b.       Sub-surface rights

c.       Surface rights

d.       Water rights

109)                       Sarah owns her own home. As part of her basic property rights, she has the right to decide who may or may not access the property. Which right is this?

a.       Disposition

b.       Enjoyment

c.       Exclusion

d.       Possession

110)                       Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?

a.       Alluvial

b.       Littoral

c.       Prior appropriation

d.       Riparian

111)                       The right to access ponds, lakes, and other stationary bodies of water is ______.

a.       Littoral

b.       Mineral

c.       Riparian

d.       Water

112)                       Jamie owns a lakeside home. Over a period of years, the water has receded quite a bit, doubling the size of the sand beach on his property. What’s the name of this process?

a.       Accretion

b.       Erosion

c.       Exclusion

d.       Reliction

113)                       Licensee Arlene is helping a client purchase a property that’s suitable for use as a private school, meaning it needs to have classrooms, assembly rooms, and sports fields. She locates two properties in the area that have the required attributes. What category of property is this considered?

a.       Commercial

b.       Industrial

c.       Residential

d.       Special purpose

114)                       Basic property rights include the rights of possession, control, exclusion, enjoyment, and ______.

a.       Destruction

b.       Disposition

c.       Encroachment

d.       Reliction

115)                       Doreen owns an office building and receives income from six stable tenants. What category of real estate does Doreen own?

a.       Agricultural

b.       Commercial

c.       Industrial

d.       Residential

116)                       Which physical characteristic of land addresses the concept that land isn’t interchangeable, and one piece of land isn’t exactly like another?

a.       Immobility

b.       Indestructibility

c.       Permanence of investment

d.       Uniqueness

117)                       Jordan bought 25 acres along a navigable river. Several years later, Jordan calculates that the river has slowly carried away almost two acres of land. What process caused this?

a.       Accretion

b.       Avulsion

c.       Erosion

d.       Riparian buffering

118)                       When Henry first began his real estate career, he focused on residential properties. As he gained more experience, he found that he really enjoyed helping business owners find warehouses for their products, or properties where they could conduct manufacturing activities. Of the primary categories of real estate, what types of properties does Henry handle?

a.       Industrial

b.       Leisure

c.       Residential

d.       Retail

119)                       Property ownership gives the title holder a bundle of rights. What’s significant about the concept of a bundle of rights?

a.       It describes an infinite number of rights associated with property ownership.

b.       It describes the ability to separate one right from the others while leaving the rest of the bundle intact.

c.       It’s an ancient Latin term meaning the property owner’s rights can’t be taken away.

d.       The property owner must identify each separate right that will be purchased; they’re not automatically included in a transfer.

120)                       Along with property ownership, rights are granted to use the land’s physical components. Which right allows a property owner to use or sell the underground resources, such as natural gas and minerals?

a.       Air

b.       Sub-surface

c.       Surface

d.       Water

121)                       Which term would you most likely see associated with a lake?

a.       Fracking

b.       Littoral

c.       Percolating

d.       Riparian

122)                       Which physical characteristic of land addresses the concept that the geographic location of a piece of land is fixed and can never be changed?

a.       Immobility

b.       Indestructibility

c.       Scarcity

d.       Uniqueness

123)                       Ruby just bought a few undeveloped acres in the California desert. Once she installs her manufactured home, she plans to obtain water for herself and her animals by digging a well to access the ______.

a.       Appropriated water

b.       Percolating ground water

c.       Public water source

d.       Riparian water

124)                       What’s the best definition of personal property?

a.       Artificial attachments to land that include things such as fencing, buildings, and walkways

b.       Everything that’s not real property

c.       Land

d.       Property that’s fenced

125)                       Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, Lewis’ condo is worth much more two years later. Which economic characteristic does this demonstrate?

a.       Area preference

b.       Improvements

c.       Permanence

d.       Scarcity

126)                       Juan has decided to invest his small inheritance in real estate. He is drawn to the fact that he can add a building where there wasn’t one previously and immediately increase the value of his investment. Which economic characteristic of real property is this?

a.       Area preference

b.       Improvements

c.       Permanence

d.       Scarcity

127)                       The owners of Brick and Brack, a development company, have purchased several acres of vacant land for their latest development. They plan to build a community of affordable single-family homes. What category of real estate will these be in after construction?

a.       Agricultural

b.       Commercial

c.       Industrial

d.       Residential

128)                       Your neighbor bought rights that will prevent you from ever building above two stories. What type of rights are these?

a.       Air

b.       Littoral

c.       Mineral

d.       Riparian

129)                       Sally and Pete are city dwellers who have always dreamed of living in a rural setting. When Pete inherits a 600-acre cattle ranch from his uncle, they don’t waste a moment packing up and moving to the ranch. What category of real estate is their new home considered?

a.       Agricultural

b.       Commercial

c.       Industrial

d.       Residential

130)                       What do riparian rights give landowners the ability to do?

a.       Drill an agricultural water well.

b.       Prohibit others from using the water.

c.       Use a pond adjacent to the property.

d.       Use a river running through the property.            

131)                                                                                                                                               Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?

a.       Area preference

b.       Immobility

c.       Permanence of investment

d.       Scarcity

132)                                          What’s the best definition of real property?

a.       Artificial attachments to land that include things such as fencing, buildings, and walkways

b.       Earth, soil, and air

c.       Land, plus all things permanently attached to it naturally or artificially

d.       Real estate, plus all of the interests, benefits, and rights included in ownership

133)                                          Alluvion describes new deposits of land that are the result of what natural process?

a.       Accretion

b.       Erosion

c.       Exclusion

d.       Reliction

134)                                          John and Tara have lived in their home for 23 years and are excited to move to Florida for retirement. As homeowners, what right allows them to sell their home?

a.       Disposition

b.       Enjoyment

c.       Exclusion

d.       Possession

135)                                          Which of the following is true about air rights?

a.       They allow the owner to use the open space above buildings.

b.       They allow the owner to use the space directly below buildings.

c.       They cannot be bought or sold.

d.       They include mineral rights.

136)                                          What are improvements with regard to property?

a.       Another name for a building permit

b.       Artificial attachments to land that include items such as fencing, buildings, and walkways

c.       Natural fixtures that are part of the land and that enhance its value

d.       The right to increase the value of a property

137)                                          Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed?

a.       Immobility

b.       Indestructibility

c.       Permanence of investment

d.       Uniqueness

138)                                          Which of the following is included with real property rights?

a.       Enjoyment

b.       Hazardous acts

c.       Right to destroy

d.       Right to encroach

139)                                          Shannon’s rural property in San Diego County has a small stream that runs across one corner where her horses are pastured, and her horses use it as a water source. What’s true about this situation?

a.       Shannon has a riparian right to use the water flowing across her property as a water source for her animals, though she may not divert the water.

b.       Shannon is violating the state’s water laws, which prohibit any use of water that flows across a property.

c.       She must have a permit from the state water board to use the water from the stream that runs across her property.

d.       The doctrine of prior appropriation makes this use of the stream water illegal, since it originates on another person’s property.

140)                                          The right to access rivers, streams, and other flowing bodies of water adjacent to a property is called ______.

a.       Land

b.       Littoral

c.       Mineral

d.       Riparian

141)                                          Display shelves installed by a business owner in a rented building are a good example of ______.

a.       Leased premises

b.       Real estate

c.       Real property

d.       Trade fixtures

142)                                          The Acme Company is planning to build a factory on the three-acre property it just purchased in Southern California. The factory will need access to a large amount of water. How will the company gain the right to the water it needs?

a.       It must apply for a water permit from the California State Water Resources Control Board.

b.       It must negotiate a deal with a property owner with previous water rights under the doctrine of prior appropriation.

c.       It must purchase water rights from a current property owner with riparian rights.

d.       It must use reclaimed water from the local water treatment plant.

143)                                          What term explains the complexity of property ownership rights and how rights for a single property can be “owned” by multiple parties at the same time?

a.       Littoral rights

b.       Physical component rights

c.       Riparian rights

d.       The bundle of rights

144)                                          Licensee Dionne pointed out to her buyer client the items that would be considered real property. What is one of the key characteristics of an item that is real property (also known as a fixture)?

a.       Internal or external to the house

b.       Made of the same material as an interior or exterior wall

c.       Over or under a certain value

d.       Permanently affixed to the property

145)                                          Of the following, which is most likely to be considered a fixture?

a.       a fence around a field

b.       a pasture

c.       a stream

d.       a tractor

146)                                          Mrs. Blanchard cut down a tree growing on her property. Which of the following has occurred?

a.       A fixture has become real property.

b.       Personal property has become real property.

c.       Real property has become a trade fixture.

d.       Real property has become personal property. 

147)                                          What are emblements in real estate?

a.       Cultivated crops

b.       Detached fixtures

c.       Free-standing plants

d.       Open spaces

148)                       Having _______ on file allows lenders to confiscate personal property pledged as collateral in the event of a borrower default.

a.       A chain of title

b.       A title insurance policy

c.       A UCC security agreement and financing statement

d.       Proof of ownership

149)                       What’s the Uniform Commercial Code?

a.       A set of business laws created to regulate commercial transactions, including contracts dealing with personal property

b.       A set of business laws created to regulate financial contracts dealing with real estate

c.       A set of standards created to create a uniform way in which all commercial real estate transactions must be conducted

d.       A set of standards for commercial business code of ethics

150)                       Which of the following is an example of a fixture that is real property?

a.       Above-ground pool and pool accessories

b.       Bathroom mirror hanging on a hook

c.       Photos and wall hangings

d.       Shelves attached to the wall with brackets

151)                       What’s contained in a UCC security agreement?

a.       A complete description of the personal property used as collateral

b.       A list of personal character references

c.       A list of security services provided under the contract

d.       A signature of an authorized representative of the lender

152)                       Bart just toured his fourth patio home of the day. To help him remember what he saw in each one, he’s making notes about décor, updates, and inclusions that will stay with the property. Which of the following items is NOT considered personal property and would therefore stay with a home?

a.       The area rug in the dining room

b.       The banker’s lamps in the den

c.       The chandelier in the foyer

d.       The patio heater on the back patio

153)                       Who is required to sign a security agreement for security arrangements under the Uniform Commercial Code?

a.       The borrower

b.       The lender

c.       The seller

d.       The testator

e.       The UCC requires the borrower to sign a security agreement for any security arrangements. When used in the financing of real estate, the agreement must adequately identify personal property used as collateral.

154)                       Which of the following would be considered personal property?

a.       Built-in microwave

b.       Custom curtains

c.       Free-standing TV

d.       In-ground pool

155)                       Which of the following are included in the transfer of real property unless specifically excluded in writing?

a.       Chattel

b.       Fixtures

c.       Personal possessions

d.       Personal property

156)                       What is the best way for a seller and buyer to demonstrate their agreement that the home’s existing refrigerator and a dishwasher are included in the property sale?

a.       By including a bill of sale or agreement in the purchase contract

b.       By shaking hands on it on the day of the sale

c.       By verbal agreement after the sale

d.       By verbal agreement before the sale

157)                       Which of the following would be used to describe an item that is both a fixture and real property?

a.       Above-ground

b.       Free-standing

c.       In-ground

d.       Movable

158)                       An item that would most likely be considered a fixture because of agreement between buyer and seller is _____.

a.       a garage door opener

b.       a garbage disposal

c.       draperies

d.       kitchen cabinets

159)                       Ron’s company leased a building so that it could build an escape room experience. After operating for two years, attendance (and thus its profits) started to drop significantly, so it decided to close the location. When the workers started taking down the installation, they realized that some of the structures would damage the walls if they were to try to remove them. Which of these is true about these trade fixtures?

a.       If Ron leaves them in place and the lease expires, he has three months to remove them.

b.       Ron is required to leave the fixtures if they’re attached.

c.       Ron is required to take the fixtures and return the premises to its original condition.

d.       Ron may take the fixtures as long as he repairs any damage caused by removal.

160)                       If an item is permanently attached to a property, a court would most likely consider it a fixture if it passes which of the following tests?

a.       Adaptability of the item to the land’s use

b.       Agreement of the parties

c.       Method of annexation

d.       Relationship of the parties

161)                       When using the MARIA acronym to test whether an item is a fixture, what do the two As stand for?

a.       Acceptability of the fixture and agreement of the parties

b.       Adaptability of item and accessibility to the property

c.       Adaptability of item to land’s use and agreement of the parties

d.       Allowable use and acceptable use

162)                       Ted’s seller client is adamant that she’ll be uprooting and taking most of the fruit trees in the backyard when she sells her home. Ted makes a note to himself that he’ll need to include the ______ of the trees in the comments for his listing.

a.       Abatement

b.       Annexation

c.       Defenestration

d.       Severance

163)                       In the consideration of real property and personal property, severance is ______.

a.       The process of cancelling the agreement or bill of sale for a real estate transaction.

b.       The process of converting personal property to real estate.

c.       The process of removing a fixture before agreement or after negotiation, to designate it as personal, rather than real, property.

d.       The test of how an item is attached to the property and how permanent the attachment is.

164)                       If the sale of a property that includes soybean fields occurs before the crops are ready for harvest, which of the following is the best option for the parties to the transaction to take?

a.       The buyer should assume the crop transfers with the property.

b.       The contract between the parties should clarify the disposition of the crop.

c.       The seller should assume the crop does not transfer with the property.

d.       The seller should harvest the beans before the sale closes.

165)                       Tim and Tina Wells bought a home with absolutely beautiful perennial gardens in the back. The plantings were designed to bring birds, bees, and butterflies and to provide color for most of the year. When they did the final walkthrough, they were dismayed to see that many of the shrubs and flowering plants had been removed. They expected these plantings to be considered part of the real property because of the ______.

a.       Adaptation to the land

b.       Agreement of the parties

c.       Intention in placing the item

d.       Method of annexation

166)                       The MARIA acronym helps to identify the five tests of a fixture. Which of the following tests refers to how and whether the item is attached to the property?

a.       Adaptability of the item to the land’s use

b.       Agreement of the parties

c.       Intention in placing item on land

d.       Method of annexation

167)                       Which of the following is NOT one of the five basics tests that courts use to determine whether an item is a fixture or personal property?

a.       Agreement of parties

b.       Legally permissible use

c.       Method of annexation

d.       Relationship of the parties

168)                       In which form of co-ownership is a person’s ownership inheritable?

a.       Joint tenancy

b.       Tenancy by the entirety

c.       Tenancy in common

d.       Tenancy in severalty

169)                       Once Greg and Caitlin were married, they decided to purchase a home together. Since it was a shotgun wedding after a weekend in Vegas, they made sure that their ownership included the right of survivorship as well as protection from the other spouse attempting to sell the house from under them. Though not recognized in all states, the most likely form of co-ownership under which they would make this purchase is ______.

a.       Estate in severalty

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenancy in common

170)                       John and Dale are married in San Francisco, and soon purchase a condo. They’ll take title to it by default as ______ according to California law.

a.       Community property

b.       Joint tenants

c.       Tenants by the entirety

d.       Tenants in common

171)                       California couple Tim and Roxanne own a condo as community property. When Tim stops paying his credit card debt, can the creditor put a lien on their condo?

a.       No. Community property is exempt from liens and judgments.

b.       No. Creditors may not place a lien on community property to collect on an individual co-owner’s debt.

c.       Yes. A lien may be placed on community property for a debt owed by one of the co-owners.

d.       Yes, as long as Tim’s debt was incurred while he and Roxanne were married.

172)                       Property with ownership by more than one person is known as ______.

a.       Co-ownership

b.       Dual ownership

c.       Estate by severalty

d.       Property partnership

173)                       Billie (Wilhelmina) Silva was just licensed as a broker, and she plans to hang out a shingle and go into business for herself. As a sole proprietor, which of the following business names can she NOT use?

a.       Billie Silva

b.       Billie Silva Realty

c.       Happy Homes Realty

d.       Wilhelmina Silva Realty

174)                       Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?

a.       Estate in severalty

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenancy in common

175)                       Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided?

a.       Barbie and Midge each own 50%.

b.       Barbie and Skipper each own 50%.

c.       Barbie, Midge, and Ken’s heirs each own one-third.

d.       Barbie owns two-thirds, and Midge owns one-third.

176)                       Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn’t allow him to do so. What type of ownership do they have?

a.       Joint tenancy

b.       Tenancy by the entirety

c.       Tenancy in common

d.       Tenancy in

177)                       Debbie and Chris are a married couple in California. When they purchase their first home together, they want to make sure that if one of them dies, the other will inherit ownership of the property. How should their ownership be recorded on the deed?

a.       Community property

b.       Community property with right of survivorship

c.       Tenants by the entirety

d.       Tenants in common with right of survivorship  severalty

178)                       Which ownership type is defined by four unities: time, title, interest, and possession?

a.       Freehold estate

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenancy in common

179)                       Which type of ownership includes the unity of time, title, interest, possession, and marriage, and dissolves to a tenancy in common after a divorce?

a.       Estate in severalty

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenants in common

180)                       Which one of the following statements about community property rights and property ownership is true?

a.       All property purchased before and during the marriage or legal union automatically becomes community property.

b.       All property purchased separately before the marriage or legal union must be sold and the profits divided equally between the partners.

c.       Any property purchased before the marriage or legal union must have the spouse as the beneficiary.

d.       Property owned separately before the marriage or legal union is separate from the community property, but property purchased during the marriage is owned equally.

181)                       Ryanne is a tenant in a single-family home owned by Dominick. What type of interest does Ryanne have in the property?

a.       Freehold

b.       Homestead

c.       Leasehold

d.       Lifelong

182)                       Which of the following describes an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other?

a.       Estate at will

b.       Estate for years

c.       Leasehold estate

d.       Life estate

183)                       Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace’s death?

a.       Lucas

b.       Lucas and Tom

c.       Lucas, Monique, and Amy

d.       Lucas, Tom, Amy, and Monique

184)                       What form of ownership is inheritable and includes the entire bundle of rights, not subject to any conditions or qualifications?

a.       Fee entire

b.       Fee on condition

c.       Fee simple absolute

d.       Qualified fee

185)                       In California, an estate at will is known as ______.

a.       A life estate

b.       Chattel interest

c.       Personal property

d.       Real chattel

186)                       Eva, Stella, and Lynn owned a vacation home two blocks from the beach. Sadly, Stella passed away over the winter, so when summer arrived, Eva and Lynn shared the home with Stella’s nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?

a.       Estate in severalty

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenancy in common

187)                       Which of the following is a life estate in property held by a widow?

a.       Curtesy

b.       Dower

c.       Estate at will

d.       Homestead

188)                       Lewis and Elliot started a real estate investment business together. After much discussion with their attorney, they decided to incorporate, but in such a way that they are treated like a partnership and don’t have to pay corporate taxes. What form of business do they have?

a.       Double proprietorship

b.       Limited liability partnership

c.       Subchapter C corporation

d.       Subchapter S corporation

189)                       Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building?

a.       As a joint tenant with rights of survivorship

b.       As a tenant in common with Oliver’s heirs

c.       In severalty

d.       In trust

190)                       Ken, Dale, and James were brothers who owned more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result was that the court gave each brother a designated set of acres to own. What did the court grant?

a.       Bifurcation

b.       Parcel

c.       Partition

d.       Severalty

191)                       An inheritable freehold estate that’s a fee simple defeasible (where the grantor can reclaim ownership) is also known as ______.

a.       Fee absolute

b.       Fee simple

c.       Qualified fee

d.       Tenancy at will

192)                       What’s the difference between reversionary interest and remainder interest in a property?

a.       Remainder interest applies only to heirs.

b.       Reversionary interest only applies to spouses.

c.       With remainder interest, the property remains with the owner, even when a life tenant possesses the property.

d.       With reversionary interest, the property reverts to the owner after the death of the life tenant.

193)                       Sherman, who owns property in a life estate, neglects the property, significantly diminishing its value. This is called ______.

a.       A lease option

b.       An act of waste

c.       An estate at sufferance

d.       A possessional prerogative

194)                       Non-lawful possession after the expiration of a lease is called ______.

a.       Estate at sufferance

b.       Estate at will

c.       Estate for years

d.       Leasehold estate

195)                       A sole proprietor is a familiar business model. If you practice real estate as a sole proprietor, which of the following is a true statement?

a.       You are on a salary.

b.       You cannot be held liable for your actions.

c.       You have a partner.

d.       You’re an independent contractor.

196)                       Peter is a tenant in a single-family home owned by Cheyenne. What type of interest does Cheyenne have in the property?

a.       Freehold

b.       Homestead

c.       Leasehold

d.       Lifelong

197)                       Dan and Rita are a married couple in California. Which of these items will NOT become community property for them?

a.       The 10-bedroom, 10-bath home they purchase together.

b.       The horse Rita buys with income from her paycheck.

c.       The Maserati Dan buys with income from his investments.

d.       The ruby slippers Rita inherits from her Auntie Em.

198)                       ______ is the form of ownership used by married couples in certain states. It includes automatic survivorship rights.

a.       Tenancy by five unities

b.       Tenancy by the entirety

c.       Tenancy by union

d.       Tenancy in common

199)                       To what type of estate does pur autre vie apply?

a.       Fee simple

b.       Freehold estate

c.       Homestead

d.       Leasehold

200)                       Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?

a.       Termination by division

b.       Termination of co-ownership by partition

c.       Termination of estate in severalty

d.       Termination of joint tenancies

201)                       Which form of real property ownership (for owners other than married couples) means there’s equal ownership shares with undivided possession rights?

a.       Joint tenancy

b.       Tenancy by the entirety

c.       Tenancy in common

d.       Tenancy in severalty

202)                       Jenner purchased his first home, to which he’ll have access forever, as far as he knows. Jenner owns ______.

a.       A freehold estate

b.       A leasehold estate

c.       An estate for years

d.       An ownership estate

203)                       In California, an estate for years is known as ______.

a.       Annual chattel

b.       Chattel annual

c.       Chattel real

d.       Personal interest

204)                       Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned?

a.       It’s a joint tenancy.

b.       It’s held as a tenancy in common.

c.       It’s owned as an estate in severalty.

d.       There isn’t enough information to tell.   

205)                                                                                                                               Which of the following is NOT a characteristic of a corporation?

a.       Corporations are recognized legal entities.

b.       Corporations are tangible and nontaxable.

c.       Corporations are taxable.

d.       Corporations have tax rates separate from individual tax rates.

206)                                                                                                                               Which of the following is a life estate in a property held by a widower?

a.       Curtesy

b.       Dower

c.       Estate at will

d.       Remainderman

207)                                                                                                                               Limited liability companies and limited liability partnerships are favorable forms of business because ______.

a.       Owners of the LLC or LLP are personally liable for LLC/LLP obligations.

b.       They aren’t taxed as partnerships.

c.       They don’t require a general partner.

208)                                                                                                                               All trusts have three parties: the trustor, the beneficiary, and the ______.

a.       Attorney in fact

b.       Broker

c.       Founder

d.       Trustee

209)                                                                                                                               When Edmund died, he left several properties to his heirs. He owned a grocery store and a campground outright, and a strip mall that was held in a living trust. Which of the properties, if any, did NOT have to go through the probate process after his death?

a.       The campground

b.       The grocery store

c.       The strip mall

d.       They all had to go through probate.

210)                                                                                                                               Marcia Weinstein died, and her property wasn’t held in a trust. Thus, her estate will go through ______ to ensure her property is distributed to her beneficiaries in accordance with her will.

a.       A moderator

b.       An attorney

c.       Estate planning

d.       Probate

211)                                                                                                                               Under a land trust, the owner directs a ______ to hold title to the real estate.

a.       Corporate fiduciary

b.       Family member

c.       Friend

d.       Real estate broker

212)                                                                                                                               What primary benefit does a living trust have over a will?

a.       It avoids probate.

b.       It avoids taxes.

c.       It’s easier to establish.

d.       It’s less expensive.

213)                                                                                                                               Peter wants to set up a land trust so that his children can benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust, and Tom agreed. How is the trust created?

a.       Peter conveys the real estate to Tom.

b.       Peter dies.

c.       Peter purchases the real estate.

d.       Tom distributes income from the real estate investments.

214)                                                                                                                               Julian and Clara want to leave their real estate holdings to their children. If at all possible, they’d like those holdings to avoid the probate process after they’re deceased. Their attorney recommends a land trust. Is there a type of trust they could establish that would avoid probate?

a.       No, all trusts go through probate.

b.       Yes, a C trust would avoid probate.

c.       Yes, a living trust would avoid probate.

d.       Yes, a testamentary trust would avoid probate.

215)                                                                                                                               Which one of the following statements about testamentary trusts is true?

a.       Like living trusts, testamentary trusts avoid probate.

b.       Testamentary trusts do not avoid probate.

c.       Testamentary trusts do not need to be reviewed by an attorney.

d.       The costs of administering a testamentary trust is not borne by the beneficiaries.

216)                                                                                                                               Martin placed all of his real estate investments in a trust, and the proceeds are distributed through the trust to his son Nathan. Martin still manages the properties indirectly, and Nathan currently benefits, as he’s past the required beneficiary age of 18. What type of trust is this?

a.       Indirect trust

b.       Living trust

c.       Probate trust

d.       Testamentary trust

217)                                                                                                                               Martin placed all of his real estate investments in a trust, and the proceeds will be distributed through the trust to his son Nathan. In this situation, Nathan is the ______.

a.       Beneficiary

b.       Fiduciary

c.       Trustee

d.       Trustor

218)                                                                                                                               In a trust, the trustee is the person who ______.

a.       Creates the trust

b.       Is empowered to void the trust for any reason

c.       Makes sure the terms of the trust are carried out

d.       Receives the benefits of the trust

219)                                                                                                                               Which one of the following statements is true about land trusts?

a.       A beneficiary’s interest in the land must be conveyed through a deed.

b.       Land trusts generally continue for a specified term, such as 10, 20, or 30 years.

c.       The identity of the trust owner is made public.

d.       The person who establishes the trust (the trustor) is rarely the beneficiary.

220)                                                                                                                               Which of the following trusts is created according to the terms of the will of a deceased person?

a.       Juvenile

b.       Living

c.       Tertiary

d.       Testamentary

221)                                                                                                                               XYZ Trust would like to sell its property. Which of the following is the legal title holder?

a.       The beneficiary

b.       The personal representative of the estate

c.       The trustee

d.       The trustor

222)                       Which of the following statements is true regarding trusts?

a.       Any asset may be held in a trust.

b.       The beneficiary can’t be a minor.

c.       The trustee conveys title to the trustor.

d.       The trustor is the person who carries out the trustee’s wishes.

223)                       A living trust differs from a testamentary trust in that a living trust is established to convey property as well as to ______.

a.       Dictate terms of care in the event the trust creator becomes incapacitated

b.       Hasten the probate process

c.       Shelter income from taxation

d.       Transfer ownership before death and avoid probate       

224)                                                                                                                                                                                 There are many advantages to holding property within a trust. One of the most important advantages is that some trusts ______.

a.       Avoid probate

b.       Need not be reviewed by an attorney

c.       Require probate

d.       Typically take years to sort out

225)                                                                                                                                                                                 Henry died, and his property wasn’t held in a trust. Thus, his estate will go through probate to ensure his property is distributed to his beneficiaries in accordance with his will. The probate process often takes ______ before the property is distributed.

a.       20 years or more

b.       A few days

c.       A few hours

d.       A year or more

226)                                                                                                                                                                                 All sorts of trusts, including living trusts, have three parties: a trustee, a trustor, and a beneficiary. In the case of a living trust, the person who places property in trust while still alive for the benefit of another person is the ______.

a.       Beneficiary

b.       Optee

c.       Trustee

d.       Trustor

227)                                                                                                                                                                                 When a land trust expires, the trustee must either extend the trust term or sell the real estate and ______.

a.       Give all of the proceeds to the attorneys involved

b.       Give the proceeds to the beneficiary

c.       Give the proceeds to the trustor

d.       Retain the proceeds

228)                                                                                                                                                                                 Darren set up a land trust so that his children could benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust. Darren is the ______.

a.       Beneficiary

b.       Executor

c.       Trustee

d.       Trustor

229)                                                                                                                                                                                 What type of asset is held in a land trust?

a.       Always tillable land

b.       Cash

c.       Real estate

d.       Stocks and bonds

230)                                                                                                                                                                                 Beneficiary interest in land that’s part of a land trust is considered ______.

a.       Personal property

b.       Protected from creditors

c.       Real property

d.       Subject to partition

231)                                                                                                                                                                                 Anthony owns a new commercial strip mall with several units. He’s hired Jillian as his agent to find tenants to rent each unit. Is Jillian required to provide Anthony with an agency disclosure form?

a.       It depends on how many units are for lease.

b.       No, agency disclosure is only required for residential transactions.

c.       No, agency disclosure is only required on sales of commercial properties.

d.       Yes, Jillian is required to provide Anthony with an agency disclosure form.

232)                                                                                                                                                                                 Rob is searching for a new apartment that he can lease for the next two years while he’s working in the area. He has hired Danielle to represent him as his agent in this transaction. Is Danielle required to provide Rob with an agency disclosure form?

a.       No, agency disclosure is only required on leases shorter than one year.

b.       No, agency disclosure is only required on sales of residential properties with one to four units.

c.       No, Danielle does not provide the agency disclosure to her client. He only provides it to the landlord involved in the transaction.

d.       Yes, agency disclosure is required on leases exceeding one year.

233)                                                                                                                                                                                 Simon is a buyer represented by Peter. Peter shows Simon several homes currently on the market. What is Peter’s relationship to the sellers, if he doesn’t represent them?

a.       Peter has no relationship with the sellers.

b.       Peter is a fiduciary for the sellers.

c.       The sellers are Peter’s customers.

d.       The sellers are Peter’s principals.

234)                                                                                                                                                                                 Cam is a broker. His licensees, Jane and John, represent two sides in a single transaction. Jane represents the seller; John represents the buyer. What relationship does Cam have to the buyer and the seller?

a.       Cam is a designated agent to both the buyer and seller.

b.       Cam is a designated agent to the buyer and a dual agent to the seller.

c.       Cam is a designated agent to the seller and a dual agent to the buyer.

d.       Cam is a dual agent to both the buyer and seller.

235)                                                                                                                                                                                 Rhonda is an unrepresented buyer who’s purchasing Tony’s townhome. Gary represents Tony in the sale of his property. What’s Rhonda’s relationship to Gary?

a.       A client and fiduciary

b.       A customer

c.       A customer and client

d.       A fiduciary

236)                                                                                                                                                                                 As Tina’s agent, Marcus has broad responsibility to handle all the details of a specific transaction. What type of agent is Marcus?

a.       Dual

b.       General

c.       Limited

d.       Specific or special

237)                                                                                                                                                                                 Stacey, a buyer, is working with Rebecca, a licensee, in a state that doesn’t recognize or permit implied agency. Rebecca doesn’t represent Stacey, however, and is performing only ministerial tasks for her. Which of the following statements about this situation is correct?

a.       Rebecca can’t work with Stacey without an agency agreement.

b.       Rebecca is acting in an agency capacity for Stacey.

c.       Stacey is Rebecca’s client.

d.       Stacey is Rebecca’s customer

238)                                                                                                                                                                                 Which of the following lease agreements should be accompanied by an agency disclosure?

a.       15-month lease

b.       Nine-month lease

c.       Six-month lease

d.       Three-month lease

239)                      Jill is selling her property and hired David as her agent. David brings another client, Kirk, to see the property, which Kirk is interested in purchasing. What kind of agent is David acting as in this scenario?Top of Form

a.       A buyer’s agent

b.      A dual agent

c.       A seller’s agent

d.      A sub-agent

240)                      An unrepresented ______ who’s a party to a transaction is known as a principal.

a.       Agent

b.      Broker

c.       Client

d.      CustomerBottom of Form

241)                      When a licensee has broad responsibility to handle all details of a specific transaction, what type of real estate agency relationship usually exists?

a.       Designated

b.       General

c.       Special

d.       Universal

242)                      You’re holding an open house for Brenda. Walt and Mary walk in and ask you for a flyer that gives details about the property. At this point, what’s your relationship with Walt and Mary?

a.     Clients

b.     Confidantes

c.      Customers

d.     Friends Top of Form

243)                      Which one of the following definitions best describes a consumer?

a.       Someone who is hired to act on behalf of a client

b.      Someone who is in a position of trust and loyalty

c.       Someone who is involved in a transaction but represents neither party

d.      Someone who uses or purchases a product or service

244)                      Which of the following best indicates that Harold is Kelsey’s seller client?

a.       At an open house, Harold asked Kelsey about her commission rate and sales track record.

b.      Harold and Kelsey talked at a local elementary school event about the real estate market and the possibility of Harold selling his house.

c.       Kelsey and Harold have a signed agency agreement.

d.      Kelsey cold-called Harold, and he mentioned that he had been thinking of selling his house.

245)                      Javier represents Marcus, who’s selling his rental property to Ben. Ben is represented by another real estate licensee, Francis. What is Ben’s relationship to Javier?

a.       Client and fiduciary

b.      Customer

c.       Customer and client

d.      Fiduciary

246)                      What types of transactions in California may require agency disclosure?

a.       Commercial leases only

b.      Residential and non-residential sales and leases

c.       Residential leases only

d.      Residential sales onlyBottom of Form

247) What’s the term for someone who’s been given the authority to act on behalf of someone else?

a.     Agent

b.     Client

c.      Mortgage lender

d.     Trustor

248) Phil is a property manager, which means he serves as a _______ agent to his landlord/client.

a.     Designated

b.     General

c.      Special

d.     Universal

249) Jennifer is selling her property and hired Larry as her agent. Jane brings her prospective buyer client, Andrew, to see Jennifer’s property. What is Larry’s role in this scenario?

a.     A buyer’s agent

b.     A dual agent

c.      A seller’s agent

d.     A sub-agent

250) Which of the following statements regarding buyer and seller agency is true?

a.     A seller’s agent represents the buyer, while the buyer’s agent represents the seller.

b.     A seller’s agent represents the seller, while the buyer’s agent represents the buyer.

c.      A sub-agent represents the buyer.

d.     Seller agents are dual agents.

251) Terry represents seller Farrah, and Michael represents Troy, the buyer. Who is (or are) the principal(s) in this transaction?

a.     Farrah

b.     Farrah and Troy

c.      Terry and Michael

d.     Troy

252) Which of the following describes a universal agent?

a.     Buyer’s agent

b.     Conservator

c.      Escrow officer

d.     Listing agent

253) Paulo is a property manager for several large properties. Which type of agent is he in relation to the landlord/client?

a.     Dual

b.     General

c.      Limited/special

d.     Unlicensed

254) April and Wayne are the buyer and seller of a condo, respectively. April is represented by Steve. Wayne is represented by Wanda. Name the principal(s) in this transaction.

a.     April and Wayne

b.     Only Wanda

c.      Only Wayne

d.     Steve and Wanda

255) Listings for sale or lease involving ______ to ______unit residential and commercial properties require agency disclosure in California.

a.     One; 10

b.     One; 40

c.      One; five

d.     One; four

256) You have a listing agreement with Sam. Because of this, what is Sam’s relationship to you?

a.     Client

b.     Confidante

c.      Customer

d.     Friend

257) Tamron owns a commercial strip mall with several units. She’d like to sell the property and move on to another project. She has hired Christopher as her agent. Is Christopher required to provide Tamron with an agency disclosure form?

a.     No, agency disclosure is not required on commercial properties.

b.     No, agency disclosure is only required on sales of residential properties with one to four units.

c.      No, Christopher does not provide the agency disclosure to his client. He only provides it to prospective buyers.

d.     Yes, agency disclosure is required on commercial properties

258) Which of the following is the most serious consequence of treating a customer as a client?

a.     Breaching your duty to your actual client

b.     Drumming up potential business

c.      Wasting your time

d.     Working for someone for free

259) In general, what is the term for a person who’s been placed in a position of loyalty and trust?

a.     Attorney in fact

b.     Client

c.      Fiduciary

d.     Mortgage lender

260) Which type of agent is an escrow officer?

a.     General agent

b.     Limited agent

c.      Single agent

d.     Universal agent

261) Taylor is the owner of a new apartment building. She has 15 units she needs to lease, so she has enlisted Pablo as her agent. Is Pablo required to give Taylor an agency disclosure form?

a.     No, agency disclosure is not required for residential transactions involving five or more units.

b.     No, agency disclosure is only required for commercial transactions.

c.      No, agency disclosure is only required on sales of residential properties.

d.     Yes, agency disclosure is required for lease transactions.

262) Gregory is looking for an apartment to rent for six months. He’s hired Franklin as his agent to help with this search. Is Franklin required to provide Gregory with an agency disclosure form?

a.     No, agency disclosure is only required for commercial transactions.

b.     No, agency disclosure is only required for lease agreements exceeding one year in length.

c.      No, agency disclosure is only required on sales of residential properties.

d.     Yes, agency disclosure is required for lease transactions.

263) What’s the term for someone who has agency representation with the licensee?

a.     Client

b.     Consumer

c.      Customer

d.     Fiduciary

264) Which of these transactions in California is exempt from agency disclosure requirements?

a.     10-year lease of a commercial unit

b.     Sale of a 10-unit residential building

c.      Sale of a single-family home

d.     Two-year lease of a residential unit

265) Melanie is selling her single-family home. She has hired Damian to represent her as her agent in this transaction. Is Damian required to provide Melanie with an agency disclosure form?

a.     No, agency disclosure is not required on sales of residential properties with one to four units.

b.     No, agency disclosure is only required on leases exceeding one year.

c.      No, Damian does not provide the agency disclosure to his client. He only provides it to others involved in the transaction.

d.     Yes, agency disclosure is required on sales of residential properties with one to four units.

266) When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent?

a.     Designated

b.     General

c.      Special

d.     Universal

267) In most cases, what type of agent is a real estate licensee when working with a client on a real estate sale?

a.     Double

b.     Dual

c.      General

d.     Limited or special

268) Your college friend Dave found out that you have a real estate license, and has asked you to help him put together an offer on his neighbor’s house. You agree. What is your relationship with Dave?

a.     Dave is your client.

b.     Dave is your customer.

c.      Dave is your principal.

d.     You are Dave’s customer.

269) After the closing, Donna ensures that her client has keys to the property and copies of all the transaction paperwork. Which fiduciary duty is Donna performing?

a.      Accounting

b.     Confidentiality

c.      Disclosure

d.     Loyalty

270) Micah’s client often tells him to do things that Micah doesn’t necessarily agree with and that create a lot more work for him. Micah has multiple clients and can’t spend all of his time doing the bidding of just one demanding client. Micah decides to pick and choose which of his client’s instructions he is going to follow. What might be the consequence if Micah doesn’t fulfill his duty of obedience to his client?

a.     Micah may be forced to send the client a written apology.

b.     Micah may lose the client’s business.

c.      Micah may receive a slap on the wrist from his broker, and be told to shape up or ship out.

d.     Micah’s commission may be at risk.

271) In which of these situations did the licensee breach the fiduciary duty of loyalty?

a.     Margo tells her seller client Troy that his property is worth less than it really is so he will get a quick sale.

b.     Michael submits all offers he receives on Jarrod’s property.

c.      Steven postponed his vacation so he could attend his seller client’s closing.

d.     Tanaka refuses to encourage his seller client to lower his asking price.

272) Informing parties of material facts related to a transaction describes the duty of ______.

a.     Accounting

b.     Disclosure

c.      Loyalty

d.     Reasonable skill and care

273) What happens when two fiduciary duties conflict? For instance, your clients ask you not to show their property on evenings and weekends, when most showings occur. To obey (a fiduciary duty) means to fail in reasonable skill and care (another fiduciary duty). What should you do?

a.     Discuss the issue with your clients and let them decide.

b.     Obey. It always trumps reasonable skill and care.

c.      Refuse to work with these unreasonable clients.

d.     Wait until your clients are out of town, then show the property.

274) Which of these situations addresses the fiduciary duty of confidentiality?

a.     Jeanette, a seller’s agent, tells the buyer’s agent that her client must sell his home because of an illness.

b.     Mark discloses the commission split he receives from his broker to a colleague at another firm.

c.      Regina tells her seller client that he’s required to disclose the roof damage.

d.     Todd’s lender shares Todd’s financial information with the loan underwriter.

275) Monica meets a colleague from another firm, Kate, for lunch, and discovers that a former seller client, Reuben, is now Kate’s buyer customer. Monica tells Kate, “You know Reuben inherited a bunch of money right before he sold his house, right?” Which of these statements is true?

a.     This is a breach of confidentiality because confidentiality survives forever.

b.     This is a breach of confidentiality because the information impacts Reuben’s negotiating ability with the seller.

c.      This isn’t a breach of confidentiality because Reuben is no longer Monica’s client.

d.     This isn’t a breach of confidentiality because the information shared doesn’t negatively impact the client.

276) If an agent fails to perform the duty of obedience, what might the legal consequence be?

a.     The agent may be charged with misrepresentation.

b.     The agent may be given a verbal warning by his broker.

c.      The agent may receive a nasty call from the client.

d.     The agent may receive a reduced commission.

277) Norman, the seller’s agent, notices a significant crack in the foundation that the inspector failed to note in the inspection report. Norman decides to keep this information to himself. He really needs to close this deal. Which fiduciary duty has Norman breached?

a.     The duty of accounting

b.     The duty of disclosure

c.      The duty of obedience

d.     The duty of reasonable skill and care

278) Specifically, what does the fiduciary duty of disclosure relate to?

a.     Adverse material facts and publicly recorded facts only

b.     Conflicts of interest and confidential information only

c.      Conflicts of interest, material facts, and adverse material facts

d.     Material facts and adverse material facts only

279) The duty of confidentiality survives agency unless the information is known from other sources or ______.

a.     it will help another client.

b.     the former client has moved out-of-state.

c.      the former client is found guilty of fraud.

d.     the transaction has closed.

280) Carrying out a client’s instructions describes the duty of ______.

a.     Accounting

b.     Loyalty

c.      Obedience

d.     Reasonable skill and care

281) Alex’s client doesn’t want prospective buyers to track dirt and mud throughout her clean home. She asks Alex to place a box of booties by the front door with a sign asking visitors to wear the booties while viewing the home. Alex does as his client instructs—no questions asked. What fiduciary duty is this an example of?

a.     The duty of accounting

b.     The duty of loyalty

c.      The duty of obedience

d.     The duty of reasonable skill and care

282) When does an agent’s fiduciary duty of loyalty to the client begin?

a.     Five days after both parties have signed the agency agreement

b.     The moment both parties agree to an agency relationship

c.      The moment the client enters into a sales transaction with another party

d.     The moment the seller accepts the buyer’s purchase offer

283) Gary’s new seller client is concerned about privacy and doesn’t want her listing posted on the MLS. Gary explains to her the potential impact this will have on marketing her property, but the client remains adamant. Gary doesn’t list the property on the MLS. What fiduciary duty is at play?

a.     The duty of confidentiality

b.     The duty of disclosure

c.      The duty of loyalty

d.     The duty of obedience

284) If you fail to notify your client of a conflict of interest, in addition to the duty of loyalty, what other duty have you breached?

a.     Confidentiality

b.     Disclosure

c.      Obedience

d.     Reasonable skill and care

285) Nadine is a busy California licensee. She receives an offer for one of her listings, conveyed to her by a buyer’s representative. What’s true Nadine’s obligation to others in this situation?

a.     She must be loyal to her client, which means providing the buyer in this transaction with as little care and attention as possible.

b.     She owes everyone she comes in contact with, whether they are part of a transaction or not, the duty of reasonable skill and care.

c.      She owes her client the duty of reasonable skill and care and must treat the buyer with honesty and fairness.

d.     She owes her client the duty of utmost skill and care, and other principals in the transaction (such as the buyer making the offer on her listing) the duty of reasonable skill and care.

286) Your clients closed on their property yesterday, but you still have some paperwork that you need to deliver to them as soon as possible. Under which fiduciary duty are you acting?

a.     The duty of accounting

b.     The duty of confidentiality

c.      The duty of disclosure

d.     The duty of obedience

287) What’s one of the most fundamental of all fiduciary duties, and is the one that underlies all other duties?

a.     Accounting

b.     Disclosure

c.      Loyalty

d.     Obedience

288) Your buyer client, Ben Dalton, tells you two weeks before closing that he’s lost his job. He doesn’t have any other income at the moment, and may not be able to follow through on his purchase of the house you’re helping him buy. However, he doesn’t want to miss out on his dream home and is optimistic that he’ll find something soon, so he asks you to keep it confidential. What should you do?

a.     Disclose this fact to all parties to the transaction if Ben refuses to do so.

b.     Keep it confidential, because you owe him that fiduciary duty.

c.      Keep it confidential, but only on the condition that Ben promises not to tell anyone he told you, so you can play dumb.

d.     Send an anonymous note to the seller’s agent telling him the truth.

289) Select the situation that correctly represents a true conflict of fiduciary duties.

a.     Kai learns that her buyer clients’ inspector will be reporting a furnace issue to the buyers. She doesn’t want to break the news to them. Her duty of confidentiality to the seller and her duty of loyalty to her buyers are in conflict.

b.     Nikki’s seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki’s duty of disclosure, which requires her to present all offers, and her duty of obedience.

c.      Renee’s clients don’t want showings on weekends. Renee knows this may reduce market exposure and she feels it’s not in her client’s best interests. This is a conflict of her duty of loyalty and her duty of obedience.

d.     Terrance’s buyer clients don’t want him to share with the seller that they’re having trouble coming up with the down payment. Terrance’s duty of loyalty to his clients is in conflict with his duty of disclosure.

290) Which of the following details may you share with the buyer if you’re the seller’s agent?

a.     None of these facts may be shared with the buyer if you’re the seller’s agent.

b.     The roof leaks when it rains.

c.      The seller is in a hurry to move because his wife is seven months pregnant.

d.     The seller is willing to take less than the asking price.

291) Simone can’t believe that her client won’t let her put a lockbox on the property. How does he expect other agents to be able to show the home? Oh well, it’s not as if he’s asking her to do something illegal. The client’s wish is her command. What fiduciary duty is this an example of?

a.     The duty of accounting

b.     The duty of loyalty

c.      The duty of obedience

d.     The duty of reasonable skill and care

292) To which of these individuals does California licensee Nadine owe the duty of reasonable skill and care rather than utmost skill and care?

a.     Don, a seller, and Betty, a buyer, who have agreed to use Nadine as the dual agent in their transaction

b.     Fred, the buyer offering for Ruby’s house, who is represented by another licensee

c.      Nicholas, Nadine’s buyer client

d.     Ruby, Nadine’s seller client

293) A seller tells his agent that he has to sell his house quickly because of a divorce proceeding, and that he’s willing to accept less than his list price. His agent tells a buyer that the seller will accept as much as $10,000 less than the list price. Which of these is true?

a.     The agent has breached his duty of confidentiality to his client.

b.     The agent hasn’t violated any fiduciary responsibilities to his client.

c.      The buyer is prohibited from making an offer because of the agent’s breach of confidentiality.

d.     Unless the agent has the seller’s permission to share this information, the agent should have disclosed only that the seller is willing to reduce his price, not the amount.

294) Henry is Monica’s listing agent. As Monica’s agent, Henry has a duty to account for and properly handle her funds and ______.

a.     Financial investments

b.     Paperwork

c.      Personal savings

d.     Property taxes

295) While hosting an open house, Liza speaks with prospective buyers. They’re interested in the house, but think the listing price is a little high. They ask her what other incentives they could include in their offer to get the seller to come down on their price. If Liza helps them, what duty may she be breaching?

a.     Accounting

b.     Loyalty

c.      Obedience

d.     Reasonable skill and care

296) You might tell a new client, “This means that I, as the agent, have to keep certain private information you tell me, or that I find out otherwise in our relationship, to myself,” when describing your duty of ______ to the client.

a.     Confidentiality

b.     Loyalty

c.      Obedience

d.     Reasonable skill and care.

297) What happens when your client asks you to do something that’s against the law?

a.     According to the duty of obedience, you must obey, but document the request.

b.     You must break your duty of obedience.

c.      You must obey, but ask your client to sign a disclaimer for your actions.

d.     You must report your client to the authorities.

298) Which of these would be a breach of Margo’s fiduciary duty of confidentiality?

a.     Margo told a potential buyer that the city council was considering rezoning the area around the property to commercial/light industrial.

b.     Margo told her seller client Troy the percentage commission split she gets from her broker.

c.      Under court order, Margo revealed conversations about the financial status of her previous client.

d.     When asked by the buyer’s agent if the seller was firm on his price, Margo said, “Everything’s negotiable,” and winked at the other agent.

299) Shari’s clients want her to post that there are “no showings on weekends” on the MLS. Shari knows that will significantly cut down on their market exposure. Her duty of reasonable skill and care is in conflict with her duty of ______.

a.     Accounting

b.     Disclosure

c.      Loyalty

d.     Obedience

300) What does the letter R in the acronym for fiduciary duties (OLD CAR) stand for?

a.     Rationality

b.     Reasonable skill and care

c.      Respect

d.     Responsibility

301) Which of these situations is addressed by the fiduciary duty of disclosure?

a.     The buyer fails to disclose to the seller his need to close on the property quickly.

b.     The buyer’s home inspector refuses to share the inspection report with the seller.

c.      The seller refuses to complete a property disclosure form.

d.     The seller’s agent fails to disclose a conflict of interest.

302) Which one of the following is an example of the duty of loyalty?

a.     Carrying out a client’s instructions without question

b.     Keeping a client’s confidential information confidential

c.      Never questioning a client’s opinion

d.     Putting the client’s interests first

303) Jim represents Joel in the sale of Joel’s country acreage and house. Jim’s business partner, Rolly, informed Jim that he wants to put an offer in to purchase the property, with the intention to subdivide it. Which statement best represents the disclosure requirements regarding this transaction?

a.     Because Jim isn’t buying the property for himself, he has no disclosure requirements.

b.     Jim may disclose that he’s partners with Rolly, only if Rolly agrees.

c.      Jim must disclose that Rolly is his partner and that Rolly intends to subdivide the property.

d.     Rolly must disclose that he and Jim are business partners.

304) A client has asked her agent for a 24-hour notice on showings. The agent knows this will have a negative impact on the number of showings. Which duty is in conflict with reasonable skill and care?

a.     Accounting

b.     Confidentiality

c.      Disclosure

d.     Obedience

305) Newt’s buyer client isn’t happy with him. The buyer has accused Newt of breaching his duty of ______ by mishandling the earnest money.

a.     Accounting

b.     Confidentiality

c.      Disclosure

d.     Obedience

306) Which of these is an example of an agent NOT executing the duty of reasonable skill and care?

a.     Kevin, Corinne’s buyer agent, helped her write her offer and reviewed it to make sure it was what she wanted before presenting it to the seller’s agent.

b.     Marta agreed to list a commercial property even though her expertise is in residential real estate.

c.      Morgan is careful to protect and manage all his client’s earnest money deposits.

d.     Rex promptly submits all offers to his seller client.

307) Which fiduciary duty requires agents to handle their clients’ funds and paperwork properly?

a.     The duty of accounting

b.     The duty of confidentiality

c.      The duty of disclosure

d.     The duty of obedience

308) Which of these is NOT a duty that California licensees owe to the non-client principals in a transaction?

a.     Disclosure of material facts

b.     Honesty, fairness, and good faith

c.      Loyalty

d.     Reasonable skill and care

309) Which of these tasks that Jenna performs does NOT represent the fiduciary duty of accounting?

a.     She avoids commingling trust funds with her firm’s operating funds.

b.     She discloses the terms of the listing agent’s compensation to her client.

c.      She meticulously manages all her clients’ transactional paperwork.

d.     She properly records the earnest money her buyer client gave her.

310) Facts that negatively affect a property’s value are known as:

a.     confidential.

b.     Immaterial facts.

c.      Material facts.

d.     property fraud.

311) Which of these circumstances does NOT require agent disclosure?

a.     As part of his corporation, Sean, a licensee, owns several investment properties. He’s selling one.

b.     Gary represents the buyer. He’s a shareholder in the title insurance company the buyer has selected.

c.      Marty is representing Dwayne in both the sale of his current home and the purchase of his new home.

d.     Megan has listed her brother’s townhome for sale.

312) Which of the following statements about the fiduciary duty of confidentiality is true?

a.     It doesn’t extend to material facts relating to the property.

b.     It encompasses any and all information the client tells the agent, not just confidential information.

c.      It ends with the termination of the agency agreement.

d.     It never conflicts with the duty of disclosure.

313) Which of the following is an example of the duty of disclosure?

a.     Carrying out a client’s instructions without question

b.     Informing parties to the transaction of material facts related to the transaction

c.      Keeping a client’s confidential information confidential

d.     Keeping the client in the loop on all that is happening with the transaction

314) Jessie, the buyer’s agent, decides to informally inspect the property while she waits for the professional inspection. She notices a small puddle of water in the basement behind a stack of boxes. Later, Jessie calls the seller’s agent and tells him what she found. The agent tells her not to worry; the seller is aware of the leak and plans to have it fixed within the week. Which one of these statements about this situation is true?

a.     Jessie can check the basement later to be sure the leak is fixed.

b.     Jessie can rely on the inspector to discover and disclose the leak.

c.      Jessie should disclose this to her buyer.

d.     Since the seller intends to fix the leak, Jessie doesn’t need to disclose it to her buyer.

315) When agents put their clients’ interests ahead of their own, this describes the duty of ______.

a.     Accounting

b.     Loyalty

c.      Obedience

d.     Reasonable skill and care

316) Which of the following statements about the fiduciary duty of disclosure is true?

a.     It only applies to the seller’s agent.

b.     It requires licensees to disclose everything to all parties.

c.      It’s owed to other parties, not just to the licensee’s clients.

d.     It’s owed to the licensee’s clients only.

317) Which fiduciary duty may continue even after the transaction closes?

a.     The duty of accounting

b.     The duty of disclosure

c.      The duty of obedience

d.     The duty of reasonable skill and care

318) Layla, a licensee, has had a few casual meetings with a potential client, Marcus. Marcus has told Layla the type of home and locations he’s interested in. Layla has mentioned a few homes that she thinks Marcus might be interested in. Although Layla hasn’t said that she will continue to look for homes for Marcus, Marcus believes she’ll do just that. Which of these statements about this situation is correct?

a.     Because Layla doesn’t know if Marcus is working with another agent, she’s just inadvertently created a dual agency situation.

b.     Because Layla has performed some agency tasks for Marcus, she has an express agency agreement with him.

c.      Layla and Marcus have no agency agreement, either express or implied, until Layla begins showing Marcus homes.

d.     Layla’s actions may have created an implied agency agreement with Marcus.

319) Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max’s representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he’s seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max’s agency coupled with interest?

a.     It’s still in place because it doesn’t terminate on the death or incompetence of the principal.

b.     Max has no recourse; the agency relationship is terminated and he receives no compensation.

c.      Max now owns the subdivision as a result of the principal’s death or incapacity.

d.     Rufus must now pay Max the commission that he didn’t get from the original listing, and the agency relationship is terminated.

320) Leigh Ann is a licensee. Her cousin, Carly, is interested in buying a house. Leigh Ann shows Carly how to look for properties online and runs some CMAs for her. When Carly finds a property she likes and asks Leigh Ann to help her make the offer, Leigh Ann decides she should ratify the agreement with Carly. What are Leigh Ann’s options for accepting an agency relationship after the fact?

a.     Continue to assist Carly and have her sign an estoppel certificate.

b.     Leigh Ann’s only option is to get a signed listing agreement.

c.      Prepare an agency agreement or continue to assist Carly with the purchase.

d.     Prepare an estoppel certificate and a listing agreement.

321) Elisa agreed to list Simone’s house for sale. After the listing contract was signed, Simone lost her job, and her father, George, offered to help Simone by paying Elisa’s listing commission. The buyer’s agent, Carl, also reduced his commission. Who is Elisa’s client?

a.     Carl

b.     George

c.      No one

d.     Simone

322) When the listing agreement’s purpose has been fulfilled, what happens to the agency agreement?

a.     Agency continues for future transactions.

b.     Agency continues until the agreement’s expiration date.

c.      The agency agreement terminates by completion.

d.     The agent can renounce the listing agreement to terminate it.

323) Alice listed a three-bedroom home for her client, but before she finds a buyer, the home burns to the ground. What happens to the agency agreement that Alice has with her client?

a.     The agency agreement continues as created unless Alice and her client can mutually agree to terminate it.

b.     The agency agreement is terminated if the property is destroyed.

c.      The agency agreement must be extended until the home is rebuilt, or for six months, whichever is longer.

d.     The agreement must continue, but it can be modified due to the changed value of the property.

324) Jenson signed a seller agency agreement with Susan. Right before closing, a hurricane destroyed the property. What happened to Jenson and Susan’s agreement?

a.     It’s terminated once the specified term in the agency agreement expires.

b.     Jenson and Susan can mutually agree to terminate the agreement.

c.      The agreement terminates by force of law.

d.     The client can revoke the agreement but may be considered in breach of contract.

325) Which one of the following actions would result in the legal termination of an agency agreement?

a.     The client wants the seller to make improvements to the property.

b.     The client wants to attach an addendum to the sales contract.

c.      There’s an unexpected death in the agent’s family.

d.     The term specified in the agency agreement expired.

326) In which of the following listing agreement terminations is there LEAST likely to be a penalty for terminating the agreement?

a.     The agent abandons the listing.

b.     The client and agent mutually agree to terminate the listing.

c.      The client revokes the listing agreement to sell the property to a family member.

d.     The seller withdraws the listing, deciding instead to stay in the property.

327) Imagine that you’re an active real estate licensee as well as an architect, and you’d like to partner with a builder who’s just beginning a development. Which of these creates agency coupled with interest?

a.     You agree to design the houses for this builder in return for getting the listings when the properties are finished.

b.     You agree to list the properties for a reduced commission once they’re built.

c.      You have the builder and developer sign listing agreements now that will be effective when the properties are complete.

d.     You tell the builder that he has to hire you to design the houses if the builder wants you to list them when they’re finished.

328) In which of these situations would a listing be most likely to terminate due to listing agreement expiration?

a.     A market with high inventory and low demand

b.     A market with low inventory and high demand

c.      A moderately-priced home in a neighborhood slated for renewal

d.     A moderately priced home sold as-is in a market full of investors

329) Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of the following statements about this situation is true?

a.     Bankruptcy has no impact on agency agreements.

b.     Marcus can choose whether or not to continue the listing agreement with Ron.

c.      The agency agreement is terminated because the agent filed for bankruptcy.

d.     The agency agreement only terminates if the broker or the principal declares bankruptcy.

330) What happens if a real estate licensee acting as a finder performs duties beyond just introducing the buyer and seller?

a.     An agency relationship is created. The licensee can face disciplinary action if an agency is formed without proper agency disclosures.

b.     Nothing. The person has a real estate license and can perform other duties as needed.

c.      The licensee can get in trouble for acting as a dual agent.

d.     The licensee is guilty of misrepresentation.

331) You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients?

a.     Buyer agency

b.     Dual-licensed dual agency

c.      Seller agency

d.     Single-licensed dual agency

332) Broker Adeline’s firm has a listing for a condo downtown. Maurice is a cooperating agent. What does this mean?

a.     He doesn’t mind working with other brokers.

b.     He’s from another brokerage and brings a potential buyer for the listing.

c.      He’s the listing agent for the condo and also represents a buyer interested in the condo.

d.     He works at Adeline’s firm and is helping to market the condo listing.

333) Which fiduciary duties does a finder owe?

a.     A finder doesn’t owe any fiduciary duties.

b.     A finder only owes the duties of confidentiality and loyalty.

c.      A finder only owes the duty of confidentiality.

d.     A finder owes the duties of obedience, loyalty, disclosure, confidentiality, accountability, and reasonable skill and care.

334) Hanna represents the buyer, and Hank, an agent from a different firm, represents the seller in the same transaction. What type of agency relationship does Hanna have with her client?

a.     Buyer agency

b.     Dual-license dual agency

c.      Seller agency

d.     Single-license dual agency

335) Estelle is representing seller Margaret. Which of the following tasks is one that Estelle is required to perform as Margaret’s agent?

a.     Determine the property’s listing price based on comparables.

b.     Give the buyer’s earnest money to Margaret to deposit into her personal checking account.

c.      Hire someone to market the property.

d.     Inform Margaret about required property condition disclosures.

336) Which of the following is an example of a sub-agency situation?

a.     Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group, and he has a buyer customer who wants to see the property.

b.     Kermit is represented by Burt, an agent with Street Realty. Today they are seeing Oscar’s house, which has been listed by Oscar’s agent, Ernie, from Energy Realty.

c.      Rita is a licensee with Hawthorne Realty. She has a client, Dinah, who is selling her condo. Rita thinks Dinah’s house will be perfect for Ruby, a customer.

d.     Tim and Tom are both licensees with Acme Realty. Tim is the listing agent on a home where Tom represents the buyer.

337) Madeline works for a single-agency firm. If she wants to represent both the buyer and seller in a transaction, what must she do?

a.     She can’t do this at her firm.

b.     She may act as a designated agent for one client and a representative agent for the other.

c.      She should get informed consent from both sides to represent them.

d.     She should have her broker act as a dual agent, and she can be a single agent for each party.

338) Ned represents Sofia in the sale of her townhome. Luciana represents Sofia’s buyer, Arturo. What is Luciana’s responsibility to Sofia?

a.     Assist Sofia in the performance of tasks that Sofia needs to accomplish in order to get to a successful closing.

b.     Contact the tax assessor’s office for an estimate of the real property taxes.

c.      Disclose that the buyer is a registered sex offender.

d.     Disclose that the buyer will not have the funds for the down payment unless he sells his current home.

339) In a seller agency relationship, to which party does the licensee owe undivided loyalty?

a.     Both the seller and the buyer

b.     The broker

c.      The buyer

d.     The seller

340) As a licensee, you’ll have several tasks you must perform for your buyer client. One of these tasks is to ______.

a.     Coach the buyer on how to negotiate the terms of the sales contract to be completely in the buyer’s favor

b.     Explain to the buyer why it’s unnecessary to have a professional inspection done on a new home

c.      Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license

d.     Show properties the buyer might qualify for if he would put down more earnest money

341) Bradley is acting as a finder for Emma. He’s introduced her to Rachel, the other party in the transaction. Whom does Bradley represent?

a.     Both Emma and Rachel

b.     Emma

c.      Neither Emma nor Rachel

d.     Rachel

342) If you represent the buyer and seller in the same transaction, what type of agency relationship do you have with your clients?

a.     Buyer agency

b.     Dual-licensed dual agency

c.      Seller agency

d.     Single-licensed dual agency

343) Assuming that dual agency is legal where these scenarios occur and that the licensees’ brokerages permit it, which of these situations demonstrates illegal dual agency?

a.     Jarrod represents the seller, Juan. A buyer, Alaina, approaches Jarrod about representing her in the purchase of Juan’s house. Jarrod obtains Juan and Alaina’s consent to dual agency.

b.     Kady’s firm uses representation agreements that, when signed, provide consent to dual licensee dual agency. Kady’s buyer makes an offer on one of Kady’s colleague’s listings.

c.      Levi’s customer, Renee, wants to make an offer on Levi’s seller client’s home. Levi explains that he represents the seller but then presents Renee’s offer to his client.

d.     Tom is holding an open house for his client. Ruby, a buyer, says she wants to make an offer. She details her situation; Tom waits until she finishes and then suggests that she offer a non-refundable earnest money deposit to strengthen her offer.

344) What happens if a person without a real estate license is acting as a finder and performs duties beyond just introducing the buyer and seller, such as negotiation or advising?

a.     An agency relationship is created. The individual can face disciplinary action if an agency relationship is formed without proper agency disclosures.

b.     Nothing. The person is not a licensee and doesn’t face any repercussions from the real estate commission.

c.      The individual can get into trouble for acting as a dual agent.

d.     The individual could face penalties for acting as a real estate licensee without having a real estate license.

345) Bradley is acting as a finder for Emma. He’s introducing her to Rachel, the other party in the transaction. Which fiduciary duties does Bradley owe Rachel?

a.     A finder doesn’t owe any fiduciary duties.

b.     He only owes the duties of confidentiality and loyalty.

c.      He only owes the duty of confidentiality.

d.     He owes the duties of obedience, loyalty, disclosure, confidentiality, accountability, and reasonable skill and care.

346) Licensee Randy has a written listing agreement with Brent, a seller. The buyer is Tim. Who is Randy’s client?

a.     Both the seller (Brent) and the buyer (Tim)

b.     Randy’s broker

c.      The buyer (Tim)

d.     The seller (Brent)

347) Natalie is selling her home and has hired Dylan as her agent. Natalie has given Dylan permission to enlist the services of another licensee, Al, to act as a sub-agent for the transaction. Who is liable for Al’s actions?

a.     Dylan and Al only

b.     Dylan, Natalie, and Al

c.      Dylan only

d.     Natalie only

348) Who does a finder represent?

a.     Both the buyer and seller

b.     Neither the buyer nor seller

c.      The buyer

d.     The seller

349) Orla represents the seller, and Pardeep, an agent from a different firm, represents the buyer in the same transaction. What type of agency relationship does Orla have with her client?

a.     Buyer agency

b.     Dual-licensee dual agency

c.      Seller agency

d.     Single-licensee dual agency

350) After a few meetings, the Stinsons sign a listing agreement with broker Vera so she can sell their house. The house has already generated interest from a potential buyer named Sergei, who has spoken with Vera about the house’s price and square footage. Which of the following is true about this situation?

a.     Because Vera now has a sub-agency relationship with the Stinsons, she shouldn’t talk to Sergei until the house is officially on the market.

b.     The Stinsons and Vera have brokerage relationship agreement.

c.      Vera has an agency agreement with Sergei.

d.     Vera should disclose the dual agency that has been created by her direct assistance to the buyer

351) Bradley is acting as a finder for Emma. Which action can he perform?

a.     Introduce Emma to the seller (or buyer)

b.     Negotiate an offer for Emma

c.      None of these actions

d.     Present the offer on Emma’s behalf

352) In a buyer agency relationship, what relationship does the seller have to the licensee?

a.     The seller is the licensee’s client.

b.     The seller is the licensee’s customer.

c.      The seller is the licensee’s fiduciary.

d.     The seller is the licensee’s nemesis.     

353) Which of the following questions can an agent in a dual agency transaction answer without breaching her duties to either client?

a.     Are you aware of any structural issues with the property?

b.     How much should my counter-offer to the buyer be?

c.      What repairs or concessions should I ask for from the home inspection?

d.     What should I agree to fix from this list the buyer sent?

354) A middleman is another term for a _______.

a.     Finder

b.     Keeper

c.      Universal agent

d.     Wholesaler

355) Mavis is a buyer’s agent working with Blaine, an unrepresented seller. Mavis’s buyer, Cintra, makes an offer on Blaine’s property. Mavis assists Blaine with the paperwork. What’s Mavis’s relationship to the parties?

a.     She’s a buyer’s agent to Cintra and an undisclosed dual agent with the seller.

b.     She’s a dual agent to the buyer and seller.

c.      She’s an agent to Cintra, and the seller is her customer.

d.     The seller and buyer are her customers.

356) When a licensee represents a seller, which one of the following statements is true about the licensee’s ability to list other properties that are for sale?

a.     The licensee isn’t permitted to list other properties for sale.

b.     The licensee is permitted to list other properties for sale as long as they’re not competing properties.

c.      The licensee is permitted to list other properties for sale, even if they’re competing properties.

d.     The licensee must list the seller’s property only for the first 90 days, after which the licensee may list other properties.

357) A licensee has several tasks to perform for seller clients. What’s one of those tasks?

a.     Advise sellers on the property conditions they shouldn’t disclose to the buyer.

b.     Communicate all offers and counter-offers to the sellers.

c.      Disclose to the sellers that if the property doesn’t sell within 60 days, the asking price must be lowered.

d.     Ensure an implied agency agreement is in place.

358) Erik is acting in a single agency capacity in a transaction. What does this mean?

a.     Erik isn’t part of a realty team within his brokerage firm.

b.     He’s representing (and owes undivided loyalty to) either the buyer or the seller.

c.      He’s working as a non-agent for either the buyer or seller.

d.     His firm doesn’t allow dual agency.

359) Bradley is a real estate licensee acting as a finder for Emma. What happens if he performs duties beyond just introducing the buyer and seller, such as negotiating a deal?

a.     An agency relationship is created. Bradley can face disciplinary action if an agency is formed without proper agency disclosures.

b.     Bradley is guilty of misrepresentation.

c.      He can get in trouble for acting as a dual agent.

d.     Nothing. He has a real estate license so he can perform other duties as needed.

360) Which one of the following tasks must licensees perform for seller clients?

a.     Dictate the listing price of the property.

b.     Drive the sellers around to show them other properties that are for sale in their neighborhood.

c.      Ensure that the buyer’s earnest money is deposited.

d.     Show the sellers how they can market their property.

361) A licensee must perform which of the following tasks for a buyer client?

a.     Ensure the buyer understands the importance of due diligence, including a professional inspection of the property.

b.     Review the seller’s property disclosures and show the buyer the ones that you believe are important.

c.      Show the buyer properties that you are listing for other sellers.

d.     Tell the buyer how much earnest money she should put down to ensure the deal goes through.

362) What is a sub-agent?

a.     An agent appointed by another agent to assist in serving a seller client

b.     An agent who handles the listing for a seller

c.      An inexperienced agent

d.     Anyone who works for a broker

363) Buyer Kristin has a buyer agency agreement with Carlotta, a licensee. Kristin’s brother, Dalton, is going to showings with Kristin and helping her decide which house is the best fit. Who is/are Carlotta’s client(s)?

a.     Kristin

b.     Kristin and Dalton

c.      Kristin and the seller

d.     The seller

364) A finder is a _______.

a.     General agent

b.     Limited agent

c.      Middleman

d.     Universal agent

365) Melinda is selling her home and has hired Megan as her agent. Megan enlists the services of another licensee, Alison, to act as a sub-agent for the transaction without permission from Melinda. Who is liable for Alison’s actions?

a.     Megan and Alison only

b.     Megan, Melinda, and Alison

c.      Megan only

d.     Melinda only

366) Marge is a licensee in a dual agency transaction with seller Steven and buyer Alda. In which of the following situations can Marge share what she knows with all parties without compromising her duty of loyalty?

a.     Alda tells Marge she wants to make an offer on Steven’s property and asks Marge what she should offer, since Marge knows Steven’s rock-bottom price.

b.     Alda tells Marge that she’s hired an inspector to perform a property inspection.

c.      During the home inspection, Marge hears the buyer tell the inspector several times, “That’s no big deal. I can fix that.” The buyer lists those as repairs she wants the seller to make.

d.     Steven tells Marge he can reduce his price, and Alda tells Marge she can increase her offer.

367) In a buyer agency relationship, whom does the licensee represent?

a.     Both the seller and the buyer

b.     The buyer

c.      The listing firm and the buyer

d.     The seller

368) Bradley is acting as a finder for Emma. What’s Bradley’s role?

a.     To help buyers and sellers locate agents

b.     To introduce the buyer and seller, but not provide representation

c.      To investigate title issues

d.     To try to locate the prior owners of a specific property

369) A person who doesn’t owe either party any fiduciary duties and only introduces the buyer and seller is called a ____.

a.     Finder

b.     General agent

c.      Limited agent

d.     Special agent

370) Ryan is an unlicensed individual acting as a finder for Rachel. What happens if he performs duties beyond just introducing the buyer and seller, such as negotiating a deal?

a.     An agency relationship is created. Ryan can face disciplinary action if an agency is formed without proper agency disclosures.

b.     Nothing. Ryan is not a licensee, so he doesn’t face any repercussions from the real estate commission.

c.      Ryan can get in trouble for acting as a dual agent.

d.     Ryan could face penalties for acting as a real estate licensee without having a real estate license.

371) What responsibility does the seller’s agent have to the seller?

a.     Advocate for and ensure the sale is profitable for the seller.

b.     Advocate for the seller and help present the property in the best light, even if it means covering up material defects.

c.      Ensure the sale is profitable for the seller.

d.     Seek a sale at the best price at terms that are acceptable to the seller.

372) Which of the following is a buyer’s agent’s task or duty?

a.     Advocating for the seller

b.     Negotiating for the seller

c.      Representing the buyer’s interests

d.     Reviewing transactional documents with the seller

373) Which one of the following provides the best example of single agency?

a.     A broker acts as a dual agent to one party only.

b.     An agent from one firm acts as the agent for the buyer.

c.      Two agents from different firms each act as a sub-agent for the other.

d.     Two agents from one firm act, separately, as the agent for the buyer the agent for the seller.

374) Monica’s business is booming. She’s representing an owner who’s selling a $500,000 home on one side of town, and a buyer who’s purchasing a $300,000 property on the other side of town. As it happens, the seller and buyer both know each other from church and have been talking to others about Monica’s talents, which has brought in several new leads for her to pursue. What type of agency relationship does Monica have with the seller and buyer?

a.     She is each party’s single agent.

b.     She’s a dual agent, since the seller and buyer know each other.

c.      She’s the buyer’s agent and the seller’s sub-agent.

d.     She’s the seller’s agent and the buyer’s sub-agent.

375) Which of these situations is an example of designated (appointed) agency?

a.     Jacob, a broker, acts as the dual agent and appoints Mark to represent the buyer and Todd to represent the seller in the same transaction.

b.     Marvel’s broker at Homeworks Realty appoints her as the buyer’s agent in a transaction. Tim’s broker at Great Homes Real Estate appoints him as the seller’s broker in the same transaction.

c.      Meredith’s broker appoints her to represent both the buyer and the seller in a single transaction.

d.     Michele is the firm’s managing broker. She’s the designated dual agent in all dual agency transactions.

376) Which action can a finder perform?

a.     Introduce the buyer and seller

b.     Negotiate an offer for a client

c.      None of these actions

d.     Present the offer on a client’s behalf

377) Camille has a listing for a townhome, and appoints Ivy as her sub-agent. Ivy brings a buyer customer to the transaction, and the buyer purchases Camille’s listing. What’s true about the agency relationships in this situation?

a.     Camille owes her loyalty to Ivy.

b.     Ivy is Camille’s sub-agent and owes loyalty to the seller.

c.      Ivy owes her loyalty to the buyer.

d.     The buyer is the sub-agent to the seller.

378) Which of these tasks must a licensee perform for buyer clients?

a.     Advise the buyer on how to get the seller to come down on the asking price.

b.     Ensure that the buyer receives copies of all signed paperwork.

c.      Explain to the buyer how to deposit the earnest money into the seller’s personal checking account.

d.     Explain to the buyer that there’s really no need to review transaction documents because they’re all standard.

379) You’re representing Abe and Ben in a dual agency situation. Abe tells you something that would give Ben a distinct advantage if he knew. Do you tell Ben?

a.     No, because agents can’t share information with their clients.

b.     No, because it’s hearsay.

c.      No, because you can’t share one client’s confidential information with another client.

d.     Yes, because Ben is your client and has a right to know.

380) Which legal description method uses compass headings and directions?

a.     Block and grid

b.     Lot and block

c.      Metes and bounds

d.     Rectangular government survey

381) “Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Henry Nelson …” is an example of what type of legal description?

a.     Benchmark

b.     Lot and block

c.      Metes and bounds

d.     Rectangular

382) Which entity decides the matter when two different legal descriptions conflict?

a.     Appraisers

b.     Land surveyors

c.      The courts

d.     The property owners

383) Travis is a new real estate licensee and is writing up his first offer to purchase for his buyer clients. Which of these statements is true?

a.     Real estate licensees don’t have access to legal descriptions.

b.     Travis should include the legal description in the offer, because it provides a complete description of the property.

c.      Travis should not include the legal description on the offer to purchase, but he should include the address.

d.     Travis shouldn’t write up the offer to purchase; the client should.

384) Which of these may have been used as a point of beginning in the metes and bounds system?

a.     A fence post

b.     All of these

c.      An iron stake

d.     A pine tree

385) A registered land surveyor is preparing a plat map that will show elevations and boundaries for a multi-level condominium complex. What is used as a reference point for measuring elevation?

a.     Datum

b.     Monument

c.      Point of beginning

d.     Sea level

386) Morty, a land surveyor, was called out to survey a property. After doing some research, he located the legal description for the property in question. Now, if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to Bear Creek. What type of legal description is Morty working with?

a.     Benchmark

b.     Datum

c.      Metes and bounds

d.     Rectangular government survey

387) What’s a datum?

a.     An iron pin or other permanent marker used in metes and bounds descriptions

b.     A point indicating a location is at sea level

c.      A point, surface, or line used as a reference for measuring elevations

d.     The center of a township

388) Sunshine Surveyors, Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing the surveyor did when he surveyed the new neighborhood was to reference what type of description?

a.     Map

b.     Metes and bounds description

c.      Monument

d.     Plat book

389) Cheri wants to find the legal description for her property. Where could she look?

a.     At a deed

b.     In a history book

c.      In a phone book

d.     On a piece of mail

390) Which of the following is NOT one of the three most commonly used systems to describe land in the U.S.?

a.     Lot and block

b.     Metes and bounds

c.      Monument system

d.     Rectangular survey system

391) When looking at a rectangular survey system map, where would Section 36 be located?

a.     The exact center of the township

b.     The northeastern-most section of the township

c.      The southeastern-most section of the township

d.     The southwestern-most section of the township

392) What is a principal meridian?

a.     An east-west line used as a reference point in the rectangular survey system

b.     A north-south line used as a reference point in the rectangular survey system

c.      The center-most section identified in the rectangular survey system

d.     The center-most township identified in the rectangular survey system

393) Who can verify the boundaries of a legal description for a given property?

a.     Anyone with a smart phone

b.     Designated broker

c.      Land surveyor

d.     Title company

394) Pamela inherited a piece of property that has been in her family for generations. She wants to find the property’s exact boundaries. What should contain this information?

a.     A fence company’s records

b.     A legal description of the property

c.      A satellite image of the property

d.     Old family photos of the property

395) Buyers Tony and Sylvia know the postal address of the property they’re purchasing but are wondering about the legal description of the property. Where is the most likely place to find the legal description?

a.     Deed

b.     HOA covenant

c.      Home warranty

d.     Listing agreement

396) The Simpsons are buying a five-acre lot that was part of a much larger tract of acreage. When the owners of the large acreage decided to subdivide it, they needed to have a legal description created for the five-acre lot. What was used as the starting point for creating that legal description?

a.     A benchmark

b.     A plat map

c.      A survey

d.     Metes

397) What does the metes and bounds system use to develop a property’s legal description?

a.     Compass headings and directions

b.     Plat references

c.      Principal meridians and base lines

d.     Townships and sections

398) Related to the legal description of land, what is a monument?

a.     43,560 square feet

b.     A permanent land marker sometimes used in legal descriptions

c.      A point from which elevations are measured

d.     The subdivision of air above the land

399) How is the grid that’s used in the rectangular survey system laid out?

a.     The numbers are read left to right.

b.     The numbers are read right to left.

c.      The numbers start in the center and spiral out clockwise.

d.     The numbers start in the northeastern corner and follow a zigzag pattern.

400) Absent a legal description, what are other ways to identify a property?

a.     A legal description is the only way to identify a property

b.     Family photos

c.      Satellite imagery

d.     Street addresses and tax map personal identification numbers

401) Which of the following is a key consideration and starting reference for a metes and bounds description?

a.     Base line

b.     Benchmark

c.      Point of beginning

d.     Principal meridian

402) Why is it important that the legal description appears in real estate documents?

a.     It defines the duties an agent owes a client.

b.     It details the terms for a lease.

c.      It outlines all of the terms of a real estate purchase.

d.     It precisely locates the property and its boundaries.

403) Which of the following is the least specific method for describing a property?

a.     Lot and block description

b.     Metes and bounds description

c.      Rectangular survey system description

d.     Street address

404) How large is a section used in the rectangular survey system?

a.     640 acres

b.     640 miles

c.      640 square feet

d.     One acre

405) What does the lot and block system use to develop a property’s legal description?

a.     Compass headings and directions

b.     Plat references

c.      Principal meridians and base lines

d.     Townships and sections

406) Kellan and Stacy are in the midst of a property dispute. Each party has a legal description and survey that show conflicting boundaries between their properties. What may be the best way to resolve this dispute?

a.     One property owner can sell their property to the other.

b.     They must agree between themselves where the true boundary lies.

c.      They must take the dispute to court.

d.     They should each hire a land surveyor to determine the boundary.

407) Shannon is reading through paperwork related to her upcoming home purchase when she comes across the following: “Southwest quarter of Southwest quarter (SW ¼ of SW ¼) and West Half of Southeast quarter of Southwest quarter (W½ SE¼ SW¼) of Section Eleven (11), Township Four (4) North of Range Eight (8) West.” What did Shannon just find?

a.     Legal description

b.     Mortgage clause

c.      Quitclaim deed

d.     Tax description

408) If the land is described as “Lot 6 of Block 3 of the East Subdivision plat as recorded in Map Book 18, Page 11 at the Recorder of Deeds,” what type of legal description is being used?

a.     Lot and block

b.     Metes and bounds

c.      Monument system

d.     Rectangular government survey system

409) What is a bound?

a.     A line that runs east to west

b.     A line that runs north to south

c.      A physical feature that defines the boundaries of the land

d.     The direction and distance of a line forming the boundary of a property

410) What is a plat map?

a.     A detailed depiction of air lots above the land

b.     A detailed map of a subdivision that includes boundaries, measurements, and distances between points

c.      A map showing all of the benchmarks located in the U.S.

d.     A map tax assessors use when determining the value of a property

411) What is a section?

a.     A 36-square-mile square formed in the use of the rectangular survey system

b.     A one-square-mile square formed in the use of the rectangular survey system

c.      A permanent reference point used in the measurement of elevations

d.     The point of beginning used in a metes and bounds survey

412) Which of the following statements related to condominiums and surveys is true?

a.     All states require that land used for condominiums be surveyed by a registered land surveyor and that a plat map be prepared to show the elevations of the floor and ceiling boundaries, as well as the vertical boundaries of each unit.

b.     Condominiums are not required to be surveyed.

c.      Multi-level condominium units cannot be surveyed.

d.     Only the ground floor of a condominium unit is surveyed.

413) The process of determining the location, size, and boundaries of a parcel of property is called ______.

a.     Platting

b.     Subdividing

c.      Surveying

d.     Title searching

414) Jamie wants to find the legal description for a property. What’s her best bet?

a.     County recorder’s office, registry of deeds, or a title company

b.     Motor vehicle department

c.      Neighborhood notice

d.     Real estate flyer

415) Which type of legal description is this: “Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office”?

a.     Benchmark

b.     Lot and block

c.      Metes and bounds

d.     Rectangular government survey

416) Brandon is interested in purchasing a piece of property, but before doing so, he’d like to verify the accuracy of the legal description. Which of these options will accomplish this?

a.     Having a home inspection performed

b.     Having an appraisal performed

c.      Having a survey conducted

d.     Looking up the property on Google

417) What is the oldest type of legal description used in the U.S.?

a.     Assessor’s parcel number

b.     Lot, block, tract

c.      Metes and bounds

d.     Rectangular government survey

418) In the rectangular survey system, what is a base line?

a.     An east-west line used as a reference point

b.     A north-south line used as a reference point

c.      The center-most section identified

d.     The center-most township identified

419) How are sections and townships related to one another, relative to the rectangular government survey system?

a.     Sections are divided into townships.

b.     Townships and sections are opposites.

c.      Townships and sections are synonyms.

d.     Townships are divided into sections.

420) When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: “Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet.” In this description, what does “north for 314 feet” represent?

a.     A benchmark

b.     A bound

c.      A mete

d.     A monument

421) Which type of legal description do courts prefer?

a.     Benchmark

b.     Lot and block

c.      Metes and bounds

d.     Rectangular government survey

422) If the land is described as “Beginning at the great oak 60 yards from the center of the Rock River that runs north to south through the county,” what type of legal description is being used?

a.     Lot and block

b.     Metes and bounds

c.      Monument system

d.     Rectangular survey system

423) Benjamin is interested in a piece of property but is curious about its exact legal description. What’s one of the best ways to find this information?

a.     Ask neighbors where the property boundaries are.

b.     Look for the point of beginning.

c.      Look up the latitude and longitude coordinates of the property on Google Maps.

d.     Reference a previous property deed.

424) Harmony is looking at the legal description on her purchase contract. It mentions that the plat of her property is recorded in Map Book 12, page 14, at the county courthouse. What type of legal description is this?

a.     Lot and block

b.     Metes and bounds

c.      Monument and benchmark

d.     Rectangular government survey

425) Which legal description method is regulated by the U.S. Department of the Interior’s Bureau of Land Management?

a.     Governmental

b.     Lot and block

c.      Metes and bounds

d.     Rectangular government survey

426) Stan and Emile are arguing over their shared lot line, since Stan thinks that Emile planted a privet hedge on Stan’s property. Stan filed a civil legal action against Emile. Which of these would the court use to determine the actual lot line?

a.     Aerial photographs

b.     An affidavit from a surveyor

c.      Legal descriptions of both properties

d.     Testimony from long-time neighbors

427) Which type of survey system is also known as the public land survey system (PLSS)?

a.     Address and zip code

b.     Lot and block

c.      Metes and bounds

d.     Rectangular survey

428) When measuring elevations, what is used instead of a point of beginning?

a.     Datum

b.     Equator

c.      Monument

d.     Sea level

429) A drawing prepared by a surveyor showing the layout and location of a tract of land, including boundaries, designations of lots and blocks, and names of streets, is called a ______.

a.     Metes and bounds description

b.     Plat

c.      Rectangular survey

d.     Topographical map

430) A professional, on-site measurement of the lot lines and dimensions of a property is known as ______.

a.     An abstract

b.     An appraisal

c.      An inspection

d.     A survey

431) Which of the following is the best definition of a township?

a.     A 36-square-mile square formed when using the rectangular survey system

b.     A one-square-mile square formed when using the rectangular survey system

c.      A permanent reference point used in the measurement of elevations

d.     The point of beginning used in a metes and bounds survey

432) A surveyor created a lot and block survey for a new residential development. The first thing she did when she surveyed the new neighborhood was to reference a metes and bounds land description. From there, she divided the land into numbered lots and blocks. This output is known as a ______.

a.     Benchmark

b.     Monument

c.      Plat map

d.     Rectangular survey

433) Datums and benchmarks are used for ______.

a.     Calculating area

b.     Determining land acquisition costs

c.      Measuring distance

d.     Measuring elevations

434) What is a sketch that shows the location, size, and shape of any improvements on a property being surveyed?

a.     Building plan

b.     Legal description

c.      Plat reference map

d.     Spot survey

435) What is the starting point for any land surveyor who has been asked to perform a survey?

a.     A review of existing historical records

b.     Satellite photos

c.      The point of beginning

d.     Visiting the site

436) What does a land surveyor produce?

a.     A determination of value of a property

b.     A report detailing defects of a property

c.      A survey that includes a legal description and a survey sketch

d.     Property boundaries

437) Which of these is usually a brass marker that is used to mark a datum?

a.     Base line

b.     Benchmark

c.      Monument

d.     Principal meridian

438) Jenna’s closing agent has asked her to get a spot survey of the property she’s purchasing. What will this accomplish for Jenna and the closing agent?

a.     It decides the location of the point of beginning.

b.     It notes the location of major appliances and features inside a home.

c.      It notes the location, size, and shape of any improvements on a property.

d.     It’s provides a sketch based upon driving by the property.

439) Which of the following are possible effects of an incorrect legal description?

a.     Clearer title for the property owners

b.     Fewer legal issues for real estate licensees

c.      No effect

d.     Unintentional encroachment, title and legal issues

440) A ______ is a point, surface, or line used as a reference for measuring elevation.

a.     Base line

b.     Datum

c.      Monument

d.     Principal meridian

441) For what are datums and benchmarks used?

a.     Calculating area

b.     Determining land acquisition costs

c.      Measuring distance

d.     Measuring elevations

442) What’s the permanent marker used primarily for marking datums when measuring elevation?

a.     Benchmark

b.     Monument

c.      Point of beginning

d.     Sea level

443) What describes the different symbols that are used in a survey sketch?

a.     Legal description

b.     Spot survey

c.      Survey legend

d.     Surveyor’s stamp

444) What’s the point from which elevation is measured?

a.     Base line

b.     Datum

c.      Monument

d.     Principal meridian

445) What signifies that a survey is certified and represents a guarantee of accuracy?

a.     Spot survey

b.     Survey legend

c.      Surveyor’s stamp

d.     Title insurance policy

446) A lot measuring 108,900 square feet is for sale. How many acres is this?

a.     Five

b.     One

c.      Three

d.     Two-and-a-half

447) If a farm that’s for sale measures one and three-quarter square miles, how many acres is it?

a.     1,050

b.     1,120

c.      1,280

d.     875

448) A parcel of land measures one half mile by 3,000 feet. If price per acre is $4,200, what’s the list price for this parcel? Round to 10ths of an acre for your calculation.

a.     $1,527,273

b.     $752,066

c.      $756,000

d.     $763,560

449) The cost of a parcel of land is 50 cents per square foot. Candace wants to purchase one acre. How much will this cost?

a.     $21,780

b.     $43,560

c.      $500

d.     $5,000    

450) How many acres are in a square mile?

a.     1,760

b.     43,560

c.      5,280

d.     640

451) James purchased five acres of land for $75,000. What was the cost per acre?

a.     $15,000

b.     $25,000

c.      $375,000

d.     $5,000

452) How do you determine the cost of purchasing land?

a.     Divide the cost per unit by the land area

b.     Divide the land area by the cost per unit

c.      Multiply the land area by $100 per acre

d.     Multiply the land area by the cost per unit

453) How many square feet are in an acre?

a.     10,000 square feet

b.     43,560 square feet

c.      53,640 square feet

d.     640 square feet

454) How long is a mile?

a.     1,000 feet

b.     1,000 yards

c.      43,560 feet

d.     5,280 feet

455) Gabi owns one parcel measuring one square mile and another parcel measuring one mile by a half mile. She combined the parcels and sold them for $2.5 million. What price per acre did she receive for the land?

a.     $1,953.13

b.     $2,604.17

c.      $3,125.00

d.     $3,906.25

456) How many feet are in a mile?

a.     2,400

b.     320

c.      5,280

d.     6,044

457) How many acres are in a quarter section in a rectangular survey?

a.     160

b.     450

c.      640

d.     One

458) A property is 330 feet long by 100 feet wide. How many square feet is the property?

a.     10,300

b.     30,000

c.      3,300

d.     33,000

459) An 800-square-foot rectangular building sells for $75,000. What’s the cost per square foot?

a.     $187.50

b.     $46.88

c.      $60.50

d.     $93.75

460) A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400 feet deep. What was the price per front foot of the property?

a.     $1,335.67

b.     $2,000

c.      $363.64

d.     $598.95

461) Margie needs to know the square footage for the first floor of the condo her client is interested in buying. The kitchen is 10 feet by 15 feet, the living/dining combo is 20 feet by 25 feet, and the office and bedroom are each 10 feet by 10 feet. What’s the total square footage?

a.     2,200 square feet

b.     3,000 square feet

c.      750 square feet

d.     850 square feet

462) Your client Frank is interested in selling a 54,450-square-foot lot. A comparable property in the vicinity sold for $3,500 per acre. What would be reasonable list price for Frank’s property?

a.     $3,500

b.     $4,375

c.      $4,955

d.     $5,250

463) Alana and Michael want to build a 5,000-square-foot ranch home on two acres of land they just bought. Once the house is built, how many acres of land will remain unbuilt?

a.     0.88 acres

b.     0.89 acres

c.      1.86 acres

d.     1.89 acres

464) Your client, a builder, is considering buying three adjacent lots. They each have the same depth: 275 feet. Lot A is 35,750 s.f., Lot B 53,900 s.f., and Lot C is 33,000 s.f. If your client buys all three lots, what total street frontage will he have?

a.     446 feet

b.     462 feet

c.      464 feet

d.     466 feet

465) How much would a lot that is 400 feet wide by 500 feet long cost at $900 per acre?

a.     $2,200

b.     $3,060

c.      $4,132

d.     $4,500

466) A four-bedroom, four-bath, 4,875-square-foot house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% of the listing price. What price per square foot did he get for the house?

a.     $45.64

b.     $82.15

c.      $86.72

d.     $93.00

467) A lot measuring three-fourths of an acre is for sale. How many square feet is this?

a.     10,890

b.     14,520

c.      32,670

d.     43,560

468) Clint is interested in making an offer on a house with hardwood floors that will need to be replaced. The hallway is 18 feet by 6 feet. The kitchen is 20 feet by 30 feet. The living room is 25 feet by 45 feet. There are two bedrooms, which measure 12 feet by 16 feet each, plus a master bedroom that is 14 feet by 20 feet. If the cost of the flooring is $5.48 per square foot, and the cost of installation is $1.49 per square foot, how much can Clint plan to spend to replace the floors?

a.     $13,683.56

b.     $16,065.85

c.      $16,309.80

d.     $17,404.09

469) An area of 640 acres is equal to ______.

a.     One hectare

b.     One kilometer

c.      One square mile

d.     One township

470) When a city is determining zones, what should be followed?

a.     Construction standards

b.     Federal zoning codes

c.      State zoning codes

d.     The comprehensive plan

471) When a California planning board is developing a general plan for an area, which of these elements is it NOT required to consider?

a.     Housing for a variety of income levels

b.     Noise control

c.      Ratio of business, industrial, and residential spaces

d.     Standards for land use and density

472) When the planning board gets together, Carl focuses on commercial aspects, Renee focuses on residential areas, and Arthur focuses on agricultural spaces—all without any insight from one another. What type of planning is this?

a.     Form-based planning

b.     Integrated planning

c.      Pocket planning

d.     Traditional planning

473) Spark City has built a new city courthouse. The construction caused a landslide, which buried most of Joe’s farmland; now it can no longer be used for farmland. Joe is bringing an action against the city for his property loss. What is this an example of?

a.     Condemnation

b.     Eminent domain

c.      Foreclosure

d.     Inverse condemnation

474) The Johnsons have owned a small restaurant for more than 20 years. It’s open for lunch and dinner six days a week, and 80% of its weekday revenue comes from the happy hour drink and appetizer specials. The town in which their restaurant is located recently constructed a new middle school and stripped the liquor license from the Johnsons’ restaurant, because it no longer complies with the ordinance to be 500 feet from a school property. The Johnsons have accused the town of _____.

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Inverse condemnation

475) Police power is the government’s authority at what level(s)?

a.     At any level

b.     Federal only

c.      Local only

d.     State only

476) Which statement best describes traditional planning?

a.     Developers identify how land will be used.

b.     Residents determine how land will be used.

c.      Specialists with different areas of expertise work separately and focus on designing “their” areas.

d.     Specialists with different areas of expertise work together, focusing on overall use.

477) _________ is the power of the government to take private land for public use.

a.     Eminent domain

b.     Encumbrance

c.      Escheat

d.     Foreclosure

478) At what level of government are budgeting, site plan review, and building codes controlled?

a.     Federal

b.     Federal and state

c.      Local

d.     State

479) The Kelo vs. City of New London U.S. Supreme Court ruling was controversial because the U.S. Constitution prohibits the government from taking private property except for “public use”. What governmental power was central to this case?

a.     Eminent domain

b.     Escheat

c.      Police power

d.     Taxation

480) The power of ______ was commonly used by community redevelopment agencies (CRAs) to acquire blighted properties.

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Inverse condemnation

481) What’s inverse condemnation?

a.     It occurs when a property owner dies without a will, heirs, or creditors.

b.     It occurs when government actions deprive a property owner of the value of the property without offering just compensation.

c.      It occurs when municipalities pass enabling acts.

d.     It occurs when the government places a lien on a property due to failure to pay taxes.

482) When government regulation causes a land owner’s property to decrease in value, it’s called ______.

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Inverse condemnation

483) Under what type of police power is a property owner compensated for the loss of property?

a.     Eminent domain

b.     Escheat

c.      Riparian

d.     Taxation

484) Which agency administers the Interstate Land Sales Full Disclosure Act?

a.     Consumer Financial Protection Bureau

b.     Department of Energy Conservation

c.      Developers Land Sales Act

d.     Housing and Urban Development

485) A ______ is created after a jurisdiction’s general plan is adopted. It provides more detailed information and aids in the implementation of the general plan.

a.     Development plan

b.     General plan

c.      Specific plan

d.     Zoning map

486) Adams County implemented a 10 p.m. curfew for youths under age 18 because of the high number of fights that have been occurring late at night in public places. Which of the following gives Adams County the right to restrict the movements of its minor citizens?

a.     Doctrine of laches

b.     Municipal master plan

c.      Police power

d.     Power of escheat

487) What type of police power allows cities to identify specific uses for an area?

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Zoning

488) In the movies, a shady salesperson might say “I have some great farmland to sell you in the Midwest; just take a look at this brochure and let me know if you’d like to buy!” The federal government passed a law to prevent such fraudulent sales of property sight unseen. What is that law?

a.     Interstate Citizens Protection Act

b.     Interstate Land Sales Full Disclosure Act

c.      Police Power Act

d.     Subdivision Act of 1997

489) The government’s authority at all levels to ensure the health, safety, and welfare of its citizens, which includes the control of public land use, is the definition of ______.

a.     Condemnation

b.     Eminent domain

c.      Police power

d.     Sovereignty

490) Which of the following is a true statement about police power and public land use controls?

a.     Government agencies may exercise police power only when it does not restrict the freedom of its citizens.

b.     Local governments and their planning boards control budgeting, site-plan review, and building codes.

c.      Planning, zoning, and subdivision development are primarily controlled at the state level.

d.     Police power is citizens’ rights to police themselves.

491) When it came time to plan the city, Arlene (the agriculture specialist), Robert (the residential guru), and Carmen (the commercial genius) all locked themselves in a room and planned the area together. What type of planning is this?

a.     Form-based planning

b.     Integrated planning

c.      Pocket planning

d.     Traditional planning

492) Local authorities lack police power over which of the following?

a.     Budgeting

b.     Federal government construction projects

c.      Subdivision development

d.     Zoning

493) What police power did community redevelopment agencies (CRAs) use?

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Inverse condemnation

494) After a general plan is developed, what is the next step in the adoption process?

a.     Developers bid on areas they would like to develop.

b.     Residents vote on the plan.

c.      The plan is reviewed at a public hearing by the local legislative body.

d.     The plan is reviewed at a public hearing by the planning commission.

495) The Kelo vs. City of New London U.S. Supreme Court ruling was controversial because the U.S. Constitution prohibits the government from taking private property except for “public use”. What governmental power was central to this case?

a.     Eminent domain

b.     Escheat

c.      Police power

d.     Taxation

496) Can police power ever be used in a way that restricts citizens’ freedom?

a.     No, that’s beyond the scope of police power.

b.     Yes, but only when the citizen has committed a crime.

c.      Yes, if it’s for the public good.

d.     Yes, that’s the purpose of police power.

497) The process in which the government actually takes someone’s property through the power of eminent domain is called __________.

a.     Condemnation

b.     Encroachment

c.      Encumbrance

d.     Escheat

498) A ______ is created after a jurisdiction’s general plan is adopted. It provides more detailed information and aids in the implementation of the general plan.

a.     Development plan

b.     General plan

c.      Specific plan

d.     Zoning map

499) Jeffersontown has a zoning ordinance that requires all properties in a designated historic district to have brick or wood plank facades. No aluminum, cement board, or vinyl siding is allowed. What type of zoning is this?

a.     Aesthetic zoning

b.     Downzoning

c.      Incentive zoning

d.     Spot zoning

500) What’s one of the ways that bulk zoning achieves its objectives?

a.     Through architectural style requirements

b.     Through minimum height requirements

c.      Through minimum parking space requirements

d.     Through setbacks

501) What purpose does bulk zoning serve?

a.     It homogenizes the look of the area.

b.     It keeps similar races together.

c.      It provides increased density.

d.     It restricts building density.

502) Which of the following situations may result in inverse condemnation?

a.     Property taxes rise because of an increase in property value.

b.     Property values decrease because adjacent property was rezoned.

c.      Property values decrease because the property was rezoned.

d.     The government takes private property for public use and compensates the owner.

503) Residents of Tinytown have been complaining to town officials that the village-like character of their town is being affected by the medium-rise condos that developers are building on the edge of town. In response, local government officials rezoned the areas on the edges of town as parklands. What type of zoning is this?

a.     Aesthetic zoning

b.     Downzoning

c.      Incentive zoning

d.     Spot zoning

504) The Druid Hills neighborhood sits firmly within a single-family residential zoning area. Most of the lots are one-third of an acre or larger. A 20-acre parcel on the edge of the neighborhood sold recently. The buyer wants to build condominium flats since multi-family housing is in short supply in the area. The town is considering rezoning that parcel to allow this development because the developer plans to also include a public park and a walking trail. What kind of zoning is this?

a.     Aesthetic zoning

b.     Downzoning

c.      Incentive zoning

d.     Spot zoning

505) Your clients, the Harpers, live in Area B that’s adjacent to Area C; Area C was recently downzoned. If the Harpers believe the rezoning has harmed their property values, what can they do?

a.     File a claim of inverse condemnation.

b.     Move to Area C and file a claim.

c.      Nothing, because they don’t live in the rezoned area.

d.     They must sell to prove a loss of value.

506) Zoning that preserves the architectural style and cohesive appearance of an area is termed ______.

a.     Aesthetic zoning

b.     Architectural zoning

c.      Bulk zoning

d.     Density zoning

507) The Town of Petersville has just decided to restrict density in one area of town that previously allowed a higher density. This is known as ______.

a.     Aesthetic zoning

b.     Density zoning

c.      Downzoning

d.     Reduction zoning

508) FAR, or floor-to-area ratio, includes ______.

a.     All of the habitable structures on a lot

b.     All structures, including habitable structures and parking structures, but not parking lots

c.      None of the habitable structures on a lot

d.     The area within parking lots or parking structures

509) Which of the following statements is true about zoning classifications?

a.     A property that’s zoned residential may be either single-family or multi-family.

b.     A residential property may only have one use.

c.      Condos are always commercial property.

d.     Multi-family housing is zoned commercial.

510) What is a buffer zone?

a.     A reduction in density

b.     Rezoning of various spots in a city, town, or village that have similar architectural styles

c.      Strips of land that are used to separate property dedicated to one use from property of another use

d.     Zoning targeted to a specific demographic make-up

511) What’s the definition of a group home?

a.     A facility where unrelated adults live

b.     A home that’s grouped closely to other dwellings for increased density

c.      An institution, such as a prison or mental health facility

d.     Any multi-family dwelling

512) One area of town has maximum building height requirements and setbacks for the front, side, and rear yards. These requirements are all indicative of ______.

a.     Bulk zoning

b.     Commercial zoning

c.      Density zoning

d.     Residential zoning

513) You’re on a planning board that’s discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response?

a.     “That applies to commercial areas only.”

b.     “That’s a great way to meet our objectives.”

c.      “That’s crazy. We’re trying to reduce density, not increase it.”

d.     “That will work for residential areas, but what about commercial?”

514) If downzoning occurs in one area, reducing property values in adjacent areas, what can the homeowners in those adjacent areas do?

a.     File a claim for inverse condemnation.

b.     Require a zoning change to their own property.

c.      Sell at a loss and file a claim.

d.     Sue their neighbors.

515) A town has just assigned a lower-density use zone to an area that previously allowed higher density. What’s one reason the town may have done this?

a.     To improve property values

b.     To increase density in surrounding areas

c.      To increase taxes

d.     To limit overgrowth

516) The Arbor Heights community passed a zoning ordinance that requires group homes designated for disabled citizens to be situated outside of city limits. This is a violation of the ______.

a.     City Charter Act

b.     Fair Housing Act

c.      Municipality Zoning Act

d.     Zoning Disability Act

517) Which zoning classification would be used solely for the development of a home?

a.     Industrial

b.     Mixed use

c.      Planned use

d.     Residential

518) A town passes a zoning ordinance preserving the architectural style of an area and requiring plantings in the parking strips. This is an example of ______.

a.     Aesthetic zoning

b.     Architectural zoning

c.      Bulk zoning

d.     Variance zoning

519) Which type of zoning classification is used for areas that are undeveloped or are used to raise animals or plants?

a.     Agricultural

b.     Commercial

c.      Industrial

d.     Residential

520) Cluster zoning would include single-family homes, townhomes, apartments, and condominiums on a single parcel, provided that the developer leaves a portion ________.

a.     Of each building for a community room

b.     Of the parcel for parking

c.      Of the parking lot for RV parking

d.     Open for a playground, a park, and a walking path

521) Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this?

a.     Aesthetic zoning

b.     Downzoning

c.      Incentive zoning

d.     Spot zoning

522) A new development is going up just outside city limits where the population is expected to grow significantly in the next decade. The development will consist of commercial properties in one quadrant near a main road. The other areas are designated residential and will include single-family residences and multi-family townhomes. A small number of the single-family homes will border a golf course that is at the center of the development. What type of zoning is this an example of?

a.     Conforming

b.     Exclusive-use

c.      Non-conforming

d.     Planned unit development

523) Which of the following is a type of zoning action?

a.     Aesthetic

b.     Bulk

c.      Moratorium

d.     Rural

524) Which of the following actions likely requires a variance?

a.     A change in architectural style

b.     A garage repair

c.      An addition which alters the setback

d.     A remodel involving a different internal layout

525) Which of the following must occur before zoning changes are made?

a.     Local development experts must be consulted.

b.     Public hearings must be held.

c.      The real estate commission must approve the changes.

d.     Voters in that jurisdiction must vote to approve the change.

526) Which of the following is true about zoning?

a.     Proposed zoning ordinances are examined for fairness before being enacted.

b.     While zoning may impact a community, it does not impact individual property owners.

c.      Zoning changes are enacted by local governments without public input.

d.     Zoning does not impact property value.

527) Which of the following is a common action of historic preservation commissions?

a.     Adopting ordinances to protect the historical character of the area

b.     Buying any properties that are listed for sale in the area

c.      Demolishing properties in the area

d.     Prohibit construction or renovations of any kind

528) Which of the following statements about zoning ordinances is true?

a.     Before zoning ordinances are changed, they must be examined for fairness and reasonableness.

b.     Zoning ordinance changes apply to specific properties in different ways.

c.      Zoning ordinance changes impact communities, but not individual property owners.

d.     Zoning ordinance changes impact individual property owners, but not communities.

529) April was able to establish a day care in a residential neighborhood, where the zoning wouldn’t normally be permitted. This required permission from the planning commission and ______.

a.     A special use permit

b.     A tax referendum

c.      A variance

d.     A zoning ordinance

530) Back in the 1930s, the house at 102 Barbour Street was the only one in sight. Since then, however, the town has grown considerably and the once-residential Barbour Street is an industrial zone, with the residence at 102 Barbour Street in the middle of it all. What type of zoning does the residence demonstrate?

a.     Conforming zoning

b.     Non-conforming zoning

c.      Planned unit development

d.     Spot zoning

531) Your client, William, wants to run a tax office out of his home. He lives in an area that is not zoned for that purpose. What must William obtain to operate his tax office legally?

a.     A home business waiver

b.     A petition from his neighbors

c.      A special use permit

d.     A variance

532) The purpose of ______ commissions is to preserve buildings, landmarks, and the character of certain areas.

a.     Historic preservation

b.     Human rights

c.      State real estate

d.     Wetlands

533) What’s the difference between a special use permit and a variance?

a.     A special use permit allows a deviation from the requirements of the zoning ordinance; a special use permit is the temporary use of another’s property.

b.     A variance allows a deviation from the requirements of the zoning ordinance; a special use permit allows a use not ordinarily allowed in the zone.

c.      A variance is temporary; a special use permit is permanent.

d.     A variance relates to building height only; a special use permit can relate to building height, use, or setback.

534) The developer of a new subdivision is placing residential properties closer together, allowing him to include large open spaces throughout the development to build bike and walking trails, as well as a community pool and recreation center. What type of zoning is this?

a.     Cluster

b.     Conforming

c.      Non-conforming

d.     Spot

535) Which of the following is true about a variance?

a.     It involves eminent domain.

b.     It’s a use that was in place when the zoning ordinance was enacted.

c.      It’s temporary.

d.     To obtain it, the owner must show hardship.

536) What describes both the type of the development and the regulatory process that allows the developer to meet the community’s goals for land use and density without being restricted by existing zoning requirements?

a.     Cumulative zoning

b.     Planned unit development

c.      Spot zoning

d.     Subdivision

537) Which of the following is the sunshine law based on?

a.     The First Amendment

b.     The Freedom of Information Act

c.      The Sarbanes-Oxley Act

d.     The SPEECH Act

538) Builders weren’t allowed to develop new properties in Cityville for six months. This is likely because the city had enacted a ______.

a.     Condemnation

b.     Moratorium

c.      New tax base

d.     Zoning ordinance

539) When would a sheriff’s deed be used?

a.     Property owned free and clear by the owner(s)

b.     Property that is being passed down in probate

c.      The court-ordered sale of a property

d.     To clear interest in property from the title

540) Which term describes an oath by a subscribing witness, such as a notary public, that the grantor’s signing of the deed is a voluntary act and enables a deed to be recorded?

a.     Acknowledgment

b.     Grantee

c.      Granting clause

d.     Habendum clause

541) Siblings Shasta and Ruby inherited their mother’s home when she died. Ruby had been taking care of their mom, so she was already living in the home and continued to do so. Shasta lived in another state and remained there. After some years, Ruby decided to sell the house. Shasta agreed to the sale, and even offered to give up any of his ownership so Ruby could enjoy all the profits of the sale. What’s the best deed to use in this situation?

a.     Executor’s deed

b.     Quitclaim deed

c.      Trustee’s deed

d.     Warranty deed

542) Which of the following is an instrument of conveyance?

a.     Deed

b.     Mortgage

c.      Promissory note

d.     Title insurance policy

543) Joe Bob is the grantor of a deed, and is in the final stages of transferring a deed to the new owner, Frank. What must Joe Bob do in order to satisfy delivery and acceptance of the deed to Frank?

a.     Deliver the deed to Frank, his agent or attorney, or the title company issuing the title

b.     Get Frank’s signature on the official acceptance letter notarized and recorded at the county clerk’s office.

c.      Send the deed via certified mail so that the shipment is officially tracked

d.     Submit delivery and acceptance paperwork to the Board of Submission and Acceptance

544) Select the statement that accurately reflects the type of deed used for the transfer.

a.     A bargain and sale deed conveys property in a foreclosure proceeding.

b.     A deed of trust conveys real estate to a trustee for the beneficiary named in the deed.

c.      A referee’s deed conveys property from one spouse to another in a divorce proceeding.

d.     A warranty deed conveys REO property from the lender.

545) Which kind of deed releases any rights of the grantor to the property to the grantee and clears any clouds on a title, but does not offer any warranties to the grantee?

a.     Executor’s deed

b.     Grant deed

c.      Quitclaim deed

d.     Sheriff’s deed

546) What type of deed are you likely to receive if you purchase a California property with cash at a foreclosure auction?

a.     Bargain and sale deed

b.     Executor’s deed

c.      Full covenant and warranty deed

d.     Trustee’s deed upon sale

547) Which one of the following covenant terms promises that the grantor will provide any additional assurances that the grantee reasonably requires and perform any acts necessary to correct any defect in the title being conveyed?

a.     Against encumbrance

b.     Further assurances

c.      Quiet enjoyment

d.     Warranty

548) Select the statement that correctly exemplifies the covenant term.

a.     The covenant against encumbrances is the grantor’s guarantee that he or she owns the property being conveyed.

b.     The covenant for further assurances assures the grantee that there are no undisclosed encumbrances on the property.

c.      The covenant of quiet enjoyment promises that the grantee won’t be disturbed by a title defect the grantor passes on.

d.     The covenant of warranty promises that the grantor has the capacity to convey title.

549) A ______ is a method of conveying real property from one party to another.

a.     Deed

b.     Power of attorney

c.      Promissory note

d.     Recordation

550) Jerry’s client Carla has successfully closed on the purchase of a home. The deed shows she’s taken sole ownership of the property. Which of these actions is necessary before the escrow agent can have the deed recorded?

a.     Carla must name a beneficiary.

b.     Carla must state her acceptance of the deed.

c.      The grantor’s signature must be acknowledged.

d.     The title company must issue a standard policy that validates the deed.

551) Which type of deed comes with two covenants of warranty implied in its use?

a.     Grant deed

b.     Quitclaim deed

c.      Sheriff’s deed

d.     Warranty deed

552) Which covenant term means that the grantor both has legal capacity to convey the title and also has the title to convey?

a.     Further assurances

b.     Quiet enjoyment

c.      Right to convey

d.     Warranty forever

553) Which type of deed conveys real property from a decedent’s estate to a buyer?

a.     Deed in trust

b.     Executor’s deed

c.      Quitclaim deed

d.     Referee’s deed

554) John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted’s property several years earlier. Which general warranty deed covenant does this represent?

a.     The covenant against encumbrances

b.     The covenant of further assurances

c.      The covenant of quiet enjoyment

d.     The covenant of seisin

555) Kevin and Regina sold their property to Vickey using a general warranty deed. Which one of these statements is true?

a.     Either Regina or Kevin can convey the property.

b.     Kevin and Regina are the grantees.

c.      Vickey is the grantee.

d.     Vickey is the grantor.

556) A property owner who wishes to convey property to a new owner will generally use a ______.

a.     Deed

b.     Lease

c.      Mortgage

d.     Title abstract

557) Ari owned acreage in a rural area. He sold a small portion of it to a neighbor in an informal transaction but made no record of the sale or change of ownership. A developer offered Ari several million dollars for the entire acreage, and Ari eagerly accepted the offer. What covenant is Ari in danger of violating?

a.     Against encumbrances

b.     Quiet enjoyment

c.      Seisin

d.     Warranty

558) Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who’s 16. Which of these must occur to make this transfer legal?

a.     Christian must agree to the transfer and sign the deed.

b.     Christian must provide monetary compensation to Meg.

c.      Meg must sign the deed and have her signature acknowledged.

d.     Meg must wait until Christian has reached the age of majority.

559) Which term refers to the person conveying title, often called the “party of the first part,” in a deed?

a.     Grantee

b.     Grantor

c.      Notary public

d.     Witness

560) Todd conveyed title to his out-of-state property to Brad using a general warranty deed. A few months later, Brad discovered that the legal description of the property on the deed was incorrect, and his property was only half the size he thought he’d purchased. He sued Todd based on Todd’s promises of ______ in the deed.

a.     Consideration and compensation

b.     Habendum and fair dealing

c.      Quiet enjoyment and further assurances

d.     Seisin and right to convey

561) What phrase is or words are required on a deed and are considered an “act of conveyance?”

a.     “Between ____ and ____.”

b.     “Forever and always”

c.      “Grant and convey”

d.     “Witnesseth and acknowledged”

562) Colleen and Judy purchased a dilapidated townhome in an estate sale. Due to their fix-up work and the current economy, the property value has skyrocketed. They decide to sell it to get their equity out of it. After they list it, a woman comes forward, saying she is an heir to the previous owner and lays claim to the property. Which general warranty deed covenant protects Colleen and Judy?

a.     The covenant against encumbrances

b.     The covenant of seisin

c.      The covenant of the right to convey

d.     The covenant of warranty

563) Which of the following terms describes the actions required to transfer a title by deed?

a.     Acknowledgment

b.     Delivery and acceptance

c.      Granting clause

d.     Habendum

564) In order to convey real property, which one of the following documents would you use?

a.     Deed

b.     Mortgage

c.      Promissory note

d.     Title insurance

565) Which term refers to the person receiving title, often called the “party of the second part,” in a deed?

a.     Grantee

b.     Grantor

c.      Notary public

d.     Witness

566) Cheng is selling his property to Jericho. What’s the best method Jericho can use to ensure his interest in the property?

a.     Ensure that Cheng signs the deed.

b.     Ensure that he signs the deed.

c.      Purchase title insurance.

d.     Record the deed in his name.

567) Which type of deed is sometimes called a general warranty deed and contains all six covenants?

a.     Bargain and sale deed

b.     Quitclaim deed

c.      Referee’s deed

d.     Warranty deed

568) Which of the following could be a valid deed?

a.     A napkin with both parties’ signatures and an oral agreement to sell the land

b.     An oral agreement between two trusted individuals

c.      An oral agreement between two trusted individuals and witnesses

d.     A written document containing all of the required elements and adhering to all document formatting requirements

569) Which address(es) must be included on the deed?

a.     The grantee’s

b.     The grantor’s and the county clerk’s

c.      The notary public’s and the county clerk’s

d.     The notary public’s and the grantee’s

570) When you’re working with clients in California, how will you explain the grant deed to them?

a.     It includes implied warranties from the grantor, and is commonly used in California.

b.     It includes six express covenants from the grantor, but is rarely used in California.

c.      It’s used in transactions where no consideration or consideration of “love and affection” is given in exchange for the property.

d.     It’s used to convey title when the property is used as security for a loan.

571) Which option must be included on a deed for it to be valid?

a.     County judge’s and sheriff’s signatures and approval

b.     List of all living neighboring property owners

c.      Name of next of kin for inheritance purposes

d.     Names of grantor/grantee

572) Kandy was so excited to be buying her first home, a condo in a San Diego beach neighborhood. Thanks to an inheritance, she was able to pay for the property in cash! She gazed adoringly at her deed, admiring each of its elements that proclaimed her the sole owner of 1256 Voltaire Street, Unit 15. Which of these is NOT on Kandy’s deed?

a.     A granting clause

b.     Kandy’s signature

c.      Names of the grantor and the grantee

d.     The property description

573) What term is defined as the addition of value to property through labor or the addition of new materials?

a.     Accession

b.     Accretion

c.      Alluvion

d.     Avulsion

574) Jerome has four grown children. When he dies, he leaves his home to all four children, making them tenants in common with equal shares. One child wants to live in the house, another wants to use it as investment property, and two others want to sell it and take the cash. When they can’t agree on a solution, they end up in court and the property is ______.

a.     Deeded by appointment

b.     Foreclosed

c.      Partitioned

d.     Transferred via intestate succession

575) Which term is defined as someone claiming property of another simply by using it for an extended period of time?

a.     Accession

b.     Adverse possession

c.      Dedication by deed

d.     Public grant

576) What takes precedence over a deceased person’s wishes to grant his property at death, even if those wishes are specified in the decedent’s will?

a.     Intestate succession

b.     Location, location, location

c.      Operation of law

d.     Public interest

577) When co-owners of a property decide to partition the property, what does it mean?

a.     One co-owner is foreclosing on another.

b.     They’re dividing the property into parcels and maintaining co-ownership of each parcel proportionally.

c.      They’re dividing the property proportionally so that each co-owner becomes sole owner of a portion.

d.     They’re selling additional interests in the property, in essence adding co-owners.

578) Trinity has been named executor of her uncle’s will. What does this mean?

a.     She receives all her uncle’s possessions and property.

b.     She’s responsible for carrying out the will’s provisions.

c.      She’s responsible for taking care of her uncle until his death.

d.     She’s responsible for the probate of her uncle’s will.

579) Which term is defined as land that washes away and decreases the property size?

a.     Accession

b.     Accretion

c.      Alluvion

d.     Avulsion

580) Who would inherit the property in a family with legally adopted children if both parents died without a will?

a.     The illegitimate children

b.     The IRS

c.      The legally adopted children

d.     The state

581) Which term is used to describe when an owner gives or donates land or an easement for public use?

a.     Accession

b.     Adverse possession

c.      Dedication by deed

d.     Public grant

582) Which term is defined as an increase in land by the permanent and gradual withdrawal of water?

a.     Alluvion

b.     Avulsion

c.      Dedication

d.     Reliction

583) Frank had been talking about getting a will for a while now, but he never got around to it before he passed away unexpectedly. His wife and two kids were very distraught and the family got together with his only living relative, a cousin, and friends at the funeral for the first time in years. Frank’s wife is now concerned about who will get the farm where she and her children live. According to the laws of intestacy, can you figure out who will get the land?

a.     The children

b.     The closest living relative, Frank’s cousin.

c.      The state

d.     The wife

584) Susan Duffield died testate at age 49. What can be said about Susan’s estate?

a.     Because of Susan’s age, any will is invalid.

b.     Because of the will, it will avoid probate.

c.      Because she died without a will, the estate becomes property of the state.

d.     It will be put through probate.

585) Marsten is the personal representative for his grandmother’s estate. After her death, he learns that he can’t distribute the estate’s property until after the will goes through probate. What does this mean?

a.     Marsten must apply through the courts to manage his grandmother’s estate.

b.     The court must determine the will’s validity and supervise distribution of the estate.

c.      The courts must contact all potential heirs to learn of their wishes regarding distribution of the estate.

d.     The courts must review Marsten’s ability and knowledge related to distribution of the estate.

586) Which term is defined as the act of transferring away ownership of a property?

a.     Alienation

b.     Avulsion

c.      Real transference

d.     Reliction

587) Which term describes the newly formed land mass built up by the deposits of sediments on a property that belongs to the owner?

a.     Alluvion

b.     Avulsion

c.      Erosion

d.     Reliction

588) What might Trina’s mother have bequeathed to Trina?

a.     Her interest in an oil drilling operation

b.     Her jewelry and fine china

c.      Her primary residence

d.     Her vacation property

589) According to the laws of descent, who will inherit the property when there are no surviving heirs?

a.     Friends of the family

b.     Private auction

c.      The neighboring property owner

d.     The state

590) Which term is defined as the build-up of land near water from the accumulation of sand, silt, or gravel deposits?

a.     Accession

b.     Accretion

c.      Accumulon

d.     Avulsion

591) What is it called when property is taken by the state after the owner dies without heirs?

a.     Accession

b.     Escheat

c.      Estoppel

d.     Forfeiture

592) If a property owner dies intestate and no heirs or creditors can be found, what becomes of the property?

a.     A lottery is held for ownership.

b.     The property is combined with an adjoining property.

c.      The property reverts to a former owner as recorded on the deed.

d.     The state claims the property through escheat.

593) June specified in her will how title to her home would transfer. At her death, alternate conveyance occurred. What likely happened?

a.     Fraud

b.     Intestate hereditary

c.      Operation of law

d.     Testate succession

594) What do you have to prove in order to claim a piece of property through adverse possession?

a.     Have a public grant land patent document

b.     Must be dedicated to you by the true owner

c.      Possession must be open, notorious, continuous, and uninterrupted without permission of the true owner

d.     Prove the land was acquired through the accumulation of sediments

595) Which term is defined as the state government granting power, license, or real property to a private individual or individuals using a land patent?

a.     Accession

b.     Adverse possession

c.      Dedication by deed

d.     Public grant

596) Roberta worked with an attorney to prepare her will. What kind of will is this?

a.     Descent

b.     Functional

c.      Holographic

d.     Statutory

597) The terms of a person’s will are subject to ______.

a.     Intestate succession

b.     Legal duress

c.      Nothing

d.     Operation of law

598) Jardin passed away suddenly, and when his family started looking through his documents, they found a handwritten will. Which of these statements about the will is true?

a.     A handwritten will, also called a holographic will, may be valid if it meets other terms for validity.

b.     A handwritten will, also called a statutory will, is valid if it’s been witnessed.

c.      A handwritten will is called a simple will.

d.     A handwritten will is not valid.

599) What is it called when a property owner acquires additional land through manmade or natural causes?

a.     Accession

b.     Alienation

c.      Dedication

d.     Reliction

600) Your aunt bequeathed you her property in her will, but you never received it. Instead, the property went to pay her tax bill. Is this legal?

a.     No, never

b.     Not if there were other heirs

c.      Yes, due to operation of law

d.     Yes, if the will wasn’t witnessed

601) Shana received a devise from her mother. What might this be?

a.     A written message

b.     Her mother’s car

c.      Her mother’s farm

d.     Her mother’s jewelry

602) Elmer died and left a will. Before his estate can be distributed according to his wishes, it must go through ______.

a.     A lawyer

b.     Devise

c.      Escheat

d.     Probate

603) Meredith died, leaving behind a will. Although her instructions to devise her property to her daughter were explicit, her husband inherited. Why might this be?

a.     Escheat

b.     Intestate

c.      Testate

d.     The operation of law

604) Wilma died without a will. How will her heirs be determined?

a.     A committee appointed by the court

b.     Intestate bequest

c.      Intestate succession

d.     The process of escheat

605) ______ determines who the heir or heirs will be if a person dies without a will.

a.     Court appointment

b.     Escheat

c.      Intestate bequest

d.     Intestate succession

606) When tenants in common can’t agree on how to manage the property and want to terminate their co-ownership without selling the property, how can this be accomplished?

a.     Foreclosure

b.     Law of succession

c.      Partition

d.     Process of escheat

607) In a contract, consideration is the giving of ______.

a.     Notice to attorneys that they may review the terms of the agreement

b.     Something of value in exchange for something of value

c.      Something of value in exchange for something without value

d.     Thoughtfulness and courtesy to all parties

608) Which of the following best explains how the statute of frauds protects consumers?

a.     It doesn’t allow people to own land unless they can afford it.

b.     It provides requirements that certain contracts have to meet to be legally enforceable.

c.      It puts a limit on how much interest financial institutions can charge.

d.     It states that all real property sales must involve lawyers.

609) Ken signed a contract to purchase Debra’s condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken’s birthday. What was the status of the contract when Ken and Debra entered into it?

a.     Executed

b.     Illegal

c.      Void

d.     Voidable

610) A legally competent party means that an individual has the capacity, legally and ______, to enter into a contract.

a.     Financially

b.     Mentally

c.      Morally

d.     Purposefully

611) Louellen is about to take out a mortgage loan from her credit union. The contract includes the following information: Louellen is offering her house as consideration, and the credit union is offering $350,000; and Louellen will pay the loan back over a certain number of months at a certain rate. Both Louellen’s signature and the credit union representative signed it. What, if anything, is this contract missing in order for it to be legally binding, according to the statute of frauds?

a.     Louellen’s credit history needs to be included.

b.     Nothing is missing.

c.      The condition and size of the house needs to be included.

d.     The credit union’s physical address needs to be included.

612) In contract law, a “legally competent” party has the ______ to enter into a contract.

a.     Financial resources

b.     Legal and mental capacity

c.      Legal background

d.     Motivation and means

613) Bill and Mindy, who are neighbors, get into a disagreement about late-night noise. The two come to an agreement: Bill promises to stop having loud parties and Mindy promises to keep her dogs inside after 10 p.m. Their promises represent the ______ in their agreement.

a.     Consideration

b.     Flaw

c.      Legal competency

d.     Undue influence

614) A real estate contract written for an illegal purpose is ______.

a.     Permissible and valid

b.     Void

c.      Voidable only by the buyer

d.     Voidable only by the seller

615) Which of the following elements is always required for a real estate contract to be valid?

a.     Attorney review

b.     Consideration

c.      Earnest money

d.     Profit

616) Which of the following is true about the statute of frauds?

a.     All types of written contracts, with the exception of email or other online communication, may be considered “in writing” and binding.

b.     Any form of written contract, including email communication, may be considered “in writing” and binding.

c.      Only contracts that are handwritten are considered to be “in writing” and binding.

d.     Only pre-printed contracts, the blanks of which have been filled in in ink, are considered to be “in writing” and binding.

617) What’s the best definition of legal purpose?

a.     Attorney consideration

b.     Mentally capable of entering into a contract

c.      Written for a lawful objective

d.     Written for an illegal purpose

618) Robert and Sarah enter into a contract for Sarah to purchase Robert’s home. Robert decides he doesn’t want to sell, and is elated when he finds out that Sarah’s only 17 years old. Can Sarah force Robert to sell?

a.     No, because Sarah can’t legally enter into a contract.

b.     No, she can purchase the house if Robert doesn’t object, but can’t do so if he objects.

c.      Yes, as long as she gets a legally competent party to co-sign the contract with her.

d.     Yes, Sarah can require that Robert fulfill the contract terms.

619) The statute of frauds states that if a contract transferring ownership of real property is not in writing, it’s ______.

a.     Enforceable

b.     Executory

c.      Unenforceable

d.     Voidable

620) What does the parol evidence rule say about contracts?

a.     All contracts, commitments, and agreements for the sale of real property must be in writing.

b.     A sales contract must contain the essential elements of a contract for it to be enforceable.

c.      In order for a real estate agreement to be enforceable, it must be in writing and signed by both parties.

d.     The terms agreed to in a written contract are the only terms relating to that contract.

621) According to the statute of frauds, which of the following agreements needs to be in writing to be legally enforceable?

a.     Condo owner Freya agreed to let her friend’s daughter stay in her spare room for four months.

b.     Geoffrey agreed to work on his uncle’s farm for a few days to pay off the $300 he owes him.

c.      Lara sold her book collection to her friend for $450.

d.     Pam agreed to rent her house to Miguel for three years.

622) Per the statute of frauds, which of the following agreements does NOT have to be written down in order to be legally binding?

a.     Sierra sells her car to her cousin for $2,500.

b.     Sloane agrees to pay the $400 in credit card debt that her sister owes.

c.      The Lees rent out their basement to some college students for three months.

d.     Tyrone and Alaya are getting married.

623) Which of these statements about alien residents and non-residents of California is true?

a.     Federal law grants equal property ownership rights to resident and non-resident aliens as citizens in California.

b.     Resident aliens may legally own property if their alien status is unknown.

c.      Resident aliens may own property, but non-resident aliens may not.

d.     Resident and non-resident aliens have the same property ownership rights as citizens in California.

624) Tom and Jim are neighbors. Jim wants to buy Tom’s rental property. In the contract they sign, Jim is identified only as “the neighbor.” Which statute or contract element does this violate?

a.     Fair housing

b.     Legal purpose

c.      Offer and acceptance

d.     The statute of frauds

625) Drew and Hank were camping at Hank’s riverfront cabin. Hank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he’d buy it from Hank for $80,000, which Hank agreed was a fair price. It’s two months later, and Hank is upset that Drew now says he won’t buy it. Why isn’t this contract enforceable?

a.     Drew didn’t have the financial resources to make the offer.

b.     Real estate contracts must be in writing.

c.      There was no offer and acceptance.

d.     This wasn’t a legal purpose.

626) Jolene signs a contract to buy Harvey’s home. Before closing, it’s discovered that Jolene is only 16 years old. Because she’s a minor, she’s not considered legally competent to enter into a contract. Which of the parties can void the contract?

a.     Harvey

b.     Jolene

c.      Nobody

d.     Only a judge

627) Which of these groups of people are considered legally able to enter into a contract in California?

a.     Convicts, incompetents, corporations

b.     Emancipated minors, aliens, LLCs

c.      Minors, aliens, convicts

d.     Minors, aliens, LLCs

628) The residents of Blair Avenue are a close-knit bunch. They’re all young couples with small children, and they don’t want this dynamic to change when two of the couples have to move. Those couples sign an agreement promising not to sell to anyone without kids or to anyone over the age of 50. The contract can’t be enforced because it’s missing ______.

a.     Consideration

b.     Legally competent parties

c.      Legal purpose

d.     Offer and acceptance

629) A valid contract must include which of the following elements?

a.     Counter-offer

b.     Electronic signature

c.      Fairness clause

d.     Legally competent parties

630) If a party to a contract lacks legal capacity but enters into a contract anyway, which party may void the contract?

a.     Both parties

b.     The broker

c.      The party lacking legal capacity

d.     The party possessing legal capacity

631) In a real estate transaction, which of the following is established when the parties enter into an agreement voluntarily with a full understanding of the contract terms?

a.     Consent

b.     Consideration

c.      Legal competency

d.     Legal purpose

632) Both the buyer and the seller have to sign the purchase and sale agreement in order to demonstrate that ______.

a.     An attorney has reviewed the contract

b.     Their agents have agreed to the terms and conditions

c.      The very first offer was accepted

d.     They understand the terms

633) An ______ minor is considered to be a legally competent party who is able to enter a contract.

a.     Alien

b.     Emaciated

c.      Emancipated

d.     Incompetent

634) When offer and acceptance has occurred, both parties enter into ______.

a.     A contingency

b.     A mutual agreement

c.      Consideration

d.     Understanding

635) A contract for an illegal purpose is ______.

a.     Fraud

b.     Valid

c.      Void

d.     Voidable

636) To meet the requirements of the statute of frauds, an agreement must clearly identify the contract’s subject matter, present the contract’s essential terms and conditions, and ______ to be enforceable.

a.     Achieve a result that’s fair to all parties

b.     Be agreed to verbally

c.      Be reviewed by an attorney

d.     Identify the contracting parties

637) Bobby has just found out that he was named as the executor of his grandfather’s will. In accordance with the terms of the contract, he may sell his grandfather’s property while serving as a ______.

a.     Lawyer

b.     Partner

c.      Personal representative

d.     Seller representative

638) Claudia and Yves enter into contract for her to buy his condo. The written contract must _____, identify the subject matter of the contract, and present the essential terms and conditions of the contract.

a.     Achieve a result that is fair to all parties

b.     Be handwritten

c.      Be signed by two or more attorneys

d.     Name the contracting parties

639) Carl and Sadie, who are neighbors, got into a disagreement about early-morning noise on the weekends. The two came to an agreement: Carl promised to not mow the lawn before 10 a.m., and Sadie promised to put bark collars on her dogs in the early morning hours. Their promises represent the ______ in their agreement.

a.     Consideration

b.     Flaw

c.      Legal competency

d.     Undue influence

640) In the eyes of the law, why do people under age 18 lack contractual ability?

a.     They have insufficient resources.

b.     They lack intelligence.

c.      They’re immature.

d.     They’re minors.

641) Another term used to describe an executor or executrix who was named to carry out the provisions of a will is a personal ______.

a.     Assistant

b.     Executor

c.      Lawyer

d.     Representative

642) What does the parol evidence rule state?

a.     All contracts, commitments, and agreements for the sale of real property must be in writing.

b.     An Agreement of Sale must contain the essential elements of a contract for it to be enforceable.

c.      For a real estate agreement to be enforceable, it must be in writing and signed by both parties.

d.     In most cases, a written agreement is the final and comprehensive expression of the parties’ agreement. It generally prohibits introducing oral or written evidence that contradicts that agreement.

643) Sylvia, who’s 15 years old, and her neighbor Marge, who’s 24, sign an agreement that Sylvia will babysit Marge’s toddler for the summer for $10 an hour. What type of contract is this?

a.     Enforceable

b.     Unilateral

c.      Valid

d.     Voidable

644) Jessica enters into a contract to acquire real property in return for some form of consideration. On the contract, Jessica is regarded as the ______.

a.     Agent

b.     Broker

c.      Buyer

d.     Seller

645) Doris and Kathleen, who are neighbors, enter into an agreement to not permit their real estate agents to sell their homes to families with children. This agreement lacks ______, so it’s void.

a.     A lawful objective

b.     A mutual agreement

c.      A purpose

d.     Two parties

646) Which of these is an example of good consideration?

a.     A payment of less than $10,000

b.     A payment of more than $10,000

c.      Earnest money paid with a cashier’s check or wire transfer

d.     Gifting a house to a family member

647) Which of the following states that, in certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract?

a.     The parol evidence rule

b.     The statute of frauds

c.      The statute of limitations

d.     The statute of oral evidence

648) Alex, a high school freshman, started a neighborhood lawn care business. Simone decides to hire Alex to mow her lawn every two weeks. Alex presents Simone with a written contract outlining the services to be provided and the fee Simone will pay. Which of the following is true in this situation?

a.     Because minors can’t enter into a contract, this contract is void.

b.     Because this contract binds Alex and Simone to an obligation that’s legal for a minor to perform (mowing lawns), the contract is valid and enforceable for both parties.

c.      If both parties are content to uphold their agreement, the fact that it’s not legally binding doesn’t matter.

d.     Minors can’t enter into contracts, so Alex’s parents are legally obligated to uphold the contractual obligations if Alex fails to fulfill them.

649) Which of these statements about alien residents and non-residents of California is true?

a.     Federal law grants equal property ownership rights to resident and non-resident aliens as citizens in California.

b.     Resident aliens may legally own property if their alien status is unknown.

c.      Resident aliens may own property, but non-resident aliens may not.

d.     Resident and non-resident aliens have the same property ownership rights as citizens in California.

650) An ______ minor is considered to be a legally competent party who is able to enter a contract.

a.     Alien

b.     Emaciated

c.      Emancipated

d.     Incompetent

651) Only one of these lists of people includes parties who are all legally capable of contracting in California. Which is it?

a.     Aliens, minors, incompetents, convicts

b.     Convicts, emancipated minors, aliens, incompetents

c.      Convicts, emancipated minors, incompetents

d.     Corporations, nonprofit associations, LLCs, individual proprietors

652) Jessica enters into a contract to acquire real property in return for some form of consideration. On the contract, Jessica is regarded as the ______.

a.     Agent

b.     Broker

c.      Buyer

d.     Seller

653) All of the following are true regarding implied agreements EXCEPT which one?

a.     An implied agreement is based on actions or behaviors.

b.     An implied agreement is based on a formal agreement.

c.      With an implied agreement, it’s possible that the other party didn’t intend to be bound.

d.     With an implied agreement, there’s an increased chance of confusion.

654) Real estate sales contracts must be valid, express, bilateral, ______, and executed or executory.

a.     Enforceable

b.     Oral

c.      Unenforceable

d.     Voidable

655) You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don’t actually exist (for now), what type of contract is this?

a.     Enforceable

b.     Unilateral

c.      Void

d.     Voidable

656) Your automatic check writer wrote a check for $51.50, but your printer ran out of toner, so you had to fill in the handwritten line. In a hurry, you accidentally wrote, “Fifty-one dollars and no/100 cents.” Which amount takes priority?

a.     Neither; the check is void

b.     The handwritten number

c.      The numerals

d.     The recipient must split the difference between the two amounts

657) Which of the following is a contract that exists based on an understanding or assumption, rather than on specifically defined terms?

a.     Express contract

b.     Implied contract

c.      Invalid contract

d.     Unilateral contract

658) Which of these sentences accurately lists rules for interpreting a contract?

a.     Pre-printed text takes precedence over typed and handwritten text.

b.     Typed text takes precedence over handwritten text.

c.      Typed text takes precedence over pre-printed text, and numbers (e.g. 2) take precedence over spelled-out numbers (e.g. three).

d.     Typed text takes precedence over pre-printed text, and spelled-out numbers (e.g. four) take precedence over numerals (e.g. 5).

659) Which of the following is a primary focus of the statute of frauds as it relates to real estate transactions?

a.     Anyone caught committing real estate fraud will be prosecuted.

b.     Fraudulent behavior won’t be tolerated in the real estate profession.

c.      Real estate purchase and sale contracts must be in writing to be enforceable.

d.     There’s a limitation on how long someone can sue for fraud.

660) You receive an offer in the mail that says you’re eligible to win a cash prize if you place some stickers on a form and return it to the sender. What type of contract is this?

a.     Implied contract

b.     Invalid contract

c.      Unenforceable contract

d.     Unilateral contract

661) Which of the following is true regarding express agreements?

a.     Express agreements are implied.

b.     Express agreements are invalid.

c.      Express agreements may be written or verbal.

d.     Express agreements must be lengthy.

662) Alex and Michael Helbig signed a contract to purchase their first home from sellers Joe and Bonnie Watson. Once closing occurred and all closing requirements wrapped up, the Helbigs were given the keys to their house. What type of contract do they have at this point ?

a.     Executed

b.     Executory

c.      Implied

d.     Voidable

663) You’re talking to a co-worker at lunch, and she mentions she has a box of baby clothes her kids have outgrown that she needs to get rid of. You have a baby on the way, so you offer to pay her $25, and she agrees to bring the box to work the next day and give it to you. Which of the following is true in this situation?

a.     This is an express contract because you defined in words the specific terms of the agreement and consideration to be exchanged.

b.     This is an implied contract because it is not written down and nobody signed anything.

c.      This is an invalid contract because it is not written down and nobody signed anything.

d.     This is a unilateral contract because only one party is providing anything of value.

664) Why do you think that handwritten changes take priority over typed changes?

a.     All typewriters are different.

b.     It’s less likely to be done inadvertently.

c.      They are made last.

d.     Typed changes are the same as pre-printed changes.

665) In which of the following types of contracts does one or more of the contract’s terms still need to be completed?

a.     Bilateral contract

b.     Executed contract

c.      Executory contract

d.     Unilateral contract

666) Three of these statements about interpreting contracts are true, and one is not. Which statement is FALSE?

a.     A handwritten insertion can be canceled out by typing over it.

b.     Handwritten insertions take precedence over typed and pre-printed insertions.

c.      If a contract shows a fee as $250 in one location and “three hundred fifty” in another, the amount of 350 will be assumed to be correct.

d.     If typed text is crossed out and replaced with a handwritten note, the handwritten note is what should be executed.

667) What is wrong with this statement: “Handwritten information on a contract is not legally binding. All insertions must be typed.”?

a.     Contracts are not legally binding.

b.     Insertions are not allowed on contracts. They must be pre-printed.

c.      Insertions do not have to be typed to be legally binding.

d.     There is no reason to write by hand on a contract.

668) Rex needs to handle some money he acquired during an “unsavory” business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business deal. What kind of contract do Rex and Ben have?

a.     Executed

b.     Executory

c.      Void

d.     Voidable

669) Which type of contract is the opposite of an express contract?

a.     Bilateral

b.     Executory

c.      Implied

d.     Voidable

670) In a purchase offer, is earnest money required in order to have a binding contract?

a.     No, because earnest money isn’t part of a sales contract.

b.     No, because the buyer’s consideration is the promise to buy.

c.      Yes, because it opens escrow.

d.     Yes, because it’s the buyer’s consideration.

671) Which of these situations represents a unilateral contract?

a.     Cain sells Trenton his bike.

b.     Maurice promises Shelton $100 if Shelton will sell his painting. Shelton agrees, but Maurice doesn’t pay Shelton.

c.      Nathan and Sue exchange vows at their wedding.

d.     Sherry promises to give Brent a ride home from work, and then doesn’t show up.

672) Which of the following best describes a bilateral contract?

a.     A contract for which one or more terms has yet to be completed

b.     A contract in which only one of the parties offers consideration

c.      A contract that involves an exchange of consideration between two parties

d.     A contract that is enforceable by law

673) Which of the following describes a contract that exists based not on words, but on the parties’ actions or behaviors?

a.     Executed

b.     Executory

c.      Express

d.     Implied

674) In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. Of what is this an example?

a.     A void contract

b.     Contract execution

c.      Legal purpose

d.     Partial performance

675) Kyle promised his grandmother he’d pay her $200 a month to live in the room above her garage. He lived there a few months without paying a dime and then disappeared one night after trashing the place. How long does Grandma have to decide if she can really bring herself to sue Kyle?

a.     Six months

b.     Two decades

c.      Two months

d.     Two years

676) Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal, and Kenneth kept the earnest deposit. This is an example of ______.

a.     Accepting liquidated damages

b.     Accepting partial performance

c.      Suing for damages

d.     Suing for specific performance

677) When a contract has been breached, the wronged party may attempt to sue for punitive damages, which are ______.

a.     An agreed-upon amount that the buyer will pay the seller if the buyer breaches the contract

b.     Compensation for actual loss based on the contract’s value

c.      Non-monetary damages

d.     Payments in excess of any compensatory damages

678) Which of the following scenarios is an example of novation?

a.     Cynthia has a contract with Jack to buy his house. She terminates the contract after the inspection and writes a similar contract on a new property with Jeff.

b.     Doug is buying Norm’s farm, but has a serious accident and no longer wants to own a farm, so his daughter Linda decides to buy the property. Norm agrees to the substitution of Linda for Doug in the purchase contract, effectively creating a new contract.

c.      Marcie contracts to buy Suzanna’s beauty salon. Marcie gets cold feet, though, and terminates the contract.

d.     Using a clause in the original purchase contract, Roxanne assigns her contractual right to purchase a property to her friend, Caroline.

679) Which of these sentences accurately describes the phrase “statute of limitations”?

a.     There are deadlines for certain types of legal action.

b.     There are limits to how many times someone may sue another person.

c.      There are limits to the monetary damages that may be awarded in a civil suit.

d.     There’s a limit to the number of statutes that may be enacted each year.

680) Which one of the following statements is true regarding a partially performed sales contract that otherwise contains all of the essential elements?

a.     The contract can’t close.

b.     The contract is unenforceable in court.

c.      The contract is void.

d.     The contract is voidable.

681) Anna and Cindy entered a contract to buy Jake’s home. However, at the last minute, Cindy had a change of heart and wanted out of the deal. Anna asked another friend, Sally, if she wanted to take Cindy’s place as a co-buyer of Jake’s home. Everyone agreed to the substitution of Sally for Cindy on the contract. Of what is this an example?

a.     Assignment

b.     Fraud

c.      Mutual mistake

d.     Novation

682) DeeAnna thought she purchased an investment property, but the seller refused to deliver the title to her. DeeAnna met all of her obligations per the written contract she and the seller signed. She decided to take the seller to court in an effort to force him to hand over the title. This is an example of ______.

a.     Accepting partial performance

b.     Rescinding the contract unilaterally

c.      Suing for damages

d.     Suing for specific performance

683) Which of these situations could be most appropriately addressed through reformation of the contract?

a.     Bobby the Buyer got a promotion with the same company, and a 10% raise in salary.

b.     Bobby the Buyer wasn’t approved for a mortgage loan and asks Sally if he can have his earnest money back.

c.      Sally the Seller and Bobby the Buyer request a new contract after Sally notices the property address is mistyped.

d.     Sally the Seller decides she cannot part with her house after all. Fortunately for her, but not so fortunately for him, Bobby

684) What phrase do many real estate contracts contain that reminds the parties to avoid unnecessary delays to the transaction, and to adhere to all contract dates?

a.     Haste makes waste

b.     Patience is a virtue

c.      Seek the advice of an attorney

d.     Time is of the essence

685) Sue Ellen has a contract to buy Roger’s house, which she has always admired, when Roger decides he’s ready to move to a senior living community. After Roger finds a suitable senior apartment and moves, Sue Ellen writes a check for the agreed-upon amount, and Roger transfers the deed to her. What is happening in this scenario?

a.     Assignment

b.     Breach

c.      Novation

d.     Performance

686) Which of these phrases is used to describe the act of correcting a contract that contains a mistake?

a.     Disclosing of a contract error

b.     Reformation of a contract

c.      Release of a contract

d.     Renewal of a contract

687) Mary agreed to buy her mother’s house when her mother planned to move to a senior living community. They signed a purchase agreement, but when Mary had to move because of work, she signed her rights in the contract over to her sister, Tina. Mary may still owe money if Tina can’t come up with the agreed-upon funds. What’s happening in this scenario?

a.     Assignment

b.     Breach

c.      Novation

d.     Performance

688) What is it called when one party to a contract transfers the contractual rights and obligations to another but remains liable for the contract terms?

a.     Assignment

b.     Execution

c.      Novation

d.     Termination

689) Eileen entered into a contract to buy Peter’s home. The contract specified that Peter must leave the refrigerator with the home, and he must replace the roof before closing. During the pre-closing walk-through, Eileen confirmed the house had a nice new roof, but also found that Peter took the refrigerator with him. Eileen decided she didn’t want the refrigerator that much anyway so she didn’t make a fuss. This is an example of ______ of the contract.

a.     Partial performance

b.     Performance

c.      Reinforcement

d.     Voiding

690) Sam entered into a contract to sell his home to Gina. After the inspection, Gina insisted that Sam replace the damaged roof. Sam refused, and the parties agreed to cancel the deal. This is an example of ______.

a.     Accepting liquidated damages

b.     Accepting partial performance

c.      Mutually rescinding the contract

d.     Unilaterally rescinding the contract

691) Jayne was tired of waiting for her subcontractor to get his part of the deal done. The agreed-upon deadlines came and went, and Jayne lost money waiting for the subcontractor to come through. She decided that if the subcontractor weren’t going to honor his commitments, neither was she, so Jayne consulted with her attorney and then terminated the contract. This is an example of ______.

a.     Accepting partial performance

b.     Mutually rescinding the contract

c.      Rescinding the contract unilaterally

d.     Suing for damages

692) Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.

a.     Accepting partial performance

b.     Mutually rescinding the contract

c.      Rescinding the contract unilaterally

d.     Suing for damages

693) Which of the following scenarios describes an example of unilateral rescission?

a.     A sales transaction falls through when Nora, the buyer, doesn’t qualify for financing.

b.     Bobby, the buyer, makes an offer on a house that doesn’t meet the appraisal contingency. He cancels the sale.

c.      Buyer Alice decides to join the Peace Corps. She and the seller mutually agree to cancel the sale, and the seller keeps Alice’s earnest money.

d.     Sally, the seller, sells her property to two different buyers. Both buyers sue Sally for specific performance.

694) Shannon and Rene are sisters who entered into a contract to buy an income property. The sisters got into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. If Jerry fails to live up to his obligations under the contract though, Shannon will be held responsible. Of what is this an example?

a.     Assignment

b.     Fraud

c.      Mutual mistake

d.     Novation

695) What language may be included in a contract after the assignor’s name to make it clear that the contract is assignable?

a.     “And/or assigns”

b.     “Buyer beware”

c.      “Spouse or partner”

d.     “Time is of the essence”

696) Seller Gina feels awful that Martha, who was going to buy her property, lost her job. Gina decides to ______ Martha from the purchase contract.

a.     Assign

b.     Reform

c.      Release

d.     Rescind

697) Zack enters into a contract to buy Olivia’s home. Per the terms of the contract, Zack must put down a $10,000 earnest money deposit and have the property inspected within five days. In reality, he puts down a $12,000 deposit and has the property inspected within two days. Of what is this an example?

a.     Buyer misrepresentation

b.     Partial performance of the contract

c.      Performance of the contract

d.     Voiding of the contract

698) What’s the key difference between assignment and novation of a contract?

a.     Assignment releases the original party from all obligations, while novation does not.

b.     Individual contracts must specifically allow novation, but not assignment.

c.      Novation is disallowed in many states, while assignment is not.

d.     Novation releases the original party from all obligations, while assignment does not.

699) When a buyer breaches the real estate sale contract, the seller may file a lawsuit for compensatory damages. Which of the following best describes compensatory damages?

a.     A specified monetary amount agreed upon by the buyer to pay the seller, if the buyer breaches the contract.

b.     A specified monetary amount the seller agrees to pay the buyer, if the seller breaches the contract.

c.      Compensation for actual loss based on the contract’s value.

d.     Payment in excess of the contract’s value.

700) Mary contracted to buy her mother’s house when her mother moves to a senior living community, but now Mary has to move because of work and no longer wants to buy the house. With their mother’s agreement, Mary’s sister, Tina, steps in, releasing Mary from her obligation. They write up a new contract, with the only change being that Tina is now the party to the contract rather than Mary. What’s happened here?

a.     Assignment

b.     Breach of contract

c.      Novation

d.     Performance

701) Betty hired a contractor to replace her gutters. Within days, the gutters leaked and flooded her basement. She complained to the contractor, who replaced the gutters again. The next time it rained, the gutters leaked and flooded Betty’s basement a second time. Frustrated, Betty decided to file a lawsuit against the contractor in an attempt to recover the money she lost. This is an example of ______.

a.     Accepting partial performance

b.     Rescinding the contract unilaterally

c.      Suing for damages and breach of contract

d.     Suing for specific performance

702) In contract law, when does partial performance occur?

a.     When a party acknowledges receipt of the contract

b.     When a party does some, but not all, of what the party has agreed to do

c.      When a party meets all terms of the contract

d.     When a party rejects all terms of the contract

703) Parker entered into a contract with seller Derrick to buy Derrick’s home. Before finalizing the sale, Parker had a change of heart and decided to renounce all worldly possessions. He no longer wanted to buy Derrick’s home. With Derrick’s approval, Parker is released and Parker’s brother, Tom, takes Parker’s place as the buyer in the purchase contract. Of what is this an example?

a.     Assignment

b.     Fraud

c.      Misrepresentation

d.     Novation

704) Martha made an offer to buy Drake’s home, and he accepted it. Under the terms of the agreement, Martha was supposed to make an earnest money deposit of $10,000, but she only put down $5,000. Drake accepted the lesser deposit, and the sale was ultimately finalized. This is an example of ______.

a.     Accepting partial performance

b.     Rescinding the contract unilaterally

c.      Suing for damages

d.     Suing for specific performance

705) Rescission can be ______ agreement to cancel a contract.

a.     A mutual

b.     An ill-advised

c.      An unlawful

d.     A tenuous

706) The owner of ABC Construction entered into a contract to build two homes for brothers Jack and John. The contract specified that the homes must be completed by April 1. ABC finished the homes on March 30. Of what is this an example?

a.     Non-performance

b.     Partial performance

c.      Performance

d.     Voiding

707) Francine’s landlord never returned her security deposit after she moved, even though it was in writing that she would get it back within three weeks. How long after the deadline for returning the deposit does Francine have to sue, according to California’s statute of limitations?

a.     10 years

b.     Four years

c.      One year

d.     Two years

708) What’s the key difference between assignment and novation of a contract?

a.     Assignment releases the original party from all obligations, while novation does not.

b.     Individual contracts must specifically allow novation, but not assignment.

c.      Novation is disallowed in many states, while assignment is not.

d.     Novation releases the original party from all obligations, while assignment does not.

709) In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. Of what is this an example?

a.     A void contract

b.     Contract execution

c.      Legal purpose

d.     Partial performance

710) What is the name of the process of substituting one party to an existing contract with a new party, releasing the original party from all contractual obligations and rights?

a.     Assignment

b.     Execution

c.      Novation

d.     Re-contracting

711) Select the correct definition for “reformation of a contract.”

a.     Redrafting a contract

b.     Releasing one party from a contract

c.      Renewing a contract

d.     Suing another party to a contract

712) Bob signed a contract to purchase Ingrid’s apartment building. Bob decided he didn’t want to be a landlord, and Ingrid decided she didn’t want to sell and move to Maui. They mutually agreed to cancel the contract, and Ingrid returned Bob’s earnest money. This is referred to as ______.

a.     Assignment

b.     Breach of contract

c.      Novation

d.     Rescission

713) This is a loss of money or anything of value, due to failure to perform.

a.     Covenant

b.     Forfeiture

c.      Listing agreement

d.     Options

714) This acts as the receipt for earnest money given by the buyer to secure an offer.

a.     Covenant

b.     Deposit receipt

c.      Listing agreement

d.     Options

715) This is a legal written agreement between a buyer and seller that states the purchase price and other terms of understanding by which real property will be transferred.

a.     Contract for sale

b.     Covenant

c.      Listing agreement

d.     Options

716) Which of these is a contract between a client and agent to sell real property?

a.     Contract for sale

b.     Covenant

c.      Deposit receipt

d.     Listing agreement

717) Which of the following means a legal section in a contract or law?

a.     Listing agreement

b.     Option

c.      Provision

d.     Tender

718) What is the deciding factor when determining whether the buyer or the seller takes the loss on a property that is taken by eminent domain?

a.     The amount of the earnest deposit

b.     The value of the property

c.      Whether or not title and possession have transferred

d.     Who has eminence

719) Which of these means, “A privilege sold by one party to another that offers the buyer the right, but not the obligation, to buy at an agreed-upon price during a certain period of time or on a specific date”?

a.     Commission

b.     Listing agreement

c.      Option

d.     Tender

720) Which of these means, “An agent’s compensation for performing the duties of agency; usually a percentage of a property’s selling price”?

a.     Commission

b.     Listing agreement

c.      Options

d.     Tender

721) This is the legal agreement between a buyer and a broker hired to represent the buyer’s interest.

a.     Buyer representation agreement

b.     Covenant

c.      Listing agreement

d.     Options

722) California’s Uniform Vendor and Purchaser Risk Act clarifies the rights granted to whom?

a.     The buyer and the seller

b.     The buyer only

c.      The buyer, seller, and their agents

d.     The seller only

723) Sally the Seller and Bobby the Buyer are about to sign the closing documents when a fire truck rushes by. The house is burning down! The documents are not signed. Which of these outcomes adheres to the rights provided by the Uniform Vendor and Purchaser Risk Act?

a.     Bobby does not have to pay the closing costs and will get his earnest money back.

b.     Bobby does not have to pay the closing costs, but Sally gets to keep the earnest money.

c.      Bobby must go through with the purchase and will seek reimbursement through insurance.

d.     Sally and Bobby must split the loss 50/50.

724) Which of these means “to formally offer”?

a.     Commission

b.     Conveyance

c.      Listing agreement

d.     Tender

725) Which of these scenarios describes a voluntary lien?

a.     Ruby hasn’t paid her property tax, so the state put a tax lien on her home.

b.     Sam hasn’t paid the general contractor for the new deck he built on Sam’s house, so the contractor put a mechanic’s lien on Sam’s property.

c.      Sharon purchased a condo and now the lender has a mortgage lien on the property.

d.     The court ordered Bob to pay his debt to Leo and placed a judgment lien on Bob’s property when he couldn’t pay.

726) What type of lien is defined as an involuntary lien placed on all of the property received by a deceased person’s heirs?

a.     Estate/inheritance lien

b.     Income tax lien

c.      Judgment lien

d.     Mortgage lien

727) What criteria must be met before a document is eligible for recording in California?

a.     May be on any size and type of paper

b.     Must be filed electronically

c.      Must be filed in person

d.     Must be in writing, signed, and acknowledged before a notary public

728) Which of the following defines the term ‘lis pendens’?

a.     A legal notice that a lawsuit is pending that affects the title of a property

b.     A legal term that means “it depends” and requires a certain minimum sales price of the property.

c.      A notice that notifies potential buyers of a pending lease

d.     A public listing and notice of foreclosure of a property.

729) April owes money to quite a few people after a round of court-ordered judgment liens were placed on her property. Can you determine who would get paid first?

a.     Alycea filed at the end of June and was awarded $50,000.

b.     Bob filed in May and was awarded $85,000.

c.      Frank filed in February and was awarded $10,000.

d.     Sarah filed in March and was awarded $15,000.

730) Why is it important to publicly record a deed?

a.     The title insurance policy schedule of exceptions will include anything that’s publicly recorded.

b.     Title insurance policies don’t cover publicly recorded events.

c.      Title insurance policies must be publicly recorded to be legal.

d.     Title representatives and attorneys who perform title searches look for documents that are publicly recorded.

731) Which of these statements is NOT true about a specific lien?

a.     It may allow the creditor to sell the property through a court sale (foreclosure) and be repaid from the proceeds of the sale.

b.     It prevents the debtor from transferring the property until the debt has been repaid.

c.      It’s a lien against a single property rather than a person.

d.     It’s always involuntary.

732) How is priority determined in cases where more than one judgment lien is filed against a property?

a.     The government has priority, followed by whoever is owed the most next.

b.     Whoever filed their claim first receives priority.

c.      Whoever is owed the most money has priority.

d.     Whoever paid to receive priority service at the county clerk’s office.

733) Conrad just closed on the house he’s buying to fix up. Why should he follow up to be sure the deed has been recorded?

a.     He can’t legally make any improvements to the property until the deed is recorded.

b.     He doesn’t legally own the house until that occurs.

c.      Recording provides actual notice that he owns the property.

d.     Recording provides constructive notice that he owns the property.

734) What makes an income tax lien different from a property tax lien?

a.     An income tax lien has priority over a property tax lien and will be paid first upon foreclosure.

b.     An income tax lien is a general lien and a property tax lien is a specific lien.

c.      An income tax lien is placed by the federal government and a property tax lien is placed by the state.

d.     An income tax lien is voluntary and a property tax lien is involuntary.

735) What type of notice results from publicly recording a title transfer?

a.     Actual notice

b.     Attorney notice

c.      Constructive notice

d.     Proper notice

736) Which of the following defines an income tax lien?

a.     Involuntary lien placed against a property owner’s property due to a court decree resulting from a lawsuit.

b.     Involuntary lien placed against a property owner’s property for due and unpaid taxes

c.      Involuntary lien placed on all property inherited by a deceased person’s heirs.

d.     Voluntary lien against a single property that uses the property as collateral for repayment of a loan.

737) In addition to being properly executed (signed), what are other requirements for recording a document in California?

a.     Acknowledged before a notary public

b.     At least two witnesses present at the time of filing

c.      Meet SEQRA standards

d.     Sealed and mailed in a registered envelope to the county clerk’s office

738) Joshua won his lawsuit against Savannah. The judge awarded him $30,000. Savannah was unable to pay, so the court placed a ______ on her home.

a.     Foreclosure action

b.     Judgment lien

c.      Lis pendens

d.     Mortgage lien

739) Which option is true if a deed is not recorded after closing?

a.     The buyer must pay a fine to the seller.

b.     The entire closing is void.

c.      The property’s legal ownership can be challenged.

d.     The title never changes hands from the seller to the buyer.

740) Which of these scenarios describes a voluntary specific lien?

a.     The court placed a lien on the property Marge inherited upon Homer’s death.

b.     The IRS placed a lien on Lisa’s property when she failed to pay her income taxes.

c.      When Jack and Jill refused to pay the roofing contractor, he placed a lien on their property.

d.     When Rob and Sue bought their house using a mortgage, the lender put a lien on the property.

741) Under which of the following circumstances would a mechanic’s lien be attached to a property?

a.     The court has determined that the owner must pay for damages from a civil court case.

b.     The owner fails to pay his homeowners association dues.

c.      The owner fails to pay his property taxes.

d.     The owner fails to pay the builder who added an extra bedroom to the house.

742) Which option describes a real property tax lien?

a.     General and involuntary

b.     General and voluntary

c.      Specific and involuntary

d.     Specific and voluntary

743) Daisy and her kids loved their new pool, but Daisy wasn’t so happy when she received notice that the general contractor who poured the concrete had placed a lien on her home. Daisy went through her records and discovered that she had never paid the general contractor. What’s true about this situation?

a.     Daisy can now place a lien on the general contractor’s property.

b.     The lien is illegal.

c.      This is a legal judgment lien.

d.     This is a legal mechanic’s lien.

744) What type of involuntary lien is placed on a person’s estate after their death if there are unpaid debts to creditors?

a.     Deceased person’s debt lien

b.     Estate/ inheritance tax lien

c.      Mechanic’s lien

d.     Real property tax lien

745) What type of individual’s property is affected by a general lien?

a.     All real property and personal property

b.     One specific property

c.      Only personal property, not real property

d.     Only real property and not personal property

746) Dorcas and Ralph were married for 15 years. Ralph, an accountant, always took care of the bills and other financial matters for the couple. Then Dorcas discovered that Ralph had failed to pay the property tax on their property for the last three years. Which of these is likely to happen?

a.     Dorcas and Ralph will be required to sell their home to the state for the amount of property tax owed.

b.     The state will place a condemnation order on their property so they can’t transfer their property until the debt is satisfied.

c.      The state will place a mortgage lien on their home for the amount of property tax owed.

d.     The state will place a tax lien on their property so it can’t be transferred without satisfying the debt.

747) What’s the definition of a judgment lien?

a.     An involuntary lien due to a court decree resulting from a lawsuit

b.     An involuntary lien placed on all of the property received by a deceased person’s heirs

c.      An involuntary lien placed on a person’s estate after his or her death if there are unpaid debts to creditors

d.     A voluntary lien against a single property that uses the property as collateral for repayment of a loan

748) When property changes hands, the deed is recorded and a fee is charged. What is the benefit to the grantee of having the deed recorded?

a.     It impacts who owns the property.

b.     It protects against foreclosure.

c.      It puts the public on notice regarding ownership.

d.     It’s required by law.

749) What’s the term for a notice given directly to and received by a person?

a.     Actual notice

b.     Constructive notice

c.      Proper notice

d.     UPS notice

750) Which one of the following is true about ownership or title to a property?

a.     Constructive notice to the public of real property ownership occurs when the deed is recorded.

b.     The last party to record has priority.

c.      The seller is responsible for paying for owner’s and lender’s title insurance.

d.     Title isn’t finalized until the deed has been recorded.

751) Christina purchased a house from Thomas. When did she officially gain ownership of the property?

a.     After the appraisal was completed

b.     Prior to closing after approving the Loan Estimate

c.      When actual notice of the deed was given to the mortgage company

d.     With the transfer of deed from the seller to the buyer

752) What’s the definition of a judgment lien?

a.     An involuntary lien due to a court decree resulting from a lawsuit

b.     An involuntary lien placed on all of the property received by a deceased person’s heirs

c.      An involuntary lien placed on a person’s estate after his or her death if there are unpaid debts to creditors

d.     A voluntary lien against a single property that uses the property as collateral for repayment of a loan

753) April owes money to quite a few people after a round of court-ordered judgment liens were placed on her property. Can you determine who would get paid first?

a.     Alycea filed at the end of June and was awarded $50,000.

b.     Bob filed in May and was awarded $85,000.

c.      Frank filed in February and was awarded $10,000.

d.     Sarah filed in March and was awarded $15,000.

754) Joshua won his lawsuit against Savannah. The judge awarded him $30,000. Savannah was unable to pay, so the court placed a ______ on her home.

a.     Foreclosure action

b.     Judgment lien

c.      Lis pendens

d.     Mortgage lien

755) How is priority determined in cases where more than one judgment lien is filed against a property?

a.     The government has priority, followed by whoever is owed the most next.

b.     Whoever filed their claim first receives priority.

c.      Whoever is owed the most money has priority.

d.     Whoever paid to receive priority service at the county clerk’s office.

756) How long after a notice of cessation or completion is filed can a contractor file a mechanics lien?

a.     Within 60 days

b.     Within 90 days

c.      Within six months

d.     Within two years

757) In California, which lien can be filed later than other liens and still have priority over them?

a.     Income tax lien

b.     Judgment lien

c.      Mechanic’s lien

d.     Real property tax lien

758) In California, what is filed by the trustee to notify borrowers that the foreclosure process will begin?

a.     Notice of Default

b.     Notice of Delinquency

c.      Notice of Foreclosure

d.     Notice of Sale

759) Which of the following options describes a subordination agreement?

a.     An agreement between a contractor and any subcontractors

b.     An agreement between a landowner and a contractor

c.      An agreement between the court and landowner to decrease property taxes

d.     An agreement between two lien holders to modify the order of lien priority

760) Frank has waited 30 days after notifying a client that the project he finished remains unpaid. The client has not filed a notice of completion or cessation with the county clerk. How long does Frank have left to file a mechanic’s lien?

a.     10 days

b.     30 days

c.      60 days

d.     90 days

761) How long does a homeowner have to pay off outstanding liens against his property?

a.     30 days

b.     One week before the foreclosure sale is held

c.      Until the foreclosure sale is held

d.     Up to 10 years

762) Karen’s house was recently foreclosed on to pay off a lien on her home. What happens to any extra money after the lien and expenses of the sale are paid?

a.     It goes to Karen.

b.     It’s given to a local government-approved charity.

c.      The bank receives the rest as compensation.

d.     The state government receives the extra funds.

763) Which action can be taken if you don’t pay a lien against your property?

a.     Accretion

b.     Condemnation

c.      Eminent domain

d.     Foreclosure

764) What does the right of redemption allow?

a.     It allows a property owner to freely give away her property to another and release it of any and all liens against it.

b.     It allows a property owner to pay back any debts or liens against their property until a foreclosure sale is held.

c.      It allows a property owner to sue a neighboring property owner over boundary disputes.

d.     It allows the government to satisfy liens against a property through a foreclosure sale.

765) What can a property owner do to stop contractors performing unauthorized work from filing mechanic’s liens later?

a.     File a lien release

b.     File a notice of completion

c.      Post and file a notice of nonresponsibility

d.     Require the contractor obtain a payment bond

766) Which option best defines an equitable lien?

a.     An income tax lien

b.     A real property tax lien

c.      Created by a court of common law; doesn’t give the right to possession of the property

d.     Created by law and gives right of possession

767) One of Jackie’s creditors sued her in civil court. As a result of the judgment against her, her house, car, and art collection were all subject to sale in order to pay the creditor. What type of lien is this?

a.     General

b.     Special assessment

c.      Vendor’s

d.     Voluntary

768) What’s it called when lien holders allow another lien holder’s claim to have priority over their own?

a.     Equitable lien

b.     Lis pendens

c.      Subordination agreement

d.     Voluntary lien

769) What would happen if you bought a house and later found out that there were unpaid liens against the property?

a.     Nothing. The former owner owes the money on the liens.

b.     The lien claimants would lose their liens against your property.

c.      The unpaid liens could trigger a foreclosure on your property.

d.     You would have to assume a loan to pay off the liens.

770) Homeowners Daryl and Stella, who are both in their 70s, paid off their mortgage during good times, but recent medical bills have overcome them and their creditors have a judgment lien against their property. They decide to sell their home and downsize to pay off their bills. Which of these is NOT true about the homestead exemption for Daryl and Stella?

a.     It protects $175,000 of their equity.

b.     The holder of the judgment lien will be paid before they receive their exemption.

c.      They’ll need to purchase another home within six months of the sale.

d.     They must first file a declaration of homestead.

771) How can a foreclosure be stopped or prevented?

a.     Auction

b.     Fleeing the state

c.      Paying all outstanding liens against the property

d.     Refinancing

772) In a foreclosure situation, which lien has highest priority of the options listed below?

a.     A judgment lien

b.     A mechanic’s lien

c.      An income tax lien

d.     A real property tax lien

773) Which process temporarily stalls foreclosure?

a.     Filing for Chapter 7 bankruptcy

b.     Fleeing the state

c.      Making a request for a break

d.     Paying off all debts

774) How are creditors or lien holders paid during a foreclosure process?

a.     Lien holders are given a referee’s deed to the property.

b.     Tax refunds are disbursed after supplying a foreclosure affidavit to the court.

c.      The property is portioned among the lien holders to have or to sell.

d.     The property is sold at auction and lien holders are paid from the proceeds of the sale.

775) You have just started a construction project on your property and have hired a contractor to do some of the work. The contractor then brings on several subcontractors to do some of the tasks. What can you do to protect yourself from subcontractor liens should the contractor not pay them?

a.     File a lien release.

b.     File a notice of completion.

c.      Nothing. There is no defense against unpaid subcontractors.

d.     Require the contractor obtain a payment bond.

776) Which term means property that is used as the owner’s primary residence?

a.     Estoppel

b.     Homestead

c.      Lis pendens

d.     Reliction

777) California homeowner Randy, who is 40 years old and lives alone, owes some creditors but hasn’t been able to pay them. They place a lien on his home. He owes $35,000 on his mortgage, and the property’s market value is about $250,000. What can happen in this situation?

a.     Randy doesn’t qualify as a family unit so he won’t receive protection from the homeowner exemption.

b.     Randy must file a declaration of homestead to receive equity protection since he owes less on his mortgage than the home is worth.

c.      The homeowner exemption will prevent the forced sale of his home.

d.     The homeowner exemption will protect some of his equity, but the courts may force the sale of his home.

778) What happens after a foreclosure if there isn’t enough money from the sale to pay off all of the lien holders against a property?

a.     All claims are void if there isn’t enough money after the foreclosure sale of the property.

b.     The former owner may owe a debt to lien holders who aren’t fully paid.

c.      The former owner’s wages will be garnished for the remainder of what’s owed.

d.     The lien holders must refile on the former owner’s next property.

779) What is the process used to sell a foreclosure home in California called?

a.     Default sale

b.     Fire sale

c.      Referee’s sale

d.     Trustee’s sale

780) What is the six-month rule for homestead exemptions?

a.     No liens may be filed against homesteads unless at least six months’ notice has been given to the homeowner.

b.     The property owner has six months to sell the property after a lien is filed.

c.      The property owner must live in the home for at least six months before they may qualify for a homestead exemption.

d.     The property owner must reinvest the homestead exemption amount within six months in another homestead to protect it from creditors.

781) Which option best defines a statutory lien?

a.     A judgment lien

b.     A mortgage

c.      Created by a court of common law; doesn’t give the right to possession of the property

d.     Created by law and gives right of possession

782) Who has the right to make the first bid during a trustee’s sale in California?

a.     Anyone

b.     The beneficiary (lender)

c.      The trustee

d.     The trustors (borrowers)

783) How can a foreclosure process be temporarily stalled?

a.     By filing for Chapter 7 bankruptcy

b.     By fleeing the state

c.      By paying off all debts

d.     By request

784) How long after a project begins must a contractor give the owner preliminary notice of their right to file a mechanic’s lien in California?

a.     Within 20 days

b.     Within 90 days

c.      Within one year

d.     Within six months

785) Which document is used to establish proof of ownership?

a.     Abstract of title

b.     Chain of title

c.      Deed

d.     Title insurance

786) Jeff has filed a quiet title suit against Roger. What’s the purpose of this suit?

a.     To clear up a cloud on title

b.     To clear up a property line dispute

c.      To exercise his right to quiet enjoyment of the property

d.     To prohibit the seller from releasing the buyer’s name

787) What is the purpose of the title search?

a.     To collect evidence that the title is a marketable title, meaning it’s clear and free of encumbrances

b.     To ensure the current owner has the title to give to the buyer

c.      To ensure the title is on the record at the local clerk recorder’s office

d.     To insure the owner against any financial loss due to a defect in the title

788) Anita is a new buyer. Luckily, ______ will help her before the sale and can reimburse her after the sale if a title issue arises.

a.     Her buyer’s agent

b.     Her title insurance

c.      Seller credits

d.     Seller disclosures

789) Which of these statements is NOT true about an extended title insurance policy?

a.     It covers some items that aren’t part of the public record, such as unrecorded liens.

b.     It’s typically purchased for the lender.

c.      It’s typically used when the property is paid for in cash.

d.     The buyer will most likely pay for this policy.

790) You’re working with a client, Donny, who’s found his dream home in the neighborhood where he grew up. Unfortunately, the title search finds some issues and the title company refuses to issue a policy. Donny still wants to go forward with the purchase, and since he’s paying cash, he doesn’t have to worry about obstacles from a lender. In California, what is one thing that has to happen in this situation?

a.     Donny must receive written notice that no title insurance will be provided.

b.     The escrow agent must record the refusal to provide title insurance with the county clerk and recorder.

c.      The seller must use a warranty deed to transfer ownership rather than a grant deed.

d.     You must refuse to continue representing Donny in order to protect your license.

791) What’s a quiet title action?

a.     A lien placed against a potential land owner for property purchased by another

b.     An action to locate and notify all who may have some claim on the title, and determine the validity of all claims

c.      A type of title insurance that reimburses the policyholder if the neighborhood is noisier than normal

d.     A way to anonymously purchase property without filing the title or transfer on record

792) What type of title insurance covers defects of an incorrect survey and boundary encroachments?

a.     Extended title insurance

b.     Homeowners insurance

c.      Standard title insurance

d.     Title survey and boundary insurance

793) In a typical transaction, which of these title defects is unlikely to cause a problem for the buyer?

a.     A faulty survey

b.     An unrecorded lien

c.      A past error in recording title transfer

d.     The seller’s existing mortgage

794) Which document is used to give a buyer an overview of the title history and information about what is or isn’t covered in an insurance policy?

a.     Abstract of title

b.     Guarantee of title

c.      Preliminary report

d.     Title insurance

795) Your buyer client is following your advice and has obtained title insurance. The policy is from ______ and shows the legal description of the property and the standard items it covers, such as encumbrances of record.

a.     American Land Title Association (ALTA)

b.     California Land Title Association (CLTA)

c.      General Land Title Association (GLTA)

d.     Standard Land Title Association (SLTA)

796) Which document establishes path and proof of ownership?

a.     Abstract of title

b.     Chain of title

c.      Deed

d.     Title insurance

797) Lisa purchased an older home with a large backyard that’s perfect for her pack of collies to romp in. Six months after she bought the property, a total stranger knocked on her door and told her he’s the true property owner. After investigating, it turns out the person who sold Lisa the property had forged the deed without the true owner’s knowledge. What’s true about Lisa’s situation?

a.     Her homeowner’s policy may protect her from loss.

b.     Her lender must initiate a quiet title action to resolve the issue.

c.      Her title insurance policy may protect her from loss.

d.     The county clerk where the documents were recorded is liable.

798) Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: ______.

a.     Buyer Trust Fund

b.     Litigation

c.      Seller guarantees

d.     Title insurance

799) As a licensee, you’re helping a couple buy a new home when you come across issues that could mean there’s a cloud on the title. What should you do?

a.     Encourage the couple to move forward with the purchase and not worry about the clouded title.

b.     File an affidavit with the court about the knowledge of the clouded title and tell the couple to move forward with the sale.

c.      Keep moving forward with the sale but recommend the couple purchase title insurance to insure against any potential title problems.

d.     Recommend the couple find another property to purchase, or ask the seller to settle the title through a quiet title action to clear any cloud before moving forward with the sale.

800) Marsha’s title insurance policy was issued on closing day, which was June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which one of these will NOT be addressed in the schedule of exceptions?

a.     Marsha’s second mortgage on the property, which she plans to get next January

b.     Marsha’s unrecorded lease on the property

c.      Smith and Martin Building and Rehab’s mechanic’s lien, which was filed on June 18

d.     The local cable company’s unrecorded easement through the property for underground wiring. Marsha disclosed this to the title company

801) What special concern do foreclosed properties often present?

a.     Buying the property at a discount may have tax implications.

b.     The homeowners may or may not have property insurance.

c.      The property sale may be subject to additional fees that will be passed to the new buyer.

d.     There could be hidden title issues.

802) What can buyers do to protect themselves from title issues when purchasing property?

a.     Ensure the seller’s name is on the deed.

b.     File a lis pendens claim at the court before buying the property.

c.      File a security agreement at the county clerk’s office.

d.     Purchase title insurance.

803) Which one of the following protects the owner against financial loss if the real estate title has defects?

a.     Abstract of title

b.     Chain of title

c.      Deed

d.     Title insurance

804) Paula is bidding on a property that’s being sold at a foreclosure auction. She’s excited about the great deal she’s getting on the property after she finds out she submitted the winning bid. What could cause Paula’s great deal to turn into a nightmare?

a.     The lender has the option to refuse her bid and revoke the deed transferring ownership to Paula.

b.     The previous owner may redeem the property by paying Paula at least 50% of the property’s market value.

c.      The title insurance company may charge her additional fees after closing to continue the title policy.

d.     The title to the property may have hidden issues that could cost her a lot of money to clear.

805) What’s a marketable title?

a.     A title that a relative has gifted

b.     A title that has been granted by public grant

c.      A title that is about to go on the market

d.     A title that is clear and free of encumbrances

806) Which document is used to provide a summary of the title history?

a.     Abstract of title

b.     Chain of title

c.      Deed

d.     Title insurance

807) Real estate licensees who want to uphold the Fair Housing Act should make a habit out of which of the following actions?

a.     Disclose their protected status to all clients.

b.     Present sellers with offers from people of the same class so they don’t ask the licensee to discriminate.

c.      Show buyers properties in neighborhoods where they are unlikely to experience discrimination.

d.     Tell potential clients in their initial meeting that they are committed to upholding fair housing laws.

808) Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals?

a.     Department of Civil Rights

b.     Department of Equal Opportunity

c.      Department of Housing and Community Development

d.     Department of Housing and Urban Development

809) Individuals who experience housing discrimination are provided the opportunity to file a complaint based on the provisions of which act?

a.     Americans with Disabilities Act of 1990

b.     Civil Rights of 1866

c.      Fair Housing Act of 1968

d.     Fair Housing Amendments Act of 1988

810) Which protected class refers to a group of people who share common characteristics, typically physical characteristics, such as skin color?

a.     Familial status

b.     National origin

c.      Race

d.     Religion

811) Which of these statements best represents what happens after a federal fair housing complaint is made?

a.     A fair housing specialist will review the complaint.

b.     An official housing discrimination complaint will be filed, and a fair housing specialist will be assigned to the case.

c.      FHEO will contact the alleged perpetrator to gather information.

d.     HUD will review the complaint to determine if it’s valid.

812) In case history regarding fair housing, which case involved an ordinance that prohibited blacks from living on a block where the majority of the residents were white?

a.     Brown vs. Board of Education

b.     Buchanan vs. Warley

c.      Jones vs. Mayer

d.     Plessy vs. Ferguson

813) The Office of Fair Housing and Equal Opportunity is a part of which federal department?

a.     CIA

b.     HHS

c.      HUD

d.     NHA

814) Which type of property is exempt from the Fair Housing Act?

a.     Condominium with no more than eight units

b.     Condominium with no more than four units

c.      Owner-occupied with no more than eight units

d.     Owner-occupied with no more than four units

815) Which act created the Office of Fair Housing and Equal Opportunity under the Department of Housing and Urban Development?

a.     Americans with Disabilities Act of 1990

b.     Equal Credit Opportunity Act of 1974

c.      Federal Fair Housing Act of 1968

d.     Housing and Community Development Act of 1974

816) If a private individual owner doesn’t own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?

a.     Housing designated for senior use

b.     “Mrs. Murphy” exemption

c.      Owner-occupied buildings with no more than six units

d.     Single-family housing sold or rented without the use of a broker

817) What protected class is involved when there is discrimination due to a person being lighter-skinned or darker-skinned?

a.     Color

b.     Familial status

c.      National origin

d.     Race

818) Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it’s due to his disability. He is protected under what federal law?

a.     Civil Rights Act of 1866

b.     Fair Housing Amendments Act of 1988

c.      Federal Fair Housing Act of 1968

d.     Housing and Community Development Act of 1974

819) Which U.S. Supreme Court decision consolidated five cases involving the constitutionality of state-sponsored segregation in public schools?

a.     Brown vs. Board of Education

b.     Buchanan vs. Warley

c.      Jones vs. Mayer

d.     Plessy vs. Ferguson

820) The Housing and Community Development Act of 1974 added which protected class to federal fair housing law?

a.     Color

b.     Disability

c.      Religion

d.     Sex

821) Contrary to federal fair housing laws, the state where Katrina lives includes age as a protected class. Which of these statements about this conflict is true?

a.     Katrina can follow either the federal or the state law as long as she is consistent.

b.     Katrina is permitted to follow whichever law is least restrictive.

c.      Katrina must follow federal law for any federally related transaction.

d.     Katrina must follow the more restrictive of federal or state law.

822) Prior to a certain act’s existence, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. What’s this act called?

a.     Civil Rights Act of 1866

b.     Fair Housing Amendments Act of 1988

c.      Federal Fair Housing Act of 1968

d.     Housing and Community Development Act of 1974

823) A mortgage lender has landed in hot water for fair housing discrimination. Which of these actions might have gotten the lender in trouble?

a.     Denying a loan based on income-to-credit ratio

b.     Denying a loan that was pre-approved after the mother stops working to care for her baby

c.      Imposing different interest rates based on credit scores

d.     Refusing to provide literature about loans to consumers with poor English language skills

824) If a landlord refuses to rent an apartment to two single women who live together, this is discrimination on the basis of what federally protected class?

a.     Familial status

b.     Lifestyle

c.      Same sex relationship

d.     Sex

825) Which agency enforces fair housing law?

a.     FFA

b.     FHEO

c.      NFHA

d.     NHA

826) Which of these actions is legal?

a.     A landlord offers an apartment to a woman only if she goes out with him.

b.     A landlord refuses to show or rent an apartment to someone who is not Christian or Jewish.

c.      A landlord requires a larger deposit for each child who will be living in the home.

d.     A man advertises for a roommate to share his two-bedroom apartment and specifies that he prefers female roommates.

827) A landlord with a strict “no pets” policy won’t rent to a woman who uses a service animal to assist with her epilepsy. Which of the following is a true statement about this situation?

a.     This is discrimination based on disability.

b.     This is discrimination based on familial status.

c.      This isn’t discriminatory because service animals are restricted to the vision-impaired.

d.     This isn’t discriminatory if the “no pets” policy is universally applied.

828) In what way did the Supreme Court case of Brown vs. Board of Education affect the way fair housing laws are implemented today?

a.     The court found that racially segregated school buses were unconstitutional.

b.     The court legalized racial segregation through the “separate but equal” doctrine.

c.      The court’s decision made segregated school boards illegal.

d.     The decision overturned the doctrine of “separate but equal.”

829) A family of four, with children ages six and nine, is denied the opportunity to view an available unit in housing intended for older persons. Which of the following statements is true?

a.     The federal Fair Housing Act allows an exemption for communities that are designed and operated for older persons.

b.     The federal Fair Housing Act allows an exemption for communities that don’t have playgrounds or play areas for children.

c.      This is a violation of the federal Fair Housing Act because it discriminates on the basis of age.

d.     This is a violation of the federal Fair Housing Act because it discriminates on the basis of familial status.

830) Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations?

a.     Office of Civil Rights

b.     Office of Equal Credit Opportunity

c.      Office of Fair Housing and Equal Opportunity

d.     Office of Housing and Community Development

831) Why did the Civil Rights Act of 1866 fail to have an immediate impact on practice?

a.     It was unconstitutional.

b.     Nobody understood the Civil Rights Act.

c.      The protected classes had to be approved.

d.     There was no agency put in place to enforce the laws.

832) Which act provides consumers with remedies if they become victims of discrimination in the sale, rental, or financing of housing?

a.     Civil Rights Act of 1866

b.     Equal Credit Opportunity Act of 1974

c.      Fair Housing Amendments Act of 1988

d.     Housing and Community Development Act of 1974

833) In what year was the Americans with Disabilities Act made law?

a.     1950

b.     1978

c.      1988

d.     1990

834) Jericho and Cindy, an unmarried couple, have three children, ages 3, 5, and 12. A seller’s broker refuses to show them a house in a neighborhood where residents tend to be older, and no one else has children. Which protected class status applies?

a.     Age status

b.     Familial status

c.      Marital status

d.     Partnership status

835) The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn’t attend church. Nora then told them that she didn’t know of any listings that met their needs, even though that wasn’t true. Nora is discriminating based on _______.

a.     Familial status

b.     National origin

c.      Religion

d.     Sex

836) Which decision stated that separate facilities for blacks and whites were constitutional as long as they were “equal”?

a.     Brown vs. Board of Education

b.     Buchanan vs. Warley

c.      Jones vs. Mayer

d.     Plessy vs. Ferguson

837) Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing?

a.     Civil Rights Act of 1866

b.     Civil Rights Act of 1968

c.      Equal Credit Opportunity Act of 1974

d.     Housing and Community Development Act of 1974

838) A landlord refuses to show or rent an apartment to someone who is not Christian or Jewish. What type of discrimination is this?

a.     Disability discrimination

b.     Familial status discrimination

c.      Racial discrimination

d.     Religious discrimination

839) Which fair housing case tested discrimination in a private sale?

a.     Brown vs. Board of Education

b.     Buchanan vs. Warley

c.      Jones vs. Mayer

d.     Plessy vs. Ferguson

840) A homeowner has converted two rooms in his home to a rental unit. What does the “Mrs. Murphy” exemption permit him to do?

a.     Advertise for a tenant of a specific race.

b.     Move out of the property and rent both portions of it, relying on the “Mrs. Murphy” exemption to permit renting only to single females.

c.      Refuse to rent to a female tenant.

d.     Use the services of a real estate professional to advertise for a male tenant.

841) Which of these is something that is NOT requested in the initial fair housing complaint form?

a.     A description of the alleged discrimination

b.     A notarized copy of the complaint description

c.      The applicable protected class of the complainant

d.     The physical location of the discrimination event

842) Which protected class is protected against discriminatory practices, such as against placing limitations on the number or age of children in the residence?

a.     Familial status

b.     Marital status

c.      National origin

d.     Partnership status

843) A fair housing specialist is reviewing fair housing complaints. Which of these contains an action that is prohibited?

a.     An appraiser inflates the value of a property because the person buying the property stole his girlfriend in high school.

b.     A pregnant woman was not given the opportunity to rent a room in a three-bedroom house because the owner doesn’t want to live with a baby.

c.      A real estate professional doesn’t respond to any requests to view a property.

d.     A transgender woman is evicted from a rental property because she makes the neighbors uncomfortable.

844) When state and federal laws differ, as they sometimes do with fair housing and/or human rights, which of these statements is true?

a.     State and local law override federal law.

b.     State lawmakers decide which law prevails.

c.      The conflicting law is invalidated, effectively removing the law’s requirements.

d.     The state law may not remove rights granted to citizens under the federal law.

845) Which of these situations does the Americans with Disabilities Act address?

a.     Marcus, a property manager, routinely dismisses rental applications from families with children under the age of 18.

b.     Meridian Apartments provides a gym and pool area for residents, but it’s not accessible to residents who use wheelchairs.

c.      Metro Agents hired an interpreter to assist Spanish-speaking clients with the real estate process.

d.     The Golden Gate senior housing center has no exercise or activity center for its residents.

846) Which act was the first to prohibit any exceptions for discrimination based on race or color?

a.     Civil Rights Act of 1866

b.     Fair Housing Amendments Act of 1988

c.      Federal Fair Housing Act of 1968

d.     Housing for Older Persons Act of 1995

847) Which of these statements accurately describes finance- and housing-related legislation?

a.     As a stipulation of the Housing and Community Development Act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days.

b.     The Americans with Disabilities Act added familial status and disability (both physical and mental) to the existing protected classes.

c.      The Equal Credit Opportunity Act of 1974 required lenders to provide consumers with equal access to credit and prohibited credit discrimination based on just the three protected classes of race, color, or national origin.

d.     The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin.

848) Which of these scenarios is legal?

a.     A homeowner makes a room available for rent in her residence, but only interviews female applicants.

b.     A property manager refuses to show a property to a blind person with a guide dog because the property does not allow pets.

c.      A selling agent does not respond to a request to view a listed property because the person’s accent in the voicemail is very thick.

d.     The sellers refuse to consider an offer from someone who looks like a man wearing women’s clothing, because they don’t think the neighbors would be happy if they sold their house to someone who might be transgender or gay.

849) Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager’s office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on _______.

a.     Color

b.     National origin

c.      Race

d.     Sex

850) As a stipulation of a specific act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days. What’s the name of this act?

a.     Americans with Disabilities Act of 1990

b.     Equal Credit Opportunity Act of 1974

c.      Fair Housing Amendments Act of 1988

d.     Federal Fair Housing Act of 1968

851) Which act states that communities and facilities that meet certain criteria for providing housing to older persons are legally exempt from familial status discrimination?

a.     Fair Housing Amendments Act of 1988

b.     Federal Fair Housing Act of 1968

c.      Housing and Community Development Act of 1974

d.     Housing for Older Persons Act of 1995

852) Which of these situations would be exempt from most provisions of the federal Fair Housing Act?

a.     A homeowner engages a real estate professional to rent out his basement apartment.

b.     An investor owns and rents out five duplexes.

c.      A non-profit owns 20 properties that it only rents to Caucasian families.

d.     The local Elks club owns a property that’s rented only to Elks club members.

853) What is the length of the statute of limitations to file a fair housing complaint with HUD?

a.     10 years

b.     Five years

c.      One year

d.     Seven years

854) How does the Office of Fair Housing and Equal Opportunity support real estate consumers?

a.     The FHEO conducts regular audits of licensee advertising activities for fair housing violations.

b.     The FHEO makes loans available to first time home buyers.

c.      The FHEO provides financing education for future homeowners.

d.     The FHEO provides support for protected classes through the fair housing complaint process.

855) Your client tells you to do something. It would violate fair housing laws, but it will earn you an amazing commission. What should you do?

a.     Explain that you cannot do it, because it’s a fair housing violation, and you could both get into trouble for doing what she’s asked.

b.     Immediately fire her as your client and report her as a violator of federal fair housing laws.

c.      Try to talk her out of it, but then go along with what she asks. If you don’t, someone else will, and then they’ll get to cash that giant check.

d.     You should do what she asks. As your client’s agent, you owe her the duties of loyalty and obedience above all.

856) To whom/which entity should a licensee who’s been threatened with violence after refusing to violate fair housing law report the threat?

a.     HUD

b.     Law enforcement officials

c.      The governor

d.     The National Fair Housing Alliance

857) Which of these might bring a charge of illegal steering against a licensee?

a.     Benny screens the properties he shows his clients based on the clients’ preferences.

b.     Johnny is working with a client who has a disability. At the client’s request, Johnny refrains from showing the client listings that aren’t ADA accessible.

c.      Norton encourages his clients to contact local agencies to learn more about a neighborhood’s schools, crime rates, and religious institutions.

d.     When working with single female clients, Cassandra is careful to promote properties in neighborhoods she considers safe.

858) Which of these is an example of blockbusting?

a.     A lender withholds mortgage loans in areas considered demographically risky.

b.     A licensee doesn’t tell her buyer client about a first-floor condo because she felt it wasn’t safe for the client.

c.      A licensee focuses on showing properties in areas that are demographically similar to her buyer clients’ ethnicity.

d.     A real estate licensee approaches a homeowner as soon as a demographic shift starts to occur in her neighborhood and convinces her that she needs to sell now, or she’ll never be able to sell.

859) What’s the term for a lender refusing to lend in a specific area, often based on the area’s minority make-up?

a.     Blockbusting

b.     Gerrymandering

c.      Redlining

d.     Steering

860) What’s the term for the illegal practice of nudging buyers away from or toward a specific area based on the presence or absence of protected class members?

a.     Blockbusting

b.     Gerrymandering

c.      Redlining

d.     Steering

861) Which one of these situations represents the illegal practice of redlining?

a.     Arlo, a licensee, distributed a flyer in several neighborhoods warning of impending commercial developments that would negatively impact property values.

b.     Based on the neighborhood’s demographics, Hunter, a mortgage broker, refused to underwrite mortgage applications from applicants who want to buy in specific neighborhoods.

c.      Eunice refused to allow her listing broker to show her house to families with children.

d.     Jaime was working with Korean clients, so he focused on showing them homes in Korean communities because he thought they would be more comfortable there.

862) How should you respond if your buyer says the following? “We’re looking for a three-bedroom, two-bathroom home. We have young children, so we want to make sure we’re in a good neighborhood—somewhere safe, where we’ll find a lot of good families and neighbor kids that we’d want our children to play with.”

a.     “I can screen neighborhoods based on good school districts for you. That usually means you’ll end up in the kind of neighborhood you want.”

b.     “If you provide me with specific kinds of people you want to avoid, I can screen the properties more closely.”

c.      “If you provide me with specific neighborhood names, I can certainly look for homes in those areas. You can learn about the different neighborhoods in the area at neighborhoodscout.com.”

d.     “Let’s keep this off the record. We just need to make sure it all looks legitimate from the outside.”

863) Which act attempted to eliminate discrimination caused by blockbusting, steering, and redlining?

a.     Civil Rights Act of 1866

b.     Fair Housing Act of 1968

c.      Housing Discrimination Act of 1974

d.     HUD Act of 1961

864) What discriminatory lending practice by lenders resulted in the destruction of whole neighborhoods, with perfectly good housing left abandoned?

a.     Blockbusting

b.     Gerrymandering

c.      Redlining

d.     Steering

865) Which of these is a recommended strategy for a real estate professional who wants to avoid being asked to violate fair housing laws?

a.     Let consumers know upfront that you adhere to fair housing laws.

b.     Only work with clients who are the same race as you.

c.      Quiz clients on their views about protected classes.

d.     Require your clients to complete training on fair housing laws.

866) Early in its history, the Federal Housing Administration officially supported keeping “incompatible” racial groups out of the newly developed white suburbs. What is this practice known as?

a.     Blockbusting

b.     Consolidating

c.      Redlining

d.     Steering

867) In 1934, when the Federal Housing Administration was created, it adopted the practice of crossing off cities and neighborhoods it considered risky and refused to insure loans for purchases in those areas. What is this action called?

a.     Blockbusting

b.     Gerrymandering

c.      Redlining

d.     Steering

868) How would you respond if your seller makes the following request? “We’ve lived here 10 years and love our neighbors. They’re really concerned about the changes happening to the blocks around us, so we want to be careful about who we sell this house to. You know what we mean. You’ll help us find the ‘right’ kind of buyer, won’t you?”

a.     “I can’t technically do that, but I could choose to advertise only in publications that target a white readership.”

b.     “I’m sorry that you feel that way. I am obligated to obey the requests of my clients, but I’m going to need you to write up your request and sign it, so there’s no way I can get in trouble for fair housing violations.”

c.      “It would be illegal to limit the search based on race or religion or anything like that, but I promise I’ll find you the most qualified buyer I can, and we’ll sell this house for the highest price possible.”

d.     “Let’s keep this off the record. As long as we can come up with other reasons to disqualify the buyers you don’t want, we’ll be okay. We just need to make sure it looks legitimate from the outside.”

869) Which of these sentences most accurately describes the purpose of the Unruh Civil Rights Act?

a.     The act grants protections to members of protected classes from discrimination by business establishments.

b.     The act protects everyone from discrimination by business establishments.

c.      The act protects everyone from discrimination in public housing accommodations.

d.     The act removes protections from some of the federally protected classes.

870) Which one of these classes is protected under California fair housing law?

a.     Convicts

b.     Drug addicts

c.      Smokers

d.     Source of income

871) What is the purpose of the fair lending notice?

a.     To disclose the demographic characteristics of approved mortgagors by the bank over the past five years.

b.     To explain that financial institutions have the right to refuse to provide loans on homes in neighborhoods with historically high rates of foreclosure.

c.      To notify mortgagors of their rights to equitable interest rates.

d.     To notify mortgagors that it is illegal for financial institutions to discriminate on the basis of a protected class or on the basis of the characteristics of the neighborhood.

872) The ______ Civil Rights Act protects consumers of businesses from discrimination.

a.     American

b.     California

c.      Unruh

d.     U.S.

873) The Unruh Civil Rights Act prohibits discrimination against protected classes by ______ establishments.

a.     All business

b.     All for-profit

c.      Only non-profit

d.     Only real estate

874) Which of these actions are exempt from California’s Fair Employment and Housing Act?

a.     A man posts a classified ad stating he is looking for a male roommate to share his two-bedroom, one-bath apartment.

b.     An apartment manager assigns minorities to one building.

c.      An apartment manager refuses to allow an assistance animal in a building with a “no pets” policy.

d.     A woman advertises her single-family residence for lease, and says, “No minorities allowed.”

875) Identify the action that is illegal under California’s FEHA.

a.     A lender refuses to make loans to someone with a recent bankruptcy.

b.     A local city council decides to re-zone a neighborhood from residential to commercial to prevent a housing development aimed at families who receive housing assistance.

c.      Jessup, an apartment manager, refuses to permit waterbeds in any building units.

d.     Sheila refuses to rent to tenants with poor credit history.

876) To make a complaint with the Department of Fair Employment and Housing, the complainant must first complete what form?

a.     Formal DFEH complaint form

b.     Pre-complaint inquiry

c.      Protected class disclosure form

d.     Request for temporary restraining order

877) Which of these actions is a violation of California’s Fair Employment and Housing Act?

a.     An apartment manager favors better-looking female applicants over equally qualified plain Janes.

b.     An apartment manager screens out a tenant whose source of income is illegal drugs.

c.      Kirby, a buyer’s agent, carefully shows Democratic clients only neighborhoods that match their demographics.

d.     While presenting offers to a seller client, an agent notes at the top of a summary sheet that the buyer is an “EXOTIC DANCER” and suggests that they look for someone with a more tasteful source of income.

878) Which act prohibits housing financial discrimination on the basis of protected class make-up or location of a property?

a.     The DFEH Act

b.     The Holden Act

c.      The HUD Act

d.     The Unruh Act

879) Which of these classes may not be protected outside of California?

a.     Disability status

b.     Gender expression

c.      Race

d.     Sex

880) The California Supreme Court has held that protections under the Unruh Act are ______.

a.     Applicable to anyone exhibiting characteristics of the protected groups named in the act

b.     Restricted to the protected groups named in the act

c.      Set to expire in 2016

d.     Unconstitutional

881) The ______ has held that protections under the Unruh Act are applicable to anyone exhibiting characteristics of the protected groups named in the act.

a.     California Department of Real Estate

b.     California Supreme Court

c.      FDCA

d.     FEMA

882) When a Department of Fair Employment and Housing complaint reaches litigation, the parties have the option to have the case heard before _____________________.

a.     A court-appointed mediator

b.     Civil court

c.      The Department of Fair Employment and Housing or in civil court

d.     The Housing and Urban Development Commission

883) Which of these statements about the Unruh Civil Rights Act is true?

a.     The act provides for a variety of remedies, including court-ordered damages up to five times the victim’s actual damages.

b.     The act provides for a variety of remedies, including court-ordered damages up to three times the victim’s actual damages.

c.      The act provides for a variety of remedies, including court-ordered damages up to two times the victim’s actual damages.

d.     The act specifies that victims of discrimination may not be reimbursed for attorney fees.

884) Which act provides similar protections for consumers of business services and products as those provided by the California Fair Employment and Housing Act?

a.     ADA

b.     Federal Fair Housing Act

c.      Foreign Investment Act

d.     Unruh Act

885) Which step of the DFEH complaint process takes place in civil court?

a.     Investigation

b.     Litigation

c.      Pursuit of resolution

d.     Remedies

886) Which of these statements is true?

a.     The Unruh Civil Rights Act does not include the seven federally protected classes.

b.     The Unruh Civil Rights Act extends protections to several classes in addition to the seven federally protected classes.

c.      The Unruh Civil Rights Act protects one class—source of income—in addition to the seven federally protected classes.

d.     The Unruh Civil Rights Act protects the seven federally protected classes and no other classes.

887) During which step of the DFEH complaint process does the DFEH explore options to resolve a complaint after a violation of the law has been found?

a.     Investigation

b.     Litigation

c.      Pursuit of resolution

d.     Remedies

888) The Unruh Civil Rights Act requires: “Full and equal accommodations, advantages, facilities, privileges or services in ______ business establishments.”

a.     All

b.     For-profit

c.      Non-profit

d.     Privately owned

889) Which of these statements accurately describes the formal DFEH complaint process?

a.     A formal complaint is only filed if a full investigation reveals a violation of the law.

b.     DFEH cases are litigated by private lawyers.

c.      The formal process begins with filing of a complaint and ends with remedies. In the middle, you have investigation, pursuit of resolution, and litigation.

d.     The process begins with mediation in an effort to avoid a costly investigation.

890) Which of these actions would be considered illegal under the Holden Act?

a.     Refusing to provide a mortgage loan to a customer who wishes to buy a home in a neighborhood with a high rate of foreclosures

b.     Refusing to provide a mortgage loan to a recently divorced woman who just filed bankruptcy

c.      Requiring a legal address for the property before approving a mortgage loan

d.     Running a credit report on a mortgage applicant who has darker skin

891) How does the Department of Fair Employment and Housing complaint process begin?

a.     A pre-complaint questionnaire is completed by the complainant’s lawyer.

b.     Complainants fill out a pre-complaint inquiry form and then are contacted by the DFEH to arrange a telephone interview to gather more information.

c.      Complainants fill out formal complaint forms on the DFEH website.

d.     Someone who has a complaint calls the DFEH to schedule an interview. If the interviewer deems the complaint to be valid, they give the complainant a questionnaire to fill out.

892) Identify the action that is illegal under California fair housing laws.

a.     A landlord gives a tenant notice to vacate after she notices the tenant, a man, has begun dressing as a woman.

b.     Brenda, a licensee, is learning Spanish to better converse with her Spanish-speaking clients.

c.      Manny, a landlord, refuses to rent to motorcycle riders.

d.     Tess, who owns a rental, refuses to allow waterbeds because of their weight.

893) Which term refers to the tenant’s right to live in a rental property without harassment or trespass by the landlord?

a.     The right of quiet enjoyment

b.     The right to live

c.      The right to peace

d.     The right to possession

894) Lorenzo just received a prestigious fellowship to study abroad for a year! However, he still has six months left on his one-year apartment lease. His landlord has given him permission to draw up a new agreement with his sister Maggie, whereby Maggie will live in the apartment, pay rent to Lorenzo, and then Lorenzo will pay the landlord. This is an example of ______.

a.     Assignment

b.     Assimilation

c.      Subleasing

d.     Transfer

895) Malcolm loves his apartment, even though he’s rarely there. His job in international development has him on the road for months at a time. He doesn’t have to worry about missing out on his lease renewal, though, because he has ______.

a.     A freehold estate

b.     An estate at will

c.      An estate for years

d.     A periodic estate

896) What type of leasehold is characterized by possession of a property without the express permission of the property owner, such as a situation in which a tenant continues to occupy an apartment after the lease has terminated?

a.     Estate at sufferance

b.     Estate at will

c.      Freehold estate

d.     Periodic estate

897) Selma and Richard have the temporary right to live at 123 Elm Street. They can come and go and use the property as they see fit, but they can’t do so indefinitely. They must vacate the property at the end of next year. What sort of interest do they have in 123 Elm Street?

a.     Fee simple estate

b.     Leasehold estate

c.      Life estate

d.     Reversionary estate

898) Randolph has a leasehold estate that automatically renews at the end of each lease period. What type of leasehold estate does Randolph hold?

a.     Estate at will

b.     Estate for months

c.      Periodic estate

d.     Renewable estate

899) An example of this type of leasehold estate is a month-to-month lease.

a.     Estate at sufferance

b.     Estate at will

c.      Estate for months

d.     Periodic estate

900) Eric’s residential tenant hasn’t paid rent for more than three months, so Eric went to court to start eviction proceedings. He’s now been granted the right to remove the tenant. This is a(n) ______ eviction.

a.     Actual

b.     Aggressive

c.      Constructive

d.     Sufferance

901) Dawn owns a bungalow three miles from the city center. She rents it to Bob and Jan Siegel. Dawn is a ______.

a.     Beneficiary

b.     Lessee

c.      Lessor

d.     Trustee

902) Cedric is opening a model railroad shop, but he knows that he’ll only run the store until his partner finishes law school. He signed a three-year lease, after which the lease will terminate. What kind of leasehold is this?

a.     Estate at sufferance

b.     Estate at will

c.      Estate for years

d.     Periodic estate

903) Lacey is new to California and has found a room to rent on a month-to-month basis until she finds a more permanent place to live. For her lease to be legally binding, it must meet the following minimum criteria:

a.     Put in writing and discussed orally

b.     Put in writing and notarized

c.      Put in writing and signed by a witness

d.     Put in writing or discussed orally

904) Which of these terms is used to describe when a new occupant lives in a rental unit and pays rent to the previous tenant, who is still under contract with the landlord?

a.     Assignment

b.     Covenant

c.      Estate at will

d.     Sublease

905) Which of these statements about leases in California is true?

a.     A lease must identify the parties to the lease and emergency contact information for the tenant.

b.     A lease must identify the parties to the lease and the rental property.

c.      By default, a residential lease in California has a term of one year.

d.     The amount of the rent payment may be decided after the parties have agreed to the lease.

906) Leases with a term of one year or more are required to be in writing according to the California statute of ______.

a.     Frauds

b.     Landlords and Tenants

c.      Leases

d.     Limits

907) What’s required for both assignments and subleasing in most cases?

a.     An escrow account

b.     A real estate license

c.      A security deposit

d.     Landlord approval

908) Landlords may protect themselves from having to pay for damages to the property caused by the tenant by collecting a security ______ from the tenant.

a.     Charge

b.     Deposit

c.      Guarantee

d.     Payment

909) Lorenzo just received a prestigious fellowship to study abroad for a year! However, he’d just signed a one-year lease on his apartment. With the landlord’s permission, he substituted his sister’s name on the lease, and Lorenzo’s sister will pay rent directly to the landlord. Lorenzo may still be liable for the rent if she misses any payments. This is an example of ______.

a.     Assignment

b.     Assimilation

c.      Subleasing

d.     Transfer

910) Shannon is moving to California in seven months to attend college and has already signed a nine-month lease agreement. Which of these statements about her lease agreement is true?

a.     Her lease does not need to be in writing because California allows oral lease agreements.

b.     Her lease does not need to be in writing because the lease term is only for nine months.

c.      Her lease needs to be put in writing because California requires that all leases be put in writing, regardless of the term.

d.     Her lease needs to be put in writing in because the entire agreement will cover a period of 16 months.

911) Which type of leasehold lasts for a defined period of time and automatically terminates when that period ends?

a.     Estate at sufferance

b.     Estate at will

c.      Estate for years

d.     Periodic estate

912) Jake, who was leasing a house, retained possession even after his right to possess had terminated. Jake has a(n) ______.

a.     Estate at sufferance

b.     Estate at will

c.      Estate for months

d.     Holdover tenancy

913) Which of these is NOT one of the five required ingredients of a lease in California?

a.     Amount of rent and due dates

b.     Length of the lease

c.      Names of the landlord and tenant

d.     Written signatures

914) As part of his lease agreement with his landlord, Alex mows the grass around his apartment building each week in return for a small reduction in rent. What is this an example of?

a.     Condition

b.     Covenant

c.      Enjoyment

d.     Promissory

915) Sonya’s lease expired, but she hasn’t yet moved out and she’s not paying rent. Walt has started eviction proceedings. Sonya is considered a(n) ______.

a.     Expired tenant

b.     Holdover tenant

c.      Illegal tenant

d.     Malingerer

916) Tyra owns a nail salon that’s located in a strip mall. Her rent every month includes $1,800 base rent and 10% of her gross sales. What kind of lease does Tyra have?

a.     Graduated

b.     Gross

c.      Net

d.     Percentage

917) How does the “break-even point” relate to percentage leases?

a.     Sales proceeds must exceed last year’s total before the percentage applies.

b.     The landlord charges a percentage of the cost for improvements to all tenants.

c.      The landlord doesn’t charge a percentage of sales until the tenant’s sales exceed a break-even point.

d.     The landlord must receive enough in rent plus the share of sales to break even on the debt service.

918) Martin is a tenant. His lease has a fixed rent but also requires that he pay for insurance and other expenses for the property. What type of lease does he have?

a.     Gross

b.     Ground

c.      Net

d.     Variable

919) Which clause allows a landlord to increase the lease payment during the lease term?

a.     Acceleration

b.     Escalation

c.      Mid-lease

d.     Upward

920) Gary leases a commercial building and pays all expenses related to the building, including taxes and insurance. Gary has a ______.

a.     Gross lease

b.     Net lease

c.      Percentage lease

d.     Sublease

921) How is the break-even point calculated for a percentage lease?

a.     Divide the annual expenses by the monthly base rent.

b.     Divide the monthly base rent by the percentage the landlord established.

c.      Multiply the established percentage by the base rent.

d.     Subtract the base rent from the monthly expenses.

922) Which type of lease is one in which the tenant pays the rent and some expenses related to the property (e.g., maintenance) separately?

a.     Graduated

b.     Gross

c.      Net

d.     Percentage

923) What’s an expense stop as used in leases?

a.     A lease that increases its rate when operating expenses exceed a certain threshold

b.     A limit to a landlord’s maintenance costs

c.      A way of computing capitalization rates for lease agreements

d.     A way to limit taxes on income-producing properties

924) Commercial lease escalation clauses typically do not take effect until after what period of time?

a.     Five years

b.     One week

c.      Six months

d.     The “base year,” or first year

925) Charlie, who owns and leases out a commercial building, pays taxes, maintenance, and insurance on the building. What type of lease agreement does Charlie have with his tenants?

a.     Gross

b.     Net

c.      Percentage

d.     Triple net

926) How does the term “break-even point” relate to percentage leases?

a.     Sales proceeds must exceed last year’s total before the percentage applies.

b.     The landlord doesn’t charge a percentage of sales until the tenant’s sales exceed a break-even point.

c.      The landlord must receive enough in rent plus the share of sales to break even on the debt service.

d.     The tenant has to break even on expenses before the percentage charge is applied.

927) A commercial landlord finds herself in trouble because the rent she is collecting is not keeping up with inflation due to the type of leases she signed with her tenants. She has the longest tenancies of commercial landlords she knows, which is probably because she signed with them ______ leases.

a.     Cheap

b.     Flat rate

c.      Indexed

d.     Low rate

928) Brittany has a small office in a professional building. She has a set monthly lease payment that has been calculated to include maintenance of the common areas in the building, such as the restroom and small kitchen, and all nets, utilities, and janitorial charges for her space. The payment also includes taxes and insurance. The landlord takes these payments and pays the individual expenses himself. What type of lease does Brittany have?

a.     Graduated lease

b.     Gross lease

c.      Net lease

d.     Percentage lease

929) Which of these types of tenants most often uses a percentage lease?

a.     Manufacturing

b.     Residential

c.      Retail

d.     Triple net

930) Headhunters Anonymous rents office space in a large office building owned by CEO Properties. CEO Properties pays all expenses for the property, including taxes, insurance, and routine maintenance. What type of commercial lease does Headhunters Anonymous have?

a.     Gross lease

b.     Net lease

c.      Office space lease

d.     Percentage lease

931) Raymond just started his clothing business in a high-traffic shopping center. This type of lease agreement will require Raymond to pay the landlord rent based upon the percentage of the periodic gross sales. This type of agreement is called a ______ lease agreement.

a.     Gross

b.     Ground

c.      Net

d.     Percentage

932) With a triple net lease, the tenant pays ______ separately from the base rent.

a.     Insurance, utilities, and maintenance

b.     Maintenance, insurance, and debt service

c.      Taxes, debt service, and lease payment

d.     Taxes, insurance, and maintenance

933) What type of a lease escalation clause is tied to a market index (typically the CPI)?

a.     A flat rate lease escalation clause

b.     An expense lease escalation clause

c.      An index lease escalation clause

d.     A profit margin lease escalation clause

934) Fiona signed a lease with her landlord for a commercial building. A percentage of Fiona’s sales will be paid to the landlord, in addition to her lease payment. Why would Fiona agree to this arrangement?

a.     Fiona is hoping to purchase the building at a later date.

b.     Fiona wants to demonstrate how viable her business is.

c.      Fiona wants to reduce her base rent.

d.     The landlord is her business partner.

935) You have a client who is leasing commercial space. The lease terms call for him to pay a portion of the landlord’s taxes, insurance, and maintenance. What type of lease does your client have?

a.     Itemized lease

b.     Percentage lease

c.      Sublease

d.     Triple net lease

936) Maxwell is a tenant. His lease has a fixed rent in which the landlord pays all taxes, insurance, and maintenance expenses. What type of lease does he have?

a.     Gross

b.     Ground

c.      Net

d.     Variable

937) One of the requirements of an enforceable lease is that both parties are bound to the terms of the lease. This is called ______.

a.     Mutuality of assent

b.     Mutuality of enforceability

c.      Mutuality of liability

d.     Mutuality of obligation

938) Which term describes the transfer of possession of rental property?

a.     Clairvoyance

b.     Contract

c.      Conveyance

d.     Covenant

939) Which of these terms refers to the mutual agreement between the landlord and the tenant?

a.     Lawful object

b.     Legal capacity

c.      Mutual assent

d.     Mutuality of obligation

940) This legal aspect of a lease establishes “privity of contract.”

a.     Contract

b.     Conveyance

c.      Covenant

d.     Statute of Frauds

941) Which of these statements about leases is true?

a.     A lease must be signed by a notary and recorded in public records to be enforceable.

b.     A lease must meet the essential requirements of any contract to be enforceable.

c.      A lease that is not signed is not enforceable.

d.     A tenant may waive the right to peaceful enjoyment if the lease includes an unlimited right-of-entry covenant.

942) Which terms describes a lease that has been agreed to by both parties?

a.     Accepted

b.     Delivered

c.      Effective

d.     Executed

943) Which of these two terms describe the dual legal nature of a lease?

a.     Clairvoyance and contract

b.     Concession and contract

c.      Conveyance and concession

d.     Conveyance and contract

944) Which of these statements about recording a lease is true?

a.     A lease must be recorded to be legally enforceable.

b.     A tenant who lives in a building that is being sold may want to have the lease filed as a public record.

c.      Landlords in California are obligated to record leases with public records.

d.     Leases may only be recorded with the consent of the landlord.

945) When a landlord grants possession of a property to a tenant, this is called an act of what?

a.     Clairvoyance

b.     Contract

c.      Conveyance

d.     Ownership

946) One of the requirements of an enforceable lease is that both parties are bound to the terms of the lease. This is called ______.

a.     Mutuality of assent

b.     Mutuality of enforceability

c.      Mutuality of liability

d.     Mutuality of obligation

947) Which of these contract-specific requirements for a lease prohibits minors from entering into a lease agreement?

a.     Lawful object

b.     Legal capacity

c.      Mutual assent

d.     Mutuality of obligation

948) This legal aspect of a lease establishes “privity of estate.”

a.     Clairvoyance

b.     Contract

c.      Conveyance

d.     Ownership

949) When presenting a CMA, if you take the time to explain the CMA process, help the prospective sellers understand what’s behind the numbers, and ultimately leave the decision of the list price up to them, what characteristic have you demonstrated?

a.     Documentation

b.     Effective communication

c.      Law-abiding

d.     Precision

950) You are working on a CMA for your new listing. The seller has indicated that he really wants to list his home for $400,000 or more. Which of the following would indicate that price may be too high?

a.     The closest comparable is a two-story while your client’s house is a ranch house.

b.     There are no comparables within the last six months.

c.      There were three expired listings priced between $400,000 and $425,000.

d.     Two properties recently sold for just under $400,000.

951) Which of the following statements is true about appraisals?

a.     “Appraisal” and “CMA” are interchangeable terms for a property valuation.

b.     Appraisals may only be performed by certified appraisers (with certain exceptions in some states).

c.      Either certified appraisers or managing brokers may perform appraisals.

d.     Real estate licensees may perform appraisals on foreclosed properties, but a certified appraiser must perform all other appraisals.

952) Clark works for Acme Bank and asks for your assistance. He wants you to look at a property that’s about to go into foreclosure and provide him with a report on its current marketability and an approximate market value. What’s Clark most likely asking you to provide?

a.     Appraisal

b.     BPO

c.      CMA

d.     Professional opinion

953) Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?

a.     Expired

b.     Foreclosed

c.      Pending

d.     Withdrawn

954) When pricing a property, which of the following is a reason a licensee would consider expired listings?

a.     To determine approximately how long it will take the home to sell

b.     To determine the price at which a property is most likely to sell

c.      To determine the price at which a property won’t sell

d.     To determine the property’s competition

955) Marcy’s offer on a home was accepted! Which party will be contacting her about arranging an appraisal?

a.     The closing attorney

b.     The lender

c.      The seller’s agent

d.     The title insurance representative

956) What does a CMA determine?

a.     Availability of funding

b.     Cost of replacement

c.      Cost per square foot

d.     Market price range

957) When a real estate professional goes beyond a broad brushstroke approach to a CMA and takes the time to research not only recent sales, but competition and expired listings, what trait are they exhibiting?

a.     Diligence

b.     Documentation

c.      Effective communication

d.     Empathy

958) Ellen has only been licensed for two weeks, but she’s already toured the home of potential clients, the Birds. What should she do to next to secure the listing?

a.     Call her mom and get a pep talk.

b.     Prepare a CMA.

c.      Print out two copies of her professional resume.

d.     Review her pre-licensing coursework for information about taking property photos.

959) When completing a CMA, what might be indicated if a comparable property had a quick sale?

a.     It’s a buyer’s market.

b.     The market for similar homes is good.

c.      The other agent was incompetent.

d.     The property was priced too high.

960) Real estate licensees turn to specific information sources when preparing CMAs for clients. Which of the following information sources is best for estimating the market value of a property?

a.     Comparable sales

b.     Construction costs

c.      Previous sales price

d.     Time to close

961) In which form of price determination does the real estate professional often just drive by the property and take photos, then complete paperwork for the lender?

a.     Appraisal

b.     Broker’s price opinion

c.      Comparative market analysis

d.     Competitive market analysis

962) Which type of analysis is a broad estimate of price in case the lender must take over the property and sell it to an investor or on the market?

a.     Appraisal

b.     Broker’s price opinion

c.      Comparative market analysis

d.     Credit analysis

963) Which of the following features is most likely to be the cause of an adjustment to a comparable when preparing a CMA?

a.     Busy street

b.     Color

c.      Demographics

d.     Interest rates

964) Which of the following provides an opinion of list price range by looking at recently sold properties, comparing current competing properties and properties that didn’t sell, and estimating buyer appeal regarding the style, location, and size?

a.     Appraisal

b.     Broker price opinion

c.      Collective market analysis

d.     Comparative market analysis

965) What’s the primary purpose of a CMA?

a.     To determine an appropriate listing price range

b.     To ensure that the sales price reflects the cost of replacement

c.      To provide the property value to the lender

d.     To set a price that an appraiser will approve

966) You need to perform a sales comparison for your clients. Comparable A’s adjusted sales price is $277,000. Comparable B’s adjusted sales price is $255,000. How might you use this data to determine a list price range for the clients’ home?

a.     Find the average of the adjusted sales prices of Comparable A and Comparable B.

b.     Give more weight to the list price on Comparable A, because it’s lower.

c.      Give more weight to the list price on Comparable B, because the subject property will likely sell more quickly at this higher price.

d.     Give more weight to the list price on the comparable that’s most similar to the property.

967) Steve is preparing a comparative market analysis for the Joneses and has selected three comparable properties. How many adjustments should Steve make to the Joneses’ property?

a.     One

b.     Three

c.      Two

d.     Zero

968) Steve won’t adjust the subject property. Only the comparable’s sales price is adjusted. If it is inferior, adjust upward. If it’s superior, adjust downward.

969) Question 4

970) Which of the following is typically used for purposes other than a prospective listing or sale?

a.     Appraisal

b.     AVM

c.      BPO

d.     CMA

971) Jan is a real estate licensee gathering information to help her seller determine a good listing price. How could expired listings help her in this process?

a.     They denote the property’s competition.

b.     They determine approximately how long it will take the property to sell.

c.      They help determine the price at which the property is most likely to sell.

d.     They illustrate the price at which the property won’t sell.

972) When licensees follow through on what prospects have asked, arrive for meetings on time, and come prepared, what trait are they exhibiting?

a.     Competence

b.     Documentation

c.      Effective communication

d.     Empathy

973) Comparative market analysis is most effective when a licensee limits the data collection time frame for sold properties. A CMA should look at properties that sold within ______.

a.     In the last two years

b.     No later than three to six months ago

c.      Within 18 to 24 months

d.     Within the last six to 12 months

974) Which type of analysis starts with a visit to the property, a search on the MLS, and a comparison of comparable sales, and hopefully ends in a listing for a real estate licensee?

a.     Appraisal

b.     Broker price opinion

c.      Comparative market analysis

d.     Credit analysis

975) Supply and demand determine competition within a market. Which of the following is a true statement?

a.     When there are fewer houses on the market, buyers will pay less.

b.     When there are fewer houses on the market, demand wanes, as well.

c.      When there are fewer houses on the market, neighborhood blight occurs.

d.     When there are fewer houses on the market, sellers can demand more for their properties.

976) When you’re putting together a listing presentation, which of these is a key point to address?

a.     Buyers won’t pay more for a home than the market dictates.

b.     Everything you talk about with the seller will change in six months.

c.      The house needs work before you can sell it for the right price.

d.     Your credentials are the best in the market.

977) After you’ve made a professional listing presentation and the seller has declined to use you as a listing agent, what’s the best practice?

a.     You should accept the outcome either way.

b.     You should ask the sellers for a second chance.

c.      You should call the competing salespersons to discuss the matter.

d.     You should pursue the sellers with questions about their decision, even if they tell you they don’t want to talk about it.

978) Getting the best price is always a factor for a seller, but the ______ at which it would actually sell must be another consideration.

a.     Guesstimate

b.     Highest possible price

c.      Market price

d.     Reduced price

979) If, after seeing your carefully prepared comparative market analysis, a seller doesn’t agree with the price range you prepared in your listing presentation, your best practice would be to ______.

a.     Decline the listing if the seller’s price and your price analysis are too far apart.

b.     List the property at the seller’s price and hope to reduce the price later.

c.      Offer to purchase the property at your suggested list price if it doesn’t sell at the seller’s price.

d.     Split the difference.

980) What happens when an appraiser determines a property’s value to be less than the pre-approved loan amount?

a.     Most buyers will have an appraisal contingency, so they can back out and receive a refund of their earnest money.

b.     Most sellers will have an appraisal contingency, so the seller can keep the buyer’s earnest money.

c.      The buyer must make up the difference between the appraisal and the purchase price.

d.     The seller must make up the difference between the appraisal and the purchase price.

981) Why is it so important to properly price a property when it first enters the market?

a.     If a property is overpriced from the beginning, the chances of the property selling are not impacted significantly.

b.     Overpricing a property will drive up the price of other properties as well, causing a false inflation.

c.      The first several months are crucial because they’re the best chance for the property to sell.

d.     The first several weeks are crucial because they’re the best chance for the property to sell.

982) What are some ways you can make sure you’re pricing a property at fair market value?

a.     Ask the sellers what the sales price should be.

b.     List to sell as fast as possible.

c.      Prepare a well-researched CMA.

d.     Price it at the price the house originally sold for to be fair.

983) An agent lists a home that receives an offer for full list price within one day in a buyers’ market. There is a chance the agent ______ the home.

a.     Appraised

b.     Inflated

c.      Overpriced

d.     Underpriced

984) What’s a CMA?

a.     Company marketing announcement

b.     Comparative market analysis

c.      Comparison marketing algorithm

d.     Comprehensive market appraisal

985) What’s the best advice when challenging an appraisal?

a.     Be specific and concise about why the value opinion is different in your mind.

b.     Blame it on the appraiser.

c.      Don’t bother asking the appraiser to explain why certain adjustments were made or not made.

d.     Suggest a minimum value for the appraiser to meet.

986) Many market conditions impact housing prices. Which of the following is a true statement?

a.     High unemployment rates mean there are more available buyers in the market.

b.     Inflation increases buying power.

c.      Low unemployment rates mean there are fewer available buyers in the market.

d.     Reduced consumer confidence makes new buyers wary of purchasing and homeowners hesitant to trade up.

987) A property has been listed on the market for four months with no offers. Finally, a buyer makes an offer that is 18% less than the list price. How was this property likely priced when it first hit the market?

a.     At appraisal value

b.     Fair market value

c.      Overpriced

d.     Underpriced

988) Demographics impact the housing market. Which of the following is a true statement?

a.     An increase in the number of retirees in a given population would negatively impact the demand for large, single-family homes.

b.     An increase in the number of retirees in a given population would positively impact the demand for large, single-family homes.

c.      An influx of higher wage earners to a given area would create a price decrease for lower-valued homes.

d.     An influx of higher wage earners to a given area would decrease the demand for higher-priced housing.

989) Why might a licensee want to make two visits to the property as part of a listing presentation?

a.     To find out how many licensees the seller will be interviewing, which will help determine how much effort to put into preparing a comparative market analysis

b.     To see if the sellers say the same thing both times

c.      To see the property at different times of day

d.     To use information from a tour to prepare the CMA

990) When market conditions indicate top-of-the-market pricing, is it always in your client’s best interest to price it there?

a.     No, because higher sales prices result in higher taxes.

b.     No, it still has to appraise.

c.      Yes, because it’s probably what will win the listing for you.

d.     Yes, because it will sell fast.

991) Which of the following is a potential consequence of overpricing a property?

a.     A competing broker can report you for unfairly pricing a property.

b.     It increases the odds that buyers will be interested because it must be worth the higher price point.

c.      The property will receive offers from serious buyers only, since it is listed at a higher price point.

d.     The property won’t appraise high enough and you could lose the contract if you do get an offer.

992) When pricing a home for the market, what should a licensee try to get sellers to do?

a.     Put themselves in the buyers’ shoes

b.     See how much it might be able to fetch on the market

c.      Set the price at one level, with the expectation of lowering it in 30 days

d.     Visit the neighbors and come up with a price

993) An agent has a seller who wants to list the property at $550,000. The market has taken a downturn, and the fair market value is estimated at $495,000. What is the best approach for this listing?

a.     Explain the benefits in the long run of entering the market at a fair price.

b.     List the home at $550,000 to keep the seller happy.

c.      Tell the seller it’s worth a shot to try it and see if you can get more.

d.     Tell the seller that you won’t work with her unless she lists the home at $495,000.

994) Which of the following statements is true about the listing presentation?

a.     It’s best to leave out financial data (such as a CMA or comparable property information) and listing agreements, so the seller doesn’t think you’re jumping the gun and already counting your commission.

b.     The less you say, the better. You don’t want to overwhelm your potential clients with numbers and decisions at this first presentation.

c.      The most important part of a listing presentation is to make the buyers like you as a person. Try not to talk numbers or about their house, but instead focus on charming them.

d.     You should go into the presentation fully prepared with a comparative market analysis, listing agreement, MLS listings of comparable properties, and your plan for marketing the sellers’ property.

995) If an appraisal is lower than the agreed-upon sales price, what steps can the seller take?

a.     A second appraisal can be ordered, although there should be good reason to question the first appraisal.

b.     A second appraisal can be ordered, but it’s always the buyer’s expense.

c.      A second appraisal can be ordered, but the seller must pay for it.

d.     A second appraisal can be ordered, which typically turns out to be higher.

996) Claire, a seller, accepted an offer on her home. However, it just appraised for less than the sales price. Which of the following is true?

a.     Claire must refund the buyers for the cost of the appraisal.

b.     Claire must take her house off the market.

c.      The appraiser must perform a second appraisal.

d.     The lender will only approve a loan based on the property’s appraised value.

997) A home enters the market priced above fair market value. Within the same time frame, three additional homes enter the market listed between 5% and 10% less than the first home, at a fair market price. What is likely to happen with the first home?

a.     Buyers will recognize the higher price point and immediately submit much lower offers.

b.     If a property is overpriced from the beginning, buyers will move on and likely make a purchasing decision before the price is corrected on the overpriced home.

c.      The backload of buyers on the market will wait to see if the price is adjusted on the first home.

d.     The chances are high there are one or two buyers in the backload of buyers who are willing to make an offer at the entry price.

998) Interest rates determine buying power. Which of the following is a true statement?

a.     When interest rates are high, buyers are often priced out of the market.

b.     When interest rates are high, buyers will be able to afford higher-priced homes.

c.      When interest rates climb, more buyers are encouraged to buy.

d.     When interest rates shift higher, buyers can still buy in the same price range.

999) When a property is overpriced, what happens?

a.     A backlog of buyers will return to it again and again.

b.     It can usually list again at a higher price.

c.      It increases buyer interest and demand.

d.     It may become stale on the market, resulting in low-ball offers.

1000)               An agent is working with seller clients who are very emotionally attached to their home. They want to list the property at $330,000, but the CMA indicates a price range of $255,000 to $275,000. What is the best course of action?

a.     Explain the importance of fair market value and offer to walk them through the process.

b.     List the home for $300,000 because it’s a good compromise.

c.      List the home to sell, so start with the lower end of the CMA.

d.     Start with listing for $330,000 and see if you get any interest.

1001)               What’s the best strategy for pricing a home?

a.     Always go with what the seller thinks it’s worth—the customer is always right.

b.     Prepare a detailed comparative market analysis and base the price on recent comparable sales.

c.      Price it higher than market value so buyers think it has more to offer and will schedule a showing.

d.     Price it lower than market value so that there are lots of offers and a bidding war.

1002)               At a listing appointment, licensee Chet asks Sam, the seller, if his property is his own home or an investment property. Why would Chet ask this?

a.     Chet can only represent sellers if they’re selling their own home; selling investment properties requires a different license.

b.     If the home is his own, he’s likely to be purchasing a new one, so Chet has a chance to land two transactions.

c.      Investment homes are easier to sell because they’re sold “as-is.”

d.     Investment home sellers tend to be more emotionally attached because the homes bring them more income.

1003)               A fire destroyed Meredith’s house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn’t fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?

a.     Its current market value

b.     The amount for which it was appraised

c.      The amount it would cost to completely replace her home

d.     The original sales price when it was first constructed

1004)               Which of these terms can be defined as what a buyer has paid for a property and what the seller has accepted?

a.     Appraisal

b.     Cost

c.      Price

d.     Value

1005)               Who typically performs an appraisal?

a.     Certified appraiser

b.     Inspector

c.      Real estate licensee

d.     Tax assessor

1006)               Which economic principle is related to supply and demand?

a.     Competition

b.     Conformity

c.      Contribution

d.     Substitution

1007)               A rundown home, overgrown with weeds and in desperate need of repairs, is driving down property values on the block. What economic principle is at work here?

a.     Anticipation

b.     Contribution

c.      Progression

d.     Regression

1008)               The economic principle that tells us that when supply goes up, price goes down is also called ______.

a.     Conformity

b.     Price dropping

c.      Regression

d.     Supply and demand

1009)               There are a lot more sellers than buyers in the current market. How does this demand influence value?

a.     Demand doesn’t influence value.

b.     Value is pushed downward.

c.      Value is pushed upward.

d.     Value remains the same.

1010)               The Hendersons were hoping to list their home for $400,000; however, four other comparable homes in the neighborhood just went up for sale, and they now must list their property at $380,000 to sell quickly. Which economic principle is at work here?

a.     Competition

b.     Conformity

c.      Progression

d.     Substitution

1011)               Boris is an appraiser working for the Smith family. They’ve hired him to perform an appraisal on their six-bedroom house. What two types of data will Boris gather?

a.     Digital and hand-written

b.     General and specific

c.      Old and recent

d.     Pertinent and unrelated

1012)               What acronym can be used to remember factors that influence real property value?

a.     CRUD

b.     DUST

c.      GIVEN

d.     OLD CAR

1013)               What type of value may consumers be interested in if they are looking for the potential rate of return?

a.     Assessed value

b.     Insured value

c.      Investment value

d.     Value in use

1014)               Appraiser Jamie is looking past how a property is being used to determine a higher value. What is Jamie determining?

a.     Cost to replace

b.     Highest and best use

c.      Loan value

d.     Value in use

1015)               What’s another term for a valuation that’s an unbiased opinion of value?

a.     Assessment

b.     Comparative market analysis

c.      Evaluation

d.     Formal appraisal

1016)               When appraisers look past how a property is being used to determine a more optimal function, what are they determining?

a.     Cost to replace

b.     Highest and best use

c.      Market value

d.     Value in use

1017)               Which of the following is the cost of replacing a building in the case of total loss?

a.     Insured value

b.     Investment value

c.      Mortgage value

d.     Value in use

1018)               Which of the following is defined as what it would take to recreate a property if it disappeared off the face of the earth today?

a.     Cost

b.     Insurance

c.      Price

d.     Value

1019)               A CMA or a BPO is an example of ______.

a.     A formal appraisal

b.     An assessment

c.      An informal estimate of market value

d.     An inspection

1020)               What is an appraisal?

a.     A determination of property defects and conditions

b.     An opinion of listing price as determined by a real estate professional

c.      An opinion or estimate of a property’s value as of a specific date

d.     A study on the feasibility of developing land

1021)               When prices go down because there are too many homes on the market and too few buyers, what economic principle is at work?

a.     Competition

b.     Conformity

c.      Progression

d.     Regression

1022)               Which factor influences property value and addresses questions such as, “What’s the market like?” and “Are there more buyers than sellers, or vice versa?”

a.     Demand

b.     Scarcity

c.      Transferability

d.     Utility

1023)               Marcus bought two adjoining pieces of land that were zoned for commercial use. When he realized that combining the two parcels would dramatically increase the land’s value, he jumped at the opportunity. What’s this an example of?

a.     Contribution

b.     Eminent domain

c.      Plottage

d.     Zoning

1024)               Building codes, zoning laws, and environmental legislation are examples of which force that influences property value?

a.     Economic

b.     Physical/environmental

c.      Political/governmental

d.     Social

1025)               Which economic principle pertains to how a change in a property affects its value as a whole?

a.     Anticipation

b.     Conformity

c.      Contribution

d.     Substitution

1026)               Appraiser John is determining how a property is being used to determine a more optimal function. What is he determining?

a.     Cost to replace

b.     Highest and best use

c.      Mortgage value

d.     Value in use

1027)               Which of the following terms means the price a property is worth to its owner as currently enjoyed?

a.     Appraisal

b.     Insured value

c.      Investment value

d.     Value in use

1028)               Kevin is having an appraisal performed on a piece of property he’s interested in buying. He’s especially interested in hearing about the estimated rate of return the property could pull. What type of value is he interested in?

a.     Assessed value

b.     Insured value

c.      Investment value

d.     Value in use

1029)               A property’s value is dropping because the neighboring property’s yard is filled with trash. What’s this an example of?

a.     Depreciation

b.     Progression

c.      Regression

d.     Substitution

1030)               Appraiser Jerry is looking past how a property is being used to determine a more optimal function. What is he determining?

a.     Cost to replace

b.     Highest and best use

c.      Market value

d.     Value in use

1031)               What’s the first step an appraiser will perform when conducting an appraisal?

a.     Estimate the value of the land.

b.     Gather and analyze data.

c.      Identify the data that’s needed.

d.     State the problem.

1032)               The Richards family farm is located on a 10-acre parcel of land, which is very rare in their area. However, the house is rundown and in need of many repairs. Most buyers in the area are looking for a move-in-ready home, which means they would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards’ property?

a.     Demand

b.     Scarcity

c.      Transferability

d.     Utility

1033)               Which of the following is a piece of general data an appraiser may gather?

a.     Improvements made to a property

b.     Kitchen upgrades

c.      Population size

d.     Property lot size

1034)               Your neighbors build a high-quality addition to their home, increasing its value compared to your own home’s value. Because of this, you notice a bump in your property value. Which economic principle is at work here?

a.     Conditional value

b.     Price bump

c.      Progression

d.     Regression

1035)               Which of the following can be defined as what a property is worth?

a.     Appraisal

b.     Cost

c.      Price

d.     Value

1036)               What’s one purpose of a BPO?

a.     To assist buyers in determining an offer amount or sellers in determining a listing price

b.     To assist insurers in determining the amount of liability insurance to place on a property

c.      To assist lenders in determining the marketability and potential sales price for distressed properties

d.     To ensure that the value of a property is sufficient as collateral for a mortgage loan

1037)               What’s the price at which a willing buyer and a willing seller would strike a deal given normal market conditions?

a.     Insured value

b.     Market value

c.      Valuation

d.     Value in use

1038)               Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?

a.     Contribution

b.     Impact on value

c.      Plottage

d.     Progression

1039)               What is the term for an increase in property value caused by the joining of two neighboring parcels of land?

a.     Anticipation

b.     Contribution

c.      Plottage

d.     Progression

1040)               Appraiser Victor is determining the insured value of a property. What is he evaluating?

a.     Items of great importance to a lender to replace or rebuild

b.     The cost to replace or rebuild a property

c.      The price at which the property can be loaned on or sold at a foreclosure sale

d.     The return on investment the property may provide

1041)               Trudy loved her new neighbors. The investor couple bought every available house on Trudy’s block and was working hard to renovate them and increase their value. Trudy decided that she’d sit back, relax, and let her property’s value go up, too, thanks to ______.

a.     Competition

b.     Progression

c.      Regression

d.     Substitution

1042)               What type of value is of interest to taxing authorities?

a.     Assessed value

b.     Insured value

c.      Investment value

d.     Value in use

1043)               Rico is an appraiser who is performing a valuation on a property. What’s another term for what Rico is doing?

a.     Analytical exercise

b.     CMA

c.      Formal appraisal

d.     Price opinion

1044)               Which economic principle states that the value of property today is impacted by the current value of the total expected future benefits?

a.     Anticipation

b.     Conformity

c.      Highest and best use

d.     Progression

1045)               Which of these is true about the assessed value of real estate?

a.     It is typical for the assessed value to increase by 5% or more per year.

b.     It’s the value used to calculate the property taxes, and it’s based on a percentage of the market value.

c.      Property taxes are based on real market value and not assessed value.

d.     The assessed value of a property will almost always be higher than real market value.

1046)               While market value is an opinion of a property’s worth on the fair market, which of the following best describes market price?

a.     How much a buyer has paid and a seller has accepted for the property.

b.     How much a lender would be willing to finance for the property.

c.      How much an appraiser estimates a property is worth on a given day.

d.     How much it would take to rebuild the property from scratch, including the cost of the land.

1047)               Identifying the purpose of the appraisal leads the appraiser to do what next?

a.     Determine highest and best use.

b.     Estimate value of land.

c.      Identify data needed.

d.     Use three approaches to estimate value.

1048)               Quality of amenities, climate, and topography are examples of which force that influences property value?

a.     Economic

b.     Physical/environmental

c.      Political/governmental

d.     Social

1049)               Parcels of land are valued at $50,000 each. However, when two of the parcels are joined, they are valued at $120,000. What economic principle is at work here?

a.     Anticipation

b.     Contribution

c.      Plottage

d.     Progression

1050)               Soren is an appraiser. As such, what guidelines must he follow?

a.     NAR Code of Ethics

b.     National Association of Appraisers (NAA) bylaws

c.      Real estate license law

d.     Uniform Standards of Professional Appraisal Practice (USPAP)

1051)               Which economic principle says that value is created and maintained when the characteristics of a property fit in with its surroundings?

a.     Anticipation

b.     Conformity

c.      Contribution

d.     Substitution

1052)               John’s home is up for sale. He originally bought it five years ago for $300,000. Its current value is $350,000. His real estate agent notified him that a buyer just made an offer on his home for $365,000, which is the price for which other similar homes in the neighborhood are selling, and John accepts. What does the price of $365,000 represent?

a.     The appraised value

b.     The assessed value

c.      The investment value

d.     The market value

1053)               If there is some kind of defect on a property’s title, what effect does this level of transferability have on the property’s value?

a.     The value falls.

b.     The value remains unchanged.

c.      The value rises.

d.     Transferability has no effect on value.

1054)               What well-known economic principle says that a property’s value is determined by what it would cost to purchase a similar property?

a.     Conforming value

b.     Regression

c.      Similar cost principle

d.     Substitution

1055)               The fewer properties on the market, the greater the scarcity. What’s the effect on prices?

a.     Prices are pushed downward.

b.     Prices are pushed upward.

c.      Prices remain the same.

d.     There’s no correlation between scarcity and price.

1056)               Interest rates, availability of credit, and employment trends are examples of which force that influences property value?

a.     Economic

b.     Physical/environmental

c.      Political/governmental

d.     Social

1057)               What two types of data does an appraiser gather?

a.     Computer and hand-written

b.     General and specific

c.      Old and new

d.     Related and non-related

1058)               The smallest property on the block is priced lower than any others, but the higher-priced properties that surround it help to drive the property’s market value up. What economic principle is at work here?

a.     Anticipation

b.     Contribution

c.      Progression

d.     Regression

1059)               Which of the following is a piece of specific data an appraiser may gather?

a.     Cost of living

b.     Employment figures

c.      Population size

d.     Property lot size

1060)               Which of the following is the price a lender believes the property will bring at a foreclosure sale?

a.     Insured value

b.     Investment value

c.      Mortgage value

d.     Value in use

1061)               Marsha made an offer of $325,000 on a home listed for $350,000. The seller accepted her offer. What service will her lender order to determine the home’s actual value?

a.     Appraisal by an appraiser

b.     Assessment by the seller’s agent

c.      Estimate by her broker

d.     Quote by a property insurer

1062)               Which economic principle says that a property’s value is determined by what it would cost to purchase a similar property?

a.     Anticipation

b.     Competition

c.      Contribution

d.     Substitution

1063)               What does Susanna do as an appraiser?

a.     She determines what a buyer may pay for a property.

b.     She provides an estimate of value that the consumer may influence.

c.      She provides an unbiased estimate of value.

d.     She’s usually hired by the buyer or seller.

1064)               What economic principle is related to a property’s most profitable use that is both legal and economically feasible?

a.     Anticipation

b.     Contribution

c.      Highest and best use

d.     Progression

1065)               Joaquin is an appraiser. What purpose do Joaquin and other appraisers serve?

a.     Cause a sale to go through

b.     Determine a property’s value

c.      Help buyers buy a property

d.     Make a real estate agent’s life better

1066)               Population growth, marriage rates, and attitudes toward education are examples of which force that influences property value?

a.     Economic

b.     Physical/environmental

c.      Political/governmental

d.     Social

1067)               There are a lot more sellers than buyers in the current market. How does this demand influence value?

a.     Demand doesn’t influence value.

b.     Value is pushed downward.

c.      Value is pushed upward.

d.     Value remains the same.

1068)               ______ is the principle that the more similar properties there are on the market, the lower the price will be driven.

a.     Competition

b.     Conformity

c.      Contribution

d.     Plottage

1069)               Mary Ann is looking for the potential rate of return. What sort of value is she interested in?

a.     Assessed value

b.     Investment value

c.      Market value

d.     Value in use

1070)               What standards do appraisers follow?

a.     Appraisal bylaws

b.     License law

c.      NAR Rules of Ethics

d.     Uniform Standards of Professional Appraisal Practice

1071)               Which factor that influences value considers the property’s function?

a.     Demand

b.     Scarcity

c.      Transferability

d.     Utility

1072)               Which of the following is the price a lender believes the property will bring at a foreclosure sale?

a.     Insured value

b.     Investment value

c.      Mortgage value

d.     Value in use

1073)               Margot has fallen in love with a three-bedroom, 2,500-square-foot property in her friend’s neighborhood. It’s listed for $400,000. However, just down the street, another three-bedroom, 2,400-square-foot home very similar to the one Margot loves was just listed for $350,000. Margot and her agent immediately make an offer on the second property. Which economic principle is at work here?

a.     Anticipation

b.     Conformity

c.      Progression

d.     Substitution

1074)               Jerry is appraising a five-bedroom home in the suburbs. After identifying the purpose of the appraisal, what does he need to do next?

a.     Determine the highest and best use.

b.     Estimate the value of the land.

c.      Identify the data that is needed.

d.     Use three approaches to estimate the value. 

1075)               What does the income approach to value rely on when valuing properties that are five or more units?

a.     Gross income multiplier

b.     Gross rent multiplier

c.      Monthly gross rent

d.     Sales comparison

1076)               To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first?

a.     Conditions of sale

b.     Financing terms and cash equivalency

c.      Market conditions

d.     Physical characteristics

1077)               To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed has the highest priority?

a.     Conditions of sale

b.     Location

c.      Market conditions

d.     Physical characteristics

1078)               An investor is analyzing a three-unit property by looking at its ability to produce future income. Which of the following would most likely be used to determine this value?

a.     Effective gross income

b.     Gross income multiplier

c.      Gross rent multiplier

d.     Potential gross income

1079)               A property generates $30,000 in net operating income and has a 15% cap rate. Using the income approach, what is its value?

a.     $100,000

b.     $20,000

c.      $200,000

d.     $25,000

1080)               Homes in a new home development have been built with a floor plan that doesn’t appeal to today’s buyers. In a cost approach valuation of the houses, what sort of depreciation will the appraiser apply?

a.     External depreciation

b.     Functional obsolescence

c.      None. Depreciation doesn’t apply to new buildings.

d.     Physical depreciation

1081)               The value principle of ______ is the basis of the income approach to appraisal.

a.     Anticipation

b.     Capitalization

c.      Competition

d.     Substitution

1082)               An investor is analyzing a property by looking at its ability to produce future income. The property is a 10-unit apartment building. Which of the following would be used to determine this value?

a.     Effective gross income

b.     Gross income multiplier

c.      Gross rent multiplier

d.     Potential gross income

1083)               Which of the following is a true statement about how adjustments are made in the sales comparison approach?

a.     Adjustments are made to the subject property, not the comparables.

b.     Appraisers adjust downward when a comparable is missing a feature found in the subject property.

c.      Appraisers adjust upward when a comparable is missing a feature found in the subject property.

d.     Only three adjustments per comparable property are allowed; otherwise it’s not considered sufficiently similar.

1084)               On which principle of value is the sales comparison approach based?

a.     Anticipation

b.     Competition

c.      Conformity

d.     Substitution

1085)               If a property’s income value is $200,000 and it’s earning a net operating income of $40,000, what is the cap rate?

a.     20%

b.     25%

c.      40%

d.     5%

1086)               In the sales comparison approach, which of these are selected and evaluated both quantitatively and qualitatively against the subject property?

a.     Alternatives

b.     Comparables

c.      Conformables

d.     Substitutions

1087)               In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what?

a.     Bracketing

b.     Bridging

c.      Substituting

d.     Surrounding

1088)               A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the capitalization rate for the strip mall?

a.     12.59%

b.     7.9%

c.      8.67%

d.     9.2%

1089)               Burt owns a development company that specializes in constructing new, energy-efficient houses. The best approach for an appraiser to use in the appraisal of Burt’s newly built homes is the ______.

a.     Appraisal process

b.     Cost approach

c.      Income approach

d.     Sales comparison approach

1090)               Which approach to value measures the cost to produce a property, including land acquisition and construction costs?

a.     Cost approach

b.     Income approach

c.      Indirect approach

d.     Sales comparison approach

1091)               A poor floor plan is an example of which type of depreciation?

a.     External depreciation

b.     Functional obsolescence

c.      Incurable depreciation

d.     Physical depreciation

1092)               With the cost approach to value, what is the replacement cost?

a.     Cost of the materials used in construction

b.     Cost to build a functionally equivalent improvement

c.      Cost to build an exact replica of the subject, with the same materials and deficiencies

d.     Cost to buy the property

1093)               Which of the following terms may be defined as a form of depreciation or loss in value caused by defects in design?

a.     Economic obsolescence

b.     External depreciation

c.      Functional obsolescence

d.     Physical depreciation

1094)               Nearby industrial odor is an example of which type of depreciation?

a.     Curable depreciation

b.     External depreciation

c.      Functional obsolescence

d.     Physical depreciation

1095)               What’s the capitalization formula used in the income approach?

a.     Value = cap rate – income

b.     Value = income × cap rate

c.      Value = income  cap rate

d.     Value = net operating income ÷ cap rate

1096)               The economic principle of ______ says that when there are two houses in the same neighborhood with the same size, appeal, and utility, the lower-priced one will tend to sell first.

a.     Correlation

b.     Substitution

c.      Supply and demand

d.     Under-bidding

1097)               Giant Industries has a $674,232 gross operating income, operating expenses of $329,129, and other expenses totaling $38,719. What is the net operating income?

a.     $306,384

b.     $345,103

c.      $383,822

d.     $635,513

1098)               With the cost approach to value, what is the reproduction cost?

a.     Cost of the materials used in construction

b.     Cost to build a functionally equivalent improvement

c.      Cost to build an exact replica of the subject, with the same materials and deficiencies

d.     Cost to buy the property

1099)               A small duplex sold for $550,000. Each unit can gross $2,500 in monthly rent for the owner, and there are no additional income sources from the property. What’s the GRM?

a.     100

b.     110

c.      200

d.     220

1100)               Which approach to value is typically used for investment property of two- to four-family units?

a.     Cost approach

b.     Income approach

c.      Revenue approach

d.     Sales comparison approach

1101)               Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation?

a.     Financing terms and cash equivalency

b.     Income generated

c.      Market conditions at time of sale

d.     Physical characteristics of the property

1102)               The loss in value caused by deterioration in physical condition is called ______.

a.     Economic obsolescence

b.     External depreciation

c.      Functional obsolescence

d.     Physical depreciation

1103)               A 20-unit apartment building sells for $5 million. The property can bring in $400,000 in annual gross income. What is the gross income multiplier (GIM)?

a.     0.125

b.     125

c.      1.25

d.     12.5

1104)               When you’re using the sales comparison approach to value a property, which of the following is considered a category of adjustment?

a.     Area demographics

b.     Financing terms and cash equivalency

c.      Seller motivation

d.     Types of obsolescence

1105)               A loss in value caused by an undesirable or hazardous influence offsite is which type of depreciation?

a.     Economic and material depreciation

b.     External depreciation

c.      Functional obsolescence

d.     Physical depreciation

1106)               Which of the following best defines capitalization rate?

a.     The expected rate of return on investment

b.     The rate at which assets depreciate over time

c.      The rate of capital recapture

d.     The value of a business as an investment

1107)               Using the income approach, determine the value of a property that has a net operating income of $15,000 and a cap rate of 15%.

a.     $100,000

b.     $15,000

c.      40%

d.     5%

1108)               The GRM for Sunny Hills is 147. If a three-bedroom, one-bath house in Sunny Hills rents for $820 monthly and sold for $125,000, what is the suggested value of a house that leases for $1,000 monthly based on the GRM?

a.     $120,540

b.     $147,000

c.      $152,439

d.     $198,540

1109)               To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements is applied last?

a.     Conditions of sale

b.     Location

c.      Market conditions

d.     Physical characteristics

1110)               Related to depreciation, what are the two types of physical deterioration?

a.     Curable and incurable

b.     Economic and material

c.      Internal and external

d.     Qualitative and quantitative

1111)               Which of these properties are exempt from the FIRREA federal appraisal guidelines?

a.     Properties valued at $400,000 or less

b.     Properties valued at $450,000 or less

c.      Properties valued at $500,000 or less

d.     Refinanced properties

1112)               Which category of appraiser can appraise one- to four-unit residential property valued under $1 million and that are not complex in nature, and non-residential properties valued below $250,000?

a.     Certified general appraiser

b.     Certified residential appraiser

c.      Residential license

d.     Trainee license

1113)               Which of the following properties is exempt from the FIRREA federal appraisal guidelines?

a.     A refinance of a property valued at $375,000

b.     A refinance of a property valued at $475,000

c.      The purchase of a property valued at $455,000

d.     The purchase of a property valued at $475,000

1114)               Which category of appraiser can appraise any residential property without any limitations related to value or complexity, but only non-residential properties valued below $250,000?

a.     Certified general appraiser

b.     Certified residential appraiser

c.      Residential license

d.     Trainee license

1115)               Which category of appraiser can appraise any real property without any limitations related to value or complexity?

a.     Certified general appraiser

b.     Certified residential appraiser

c.      Residential license

d.     Trainee license

1116)               Which type of appraisal report makes use of pre-printed documents?

a.     Form report

b.     Letter report

c.      Narrative report

d.     Printed report

1117)               Which category of appraiser must be supervised by a certified appraiser and can assist on any appraisals their supervisor can perform?

a.     Certified general appraiser

b.     Certified residential appraiser

c.      Residential license

d.     Trainee license

1118)               What type of appraisal report contains minimal detail, and may be prepared for a specific client for an explicit, limited purpose?

a.     Appraisal report

b.     Oral report

c.      Restricted appraisal report

d.     Summary report

1119)               What entity sets the standards for the appraisal report?

a.     Appraisal Ethics Association

b.     FIRREA

c.      State real estate license law

d.     USPAP

1120)               Which of the following actions toward an appraiser would be considered proper?

a.     Asking an appraiser to correct errors in the appraisal report

b.     Making payment of an appraisal report conditional on the value or estimate to be reached

c.      Threatening to no longer do business with an appraiser

d.     Withholding payment for a completed appraisal report

1121)               Which of the following statements about appraisal activities is true?

a.     Appraisers’ activities are highly regulated, especially when a federally related transaction is involved.

b.     Appraisers’ activities are not regulated.

c.      Appraisers’ activities are only regulated when a federally related transaction is involved.

d.     None of these statements is true.

1122)               Which type of appraisal report is lengthy and often used for complex properties?

a.     Form report

b.     Letter report

c.      Narrative report

d.     Restrictive report

1123)               Which of the following actions toward an appraiser would be considered improper?

a.     Asking an appraiser to consider additional, appropriate property information

b.     Asking an appraiser to correct errors in the appraisal report

c.      Asking an appraiser to remove information about adverse property conditions from an appraisal report

d.     Giving an appraiser additional details, substantiation, or explanation for the appraiser’s value conclusion

1124)               What does the Financial Institutions Reform, Recovery, and Enforcement Act require?

a.     Federally related appraisals must be conducted by an appraiser who’s either licensed or certified by the state.

b.     Federally related transactions need not be appraised.

c.      Non-federally related transactions must be appraised by government employees.

d.     Real estate licensees who perform appraisals must have a federal security clearance.

1125)               Which of the following is true of agency disclosures?

a.     Agency disclosure is not required if a licensee represents both the tenant and the landlord.

b.     Agency disclosure is required for both landlords and tenants.

c.      Agency disclosure is required for buyers and sellers, but not tenants or landlords.

d.     A rental agent only has “agency” with landlords, so only landlords must be provided with the disclosure.

1126)               Noah is a real estate professional who is helping a landlord list her rental property. What is the minimum real estate license that Noah must possess?

a.     Broker license

b.     Listing license

c.      Rental license

d.     Salesperson license

1127)               Which of the following would be a typical task of a rental agent?

a.     Advertising a vacancy

b.     Collecting rent

c.      Preparing year-end tax reports for the building owner

d.     Taking care of maintenance and repair

1128)               Landlords and tenants in California can easily find information about their rights and obligations in this publication by the Department of Consumer Affairs.

a.     California DRE Reference Book

b.     California legal code

c.      California Tenant’s handbook

d.     Consumer Guide to Rentals

1129)               What type of license did Noah need in order to act as a rental agent in California?

a.     Broker license

b.     Property manager license

c.      Rental agent license

d.     Salesperson license

1130)               Which of the following is a true statement about a rental agent?

a.     Rental agents always represent tenants.

b.     Rental agents always represent the landlord.

c.      Rental agents represent neither the tenant nor the landlord, but instead represent the building itself.

d.     The listing agent and leasing agent may be the same person.

1131)               Which of these statements about agency disclosure and leases is true?

a.     Agency disclosure is not required for leases.

b.     Agency disclosure is only required for verbal leases.

c.      Agency disclosure is required for written leases with a duration of a year or more.

1132)               A lease that has a term of a year or more requires rental agents to complete what type of disclosure form?

a.     Agency disclosure form

b.     Lease term disclosure form

c.      Property condition disclosure form

d.     Rental condition disclosure form

1133)               The California Tenants handbook provides information about whose rights and responsibilities?

a.     Landlords and tenants

b.     Landlords, tenants, and listing agents

c.      Listing and leasing agents

d.     Only tenants

1134)               Which of these statements about listing and leasing agents is true?

a.     A listing agent and leasing agent cannot represent the same client.

b.     Landlords cannot enter into a lease agreement without entering into agency with a listing agent.

c.      Listing agents cannot represent tenants.

d.     The listing agent and the leasing agent can be the same person.

1135)               Which of these statements about working with landlords and tenants is true?

a.     A broker’s license is required to represent landlords or tenants.

b.     It is highly unusual for real estate licensees to represent landlords or tenants in California.

c.      Rental agents must attain a leasing license.

d.     Representing a landlord is similar to representing a seller.

1136)               A commercial landlord in California could find answers to questions about commercial landlords’ rights and responsibilities in which of these resources?

a.     California Commercial Landlords handbook

b.     California DRE Reference Book

c.      California Tenants handbook

d.     Commercial Property handbook

1137)               Lorelei doesn’t like the man who is living in her rental home and wants to kick him out. When she goes to his house to give him immediate notice, she takes a copy of the rental agreement, which stated that the rental agreement was at-will, meaning she could resume possession at any moment. What is the best explanation for why the tenant doesn’t need to move out?

a.     Lorelei didn’t give 90 days’ notice.

b.     Lorelei hasn’t specified why she doesn’t like the tenant.

c.      Lorelei needs to have the tenant removed by a sheriff.

d.     The lease provision is void, because the right to notice is a non-waivable right.

1138)               Which of the following sentences about non-waivable tenant rights is true?

a.     Any lease provision that is meant to waive one of the non-waivable rights is void and unenforceable.

b.     Lease provisions may only include the non-waivable tenant rights.

c.      The non-waivable rights may be waived in writing, but not orally.

d.     The non-waivable tenant rights must be provided to a tenant in writing to be enforceable.

1139)               Carla’s landlord raised her rent 12% over the previous year’s rental rate and gave her 45 days’ notice. Was this legal under California’s Tenant Protection Act?

a.     No; landlords may not raise rents more than 10% annually.

b.     No; the landlord may not raise rents more than 5% annually.

c.      Yes, as long as he gives Carla 30 days notice of the increase.

d.     Yes, provided the landlord gives Carla the option to move into a less expensive unit.

1140)               Jake is saving up to move out of his parents’ house. If he finds an unfurnished rental for $1,000 per month, what is the most he will need to have saved up for the security deposit?

a.     $1,000

b.     $2,000

c.      $3,000

d.     $4,000

1141)               You’re a landlord who wants to increase your month-to-month tenant’s rent from $800 to $900. You may do this if ______.

a.     The property is owned by a real estate investment trust.

b.     The rental is a multi-unit building constructed prior to 1995.

c.      The rental is a single-family residence.

d.     The tenant has lived in the unit for more than 12 months.

1142)               Rental properties that are less than ______ are exempt from the Tenant Protection Act of 2019.

a.     15 years old

b.     20 years old

c.      25 years old

d.     30 years old

1143)               Josie has signed a lease agreement for a furnished apartment for $2,000 and the required security deposit is equal to the highest amount the landlord could ask for. How much is her security deposit?

a.     $10,000

b.     $2,000

c.      $4,000

d.     $6,000

1144)               You inherit five mobile homes from your favorite Aunt Tina. It’s good to be a land baron. Before you jump into signing rental agreements, what law might you want to consult?

a.     Mobilehome Landlord-Tenant Relations

b.     Mobilehome Rent Law

c.      Mobilehome Residency Law

d.     RV Park Occupancy Law

1145)               If a landlord wants to increase the rent on a unit that’s regulated by the Tenant Protection Act of 2019, what’s the maximum allowed as an annual increase?

a.     10% plus the cost of living

b.     2%

c.      4%

d.     5% plus the cost of living

1146)               A landlord owns a 15-unit rental property in an area without local rental control. Under what circumstances may this landlord increase the monthly rent of a unit by 20%?

a.     If it’s covered by the Costa-Hawkins Act.

b.     If the landlord lives in one of the units.

c.      If the previous tenant moved out and the increased rate is for a new tenant.

d.     If the tenant has missed at least two previous rental payments.

1147)               Your cousin, Joe, owns a mobile home that he wants to sell, but the park owner told him to take down his “for sale” sign. He knows you’re studying real estate, so he asks you for advice. Where do you recommend Joe start his research?

a.     Mobilehome Landlord-Tenant Relations

b.     Mobilehome Rent Law

c.      Mobilehome Residency Law

d.     RV Park Occupancy Law

1148)               Hank moved out of a rental house on the second of the month. How long until his landlord must refund the security deposit and/or provide an itemized list of deductions?

a.     By the 23rd of the same month

b.     By the 26th of the same month

c.      By the second of the next month

d.     Within 45 days

1149)               Which of the following is true about landlord-tenant laws in California?

a.     A landlord may charge a higher security deposit for a furnished apartment than for an unfurnished apartment.

b.     A landlord must give 60 days’ notice before raising a tenant’s rent.

c.      Landlords must return tenants’ security deposits within 30 days of move-out.

d.     Security deposits may be no more than two months’ rent for all residential properties.

1150)               Which of these statements about mobile home tenancies is true?

a.     A mobile home license is required to serve as a mobile home rental agent in California.

b.     Mobile home landlord and tenant rights and responsibilities are spelled out by the Mobilehome Residency Law.

c.      Mobile home tenancies are exempt from residential landlord-tenant laws.

d.     Mobile home tenancies are subject to the same laws as commercial rentals.

1151)               Janey hasn’t been able to use her toilet for a week because the sewer pipe is blocked by tree roots, and her landlord is not responding to her calls. Upon reviewing her lease, she notices she signed an agreement not to sue the landlord for any cause. What can she do?

a.     She cannot sue and must contact a mediator.

b.     She cannot sue and must pay for the repairs herself.

c.      She can still sue because the lease provision is void.

d.     She can sue, but will probably be counter-sued for breaching the agreement to not sue.

1152)               A landlord owns a 15-unit rental property in an area without local rental control. Under what circumstances may this landlord increase the monthly rent of a unit by 20%?

a.     If it’s covered by the Costa-Hawkins Act.

b.     If the landlord lives in one of the units.

c.      If the previous tenant moved out and the increased rate is for a new tenant.

d.     If the tenant has missed at least two previous rental payments.                            

1153)               Which of these landlords has filed an unlawful detainer suit?

a.     April fined her tenant $60 for damage to the lawn when he parked his motorcycle there.

b.     Cary sued to collect three months’ back rent from his tenant.

c.      Chet tried to kick his tenant out, but he wouldn’t leave, so he’s started eviction proceedings.

d.     Norma’s tenant always pays his rent late and Norma has decided not to renew his lease.

1154)               Which of the following circumstances would likely constitute an emergency, giving a landlord the right to enter a tenant’s premises without notice?

a.     Curiosity

b.     Inventory of valuables for building insurance

c.      Prevention of property destruction

d.     Spot check for cleanliness

1155)               Deirdre is receiving a lot of advice about how to respond to the breach of contract by one of her tenants. Which of these statements is bad advice because it is blatantly false?

a.     Even if you terminate the lease and kick her out, you can sue for the rest of the rent, because she agreed to pay it by signing the lease.

b.     If you’re thinking of going the route of eviction, you’ll need to terminate the lease first.

c.      Keeping the lease in effect means you can sue for rent owed for the remainder of the lease term.

d.     Terminating the lease means the tenant won’t be obligated to pay any more rent.

1156)               Harry discovers that his commercial lease requires him to pay for the installation of his business sign. This is a common requirement, called what?

a.     Franchise fixtures

b.     Tenant encroachments

c.      Tenant expenses

d.     Tenant improvements

1157)               A tenant is not legally obligated to let her landlord enter the premises to visit her goldfish, because she has what legal right?

a.     Freedom from harassment

b.     Landlord prohibition from entry

c.      Right to enjoyment

d.     Right to entry

1158)               Which of these statements about landlord liability for injuries is true?

a.     A residential landlord must regularly inspect the property for defects throughout the tenancy period.

b.     Both commercial and residential landlords may be liable for injuries if they promised to repair the defect but never followed through.

c.      Commercial landlords are never liable for injuries resulting from the condition of the premises.

d.     Residential landlords are only liable for injuries resulting from the condition of the premises if they agreed to make repairs in writing.

1159)               Audrey has assigned her lease to her college buddy, Skip. After two months, Skip vacates the premises and is never heard from again. Who could the landlord reasonably sue for non-payment of rent?

a.     No one

b.     Only Audrey

c.      Only Skip

d.     Skip and Audrey

1160)               Which of these landlords is using their right to maintain a lease in effect after a tenant breach of contract?

a.     Ben installs a lock-out bolt on his tenant’s door, prohibiting him from entry.

b.     Brenda sues her tenant, Shep, for missed rental payments.

c.      Calli serves an eviction notice against her tenant, Steve.

d.     Kermit begins legal proceedings against Miss Piggy, who won’t vacate.

1161)               Which of these fits the description of the “rent deduction” remedy?

a.     Kip found out that his neighbor was paying $10 less rent than he was, so he began deducting that amount from his rent.

b.     The landlord didn’t fix the plumbing after the tenant provided notice, so the tenant hired a plumber and deducted the cost from the rent.

c.      The landlord refused to replace the stained carpets after the tenant’s cats made a mess on them, so the tenant bought new carpet and deducted it from the rent.

d.     The wagon wheel light fixture wasn’t to the tenant’s taste, so the tenant replaced it and billed the landlord.

1162)               What is an unlawful detainer lawsuit?

a.     A lawsuit filed by a landlord against a holdover tenant.

b.     A lawsuit filed by a landlord to regain possession of an improvement to property.

c.      A lawsuit filed by a rental agent when the commission is not paid.

d.     A lawsuit filed by a tenant when the security deposit is withheld unlawfully.

1163)               Who’s responsible for a person’s injury that was sustained on the premises depends on ______.

a.     The landlord

b.     The tenant

c.      Whether the premises are commercial or residential

d.     Who’s at fault

1164)               Which of these statements about tenant remedies is true?

a.     Abandonment is the only remedy a landlord may take without legal representation.

b.     A tenant may repair and deduct without providing notice if the repair is under a specific dollar amount.

c.      The three types of remedies available include repair and deduct (aka rent deduction), abandonment, and rent withholding.

d.     When landlords fail to meet their obligations, tenants have 21 days to choose a remedy to apply.

1165)               Which of these scenarios includes a landlord using the right to terminate a lease after breach of contract?

a.     Benjamin refused to babysit his landlord’s children and was served with an eviction notice.

b.     India missed three rental payments and her landlord sued to collect.

c.      No pets are allowed at Hartford Arms. Bob has been warned twice, and now his landlord tells him to move out.

d.     Steve is continually taking other tenants’ parking spaces. The landlord fines him one month’s rent.

1166)               Which of these is a valid way for a landlord to deliver reasonable notice of a need to enter the property?

a.     Knocking on the door prior to entering

b.     Leave notice with a neighbor’s kid

c.      Mail notice to the tenant the day the landlord needs to enter

d.     Personally deliver notice to the tenant 24 hours before entry

1167)               A landlord wants to show a tenant’s unit to a prospective tenant. What constitutes reasonable notice?

a.     24 hours

b.     No notice is required if the showing occurs during regular business hours

c.      One month, for month-to-month tenancy

d.     Two weeks

1168)               Which of these fits the description of the abandonment remedy?

a.     Biff’s boss sent him to Taiwan for six months, so Biff decided to move out.

b.     Rats drove Willard out of his apartment.

c.      Sheila loved Hawaii so much she never returned to her rental unit.

d.     The neighbor’s newborn’s nighttime awakenings were driving Cora to her mother’s every night.

1169)               Audrey is raging mad at her landlord, Ruby, who hasn’t sent anyone to fix the toilet. To show that she is serious, Audrey could remind Ruby that she is legally obligated to maintain the ______ of the premises.

a.     Habitability

b.     Habitat

c.      Security

d.     Water protection

1170)               Which of these actions fits the description of a “repair and deduct” remedy?

a.     After his landlord refused to fix the broken window, Rick had it replaced and deducted the cost from his rent.

b.     Ryan did not like having carpeting in the bathroom, so he replaced it with vinyl and deducted the cost in his next month’s rent.

c.      Seamus is a carpenter and crafted some built-in bookshelves for his unit. Because they will increase the value, he deducts the cost from his rent.

d.     The wallpaper was peeling in Susan’s dining room and she hired a contractor to repair it, deducting the cost from her rent.

1171)               Which of the following is a valid reason for a tenant to refuse to allow a landlord to enter the property?

a.     “I take it back. I don’t want the repairs done today anymore. I’m sleepy.”

b.     “The water dripping through the ceiling of the unit below isn’t mine.”

c.      “You didn’t provide notice that you wanted to show the property to a buyer today.”

d.     “You shall not pass!”

1172)               A residential tenant decides the 70s-era shag carpeting has to go, rips it up, and replaces it with nail down wood floors. When she moves out, she can’t take the floor with her, because it is what?

a.     A fixture

b.     An improvement

c.      The wrong color for her new house

d.     Too heavy

1173)               Marley has just purchased an occupied rental property. Which of these rights does she have?

a.     The right to change the terms of the lease, including an increase in rent

b.     The right to collect rent according to the terms of the existing lease

c.      The right to evict the tenant and take possession for herself

d.     The right to terminate the lease, effective immediately

1174)               A landlord who wishes to show an occupied rental property to a prospective buyer must provide the tenant with reasonable ______.

a.     Compensation

b.     Identification

c.      Justification

d.     Notice

1175)               Johnny is overwhelmed by the amount of work that goes into being a landlord and has too many requests for repairs from his tenants. He needs to choose one of these to hold off on for now. Which repair can he legally postpone completing?

a.     Evie’s key broke in her deadbolt and she can’t lock the front door.

b.     Jay clogged up his toilet again, and still hasn’t bought himself a plunger.

c.      The lights and outlets aren’t working in Ethan’s living room.

d.     The water to Julie’s shower won’t turn on.

1176)               Which of these is a legal reason for a landlord to enter a rental unit without notice?

a.     Abandonment of the property

b.     To conduct a home inspection for a buyer

c.      To inspect a waterbed

d.     To make repairs scheduled in advance

1177)               One of these parties is likely to be held liable for an injury resulting from the condition of the premises. Who is it?

a.     A passerby is hit by a falling icicle left behind by a freak ice storm.

b.     A residential landlord promises to repair the exposed wiring in the laundry room, but forgets—until someone is electrocuted.

c.      A tenant watches the neighbor start to disappear into a sinkhole in the front yard that she had no idea existed.

d.     The owner of a strip mall learns that a shopper tripped over the cord of a vacuum while a tenant was cleaning up some cereal dropped by their child.

1178)               Audrey has assigned her lease to her college buddy, Skip. After two months, Skip vacates the premises and is never heard from again. Who could the landlord reasonably sue for non-payment of rent?

a.     No one

b.     Only Audrey

c.      Only Skip

d.     Skip and Audrey

1179)               A tenant is not legally obligated to let her landlord enter the premises to visit her goldfish, because she has what legal right?

a.     Freedom from harassment

b.     Landlord prohibition from entry

c.      Right to enjoyment

d.     Right to entry

1180)               Which of these statements about transfer of interest in rental property by a landlord is true?

a.     It is illegal for a landlord to transfer interest in rental property while a lease is in effect.

b.     The existing lease is unenforceable unless it is renewed by the new landlord.

c.      There are two ways a landlord may transfer interest: subleasing or assignment.

d.     The tenant retains the same rights and responsibilities that were provided by the original lease.

1181)               A jewelry store is relocating from a mall to a free-standing building and is pulling all of its display cases out of the storefront. These cases belong to the jewelry store because they are ______.

a.     Franchise fixtures

b.     Improvements

c.      Jewelry fixtures

d.     Trade fixtures

1182)               A landlord who wishes to show an occupied rental property to a prospective buyer must provide the tenant with reasonable ______.

a.     Compensation

b.     Identification

c.      Justification

d.     Notice

1183)               Johnny is overwhelmed by the amount of work that goes into being a landlord and has too many requests for repairs from his tenants. He needs to choose one of these to hold off on for now. Which repair can he legally postpone completing?

a.     Evie’s key broke in her deadbolt and she can’t lock the front door.

b.     Jay clogged up his toilet again, and still hasn’t bought himself a plunger.

c.      The lights and outlets aren’t working in Ethan’s living room.

d.     The water to Julie’s shower won’t turn on.

1184)               Barb has six months left on her lease when the house is sold in foreclosure. The buyer is planning to move in, which may happen how soon?

a.     In 120 days

b.     In 60 days

c.      In 90 days

d.     In six months, when the original lease term expires

1185)               California law protects tenants at foreclosure by requiring buyers to provide what?

a.     Alternative living arrangements

b.     Compensation

c.      Notice

d.     Sympathy

1186)               What must be filed for the eviction process to begin?

a.     An unlawful detainer lawsuit

b.     A writ of possession

c.      Evidence of missed rental payments

d.     The lease

1187)               Jake is unhappy that his lease was extended automatically. What lease provision should Jake review closely to ensure it is enforceable?

a.     Automatic lease creation clause

b.     Automatic lease extension clause

c.      Automatic lease renewal clause

d.     Non-cancellation clause

1188)               Which of these accurately describes a lease extension?

a.     A landlord may impose a lease extension on a tenant.

b.     A lease extension is a continuation of the current lease.

c.      A lease extension is a new lease.

d.     A lease extension occurs as the result of fraud.

1189)               Which of these statements about tenants in the military is true?

a.     A tenant in the military who cannot pay rent due to military service may be eligible for a 90-day stay of eviction.

b.     Landlords may not increase rent on units occupied by tenants in the military.

c.      Tenants in the military may miss up to 90 days of rent payments while deployed.

d.     Tenants in the military may not rent property with a monthly payment that exceeds $1,200.

1190)               Brandy, a member of the National Guard, has been called up to duty. If she’s unable to pay her rent due to her orders, she may be entitled to a delay of eviction service. To qualify, her monthly rent must be __________ as adjusted by the housing price inflation adjustment.

a.     $1,500 or less

b.     $1,500 or more

c.      $2,400 or less

d.     $2,400 or more

1191)               Which of these answers best describes the difference between lease expiration and lease termination?

a.     Termination of a lease may only occur after the expiration date set in the lease.

b.     Termination of a lease occurs before the lease would have expired.

c.      Termination of a lease requires consent of both parties, whereas expiration is written into the lease terms.

d.     There is no difference. A lease that is expired is also terminated.

1192)               California allows a stay of eviction for up to 90 days for military tenants who meet certain criteria and cannot pay rent as a result of _______________.

a.     Foreclosure

b.     Honorable discharge

c.      Military expenses

d.     Military service

1193)               Julie has received notice that the house she is renting was sold in foreclosure. She has a month-to-month lease, so how long does she have until her lease may be terminated?

a.     21 days

b.     30 days

c.      60 days

d.     90 days

1194)               What legal document must be delivered to the sheriff before a tenant may be forcibly removed from a rental?

a.     Writ of eviction

b.     Writ of possession

c.      Writ of removal

d.     Writ of unlawful detainer

1195)               What is it called when a tenant repays past-due rent to retain possession?

a.     Due process

b.     Relief from forfeiture

c.      Unlawful detainer

d.     Writ of possession

1196)               Which of these ways of ending a lease falls into the category of lease termination?

a.     A one-year lease reaches the end of its term

b.     A periodic lease is automatically renewed per the terms of the lease extension clause

c.      The tenant ends the lease after the property is condemned

d.     Two parties mutually agree to rescind the contract

1197)               Which of these accurately describes a lease renewal?

a.     A lease renewal is a continuation of the current lease.

b.     A lease renewal is a new lease.

c.      A lease renewal is unenforceable.

d.     A lease renewal requires an automatic lease renewal clause.

1198)               Which of these statements about terminating a lease is true?

a.     Rescission is one way to terminate a lease.

b.     Termination of a lease differs from rescission of a lease.

c.      Termination of a lease requires the consent of both parties.

d.     The first step to terminating a lease is to file an unlawful detainer lawsuit.

1199)               If a negotiable instrument is transferrable, it must be ___________.

a.     Include a “not to exceed” clause

b.     On a government-issued form

c.      Payable at an indefinite time

d.     Signed

1200)               Rusty received an acceleration letter from his mortgage lender. What is the most likely reason for receiving this letter?

a.     Rusty failed to pay his property taxes.

b.     Rusty has paid off his mortgage.

c.      Rusty is two or three months in default.

d.     Rusty’s mortgage is being sold on the secondary market.

1201)               A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what entity is considered the mortgagee?

a.     Borrower

b.     Lender

c.      Loan

d.     Property

1202)               What generally determines the priority of a lien?

a.     The amount of the lien

b.     The date it is recorded

c.      The date the lien is to be paid off

d.     The lien holder

1203)               What’s a discount point?

a.     An upfront charge to make up for the difference between the rate the borrower is receiving and the rate the lender normally requires

b.     The amount a borrower charges a lender for using its money, charged either monthly or annually

c.      The amount a lender charges to initiate a loan

d.     The interest rate at which a bank is allowed to borrow money from the Fed; this rate changes with the stock market

1204)               In a title theory state, which of the following is a true statement?

a.     A promissory note creates a lien against the property used as security for the loan.

b.     It’s generally much easier for a lender to foreclose on a property.

c.      The lien makes non-judicial foreclosure typical.

d.     The mortgage creates a lien against the property used as security for the loan.

1205)               What type of foreclosure is commonly used when a deed of trust is the security instrument?

a.     Eviction

b.     Judicial

c.      Non-judicial

d.     Strict

1206)               Which one of the following is a true statement regarding prepayment penalties?

a.     All loans involve prepayment penalties.

b.     Lenders don’t have to tell borrowers about prepayment penalties until the borrower’s payoff amount is received.

c.      Lenders must disclose up front if they reserve the right to charge a prepayment penalty, and under what conditions a penalty will apply.

d.     Prepayment penalties are illegal.

1207)               Ken and Julia took out a five-year subprime loan that included a prepayment penalty clause. They’re on track to pay it off after only three years. Which one of the following is a true statement?

a.     Lenders may not charge a prepayment penalty.

b.     The lender can only charge a prepayment penalty if it was disclosed to the borrower.

c.      The prepayment penalty can be as much as 30 days’ interest.

d.     The prepayment penalty can be as much as 5% of the original loan balance.

1208)               What purpose does the promissory note serve?

a.     It gives the lender the right to begin foreclosure proceedings if the buyer defaults.

b.     It gives the trustee the right to begin foreclosure proceedings if the buyer defaults.

c.      It’s a promise made to the buyer that the lender will not foreclose as long as the note is kept current.

d.     It’s a promise the buyer makes to the lender that the note will be repaid in full.

1209)               Olivia took out a 15-year loan secured with a deed of trust. She worked two jobs in order to pay the loan back and finally made her last payment this month. What happens now?

a.     The lender releases the deed of trust that secured her mortgage loan.

b.     The lender releases the mortgage that secured her mortgage loan.

c.      The lender tells the trustee to release the title to Olivia.

d.     The trustee releases the mortgage that secured her mortgage loan.

1210)               Which of the following statements about the promissory note is true?

a.     A promissory note is a negotiable instrument and can be transferred to a secondary holder who has the right to enforce the note’s terms.

b.     A promissory note isn’t a legal document.

c.      A promissory note isn’t transferable, so it must be held by the original lender until paid in full.

d.     A promissory note serves as collateral for a mortgage loan.

1211)               Alyssa’s mortgage loan is secured by the note and the mortgage. Which of the following is true if she lives in a lien theory state?

a.     Her lender can foreclose on her without advance notice.

b.     She holds title to the property, and the mortgage becomes a lien on the property.

c.      The lender can never legally foreclosure on her home.

d.     The lender doesn’t need to involve the court to foreclose.

1212)               Which mortgage clause requires the lender to discharge the mortgage lien once the borrower has paid in full?

a.     Acceleration

b.     Alienation

c.      Defeasance

d.     Due-on-sale

1213)               Which of the following is one reason a lender might charge a prepayment penalty?

a.     Because the lender is a subprime lender

b.     To cover the costs of processing an early payoff

c.      To deter buyers from ever paying off their mortgage

d.     To recover the money lost in anticipated interest

1214)               While Martha’s paying off her loan, her lender is holding on to something that includes her name, property address, the interest rate on her loan, what the late charge amount would be, and the amount and term of the loan. When her loan is paid off, the lender returns it to Mary, marked paid in full. What is this item?

a.     A deed of trust

b.     A mortgage

c.      An assignment

d.     A promissory note

1215)               Daniel purchased a townhome and obtained financing from Bank A on February 1, 2014. On April 1, 2015, he took out a home equity loan on the property with Bank B. On August 1, 2015, Daniel refinanced his mortgage through Bank C, which resulted in Bank A’s loan being paid off. Bank B signed a subordination agreement related to Bank C’s loan. Which lender will be paid first in the event of a foreclosure?

a.     Bank A

b.     Bank B

c.      Bank B and C will be paid at the same time.

d.     Bank C

1216)               When a deed of trust is used as a security instrument, who holds the deed and the note?

a.     The lender holds the deed and the note

b.     The lender holds the deed, and the trustee holds the note.

c.      The trustee holds the deed, and the lender holds the note.

d.     The trustee holds the mortgage and the note.

1217)               Generally, there are covenants between the borrower and the lender within a mortgage document. Which of the following is a mortgage covenant?

a.     Agree to refinance only with the current lender.

b.     Give the lender first right of refusal.

c.      Move all checking and savings account to the lender’s institution.

d.     Pay any charges and assessments against the property.

1218)               Which of the following describes the amount a lender charges a borrower for using money?

a.     Discount point

b.     Interest

c.      Principal

d.     Usury

1219)               Buyer Ed is reviewing the Loan Estimate he received from the lender he’s working with. He notices the loan terms include a prepayment penalty. Because he’s a savvy consumer, which of the following does Ed do?

a.     Ask the lender if there are other options available that would not involve a prepayment penalty.

b.     Check with his real estate agent to make sure that the penalty shown is typical.

c.      Laugh and throw the Loan Estimate in the trash.

d.     Resolve to not try to pay the loan off early.

1220)               Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan?

a.     A trustee will hold title until the loan is paid.

b.     Their transaction is secured with a mortgage as well.

c.      The lender will hold the mortgage, while a trustee will hold the deed of trust until their loan is paid off.

d.     The lender will hold the title until the loan is paid off.

1221)               Which of the following defines when a lender charges a borrower more than the highest allowable interest rate?

a.     Default

b.     Discount points

c.      Note

d.     Usury

1222)               In title theory states, which of the following is true?

a.     The borrower and lender hold the title jointly.

b.     The borrower doesn’t hold the legal title to the property until the loan is paid in full.

c.      The borrower receives the title at closing.

d.     The lender is not allowed to hold the title.

1223)               Which of the following is a mortgagor’s responsibility?

a.     Assign the mortgage.

b.     Charge late payment penalties.

c.      Foreclose on the property if in default.

d.     Keep the property in good repair.

1224)               Upon examination of his mortgage document, Jared finds a clause stating he will owe additional interest if he pays off his loan within one year of the loan origination date. What type of penalty does this describe?

a.     Acceleration

b.     Alienation

c.      Defeasance

d.     Prepayment

1225)               Shirley’s lender discharged the mortgage lien on Shirley’s property after processing her final payment. Which clause requires the lender to take this action?

a.     Acceleration

b.     Alienation

c.      Defeasance

d.     Due-on-sale

1226)               In a mortgage, the property is used as collateral for the loan. What’s the term for the process of pledging something as collateral?

a.     Hypercollateral

b.     Hyperinflation

c.      Hyperventilation

d.     Hypothecation

1227)               Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?

a.     Deed of trust

b.     Mortgage lien

c.      Promissory note

d.     Usury

1228)               Rob and Jill obtained a mortgage from Taylor Bank & Trust in 1998. In 2014, they obtained a second mortgage from Quail Loans. What is the loan with Quail Loans considered?

a.     First mortgage

b.     Graduated mortgage

c.      Home equity line of credit

d.     Junior mortgage

1229)               What type of foreclosure is commonly used when a mortgage is the security instrument?

a.     Eviction

b.     Judicial

c.      Non-judicial

d.     Strict

1230)               Which of the following documents is an example of a promissory note?

a.     Borrower Keesha just signed a document that states that she pledges to pay back her mortgage loan of $310,000.

b.     First Financial drafted a document for a borrower that includes, among other things, an acceleration clause.

c.      The document that Darren is about to sign includes an acceleration clause.

d.     The document that Sandra will sign also includes spaces for her lender’s and her trustee’s signatures.

1231)               Gerard has been offered a 4% interest rate on a $300,000 mortgage. His monthly mortgage payment would run about $950 per month. He plans to pay $2,000 up front to drop his interest rate to 3.75% and his payment to $920 per month. What is this upfront charge called?

a.     Discount point

b.     Interest

c.      Notes

d.     Usury

1232)               Which of the following options describes a subordination agreement?

a.     An agreement between a contractor and any subcontractors

b.     An agreement between a landowner and a contractor

c.      An agreement between the court and landowner to decrease property taxes

d.     An agreement between two lien holders to modify the order of lien priority

1233)               What’s an up front charge to make up for the difference between the interest rate the borrower is paying and the rate the lender normally requires?

a.     Discount point

b.     Interest

c.      Note

d.     Usury

1234)               When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?

a.     The borrower holds the mortgage, and the lender holds the note.

b.     The borrower holds the mortgage and the note.

c.      The lender holds the mortgage, and the borrower holds the note.

d.     The lender holds the mortgage and the note.

1235)               Which of the following is the name of a penalty lenders charge when borrowers repay their loans earlier than expected?

a.     Discount point

b.     Late fee

c.      Prepayment penalty

d.     Usury

1236)               Jim decided to refinance his three-year-old mortgage that has a balance of $300,000. He has to pay a fee of 5% of the loan amount to the original lender for paying off the mortgage early. What is this fee called?

a.     A prepayment penalty

b.     Closing costs

c.      Origination fee

d.     Points

1237)               How many parties does a mortgage involve?

a.     Five: borrower, lender, trustee, trustor, and beneficiary

b.     Four: borrower, lender, trustee, and trustor

c.      Three: borrower, lender, and trustee

d.     Two: borrower and lender

1238)               A trustee is holding title to Cassandra’s house until the loan is paid in full. Which type of security instrument was used?

a.     Deed of trust

b.     Mortgage

c.      Mortgage and deed of trust

d.     Promissory note

1239)               Where are mortgages recorded?

a.     Mortgages are not recorded; only deeds are.

b.     They’re recorded at the lending bank’s main office.

c.      They’re recorded at the real estate brokerage’s main office.

d.     They’re recorded at the recorder’s office in the county where the property is located.

1240)               Phyllis and Maury obtained a mortgage from Taylor Bank & Trust in 1998. In 2014, they obtained a second mortgage from Quail Loans. What’s the loan with Taylor Bank & Trust considered?

a.     First mortgage

b.     Home equity line of credit

c.      Junior mortgage

d.     Subordinate mortgage

1241)               Stacy has gone into default on her mortgage. Her lender is demanding that the entire loan balance be paid in full. Which mortgage clause permits her lender to do this?

a.     Acceleration

b.     Alienation

c.      Defeasance

d.     Due-on-sale

1242)               After getting into a fender bender, Parker had to buy a new car. To make the down payment on the car, he had to skip a couple of his mortgage payments. He received a notice from his lender indicating the remaining amount of his loan is due immediately and in full. What clause in his mortgage stipulates this?

a.     Acceleration

b.     Alienation

c.      Defeasance

d.     Due-on-sale

1243)               Which one of the following examples describe a prepayment penalty?

a.     A fee the government charges the lender if the borrower pays off a loan before its intended time

b.     A fee the lender charges for servicing a loan

c.      A loan origination fee charged to the borrower

d.     A monetary penalty imposed on a borrower for paying off a loan before its intended time

1244)               How can a lender with a lien that’s in second position get into the first position?

a.     With a deed of trust

b.     With an IOU

c.      With a promissory note

d.     With a subordination agreement

1245)               Sondra, a buyer, signs all the required mortgage documentation, promising to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank indicates that it’s going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the deed to the land. What kind of state does Sondra live in?

a.     A deed of trust theory state

b.     A lien theory state

c.      An intermediary theory state

d.     A title theory state

1246)               Sheila’s financing calls for the use of a promissory note. What’s a promissory note?

a.     A lien on a property

b.     An agreement for a consumer to buy a new condominium

c.      The borrower’s promise to repay a certain sum of money to another party (the lender or holder of the note) under specified terms

d.     The lender’s promise to repay a certain sum of money to another party

1247)               Who or what entity has legal title to a financed property in a lien theory state?

a.     The beneficiary

b.     The borrower

c.      The lender

d.     The state

1248)               Janice is selling her property, and Tim wants to assume her loan. If a due-on-sale clause exists in Janice’s mortgage, ______.

a.     Janice will have to pay any loan assumption fee

b.     The entire loan balance may be due at once, and Tim won’t be able to assume it

c.      The interest rate will rise with the assumption

d.     Tim will have to accept existing terms of the loan

1249)               What’s the purpose of a typical subordination agreement?

a.     It allows a junior mortgage to move into first lien position.

b.     It allows the lien(s) ahead of the junior mortgage to be refinanced without changing their priority in lien positions.

c.      It raises interest rates incrementally over time.

d.     It removes a lien from a property when it’s been repaid.

1250)               Jason purchased his dream home six months ago. After Jason received an inheritance from his uncle, he decided to pay off his mortgage. What should he consider before doing this?

a.     A second mortgage

b.     The state of his local housing market

c.      Whether he will incur a prepayment penalty

d.     Whether his uncle would like this

1251)               What often comprises the sum total of a buyer’s mortgage payment?

a.     Principal and interest

b.     Principal and taxes

c.      Principal, interest, and taxes

d.     Principal, interest, taxes, and insurance

1252)               Which of the following is a true statement about loan assumptions?

a.     Most loans are assumable.

b.     The lender may not change the loan terms for the buyer.

c.      The seller can’t also ask the buyer to pay the seller for any equity built up.

d.     They may trigger a due-on-sale clause, making the seller have to pay the entire loan balance.

1253)               When a mortgage holder is released from liability for a mortgage, it’s also called ______________.

a.     Clear title

b.     Release clause reformation

c.      Satisfaction of mortgage

d.     Subordination

1254)               Which of the following describes a buydown?

a.     ABC Lending charges origination points and offers a 4.5% rate.

b.     Buyers pay the seller a prepaid lump sum prior to closing to reduce the sales price.

c.      Your clients opt to pay their lender two discount points in a lump sum so they can lock in a reduced interest rate.

d.     Your sellers pay some of the buyer’s closing costs so the buyer can put more money to their down payment.

1255)               Lisa took out a conventional 30-year mortgage at a 6% interest rate when she bought her home 15 years ago. Her payments today are the same as they were when she made her first payment. What’s this an example of?

a.     Constant payment method

b.     Graduated payment

c.      Home equity line of credit

d.     Straight loan

1256)               What’s a reserve fund?

a.     An account brokers use to pay commissions to licensees

b.     A specified number of months’ worth of property tax and insurance funds that have been set aside

c.      The amount of money a bank reserves for mortgage lending

d.     The amount of money lenders keep on hand

1257)               What may happen if a property lies in a designated floodplain?

a.     Flood insurance may be required.

b.     Lenders will not approve a loan.

c.      The property may float away.

d.     The property will never sell.

1258)               Nina and Rob prepaid some of their interest to their lender when financing their new home. What’s this called?

a.     A buydown

b.     A down payment

c.      An adjustable rate mortgage

d.     An interest-free loan

1259)               Who or what determines the amount that can be set aside in reserve funds?

a.     Borrowers

b.     Builders

c.      Federal regulations

d.     Lenders

1260)               What’s it called when a borrower’s installment payment remains relatively the same over the life of the loan?

a.     Constant payment method

b.     Graduated payment

c.      Negative amortization

d.     Straight loan

1261)               ABC Lending requires mortgage borrowers to prepay 12 months of property taxes and insurance at closing. Where must these funds be held?

a.     Brokerage account

b.     Escrow account

c.      Safe

d.     Savings account

1262)               Which program helps homeowners in flood hazard areas obtain insurance?

a.     Federal Emergency Management Act

b.     Flood Alleviation Program

c.      National Flood Insurance Program

d.     Safe Drinking Water Act

1263)               Evelyn’s mortgage payments fluctuate. The amount applied toward principal each payment remains the same, but the interest amount varies. What type of amortization is this?

a.     Constant payment

b.     Negative amortization

c.      Standard amortization

d.     Straight-line amortization

1264)               A reserve fund may also be called a(n) ______ account.

a.     Additional

b.     Escrow

c.      Insurance

d.     Taxable

1265)               Which of the following is generally true of flood insurance?

a.     It is a standard part of any homeowners policy.

b.     It is optional for all properties.

c.      It is required by lenders for all properties.

d.     It is usually purchased separately or bundled with a homeowners policy, but it’s not standard.

1266)               Maddy is looking over some documents while preparing for the closing of her first home purchase. She sees that her lender requires six months prepayment of this in her escrow account.

a.     Insurance and taxes

b.     Insurance only

c.      Late fees

d.     Taxes only

1267)               What might a borrower’s escrow account or reserve fund pay for?

a.     Insurance and taxes

b.     Insurance only

c.      Late fees

d.     Taxes only

1268)               Your buyer clients have plenty for a down payment and closing costs, and they’d like a lower interest rate than the going rate. How can they use some of their saved funds to get a better interest rate?

a.     They can buy down the interest rate.

b.     They can eliminate the interest rate.

c.      They can postpone paying interest for a certain amount of time.

d.     They can’t use funds to get a better interest rate.

1269)               Janice is selling her property, and Tim wants to assume her loan. If a due-on-sale clause exists in Janice’s mortgage, ______.

a.     Janice will have to pay any loan assumption fee

b.     The entire loan balance may be due at once, and Tim won’t be able to assume it

c.      The interest rate will rise with the assumption

d.     Tim will have to accept existing terms of the loan

1270)               With which type of amortization does the amount applied toward the principal remain the same each month, with the interest amount varying according to the outstanding loan balance?

a.     Constant payment

b.     Graduated payment

c.      Negative amortization

d.     Straight-line

1271)               If a buyer assumes the seller’s mortgage, which of the following is a true statement?

a.     The buyer is solely responsible for the mortgage.

b.     The mortgagee and mortgagor are both responsible for the note.

c.      The mortgagee assumes personal liability for the note.

d.     Unless the lender releases the seller, the seller remains responsible for the mortgage and note.

1272)               Which occupancy type is eligible for a VA loan?

a.     All occupancy types

b.     Investment property

c.      Owner-occupied

d.     Second home

1273)               Joann purchased her house with a mortgage loan from her friendly neighborhood bank. Which of these most likely happened to Joann’s loan soon after she received it from her bank?

a.     Her bank foreclosed on the loan.

b.     Her bank sold it on the secondary market as an investment product.

c.      She received another loan on the secondary market when her bank demanded full payment.

d.     She sold the loan on the primary market for a lower interest rate.

1274)               What type of loan is neither guaranteed nor insured by government agencies?

a.     Conventional

b.     Federal Housing Administration (FHA)

c.      U.S. Department of Agriculture (USDA)

d.     U.S. Department of Veterans Affairs (VA)

1275)               Which entity’s purpose is to keep U.S. finances in check by maintaining balanced and favorable economic conditions?

a.     Federal Reserve System

b.     Primary mortgage market

c.      Secondary mortgage market

d.     Stock market

1276)               Amy purchased a new home and obtained financing through a bank, called Natula Bank. Natula originated the loan, but before Amy’s first mortgage payment was due, it sold her loan to CitiMortgage. As a loan originator, what market is Natula Bank operating in?

a.     Federal Reserve System

b.     Primary mortgage market

c.      Secondary mortgage market

d.     Stock market

1277)               Which of these provides some protection to lenders in the event that the borrower obtaining a conventional loan does not have a down payment of 20 to 25%?

a.     Acceleration clause

b.     Mortgage insurance premium

c.      Prepayment penalty

d.     Private mortgage insurance

1278)               What are the main benefits to veterans of the VA-guaranteed loan program?

a.     A VA guarantee of the property condition

b.     Lower interest rates than are available on the open market

c.      No down payment, no mortgage insurance, and no prepayment penalty

d.     Reduced homeowner’s insurance requirements

1279)               Which of the following statements is true of the secondary mortgage market?

a.     Borrowers have a say in which entity may purchase their mortgages in this market.

b.     Lenders don’t purchase loans from other lenders in this market.

c.      The borrower’s rights are unaffected.

d.     The loan originator continues to service the loan after it’s sold.

1280)               Goldie and Kurt are looking at purchasing their first home. Their credit history is a little shaky and they don’t have enough money saved to put down 20%. What type of loan seems most appropriate?

a.     Conventional

b.     FHA

c.      FHA, VA, or conventional

d.     VA

1281)               Mick focuses on originating mortgage loans at a company that has in-house loan processors and underwriters. The options he offers consumers are limited to the products his company offers. What’s Mick’s position?

a.     Mortgage banker

b.     Mortgage broker

c.      Mortgage servicer

d.     Real estate investor

1282)               Which of the following is a true statement about FHA financing?

a.     An FHA loan is best for borrowers who have large down payments.

b.     An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments.

c.      FHA loans are available to all borrowers, regardless of credit history.

d.     FHA loans have more stringent requirements than conventional loans do.

1283)               Which of the following is a borrower eligibility requirement for CalHFA?

a.     California veteran

b.     Doesn’t intend to reside in the home for the length of the loan

c.      Owned a home before

d.     U.S. citizen, permanent resident, or qualified alien

1284)               Lydia put the minimum 3.5% down on her $210,000 home. She’ll have to pay an MIP. What type of loan does Lydia have?

a.     Conventional

b.     FHA

c.      Standard

d.     VA

1285)               What institution was formed in 1968 and took over the sale of the government loan market?

a.     Fannie Mae (FNMA)

b.     Farmer Mac

c.      Freddie Mac (FHLMC)

d.     Ginnie Mae (GNMA)

1286)               Which of the following is a property requirement for CalVet loans?

a.     The property can be transferred, encumbered, or leased as the owner sees fit.

b.     The property cannot be a mobile or manufactured home.

c.      The property must be a unit in a planned unit development (PUD).

d.     The property must be owner-occupied.

1287)               Stacey’s lengthy military service makes her uniquely eligible for a(n) ________.

a.     FHA loan

b.     Piggyback loan

c.      Subprime loan

d.     VA loan

1288)               Which governmental department guarantees VA loans?

a.     CFPB

b.     FHA

c.      HUD

d.     VA

1289)               Rachel loves convenience. As you can imagine, she was thrilled when she was able to finance her mortgage through the same institution where she deposits her payroll checks. Which of these most likely financed Rachel’s mortgage?

a.     Insurance company

b.     Investment group

c.      Mortgage broker

d.     Savings and loan

1290)               Any financial institution with deposits that are insured by a federal government agency can sell mortgages to which institution?

a.     Fannie Mae (FNMA)

b.     Farmer Mac

c.      Freddie Mac (FHLMC)

d.     Ginnie Mae (GNMA)

1291)               What could be a consequence if there were no secondary mortgage market?

a.     Interest rates would fall.

b.     Lenders might not have funds available to make new loans to the public.

c.      There wouldn’t be any institutions available to service loans.

d.     Unemployment would rise.

1292)               Shelly’s flower business is blooming and it’s time for her business to grow. She plans to take out a business loan to open two more shops on the north side of town. Which lending institution would she most likely go to for the loan?

a.     A commercial bank

b.     A credit union

c.      An investment group

d.     A savings and loan

1293)               In which market do lenders purchase packaged loans?

a.     Housing market

b.     Primary mortgage market

c.      Secondary mortgage market

d.     Stock market

1294)               How do the primary and secondary mortgage markets work together?

a.     The primary market packages loans to sell to the secondary market.

b.     The primary market regulates the secondary market.

c.      The secondary market packages loans to sell to the primary market.

d.     The secondary market regulates the primary market.

1295)               Which of the following statements is true about government loans?

a.     They originate in the secondary market.

b.     They’re insured or guaranteed by a government agency.

c.      They’re serviced by the U.S. Department of the Treasury.

d.     They’re underwritten by the Federal Reserve.

1296)               Sandra retired from a career in the Navy and is ready to buy her first home, a small bungalow in a quiet neighborhood, for $169,900. Her military service gives her the benefit of Veterans Affairs (VA) loan. What’s her required down payment?

a.     $0

b.     $1,699

c.      $2,548.50

d.     $500

1297)               According to the PMI Act of 1998, at what percentage of equity position does personal mortgage insurance automatically cancel for homeowners?

a.     20%

b.     21%

c.      22%

d.     25%

1298)               Your clients, the Schwans, are financing their home purchase. They want to obtain a conventional loan directly from a bank and to put down at least 20% of the home price. They will most likely get their loan from ______.

a.     A primary lender

b.     A secondary lender

c.      A subprime lender

d.     A supra-prime lender

1299)               Sgt. Johnson is an active member of the Marines. He’s been serving for 10 years. He wants to buy a home with no money down. What loan option seems like the best fit?

a.     Conventional

b.     FHA

c.      FHA, VA, or conventional

d.     VA

1300)               The secondary mortgage market buys loans from the primary market. How does this aid the lending market?

a.     Avoid foreclosure of borrower properties

b.     Ensure funds are available to borrowers

c.      Prevent bank runs by consumers

d.     Streamline lenders’ bankruptcy processes

1301)               Darrel loves working in the mortgage lending industry. On a daily basis, he works with multiple lenders to find and negotiate the best deals for his customers. What is Darrel’s profession?

a.     Mortgage banker

b.     Mortgage broker

c.      Mortgage servicer

d.     Real estate investor

1302)               The Baxters are looking at a $425,000 home. They have $90,000 in savings to use as a down payment. What loan type(s) would likely be the best option for them?

a.     Conventional

b.     FHA

c.      FHA, VA, or conventional

d.     VA

1303)               Robin has great credit and was able to secure a loan for her ocean-side dream home. Her 30-year, fixed-rate loan is for an amount that’s above conventional loan limits. What type of loan does Robin have?

a.     A conforming Freddie Mac loan

b.     A government loan

c.      An FHA loan

d.     A non-conforming loan

1304)               In which market do lenders that originate real estate loans operate?

a.     Government market

b.     Primary mortgage market

c.      Real estate investment trust market

d.     Secondary mortgage market

1305)               Which of the following is a property requirement for CalHFA?

a.     The property can be a mobile or manufactured home.

b.     The property can be a primary or secondary residence.

c.      The property must be at least five acres.

d.     The property must be located in California.

1306)               To which of the following borrowers might a lender be most likely to recommend an FHA loan?

a.     An investor who intends to use equity in another investment property as his down payment

b.     A retired couple interested in downsizing from a large four-bedroom house they own free and clear to a condominium

c.      A single stockbroker with a $40,000 down payment and significant assets in a stock portfolio

d.     A young couple with only a few thousand dollars saved for a down payment and relatively low credit scores

1307)               Which of the following statements is true about conventional loans?

a.     Originators usually package and sell the loans on the secondary market.

b.     They’re guaranteed by the U.S. Department of Veterans Affairs.

c.      They’re insured by the Federal Housing Administration.

d.     They’re provided by the U.S. Department of Agriculture.

1308)               Who generally qualifies for CalVet loans?

a.     First-time home buyers

b.     Low-income households

c.      Military personnel and veterans

d.     Senior citizens

1309)               Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he’s retired, but one that has the necessary accommodations for the admiral’s disability. They also confide in you that they don’t have a lot of money saved up for a down payment. Which type of financing may work best for them?

a.     A conventional loan combined with a seller carry back.

b.     A conventional loan using the admiral’s retirement money as a down payment.

c.      An FHA 203(k) loan to fix their new home up.

d.     A VA loan, which requires no down payment.

1310)               Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use?

a.     Conventional

b.     FHA

c.      FHA, VA, or conventional

d.     VA

1311)               Which type of lender specializes in taking in savings deposits and then lending money out to consumers through mortgages and other loans?

a.     Credit union

b.     Mortgage banker

c.      Mortgage broker

d.     Savings and loan

1312)               Noah owns an LLC that buys and sells stocks on the NASDAQ 100. He needs some additional financing. To which type of lending institution might he prefer to go?

a.     A commercial bank

b.     A credit union

c.      An investment group

d.     A savings and loan

1313)               How does the Fed maintain a balanced economy?

a.     By limiting the number of loans a bank may originate

b.     By purchasing loans on the secondary market

c.      By regulating the flow of available funds and interest rates

d.     By shutting down the stock market

1314)               Rhonda and her husband filed for bankruptcy five years ago. They want to purchase a new house but don’t have the best credit score. They’ve decided to buy the home using an FHA loan. Which of these is a true statement?

a.     A minimum down payment of 3.5% is required.

b.     Mortgage insurance is not required.

c.      The loan-to-value ratio must be less than 80%.

d.     They must have PMI.

1315)               What institution was established in 1938 to purchase FHA-insured loans from individual lenders, group the loans together, and sell them as mortgage-backed securities to investors?

a.      Fannie Mae (FNMA)

b.     Farmer Mac

c.      Freddie Mac (FHLMC)

d.     Ginnie Mae (GNMA)

1316)               Who guarantees VA loans?

a.     Federal Housing Authority

b.     Housing and Urban Development

c.      The primary mortgage market

d.     U.S. Department of Veterans Affairs

1317)               David is an active duty member of the U.S. Air Force. Assuming he and the property meet the qualifications, which type of mortgage may be the best option for him?

a.     A conventional loan

b.     A Ginnie Mae-originated loan

c.      An FHA loan

d.     A VA-guaranteed loan

1318)               You’re a farmer. Which loan program might be tailor-made for you?

a.     Farmer Mac

b.     FHA

c.      Freddie Mac

d.     Ginnie Mae

1319)               Which type of lender is a member-based cooperative that provides credit for auto loans and home loans, takes deposits, and offers savings vehicles and money markets?

a.     Credit union

b.     Mortgage banker

c.      Mortgage broker

d.     Savings and loan association

1320)               What is a requirement of the CalVet program?

a.     The borrower must be a California resident.

b.     The property being purchased must be located in California.

c.      The property must be at least five acres in size.

d.     The veteran must have been stationed in California during their military career.

1321)               Lauren obtained a loan that’s insured and that only required a down payment of 3.5%. Which of these is most likely the type of loan Lauren has?

a.     Conventional

b.     FHA

c.      Home equity line of credit

d.     VA

1322)               Which of the following is a true statement about U.S. Department of Veterans Affairs loans?

a.     All properties are eligible.

b.     All veterans are eligible.

c.      The VA will guarantee a loan based on the sales price or the certificate of reasonable value (CRV).

d.     VA loans can be used for investment properties.

1323)               What’s it called when a number of percentage points is added to the index to determine the rate for an adjustable rate mortgage?

a.     Initial cap

b.     Lifetime cap

c.      Margin

d.     Usury

1324)               Which of these is a type of gap financing that’s used temporarily until the consumer can obtain permanent financing?

a.     Balloon payment

b.     Blanket mortgage

c.      Bridge loan

d.     Wrap-around mortgage

1325)               With this type of loan, personal property is included with the real property in the sale. It’s commonly seen in commercial real estate, but you may also see this in the sale of furnished condominiums.

a.     Blanket mortgage

b.     Package mortgage

c.      Shared equity mortgage

d.     Wrap-around mortgage

1326)               An adjustable rate mortgage has an initial interest rate of 5%. When the first interest rate adjustment date arrives, the rate can be adjusted a maximum of 1%. At all subsequent adjustment dates, the interest rate can be adjusted a maximum of 2%. The highest rate of interest that may be charged at any given time is 9%. What does the 9% rate represent?

a.     Initial cap

b.     Lifetime cap

c.      Maximum rate able to be charged

d.     Periodic cap

1327)               Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What is this an example of?

a.     A land contract

b.     An assumable mortgage

c.      A straight-term loan

d.     A wraparound mortgage

1328)               Which type of mortgage has an interest rate that remains constant over the life of the loan?

a.     Adjustable-rate

b.     Fixed-rate

c.      Growing equity

d.     Pledged account

1329)               What type of loan is given based on the amount of equity a borrower has in the home?

a.     Bridge loan

b.     Home equity loan

c.      Shared equity mortgage

d.     Swing loan

1330)               This is a type of renegotiable mortgage in which the interest rate on the loan can be renegotiated at specified intervals (usually every five years).

a.     Adjustable rate mortgage

b.     Rollover mortgage

c.      Shared appreciation

d.     Swing loan

1331)               This is a loan when, at specified intervals, borrowers have the option to renew their loan (with a likely change in interest rate) or immediately pay the remaining loan balance and interest due.

a.     Adjustable rate mortgage

b.     Renegotiable-rate mortgage

c.      Rollover mortgage

d.     Swing loan

1332)               An adjustable rate mortgage has an initial interest rate of 5%. When the first interest rate adjustment date arrives, the rate can be adjusted a maximum of 1%. At all subsequent adjustment dates, the interest rate can be adjusted a maximum of 2%. The highest rate of interest that may be charged at any given time is 9%. What does the 1% rate represent?

a.     Initial cap

b.     Lifetime cap

c.      Periodic cap

d.     Usury

1333)               An adjustable rate mortgage has an initial interest rate of 5%. When the first interest rate adjustment date arrives, the rate can be adjusted a maximum of 1%. At all subsequent adjustment dates, the interest rate can be adjusted a maximum of 2%. The highest rate of interest that may be charged at any given time is 9%. What does the 2% rate represent?

a.     Initial cap

b.     Lifetime cap

c.      Periodic cap

d.     Usury

1334)               What’s the process of paying off a loan by making periodic payments?

a.     Accession

b.     Accretion

c.      Acquisition

d.     Amortization

1335)               In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers?

a.     Investors always pay cash.

b.     Investors are less of a risk.

c.      Investors can use rental income to qualify.

d.     Investors maintain their property better.

1336)               When must lenders provide borrowers with a disclosure statement regarding finance charges, annual percentage rate, etc.?

a.     At loan application or within three days after loan application

b.     Prior to loan application

c.      Prior to or within 10 days after the loan application

d.     Prior to or within three days after the loan application

1337)               Which percentage reflects the top debt-to-income ratio limit for qualified mortgages?

a.     28%

b.     35%

c.      38%

d.     43%

1338)               A homeowner is behind on his mortgage. He’s decided to try to sell the property and is working with his lender to do so. He owes $315,000 on his loan balance and closing costs. He has an offer for $300,000, which the lender approves. What is this an example of?

a.     Deed in lieu of foreclosure

b.     Eviction

c.      Redemption

d.     Short sale

1339)               To whom does the subprime market cater?

a.     High-wealth individuals

b.     Investors

c.      Less creditworthy borrowers

d.     Property managers

1340)               Mortgages may still, but only rarely, contain which of the following clauses?

a.     Alienation clause

b.     Amortization clause

c.      Prepayment penalty clause

d.     Underwriting clause

1341)               Which of the following is a characteristic of predatory lending?

a.     Disclosing fees

b.     Disclosing the true nature of the loan obligation

c.      Linking interest rates charged to consumer creditworthiness

d.     Making loans the consumer can’t afford

1342)               What is a short sale?

a.     The borrower pays back the loan, thus avoiding foreclosure.

b.     The borrower sells the property, but for less than the amount owed on the property

c.      The borrower turns the deed over to the lender, rather than face foreclosure proceedings.

d.     The lender receives the deed as a result of foreclosure proceedings.

1343)               Which practice involves talking the consumer into refinancing over and over so a lender can charge fees?

a.     Loan flipping

b.     Poison lending

c.      Premeditated lending

d.     Turnover lending

1344)               This is a legal process borrowers may go through to either discharge or restructure all of their debt.

a.     Bankruptcy

b.     Deed in lieu of foreclosure

c.      Deficiency judgment

d.     Short sale

1345)               Which of the following is a mortgage where the consumer cannot later claim that the lender did not comply with the ability to repay requirements?

a.     Qualified mortgage with ability to repay

b.     Qualified mortgage with a safe harbor status

c.      Qualified mortgage with cash payment option

d.     Qualified mortgage with the rebuttable presumption

1346)               Which of the following prohibits lenders from discriminating based on protected class status?

a.     Community Reinvestment Act

b.     Equal Credit Opportunity Act

c.      RESPA

d.     Truth in Lending Act

1347)               Which act was created to safeguard the consumer in the use of credit by requiring full disclosure of the terms and conditions of that credit?

a.     Community Reinvestment Act

b.     Consumer Credit Protection Act

c.      Equal Credit Opportunity Act

d.     Real Estate Settlement Procedures Act

1348)               Which of the following is the process the lender uses to evaluate whether to make the loan?

a.     Application

b.     Appraisal

c.      Commitment

d.     Underwriting

1349)               How long does the borrower have to rescind or cancel a new mortgage obtained for an already owned property?

a.     The borrower has 24 hours after loan application to rescind or cancel.

b.     The borrower has 48 hours after loan application to rescind or cancel.

c.      The borrower has three days after loan application to rescind or cancel.

d.     The borrower must do this at the time of application.

1350)               Which of the following loan transactions would be exempt from TILA disclosure requirements?

a.     Duplex, with office building used as collateral

b.     Grocery store, with personal funds used as collateral

c.      Hobby farm

d.     Vacation home

1351)               A lender is preparing to begin foreclosure proceedings. Rather than go through this proceeding, the borrower decided to turn over the deed to the property. What is this called?

a.     Deed in lieu of foreclosure

b.     Default

c.      Deficiency judgment

d.     Redemption

1352)               Loans for ______ purposes don’t require TILA disclosure.

a.     Business

b.     Consumer

c.      Housing

d.     Personal

1353)               Jacqueline found a ready, willing, and able buyer for her client’s condo, with a sales price of $20,000 more than the asking price. However, the appraisal came in just under the asking price. Which number will the lender use to calculate the loan-to-value ratio?

a.     A middle point between the two numbers

b.     A weighted average based on the sales price, appraisal amount, and recent sales

c.      The larger number, as a buyer has already been found

d.     The smaller number

1354)               Loans made to high-risk borrowers, at higher interest rates and with higher fees, are ______.

a.     Highly qualified loans

b.     Prime loans

c.      Secondary loans

d.     Subprime loans

1355)               Which of the following is an example of a prime lender, as compared to a subprime lender?

a.     Offers higher interest rates

b.     Offers lower fees

c.      Refuses to work with minorities

d.     Targets low credit scores

1356)               What is a deed in lieu of foreclosure?

a.     The borrower pays back their loan, thus avoiding foreclosure.

b.     The borrower sells their property, but for less than the amount owed on their property.

c.      The borrower turns the deed over to the lender rather than face foreclosure proceedings.

d.     The lender receives the deed as a result of foreclosure proceedings.

1357)               Which method of foreclosure involves the court and a sheriff’s sale?

a.     Deed in lieu of foreclosure

b.     Judicial

c.      Non-judicial

d.     Strict

1358)               Which of the following is a tactic used by a predatory lender?

a.     Charging minorities lower interest rates

b.     Encouraging debt

c.      Refusing to loan to minorities

d.     Selling mortgages on the secondary market

1359)               How does the lender determine whether the property is worth the sales price?

a.     Appraisal

b.     Demographics of the area

c.      Prior history with borrower

d.     Style of home

1360)               Jeffrey has accepted an offer of $310,000 for his house. The buyer is making a $50,000 down payment, and the buyer’s appraisal came in at $300,000. On what number will the buyer’s lender base the loan-to-value ratio?

a.     $249,000

b.     $299,000

c.      $300,000

d.     There’s no way to tell given the data provided.

1361)               You’ve just learned that your buyer, Kirk, can’t obtain a qualified mortgage for his dream home because his debt-to-income ratio would be above the threshold. What is Kirk’s best option?

a.     Get a sub-prime loan.

b.     No options here; Kirk will need to wait until his debt-to-income ratio meets qualified lending standards.

c.      Offer a shared equity situation with the lender.

d.     Pay off his other debt and/or increase monthly income.

1362)               What is it called when the borrower and lender work together to restructure the terms of a home loan?

a.     Deed in lieu of foreclosure

b.     Deficiency judgment

c.      Loan modification

d.     Reinstatement

1363)               Which method of foreclosure does not involve the court, but includes a trustee’s sale?

a.     Deed in lieu of foreclosure

b.     Judicial

c.      Non-judicial

d.     Strict

1364)               Lenders examine a variety of documents to determine whether the buyer is a good risk for a loan, such as _______.

a.     Genealogy report

b.     Marriage certificate

c.      Resume

d.     Tax returns

1365)               What is it called when borrowers pay back all of the amounts owed and become current (no longer in default) on their loan?

a.     Deed in lieu of foreclosure

b.     Deficiency judgment

c.      Loan modification

d.     Reinstatement

1366)               Which of the following is an alternative to foreclosure?

a.     Deed in lieu of foreclosure

b.     Default

c.      Deficiency judgment

d.     Eviction

1367)               When considering loan risk, which two items will lenders consider in equal measure?

a.     Borrower and property

b.     Credit and employment

c.      Debt and income

d.     Loan and value

1368)               What is it called when borrowers pay back all of the amounts owed and become current (no longer in default) on their loan?

a.     Deed in lieu of foreclosure

b.     Deficiency judgment

c.      Loan modification

d.     Reinstatement

1369)               Which consumer protection act enacted in 1974 prohibits kickbacks and referral fees and requires written lender disclosure of estimated and final settlement costs?

a.     ECOLA

b.     Real Estate Settlement Procedures Act

c.      The Community Reinvestment Act

d.     The Equal Credit Opportunity Act

1370)               The Truth in Lending Act requires lenders to make certain ______ to consumers.

a.     Concessions

b.     Disclosures

c.      Loans

d.     Rates available

1371)               Which of the following is most susceptible to a predatory lender?

a.     A borrower with poor credit

b.     A family

c.      A minority

d.     An investor

1372)               Loans made to high-risk borrowers, at higher interest rates and with higher fees, are ______.

a.     Highly qualified loans

b.     Prime loans

c.      Secondary loans

d.     Subprime loans

1373)               Which of the following is a type of subprime loan usually offered to consumers with insufficient or marginal credit history?

a.     Qualified mortgage with a safe harbor

b.     Qualified mortgage with the rebuttable presumption

c.      Qualified with ability to repay

d.     Qualified with cash

1374)               A qualified mortgage may not include interest-only payments and balloon payments, or lender fees and points that total more than 3% of the loan because these are considered ______ in relation to the qualified mortgage.

a.     FHA and VA loan provisions

b.     Qualified and allowable

c.      Toxic loan features

d.     Updated financing provisions

1375)               Improving credit scores can also _____________________.

a.     Increase credit risk for the lender

b.     Increase how much house the borrower can afford

c.      Increase risk for the borrower

d.     Lower the borrower’s FICO® score

1376)               Roth IRA rules state that a first-time homebuyer can withdraw funds with no penalties from a Roth IRA under which of the following conditions?

a.     Account has been open for five years or longer

b.     Borrower must not have other money saved

c.      Distribution does not exceed $15,000

d.     Funds are used for renovations only

1377)               What effect does a pre-approval letter have on an offer?

a.     It assures the seller that the buyer’s financial information has been verified.

b.     It has no effect.

c.      It kills it.

d.     It provides some assurance to the seller, but not as much as a pre-qualification letter would.

1378)               Which organization establishes relationships with financial institutions to offer home ownership programs that include down payment assistance through grants and favorable terms?

a.     HUD

b.     NHF

c.      OSHA

d.     RESPA

1379)               The three companies that track credit for lenders are TransUnion, Equifax, and Experian. Which of the following is a true statement?

a.     Each company a uses a slightly different scoring system

b.     Each company posts the borrower’s FICO® Score

c.      Scoring is consistent across the three companies

d.     The higher the score, the higher the credit risk

1380)               A borrower’s credit history and willingness and desire to repay a loan are elements of which C of credit?

a.     Capacity

b.     Capital

c.      Character

d.     Collateral

1381)               From a lender’s perspective, what does a credit score on the low end indicate?

a.     Better rates

b.     Credit usage

c.      Higher risk

d.     Lower risk

1382)               When your clients improve their credit score, they _____________.

a.     Are likely to get better rates

b.     Are likely to get better service

c.      Must wait three years before applying for a loan

d.     Must wait three years before it will show up in their FICO® score

1383)               What are the three Cs of credit?

a.     Cash, credit, change

b.     Character, capital, capacity

c.      Character, cash, credit

d.     Collateral, character, credit

1384)               Your clients are first-time home buyers. They can access up to _________ of their Roth IRA accounts, penalty free, for their down payment.

a.     $0

b.     $10,000

c.      $20,000

d.     $5,000

1385)               Lenders look at a HELOC balance of less than $50,000 as if ________________.

a.     It were a credit card

b.     It were an asset

c.      It were a paid mortgage

d.     It were cash

1386)               Increasing income improves your debt-to-income ratio. Which of the following factors is also considered by lenders?

a.     Bonus income

b.     Demographics

c.      Place of work

d.     Proof of permanent employment

1387)               Who may borrow money from a Roth IRA to obtain down payment funds?

a.     Any Roth IRA holder

b.     First-time home buyers who’ve held a Roth IRA account for at least 10 years

c.      First-time home buyers who’ve held a Roth IRA account for at least five years

d.     Only 10-year Roth IRA holders

1388)               What is the best way to reduce debt while maintaining cash reserves?

a.     Increase spending, using cash

b.     Increase tax deductions

c.      Placing more on low-interest credit cards

d.     Purchase assets

1389)               Some first-time homebuyers tap into the bank of mom and dad. In what circumstance would the parents’ contribution be acceptable for loan qualification?

a.     A balloon payment must not apply for the first three years.

b.     Interest rates for the loan must not exceed 3%.

c.      The borrower receives cash at closing.

d.     The money is given as a gift with no expectation of repayment.

1390)               A borrower is using a gift to fund part of his home purchase. What criteria for the gift holds the most weight in the lender’s eyes?

a.     How long ago the gift was given

b.     How the gift giver is related

c.      The amount of the gift

d.     The terms for repayment

1391)               What is one way to improve your debt-to-income ratio without reducing your debt?

a.     Increase credit card balance

b.     Increase debt

c.      Increase expenses

d.     Increase income

1392)               Buyers who intend to finance should understand that the higher their credit score, _______________.

a.     The better interest rates they will qualify for

b.     The higher their cash reserves

c.      The higher their taxes

d.     The more house they can afford

1393)               As a real estate licensee, you should ______.

a.     Be willing to loan money to your clients for their down payment

b.     Calculate a buyer’s loan pre-qualification

c.      Know the benefits of reverse mortgages

d.     Understand what helps your buyer qualify for a mortgage

1394)               You’re working with buyers who are close to being financially ready to buy. To prepare themselves for loan approval, they should __________.

a.     Delay paying bills with high-dollar amounts to show better available cash

b.     Pay down credit card balances

c.      Pay off and close all but one or two credit cards

d.     Take out a home equity line of credit to pay off credit card debt

1395)               Which of the following is the credit score range?

a.     200 and 500

b.     300 and 850

c.      80 and 100

d.     One and 10

1396)               Paying down your credit cards is a great idea to reduce debt, but it can backfire. In the eyes of the lender, which action is the least damaging to loan qualification?

a.     Keeping a high balance card and having several cards with nothing charged on them

b.     Keeping one card with a high balance

c.      Paying off several cards and cancelling them

d.     Several open cards with available credit on them

1397)               Most lenders like to see at least _______ months of cash reserves in addition to the buyers’ down payment.

a.     12

b.     Eight

c.      Four

d.     Two

1398)               Which of these provides a number that signifies your credit risk to lenders?

a.     Credit analysis

b.     Credit appraisal

c.      Credit score

d.     Credit tabulation

1399)               Why do lenders care so much about their borrowers’ debt reduction?

a.     It eliminates the need for credit.

b.     It lowers affordability.

c.      It makes it easier for borrowers to pay their mortgages.

d.     It raises the debt-to-income ratio.

1400)               This letter is created after a borrower submits information about their income and debts, which is verified by the lender, who then estimates how much a borrower qualifies for.

a.     Approval letter

b.     Disclosure letter

c.      Pre-approval letter

d.     Pre-qualification letter

1401)               The Fair and Accurate Credit Transactions Act of 2003 requires the credit bureaus to _____________________.

a.     Caution consumers that information in the credit report only influences FICO® scores

b.     Not charge for credit reports

c.      Provide consumers with a free copy of their credit report annually

d.     Use FICO® scores

1402)               A borrower’s ability to repay a loan is which C of credit?

a.     Capacity

b.     Capital

c.      Character

d.     Collateral

1403)               What is the best-case scenario with a debt-to-income ratio?

a.     100% debt-to-income

b.     20% debt-to-income

c.      60% debt-to-income

d.     80% debt-to-income

1404)               Improving a credit score can help a buyer ______________.

a.     Avoid financing

b.     Decrease debt

c.      Increase savings

d.     Qualify for better interest rates

1405)               Buyers who want to look good to lenders prior to financing should employ which of the following strategies?

a.     Close all credit card accounts

b.     Keep high credit card balances to improve available cash

c.      Pay off as much debt as possible, even if it means they will have no cash reserves

d.     Reduce credit, but retain cash reserves

1406)               First-time home buyers who’ve had a Roth IRA account for at least five years may withdraw an amount that equal to the contributions they’ve made to use as a down payment. After that, how much more can they withdraw to help with a home purchase without penalty?

a.     Up to $10,000

b.     Up to $20,000

c.      Up to $25,000

d.     Up to 50% of their fund balance, or $5,000, whichever is less

1407)               Consumers may use Roth IRA funds to obtain the down payment for their home purchase. Which of the following scenarios is allowed?

a.     Clayton, who has had his IRA for 10 years, withdraws $15,000 as part of his down payment on a vacation home.

b.     Desiree, who has held her Roth IRA for three years, withdraws $7,000 to help fund a down payment on her third home.

c.      Mary borrows $5,000 from her brother Jack’s Roth IRA for her home purchase.

d.     Nevil, who has held his Roth IRA for five years, withdraws $8,000 to go toward a down payment on his first home.

1408)               Which of these is an encroachment?

a.     A path providing neighborhood access to a pond cuts through part of Bill’s property.

b.     Jeff installed a sidewalk next to his driveway, six inches outside his property.

c.      The city seized a formerly private parcel of land for public use.

d.     The state took ownership of Dawn’s property when no heirs could be located following her death.

1409)               What type of easement is created when the government exercises its right of eminent domain?

a.     Easement by condemnation

b.     Easement by grant

c.      Easement by implication

d.     Easement by prescription

1410)               When is an easement by necessity created?

a.     When a landowner sells a mineral right to another, access to the land is created by this type of easement.

b.     When a property doesn’t have direct access to a road, this type of easement is created across any intervening properties.

c.      When a property owner allows others to use the property for a specific purpose, this type of easement is created.

d.     When the government requires a portion of a property for a public good, the property is taken with this type of easement.

1411)               Seth owns a property on a small island with six other property owners. Recently, Seth built a fishing pier along the water’s edge; however, the pier is actually on his neighbor’s property, which Seth has no rights to. What might this be an example of?

a.     Easement

b.     Encroachment

c.      Estate

d.     Eviction

1412)               What does CC&R stand for?

a.     Carparks, curbs, and roadways

b.     Conditions, consideration, and reports

c.      Condominiums, cooperatives, and residential housing

d.     Covenants, conditions, and restrictions

1413)               Sam decided to build a swimming pool in his yard. He built it one foot inside his neighbor’s property. What is this an example of?

a.     Easement

b.     Eminent domain

c.      Encroachment

d.     Necessity

1414)               Which of the following statements about an easement appurtenant is TRUE?

a.     It does not involve an adjoining property.

b.     It’s an encumbrance on the dominant property.

c.      It’s a permanent right that runs with the land.

d.     It’s a temporary agreement between two parties.

1415)               You’ve just purchased a rural property, and the attorney at the closing tells you, “You have a dominant estate.” What does that mean to you?

a.     The property comes with an easement in gross granted to the utility company.

b.     You’ll be using an easement across your neighbor Jim’s property.

c.      Your property has an easement granted to your neighbor Jim, allowing him to cross your property to access his land.

d.     Your property has direct access to a road and doesn’t require an easement.

1416)               This is a shared side of a structure; each owner owns his section of the wall in severalty, with the ownership subject to an easement by the other.

a.     A party wall

b.     Easement by implication

c.      Easement by necessity

d.     Easement by prescription

1417)               A part of your property is used by the local utility company to maintain its power lines. What’s this an example of?

a.     Easement

b.     Eminent domain

c.      Encroachment

d.     Illegal use

1418)               Which of the following is an easement?

a.     A path providing neighborhood access to a pond cuts through part of Bill’s property.

b.     Jeff installed a sidewalk next to his driveway, six inches outside his property.

c.      The city seized a formerly private parcel of land for public use.

d.     The state took ownership of Dawn’s property when no heirs could be located following her death.

1419)               The doctrine of “use it or lose it” is known as the doctrine of ______.

a.     Eminent domain

b.     Escheat

c.      Laches

d.     Taking

1420)               Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______.

a.     Covenant

b.     Easement

c.      Grant

d.     License

1421)               Regarding restrictive covenants/deed restrictions, to what does the doctrine of laches refer?

a.     Creation

b.     Enforcement

c.      History

d.     Types

1422)               If John suspects that his neighbor’s deck encroaches on his back yard, what should John do to determine whether an encroachment exists?

a.     He should check legal description of the property.

b.     He should consult a survey for the exact property lines.

c.      He should find out if the neighbor’s deed has been recorded or not.

d.     He should investigate whether there is a tax lien on their neighbor’s property.

1423)               Brent and Kathy recently bought a property in a gated community. While doing some landscaping they noticed that their neighbor’s shed seems to be over the lot line and on their property. What should they consult to determine if the shed is an encroachment?

a.     Deed

b.     HOA covenant

c.      Mortgage

d.     Survey

1424)               Which of the following is true about easements appurtenant?

a.     Only the dominant estate may terminate an easement.

b.     Parcels with easements may not be joined.

c.      The necessity of an easement by necessity could be terminated even if the reason for the necessity still exists.

d.     They can be terminated if dominant and servient lands are merged into one parcel.

1425)               Which of the following is a type of encumbrance?

a.     Counter-offers

b.     Deed restrictions

c.      Improvements

d.     Options

1426)               Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would be, they found he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. Kurt owns the _______ estate or tenement.

a.     Dominant

b.     Gross

c.      Prescriptive

d.     Servient

1427)               Without this easement—usually involving access to a road—the owner requiring the right of passage would be landlocked.

a.     Easement appurtenant

b.     Easement by necessity

c.      Easement by prescription

d.     Easement in gross

1428)               Eloise is interested in buying a bungalow on the outskirts of the city. Her agent is reviewing the property details and informs her that there are several easements on the property. In particular, the gas company has a right of way because the natural gas line for the neighborhood runs through the back of the lot. What type of easement would this be?

a.     Easement appurtenant

b.     Easement by necessity

c.      Easement by prescription

d.     Easement in gross

1429)               Rancher Ross was thrilled to learn he could sell his property’s mineral rights to a company that’s looking for oil. He didn’t realize he’d also created an ______, allowing them to bring drilling equipment onto his land.

a.     Easement by implication

b.     Easement by necessity

c.      Easement by prescription

d.     Easement by right

1430)               Sam grants Steve a license to hunt deer on his property. Which of the following statements about the license is true?

a.     Sam can revoke the license at any time.

b.     The license is a permanent privilege.

c.      The license is assignable.

d.     The license is inheritable.

1431)               Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this?

a.     Easement by prescription

b.     Easement in gross

c.      Express easement

d.     Visible easement

1432)               Elizabeth’s property is encumbered by an easement in gross with which of these entities?

a.     The neighbor who constructed his new backyard fence six inches across Elizabeth’s property line

b.     The owner of the empty lot down the street that Elizabeth uses as a vegetable garden with the owner’s permission

c.      The resident of the adjoining property to whom Elizabeth has given permission to store some items in her gardening shed

d.     The utility company that needs to access the power line that crosses a corner of Elizabeth’s land

1433)               Sondrine’s beach cottage has a right of way that allows nearby residents to get to the beach. What is the primary difference between a right of way and an easement?

a.     A right of way always has a defined expiration date.

b.     A right of way is always for an indefinite time period.

c.      A right of way offers the right to use the property for some function, as compared to just as a pass-through.

d.     A right of way provides a pass-through, but not a right to use the property.

1434)               Because of the topography of Elsie’s and Lawrence’s respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence’s property line. What word or phrase best describes Elsie’s fence?

a.     Easement in gross

b.     Encroachment

c.      Servient estate

d.     Visible easement

1435)               Which of the following describes a deed restriction?

a.     It can be placed on a single property, an entire subdivision, or a neighborhood.

b.     It ensures compliance with zoning and public safety and preserves property value.

c.      It must be placed by the property owner within one year of purchasing the property.

d.     It’s limited to three years in duration.

1436)               Why is it important for a buyer to know if any easements or encroachments exist on a property?

a.     Both easements and encroachments affect the property’s lot size, enjoyment, and use, which can affect a property’s value.

b.     Both easements and encroachments are illegal. The buyer could end up in court.

c.      It helps determine special assessment levies.

d.     The buyer will have to remove these before the property can be re-sold.

1437)               Terry purchases a property. The deed includes a description of an easement given to the neighboring property. This is an easement created by ______.

a.     Condemnation

b.     Express grant

c.      Implication of law

d.     Prescription

1438)               Jason, your client, is developing a subdivision of 140 houses. He may place deed restrictions on as many as ______ properties.

a.     140 (100%)

b.     35 (up to 25%)

c.      70 (up to 50%)

d.     Zero

1439)               Who or what entity is the beneficiary of a completion bond?

a.     The bank

b.     The developer

c.      The homeowner

d.     The municipality

1440)               Which map must be filed within two years of approval of the initial map?

a.     Final map

b.     Lot map

c.      Parcel map

d.     Tentative map

1441)               Which document is issued by the state real estate commissioner to help protect purchasers of subdivision plots?

a.     Feasibility study

b.     Public report

c.      Subdivision map

d.     Subdivision regulations

1442)               Which document is filed with the local municipality to coordinate development with the community’s general plan?

a.     Feasibility study

b.     Public report

c.      Subdivision map

d.     Subdivision regulations

1443)               Which of the following types of subdivisions are exempt from filing a public report?

a.     A commercial subdivision

b.     A planned development subdivision

c.      A stock cooperative

d.     Campground

1444)               Which type of subdivision is defined as parcels of land that purchasers own individually, with no commonly owned areas?

a.     Common interest subdivision

b.     Standard subdivision

c.      Subdivided lands project

d.     Undivided interest subdivision

1445)               Once the market study has been conducted, a developer can apply to ________________ for approvals.

a.     Local agencies only

b.     State and local agencies

c.      The board of governors

d.     The municipal court

1446)               In which type of common interest subdivision do the owners have exclusive rights to a unit, as well as a shared interest in the common areas?

a.     Condominium project

b.     Planned development

c.      Stock cooperative project

d.     Timeshare

1447)               What is the purpose of the Subdivided Lands Law?

a.     To coordinate subdivision development with local municipalities

b.     To dissuade developers from subdividing lands

c.      To enforce public land dedication minimums on developers

d.     To protect consumers from subdivision fraud and misrepresentation

1448)               Which type of subdivision is defined as a property owned jointly by all purchasers, who are tenants in common with all other owners?

a.     Common interest subdivision

b.     Standard subdivision

c.      Subdivided lands project

d.     Undivided interest subdivision

1449)               A plat book can be defined as ______.

a.     A collection of subdivision regulations and ordinances

b.     A public record of subdivision plats held at the county clerk’s office

c.      The recorded legal description of a lands lot dimensions

d.     Zoning map

1450)               A piece of land that’s been split into lots where homes will be built is called a ______.

a.     Development project

b.     Market

c.      Neighborhood

d.     Subdivision

1451)               The first step in the subdivision development process is the market study. This step includes ______.

a.     A feasibility study

b.     Fair housing interviews

c.      Raising venture capital

d.     Underwriting financing

1452)               What is the purpose of the Subdivision Map Act?

a.     To coordinate subdivision development with local municipalities

b.     To dissuade developers from subdividing lands

c.      To enforce public land dedication minimums on developers

d.     To protect consumers from subdivision fraud and misrepresentation

1453)               What is the longest time (with extensions) a developer can have to file a final map after receiving tentative map approval?

a.     Eight years

b.     Five years

c.      One year

d.     Two years

1454)               Which of the following must be disclosed in a subdivision’s public report, according to the Subdivided Lands Law?

a.     The filing date of the first tentative map

b.     The financial history of the developer

c.      The interest to be acquired by the purchaser

d.     The number of parcels to be sold with or without pools

1455)               Why may a developer have to pay impact fees?

a.     To address a violation of zoning ordinances

b.     To address the burden on existing infrastructure caused by the development

c.      To apply for a use variance from the Zoning Board of Appeals

d.     To pay for an Environmental Impact Statement

1456)               In which type of common interest subdivision are the owner’s shareholders in a corporation that owns the property?

a.     Condominium project

b.     Planned development

c.      Stock cooperative project

d.     Time-share

1457)               When developers consider what to do with leftover pieces of land that remain after the subdivision is built, they are considering what to do with ____________.

a.     Municipal boundaries

b.     Outlots

c.      Parcel overage

d.     Residual development

1458)               Which of the following must be disclosed in a subdivision’s public report, according to the Subdivided Lands Law?

a.     A six-month plan to ensure the removal of any blanket encumbrances

b.     Available financing payment options

c.      Conditions and restrictions of use included with the purchase of the property

d.     The license number of any agent marketing the property

1459)               What’s an outlot?

a.     A parcel of land left over after the subdivision is built

b.     The cornerstone space of a retail center occupied by an anchor tenant

c.      The main roadway leading into and out of a subdivision

d.     The parcel of land where a home in a subdivision is built

1460)               In order for a Adroc Development Corp. to receive approval to build a new subdivision, it is required to create a community park bordering the development. The developer agreed to do so, but what may the city require to ensure the park actually gets completed?

a.     A completion bond

b.     A feasibility study

c.      An IOU

d.     A promissory note

1461)               What is an impact fee?

a.     A fee charged to conduct an environmental assessment

b.     A fee paid to clean up the site after development is complete

c.      A fee paid to offset the development’s negative effects on the natural environment

d.     A fee paid to offset the increased burden on area infrastructure that the new subdivision may create

1462)               Which of the following describes a subdivision plat?

a.     A collection of subdivision regulations and zoning ordinances

b.     A map that defines zoning districts

c.      A record in the county clerk’s office that can serve as the legal description on a deed

d.     A record of the previous owners of a tract of land

1463)               What kind of contracts can a developer enter into if they have obtained an interim report?

a.     Any type of contract

b.     Binding contracts

c.      Free-finance contracts

d.     Non-binding reservations

1464)               Which type of subdivision is defined as separately owned parcels where purchasers also share interest in common areas?

a.     Common interest subdivision

b.     Standard subdivision

c.      Subdivided lands project

d.     Undivided interest subdivision

1465)               Which of the following must be included on the subdivision map?

a.     Distance from the county clerk’s office

b.     Existing and proposed easements and utility locations

c.      Financial plan information

d.     Solar angles at the subdivision’s latitude

1466)               _______ fees are paid to state and local agencies for items such as permits and utility hook-ups.

a.     Developer

b.     Impact

c.      Municipal

d.     Residential

1467)               Which type of common interest subdivision limits an owner’s exclusive use of the property to a certain period of time?

a.     Condominium project

b.     Planned development

c.      Stock cooperative project

d.     Time-share

1468)               Chadwick is a developer considering purchasing a large piece of unimproved land for a subdivision development. What should he do before committing to the project?

a.     Apply for financing.

b.     Conduct a feasibility study.

c.      Phone a friend.

d.     Start marketing the property to see if there are buyers.

1469)               How long after receiving tentative map approval does a developer have before a final map must be filed, according to the Subdivision Map Act?

a.     Eight years

b.     One year

c.      Three years

d.     Two years

1470)               Which public report can be issued while awaiting final approval and allows developers to take reservations for up to a year while waiting for the final report?

a.     Amended report

b.     Conditional report

c.      Interim report

d.     Preliminary report

1471)               Which type of common interest subdivision retains individually owned parcels of land, but the owners also share an interest in common areas?

a.     Condominium project

b.     Planned development

c.      Stock cooperative project

d.     Time-share

1472)               Larry is a developer. His current project involves him taking a large parcel of land, dividing it into hundreds of lots and building single family homes on those lots then selling the properties to home buyers. What is Larry developing?

a.     A condominium

b.     A cooperative

c.      An apartment complex

d.     A subdivision

1473)               What’s a subdivision?

a.     A developed property zoned for multiple uses, such as residential and commercial

b.     An unimproved piece of land zoned for residential use

c.      A piece of land that has been split into lots where homes will be or have been built

d.     A retail development in which one building houses several commercial tenants

1474)               Which of the following involves street specifications, lot size, single- or multi-family dwellings, utilities provided and easements, how far houses must be set back from property lines, and drainage requirements?

a.     Abstract of title

b.     Alquist-Priolo Act

c.      CEQA

d.     Subdivision regulations

1475)               A community apartment project is an example of what type of subdivision?

a.     Common interest subdivision

b.     Standard subdivision

c.      Subdivided lands project

d.     Undivided interest subdivision

1476)               Determining who the buyers of subdivision homes are, the market niche to target, and whether to have different price points for various phases of development are all considerations in the ___________.

a.     Environmental assessment

b.     Feasibility study

c.      Marketing strategy

d.     Subdivision lot release plan

1477)               Which type of contract allows developers to enter into binding contracts with purchasers?

a.     Binding report

b.     Conditional report

c.      Interim report

d.     Preliminary report

1478)               Which of the following must be included on the subdivision map?

a.     Account number of the completion bond associated with the project

b.     Interest to be acquired by purchasers

c.      Marketing plan

d.     Widths and names of all streets

1479)               Which map only contains the boundary and division lines for lots of land?

a.     Final map

b.     Lot map

c.      Parcel map

d.     Tentative map

1480)               Who approves subdivision maps?

a.     A local judge

b.     The county clerk

c.      The local planning board

d.     The real estate commissioner

1481)               What must happen before a subdivision’s tentative map can be approved?

a.     A dedication of at least 15% of the land must be given to the local government

b.     An in-person site review by all planning board members must occur

c.      A notice must be filed with the local planning board, with an opportunity for a hearing

d.     The real estate commissioner must sign off on it

1482)               How long does a subdivision developer have to respond to a D&R order if they wish to contest it?

a.     10 days

b.     15 days

c.      30 days

d.     90 days

1483)               What does the Alquist-Priolo Earthquake Fault Zoning Act have to do with regard to subdivision development?

a.     Issues grants to fix faults

b.     Limits development next to coastal areas

c.      Regulates development in earthquake fault zones and requires disclosure of fault zones to purchasers

d.     Requires all houses in fault zones be clearly labeled on the front door or entryway

1484)               When financing is structured, when are disbursements typically made?

a.     As each home is sold

b.     As materials are needed

c.      As stages of construction are completed

d.     On a particular day of each month

1485)               What does a D&R stand for when issued by the state real estate commissioner?

a.     Delivery and Research

b.     Demolition and Recovery

c.      Desist and Refrain

d.     Do Not Resuscitate

1486)               What does a lot release provision require?

a.     That all of the loan be repaid when 50% of the lots are sold

b.     That a portion of the loan be repaid when each lot is sold

c.      That the developer release deed restrictions on the lots when sold

d.     That the lot be released from the subdivision plat when sold

1487)               What recourse does a subdivision developer have to a D&R order?

a.     Nothing. D&Rs are immediate and irreversible once issued

b.     Refund purchasers’ deposit money

c.      Sue the commissioner for improper use of authority

d.     They can write a request to have a hearing and contest the order

1488)               What must a developer selling lots to a subdivision in another state do in addition to registering the project with the BRE?

a.     Attain a surety bond and furnish it to the state of California for one-and-a-half times the amount of any deposit monies.

b.     Dedicate a certain percentage of the land to the state of California

c.      Sign an affidavit of proforma

d.     They must have a disclaimer that the property has not been examined the BRE on all marketing and sales materials.

1489)               Which option is an acceptable way for a subdivider to handle a purchaser’s deposit money?

a.     Place the deposit money in an escrow account until the blanket encumbrance is lifted

b.     Place the money in the company’s bank account

c.      Reinvest it back into the property development

d.     Use the money to purchase newer equipment

1490)               Owner participation is often a key factor in the approval of a construction loan. What does owner participation refer to?

a.     Capital provided by the owner’s investors

b.     The developer’s own funds used as a down payment

c.      The developer’s participation in construction

d.     The participation of individual homeowners

1491)               Why might a developer buy a bond furnished to the state of California?

a.     As a means to quicken public report approval and issuance

b.     In order to protect purchasers’ deposit money, as required by law, if the blanket encumbrance is not lifted off of the subdivision

c.      In order to qualify for lower development insurance premiums from the state

d.     To reduce the amount of filing fees they would have to pay without it

1492)               Subdivision financing usually comes from _____________________.

a.     A combination of sources

b.     A waterfall loan

c.      Developer capital

d.     One single source

1493)               Which act requires developers to acquire a permit before development in a coastal zone?

a.     California Coastal Act

b.     CEQA

c.      Grassland Protection Act

d.     The Alquist-Priolo Act

1494)               Construction loans usually come with a higher interest rate because they involve _____ for the lender.

a.     Less participation

b.     More approvals

c.      More paperwork

d.     More risk

1495)               What does a developer have to do if they are selling lots to a subdivision that is in another state?

a.     Disclose the state and location the property is in

b.     Petition for clemency

c.      Register the project with the BRE

d.     Request a permit from the governor to sell out-of-state property

1496)               Which act requires an environmental impact report before a subdivision may be approved?

a.     California Coastal Act

b.     CEQA

c.      Grassland Protection Act

d.     The Alquist-Priolo Act

1497)               What is the definition of a blanket encumbrance?

a.     An encumbrance on subdivisions with an intended use for industrial textile factories

b.     A security bond that protects against encumbrances to subdivided property

c.      Both personal and real property are used as security for a loan

d.     When more than one lot, unit, or interest in a subdivision is used to secure payment of a trust deed note or other lien of encumbrance

1498)               What type of encumbrance exists when one or more property in a subdivision is used to secure a loan?

a.     Blanket encumbrance

b.     Easement by appurtenant

c.      Judgment lien

d.     Mechanic’s lien

1499)               A buyer is purchasing a home for $400,000 and is financing $300,000. What is the loan-to-value ratio?

a.     72%

b.     75%

c.      82%

d.     96%

1500)               A square room has an area of 144 square feet. How long is each side?

a.     10 feet

b.     12 feet

c.      24 feet

d.     72 feet

1501)               A buyer is purchasing a property for $500,000. His lender’s loan-to-value ratio is 90%. How much is the buyer financing?

a.     $400,000

b.     $450,000

c.      $50,000

d.     $500,000

1502)               Jane is purchasing a property for $310,000 and plans to finance $250,000. What is the loan-to-value ratio? (Round to the nearest percentage.)

a.     79%

b.     81%

c.      83%

d.     85%

1503)               Your client Ellis is purchasing a property for $520,000. He made a down payment of $200,000 and plans to finance $320,000. What is the LTV ratio as rounded to the nearest percentage?

a.     50%

b.     55%

c.      62%

d.     65%

1504)               A property is 60 feet long and 75 feet wide. What is its area?

a.     135 square feet

b.     175 square feet

c.      3600 square feet

d.     4,500 square feet

1505)               Property is being sold for $15,000 an acre. A buyer spent $75,000. How many acres did he buy?

a.     Eight

b.     Five

c.      Six

d.     Ten

1506)               Property is being sold for $15,000 an acre. How much will five acres cost?

a.     $15,000

b.     $30,000

c.      $45,000

d.     $75,000

1507)               How do you calculate the area for a rectangular room?

a.     Add the length of all four sides.

b.     Multiply the length of all four sides.

c.      Multiply the length of two opposite sides.

d.     Multiply the length times the width.

1508)               A triangle has a base of 10 feet and a height of eight feet. What is its area?

a.     180 square feet

b.     18 square feet

c.      40 square feet

d.     80 square feet

1509)               Your buyer client, Max, just signed a purchase agreement for a $520,000 home. He has a 60% LTV ratio, and his lender’s charging a 1.5% loan origination fee. What loan origination fee can Max expect to pay at closing?

a.     $2,200

b.     $3,120

c.      $4,200

d.     $4,680

1510)               A property is 30 square yards. How many square feet is this?

a.     270 square feet

b.     27 square feet

c.      300 square feet

d.     Nine square feet

1511)               Your buyer clients, the Fowlers, obtained an 80% loan on their $600,000 home. At closing, they paid $8,250 for points. How many points did the Fowlers pay to lower their interest rate?

a.     0.017

b.     1.17

c.      1.72

d.     7.2

1512)               How much would a lot that is 300 feet wide by 400 feet long cost at $900 per acre?

a.     $2,479

b.     $2,700

c.      $3,600

d.     $6,300

1513)               A buyer is purchasing a property for $500,000. He has a down payment of $50,000 and is financing the rest. What’s the amount of the loan origination fee if the lender charges one-and-a-half points?

a.     $5,000

b.     $6,750

c.      $750

d.     $7,500

1514)               How do you calculate the area for a triangle?

a.     Add all three sides together

b.     Multiply base times height

c.      Multiply half the base times the height

d.     Multiply the length of all three sides together

1515)               A buyer is purchasing a property for $400,000. His lender’s loan-to-value ratio is 80%. How much is the buyer financing?

a.     $320,000

b.     $360,000

c.      $400,000

d.     $80,000

1516)               How do you calculate the area for a square room?

a.     Add the length of all four sides together

b.     Add the length of two sides together

c.      Multiply the length of all four sides together

d.     Multiply the length of two sides together

1517)               How large is one square yard?

a.     10 square feet

b.     Nine square feet

c.      Six square feet

d.     Three square feet

1518)               You’re working with a buyer who’s purchasing a home that appraised at $80,000. The buyer is obtaining a 90% loan, and the lender will charge a one-point origination fee at closing. How much will the loan origination fee be?

a.     $712

b.     $720

c.      $728

d.     $800

1519)               A basement is 40 feet long and 20 feet wide. What is its area?

a.     600 square feet

b.     60 square feet

c.      800 square feet

d.     80 square feet

1520)               A discount point equals 1% of the _______.

a.     Appraised value

b.     List price

c.      Loan amount

d.     Sales price

1521)               Your clients Earnestine and Sammie Griffin are financing $180,970 for a $500,000 home. The Griffin’s lender will approve an interest rate of 4.5% if they pay two discount points at closing. How much is this?

a.     $10,000

b.     $3,619.40

c.      $6,380.60

d.     $8,143.65

1522)               How many feet are in one yard?

a.     10

b.     Nine

c.      Six

d.     Three

1523)               Your buyer client Heather just signed a purchase agreement for a $520,000 home. The LTVR is 60%. How much is Heather putting down on the purchase?

a.     $208,000

b.     $220,000

c.      $300,000

d.     $312,000

1524)               A property is 21,780 square feet. How many acres is this?

a.     Half an acre

b.     One acre

c.      Three acres

d.     Two acres

1525)               One mile contains ______ feet.

a.     2,400

b.     3,620

c.      4,800

d.     5,280

1526)               A triangle has a base of three feet and a height of eight feet. What is its area?

a.     11 square feet

b.     12 square feet

c.      24 square feet

d.     Six square feet

1527)               Another closing appointment is approaching. These clients are purchasing a $160,000 home. If they have a down payment of 25% and the bank charges two points at closing, how much are they paying in points?

a.     $2,400

b.     $2,450

c.      $2,475

d.     $3,200

1528)               James is purchasing some property. How will he determine the cost of purchasing that land?

a.     Divide the cost per unit by the land area

b.     Divide the land area by the cost per unit

c.      Multiply the land area by $100 per acre

d.     Multiply the land area by the cost per unit

1529)               A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much is the loan origination fee?

a.     $3,200

b.     $3,600

c.      $4,000

d.     $800

1530)               Gunther’s gross monthly income is $3,800, and he has no monthly debt payments. The lender’s qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What’s the maximum housing payment Gunther can afford?

a.     $1,064

b.     $1,297

c.      $1,368

d.     $1,492

1531)               A buyer with a 20-year, $419,000 loan at a 4.25% interest rate has a monthly principal and interest payment totaling $2,594.59. If $1,483.95 is interest, how much is applied toward principal for that payment?

a.     $1,110.64

b.     $1,246.10

c.      $1,578.57

d.     $1,780.75

1532)               A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What’s the total amount he’ll pay over the life of the loan?

a.     $1,108,292.40

b.     $500,000

c.      $608,292.40

d.     $750,000

1533)               A buyer with a 15-year, $250,000 loan at a fixed 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?

a.     $117,687.80

b.     $250,000.00

c.      $367,687.80

d.     $735,375.60

1534)               A buyer has a 30-year, $400,000 loan with a 7% interest rate. How much of the first month’s mortgage payment is interest?

a.     $2,333.33

b.     $28,000

c.      $3,100

d.     $933.33

1535)               A buyer with a 30-year, $750,000 loan at a 5.75% interest rate has a monthly principal and interest payment totaling $4,376.80. If $3,593.75 is interest, how much is applied to principal?

a.     $251.66

b.     $3,593.75

c.      $4,376.80

d.     $783.05

1536)               A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What’s the total amount the borrower will pay back over the life of the loan?

a.     $250,000.00

b.     $30,640.65

c.      $367,687.80

d.     $735,375.60

1537)               George has $625 in monthly debt obligations, and his anticipated mortgage payment is $1,828. His gross income is $9,869, and his net income is $7,895. What’s his housing ratio?

a.     15.23%

b.     18.52%

c.      23.15%

d.     30.71%

1538)               You’re working with buyers who are pre-approved for a loan of as much as $200,000. Assuming they lock in a 5.25% interest rate at closing, how much of their first payment will go toward interest?

a.     $824

b.     $825

c.      $874

d.     $875

1539)               Traditionally, lenders’ qualifying mortgage rules use a range of percentages to qualify for both the housing debt-to-income ratio and the total debt-to-income ratio. What are those ratio ranges?

a.     25% to 28% for housing; 33% to 36% for total debt

b.     25% to 28% for total debt; 33% to 36% for housing

c.      25% to 33% for housing; 28% to 36% for total debt

d.     25% to 33% for total debt; 28% to 36% for housing

1540)               The Gatlins’ lender tells them they can afford a monthly payment of $1,830 on their new home loan. What interest rate are the Gatlins getting if this is an interest-only loan with a principal balance of $349,000?

a.     0.524%

b.     5.24%

c.      6.29%

d.     6.39%

1541)               Tess has $385 in monthly non-housing debt obligations, and her anticipated mortgage payment is $1,103. Her gross income is $7,598, and her net income is $5,815. What’s her total DTI (debt-to-income ratio)?

a.     14.51%

b.     18.96%

c.      19.58%

d.     25.58%

1542)               A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. How many payments will the borrower make over the course of the loan?

a.     15

b.     180

c.      240

d.     360

1543)               Phoebe’s gross monthly income is $4,200, and she has $360 in monthly non-housing debt payments. The lender’s qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What’s the maximum housing payment she can afford?

a.     $1,075

b.     $1,152

c.      $1,176

d.     $1,512

1544)               A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What’s the total amount of interest he’ll pay over the course of the loan?

a.     $1,108,292.40

b.     $500,000

c.      $608,292.40

d.     $750,000

1545)               Gary has an 80% LTVR on his new $318,000 townhome with an annual interest rate of 4.125%. What’s his interest payment the first month?

a.     $1,093.13

b.     $1,126.25

c.      $874.50

d.     $901

1546)               A buyer anticipates a house payment of $1,000 per month, with monthly homeowner association fees of $150. The buyer also has a car payment of $400 per month. If the buyer earns a monthly gross income of $5,000, what’s the housing ratio?

a.     20%

b.     23%

c.      28%

d.     31%

1547)               A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the first monthly payment is interest?

a.     $10,869.57

b.     $3,500.93

c.      $3,593.75

d.     $3,750.27

1548)               Juan secures a fixed rate amortized 30-year loan for $295,000 at 4.25%. If his monthly P&I payment is $1,750, how much interest does he pay in the second month of the loan?

a.     $1,038.59

b.     $1,042.29

c.      $1,044.79

d.     $1,750

1549)               A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the first monthly payment is interest?

a.     $1,145.83

b.     $13,750.28

c.      $1,388.89

d.     $916.67

1550)               Grant and Adela arrange a $150,000 loan at 4.5% annual interest with their lender. What’s their monthly interest amount?

a.     $550.25

b.     $562.50

c.      $570

d.     $575.75

1551)               At closing, ______ is an amount that’s divided proportionately between the buyer and the seller.

a.     A discount point

b.     An origination fee

c.      Mortgage interest

d.     Proration

1552)               Sherry is buying a property from Thomas. The property is located in Northern California. Who typically pays the transfer tax in this area?

a.     Buyer

b.     Lender

c.      Seller

d.     The tax is split evenly between buyer and seller.

1553)               Your client Michael feels like he’s getting a great deal on the purchase of his home, since he’s paying only $385,000 and the assessed value is $492,500. He asked you to estimate his monthly property taxes. You know the rate for his jurisdiction is .52%.

a.     $159.72

b.     $166.83

c.      $213.42

d.     $234.00

1554)               Your seller client has an offer for $300,000. If the agreed-upon commission is 5%, what is net to seller before any other costs are taken into account?

a.     $280,000

b.     $285,000

c.      $290,000

d.     $295,000

1555)               A buyer is purchasing a $1.5 million property in a city that imposes a transfer tax of $12 per $1,000, in addition to the county transfer tax of 55 cents per $500. What is the total transfer tax this property is subject to?

a.     $1,800

b.     $18,000

c.      $19,650

d.     $825

1556)               A listing brokerage received a $25,000 check from a property sale, which represented the brokerage’s 2.5% split. The total commission was 5%. How much did the property sell for?

a.     $100,000

b.     $10 million

c.      $1 million

d.     $2 million

1557)               A licensee sells a property for $325,000. The total commission rate is 6%, which is split evenly with the cooperating agent. What amount goes to the listing broker?

a.     $0

b.     $19,500

c.      $4,875

d.     $9,750

1558)               Jamal is selling his townhome for $242,000, and closing is set for July 20. He has a loan balance of $193,000 at a 3.7% interest rate, and he’s current on his payments. Jamal has prepaid the property taxes ($1,165) and insurance ($745). Using a calendar year proration method for calculations, how will these amounts appear on Jamal’s closing statement?

a.     $523.16 seller credit

b.     $523.16 seller debit

c.      $798.89 seller credit

d.     $872.45 seller credit

1559)               Maurice received an offer of $480,000 for his home. The commission on the sale is 6%. Maurice’s mortgage payoff is $78,500. He has additional closing expenses totaling $2,200. What will Maurice net from the sale of his home, rounded to the nearest whole dollar?

a.     $289,850

b.     $370,500

c.      $374,930

d.     $398,020

1560)               The daily property tax rate is $1.23 and closing is August 31. Assuming the buyer owns the property on closing day, and the seller hasn’t made any payments, what will the seller owe at closing using the calendar year proration method? Round to the nearest whole dollar.

a.     $151

b.     $242

c.      $298

d.     $449

1561)               A licensee sells a property for $525,000. The total commission rate is 6%, which is split evenly with the cooperating agent. What amount goes to the listing broker after this split?

a.     $15,750

b.     $3,000

c.      $31,500

d.     $7,875

1562)               Seller Adelaide and buyer Colin close on a transaction for two rental condos on March 15. They live in a state where the seller is considered the owner of the property on the day of closing. The combined rental income per month is $4,000. How much rental income can Colin expect to earn in March?

a.     $2,011.56

b.     $2,064.48

c.      $2,193.51

d.     $2,300.25

1563)               The Davises pay the annual property tax of $1,825 on their lake house every January. On a whim, they sell the lake house to the Bennets to buy a Winnebago and travel the country. Closing is set for July 31, and the buyers own the day of closing (pay prorated expenses through the day of closing). Using the calendar year proration method (assume that it’s not a Leap year), how much of the pre-paid property tax was the Davises’ responsibility?

a.     $1,050

b.     $1,055

c.      $1,064.70

d.     $1,069.77

1564)               The Simpsons are buying the Martins’ house for $415,000, and closing is set for March 15. The Martins have a loan balance of $230,000 at a rate of 4.7% and have prepaid property taxes ($2,506) and insurance ($1,400), and they also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Simpsons will owe the Martins at closing. Assume February has 28 days this year. The sellers own the day of closing.

a.     $1,997.62

b.     $3,113.46

c.      $604.95

d.     $792.54

1565)               What must you do to convert a fraction to a decimal?

a.     Divide the top number by the bottom number.

b.     Move the decimal point two places to the left and remove the percent symbol.

c.      Move the decimal point two places to the right and remove the percent symbol.

d.     Move the decimal point two spots to the right and add a percent symbol.

1566)               What must you do to convert a percentage to a decimal number?

a.     Divide the smaller number by the larger number.

b.     Divide the top number by the bottom number.

c.      Move the decimal point right two spots and add a percent symbol.

d.     Move the decimal point two places to the left and remove the percent symbol.

1567)               Lorena and Julio purchased a home for $205,950. Their loan amount was $164,760, and the assessed value is now $200,500. Their tax rate is 1.5%. How much will their monthly taxes be?

a.     $111.04

b.     $191.37

c.      $250.62

d.     $86.49

1568)               A buyer in California is purchasing a property for $420,000. Only the county transfer tax applies to this property. What is the amount of the transfer tax?

a.     $231

b.     $2,310

c.      $462

d.     $4,620

1569)               Mary is buying a property from Pamela. The property is located in Southern California. Who typically pays the transfer tax in this area?

a.     Buyer

b.     Lender

c.      Seller

d.     The tax is split evenly between buyer and seller

1570)               How are real estate-related prorations usually calculated?

a.     On a 12-month basis

b.     On a 360- or 365-day basis

c.      On a 52-week basis

d.     On a quarterly basis

1571)               Seller Garrett has a closing date of October 11. He’s already paid his annual taxes of $1,825. Assuming the buyer owns the day of closing and assuming a calendar year proration, which of the following statements is true regarding the property tax proration?

a.     Garrett will be credited $1,825 at closing.

b.     Garrett will be credited $410 at closing.

c.      Garrett will be debited $1,415 at closing.

d.     Garrett will be debited $410 at closing.

1572)               What is the transfer tax rate in California?

a.     55 cents per $1,000

b.     55 cents per $500

c.      .5% per $1,000

d.     It varies by county

1573)               Which of the following statements about transfer tax rate in California is true?

a.     The rate is consistent from county to county, but some cities also have a transfer tax.

b.     The rate is consistent throughout the state.

c.      The rate varies by county.

d.     The rate varies by sale price.

1574)               Buyer Maria and seller Doug are closing on June 1. Maria’s mortgage loan is $927.86, and $871.86 will go to interest in the first month. Maria will have to pre-pay interest for June using the 360-day proration method. If Doug owns the closing day, what Maria’s prepaid interest cost be at closing?

a.     $842.74

b.     $871.80

c.      $896.97

d.     $927.90

1575)               A seller wants to net $10,000 after the broker’s commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?

a.     $250,000

b.     $265,957

c.      $276,596

d.     $650,000

1576)               Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she’s current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue’s closing statement?

a.     Credit of $1,059.10

b.     Credit of $1,350 and debit of $484.04

c.      Credit of $721.50

d.     Debit of $1,214.85

1577)               A seller wants to break even after the broker’s commission of 5% and loan balance of $300,000 are paid. At what price must the house sell?

a.     $150,000

b.     $300,000

c.      $315,789

d.     $450,000

1578)               Dale is purchasing a property that has an assessed value of $35,190. If the tax rate is 5%, what will he likely pay annually in property taxes?

a.     $17,595

b.     $1,759.50

c.      $17.60

d.     $35.19

1579)               James is the buyer’s agent. A property sold for $450,000. The total commission rate is 5%, with the listing agent receiving 3% and the buyer’s agent (the cooperating broker) receiving 2%. James has a 75/25 split with his broker (meaning he’ll receive 75% of the commission paid to his broker for the sale). What commission does James receive?

a.     $16,875

b.     $22,500

c.      $6,750

d.     $9,000

1580)               A real estate transaction has a closing date of May 20. The seller, who’s responsible for closing costs up to but not including the day of closing, has already paid annual property taxes of $1,949. How will the closing statement reflect the proration for the seller? Use a calendar year proration, and round to the nearest dollar.

a.     Credited $1,207

b.     Credited $742

c.      Debited $1,207

d.     Debited $742

1581)               A California property sold for a $600,000 in a city that does not impose a transfer tax. What is the total transfer tax this property is subject to?

a.     $0

b.     $1,3250

c.      $330

d.     $660

1582)               Kelly is purchasing a property that has an assessed value of $160,000. If the tax rate is 2.5%, what will Kelly likely pay annually in property taxes?

a.     $160

b.     $400

c.      $4,000

d.     $40,000

1583)               Your seller wants to net $100,000 after the 5% commission is paid. Assuming no closing costs, at what price does the home need to sell for the seller to net this amount?

a.     $105,163.16

b.     $105,263.16

c.      $105,363.16

d.     $105,463.16

1584)               Your buyer purchases a property for $120,000. It has an assessed value of $130,000. The annual rate for property taxes is $2.10 per $100 of the property’s tax value paid on a semi-annual basis. On the next tax bill, what amount is due?

a.     $1,260

b.     $1,365

c.      $2,100

d.     $619

1585)               A seller wants to net $10,000 after the broker’s commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?

a.     $250,000

b.     $265,957

c.      $276,596

d.     $650,000

1586)               Maurice received an offer of $480,000 for his home. The commission on the sale is 6%. Maurice’s mortgage payoff is $78,500. He has additional closing expenses totaling $2,200. What will Maurice net from the sale of his home, rounded to the nearest whole dollar?

a.     $289,850

b.     $370,500

c.      $374,930

d.     $398,020

1587)               Sherry is buying a property from Thomas. The property is located in Northern California. Who typically pays the transfer tax in this area?

a.     Buyer

b.     Lender

c.      Seller

d.     The tax is split evenly between buyer and seller.

1588)               What must you do to convert a decimal to a percentage?

a.     Divide the larger number by the smaller number.

b.     Divide the top number by the bottom number.

c.      Move the decimal point two places to the left and remove the percent symbol.

d.     Move the decimal point two spots to the right and add a percent symbol.

1589)               Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she’s current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue’s closing statement?

a.     Credit of $1,059.10

b.     Credit of $1,350 and debit of $484.04

c.      Credit of $721.50

d.     Debit of $1,214.85

1590)               A property valued at $1 million is returning a net annual income of $85,000. What’s its cap rate?

a.     7.0%

b.     7.5%

c.      8.0%

d.     8.5%

1591)               In investments, each type of depreciation is defined by a particular event. Which of the following best describes a depreciation type and an event it’s tied to?

a.     Economic depreciation and cost recovery

b.     Economic depreciation and physical deterioration

c.      Operating depreciation and taxing authority

d.     Tax depreciation and physical deterioration

1592)               A three-unit income-producing property has a sales price of $600,000. Monthly gross rent is estimated at $6,000. What’s the gross rent multiplier?

a.     100x

b.     10x

c.      83x

d.     8.3x

1593)               “Income received before expenses are deducted” is the definition of ______.

a.     Effective gross income

b.     Gross income

c.      Net income

d.     Taxes

1594)               Which one of the following is a description of economic depreciation?

a.     Investors can take a business deduction for annual depreciation.

b.     The asset is worth less because the economy took a downturn.

c.      The asset is worth more because of capital improvements.

d.     The owner/investor is making less income from the property than previously.

1595)               Capitalization is the process of using ______.

a.     Capital to build equity

b.     Income to calculate value

c.      Sales to determine income

d.     Value to calculate income

1596)               A comparable residential property sold one month ago for $300,000. That property is on a busy street, whereas the subject property you’re preparing to list is a corner lot on a quiet street. What should you do to determine the subject property’s market value?

a.     Adjust the comparable’s price down

b.     Adjust the comparable’s price up

c.      Adjust the subject’s price down

d.     Adjust the subject’s price up

1597)               Yanni is an investor who has just purchased a building for $300,000. Similar buildings are returning a rate of 7%. What can Yanni anticipate his annual net operating income to be?

a.     $18,700

b.     $21,000

c.      $30,000

d.     $7,000

1598)               In the capitalization formula, what does the I stand for?

a.     Impact

b.     Income

c.      Interest

d.     Investment

1599)               Jennifer is the owner of the single-family residence in which she resides. How long can she take to depreciate her property?

a.     27.5 years

b.     39 years

c.      Indefinitely

d.     Zero years (personal residences cannot be depreciated)

1600)               Malcolm purchased an old convenience store, and after renovations will open a small vegan grocery. He paid $517,000, of which $417,000 was for the building, and renovations cost him $107,000. What does the amount $524,000 represent?

a.     Cash position

b.     Depreciable basis

c.      Income baseline

d.     Investment basis

1601)               Based on capitalization rate alone, which investment will have the higher appraised value: one with a 10% cap rate or one with a 4% cap rate?

a.     10%

b.     4%

c.      Cap rates have nothing to do with appraised value.

d.     It’s impossible determine based on cap rate alone.

1602)               When a subject property has a feature that a comparable property doesn’t have, what should the licensee preparing a CMA do?

a.     Adjust the comparable’s price down

b.     Adjust the comparable’s price up

c.      Adjust the subject’s price down

d.     Adjust the subject’s price up

1603)               Which one of the following statements about investors and tax depreciation is true?

a.     Depreciation is not limited to investment properties.

b.     Investors are not allowed to take a business deduction for annual depreciation.

c.      Investors can depreciate an appreciating asset.

d.     Most investors try to avoid depreciation.

1604)               A property valued at $500,000 is returning a net annual income of $45,000. What is the cap rate for this investment?

a.     12.5%

b.     7.5%

c.      8%

d.     9%

1605)               A comparable property sold one month ago for $400,000. That property has a three-car garage, whereas the subject property you’re preparing to list only has a two-car garage. What should you do to determine the subject property’s market value?

a.     Adjust the comparable’s price down

b.     Adjust the comparable’s price up

c.      Adjust the subject’s price down

d.     Adjust the subject’s price up

1606)               The sales price, acquisition costs, and capital improvement costs (such as renovations or additions) of a property combine to make up what?

a.     Appraisal value

b.     Basis

c.      Debt coverage

d.     Market value

1607)               A 30-unit income-producing property has a sales price of $9 million. Annual gross income is estimated at $750,000. What’s the gross income multiplier?

a.     10x

b.     12x

c.      14x

d.     8x

1608)               Maya owns a small graphics shop and is meeting with her tax professional to review the year’s receipts and other tax documentation. Her tax advisor lets her know that she has an appreciating asset, which makes Maya very happy! Which of the following is Maya’s appreciating asset?

a.     Her new 3-D printer

b.     The digital printing press that she bought six months ago

c.      The retail addition she put onto the building she already owned

d.     The van she’ll use for trade show setups

1609)               When a comparable property has a feature that the subject property doesn’t have, what should the licensee preparing a CMA do?

a.     Adjust the comparable’s price down

b.     Adjust the comparable’s price up

c.      Adjust the subject’s price down

d.     Adjust the subject’s price up

1610)               “Effective gross income” most closely means ______.

a.     Income after losses from vacancies and credit losses are deducted from potential gross income

b.     Income after operating expenses are deducted

c.      Income after taxes are deducted

d.     Income that a property could bring if it were leased at full capacity

1611)               The income a property could bring if it’s fully leased is known as the ______.

a.     Depreciated gross income

b.     Effective gross income

c.      Net operating income

d.     Potential gross income

1612)               The gross income multiplier for an area is 12x. If the estimated annual rent is $10,000, what’s the property’s estimated value?

a.     $10,000

b.     $100,000

c.      $12,000

d.     $120,000

1613)               Your client Joseph has a commercial income-producing property. How long does he depreciate this property?

a.     27.5 years

b.     39 years

c.      Indefinitely

d.     Zero years (commercial properties cannot be depreciated)

1614)               The Siegels are purchasing a commercial investment property and plan to use straight-line depreciation on their financial statements and tax calculations. Which of the following would NOT be included in the Siegels’ depreciation basis calculations?

a.     The cost of the electrical system upgrades they did after purchase

b.     The cost of the title insurance for the property

c.      The loan origination and lender fees that they paid at closing

d.     The price that they paid for the property, minus any land costs

1615)               You know a property’s effective gross income and its operating expenses. How would you calculate the net operating income?

a.     Add income to tax deductions.

b.     Multiply annual return by .05 of the property’s value.

c.      Multiply monthly income by 12.

d.     Subtract operating expenses from effective gross income.

1616)               What’s the definition of “potential gross income”?

a.     After-tax income

b.     Before-tax income

c.      Income received after expenses are deducted

d.     Income that a property could bring if fully leased

1617)               Based on capitalization rate alone, which investment involves more risk: one with a 12% cap rate or one with a 8% cap rate?

a.     12%

b.     8%

c.      It’s impossible determine based on cap rate only.

d.     They’re equally risky.

1618)               Capitalization is the process of using ______.

a.     Capital to build equity

b.     Income to calculate value

c.      Sales to determine income

d.     Value to calculate income

1619)               Tyrell and Barb bought a commercial investment property in 2009 during the real estate market downturn. Through what year will they be able to depreciate the investment?

a.     2019

b.     2029

c.      2039

d.     2048

1620)               If a property has a potential gross income of $50,000, a vacancy and collection loss of 10%, and taxes are another 10%, what’s the effective gross income?

a.     $40,000

b.     $45,000

c.      $50,000

d.     $55,000

1621)               A property has 10 units and is 90% occupied. Rent is $500 per month. Total vacancy and collection loss equals 10%. What’s the potential gross income?

a.     $4,500

b.     $5,000

c.      $54,000

d.     $60,000

1622)               Carmen is a builder. Which of the following is true about construction codes as they apply to her next project?

a.     Carmen must adhere to all federal, state, and local building codes, which are enforced at the local level.

b.     Carmen must adhere to local, but not state or federal, building codes.

c.      Carmen must adhere to local, state, and federal building codes, but only if her project is a commercial (non-residential) project.

d.     If Carmen builds four or fewer homes, building codes don’t apply at the local level.

1623)               Although codes can be established at the local, state, and federal level, they’re generally enforced by local or county authorities.

1624)               Which of the following might a builder use to conceal unsightly areas, reduce noise levels, define space, and prevent soil erosion?

a.     Foundation

b.     Grading

c.      Landscaping

d.     Paving

1625)               May homeowners perform work on their own properties without a contractor’s license?

a.     No, a license is needed for any work, no matter who does the work.

b.     Yes, homeowners are exempt from contracting laws.

c.      Yes, provided it is for a kitchen or bathroom remodel only.

d.     Yes, provided the homeowner doesn’t intend to sell right away.

1626)               Who must stamp a blueprint to verify its accuracy?

a.     An architect or engineer

b.     The builder

c.      The buyer

d.     The real estate licensee

1627)               If a site has improper drainage, what might happen?

a.     Flooding can occur.

b.     Water bills will be higher.

c.      Water bills will be lower.

d.     Water tables will be lower.

1628)               What type of requirements must a contractor applicant meet in order to obtain a license?

a.     Pay a fee and post a bond

b.     Pay a fee, post a bond, meet educational and experience requirements

c.      Perform a 30-hour practicum with a licensed contractor, pay a fee, and post a bond

d.     Post a bond and pass an exam

1629)               Bob is quite proud of the 600-square-foot garage he’s included in his new home. According to national standards, how can he include the garage square footage in his total?

a.     He cannot.

b.     He can only include it as unfinished square footage.

c.      He can only include it if it cost more than $50,000 to construct, including labor.

d.     He can only include it if its value is more than 33% of the home’s value.

1630)               According to national standards for measuring square footage of a dwelling, which space should be included?

a.     Attached accessory apartment

b.     Garage

c.      Unfinished attic

d.     Unfinished basement

1631)               When you’re working with a client who is looking for a home to purchase, why should you determine if any additions to the home have been permitted?

a.     Because the buyer may be subject to fees from an HOA if the addition doesn’t meet the CC&Rs.

b.     Because the permitting process ensures building code compliance.

c.      Because this may provide negotiating power on the offering price.

d.     Because this will determine the amount of property tax the buyer will pay.

1632)               Cory is applying for his contractor’s license. He has met the educational and experience requirements, and has filed a Certificate of Self-Insurance with the Contractor’s State License Board. What else must he do?

a.     Complete a 30-hour practicum with a licensed contractor

b.     Post a cash deposit or bond with the state

c.      Provide proof of citizenship

d.     Register with HUD

1633)               Before a builder can obtain a permit, two items must be submitted to the building department. What are these items?

a.     A blueprint and building specifications

b.     A list of code discrepancies and an environmental assessment

c.      A list of contractors and the developer’s bonding number

d.     A plat map and contractor verification

1634)               Kenny is updating a bathroom. Under what circumstances is a contractor’s license required?

a.     If he is not the homeowner and the work costs less than $500

b.     If he is preparing his house to sell

c.      If he is the homeowner

d.     If he is the homeowner and the work costs more than $500

1635)               Which of the following individuals is exempt from contractor licensing requirements?

a.     Diedre, who is remodeling her kitchen because extended family is coming to live with her

b.     May, who is updating her bathroom to prepare her house for market

c.      Ray, who is replacing his neighbor’s garage door for $550

d.     Thomas, who is putting in a covered porch for Susan at a cost of $1,250

1636)               At which level does the Department of Housing and Community Development operate?

a.     Federal

b.     International

c.      Local

d.     State

1637)               What is another name for a blueprint?

a.     Building plan

b.     Plat map

c.      Road map

d.     Tax assessor map

1638)               Positioning a house on a lot in order to take advantage of a view is called ______.

a.     Dedication

b.     Infrastructure

c.      Paying the piper

d.     Siting

1639)               You’re measuring the square footage of a single-family home you’ve just built. What national requirements apply to your measurements?

a.     There are no national requirements.

b.     You must measure from the inside out.

c.      You must measure from the outside in.

d.     You must measure from the top down.

1640)               Jeb is performing work for a cousin and charging him $450. What requirements relate to Jeb?

a.     He must be a licensed contractor.

b.     If Jeb is not licensed, he may not charge his cousin for the work.

c.      If Jeb is not licensed, he must disclose it.

d.     Jeb must post a bond with the state equal to 1.5 times the cost of the work ($675).

1641)               Which of the following is true regarding national standards for measuring square footage?

a.     They’re required.

b.     They’re voluntary but recommended.

c.      You should measure to the nearest foot.

d.     You should only include attic square footage if the ceiling height exceeds six feet.

1642)               In what way does the California Department of Health impact building practices?

a.     It drafts building codes

b.     It establishes licensing requirements

c.      It requires builders to carry a bond

d.     It sets guidelines for ensuring water safety

1643)               What can proper drainage do for a building site?

a.     Improve aesthetics

b.     Prevent water pressure problems

c.      Protect the foundation

d.     Provide a water feature

1644)               What benefit is provided by grading a building site?

a.     It can improve drainage.

b.     It provides a level foundation for out-buildings.

c.      It provides an alternative to public water.

d.     It provides a score that can be used to market the property.

1645)               Glen is a skilled carpenter, and he is building his own home on the unimproved lot he and his wife Sandy purchased. Sandy takes responsibility for handling the permitting and inspection process. Which part of their custom home will Glen and Sandy NOT need to have a permit and inspection for?

a.     Interior design

b.     Materials used

c.      Method of construction

d.     Plumbing, electric, and sanitation systems

1646)               What are building specifications?

a.     A blueprint

b.     A survey

c.      A written narrative of the building plan

d.     The building plan

1647)               With which entity must contractors who work in California obtain their licensure?

a.     California Department of Housing

b.     California Department of Public Health

c.      Contractor’s State License Board

d.     HUD

1648)               What will you find in building specifications?

a.     Color choices and a list of appliance vendors and sub-contractors

b.     Energy ratings and certifications, and water flow indicators

c.      Fixture and furnishing choices

d.     Major systems, construction details, and landscaping

1649)               At which level of government are building codes generally enforced?

a.     Board

b.     Federal

c.      Local

d.     State

1650)               Which type of site provides better natural drainage?

a.     Hilly site

b.     Level site

c.      Paved site

d.     Sloped site

1651)               What is the most severe penalty a person may receive for performing contracting work without appropriate licensure?

a.     Criminal charges

b.     Fines

c.      Revocation of their bond

d.     Revocation of their license

1652)               A new development is complete, and almost all the homes are now occupied. All is well for the first year, but after a season of heavy rains many homeowners are experiencing issues with sewage backing up into their homes. What process should have prevented this from happening?

a.     Compliance with building codes and inspection by a local health official to ensure sanitation and drainage systems were adequate

b.     Establishment of special assessment districts to fund adequate drainage systems for the community

c.      Professional home inspections ordered by homebuyers prior to closing

d.     Seller disclosure requirements regarding potential environmental hazards in a flood plain

1653)               What are the national requirements for measuring a dwelling’s square footage?

a.     Measurement is required for any home valued at more than $500,000.

b.     Only a contractor/builder may measure it.

c.      Only the homeowner may measure it.

d.     There are no national requirements.

1654)               You’re a builder who wants to follow the national standards for measuring the square footage of a home you’ve built. Which of the following areas do you include?

a.     A master suite

b.     An unfinished attic with six-foot ceilings

c.      Attached garage

d.     Detached pool house

1655)               What’s NOT true about building codes in California?

a.     California uses uniform codes as the standards for construction in the state.

b.     Homeowners performing their own construction aren’t required to follow building codes.

c.      Local building codes can be established that meet local requirements, but must also follow state codes.

d.     The Department of Housing and Community Development administers the laws regulating construction.

1656)               According to national standards, under what circumstances may a pool house be included in total square footage?

a.     If it is attached to the main house by a hallway or stairway

b.     If it is larger than 500 square feet

c.      If it is smaller than 500 square feet

d.     If its total cost is more than $25,000

1657)               What’s one measure a builder would likely take to improve a site’s drainage?

a.     Grade the lot

b.     Install a moat

c.      Install concrete walls

d.     Pave the lot

1658)               Which type of insulation is no longer manufactured due to concerns about formaldehyde?

a.     Flexible

b.     Rigid

c.      UFFI

d.     Vermiculite

1659)               Foundation walls are constructed on top of which of these items?

a.     Footings

b.     Girders

c.      Joists

d.     Slabs

1660)               What must a foundation wall or floor have if it’s in contact with the soil?

a.     A radon detector

b.     A radon detector and drainage field

c.      A sump pump

d.     A vapor barrier and termiticide

1661)               Which of the following is part of the eave system?

a.     Composites

b.     Fascia

c.      Framing

d.     Shingles

1662)               Which of the following is a type of loose-fill insulation?

a.     Batting

b.     Fiberglass roll

c.      Vermiculite

d.     Wallboard

1663)               Architect Camilla is drawing up plans for a house. Her client is passionate about wanting it to be a Craftsman style. Which of the following parts of the roofing system should Camilla check most closely to make sure her client is happy?

a.     The flashing that’s installed near the edge of the eaves in the front

b.     The pitch

c.      The ridge beam, or girder

d.     The soffit

1664)               What’s used on areas in direct contract with the ground in order to keep moisture out of the structure?

a.     Grading

b.     Level

c.      Termiticide

d.     Vapor barrier

1665)               Foundation walls are often constructed out of which of the following?

a.     Gypsum, concrete, or brick

b.     Poured concrete, bricks, or concrete blocks

c.      Poured concrete or steel girders

d.     Wood, steel, or brick

1666)               What is slab on grade?

a.     A basement

b.     A footing

c.      A foundation

d.     A wall

1667)               When constructing a foundation, besides a vapor barrier, what might local building codes require?

a.     Bricks

b.     Poured concrete instead of blocks

c.      Soil

d.     Termiticide

1668)               Which structural component is described as “the concrete base that supports the foundation of a building”?

a.     Beam

b.     Footing

c.      Foundation

d.     Lally column

1669)               Which of the following is a true statement about insulation types?

a.     Loose insulation includes batting and UFFI

b.     Reflective and sprayed are types of insulation

c.      Vermiculite often comes in 15.5-inch rolls for ease of carrying

d.     Wallboard and UFFI are types of flexible insulation

1670)               Which type of framing is most commonly used in housing?

a.     Balloon

b.     Platform

c.      Post-and-beam

d.     Sub-form

1671)               What are constructed on top of footings?

a.     Foundation walls

b.     Joists

c.      Lally columns

d.     Steel girders

1672)               Where would you likely find loose-fill insulation?

a.     Attic floor

b.     Basement

c.      Crawl space

d.     Walls

1673)               As the most important foundation building block, what’s the purpose of a foundation footing?

a.     Act as a mold

b.     Make up the foundation wall

c.      Provide decorative curb appeal

d.     Support the entire weight load of the building

1674)               This round steel column is filled with concrete and rests on a base plate called the column footing pad.

a.     Beam

b.     Girder

c.      Lally column

d.     Sill plate

1675)               What is the purpose of a termiticide?

a.     Increases air circulation

b.     Prevents moisture build-up

c.      Prevents pest damage

d.     Prevents water intrusion

1676)               In which type of framing are the framing members much larger and spaced much farther apart?

a.     Balloon

b.     Platform

c.      Post-and-beam

d.     Sub-form

1677)               Where would you likely find blanket insulation?

a.     Basement

b.     Bedrooms

c.      Crawl space

d.     Rafters

1678)               Which of the following is a framing member?

a.     Footings

b.     Rafters

c.      Soffits

d.     Sticks

1679)               All of these are components of the flooring system EXCEPT _______.

a.     Beams

b.     Lally columns

c.      Sill plates

d.     Soffits

1680)               Why is UFFI insulation no longer used?

a.     Environmental concerns

b.     Not energy efficient

c.      Too expensive

d.     UFFIs are an endangered species

1681)               Which type of framing involves a single system of wall studs run from the foundation through the first and second floors to the ceiling support?

a.     Balloon

b.     Platform

c.      Post-and-beam

d.     Sub-form

1682)               Why does blanket insulation often come in fiberglass rolls that are 15.5 inches wide?

a.     Building code requires it to be no more than 16 inches wide

b.     Ease of carrying

c.      For ease of blow-in

d.     To fit between framing members

1683)               What is slab on grade?

a.     A basement

b.     A footing

c.      A foundation

d.     A wall

1684)               Where would you likely find loose-fill insulation?

a.     Attic floor

b.     Basement

c.      Crawl space

d.     Walls

1685)               Why must a water heater be strapped?

a.     Insulates for energy efficiency

b.     Prevents bursting

c.      Prevents theft

d.     Prevents tipping

1686)               Which of the following is a true statement regarding carbon monoxide requirements in California?

a.     All homes built after 1978 must have carbon monoxide detectors.

b.     Homes built before 1986 are exempt.

c.      Homes with an attached garage but no gas appliances are exempt.

d.     Homes with gas fireplaces must have carbon monoxide detectors.

1687)               A carbon monoxide detector would be required for which of the following dwellings?

a.     A duplex with electric heat and appliances

b.     A single family home with a detached garage and electric appliances

c.      A single-family home with an attached garage

d.     A single family home with an attached pool house

1688)               What is a seller’s responsibility regarding water heaters?

a.     Ensure energy efficiency

b.     Provide buyer notice that it meets earthquake requirements

c.      Provide energy efficiency disclosure to buyer

d.     Replace before placing the home on the market if the water heater is more than five years of age

1689)               Which of the following plumbing elements in a dwelling should be vented?

a.     Sink, toilet and tub

b.     Sink, toilet, tub, and washing machine

c.      Washing machine and sink

d.     Washing machine and toilet

1690)               Which system uses a central exhaust fan and ducts to move stale air out of the building?

a.     Air conditioning

b.     Forced air

c.      Heating

d.     Ventilation

1691)               Raymond was comparing two air conditioners. Air conditioner “A” had an EER of five; air conditioner “B” had an EER of eight. What does Raymond know about these two units?

a.     A is far more efficient

b.     A will cost less to use

c.      B is far more efficient

d.     B will cost more to use

1692)               “That plumbing fixture must be vented.” For which plumbing fixture or fixtures might this statement apply?

a.     All plumbing fixtures

b.     Sink

c.      Sink and toilet

d.     Toilet

1693)               What type of heating system uses a furnace to heat cool air and transports the warm air via ducts?

a.     Electric heating system

b.     Forced air system

c.      Hot water system

d.     Radiant system

1694)               All single-family homes sold on or after January 1, 1986 must have operable _____________ detectors.

a.     Radon

b.     Smoke

c.      Smoke and carbon monoxide

d.     Smoke, carbon monoxide and radon

1695)               Which system pulls stale air out of the kitchen, bathrooms, and other places where smells and pollutant concentrations occur?

a.     Air conditioning

b.     Forced air

c.      Heating

d.     Ventilation

1696)               Which type of heating system takes cool air and passes it through the heat source using a fan or blower?

a.     Boiler

b.     Forced air

c.      Hot water

d.     Steam

1697)               You’re evaluating an air conditioning unit. Based on the following energy efficiency ratios, which one is the most energy efficient?

a.     3.0

b.     4.5

c.      5.0

d.     6.5

1698)               In older houses built before 1950, which type of electrical system would frequently be found?

a.     BX

b.     Conduit

c.      Greenfield

d.     Romex

1699)               What type of heating system uses a boiler to produce steam, which is transferred to rooms through a pipe?

a.     Forced warm air system

b.     Hot water system

c.      Radiant system

d.     Steam system

1700)               You’re a seller of a home built in 1975. What must you have installed before selling your property?

a.     Carbon monoxide detector

b.     Smoke and carbon monoxide detector

c.      Smoke, carbon monoxide and radon detector

d.     Smoke detector

1701)               We’ve all had this happen: We turn on every appliance in the kitchen and are happily cooking away, then all of a sudden, we’re plunged into darkness and silence. What probably just happened?

a.     A circuit breaker tripped.

b.     An earthquake has hit.

c.      The food we’re cooking splashed into an uncovered outlet.

d.     There is a storm outside, and a power line has been hit, taking out your electricity.

1702)               What does PVC stand for?

a.     Pipe-venting conductor

b.     Plumbing viscosity volume

c.      Polarity-voltage conductor

d.     Polymerized vinyl chloride

1703)               What does EER stand for with regard to air conditioners?

a.     Electricity energy runoff

b.     Energy efficiency rating

c.      Energy efficiency ratio

d.     Energy Star Rating

1704)               Which of the f ollowing is a type of water heater?

a.     A/C vent

b.     Blower

c.      Register

d.     Resister

1705)               Your clients, the Rawlings, forgot to include smoke detectors or a disclosure about the smoke detectors when they sold their property to the Englebrights. What could happen?

a.     The Englebrights can back out of the sale.

b.     The Englebrights can sue the Rawlings and you for up to $1,000, plus attorney costs.

c.      The Rawlings could be fined $100 plus attorney costs.

d.     The Rawlings must pay the Englebrights’ heating bills for the first year.

1706)               Which law applies to smoke detectors and carbon monoxide detectors in California?

a.     All laws, with the more restrictive law taking precedence

b.     Federal

c.      Local

d.     State

1707)               Air conditioner efficiency is rated based on _________, which calculates the amount of energy or electricity needed to run a unit.

a.     BTUs

b.     CSIs

c.      EERs

d.     ICCs

1708)               Where is aluminum wiring used in construction today?

a.     In appliances

b.     In branch circuit wiring, which goes from the panel through the walls to the outlets and switches

c.      In motor vehicles

d.     Where the current is heaviest, such as at the service entrance

1709)               If a seller fails to install a smoke detector and also fails to provide a smoke detector disclosure to the buyer, what damages may apply?

a.     Up to $100, plus court costs

b.     Up to $100 total

c.      Up to $500, plus court costs

d.     Up to $500 total

1710)               A California homeowner might receive an energy credit for opting for ____________.

a.     A shorter commute

b.     A smaller home

c.      Baseboard heating

d.     Geothermal power

1711)               Joe is finally remodeling his parents’ home from the late 1960s and, to his mother’s delight, it’s time to install a new washer and dryer. As he is hooking up the new machines, what type of wiring is he likely to encounter?

a.     Aluminum

b.     Copper

c.      Gold

d.     Silver

1712)               Shannon received a tax credit due to her energy choice option. She likely selected ___________ to provide energy to her home.

a.     Coal

b.     Gas

c.      Oil

d.     Wind

1713)               Which of the following is a type of pipe often used in construction?

a.     Aluminum

b.     Polymerized Vinyl Chloride

c.      Titanium

d.     Wood-framed metal

1714)               Which of the following is a type of water heater?

a.     Coal

b.     Geolectric

c.      Tankless

d.     Wind

1715)               In California, incentives in the form of __________ may be available to homeowners who use alternative energy forms.

a.     Gifts and prizes

b.     Increased services

c.      Property tax reductions

d.     Rebates

1716)               In an air conditioning system, what takes heat from the air and brings it to the refrigerant?

a.     Compressor

b.     Condenser

c.      Evaporator

d.     Recycler

1717)               What’s supposed to be installed wherever water can be found, such as in bathrooms, kitchens, basements, utility rooms, garages, outdoors, and near swimming pools, to protect people from getting electrocuted?

a.     BX

b.     GFCI

c.      NEC

d.     PVC

1718)               If you suspect there might be an environmental issue with a property you’re selling but you’re not sure, what should you do?

a.     Ask a lot of questions, ask for help, and disclose everything if issues do exist.

b.     Ignore your hunch; it’s not your responsibility.

c.      Refuse to sell the property.

d.     Sell the property as quickly as possible and cash that commission check.

1719)               Your client, Eric, is interested in purchasing an industrial property to start a new business. You’ve recommended that soil, air, and water testing be done, but Eric is on a tight budget and doesn’t feel these tests are necessary. What should you do?

a.     Keep records of your recommendations and a written response from Eric.

b.     Perform the tests yourself.

c.      Refuse to be a part of the transaction.

d.     Support Eric in his decision and do nothing further.

1720)               Which of the following is one of a licensee’s responsibilities when the licensee suspects an environmental issue exists on a property?

a.     Hire environmental experts to perform audits of all property when representing the seller.

b.     Investigate and discover hidden environmental issues associated with a property.

c.      Know when, where, and how to seek expert assistance regarding environmental issues.

d.     Pay for any required environmental audits.

1721)               Which of the following scenarios accurately represents your environmental disclosure responsibility as a real estate licensee?

a.     You must disclose all known environmental hazards for both residential and commercial properties.

b.     You must disclose all known environmental hazards for commercial properties only; residential disclosure is the seller’s sole responsibility.

c.      You must disclose all known environmental hazards for residential properties only; commercial disclosure is the seller’s sole responsibility.

d.     You must disclose all suspected environmental hazards for both residential and commercial properties.

1722)               Mercedes is assisting a buyer who wants to purchase a home in a particular neighborhood. When looking at homes with her client, where should Mercedes look for potential environmental concerns?

a.     At her broker’s office

b.     Inside the home and other structures

c.      The area where the home is built, outside the home, and inside the home

d.     The outdoor areas of the property

1723)               A licensee must understand risks and provide disclosure of known environmental issues. A licensee must also do which of the following?

a.     Be an expert in every aspect of environmental science.

b.     Hire professional inspectors.

c.      Know when to ask questions.

d.     Perform environmental testing.

1724)               Your client, Eric, is interested in purchasing an industrial property to start a new business. You’ve recommended that soil, air, and water testing be done, but Eric is on a tight budget and doesn’t feel these tests are necessary. What should you do?

a.     Keep records of your recommendations and a written response from Eric.

b.     Perform the tests yourself.

c.      Refuse to be a part of the transaction.

d.     Support Eric in his decision and do nothing further.

1725)               Stan is a home inspector who’s evaluating a home for potential buyers. He pointed out that neither of the two bathrooms had vent fans installed. Why is this a potential problem that will be noted on the inspection report?

a.     Bathroom fans can mitigate lead paint particles.

b.     Bathroom fans vent radon to the exterior of the home.

c.      The lack of air circulation in a moist room can lead to mold growth.

d.     Unseemly smells located that close to the kitchen are a problem.

1726)               Radon can cause _____, if inhaled.

a.     Brain cancer

b.     Heart attacks

c.      Lung cancer

d.     Permanent paralysis

1727)               What must be provided to consumers who are buying homes built prior to 1978?

a.     A list of lead-abatement contractors

b.     An Environmental Conservation Law handout

c.      The EPA pamphlet titled “Protect Your Family from Lead in Your Home”

d.     The hotline number for Lead Poison Control

1728)               What act requires sellers, landlords, and their agents to disclose any known lead hazards in the home?

a.     DECs Lead Reduction Act

b.     Federal Lead Disclosure Act

c.      Residential Lead-Based Paint Hazard Reduction Act

d.     Universal Lead-Based Paint Disclosure Act

1729)               Which one of the following is a reason mold is an environmental issue?

a.     It can grow without water or moisture.

b.     It damages what it grows on and can be unhealthy to humans.

c.      It produces off gasses.

d.     It releases radon as it breaks down.

1730)               Which one of the following may cause carbon monoxide to be present in a home?

a.     A detached garage

b.     A gas furnace

c.      An electric dryer

d.     An electric stove

1731)               What makes urea formaldehyde foam insulation a health hazard?

a.     It contains asbestos.

b.     It contains formaldehyde.

c.      It contains radon.

d.     Levels increase over time.

1732)               Volatile organic compounds can make indoor air quality toxic. Where are VOCs likely to be found?

a.     Air fresheners

b.     Bamboo

c.      Jute

d.     Wool

1733)               Certain homes and other buildings are designated as “target” dwellings by the EPA. What does this mean?

a.     There are specific requirements for contractors performing lead abatement or remodeling these homes.

b.     These are the most desirable homes for green living.

c.      These homes cannot be inhabited until lead abatement has been performed.

d.     These homes have been targeted for removal.

1734)               Which one of the following is a substance found in air fresheners, cleansers, paint, and building materials that at high levels can make indoor air quality toxic?

a.     BPA

b.     Natural scents

c.      PCBs

d.     VOCs

1735)               Under what circumstances should real estate licensees advise buyers to have listed homes tested for radon?

a.     In all circumstances, regardless of location

b.     Only if the home is located in a high-risk area

c.      Only if the home were built before 1978

d.     When they’re feeling ill

1736)               What are the first symptoms of carbon monoxide poisoning?

a.     Dizziness and nausea

b.     Heart palpitations

c.      Ringing in the ears

d.     Sore throat

1737)               In addition to providing a disclosure of any lead-based paint hazards in homes built before 1978, what must a seller’s agent provide to prospective buyers?

a.     Assurance that the home is lead-free before offering it for sale

b.     EPA lead safety pamphlet

c.      List of reputable home improvement contractors

d.     Written proof that the home is lead-free

1738)               What is the name of the fibrous material found in rocks and soil worldwide that was used in construction of older homes and causes chronic lung disease and cancer?

a.     Asbestos

b.     Lead paint

c.      Radon

d.     Silicone

1739)               Dizziness and nausea are the first signs of what?

a.     Asbestosis

b.     Carbon monoxide poisoning

c.      Good air quality

d.     Radon exposure

1740)               Radon is an important environmental issue because it causes what?

a.     Brain cancer

b.     Heart attacks

c.      Lung cancer

d.     Permanent paralysis

1741)               Why is asbestos an environmental issue?

a.     It causes brain clouds.

b.     It causes chronic lung disease.

c.      It causes depression.

d.     It takes up space in a landfill.

1742)               Which one of the following statements about asbestos is true?

a.     Homeowners can safely remove it.

b.     It’s harmful only if left in place.

c.      It’s not harmful at low levels.

d.     No amount of it is considered safe.

1743)               Children and pregnant women are especially vulnerable to poisoning caused by what hazard?

a.     Asbestos

b.     Lead

c.      Oil

d.     Pigment

1744)               Which of the following statements is true about radon?

a.     It’s a man-made chemical.

b.     It’s a naturally occurring gas.

c.      It’s only a problem outdoors.

d.     It’s safe at any level.

1745)               When lead is present, what rule covers remodeling of the property?

a.     Lead Removal, Repair, and Paint (RRP) Rule

b.     Lead Removal, Repair, and Renovation (RRR) Rule

c.      Lead Renovation, Repair, and Painting (RRP) Rule

d.     Lead Repair, Replace, and Painting (RRP) Rule

1746)               Which one of the following is a true statement about radon testing?

a.     It can only be performed by a licensed professional.

b.     It’s not necessary.

c.      Test kits are available for purchase.

d.     Test kits are only available to certified professionals.

1747)               Which one of the following actions is a recommended (and in some states, required) method for protecting occupants of a home from carbon monoxide poisoning?

a.     Have a licensed professional install a vent system if carbon monoxide levels are unacceptable.

b.     Install a carbon monoxide alarm.

c.      Remove all gas-powered devices from the home.

d.     Replace all gas-powered appliances with newer electric models.

1748)               Microscopic pieces of mold that float around in the air are called what?

a.     Isotopes

b.     Mites

c.      Moldies

d.     Spores

1749)               Which of the following is a means by which radon may enter a home?

a.     In garage debris

b.     In public water systems

c.      Through floor joists

d.     Via trees and shrubs

1750)               Which substance when it’s absorbed into the body prevents blood’s ability to transport oxygen?

a.     Carbon monoxide

b.     Lead

c.      Mold

d.     Radon

1751)               How can a homeowner identify asbestos?

a.     By hiring a certified asbestos consultant

b.     By looking at it with a black light

c.      By performing a normal visual inspection

d.     By using an asbestos test kit

1752)               Which agency applies the “target” designation to a dwelling and has set specific requirements for lead abatement and remodeling of these homes?

a.     DARPA

b.     The DEC

c.      The EPA

d.     The Local Lead Standards Designation Board

1753)               Your buyer client is under contract to purchase a home. During the inspection, asbestos is discovered in the home. Which of the following is true about asbestos?

a.     It’s an invisible and odorless gas.

b.     It’s a potential health hazard.

c.      It’s common and of no concern.

d.     It’s something homeowners should remove themselves.

1754)               In any given property, where will you most likely find the highest radon levels?

a.     Closets

b.     Garage

c.      Highest level

d.     Lowest level

1755)               Which one of the following is a true statement about radon?

a.     It’s a manmade chemical.

b.     It’s a naturally occurring gas.

c.      It’s a problem outdoors.

d.     It’s safe at any level.

1756)               Why is asbestos considered hazardous?

a.     It can cause serious lung disease and cancer.

b.     It causes a skin rash.

c.      It causes dementia if levels of exposure are high.

d.     It causes premature birth.

1757)               What is true about carbon monoxide in the home?

a.     It cannot be prevented.

b.     It is odorless and tasteless.

c.      It is slow to cause symptoms.

d.     It is usually not dangerous.

1758)               The EPA has special requirements for contractors performing lead abatement or remodeling in “target” dwellings. These requirements relate to what?

a.     Cost of the abatement or repairs

b.     “Green home” certification from the EPA

c.      Safety precautions to protect occupants and workers from lead dust

d.     Targeting the dwelling for removal

1759)               According to the EPA, at what level does radon become a health concern requiring mitigation?

a.     .04 picocuries per liter of air

b.     1.4 picocuries per liter of air

c.      2.4 picocuries per liter of air

d.     4.0 picocuries per liter of air

1760)               Radon is found in well water and where else?

a.     Ceiling tiles

b.     Insulation

c.      Plastics

d.     Soil

1761)               Homes built in which one of the following years are more likely to have asbestos present?

a.     1960

b.     1990

c.      2000

d.     2010

1762)               Who is most vulnerable to lead poisoning and its effects?

a.     Children

b.     Men

c.      Pets

d.     Women over age 70

1763)               ______ is called the “silent killer” because it’s odorless, tasteless, and deadly.

a.     Carbon monoxide

b.     Formaldehyde

c.      Radon

d.     VOCs

1764)               Lead is a highly toxic metal that may cause a range of health problems, especially in young children. Which one of the following is a true statement about lead hazards?

a.     Lead causes blindness on contact with the eyes.

b.     Lead is a confounding factor in diabetes.

c.      Lead is associated with coronary heart disease.

d.     Lead may cause behavioral problems, learning disabilities, seizures, and, in extreme cases, death.

1765)               Which product’s fibers are dangerous when inhaled because they can lodge in the lungs and intestines, causing cancer?

a.     Asbestos

b.     Lead paint

c.      Radon

d.     Silicone

1766)               Microscopic pieces of mold that float around in the air are called what?

a.     Isotopes

b.     Mites

c.      Moldies

d.     Spores

1767)               Which one of the following is a true statement about asbestos?

a.     It can be safely removed by homeowners.

b.     It is harmful only if left in place.

c.      It is not harmful at low levels.

d.     It is not safe at any level.

1768)               The Residential Lead-Based Paint Hazard Reduction Act requires sellers, landlords, and their agents to ______ any known lead hazards in the home.

a.     Assess the degree of

b.     Disclose

c.      Negotiate fees for removal of

d.     Remove

1769)               What are the first symptoms of carbon monoxide poisoning?

a.     Dizziness and nausea

b.     Heart palpitations

c.      Ringing in the ears

d.     Sore throat

1770)               Which one of the following is a reason mold is an environmental issue?

a.     It can grow without water or moisture.

b.     It damages what it grows on and can be unhealthy to humans.

c.      It produces off gasses.

d.     It releases radon as it breaks down.

1771)               Sam and Monique knew that the old industrial site that they purchased needed some environmental cleanup, but they don’t have the cash and put cleanup on hold. The EPA hired its own crew to deal with groundwater issues because of industrial solvents and billed Sam and Monique $164,000 when the job was complete. If Sam and Monique don’t pay the bill, which one of the following could happen?

a.     Sam and Monique will forfeit their ownership rights to the site and will be forced to foreclose.

b.     The EPA can seek damages in court for up to three times the actual cleanup costs.

c.      The EPA will have to find the former owners of the site and bill them.

d.     The EPA will have to fund the cleanup itself.

1772)               An investor is interested in purchasing and rehabilitating a brownfields property. Which of the following is likely true?

a.     Many localities would rather these sites sit empty, for fear of disturbing the soil.

b.     The investor probably can’t get a loan for the property.

c.      The price will likely be so high that he will need additional capital.

d.     The state probably has a program to help finance the purchase and rehabilitation of the property.

1773)               Which amendment to CERCLA says that “innocent landowners” aren’t responsible for the cleanup of hazardous contamination?

a.     Environmental Responsibility Amendment

b.     Hazardous Contamination Amendment

c.      Superfunds Amendments and Reauthorization Act

d.     The Fair Housing Act

1774)               What is a Superfund site?

a.     A commercial property landscaping project

b.     A property with “green” improvements that cost over $1 million

c.      A site identified by the EPA as requiring remediation of hazardous waste spills

d.     A site paid for by state taxes

1775)               Former landfills are often used for what purpose?

a.     Brownfields

b.     Development of golf courses and parks

c.      Special purpose landfills

d.     Unregulated waste disposal areas

1776)               Many parks and golf courses are the sites of ______.

a.     Former landfills

b.     Special purpose landfills

c.      Unregulated waste disposal areas

d.     Working landfills

1777)               Where are underground storage tanks primarily found?

a.     In newer homes

b.     In newer industrial sites

c.      In older homes and former industrial sites

d.     In parks and golf courses

1778)               What role does the Brownfields Law play in the assessment and cleanup of unused commercial/industrial sites that may contain hazardous waste?

a.     It ensures safe operation of storage tanks.

b.     It oversees the assessment and cleanup.

c.      It provides funds.

d.     It provides manpower for cleanup.

1779)               What is done to a landfill that is put out of commission?

a.     It is capped.

b.     It is converted to a special purpose landfill.

c.      It is no longer tested.

d.     Ventilation pipes are removed.

1780)               In addition to its potential health hazards, what is a common consequence of a brownfield’s presence in a community?

a.     Decreased property values

b.     Decreased state regulatory oversight

c.      Increased interest in development

d.     Increased wetlands and groundwater reserves

1781)               An abandoned or otherwise unused commercial or industrial site that contains suspected contaminants is known as a what?

a.     A brownfield

b.     A Brown Zone

c.      A space that cannot be used

d.     A special use landfill

1782)               What is the term for sites identified by the EPA under the Comprehensive Environmental Response, Compensation, and Liability Act?

a.     CERCLA site

b.     Hazardous Environment Community Clean-up (HECC) site

c.      Superfund site

d.     Waste Remediation Environmental Need (WREN) site         

1783)               Which of these regarding the impact of the Brownfields Law is true?

a.     The Mesmer family has discovered petroleum contamination on a site they just purchased. The Brownfields Law holds both them and the previous owner jointly responsible for cleanup.

b.     The Rodriguez family purchased a property that was formerly a commercial dry cleaner. They plan to convert the property to a residential dwelling. The Brownfields Law requires that they be held accountable for any contamination on the property.

c.      The Smiths have discovered chemical contamination on the property deed to them by their late parents. The Brownfields Law may provide funds to help them clean up the site.

d.     The Tennysons purchased a property that they later discovered was contaminated with methamphetamine waste. The Brownfields Law limits their liability since they were unaware of the contamination when they purchased the property.

1784)               Lines and drainage pipes are installed in which location to prevent waste from polluting groundwater?

a.     Cemeteries

b.     Former golf courses

c.      Landfills

d.     Unregulated waste disposal areas

1785)               Jacqueline is a licensee working with a property near a Superfund site. Which of these statements is true?

a.     A portion of the sale price must go to the EPA to fund clean-up of the site.

b.     She must disclose potential health threats to anyone in the area when showing the property.

c.      She must disclose the existence of an environmental hazard in the area.

d.     The property can’t be sold until the site is removed from the NPL.

1786)               Which of the following is true about special purpose landfills?

a.     They are common sites for parks, golf courses, and office buildings.

b.     They are not as strictly regulated.

c.      They are usually close to areas of human habitation.

d.     They contain hazardous waste.

1787)               Who is responsible for providing maps of earthquake fault zones in California?

a.     California EPA

b.     Local seismologists

c.      State geologist

d.     State university system

1788)               What type of natural hazard area is designated by local agencies?

a.     Earthquake fault zone

b.     Forest fire hazard area

c.      High fire hazard area

d.     Seismic hazard area

1789)               A special flood hazard zone is one of the six natural hazards that must be disclosed. How are special flood hazard zones identified?

a.     By local government

b.     By the EPA

c.      By the Federal Emergency Management Agency (FEMA)

d.     By the state water board

1790)               A licensee works at a brokerage that deals primarily in a mountainous county in California. Which of the following questions would best help the licensee understand the environmental issues unique to the county?

a.     Are any home owners in the county required to maintain defensible areas around their home?

b.     How do dirt roads in these rural areas affect our sales?

c.      What is the population density in the county?

d.     What property that we’ve listed has the highest elevation?

1791)               What is important to real estate professionals in California about the following environmental hazards: special flood hazard zone; area of potential flooding; high fire hazard area; forest fire hazard area; earthquake fault zone; and seismic hazard area?

a.     California brokerages must have emergency plans associated with each of these hazards.

b.     Destruction from any of these hazards is remediated by the California Real Estate Fund, which all brokerages must pay into.

c.      These are the hazards that homeowner’s insurance will not cover.

d.     These are the six natural hazard areas that require disclosure in California.

1792)               What is the danger of a seismic hazard area?

a.     Cracks in the earth greater than 50 feet

b.     Earthquake

c.      Flooding from dam failure

d.     Landslides or liquefaction

1793)               In what way, other than actual fire, does owning property in a designated forest fire hazard area affect home owners?

a.     They are required to have a fireproof basement in their dwelling.

b.     They may not receive fire protection services.

c.      They may not use candles, barbecues, fireplaces, or open flames of any sort in their home.

d.     They must serve on the volunteer fire department.

1794)               With which type of mortgage does the interest rate vary according to a specified index?

a.     Adjustable rate

b.     Balloon rate

c.      Fixed rate

d.     Straight term

1795)               –Final —

1796)               The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ______.

a.     Estate

b.     Land

c.      Real estate

d.     Real property

1797)               Jarvis is a builder. The building codes that apply to Jarvis’s work were established at what level (or levels) of government?

a.     Federal and state

b.     Local

c.      Local and state

d.     Local, state, and federal

1798)               What’s needed to protect a property buyer from financial loss if a real estate title has defects?

a.     Abstract of title

b.     Chain of title

c.      Title insurance

d.     Title search

1799)               How is a standard subdivision defined?

a.     Parcels of land or portions of a building owned individually with joint ownership in common areas.

b.     Parcels of land smaller than 160 acres being sold for individual ownership with no common interest with other owners of nearby parcels.

c.      Parcels of land sold to more than five people with an undivided interest in the entire property.

d.     Undeveloped land being sold to individual owners that are typically larger than 160 acres.

1800)               Which term represents the transfer of property to another through means of eminent domain, foreclosure, or adverse possession?

a.     Dedication by deed

b.     Involuntary alienation

c.      Public land grant

d.     Voluntary alienation

1801)               What is the difference between a pre-qualification letter and a pre-approval letter?

a.     A pre-qualification letter and pre-approval letter are the same thing.

b.     A pre-qualification letter is prepared before a loan is processed and the pre-approval letter is prepared after the home appraisal.

c.      With a pre-qualification letter, information provided by the borrower is not verified. With a pre-approval letter, the information is verified.

d.     With a pre-qualification letter, information provided by the borrower is verified. With a pre-approval letter, it is not.

1802)               Who typically performs a CMA or BPO?

a.     Appraiser

b.     Inspector

c.      Loan servicer

d.     Real estate licensee

1803)               Who is the chief executive officer of the California Department of Real Estate?

a.     The governor

b.     The Real Estate Advisory Commission

c.      The Real Estate Commissioner

d.     The state attorney general

1804)               What are municipal fees as they relate to property development?

a.     Fees a new homeowner pays for items such as permits and utility hook-ups

b.     Fees developers pay for items such as permits and utility hook-ups

c.      Fees taxpayers pay for items such as permits and utility hook-ups

d.     Fees the city pays for items such as permits and utility hook-ups

1805)               What’s the name of the required clause in a deed that “grants” or “conveys”?

a.     Acknowledgment

b.     Granting clause

c.      Habendum clause

d.     Warranty clause

1806)               With this type of commercial lease, the tenant typically pays the taxes, insurance, and maintenance expenses.

a.     Gross lease

b.     Net lease

c.      Percentage lease

d.     Triple net lease

1807)               Ralph leases 1,000 square feet in a large warehouse. The lease agreement requires him to pay portions of the landlord’s taxes, insurance, and maintenance, in addition to the amount he pays to lease the space. What type of lease does Ralph have?

a.     Gross lease

b.     Operating stop lease

c.      Percentage lease

d.     Triple net lease

1808)               How do predatory lenders take advantage of consumers?

a.     Making loans to consumers who can’t afford them

b.     Not selling their loans on the secondary market

c.      Selling their loans on the secondary market

d.     Underwriting loans

1809)               Which agency enforces federal fair housing laws?

a.     FHA

b.     FHEO

c.      NFHA

d.     NHA

1810)               Jake is unhappy that his lease was extended automatically. What lease provision should Jake review closely to ensure it is enforceable?

a.     Automatic lease creation clause

b.     Automatic lease extension clause

c.      Automatic lease renewal clause

d.     Non-cancellation clause

1811)               Which of the following is true about VA loans?

a.     A 3.5% down payment is required.

b.     No funding fee applies.

c.      The VA guarantees 100% of home loan amount.

d.     The VA guarantees 25% of the home loan amount.

1812)               A seller you’re working with still owes $50,000 on his mortgage but wants to net $20,000 after the mortgage and 7% commission are paid. What is the minimum for which the house must sell?

a.     $75,269

b.     $79,645

c.      $89,900

d.     $90,645

1813)               Which of the following statements is true about zoning?

a.     A moratorium is a permanent halt on development.

b.     A moratorium is a temporary halt on development.

c.      Special use permits are temporary.

d.     Variances do not require the petitioner to show hardship.

1814)               What is one reason that carbon monoxide could be called a “sneaky” toxin?

a.     It creeps in through the soil.

b.     It increases when the weather is rainy.

c.      It’s odorless and tasteless.

d.     It’s present in paint.

1815)               What is inverse condemnation?

a.     A land owner’s right to give their property to the government

b.     The process by which land is given to the government after the death of the land owner

c.      The process by which the government can take land from private owners for the good of the public

d.     When the government takes land from a property owner without offering compensation, and the owner must sue to be compensated for the property value.

1816)               You demonstrate the fiduciary duty of accounting by ____________.

a.     Disclosing any adverse material facts

b.     Properly tabulating expenses and income

c.      Putting your client’s interest ahead of your own

d.     Taking care of your client’s funds and paperwork

1817)               For how long is a tentative map’s approval good before an extension must be requested?

a.     Five years

b.     One year

c.      Three years

d.     Two years

1818)               Which of the following provides everything a lender needs to know in order to value the property used as collateral for a loan?

a.     Apportionment

b.     Appraisal

c.      Comparative market analysis

d.     Competitive market analysis

1819)               Emblements are considered to be ______.

a.     A subsurface right

b.     Land

c.      Personal property

d.     Real property

1820)               What’s income received before any operating expenses are deducted?

a.     Effective gross income

b.     Gross income

c.      Net income

d.     Potential gross income

1821)               What must happen if two or more people own a piece of property and one wants to sell?

a.     A quitclaim deed must be used.

b.     The land is automatically dedicated for public use.

c.      The property can only be sold if all owners agree to the sale.

d.     The property must be partitioned or sold according to the owner’s portion or share of interest.

1822)               Which mortgage market comprises lending institutions that lend directly to the consumer?

a.     Government market

b.     Primary mortgage market

c.      Secondary mortgage market

d.     Stock market

1823)               Who typically prepares a CMA or a BPO?

a.     Appraiser

b.     Inspector

c.      Loan servicer

d.     Real estate licensee

1824)               Which term refers to the ordinances/regulations that protect the community and control property development within subdivisions?

a.     Environmental impact statement

b.     Plat book

c.      Subdivision plat

d.     Subdivision regulations

1825)               Which of the following best describes market price?

a.     The amount at which the seller chooses to list the property on the open market.

b.     The amount it would take to replicate the property if it were to be rebuilt.

c.      The amount that a buyer has paid and a seller has accepted for a property.

d.     The amount that an appraiser estimates a property to be worth on the fair market.

1826)               Which of these statements is correct when it comes to interpreting contracts?

a.     Handwritten insertions take precedence over typed insertions.

b.     Insertions must be typed to be legally binding.

c.      Insertions must be written in red to be legally binding.

d.     Typed insertions take precedence over handwritten insertions.

1827)               What’s a certified opinion or estimate of value of a particular property as of a particular date?

a.     Appraisal

b.     Assessment

c.      Evaluation

d.     Inspection

1828)               Which of these statements about the enforceability of leases is true?

a.     A lease is only enforceable when signed by a notary.

b.     A lease must be recorded in public records of the county to be enforceable.

c.      A lease must meet the essential requirements of any contract to be enforceable.

d.     A lease that is not signed is not enforceable.

1829)               An ______ minor is considered to be a legally competent party who is able to enter into a contract.

a.     Alien

b.     Emaciated

c.      Emancipated

d.     Incompetent

1830)               The amount of money that a seller will make on a transaction after closing expenses and brokerage fees are paid is called ______.

a.     Commission

b.     Net to buyer

c.      Net to seller

d.     Purchase price

1831)               What’s the amount a lender charges a borrower for using the lender’s money?

a.     Discount point

b.     Interest

c.      Principal

d.     Usury

1832)               Which of the following must be disclosed in a subdivision’s public report, according to the Subdivided Lands Law?

a.     An alphabetical listing of all current owners

b.     Any unusual conditions are easements

c.      The proximity to the nearest grocery store in the area

d.     The year the development plan for the subdivision was drawn

1833)               What’s the best definition of a cooperating agent?

a.     A broker who gives a referral fee to another broker or the other broker’s agents

b.     A broker who serves as a dual or designated agent

c.      An agent from another brokerage who brings you a buyer when you’re the listing agent

d.     An agent with uncommon social graces

1834)               As an agent, you owe fiduciary duties to your client. Among these are loyalty, reasonable skill and care, confidentiality, accounting, and disclosure. What fiduciary duty is missing from this list?

a.     Kindness

b.     Obedience

c.      Profitability

d.     Strategy

1835)               A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. If $1,145.83 is interest, how much is applied to principal?

a.     $1,145.83

b.     $2,042.71

c.      $896.88

d.     $916.67

1836)               What’s used to calculate the housing debt-to-income ratio and total debt-to-income ratio?

a.     After-tax income

b.     Gross income

c.      Net income

d.     Operating income

1837)               The Consumer Credit Protection Act, which includes the Truth in Lending Act, is often referred to as _________________.

a.     Regulation B

b.     Regulation C

c.      Regulation T

d.     Regulation Z

1838)               Which entity is responsible for regulating the real estate industry in California?

a.     California Department of Real Estate

b.     California Licensing Division

c.      Real Estate Brokers

d.     Real Estate Salespersons

1839)               Which one of the following terms refers to a tract of land divided into lots or plots and used for building purposes?

a.     Plat

b.     Site plan

c.      Subdivision

d.     Topography

1840)               Which term describes the act of transferring possession of the rental property from the landlord to the tenant?

a.     Clairvoyance

b.     Contract

c.      Conveyance

d.     Covenant

1841)               Complete this formula: Net to seller = ______ x (100% – commission rate)

a.     Closing costs

b.     Commission rate

c.      Market value

d.     Sales price

1842)               In most transactions involving a buyer or seller, real estate agents have limited authority to act on behalf of their clients. Therefore, which type of agency relationship are they in?

a.     Designated

b.     General

c.      Special

d.     Universal

1843)               Easements are a type of encumbrance that can affect a property. Which of the following is true about easements?

a.     Easements are always permanent.

b.     Easements are often established by a written agreement between the parties.

c.      Easements are rights one party acquires to use another party’s land, usually for one day.

d.     Easements require the property owner’s express permission.

1844)               What’s a real estate licensee’s responsibility regarding radon?

a.     Advise all buyers to have homes tested for radon only if they are in a high-risk area.

b.     Advise all buyers to have homes tested for radon, regardless of the location.

c.      Assist buyers with installing radon mitigation equipment.

d.     Assist sellers with purchasing radon detection equipment.

1845)               What is the instrument called that’s generally used to convey property?

a.     Deed

b.     Lien

c.      Mortgage

d.     Title

1846)               What does a chain of title document establish?

a.     A chain of past title liens

b.     An abstract of title

c.      The path of title ownership over time

d.     Whether the title is free of encumbrances

1847)               What is eminent domain?

a.     The authority to enact legislation to protect the welfare of the public

b.     The power of the government to claim interest in a property due to the owner’s failure to pay taxes

c.      The power of the government to take private land for public use

d.     The process for transferring ownership of private property when the owner dies without a will, heirs, or creditors

1848)               What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach?

a.     Broad and specific

b.     Components and measures

c.      Elements and units

d.     General and detailed

1849)               Net to seller equals the ______ multiplied by the percent to seller.

a.     Closing costs

b.     Commission rate

c.      Sales price

d.     Tax rate

1850)               An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?

a.     $100,000

b.     $15,000

c.      $3,750

d.     $60,000

1851)               Which one of these describes a deed?

a.     Abstract of title

b.     Ownership document

c.      Promissory note

d.     Recording fee

1852)               Which of the following is used to protect the buyer from title defects after closing?

a.     Abstract of title

b.     Chain of title

c.      Survey

d.     Title insurance policy

1853)               What does PITI stand for?

a.     Principal, insurance, title, and interest

b.     Principal, interest, taxes, and insurance

c.      Property, insurance, taxes, and interest

d.     Property, interest, title, and insurance

1854)               What’s a brownfield?

a.     An abandoned or unused commercial or industrial site with suspected contaminants

b.     A partially restored residential area

c.      A special use landfill

d.     A wild space saved from development

1855)               Who generally writes a broker’s price opinion?

a.     A buyer

b.     An appraiser

c.      A real estate broker for a buyer

d.     A real estate broker for a lender

1856)               The business under which real estate activities are performed is called ______.

a.     A broker

b.     A corporation

c.      An agency

d.     A real estate brokerage

1857)               What is the type of possession in which a tenant stays after the right to possess has terminated?

a.     Estate at sufferance

b.     Estate at will

c.      Estate for years

d.     Leasehold estate

1858)               Who is responsible for supervising and retaining the licenses of the salespersons they employ?

a.     Advisory Commission

b.     Associate broker

c.      Broker

d.     Salesperson

1859)               Property ownership for an indeterminable length of time is an example of what form of estate?

a.     Freehold

b.     Homestead

c.      Leasehold

d.     Periodic

1860)               Where can you find out what’s not covered by a title insurance policy?

a.     The county clerk’s office

b.     The internet

c.      The lender’s attorney

d.     The title insurance policy’s schedule of exceptions

1861)               How long is a public report valid before it must be renewed?

a.     10 years

b.     Five years

c.      One year

d.     Three years

1862)               What are three methods of handling purchasers’ deposit money that are acceptable under current law?

a.     Putting the money in escrow, dispersing the funds across other investments to reduce risk of loss, or buying deposit insurance

b.     Putting the money in escrow, putting the title in trust, or purchasing a bond furnished to the state

c.      Reinvesting the new money in other subdivision development projects, purchasing of subdivision equipment, or purchasing resources required for completing subdivision development

d.     Throwing the check away, placing it on a desk in an open office environment, depositing it with other mixed funds from the developer

1863)               What is the purpose of a deed?

a.     It offers proof of a lender’s lien on real property.

b.     It’s a method of obtaining an abstract of title.

c.      It’s used to determine a property’s assessed value for property taxes.

d.     It’s used to transfer real property from one party to another.

1864)               In order to assist your clients with environmental issues, what must you do?

a.     Assure potential buyers there is nothing to worry about.

b.     Disclose environmental issues only if they have not been addressed.

c.      Ignore potential environmental issues.

d.     Understand the risks and disclose everything.

1865)               What is it called when a person who has possession of a property through a life estate abuses the property or allows it to deteriorate?

a.     Act of waste

b.     Escheat

c.      Estate at sufferance

d.     Reversionary interest

1866)               What exactly is a deed?

a.     A mortgage

b.     An instrument of conveyance

c.      An interest in personal property

d.     Chattel

1867)               Which fiduciary duty goes beyond closing?

a.     Confidentiality

b.     Disclosure

c.      Loyalty

d.     Obedience

1868)               Jerome, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.

a.     A broker

b.     An associate broker

c.      An associate broker with at least five years of experience

d.     A salesperson

1869)               A month-to-month lease agreement is considered to be this type of leasehold estate, in which the interest is automatically renewed at the end of each period specified in the lease.

a.     Estate at sufferance

b.     Estate at will

c.      Estate for months

d.     Periodic estate

1870)               What is the term used for the ability to pay off liens against a property up until a foreclosure sale is held?

a.     Adverse possession

b.     Dedication by deed

c.      Involuntary alienation

d.     Right of redemption

1871)               California’s Uniform Vendor and Purchaser Risk Act specifies the rights and duties that apply when a property is ______.

a.     Damaged or destroyed

b.     Foreclosed upon

c.      Improved

d.     Sold

1872)               Carl is interested in purchasing a lot that is 200 feet wide by 600 feet long. The seller has it priced at $800 per acre. How much would this lot cost?

a.     $1,600

b.     $2,204

c.      $4,132

d.     $4,800

1873)               The ease with which the property can be conveyed to another describes which factor that influences value?

a.     Demand

b.     Scarcity

c.      Transferability

d.     Utility

1874)               Which term describes the action taken to force a sale of real property encumbered by a lien?

a.     Adverse possession

b.     Dedication by deed

c.      Foreclosure

d.     Judgment lien

1875)               A tenant just paid a $6,000 security deposit to rent a furnished home. If the security deposit is equal to the maximum allowed, how much is the rent?

a.     $1,000

b.     $2,000

c.      $3,000

d.     $4,000

1876)               In what type of lease does the landlord pay taxes, maintenance, and insurance?

a.     Gross lease

b.     Net lease

c.      Percentage lease

d.     Triple net lease

1877)               What happens when the terms of a lease require the tenant to waive a non-waivable right?

a.     The entire lease is void.

b.     The lease provision is void, and the lease is voidable by the landlord.

c.      The provision is void.

d.     The tenant may legally stop paying rent until the provision is removed.

1878)               One of a seller’s agent’s duties is to ______.

a.     Keep the buyer informed

b.     Market and sell the property

c.      Negotiate for the buyer

d.     Represent the buyer while making sure that none of the seller’s advantages are lost

1879)               A(n) ______ is an example of a limited agent.

a.     Attorney

b.     Escrow officer

c.      Facilitator

d.     Transactional broker

1880)               What is a judicial foreclosure?

a.     After borrower and public notice are provided, the property is sold at auction to the highest bidder without court action due to the power of sale clause in the security instrument.

b.     After borrower default, the lender records paperwork with the court, the court sets a payment deadline for the borrower, and the lender is awarded title if the borrower doesn’t pay.

c.      After sufficient notice to the borrower and to the public, the court permits the property to be sold at auction to the highest bidder.

d.     The property is sold at a foreclosure auction for less than the amount due by the borrower and the lender sues the borrower to collect the difference.

1881)               What is a capitalization rate?

a.     The expected rate of return on investment

b.     The rate at which assets depreciate over time

c.      The rate of capital recapture

d.     The value of a business as an investment

1882)               When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach.

a.     Cost

b.     Income

c.      Market value

d.     Sales comparison

1883)               You’re representing Janice in the purchase of a home. Under which of the following instances would it be unacceptable to disclose confidential information?

a.     Disclosure is necessary to defend yourself against an accusation of wrongful conduct

b.     Janice gives you written permission to disclose the information

c.      The information is made public from a source other than you

d.     You suspect the disclosure will enable Janice to buy a home at a lower price

1884)               The seller said he never received the buyers’ earnest money deposit. How can the buyers prove they deposited earnest money on time?

a.     Covenant

b.     Deposit receipt

c.      Listing agreement

d.     Options

1885)               Every foundation in direct contact with the ground should have which two features?

a.     Grading and leveling

b.     Landscaping and grading

c.      Radon detector and carbon monoxide detector

d.     Vapor barrier and termiticide

1886)               You have a client who has an investment property valued at $400,000. Annual cap rates are 8%. What can your client expect in net operating income?

a.     $12,000

b.     $22,000

c.      $32,000

d.     $42,000

1887)               Personal interest most often conflicts with what fiduciary duty?

a.     Accounting

b.     Confidentiality

c.      Loyalty

d.     Reasonable skill and care

1888)               Pedro has a lease with no definite end date. This is an estate at will, also known as ______ in California.

a.     Chattel interest

b.     Chattel real

c.      Freehold interest

d.     Qualified interest

1889)               Which of these is a colorless, odorless, radioactive gas that is released when uranium decays?

a.     Carbon monoxide

b.     Chlorofluorocarbons

c.      Polychlorinated biphenyls

d.     Radon

1890)               What’s the purpose of zoning?

a.     It dictates how land in a specific area can be used.

b.     It increases property taxes.

c.      It provides safety standards for construction.

d.     It reduces development in an area.

1891)               First-time homebuyers can access an additional amount up to $________ of their Roth IRA accounts over and above withdrawals equal to their contributions.

a.     $10,000

b.     $15,000

c.      $20,000

d.     $5,000
Robert purchased a new home and obtained financing through First Lending Bank, a regional bank located in his city. First Lending originated the loan, but before Robert’s first mortgage payment was due, it sold the loan to CitiMortgage. As a loan originator, what market is First Lending operating in?

e.     Federal Reserve System

f.      Primary mortgage market

g.     Secondary mortgage market

h.     Stock market

1892)               The Unruh Civil Rights Act requires: “Full and equal accommodations, advantages, facilities, privileges or services in ___ business establishments.”

a.     All

b.     For-profit

c.      Non-profit

d.     Privately owned

1893)               Which of the following is an example of a metes and bounds description?

a.     123 Roanoke Street Any Town, ST 98765

b.     “Beginning at the iron pin 30 paces from the center of the brook that runs across the road Southwesterly from the dwelling …”

c.      Lot 6 of Block 3 of the Meridian subdivision …

d.     S ½ SE ¼ NW ¼ Section 2 …

1894)               What effect will a property’s utility have on the value if it’s currently uninhabitable?

a.     Utility doesn’t influence value.

b.     Value will be pushed downward.

c.      Value will be pushed upward.

d.     Value will remain the same.

1895)               –part2 final—

1896)               What’s a feasibility study?

a.     An approach appraisers use to determine the value of a home

b.     An evaluation performed by environmental agencies considering the cost of clean-up

c.      A process that answers the questions about whether a development is possible and whether there is a market

d.     A test that home inspectors conduct to determine whether a certificate of occupancy should be issued

1897)               James is obtaining an 80/20 loan. What does 80/20 signify?

a.     Amount financed/Down payment

b.     ARM

c.      Debt-to-income ratio

d.     Fixed-rate mortgage

1898)               Co-ownership without inheritance rights is what kind of real property ownership?

a.     Joint tenancy

b.     Tenancy at will

c.      Tenancy in common

d.     Tenancy in severalty

1899)               Jenny and her friend Kali went out to lunch. Afterward, they paid the bill. Their agreement to pay for the food they were served is what type of contract?

a.     An audible contract

b.     An express contract

c.      An implied contract

d.     A written contract

1900)               Archie signed a contract to buy Pam’s home. The deal eventually closed, but Pam failed to hand over the home’s keys to Archie. A week passed, and Archie filed a lawsuit in an attempt to force Pam to give him the keys. This is an example of ______.

a.     Accepting liquidated damages

b.     Accepting partial performance

c.      Suing for damages

d.     Suing for specific performance

1901)               What responsibility do licensees have regarding household lead hazards?

a.     Disclosing that there’s lead-based paint to a buyer, even when they don’t know for sure it’s there

b.     Disclosing that there’s lead-based paint to a buyer when they know about it

c.      Making sure all lead is removed, even if they have to personally remove it

d.     Making sure their sellers know how to hide the presence of lead-based paint

1902)               Which of the following individuals must have a license if performing contracting work in California?

a.     Art, who is installing a fence for his neighbor at a cost of $375

b.     Georgia, who is preparing her home for sale

c.      Micky, who is replacing his nonfunctioning master bath faucet

d.     Reggie, who is carpeting his family room for $3,000, so his dogs don’t scratch the hardwoods

1903)               Which term is used to describe a correction to a contract that contains a mistake?

a.     Disclosure

b.     Fraud

c.      Reform

d.     Renewal

1904)               ______ may only be used to help determine an appropriate list price for a property or to help a buyer determine fair market value.

a.     A BPO

b.     A CMA

c.      An appraisal

d.     An AVM

1905)               Which of the following is an example of a voluntary lien?

a.     Estate and inheritance tax lien

b.     Income tax lien

c.      Mechanic’s lien

d.     Mortgage lien

1906)               Which of the following activities requires licensure beyond a real estate salesperson or broker license?

a.     Advertising three mobile homes at the place of business

b.     Collecting rent or royalties from a mineral, oil, or gas property

c.      Providing prospective tenants with a list of properties available for rent

d.     Selling subdivided property

1907)               Which of these is a horizontal wood-framing member used in floor and ceiling framing?

a.     Joist

b.     Rafter

c.      Sill plate

d.     Stud

1908)               Ellen and Sadie signed an agreement to list Sadie’s condo for sale. After the contract was signed, Sadie’s father, Grant, offered to pay Ellen’s commission as a housewarming present. Sadie’s Mom and stepdad, Linda and Rick also chipped in. Who is Ellen’s client?

a.     Grant

b.     Linda

c.      Rick

d.     Sadie

1909)               Which of the following is an example of single agency?

a.     Mary from XYZ Real Estate represents Susan, a buyer for Seamus’s listing. Seamus represents the seller and is also a licensee for XYZ.

b.     Randolph from ABC Realty represents Cindy, a buyer for Carol’s listing. Carol is affiliated with Net Realty.

c.      Walter from Sell Fast Realty represents Hallie, a seller. He also represents Jackson, a buyer who wants to make an offer on Hallie’s condo.

d.     Whenever dual agency doesn’t exist, it’s single agency.

1910)               Gross rent multiplier (GRM) and gross income multiplier (GIM) are used to ______.

a.     Determine rent

b.     Determine the list price of a property

c.      Evaluate the value of income-producing property

d.     Get an estimate of annual losses

1911)               What actions must you take to renew a real estate license that has been expired for two years?

a.     Complete the continuing education requirements and submit a renewal and late fee.

b.     File an appeal with the Real Estate Commissioner.

c.      Re-qualify for a real estate license by completing pre-licensing courses and passing the state licensing exam.

d.     Retake the state licensing exam.

1912)               Kim and Kip are a married couple who own community property. What happens when they divorce?

a.     Their community property will be divided according to their equal rights of ownership and possession.

b.     Their ownership rights terminate.

c.      The one who records title first gets the property.

d.     They automatically become joint tenants with the right of survivorship.

1913)               What’s a finder?

a.     A person who helps buyers and sellers locate agents

b.     A person who introduces the buyer and seller, but doesn’t represent either party

c.      A person who investigates title issues

d.     A search featured on the MLS

1914)               To determine the net operating income of a property, subtract the total operating expenses from the ______.

a.     Effective gross income

b.     Potential gross income

c.      Scheduled rent

d.     Vacancy and collection losses

1915)               What are the four external forces that may affect value?

a.     Demand, usability, scarcity, transferability

b.     Physical/environmental, economic, social, political/governmental

c.      Positive, negative, dual, single

d.     Unintentional, intentional, express, implied

1916)               After a general plan is developed and the planning commission makes its recommendation, what is the next step in the adoption process?

a.     Developers bid on areas they would like to develop.

b.     Developers clear any existing infrastructure on the land.

c.      Residents vote on the plan.

d.     The plan is reviewed at a public hearing by the local legislative body.

1917)               When a real estate salesperson or broker license is issued, how long is it valid?

a.     Five years

b.     Four years

c.      One year

d.     Two years

1918)               What hazardous material might be found in vinyl flooring, insulation, and roof shingles of older homes?

a.     Asbestos

b.     PCBs

c.      Radon

d.     VOCs

1919)               You represent a seller as a single agent. What’s it called when you’re simultaneously working for the buyer’s best interests in the transaction without the seller’s knowledge?

a.     Broker agency

b.     Dual agency

c.      Split agency

d.     Sub-agency

1920)               According to the Statute of Frauds, in order to be legally enforceable, a contract must be in writing, name the contracting parties, identify the subject matter of the contract, and ______.

a.     Be for a legal purpose

b.     Be signed by two or more attorneys

c.      Include a certain amount of financial consideration

d.     Present the essential terms and conditions of the contract

1921)               What will a typical condominium legal description reference?

a.     Mailing address

b.     Township, section, and condominium name only

c.      Unit number and condominium name only

d.     Unit number, condominium name, plat map, page, and number

1922)               Katrina’s business card has the REALTOR® logo on it because Katrina respects the National Association of REALTORS®, although she’s not yet a member. This is ______.

a.     A violation of consumer protection laws

b.     A violation of real estate law

c.      Commingling

d.     Okay, as long as she plans to become a member within one year

1923)               In which of the following situations would an agent be representing a customer in a real estate purchase?

a.     Any time

b.     Never

c.      When the agent has his broker’s permission

d.     When the agent has his broker’s written and signed permission

1924)               The requirement that a portion of the purchase money mortgage be repaid when each lot is sold is called ____________.

a.     Completion bond

b.     Developer incentive

c.      Lot release provision

d.     Owner participation

1925)               In which type of lease does the tenant pay some or all expenses separately?

a.     Gross lease

b.     Net lease

c.      Percentage lease

d.     Sublease

1926)               What practice did the Fair Housing Act of 1968 attempt to eliminate?

a.     Discrimination based on marital status

b.     Discrimination based on sexual orientation

c.      Discrimination based on source of income

d.     Discrimination through blockbusting, steering, and redlining

1927)               The requirement of a developer to use their own funds as down payment on a project is called ______________.

a.     Completion bond

b.     Developer incentive

c.      Owner participation

d.     Wraparound insurance

1928)               What does the rectangular survey system use as the basis for legal descriptions?

a.     Principal meridians, base lines, and sections

b.     Reference to a subdivision plat

c.      Reference to degrees latitude and longitude

d.     The beginning point of a boundary line as identified by a surveyor

1929)               Before a blueprint and building specifications will receive a building permit, which party must stamp the blueprint?

a.     An architect or engineer

b.     The builder

c.      The buyer

d.     The developer

1930)               In the conveyance of real property after death, what takes precedent over any terms specified in the deceased person’s will?

a.     Heirs’ wishes

b.     Intestate

c.      Nothing

d.     Operation of law

1931)               A plan adopted by every city or county in the state outlining the development of the area is called a ______, also known as a master plan.

a.     Development plan

b.     General plan

c.      Specific plan

d.     Zoning map

1932)               If you take gross income and deduct operating expenses, what do you get?

a.     Effective gross income

b.     Net operating income

c.      Potential gross income

d.     Profit

1933)               A landlord who wishes to enter an occupied rental unit for a legal reason may need to provide reasonable ______.

a.     Compensation

b.     Identification

c.      Justification

d.     Notice

1934)               What’s the National Flood Insurance Program?

a.     A program that cleans up flooding in hazard areas

b.     A program that covers all of the costs of flood insurance in hazard areas

c.      A program that helps homeowners in flood hazard areas obtain insurance

d.     A program that provides boats to homeowners in flood hazard areas

1935)               Joe signed a listing agreement with Marisa. A week later, Marisa’s co-worker, Tina, showed Joe a property that he’s interested in buying once his home sells. A week after that, Ross submitted an offer on Joe’s property on behalf of his buyer client. Who is Joe’s agent?

a.     Joe doesn’t have an agent.

b.     Marisa

c.      Ross

d.     Tina

1936)               Which of the following statements is true regarding assignments and subleasing?

a.     Both assignment and subleasing allow the former tenant to relinquish liability for the lease payment.

b.     Both assignment and subleasing require specific written approval of the landlord

c.      Neither assignment nor subleasing relieve the former tenant of liability.

d.     When you sublet a lease, you’re no longer liable for lease payments, even if the new tenant doesn’t pay rent.

1937)               Which of the following best describes a property’s assessed value?

a.     A broker’s opinion of the property’s value based on market comparables.

b.     The seller’s assessment of the property’s worth based on all known facets and features of the property; used to set the listing price.

c.      The value placed on the property by the local jurisdiction’s taxing authorities to calculate property taxes.

d.     The value placed upon a property by a certified appraiser.

1938)               Supply and demand determine the competitive environment. Which of the following is a true statement?

a.     When there are more homes on the market, buyers can’t be picky.

b.     When there are more homes on the market, buyers hold the negotiating power.

c.      When there are more homes on the market, it drives prices upward.

d.     When there are more homes on the market, sellers can demand more for their property.

1939)               Supply and demand determine competition within a market. Which of the following is a true statement?

a.     When there are fewer houses on the market, sellers can demand more for their properties.

1940)               Which of these statements about landlord liability is true?

a.     Commercial landlords are never liable for injuries resulting from the condition of the premises.

b.     Landlords may be liable for injuries if they promised to repair the defect but never followed through.

c.      Landlords must regularly inspect the property for defects throughout the tenancy period.

d.     Residential landlords are only liable for injuries resulting from the condition of the premises if they agreed to make repairs in writing.

1941)               Which type of lease escalation ties lease payments to a market indicator?

a.     Base

b.     Direct operating costs

c.      Expense stop

d.     Index

1942)               Why is debt reduction recommended when preparing to obtain financing?

a.     Builds discipline

b.     Improves credit score

c.      Increases loan-to-value ratio

d.     Lowers your cash reserves

1943)               Tenants in the military who are facing eviction may be eligible for a stay of eviction if they meet which of these criteria?

a.     Their ability to pay rent is adversely affected by military service.

b.     Their monthly rent is more than $2,400 per month.

c.      They have no dependents.

d.     They have one or more dependent.

1944)               Gerald creates a trust to convey his property to his heirs. His friend, Nancy, is placed in charge of making sure the terms of the trust are carried out. In this example, Nancy is the ______.

a.     Beneficiary

b.     Broker

c.      Trustee

d.     Trustor

1945)               What is a survey?

a.     A description method that uses principal meridians and base lines

b.     A description of the land that specifies the boundaries and location of a specific piece of real property

c.      An object used as a boundary or starting point for a metes-and-bounds description

d.     A professional, on-site measurement of the lot lines and dimensions of a property

1946)               Which type of deed offers the strongest and broadest form of guarantee and protection of title to the grantee?

a.     Grant deed

b.     Quitclaim deed

c.      Sheriff’s deed

d.     Warranty deed

1947)               Jillian has a loan-to-value ratio of 90/100. This means __________.

a.     Her loan is 10% of the value of the real estate used as collateral and she is obtaining a second mortgage for 90%.

b.     Her loan is 90% of the value of the real estate used as collateral and she is putting 10% down.

c.      She is putting 10% down, with 90% being pulled from her IRA.

d.     The property is only worth 90% of the amount loaned.

1948)               Octogenarians Gertie and Frank met in Sunset Living, a skilled nursing center for people with advanced Alzheimer’s disease, where they’re both residents. They fell in love and get hitched, signing a marriage certificate. This is an example of ______ contract.

a.     An executory

b.     An implied

c.      An invalid

d.     A valid

1949)               California homeowners may receive ________ and tax credits for opting for energy efficient systems.

a.     Prizes

b.     Property tax waivers

c.      Rebates

d.     Retirement funds

1950)               What happens when a married or otherwise legally joined couple who owns a property as tenancy by the entirety dissolves their union?

a.     Their ownership automatically becomes a tenancy in common.

b.     Their ownership rights terminate.

c.      The one who records title first gets the property.

d.     They become joint tenants with right of survivorship.

1951)               If a tenant replaces a kitchen faucet, can the tenant take the new faucet when vacating?

a.     No, because any fixtures belong to the landlord

b.     Only if the new faucet costs more than the old faucet

c.      Only if the old faucet is replaced

d.     Yes, if the tenant paid for the new faucet

1952)               Which of these is a written description of a blueprint?

a.     Building permit

b.     Building plan

c.      Building specifications

d.     Offering plan

1953)               What type of tenant uses a percentage lease most often?

a.     Manufacturing

b.     Residential

c.      Retail

d.     Triple net

1954)               What agency oversees the Underground Storage Tank Program in California?

a.     California Tank Testers Union

b.     Division of Water Quality

c.      Hazardous Waste Board

d.     Underground Storage Tank Agency

1955)               Carla creates a trust to convey her assets to her children. Her brother, Alvin, is placed in charge of making sure the terms of the trust are carried out. In this example, Carla is the ______.

a.     Beneficiary

b.     Broker

c.      Trustee

d.     Trustor

1956)               How many feet are in three yards?

a.     12

b.     Nine

c.      Six

d.     Three

1957)               What duties does a buyer agent have to the seller?

a.     To advocate and negotiate on behalf of both parties

b.     To disclose the agent’s relationship with the buyer

c.      To obtain the highest price possible

d.     To provide comparables to support the buyer’s offering price

1958)               With which type of commercial lease does the tenant pay some or all of the expenses?

a.     Gross lease

b.     Net lease

c.      Percentage lease

d.     Sublease

1959)               What is a non-judicial foreclosure?

a.     After borrower and public notice is provided, the property is sold at auction to the highest bidder without court action due to the power-of-sale clause in the security instrument.

b.     After borrower default, the lender records paperwork with the court, the court sets a payment deadline for the borrower, and the lender is awarded title if the borrower doesn’t pay.

c.      After sufficient notice to the borrower and to the public, the court permits the property to be sold at auction to the highest bidder.

d.     The property is sold at a foreclosure auction for less than the amount due by the borrower and the lender sues the borrower to collect the difference.

1960)               Which lien can be filed after other liens but still take priority over them?

a.     Deceased person’s debt and mortgage liens

b.     Income tax lien

c.      Mechanic’s lien

d.     Real property tax lien

1961)               Which of the following is true about easements appurtenant in California?

a.     Easements appurtenant are not legal in California

b.     The easement owner may release the easement if it is no longer needed

c.      The easement remains, even if the easement owner abandons the easement

d.     They expire automatically after 10 years of use

1962)               What’s the definition of a “proportionate share” escalation clause in a lease agreement?

a.     It allocates electricity among tenants based on the square footage of their unit.

b.     It allows the tenants to invoice landlords for repairs done to their units.

c.      It requires tenants to pay their fair share of costs to operate the building.

d.     It stipulates how the landlord allocates usage of common areas.

1963)               Which of these leases is not legally enforceable in California?

a.     A month-to-month lease that was conveyed orally and agreed to through a handshake

b.     A month-to-month lease that was put in writing

c.      A month-to-month lease that was put in writing and signed by both parties

d.     A two-year lease that was conveyed orally and agreed to through a handshake

1964)               When would a subdivision developer have to disclose that the property being sold has not been examined by the BRE in a disclaimer on all of their marketing and sales contracts?

a.     When development has gone on longer than six years without an amended or renewed public report

b.     When the developer has an amended public report

c.      When the developer has applied for a conditional public report

d.     When the subdivision development is in another state or country

1965)               What’s the primary purpose of bulk zoning?

a.     To allow warehouse facilities in residential areas

b.     To increase density

c.      To keep like properties together

d.     To reduce density

1966)               Sisters Sheila and Vickie entered into a contract together to buy a vacation property. The sisters get into a dispute, and Vickie no longer wants any part of the deal. Sheila is in agreement with this idea, and talks her younger brother Joe into replacing Vickie on the contract. Sheila, Joe, Vickie and the seller agree to the substitution. Of what is this an example?

a.     Assignment

b.     Fraud

c.      Mutual mistake

d.     Novation

1967)               Which of the following is true about the DFEH authority in the event of a complaint against a licensee?

a.     After receiving a bona fide complaint, it automatically revokes a licensee’s license as a pre-emptive measure against further violations.

b.     If, after interviewing the complainant, the DFEH finds no evidence of a possible law violation, it may dismiss the complaint.

c.      It can impose jail time, if the situation warrants it.

d.     It must refer any egregious complaints to the Department of Justice.

— Extra random (started with ca principles-6/23) —

1)      When does the licensee’s duty of confidentiality to the client end?

2)      Drake has a new listing, and he signs a sub-agency agreement with Erika. Erika has a buyer customer, Trinity, who wants to see the listing and eventually buys it. What’s true about the agency relationship in this situation?

3)      Serena’s customer, Ben, has some defects in his property’s title. He asks her to please keep this information to herself. What’s Serena obligated to do in this situation?

4)      Which laws prevent real estate licensees from setting a standard rate for commissions or compensation?

5)      Eric is making an offer on his dream home. He is ready to write the earnest money check. To whom should he make the check out?

6)      Fraud is always _______.

7)      Buyer brokerage relationships ______.

8)      What’s the overhang on a roof called?

9)      Aside from price, which of the following is a legitimate reason to counter an offer?

10)   Which type of buyer usually has a fixed income and is looking for a home with little to no maintenance?

11)   What type of listing agreement provides the most protection for the listing agent’s commission?

12)   What do you call the person who or entity that oversees trust or escrow money?

13)   Tom is comparing heating systems. He’s looking at an 80,000 BTU system with an AFUE of 85%. Which of the following statements about these measures is true?

14)   Which of the following bears the weight of the building?

15)   Homeowners can take several actions related to pest infestations, but ______ should be left to professionals.

16)   Which of the following would be considered a substantive communication about a property?

17)   Which of the following items go into the seller’s credit column and the buyer’s debit column?

18)   What electrical component is usually placed in the garage or basement for ease of access?

19)   Which of these is a colorless, odorless, radioactive gas that is released when uranium decays?

20)   What not a good idea to post photos of your clients’ expensive belongings in place?

21)   Who must provide a copy of the seller instructions if a cooperating broker requests it?

22)   Your Aunt Peggy works in another county and is thinking of buying a townhome. She’s working with the seller’s agent but isn’t under an agency agreement. What should you tell her about this situation?

23)   When a prospective homebuyer isn’t represented, what doesn’t she have?

24)   Which of these is a problem with a property that would have a negative impact on the property value or pose an unreasonable risk on the people who will reside in it?

25)   Which type of contract is not based not on words, but is based on the parties’ actions or behaviors?

26)   To prepare for financing, buyers should ______.

27)   Before a blueprint and building specifications will receive a building permit, the blueprint must be stamped by __________.

28)   Which of these must be obtained before a developer can begin construction?

29)   Mixing escrow funds with personal funds is illegal and is called _______.

30)   Who determines the earnest money amount?

31)   Francois wants his transaction broker, Shelly, to refuse to show her other customers and clients the property he wants to buy. What should Shelly say to Francois about his request?

32)   Which of the following statements best illustrates how the National Electrical Code is enforced?

33)   When using the farming approach, diversity is a key factor when identifying a neighborhood. Which statement best describes diversity?

34)   What’s your relationship with a buyer who’s not a client but is a customer?

35)   Which party is usually responsible for appraisal and credit report fees?

36)   In a transaction broker situation, the transaction broker represents _____.

37)   Calculate the total debt ratio based on the following information, assuming the lender does not consider any debt with 10 or fewer payments remaining: $1,500 condo payment; $100 monthly association fees; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a monthly gross income of $5,000.

38)   Which of the following would be considered a first practical opportunity for communication about a property?

39)   You are not expected to be an expert at investigating or inspecting environmental issues if it is outside your area of expertise. Encourage your clients to seek professional property inspection services to determine material _______ facts.

40)   Daria is representing Max, a seller. Unbeknownst to either of them, Max’s home has a serious foundation issue that is only detectable by a trained professional. This type of problem is considered a(n) ______.

41)   Which of the following expenses is typically the buyer’s responsibility?

42)   Jarvis is a builder. The building codes that apply to Jarvis’s work were established at what level (or levels) of government?

43)   Harmful gases resulting from waste incineration are disposed of in a special process. Where are they stored once processed?

44)   The seller pays for which of the following closing expenses?

45)   Which fees are negotiated between the seller and the broker, and can be either a lump sum or a percentage of the listing amount?

46)   As a transaction broker, you are responsible for representing _______.

47)   When a loan pre-approval is provided to a buyer, what does it mean?

48)   You’re working with buyers who have found their dream home, but it’s almost more than they can afford. When the appraisal comes in, it’s higher than the agreed-upon sales price. Now what?

49)   What type of window consists of one or more panes that either move up and down or side to side in tracks?

50)   The _______ of a property assumes normal market conditions, a willing buyer and seller, and an arm’s length transaction.

51)   Licensee Brooke receives a $1,000 bonus from the seller when she encourages her buyer client to purchase the seller’s property. She doesn’t let her client know about the bonus. Has Brooke committed a violation, and, if so, what violation has she committed?

52)   You represent the Taylors, who have minor children and are looking to buy a home. They ask you whether there are registered sex offenders in the area. How should you respond?

53)   Which party to the transaction pays earnest money to solidify his or her commitment to completing a real estate transaction?

54)   What’s the difference between direct capitalization and yield capitalization when appraising income property?

55)   Llorona is working with her transaction broker, Jorge, to list her home for sale. She asks Jorge for advice on setting the listing price for her property. What is Jorge legally allowed to tell Llorona?

56)   Which of the following appears on the closing statement?

57)   Which of the following statements is true regarding earnest money in Kansas?

58)   States where the burden to determine a property’s condition rests on the buyer are considered _______ states.

59)   When preparing a market analysis, or CMA, what’s the maximum number of adjustments you can make to the subject property?

60)   Bob wants an open listing agreement. Why might this not be in Bob’s best interest?

61)   Andy is interested in buying a home, but his credit score isn’t the greatest. Which of the following is a way he could improve it?

62)   Private sewage disposal systems, such as septic systems, are governed by the _______.

63)   Marnie decided the listing she was representing would be perfect for her family. She had her brother buy it, and after closing, he sold it to her. What is this an example of?

64)   Freida is planning the plumbing system for her new building project. She wants the least expensive and easiest-to-install material for all her supply lines. She’s highly sensitive to chemical smells and hopes to avoid the use of chemicals to install the pipes. What’s her best choice in piping materials?

65)   What is an escalator offer?

66)   A title representative offers to pay you a referral fee for sending more clients to her. Would accepting this fee be a violation?

67)   Anthony meets up with his buddy, Ted, a licensee for a brokerage in Shreveport, to discuss the possibility of Anthony getting licensed. Why does his friend tell Anthony it’s so important to get E&O coverage?

68)   Cameron had a listing agreement with a client named Ben. Ben got mad at Cameron and said he was terminating the agreement. Can Ben do this?

69)   Sometimes when a buyer can’t qualify for a loan, the property seller drops the price and accepts a second mortgage without disclosing it to the original lender. This is a form of mortgage fraud known as ______.

70)   From whom or what entity do licensees receive compensation for brokerage services once a transaction is closed?

71)   From a real estate professional’s point of view, what’s the purpose of qualifying buyers?

72)   What’s the best way to respond when your buyer’s offer is accepted verbally?

73)   A broker’s price opinion is generally written by ______.

74)   When drafting a sales contract, how should a licensee handle areas that don’t pertain to the current transaction?

75)   Last week, The Rialdis’ listing agreement ended after months on the market and not even a single offer to show for it. Today, they received a call from Mindy, a real estate professional who would like to relist the property and has some new ideas for getting it sold. What approach is Mindy using to find listings?

76)   Keeping an area dry and keeping the air circulating can ______.

77)   In order to avoid wire fraud, always contact the closing officer in order to ______.

78)   Karissa is financing her home through a lender and is offering no money as a down payment. What type of loan is she most likely using?

79)   When a listing agreement is signed, the two parties who enter into the agreement together are ______.

80)   Properly pricing a property that is entering the market will ______.

81)   Marissa, a buyer, asks you what she can do to prepare to buy. What should you tell her?

82)   A licensee may accept compensation from ______.

83)   If buyers see evidence of a pest infestation, they should always inquire with the seller to see if there is ______ on the property.

84)   Rick represents Jules, a seller, who wants to know if he has to disclose his leaking roof to buyers. Rick says yes, since the problem constitutes _______.

85)   When an investor receives title to a property—often by using a straw buyer—doesn’t make the mortgage payments, and rents out the home until foreclosure occurs, the investor is committing a type of mortgage fraud known as ______.

86)   What is an initial cap, as it relates to an adjustable rate mortgage?

a.       The number of percentage points that are added to the index to determine the rate

b.       The value that limits the amount that interest can adjust at the mortgage’s first interest rate adjustment

c.       The value that limits the amount the rate can adjust at subsequent adjustment dates

d.       The value that limits the amount the rate can adjust over the life of the loan

87)   Licensees must always be paid by their brokers, unless ________.

a.       The broker authorizes otherwise in writing

b.       The commission is less than $1,000

c.       The payment is from a nonprofit organization

d.       The payment will be deposited into a corporate account

88)   Fiona and her husband, Ed, have just entered into their first-ever agency agreement with their new agent, Ken. The couple is a little nervous, but they like the idea that they have something in writing that explains both their agent’s responsibilities and what they’re expected to do as part of the relationship agreement. Life is good. What type of agency exists between Ken and his clients?

a.       Implied agency

b.       Oral express agency

c.       Undocumented agency

d.       Written express agency

89)   Wayne conveys a property to Robbie until Robbie’s death, when the property is conveyed to Tiffany. What is this scenario an example of?

a.       Fee simple estate

b.       Homestead

c.       Leasehold estate

d.       Life estate

90)   Which type of mortgage has a payment that adjusts (usually upward) based on a predetermined schedule and amount?

a.       Amortized

b.       Blanket

c.       Bridge

d.       Graduated payment

91)   What occurs when one or both parties don’t meet all terms of the contract?

a.       Impossibility of performance

b.       Partial performance

c.       Performance of a contract

d.       Specific performance

92)   When a buyer and seller enter into an agreement to transfer ownership of property, what type of contract will be used to complete the transaction?

a.       Buyer agency agreement

b.       Listing agreement

c.       Option agreement

d.       Sales contract

93)   A borrower makes the same monthly mortgage payment for the entire term of the loan. At the end of the loan period, all of the interest and principal is paid off. This is known as a ______ loan.

a.       Fully amortized

b.       Growing equity

c.       Negative amortization

d.       Reverse annuity

94)   Sheila and Vickie are sisters who enter into a contract to buy a vacation property. The sisters get into a dispute, and Vickie no longer wants any part of the deal. However, Sheila talks her younger brother Joe into replacing Vickie on the contract. Vickie agrees to the substitution. This is an example of ________.

a.       Assignment

b.       Fraud

c.       Mutual mistake

d.       Novation

95)   Buyer Josephine had just signed a contract on a house when she discovered that seller’s agent Franklin knew that this house was 3500 square feet, but he listed it at 3900 square feet. Which essential contract element has been compromised?

a.       Consent

b.       Consideration

c.       Legal purpose

d.       Offer and acceptance

96)   An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?

a.       $100,000

b.       $15,000

c.       $3,750

d.       $60,000

97)   Janice’s life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has made arrangements that the property will go to the School for the Gifted. What interest does the School for the Gifted currently have?

a.       Ownership

b.       Possession

c.       Remainder

d.       Reversionary

98)   ______ is the legal concept of property ownership.

a.       Certificate of occupancy

b.       Deed

c.       Title

d.       Will

99)   Burt is an unrepresented buyer of Sima’s home. Sima’s listing agent is Aubrey. Who’s the client in this transaction?

a.       Burt

b.       Burt and Aubrey

c.       Burt and Sima

d.       Sima

100)                       Assume you’re entering into an agreement with a client to help him look for a property to call his own. What type of contract will you use to identify your agency relationship’s terms?

a.       Buyer agency agreement

b.       Option agreement

c.       Purchase contract

d.       Sales contract

101)                       A(n) ________ is a set of guidelines for ethical conduct.

a.       Code of ethics

b.       Contract

c.       Option

d.       Rule book

102)                       Shawn has agreed to pay $275,000 for his new home, with a $30,000 earnest money deposit. His bank is loaning him 80% of the appraised value of $350,000. In addition, the settlement costs he’s required to pay amount to 6% of the purchase price. If you wanted to calculate how much additional money Shawn needs to bring to closing, which of these would be a good place to start?

a.       Calculate 5% of $295,000.

b.       Calculate the difference between purchase price and settlement costs.

c.       Calculate the loan amount that Shawn will receive from the bank.

d.       Figure out why Trish’s agent doesn’t renegotiate the purchase price based on the appraised value.

103)                       Which of the following is an example of a limited agent?

a.       Attorney

b.       Escrow officer

c.       Facilitator

d.       Transactional broker.

104)                       Who’s responsible for conducting the closing meeting?

a.       The broker

b.       The buyer

c.       The closing agent

d.       The seller

105)                       What’s a brownfield?

a.       An abandoned or unused commercial or industrial site with suspected contaminants

b.       A partially restored residential area

c.       A special use landfill

d.       A wild space saved from development

106)                       Which of the following actions does the secondary mortgage market commonly take?

a.       Issues loans to consumers.

b.       Purchases loans from lending institutions.

c.       Regulates lending institutions.

d.       Sets interest rates.

107)                       What is the legal effect on the purchase agreement if an attached contingency is rejected or not met?

a.       The agreement has to be renegotiated.

b.       The contract is voidable.

c.       The party who failed to meet the contingency must pay a fine.

d.       The party who rejected the contingency must offer an alternative.

108)                       What type of agency exists because of the actions and behavior of the parties?

a.       Action agency

b.       Behavioral agency

c.       Express agency

d.       Implied agency

109)                       As part of the license application, prospective appraisers must submit ________.

a.       A fingerprint card

b.       An employment bond

c.       Performance reviews

d.       Physical exam results

110)                       Along with your two siblings, you have a one-third interest in your childhood home. You’ve all decided to put the house on the market and you’ll serve as the listing agent. What must you disclose to parties to the sale?

a.       Nothing, since you own less than 50%

b.       That the house is an estate with its owner in a nursing home

c.       That you have a financial interest in the house

d.       That your siblings will take much less than the list price

111)                       A subdivision that includes space for offices, shopping centers, movie theaters, and apartment buildings is an example of a _________________.

a.       Converted-use development

b.       Cooperative

c.       Mixed-use development

d.       Planned unit development

112)                       Shawn specializes in the sale of retail stores and shopping centers. What types of properties are these?

a.       Commercial

b.       Industrial

c.       Residential

d.       Special purpose

113)                       Which of the following items go into the seller’s credit column and the buyer’s debit column?

a.       Credits

b.       Debits

c.       Prepaids

d.       Prorations

114)                       Which of the following are addressed by the Subdivided Land Act?

a.       Development requirements

b.       Financing requirements

c.       Labor requirements

d.       Reporting requirements

115)                       Which term refers to the ordinances/regulations that protect the community and control property development within subdivisions?

a.       Environmental impact statement

b.       Plat book

c.       Subdivision plat

d.       Subdivision regulations

116)                       Which of the following statements about restrictive covenants is true?

a.       They are permanent and follow the land forever.

b.       They are temporary and have a specific time limit.

c.       They may run with the land forever, or they may have a time limit.

d.       They must last at least 30 years.

117)                       Donna rents an apartment in a building that’s being converted to condominiums. By law, the owner of the building must give Donna ________.

a.       10 days’ notice before evicting her

b.       The option to buy her unit or continue as a tenant for a specified period of time

c.       The option to buy the unit at a reduced price

d.       The option to continue renting the unit at a reduced rate

118)                       Marvin purchased the right to use a resort unit for two weeks every year, although he doesn’t own the property itself. What kind of timeshare is this?

a.       Divided timeshare

b.       Right-to-use timeshare

c.       Timeshare estate

d.       Timeshare in perpetuity

119)                       Which option best defines voluntary alienation?

a.       A person dies without a will.

b.       A property is taken from a property owner due to failure to pay real property taxes.

c.       A property owner intentionally transfers property to another.

d.       Someone takes possession of another’s property by adding a previous claim to their own.

120)                       In how many states is undisclosed dual agency legal?

a.       18

b.       38

c.       All 50

d.       Zero

121)                       What is a lifetime cap, as it relates to an adjustable rate mortgage?

a.       The number of percentage points that are added to the index to determine the rate

b.       The value that limits the amount that interest can adjust at the mortgage’s first interest rate adjustment

c.       The value that limits the amount the rate can adjust at subsequent adjustment dates

d.       The value that limits the amount the rate can adjust over the life of the loan

122)                       Which document is provided to borrowers no fewer than three days prior to closing and provides details about the costs of the transaction?

a.       Closing Disclosure

b.       Escrow Closing Notice

c.       Loan Estimate

d.       Mortgage Servicing Transfer Disclosure

123)                       What is typically used to prove there are no encroachments on the property?

a.       Abstract of title

b.       Chain of title

c.       Deed

d.       Survey

124)                       Which of the following is a right included with real property?

a.       Contamination

b.       Encroachment

c.       Exclusion

d.       Hazardous acts

125)                       Sue, the seller, and Carl, the buyer, are preparing to close on their transaction. Who is responsible for reviewing the settlement statement before closing?

a.       Carl only

b.       Sue and Carl

c.       Sue only

d.       Sue’s and Carl’s attorneys

126)                       How do predatory lenders take advantage of consumers?

a.       Making loans to consumers who can’t afford them

b.       Not selling their loans on the secondary market

c.       Selling their loans on the secondary market

d.       Underwriting loans

127)                       Dominique purchased a timeshare that conveys the right to occupy the property for two weeks each year, continuing for 20 years. However, the timeshare does not convey ownership. This is an example of a ______ timeshare.

a.       Estate for life

b.       Fee simple ownership

c.       Renewable

d.       Right-to-use

128)                       Only brokers may do which of the following?

a.       Conduct brokerage activities

b.       Hold open houses

c.       Receive compensation directly form buyers or sellers

d.       Work directly with buyers and sellers

129)                       Which essential element of a deed contains the words, “does hereby bargain, grant, deed, and convey?”

a.       Acknowledgment

b.       Conveyance

c.       Delivery and acceptance

d.       Recording

130)                       What does procuring cause refer to?

a.       A condition that must be met in order for a contract to be legally binding

b.       An uninterrupted series of events that results in a successful transaction

c.       Compensation for loss, damage, or injury caused

d.       Failure to perform an act agreed upon by all parties

131)                       If Elizabeth is a property manager, she is acting as what of type of agent?

a.       Dual

b.       General

c.       Special/specific

d.       Unlicensed

132)                       Which of these describes a deed?

a.       Abstract of title

b.       Ownership document

c.       Promissory note

d.       Recording fee

133)                       What happens to a joint tenant’s share of property when the joint tenant dies?

a.       The joint tenant’s interest goes to the remaining joint tenants. If only one joint tenant is left, that joint tenant owns the property in severalty.

b.       The property must be sold, with the proceeds from the joint tenant’s share distributed to heirs.

c.       The tenancy remains, but the joint tenant’s interest passes to heirs.

d.       The tenancy terminates, and the joint tenant’s share goes to the state.

134)                       Which of the following statements about covenants is true?

a.       A bargain and sale deed will always come with covenants of warranty.

b.       Every conveyance comes with a fully warrantied title.

c.       The full covenant and warranty deed contains the strongest and broadest form of guarantee of title.

d.       The “full covenant” typically means three covenants are included.

135)                       Which of the following opinions can a real estate licensee provide?

a.       An opinion regarding the appraisal value of a property

b.       An opinion regarding the effect of breaking an existing agreement to accept a new offer

c.       An opinion regarding the listing price

d.       An opinion regarding whether a roof needs to be replaced

136)                       A dwelling is in untenantable if it substantially lacks

a.       A heating unit

137)                       Transfer of all of a tenant’s rights under a lease is

a.       An Assignment

138)                       If a landlord wants to increase the rent on a unit that is regulated by the Tenant Protection Act of 2019, what’s the maximum allowed as an annual increase?

a.       5% plus the cost of living

139)                       Malcolm loves his apartment, even though he’s rarely there. His job in international development has him on the road for months at a time. He doesn’t have to worry about missing out on his lease renewal though, because he has a(n) _____________

a.       Periodic Estate

140)                       Eric’s residential tenant hasn’t paid rent for more than three months, and so Eric went to court to start eviction proceedings. He’s now been granted the right to remove the tenant. This is a(n) _________________ eviction.

a.       Actual

141)                       A security deposit on furnished residential property can be no more than

a.       3 month’s rent

142)                       A retail business has a percentage lease based on 5% of gross income of up to $25,000 per month and 2 1/2% of gross income above that amount. The minimum to be paid is $1,000 per month. For a month in which the business has a gross income of $47,000, what will be the rent payment?

a.       $1,800

143)                       The owner of 417 Main, an office building, receives a guaranteed monthly income from her tenants and pays no expenses. She has

a.       A Net Lease

144)                       Which of these landlords had filed an unlawful detainer suit?

a.       Chet tried to kick his tenant out, but he would not leave, so he’s started eviction proceedings.

145)                       A landlord has a right of entry

a.       In an Emergency

146)                       Buyer Penelope adores the house at 212 Maple Street, but two weeks after making her offer, she’s discovered it’s got some issues that weren’t identified on the state-required seller disclosure form. She still wants to buy the house. Since the seller appears to have lied on the disclosure form, what can Penelope do?

a.       Ask the seller to make the repairs needed, or ask for a credit to cover the cost of those repairs.

b.       Because the seller lied on the disclosure forms, the purchase contract is invalidated, so Penelope must make a new offer.

c.       Complete the transaction, then sue the seller for fraud.

d.       Reduce the amount of her offer

147)                       Jose, who is 16, entered into a contract to sell a condo he owned. Because Jose is a minor, ______.

a.       Either Jose or the buyer may void the contract due to Jose’s minority

b.       It makes no difference; if he signed the agreement, he must abide by it

c.       Only Jose may void the contract

d.       The contract is void                        

148)                       Which of these is a system that many states use to determine lien priority?

a.       First in time, first in right

b.       Government payments come last

c.       Largest lien has first priority

d.       Mortgage liens before judgment liens

149)                       What’s the definition of a land contract?

a.       Buyers purchase a piece of undeveloped land.

b.       Land owners divide their land into parcels.

c.       Property owners lease their land to someone else, who develops the property.

d.       Sellers provide funds or credit to buyers in order to close the transaction.

150)                       Where is a complaint against a licensee filed?

a.       On the Real Estate Commission’s Web site.

b.       With a co-worker of the licensee

c.       With the licensee themselves

d.       With the supervising brokerage

151)                       Which of the following is true about condominium ownership?

a.       A condo is a multi-family dwelling.

b.       A condo is a single-family dwelling.

c.       It involves proprietary leases.

d.       There is a large yard to maintain.

152)                       What’s a subordination agreement?

a.       It’s a document that’s produced by the court during bankruptcy trials that states the order of payment for creditors.

b.       It’s an agreement that a previous lender signed allowing a later lender to take over the primary, or first, loan position.

c.       It’s an agreement that borrowers sign to determine the order or priority for lien holders against their property.

d.       It’s an agreement the lender signs saying it will provide title to the property to the borrower when the loan is paid off.

153)                       Which act gives companies the right to sue a competitor for making deceptive ad claims?

a.       The Gramm-Bliley Act

b.       The Lanham Act

c.       The Privacy Act

d.       The Truth in Advertising Act

154)                       What’s a benchmark?

a.       A permanent reference point for marking datums

b.       The beginning point for lot and block surveys

c.       The beginning point for metes and bounds surveys

d.       The beginning point for rectangular surveys

155)                       You have clients who are interested in purchasing a property in a floodplain. As their agent, what do you want to ensure they are aware of?

a.       That resale will be difficult because the home is in a floodplain.

b.       The client will not need flood insurance.

c.       The house most definitely has the potential for some kind of flood damage in the next 100 years.

d.       Their lender may require flood insurance, which may affect the affordability of the home.

156)                       What type of ground lease allows a tenant to buy out the lease?

a.       Conceivable

b.       Irretrievable

c.       Redeemable

d.       Retrievable

157)                       Lenders will require which type of fund for taxes and insurance?

a.       Balloon fund

b.       Emergency fund

c.       Mortgage fund

d.       Reserve fund

158)                       In order for you to earn compensation for brokerage activities, you must be employed as the agent of the client. How is this employment accomplished?

a.       The client must be a buyer.

b.       The client must make an express agreement to pay a commission to your broker.

c.       You must be employed by a broker.

d.       You must express an interest in representing the client.

159)                       A broker’s price opinion is generally written by ______.

a.       A buyer

b.       An appraiser

c.       A real estate broker for a buyer

d.       A real estate broker for a lender

160)                       In states without full disclosure requirements, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?

a.       Buyer

b.       Licensee representing the buyer

c.       Licensee representing the seller

d.       Seller

161)                       A good way for real estate licensees to prevent problems at the closing is to ____________.

a.       Check up on the other party in the transaction so they don’t forget anything

b.       Communicate frequently with your client and make sure they know what to do

c.       Show up early

d.       Work only with a known, trusted settlement officer

162)                       Whose responsibility is it to keep track of all buyer contingency deadlines and ensure they’re not missed?

a.       The buyer

b.       The buyer and the buyer’s agent

c.       The seller

d.       The seller and the seller’s agent

163)                       Which term refers to a permitted deviation from current zoning restrictions that allows an owner to use land for a purpose that’s otherwise prohibited, and requires the owner to prove the zoning creates an unnecessary hardship?

a.       Moratorium

b.       Property variance

c.       Special use permit

d.       Use variance

164)                       Assigning a lower-density use zone to an area that previously allowed higher density and that may reduce property values is known as ______.

a.       `Bulk zoning

b.       Density-reduction zoning

c.       Downzoning

d.       Reduction zoning

165)                       Mortgage lenders will ___________

a.       Not use the FICO® score, only their personal judgment

b.       Only use the FICO® score to determine creditworthiness of the applicant

c.       Sometimes extend credit, even when a FICO® score is low

d.       Weigh poor credit from the past the most heavily, even if FICO® scores have improved

166)                       The location of wetlands and springs at a development site is part of ______.

a.       Development cost

b.       Development impact

c.       TDR

d.       Topography

167)                       Which loan type is a fixed-rate mortgage where the monthly payments increase over time, according to a set schedule?

a.       Blanket

b.       Growing equity

c.       Negative amortization

d.       Pledged account

168)                       Octogenarians Gertie and Frank met in Sunset Living, a skilled nursing center for people with advanced Alzheimer’s disease, where they’re both residents. They fell in love and get hitched, signing a marriage certificate. This is an example of a(n) ______ contract.

a.       Executory

b.       Implied

c.       Invalid

d.       Valid

169)                       What’s a foreclosure?

a.       A property sale that occurs in less than one week

b.       A sale that fails to receive a high enough bid at auction and then falls to the bank’s ownership

c.       The forced sale of a property due to the borrower defaulting on the mortgage loan

d.       The sale of a property when the market value of the home is less than what is owed, plus closing costs

170)                       _______ can be defined as everything that’s not real property.

a.       Land property

b.       Personal property

c.       Private property

d.       Real estate

171)                       Which of the following items must be included in the security instrument used for a real estate transaction?

a.       Borrower credit report

b.       Legal description of the property

c.       Lender disclosures

d.       Title insurance abstract

172)                       Which of the following statements best describes a mortgage broker?

a.       An institution that focuses on commercial lending

b.       An institution that specializes in taking in savings deposits then lends money out as loans and mortgages

c.       A person who works for a specific lender and can offer products from that particular institution

d.       A person who works with multiple lenders to find the product that works best for the client

173)                       Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.

a.       Bracketing

b.       Competition

c.       Correlation

d.       Substituting

174)                       At what point in a residential transaction must a seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?

a.       At least five days prior to closing

b.       Prior to showing the property to the prospective buyer

c.       Prior to the parties signing a purchase agreement

d.       Within three days after the parties sign a purchase agreement

175)                       Which of the following is a residential dwelling with attached walls, where the owner also typically owns the land on which the home sits?

a.       Apartment

b.       Condominium

c.       Single-family detached home

d.       Townhome

176)                       A ______ is the expected rate of return on an investment.

a.       Capitalization rate

b.       Cash flow

c.       Income ratio

d.       Profit margin

177)                       Carolyn is representing John in the sale of his home. Which listing agreement clause gives her additional authority and obligates her to distribute the listing to other brokers?

a.       Broadcast clause

b.       Broker extension clause

c.       Marketability clause

d.       Multiple listing clause

178)                       _______ are artificial attachments to land that include items such as fencing, buildings, and walkways.

a.       Emblements

b.       Encroachments

c.       Improvements

d.       Levies

179)                       Violators of the Sherman Antitrust Act may be subject to fines. For what amount may corporations and individuals be liable?

a.       Up to $100,000 for corporations and $1,000 for individuals

b.       Up to $100 million for corporations and $1 million for individuals

c.       Up to $10 million for corporations and $1 million for individuals

d.       Up to $1 million for corporations and $100,000 for individuals

180)                       You helped Frasier buy his penthouse condo. He’s just received the keys and you two have said your goodbyes after closing, and you’re heading back to the office to close out the transaction file. Which of your fiduciary duties continue?

a.       Accounting and loyalty

b.       Confidentiality and accounting

c.       Confidentiality, loyalty, and accounting

d.       Reasonable skill and care, confidentiality, and loyalty

181)                       When licensee Linda asks potential seller clients about their reasons for selling, what’s her purpose?

a.       To create a data set about typical seller characteristics

b.       To develop a rapport with the customer

c.       To help her determine a suggested listing price

d.       To help her gauge the seller’s motivation as part of her qualifying process

182)                       In the conveyance of real property after death, what trumps any terms specified in the deceased person’s will?

a.       Heirs’ wishes

b.       Intestate

c.       Nothing

d.       Operation of law

183)                       Which agency duties survive termination of an agreement?

a.       Accounting and loyalty

b.       Confidentiality and accounting

c.       Confidentiality, loyalty, and accounting

d.       Reasonable skill and care, confidentiality, and loyalty

184)                       With regard to contingencies, what responsibility does licensee Wanda have when representing buyers?

a.       She should avoid contingencies altogether because they tend to put sellers off.

b.       She should maximize the number of contingencies used to avoid being sued.

c.       She should use a standard set of contingencies with each buyer.

d.       She should use contingencies judiciously to protect her clients and the deal.

185)                       With which approach to value does the appraiser analyze a property’s ability to earn future income?

a.       Cost approach

b.       Income approach

c.       Sales comparison approach

d.       Taxable revenue approach

186)                       Which federal lending act was introduced to combat lending discrimination in low- and moderate-income neighborhoods?

a.       Community Reinvestment Act

b.       Consumer Credit Protection Act

c.       Equal Credit Opportunity Act

d.       Home Mortgage Disclosure Act

187)                       How large is an acre?

a.       10,000 square meters

b.       43,560 feet

c.       43,560 square feet

d.       5,480 square feet

188)                       Federal fair housing laws prohibit ______.

a.       A 49-year-old, single woman from describing herself as such in an advertisement for a roommate

b.       An ad stating families with small children need not apply

c.       Evicting a tenant who sells drugs from the property

d.       Refusing to rent a property to smokers

189)                       In a life estate, all of the following apply during the term except ______.

a.       Control

b.       Ownership

c.       Possession

d.       Transferability

190)                       Zoning regulations must be aligned with an area’s ______.

a.       Comprehensive plan

b.       Government plan

c.       Majority opinions

d.       Political jurisdictions

191)                       The courts use three primary tests to determine whether something is personal property or real property. What are the names of the three tests?

a.       Method of attachment, acknowledgement and adaptation

b.       Method of attachment, agreement, and accessory

c.       Method of attachment, agreement, and adaptation

d.       Method of reimbursement, agreement, and adaptation

192)                       Why is it important for a buyer to know if an underground storage tank is present on a property?

a.       Buyers don’t need to know.

b.       Older tanks may leak and contaminate the ground.

c.       The buyer may want to use the tank.

d.       The buyer will need to check if the tank is correctly sized.

193)                       Which of the following is appropriate to include in a buyer agency agreement?

a.       A list of duties the agent owes to the buyer

b.       An automatic renewal clause

c.       The buyer’s age and number of children

d.       The buyer’s preference for ethnic ratio of a neighborhood

194)                       Tim, a new buyer client, is pre-approved for a mortgage loan of as much as $250,000. This information can help to _______.

a.       Identify properties

b.       Inspect a property he has identified

c.       Research a property he is interested in

d.       Show him properties

195)                       It’s not a good idea to post photos of your clients’ expensive belongings. Why is that?

a.       It can attract the attention of thieves.

b.       It will decrease the market value of the property.

c.       It will discourage criminals.

d.       It will make the property less attractive to potential buyers.

196)                       Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages her to break her existing agency agreement and sign with him instead. This violation is an example of ______.

a.       Contractual interference

b.       Failure to disclose an agency relationship

c.       Making a substantial and willful misrepresentation

d.       Performing services that would qualify as practice of law

197)                       Which document provides an estimate of the costs a buyer is likely to pay at settlement?

a.       Closing Disclosure

b.       HUD-1 statement

c.       Loan Estimate

d.       Mortgage Servicing Transfer Disclosure

198)                       Bob and Mary are financing $80,500 for a new home. Their lender will approve an interest rate of 6.5% if Bob and Mary pay three-and-a-half discount points at closing. How much is this?

a.       $2,415

b.       $2,817.50

c.       $5,232.50

d.       $8,050

199)                       What’s the purpose of a short sale?

a.       To avoid foreclosure

b.       To avoid responsibility for taking the traditional route to selling property

c.       To replenish the local real estate market with fresh properties in a short amount of time

d.       To sell the property quickly when the real estate market is booming

200)                       Wyatt is selling his home to Kirk, and promises in writing to have a licensed professional repair the home’s leaky roof. After closing, Kirk, who financed the purchase, discovers that Wyatt patched the roof poorly and it leaks whenever it rains heavily. Under the Illinois statute of limitations, if Kirk wishes to sue Wyatt, he must do so within ________ of the contract breach.

a.       10 years

b.       Five years

c.       Three years

d.       Two years

201)                       The Lanham Act gives companies the right to ______.

a.       A trial by jury

b.       Make misleading advertising claims less than 10% of the time, which is known as the Lanham Percentage Right

c.       Pursue clients by whatever means possible

d.       Sue competitors that are using deceptive claims in ads

202)                       The power of the state to claim property when the owner dies without a will and without locatable heirs or creditors is also known as ______.

a.       Eminent domain

b.       Escheat

c.       Life estate

d.       Taking

203)                       Agents owe fiduciary duties to their clients. Among these are loyalty, reasonable skill and care, confidentiality, accounting, and disclosure. Which fiduciary duty is missing from this list?

a.       Kindness

b.       Obedience

c.       Profitability

d.       Strategy

204)                       George just applied for a conventional loan on a cottage he wants to buy. What percentage of the loan can he expect to submit as a down payment?

a.       0%

b.       20%

c.       25%

d.       5%

205)                       Which of the following best describes what an appraisal is?

a.       It’s a broker price opinion.

b.       It’s a comparative market analysis.

c.       It’s an assessment of market value.

d.       It’s an opinion of value.

206)                       Which of these is a recommended best practice after any discussion between a licensee and a client or other party involved in a transaction?

a.       Allow no more than 48 hours to pass without additional contact.

b.       Enter notes about the discussion in the property’s listing in the MLS.

c.       Send a follow-up email to create a written record of the discussion.

d.       Send a hand-written thank you note.

207)                       How do licensees use the funnel?

a.       To calculate the number of homes sold in an area that the licensee may be able to list

b.       To calculate the number of leads required to generate a certain amount of income

c.       To calculate the number of transactions to close each year to reach a certain amount of income

d.       To sift through leads to find the clients worth spending time on

208)                       Your clients, the Meltons, found their dream home, which they will be financing with ABC Lending. What should they include with their offer?

a.       A letter describing their family’s lineage

b.       A loan commitment

c.       A pre-approval letter from ABC Lending

d.       Cash (no checks)

209)                       In which of the following situations is it legal to receive compensation?

a.       You help a neighbor buy a foreclosed home, and in addition to your commission, your neighbor pays your rent for that month.

b.       You help your aunt sell her house as a for sale by owner, and she gives you a $5,000 savings bond.

c.       You refer a client to your favorite mortgage broker, who gives you 10% of the money earned.

d.       You refer a client to your sister, who works at another real estate agency. When she gets her commission check, she sends you a thank you note.

210)                       Dominic’s seller clients want him to lower his commission rate. What’s the best way for him to reply?

a.       “I base my fees on my services. Which services would you like to give up?”

b.       “No way!”

c.       “Sure!”

d.       “This is the standard rate in this market.”

211)                       Whose consent and agreement are required to conduct a short sale?

a.       The buyer’s attorney’s

b.       The court’s

c.       The lien holder’s

d.       The seller’s attorney’s

212)                       Bart and Claire are under contract for Claire to buy Bart’s house, but her financing fell through. They decide to cancel the contract just as if it never happened. Which termination method does this describe?

a.       Reformation

b.       Release

c.       Rescission

d.       Restraint

213)                       Which of these photo descriptions may be a potential MLS violation?

a.       A photo of the master bedroom, including the bed, dresser, and jewelry armoire

b.       Multiple exterior photos, taken in different seasons

c.       Photos taken after a professional cleaning service and stager spruced it up

d.       Wide-angle photos of the recently updated bathrooms and kitchen

214)                       The ______ provides buyers with an approximation of the costs they’re likely to pay at settlement.

a.       Closing Disclosure

b.       HUD-1 statement

c.       Loan Estimate

d.       Mortgage Servicing Transfer Disclosure

215)                       Which of the following activities occurs before closing?

a.       The buyer and lender close on the mortgage loan commitment.

b.       The buyer obtains an insurance binder.

c.       The seller and buyer agents close on their cooperative brokerage agreement.

d.       The seller is paid the balance of the purchase price.

216)                       _________ occurs when the parties meet all terms of the contract.

a.       Impossibility of performance

b.       Partial performance

c.       Performance of contract

d.       Specific performance

217)                       Under what circumstances may a seller legally terminate an exclusive right-to-sell listing agreement before its listing term has passed?

a.       If the listing broker agrees in writing to the termination

b.       If the seller has found a ready, willing, and able buyer with no assistance from the listing broker

c.       If the seller loses his job

d.       Under no circumstances

218)                       When an ______ is added to a sales contract, it changes the original terms of the contract.

a.       Addendum

b.       Amendment

c.       Annexation

d.       Appurtenance

219)                       For a deed to be valid, which two elements are required?

a.       Habendum clause and habeus corpus clause

b.       Signature of the grantee and habendum clause

c.       Signature of the grantor and habendum clause

d.       Signatures of the grantee and grantor

220)                       Agreeing to a specific price, price range, or minimum or maximum charges among competing firms is an example of which type of antitrust violation?

a.       Group boycotting

b.       Market allocation

c.       Price fixing

d.       Tie-in arrangement

221)                       After signing a purchase contract, buyer Pam and seller Waylon both realize that the address for Pam’s newly-purchased home reads “344 Beverly Way” instead of the correct address: “334 Beverly Way.” Which of the following is true about this situation?

a.       Pam has clear evidence that Waylon tried to trick her.

b.       Pam or Waylon can void this contract and present a new one with the correct address.

c.       The contract is invalid because there is no offer and acceptance.

d.       This is definitely a case of fraud.

222)                       What’s the difference between an exclusive right-to-sell and an exclusive agency agreement?

a.       No commission is earned if the seller locates the buyer with exclusive agency.

b.       No permission is required for dual agency with an exclusive right to sell.

c.       One is for buyers, and one is for sellers.

d.       They are two names for the same thing (no difference).

223)                       Sanjiv recently signed a brokerage agreement with a landlord client. To be considered a valid contract in Illinois, the agreement must have either a provision for the client’s right to terminate annually with a 30-day written notice or ______________________.

a.       A firm expiration date

b.       An automatic renewal clause

c.       An option to renew clause

d.       A right to early termination waiver

224)                       Jamilynn violated antitrust law by engaging in price fixing. Which of these actions did she most likely perform?

a.       She agreed with licensees from other brokerages not to engage in business with licensees from a certain firm.

b.       She followed her brokerage’s pricing policy.

c.       She sets her commission based on the services she performs.

d.       She told a consumer the commission rate is standard for the industry.

225)                       What are the three most common forms of legal descriptions?

a.       Lot and block, rectangular government survey, and monument

b.       Metes and bounds, lot and block, and plat map

c.       Metes and bounds, lot and block, and point of beginning

d.       Metes and bounds, lot and block, and rectangular government survey

226)                       What type of loan may be used if the buyer is obtaining seller financing?

a.       Graduated payment mortgage

b.       Pledged account mortgage

c.       Purchase money mortgage

d.       Wrap-around mortgage

227)                       Nina signed an exclusive buyer agency agreement with Ken, her client. Ken buys a property from another agent. What might happen?

a.       Ken may owe commission to Nina.

b.       Ken may void the transaction.

c.       Nina may void the transaction.

d.       Nothing; buyers are free to work with whomever they choose.

228)                       The zoning ordinances changed 10 years after Stan built his home, and it was grandfathered into the current zoning through nonconforming use. Now Stan is selling the home. Which of the following is true regarding the new owners’ responsibilities to comply with zoning regulations?

a.       They’ll have to apply for new zoning.

b.       They’ll have to comply with the current zoning.

c.       They’ll have to get an area variance.

d.       They’re able to continue nonconforming use.

229)                       This statement is part of a promissory note attached to a security instrument: “I have the right to make payments of Principal at any time before they are due.” What’s the name of the clause where this statement is included?

a.       Lock-in clause

b.       Penalty clause

c.       Pre-payment clause

d.       Principal clause

230)                       If a buyer you represent waives the inspection, what should you do?

a.       Congratulate yourself—this is going to be an easy deal

b.       Get the waiver in writing

c.       Hire an inspector anyway

d.       Perform it yourself

231)                       Blake recently negotiated a net lease for space in an office building he owns. Under a net lease, the tenant pays ________.

a.       All of the property expenses

b.       All of the property taxes

c.       A portion of the property expenses

d.       No rent

232)                       Which laws does the Office of Fair Housing and Equal Opportunity uphold?

a.       Civil rights laws

b.       Equal opportunity laws

c.       Federal fair housing laws

d.       The Fair Housing and Equal Opportunity Act

233)                       What was the estimated cost of improvements?

a.       value = site value  improvement cost – depreciation

b.       or

c.       improvement cost = value -site value  depreciation

234)                       Which of the following measurement systems is mostly used in states that were part of the original 13 colonies?

a.       Compass and ruler

b.       Lot and block

c.       Metes and bounds

d.       RGSS

235)                       You have found the perfect home for Lucy and she is ready to make an offer. The home was built in 1938. Who is responsible for scheduling paying for the home’s lead inspection?

a.       The buyer

b.       The listing agent

c.       The mortgage company

d.       The seller

236)                       Which of the following is a true statement about options and option fees?

a.       An option fee may be for any amount agreed to by the parties.

b.       Neither party is obligated to perform with an option.

c.       Once the option fee is paid, both parties are obligated to exercise the option.

d.       The option is a bilateral contract.

237)                       The state claimed Sophia’s home under eminent domain. It appraised her property and offered to pay Sophia the appraised value for the home. What’s this process called?

a.       Condemnation

b.       Inverse condemnation

c.       Inverse taking

d.       Regulatory taking

238)                       ______ is when one party didn’t meet the terms of the contract in the specified timeframe, and is now being required to do exactly what was agreed to in the contract.

a.       Impossibility of performance

b.       Partial performance

c.       Performance of a contract

d.       Specific performance

239)                       Jay’s new loan to purchase a property includes the seller’s existing mortgage. What type of loan is this?

a.       Blanket

b.       Package

c.       Unsecured

d.       Wraparound

240)                       What are PCBs?

a.       A chemical compound that occurs naturally in the environment

b.       A substance resulting from the decay of uranium

c.       A substance that grows due to moisture problems

d.       Chemical compounds used in cooling and insulating, mainly in electrical transformers

241)                       Which term is used to define a search of public records going back at least 60 years to establish a property’s title history?

a.       Correction deed

b.       Limited search

c.       Title examination

d.       Title report

242)                       Which of the following describes the appropriate capital gains exclusion for a taxpayer’s primary residence?

a.       The taxpayer lived in the home at least five of the seven years immediately preceding the sale, with an exclusion of up to $125,000 for single taxpayers, $250,000 for couples filing jointly.

b.       The taxpayer lived in the home at least five of the seven years immediately preceding the sale, with an exclusion of up to $250,000 for single taxpayers, $500,000 for couples filing jointly.

c.       The taxpayer lived in the home at least two of the five years immediately preceding the sale, with an exclusion of up to $125,000 for single taxpayers, $250,000 for couples filing jointly.

d.       The taxpayer lived in the home at least two of the five years immediately preceding the sale, with an exclusion of up to $250,000 for single taxpayers, $500,000 for couples filing jointly.

243)                       When is a transfer tax payable?

a.       During the title search

b.       When passing property from parent to child or between siblings

c.       When the deed is recorded

d.       When there is an equitable distribution between divorced spouses

244)                       A buyer can submit the earnest money deposit in the form of __________.

a.       A personal check

b.       A postdated check

c.       A promissory note

d.       Verbal assurance

245)                       Licensees’ ethical duties to the public include not naming false consideration, _________________________, and completing paperwork accurately.

a.       Memorizing the Code of Ethics

b.       Sharing confidential information

c.       Staying informed about real estate issues

d.       Taking twice as many continuing education courses as required

246)                       The cost approach to finding an appraised value measures ______.

a.       The cost to acquire a property only

b.       The cost to acquire land and construct a reproduction

c.       The cost to construct a reproduction only

d.       The expenses the property is expected to produce for the owner

247)                       Wendell is a first-time home buyer who needs to take out a loan to help finance his purchase. What is the first thing Wendell must do once the seller has accepted his offer and the contract has been finalized?

a.       Check his credit score

b.       Pay off all his credit cards

c.       Request that the settlement date be delayed by 30 days

d.       Submit a written application for financing

248)                       What is the highest penalty an unlicensed individual practicing real estate may be fined for more than two offenses?

a.       $10,000 per violation

b.       $1,000 per violation

c.       $25,000 per violation

d.       $2,500 per violation

249)                       Which of the following is an example of a development cost?

a.       Crime rates

b.       Increased demand on infrastructure

c.       Lower unemployment

d.       School ratings

250)                       Which of the following items is something a lender is prohibited from doing if the lender wants to write qualified mortgages?

a.       Amortization

b.       Balloon interest

c.       Debt-to-income ratios less than 43%.

d.       Payback terms longer than 30 years

251)                       The question, “What’s the purpose of this appraisal?” can be answered by which step of the appraisal process?

a.       Determine highest and best use.

b.       Estimate land value.

c.       Identify data needed.

d.       State the problem.

252)                       A valid deed must contain all of the essential elements, and ______.

a.       It must be approved by the local judge

b.       It must be in nuncupative form

c.       It must be in writing

d.       It must be sealed in an envelope and sent to all parties via registered mail

253)                       In order for an owner-occupant of a building with rental units to reject applicants based on sex, marital status, gender identity, and/or sexual orientation, they must not own more than how many rental units in a building?

a.       Five

b.       Four

c.       Three

d.       Two

254)                       How do discrimination testers work?

a.       They hold focus groups and ask questions of attendees about fair housing.

b.       They provide a 20-point questionnaire on discrimination and score it, with a passing score set at 70% or more.

c.       They send a minority into a place offering housing to test how they’re treated.

d.       They send two different applicants whose only difference is status within a protected class, and test whether the applicants are treated differently.

255)                       The VA guarantees _____ of the home loan amount.

256)                       Investors in commercial real estate often give up _________ when they purchase a new property.

257)                       A limited liability company combines some advantages of

258)                       There are many versions of property management agreements, although all management agreements should include

259)                       Soundproofing and decorative material, shingles and siding made before 1970 contain what hazardous material?

260)                       The listing agreement is a legally binding contract between __________________.

261)                       Rick, a builder, is getting a loan in which two properties are used for collateral. This is an example of a _______ loan.

262)                       Which one of the following is a buyer required to disclose in the Purchaser’s Representations section of the Regional Sales Contract?

263)                       What is a land contract?

264)                       What must occur to effect a transfer of title?

265)                       It’s very important that a buyer obtain a/an _________that shows that he has obtained homeowners fire and hazard insurance.

266)                       What is the depreciation schedule for a residential income-producing property?

267)                       Radon has natural origins and is a colorless, odorless, radioactive gas that’s released when ___________ decays.

268)                       A buyer can submit the earnest money deposit in the form of a check or __________

269)                       How many approaches do appraisers use when estimating a property’s value?

270)                       What regulation or regulatory authority identifies sites that have hazardous substances, and requires clean-up by the responsible parties?

271)                       What is a gaseous compound used in refrigeration cleaning solvents, Styrofoam, and aerosol propellants?

272)                       The definition, “The earth’s surface extending downward to the center and upward to infinity and including permanently attached natural objects,” describes ____________.

273)                       When possible, comparable sales from ______ should be used.

a.       At least six other properties

b.       Competing market areas

c.       No more than 24 months ago

d.       The same neighborhood

274)                       In relation to appraisals, what is a “federally related transaction”?

a.       An appraisal that a federally licensed appraiser conducts

b.       A real estate transaction in which a federal financial agency or regulatory authority is involved

c.       A transaction involving the sale of government secrets

d.       A transaction in which financing is obtained from foreign investors

275)                       Which type of REIT receives most of its revenue from rental of its properties?

a.       Equity REIT

b.       Leasehold REIT

c.       Mortgage REIT

d.       Tax-deferred REIT

276)                       The income approach to appraisal is based on which value principle?

a.       Anticipation

b.       Capitalization

c.       Competition

d.       Substitution

277)                       Ownership in a planned unit development consists of ______.

a.       A house, but not the property it sits on

b.       A house, the property it sits on, and shared ownership of commercial enterprises

c.       A parcel of land and the structures on it

d.       A parcel of land, the structures on it, and shared common areas

278)                       Land, plus all things permanently attached to it naturally or artificially, is ______.

a.       Interest

b.       Private property

c.       Real estate

d.       Real property

279)                       John is an investor who wants to find out how much his money could’ve earned if he’d put it into a different investment, which is known as the ______.

a.       Capital recapture

b.       Cost of capital

c.       Return of investment

d.       Return on investment

280)                       Archie wants to buy Claire’s membership share in a cooperative. Assuming he has submitted his application, which of the following statements is true?

a.       Archie need not submit an application to the cooperative board.

b.       At Claire’s request, the cooperative is obligated to approve Archie’s application.

c.       Claire can sell her membership share to whomever she wants, regardless of what the cooperative board says.

d.       The cooperative board must approve Archie’s application before Claire can sell her membership share to him.

281)                       Which of the following establishes requirements for property appraisals in order to protect home buyers who use a conventional loan?

a.       Appraiser Independence Requirements

b.       Building codes

c.       Contract laws

d.       TILA

282)                       A property is uninhabitable in its current state. What effect will its utility have on the value?

a.       Utility doesn’t influence value.

b.       Value will be pushed downward.

c.       Value will be pushed upward.

d.       Value will remain the same.

283)                       Lucille is estimating the property’s loss in value for both curable and incurable items of depreciation. Which method is Lucille using to measure depreciation?

a.       Age-life

b.       Capitalized Value

c.       Market Extraction

d.       Observed Condition

284)                       If an adjustment is needed for sales or financing concessions, when should an appraiser make this adjustment?

a.       After adjusting for specific features

b.       After adjusting for time

c.       First, before adjusting anything else

d.       Last, after adjusting for all other factors

285)                       Which part of the cost approach equation is considered the most difficult part to estimate accurately?

a.       Accrued depreciation

b.       Property value

c.       Reproduction/replacement cost

d.       Site value

286)                       Where in the Uniform Residential Appraisal Report would you find the number of total rooms, bedrooms, and bathrooms?

a.       Improvements

b.       Neighborhood

c.       Sales comparisons

d.       Site

287)                       Property that is free-standing and not attached to real estate is called ______.

a.       Land property

b.       Personal property

c.       Real property

d.       Vacant property

288)                       Which of the following is the presentation of the appraiser’s solution to the appraisal problem for a commercial property?

a.       Financial report

b.       Narrative report

c.       Property value report

d.       Subject property report

289)                       Real estate, plus all of the interests, benefits, and rights included in ownership, is also known as ______.

a.       Estate

b.       Land

c.       Personal property

d.       Real property

290)                       Which approach to finding value would licensed appraiser Christina probably weigh most heavily when appraising a three-unit rental property?

a.       Cost

b.       Income

c.       Sales comparison

d.       Substitution

291)                       What’s the name of a process that estimates future income and then applies a discount rate in order to provide an investment’s present value?

a.       Direct capitalization

b.       Discounting

c.       Reversion capitalization

d.       Yield capitalization

292)                       You’re touring your new seller clients’ property. While you visually assess the property and measure rooms, what else should you do?

a.       Ask about the age of the appliances and roof, heat sources, and whether there have been any issues with moisture, pests, or any systems

b.       Give them a ballpark range for a list price

c.       Have them look over the seller’s disclosures

d.       Offer staging advice for the rooms

293)                       Why should a listing agent include a seller net sheet with a comparative market analysis?

a.       This is not a good strategy.

b.       To bulk up the CMA with extra paperwork

c.       To remind the sellers how much commission they will owe

d.       To show the sellers what the current recommended list price will net them

294)                       Which of the following will an appraiser do first when using the sales comparison approach?

a.       Compare properties to the subject property and adjust for differences.

b.       Estimate a fair and current market value for the subject property.

c.       Identify features of the subject property that are in demand in the market.

d.       Select recently sold comparables that are substantially similar to the subject property.

295)                       What type of information might an appraiser find at the local chamber of commerce?

a.       Comparable data

b.       Construction cost data

c.       General data

d.       Specific data

296)                       Your client has an income-producing property that generates $30,000 per year. The property is valued at $400,000. What is your client’s capitalization rate?

a.       6

b.       7.5

c.       8

d.       8.5

297)                       Building codes, zoning laws, and environmental legislation can all influence the value of real property. How do appraisers refer to this type of value influencer?

a.       Geographic

b.       Governmental

c.       Physical

d.       Social

298)                       When the building value is known, but the land value is unknown, the ______ technique can be used.

a.       Building residual

b.       Capital recapture

c.       Direct capitalization

d.       Land residual

299)                       What’s the name for a capitalization method which converts a single year’s expected income into a market value?

a.       Direct capitalization

b.       Income analysis

c.       Indirect capitalization

d.       Yield capitalization

300)                       A capitalization rate takes an investment’s ability to produce income and converts it into ______.

a.       Anticipated profit

b.       Expected ROI

c.       NOI

d.       Value

301)                       Which factor that influences value addresses the ease with which the property can be conveyed to another?

a.       Demand

b.       Scarcity

c.       Transferability

d.       Utility

302)                       What type of capitalization helps to determine the expected return on investment the property is capable of producing in a single year?

a.       Annuity method of capitalization

b.       Direct capitalization method

c.       Sales comparison approach

d.       Yield capitalization method

303)                       The income approach to value relies on _______ when valuing single-family and two- to four-unit properties.

a.       Capitalization rate

b.       Gross income multiplier

c.       Gross rent multiplier

d.       Monthly net rent

304)                       What’s an appraisal?

a.       An inspection of a home for defects

b.       An unbiased estimate of property value as of a specified date

c.       The process of forming an opinion of a property’s value

d.       The study of a property, potentially for land use or marketability

305)                       Real property rights include the right ______.

a.       Of enjoyment

b.       To avoid taxation

c.       To encroach on a neighboring property

d.       To pollute a neighboring property

306)                       Which of the following best describes how an appraiser reconciles the adjusted sales prices of the comparable properties to indicate the value of the subject property?

a.       The appraiser calculates the average of the three adjusted sales prices to use as the indicated value.

b.       The appraiser selects the adjusted sales price of the property most like the subject to use as the indicated value.

c.       The appraiser selects the highest value of the three adjusted sales prices to use as the indicated value.

d.       The appraiser selects the middle value of the three adjusted sales prices to use as the indicated value.

307)                       Who is responsible for developing the Uniform Standards of Professional Appraisal Practice (USPAP) that licensed appraisers must follow?

a.       Appraisal Practices Board

b.       Appraisal Qualifications Board

c.       Appraisal Standards Board

d.       Appraisal Subcommittee

308)                       By comparing the number of houses sold to the number of houses listed for sale in a recent time period, appraisers can determine what trend?

a.       Built-up percent

b.       Neighborhood growth

c.       Property values

d.       Supply and demand

309)                       An appraiser is working to find the market rent for a 10-unit apartment building. In order to compare the subject property to similar properties, she will ______.

a.       Calculate a gross income multiplier

b.       Calculate a gross rent multiplier

c.       Convert monthly contract rent to scheduled rent

d.       Convert monthly rental income to annual dollars per room

310)                       Which of the following will an appraiser use to determine potential gross income for an income property appraisal?

a.       Capitalized rent

b.       Contract rent

c.       Market rent

d.       Scheduled rent

311)                       ____________ is when one party didn’t meet the terms of the contract in the specified time frame and is now being required to do exactly what was agreed to in the contract.

312)                       What’s the purpose of a home inspection?

313)                       Rick, a builder, is using two properties as collateral for a loan. This is an example of a (n) ________ loan.

314)                       An acre is equal to _________.

315)                       Niko has decided to move somewhere else when his lease ends on April 30. This would be considered termination through _________.

316)                       Which liens take priority over other liens?

317)                       Real property ownership has significant tax advantages. Which of the following is an advantage?

318)                       If licensees are asked to discriminate, what must they do?

319)                       What is self-dealing?

320)                       Why was the Civil Rights Act of 1866 monumental among fair housing and anti-discrimination laws?

321)                       The ________ protects consumers from unwanted email solicitations.

322)                       Given all of the laws prohibiting discrimination in housing, why does it still occur?

323)                       How does the income from property taxes benefit the community?

324)                       Which of the following is a benefit of the MLS from a broker’s standpoint?

325)                       Jamal is a real estate licensee. What’s his responsibility regarding household lead hazards?

a.       He must disclose the possible presence of lead-based paint to a buyer if the home was built prior to 1978.

b.       Or

c.       He must remind the sellers to disclose the possible presence of lead-based paint to a buyer if the home was built prior to 1978.

326)                       What’s the depreciation schedule for a residential income-producing property?

327)                       Which of these items should real estate professionals help first-time buyers with recent credit issues understand?

328)                       Switches that are warm to the touch, damagd panels, and lights that dim or flicker when other appliances are in use can be signs of a (n) _________ problem.

329)                       With local land use, the stress placed on the community’s infrastructure is an example of __________.

330)                       What protects the buyer before the sale and can reimburse the buyer after the sale if a title issue arises?

331)                       If Mega Corporation owns real property, chances are it owns it in _________.

332)                       What instruments are commonly used to secure the purchase of real property?

333)                       Jimmy always has a face-to-face meeting before he works with any buyer. What might be a good reason for this?

334)                       What’s a survey?

335)                       _________ pay earnest money to solidify their commitment to completing a real estate transaction.

336)                       A defect on a title that can be monetary or physical is called an _______.

337)                       Sampson is acting as a buyer agent. What duties does he owe the seller in the transaction?

338)                       When does the sales contract become a legally binding document?

339)                       What’s a licensee’s responsibility regarding household lead hazards?

340)                       What’s the purpose of testing with regards to fair housing?

341)                       Local real estate developments, such as a new subdivision, will likely impact _______ the most.

342)                       When banks have lots of funds available for lending, what tends to happen to interest rates?

343)                       If Rina wants to pay off her mortgage early, what might she consider before doing so?

344)                       Fiona signed an agreement to either buy or not buy Nick’s vacant lot for $310,000 by a specific date. What’s this agreement called?

345)                       Edgar’s in the process of selling his home as a short sale. What’s a short sale?

346)                       You represent a buyer of a $1 million property. The seller’s agent, through the seller, offers a 2.5% cooperative agent commission. Who’s your client?

347)                       If a rectangular building were 40 feet by 20 feet, the area would be _________.

348)                       ________ may be found in paint in homes built before 1978.

349)                       Real estate, plus all of the interest, benefits, and rights included in ownership is also known as ________.

350)                       Which entity ensures that contractors perform their work according to code by inspecting their job sites?

351)                       How do you decide whom you represent in a transaction?

352)                       Which mortgage market is comprised of lending institutions that lend directly to the consumer?

353)                       What happens when a married couple who owns a property as tenants by the entirety divorce?

354)                       In caveat emptor states, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?

355)                       Who is responsible for ordering an appraisal, completing the loan application, ordering a home inspection, and obtaining homeowners insurance before closing?

356)                       Which type of antitrust violation involves two or more businesses conspiring against another business?

357)                       What instrument is generally used to convey property?

358)                       As a security precaution, when posting on social media, what should you do?

359)                       When a buyer hands over an earnest money check to you as the buyer’s agent, what’s your responsibility?

360)                       When assigning a contract, the assignor should also check to be sure that language regarding ________ is part of the purchase contract.

361)                       In full seller disclosure states, whose responsibility is it to notify the seller of the seller’s duty to disclose all known material defects?

362)                       Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result is that the court gave each brother a designated set of acres to own. What was granted by the court?

A.      Bifurcation

B.      Parcel

C.      Partition

D.      Severalty

363)                       Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella’s nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?

A.      Estate in severalty

B.      Joint tenancy

C.      Tenancy by the entirety

D.      Tenancy in common

364)                       One way to demonstrate reasonable skill and care is by acting within the scope of your duties. When working an open house for one of her listings, Keira meets a young couple. They’re not looking to purchase anything right now, but are trying to get a sense for how much house their money will buy in different areas of town. Keira tells them about a few listings she knows about and the listing prices compared to house size and amenities. They also ask about financing a new home, the best way to save money for a down payment when they have other debt, and how much they should save. She tells them that in order to receive the best terms, they should have about 20% of the sale price saved for a down payment and that other debt will factor into the ability to obtain financing, so they should pay off anything they can. She also tells them that fixed-rate mortgages are better than adjustable-rate mortgages.

365)                       Was Keira’s discussion with the couple within the scope of her expertise?

A.      Yes. Since the couple are not clients, she has more flexibility in what she can tell them.

B.      No. She shouldn’t have told the couple about other properties around town.

C.      No. She shouldn’t have given the couple advice related to specific mortgage types.

366)                       A friend of Keira’s represents sellers of a two-bedroom bungalow that would be perfect for Keira’s buyer client. She shows the buyer the property, but doesn’t tell them she knows the seller’s agent.

A.      Loyal

B.      Disloyal

367)                       Keira has a buyer looking at condos downtown, but she shows him a condo in the same price range slightly farther away from his desired area so he can see the difference in what his money will buy.

A.      Loyal

B.      Disloyal

368)                       Which of the following statements about the fiduciary duty of confidentiality is true?

A.      It doesn’t extend to material facts relating to the property.

B.      It encompasses any and all information the client tells the agent, not just confidential information.

C.      It ends with the termination of the agency agreement.

D.      It never conflicts with the duty of disclosure.

369)                       Which of the following is an example of the duty of loyalty?

A.      Carrying out a client’s instructions without question

B.      Keeping a client’s confidential information confidential

C.      Never questioning a client’s opinion

D.      Putting the client’s interest first

370)                       Which of the following statements best describes a listing that terminates by performance?

A.      Evan performed all required fiduciary duties and tasks in listing Von’s house, even though it didn’t sell before the listing expired.

B.      Greg listed a property that failed to sell during the term of the listing agreement. Aside from that, he performed all the tasks promised to the seller.

C.      Marty listed Todd’s condo. With Marty’s efforts they got almost to closing only to have the buyer’s financing fall through.

D.      Roberto listed a property for Terrence. After two failed offers, the property made it to a successful closing.

371)                       Which act prevents the fraudulent sale of property sight unseen through the regulation of land sales across state lines?

A.      Interstate Land Sales Full Disclosure Act

B.      Intrastate Citizens Protection Act

C.      Police Power Act

D.      Subdivision Act of 1997

372)                       The statute of frauds states that if a contract transferring ownership of real property is not in writing it is __________.

A.      Enforceable

B.      Executory

C.      Void

D.      Voidable

373)                       What is the key difference between assignment and novation of a contract?

A.      Assignment releases the original party from all obligations, while novation does not.

B.      Individual contracts must specifically allow novation, but not assignment.

C.      Novation is disallowed in many states, while assignment is not.

D.      Novation releases the original party from all obligations, while assignment does not.

374)                       When property changes hands, the deed is recorded. There’s a fee for recording. What is the benefit to the grantee of having the deed recorded?

A.      It impacts who owns the property.

B.      It protects against foreclosure.

C.      It puts the public on notice regarding ownership.

D.      It’s required by law.

375)                       How long after a notice of cessation or completion is filed can a contractor file a mechanics lien?

A.      Within 60 days

B.      Within 90 days

C.      Within six months

D.      Within two years

376)                       Frank has waited 30 days after notifying a client that the project he finished remains unpaid. The client has not filed a notice of completion or cessation with the county clerk. How long does Frank have left to file a mechanic’s lien?

A.      10 days

B.      30 days

C.      60 days

D.      90 days

377)                       What is the six-month rule for homestead exemptions?

A.      No liens may be filed against homesteads unless at least six months’ notice has been given to the homeowner.

B.      The property owner has six months to sell the property after a lien is filed.

C.      The property owner must live in the home for at least six months before they may qualify for a homestead exemption.

D.      The property owner must reinvest the homestead exemption amount within six months in another homestead to protect it from creditors.

378)                       Kris made an offer on Lincoln’s townhouse. However, Kris offered no earnest money. If Lincoln accepted her offer, would it be binding?

379)                       Which type of lien affects real and personal property?

380)                       What law governs the rules and regulations that tenants and landlords must adhere to in counties with 75,000 residents or more?

381)                       Which document is used to protect the buyer from title defects after closing?

382)                       In a typical real estate transaction, who is the seller?

383)                       A property manager is a ______ agent for the owner, and as such is authorized to perform all of the duties related to the property on the owner’s behalf.

384)                       Which scam, as described by the FBI, involves an appraiser working secretly with a borrower and providing a fraudulent appraisal report to the lender?

385)                       Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?

386)                       Your assistant, Brady, often answers client questions about offers and negotiation. What do we know about Brady?

387)                       Sandra enters into a contract to sell her home to Paul. Under the statute of frauds, in order to be legally enforceable, the written contract must name the contracting parties, identify the subject matter of the contract, and ______.

388)                       A complaint was filed against Regina, a real estate licensee. At the TREC hearing, her license was revoked. How many commission members must have agreed with that decision?

389)                       Which of the following is true about title to a property?

390)                       The price for which an owner offers to sell a property is called the ______.

391)                       Per the TAR Purchase and Sale Agreement, when does the sales contract become a binding agreement?

392)                       In real estate contracts, which are required: legal descriptions or street addresses?

393)                       If a licensee is serving as a facilitator, rather than representing a buyer or seller, this must be disclosed to whom?

394)                       A consumer has just sued TREC for its role as an administering authority of license law. What will the likely outcome be?

395)                       What’s the maximum the Real Estate Education and Recovery fund will pay out on behalf of a single licensee, regardless of the number of awards or transactions involved?

396)                       Lacey is preparing an offer for her buyer clients, and it’s time to enter the amount of earnest money they’re going to offer. Which of the following statements is true regarding what earnest money the buyers should offer?

397)                       Which of these is an example of illegal market allocation?

a.       Based on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes.

b.       A month-to-month lease agreement is considered to be this type of leasehold estate, in which the total duration is unknown.

c.       estate at will

398)                       What may be found in paint in homes built before 1978?

399)                       A property appraised for $257,000 and the buyer paid $249,000. Which value will a lender use when determining the loan-to-value ratio?

400)                       Per the EPA, what must be conducted before a project may be approved for development?

401)                       What’s the purpose of the Interstate Land Sales Full Disclosure Act?

402)                       As required by the statute of frauds, every deed must have which of the following?

403)                       Which of the following is an adverse material fact?

404)                       What must a license applicant demonstrate to minimize the chance of license denial?

405)                       Errors and omissions insurance covers _______ who are sued by consumers for inadvertent mistakes in a real estate transaction.

406)                       At its most basic level, which type of antitrust violation is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point?

407)                       In what type of market might an agent ask the multiple buyers who have submitted offers to submit their highest and best?

408)                       Which choice correctly identifies the seven protected classes according to the Fair Housing Act?

409)                       Your clients, the Jamesons, are selling their lakefront property. They receive an offer, and the buyer has included a pre-approval letter. The Jamesons balk, saying, “We want a pre-qualification letter, or we’re not selling.” What do you tell them?

410)                       Which one of the following statements regarding depreciation schedules is true?

411)                       Which entity guarantees loans?

412)                       Based on the duty of reasonable skill and care, if clients ask agents for advice in areas outside of an agent’s scope of expertise, what should agents do?

413)                       When finding listings, which statement describes the farming approach?

414)                       Mary, who’s suffering from Alzheimer’s disease, signs a contract to buy Edgar’s home. Before the deal closes, it’s determined that Mary lacks legal capacity to enter into a contract. Which party is permitted to void the contract?

415)                       Historically, what do property values tend to do over long periods of time?

416)                       Which type of estate conveys possession and control, but not title?

417)                       Broker Regina tells her client that a property is zoned as residential, even though she’s pretty sure it’s zoned commercial. This violation is an example of _________.

418)                       Uh-oh. You failed to present an offer on behalf of your client in a timely manner. As a result, the seller accepted a lower offer from another buyer. For which of the following could your buyer sue you?

419)                       What’s a covenant between a lessor and lessee?

420)                       ______ is when the buyer and seller settle all terms of their agreement.

421)                       What type of real estate market occurs when both supply and demand are low?

422)                       Once signed, the listing agreement is a legally binding contract between _______.

423)                       Proposed zoning ordinances must undergo tests to determine their validity. These tests include which of the following?

424)                       Which type of buyer tends to know little about the homebuying process and has limited funds?

425)                       In a deed, this person is referred to as “the party of the first part.”

426)                       When preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client?

427)                       Loans available through the Farm Service Agency have which of the following characteristics?

428)                       Which type of property manager works mostly with real estate developers and investors?

429)                       How can a licensee earn commission from a seller who has not listed the property through an agent?

430)                       The owner-manager relationship is based on the property manager performing particular duties. This would include ______.

431)                       What would the monthly rate be if annual taxes are $890? Round to the nearest cent.

432)                       Before closing, who is generally responsible for obtaining an appraisal, completing the loan application, ordering a home inspection, and securing homeowner’s insurance?

433)                       Co-ownership with inheritance rights is what kind of real property ownership?

434)                       To what properties does the Tennessee Residential Property Disclosure Act apply?

435)                       Jorge is a dual agent. He owes his clients all of the following fiduciary duties except ______.

436)                       The Title and Conveyance paragraph of the TAR Purchase and Sale Agreement stipulates that the seller is conveying the property to the buyer with ________________.

437)                       An affiliate broker may perform brokerage duties under what circumstances?

438)                       What is a primary factor a lender reviews when determining if a borrower is a good credit risk?

439)                       Under which of the following conditions is it unacceptable to disclose confidential information?

440)                       What type of real estate market occurs when supply is high and demand is low?

441)                       Brenda, a new licensee, wants to impress her buyer clients, the Changs, who are practically royalty in China, their country of origin. Her responsibility is to _________.

442)                       Kevin, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.

443)                       Your clients, the Samsons, ask you to provide them with an appraisal in order to determine a list price for their property. Since you’re not an appraiser, what should you do?

444)                       Which of the following is a violation of federal fair housing law?

445)                       When a higher-quality property is adjacent to a lower-quality property, it can increase the lower-quality property’s value. What economic principle is this?

446)                       The Emery family, along with 20 other families, purchased a timeshare estate that will enable them to share a condominium in a resort community. A timeshare estate involves a ______ type of ownership.

447)                       Which of these pieces of legislation work together to prevent discriminatory lending practices?

448)                       Which of the following scenarios is an example of group boycotting?

449)                       Caveat emptor means ________.

450)                       Michael doesn’t have a real estate license, but he helps his friend, Nancy, sell her home. What can Michael legally receive as compensation?

451)                       Which type of real estate license requires successful completion of a 90-hour course and passing the licensing exam before a license is issued?

452)                       Brendon is obtaining a loan to buy a home. When reviewing his loan documents, he sees one called a note and one called a mortgage. What is the role of the note?

453)                       How many approaches to value do appraisers generally use?

454)                       Mark works at Farm and Country Bank, and has arranged an agricultural loan for Josh, a local organic farmer. Josh didn’t meet the bank’s normal underwriting standards, but Mark made the loan because he was able to arrange for a guarantee from ______.

a.       Farmer Mac

b.       The Farm Credit System

c.       The Farm Service Agency

d.       The Federal Agricultural Housing Authority

455)                       When a developer selling timeshare units receives earnest money deposits or down payments, what is the developer required to do with that money?

a.       Forward the money to the timeshare owner’s association

b.       Hold the money in the developer’s escrow account for no more than three days

c.       Hold the money in the developer’s escrow account through the buyer’s rescission period

d.       Maintain the money in a trust fund account that will be used for maintenance of the timeshare complex

456)                       Which type of events are generally on a title insurance policy’s schedule of exceptions?

a.       Claim from an owner with an unrecorded deed

b.       Claim that was filed on the public record before a title insurance policy’s effective date

c.       Liens or claims that aren’t on the public record

d.       Mechanic’s liens filed prior to a title insurance policy’s effective date

457)                       Annie and George have been saving and are finally ready to purchase their first home for their family (including their two toddlers). They want to make an offer on a sweet little bungalow in a quiet Richmond neighborhood. If the sellers are represented by a real estate licensee, which situation would be a violation of fair housing laws?

a.       Their offer is rejected because it’s too low.

b.       Their offer is rejected because the seller knows the neighbors don’t like children.

c.       They rescinded their offer when a house they were previously outbid on became available again.

d.       They rescinded their offer when their inspection revealed structural issues with the house.

458)                       Who is responsible for testing private wells for water safety?

a.       Property owners

b.       The DEP

c.       The EPA

d.       The local water utility

459)                       Which of these statements about cooperating with other licensees is true?

a.       Licensees must cooperate with and compensate other licensees, but only when it’s their client’s best interest.

b.       Licensees must cooperate with and compensate other licensees, even if it is not in their client’s best interest.

c.       Licensees must cooperate with other licensees, but only if it’s in their client’s best interest, and there’s no obligation to compensate cooperating licensees.

d.       Licensees must cooperate with other licensees, even if it is not in their client’s best interest.

460)                       Who is responsible for testing community wells?

a.       The DEP

b.       The EPA

c.       The local health department

d.       The local water utility

461)                       The ______makes it illegal to send unsolicited commercial solicitations via fax without the recipient’s permission or an established relationship.

a.       Anti-Telemarketer Act of 2000

b.       CAN-SPAM Act of 2003

c.       Do Not Call Implementation Act of 2003

d.       Junk Fax Prevention Act of 2005

462)                       What is a general lien?

a.       A claim against a person and all of that person’s property

b.       A claim against a specific piece of property

c.       A type of mortgage lien

d.       A type of tax lien

463)                       Under standard lease provisions, a demising clause would contain ______.

a.       A demising clause states when the landlord will lease the property and the date the tenant will take possession.

464)                       A requirement for legal competence

a.       The date the tenant will take possession of the property

b.       The schedule for rate increases

c.       The street address and unit number, if applicable, and possibly the legal description

d.       The date the tenant will take possession of the property

465)                       Which of the following statements describes laws and ethics?

a.       Both laws and ethics establish what actions are deemed illegal and are punishable.

b.       Ethics are consistent from person to person, whereas laws may change.

c.       It’s not a punishable offense to violate either laws or ethics.

d.       Laws are made by the government, and ethics are dependent on conscience and values.

466)                       How many hours of continuing education must first-year salespersons take?

a.       16

b.       30

c.       60

d.       None; they must take 30 hours of post-licensing education

467)                       Activities that restrain trade and reduce competition and choices for consumers are considered to be what kind of violations?

a.       Agency law

b.       Antitrust

c.       Fair housing

d.       License law

468)                       When prospecting and soliciting for new business, licensees should be familiar with what federal acts?

a.       Do Not Call Implementation Act, CAN-SPAM Act, and Junk Fax Prevention Act

b.       Do Not Call Implementation Act, Sherman Act, and Unfair Trade Practices Act

c.       Human Relations Act, Fair Housing Act, and Americans with Disabilities Act

d.       Sherman Act, Clayton Act, and Unfair Trade Practices Act

469)                       Real property ownership may have significant tax advantages. Which of the following is a potential advantage?

a.       Depreciation

b.       Insurance expenses

c.       Taxable gains

d.       Transfer tax

470)                       Your neighbor Mort wants to buy an investment property but he’s a busy man and asks you to act as his attorney in fact as well as his buyer’s agent. What should you tell Mort?

a.       Sure, but it only under a specific power of attorney

b.       Sure, but only because I also hold a law degree

c.       That would be a conflict of interest

d.       That would not be possible because neighbors are not allowed to be attorneys in fact

471)                       What’s an MLS?

a.       A classified advertising site that charges by the column inch

b.       A free service for real estate professionals and the public

c.       An online database of active, under contract, sold, expired, and withdrawn listings

d.       A proprietary site open only to real estate professionals

472)                       Carson is purchasing a $600,000 property by obtaining an 80/20 loan. How much is Carson financing?

a.       $120,000

b.       $420,000

c.       $480,000

d.       $600,000

473)                       Why does HUD test for housing discrimination?

a.       To create revenue through fines

b.       To educate the public

c.       To punish blatant discrimination

d.       To uncover hidden discrimination

474)                       Which of the following options describes a method by which a licensee can determine an appropriate listing price range?

a.       Appraisal

b.       Comparative market analysis

c.       Creative market analysis

d.       Proforma

475)                       The secondary market is comprised of _________________________.

a.       FNMA, GNMA, FHLMC, and lending institutions that buy loans from other lenders

b.       Lending institutions that lend directly to consumers

c.       Savings and loans, thrifts, and credit unions

d.       The VA and the FHA

476)                       Which of these is NOT a form of ownership for real estate?

a.       Joint tenancy

b.       Riparian

c.       Severalty

d.       Tenancy in common

477)                       What is the purpose of the Common Interest Communities Law?

a.       To administer and promulgate fair housing laws within the scope of common interest communities.

b.       To collect taxes from common interest communities.

c.       To create a policy board and regulations to administer the Virginia Property Owners’ Association Act, Cooperative Act, Condominium Act, and Time-share Act.

d.       To develop regulations for licensure of real estate professionals who specialize in common interest communities.

478)                       What are two types of evictions?

a.       Actual and constructive

b.       Easement and encroachment

c.       Proactive and reactive

d.       Probationary and statutory

479)                       Federal and state fair housing laws are designed to _______:

a.       Allow the disabled to pay lower rents

b.       Group like-minded people together in neighborhoods and housing units

c.       Help those from other backgrounds assimilate into American culture

d.       Protect certain classes of people from housing discrimination

480)                       If you’re in a caveat emptor state, which statement about property condition disclosures is true?

a.       The seller isn’t obligated to proactively disclose property defects.

b.       The seller must conduct a home inspection in addition to providing disclosure forms.

c.       The seller must proactively disclose any known defects.

d.       The seller must proactively disclose any known defects and the seller must have a home inspection conducted.

481)                       What can a wet environment with little air circulation do?

a.       Kill mold

b.       Lead to mold growth

c.       Prevent mold from growing

d.       Remove mold

482)                       When does the purchase agreement become a legally binding contract?

a.       After an attorney reviews it

b.       Once both parties sign it

c.       Once the seller provides verbal agreement to the buyer’s offer

d.       The moment the buyer signs the document and sends it to the seller

483)                       Joe and Emma Parsons begin informally working with their neighbor Kyle, who’s a real estate licensee, to find a bigger house. The parties have not signed any agreements or discussed the arrangements. This is an example of a(n) ______ agency agreement.

a.       Executory

b.       Express

c.       Implied

d.       Unspoken

484)                       A broker’s price opinion is generally written by whom?

a.       A buyer

b.       An appraiser

c.       A real estate broker for a buyer

d.       A real estate broker for a lender

485)                       Licensee Kyle has had a few casual meetings with a potential client, Mary. Mary told Kyle the type of home and area she’s interested in, and Kyle mentioned a few homes he thinks Mary might be interested in. Although Kyle hasn’t said he will continue to look for homes for Mary, Mary believes he’ll do just that. Which of the following statements about this situation is correct?

a.       Because Kyle doesn’t know if Mary is working with another agent, he’s just inadvertently created a dual agency situation.

b.       Because Kyle has performed some agency-related tasks for Mary, he has an express agency agreement with her.

c.       Kyle and Mary have no agency agreement—either express or implied—until Kyle begins showing Mary homes.

d.       Kyle’s actions may have created an implied agency agreement with Mary.

486)                       Which document spells out for buyers all settlement costs in a federally related residential real estate transaction?

a.       Closing Disclosure

b.       Consumer Notice

c.       Freddie Mac borrower disclosure

d.       MLS affidavit to consumers

487)                       Google and “if this, then that” alerts can assist you with which of the following?

a.       Guaranteeing that the property owner receives all rental income

b.       Monitoring your online listings for rental scams

c.       Posting your online listings for rent

d.       Removing your listings from a rental website

488)                       The number of properties available describes this factor that influences value.

a.       Demand

b.       Scarcity

c.       Transferability

d.       Utility

e.       Scarcity is related to demand, and reflects the supply of property, or lack thereof.

489)                       Which of these items should real estate professionals help first-time buyers and buyers who have experienced recent credit issues to understand?

a.       Appropriate financing

b.       High-risk loan products

c.       Rental options

d.       Rental options and high-risk loan products

490)                       Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage’s escrow account and deposits it in her account for a few days before paying the developer. Which answer correctly identifies the violation(s) Jill has committed?

a.       Commingling and conversion

b.       Commingling only

c.       Conversion only

d.       Deceptive business practice

491)                       Which of these situations would result in the earnest money being disbursed to the seller?

a.       The buyer backs out when the appraisal comes in too low to satisfy the contingency.

b.       The buyer includes hard money in the purchase offer, then terminates the sale when the appraisal comes in low.

c.       The escrow agent converts the earnest money.

d.       The seller gets cold feet and cancels the transaction.

492)                       Your client, Bruno, is an investor. He is in the process of selling a fourplex and mentions to you that he hates the idea of the capital gains tax he’ll be subject to. What should you tell him?

a.       “Capital gains do not apply to investment properties.”

b.       “Investors don’t pay taxes.”

c.       “Taxes are required, no matter what you do.”

d.       “You might consider a 1031 tax-deferred exchange.”

493)                       Mary is preparing a purchase offer for her buyer client. It’s a pretty standard offer: a little less than list price, with the seller paying a little toward the buyer’s closing costs. Mary fills in the blanks on a standard form used in her brokerage firm based on the current situation. Is this okay?

a.       No, Mary is not an attorney and shouldn’t prepare contracts.

b.       No, Mary should have her client prepare the offer.

c.       No, Mary should hire an attorney to prepare the purchase offer.

d.       Yes, Mary can use the standard forms that her brokerage uses (assuming these forms were originally created or approved by an attorney).

494)                       Cracks, holes, or rotten areas on a soffit are common ______ issues.

a.       Chimney

b.       Foundation

c.       Roof

d.       Window

495)                       A licensee says, “This is a dream home with the best views in town.” This is an example of _______.

a.       A lie

b.       Intentional misrepresentation

c.       Positive misrepresentation

d.       Puffery

496)                       Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office is an example of which essential element of a deed?

a.       Consideration

b.       Granting clause

c.       Habendum clause

d.       Legal description

497)                       Which of the following best describes the fiduciary duty of confidentiality?

a.       You must keep all material facts confidential.

b.       You must keep all parties’ information confidential.

c.       You must not discuss confidential matters with your client.

d.       You must not share your client’s confidential information.

498)                       ______ is a process in which an appraiser determines a probable range of values for a property by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison, such as age, transaction price, etc.

a.       Bracketing

b.       Bridging

c.       Substituting

d.       Surrounding

499)                       Cultivated crops are considered personal property even though they’re part of the soil, and they’re known as _______.

a.       Accessories

b.       Accoutrements

c.       Emblements

d.       Produce

500)                       Which statement best describes a trade fixture?

a.       A fixture or item installed by a commercial tenant that becomes personal property of the landlord when the tenant moves out

b.       A fixture or item installed by a commercial tenant that’s considered personal property of the tenant

c.       Personal property of the tenant used as a bargaining chip when negotiating a sale

d.       Property of the landlord that’s used by the tenant and must remain on the premises when the tenant moves out

501)                       A landlord discovers that his married tenants are expecting their first child. He wouldn’t have rented to the couple had he known they were going to have children, so he serves them with an eviction notice and tells them they must be out in 30 days. The landlord is guilty of ______.

a.       Familial status discrimination

b.       Racial discrimination

c.       Religious discrimination

d.       Sex discrimination

502)                       What types of monies received from income-producing properties should be deposited into an escrow account?

a.       Current rent and prepaid rent

b.       Current rent and security deposits

c.       Current rent, prepaid rent, and security deposits

d.       Prepaid rent and security deposits

503)                       Which option best describes a delivery and acceptance of a deed as required?

a.       Grantor has acknowledged and voluntarily signed the deed in front of a public notary and delivered it in person to the grantee or an agent of the grantee

b.       Grantor has handed the grantee the deed and the grantee has signed it in front of a public notary voluntarily accepting it.

c.       Grantor has mailed the deed to the county clerk’s office for recording.

d.       Grantor has signed the deed and left it on the grantees patio.

504)                       What’s the purpose of a POA’s restrictive covenants?

a.       To encourage the residents to live there long-term

b.       To make it harder to sell the properties within the POAs

c.       To preserve a community’s overall aesthetic

d.       To weed out people of certain ethnicities

505)                       What is the term used to describe submerged land below the mean water mark?

a.       Aqueducts

b.       Channels

c.       Mud pits

d.       Water bottoms

506)                       In which of these situations does the disclosure for unrepresented parties need to be provided?

a.       Any time an agent is interacting with an unrepresented party and the discussion starts to become substantive

b.       Any time an agent speaks to a party who is not represented by an agent

c.       Any time an agent speaks to the opposing party without their agent present

d.       To any prospective buyer attending an open house

507)                       An organization with many investors who jointly participate in a real estate investment and must adhere to the rules and regulations of the Securities and Exchange Commission is a ______.

a.       C corporation

b.       Partnership

c.       S corporation

d.       Syndicate

508)                       Which term describes the process of real property becoming personal property by detaching it from the land?

a.       Accoutrement

b.       Annexation

c.       Emblement

d.       Severance

509)                       What’s the purpose of testing with regard to fair housing?

a.       To educate applicants

b.       To increase fines on landlords

c.       To punish blatant discrimination

d.       To uncover hidden discrimination

510)                       A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. How many payments will he make over the course of the loan?

a.       180

b.       240

c.       30

d.       360

511)                       All of the homes on Elm Street are currently on septic systems. However, the county plans to extend the sewer lines to Elm Street within the next two years. What’s the biggest reason why it’s important for your buyers to know this?

a.       Public sewers have a better safety record than septic systems.

b.       Sewer installation means construction traffic.

c.       Some people prefer septic systems to having to tie into public sewers.

d.       The county will likely impose an installation fee on Elm Street residents to cover the costs.

512)                       Which statement about lead-related health problems is true?

a.       Lead can be traced to senioritis.

b.       Lead causes blindness upon contact with the eyes.

c.       Lead is associated with coronary heart disease.

d.       Lead may cause behavioral problems, learning disabilities, seizures, and, in extreme cases, death.

513)                       John’s property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John’s property?

a.       Add 185 to 225.

b.       Multiply 185 by 225, then divide by four.

c.       Multiply 185 by .5; multiply your answer by 225.

d.       Multiply 185 x 225.

514)                       Using the capitalization formula, what is the value if the net operating income is $20,000 and the rate of capitalization is 10%?

a.       $2,000

b.       $20,000

c.       $200,000

d.       $2 million

515)                       A fire destroyed Meredith’s house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn’t fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?

a.       Its current market value

b.       The amount it appraised for

c.       The amount it would cost to completely replace her home

d.       The original sales price when it was first constructed

516)                       A quitclaim deed does which of these?

a.       Transfers a property with only the covenant of warranty

b.       Transfers the property with full covenants

c.       Transfers without warranty any interest or title the grantor has when conveying it

d.       Transfers with warranty any interest or title the grantor has in the property when conveying it

517)                       In many cases, property managers must get explicit permission in order to disburse funds from a trust account. What is one common way to do so without this explicit permission?

a.       Ensure the bank has a signature card for the property manager.

b.       Give the property manager a power of attorney.

c.       Have all who supply trust funds sign waivers.

d.       Put it in the property management agreement.

518)                       Johannes must obtain a permit for a construction project that is located right next to a wetlands. Which federal law or regulation requires him to get the permit?

a.       Army Corps Construction Regulations

b.       Clean Water Act

c.       Coastal Zone Management Act

d.       Rivers and Harbors Act

519)                       When a licensee is working with a property located near a Superfund site, what does that mean?

a.       A portion of the sale price must go to the EPA to fund clean-up of the site.

b.       The licensee is required to disclose potential health threats to anyone in the area when showing the property.

c.       The licensee must disclose the existence of an environmental hazard in the area.

d.       The property cannot be sold until the site is removed from the NPL.

520)                       Which of these situations represents the illegal practice of redlining?

a.       Arlo, a licensee, distributed a flyer in several neighborhoods warning of impending commercial developments that would negatively impact property values.

b.       Eunice refuses to allow her agent to show her house to families with children.

c.       Hunter, a mortgage broker, refuses to underwrite mortgage applications from applicants who are buying in specific neighborhoods, based on the neighborhood’s demographics.

d.       Jaime is working with Korean clients. He’s focusing on homes in Korean communities because he thinks his clients will be more comfortable there.

521)                       Redlining is the practice of selecting geographical areas in which no mortgage loans will be written (based on demographics instead of creditworthiness).

522)                       Jeanetta leases an apartment from Quad City Leasing. Jeanetta has filed a complaint with the state real estate licensing division stating that Marissa, Quad City’s property manager, breached her fiduciary duty of loyalty to Jeanetta. Which of these statements about this situation is true?

a.       As a property manager, Marissa doesn’t owe fiduciary duties to clients or residents.

b.       As a property manager, Marissa owes fiduciary duties to her client and the apartment community.

c.       If Marissa did breach a fiduciary duty to Jeanetta, Jeanetta has a legitimate complaint.

d.       Marissa owes fiduciary duties only to the landlord.

523)                       Property managers owe fiduciary duties to their clients (the landlord) and the community as a whole, not to individual residents.

524)                       In which of these situations would the property most likely be conveyed with a trustee’s deed?

a.       Karla is the executor of her father’s estate and is selling his farm.

b.       Marvin and Tricia are selling their house.

c.       Tim’s property will be sold at auction in a foreclosure action.

d.       TLC Lending is selling an REO property.

525)                       states that use a deed of trust as security for a mortgage, the trustee conveys foreclosed property with a trustee’s deed.

526)                       Luci’s client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home?

a.       If Kaden uses his builder’s lender, he can get a better interest rate and won’t have to worry about market fluctuations between now and closing.

b.       Kaden doesn’t need to worry about interest rates for his long-term mortgage until 90 days prior to closing when he can lock in the best rate.

c.       Kaden needs to allow for the possibility of an interest rate increase between now and closing because lenders aren’t likely to lock in an interest rate for more than 90 days before closing.

d.       Kaden needs to lock in the interest rate on his long-term mortgage now to avoid unexpected increases that could put his loan amount over his approval amount.

527)                       Jerrica is set to close on the property she’s buying on Friday. Because of other delays in the closing date, Jerrica’s interest rate as of the day of closing will increase by 1/4 of a percent. What impact does this have on the closing?

a.       A new Closing Disclosure must be issued at least three days before the closing date.

b.       A new Loan Estimate must be issued, so the closing date must be moved back.

c.       Jerrica will not be able to close until she re-applies for her loan.

d.       The closing date will remain the same, but Jerrica will need to bring additional funds to the closing

528)                       Mike’s been friends with Tim since college. They often work together: Mike flips houses and Tim’s an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they’re engaging?

a.       Equity skimming

b.       Falsely inflating appraisals

c.       Under-valuing the homes

d.       Violating fair housing laws

529)                       For conventional loans in which the loan-to-value ratio is in excess of of a certain percentage, lenders generally require private mortgage insurance. What’s this percentage?

a.       75%

b.       80%

c.       85%

d.       90%

530)                       Loans above 80% don’t conform to Fannie Mae/Freddie Mac guidelines, so a lender may require PMI to offset the risk.

531)                       Corinne is 68 years old and employed full time. She’s of Spanish descent, is raising her 12-year-old grandson, and lives with her partner, Katherine. She requires an accessible apartment because she uses a wheelchair. Under which of the following federally protected classes might Corinne be protected if she faces housing discrimination?

a.       Age, employment status, national origin, familial status, and sexual identity

b.       Age, race, familial status, sexual identity, and disability

c.       National origin, sex, disability, and familial status

d.       Religion, familial status, and disability

532)                       Federal fair housing laws don’t name age, employment status, or sexual identity as protected classes. Corinne would be protected if she experienced housing discrimination based on her national origin, sex, disability, or familial status.

533)                       Savvy’s buyer client made an offer on a property but is having second thoughts. Savvy tells her client that she’ll ask the seller’s agent for an extension on the inspection period “to gather more bids,” and use that time to look at other properties to avoid losing out on the current property. Savvy’s client found a property she liked better, so they made an offer. The offer was accepted, so Savvy contacted the first property’s agent to terminate that offer. Is this wrong?

a.       No, she acted in her client’s best interest.

b.       No, she fulfilled her duty of loyalty to her client.

c.       Yes, she broke a contract.

d.       Yes, she did not treat the other party honestly, or act in good faith.

534)                       In pricing a property, what might expired listings tell the real estate professional?

a.       The price at which a property is most likely to sell

b.       The price at which a property won’t sell

c.       The property’s competition

d.       When the home will sell

535)                       How are principal meridians and baselines used in the rectangular government survey system?

a.       All legal descriptions in this system use a single principal meridian and multiple baselines.

b.       A principal meridian separates each township from the next and baseline separates each tier from the next.

c.       Each legal description in this system originates at the intersection of a principal meridian and a baseline.

d.       The boundary formed by two principal meridians and two baselines forms a township.

536)                       A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a 1% loan origination fee. How much is the loan origination fee?

a.       $3,200

b.       $3,600

c.       $4,000

d.       $800

537)                       An 80% LTVR means the buyer is financing 80% of the purchase price. This equates to $320,000, and 1% of this amount is $3,200.

538)                       Margo’s accountant tells her that she’s eligible to deduct the property taxes she paid last year. Select the statement about this deduction that’s true.

a.       Margo can only deduct the property taxes charged back to her at closing.

b.       Margo has to be an investor to be eligible to deduct property taxes.

c.       Margo is in the ownership stage of the property ownership lifecycle.

d.       Margo is in the reversion stage of the property ownership lifecycle.

539)                       Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true?

a.       The CFPB provides forms similar to the Closing Disclosure and Loan Estimate for seller/financers to use.

b.       The Closing Disclosure and Loan Estimate aren’t required in a seller-financed transaction.

c.       The seller is required to provide the same disclosure forms to Katherine as a standard lender would provide.

d.       The seller will provide the Closing Disclosure and Loan Estimate to Katherine but has a longer timeframe to do so than a traditional lender would have.

540)                       In a seller-financed transaction, the Closing Disclosure and Loan Estimate aren’t required. Some other form of statement may be prepared to show the buyer and the seller their respective closing figures.

541)                       The purchase price of the home Leroy is buying is $300,000. He’s putting $100,000 down and is paying three discount points. How much will this cost?

a.       $2,000

b.       $4,000

c.       $6,000

d.       $9,000

542)                       What title guarantees will Jody have if her property is deeded to her after a foreclosure?

a.       The covenant against encumbrances

b.       The covenant of further assurances

c.       The covenant of quiet enjoyment

d.       The covenant of seisin

543)                       Which of these statements about statutory duties and fiduciary duties is true?

a.       Statutory duties are typically imposed in addition to fiduciary duties.

b.       Statutory duties spring from common law and include six duties that licensees owe clients.

c.       Statutory duties spring from state statutes and tend to be more specific than fiduciary duties.

d.       Statutory duties tend to be more broad than fiduciary duties.

544)                       The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this?

a.       The Clayton Act of 1914

b.       The Federal Trade Commission Act of 1914

c.       The Restraint of Trade Act of 1894

d.       The Sherman Antitrust Act of 1890

545)                       Which of these examples describes a prepayment penalty?

a.       A fee the government charges the lender if the borrower pays off a loan before its intended time

b.       A fee the lender charges for servicing a loan

c.       A loan origination fee charged to the borrower

d.       A monetary penalty imposed on a borrower for paying off a loan before its intended time

546)                       An abandoned or otherwise unused commercial or industrial site with suspected contaminants is known as what?

a.       A brownfield

b.       A Brown Zone

c.       A space that cannot be used

d.       A special use landfill

547)                       year! Kim is taking a leave of absence from her job to accompany Marta. They don’t want their home in a gated community to sit empty, so they’d like to rent it out for the year. What might prohibit them from doing so?

a.       County ordinance

b.       Homeowner regulations

c.       Neighborhood watch group

d.       State law

548)                       County or state laws likely wouldn’t address homeowners’ ability to lease an owned piece of property, but HOA regulations might.

549)                       What’s the primary difference between an ordinary and a pur autre vie life estate?

a.       An ordinary life estate ends when the grantor dies; a pur autre vie life estate ends when the estate holder dies.

b.       An ordinary life estate ends within a specified period of time; a pur autre vie life estate ends when the estate holder dies.

c.       An ordinary life estate ends with the death of the estate holder; a pur autre vie life estate ends with the death of someone other than the life estate holder.

d.       A pur autre vie life estate ends within a specified time period; an ordinary life estate ends when someone other than the estate holder dies.

550)                       Elaine owns a home on a flag lot behind James. Her easement for a common driveway runs through James’s property. What kind of ownership rights does Elaine have of the driveway that runs through James’s property?

a.       Absolute

b.       Non-possessory

c.       Possessory

d.       Temporary

551)                       Jerry and Simon signed a contract so that Jerry could purchase all of Simon’s restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this?

a.       Specific time

b.       Statute of limitations

c.       Time is of the essence

d.       Time of performance

552)                       Dave’s company just did some renovation work on a free-standing hobby store in order to ensure that it’s ADA compliant. As Dave is doing the final walk-through, he notes that the aisles are now wider, the restrooms each have an accessible stall, and the water fountain near the restrooms is lower and has more clearance. But he notices that one critical renovation hasn’t been made. Which of these is key for ADA compliance?

a.       The cash register should be lower with no visual barrier.

b.       There should be a completely separate accessible restroom.

c.       There should be an accessible pay phone in the store.

d.       There should be a ramp in addition to steps for wheelchair accessibility.

553)                       Pay phones aren’t required, nor are accessible cash registers. But ramps for wheelchair access to the store are key!

554)                       How many acres are in a parcel described as, “The E 1/2 SE 1/4 NE 1/4 Section 3, Township 4 North, Range 2 East of the 6th PM”?

a.       160

b.       20

c.       40

d.       80

555)                       If the private individual owner doesn’t own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?

a.       Housing designated for senior use

b.       “Mrs. Murphy” exemption

c.       Owner-occupied buildings with no more than four units

d.       Single-family housing sold or rented without the use of a broker

556)                       Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might her lender also require her to obtain private mortgage insurance?

a.       Her down payment of $50,000 isn’t at least 20% of the purchase price.

b.       Her lender is a subprime lender.

c.       PMI is triggered at the $50,000 down payment amount.

d.       She has poor credit.

557)                       Roland’s farm land is assessed at 1.5 million dollars and the improvements for $500,000. At a tax rate of 4 mills, how much are Rolan’s monthly taxes?

a.       $6,667.00

b.       $667.00

c.       $8,000.00

d.       $80,000.00

558)                       Which of these areas would be included in the livable area calculation?

a.       A detached garage

b.       An attached garage

c.       An unfinished attic area with seven-foot ceilings

d.       A pool house connected to the house by a hallway

559)                       In a residential real estate sale involving a federally related loan, what entity is required to provide Real Estate Settlement Procedures Act disclosures to the consumer?

a.       The consumer’s lender

b.       The consumer’s mortgage broker

c.       The consumer’s real estate broker

d.       The settlement officer for the transaction

560)                       Shalonda is looking to purchase a home for $325,000 using a conventional loan. She has $49,000 to place as a down payment on the house. Which of the following statements is true?

a.       Her down payment on the loan only needs to be 3.5%.

b.       She must come up with another $16,000 to purchase the house.

c.       She will be required to purchase MIP.

d.       The loan-to-value ratio exceeds 80%.

561)                       Seller Jamison is closing on his property with buyer Conrad. Jamison paid the current year’s property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement?

a.       The taxes are an accrued expense, and will appear as a buyer credit and a seller debit.

b.       The taxes are an accrued expense, and will appear as a buyer debit and a seller credit.

c.       The taxes are a prepaid expense, and will appear as a buyer credit and a seller debit.

d.       The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.

562)                       These taxes have already been paid, so they are a prepaid item. They’ll appear as a buyer debit and seller credit at closing.

563)                       If there’s no state or local building code to cover a specific situation, what code must the builder abide by?

a.       The Builder Code of 1912

b.       The builder’s own

c.       The Development Code of 1986

d.       The federal building code

564)                       A closing agent has several duties to perform both before and after the closing. Which of the following is a task the closing agent must complete after the closing?

a.       Obtain title insurance

b.       Pay the existing loan off

c.       Perform a title search

d.       Prepare a closing statement

565)                       A brokerage firm that hires licensees as employees instead of as independent contractors must ______.

a.       Advise the state licensing regulators of the non-traditional working relationship

b.       Avoid controlling their activities too closely to ensure proper worker classification

c.       Offer incentive bonuses to ensure a motivated workforce

d.       Pay licensees a regular salary regardless of the revenue they generate

566)                       Stu is buying Freddie’s property. What must occur for the transfer of title to take place?

a.       Freddie and Stu must sign the deed.

b.       Freddie must intend to convey the property to Stu.

c.       Stu must convey the deed.

d.       Stu must sign the deed.

567)                       What’s the penalty for violating federal do not call rules?

a.       A fine of more than $40,000 for each day violations took place

b.       A fine of more than $40,000 for each violation

c.       Restrictions on all business telephone use

d.       Suspension of the violator’s business license

568)                       Which of the following is an example of commingling?

a.       Mixing earnest money with personal funds

b.       Mixing two earnest money deposits

c.       Paying licensee bonuses from forfeited escrow deposits

d.       Using escrow funds to pay business expenses

569)                       Your clients are purchasing a $160,000 home. If they have a down payment of 25% and the bank charges two points at closing, how much are they paying in points?

a.       $2,350

b.       $2,400

c.       $2,450

d.       $2,475

570)                       Christine listed her house with you. Tailleur represents the buyer, Rebecca, and the seller’s mother, Freida, is paying your commission. Which of these factors determines how legal agency is determined in this situation?

a.       Christine listed the property with you.

b.       Christine’s mother, Freida, owns the house you listed.

c.       Freida is paying your commission.

d.       Tailleur represents the buyer.

571)                       LaTonya’s aunt left her a bungalow on the outskirts of the city. For many years, it was the place for family holiday gatherings, and LaTonya’s sister was even married there. That’s why her family is so upset to learn that she plans to sell the bungalow as soon as she gets it cleaned out. Which real property right allows her to sell the property?

a.       Control

b.       Disposition

c.       Exclusion

d.       Possession

572)                       The right of disposition includes the right to determine how, when, and if the property is to be sold or transferred to another owner.

573)                       Which of the following would be a description used for real property and a fixture?

a.       Above-ground

b.       Free-standing

c.       In-ground

d.       Movable

574)                       Your client Faye is buying a condo downtown for $565,000 and financing 60% of the purchase. Her lender is charging a one-point loan origination fee and two discount points. Can you help Faye calculate the dollar amount for points she’s going to pay on her loan?

a.       $10,170

b.       $16,950

c.       $4,520

d.       $6,780

575)                       Jansen and his listing agent just left the closing on Jansen’s house. What kind of notice does Jansen, his agent, the buyer, and the buyer’s agent have regarding the sale of Jansen’s house?

a.       Actual notice

b.       Constructive notice

c.       Legal notice

d.       Personal notice

576)                       Dale and Barbara, your buyer clients, aren’t thrilled about the current interest rates on home loans. They opt to pay two discount points to their lender to bring down their monthly payment. They’re financing $235,000 on their new $400,000 home, so how much can they expect to pay for points at closing?

a.       $2,350

b.       $3,300

c.       $4,700

d.       $8,000

577)                       Why are lenders required to provide the Loan Estimate and Closing Disclosure forms to loan applicants and borrowers?

a.       Because interest rates may rise if the buyer doesn’t close on time

b.       So borrowers can compare loans and make decisions regarding the affordability of loans offered

c.       So government entities can track the numbers of borrowers who decline certain types of loans

d.       So they can collect information about loan applicants and borrowers

578)                       While walking around the exterior of a rural home she’s inspecting, Juanita noticed a metal vent pipe sticking out of the ground 25 feet from the house. She documents this because it may be a sign of what potential environmental hazard?

a.       Capped well

b.       Radon vent system

c.       Septic system

d.       Underground storage tank

579)                       What factors directly affect an adjustable rate mortgage?

a.       Amortization tables, index, and rate

b.       Index, tax basis, and margin

c.       Rate, index, and margin

d.       Rate, loan-to-value ratio, and index

580)                       Sondra thinks the new business contract she signed with her business partner is valid. Both parties are legally competent, the contract has a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered?

a.       Whether consent was voluntary

b.       Whether the contract has been translated into all possible languages

c.       Whether the contract is in writing

d.       Whether the parties are over 21

581)                       The only element Sondra hasn’t considered is whether the consent to enter into the contract was voluntarily given. Only real estate contracts have to be in writing, and parties are legally competent to enter into contracts from the age of 18.

582)                       Danette hasn’t paid the first quarter water bill on her property. It was due on April 1. She’s closing with the buyer, Jason, on April 1. What type of expense is this and how will it appear on the settlement statement?

a.       This is an accrued expense, and will appear as a buyer debit and a seller credit.

b.       This is an accrued expense, and will appear as a seller debit and a buyer credit.

c.       This is a prepaid expense, and will appear as a buyer debit and a seller credit.

d.       This is a prepaid expense, and will appear as a seller debit and a buyer credit.

583)                       Shira bought a condominium in a planned unit development. The development has a small playground, tennis and basketball courts, and a putting green. Who owns these recreational facilities?

a.       The businesses located in the PUD

b.       The condo owners

c.       The development investors

d.       The PUD developer

584)                       Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have?

a.       Fee simple conditional

b.       Fee simple determinable

c.       Fee simple subject to a condition subsequent

d.       Legal life estate

585)                       Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?

a.       Averaging

b.       Bracketing

c.       Conformity

d.       Correlation

586)                       Through a correlation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term reconciliation is often synonymous with correlation.

587)                       Casey signed a contract form offering a purchase price of $309,000 on a home, and gave his agent a $5,000 earnest money deposit. The owner is out of town and her agent can’t reach her. At this point what does Casey have?

a.       An executory contract

b.       An implied contract

c.       An offer

d.       A voidable contract

588)                       Sandra is purchasing a home for $200,000 and provides a $3,000 earnest money check to the seller. Her closing costs and down payment total $7,000. Assuming that Sandra is financing the purchase, how much should she bring to the closing?

a.       $2,000

b.       $3,000

c.       $4,000

d.       $5,000

589)                       Alexandra sells her house to Clark for $178,000. They negotiate to split the transfer tax, which has a rate of $0.33 per $100. What do they each pay to cover the transfer tax?

a.       $29.37

b.       $293.70

c.       $58.74

d.       $587.40

590)                       Joan is representing the buyer, Carlton, and Reggie is representing the sellers, Zeb and Teresa Martin. Carlton’s Great Aunt Matilda has agreed to pay any portion of Joan’s commission the sellers don’t cover. Teresa’s father, Teddy, has agreed to pay half of the sales commission that will be owed to the listing agent. Which of these statements is true?

a.       Carlton and the Martins are the agents’ principals in this transaction.

b.       Matilda and Teddy are the agents’ principals in this transaction.

c.       Reggie’s clients are Zeb, Teresa, and Teddy.

d.       Since she’s paying Carlton’s share of the commission, Matilda is Joan’s client.

591)                       What’s a typical prepaid item that will go into a seller’s credit column and a buyer’s debit column on a closing statement?

a.       Broker fees

b.       Loan fees

c.       Property taxes

d.       Recording fees

592)                       Related to the legal test of a fixture, in the acronym MARIA, what do the two As stand for?

a.       Acceptability of the fixture and agreement of the parties

b.       Adaptability of item and accessibility to the property

c.       Adaptability of item to land’s use and agreement of the parties

d.       Allowable use and acceptable use

593)                       Which of these is NOT one of the ways in which an agency relationship may be terminated without penalty for either the agent or the principal?

a.       Delaney signed a buyer’s representation agreement with Martha. After Delaney made an offer on a house, she changed her mind and terminated the agency agreement.

b.       Martha listed Sonja’s home for sale. Martha helped Sonja negotiate an offer and performed the other tasks required of her. The closing has taken place.

c.       Phyllis listed her home with Brad. Brad put the property on the MLS, but Phyllis hasn’t heard from him in more than two months.

d.       Richard listed Ole’s ski chalet for sale. Two weeks later, an avalanche destroyed the property.

594)                       Which statement best describes an adjustable rate mortgage?

595)                       Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller, which will be applied to her down payment. She’s financing the transaction, and her closing costs and down payment total $4,800. How much should Helen bring to the closing?

a.       $2,300

b.       $2,700

c.       $4,800

d.       $7,300

596)                       Which task is NOT the responsibility of an escrow officer?

a.       Determine how earnest money is to be distributed in case of a dispute.

b.       Manage transaction documents from all parties.

c.       Prepare closing documents and manage the closing meeting.

d.       Verify funding of the buyer’s loan.

597)                       Which of these is NOT a likely features of a bridge loan?

a.       Amortized loan paid back over a period of no more than five years

b.       Interest-only loan

c.       Secured by the borrower’s existing home

d.       Temporary, short-term loan

598)                       Following all of the client’s lawful instructions describes which fiduciary duty?

a.       Disclosure

b.       Loyalty

c.       Obedience

d.       Reasonable skill and care

599)                       Georgina is an escrow agent who’s holding funds for several transactions. Which of these statements about how she’ll disburse these funds is true?

a.       If the transaction closes, Georgina will disburse the earnest money to the listing broker as part of his commission.

b.       If the transaction closes, she’ll refund the earnest money to the buyer, since the buyer brings the full amount necessary for the down payment and loan costs to closing.

c.       If the transaction doesn’t close, Georgina will disburse the earnest money as instructed by the parties or according to state law.

d.       If the transaction doesn’t close, Georgina will refund the earnest money to the buyer.

600)                       A prospective buyer is curious why a previous owner is selling such a perfect home. The licensee knows that the previous owner recently died due to complications from AIDS. How should the licensee respond to the prospective buyer’s inquiry?

a.       The licensee can disclose that the owner had AIDS, but can’t reveal whether the owner died from the disease.

b.       The licensee can obtain permission from the seller to reveal the previous owner’s AIDS diagnosis.

c.       The licensee can share that the previous owner died from AIDS.

d.       The licensee can’t disclose that a previous owner had HIV or AIDS.

601)                       Broker Sam has extended an offer to licensee Jane, who has accepted the offer. Jane will work as an independent contractor for Sam. Based on this, which of the following statements is true?

a.       As an independent contractor, Jane will not have to fill out any tax-related or IRS-related paperwork.

b.       It is up to Jane whether or not she wants to have taxes withheld from her pay. If she does choose to have taxes withheld, she must complete a W-4.

c.       Jane will need to fill out a W-4 for tax withholding information.

d.       Jane will need to fill out a W-9 for IRS reporting purposes.

602)                       You’re showing your buyers a house that clearly has a second-story addition. What important thing do you need to find out from the sellers?

a.       How much the seller’s heating and cooling bills went up after the addition was put on

b.       Whether or not a licensed general contractor did the work

c.       Whether or not the addition was permitted

d.       Whether or not the materials used match the original construction

603)                       Shemar owns a starter home a few miles outside of the city center, and he wants to deed it to his grandson, Tyler. According to the paperwork Shemar had drawn up, Tyler will own the property as long as he continues to pay the property taxes on time. After the second missed property tax payment, ownership would revert to Shemar. What did Shemar place on the deed?

a.       CC&Rs

b.       Deed condition

c.       Deed covenant

d.       Deed limitation

604)                       Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements?

a.       No, because Gus won’t be using a real estate professional.

b.       No, because there’s no transfer of title involved.

c.       Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit.

d.       Yes, because the bank is also the lender for his home mortgage. If he’d used a different lender, RESPA would not apply.

605)                       Chip is a residential and commercial agent. His friend asks him to list his cattle ranch for sale, but Chip’s never listed an agricultural property before. How should Chip handle this listing so he can still work for his friend but also not work outside his area of expertise?

a.       Disclose to his friend that he’s not an agricultural expert and ask his friend’s permission to work with an agricultural expert in his firm.

b.       Refer the listing to an agricultural agent and ask his friend to keep him informed of the transaction’s progress.

c.       Take the listing and apply commercial real estate practices, since agricultural sales are similar to commercial sales.

d.       Turn down the listing, citing his lack of experience in agricultural work.

606)                       Tiers in the rectangular government survey system are formed by ______.

a.       Parallel baselines

b.       Parallel principal meridians

c.       Parallel range lines

d.       Parallel township lines

607)                       SARA is an amendment to which environmental act?

a.       CERCLA

b.       Clean Air Act

c.       Clean Water Act

d.       Environmental Responsibility Act

608)                       Rhonda purchased an existing pet store in her neighborhood, and she’s so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won’t be able to visit the store in her wheelchair, as the aisles are narrow and there isn’t enough room to move around. What is true about Rhonda’s responsibilities to her aunt and other people with disabilities?

a.       At a minimum, Rhonda is required to add an accessible bathroom.

b.       At a minimum, Rhonda is required to add an accessible entrance to the building.

c.       Because Rhonda purchased a retail business, she must meet the same ADA requirements as new construction buildings.

d.       Since Rhonda purchased an existing building and business, the ADA requirements aren’t as strict as with new construction and vary by building.

609)                       Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?

a.       If the disability for which the tenant is making the request is obvious, the landlord may not ask why it is needed.

b.       If the disability is not obvious, the tenant must provide the landlord with full medical records to support the request.

c.       The landlord is not obligated to consider the request unless the tenant can produce either the original or a certified true copy of the animal’s service certification.

d.       The landlord must consider the request but may require an additional “pet” security deposit.

610)                       Henry submits an offer on a condo and includes an earnest money check for 10% of his offer, which the seller accepts. Later on at closing, he brings a cashier’s check for $34,450 (comprising the remaining half of his 20% down payment and $7,950 in closing costs). What’s the condo’s purchase price in whole dollars?

a.       $132,500

b.       $265,000

c.       $344,500

d.       $88,333

611)                       Subtract the closing costs from cashier’s check amount ($34,450 – $7,950=$26,500) for half of down payment. The total DP was double this ($53,000). Next, divide $53,000 by 20% (to find purchase price ($53,000 ÷ .2=$265,000). Purchase price is $265,000.

612)                       What’s the estimated value by cost approach for a property if the site value is $25,000, the new cost of improvements is $100,000, and the total depreciation estimate is $15,000?

a.       $110,000

b.       $115,000

c.       $140,000

d.       $90,000

613)                       An appraiser used the cost approach to estimate a property’s value at $220,000. The site value was $50,000, and the total depreciation estimate was $4,000. What was the estimated cost of improvements?

a.       $166,000

b.       $174,000

c.       $266,000

d.       $274,000

614)                       Dean’s new business venture is a software services firm where IT professionals handle programming and customer service tasks for a number of business clients. His employees all work at tables in an open office space. Dean most likely has a _______ lease for the office space.

a.       Gross

b.       Loft

c.       Percentage

d.       Triple net

615)                       The best way to start comparative market analysis data collection is to use properties that sold when?

a.       18 to 24 months ago

b.       Between two and three years ago

c.       In the last 12 to 18 months

d.       No later than three to six months ago

616)                       Why is proof of ownership required when transferring real property?

a.       It places the new owner’s name on the deed.

b.       It provides evidence that the title is marketable.

c.       It provides proof that property taxes have been paid for the property.

d.       It verifies the property address.

617)                       Tom and Martha live in a neighborhood where lawn ornaments are prohibited. They want to put up a nativity scene at Christmas and argue that the covenant doesn’t apply to temporary decorations but only to permanent ones. Their homeowners association disagrees. Which entity enforces subdivision covenants?

a.       The civil court system

b.       The homeowners association

c.       The municipal code enforcement agency

d.       The original developer of the neighborhood

618)                       At what point must a listing agent disclose material facts to all parties involved in the transaction?

a.       As soon as possible

b.       If asked directly by a party to the transaction

c.       Never

d.       Only with the seller’s permission

619)                       Which of these situations might be addressed by limitations or a subject to clause in the deed Jane is using to convey property to Moira?

a.       An easement runs across the property, permitting Jane’s neighbors to access the neighborhood boat dock.

b.       Jane has given Moira 24 hours to accept delivery of the deed.

c.       Jane wants to limit her liability for any title defects that may occur.

d.       Moira’s acceptance of the deed is subject to receiving her financing

620)                       Most often, what’s the first course of action for disputed home warranty claims?

a.       Arbitration

b.       Condemnation

c.       Litigation

d.       Mediation

621)                       Gabe’s home has an assessed value of $172,000, and his tax rate is .55%. What are the annual taxes?

a.       $1,125

b.       $1,265

c.       $935

d.       $946

622)                       First you have to convert the percentage to a decimal. .55% = .0055, so multiply the assessed value by the tax rate to calculate annual taxes: $172,000 × .0055% = $946.

623)                       Which of the following is an acceptable ad based on Regulation Z?

a.       Get a low interest rate of 4.75% (4.925% APR) with as little as 10% down payment and a 30-year fixed rate with no points.

b.       Get a low interest rate of 4.75% on a monthly payment of $900.

c.       Get a low interest rate of 4.75%, with 85% loan to value.

d.       Get a low interest rate of 4.75% with as little as 3% down.

624)                       Citytown officials know that they have an abandoned factory site that has been identified for cleanup under CERCLA. When city officials tried to trace the ownership of the property, they found several shell corporations but can’t determine which individual or corporate entity actually owns the property. What is a likely outcome of this situation?

a.       Citytown will apply to the CERCLA trust fund for cleanup costs.

b.       Citytown will bill the EPA for cleanup costs.

c.       Citytown will end up paying for cleanup.

d.       The factory site won’t be cleaned up and will sit empty.

625)                       Quentin brought an application before city council to build a shopping mall on 17 acres south of town that currently don’t have a zoning designation. The council referred him to the planning commission, which will review the application in light of the city’s ________.

a.       Comprehensive plan

b.       Economic development plan

c.       Health and sanitation ordinances

d.       Zoning ordinances

626)                       Since the parcel isn’t currently zoned, zoning should be established in alignment with an area’s comprehensive plan.

627)                       Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn’t fully understand. Belinda should ______.

a.       Avoid unauthorized practice of law

b.       Hire an attorney

c.       Refuse to work with this client

d.       Use legalese

628)                       Which act sets guidelines for public and common use areas at housing developments?

a.       Accessibility Options Act

b.       Americans with Disabilities Act

c.       Fair Housing Act

d.       Multi-Family Dwelling Act

629)                       Sebastien’s four-story home includes a 400-square-foot unfinished bonus room on the top floor, an upper level with 850 square feet, a main level with 1,450 square feet (which includes a garage that’s 500 square feet), and a finished basement that’s 900 square feet. The MLS system in Sebastien’s area includes below-grade square footage. What square footage will be reported on his MLS listing?

a.       2,200

b.       2,700

c.       3,600

d.       4,100

630)                       Sebastien should exclude the unfinished bonus room and the garage and add the remaining area (850  (1,450 – 500)  900).

631)                       Your buyer, Billy, wants to make an offer on the craftsman house he saw today, but he wants the sellers to start the paperwork for a tax reassessment before closing. This isn’t part of the standard sales contract in your area. What will you use to accomplish this request?

a.       Addendum

b.       Amendment

c.       Annotation

d.       Appendix

632)                       Joaquin sold his house for $327,600. He bought it several years ago for $139,900 with a $100,000 loan. The loan balance when he sold it was $73,400. What was Joaquin’s equity?

a.       $114,300

b.       $187,700

c.       $214,300

d.       $254,200

633)                       Kelly is closing on the house she’s purchasing on Wednesday. Which of these statements is true?

a.       Kelly must receive the Loan Estimate at least four days before closing.

b.       The closing officer must deliver the Closing Disclosure at closing.

c.       The lender must provide the Closing Disclosure by Friday of the week before closing.

d.       The Loan Estimate amounts must be within 1/4 of a percent of the final settlement costs.

634)                       Gerald practices real estate in a state that recognizes sub-agency. Which of the following statements is true of Gerald’s authority to appoint a sub-agent?

a.       He can independently appoint a sub-agent at any time during the transaction.

b.       He must receive the principal’s permission in writing in order to appoint a sub-agent.

c.       Only Gerald’s broker can appoint a sub-agent.

d.       Only the principal can appoint a sub-agent.

635)                       How many acres are in a parcel described as, “The S 1/2 NW 1/4 Section 3, Township 4N, Range 2W of the 6th PM”?

a.       160

b.       20

c.       40

d.       80

636)                       If a community isn’t growing in an orderly fashion, which local land use group is likely at fault?

a.       Downtown business association

b.       Planning board

c.       PTA

d.       Zoning board of appeals

637)                       Tracy is looking in the MLS and sees a listing marked “REO.” Which of these statements regarding REOs is correct?

a.       An REO property is one that the lender is trying to help the owner sell before beginning foreclosure proceedings.

b.       Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions.

c.       REOs are properties that the lender has given permission to sell for less than the loan amount.

d.       REOs refer to investment properties a bank owns.

638)                       Melisa’s mother gave her house to Melisa, along with a signed copy of the deed granting ownership to Melisa. Years later, Melisa decides to downsize by selling the property. The title company shows that the property is still in Melisa’s mother’s name. What does Melisa have to do to clear this up?

a.       File a suit to quiet title.

b.       Present the signed deed to the new buyer.

c.       Present the signed deed to the title company.

d.       Record the signed deed.

639)                       What’s a good policy that a buyer’s agent should employ regarding contingencies?

a.       Avoid contingencies because they tend to put sellers off.

b.       Maximize the number of contingencies allowed.

c.       Use a standard set of contingencies with each buyer to avoid missing any.

d.       Use contingencies judiciously to protect the clients and the deal.

640)                       Alice owned a double lot on the waterfront. She sold the lot to Ronesha and included a deed restriction prohibiting construction of any building taller than one story. Ronesha wants a three-story house. What should she do?

a.       Apply to the zoning board of appeals for a variance.

b.       Check to see if the building code will permit a larger house.

c.       Conform to the deed restriction.

d.       File a suit against Alice to have the restriction removed.

641)                       What type of arrangement allows the buyer to retain title to the property, but places a security interest in the property on behalf of the seller?

a.       A straight-term loan

b.       Land contract

c.       Purchase money mortgage

d.       Wrap-around mortgage

642)                       Tristan’s offer has been signed by all parties and delivered back to the seller. This means that ______ has occurred.

a.       Acceptance

b.       Binding acceptance

c.       Notarization

d.       Personal delivery

643)                       Compared to conventional loans, what are typical characteristics of construction loans?

644)                       An __ contract or agreement is one that exists based not on words, but on the parties’ actions or behaviors.

645)                       __ consist of agreements in which the terms are stated by the parties. The terms may be stated orally or in writing. But the contract as a whole must reflect the intention of the parties.

646)                       The Equal Credit Opportunity Act is designed to prevent discrimination in ______.

647)                       __ asks the court to force the opposing party into a contract that binds them to actually perform the contract at issue, rather than award damages for breach of contract. In real estate litigation, a buyer can force a reluctant seller to live up to the purchase and sale agreement.

648)                       __ are typically voluntary liens. Voluntary liens are placed on the subject property with the consent of the owner. This is usually done through the loan documents (mortgage and promissory note).

649)                       When a loan is recasted, what does it essentially become?

650)                       Which of the following may be used to defer paying taxes when there is an almost immediate repurchase of what’s called a “like-kind” property?

651)                       What is a clear zone?

652)                       When it comes to advertising in real estate, a __ is an established zone created to prevent safety hazards and unsightly advertising.

653)                       ______ is a leasehold estate of definite duration that terminates automatically and is inheritable.

654)                       Sandra enters a contract to sell her home to Paul. Under the statute of frauds, the written contract must name the contracting parties, identify the subject matter of the contract, and ______.

655)                       What is a capital gain?

656)                       For an investor, purchase price plus closing expenses is known as ___________________.

657)                       Your client, Lee, a foreign investor, is selling his property and learns a 15% withholding of the sales price will be imposed. Why is this?

658)                       The requirement is two of the last five years, and the exclusion is up to $250,000 for single taxpayers and __ for couples filing jointly.

659)                       The __ is a person who applies for a mortgage and makes a home purchase on behalf of another. The actual buyer may be someone with bad credit who is unable to qualify for a mortgage themselves, or a scam artist looking to profit by manipulating the mortgage and real estate transaction process.

660)                       A __ typically has no right of survivorship. This means that if A and B are tenants in common of Blackacre, and A dies, A’s share does not to go B. Rather, A’s share goes to the party selected in A’s will.

a.       tenancy in common

661)                       Kevin, your buyer client, signed a contract to buy Lydia’s home. The contract states that “time is of the essence.” You correctly advise Kevin that this means ______.

662)                       Ensuring land is put to the use for which it is best suited while also protecting livability of a community and property values is achieved through ______.

663)                       The local planning and zoning commission is reviewing multiple applications at this week’s meeting. Which of the following new developments is likely to be reviewed relative to a mixed-use zoning ordinance?

664)                       A __ lease is usually for a large open space that may have few amenities.

665)                       A __ is the “embryo stage” of a land purchasing process that analyzes and determines if the property is practical for the planned use of the land. This task can also include reviewing all aspects of the property from both a financial and environmental perspective as well.

666)                       A __ is a legal proceeding that asks the court to remove any claims, or “clouds,” against the title so that it can be conveyed.

667)                       Terry has a costume shop in a commercial building. He has a one-year lease that automatically renews for another year unless either Terry or the landlord terminates. What type of leasehold estate is this?

668)                       __ does impact property values and may be perceived as infringing on personal rights; therefore, public opinion is sought before zoning changes are made.

669)                       In an amortized mortgage, the monthly payment is the same each month. While the portion used to pay interest decreases over time, the portion used to repay principal ______________.

670)                       Edgar is in the process of selling his home in a short sale. What’s a short sale?

671)                       ______ is allowed to perform appraisals on any type of real estate.

672)                       Frank took out a mortgage from First National Bank in order to purchase a new home. In a lien theory state, who or what retains the title to the property?

673)                       Which type of property management situation requires a license?

674)                       According to the Telephone Consumer Protection Act guidelines, who or which entity may call a person listed on the Do Not Call Registry?

675)                       With an interest-only payment plan, ______.

676)                       Which term involving trespassing is used when someone other than the owner claims title to real property?

677)                       Which of the following is true about pocket listings?

678)                       What type of contract is one in which the terms of the agreement and consideration to be exchanged are defined in words, whether verbally or in writing?

679)                       A landlord locks a tenant out and requires the tenant to pay past-due rent before regaining access to the unit. This is considered ______.

680)                       Which activity requires a license?

681)                       In addition to residential and commercial real estate sales, King County Realty has an active residential property management department. The firm rarely holds earnest money on sales transactions, so it has a single trust account for earnest money and security deposits. The firm ______.

682)                       How do you decide which party you represent in a transaction?

683)                       What is a margin, as it relates to an adjustable rate mortgage?

684)                       Your client, Brian, is an investor who likes to put as little cash down on his investments as possible. Brian believes in the power of ______.

685)                       In order to be enforceable, what does the statute of frauds require a real estate contract to be?

686)                       What is usury?

687)                       Stanley is having second thoughts about taking his neighbor to court over a written agreement they have concerning who pays the rent on a storage unit that they share, because it’s used to store stolen merchandise. Stanley doesn’t think the contract will stand up in court. What type of contract does Stanley have?

688)                       What brokerage activities can Austin perform if his license is inactive?

689)                       Seller Darlene wants to know when she’ll be paid the full amount of the purchase price for her property. What should you say?

690)                       Three friends entered into a contract to buy a vacation property. The friends got into a dispute, resulting in one of them wanting out of the deal. The remaining two friends didn’t want to lose the deal, but couldn’t afford it on their own. They talked a fourth friend into replacing the person who backed out of the contract. The seller agreed to the substitution, and they moved forward with the purchase. What does this describe?

691)                       Cheryl wants new carpeting for her rectangular living room. Her living room is 18 feet by 12 feet. How much carpeting does she need?

692)                       What’s alienation with regard to real estate?

693)                       One regulatory requirement says that a broker has a specified amount of time to provide copies of transaction documents to a managing or designated broker. How long is this window of time?

694)                       Carlos, a property manager at Your Best Bet Property Management Company, manages multiple properties for their owners. Which of the following statements is true?

695)                       When you refuse to screen prospective buyers based on their ethnicity, your client, Matt, “fires” you as his agent, and you agree to his decision to part ways. Do you still owe this guy any fiduciary duties?

696)                       Liz listed her property with an agreement end date of May 31. The property went under contract on May 12, and the buyer’s earnest money was deposited on May 13. Based on the home inspection results, the buyer legally terminated the contract on May 20. When did the listing agreement between Liz and the listing broker officially terminate?

697)                       Curtis is having second thoughts about taking his partner to court over a written agreement they have concerning the purchase of a rental property. Curtis doesn’t think the contract will stand up in court because the partner is only 17 years old. What type of contract does Curtis have?

698)                       The appraiser applies a capitalization rate to an income comparison of similar properties with which of the four methods used to measure depreciation?

699)                       Janice’s life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has arranged for the property to be given to the School for the Gifted. What interest does the School for the Gifted currently have?

700)                       James creates a trust to hold a piece of real estate he owns. He directs a corporate fiduciary to hold title to the real estate and provides instructions for the management, control, and disposition of the real estate upon his death. Given that the trust only holds real estate, James likely set up a(n) ______ trust.

701)                       Which entity is responsible for deciding the general layout of a specific municipality —a city, town, or village—and mapping the zones and the uses allowed within each zone?

702)                       What’s the purpose of a brief adjudicative hearing?

703)                       What is the purpose of an operating budget?

704)                       Janie’s got an open house scheduled for Sunday, but lets her friend in on Saturday to preview it. It’s love at first sight! With the owner out of town, Janie decides to cancel the open house so there won’t be any other offers. Her friend makes an offer and it’s accepted on Monday. What fiduciary duty or duties has Janie breached?

705)                       During the closing, whose job is it to deliver the title commitment after ensuring the title is marketable and without defect?

706)                       Isabella is thinking about buying a one-bedroom residence in a cooperative. A residence in a cooperative, unlike a condominium, is considered ______.

707)                       What is the term for paying off a loan over time?

708)                       Maria’s neighbor is building a shed in his backyard that appears to be about a foot over the property line into her yard. What term describes the placement of the shed on Maria’s property?

709)                       The Jeffersons would like to sell their home. However, they had their home painted last year and never paid the contractor. The contractor has placed what type of lien on the home?

710)                       Which of these is an example of a lot and block description?

711)                       Which term refers to the division of community land into designated districts on a map that includes a text description defining the uses permitted under each classification?

712)                       What’s a vendee’s lien?

713)                       The Consumer Financial Protection Bureau ______.

714)                       The government’s power to take private land for public use is called ______.

715)                       A tenant is entering into a 12-month agreement with an owner of an upscale apartment complex to rent an apartment. What type of contract will be used to identify the rental arrangement’s terms?

716)                       Dual agent Barbara Park can only disclose Seller Carrie’s reason for moving if:

717)                       Which term is used when someone claims someone else’s property by using it for an extended period of time?

718)                       Which of the following is a residential dwelling with shared walls where the owner also typically owns the land on which the home sits?             

719)                       The ______ provides administration and enforcement of federal fair housing laws.

720)                       You’ve signed a listing agreement with a client. Which of the following activities will you address next in order to complete the sales process for your listing?

721)                       Which liens take priority over all other liens?

722)                       What form should be provided to borrowers no fewer than three days prior to closing?

723)                       Which of the following statements about agents and the duty of obedience is true?

a.       An agent can ignore a client’s instructions if they negatively affect the agent’s commission.

b.       An agent should carry out the client’s instructions as long as they are within the law.

c.       An agent should never question a client’s instructions.

d.       The duty of obedience extends beyond the termination of the agency agreement.

724)                       What does REO stand for?

a.       Real estate office

b.       Real estate owned

c.       Rental equality ownership

d.       Rental equal opportunity

725)                       What does the rectangular government survey system use as the basis for legal descriptions?

a.       Principal meridians, base lines, and sections

b.       Reference to a subdivision plat

c.       Reference to degrees latitude and longitude

d.       The beginning point of a boundary line as identified by a surveyor

726)                       Randi is a licensee who would like to update her advertising. What must she be sure to include on any advertising listed with her or any other brokerage?

a.       Brokerage name

b.       Fax number

c.       Franchise logo

d.       Personal photo

727)                       Seller Randy signed a listing agreement with Barbara, who worked very hard to find him a buyer. Randy’s cousin decided to purchase the house during the listing period. Is Barbara owed a commission?

a.       No, because sellers don’t have to pay a commission if a relative purchases the property.

b.       Yes, because Randy is not a licensee.

c.       Yes, because she worked hard for Randy.

d.       Yes, if she has an exclusive right-to-sell agreement.

728)                       Mario doesn’t want to include a religious preference in his listing ad, so which of the following phrases should he use?

a.       Apartment available for members of attached temple

b.       Close to Catholic cathedral

c.       Jewish community

d.       Within walking distance to a mosque

729)                       Homeowners can take several actions related to pest infestations, but which of the following actions should be left to licensed pest management professionals?

a.       Applying pesticides

b.       Installing a vapor barrier

c.       Looking for sings of an infestation

d.       Removing moisture from the home

730)                       Which of these transactions would require the Missouri licensee to provide written disclosure of his or her interest?

a.       Henry is the listing agent for a vacant property in the condo complex where he lives.

b.       John is the listing agent for his neighbor’s house.

c.       Sally is the buyer’s agent for a couple that was referred to her by her previous client.

d.       Step is her father’s buyer’s agent.

731)                       Which of the following is true about an attorney’s opinion of title?

a.       It protects buyers from material defects.

b.       It’s no longer required anywhere.

c.       It’s the document that notes the cloud on the title.

d.       It uses public records to validate property transfers.

732)                       What’s designed to protect buyers from financial loss if the title to the property they buy has defects?

a.       Abstract of title

b.       Chain of title

c.       Title insurance

d.       Title search

733)                       When considering buying property subject to an existing lease, it’s critical to understand the lease terms, including the lease duration, rent amount, renewal/purchase options, and the __________________.

a.       Lease start date

b.       Property management responsibilities

c.       Security deposit amount

d.       Tenant’s occupation

734)                       Which of these may be covered by a builder-backed home warranty?

a.       Custom exterior paint

b.       Owner-installed landscaping

c.       Ugly carpeting

d.       Workmanship

735)                       Jasper has a new listing, and he appoints Esther as his sub-agent. Esther brings Julie, a buyer customer, to the transaction, and Julie buys Jasper’s listing. What’s true about the agency relationships in this situation?

a.       Esther owes her loyalty to the seller

b.       is the sub-agent to Esther.

c.       Jasper is the sub-agent to the seller.

d.       Julie is the sub-agent to Jasper.

736)                       Heath leases space in a commercial building for his sporting goods store, and the building owner insisted on having Heath sign a percentage lease. Under the terms of a percentage lease, Heath must pay ________.

a.       All of his net income to the property owner

b.       A percentage of his sales to other tenants in the building

c.       A percentage of his sales to the property owner

d.       A percentage of the rental rate of charity

737)                       With which type of government power can a lien be placed on a property, giving the government a claim to the property?

a.       Eminent domain

b.       Escheat

c.       Police power

d.       Taxation

738)                       The Johnsons are shopping for a mortgage loan and are attracted to the below-market interest rate offered for the first year of an adjustable rate mortgage. What’s this type of rate called?

a.       Bait and switch

b.       Balloon payment

c.       Fixed rate

d.       Teaser rate

739)                       At a business meeting among heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. What’s this is an example of?

a.       Group boycotting

b.       Market allocation

c.       Price fixing

d.       Tie-in arrangement

740)                       The tax associated with property taxes is relatively stable and a high revenue generator because ______.

a.       No one is exempt from paying property taxes

b.       People enjoy paying taxes

c.       Property values tend to remain stable over time

d.       Taxes are always increasing.

741)                       A fee a lender charges for processing a loan is called _______.

a.       A buydown

b.       A loan origination fee

c.       A loan servicing fee

d.       An appraisal fee

742)                       The Knolls are purchasing a property and are concerned about the title. They want to have a title search performed. Who can perform a title search?

a.       A property inspector

b.       A title insurance company

c.       The Knolls

d.       The Knolls’ real estate agent

743)                       What type of emails are prohibited by the CAN-SPAM Act?

a.       Customer service emails

b.       Emails containing more than three hyperlinks or attachments

c.       Junk emails

d.       Subscriber emails.

744)                       Clara signs a net lease for office space. Under a net lease, she’ll be responsible for ________.

a.       A portion of the property’s operating expenses.

b.       Cleaning the property’s common areas herself.

c.       Ensuring the parking areas are well lit and safe.

d.       Paying for repairs to the property’s foundation.

745)                       Charles is selling his home to Sheila. Charles has an existing loan that he will continue to make payments on. Charles is also extending credit to Sheila for the balance of the purchase price. Sheila will make monthly payments to Charles. What type of financing is used in this transaction?

a.       Home equity loan

b.       Loan amalgamation

c.       Refinance

d.       Wrap-around loan

746)                       Which of the following equals one furlong?

a.       16.5 feet

b.       220 yards

c.       2.47 acres

d.       7.92 inches

747)                       Which of the following is considered an act of discrimination under federal fair housing laws?

a.       Renting only to Catholics

b.       Renting to a married lesbian couple

c.       Renting to a white man who has good credit

d.       Showing a property to qualified buyers only

748)                       Compared to working without a buyer agency agreement, a buyer who works under a buyer agency ?

749)                       Switches that are warm to the touch, damaged panels, and lights that dim or flicker when other appliances are in use can be signs of a(n) ______ problem.

750)                       What is the purpose of the Consent for Dual Agency form?

751)                       What types of leases must be recorded?

752)                       Which of these is an example of a rectangular survey system description?

753)                       Jorge is a dual agent in a single-license dual agency situation. He owes his clients all of the following fiduciary duties EXCEPT ___________.

754)                       Shelly buys Mark’s house, which is still in an option period with Monique. Monique decides to exercise her option after Shelly moves in. What will happen?

755)                       Your client exchanged one property for a similar property and did not have to pay capital gains taxes that year. How did he do this?

756)                       Soundproofing and decorative material, shingles, and siding may contain what hazardous material?

757)                       Jay’s new loan to purchase a property includes the seller’s existing mortgage. This type of loan is called a ______ loan.

758)                       What is one drawback of a real property transfer?

759)                       When assigning a contract, the assignor should ensure that ______ is not prohibited in the purchase contract.

760)                       You’re trying to impress your neighbors, who are considering selling their house. You’d like to get the listing. They ask you about a listing your firm has that’s been on the market forever. Why isn’t it selling, they want to know? You answer:

761)                       Which of the following occurs when a property owner dies without having a will in place, and no heirs or creditors can be found?

762)                       To effect a transfer of title by deed, _________________ must occur.

763)                       When operating under a power of attorney concerning the transfer of real property, who may sign in place of the principal?

764)                       Carla Ricardo asks the landlord if she could be let her out of her lease early. The landlord agrees to let her out of her lease, no strings attached. Carla and her landlord have decided to terminate the contract through _________________.

765)                       Single agency is _______.

766)                       Which of the following closing activities occurs on the day of closing?

767)                       In relation to appraisals, what’s a “federally related transaction”?

768)                       First-time homebuyers can access up to $________ of their Roth IRA accounts, penalty-free, under certain conditions.

769)                       Which of the following is the best definition of a covenant between a lessor and lessee?

770)                       Which of the following is a material fact that must be disclosed to prospective buyers?

771)                       The National Fair Housing Alliance believes in promoting the message that __________ neighborhoods are stronger neighborhoods.

772)                       Which of the following can indicate drainage problems?

773)                       Which of the following are landlords required by law to ensure?

774)                       A deed must be ______________ before it can be recorded.

775)                       What type of agency exists because a written or oral agreement is in place?

776)                       Which act introduced the “innocent landowner” defense that states that a landowner isn’t responsible for clean-up of contamination that occurred prior to their ownership, provided they have not tried to cover up the contamination and can prove due diligence in investigating the property when it was purchased?

777)                       Which of the following terms best describes real property?

778)                       In the sales comparison approach, the appropriateness of the various comparable sales in relationship to the subject is considered in a process known as ______, where certain factors may be given more weight.

779)                       What is the definition of a testator?

780)                       You are meeting with prospective clients in person for the first time. What are you required by law to explain to them?

781)                       Which of the following is true?

782)                       What type of tenancy can be automatically created if a tenant under a lease stays beyond the lease’s terms, and the landlord continues to accept rent from that tenant?

783)                       What might the financial implications be if a buyer needed to use individual retirement account funds toward a down payment?

784)                       Kip is a sub-agent working with a buyer customer, Charlie, for Sheila’s listing of May’s property. To whom does Kip owe his loyalty?

785)                       When a lower-quality property is adjacent to a higher-quality property, it can diminish the value of the higher-quality property. What economic principle is this?

786)                       At what point in a residential transaction must a seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?

a.       At least five days prior to closing

b.       Prior to showing the property to the prospective buyer

c.       Prior to the parties signing a purchase agreement

d.       Within three days after the parties sign a purchase agreement

787)                       Which portion of a mortgage payment is the financial institution’s charge for the use of its money?

a.       Insurance

b.       Interest

c.       Principal

d.       Tax

788)                       What’s it called when a person who has possession of a property through a life estate abuses the property or allows it to deteriorate?

a.       Act of waste

b.       Escheat

c.       Estate at sufferance

d.       Reversionary interest

789)                       Which ownership type involves one person owning the property?

a.       Co-ownership

b.       Dual ownership

c.       Estate in severalty

d.       Property partnership

790)                       Which of the following is designed to protect buyers from financial loss if the title to the property they buy has defects?

a.       Abstract of title

b.       Chain of title

c.       Title insurance

d.       Title search

791)                       When people are treated differently because they were born in another country or are from a specific part of the world, this is discrimination based on _______.

a.       Color

b.       Familial status

c.       National origin

d.       Race

792)                       You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ______.

a.       Can be ignored if you’re sharing confidential information with someone other than the buyer

b.       Ceases once the seller’s property is sold

c.       Continues even after your fiduciary relationship with the client ends

d.       Ends 30 days after you’ve received the confidential information

793)                       REEB automatically suspended the licensee’s real estate license when the board found the licensee guilty of which of these offenses?

a.       Cynthia, a salesperson, accepted a commission payment from her buyer client.

b.       Jeannie, a salesperson, failed to properly remit an earnest money deposit she received.

c.       Teresa, a broker, failed to disclose to the buyer a property defect that her seller client told her about but didn’t want to disclose.

d.       Tom, a real estate licensee who works in property management, denied a rental application from Ram and Aarthi Ramesh because of their race.

794)                       Which one of the following elements of a deed signify the grantor’s intention to transfer title to the grantee?

a.       Act of conveyance

b.       Consideration

c.       Evidence

d.       Grantor/grantee

795)                       The transfer tax rate is $0.37 per $100. A property that sold for $300,000 would have a ______ transfer tax.

a.       $1,110

b.       $1,200

c.       $2,200

d.       $920

796)                       How does discrimination still occur, even though it’s illegal?

a.       Discrimination is human nature.

b.       Discrimination is often not visible to the public.

c.       Discrimination makes good business sense.

d.       Not all laws make sense.

797)                       As a property manager, Darby expects to _______.

a.       Charge tenants for maintenance calls

b.       Have the property owner reimburse her for expenses

c.       Include free lawn care service

d.       Pay some expenses out of pocket

798)                       Which type of estate conveys all rights of ownership?

a.       Fee simple estate

b.       Leasehold estate

c.       Legal estate

d.       Life estate

799)                       Alexandra is perusing her closing statement, particularly those amounts that are a benefit to her. What’s the term for these items?

a.       Benefits

b.       Credits

c.       Debits

d.       Favorables

800)                       You’ve signed a listing agreement with a client. Which of the following activities will you address next in order to complete the sales process for your listing?

a.       Deposit the earnest money check.

b.       Hold an open house.

c.       Prepare a features list.

d.       Publish the MLS listing with photos.

801)                       Which stage of the property ownership life cycle can be affected by income tax issues?

a.       Acquisition, ownership, and reversion can all be affected by income tax issues.

b.       Only acquisition

c.       Only ownership

d.       Only reversion

802)                       How can an agent offer dual agency legally?

a.       By getting general agreement from both parties

b.       By having clients sign waivers

c.       By not disclosing one of the agency relationships

d.       By obtaining informed consent in writing from both parties

803)                       Which type of contract involves an exchange of consideration between two parties?

a.       Bilateral

b.       Executed

c.       Mutual

d.       Unilateral

804)                       A clause that allows the parties to agree that they won’t litigate if there are any contract disputes is a/n _________.

a.       Arbitration clause

b.       Choice of law clause

c.       Indemnification clause

d.       Severability clause

805)                       Conrad and Evan have been renting their house in Green Bay for several years. The end of their current lease is approaching, and the couple wants to continue renting the home. Which of the following is true of the lease arrangement they will enter into with their landlord?

a.       They can simply extend the lease they are currently in.

b.       They must enter into a new lease.

c.       They must go on a month-to-month lease.

d.       They must pay a renewal fee to the state.

806)                       What is the definition of a tax lien?

a.       A tax lien can be attached to a property as a result of an unpaid mortgage.

b.       A tax lien can be attached to a property for a violated covenant restriction.

c.       A tax lien can be attached to a property for work performed on a property by a contractor.

d.       A tax lien can be attached to property for failure to pay any type of taxes, including property taxes and income taxes.

807)                       What figure results when you subtract the buyer credits from the buyer debits on the closing statement?

a.       The amount the broker will distribute on behalf of the buyer

b.       The balance due from the buyer at closing

c.       The balance due to the seller at closing

d.       The buyer’s total expenses and fees

808)                       Roger just discovered that his loan includes a hidden balloon payment, so now he must ________.

a.       Make one large final payment to pay off the principal

b.       Make one large initial payment to pay down the principal

c.       Pay off the interest with a second mortgage

d.       Pay off the interest with higher payments for the first year

809)                       Mario does not want to include a religious preference in his listing ad, so he decides to use which of the following phrases?

a.       Apartment complex with a temple

b.       Close to Catholic cathedral

c.       Jewish community

d.       Within walking distance to a mosque

810)                       Juniper is buying a newly constructed home with a fireplace and garage. A _______ is required, per state laws.

a.       Carbon monoxide detector

b.       Radon test

c.       UST

d.       Well inspection

811)                       Seller Julius knows he has asbestos in his insulation, and he wants to remove it before listing his house. What’s Julius’s best option for removal?

a.       Hire an odd jobs contractor

b.       Hire someone with proper and training and certification

c.       Leave it for the buyer to deal with it

d.       Remove the insulation himself

812)                       A listing agreement describes how compensation the seller’s agent earns will be shared with the licensee who brings the buyer. This is known as the _______.

a.       Buyer’s split

b.       Cooperating broker’s split

c.       Honor system

d.       Office fee

813)                       Fred wants to make sure that his home is radon free. He wants to check all likely access points, including which of the following?

a.       Doorways

b.       Drains

c.       Outlets

d.       Windows

814)                       Ralph has a right of first refusal agreement on his neighbor’s property. When the property goes up for sale, how will Ralph exercise his right?

a.       He’s allowed to review and refuse any offer the seller would like to accept, giving him control over who lives next door.

b.       His neighbor isn’t allowed to market the property until Ralph has decided to either purchase the property at market value or give up his right of first refusal.

c.       His neighbor must notify Ralph as soon as he receives his first offer, giving Ralph the opportunity to match the offer and buy the property. If Ralph doesn’t do so, he gives up his right of first refusal.

d.       Ralph is allowed to refuse any material change to the property, including a sale, lease, or substantial change to the property improvements.

815)                       Which of the following is an example of a deed restriction?

a.       Eminent domain

b.       EPA wetland conservation guidelines

c.       Fence height

d.       Zoning regulation

816)                       A property manager is authorized to perform all of the duties related to the property on whose behalf?

a.       The lender’s

b.       The owner’s

c.       The state’s

d.       The tenant’s

817)                       uyer Yun-Wah is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much will his loan origination fee be?

a.       $2,400

b.       $3,200

c.       $3,600

d.       $800

818)                       What’s the area of a rectangular building that’s 40 feet by 20 feet?

a.       800 feet

b.       800 square feet

c.       80 feet

d.       80 square feet

819)                       Karen wants to sell her lakeside vacation home. Upon visiting for the first time in six months, she discovers it flooded during the rainy season. She should have the property checked for _______.

a.       Formaldehyde

b.       Lead-based paint

c.       Mold

d.       Radon

820)                       Al is a real estate licensee. Assuming that none of the following people are his clients but are parties to a potential transaction, to whom must he provide an agency disclosure form?

a.       Any party

b.       Only buyers

c.       Only sellers

d.       Only tenants

821)                       REALTOR® Jim wants to become a social media influencer to get his name out there as an exceptional real estate professional. Why might this be a good idea?

a.       It isn’t; NAR prohibits REALTORS® from becoming social media influencers.

b.       Social media platforms are exempt from license law.

c.       The Code of Ethics doesn’t apply to social media, so he can get away with more ruthless marketing tactics.

d.       Used the right way, it can be a great way to find clients.

822)                       What is it called when a seller removes an item or fixture from a property (so that it becomes personal property instead of real property) before an agreement of sale has been signed or after negotiations have commenced?

a.       Adaptation

b.       Annexation

c.       Detachment

d.       Severance

823)                       Which of the following is something the seller is required to disclose to a buyer in a transaction?

a.       Any and all offer amounts from other buyers.

b.       The kitchen drain often clogs and backs up into the sink.

c.       The seller has HIV.

d.       The seller’s willingness to offer seller financing.

824)                       Which of the following is a duty that licensees owe to ALL parties in a transaction?

a.       Exercising reasonable skill and care

b.       Negotiating on a party’s behalf

c.       Placing a party’s interests first

d.       Protecting confidential information

825)                       Which of the following is a reason that wetlands are protected?

a.       To be developed at a later date

b.       To grow commercial crops

c.       To open them to commercial fishing

d.       To stabilize soil and help control erosion

826)                       What’s an encumbrance?

a.       A claim on property that limits the owner’s use or rights, or decreases the property value

b.       A defect on the property found during inspection

c.       An unauthorized claim to property

d.       Anything that affects the marketability of a property

827)                       Felicity doesn’t mind if her listing firm represents potential buyers of her home, but she would prefer that her listing agent only represent her in the transaction. What type of agency relationship should she select in her residential listing contract?

a.       Designated agency only

b.       Multiple representation relationship with designated agency

c.       Multiple representation relationship without designated agency

d.       Rejection of multiple representation relationships

828)                       Vanessa has just returned $200 to a former tenant whose security deposit was $800. What else, if anything, must she do?

a.       She doesn’t have to do any of these things.

b.       She must send a letter to the tenant that confirms the end of the lease in writing.

c.       She must send the tenant an itemized statement that details how the missing money was spent.

d.       She must use the missing $600 to fix the damage caused by the tenant’s normal wear and tear.

829)                       In terms of encumbrances, what’s a license?

a.       Permission to alter someone’s land or property

b.       Permission to do something on another’s land while also possessing an interest or ownership in the land

c.       Permission to do something on one’s own land

d.       Permission without possession, interest, or ownership

830)                       Shelly is a landlord and places an advertisement for her apartment complex saying, “Bienvenido! These Spanish-style apartments are perfect for the Spaniard in you.” Is this a fair housing violation?

a.       No, because as the property owner, Shelly can advertise as she likes

b.       No, because it appeals to a certain style of housing

c.       Yes, because it’s discriminating based on national origin

d.       Yes, because Shelly doesn’t know for a fact that the housing is Spanish-style

831)                       What’s the term for an addition to a sales agreement form that can be added before it is signed without changing any of the other terms that have already been agreed upon?

a.       Addendum

b.       Amendment

c.       Annexation

d.       Appurtenance

832)                       Ella, a listing agent, accidentally discriminated on the basis of familial status by using which statement in her advertisement?

a.       “Families will love it here!”

b.       “Features a cozy fireplace.”

c.       “House located on quiet street.”

d.       “Offers a spacious family room.”

833)                       Which of these is a requirement when licensees present a party’s written proposal to their client?

a.       Ensure the client’s decision is given to the party in person.

b.       Ensure the party is promptly notified of the client’s acceptance; rejection doesn’t require notification of the party.

c.       Present the client’s decision to the other party within 24 hours of receiving the written proposal.

d.       Promptly notify that party of their client’s decision.

834)                       Which of these statements regarding the purpose of real estate governance is the most accurate?

a.       Real estate governance organizations are created primarily to ensure that licensees have the appropriate education and experience before becoming licensed.

b.       Real estate licensing law is in place to assure that brokers treat licensees equitably.

c.       States enact licensing laws to ensure that licensees are well-qualified and that they act within the law.

835)                       Lease types, space planning, area design, and building layout are especially important for a property manager who’s working with a ______.

a.       Condominium property

b.       Non-residential property

c.       Residential property

d.       Vacation property

836)                       What responsibilities does a real estate professional have regarding property taxes?

a.       Assist with paying property taxes at closing

b.       Determine whether property taxes have been correctly assessed

c.       Testify at property tax hearings

d.       Understand how property taxes are calculated and disclose to buyers what their property taxes will be based on true taxes, not assessed value nor taxes after exemptions are taken

837)                       Licensees conduct CMAs to determine ______.

a.       An appropriate listing price

b.       Appraisal value

c.       Construction costs

d.       Multiple methods

838)                       Listing agent Paula receives three offers for the property overnight and finds them in her inbox first thing in the morning. How should she handle them?

a.       For any offers that a buyer has submitted directly, she must first verify the source. Those that come from other agents should be presented to the seller promptly.

b.       She must present them one at a time in the order received, according to the time stamp on the email. The seller must make a decision on the offer before she presents the next one.

c.       She should present them all promptly to the seller for review.

d.       She should present them promptly to the seller unless the seller already has an offer under consideration. If so, she must hold all other offers until the seller has made a decision.

839)                       A home sells for $225,000. Per the listing agreement, the total commission is 7% of the sales price. The listing brokerage will split the full commission with the buyer’s broker 50/50. Kiko the seller’s listing agent has a 70/30 split arrangement with her brokerage, with Kiko receiving the “70”. After sharing the commission with the buyer’s broker and her commission split with her brokerage, how much will Kiko receive?

a.       $15,750

b.       $2,362.50

c.       $5,512.50

d.       $7,875

840)                       Determine which of the following statements is TRUE when an as-is clause is used.

a.       Sellers are exempt from lead-based paint disclosure requirements.

b.       Sellers are required to fill out Real Estate Condition Reports.

c.       Sellers have no disclosure obligations.

d.       Sellers must still disclose any potential material adverse facts.

841)                       What do buyers provide to the seller as an indication that they are serious and intend to go through with the purchase?

a.       A copy of the signed agency agreement

b.       A promissory note

c.       Earnest money

d.       Their word

842)                       To avoid discriminating against those with disabilities in her advertisements, June, a listing agent, should use which of the following phrases?

a.       Fourth-floor walk-up

b.       Ideal for active singles

c.       No service animal allowed

d.       No wheelchairs on premises

843)                       Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.

a.       Hazard and flood insurance

b.       Legal counsel

c.       Personal property insurance

d.       Pest and hazard inspections

844)                       Where is an appropriate place for a broker to place client trust funds?

a.       In an interest-bearing account within the state, with a ledger entry noting they are trust funds

b.       In a non-interest-bearing general business account

c.       In a trust fund account or neutral escrow account

d.       In the broker’s personal checking account

845)                       You should make sure that any property management agreement you sign has _______ that outlines why and when you have the right to terminate a contract with an owner.

a.       A hold harmless clause

b.       An activation clause

c.       A reasonable care clause

d.       A termination clause

846)                       REEB has received information that leads the board to believe that a broker has pursued a continuing course of mortgage fraud. Which of these statements about the board’s authority is true?

a.       REEB may issue a summary suspension pending a disciplinary investigation and hearing.

b.       REEB may petition the attorney general’s office for a temporary injunction against the broker.

c.       REEB must give the licensee an opportunity to appear at a hearing before taking any action against the licensee.

d.       REEB must schedule a show cause hearing before beginning an investigation or commencing any disciplinary action.

847)                       The potential for health hazards related to ______ must be disclosed when selling or renting homes built before 1978.

a.       Arsenic

b.       Asbestos

c.       Lead

d.       Radiation

848)                       Which law requires the EPA to establish air quality standards?

a.       The Clean Air Act of 1970

b.       The Clean Air Act of 2010

c.       The Environmental Quality Act of 1970

d.       The EPA Air Quality Standards Act

849)                       In which type of contract does only one of the parties offer consideration?

a.       Bilateral

b.       Executed

c.       Mutual

d.       Unilateral

850)                       Which of the following is a private agreement that impacts the use of the land?

a.       Assessment

b.       Deed restriction

c.       Encroachment

d.       Encumbrance

851)                       John is a qualified third party conducting a standard review of a property. John is conducting a(n) ______.

a.       Analysis

b.       Inspection

c.       Review

d.       Test

852)                       Lester, a confirmed bachelor, decided to celebrate the fact that he just made the final payment on his home in Oshkosh. He invited several friends over for a “burn the mortgage” party. How does Lester own his home now?

a.       As chattel

b.       As tangible property

c.       Encumbered

d.       In severalty

853)                       Jerome is buying Joanne’s bungalow in Kenosha. Both parties decided they would prefer a title agent hold the earnest money prior to closing. In what type of account is the earnest likely to be deposited?

a.       Broker’s operating account

b.       Escrow account

c.       Mortgage account

d.       Trust account

854)                       A late spring snow melt caused a river to swell past its bank. The flooding led to many landowners losing portions of their properties. What is the process called that caused this land loss?

a.       Accretion

b.       Avulsion

c.       Erosion

d.       Prior appropriation

855)                       Wanda wants to use some copyrighted material on her website. The law _______.

a.       Allows her to legally use up to 15% of the original work

b.       Offers no rules permitting the use of a specific number of words or percentages of a work

c.       Permits her to use whatever she wants

d.       States that she can legally use 300 words

856)                       Which of the following describes a timeshare?

a.       Non-transferable property

b.       Property with a divided form of ownership or use rights that is usable during defined periods

c.       Real property that can be used at any time

d.       Theoretical property

857)                       When can real estate agents give legal advice to a buyer about backing out of a contract?

a.       An agent should never give legal advice unless the agent is also a practicing and licensed attorney.

b.       They can give legal advice any time.

c.       They can give legal advice any time they are asked by the buyer, if the information is provided orally.

d.       They can give legal advice any time they are asked to do so by the buyer, and they provide the information in writing.

858)                       Raj wants to protect some of the equity in his home in case of bankruptcy or foreclosure. He should file a(n) _____.

a.       Equity Protection form

b.       Foreclosure waiver

c.       Homestead exemption

d.       Security Interest form

859)                       A claim of misrepresentation can stand up in court if it includes ________ elements.

a.       Five

b.       Four

c.       Three

d.       Two

860)                       The ______ form is used to form the type of contract that only binds the seller, who must not sell the property to anyone else during the specified time period. The buyer, on the other hand, isn’t bound by the contract.

a.       WB-1

b.       WB-11

c.       WB-24

d.       WB-35

861)                       Hilary just learned that some of the repairs the seller was going to make on the house she is buying in the Milwaukee suburbs will not be completed before closing. Rather than delaying the closing, what can Hilary and the buyer do?

a.       Draft a post-closing escrow agreement with instructions for how the seller will pay for the repairs.

b.       Hilary can hire her own contractor to finish the repairs and send the seller the bill.

c.       Nothing, Hilary will have to pay for any repairs that are not made before closing.

d.       Require the contractor to work overnight to complete all repairs.

862)                       Levinia is preparing a sales contract for her clients Rose and Lily. When is it acceptable for her to offer them legal advice?

a.       Never

b.       When covering the options for terms and contingencies

c.       When determining the purchase price amount

d.       When discussing the amount of earnest money to place as a down payment

863)                       What’s the term for paying off a loan over time?

864)                       What occurs when a tenant moves out because an issue with the unit makes the unit uninhabitable, such as a lack of heat in the winter?

865)                       What’s true of a contract amendment once it’s signed by both parties to the transaction?

866)                       What term is used to describe the illegal use of escrow funds, such as earnest money?

867)                       Serena works in the property management department of a large apartment complex. For which of the following tasks would she be required to hold a real estate license?

868)                       When preparing a property for showing, which of the following is true?

869)                       Sam the appraiser is most likely to use the cost approach for which of the following properties?

870)                       Why might a buyer want to assume a loan?

871)                       Leading up to closing, who should ensure that all deadlines are being met, all contingencies are cleared, and all paperwork is fully executed and delivered?

872)                       Which of the following responsibilities does the commercial property manager have that the residential property manager doesn’t have?

873)                       Which mortgage market is made up of lending institutions that lend directly to the consumer?

874)                       Which IRS forms are independent contractors and employees required to complete?

875)                       Lacey is preparing an offer for her buyer clients, and it’s time to fill in the amount of earnest money they’re going to offer. Which of the following statements is true regarding what earnest money the buyers should offer?

876)                       Jamie enters an agreement to buy Yolanda’s home. Per the agreement, Jamie promises to provide a $5,000 earnest money deposit, whereas Yolanda promises to sell her home to Jamie. These promises represent forms of ________, which are required to make the contract valid.

877)                       As supply increases, price ______.

878)                       Which of these statements about licensee cooperation is true?

879)                       Which term describes a contract in which the parties have met all agreement terms?

880)                       Which type of REIT receives most of its revenue from rental of their properties?

881)                       Government tax assessment offices determine the _________________ by comparing similar properties in a geographic area.

882)                       Dawn and John own a home together, but they’re getting a divorce. They agree that John will keep the house and assume the loan they signed together. Will the alienation clause in their security document prevent the assumption?

883)                       The process the government uses to take someone’s property is called __________.

884)                       The designated broker for Jennifer’s firm left the firm without warning. Can Jennifer and her fellow licensees continue to provide brokerage services?

885)                       Abe signs a contract to buy Penelope’s home. The deal eventually closes, but Penelope fails to hand over the home’s keys to Abe. A week passes, and Abe files a lawsuit in an attempt to force Penelope to give him the keys. This is an example of ________.

886)                       Archie wants to buy Claire’s membership share in a cooperative. Which of the following statements is true?

887)                       A line of credit that’s based on a percentage of the equity a person has in a property and which can be drawn upon for a number of years is known as a ______.

888)                       Which of the following statements about the duties that seller and buyer clients owe to their agents is true?

889)                       Janie’s got an open house on Sunday but lets her friend in on Saturday to preview it. It’s love at first sight! With the owner out of town, Janie decides to cancel the open house so there won’t be any other offers. Her friend makes an offer and it’s accepted on Monday. What fiduciary duty or duties has Janie breached?

890)                       What must you disclose to be in full compliance with an agent’s fiduciary duty to disclose?

891)                       How should you respond to a buyer who says the following? “I know that you technically can’t show me just the white neighborhoods, but I’m paying for your help. My time is valuable, and I don’t want to waste it going to showings in neighborhoods I don’t want to see. If you won’t screen properties for me the way I want you to, I’ll find someone else who will.”

892)                       When preparing the sales contract, when is it acceptable for a licensee to offer legal advice to the client?

893)                       Which option is a right guaranteed under the Privacy Act of 1974?

894)                       After selling your first house, you decide to cash the commission check yourself, and then give a bonus to your licensed assistant. What type of violation have you committed?

895)                       What’s the purpose of police power?

896)                       Trinity is 18 and wants to be a managing broker in Washington. She has completed the required 90 hours of coursework. What else might prevent her from taking the managing broker’s licensing exam?

897)                       Place the stages of the loan approval process in the correct order.

898)                       What’s the term for a contract for which one or more terms have yet to be completed?

899)                       The DOL director received a complaint against broker Carl Savage and has decided to investigate. What’s the next step in the process?

900)                       You prepared a comparative market analysis and have a plan for educating the seller about the value you can provide. Which stage of the residential sales process are you in?

901)                       What’s a legal description?

902)                       Jacob and Cynthia are purchasing a house from Carlos. They want to be protected from having to purchase the house if they find substantial property condition defects. What can they do with the contract to protect themselves?

903)                       Which of the following is an example of the duty of obedience?

904)                       Prior to closing on the property, Monica substituted her daughter’s name, Melanie, as the buyer. Although Melanie is now listed as the buyer, Monica isn’t released from her contractual obligations. This is an example of ______.

905)                       According to the Federal Communications Commission, who or which entity may call a person listed on the national Do Not Call Registry?

906)                       Why would a retail tenant be willing to sign a lease in which a percentage of sales proceeds are paid to the landlord?

907)                       What type of agency exists when a buyer’s broker is the listing agent for the same property?

908)                       Which term refers to a tract of land divided into lots or plots and used for building purposes?

909)                       How are independent contractors compensated and their income reported?

910)                       Which of the following statements is true about a licensee’s duties to a landlord the licensee represents?

911)                       A property owner’s right to access ponds, lakes, oceans, and other closed bodies of water bordering the owner’s land is called ______ rights.

912)                       Melissa, a new broker, is excited to meet with her first seller. She knows she needs some sort of form to outline her agreement with the seller. What should she do?

913)                       Renatta is under contract to sell her home to Marcus. Marcus has a financing contingency, and he finds that he’s unable to get financing for the home. He terminates the contract under this contingency. Renatta’s brokerage firm is holding the earnest money. What is their responsibility regarding disbursement of those funds?

914)                       You represent Cynthia and Ronald, who signed a contract to buy Margie’s home. The contract included the phrase, “time is of the essence.” You explain to Cynthia and Ronald that this phrase means ______.

915)                       The installment land contract is what type of financing?

916)                       A real estate licensee can provide which of the following opinions?

917)                       The secondary mortgage market is comprised of _________________________.

a.       FNMA, GNMA, FHLMC, & lending institutions that buy loans from other lenders

b.       Lending institutions that lend directly to consumers

c.       Savings and loans, thrifts, and credit unions

d.       The VA and the FHA

918)                       Which document is provided to borrowers no fewer than three days prior to closing and provides disclosures about the costs of the transaction?

a.       Closing Disclosure

b.       Escrow Closing notice

c.       Loan Estimate

d.       The Mortgage Servicing Transfer disclosure

e.        

919)                       Which document given before closing provides an estimate of the costs a buyer is likely to pay at settlement?

a.       Abstract of title

b.       Closing Disclosure

c.       Loan Estimate

d.       The Mortgage Servicing Transfer disclosure

920)                       If a lead-based paint risk assessment or inspection reveals hazards on the property and the seller refuses to fix the problem, what options does the buyer have?

a.       The buyer can declare the contract null and void or remove the contingency and continue with the purchase of the property.

b.       The buyer can report the seller to the EPA and force the seller to make the repairs or serve jail time.

c.       The buyer can sue the seller for breach of contract.

d.       The buyer has only one option and that is to back out of the contract.

921)                       How much notice must a tenant give if they want to terminate their lease?

a.       30 days

b.       It depends on the type of tenancy.

c.       Three weeks

d.       Two weeks

922)                       Elisa and Simone signed an agreement to list Simone’s house for sale. After the contract was signed, Simone lost her job, and her father, George, offered to help Simone out by paying Elisa’s commission. The buyer’s agent, Carl, also reduced his commission by a quarter of one percent to help Simone out. Who is Elisa’s client?

a.       Carl

b.       Carrie

c.       George

d.       Simone

923)                       Renae showed a property to a Shannon, a buyer client, then to another client later that week. The second client made an offer and the seller accepted. The next day, Shannon called Renae to make an offer on the property and was angry that Renae showed it to another buyer. Did Shannon have a case?

a.       No. Renae hasn’t violated agency law by showing the same property to two separate buyer clients.

924)                       How does the building department ensure that a builder who has obtained a permit builds according to code?

925)                       When must informed consent for dual agency be obtained?

926)                       When a local planning board is reviewing density, it would consider ______.

a.       Federal impact

b.       Impact on neighboring states

c.       Property values

d.       Setbacks and boundaries

927)                       What regulation or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?

928)                       Agatha helped her client Rufus complete the form that documents Rufus’s purchase offer to the seller for the property he’d like to buy. What is this form?

a.       Buyer representation agreement

b.       Listing agreement

c.       Promissory note

d.       Sales contract

929)                       Which of the following is an example of positive misrepresentation?

a.       An agent knowingly made a false statement that caused harm.

b.       An agent made an unintentional error that resulted in a positive outcome.

c.       An inadvertent error occurred.

d.       It results in a positive outcome.

930)                       What type of violation are you committing when you fail to include a material fact or make false or misleading advertising statements?

a.       Conflict of interest

b.       Improper brokerage commission

c.       Improper delivery of instruments

d.       Misrepresentation

931)                       Although Kirk has been paying rent toward his ground lease for more than 17 years, he will never be able to buy the lease from the landowner. What type of ground lease does Kirk have?

a.       Assumable

b.       Irredeemable

c.       Non assumable

d.       Redeemable

932)                       Dan is buying Chuck’s property, which is listed with Nevin’s brokerage. Who are the parties to the exclusive right-to-sell listing agreement?

a.       Chuck and Nevin’s brokerage

b.       Dan and Chuck

c.       Dan and Nevin

d.       Dan, Chuck, and Nevin

933)                       Which formula calculates net to seller?

a.       (Net amount  mortgage or other expenses) / (100% ‒ commission rate)

b.       Sales price ÷ (100% – commission rate)

c.       Sales price – (100% – commission rate)

d.       Sales price x (100% – commission rate)

934)                       Which of the following terms best describes an item that is both a fixture and real property?

a.       Built-in

b.       Chattel

c.       Free-standing

d.       Movable

935)                       To indicate that they understand and consent to the terms that appear on each page of the sales contract, what are the seller and buyer required to do?

a.       Check the “We understand and consent to the terms presented on this page” statement.

b.       Initial and date the bottom of each page of the contract.

c.       Nod their heads ‘yes.’

d.       Sign a consent form.

936)                       A negotiable instrument must contain an order to pay or a ________.

a.       Flexible sum of money

b.       Hand written signature

c.       Notary stamp

d.       Promise to pay

937)                       Offers become binding contracts when they’re ______.

938)                       Cari is preparing an operating budget, and it shows a net loss. What should she do?

939)                       What is tortious interference?

940)                       Which of the following statements is true regarding conventional loans?

941)                       Genevieve is a licensee interested in purchasing a new home. She found the perfect place, which happens to be listed by the brokerage where she’s affiliated. What must she do if she intends to purchase the property?

942)                       What pricing strategy could work well in any market, primarily by generating buyer interest?

943)                       Why is it important for a company to revisit its objectives periodically?

944)                       A(n) _______ is an independent contractor who’s an employee by statute for certain employment tax purposes. An example is a food delivery driver who’s paid on commission.

945)                       A ____________________ is a worker who’s classified by the common understanding of the profession. An example would be a food server.

946)                       Georgette is meeting with her buyer clients to fill out the purchase and sale agreement. Which of the following must be true?

947)                       You’re writing an offer for your buyer client in a cold market. What would be a good negotiation strategy?

948)                       What’s it called when a real estate company establishes policies and procedures designed to keep confidential information secure, particularly regarding in-house transactions?

949)                       The buyer and seller are prorating property taxes. Step one is to calculate the daily rate. Next, the number of_________ is multiplied by the daily rate to get the prorated amount.

950)                       When evaluating the income listed on a loan application, what will the lender consider?

951)                       Not wanting to cause the sellers or mortgage lenders unnecessary concern, Gwen, the buyer’s agent, wasn’t exactly forthcoming about a slight change in her client’s financial status that her client had shared with her in confidence. Which fiduciary duty to the customer is Gwen violating?

952)                       What determines how frequently an interest rate adjusts in an adjustable rate mortgage?

953)                       Which of the following is an example of what would be included in a mission statement?

954)                       You’ve just accepted a new listing. Why would you want to view the details of past listings for this property?

955)                       Liam is buying Abigail’s home. Per their agreement, Liam promises to buy the home for $325,000, and Abigail promises to sell her home to Liam. These promises represent forms of ______, which are required to make the contract valid.

956)                       Jacob and Alexa have decided that they’ve had enough of city life and it’s time to move to the county. Which of the following should be included in the listing agreement they sign with Carla?

957)                       When preparing a purchase agreement, when is it appropriate for a licensee to offer legal advice to the client?

958)                       What’s the best way to describe your sphere of influence?

959)                       Terry just passed her licensing exam, and she’s been working with a broker for the last two months. So far, though, she doesn’t have any clients. How can she spend her time most productively?

960)                       Which of these is the best definition of a property’s market value?

961)                       Which entity guarantees government loans?

962)                       Of the benefits of seller agency, which is the most important to convey to a seller?

963)                       When you interview with a broker, which of the following goals should your questions help you confirm?

964)                       You have a duty of honesty and fairness to customers. You have a duty of obedience to your clients. What happens if a client asks you NOT to be honest about a material fact related to the property?

965)                       What’s a residential marketing plan?

966)                       Jan is a listing agent assisting the Chesters with the sale of their home. What is one of Jan’s duties?

967)                       When performing a market analysis, you’ll want to evaluate the number of houses on the market in a given price range and region. What is this data point called?

968)                       In Janie’s comparative market analysis, comparable A has an adjusted price of $118,000, comparable B has an adjusted price of $112,500, and comparable C has an adjusted price of $121,300. What would be a good way to use this data?

969)                       What is the purpose of the seller net sheet?

970)                       Stella is looking for a good broker with whom to affiliate. She begins her search by identifying brokerages located in a particular area. Which of these would be most important in terms of location?

971)                       Which of the following statements about using real estate assistants is true?

972)                       Minimizing risk in part means avoiding public networks, unsecure sites, and ______ sites.

973)                       Which of the following is the best piece of advice you would give to a licensee for avoiding legal concerns over any contract?

974)                       If you’re alone at an open house, what should you never post online?

975)                       Broker Janelle is deciding on an office location for her new firm. The main purpose of the office will be to meet with customers and clients. Where can she find data about where her prospective clients are located to help her decide on an office location?

976)                       Matt is representing the Tyler family in the sale of their house. What should he tell them about the property disclosure form?

977)                       What are vacancy rates, new building permits, inventory rates, and sales volume?

978)                       Clayton is your seller client, and you’ve provided him with an appropriate list price range for his house. He’s now found another house he’d like to purchase, but he needs to sell his current house before he can make an offer. Should his desire for another property impact pricing strategy?

979)                       Jose, a listing agent wants to write an ad for his new listing. Which of the following phrases is acceptable under fair housing guidelines?

980)                       Benji is a buyer’s agent, and he’ll receive a split of the commission paid from the sale of Harriet’s listing. The property sold for $425,000. The total commission paid from the sale is 6%, split evenly between the buyer and seller brokerages. Benji has an agreement with his broker that he earns 80% of the commission received. How much will Benji be paid from this sale?

981)                       To meet legal and ethical standards, all transactional records that you keep should be complete and ________.

982)                       Built-to-Last Construction, Inc., entered into a contract to build a new home for Jane and Dick Monahan. The contract specified that the home must be completed by June 1. Built-to-Last Construction finished the home on May 28. What’s this an example of?

983)                       Calculate the housing ratio based on the following information: $1,500 condo payment; $100 association fees per month; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a gross monthly income of $5,000.

984)                       Which of the following options describes a method by which a person with a real estate license can determine an appropriate listing price range?

985)                       In an analysis of comparables, property A is next door to the subject property and had six adjustments. Property B is three blocks away and had three adjustments. Property C is six blocks away and had two adjustments. Property D is one block away and had eight adjustments. Which comparable should carry the most weight in determining a list price range?

986)                       Your client, Arliss Xavier, insists on finding a buyer who is willing to pay top dollar for her property. You, on the other hand, would like to get the property sold so you can get your commission. What should you do?

987)                       Camille makes it a point to check the MLS for seller clients’ properties’ former MLS listings. What information will she find there?

988)                       Can Jeremy, a licensee, receive a referral fee for sending his buyer client to Ajax Title?

989)                       Marcus is representing a seller client. Which of the following is a true statement?

990)                       Last week, The Rialdis’ listing agreement ended after months on the market, with not even a single offer to show for it. Today, they received a call from Mindy, a real estate professional who would like to relist the property and has some new ideas for getting it sold. What approach is Mindy using to find listings?

991)                       What’s the purpose of the loan application?

992)                       Because of the lack of control over the individual by the employing party, which of the following persons is not classified as an employee?

993)                       From a seller’s perspective, what’s one reason to use the MLS to promote a property?

994)                       REALTOR® Randy has a seller client who’s proving difficult to work with, and Randy knows he won’t appreciate the advice Randy needs to give him: The market has cooled and the listing price they agreed to should be lowered. He puts off contacting his client, hoping someone will make an offer in the meantime. Is Randy acting according to the NAR Code of Ethics?

995)                       Sylvia, who’s suffering from early onset Alzheimer’s, signs a contract to buy Theodore’s home. Before the deal closes, it’s determined that Sylvia lacks legal capacity to enter into a contract. Which party or parties is permitted to void the contract?

996)                       Why is it important to try to view the world from your client’s perspective?

997)                       While reviewing her purchase contract, Jeanette’s client asked, “What does this inspection contingency do?” How should Jeanette frame her response?

998)                       Edmond, a broker, signs a listing agreement with Julia, who’s selling her home. Julia insists that the agreement state that only Christians will be allowed to buy her home. For what reason would this agreement be considered void?

999)                       The formula for net to seller is sales price x (100% – _______).

1000)                   Besides building seller rapport, what’s a key purpose of touring a subject property?

1001)                   Which of the following phrases should Monica include in her new listing ad if she wants to be careful to avoid including a religious preference?

1002)                   What value principle assumes that if an identical property were sold recently, its sales price should be a good indicator of the value of the subject property?

1003)                   Which term means a calculated percentage used to determine who owes how much of a given expense over a certain period of time?

1004)                   Traci is hosting an open house for her seller, Alex. Rashid, a potential buyer, stops by, loves the home, and starts talking with Traci about buying the property. Rashid isn’t working with a broker. How does Traci avoid an undisclosed, unintentional dual agency situation?

1005)                   In accordance with RESPA prohibitions, rebates may only be offered by licensees to transaction parties, if _____.

1006)                   Lorena is getting ready to post information about her new listing on social media. Which of the following should she do?

1007)                   One type of seller financing is a(n) ______.

1008)                   In most states, tenancy in common is the assumed form of property ownership unless otherwise noted in a contract. Which of the following statements about tenancy in common is also true?

1009)                   Which of the following is a legitimate business deduction for income tax purposes for a real estate licensee?

1010)                   Which of the following statements applies to both employees and independent contractors?

1011)                   What’s the acronym for the legislation that eliminates illegal referral fees among settlement service providers?

1012)                   If an appraisal contingency is in place, what happens when a property appraises lower than the agreed-upon sales price?

1013)                   What measurement indicates how many properties are selling in a given area?

1014)                   Per the Real Estate Settlement Procedures Act (RESPA), licensees may not receive or give referral fees or finder fees (or anything of value) from/to whom?

1015)                   Where are the top two places you should spend your marketing dollars?

1016)                   When does express agency exist?

1017)                   The Real Estate Settlement Procedures Act is a consumer protection statute that ______.

1018)                   What’s a cooperating broker?

1019)                   You’re the agent for a 2,500-square-foot property that has four bedrooms, two baths, and a full basement. Your first comparable is a 2,400-square-foot home with three bedrooms, one-and-a-half baths, and no basement that’s listed for $239,000. You adjust the price by $2,500 for the lack of a bedroom, $3,000 for the missing half bath, and $5,000 for the reduced square footage. What is the adjusted price of the comparable property?

1020)                   Although open houses don’t usually result in the sale of the home, they’re still important. Why?

1021)                   How does a budget compare to a forecast?

1022)                   What is another name for a land contract?

1023)                   Which of the following is a map of a proposed subdivision development that must be approved by the planning commission, before development may begin?

1024)                   What’s the most common way that buyers’ brokers protect their compensation?

1025)                   Who’s ultimately responsible for determining the role a licensee is expected to play in any transaction?

1026)                   Why do licensees help buyers estimate closing costs?

1027)                   A $400,000 property depreciated in value by 2%. What’s its new value?

1028)                   To determine the indicated market value of a subject property, which of the following data would be correct to use?

1029)                   Which buyer negotiation strategy is unlikely to work in a hot market?

1030)                   It’s not a good idea to post photos of your clients’ expensive belongings. Why is that?

1031)                   As supply increases, what happens to price?

1032)                   Denise is a real estate licensee performing a market analysis. She uses the rule of three, which means that she selects three comparables that ______.

1033)                   What’s your responsibility regarding contingencies when representing a buyer?

1034)                   Which one of the following best describes the fiduciary duty of confidentiality?

1035)                   Which of the following are common with hot markets?

1036)                   Three friends entered into a contract to buy a vacation property. The friends got into a dispute, resulting in one of them wanting out of the deal. The remaining two friends didn’t want to lose the deal, but couldn’t afford it on their own. They talked a fourth friend into replacing the person who backed out of the contract. The seller agreed to the substitution, and they moved forward with the purchase. What does this describe?

1037)                   What does the Rule of Three say about comparables when preparing a CMA?

1038)                   As demand increases, what happens to price?

1039)                   What element of the listing presentation outlines the various ways a licensee will advertise and boost awareness of a seller’s property to potential buyers?

1040)                   How does the seller agency relationship benefit the seller?

1041)                   What is closing?

1042)                   Prior to closing on the property, Monica substituted her daughter’s name, Melanie, as the buyer. Although Melanie is now listed as the buyer, Monica isn’t released from her contractual obligations. What is this scenario an example of?

1043)                   Which type of worker is defined in statute under tax law as an independent contractor and not an employee, examples of which include direct sellers, licensed real estate agents, and certain companion sitters?

1044)                   Matt and Elaine are brokers who plan to go into business together, and they’re working on a business plan to present to prospective lenders. Which section will provide a synopsis of the plan?

1045)                   Jillian just received a trio from a title company. It contains a property profile, deed, and ______.

1046)                   If a seller receives a full-price offer, which of the following is a true statement?

1047)                   You represent Cynthia and Ronald, who signed a contract to buy Margie’s home. The contract included the phrase “time is of the essence.” How do you explain to Cynthia and Ronald what this phrase means?

1048)                   After adjusting sales prices of comparables for a market analysis, which comparable carries the most weight in determining a list price range?

1049)                   Kathy is preparing a market analysis for her clients, the Winstons. Why might she include a seller net sheet?

1050)                   The Nguyens must get top dollar. Competitive properties are priced at $250,000 and $255,000. What’s a good pricing strategy?

1051)                   The _______ orders the title search in an escrow closing.

1052)                   What’s the purpose of the buyer pre-qualification letter?

1053)                   Mona is a licensee who strives to be professional in all of her actions, so how does she keep her business account?

1054)                   Which of the following is a true statement regarding short sales?

1055)                   Mary is preparing a purchase offer for her buyer client. It’s a fairly standard offer: a little less than list price, with the seller paying a little toward the buyer’s closing costs. Mary fills in the blanks on a standard form used in her brokerage firm based on the current situation. Is this okay?

1056)                   What is the purpose of a pre-closing checklist?

1057)                   After signing a purchase contract, buyer Pam and seller Waylon both realize that the address for Pam’s newly-purchased home reads “344 Beverly Way” instead of the correct address: “334 Beverly Way.” Which of the following is true about this situation?

1058)                   When Shelby had lunch with an old high school friend, he mentioned his new career as a real estate licensee. They spent a few minutes discussing the real estate market, and Shelby’s friend promised to call when he and his wife started looking for a home to buy. Then they continued reminiscing about old times. Is the cost of the meal now an allow

1059)                   James’s brokerage, Urban Roots, will specialize in urban living spaces. During the situational analysis, he found that the population his brokerage will serve prefers to meet with sales agents virtually. Part of the brokerage’s mission statement is: “Help our customers to find the perfect urban living space in a way that suits their busy lifestyles.” Which of the following should be included in Urban Roots’ plan to address this?

1060)                   Henrietta makes an offer for $250,000 on Ollie’s bungalow. Ollie has until June 21 to respond to her offer. Before Ollie responds, Henrietta finds a house she likes better, and she withdraws her offer to Ollie. Which of the following is true of this situation?

1061)                   Which of the following hardware and software configurations is best suited for a brokerage office that will primarily serve as a meeting place for virtual sales professionals?

1062)                   You’re working with sellers who need to maximize their proceeds. Competitive properties are priced at $370,000 and $375,000. What’s a good pricing strategy?

1063)                   Nancy is thinking about paying off her mortgage loan early. She looked at the loan contract and found that her lender charges a pre-payment fee based on a percentage of interest paid within six months. The lender charges 80% of six months’ interest. Nancy’s mortgage has $50,000 remaining, and she pays 6% interest. How much would she owe in penalty fees?

1064)                   An example of confidential information is ______.

1065)                   Which of the following best describes the purpose of the Truth in Lending Act?

1066)                   Adam owes $125,000 on his home. It’s currently worth $340,000. How much equity does Adam have in his home?

1067)                   As a security precaution when posting information for a listing, which of the following should you do?

1068)                   One reality of real estate is that you’ll often need to ______ in order to make a sale.

1069)                   In the income capitalization approach to appraisal, NOI is found by ______.

1070)                   What is a reason a homeowner may seek a short sale?

1071)                   Peter is a broker with a listing agreement with the sellers, the Averys. Under the terms of the listing agreement, Peter will earn his commission whether he, the Averys, or another brokerage finds a buyer for the property. What type of listing agreement did the Averys sign?

1072)                   Why is it important to include active comparable listings in a market analysis?

1073)                   What, when signed by all parties to a sales contract, changes the original terms of the contract ?

1074)                   After the open house has ended, it’s best to _______.

1075)                   Your sellers, the McIntoshes, ask you about the MLS and why they should market their house on it. Which of the following would you tell them?

1076)                   Two types of prorations are _______.

1077)                   Bart is an independent contractor. Which of these does his managing broker have the right to do?

1078)                   Abe signs a contract to buy Penelope’s home. The deal eventually closes, but Penelope fails to hand over the home’s keys to Abe. A week passes, and Abe files a lawsuit in an attempt to force Penelope to give him the keys. Of what is this an example?

1079)                   When interest rates are lowered, real estate purchases become more ______ for buyers.

1080)                   When looking for a broker with whom to affiliate, an important consideration is to find out if the broker is ___________ .

1081)                   Under which of the following circumstances might you be advised to refuse to write a listing contract with sellers?

1082)                   Buyer Josephine had just signed a contract on a house when she discovered that seller’s agent Franklin knew that this house was 3500 square feet, but he listed it at 3900 square feet. Which essential contract element has been compromised?

1083)                   What is usually the first place serious buyers look for homes for sale?

1084)                   Risks to computer systems can be reduced by avoiding public networks, ______ sites, and suspicious sites.

1085)                   Which of the following is an action that real estate licensees may take without practicing law illegally?

1086)                   The multiple listing service is a go-to resource for data when researching a subject property. What information will you find there?

1087)                   Pam is a new real estate licensee who must receive a high level of supervision. Even with the supervisory requirement, the Internal Revenue Service allows Pam to be classified as an ______.

1088)                   A listing agent’s primary duty to a seller is to ______.

1089)                   What does a credit score tell a lender?

1090)                   Which of these is a factor in calculating a consumer’s credit score?

1091)                   Ginger, a licensee, tours a home that’s packed with clutter. She should ______.

1092)                   Real property ownersip has significant tax advantages. Which of the following is an advantage?

1093)                   Ways to minimize computer risks include avoiding public networks, unsecure sites, and ______ sites.

1094)                   Which of the following describes a sale subject to a mortgage?

1095)                   Homes built before 1978 may have what environmental hazard in their paint?

1096)                   Why would a buyer want to know whether any additions or alterations were made to a property?

1097)                   When a client understands what dual agency is and agrees in writing to allow a firm to act as a dual agent for them in a real estate transaction, this is known as ______.

1098)                   What is one drawback of sub-agency from a seller’s standpoint?

1099)                   In a real estate transaction, who may a licensee represent?

1100)                   Members of the Real Estate Commission serve _________-year terms.

1101)                   If a consumer wants to file a deceptive ad complaint, which entity should be contacted?

1102)                   Species habitat, beauty, erosion control, and pollution treatment are all reasons why wetlands are ___________.

1103)                   Kerry is a real estate licensee who has committed an ethical violation. Which of the following is a true statement about her potential penalties?

1104)                   One of Mrs. Wilson’s tenants is leaving in a few months. She hates to see this particular tenant go because he has been an ideal tenant—always paying his rent on time, keeping his place clean, and never a complaint. Unlike so many of her other tenants, this tenant deserves to get back his security deposit. By law, when must Mrs. Wilson return the deposit to her tenant?

1105)                   If a licensee is convicted of a controlled substance offense, what can the Real Estate Commission do?

1106)                   A buyer asked Clifton why she would benefit from signing an agency agreement with him. Clifton answered: ______

1107)                   At a business meeting attended by the heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. This is an example of ______.

1108)                   What type of agency relationship exists if an agent from ABC Realty represents a buyer and the seller is affiliated with Net Realty?

1109)                   Article 3 of the Code of Ethics requires NAR brokers to cooperate except

1110)                   Which term describes the addition of alluvion land to a property through the natural process of accretion?

1111)                   Which of the following are examples of Single Agency?

1112)                   Under what name must sole proprietors conduct business?

1113)                   Glenda is engaged as seller’s agent. Gary, the seller, hasn’t consent to dual agency. A prospective buyer would like Glenda’s assistance in drafting an offer to present to Gary. Can Glenda do this?

1114)                   The lender, the loan applicant, and the _____________ all complete part of the request forms for verification of deposit forms.

1115)                   April is having a limited coverage searched performed on her condo. When is a limited coverage search used?

1116)                   Which Law does the Office of Fair Housing and Equal Opportunity Uphold?

1117)                   According to the NAR code of Ethics and Standards of Practice Preamble, “REALTORS should recognize that the interests of the nation and its citizens require the ____________.”

1118)                   Ownership is a right in the bundle of rights. Which of the following is considered a form of ownership?

1119)                   Which of the following financing types involves the sale of personal property with the real property?

1120)                   In a transfer of ownership in real property, who conveys the title?

1121)                   At what level or levels does antitrust oversight exist?

1122)                   Stephanie’s primary residence is in SC, has a fair market value of $225,000, and is in an area with a millage rate of .325. Stephanie qualifies for the state homestead exemption. What could she expect to pay in property taxes?

1123)                   Sally is a licensee working under a written brokerage agreement with buyer Barney. Although she’s assisting him in the transaction, he’s her customer (not her client), and she doesn’t owe him any fiduciary duties. Based on this, you know that Sally’s acting as a __________.

1124)                   What’s a subordination agreement?

1125)                   Which of the following describes the appropriate capital gain exclusion for a taxpayer’s primary residence?