>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.