California Principles questions (ALL PRINCIPLE QUESTIONS)

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Principles Ch1 questions


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

(correct answers will be revealed with correct subscription)

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

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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

(correct answers will be revealed with correct subscription)

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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)

——

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

(correct answers 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 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)


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

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

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

A.    Community Apartment Project

B.     Condominiums

C.     Stock Cooperatives

D.    None of the Above

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

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

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

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

D.    None of the Above

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

A.    Lot and Block System

B.     Metes and Bounds System

C.     Rectangular Survey System

D.    Government Survey System

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

D.    None of the Above

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

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

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

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

D.    None of the Above

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

A.    Lot and Block System

B.     Metes and Bounds System

C.     Rectangular Survey System

D.    Both A and C

Principles Ch21 quiz

(correct answers will be revealed with correct subscription)

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

A.    The city or county planning department

B.     The city council or board of supervisors

C.     The owners of the new property

D.    Their city alderman

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

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

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

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

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

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

A.    Enabling Acts

B.     Aesthetic Zoning

C.     Directive Zoning

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

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

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

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

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

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

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

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

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

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

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

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

A.    State Building Inspectors

B.     Federal Building Inspectors

C.     Local Building Inspectors.

D.    None of the Above.

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

A.    The City Planning Commission

B.     The Building Codes

C.     Building Officials Conference of America

D.    Both B and C

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

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

B.     The Clean Air Act

C.     The National Environmental Policy Act

D.    All of the Above.

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

A.    The National Environmental Policy Act

B.     The Clean Air Act

C.     The Contractor’s License Law

D.    Both A and B

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

A.    Nonconforming Use (Illegal)

B.     Spot Zoning

C.     Nonconforming Use (Legal)

D.    A Buffer Zone

Principles Ch22 quiz

(correct answers will be revealed with correct subscription)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

D.    None of the Above

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

A.    The park had become overcrowded.

B.     They did not follow rules and regulations.

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

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

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

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

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

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

D.    All of the Above

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

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

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

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

D.    Both A and B

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

A.    A thumbprint of the person signing the document.

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

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

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

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

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

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

C.     Both A and B

D.    None of the Above

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

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

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

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

D.    Both A and B

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

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

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

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

D.    None of the Above

Principles Ch23 quiz

(correct answers will be revealed with correct subscription)

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

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

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

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

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

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

A.    January 1, 2001

B.     May 7, 2010

C.     July 1, 2011

D.    January 1, 2013

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

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

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

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

D.    None of the Above

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

A.    Agency Relationship Disclosure

B.     The owner’s motivation to sell

C.     Megan’s Law

D.    Asbestos

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

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

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

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

D.    Both A and B

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

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

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

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

D.    None of the Above

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

A.    4 pCi/L Radon and above

B.     2.73 pCi/L Radon and above

C.     3.52 pCi/L Radon and above

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

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

A.    Earthquake Information

B.     Lead-Based Paint

C.     Mold

D.    All of the Above

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

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

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

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

D.    None of the above

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

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

B.     Juanita may cancel the contract altogether.

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

D.    Both A and B

Principles Ch24 quiz

(correct answers will be revealed with correct subscription)

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

A.    California Business and Professions Code Section 10145

B.     Commissioner’s Regulation 2832

C.     California Business and Professions Code Section 10085.5

D.    Both A and B

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

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

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

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

D.    Both B and C

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

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

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

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

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

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

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

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

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

D.    None of the Above.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

D.    Both A and C

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

A.    Commingling

B.     Restitution

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

D.    Account Fraud

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

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

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

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

D.    Both A and C

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

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

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

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

D.    Both A and C

Principles Ch25 quiz

(correct answers will be revealed with correct subscription)

—–

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

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

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

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

C.     One for security deposits.

D.    None of the above

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

A.    Obtaining maximum profit on the property.

B.     Evaluating the Rental Market

C.     Handling Tenant Complaints and Conflicts

D.    All of the above

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

A.    Fiduciary Responsibility to the Owner

B.     Achieving the Highest Rate of Return for the Owner

C.     Disclosure of Material Facts

D.    Both A and B

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

A.    The Owner’s Objectives

B.     The Fair Housing Laws

C.     The Management Agreement

D.    Both A and B

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

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

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

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

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

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

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

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

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

D.    Both B and C

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

A.    Allowable Vacancy Rate Clause

B.     Escalator Clause

C.     Operating Costs Adjustment Clause

D.    Periodic Tenancy Clause

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

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

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

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

D.    None of the above.

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

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

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

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

D.    None of the above

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

A.    Property Description and Term of Agreement

B.     Definition of Responsibilities and Extent of Authority

C.     Americans with Disabilities Act (ADA)

D.    Management Fee and Allocation of Costs

Principles Ch26 quiz

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

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

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

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

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

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

A.    A bill of sale and specific financial statements.

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

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

D.    None of the above

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

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

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

C.     Goodwill is the expectation of continued public patronage.

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

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

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

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

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

D.    None of the above

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

A.    IRS

B.     State Board of Equalization

C.     California BRE

D.    Both A and B

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

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

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

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

D.    None of the above

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

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

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

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

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

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

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

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

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

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

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

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

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

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

D.    None of the above

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

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

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

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

D.    None of the above

Principles Ch27 quiz

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

A.    60 days

B.     90 days

C.     3 months

D.    4 months

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

A.    Supplemental Property Tax Notice

B.     Automatic Stay Disclosures

C.     Brownfield Disclosures

D.    All of the above

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

A.    Vacant land loan

B.     Consumer loan

C.     Commercial loan

D.    Land development loan

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

A.    a beachfront home.

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

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

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

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

A.    A manufactured housing community.

B.     A condominium project.

C.     A community apartment project.

D.    A stock cooperative.

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

A.    51%

B.     67%

C.     69%

D.    75%

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

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

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

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

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

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

A.    Real Estate Advisory Commission Fund.

B.     Real Estate Recovery Account.

C.     Real Estate Fraud Prosecution Trust Fund.

D.    Real Estate Fraud Investigation Fund.

9 of 10 If a person believes that her property has been placed under an unlawful restriction, covenant, or other provision, based on an arbitrary reason as defined in the Government Code, she may:

A.    Refuse to pay her rent or mortgage.

B.     File suit against the parties that sold her or rented her the property.

C.     File a civil suit against the party/parties that so placed this unlawful restriction.

D.    Record a Restrictive Covenant Modification document.

10 of 10 Formerly, the Unruh Civil Rights Act protected people from being discriminated against because of their sex, race, color, religion, ancestry, national origin, disability, or medical condition. However, recent changes have added two new bases for discrimination that are illegal in California. These are:

A.    Marital status and legal source of income.

B.     Marital status and source of income.

C.     Marital status and sexual orientation.

D.    Legal source of income and sexual orientation.

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

(correct answers with explanation will be revealed with correct subscription)

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

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

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

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

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

D.      None of the Above.

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

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

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

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

D.      None of the Above.

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

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

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

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

D.      Both A and B

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

A.      A special flood area.

B.      A geological hazard.

C.      A wildland high fire severity area.

D.      A seismic hazard zone.

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

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

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

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

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

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

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

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

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

D.      None of the Above.

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

A.      Section 218

B.      Proposition 13

C.      Section 205

D.      Proposition 60

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

A.      Resource Analysis

B.      Plan Implementation

C.      Formulation of Community Goals

D.      Adaptation of Zoning Ordinances

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

A.      Autograph

B.      Attestation

C.      Recording

D.      Caveat Emptor

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

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

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

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

D.      California has a very active secondary mortgage market.

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

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

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

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

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

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

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

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

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

D.      Statutory Redemption; Equitable Redemption; and Foreclosure

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

A.      Market Value

B.      Insurance Value

C.      Salvage Value

D.      All of the Above

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

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

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

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

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

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

A.      General taxes are Ad Valorem taxes.

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

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

D.      All of the Above

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

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

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

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

D.      Both A and B

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

A.      Highly Secured

B.      Low Risk

C.      Simple Interest

D.      Highly Leveraged

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

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

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

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

D.      None of the Above.

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

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

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

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

D.      None of the Above.

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

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

B.      Equal Housing Opportunity Clause

C.      California Statute of Frauds

D.      Arbitration

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

A.      In Contract

B.      Chain of Title

C.      Abstract and Opinion

D.      Both B and C

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

A.      Before June 15, 1976; HUD

B.      After June 1, 1976; HUD

C.      After June 15, 1976; HUD

D.      After June 1, 1976; California BRE

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

A.      A percentage of income.

B.      A salary.

C.      A flat fee.

D.      All of the Above

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

A.      0.0017

B.      1.07

C.      1.7

D.      17

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

A.      The power be exercised in a reasonable manner.

B.      The provisions be clear and specific.

C.      Freedom from discrimination.

D.      All of the Above

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

A.      Highest and Best Use

B.      The Law of Supply and Demand

C.      Anticipation

D.      Competition

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

A.      Directive Zoning

B.      Aesthetic Zoning

C.      Bulk Zoning

D.      None of the above

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

A.      A Covenant of Seisin

B.      A Covenant of a Warranty Forever

C.      A Covenant of Further Assurance

D.      A Covenant Against Encumbrances

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

A.      Cemetery Authorities

B.      Licensed Personal Property Brokers

C.      Off-Site Property Managers

D.      Short-Term Vacation Rental Agents

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

A.      To determine the market value of a property.

B.      To determine the insurance value of a property.

C.      To determine the marketability of a property.

D.      To determine the tax value of a property.

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

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

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

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

D.      Both A and C

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

A.      Special Agent

B.      Single Agent

C.      Universal Agent

D.      Agency Coupled with Interest

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

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

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

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

D.      None of the Above.

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

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

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

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

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

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

A.      Ostensible Agency

B.      Ratification

C.      Implied Agency

D.      Written or Expressed

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

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

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

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

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

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

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

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

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

D.      None of the Above.

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

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

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

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

D.      There are no major differences between the two.

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

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

B.      Prepayment penalties are optional.

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

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

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

A.      Rural Economic and Community Development (RECD)

B.      VA

C.      FHA

D.      Cal-Vet

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

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

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

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

D.      None of the Above.

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

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

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

C.      Jack and Justin both have the possessory right.

D.      Jack and Justin both share the reversionary right.

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

A.      A Bill of Sale

B.      Financial Statements

C.      Goodwill

D.      Both A and B

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

A.      A Participation Mortgage

B.      A Bridge Loan

C.      A Sale-Leaseback

D.      A Contract for Deed

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

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

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

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

D.      None of the Above.

46 of 50 – A Point of Beginning refers to:

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

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

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

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

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

A.      The Mello-Roos Community Facilities Act of 1982

B.      The Street Improvement Act of 1911

C.      Proposition 13

D.      Proposition 60

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

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

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

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

D.      None of the Above.

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

A.      An Estate for Years

B.      An Estate at Sufferance

C.      An Estate at Will

D.      None of the above

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

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

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

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

D.      None of the Above.

California Principles Real Estate › FINAL TEST 2 (50-example questions)

(correct answers with explanation will be revealed with correct subscription)

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

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

1 of 50 An undeveloped acre of land sits in the middle of a secluded rural community. How many separate owners could this acre have?

A.    As many as possible if they were partners in the ownership of the land.

B.     Three owners: One could own the subsurface rights, one the surface rights, and another the air rights.

C.     Two owners: One could own the surface rights, and another the air rights.

D.    Two owners: One could own the subsurface rights, and another the surface rights.

2 of 50 Deanna is buying one of Kay’s fur coats and several handbags. They are old friends and sometimes purchase each other’s items instead of selling to a consignment shop. Deanna agrees to pay Kay $650.00 for the items, writes a check, and collects her purchased items. Is this transaction legitimate?

A.    Yes, it is a private transaction between two adults where both are in agreement of the terms.

B.     No, in the State of California, an agreement for the sale of real property must be in writing if the amount or value of the property exceeds $500.00.

C.     No, in the State of California, an agreement for the sale of personal property must be in writing if the amount or value of the property exceeds $500.00.

D.    No, in the State of California, an agreement for the sale of personal property must be in writing if the amount or value of the property exceeds $600.00.

3 of 50 Ensuring consumers are fully informed of all finance changes and aware of the true annual interest rate are requirements of which regulation?

A.    Article 7

B.     RESPA

C.     Truth in Lending

D.    Uniform Settlement Statement

4 of 50 What is the form of California State Real Estate licensing examinations?

A.    True or False Tests

B.     Essay Tests

C.     Multiple-Choice Tests

D.    All of the Above

5 of 50 Due to the subdividing of lots on the lake, Jim’s property is surrounded on three sides by Louise’s property. The only other boundary is the lake. Jim can only get to his home by driving up Andrea’s driveway and behind her lake home to get to his own. How was the easement in this situation created?

A.    Implication

B.     Reservation

C.     Necessity

D.    Expressed

6 of 50 Which are the four elements required for a valid contract?

A.    Legally Competent Parties; Offer and Acceptance; Consideration; and Legality of Object

B.     Legally Competent Parties; Offer and Acceptance; Consideration; and Terms

C.     Legally Competent Parties; Offer and Acceptance; Assignment; and Legality of Object

D.    Legally Competent Parties; Offer and Acceptance; Contingency; and Legality of Object

7 of 50 Tracy and Darnell are buying a home. They have a 15% down payment and have qualified for a thirty year fixed conventional rate mortgage. Will Tracy and Darnell have to pay PMI?

A.    Yes, private mortgage insurance is required for all loans with less than 25% down payment.

B.     No, private mortgage insurance is only required for all loans with less than 15% down payment.

C.     No, this is Tracy and Darnell’s second mortgage for the purchase of a new home. Private mortgage insurance is only for first-time buyers with less than a 20% down payment.

D.    Yes, private mortgage insurance is required for all loans with less than 20% down payment.

8 of 50 Agent Green is faced with an ethical dilemma. He was present when two brokers were having an unethical discussion that could be considered collusion. He doesn’t know if he should act as if it never happened, or report the incident to his broker. What steps should he employ when making this decision?

A.    Concentrate on the pertinent facts of the case.

B.     Think about who stands to gain and lose by his decision.

C.     Explore different solutions to the problem.

D.    All of the Above

9 of 50 When is a real estate licensee considered a creditor?

A.    If the licensee routinely assists sellers in determining whether a proposed buyer in a land contract or purchase-money mortgage is creditworthy.

B.     A licensee may always be considered a creditor based on the financial information and qualification of prospective buyers.

C.     A licensee is never considered a creditor under any circumstance.

D.    None of the above

10 of 50 Appraiser Jones appraises one-to-four unit residential properties, and non-residential properties with a transaction value up to $250,000. What is this appraiser’s level? How many hours of appraiser education were completed?

A.    Residential License, 150 hours

B.     Certified Residential Real Estate Appraiser, 200 hours

C.     Certified Residential Real Estate Appraiser, 180 hours

D.    Certified General Real Estate Appraiser, 300 hours

11 of 50 Molly, a successful real estate salesperson, took some time off to stay at home with her first child. Days turned into weeks, weeks into months, months into years, until Molly’s child was starting school. She decided she needed to head back to her profession and pick up where she left off. During her at-home time, Molly hadn’t kept up with any CE requirements, nor had she renewed her license after its expiration almost three years earlier. Can Molly simply pick up where she left off?

A.    No, two years after the license expires, all license rights lapse. Molly must re-qualify through the examination process before being licensed in real estate once again.

B.     Yes, due to Molly’s experience, she may petition the DRE for special dispensation for her work-related experience in order to reapply for her license.

C.     Yes, all license rights lapse after four years of non-renewal.

D.    None of the Above.

12 of 50 Which of the following listing agreements is illegal in most states?

A.    Open Listing

B.     Exclusive Agency Listing

C.     Net Listing

D.    Agency Coupled with Interest

13 of 50 The Statute of Limitations is:

A.    An action that bars recovery by the plaintiff because of the plaintiff’s undue delay in seeking relief.

B.     Prevents action from being taken against an individual after a prescribed period of time

C.     An action that the purchaser agreed to do or not to do when they purchased the property

D.    A principle which precludes a person from asserting something contrary to what is implied by a previous action

14 of 50 XYZ Corporation is interested in a piece of land for development. They are selling off a bit of company stock to buy the property without any debt. Is XYZ’s sale of stock considered a form of financing?

A.    It is actually considered a mortgage financing alternative.

B.     NO, it is not considered a form of financing.

C.     No, it is simply paying for land with cash proceeds.

D.    None of the Above.

15 of 50 Kim, Chris, and Beth are all partners in a cosmetics firm. Kim is leaving the partnership and wants to sell her shares of the business, including the property owned by the partnership, to Chris and Beth. The three partners own the property with the right of survivorship should one or more of them die. The remaining partners are not interested in buying Kim’s interests. Kim has been unable to find a buyer for her share of the partnership. She has now resorted to asking the court to either sell her shares or sell the entire property. What form of concurrent ownership applies?

A.    Partition

B.     Tenants in Common

C.     Joint Tenancy

D.    Separate Ownership

16 of 50 What is the California Statute of Limitations on bringing a court foreclosure to enforce a mechanic’s lien? To bring action for removal of encroachments?

A.    120 days after filing the lien; Four years

B.     190 days after filing the lien; Three years

C.     90 days after filing the lien; Three years

D.    120 days after filing the lien; Five years

17 of 50 Georgina sat for the examination about two weeks ago. She believes she passed with flying colors and checks her mail immediately upon arrival home for her results. Today, they arrived and, as she opened the envelope, she saw her test score. Did Georgina pass or fail?

A.    Georgina passed the examination. Failing scores are not revealed; only the information the examinee failed.

B.     Georgina failed the exam. The exam is qualifying by nature and if you pass, you pass; your score is irrelevant and is not revealed.

C.     There is no way to tell if Georgina passed or failed without knowing her actual score.

D.    None of the Above.

18 of 50 Which of following are not considered trust funds?

A.    Real Estate Commissions

B.     General Operating Funds

C.     Rents and Deposits from Broker-Owned Real Estate

D.    All of the Above

19 of 50 Agent Sims needs one more new home sale this month to receive a bonus. She has one more that could possibly close and help her meet the goal. However, today she was informed the financing fell through for the buyer. Agent Sims has a lender friend that owes her a favor. She calls the lender, offers the friend one-quarter of her bonus if he will finance the buyers who were turned down. Which penal code section addresses this crime?

A.    PC 534

B.     PC 639-639a

C.     PC 641.4

D.    PC 532c

20 of 50 John and Thom are purchasing their dream home. Due to the expiration of escrow instructions, the escrow has been terminated. Have they lost the contract on the house of their dreams?

A.    Yes, once the escrow is terminated all contracts associated are also terminated.

B.     No, the termination of an escrow does not terminate the associated contract.

C.     No, if the escrow is terminated the contract can remain valid; however, if the escrow is cancelled, the contract is cancelled.

D.    None of the above

21 of 50 Dan has recently been transferred to San Diego, and only has a month to find a home, sell his condo, pack, move, close, and get to work. His agent shows him the Walsh home and it’s perfect. He offers the asking price, along with all the kitchen appliances and window treatments to remain with the property. The Walsh’s accept his offer exactly as it is written. Which contract term applies to this situation?

A.    Time is of the Essence

B.     Mirror Image

C.     Contingency

D.    Novation

22 of 50 Which of the following is not a prohibited escrow-related activity?

1.      An escrow agent cannot disburse a real estate broker’s commission prior to closing of the escrow.

2.      Escrow licensees may not solicit or accept escrow instructions containing any blank to be filled in after signing or initialing.

3.      They may not permit, under any condition, any person to make any addition, deletion, or alteration of an escrow instruction.

4.      None of the Above.

23 of 50 Agent Peters has qualified buyers to purchase a new home. Now he needs to qualify the property they wish to buy. He understands the human qualification process. Can you help Agent Peters with steps to qualify the property?

1.      Type of property and area zoning

2.      Location and Diversity of Neighborhood

3.      Value range and condition

4.      Both A and C

24 of 50 Agent Simpson tells residents of a neighborhood that minorities are moving into the neighborhood, and property values are sure to plummet. Simpson goes on to say, “resale values will suffer, the neighborhood will deteriorate, and if they don’t sell their homes now, they will lose money.” What form of illegal discrimination is Agent Simpson practicing?

1.      Blockbusting

2.      Redlining

3.      Steering

4.      Discriminatory Misrepresentation

25 of 50 Christina is planning on getting married in the next year. She is a very successful business owner and is planning on buying some vacation property on the coast. She asks her agent, Martina, for advice on how she should take title to this new property. Should she hold the title alone, or jointly with her fiance? How should Martina advise?

1.      Martina should advise Christina to protect her future assets and hold title separately due to California’s community property laws.

2.      Martina should simply tell Christina to consult her attorney on this matter.

3.      Martina should discuss with Christina what she knows in reference to how title can be vested but give no advice except to consult an attorney for advice.

4.      None of the Above.

26 of 50 Elliot has misrepresented himself by acting in the capacity of a real estate salesperson without being licensed by the State of California. Elliot had his license revoked three years ago for unethical actions. Elliot is guilty of what level of violation?

A.    Misdemeanor

B.     Felony

C.     Held accountable in a possible civil suit.

D.    Both B and C

27 of 50 Which of the following conditions does not apply in converting a mobile home into real property?

A.    The homeowner must obtain a building permit.

B.     The home must be placed on a permanent foundation.

C.     The homeowner must obtain a Certificate of Occupancy.

D.    The homeowner is required to have a tag guaranteeing the mobile home’s proper construction.

28 of 50 Ken has just passed his licensing examination. However, he has been notified the DRE will not issue a full-term license. Ken is behind on child support payments and therefore has not complied with a court order to provide these payments. Will Ken ever be able to obtain his license?

A.    Ken will not be eligible for a license until he has been current on all child support payments for a minimum of 150 days.

B.     Ken may be issued a 150-day temporary license while he is on the list of child support obligors. Only one 150-day temporary license may be issued. His full-term license may be issued if a release is obtained from the district attorney’s office during the 150-day temporary period.

C.     Ken must clear his name and pay his support on time for a minimum of six months to be eligible to receive a full-term license.

D.    None of the Above.

29 of 50 Which act is known as the original fair housing statute?

A.    Executive Order 11063

B.     Civil Rights Act Title VIII

C.     Fair Housing Act

D.    Civil Rights Act of 1866

30 of 50 Along a non-navigable stream, does an owner own the land, the water, both, neither? What is this right?

A.    The owner owns the land to the center of the stream and the government owns the water. It is a Riparian Right.

B.     The owner owns to the water’s edge. It is a Riparian Right.

C.     The owner owns to the average high water mark. It is a Littoral Right.

D.    The owner owns the land and the water to the center of the stream. It is a Riparian Right.

31 of 50 Which of the following liens is both general, involuntary, and statutory? Which lien is specific, voluntary, and equitable?

A.    Judgment Lien; Property Tax Lien

B.     Income Tax Lien; Property Tax Lien

C.     Judgment Lien; Mechanic’s Lien

D.    Income Tax Lien; Mortgage Lien

32 of 50 When an owner dies without a will or heirs, what happens to the property and why?

A.    The property is abandoned until it can be sold by the state. If there is not an owner, the state takes ownership.

B.     There is an auction with the proceeds going to the state. If there is not an owner, the state takes ownership.

C.     The property is transferred to the nearest living relative. Property must have an owner.

D.    The property is transferred to the state. Property cannot be without an owner.

33 of 50 Mr. Manning has owned a restaurant for forty years. He is in the process of selling his business to a group of investors who plan on revamping the restaurant and turning it into a destination. In the negotiation of the sale, Mr. Manning has stipulated he is willing to accept their offer on two conditions: There may never be any alcohol served on the property and there can never be dancing of any kind. Mr. Manning is insistent on these conditions due to his religious beliefs. If either of these activities ever takes place, Mr. Manning would have the right to take back the property. Which type of estate applies?

A.    Fee Simple Absolute

B.     Pur Autre Vie

C.     Estate in Reversion

D.    Fee Simple Defeasible

34 of 50 In studying for her real estate license, Elise is reading about police power. She is confused and doesn’t understand why law enforcement would have any role in real estate sales, transactions, and regulations. What does the term “police power” refer to in real estate?

A.    The constitutional right of the government to regulate private activity to promote the general safety, health, and welfare of society.

B.     Police power allows the government to seize land at their discretion or in reaction to zoning ordinance changes.

C.     Police power controls and directs land use regarding subdivisions.

D.    Both A and C

35 of 50 Patrice and Cornell are completing a sales contract with Mary, their agent. The sales contract used at Mary’s brokerage is preprinted. Mary, as a senior agent, has the authority to waive one of the brokerage’s fees. The fee is explained and preprinted on the contract. Mary simply crosses it out, writes “waived,” and both parties initial. Which overrules the other? The preprinted or handwritten portions of the contract?

A.    The preprinted portions of a contract always take precedence over handwritten.

B.     It depends on the portion of the contract and the language involved.

C.     Handwritten portions of real estate contracts always supersede preprinted forms.

D.    None of the Above.

36 of 50 The continuing education requirement in California is —?—  hours every —?—_years.

A.    45, six

B.     40, five

C.     45, four

D.    6, four

37 of 50 Judy is the listing agent for the Brandts’ home. In the inspection of their home, she discovers a few issues of concern. The basement is very damp and smells of mildew. Judy noticed what appeared to be mold on the interior walls of the lower level. She also saw what she believed to be their main line overflowing in the utility area of the basement. State the case that is responsible for broker’s conducting a diligent inspection of properties they are listing or selling.

A.    Sherman v. Clayton

B.     Easton v. Strassburger

C.     Mello v. Roos

D.    Jones v. Mayer

38 of 50 Which is not a form of syndication?

A.    The Corporate Form

B.     The General Partnership

C.     The Limited Liability

D.    An Equity Trust

39 of 50 Ben and Amanda are interested in a vacant, undeveloped lot. They are going to continue to live in their current home, pay off the lot’s loan, and then build a new home on the lot. Before closing on the purchase of the lot, they discover the zoning regulations permit nightclubs to be built in the immediate area. They specifically asked the broker about this issue and were told there was no reason to worry. What are Ben and Amanda’s options, if any?

A.    They do not have any options and must go forward with the sales contract or face a possible suit for breach of contract.

B.     It is the word of the broker against theirs. If they did not get the broker’s assurance in writing, they have to proceed with the contract or face a suit.

C.     They may rescind the transaction based on the misrepresentation of the broker.

D.    Both A and B

40 of 50 Broker Burns is negotiating a first trust deed loan for buyers. The buyers have signed a contract for a fifteen-year loan. What is the maximum commission for Broker Burns?

A.    Five percent of the principal of the loan.

B.     Ten percent of the principal of the loan.

C.     Fifteen percent of the principal of the loan.

D.    Two percent of the principal of the loan.

41 of 50 Ramon did not pass his licensing examination. He didn’t think it was a possibility to fail and doesn’t know what to do to re-take the test. Ramon is not even sure he is allowed to take the examination a second time. What are Ramon’s options?

A.    Ramon may take the examination as many times as he needs. He need only reapply to re-take the examination.

B.     Ramon must pay the examination fee if he is to re-take the examination.

C.     Ramon cannot take the examination for a period of two years after failing. At that time, he must reapply and pay the examination fee.

D.    Both A and B

42 of 50 Carol is studying for the California real estate license examination. She knows she has to know all areas covered in the examination extremely well to pass. Which portion of the examination, approximately, makes up the largest portion of the test?

A.    Practice of Real Estate and Mandated Disclosures

B.     Contracts

C.     Transfer of Property

D.    Financing

43 of 50 Which of the following is not an exemption to the federal fair housing laws concerning age and family status?

A.    In a government-designated retirement housing.

B.     In a retirement community if 70% of the dwellings have one person who is 55 years of age or older, provided there are amenities for elderly residents.

C.     In residential dwellings of two to four units if one of the units is occupied by the owner.

D.    None of the Above.

44 of 50 What are the types of legal life estates?

A.    Dower, a husband’s interest in his wife’s property; Curtesy, a wife’s interest in the husband’s property; and Homestead, protection against unsecured debts for the party that did not sign the loan.

B.     Dower, a wife’s interest in the husband’s property; Curtesy, a husband’s interest in a wife’s property; and Homestead, protection against all debts for the party who did not sign for the loan.

C.     Dower, a wife’s interest in the husband’s property; Curtesy, a husband’s interest in a wife’s property; and Homestead, protection against unsecured debts for the party who did not sign for the loan.

D.    Marital rights, both a husband’s and a wife’s interest in the spouse’s property; and Homestead, protection against unsecured debts for the party who did not sign for the loan.

45 of 50 What is the difference between Southern California and Northern California in reference to escrow accounts?

A.    In Northern California, the bilateral escrow instructions are signed by the buyer and seller shortly after they’ve signed their purchase agreement, just after the start of escrow, which is approximately 30 to 60 days prior to the close of escrow. In Southern California, the instructions are usually not signed until one or two days before the close of escrow.

B.     In Southern California, the bilateral escrow instructions are signed by the buyer and seller shortly after they’ve signed their purchase agreement, just after the start of escrow, which is approximately 30 to 60 days prior to the close of escrow. In Northern California, the instructions are usually not signed until one or two days before the close of escrow.

C.     In Southern California, escrow services are usually performed by independent escrow companies or financial institutions. In Northern California, the escrow services are usually performed by title insurance companies.

D.    Both B and C

46 of 50 Which of the following is not a fourfold unity?

A.    Time

B.     Title

C.     Possession

D.    Vesting

47 of 50 Which of the following statements concerning real and personal property is true?

A.    Annexation changes real property to personal property; severance changes personal property to real property.

B.     A trade fixture is personal property and can be removed by the tenant any time before the end of the lease term.

C.     Annexation changes personal property to real property; severance changes real property to personal property.

D.    Both B and C

48 of 50 Caroline has been paying her mortgage steadily for fifteen years. She has just received a notice from her lender that the loan due date is approaching and she will owe a lump sum of $11,257 to pay off her mortgage loan. Which type of promissory note has Caroline NOT been paying?

A.    A straight note

B.     A fully amortized loan

C.     A Balloon Note

D.    An Interest-Only Note

49 of 50 The Brights are buying a home from the Stones. They are splitting the escrow service fees 50-50. Do they live in Northern or Southern California? How does the other region usually handle the escrow service fees?

A.    They live in Southern California. In Northern California the seller usually pays the escrow service fees.

B.     They live in Southern California. In Northern California the buyer usually pays the escrow service fees.

C.     They live in Northern California. In Southern California the buyer usually pays the escrow service fees.

D.    They live in Northern California. In Southern California the seller usually pays the escrow service fees.

50 of 50 When can a violation that hasn’t happened yet be a violation?

A.    If the Commissioner believes that a person has or is about to commit a violation of law, order, license, permit, etc., the Commissioner has the authority to bring action against the person.

B.     It can never be a violation. A person has to commit, past or present tense, a violation to have actions filed. You cannot punish someone for something they have yet to do.

C.     The Commissioner can command in the name of the people of the State of California in the Superior court of the State of California, that the individual not continue with the violation or not move to commit the violation.

D.    Both A and C

California Principles Real Estate › FINAL TEST 3 (100-example questions)

(correct answers with will be revealed with correct subscription)

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

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer to bring up the in-page search box

1 out 100

Sacramento artist S.C. Heet has transferred a portion of her property, via a grant deed, to Cameron Dulle. However, this deed did not set forth in writing the two primary warranties Cameron should have on the property: first, that S. C. has not already transferred the title to another person; and, second, that the estate is free of any encumbrances, other than what has been disclosed to the grantor. Which of the following is true of this situation?

A- Cameron must file a quiet the title lawsuit in order to alter the transfer to include these warranties.

B- Cameron must accept the situation as is, unless he can convince S.C. to alter the transfer willingly.

C- Because this transfer has occurred with a grant deed, the two necessary warranties, as explained, are implied in the deed. However, under the Statute of Limitations, contracts must be in writing to be enforceable; so Cameron’s coverage in this situation will not stand up in court.

D- Under a grant deed, the two warranties — that S. C. has not already transferred the title to another person, and that the estate is free of any encumbrances, other than which has been disclosed — are implied within the grant. These implied warranties do not need to be stated in the deed, but are still present.

2 out of 100

The regulations regarding both advertising and doing real estate business over the Internet have been set forth in:

A- The NAR Code of Ethics.

B- The Commission’s Regulations.

C- ARELLO regulations.

D- The Federal Fair Housing Administration.

3 OUT OF 100

Any false or misleading advertising, whether on the Internet or via any other medium, can result in which of the following type of penalties?

A- Civil.

B- Administrative.

C- Criminal.

D- Any of the above.

4 OUT OF 100

San Diego broker Cal Abrams has avoided the technological trend of the past 20 years. Finally, he’s jumped online and realized what the buzz is about: He can potentially reach MILLIONS of customers just by running one little advertisement! When he talks to his salespeople, they tell him it’s not as easy as that. In California, there are regulations to follow. He’s ashamed to admit it, but since he was never interested in the Internet or “that new Web thing,” he’s not paid much attention to these regulations, and in fact, he had forgotten all about them until his salespeople reminded him. What must Cal do if he wants to advertise on the Internet?

A- He must first send the advertisement to the California BRE for approval, and then use it once it’s approved.

B- Cal must file the Approval of Electronic Advertisement Form (AEAF), along with the appropriate filing fee, for the CalBRE’s approval. Once the approval is received, the advertising may begin. If the AEAF is not approved, he may submit a new advertisement within 30 days without paying an additional fee.

C- Cal must be sure to indicate his licensed status on his advertisements.

D- None of the Above

5 OUT OF 100

The account that holds all the money collected from license and exam fees, and is used for the operating expenses of the CalBRE, is known as:

A- The Real Estate Education Fund.

B- The Real Estate General Fund.

C- The Real Estate Recovery Fund.

D- The Real Estate Operations Fund.

6 OUT OF 100

Two years after Elicia Jolie moves into her first home, a cozy two-bedroom near Lake Tahoe, she decides to buy all new kitchen appliances. Her brother, Jake Jolie, is the owner of JJ’s Appliances and More, and he gets her some great deals on beautiful stainless-steel floor models. The appliances themselves are free-standing and movable, with the exception of the built-in microwave over her new stove. She has new cabinets built around the appliances to accent the new look. When it comes time for Elicia to move, which of the following will be considered her personal property, which she may move with her?

A- All the appliances, the cabinets, and the microwave.

B- Only the unattached appliances that are free-standing.

C- Only the unattached appliances that are freestanding, plus the microwave.

D- None of the appliances, the microwave, or the cabinets.

7 OUT OF 100

Under WHICH of the following circumstances could a homeowner take his microwave with him when he moves?

A- If it is unattached, because it would still be considered the current homeowner’s personal property.

B- If it is so dictated in the contract and all parties agree to this in writing.

C- Under any circumstance.

D- Either A or B.

8 OUT OF 100

Examinees and twin brothers George and Grover Gripenstein would argue over the color of the sky on a sunny day. Surprisingly, they’ve both chosen to pursue a career in real estate and have completed their respective pre-license educational requirements. They decide to study for the exam together, but this causes more disagreements. Their current argument is over the characteristics of land. Which of the following is correct?

A- George’s statement that land has five economic characteristics, which are demand, utility, situs, uniqueness, and transferability.

B- Grover’s insistence that land has three physical characteristics, which are utility, situs, and transferability.

C- George’s insistence that there are five economic characteristics of land, and they are demand, situs, scarcity, transferability, and utility.

D- Both A and B, because the five characteristics the brothers named are considered BOTH economic and/or physical characteristics. The terms “economic” and “physical,” in this situation, mean the same thing.

9 OUT OF 100

California residents Kate and Jennifer decide to make a “deal”: Kate will sell Jennifer her new Dell laptop for $600, a steal since she paid over $1,000 for it. They both feel they’ve gotten a great deal. Does this agreement need to be in writing, under California law?

A- Yes, because under California law, an agreement for the sale of personal property must be in writing if the amount or value of the property exceeds $200.00.

B- Yes, because under California law, an agreement for the sale of personal property must be in writing if the amount or value of the property exceeds $500.00.

C- No, because this is personal property, and written agreements are not required for personal property sales.

D- No, because the value of this computer was under $2,000.00. California law ONLY requires that an agreement for the sale of personal property with a price or value of more than $2,000.00 be in writing.

10 OUT OF 100

Under Section 761 of the California Civil Code, enacted in 1872, estates in real property are classified, with respect to duration, into which of the following categories:

A- 1. Estates of inheritance or perpetual estates; 2. Estates for life; or 3. Estates for years.

B- 1. Estates of inheritance or perpetual estates; 2. Estates for life; 3. Estates for years; or 4. Estates at will.

C- 1. Freehold estates; 2. Leasehold Estates; and 3. Less-than-freehold estates.

D- 1. Fee Simple Estate; 2. Fee Defeasible Estate; 3. Life Estate; and 4. Fee Tail Estate.

11 OUT OF 100

Which of the following is NOT a type of water rights?

A- Riparian rights, which relate to rivers.

B- Littoral rights, which relate to seashores and beaches.

C- Alluvial plain, which relate to delta areas along rivers.

D- Doctrine of Prior Appropriation, which relate to irrigation and “first in time equals first in rights” theory.

12 OUT OF 100

Captain Canguro’s father was a teetotaler to the nth degree; so Canguro was not surprised when his father said he would sell Canguro one of the three properties he owned, provided that Canguro followed the condition set forth in the contract, stating that “no alcohol can be served on the premises at any time.” Canguro agreed with this provision and the sale was made. Which of the following statements is most accurate regarding this situation?

A- This type of provision is not legal and therefore the sale is voidable by Captain Canguro.

B- Captain Canguro holds the estate in fee simple defeasible.

C- Captain Canguro has a less-than-freehold interest in the property.

D- Captain Canguro holds the estate Pur Autre Vie, or for the life of another, which means that while he has possessory and some ownership rights, the seller (his father, in this case) may still dictate some of the activities that occur on the property.

13 OUT OF 100

San Bernardino seller Craig Watkins has just signed a contract to sell his home of 13 years to buyer Ivedale Bosch, who has recently moved to California from Montana. The contract has met all the necessary requirements, and all inspections and other mandates have gone along as expected and as agreed to until one week before closing, when Craig decides to back out. However, he understands that he could face legal action by Ivy; so he offers to sell her another house he owns and has rented out for the past few years, in lieu of the San Bernardino one promised. The second home is worth $15,000 more than the originally contracted one, and has an extra bedroom. However, Ivy isn’t interested, because she wants to be close to her elderly mother, who lives in a San Bernardino retirement complex. Craig refuses to complete the sale on the original home. Which of the following statements is true of this situation?

A- Ivy may sue Craig for specific performance, because no two properties are exactly the same and he hasn’t fulfilled his end of the contractual agreement.

B- Craig has the right to refuse to sell to Ivy within up to 3 business days prior to the closing date for the sale. No penalties are to be paid from either party to the other.

C- Craig has the right to refuse to sell to Ivy within up to 3 business days prior to the closing date for the sale. Any charges incurred by Ivy in the contractual process must be refunded to her by Craig within 24 hours after the original time set for closing.

D- Craig cannot force Ivy to accept his offer of the other property. However, under California Civil Code, if the seller in this type of situation (Craig) offers the prospective buyer a home of equal or greater value, with an equal or greater number of bedrooms and square footage, the buyer may not bring legal action against that seller.

14 OUT OF 100

In California, property is generally owned in one of six distinct forms of ownership. Which of the following is NOT one of these six forms?

A- Severalty

B- Tenancy in Partnership

C- Community Property

D- Life Estate.

15 OUT OF 100

In which of the following capacities does the Commissioner serve in California?

A- As the chairperson of State Department of Justice

B- As the chief executive of the Bureau of Real Estate.

C- The Commissioner serves as both the chairperson of the State Department of Justice, and the chief executive of the Bureau of Real Estate.

D- The Commissioner serves in neither of these capacities. Instead, the Commissioner strictly serves in an advisory position over the real estate industry.

16 OUT OF 100

When Jim, Jill, and Jeri take ownership to a Bakersfield home, they hold their ownership concurrently. Jim has the greatest proportion, with 45%, while Jill holds 30% and Jeri the last 25%. They each have the right to individually possess, will, or sell their interest. This is known as:

A- Community property with the right of survivorship.

B- Tenancy in Severalty.

C- Tenancy in Common.

D- Joint Tenancy.

17 OUT OF 100

When two or more people have identical interests in the whole property, with the same rights of possession and the right of survivorship this form of ownership is considered:

A- Community Property.

B- Tenancy in Severalty.

C- Tenancy in Common.

D- Joint Tenancy.

18 OUT OF 100

The legal process of making an instrument or legal document an official part of the records of a county, once it has been acknowledged, there by giving constructive notice of the exsistence and content of these instruments to the public, is known as:

A- Acknowledgement

B- Recording

C- Actual Notice

D- Encumbering

19 out of 100

Johnson Bailey and Kailey Clark’s corporation, Bailey-Clark Financial, is branching out into the field of escrow handling. They know the corporation must be licensed by the State of California. There are a total of 5 officers, trustees, and other employees who will have access to the money or negotiable securities in the possession of the corporate license, and have furnished a bond of indemnification against loss. Has the corporation fulfilled all necessary licensing requirements to work in escrow handling?

A- No, they must also make sure that all monies deposited in escrow be placed in a trust account that is exempt from execution or attachment.

B- No, they must also be able to show that the company is financially solvent.

C- No, they must also meet the requirements in Answers A and B. In addition, the corporation must furnish a surety bond in the amount of $25,000.00, or more, based upon yearly average trust fund obligations.

D- Yes, the corporation has filled all necessary obligations to be licensed.

20 OUT OF 100

If ABC Title Insurance Company wants to get in the business of handling escrows what licenses would it have to obtain?

A- A title company does not need to obtain a special license to handle escrows.

B- A title company is not permitted to handle escrows in any capacity.

C- If the title company has been in business for a minimum of 5 years, it may handle escrows without a special license.

D- If the title company has been in business for a minimum of 10 years, with annual audits for review by the State of California, it does not need to be specially licensed to handle escrows in California.

21 out of 100

By California statute, a joint tenancy may be created in which of the following ways?

A- By transfer from a sole owner to himself or herself and others as joint tenants.

B- By transfer from tenants in common to themselves or to themselves, or any of them, and others as joint tenants.

C- By transfer from joint tenants to themselves, or any of them, and others as joint tenants.

D- Any of the above.

22 OUT OF 100

What is the real estate regulatory body in California?

A- The California Association of REALTORS

B- California Bureau of Real Estate

C- ARELLO

D- The National Association of REALTORs or NAR

23 OUT OF 100

Long Beach salesperson Eric Janey is providing sellers Julie and Zach Roberts with the necessary disclosures they must be given upon the sale of real property. Which of the following is NOT a disclosure that is given upon the sale of real property?

A- Mold Disclosure.

B- Illegal Controlled Substances.

C- Natural Hazards Disclosure.

D- The Radon Detection Test Disclosure.

24 OUT OF 100

Co-authors and sisters, Mary and Perry Corrigan, have just written their fourth bestseller, even though Mary lives on the East Coast, while Perry resides in Calistoga. When the home next door to Perry is sold, Perry buys it and then gift deeds it to her sister so that they can live side-by-side for the several months of the year they spend writing together. In this situation, what consideration is necessary for this deed to be considered valid and legal?

A- Love and affection is the only consideration necessary.

B- Love and affection is necessary, but the consideration must also include something (another real property, an automobile, or monetary payment) that is worth at least 10% of the value of the property.

C- An agreement that Perry actually “owns” the property, and as such, may take it back without giving notice or a reason.

D- Both A and C.

25 OUT OF 100

What percentage of the California Real Estate General Fund is set aside to go into the Real Estate Education and Research Fund?

A- 5%

B- 8%

C- 10%

D- 12%

26 OUT OF 100

Which of the following are not really deeds?

A- Gift Deeds.

B- Grant Deeds.

C- Reconveyance Deeds.

D- Tax Deeds

27 OUT OF 100

Which of the following statements about the county fiscal year in California is factual?

A- The county fiscal year begins on January 1 and ends on December 31.

B- The county fiscal year begins on June 1, and ends on May 31.

C- The county fiscal year begins on July 1, and ends on June 30.

D- The country fiscal year begins on October 1 and ends on September 30.

28 OUT OF 100

The newest employee at Edwards Escrow Co., Adam Riley, is handling the escrow paperwork for the sellers and the buyers on an Anaheim property sale. When Adam goes to figure out the prorations for the month of February, for which some of the expenses have already been paid by the sellers, Adam cannot remember what number to use to figure out the proration. Which of the following should he use?

A- 28 days (or 29, if it’s a leap year), since that is the actual number of days in February, the month for which the prorations are being calculated.

B- 30 days, which escrow companies use as their base month in figuring out prorations.

C- 31 days, which escrow companies use as their base month in figuring out prorations.

D- 52, because there are 52 weeks in every year, and all escrow companies in California are required to use this base figure in proration calculations.

29 OUT OF 100

Escrow cannot be terminated in which of the following ways?

A- By the completion of escrow.

B- Because of the death of one of the principals.

C- By mutual agreement.

D- By a court or interpleader action.

30 OUT OF 100

When grantor, Emilie Richards, delivers the deed to the Cloverdale property to the grantee, Jane Curless, she drives it over to Curless’s current residence, where they read through the grant together. There is a condition included in the grant, but it is straightforward and agreeable to both. This type of delivery is known as:

A- Manual delivery.

B- Conditional delivery.

C- Delivery through recording.

D- Delivery through mutual acceptance.

31 out of 100

Kathy Bates has just moved into a condominium complex of 60 units. The complex has a swimming pool, and a management company takes care of the upkeep of the outside of the property. The monthly cost for pool maintenance, grass cutting, tree trimming, private street maintenance, and the newly-updated clubhouse is currently $400.00 a month. Each year, the cost of such services increases, as do the costs for necessary repairs as the buildings get older. This year, new roofs are in order for all of the buildings. The condominium association, which is made up of the owners of the property, decides that, in order to cover the increase in costs, and to replace the roofs on the property, they must pass a(n):

A- Ad valorem tax.

B- Special assessment.

C- General real estate tax.

D- Any of the above.

32 OUT OF 100

Pauline Chasse has just signed a lease agreement with landlord, Wayne Godbrey to rent a house he owns in Delano. The lease states definite beginning (January 1, 2016) and ending (October 30, 2016) dates, and sets forth the rent amount and due dates and all additional property and personal information required in such a lease. Wayne hands a copy to Pauline, but she notices that he has not signed it. When she comments about this to him, he tells her that signatures are not necessary since the lease is for less than a year. Which of the following is true of this situation?

A- Wayne is correct. Under the Statute of Frauds in California, leases of less than one year are not even required to be in writing, and therefore, signatures are not required.

B- Leases of less than one year are not required to be in writing. However, if a lease IS in writing, then it must be signed by the lessor (in this case, Wayne).

C- Leases of less than one year are not required to be in writing; but if there is a written lease, then it must be signed by both the lessee and lessor.

D- Because the property being leased is located in Northern California, a lease agreement is required to be both written and signed by the lessor if the lease period is for 6 months or more. Therefore, Wayne was incorrect and he must sign the lease. If he does NOT sign the lease, then it will remain valid, but will not be court-enforced, should Pauline default on any of the related provisions.

33 OUT OF 100

The type of estate that has a definite beginning and ending date is known as what?

A- Estate at will

B- Estate from year to year

C- Life estate

D- Estate for years

34 OUT OF 100

The right of the state to enact and enforce laws for the order, safety, health, morals, and general welfare of the public is known as:

A- Eminent domain.

B- Conversion.

C- Subversion.

D- Police power.

35 OUT OF 100

Which of the following is not a way of creating agency in California?

A- By agreement.

B- By ratification.

C- By mutual action.

D- By estoppel.

36 OUT OF 100

When potential customers, Grace and Leo Adams sit down with real estate broker, Sam Slama, they tell him they’ve just begun interviewing brokers before they sign with one to help them buy their first home. He assures them he understands, and that he will answer their questions to the best of his abilities. When they ask what his commission rate is, he responds, “It’s seven percent, just like all the other guys in town, as you’ll find. We all charge the same; so it makes for a fair deal for our wonderful customers.” Leo thinks the guy sounds great, but Grace is a bit suspicious of his uber-charm. Which of the following is true of this situation?

A- Grace is right: Sam is too good to be true. Commissions are negotiable, not set by law.

B- Grace has a good head on her shoulders. Sam is more than overly slick; he’s a law-breaker. It is a violation of the Sherman Anti-trust Law to price-fix in this way.

C- While he may sound too good to be true, Slick Sam hasn’t broken any laws, or lied. He’s just trying to gain their trust in the hopes of earning their business, and there’s no crime in that.

D- Both A and B.

37 OUT OF 100

Jeff Kase and his wife, Caren, have spent two months looking at apartments in Los Angeles. But every apartment they’ve seen has been too expensive, or too tiny, or too rodent-infested. When Jeff is driving home from work one day, he sees a “For Rent” sign in front of an apartment complex in a nice neighborhood. He uses his cell to call the number on the sign, and the landlord happens to live upstairs, and can show Jeff the apartment immediately. The good news is, Jeff loves it and the landlord says he can hold it with a deposit until Jeff’s wife can see it. The bad news is that Caren is out of town until the next evening, so that’s the earliest she can see it. The landlord tells Jeff that, unfortunately, the lease agreements for all his properties specify that lease deposits are “nonrefundable.” Which of the following statements is true of this situation?

A- It is the choice of the property owner/landlord regarding whether a lease deposit is refundable or not; so this is within the landlord’s authority.

B- It is illegal for rental security deposits in California to be labeled as “nonrefundable,” under any circumstances.

C- The regulations vary regarding furnished and unfurnished apartments in California: If the apartment is furnished, then the landlord has the right to keep the deposit and mark it as nonrefundable. If the apartment is unfurnished, the deposit may be refunded at the landlord’s discretion.

D- In California, prospective tenants have a 48-hour period in which they may back out of a lease agreement and receive their FULL deposit returned. They must receive this deposit in the same form in which it was given (check, cash, or as a credit to their credit card) at the time of the cancellation.

38 OUT OF 100

In 2013, Jack and Shirley Wright moved from Riverside, in Southern California, up to Santa Clara, in Northern California, when Jack’s company opened a new branch office there. They decided to rent for a while so they could get to know the area before buying a home. Three weeks ago, they finally found and put a contract on a lovely 3-bedroom ranch, and the sellers accepted the first offer. They took that as a good sign, but now it’s only 5 days until the close of escrow and they still haven’t signed the escrow papers yet. In fact, they aren’t due to sign the escrow papers until the day before the actual close of escrow. The Wrights are under the impression that something is wrong, because when they sold their last home, the escrow instructions had to be signed by both parties to the transaction immediately after they all signed the purchase agreement–about 60 days ahead of the actual close of escrow date. Which of the following is true of this situation?

A- Their current agent has violated his fiduciary duties to them because he is mishandling their finances, and putting off handling the escrow until the last minute, thereby risking their new home and monies.

B- Their agent in Riverside was simply being cautious by handling the escrow so early in the game, because in California, escrow signing generally takes place in the last 2 weeks prior to the actual close of escrow.

C- The escrow practices in Southern California differ from those in Northern California. In Southern California, the escrow instructions are signed by the buyer and seller shortly after they’ve signed the purchase agreement, just after the start of escrow, which is about 60 days prior to the actual close of escrow. In Northern California, the escrow instructions are usually not signed until one or two days just before the close of escrow.

D- As of December 2014, the escrow practices have been changed from what they were in 2013 (when the Wrights sold their previous home), to stipulate that the escrow signing date and location are to be determined by both the buyer and the seller, as well as to the broker who is in charge of handling the escrow proceedings. Therefore, there is no specific regulation that sets forth the date or time for such proceedings. However, their agent was negligent in not explaining this to them, as well as not asking for their input into the signing date.

39 OUT OF 100

Which of the following statements is NOT accurate about the California Disclosure Regarding Real Estate Agency Relationship Form?
A- It must be signed before the seller signs any listing agreement with the agent, or, in the case of the buyer, before that buyer signs the purchase contract.

B- This form is required for leases of residential property for more than one year and for the sale of a mobile home, IF the mobile home is offered for sale or sold through a real estate agent.

C- California law does NOT require that all real estate agents provide a written disclosure to the buyer OR the seller.

D- California law requires that all real estate agents provide a written disclosure to the buyer AND the seller, regardless of which party to the transaction the agent represents.

40 OUT OF 100

San Luis Obispo broker Gail Hayden is finally doing some long-overdue office cleaning. She comes across records dated all the way back to 8 years ago. Which of the following applies to this situation?

A- She can destroy them, since the law in California states that all brokers’ records must only be kept for a period of 3 years.

B- She can destroy them, since the law in California states that all brokers’ records must only be kept for a period of 5 years.

C- She must still keep them, because the law in California requires that brokers’ records be kept for a minimum of 8 years.

D- She must still keep them for another couple of years, because the California law requires that all brokers’ records be maintained for a minimum of 10 years.

41 OUT OF 100

In California, which of the following is considered the same as cash when provided in business transactions?

A- A check.

B- A promissory note.

C- A post-dated check.

D- All of the above.

42 OUT OF 100

Each of the following actions, except for one, is considered subversion. Which of these answers is not a form of subversion?

A- Reproducing exam material without authorization.

B- Bringing a calculator into the examination room.

C- Using paid examinees for the purpose of reconstructing an examination.

D- Buying exam material.

43 OUT OF 100

Both the federal and California governments have the right to take private property for a necessary use, IF they pay the owner “just compensation” for doing so. In addition to the payment of just compensation, if the government takes a property in this way, which of the following rules apply?

A- The property must be for the public good or use.

B- The owner must have due process in court.

C- The property must be taken to be used for the public good or use, and the owner must have due process in court.

D- No other regulations apply; this is a government-given right of the government to take a property, and the owner only need to be paid the appropriate compensation to fulfill the requirements.

44 OUT OF 100

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

A- The more demand for a particular property, the more valuable the property.

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

C- When loans are available and rates are low, real estate is easily transferable from seller to buyer.

D- Location, or situs, is the most important economic characteristic of all.

45 OUT OF 100

Which of these private properties might be exempt from the governmental use of Eminent Domain?

A- A home with a chronological age of 30 years or greater.

B- A property worth in excess of $1 million.

C- A home with a chronological age of 50 years or greater.

D- No private property is exempt from this government power.

46 OUT OF 100

Which of the following statements is most accurate?

A- In California, escrow is only used in real estate transactions.

B- Escrow is known as a small and short-lived trust arrangement.

C- The Escrow Act is found in the California Business and Professions Code.

D- All of the above.

47 OUT OF 100

Which of the following statements is NOT applicable to the Transfer Disclosure Statement, set forth under Civil Code Section 1102.3?

A- It identifies items of value on the property and whether these items are operational.

B- It applies to residential dwelling of 1-4 dwellings.

C- It must be given to the prospective buyer 7 days after the deposit receipt is signed.

D- It ask seller to identify any structural or material defects.

48 OUT OF 100

After receiving the seller’s transfer disclosure statement, buyer Clark Rivers is not satisfied that ALL has been revealed. He’s heard rumors that a previous tenant died of AIDS inside the very home he would like to buy. Clark demands to know if this is true, since it was not mentioned on the disclosure statement. Which of the following is the appropriate legal response the broker must give to Clark’s query?

A- “Yes, this is true. A previous tenant, who lived and died here two years ago, did have AIDS.”

B- “I’m sorry, but the Transfer Disclosure Statement covers all material facts that must be disclosed, and a person having AIDS is NOT a material fact, whether or not it would be applicable in this situation.”

C- “I’m sorry, but I am not permitted to answer this question, as it could be a potential civil rights violation, under the Federal and State fair housing laws.”

D- Both B and C.

49 OUT OF 100

Which of the following statements is true regarding security instruments used in California?

A- Mortgages are rare in California, because they tend to favor the borrower over the lender.

B- Mortgages are the most common financing instrument used in California, because they tend to favor the lender over the borrower.

C- Most lenders in California insist on mortgages as security in the borrower’s property.

D- Both B and C.

50 OUT OF 100

When Chloe Armstrong pays off the 30-year conventional loan on her Oceanside home in less than 20 years, she is thrilled. However, she is not nearly as happy when she reads the fine print on the contract, which permits her lender to charge her EXTRA interest just for paying off the loan early. This is known as:

A- Subrogation.

B- A prepayment penalty.

C- A subordination clause.

D- An acceleration clause.

51 OUT OF 100

On Kyle Thomason’s $400,000.00 loan, the lender charges a 2-point service charge. In this situation, how much will Kyle have to pay for this service charge at closing, and how would such a charge appear on the statement?

A- $800.00, as a debit to the buyer.

B- $8,000.00 as a credit to the buyer.

C- $8,000.00 as a debit to the buyer.

D- $80,000.00 debit to the buyer.

52 OUT OF 100

Ollie and Molly Overton have just taken out a 30-year straight term loan on their new “starter home” in Bellflower. This means that:

A- They will make payments of interest only, with the principal due on the loan due date in 30 years.

B- They will make payments of principal only, with the accumulated interest due on the loan due date in 30 years.

C- They will make payments of interest and principal on an equal basis until the final payment, which will be larger than the rest, is made at the end of the loan term.

D- They will make regular payments of principal and interest, and the entire loan will be paid off by the end of the term.

53 OUT OF 100

When new college graduate Sami Hensen goes to visit her Great-Aunt Gertrude, she is surprised when the older relative tells her she is soon leaving on a cruise with friends. Sami cannot imagine how her great-aunt can afford such luxury, while living in a nice house in a peaceful neighborhood, and wonders if her aunt’s mental capacities are failing her. At her gentle inquiry about the costs, her Great-Aunt Gertrude laughs away her concern, telling her that she has been receiving monthly checks out of the equity she has in the home. Now Sami really thinks her old aunt is off her rocker! If Great-Aunt Gertrude is correct, which of the following statements is true of this situation?

A- Gertrude has a Package Mortgage, which is commonly used in situations of people who are “house rich, cash poor.” This type of loan is common for senior citizens.

B- Gertrude has a Wraparound Mortgage, which provides for extra cash-in-hand.

C- Gertrude has a fully-amortized loan, so she receives a monthly dividend.

D- Gertrude has a Reverse Annuity Mortgage, which is a loan that must be repaid upon the owner’s death, if she moves elsewhere, or upon the sale of the property.

54 out of 100

Newlyweds Andrew and Kimmie Briggs enjoy sparring over the details of life. They squabble good-naturedly over a game of Scrabble, the pronunciation of French words, and now, over the type of home loan they’re getting on their first home. They know it’s FHA, but neither is sure WHAT the FHA has to do with the loan. An FHA loan means:

A- The money is loaned by the Federal Housing Administration.

B- The money is insured by the Federal Housing Administration.

C- The money is guaranteed by the Federal Housing Administration.

D- The Federal Housing Administration builds homes and loans money.

55 OUT OF 100

Barney Dinesh has served two years of active duty for the United States Army in the Middle East. He is still on active duty, though he is now stationed stateside in California. He and his new wife, Alma, have found a home they both love, and their agent tells them about the Cal-Vet loan, saying that he believes Barney would qualify for this. What are the main requirements for such a loan, and does Barney (from the information given here) seem to qualify for the Cal-Vet program?

A- The Cal-Vet loan requires that the veteran have served a minimum of 120 days’ active duty; provide an affidavit if on active duty (or an honorable discharge if not active); and a $500.00 deposit. Provided Barney can procure this affidavit, and the deposit money, it appears that he would qualify.

B- The Cal-Vet loan program requires that the veteran have served a minimum of 120 days’ active duty; provide Statement of Service if on active duty (or an honorable discharge if he is no longer active); and be willing to buy a California home or farm. Based on the information provided herein, Barney should qualify for the program.

C- The Cal-Vet loan program requires that the veteran have served a minimum of 90 days’ active duty; provide Statement of Service if on active duty (or an honorable discharge if he is no longer active); and be willing to buy a California home or farm. Barney would appear to qualify, based on the given information.

D- The Cal-Vet loan requires four essentials: (1) The veteran must have served a minimum of 30 days’ active duty; (2) The veteran must provide a Statement of Service if on active duty (or an honorable discharge if he is no longer active); (3) The veteran must be willing to buy a California home or farm; and (4) Most importantly, the veteran must meet the requirements for a Veterans Administration (VA) loan before he can be approved for a Cal-Vet loan before he can be approved for a Cal-Vet loan (This doesn’t mean he is going to take out a VA loan, but merely that he meets the federal VA standards). There is not enough information given in the question to determine whether or not he’d meet the federal VA qualifications; so the second part of this question cannot be answered.

56 out of 100

A full summary of all consecutive grants, conveyances, wills, records, and judicial proceedings affecting title to a specific parcel of real estate, together with a statement of all recorded liens and encumbrances affecting the property and their present status, but NOT including encroachments and forgeries, is known as a(n):

A- Chain of title.

B- Disintermediation.

C- Abstract and opinion.

D- Quitclaim deed.

57 OUT OF 100

California real estate lenders are divided into 3 major categories. Which of the following is NOT one of these categories?

A- Institutional lenders.

B- Non-institutional lenders.

C- Depository institutions.

D- Government-backed programs.

58 OUT OF 100

A contract in which the vendor (seller) agrees to convey the title to the real property after the vendee (buyer) has met certain named conditions, and which does not require conveyance within one year, is ordinarily used in the case of a buyer who can only make a small down payment and monthly installments. This type of contract, because it holds disadvantages for both the seller and the buyer, is no longer a popular financing instrument in California. This is known as a(n):

A- Mortgage.

B- Installment land contract, also known as an installment sales contract.

C- Open-end mortgage.

D- Secondary mortgage market loan, such as Fannie Mae, Ginnie Mae, or Freddie Mac.

59 OUT OF 100

Lancaster salesperson Jamie Dafe has begun to branch out into mortgage brokering. She continues to show homes to clients, but hasn’t been actively seeking out new listings. Instead, she acts as a loan broker by buying, selling, or exchanging loans. Which of the following statements applies to Jamie’s current situation?

A- Jamie may not act as a loan broker unless she is properly licensed as one, under the Mortgage Loan Broker Law, set forth under the California Business and Professions Code, Article 7.

B- Jamie may act as a loan broker without receiving any special license, other than her active California real estate broker’s license, as long as she follows the stipulations set forth under the Mortgage Loan Broker Law, under Article 7 of the California Business and Professions Code.

C- In California, a licensed real estate broker MAY assist the buyer in filling out the loan application for a financial institution, but may NOT arrange for financing for the buyer, or broker loans herself. In Jamie’s situation, she is acting out of the realm of her real estate broker’s license, and can face monetary damages and/or prison time for violating the California Financial Code AND the California Business and Professions Code, Article 5.

D- In California, anyone who wishes to sell, buy, or exchange loans, must meet two requirements: (1) The person must be licensed as a real estate salesperson or broker in California; and (2) The person must first obtain a Commissioner’s Permit to Broker Loans. Jamie needs to fulfill this second requirement before she may legally broker loans in California, under Article 5 of the California Business and Professions Code, which is known as the Mortgage Loan Broker Law.

60 OUT OF 100

Credit union president Bill Bradley has just refused a loan for 25-year-old LaDawna Kingston, an African-American woman and, in his opinion, the very definition of a “religious zealot.” Bill refused the loan based on her credit rating and lack of job stability. When LaDawna learns of his refusal, she tells him she’s calling an attorney, because she’s been discriminated against. Which of the following statements is true in this situation?

A- Bill could be in big trouble, since it is illegal for a real estate licensee to discriminate against a person seeking a loan based on racial, religious, or economic reasons.

B- Bill could be in big trouble, since it is illegal for a real estate licensee to discriminate against a person who is of any “protected class,” even if that person does not meet the financial loan qualifications that every applicant must face.

C- Bill could face serious penalties if LaDawna files suit against him. It is illegal for a real estate licensee to decline financing to a person of another race, even though that person does not meet the financial loan qualifications set forth for every applicant.

D- As long as Bill refused the financing based solely on economic reasons (lack of job stability, poor credit rating, income, or net worth), he has acted lawfully and will not face any disciplinary action.

61 OUT OF 100

Real estate syndication is accomplished through three phases. Which of the following answers correctly names these steps in their proper chronological order?

A- (1) Origination; (2) Operation; (3) Liquidation.

B- (1) Outlay; (2) Operation; (3) Completion.

C- (1) Outline; (2) Origination; (3) Completion.

D- (1) Origination; (2) Investment; (3) Liquidation.

62 OUT OF 100

The type of company that sells securities specializing in real estate ventures, and requires a minimum of 100 investors, is known as:

A- A real estate syndicate.

B- A real estate investment syndicate.

C- A real estate investment trust.

D- An equity trust.

63 OUT OF 100

Stockton broker Dustin Giles has been asked by super-cautious sellers Frank and Carole Bellacera to find out the comparable sales for a seller’s property, since that seller isn’t sure at which price to list his property. When he gives the information to them, they insist this is NOT what they want. Their lender needs the actual value upon which that lender will determine the loan amount. Someone is confused here, but which someone?

A- The Bellaceras are confused, since what they originally described was an appraisal, which Dustin provided. What their LENDER actually needed to establish the loan amount was a competitive market analysis, or CMA.

B- The Bellaceras mislead Dustin because what they originally described was a CMA, or Competitive Market Analysis, which real estate licensees perform often in order to help sellers arrive at a listing price for their home. However, what the lender needs is an appraisal, which would establish the market value. An appraisal must only be performed by an independent licensed fee appraiser.

C- Dustin should have known from the start to perform an appraisal, which is used to estimate value — both for the listing price AND for the loan value, since these two amounts are going to be very close, dollar-wise.

D- The Bellaceras didn’t really know what they were talking about, but Dustin SHOULD HAVE recognized it, and didn’t. What they requested originally was a CMA, or competitive market analysis, which Dustin is NOT legally authorized to perform unless he is licensed, under the California Business and Professions Code as a Competitive Market Analyst.

64 OUT OF 100

One appraisal principle of value is based on the concept that the more a property or its components are in harmony with the surrounding properties or components, the greater the contributory value. In other words, the more the properties are alike, the more they retain value. This is known as:

A- Substitution.

B- Regression and progression.

C- Conformity.

D- Competition.

65 OUT OF 100

Which of the following is a type of functional obsolescence?

A- Outmoded plumbing fixtures or inadequate closet space.

B- Installing siding on a building which also needs major interior repairs.

C- A residence when an industrial plant is built next to it.

D- None of the above.

66 OUT OF 100

For income-generating properties, a value based on the present value of the rights to future income is called the:

A- Economic Life.

B- Cost Approach.

C- Sales Comparison Approach.

D- Income Capitalization Approach

67 OUT OF 100

One way to figure out taxes is through the use of a mill. Which of the following is the dollar value of a mill?

A- 1.0

B- 0.1

C- 0.001

D- 0.0001

                                     

68 OUT OF 100

California property taxes are now levied using:

A- A pure ad valorem system.

B- A system that is based on the date of acquisition.

C- A special assessment system.

D- None of the above.

69 OUT OF 100

Appraiser Louis finds a property located in the same neighborhood as the appraised property, and wants to use it as a comparable sale. The comparable has more bedrooms than the subject, one less bath, and one less garage. The appraiser will have to subtract the extra bedrooms from the comparable, add a bathroom to the comparable, and add a garage to make the properties equal. What type of approach to value has Louis utilized?

A- Market data approach.

B- Cost approach.

C- Summation approach.

D- Reproduction cost.

70 OUT OF 100

A law used to finance public services, such as waste treatment plants, parks, and schools, in newly developed areas, can result in extra-high taxes, in addition to the normal property taxes, and MUST be made known to any buyer before a purchase takes place. This law is:

A- The Street Improvement Act of 1911.

B- The Mello-Roos Community Facilities Act of 1982.

C- Proposition 60.

D- Proposition 90.

71 OUT OF 100

There are four principal prerequisites for transforming a mobile home into real property: (1) Obtaining a building permit; (2) Attaching the mobile home to an approved foundation; (3) Recording a document reflecting that the mobile home has been affixed to an approved foundation system; and:

A- (4) Obtaining a certificate of occupancy.

B- (4) Canceling the registration.

C- (4) Notification by the mobile home owner of both the HCD AND the local assessor about the mobile home’s transformation into real property.

D- (4) Obtaining the written approval of the California Bureau of Real Estate Commissioner.

72 OUT OF 100

Which of the following is NOT one of California’s sets of base lines and meridians?

A- The Humboldt Base Line and Meridian.

B- The Mt. Diablo Base Line and Meridian.

C- The San Bernardino Base Line and Meridian.

D- The Los Angeles Base Line and Meridian.

73 OUT OF 100

The law that regulates the division of 2 or more lots for the purpose of selling, leasing, or financing said lots, either at that time or in the future, is the:

A- Subdivision Map Act.

B- Subdivided Lands Act.

C- Interstate Land Sales Disclosure Act

D- All of the above.

74 OUT OF 100

The law used by cities and counties for street improvements, in which a typical example would be that the local government hires a contractor to improve streets, and then each owner along that street is liable for paying a pro rata share of that cost, is known as:

A- The Street Improvement Act of 1911.

B- The Mello-Roos Community Facilities Act of 1982.

C- Documentary Transfer Tax.

D- Proposition 60.

75 OUT OF 100

Under which of the following is a subdivision defined as “a division of land into 5 or more lots for the purpose of selling, leasing, or financing, whether now or in the future”?

A- The Subdivision Map Act.

B- The Subdivided Lands Act.

C- The Interstate Land Sales Disclosure Act.

D- All of the above.

76 OUT OF 100

Which of the following is NOT considered one of the basic types of Common Interest Developments?

A- Condominiums.

B- Cooperatives.

C- Mobile home parks.

D- Planned developments.

77 OUT OF 100

Which level of government is currently “in charge” of planning controls for California property?

A- Federal.

B- State.

C- County.

D- Local.

78 OUT OF 100

The main purpose of this law is to provide procedures and information to ensure that governmental agencies will consider and respond to the environmental effects of their proposed decisions. This is known as the:

A- California Environmental Quality Act of 1970.

B- California Conservation Act.

C- National Environmental Policy Act.

D- Clean Air Act.

79 OUT OF 100

Throughout California, there are agencies within the city/county government whose employees include professionally trained planners. These agencies are known as:

A- Planning commissions.

B- Planning departments.

C- Planning boards of supervisors.

D- Building Officials Conference of America commissions.

80 OUT OF 100

La Mesa real estate broker Michael Hagans plans to begin listing or selling mobile homes. He must comply with all but one of the following statements. Which of these is NOT a requirement for Michael to list or sell mobile homes?

A- He must only sell new mobile homes.

B- He must only sell used mobile homes if they’ve been licensed by the California Department of Housing and Community Development.

C- The mobile home must be capable of being transported over a road, with a hitch attached to the unit (or stored underneath it) and the axles attached to the frame.

D- It is Michael’s responsibility to ensure the proper completion and delivery of the title to the buyer of the mobile home.

81 OUT OF 100

Regarding a broker’s commission, the California Business and Professions Code requires that in the sale of residential property (of not more than four units) the listing contain the following provision before the compensation clause: “Notice: The amount or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between the seller and broker.” This clause must be printed:

A- In not less than 8-point boldface type.

B- In not less than 10-point boldface type.

C- In not less than 11-point boldface type.

D- In not less than 12-point boldface type.

82 OUT OF 100

The MAIN purpose of the California Bureau of Real Estate is to:

A- Explain the laws to REALTORS.

B- Protect the public.

C- Protect the real estate licensees.

D- Both B and C.

83 OUT OF 100

Modesto broker Killian Johnson has just received a money deposit and the related instructions from the buyer, Luis Alverez. Which of the following does NOT describe how Killian should handle this deposit?

A- Give the money to the principal to the transaction.

B- Deposit into Killian’s account, then figure out his commission, deduct that number to arrive at the final amount (due to the principal) and then write a check to the principal for the monies due to him, within 3 business days.

C- Put it into a neutral escrow depository.

D- Put it into the broker’s trust fund account at a bank or other financial institution.

84 OUT OF 100

A house sold for $265,000.00, and the total commission received by the broker was $22,525.00. What was the rate of commission?

A- 6.7%

B- 7.5%

C- 8%

D- 8.5%

85 OUT OF 100

In California, any apartment building with this many units must have an onsite manager, who is also known as a residential manager. What is the number of units to which this statement refers?

A- Ten or more.

B- Twelve or more.

C- Sixteen or more.

D- Twenty or more.

86 OUT OF 100

Palo Alto buyer Mitch deposited $2,250.00 with the listing broker as earnest money. How is this earnest money going to be recorded on Mitch’s closing statement?

A- Credit $2,250.00 to both buyer and seller.

B- Credit $2,250.00 to the buyer; debit the seller $2,250.00.

C- Credit the buyer only $2,250.00.

D- Debit the seller only $2,250.00.

87 OUT OF 100

A land project is a speculative subdivision development of 50 or more vacant lots that are located:

A- In a rural area that has fewer than 1,000 registered voters within 2 miles.

B- In a rural area that has fewer than 1,500 registered voters within 2 miles.

C- In a rural area that has fewer than 2,000 registered voters within 2 miles.

D- In a rural area that has fewer than 2,000 registered voters within 3 miles.

88 OUT OF 100

If a mobile home is real property, then the California Business and Professions Code Section 10131 (a) is a real estate broker’s authorization to negotiate a sale of the real property/mobile home, transferring the mobile home by use of:

A- A quitclaim deed.

B- A grant deed.

C- Laches.

D- Any deed, other than a trust deed or deed of trust.

89 OUT OF 100

Napa resident Maria Gonzales, a newly-licensed real estate broker, has just negotiated her first trust deed loan for her client, Isaac Mahrsan. The loan’s term is 5 years, and it is Isaac’s first loan. Under Article 7 of the Mortgage Broker Law in California, Maria knows that certain regulations have been set forth regarding her commission in such a transaction. What is the maximum commission for loans subject to Article 7, for first loans?

A- Maria’s maximum commission on this loan is 5 percent of the principal, which applies to loans of 5 years or less.

B- Maria’s maximum commission on this loan is 5 percent of the principal, which applies to loans of 10 years or less.

C- Maria’s maximum commission on this loan is 5 percent of the principal of a loan, which applies to loans of 3 years or more.

D- Maria’s maximum commission on this loan is 10 percent of the principal of a loan, which applies to loans of 3 years or more.

90 OUT OF 100

Under Article 7 on “hard money loans” (cash) of $30,000.00 and over for first trust deed loans, and $20,000.00 and over for junior deeds of trust, except where the new usury laws apply, the loan broker’s commission maximum is:

A- 10%.

B- 12%

C- 20%

D- As much commission as her borrower will agree to pay her.

91 OUT OF 100

The legal phrase that describes the right to recover money or other personal property through a judicial proceeding, including the right to recover something under a contract, such as money owed on a note, as well as the right to recover damages for a tort or private wrong, is known as:

A- Choses in action

B- Chattels

C- Chattels real

D- Judicial action.

92 OUT OF 100

Which of the following statements is NOT accurate regarding Cal-Vet loans?

A- The required down payment is 1%-2% of the sales price or appraisal value, whichever is higher.

B- Monthly payments on a Cal-Vet loan include all of the following items (but nothing additional): principal and interest; 1/12 of the annual property taxes; hazard insurance; disability; and life insurance premiums.

C- CalVet requires a structural pest control report and a roof inspection on properties it finances.

D- The loan is made directly from the state to the veteran.

93 OUT OF 100

The Federal Reserve needs to tighten the economy. Which of the following actions would NOT act to achieve this purpose?

A- Increasing discount rates.

B- Raising the reserve requirement.

C- Increasing discount rates OR Buying securities.

D- Selling securities.

94 OUT OF 100

In 1980, an important piece of environmental legislation was passed. This legislation established a fund called the Superfund, to clean up uncontrolled hazardous waste sites and to respond to spills, and it also created a process for identifying potential responsible parties (PRPs) and ordering them to take responsibility for the cleanup action. What was the name of this law?

A- The Environmental Responsibility Act, or ERA.

B- The Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA.

C- The California Environmental Protection Agency Act, or CEPAA.

D- The Uniform Commercial Code Act, or UCCA.

95 OUT OF 100

Which of the following statements is accurate regarding escrow services in California?

A- In Northern California, the escrow services are usually performed by independent escrow companies or financial institutions.

B- In Southern California, the escrow services are usually performed by title insurance companies that have extensive escrow departments and many branch offices.

C- In Southern California, the escrow service fees are usually split 50-50 between the buyer and the seller.

D- In Northern California, the escrow service fees are usually paid by the seller.

96 OUT OF 100

In California, there is a requirement to report annual and quarterly loan activities to the California BRE, IF, within the past 12 months, a broker has negotiated any combination of 10 or more loans to a subdivision OR a total of more than $1,000,000.00 in loans. This mandate is known as:

A- Threshold Reporting.

B- “Big Lending” Reporting.

C- The Mortgage Loan Broker Law.

D- Regulation Z.

97 OUT OF 100

The main purpose of the Truth in Lending Law is:

A- Disclosure, because it requires lenders to disclose to buyers the true cost of obtaining credit.

B- Disclosure, because it requires borrowers to disclose to lenders any and all financial and material facts that could influence their ability to qualify for a loan.

C- To prevent any Federal or State Fair Lending Violation.

D- To ensure that the buyer and seller in a residential real estate transaction involving a new first mortgage loan have knowledge of all settlement costs.

98 OUT OF 100

When Christopher cuts down a tree in his backyard and sells it as firewood, the firewood then becomes personal property. This process is known as:

A- Annexation.

B- Severance.

C- Choses in action.

D- Emblementation.

99 OUT OF 100

In which of the following situations would Pasadena real estate salesperson Connie Lopez, who makes collections on real estate loans, be required to be licensed as a California real estate broker?

A- If Connie makes more than 8 collections per year, or collects more than $30,000.00.

B- If Connie makes more than 12 collections per year, or collects more than $30,000.00.

C- If Connie makes more than 10 collections per year, or collects more than $40,000.00.

D- If Connie makes more than 12 collections per year, or collects more than $40,000.00.

100 OUT OF 100

Alison Skateland, a real estate broker in Yuba City, California, has recently become interested in the sale of business opportunities — particularly restaurants and bakeries. The authority to conduct such business is covered under her real estate license, but Alison does need to know the proper way to handle such transactions. Which of the following is not an accurate statement about the handling of business opportunities?

A- If real property is involved in the sale, the broker (Alison, in this case) usually treats the sale of the business and sale of the land/building as two separate and concurrent transactions with two concurrent and contingent escrows.

B- The sale of business opportunities may involve the sale of only personal property.

C- Alison, in dealing with the sale of business opportunities, must remember to inform the purchaser of the various governmental agencies that the purchaser should contact for required permits, licenses, and clearances. These agencies include the IRS, State Board of Equalization, State Department of Benefit Payments, State Department of Industrial Relations, and various other county and municipal agencies.

D- The sale of a business opportunity includes the business’s stock, trade fixtures, and trade name, a non-competition agreement, and lease assignment. While such a sale also includes the goodwill of a business, a monetary value cannot be placed on the goodwill.

— ++—0ceshop0 principles—5.3.23—

1)      What is the California Department of Real Estate responsible for?Top of Form

a.       Advertising listings in California

b.      Connecting consumers with real estate licensees

c.       Regulating the real estate industry

d.      Valuing real property in California

2)      Where can California real estate law be found?

a.       Code of Civil Procedure

b.       Family Code

c.       In the Business and Professions Code

d.       Revenue and Tax Code

3)      How many members make up the Real Estate Advisory Commission?

a.       10

b.       12

c.       Four

d.       Six

4)      What does the Real Estate Advisory Commission do?

a.       Determines real estate policy and issues regulations to enforce law

b.       Discusses real estate policy and makes recommendations to the Commissioner

c.       Issues real estate licenses

d.       Values real property in California

5)      Which of these describes the composition of the California Department of Real Estate Advisory Commission?

a.       Top of Form

b.       Eight members, seven of whom are unlicensed consumers and one who is a licensed real estate broker

c.       Six members, all of whom must be real estate brokers with at least five years of experience

d.       Ten members, six of whom are real estate brokers and four who are unlicensed consumers

6)      What is the role of the Real Estate Commissioner?

a.       Act as chief executive officer of the California DRE

b.       Advise the governor on personal real estate dealings

c.       Preside over real estate cases in court

d.       Value properties listing for sale or rent in California

7)      What is the goal of real estate law?

a.       Limit activities real estate professionals can perform

b.       Limit the services consumers can obtain from real estate professions

c.       Promote the interests of real estate professionals

d.       Protect and promote public safety, health, order, and welfare

8)      What is the difference between real estate law and Regulations of the Real Estate Commissioner?

a.       Real estate licensees only need to follow the law, not the regulations.

b.       Real estate licensees only need to follow the regulations, not the law.

c.       Regulations are used to enforce and clarify the law. Real estate licensees must abide by both.

d.       The law governs real estate licensees, whereas the regulations govern California DRE activities.

9)      How many members on the Real Estate Advisory Commission are unlicensed consumers?

a.       Eight

b.       Four

c.       Six

d.       Ten

10)   How is an individual selected to act as Real Estate Commissioner?

a.       A public vote

b.       The individual is appointed by the governor

c.       The individual is selected by the attorney general

d.       The Real Estate Advisory Commission holds a vote

11)   How are members selected to serve on the Real Estate Advisory Commission?

a.       They are appointed by the governor

b.       They are appointed by the Real Estate Commissioner

c.       They are elected by former Real Estate Advisory Commission members

d.       They are elected in a public election

12)   Which of the following actions can an individual holding only a prepaid rental listing service (PRLS) license perform?

a.       Listing properties for rent

b.       Negotiating lease agreements on behalf of the landlord

c.       Negotiating lease agreements on behalf of the tenant

d.       Providing listings of residential properties available for rent to prospective tenants for a fee

13)   Jim would like to sell his own home. What is the minimum real estate license he must possess?

a.       Associate broker

b.       Broker

c.       None

d.       Salesperson

14)   Which of the following properties is considered a manufactured home?

a.       A structure transported in three units and built in 1975 on a permanent foundation

b.       A structure transported in two units and built in 1975 on a permanent chassis

c.       A structure transported in two units and built in 2005 on a permanent chassis

d.       A structure transported in two units and built in 2005 on a permanent foundation

15)   What must be true for a corporation to conduct real estate activities?

a.       All officers must hold a broker license

b.       All officers must hold a salesperson license

c.       At least one officer must hold a broker license

d.       At least one officer must hold a salesperson license

16)   Consuela is a real estate licensee, and she has three other licensees working under her supervision. What type of license does Consuela hold?

a.       Associate broker

b.       Broker

c.       Office manager

d.       Salesperson

17)   Jimbo doesn’t yet have a real estate license. Which activity is he legally allowed to perform without one?

a.       Give advice to a friend who is negotiating the purchase of a house.

b.       List a friend or family member’s home for sale for a fee.

c.       Negotiate the sale of a house for two friends and receive a tip as thanks.

d.       Receive payment for managing real estate.

18)   Edwina has a California salesperson license. Which of these statements is true?

a.       She must associate with a broker in order to perform any real estate activities.

b.       She must obtain a broker’s license before she can perform any real estate activities.

c.       She’s allowed to perform a limited set of real estate activities with this license.

d.       She’s allowed to perform all real estate activities, and may choose to work as an individual licensee or to associate with a broker.

19)   Edwina has a California salesperson license. Which of these statements is true?

a.       She must associate with a broker in order to perform any real estate activities.

b.       She must obtain a broker’s license before she can perform any real estate activities.

c.       She’s allowed to perform a limited set of real estate activities with this license.

d.       She’s allowed to perform all real estate activities, and may choose to work as an individual licensee or to associate with a broker.

20)   In which of these scenarios does the consumer need a real estate license?

a.       Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.

b.       Mickey is selling his own home and isn’t using the services of a listing agent.

c.       Peter is helping his sister, Kristen, find a new apartment and will not be compensated in any way.

d.       Ronald is acting as executor of his uncle’s estate, which includes selling the property his uncle owned.

21)   Which real estate brokerage ownership types may do business under a fictitious name?

a.       Partnerships only

b.       Sole proprietorships and partnerships only

c.       Sole proprietorships only

d.       Sole proprietorships, partnerships, and corporations

22)   When is a real estate license required?

a.       When performing maintenance work for one property owner

b.       When performing real estate activities for others, for compensation of any kind

c.       When performing real estate activities for others, without compensation

d.       When performing real estate activities for yourself

23)   Which of the following tasks would require a real estate license in California?

a.       Assemble closing documents

b.       Calculate a commission check

c.       Host an open house

d.       Place a for sale sign in a front yard

24)   What must be true for a partnership to conduct real estate activities?

a.       All partners must hold a broker license

b.       All partners must hold a salesperson license

c.       At least one partner must hold a broker license

d.       At least one partner must hold a salesperson license

25)   Which of the following tasks is an unlicensed assistant at a California brokerage permitted to perform?

a.       Interpret contract information for a client.

b.       Negotiate a commission.

c.       Show property.

d.       Write advertisements for broker approval.

26)   Amy acts like a salesperson and is supervised by a broker, but she holds her broker’s license. What is her job title?

a.       Associate broker

b.       Broker of record

c.       Confused

d.       Salesperson

27)   Which of the following properties is considered a mobile home?

a.       A structure transported in three units and built in 1975 on a permanent foundation

b.       A structure transported in two units and built in 1975 on a permanent chassis

c.       A structure transported in two units and built in 2005 on a permanent chassis

d.       A structure transported in two units and built in 2005 on a permanent foundation

28)   Which of the following statements best describes a sole proprietor?

a.       A brokerage owned by a single person

b.       A brokerage owned by at least two people

c.       An entity owned by one or more parties

d.       An individual who holds a real estate license

29)   Lynnette works for a regional bank. Her role is to gather information from buyers looking to obtain a home loan and make a recommendation as to whether the loan should be approved. Does she need a real estate license?

a.       If her compensation is tied to the transaction being completed, she needs a real estate license.

b.       No, bank employees are exempt from licensure.

c.       Yes, any individual, including lenders, involved in the purchase of real property must have a license.

d.       Yes, employees of banks, credit unions, and lending institutions must obtain a real estate license.

30)   You’ve been studying real estate in California for a while and are a few weeks from taking the exam and getting your real estate license. Which activities are you able to do?

a.       Charge your friends for real estate advice.

b.       Go to auctions and buy real estate on a friend’s behalf and split the profit when he flips the house.

c.       Negotiate and buy your own property.

d.       Sell your friend’s property for a small percent of the profit.

31)   Which of these parties must obtain a real estate license before performing real estate activities?

a.       Apartment resident managers or their employees

b.       Attorneys-at-law performing legal services for a client

c.       Persons holding a duly executed power of attorney from the real property’s owner

d.       Persons representing buyers or sellers who will receive compensation for their services

32)   River is an unlicensed assistant at a brokerage. Which of the following tasks is she permitted to perform for her broker?

a.       Assemble closing documents.

b.       Host an open house.

c.       Negotiate on a client’s behalf.

d.       Suggest a sale price for a client’s listing.

33)   You decide to help negotiate the sales price of a buddy’s place even though you don’t yet have a California real estate license. After the sale he pays you $50 in appreciation of your efforts. Why would this be considered an illegal activity?

a.       Because anything over $25 is considered to be an illegal form of compensation to anyone without a license.

b.       Because you can’t accept any amount of compensation for negotiating the sales price of a home that isn’t your own if you don’t have a license.

c.       Because you didn’t have the compensation agreement written down before the sale, the compensation is illegal.

d.       Because you offered advice negotiating the sales price when you shouldn’t have.

34)   What must be true for a business to perform real estate activities?

a.       All employees of the business must have a real estate license

b.       At least one employee must have a broker license

c.       At least one employee must have a salesperson license

d.       At least one employee must have a salesperson license and another employee must have a broker license

35)   Which real estate brokerage ownership types require a separate license?

a.       Corporations only

b.       Partnerships and corporations only

c.       Partnerships only

d.       Sole proprietorships only

36)   Adam is an unlicensed assistant working with Sarah, a licensed salesperson. The following tasks are on their plates. Which of these actions can only Sarah performed?

a.       Placing a for sale sign on a property

b.       Preparing marketing materials for the property

c.       Providing factual information about the property

d.       Showing the property to prospective buyers

37)   Amanda helps her neighbor sell his home by assisting with negotiations. She receives no compensation for her assistance. Based on this one transaction, Amanda ______.

a.       Doesn’t need a real estate license

b.       Must have a broker license

c.       Must have at least an associate broker license

d.       Must have at least a salesperson license

38)   What types of real estate licenses are issued in California?

a.       Broker and salesperson licenses

b.       Broker, salesperson, and associate broker licenses

c.       Only broker licenses

d.       Only salesperson licenses

39)   Angela is an unlicensed assistant working with Sam, a licensed salesperson. The following tasks are on their plates. Which of these actions can only Sam perform?

a.       Draft the buyer’s offer to the seller

b.       Negotiate on the client’s behalf

c.       Provide factual information about a property

d.       Schedule showings for a buyer

40)   Tom is an unlicensed individual helping his sister, Katie, find a new house, in return for a trip to Europe. Which of the following activities can Tom legally perform?

a.       He can negotiate the sale of her old house.

b.       He can purchase a new property for Katie at an auction.

c.       He can receive compensation from Katie for assisting in the purchase of her new house.

d.       He can search real estate sites and resources to find available homes in the area.

41)   June has worked with buyers and sellers for years. When homeowners default on their mortgage, June acts as trustee for the deed of trust. Under the deed of trust, June has the authority to sell the property. Does June have a real estate license?

a.       If she receives compensation for performing this activity, she must have a real estate license.

b.       No, trustees selling properties under a deed of trust are exempt from licensure.

c.       She only needs a real estate license if she is selling her own property.

d.       Yes, she is selling property for others. She must have a real estate license.

42)   Which activity can you perform without a license in California?

a.       Negotiate rent for another tenant in the office building where you work.

b.       Negotiate rent of an office building for the nonprofit where you work.

c.       Negotiate the sale price of a friend’s office building for a fee.

d.       Sell your neighbor’s house for a fee.

43)   In California, an individual performing real estate activities under the judgment or order of a court, such as a trustee in a bankruptcy, is ______.

a.       An exception to the real estate licensing requirement

b.       Required to have a broker license

c.       Required to have at least an associate broker license

d.       Required to have at least a salesperson license

44)   Which of the following statements best describes a real estate partnership?

a.       A brokerage owned by a single person

b.       A brokerage owned by at least two people

c.       An entity owned by one or more parties

d.       A team of two individuals who each hold a real estate license.

45)   Which of the following describes a prepaid rental listing service (PRLS)?

a.       A PRLS is a group of real estate licensees who only deal with residential property rentals.

b.       A PRLS is a type of real estate brokerage.

c.       A PRLS provides listings of residential properties available for rent to prospective tenants for a fee.

d.       A PRLS represents landlords by marketing their properties to prospective tenants for a commission.

46)   Which of the following statements best describes a real estate corporation?

a.       A brokerage owned by a single person

b.       A brokerage owned by at least two people

c.       A group of individuals who each hold a real estate license

d.       An entity owned by one or more parties

47)   What are common ownership structures for real estate brokerages?

a.       Partnerships only

b.       Sole proprietorships and partnerships only

c.       Sole proprietorships only

d.       Sole proprietorships, partnerships, and corporations

48)   California licensee Donald has a new listing for the house next door to his. He’s never had problems with these neighbors and hopes to keep it this way by making sure the “right” people move in. He doesn’t show the property to any prospective buyers with children. These actions soon bring complaints of a fair housing violation. What effect does this have on Robert (Donald’s sponsoring broker)?

a.       Neither Robert nor Donald will be affected by the fair housing violation.

b.       Only Robert is liable for Donald’s actions, and he alone will be sanctioned as a result of Donald’s fair housing violation.

c.       Robert is liable for Donald’s actions and could be sanctioned along with Donald as a result of Donald’s fair housing violation.

d.       Robert is not liable for Donald’s actions and is not affected by the fair housing violation.

49)   Sally just obtained her salesperson license. How long is the license valid?

a.       Four years

b.       One year

c.       Three years

d.       Two years

50)   Jackson holds a real estate broker license with an MLO endorsement. How many hours of continuing education must he complete each year to renew this endorsement?

a.       10 hours

b.       20 hours

c.       45 hours

d.       Eight hours

51)   To best prevent risk associated with licensee non-compliance with real estate-related federal regulations, brokerage firms should do which of the following?

a.       Encourage licensees to obtain outside training on real estate-related federal regulations.

b.       Include a review of related federal legislation in the policies and procedures manual and provide appropriate training.

c.       Rely on licensees to make themselves aware of all federal regulations related to real estate.

d.       Require licensees to keep a tracking journal of all activities as proof that they’ve not violated federal regulations.

52)   What is the minimum amount of full-time real estate industry experience that an individual must have to qualify for a broker’s license?

a.       Four years

b.       One year

c.       Three years

d.       Two years

53)   Brenda is a real estate salesperson. Jim is her sponsoring broker. Brenda is moving to a different area in the state and will no longer be able to work with Jim. Her new sponsoring broker will be Cindy. What must take place for Brenda to transfer her license to Cindy?

a.       Brenda completes a change application.

b.       Brenda must complete a new license application.

c.       Cindy completes a new license application for Brenda.

d.       Jim must notify the California DRE and give Brenda her license certificate. Brenda and Cindy complete a change application.

54)   Which agency issues the MLO endorsement?

a.       California Department of Real Estate

b.       Department of Finance

c.       Department of Licensing

d.       Nationwide Mortgage Licensing System and Registry (NMLS&R)

55)   Which of these does a sponsoring broker owe their associate brokers and salespersons?

a.       Free desk and office support

b.       Passing along leads

c.       Paying for marketing materials

d.       Supervision of activities

56)   What is vicarious liability as it applies to real estate?

a.       A broker commits an illegal act.

b.       A broker directs a licensee to commit an illegal act

c.       A broker is held responsible for the actions or omissions of the broker’s licensees.

d.       One licensee witnesses another licensee’s misconduct.

57)   How old must an individual be to qualify for a real estate broker license in California?

a.       18

b.       19

c.       20

d.       21

58)   Sally is a real estate salesperson. How many hours of continuing education must she complete before the license expiration date in order to renew it for another four years?

a.       25 hours

b.       30 hours

c.       45 hours

d.       8 hours

59)   How long is an MLO endorsement valid?

a.       Four years

b.       One year

c.       Three years

d.       Two years

60)   Maura is a real estate salesperson who does not have an MLO endorsement. Which of these actions can she perform for her client, who is financing the purchase of a single-family home?

a.       Offer to negotiate the terms of the client’s loan application.

b.       Offer to provide the client with a list of lenders they could consider working with to obtain the loan.

c.       Service the client’s loan.

d.       Take the client’s residential mortgage loan application.

61)   How many hours of continuing education must a California licensee complete in order to renew a real estate license?

a.       135 hours

b.       30 hours

c.       45 hours

d.       8 hours

62)   Jackson holds a real estate broker license with an MLO endorsement. How often must he renew his MLO endorsement?

a.       Every four years

b.       Every three years

c.       Every two years

d.       Every year

63)   Bradley has a real estate salesperson’s license. He’s done some traveling recently and missed the deadline to renew his license. It’s now 30 days past the expiration date. What must he do to renew his license?

a.       Complete the continuing education requirements and submit a renewal and late fee.

b.       File an appeal with the Real estate Commissioner.

c.       Re-qualify for a real estate license by completing pre-licensing courses and passing the state licensing exam.

d.       Retake the state licensing exam.

64)   What must take place if a real estate salesperson wants to transfer their license to a new sponsoring broker?

a.       The existing sponsoring broker must notify the California DRE and give the salesperson their license certificate. The salesperson and new sponsoring broker complete a change application.

b.       The new sponsoring broker completes a new license application for the salesperson.

c.       The salesperson completes a change application.

d.       The salesperson must complete a new license application.

65)   Al is 70 years old and has held his real estate broker license in good standing for 30 consecutive years. His license is up for renewal soon. How many continuing education hours must he complete?

a.       0 hours

b.       30 hours

c.       45 hours

d.       8 hours

66)   Years ago, Rachel held a real estate license. She took some time off to travel and start a family. Now she’s ready to get back in the saddle. Her license expired three years ago. What must she do to renew her license and start practicing real estate again?

a.       Complete the continuing education requirements and submit a renewal and late fee.

b.       File an appeal with the Real Estate Commissioner.

c.       Requalify for a real estate license by completing pre-licensing courses and passing the state licensing exam.

d.       Retake the state licensing exam.

67)   Which federal act requires states to pass laws relating to mortgage loan originator (MLO) endorsements?

a.       Consumer Financial Responsibility Act

b.       Regulation Z

c.       SAFE Act

d.       Senate Bill 36

68)   How many hours of continuing education must real estate licensees complete each year to renew their MLO endorsement?

a.       10 hours

b.       20 hours

c.       Eight hours

d.       Four hours

69)   What is the relationship between a policies and procedures manual and the broker’s obligation to supervise agents?

a.       Brokers who can prove that all agents have access to the PPM won’t be cited for failure to adequately supervise agents.

b.       Brokers who enforce policies and procedures outlined in an effective PPM have proof of efforts to properly train and supervise agents.

c.       The PPM may be used in place of face-to-face orientation training for new licensees.

d.       The PPM outlines the broker’s responsibility to supervise and provides detailed proof of scheduled one-on-one meetings and group training sessions.

70)   Karla is a sponsoring broker who owns her own brokerage. She has two associate brokers and two salespersons, who all work as independent contractors. She also has an unlicensed assistant on payroll as an employee. Which of the following is true of Karla’s liability?

a.       Karla is liable for the actions of all members of her firm, both the independent contractors and the employee.

b.       Karla is only liable for the actions of her associate brokers.

c.       Karla is only liable for the actions of her associate brokers and salespersons.

d.       Karla is only liable for the actions of her salespersons.

71)   As a managing broker, you’re responsible for your associate brokers’ actions. Which of the following risk management techniques helps prevent the risk associated with vicarious liability?

a.       Equipping your office with fire alarms and sprinklers

b.       Prohibiting licensees from recommending third party vendors to clients

c.       Providing training and policies/procedures documentation to staff

d.       Purchasing a general liability insurance policy

72)   Which of these real estate licensees may be exempt from the continuing education requirements for license renewal?

a.       Al is 70 years old and has been licensed in good standing for 30 consecutive years.

b.       Candice is 55 years old and has been licensed in good standing for 30 consecutive years.

c.       Savannah is the broker of record responsible for supervising five salespeople.

d.       Willard is 70 years old and has been licensed in good standing for 20 consecutive years.

73)   What must real estate licensees who obtain the MLO endorsement do?

a.       They must complete 20 hours of education, pass an examination, submit fingerprints to NMLS&R, and authorize a credit report pull.

b.       They only need to complete 20 hours of education.

c.       They only need to complete 20 hours of education and pass an examination.

d.       They only need to pass an MLO exam containing national and state-specific content.

74)   Steve holds a real estate license in Oregon but would also like to perform real estate activities in California. What must he do?

a.       As long as Steve holds an active license in a neighboring state, he can practice real estate in California.

b.       California does not have reciprocity agreements with any other states. Individuals licensed in other states must complete all of the requirements that an unlicensed individual completes.

c.       California has a reciprocity agreement with Oregon. Steve can complete a California application to receive a license.

d.       Steven cannot hold licenses and perform real estate activities in multiple states.

75)   How old must an individual be to qualify for a real estate salesperson license in California?

a.       18

b.       19

c.       20

d.       21

76)   Seamus sent a letter to the residents of Maywood Park, stating, “The Mormons are moving in! Sell your houses before property values plummet.” This is a fair housing violation, and also ______.

a.       A license law violation

b.       A strong business practice

c.       Creative advertising

d.       Morally ambiguous

77)   If your license is suspended, it’s only temporary. If your license is revoked, it is permanently removed and requires ______.

a.       Additional education

b.       A new license application after the penalty period

c.       A small fee

d.       A verbal reprimand

78)   What happens to a California real estate licensee if they are involved in a case and cannot pay the judgment amount, and the consumer is awarded money from the real estate Recovery Account?

a.       Nothing! That is what the fund is for!

b.       Their commissions will be garnished until the amount paid out to the victim is repaid.

c.       Their license will be suspended until they pay back the amount paid to the victim, plus interest.

d.       They can continue to practice real estate, but must pay back the amount paid out, plus interest.

79)   In most states, which of the following situations would most likely be grounds for suspension or revocation of a real estate license?

a.       Failure to determine the correct list price in a comparative market analysis

b.       Failure to find a buyer for a listed property

c.       Failure to include a broker protection clause in a listing agreement

d.       Failure to specify a definite termination date in a listing contract

80)   Bobby is representing his fiancé in a real estate transaction. Does he have any special disclosure requirements?

a.       No, because they are not married yet

b.       Only if the wedding will occur before the closing date

c.       Yes, because all special relationships must be disclosed

d.       Yes; licensees must always disclose their marital plans

81)   Serious violations of the real estate license laws typically result in which disciplinary action or actions?

a.       Additional education

b.       A small fine

c.       License suspension or revocation

d.       Reprimand

82)   Shana has a former conviction for petty theft, and one for armed robbery—two events that occurred more than five years ago. When she applies for her real estate license, what should she do with regard to these convictions?

a.       Disclose both, because any criminal conviction must be disclosed.

b.       Disclose only the armed robbery.

c.       Disclose only the petty theft, because armed robbery is not a reportable offense.

d.       Not disclose either, because they occurred more than three years ago.

83)   James represented a client who believes James was guilty of misrepresentation. The client files a complaint against James. Which entity will investigate?

a.       A private investigator

b.       California DRE

c.       James’ broker

d.       The state attorney general

84)   If a licensee commits a violation and it’s found the broker didn’t adequately supervise the licensee, whose license in jeopardy?

a.       Both the broker’s and licensee’s

b.       The broker’s

c.       The licensee’s

d.       The license of any future licensee of the firm

85)   Rita missed an important deadline for her client. This is an example of a(n) ______.

a.       Conversion

b.       Negligence

c.       Ordinary mistake

d.       Personal dealing

86)   When a complaint is filed against a real estate licensee in California, who is responsible for investigating the complaint?

a.       An arbitrator

b.       A private investigator

c.       California DRE

d.       The state attorney general

87)   If Jan is using the designation GRI (Graduate of the Real Estate Institute), but she has not paid her annual membership dues, is this a violation?

a.       No, because failure to pay dues does not constitute non-membership

b.       No, because GRI is not covered in real estate law

c.       Yes, because failure to pay dues is considered petty theft

d.       Yes, because it is dishonest

88)   James is a California licensee accused of serious license law violations. Which of these will NOT be part of the process of investigation by the DRE?

a.       It will hold a formal hearing before a judge to determine if the charges should be dismissed or are proven.

b.       It will impose disciplinary actions against James as deemed appropriate based on the violations he committed.

c.       It will issue a warrant for James’s arrest, and James will be held while the DRE completes its investigation.

d.       It will obtain statements and records related to the inquiry from James, the complainant, and any witnesses.

89)   What is the maximum amount that will be paid out of the Recovery Account for a transaction?

a.       $10,000

b.       $100,000

c.       $25,000

d.       $50,000

90)   The DRE investigated Sheila and has imposed a license suspension. What does this mean for Sheila?

a.       Her license is void. She’s not allowed to practice real estate anymore, and can’t reactivate her license.

b.       She may perform all her normal licensed activities, but she’s on probation so she better mind her Ps and Qs.

c.       She must pay a fine to have the suspension removed, and may not perform real estate activities until she does so.

d.       She’s not allowed to practice real estate during the term of the suspension, but after that time she can continue performing licensed activities.

91)   What is the maximum amount that will be paid out of the Recovery Account per licensee?

a.       $100,000

b.       $250,000

c.       $50,000

d.       $500,000

92)   Requiring a licensee to submit detailed reports related to trust fund accounting is an example of a condition that may be placed on a licensee with a ______ license.

a.       Restricted

b.       Retracted

c.       Revoked

d.       Suspended

93)   If Sima entered a plea of no contest in a criminal case she ______.

a.       Must not report this; as it would be a violation of confidential information

b.       Must report this to California DRE only if the charge is related to theft

c.       Must report this to California DRE under all circumstances

d.       Need not report this to California DRE because it is not a guilty verdict

94)   Gina received an earnest money check from her buyer on Friday, after the office had closed and her broker had gone home for the day. For safekeeping, Gina should ______.

a.       Cash the check and write a new check Monday for the same amount

b.       Deposit the money into her savings account so her client can earn interest over the weekend

c.       Hold onto the check until Monday, and give it to her broker then

d.       Return the check to her client

95)   Tabor’s uncle hired him as a listing agent. Because of their relationship, what may Tabor do with regard to the termination date of the agreement?

a.       Include an automatic renewal clause.

b.       Include a reasonable termination date.

c.       Leave it out.

d.       Write “family member” in the termination date field.

96)   A cabin has 120 feet of lake frontage. The cabin owner’s ability to access the lake is based on ______.

a.       An aquifer

b.       An easement

c.       Littoral rights

d.       Riparian rights

97)   Which economic characteristic of land contains the concept that a land’s value can be affected by the changes made to it, such as construction of buildings or fences?

a.       Improvements

b.       Permanence of investment

c.       Scarcity

d.       Uniqueness

98)   Property owners who live on or next to water have certain rights. An example of one of these rights includes ______.

a.       Contamination

b.       Hazardous waste

c.       Littoral

d.       Reversionary

99)   A river runs adjacent to a rancher’s property. The rancher’s ability to use the water from the river is based on ______.

a.       Aquifer rights

b.       Encroachment rights

c.       Littoral rights

d.       Riparian rights

100)                       Which of these is the best definition of real estate?

a.       Everything that’s not real property

b.       Land, plus all things permanently attached to it naturally or artificially

c.       Real property, plus all of the interests, benefits, and rights included in ownership

d.       The earth’s surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

101)                       Annette really wants to move to San Francisco, but she’s unsure whether she’ll be able to afford to live there. Housing is very expensive because there simply is no room to build any new housing units. Which economic characteristic does this reflect?

a.       Area preference

b.       Improvements

c.       Permanence

d.       Scarcity

102)                       The right to access non-navigable rivers, streams, and other flowing bodies of water adjacent to a property is called ______ rights.

a.       Land

b.       Littoral

c.       Mineral

d.       Riparian

103)                       California resident George has purchased a property with riparian rights. What does this mean?

a.       He has the right to use, divert, store, or sell the water that’s on or under his land.

b.       He has the right to use the percolating ground water, but only for growing crops.

c.       He has the right to use the water that flows across his land.

d.       The water rights have been separated from the land he now owns.

104)                       What’s the best definition of land?

a.       Everything that’s not real property

b.       Land, plus all things permanently attached to it, naturally or artificially

c.       Real estate, plus all of the interests, benefits, and rights included in ownership

d.       The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

105)                       Littoral rights allow property owners to take which of these actions?

a.       Construct a dock to moor their boat.

b.       Irrigate from a stream running through the property.

c.       Navigate the river running through the property.

d.       Use the water from the lake bordering the property.

106)                       Over time, a river running through Farmer Jones’ ranch deposits sediment along the banks of the river and adds half an acre of land to the ranch. This is an example of what process?

a.       Accretion

b.       Avulsion

c.       Erosion

d.       Riparian buffering

107)                       Physical characteristics of land include its immobility, indestructibility, and ______.

a.       Location

b.       Permanence of investment

c.       Scarcity

d.       Uniqueness

108)                       In many areas of the country, Marcellus Shale has become a hot commodity. This type of rock produces gas, which can be mined, stored, and sold. Abe learned that his family farmstead sat over a rich deposit of Marcellus Shale. What type of rights does Abe have relative to this shale?

a.       Air rights

b.       Sub-surface rights

c.       Surface rights

d.       Water rights

109)                       Sarah owns her own home. As part of her basic property rights, she has the right to decide who may or may not access the property. Which right is this?

a.       Disposition

b.       Enjoyment

c.       Exclusion

d.       Possession

110)                       Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?

a.       Alluvial

b.       Littoral

c.       Prior appropriation

d.       Riparian

111)                       The right to access ponds, lakes, and other stationary bodies of water is ______.

a.       Littoral

b.       Mineral

c.       Riparian

d.       Water

112)                       Jamie owns a lakeside home. Over a period of years, the water has receded quite a bit, doubling the size of the sand beach on his property. What’s the name of this process?

a.       Accretion

b.       Erosion

c.       Exclusion

d.       Reliction

113)                       Licensee Arlene is helping a client purchase a property that’s suitable for use as a private school, meaning it needs to have classrooms, assembly rooms, and sports fields. She locates two properties in the area that have the required attributes. What category of property is this considered?

a.       Commercial

b.       Industrial

c.       Residential

d.       Special purpose

114)                       Basic property rights include the rights of possession, control, exclusion, enjoyment, and ______.

a.       Destruction

b.       Disposition

c.       Encroachment

d.       Reliction

115)                       Doreen owns an office building and receives income from six stable tenants. What category of real estate does Doreen own?

a.       Agricultural

b.       Commercial

c.       Industrial

d.       Residential

116)                       Which physical characteristic of land addresses the concept that land isn’t interchangeable, and one piece of land isn’t exactly like another?

a.       Immobility

b.       Indestructibility

c.       Permanence of investment

d.       Uniqueness

117)                       Jordan bought 25 acres along a navigable river. Several years later, Jordan calculates that the river has slowly carried away almost two acres of land. What process caused this?

a.       Accretion

b.       Avulsion

c.       Erosion

d.       Riparian buffering

118)                       When Henry first began his real estate career, he focused on residential properties. As he gained more experience, he found that he really enjoyed helping business owners find warehouses for their products, or properties where they could conduct manufacturing activities. Of the primary categories of real estate, what types of properties does Henry handle?

a.       Industrial

b.       Leisure

c.       Residential

d.       Retail

119)                       Property ownership gives the title holder a bundle of rights. What’s significant about the concept of a bundle of rights?

a.       It describes an infinite number of rights associated with property ownership.

b.       It describes the ability to separate one right from the others while leaving the rest of the bundle intact.

c.       It’s an ancient Latin term meaning the property owner’s rights can’t be taken away.

d.       The property owner must identify each separate right that will be purchased; they’re not automatically included in a transfer.

120)                       Along with property ownership, rights are granted to use the land’s physical components. Which right allows a property owner to use or sell the underground resources, such as natural gas and minerals?

a.       Air

b.       Sub-surface

c.       Surface

d.       Water

121)                       Which term would you most likely see associated with a lake?

a.       Fracking

b.       Littoral

c.       Percolating

d.       Riparian

122)                       Which physical characteristic of land addresses the concept that the geographic location of a piece of land is fixed and can never be changed?

a.       Immobility

b.       Indestructibility

c.       Scarcity

d.       Uniqueness

123)                       Ruby just bought a few undeveloped acres in the California desert. Once she installs her manufactured home, she plans to obtain water for herself and her animals by digging a well to access the ______.

a.       Appropriated water

b.       Percolating ground water

c.       Public water source

d.       Riparian water

124)                       What’s the best definition of personal property?

a.       Artificial attachments to land that include things such as fencing, buildings, and walkways

b.       Everything that’s not real property

c.       Land

d.       Property that’s fenced

125)                       Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, Lewis’ condo is worth much more two years later. Which economic characteristic does this demonstrate?

a.       Area preference

b.       Improvements

c.       Permanence

d.       Scarcity

126)                       Juan has decided to invest his small inheritance in real estate. He is drawn to the fact that he can add a building where there wasn’t one previously and immediately increase the value of his investment. Which economic characteristic of real property is this?

a.       Area preference

b.       Improvements

c.       Permanence

d.       Scarcity

127)                       The owners of Brick and Brack, a development company, have purchased several acres of vacant land for their latest development. They plan to build a community of affordable single-family homes. What category of real estate will these be in after construction?

a.       Agricultural

b.       Commercial

c.       Industrial

d.       Residential

128)                       Your neighbor bought rights that will prevent you from ever building above two stories. What type of rights are these?

a.       Air

b.       Littoral

c.       Mineral

d.       Riparian

129)                       Sally and Pete are city dwellers who have always dreamed of living in a rural setting. When Pete inherits a 600-acre cattle ranch from his uncle, they don’t waste a moment packing up and moving to the ranch. What category of real estate is their new home considered?

a.       Agricultural

b.       Commercial

c.       Industrial

d.       Residential

130)                       What do riparian rights give landowners the ability to do?

a.       Drill an agricultural water well.

b.       Prohibit others from using the water.

c.       Use a pond adjacent to the property.

d.       Use a river running through the property.            

131)                                                                                                                                               Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?

a.       Area preference

b.       Immobility

c.       Permanence of investment

d.       Scarcity

132)                                          What’s the best definition of real property?

a.       Artificial attachments to land that include things such as fencing, buildings, and walkways

b.       Earth, soil, and air

c.       Land, plus all things permanently attached to it naturally or artificially

d.       Real estate, plus all of the interests, benefits, and rights included in ownership

133)                                          Alluvion describes new deposits of land that are the result of what natural process?

a.       Accretion

b.       Erosion

c.       Exclusion

d.       Reliction

134)                                          John and Tara have lived in their home for 23 years and are excited to move to Florida for retirement. As homeowners, what right allows them to sell their home?

a.       Disposition

b.       Enjoyment

c.       Exclusion

d.       Possession

135)                                          Which of the following is true about air rights?

a.       They allow the owner to use the open space above buildings.

b.       They allow the owner to use the space directly below buildings.

c.       They cannot be bought or sold.

d.       They include mineral rights.

136)                                          What are improvements with regard to property?

a.       Another name for a building permit

b.       Artificial attachments to land that include items such as fencing, buildings, and walkways

c.       Natural fixtures that are part of the land and that enhance its value

d.       The right to increase the value of a property

137)                                          Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed?

a.       Immobility

b.       Indestructibility

c.       Permanence of investment

d.       Uniqueness

138)                                          Which of the following is included with real property rights?

a.       Enjoyment

b.       Hazardous acts

c.       Right to destroy

d.       Right to encroach

139)                                          Shannon’s rural property in San Diego County has a small stream that runs across one corner where her horses are pastured, and her horses use it as a water source. What’s true about this situation?

a.       Shannon has a riparian right to use the water flowing across her property as a water source for her animals, though she may not divert the water.

b.       Shannon is violating the state’s water laws, which prohibit any use of water that flows across a property.

c.       She must have a permit from the state water board to use the water from the stream that runs across her property.

d.       The doctrine of prior appropriation makes this use of the stream water illegal, since it originates on another person’s property.

140)                                          The right to access rivers, streams, and other flowing bodies of water adjacent to a property is called ______.

a.       Land

b.       Littoral

c.       Mineral

d.       Riparian

141)                                          Display shelves installed by a business owner in a rented building are a good example of ______.

a.       Leased premises

b.       Real estate

c.       Real property

d.       Trade fixtures

142)                                          The Acme Company is planning to build a factory on the three-acre property it just purchased in Southern California. The factory will need access to a large amount of water. How will the company gain the right to the water it needs?

a.       It must apply for a water permit from the California State Water Resources Control Board.

b.       It must negotiate a deal with a property owner with previous water rights under the doctrine of prior appropriation.

c.       It must purchase water rights from a current property owner with riparian rights.

d.       It must use reclaimed water from the local water treatment plant.

143)                                          What term explains the complexity of property ownership rights and how rights for a single property can be “owned” by multiple parties at the same time?

a.       Littoral rights

b.       Physical component rights

c.       Riparian rights

d.       The bundle of rights

144)                                          Licensee Dionne pointed out to her buyer client the items that would be considered real property. What is one of the key characteristics of an item that is real property (also known as a fixture)?

a.       Internal or external to the house

b.       Made of the same material as an interior or exterior wall

c.       Over or under a certain value

d.       Permanently affixed to the property

145)                                          Of the following, which is most likely to be considered a fixture?

a.       a fence around a field

b.       a pasture

c.       a stream

d.       a tractor

146)                                          Mrs. Blanchard cut down a tree growing on her property. Which of the following has occurred?

a.       A fixture has become real property.

b.       Personal property has become real property.

c.       Real property has become a trade fixture.

d.       Real property has become personal property. 

147)                                          What are emblements in real estate?

a.       Cultivated crops

b.       Detached fixtures

c.       Free-standing plants

d.       Open spaces

148)                       Having _______ on file allows lenders to confiscate personal property pledged as collateral in the event of a borrower default.

a.       A chain of title

b.       A title insurance policy

c.       A UCC security agreement and financing statement

d.       Proof of ownership

149)                       What’s the Uniform Commercial Code?

a.       A set of business laws created to regulate commercial transactions, including contracts dealing with personal property

b.       A set of business laws created to regulate financial contracts dealing with real estate

c.       A set of standards created to create a uniform way in which all commercial real estate transactions must be conducted

d.       A set of standards for commercial business code of ethics

150)                       Which of the following is an example of a fixture that is real property?

a.       Above-ground pool and pool accessories

b.       Bathroom mirror hanging on a hook

c.       Photos and wall hangings

d.       Shelves attached to the wall with brackets

151)                       What’s contained in a UCC security agreement?

a.       A complete description of the personal property used as collateral

b.       A list of personal character references

c.       A list of security services provided under the contract

d.       A signature of an authorized representative of the lender

152)                       Bart just toured his fourth patio home of the day. To help him remember what he saw in each one, he’s making notes about décor, updates, and inclusions that will stay with the property. Which of the following items is NOT considered personal property and would therefore stay with a home?

a.       The area rug in the dining room

b.       The banker’s lamps in the den

c.       The chandelier in the foyer

d.       The patio heater on the back patio

153)                       Who is required to sign a security agreement for security arrangements under the Uniform Commercial Code?

a.       The borrower

b.       The lender

c.       The seller

d.       The testator

e.       The UCC requires the borrower to sign a security agreement for any security arrangements. When used in the financing of real estate, the agreement must adequately identify personal property used as collateral.

154)                       Which of the following would be considered personal property?

a.       Built-in microwave

b.       Custom curtains

c.       Free-standing TV

d.       In-ground pool

155)                       Which of the following are included in the transfer of real property unless specifically excluded in writing?

a.       Chattel

b.       Fixtures

c.       Personal possessions

d.       Personal property

156)                       What is the best way for a seller and buyer to demonstrate their agreement that the home’s existing refrigerator and a dishwasher are included in the property sale?

a.       By including a bill of sale or agreement in the purchase contract

b.       By shaking hands on it on the day of the sale

c.       By verbal agreement after the sale

d.       By verbal agreement before the sale

157)                       Which of the following would be used to describe an item that is both a fixture and real property?

a.       Above-ground

b.       Free-standing

c.       In-ground

d.       Movable

158)                       An item that would most likely be considered a fixture because of agreement between buyer and seller is _____.

a.       a garage door opener

b.       a garbage disposal

c.       draperies

d.       kitchen cabinets

159)                       Ron’s company leased a building so that it could build an escape room experience. After operating for two years, attendance (and thus its profits) started to drop significantly, so it decided to close the location. When the workers started taking down the installation, they realized that some of the structures would damage the walls if they were to try to remove them. Which of these is true about these trade fixtures?

a.       If Ron leaves them in place and the lease expires, he has three months to remove them.

b.       Ron is required to leave the fixtures if they’re attached.

c.       Ron is required to take the fixtures and return the premises to its original condition.

d.       Ron may take the fixtures as long as he repairs any damage caused by removal.

160)                       If an item is permanently attached to a property, a court would most likely consider it a fixture if it passes which of the following tests?

a.       Adaptability of the item to the land’s use

b.       Agreement of the parties

c.       Method of annexation

d.       Relationship of the parties

161)                       When using the MARIA acronym to test whether an item is a fixture, what do the two As stand for?

a.       Acceptability of the fixture and agreement of the parties

b.       Adaptability of item and accessibility to the property

c.       Adaptability of item to land’s use and agreement of the parties

d.       Allowable use and acceptable use

162)                       Ted’s seller client is adamant that she’ll be uprooting and taking most of the fruit trees in the backyard when she sells her home. Ted makes a note to himself that he’ll need to include the ______ of the trees in the comments for his listing.

a.       Abatement

b.       Annexation

c.       Defenestration

d.       Severance

163)                       In the consideration of real property and personal property, severance is ______.

a.       The process of cancelling the agreement or bill of sale for a real estate transaction.

b.       The process of converting personal property to real estate.

c.       The process of removing a fixture before agreement or after negotiation, to designate it as personal, rather than real, property.

d.       The test of how an item is attached to the property and how permanent the attachment is.

164)                       If the sale of a property that includes soybean fields occurs before the crops are ready for harvest, which of the following is the best option for the parties to the transaction to take?

a.       The buyer should assume the crop transfers with the property.

b.       The contract between the parties should clarify the disposition of the crop.

c.       The seller should assume the crop does not transfer with the property.

d.       The seller should harvest the beans before the sale closes.

165)                       Tim and Tina Wells bought a home with absolutely beautiful perennial gardens in the back. The plantings were designed to bring birds, bees, and butterflies and to provide color for most of the year. When they did the final walkthrough, they were dismayed to see that many of the shrubs and flowering plants had been removed. They expected these plantings to be considered part of the real property because of the ______.

a.       Adaptation to the land

b.       Agreement of the parties

c.       Intention in placing the item

d.       Method of annexation

166)                       The MARIA acronym helps to identify the five tests of a fixture. Which of the following tests refers to how and whether the item is attached to the property?

a.       Adaptability of the item to the land’s use

b.       Agreement of the parties

c.       Intention in placing item on land

d.       Method of annexation

167)                       Which of the following is NOT one of the five basics tests that courts use to determine whether an item is a fixture or personal property?

a.       Agreement of parties

b.       Legally permissible use

c.       Method of annexation

d.       Relationship of the parties

168)                       In which form of co-ownership is a person’s ownership inheritable?

a.       Joint tenancy

b.       Tenancy by the entirety

c.       Tenancy in common

d.       Tenancy in severalty

169)                       Once Greg and Caitlin were married, they decided to purchase a home together. Since it was a shotgun wedding after a weekend in Vegas, they made sure that their ownership included the right of survivorship as well as protection from the other spouse attempting to sell the house from under them. Though not recognized in all states, the most likely form of co-ownership under which they would make this purchase is ______.

a.       Estate in severalty

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenancy in common

170)                       John and Dale are married in San Francisco, and soon purchase a condo. They’ll take title to it by default as ______ according to California law.

a.       Community property

b.       Joint tenants

c.       Tenants by the entirety

d.       Tenants in common

171)                       California couple Tim and Roxanne own a condo as community property. When Tim stops paying his credit card debt, can the creditor put a lien on their condo?

a.       No. Community property is exempt from liens and judgments.

b.       No. Creditors may not place a lien on community property to collect on an individual co-owner’s debt.

c.       Yes. A lien may be placed on community property for a debt owed by one of the co-owners.

d.       Yes, as long as Tim’s debt was incurred while he and Roxanne were married.

172)                       Property with ownership by more than one person is known as ______.

a.       Co-ownership

b.       Dual ownership

c.       Estate by severalty

d.       Property partnership

173)                       Billie (Wilhelmina) Silva was just licensed as a broker, and she plans to hang out a shingle and go into business for herself. As a sole proprietor, which of the following business names can she NOT use?

a.       Billie Silva

b.       Billie Silva Realty

c.       Happy Homes Realty

d.       Wilhelmina Silva Realty

174)                       Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?

a.       Estate in severalty

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenancy in common

175)                       Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided?

a.       Barbie and Midge each own 50%.

b.       Barbie and Skipper each own 50%.

c.       Barbie, Midge, and Ken’s heirs each own one-third.

d.       Barbie owns two-thirds, and Midge owns one-third.

176)                       Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn’t allow him to do so. What type of ownership do they have?

a.       Joint tenancy

b.       Tenancy by the entirety

c.       Tenancy in common

d.       Tenancy in

177)                       Debbie and Chris are a married couple in California. When they purchase their first home together, they want to make sure that if one of them dies, the other will inherit ownership of the property. How should their ownership be recorded on the deed?

a.       Community property

b.       Community property with right of survivorship

c.       Tenants by the entirety

d.       Tenants in common with right of survivorship  severalty

178)                       Which ownership type is defined by four unities: time, title, interest, and possession?

a.       Freehold estate

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenancy in common

179)                       Which type of ownership includes the unity of time, title, interest, possession, and marriage, and dissolves to a tenancy in common after a divorce?

a.       Estate in severalty

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenants in common

180)                       Which one of the following statements about community property rights and property ownership is true?

a.       All property purchased before and during the marriage or legal union automatically becomes community property.

b.       All property purchased separately before the marriage or legal union must be sold and the profits divided equally between the partners.

c.       Any property purchased before the marriage or legal union must have the spouse as the beneficiary.

d.       Property owned separately before the marriage or legal union is separate from the community property, but property purchased during the marriage is owned equally.

181)                       Ryanne is a tenant in a single-family home owned by Dominick. What type of interest does Ryanne have in the property?

a.       Freehold

b.       Homestead

c.       Leasehold

d.       Lifelong

182)                       Which of the following describes an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other?

a.       Estate at will

b.       Estate for years

c.       Leasehold estate

d.       Life estate

183)                       Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace’s death?

a.       Lucas

b.       Lucas and Tom

c.       Lucas, Monique, and Amy

d.       Lucas, Tom, Amy, and Monique

184)                       What form of ownership is inheritable and includes the entire bundle of rights, not subject to any conditions or qualifications?

a.       Fee entire

b.       Fee on condition

c.       Fee simple absolute

d.       Qualified fee

185)                       In California, an estate at will is known as ______.

a.       A life estate

b.       Chattel interest

c.       Personal property

d.       Real chattel

186)                       Eva, Stella, and Lynn owned a vacation home two blocks from the beach. Sadly, Stella passed away over the winter, so when summer arrived, Eva and Lynn shared the home with Stella’s nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?

a.       Estate in severalty

b.       Joint tenancy

c.       Tenancy by the entirety

d.       Tenancy in common

187)                       Which of the following is a life estate in property held by a widow?

a.       Curtesy

b.       Dower

c.       Estate at will

d.       Homestead

188)                       Lewis and Elliot started a real estate investment business together. After much discussion with their attorney, they decided to incorporate, but in such a way that they are treated like a partnership and don’t have to pay corporate taxes. What form of business do they have?

a.       Double proprietorship

b.       Limited liability partnership

c.       Subchapter C corporation

d.       Subchapter S corporation

189)                       Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building?

a.       As a joint tenant with rights of survivorship

b.       As a tenant in common with Oliver’s heirs

c.       In severalty

d.       In trust

190)                       Ken, Dale, and James were brothers who owned more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result was that the court gave each brother a designated set of acres to own. What did the court grant?

a.       Bifurcation

b.       Parcel

c.       Partition

d.       Severalty

191)                       An inheritable freehold estate that’s a fee simple defeasible (where the grantor can reclaim ownership) is also known as ______.

a.       Fee absolute

b.       Fee simple

c.       Qualified fee

d.       Tenancy at will

192)                       What’s the difference between reversionary interest and remainder interest in a property?

a.       Remainder interest applies only to heirs.

b.       Reversionary interest only applies to spouses.

c.       With remainder interest, the property remains with the owner, even when a life tenant possesses the property.

d.       With reversionary interest, the property reverts to the owner after the death of the life tenant.

193)                       Sherman, who owns property in a life estate, neglects the property, significantly diminishing its value. This is called ______.

a.       A lease option

b.       An act of waste

c.       An estate at sufferance

d.       A possessional prerogative

194)                       Non-lawful possession after the expiration of a lease is called ______.

a.       Estate at sufferance

b.       Estate at will

c.       Estate for years

d.       Leasehold estate

195)                       A sole proprietor is a familiar business model. If you practice real estate as a sole proprietor, which of the following is a true statement?

a.       You are on a salary.

b.       You cannot be held liable for your actions.

c.       You have a partner.

d.       You’re an independent contractor.

196)                       Peter is a tenant in a single-family home owned by Cheyenne. What type of interest does Cheyenne have in the property?

a.       Freehold

b.       Homestead

c.       Leasehold

d.       Lifelong

197)                       Dan and Rita are a married couple in California. Which of these items will NOT become community property for them?

a.       The 10-bedroom, 10-bath home they purchase together.

b.       The horse Rita buys with income from her paycheck.

c.       The Maserati Dan buys with income from his investments.

d.       The ruby slippers Rita inherits from her Auntie Em.

198)                       ______ is the form of ownership used by married couples in certain states. It includes automatic survivorship rights.

a.       Tenancy by five unities

b.       Tenancy by the entirety

c.       Tenancy by union

d.       Tenancy in common

199)                       To what type of estate does pur autre vie apply?

a.       Fee simple

b.       Freehold estate

c.       Homestead

d.       Leasehold

200)                       Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?

a.       Termination by division

b.       Termination of co-ownership by partition

c.       Termination of estate in severalty

d.       Termination of joint tenancies

201)                       Which form of real property ownership (for owners other than married couples) means there’s equal ownership shares with undivided possession rights?

a.       Joint tenancy

b.       Tenancy by the entirety

c.       Tenancy in common

d.       Tenancy in severalty

202)                       Jenner purchased his first home, to which he’ll have access forever, as far as he knows. Jenner owns ______.

a.       A freehold estate

b.       A leasehold estate

c.       An estate for years

d.       An ownership estate

203)                       In California, an estate for years is known as ______.

a.       Annual chattel

b.       Chattel annual

c.       Chattel real

d.       Personal interest

204)                       Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned?

a.       It’s a joint tenancy.

b.       It’s held as a tenancy in common.

c.       It’s owned as an estate in severalty.

d.       There isn’t enough information to tell.   

205)                                                                                                                               Which of the following is NOT a characteristic of a corporation?

a.       Corporations are recognized legal entities.

b.       Corporations are tangible and nontaxable.

c.       Corporations are taxable.

d.       Corporations have tax rates separate from individual tax rates.

206)                                                                                                                               Which of the following is a life estate in a property held by a widower?

a.       Curtesy

b.       Dower

c.       Estate at will

d.       Remainderman

207)                                                                                                                               Limited liability companies and limited liability partnerships are favorable forms of business because ______.

a.       Owners of the LLC or LLP are personally liable for LLC/LLP obligations.

b.       They aren’t taxed as partnerships.

c.       They don’t require a general partner.

208)                                                                                                                               All trusts have three parties: the trustor, the beneficiary, and the ______.

a.       Attorney in fact

b.       Broker

c.       Founder

d.       Trustee

209)                                                                                                                               When Edmund died, he left several properties to his heirs. He owned a grocery store and a campground outright, and a strip mall that was held in a living trust. Which of the properties, if any, did NOT have to go through the probate process after his death?

a.       The campground

b.       The grocery store

c.       The strip mall

d.       They all had to go through probate.

210)                                                                                                                               Marcia Weinstein died, and her property wasn’t held in a trust. Thus, her estate will go through ______ to ensure her property is distributed to her beneficiaries in accordance with her will.

a.       A moderator

b.       An attorney

c.       Estate planning

d.       Probate

211)                                                                                                                               Under a land trust, the owner directs a ______ to hold title to the real estate.

a.       Corporate fiduciary

b.       Family member

c.       Friend

d.       Real estate broker

212)                                                                                                                               What primary benefit does a living trust have over a will?

a.       It avoids probate.

b.       It avoids taxes.

c.       It’s easier to establish.

d.       It’s less expensive.

213)                                                                                                                               Peter wants to set up a land trust so that his children can benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust, and Tom agreed. How is the trust created?

a.       Peter conveys the real estate to Tom.

b.       Peter dies.

c.       Peter purchases the real estate.

d.       Tom distributes income from the real estate investments.

214)                                                                                                                               Julian and Clara want to leave their real estate holdings to their children. If at all possible, they’d like those holdings to avoid the probate process after they’re deceased. Their attorney recommends a land trust. Is there a type of trust they could establish that would avoid probate?

a.       No, all trusts go through probate.

b.       Yes, a C trust would avoid probate.

c.       Yes, a living trust would avoid probate.

d.       Yes, a testamentary trust would avoid probate.

215)                                                                                                                               Which one of the following statements about testamentary trusts is true?

a.       Like living trusts, testamentary trusts avoid probate.

b.       Testamentary trusts do not avoid probate.

c.       Testamentary trusts do not need to be reviewed by an attorney.

d.       The costs of administering a testamentary trust is not borne by the beneficiaries.

216)                                                                                                                               Martin placed all of his real estate investments in a trust, and the proceeds are distributed through the trust to his son Nathan. Martin still manages the properties indirectly, and Nathan currently benefits, as he’s past the required beneficiary age of 18. What type of trust is this?

a.       Indirect trust

b.       Living trust

c.       Probate trust

d.       Testamentary trust

217)                                                                                                                               Martin placed all of his real estate investments in a trust, and the proceeds will be distributed through the trust to his son Nathan. In this situation, Nathan is the ______.

a.       Beneficiary

b.       Fiduciary

c.       Trustee

d.       Trustor

218)                                                                                                                               In a trust, the trustee is the person who ______.

a.       Creates the trust

b.       Is empowered to void the trust for any reason

c.       Makes sure the terms of the trust are carried out

d.       Receives the benefits of the trust

219)                                                                                                                               Which one of the following statements is true about land trusts?

a.       A beneficiary’s interest in the land must be conveyed through a deed.

b.       Land trusts generally continue for a specified term, such as 10, 20, or 30 years.

c.       The identity of the trust owner is made public.

d.       The person who establishes the trust (the trustor) is rarely the beneficiary.

220)                                                                                                                               Which of the following trusts is created according to the terms of the will of a deceased person?

a.       Juvenile

b.       Living

c.       Tertiary

d.       Testamentary

221)                                                                                                                               XYZ Trust would like to sell its property. Which of the following is the legal title holder?

a.       The beneficiary

b.       The personal representative of the estate

c.       The trustee

d.       The trustor

222)                       Which of the following statements is true regarding trusts?

a.       Any asset may be held in a trust.

b.       The beneficiary can’t be a minor.

c.       The trustee conveys title to the trustor.

d.       The trustor is the person who carries out the trustee’s wishes.

223)                       A living trust differs from a testamentary trust in that a living trust is established to convey property as well as to ______.

a.       Dictate terms of care in the event the trust creator becomes incapacitated

b.       Hasten the probate process

c.       Shelter income from taxation

d.       Transfer ownership before death and avoid probate       

224)                                                                                                                                                                                 There are many advantages to holding property within a trust. One of the most important advantages is that some trusts ______.

a.       Avoid probate

b.       Need not be reviewed by an attorney

c.       Require probate

d.       Typically take years to sort out

225)                                                                                                                                                                                 Henry died, and his property wasn’t held in a trust. Thus, his estate will go through probate to ensure his property is distributed to his beneficiaries in accordance with his will. The probate process often takes ______ before the property is distributed.

a.       20 years or more

b.       A few days

c.       A few hours

d.       A year or more

226)                                                                                                                                                                                 All sorts of trusts, including living trusts, have three parties: a trustee, a trustor, and a beneficiary. In the case of a living trust, the person who places property in trust while still alive for the benefit of another person is the ______.

a.       Beneficiary

b.       Optee

c.       Trustee

d.       Trustor

227)                                                                                                                                                                                 When a land trust expires, the trustee must either extend the trust term or sell the real estate and ______.

a.       Give all of the proceeds to the attorneys involved

b.       Give the proceeds to the beneficiary

c.       Give the proceeds to the trustor

d.       Retain the proceeds

228)                                                                                                                                                                                 Darren set up a land trust so that his children could benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust. Darren is the ______.

a.       Beneficiary

b.       Executor

c.       Trustee

d.       Trustor

229)                                                                                                                                                                                 What type of asset is held in a land trust?

a.       Always tillable land

b.       Cash

c.       Real estate

d.       Stocks and bonds

230)                                                                                                                                                                                 Beneficiary interest in land that’s part of a land trust is considered ______.

a.       Personal property

b.       Protected from creditors

c.       Real property

d.       Subject to partition

231)                                                                                                                                                                                 Anthony owns a new commercial strip mall with several units. He’s hired Jillian as his agent to find tenants to rent each unit. Is Jillian required to provide Anthony with an agency disclosure form?

a.       It depends on how many units are for lease.

b.       No, agency disclosure is only required for residential transactions.

c.       No, agency disclosure is only required on sales of commercial properties.

d.       Yes, Jillian is required to provide Anthony with an agency disclosure form.

232)                                                                                                                                                                                 Rob is searching for a new apartment that he can lease for the next two years while he’s working in the area. He has hired Danielle to represent him as his agent in this transaction. Is Danielle required to provide Rob with an agency disclosure form?

a.       No, agency disclosure is only required on leases shorter than one year.

b.       No, agency disclosure is only required on sales of residential properties with one to four units.

c.       No, Danielle does not provide the agency disclosure to her client. He only provides it to the landlord involved in the transaction.

d.       Yes, agency disclosure is required on leases exceeding one year.

233)                                                                                                                                                                                 Simon is a buyer represented by Peter. Peter shows Simon several homes currently on the market. What is Peter’s relationship to the sellers, if he doesn’t represent them?

a.       Peter has no relationship with the sellers.

b.       Peter is a fiduciary for the sellers.

c.       The sellers are Peter’s customers.

d.       The sellers are Peter’s principals.

234)                                                                                                                                                                                 Cam is a broker. His licensees, Jane and John, represent two sides in a single transaction. Jane represents the seller; John represents the buyer. What relationship does Cam have to the buyer and the seller?

a.       Cam is a designated agent to both the buyer and seller.

b.       Cam is a designated agent to the buyer and a dual agent to the seller.

c.       Cam is a designated agent to the seller and a dual agent to the buyer.

d.       Cam is a dual agent to both the buyer and seller.

235)                                                                                                                                                                                 Rhonda is an unrepresented buyer who’s purchasing Tony’s townhome. Gary represents Tony in the sale of his property. What’s Rhonda’s relationship to Gary?

a.       A client and fiduciary

b.       A customer

c.       A customer and client

d.       A fiduciary

236)                                                                                                                                                                                 As Tina’s agent, Marcus has broad responsibility to handle all the details of a specific transaction. What type of agent is Marcus?

a.       Dual

b.       General

c.       Limited

d.       Specific or special

237)                                                                                                                                                                                 Stacey, a buyer, is working with Rebecca, a licensee, in a state that doesn’t recognize or permit implied agency. Rebecca doesn’t represent Stacey, however, and is performing only ministerial tasks for her. Which of the following statements about this situation is correct?

a.       Rebecca can’t work with Stacey without an agency agreement.

b.       Rebecca is acting in an agency capacity for Stacey.

c.       Stacey is Rebecca’s client.

d.       Stacey is Rebecca’s customer

238)                                                                                                                                                                                 Which of the following lease agreements should be accompanied by an agency disclosure?

a.       15-month lease

b.       Nine-month lease

c.       Six-month lease

d.       Three-month lease

239)                      Jill is selling her property and hired David as her agent. David brings another client, Kirk, to see the property, which Kirk is interested in purchasing. What kind of agent is David acting as in this scenario?Top of Form

a.       A buyer’s agent

b.      A dual agent

c.       A seller’s agent

d.      A sub-agent

240)                      An unrepresented ______ who’s a party to a transaction is known as a principal.

a.       Agent

b.      Broker

c.       Client

d.      CustomerBottom of Form

241)                      When a licensee has broad responsibility to handle all details of a specific transaction, what type of real estate agency relationship usually exists?

a.       Designated

b.       General

c.       Special

d.       Universal

242)                      You’re holding an open house for Brenda. Walt and Mary walk in and ask you for a flyer that gives details about the property. At this point, what’s your relationship with Walt and Mary?

a.     Clients

b.     Confidantes

c.      Customers

d.     Friends Top of Form

243)                      Which one of the following definitions best describes a consumer?

a.       Someone who is hired to act on behalf of a client

b.      Someone who is in a position of trust and loyalty

c.       Someone who is involved in a transaction but represents neither party

d.      Someone who uses or purchases a product or service

244)                      Which of the following best indicates that Harold is Kelsey’s seller client?

a.       At an open house, Harold asked Kelsey about her commission rate and sales track record.

b.      Harold and Kelsey talked at a local elementary school event about the real estate market and the possibility of Harold selling his house.

c.       Kelsey and Harold have a signed agency agreement.

d.      Kelsey cold-called Harold, and he mentioned that he had been thinking of selling his house.

245)                      Javier represents Marcus, who’s selling his rental property to Ben. Ben is represented by another real estate licensee, Francis. What is Ben’s relationship to Javier?

a.       Client and fiduciary

b.      Customer

c.       Customer and client

d.      Fiduciary

246)                      What types of transactions in California may require agency disclosure?

a.       Commercial leases only

b.      Residential and non-residential sales and leases

c.       Residential leases only

d.      Residential sales onlyBottom of Form

247) What’s the term for someone who’s been given the authority to act on behalf of someone else?

a.     Agent

b.     Client

c.      Mortgage lender

d.     Trustor

248) Phil is a property manager, which means he serves as a _______ agent to his landlord/client.

a.     Designated

b.     General

c.      Special

d.     Universal

249) Jennifer is selling her property and hired Larry as her agent. Jane brings her prospective buyer client, Andrew, to see Jennifer’s property. What is Larry’s role in this scenario?

a.     A buyer’s agent

b.     A dual agent

c.      A seller’s agent

d.     A sub-agent

250) Which of the following statements regarding buyer and seller agency is true?

a.     A seller’s agent represents the buyer, while the buyer’s agent represents the seller.

b.     A seller’s agent represents the seller, while the buyer’s agent represents the buyer.

c.      A sub-agent represents the buyer.

d.     Seller agents are dual agents.

251) Terry represents seller Farrah, and Michael represents Troy, the buyer. Who is (or are) the principal(s) in this transaction?

a.     Farrah

b.     Farrah and Troy

c.      Terry and Michael

d.     Troy

252) Which of the following describes a universal agent?

a.     Buyer’s agent

b.     Conservator

c.      Escrow officer

d.     Listing agent

253) Paulo is a property manager for several large properties. Which type of agent is he in relation to the landlord/client?

a.     Dual

b.     General

c.      Limited/special

d.     Unlicensed

254) April and Wayne are the buyer and seller of a condo, respectively. April is represented by Steve. Wayne is represented by Wanda. Name the principal(s) in this transaction.

a.     April and Wayne

b.     Only Wanda

c.      Only Wayne

d.     Steve and Wanda

255) Listings for sale or lease involving ______ to ______unit residential and commercial properties require agency disclosure in California.

a.     One; 10

b.     One; 40

c.      One; five

d.     One; four

256) You have a listing agreement with Sam. Because of this, what is Sam’s relationship to you?

a.     Client

b.     Confidante

c.      Customer

d.     Friend

257) Tamron owns a commercial strip mall with several units. She’d like to sell the property and move on to another project. She has hired Christopher as her agent. Is Christopher required to provide Tamron with an agency disclosure form?

a.     No, agency disclosure is not required on commercial properties.

b.     No, agency disclosure is only required on sales of residential properties with one to four units.

c.      No, Christopher does not provide the agency disclosure to his client. He only provides it to prospective buyers.

d.     Yes, agency disclosure is required on commercial properties

258) Which of the following is the most serious consequence of treating a customer as a client?

a.     Breaching your duty to your actual client

b.     Drumming up potential business

c.      Wasting your time

d.     Working for someone for free

259) In general, what is the term for a person who’s been placed in a position of loyalty and trust?

a.     Attorney in fact

b.     Client

c.      Fiduciary

d.     Mortgage lender

260) Which type of agent is an escrow officer?

a.     General agent

b.     Limited agent

c.      Single agent

d.     Universal agent

261) Taylor is the owner of a new apartment building. She has 15 units she needs to lease, so she has enlisted Pablo as her agent. Is Pablo required to give Taylor an agency disclosure form?

a.     No, agency disclosure is not required for residential transactions involving five or more units.

b.     No, agency disclosure is only required for commercial transactions.

c.      No, agency disclosure is only required on sales of residential properties.

d.     Yes, agency disclosure is required for lease transactions.

262) Gregory is looking for an apartment to rent for six months. He’s hired Franklin as his agent to help with this search. Is Franklin required to provide Gregory with an agency disclosure form?

a.     No, agency disclosure is only required for commercial transactions.

b.     No, agency disclosure is only required for lease agreements exceeding one year in length.

c.      No, agency disclosure is only required on sales of residential properties.

d.     Yes, agency disclosure is required for lease transactions.

263) What’s the term for someone who has agency representation with the licensee?

a.     Client

b.     Consumer

c.      Customer

d.     Fiduciary

264) Which of these transactions in California is exempt from agency disclosure requirements?

a.     10-year lease of a commercial unit

b.     Sale of a 10-unit residential building

c.      Sale of a single-family home

d.     Two-year lease of a residential unit

265) Melanie is selling her single-family home. She has hired Damian to represent her as her agent in this transaction. Is Damian required to provide Melanie with an agency disclosure form?

a.     No, agency disclosure is not required on sales of residential properties with one to four units.

b.     No, agency disclosure is only required on leases exceeding one year.

c.      No, Damian does not provide the agency disclosure to his client. He only provides it to others involved in the transaction.

d.     Yes, agency disclosure is required on sales of residential properties with one to four units.

266) When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent?

a.     Designated

b.     General

c.      Special

d.     Universal

267) In most cases, what type of agent is a real estate licensee when working with a client on a real estate sale?

a.     Double

b.     Dual

c.      General

d.     Limited or special

268) Your college friend Dave found out that you have a real estate license, and has asked you to help him put together an offer on his neighbor’s house. You agree. What is your relationship with Dave?

a.     Dave is your client.

b.     Dave is your customer.

c.      Dave is your principal.

d.     You are Dave’s customer.

269) After the closing, Donna ensures that her client has keys to the property and copies of all the transaction paperwork. Which fiduciary duty is Donna performing?

a.      Accounting

b.     Confidentiality

c.      Disclosure

d.     Loyalty

270) Micah’s client often tells him to do things that Micah doesn’t necessarily agree with and that create a lot more work for him. Micah has multiple clients and can’t spend all of his time doing the bidding of just one demanding client. Micah decides to pick and choose which of his client’s instructions he is going to follow. What might be the consequence if Micah doesn’t fulfill his duty of obedience to his client?

a.     Micah may be forced to send the client a written apology.

b.     Micah may lose the client’s business.

c.      Micah may receive a slap on the wrist from his broker, and be told to shape up or ship out.

d.     Micah’s commission may be at risk.

271) In which of these situations did the licensee breach the fiduciary duty of loyalty?

a.     Margo tells her seller client Troy that his property is worth less than it really is so he will get a quick sale.

b.     Michael submits all offers he receives on Jarrod’s property.

c.      Steven postponed his vacation so he could attend his seller client’s closing.

d.     Tanaka refuses to encourage his seller client to lower his asking price.

272) Informing parties of material facts related to a transaction describes the duty of ______.

a.     Accounting

b.     Disclosure

c.      Loyalty

d.     Reasonable skill and care

273) What happens when two fiduciary duties conflict? For instance, your clients ask you not to show their property on evenings and weekends, when most showings occur. To obey (a fiduciary duty) means to fail in reasonable skill and care (another fiduciary duty). What should you do?

a.     Discuss the issue with your clients and let them decide.

b.     Obey. It always trumps reasonable skill and care.

c.      Refuse to work with these unreasonable clients.

d.     Wait until your clients are out of town, then show the property.

274) Which of these situations addresses the fiduciary duty of confidentiality?

a.     Jeanette, a seller’s agent, tells the buyer’s agent that her client must sell his home because of an illness.

b.     Mark discloses the commission split he receives from his broker to a colleague at another firm.

c.      Regina tells her seller client that he’s required to disclose the roof damage.

d.     Todd’s lender shares Todd’s financial information with the loan underwriter.

275) Monica meets a colleague from another firm, Kate, for lunch, and discovers that a former seller client, Reuben, is now Kate’s buyer customer. Monica tells Kate, “You know Reuben inherited a bunch of money right before he sold his house, right?” Which of these statements is true?

a.     This is a breach of confidentiality because confidentiality survives forever.

b.     This is a breach of confidentiality because the information impacts Reuben’s negotiating ability with the seller.

c.      This isn’t a breach of confidentiality because Reuben is no longer Monica’s client.

d.     This isn’t a breach of confidentiality because the information shared doesn’t negatively impact the client.

276) If an agent fails to perform the duty of obedience, what might the legal consequence be?

a.     The agent may be charged with misrepresentation.

b.     The agent may be given a verbal warning by his broker.

c.      The agent may receive a nasty call from the client.

d.     The agent may receive a reduced commission.

277) Norman, the seller’s agent, notices a significant crack in the foundation that the inspector failed to note in the inspection report. Norman decides to keep this information to himself. He really needs to close this deal. Which fiduciary duty has Norman breached?

a.     The duty of accounting

b.     The duty of disclosure

c.      The duty of obedience

d.     The duty of reasonable skill and care

278) Specifically, what does the fiduciary duty of disclosure relate to?

a.     Adverse material facts and publicly recorded facts only

b.     Conflicts of interest and confidential information only

c.      Conflicts of interest, material facts, and adverse material facts

d.     Material facts and adverse material facts only

279) The duty of confidentiality survives agency unless the information is known from other sources or ______.

a.     it will help another client.

b.     the former client has moved out-of-state.

c.      the former client is found guilty of fraud.

d.     the transaction has closed.

280) Carrying out a client’s instructions describes the duty of ______.

a.     Accounting

b.     Loyalty

c.      Obedience

d.     Reasonable skill and care

281) Alex’s client doesn’t want prospective buyers to track dirt and mud throughout her clean home. She asks Alex to place a box of booties by the front door with a sign asking visitors to wear the booties while viewing the home. Alex does as his client instructs—no questions asked. What fiduciary duty is this an example of?

a.     The duty of accounting

b.     The duty of loyalty

c.      The duty of obedience

d.     The duty of reasonable skill and care

282) When does an agent’s fiduciary duty of loyalty to the client begin?

a.     Five days after both parties have signed the agency agreement

b.     The moment both parties agree to an agency relationship

c.      The moment the client enters into a sales transaction with another party

d.     The moment the seller accepts the buyer’s purchase offer

283) Gary’s new seller client is concerned about privacy and doesn’t want her listing posted on the MLS. Gary explains to her the potential impact this will have on marketing her property, but the client remains adamant. Gary doesn’t list the property on the MLS. What fiduciary duty is at play?

a.     The duty of confidentiality

b.     The duty of disclosure

c.      The duty of loyalty

d.     The duty of obedience

284) If you fail to notify your client of a conflict of interest, in addition to the duty of loyalty, what other duty have you breached?

a.     Confidentiality

b.     Disclosure

c.      Obedience

d.     Reasonable skill and care

285) Nadine is a busy California licensee. She receives an offer for one of her listings, conveyed to her by a buyer’s representative. What’s true Nadine’s obligation to others in this situation?

a.     She must be loyal to her client, which means providing the buyer in this transaction with as little care and attention as possible.

b.     She owes everyone she comes in contact with, whether they are part of a transaction or not, the duty of reasonable skill and care.

c.      She owes her client the duty of reasonable skill and care and must treat the buyer with honesty and fairness.

d.     She owes her client the duty of utmost skill and care, and other principals in the transaction (such as the buyer making the offer on her listing) the duty of reasonable skill and care.

286) Your clients closed on their property yesterday, but you still have some paperwork that you need to deliver to them as soon as possible. Under which fiduciary duty are you acting?

a.     The duty of accounting

b.     The duty of confidentiality

c.      The duty of disclosure

d.     The duty of obedience

287) What’s one of the most fundamental of all fiduciary duties, and is the one that underlies all other duties?

a.     Accounting

b.     Disclosure

c.      Loyalty

d.     Obedience

288) Your buyer client, Ben Dalton, tells you two weeks before closing that he’s lost his job. He doesn’t have any other income at the moment, and may not be able to follow through on his purchase of the house you’re helping him buy. However, he doesn’t want to miss out on his dream home and is optimistic that he’ll find something soon, so he asks you to keep it confidential. What should you do?

a.     Disclose this fact to all parties to the transaction if Ben refuses to do so.

b.     Keep it confidential, because you owe him that fiduciary duty.

c.      Keep it confidential, but only on the condition that Ben promises not to tell anyone he told you, so you can play dumb.

d.     Send an anonymous note to the seller’s agent telling him the truth.

289) Select the situation that correctly represents a true conflict of fiduciary duties.

a.     Kai learns that her buyer clients’ inspector will be reporting a furnace issue to the buyers. She doesn’t want to break the news to them. Her duty of confidentiality to the seller and her duty of loyalty to her buyers are in conflict.

b.     Nikki’s seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki’s duty of disclosure, which requires her to present all offers, and her duty of obedience.

c.      Renee’s clients don’t want showings on weekends. Renee knows this may reduce market exposure and she feels it’s not in her client’s best interests. This is a conflict of her duty of loyalty and her duty of obedience.

d.     Terrance’s buyer clients don’t want him to share with the seller that they’re having trouble coming up with the down payment. Terrance’s duty of loyalty to his clients is in conflict with his duty of disclosure.

290) Which of the following details may you share with the buyer if you’re the seller’s agent?

a.     None of these facts may be shared with the buyer if you’re the seller’s agent.

b.     The roof leaks when it rains.

c.      The seller is in a hurry to move because his wife is seven months pregnant.

d.     The seller is willing to take less than the asking price.

291) Simone can’t believe that her client won’t let her put a lockbox on the property. How does he expect other agents to be able to show the home? Oh well, it’s not as if he’s asking her to do something illegal. The client’s wish is her command. What fiduciary duty is this an example of?

a.     The duty of accounting

b.     The duty of loyalty

c.      The duty of obedience

d.     The duty of reasonable skill and care

292) To which of these individuals does California licensee Nadine owe the duty of reasonable skill and care rather than utmost skill and care?

a.     Don, a seller, and Betty, a buyer, who have agreed to use Nadine as the dual agent in their transaction

b.     Fred, the buyer offering for Ruby’s house, who is represented by another licensee

c.      Nicholas, Nadine’s buyer client

d.     Ruby, Nadine’s seller client

293) A seller tells his agent that he has to sell his house quickly because of a divorce proceeding, and that he’s willing to accept less than his list price. His agent tells a buyer that the seller will accept as much as $10,000 less than the list price. Which of these is true?

a.     The agent has breached his duty of confidentiality to his client.

b.     The agent hasn’t violated any fiduciary responsibilities to his client.

c.      The buyer is prohibited from making an offer because of the agent’s breach of confidentiality.

d.     Unless the agent has the seller’s permission to share this information, the agent should have disclosed only that the seller is willing to reduce his price, not the amount.

294) Henry is Monica’s listing agent. As Monica’s agent, Henry has a duty to account for and properly handle her funds and ______.

a.     Financial investments

b.     Paperwork

c.      Personal savings

d.     Property taxes

295) While hosting an open house, Liza speaks with prospective buyers. They’re interested in the house, but think the listing price is a little high. They ask her what other incentives they could include in their offer to get the seller to come down on their price. If Liza helps them, what duty may she be breaching?

a.     Accounting

b.     Loyalty

c.      Obedience

d.     Reasonable skill and care

296) You might tell a new client, “This means that I, as the agent, have to keep certain private information you tell me, or that I find out otherwise in our relationship, to myself,” when describing your duty of ______ to the client.

a.     Confidentiality

b.     Loyalty

c.      Obedience

d.     Reasonable skill and care.

297) What happens when your client asks you to do something that’s against the law?

a.     According to the duty of obedience, you must obey, but document the request.

b.     You must break your duty of obedience.

c.      You must obey, but ask your client to sign a disclaimer for your actions.

d.     You must report your client to the authorities.

298) Which of these would be a breach of Margo’s fiduciary duty of confidentiality?

a.     Margo told a potential buyer that the city council was considering rezoning the area around the property to commercial/light industrial.

b.     Margo told her seller client Troy the percentage commission split she gets from her broker.

c.      Under court order, Margo revealed conversations about the financial status of her previous client.

d.     When asked by the buyer’s agent if the seller was firm on his price, Margo said, “Everything’s negotiable,” and winked at the other agent.

299) Shari’s clients want her to post that there are “no showings on weekends” on the MLS. Shari knows that will significantly cut down on their market exposure. Her duty of reasonable skill and care is in conflict with her duty of ______.

a.     Accounting

b.     Disclosure

c.      Loyalty

d.     Obedience

300) What does the letter R in the acronym for fiduciary duties (OLD CAR) stand for?

a.     Rationality

b.     Reasonable skill and care

c.      Respect

d.     Responsibility

301) Which of these situations is addressed by the fiduciary duty of disclosure?

a.     The buyer fails to disclose to the seller his need to close on the property quickly.

b.     The buyer’s home inspector refuses to share the inspection report with the seller.

c.      The seller refuses to complete a property disclosure form.

d.     The seller’s agent fails to disclose a conflict of interest.

302) Which one of the following is an example of the duty of loyalty?

a.     Carrying out a client’s instructions without question

b.     Keeping a client’s confidential information confidential

c.      Never questioning a client’s opinion

d.     Putting the client’s interests first

303) Jim represents Joel in the sale of Joel’s country acreage and house. Jim’s business partner, Rolly, informed Jim that he wants to put an offer in to purchase the property, with the intention to subdivide it. Which statement best represents the disclosure requirements regarding this transaction?

a.     Because Jim isn’t buying the property for himself, he has no disclosure requirements.

b.     Jim may disclose that he’s partners with Rolly, only if Rolly agrees.

c.      Jim must disclose that Rolly is his partner and that Rolly intends to subdivide the property.

d.     Rolly must disclose that he and Jim are business partners.

304) A client has asked her agent for a 24-hour notice on showings. The agent knows this will have a negative impact on the number of showings. Which duty is in conflict with reasonable skill and care?

a.     Accounting

b.     Confidentiality

c.      Disclosure

d.     Obedience

305) Newt’s buyer client isn’t happy with him. The buyer has accused Newt of breaching his duty of ______ by mishandling the earnest money.

a.     Accounting

b.     Confidentiality

c.      Disclosure

d.     Obedience

306) Which of these is an example of an agent NOT executing the duty of reasonable skill and care?

a.     Kevin, Corinne’s buyer agent, helped her write her offer and reviewed it to make sure it was what she wanted before presenting it to the seller’s agent.

b.     Marta agreed to list a commercial property even though her expertise is in residential real estate.

c.      Morgan is careful to protect and manage all his client’s earnest money deposits.

d.     Rex promptly submits all offers to his seller client.

307) Which fiduciary duty requires agents to handle their clients’ funds and paperwork properly?

a.     The duty of accounting

b.     The duty of confidentiality

c.      The duty of disclosure

d.     The duty of obedience

308) Which of these is NOT a duty that California licensees owe to the non-client principals in a transaction?

a.     Disclosure of material facts

b.     Honesty, fairness, and good faith

c.      Loyalty

d.     Reasonable skill and care

309) Which of these tasks that Jenna performs does NOT represent the fiduciary duty of accounting?

a.     She avoids commingling trust funds with her firm’s operating funds.

b.     She discloses the terms of the listing agent’s compensation to her client.

c.      She meticulously manages all her clients’ transactional paperwork.

d.     She properly records the earnest money her buyer client gave her.

310) Facts that negatively affect a property’s value are known as:

a.     confidential.

b.     Immaterial facts.

c.      Material facts.

d.     property fraud.

311) Which of these circumstances does NOT require agent disclosure?

a.     As part of his corporation, Sean, a licensee, owns several investment properties. He’s selling one.

b.     Gary represents the buyer. He’s a shareholder in the title insurance company the buyer has selected.

c.      Marty is representing Dwayne in both the sale of his current home and the purchase of his new home.

d.     Megan has listed her brother’s townhome for sale.

312) Which of the following statements about the fiduciary duty of confidentiality is true?

a.     It doesn’t extend to material facts relating to the property.

b.     It encompasses any and all information the client tells the agent, not just confidential information.

c.      It ends with the termination of the agency agreement.

d.     It never conflicts with the duty of disclosure.

313) Which of the following is an example of the duty of disclosure?

a.     Carrying out a client’s instructions without question

b.     Informing parties to the transaction of material facts related to the transaction

c.      Keeping a client’s confidential information confidential

d.     Keeping the client in the loop on all that is happening with the transaction

314) Jessie, the buyer’s agent, decides to informally inspect the property while she waits for the professional inspection. She notices a small puddle of water in the basement behind a stack of boxes. Later, Jessie calls the seller’s agent and tells him what she found. The agent tells her not to worry; the seller is aware of the leak and plans to have it fixed within the week. Which one of these statements about this situation is true?

a.     Jessie can check the basement later to be sure the leak is fixed.

b.     Jessie can rely on the inspector to discover and disclose the leak.

c.      Jessie should disclose this to her buyer.

d.     Since the seller intends to fix the leak, Jessie doesn’t need to disclose it to her buyer.

315) When agents put their clients’ interests ahead of their own, this describes the duty of ______.

a.     Accounting

b.     Loyalty

c.      Obedience

d.     Reasonable skill and care

316) Which of the following statements about the fiduciary duty of disclosure is true?

a.     It only applies to the seller’s agent.

b.     It requires licensees to disclose everything to all parties.

c.      It’s owed to other parties, not just to the licensee’s clients.

d.     It’s owed to the licensee’s clients only.

317) Which fiduciary duty may continue even after the transaction closes?

a.     The duty of accounting

b.     The duty of disclosure

c.      The duty of obedience

d.     The duty of reasonable skill and care

318) Layla, a licensee, has had a few casual meetings with a potential client, Marcus. Marcus has told Layla the type of home and locations he’s interested in. Layla has mentioned a few homes that she thinks Marcus might be interested in. Although Layla hasn’t said that she will continue to look for homes for Marcus, Marcus believes she’ll do just that. Which of these statements about this situation is correct?

a.     Because Layla doesn’t know if Marcus is working with another agent, she’s just inadvertently created a dual agency situation.

b.     Because Layla has performed some agency tasks for Marcus, she has an express agency agreement with him.

c.      Layla and Marcus have no agency agreement, either express or implied, until Layla begins showing Marcus homes.

d.     Layla’s actions may have created an implied agency agreement with Marcus.

319) Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max’s representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he’s seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max’s agency coupled with interest?

a.     It’s still in place because it doesn’t terminate on the death or incompetence of the principal.

b.     Max has no recourse; the agency relationship is terminated and he receives no compensation.

c.      Max now owns the subdivision as a result of the principal’s death or incapacity.

d.     Rufus must now pay Max the commission that he didn’t get from the original listing, and the agency relationship is terminated.

320) Leigh Ann is a licensee. Her cousin, Carly, is interested in buying a house. Leigh Ann shows Carly how to look for properties online and runs some CMAs for her. When Carly finds a property she likes and asks Leigh Ann to help her make the offer, Leigh Ann decides she should ratify the agreement with Carly. What are Leigh Ann’s options for accepting an agency relationship after the fact?

a.     Continue to assist Carly and have her sign an estoppel certificate.

b.     Leigh Ann’s only option is to get a signed listing agreement.

c.      Prepare an agency agreement or continue to assist Carly with the purchase.

d.     Prepare an estoppel certificate and a listing agreement.

321) Elisa agreed to list Simone’s house for sale. After the listing contract was signed, Simone lost her job, and her father, George, offered to help Simone by paying Elisa’s listing commission. The buyer’s agent, Carl, also reduced his commission. Who is Elisa’s client?

a.     Carl

b.     George

c.      No one

d.     Simone

322) When the listing agreement’s purpose has been fulfilled, what happens to the agency agreement?

a.     Agency continues for future transactions.

b.     Agency continues until the agreement’s expiration date.

c.      The agency agreement terminates by completion.

d.     The agent can renounce the listing agreement to terminate it.

323) Alice listed a three-bedroom home for her client, but before she finds a buyer, the home burns to the ground. What happens to the agency agreement that Alice has with her client?

a.     The agency agreement continues as created unless Alice and her client can mutually agree to terminate it.

b.     The agency agreement is terminated if the property is destroyed.

c.      The agency agreement must be extended until the home is rebuilt, or for six months, whichever is longer.

d.     The agreement must continue, but it can be modified due to the changed value of the property.

324) Jenson signed a seller agency agreement with Susan. Right before closing, a hurricane destroyed the property. What happened to Jenson and Susan’s agreement?

a.     It’s terminated once the specified term in the agency agreement expires.

b.     Jenson and Susan can mutually agree to terminate the agreement.

c.      The agreement terminates by force of law.

d.     The client can revoke the agreement but may be considered in breach of contract.

325) Which one of the following actions would result in the legal termination of an agency agreement?

a.     The client wants the seller to make improvements to the property.

b.     The client wants to attach an addendum to the sales contract.

c.      There’s an unexpected death in the agent’s family.

d.     The term specified in the agency agreement expired.

326) In which of the following listing agreement terminations is there LEAST likely to be a penalty for terminating the agreement?

a.     The agent abandons the listing.

b.     The client and agent mutually agree to terminate the listing.

c.      The client revokes the listing agreement to sell the property to a family member.

d.     The seller withdraws the listing, deciding instead to stay in the property.

327) Imagine that you’re an active real estate licensee as well as an architect, and you’d like to partner with a builder who’s just beginning a development. Which of these creates agency coupled with interest?

a.     You agree to design the houses for this builder in return for getting the listings when the properties are finished.

b.     You agree to list the properties for a reduced commission once they’re built.

c.      You have the builder and developer sign listing agreements now that will be effective when the properties are complete.

d.     You tell the builder that he has to hire you to design the houses if the builder wants you to list them when they’re finished.

328) In which of these situations would a listing be most likely to terminate due to listing agreement expiration?

a.     A market with high inventory and low demand

b.     A market with low inventory and high demand

c.      A moderately-priced home in a neighborhood slated for renewal

d.     A moderately priced home sold as-is in a market full of investors

329) Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of the following statements about this situation is true?

a.     Bankruptcy has no impact on agency agreements.

b.     Marcus can choose whether or not to continue the listing agreement with Ron.

c.      The agency agreement is terminated because the agent filed for bankruptcy.

d.     The agency agreement only terminates if the broker or the principal declares bankruptcy.

330) What happens if a real estate licensee acting as a finder performs duties beyond just introducing the buyer and seller?

a.     An agency relationship is created. The licensee can face disciplinary action if an agency is formed without proper agency disclosures.

b.     Nothing. The person has a real estate license and can perform other duties as needed.

c.      The licensee can get in trouble for acting as a dual agent.

d.     The licensee is guilty of misrepresentation.

331) You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients?

a.     Buyer agency

b.     Dual-licensed dual agency

c.      Seller agency

d.     Single-licensed dual agency

332) Broker Adeline’s firm has a listing for a condo downtown. Maurice is a cooperating agent. What does this mean?

a.     He doesn’t mind working with other brokers.

b.     He’s from another brokerage and brings a potential buyer for the listing.

c.      He’s the listing agent for the condo and also represents a buyer interested in the condo.

d.     He works at Adeline’s firm and is helping to market the condo listing.

333) Which fiduciary duties does a finder owe?

a.     A finder doesn’t owe any fiduciary duties.

b.     A finder only owes the duties of confidentiality and loyalty.

c.      A finder only owes the duty of confidentiality.

d.     A finder owes the duties of obedience, loyalty, disclosure, confidentiality, accountability, and reasonable skill and care.

334) Hanna represents the buyer, and Hank, an agent from a different firm, represents the seller in the same transaction. What type of agency relationship does Hanna have with her client?

a.     Buyer agency

b.     Dual-license dual agency

c.      Seller agency

d.     Single-license dual agency

335) Estelle is representing seller Margaret. Which of the following tasks is one that Estelle is required to perform as Margaret’s agent?

a.     Determine the property’s listing price based on comparables.

b.     Give the buyer’s earnest money to Margaret to deposit into her personal checking account.

c.      Hire someone to market the property.

d.     Inform Margaret about required property condition disclosures.

336) Which of the following is an example of a sub-agency situation?

a.     Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group, and he has a buyer customer who wants to see the property.

b.     Kermit is represented by Burt, an agent with Street Realty. Today they are seeing Oscar’s house, which has been listed by Oscar’s agent, Ernie, from Energy Realty.

c.      Rita is a licensee with Hawthorne Realty. She has a client, Dinah, who is selling her condo. Rita thinks Dinah’s house will be perfect for Ruby, a customer.

d.     Tim and Tom are both licensees with Acme Realty. Tim is the listing agent on a home where Tom represents the buyer.

337) Madeline works for a single-agency firm. If she wants to represent both the buyer and seller in a transaction, what must she do?

a.     She can’t do this at her firm.

b.     She may act as a designated agent for one client and a representative agent for the other.

c.      She should get informed consent from both sides to represent them.

d.     She should have her broker act as a dual agent, and she can be a single agent for each party.

338) Ned represents Sofia in the sale of her townhome. Luciana represents Sofia’s buyer, Arturo. What is Luciana’s responsibility to Sofia?

a.     Assist Sofia in the performance of tasks that Sofia needs to accomplish in order to get to a successful closing.

b.     Contact the tax assessor’s office for an estimate of the real property taxes.

c.      Disclose that the buyer is a registered sex offender.

d.     Disclose that the buyer will not have the funds for the down payment unless he sells his current home.

339) In a seller agency relationship, to which party does the licensee owe undivided loyalty?

a.     Both the seller and the buyer

b.     The broker

c.      The buyer

d.     The seller

340) As a licensee, you’ll have several tasks you must perform for your buyer client. One of these tasks is to ______.

a.     Coach the buyer on how to negotiate the terms of the sales contract to be completely in the buyer’s favor

b.     Explain to the buyer why it’s unnecessary to have a professional inspection done on a new home

c.      Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license

d.     Show properties the buyer might qualify for if he would put down more earnest money

341) Bradley is acting as a finder for Emma. He’s introduced her to Rachel, the other party in the transaction. Whom does Bradley represent?

a.     Both Emma and Rachel

b.     Emma

c.      Neither Emma nor Rachel

d.     Rachel

342) If you represent the buyer and seller in the same transaction, what type of agency relationship do you have with your clients?

a.     Buyer agency

b.     Dual-licensed dual agency

c.      Seller agency

d.     Single-licensed dual agency

343) Assuming that dual agency is legal where these scenarios occur and that the licensees’ brokerages permit it, which of these situations demonstrates illegal dual agency?

a.     Jarrod represents the seller, Juan. A buyer, Alaina, approaches Jarrod about representing her in the purchase of Juan’s house. Jarrod obtains Juan and Alaina’s consent to dual agency.

b.     Kady’s firm uses representation agreements that, when signed, provide consent to dual licensee dual agency. Kady’s buyer makes an offer on one of Kady’s colleague’s listings.

c.      Levi’s customer, Renee, wants to make an offer on Levi’s seller client’s home. Levi explains that he represents the seller but then presents Renee’s offer to his client.

d.     Tom is holding an open house for his client. Ruby, a buyer, says she wants to make an offer. She details her situation; Tom waits until she finishes and then suggests that she offer a non-refundable earnest money deposit to strengthen her offer.

344) What happens if a person without a real estate license is acting as a finder and performs duties beyond just introducing the buyer and seller, such as negotiation or advising?

a.     An agency relationship is created. The individual can face disciplinary action if an agency relationship is formed without proper agency disclosures.

b.     Nothing. The person is not a licensee and doesn’t face any repercussions from the real estate commission.

c.      The individual can get into trouble for acting as a dual agent.

d.     The individual could face penalties for acting as a real estate licensee without having a real estate license.

345) Bradley is acting as a finder for Emma. He’s introducing her to Rachel, the other party in the transaction. Which fiduciary duties does Bradley owe Rachel?

a.     A finder doesn’t owe any fiduciary duties.

b.     He only owes the duties of confidentiality and loyalty.

c.      He only owes the duty of confidentiality.

d.     He owes the duties of obedience, loyalty, disclosure, confidentiality, accountability, and reasonable skill and care.

346) Licensee Randy has a written listing agreement with Brent, a seller. The buyer is Tim. Who is Randy’s client?

a.     Both the seller (Brent) and the buyer (Tim)

b.     Randy’s broker

c.      The buyer (Tim)

d.     The seller (Brent)

347) Natalie is selling her home and has hired Dylan as her agent. Natalie has given Dylan permission to enlist the services of another licensee, Al, to act as a sub-agent for the transaction. Who is liable for Al’s actions?

a.     Dylan and Al only

b.     Dylan, Natalie, and Al

c.      Dylan only

d.     Natalie only

348) Who does a finder represent?

a.     Both the buyer and seller

b.     Neither the buyer nor seller

c.      The buyer

d.     The seller

349) Orla represents the seller, and Pardeep, an agent from a different firm, represents the buyer in the same transaction. What type of agency relationship does Orla have with her client?

a.     Buyer agency

b.     Dual-licensee dual agency

c.      Seller agency

d.     Single-licensee dual agency

350) After a few meetings, the Stinsons sign a listing agreement with broker Vera so she can sell their house. The house has already generated interest from a potential buyer named Sergei, who has spoken with Vera about the house’s price and square footage. Which of the following is true about this situation?

a.     Because Vera now has a sub-agency relationship with the Stinsons, she shouldn’t talk to Sergei until the house is officially on the market.

b.     The Stinsons and Vera have brokerage relationship agreement.

c.      Vera has an agency agreement with Sergei.

d.     Vera should disclose the dual agency that has been created by her direct assistance to the buyer

351) Bradley is acting as a finder for Emma. Which action can he perform?

a.     Introduce Emma to the seller (or buyer)

b.     Negotiate an offer for Emma

c.      None of these actions

d.     Present the offer on Emma’s behalf

352) In a buyer agency relationship, what relationship does the seller have to the licensee?

a.     The seller is the licensee’s client.

b.     The seller is the licensee’s customer.

c.      The seller is the licensee’s fiduciary.

d.     The seller is the licensee’s nemesis.     

353) Which of the following questions can an agent in a dual agency transaction answer without breaching her duties to either client?

a.     Are you aware of any structural issues with the property?

b.     How much should my counter-offer to the buyer be?

c.      What repairs or concessions should I ask for from the home inspection?

d.     What should I agree to fix from this list the buyer sent?

354) A middleman is another term for a _______.

a.     Finder

b.     Keeper

c.      Universal agent

d.     Wholesaler

355) Mavis is a buyer’s agent working with Blaine, an unrepresented seller. Mavis’s buyer, Cintra, makes an offer on Blaine’s property. Mavis assists Blaine with the paperwork. What’s Mavis’s relationship to the parties?

a.     She’s a buyer’s agent to Cintra and an undisclosed dual agent with the seller.

b.     She’s a dual agent to the buyer and seller.

c.      She’s an agent to Cintra, and the seller is her customer.

d.     The seller and buyer are her customers.

356) When a licensee represents a seller, which one of the following statements is true about the licensee’s ability to list other properties that are for sale?

a.     The licensee isn’t permitted to list other properties for sale.

b.     The licensee is permitted to list other properties for sale as long as they’re not competing properties.

c.      The licensee is permitted to list other properties for sale, even if they’re competing properties.

d.     The licensee must list the seller’s property only for the first 90 days, after which the licensee may list other properties.

357) A licensee has several tasks to perform for seller clients. What’s one of those tasks?

a.     Advise sellers on the property conditions they shouldn’t disclose to the buyer.

b.     Communicate all offers and counter-offers to the sellers.

c.      Disclose to the sellers that if the property doesn’t sell within 60 days, the asking price must be lowered.

d.     Ensure an implied agency agreement is in place.

358) Erik is acting in a single agency capacity in a transaction. What does this mean?

a.     Erik isn’t part of a realty team within his brokerage firm.

b.     He’s representing (and owes undivided loyalty to) either the buyer or the seller.

c.      He’s working as a non-agent for either the buyer or seller.

d.     His firm doesn’t allow dual agency.

359) Bradley is a real estate licensee acting as a finder for Emma. What happens if he performs duties beyond just introducing the buyer and seller, such as negotiating a deal?

a.     An agency relationship is created. Bradley can face disciplinary action if an agency is formed without proper agency disclosures.

b.     Bradley is guilty of misrepresentation.

c.      He can get in trouble for acting as a dual agent.

d.     Nothing. He has a real estate license so he can perform other duties as needed.

360) Which one of the following tasks must licensees perform for seller clients?

a.     Dictate the listing price of the property.

b.     Drive the sellers around to show them other properties that are for sale in their neighborhood.

c.      Ensure that the buyer’s earnest money is deposited.

d.     Show the sellers how they can market their property.

361) A licensee must perform which of the following tasks for a buyer client?

a.     Ensure the buyer understands the importance of due diligence, including a professional inspection of the property.

b.     Review the seller’s property disclosures and show the buyer the ones that you believe are important.

c.      Show the buyer properties that you are listing for other sellers.

d.     Tell the buyer how much earnest money she should put down to ensure the deal goes through.

362) What is a sub-agent?

a.     An agent appointed by another agent to assist in serving a seller client

b.     An agent who handles the listing for a seller

c.      An inexperienced agent

d.     Anyone who works for a broker

363) Buyer Kristin has a buyer agency agreement with Carlotta, a licensee. Kristin’s brother, Dalton, is going to showings with Kristin and helping her decide which house is the best fit. Who is/are Carlotta’s client(s)?

a.     Kristin

b.     Kristin and Dalton

c.      Kristin and the seller

d.     The seller

364) A finder is a _______.

a.     General agent

b.     Limited agent

c.      Middleman

d.     Universal agent

365) Melinda is selling her home and has hired Megan as her agent. Megan enlists the services of another licensee, Alison, to act as a sub-agent for the transaction without permission from Melinda. Who is liable for Alison’s actions?

a.     Megan and Alison only

b.     Megan, Melinda, and Alison

c.      Megan only

d.     Melinda only

366) Marge is a licensee in a dual agency transaction with seller Steven and buyer Alda. In which of the following situations can Marge share what she knows with all parties without compromising her duty of loyalty?

a.     Alda tells Marge she wants to make an offer on Steven’s property and asks Marge what she should offer, since Marge knows Steven’s rock-bottom price.

b.     Alda tells Marge that she’s hired an inspector to perform a property inspection.

c.      During the home inspection, Marge hears the buyer tell the inspector several times, “That’s no big deal. I can fix that.” The buyer lists those as repairs she wants the seller to make.

d.     Steven tells Marge he can reduce his price, and Alda tells Marge she can increase her offer.

367) In a buyer agency relationship, whom does the licensee represent?

a.     Both the seller and the buyer

b.     The buyer

c.      The listing firm and the buyer

d.     The seller

368) Bradley is acting as a finder for Emma. What’s Bradley’s role?

a.     To help buyers and sellers locate agents

b.     To introduce the buyer and seller, but not provide representation

c.      To investigate title issues

d.     To try to locate the prior owners of a specific property

369) A person who doesn’t owe either party any fiduciary duties and only introduces the buyer and seller is called a ____.

a.     Finder

b.     General agent

c.      Limited agent

d.     Special agent

370) Ryan is an unlicensed individual acting as a finder for Rachel. What happens if he performs duties beyond just introducing the buyer and seller, such as negotiating a deal?

a.     An agency relationship is created. Ryan can face disciplinary action if an agency is formed without proper agency disclosures.

b.     Nothing. Ryan is not a licensee, so he doesn’t face any repercussions from the real estate commission.

c.      Ryan can get in trouble for acting as a dual agent.

d.     Ryan could face penalties for acting as a real estate licensee without having a real estate license.

371) What responsibility does the seller’s agent have to the seller?

a.     Advocate for and ensure the sale is profitable for the seller.

b.     Advocate for the seller and help present the property in the best light, even if it means covering up material defects.

c.      Ensure the sale is profitable for the seller.

d.     Seek a sale at the best price at terms that are acceptable to the seller.

372) Which of the following is a buyer’s agent’s task or duty?

a.     Advocating for the seller

b.     Negotiating for the seller

c.      Representing the buyer’s interests

d.     Reviewing transactional documents with the seller

373) Which one of the following provides the best example of single agency?

a.     A broker acts as a dual agent to one party only.

b.     An agent from one firm acts as the agent for the buyer.

c.      Two agents from different firms each act as a sub-agent for the other.

d.     Two agents from one firm act, separately, as the agent for the buyer the agent for the seller.

374) Monica’s business is booming. She’s representing an owner who’s selling a $500,000 home on one side of town, and a buyer who’s purchasing a $300,000 property on the other side of town. As it happens, the seller and buyer both know each other from church and have been talking to others about Monica’s talents, which has brought in several new leads for her to pursue. What type of agency relationship does Monica have with the seller and buyer?

a.     She is each party’s single agent.

b.     She’s a dual agent, since the seller and buyer know each other.

c.      She’s the buyer’s agent and the seller’s sub-agent.

d.     She’s the seller’s agent and the buyer’s sub-agent.

375) Which of these situations is an example of designated (appointed) agency?

a.     Jacob, a broker, acts as the dual agent and appoints Mark to represent the buyer and Todd to represent the seller in the same transaction.

b.     Marvel’s broker at Homeworks Realty appoints her as the buyer’s agent in a transaction. Tim’s broker at Great Homes Real Estate appoints him as the seller’s broker in the same transaction.

c.      Meredith’s broker appoints her to represent both the buyer and the seller in a single transaction.

d.     Michele is the firm’s managing broker. She’s the designated dual agent in all dual agency transactions.

376) Which action can a finder perform?

a.     Introduce the buyer and seller

b.     Negotiate an offer for a client

c.      None of these actions

d.     Present the offer on a client’s behalf

377) Camille has a listing for a townhome, and appoints Ivy as her sub-agent. Ivy brings a buyer customer to the transaction, and the buyer purchases Camille’s listing. What’s true about the agency relationships in this situation?

a.     Camille owes her loyalty to Ivy.

b.     Ivy is Camille’s sub-agent and owes loyalty to the seller.

c.      Ivy owes her loyalty to the buyer.

d.     The buyer is the sub-agent to the seller.

378) Which of these tasks must a licensee perform for buyer clients?

a.     Advise the buyer on how to get the seller to come down on the asking price.

b.     Ensure that the buyer receives copies of all signed paperwork.

c.      Explain to the buyer how to deposit the earnest money into the seller’s personal checking account.

d.     Explain to the buyer that there’s really no need to review transaction documents because they’re all standard.

379) You’re representing Abe and Ben in a dual agency situation. Abe tells you something that would give Ben a distinct advantage if he knew. Do you tell Ben?

a.     No, because agents can’t share information with their clients.

b.     No, because it’s hearsay.

c.      No, because you can’t share one client’s confidential information with another client.

d.     Yes, because Ben is your client and has a right to know.

380) Which legal description method uses compass headings and directions?

a.     Block and grid

b.     Lot and block

c.      Metes and bounds

d.     Rectangular government survey

381) “Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Henry Nelson …” is an example of what type of legal description?

a.     Benchmark

b.     Lot and block

c.      Metes and bounds

d.     Rectangular

382) Which entity decides the matter when two different legal descriptions conflict?

a.     Appraisers

b.     Land surveyors

c.      The courts

d.     The property owners

383) Travis is a new real estate licensee and is writing up his first offer to purchase for his buyer clients. Which of these statements is true?

a.     Real estate licensees don’t have access to legal descriptions.

b.     Travis should include the legal description in the offer, because it provides a complete description of the property.

c.      Travis should not include the legal description on the offer to purchase, but he should include the address.

d.     Travis shouldn’t write up the offer to purchase; the client should.

384) Which of these may have been used as a point of beginning in the metes and bounds system?

a.     A fence post

b.     All of these

c.      An iron stake

d.     A pine tree

385) A registered land surveyor is preparing a plat map that will show elevations and boundaries for a multi-level condominium complex. What is used as a reference point for measuring elevation?

a.     Datum

b.     Monument

c.      Point of beginning

d.     Sea level

386) Morty, a land surveyor, was called out to survey a property. After doing some research, he located the legal description for the property in question. Now, if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to Bear Creek. What type of legal description is Morty working with?

a.     Benchmark

b.     Datum

c.      Metes and bounds

d.     Rectangular government survey

387) What’s a datum?

a.     An iron pin or other permanent marker used in metes and bounds descriptions

b.     A point indicating a location is at sea level

c.      A point, surface, or line used as a reference for measuring elevations

d.     The center of a township

388) Sunshine Surveyors, Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing the surveyor did when he surveyed the new neighborhood was to reference what type of description?

a.     Map

b.     Metes and bounds description

c.      Monument

d.     Plat book

389) Cheri wants to find the legal description for her property. Where could she look?

a.     At a deed

b.     In a history book

c.      In a phone book

d.     On a piece of mail

390) Which of the following is NOT one of the three most commonly used systems to describe land in the U.S.?

a.     Lot and block

b.     Metes and bounds

c.      Monument system

d.     Rectangular survey system

391) When looking at a rectangular survey system map, where would Section 36 be located?

a.     The exact center of the township

b.     The northeastern-most section of the township

c.      The southeastern-most section of the township

d.     The southwestern-most section of the township

392) What is a principal meridian?

a.     An east-west line used as a reference point in the rectangular survey system

b.     A north-south line used as a reference point in the rectangular survey system

c.      The center-most section identified in the rectangular survey system

d.     The center-most township identified in the rectangular survey system

393) Who can verify the boundaries of a legal description for a given property?

a.     Anyone with a smart phone

b.     Designated broker

c.      Land surveyor

d.     Title company

394) Pamela inherited a piece of property that has been in her family for generations. She wants to find the property’s exact boundaries. What should contain this information?

a.     A fence company’s records

b.     A legal description of the property

c.      A satellite image of the property

d.     Old family photos of the property

395) Buyers Tony and Sylvia know the postal address of the property they’re purchasing but are wondering about the legal description of the property. Where is the most likely place to find the legal description?

a.     Deed

b.     HOA covenant

c.      Home warranty

d.     Listing agreement

396) The Simpsons are buying a five-acre lot that was part of a much larger tract of acreage. When the owners of the large acreage decided to subdivide it, they needed to have a legal description created for the five-acre lot. What was used as the starting point for creating that legal description?

a.     A benchmark

b.     A plat map

c.      A survey

d.     Metes

397) What does the metes and bounds system use to develop a property’s legal description?

a.     Compass headings and directions

b.     Plat references

c.      Principal meridians and base lines

d.     Townships and sections

398) Related to the legal description of land, what is a monument?

a.     43,560 square feet

b.     A permanent land marker sometimes used in legal descriptions

c.      A point from which elevations are measured

d.     The subdivision of air above the land

399) How is the grid that’s used in the rectangular survey system laid out?

a.     The numbers are read left to right.

b.     The numbers are read right to left.

c.      The numbers start in the center and spiral out clockwise.

d.     The numbers start in the northeastern corner and follow a zigzag pattern.

400) Absent a legal description, what are other ways to identify a property?

a.     A legal description is the only way to identify a property

b.     Family photos

c.      Satellite imagery

d.     Street addresses and tax map personal identification numbers

401) Which of the following is a key consideration and starting reference for a metes and bounds description?

a.     Base line

b.     Benchmark

c.      Point of beginning

d.     Principal meridian

402) Why is it important that the legal description appears in real estate documents?

a.     It defines the duties an agent owes a client.

b.     It details the terms for a lease.

c.      It outlines all of the terms of a real estate purchase.

d.     It precisely locates the property and its boundaries.

403) Which of the following is the least specific method for describing a property?

a.     Lot and block description

b.     Metes and bounds description

c.      Rectangular survey system description

d.     Street address

404) How large is a section used in the rectangular survey system?

a.     640 acres

b.     640 miles

c.      640 square feet

d.     One acre

405) What does the lot and block system use to develop a property’s legal description?

a.     Compass headings and directions

b.     Plat references

c.      Principal meridians and base lines

d.     Townships and sections

406) Kellan and Stacy are in the midst of a property dispute. Each party has a legal description and survey that show conflicting boundaries between their properties. What may be the best way to resolve this dispute?

a.     One property owner can sell their property to the other.

b.     They must agree between themselves where the true boundary lies.

c.      They must take the dispute to court.

d.     They should each hire a land surveyor to determine the boundary.

407) Shannon is reading through paperwork related to her upcoming home purchase when she comes across the following: “Southwest quarter of Southwest quarter (SW ¼ of SW ¼) and West Half of Southeast quarter of Southwest quarter (W½ SE¼ SW¼) of Section Eleven (11), Township Four (4) North of Range Eight (8) West.” What did Shannon just find?

a.     Legal description

b.     Mortgage clause

c.      Quitclaim deed

d.     Tax description

408) If the land is described as “Lot 6 of Block 3 of the East Subdivision plat as recorded in Map Book 18, Page 11 at the Recorder of Deeds,” what type of legal description is being used?

a.     Lot and block

b.     Metes and bounds

c.      Monument system

d.     Rectangular government survey system

409) What is a bound?

a.     A line that runs east to west

b.     A line that runs north to south

c.      A physical feature that defines the boundaries of the land

d.     The direction and distance of a line forming the boundary of a property

410) What is a plat map?

a.     A detailed depiction of air lots above the land

b.     A detailed map of a subdivision that includes boundaries, measurements, and distances between points

c.      A map showing all of the benchmarks located in the U.S.

d.     A map tax assessors use when determining the value of a property

411) What is a section?

a.     A 36-square-mile square formed in the use of the rectangular survey system

b.     A one-square-mile square formed in the use of the rectangular survey system

c.      A permanent reference point used in the measurement of elevations

d.     The point of beginning used in a metes and bounds survey

412) Which of the following statements related to condominiums and surveys is true?

a.     All states require that land used for condominiums be surveyed by a registered land surveyor and that a plat map be prepared to show the elevations of the floor and ceiling boundaries, as well as the vertical boundaries of each unit.

b.     Condominiums are not required to be surveyed.

c.      Multi-level condominium units cannot be surveyed.

d.     Only the ground floor of a condominium unit is surveyed.

413) The process of determining the location, size, and boundaries of a parcel of property is called ______.

a.     Platting

b.     Subdividing

c.      Surveying

d.     Title searching

414) Jamie wants to find the legal description for a property. What’s her best bet?

a.     County recorder’s office, registry of deeds, or a title company

b.     Motor vehicle department

c.      Neighborhood notice

d.     Real estate flyer

415) Which type of legal description is this: “Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office”?

a.     Benchmark

b.     Lot and block

c.      Metes and bounds

d.     Rectangular government survey

416) Brandon is interested in purchasing a piece of property, but before doing so, he’d like to verify the accuracy of the legal description. Which of these options will accomplish this?

a.     Having a home inspection performed

b.     Having an appraisal performed

c.      Having a survey conducted

d.     Looking up the property on Google

417) What is the oldest type of legal description used in the U.S.?

a.     Assessor’s parcel number

b.     Lot, block, tract

c.      Metes and bounds

d.     Rectangular government survey

418) In the rectangular survey system, what is a base line?

a.     An east-west line used as a reference point

b.     A north-south line used as a reference point

c.      The center-most section identified

d.     The center-most township identified

419) How are sections and townships related to one another, relative to the rectangular government survey system?

a.     Sections are divided into townships.

b.     Townships and sections are opposites.

c.      Townships and sections are synonyms.

d.     Townships are divided into sections.

420) When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: “Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet.” In this description, what does “north for 314 feet” represent?

a.     A benchmark

b.     A bound

c.      A mete

d.     A monument

421) Which type of legal description do courts prefer?

a.     Benchmark

b.     Lot and block

c.      Metes and bounds

d.     Rectangular government survey

422) If the land is described as “Beginning at the great oak 60 yards from the center of the Rock River that runs north to south through the county,” what type of legal description is being used?

a.     Lot and block

b.     Metes and bounds

c.      Monument system

d.     Rectangular survey system

423) Benjamin is interested in a piece of property but is curious about its exact legal description. What’s one of the best ways to find this information?

a.     Ask neighbors where the property boundaries are.

b.     Look for the point of beginning.

c.      Look up the latitude and longitude coordinates of the property on Google Maps.

d.     Reference a previous property deed.

424) Harmony is looking at the legal description on her purchase contract. It mentions that the plat of her property is recorded in Map Book 12, page 14, at the county courthouse. What type of legal description is this?

a.     Lot and block

b.     Metes and bounds

c.      Monument and benchmark

d.     Rectangular government survey

425) Which legal description method is regulated by the U.S. Department of the Interior’s Bureau of Land Management?

a.     Governmental

b.     Lot and block

c.      Metes and bounds

d.     Rectangular government survey

426) Stan and Emile are arguing over their shared lot line, since Stan thinks that Emile planted a privet hedge on Stan’s property. Stan filed a civil legal action against Emile. Which of these would the court use to determine the actual lot line?

a.     Aerial photographs

b.     An affidavit from a surveyor

c.      Legal descriptions of both properties

d.     Testimony from long-time neighbors

427) Which type of survey system is also known as the public land survey system (PLSS)?

a.     Address and zip code

b.     Lot and block

c.      Metes and bounds

d.     Rectangular survey

428) When measuring elevations, what is used instead of a point of beginning?

a.     Datum

b.     Equator

c.      Monument

d.     Sea level

429) A drawing prepared by a surveyor showing the layout and location of a tract of land, including boundaries, designations of lots and blocks, and names of streets, is called a ______.

a.     Metes and bounds description

b.     Plat

c.      Rectangular survey

d.     Topographical map

430) A professional, on-site measurement of the lot lines and dimensions of a property is known as ______.

a.     An abstract

b.     An appraisal

c.      An inspection

d.     A survey

431) Which of the following is the best definition of a township?

a.     A 36-square-mile square formed when using the rectangular survey system

b.     A one-square-mile square formed when using the rectangular survey system

c.      A permanent reference point used in the measurement of elevations

d.     The point of beginning used in a metes and bounds survey

432) A surveyor created a lot and block survey for a new residential development. The first thing she did when she surveyed the new neighborhood was to reference a metes and bounds land description. From there, she divided the land into numbered lots and blocks. This output is known as a ______.

a.     Benchmark

b.     Monument

c.      Plat map

d.     Rectangular survey

433) Datums and benchmarks are used for ______.

a.     Calculating area

b.     Determining land acquisition costs

c.      Measuring distance

d.     Measuring elevations

434) What is a sketch that shows the location, size, and shape of any improvements on a property being surveyed?

a.     Building plan

b.     Legal description

c.      Plat reference map

d.     Spot survey

435) What is the starting point for any land surveyor who has been asked to perform a survey?

a.     A review of existing historical records

b.     Satellite photos

c.      The point of beginning

d.     Visiting the site

436) What does a land surveyor produce?

a.     A determination of value of a property

b.     A report detailing defects of a property

c.      A survey that includes a legal description and a survey sketch

d.     Property boundaries

437) Which of these is usually a brass marker that is used to mark a datum?

a.     Base line

b.     Benchmark

c.      Monument

d.     Principal meridian

438) Jenna’s closing agent has asked her to get a spot survey of the property she’s purchasing. What will this accomplish for Jenna and the closing agent?

a.     It decides the location of the point of beginning.

b.     It notes the location of major appliances and features inside a home.

c.      It notes the location, size, and shape of any improvements on a property.

d.     It’s provides a sketch based upon driving by the property.

439) Which of the following are possible effects of an incorrect legal description?

a.     Clearer title for the property owners

b.     Fewer legal issues for real estate licensees

c.      No effect

d.     Unintentional encroachment, title and legal issues

440) A ______ is a point, surface, or line used as a reference for measuring elevation.

a.     Base line

b.     Datum

c.      Monument

d.     Principal meridian

441) For what are datums and benchmarks used?

a.     Calculating area

b.     Determining land acquisition costs

c.      Measuring distance

d.     Measuring elevations

442) What’s the permanent marker used primarily for marking datums when measuring elevation?

a.     Benchmark

b.     Monument

c.      Point of beginning

d.     Sea level

443) What describes the different symbols that are used in a survey sketch?

a.     Legal description

b.     Spot survey

c.      Survey legend

d.     Surveyor’s stamp

444) What’s the point from which elevation is measured?

a.     Base line

b.     Datum

c.      Monument

d.     Principal meridian

445) What signifies that a survey is certified and represents a guarantee of accuracy?

a.     Spot survey

b.     Survey legend

c.      Surveyor’s stamp

d.     Title insurance policy

446) A lot measuring 108,900 square feet is for sale. How many acres is this?

a.     Five

b.     One

c.      Three

d.     Two-and-a-half

447) If a farm that’s for sale measures one and three-quarter square miles, how many acres is it?

a.     1,050

b.     1,120

c.      1,280

d.     875

448) A parcel of land measures one half mile by 3,000 feet. If price per acre is $4,200, what’s the list price for this parcel? Round to 10ths of an acre for your calculation.

a.     $1,527,273

b.     $752,066

c.      $756,000

d.     $763,560

449) The cost of a parcel of land is 50 cents per square foot. Candace wants to purchase one acre. How much will this cost?

a.     $21,780

b.     $43,560

c.      $500

d.     $5,000    

450) How many acres are in a square mile?

a.     1,760

b.     43,560

c.      5,280

d.     640

451) James purchased five acres of land for $75,000. What was the cost per acre?

a.     $15,000

b.     $25,000

c.      $375,000

d.     $5,000

452) How do you determine the cost of purchasing land?

a.     Divide the cost per unit by the land area

b.     Divide the land area by the cost per unit

c.      Multiply the land area by $100 per acre

d.     Multiply the land area by the cost per unit

453) How many square feet are in an acre?

a.     10,000 square feet

b.     43,560 square feet

c.      53,640 square feet

d.     640 square feet

454) How long is a mile?

a.     1,000 feet

b.     1,000 yards

c.      43,560 feet

d.     5,280 feet

455) Gabi owns one parcel measuring one square mile and another parcel measuring one mile by a half mile. She combined the parcels and sold them for $2.5 million. What price per acre did she receive for the land?

a.     $1,953.13

b.     $2,604.17

c.      $3,125.00

d.     $3,906.25

456) How many feet are in a mile?

a.     2,400

b.     320

c.      5,280

d.     6,044

457) How many acres are in a quarter section in a rectangular survey?

a.     160

b.     450

c.      640

d.     One

458) A property is 330 feet long by 100 feet wide. How many square feet is the property?

a.     10,300

b.     30,000

c.      3,300

d.     33,000

459) An 800-square-foot rectangular building sells for $75,000. What’s the cost per square foot?

a.     $187.50

b.     $46.88

c.      $60.50

d.     $93.75

460) A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400 feet deep. What was the price per front foot of the property?

a.     $1,335.67

b.     $2,000

c.      $363.64

d.     $598.95

461) Margie needs to know the square footage for the first floor of the condo her client is interested in buying. The kitchen is 10 feet by 15 feet, the living/dining combo is 20 feet by 25 feet, and the office and bedroom are each 10 feet by 10 feet. What’s the total square footage?

a.     2,200 square feet

b.     3,000 square feet

c.      750 square feet

d.     850 square feet

462) Your client Frank is interested in selling a 54,450-square-foot lot. A comparable property in the vicinity sold for $3,500 per acre. What would be reasonable list price for Frank’s property?

a.     $3,500

b.     $4,375

c.      $4,955

d.     $5,250

463) Alana and Michael want to build a 5,000-square-foot ranch home on two acres of land they just bought. Once the house is built, how many acres of land will remain unbuilt?

a.     0.88 acres

b.     0.89 acres

c.      1.86 acres

d.     1.89 acres

464) Your client, a builder, is considering buying three adjacent lots. They each have the same depth: 275 feet. Lot A is 35,750 s.f., Lot B 53,900 s.f., and Lot C is 33,000 s.f. If your client buys all three lots, what total street frontage will he have?

a.     446 feet

b.     462 feet

c.      464 feet

d.     466 feet

465) How much would a lot that is 400 feet wide by 500 feet long cost at $900 per acre?

a.     $2,200

b.     $3,060

c.      $4,132

d.     $4,500

466) A four-bedroom, four-bath, 4,875-square-foot house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% of the listing price. What price per square foot did he get for the house?

a.     $45.64

b.     $82.15

c.      $86.72

d.     $93.00

467) A lot measuring three-fourths of an acre is for sale. How many square feet is this?

a.     10,890

b.     14,520

c.      32,670

d.     43,560

468) Clint is interested in making an offer on a house with hardwood floors that will need to be replaced. The hallway is 18 feet by 6 feet. The kitchen is 20 feet by 30 feet. The living room is 25 feet by 45 feet. There are two bedrooms, which measure 12 feet by 16 feet each, plus a master bedroom that is 14 feet by 20 feet. If the cost of the flooring is $5.48 per square foot, and the cost of installation is $1.49 per square foot, how much can Clint plan to spend to replace the floors?

a.     $13,683.56

b.     $16,065.85

c.      $16,309.80

d.     $17,404.09

469) An area of 640 acres is equal to ______.

a.     One hectare

b.     One kilometer

c.      One square mile

d.     One township

470) When a city is determining zones, what should be followed?

a.     Construction standards

b.     Federal zoning codes

c.      State zoning codes

d.     The comprehensive plan

471) When a California planning board is developing a general plan for an area, which of these elements is it NOT required to consider?

a.     Housing for a variety of income levels

b.     Noise control

c.      Ratio of business, industrial, and residential spaces

d.     Standards for land use and density

472) When the planning board gets together, Carl focuses on commercial aspects, Renee focuses on residential areas, and Arthur focuses on agricultural spaces—all without any insight from one another. What type of planning is this?

a.     Form-based planning

b.     Integrated planning

c.      Pocket planning

d.     Traditional planning

473) Spark City has built a new city courthouse. The construction caused a landslide, which buried most of Joe’s farmland; now it can no longer be used for farmland. Joe is bringing an action against the city for his property loss. What is this an example of?

a.     Condemnation

b.     Eminent domain

c.      Foreclosure

d.     Inverse condemnation

474) The Johnsons have owned a small restaurant for more than 20 years. It’s open for lunch and dinner six days a week, and 80% of its weekday revenue comes from the happy hour drink and appetizer specials. The town in which their restaurant is located recently constructed a new middle school and stripped the liquor license from the Johnsons’ restaurant, because it no longer complies with the ordinance to be 500 feet from a school property. The Johnsons have accused the town of _____.

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Inverse condemnation

475) Police power is the government’s authority at what level(s)?

a.     At any level

b.     Federal only

c.      Local only

d.     State only

476) Which statement best describes traditional planning?

a.     Developers identify how land will be used.

b.     Residents determine how land will be used.

c.      Specialists with different areas of expertise work separately and focus on designing “their” areas.

d.     Specialists with different areas of expertise work together, focusing on overall use.

477) _________ is the power of the government to take private land for public use.

a.     Eminent domain

b.     Encumbrance

c.      Escheat

d.     Foreclosure

478) At what level of government are budgeting, site plan review, and building codes controlled?

a.     Federal

b.     Federal and state

c.      Local

d.     State

479) The Kelo vs. City of New London U.S. Supreme Court ruling was controversial because the U.S. Constitution prohibits the government from taking private property except for “public use”. What governmental power was central to this case?

a.     Eminent domain

b.     Escheat

c.      Police power

d.     Taxation

480) The power of ______ was commonly used by community redevelopment agencies (CRAs) to acquire blighted properties.

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Inverse condemnation

481) What’s inverse condemnation?

a.     It occurs when a property owner dies without a will, heirs, or creditors.

b.     It occurs when government actions deprive a property owner of the value of the property without offering just compensation.

c.      It occurs when municipalities pass enabling acts.

d.     It occurs when the government places a lien on a property due to failure to pay taxes.

482) When government regulation causes a land owner’s property to decrease in value, it’s called ______.

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Inverse condemnation

483) Under what type of police power is a property owner compensated for the loss of property?

a.     Eminent domain

b.     Escheat

c.      Riparian

d.     Taxation

484) Which agency administers the Interstate Land Sales Full Disclosure Act?

a.     Consumer Financial Protection Bureau

b.     Department of Energy Conservation

c.      Developers Land Sales Act

d.     Housing and Urban Development

485) A ______ is created after a jurisdiction’s general plan is adopted. It provides more detailed information and aids in the implementation of the general plan.

a.     Development plan

b.     General plan

c.      Specific plan

d.     Zoning map

486) Adams County implemented a 10 p.m. curfew for youths under age 18 because of the high number of fights that have been occurring late at night in public places. Which of the following gives Adams County the right to restrict the movements of its minor citizens?

a.     Doctrine of laches

b.     Municipal master plan

c.      Police power

d.     Power of escheat

487) What type of police power allows cities to identify specific uses for an area?

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Zoning

488) In the movies, a shady salesperson might say “I have some great farmland to sell you in the Midwest; just take a look at this brochure and let me know if you’d like to buy!” The federal government passed a law to prevent such fraudulent sales of property sight unseen. What is that law?

a.     Interstate Citizens Protection Act

b.     Interstate Land Sales Full Disclosure Act

c.      Police Power Act

d.     Subdivision Act of 1997

489) The government’s authority at all levels to ensure the health, safety, and welfare of its citizens, which includes the control of public land use, is the definition of ______.

a.     Condemnation

b.     Eminent domain

c.      Police power

d.     Sovereignty

490) Which of the following is a true statement about police power and public land use controls?

a.     Government agencies may exercise police power only when it does not restrict the freedom of its citizens.

b.     Local governments and their planning boards control budgeting, site-plan review, and building codes.

c.      Planning, zoning, and subdivision development are primarily controlled at the state level.

d.     Police power is citizens’ rights to police themselves.

491) When it came time to plan the city, Arlene (the agriculture specialist), Robert (the residential guru), and Carmen (the commercial genius) all locked themselves in a room and planned the area together. What type of planning is this?

a.     Form-based planning

b.     Integrated planning

c.      Pocket planning

d.     Traditional planning

492) Local authorities lack police power over which of the following?

a.     Budgeting

b.     Federal government construction projects

c.      Subdivision development

d.     Zoning

493) What police power did community redevelopment agencies (CRAs) use?

a.     Condemnation

b.     Eminent domain

c.      Escheat

d.     Inverse condemnation

494) After a general plan is developed, what is the next step in the adoption process?

a.     Developers bid on areas they would like to develop.

b.     Residents vote on the plan.

c.      The plan is reviewed at a public hearing by the local legislative body.

d.     The plan is reviewed at a public hearing by the planning commission.

495) The Kelo vs. City of New London U.S. Supreme Court ruling was controversial because the U.S. Constitution prohibits the government from taking private property except for “public use”. What governmental power was central to this case?

a.     Eminent domain

b.     Escheat

c.      Police power

d.     Taxation

496) Can police power ever be used in a way that restricts citizens’ freedom?

a.     No, that’s beyond the scope of police power.

b.     Yes, but only when the citizen has committed a crime.

c.      Yes, if it’s for the public good.

d.     Yes, that’s the purpose of police power.

497) The process in which the government actually takes someone’s property through the power of eminent domain is called __________.

a.     Condemnation

b.     Encroachment

c.      Encumbrance

d.     Escheat

498) A ______ is created after a jurisdiction’s general plan is adopted. It provides more detailed information and aids in the implementation of the general plan.

a.     Development plan

b.     General plan

c.      Specific plan

d.     Zoning map

499) Jeffersontown has a zoning ordinance that requires all properties in a designated historic district to have brick or wood plank facades. No aluminum, cement board, or vinyl siding is allowed. What type of zoning is this?

a.     Aesthetic zoning

b.     Downzoning

c.      Incentive zoning

d.     Spot zoning

500) What’s one of the ways that bulk zoning achieves its objectives?

a.     Through architectural style requirements

b.     Through minimum height requirements

c.      Through minimum parking space requirements

d.     Through setbacks

501) What purpose does bulk zoning serve?

a.     It homogenizes the look of the area.

b.     It keeps similar races together.

c.      It provides increased density.

d.     It restricts building density.

502) Which of the following situations may result in inverse condemnation?

a.     Property taxes rise because of an increase in property value.

b.     Property values decrease because adjacent property was rezoned.

c.      Property values decrease because the property was rezoned.

d.     The government takes private property for public use and compensates the owner.

503) Residents of Tinytown have been complaining to town officials that the village-like character of their town is being affected by the medium-rise condos that developers are building on the edge of town. In response, local government officials rezoned the areas on the edges of town as parklands. What type of zoning is this?

a.     Aesthetic zoning

b.     Downzoning

c.      Incentive zoning

d.     Spot zoning

504) The Druid Hills neighborhood sits firmly within a single-family residential zoning area. Most of the lots are one-third of an acre or larger. A 20-acre parcel on the edge of the neighborhood sold recently. The buyer wants to build condominium flats since multi-family housing is in short supply in the area. The town is considering rezoning that parcel to allow this development because the developer plans to also include a public park and a walking trail. What kind of zoning is this?

a.     Aesthetic zoning

b.     Downzoning

c.      Incentive zoning

d.     Spot zoning

505) Your clients, the Harpers, live in Area B that’s adjacent to Area C; Area C was recently downzoned. If the Harpers believe the rezoning has harmed their property values, what can they do?

a.     File a claim of inverse condemnation.

b.     Move to Area C and file a claim.

c.      Nothing, because they don’t live in the rezoned area.

d.     They must sell to prove a loss of value.

506) Zoning that preserves the architectural style and cohesive appearance of an area is termed ______.

a.     Aesthetic zoning

b.     Architectural zoning

c.      Bulk zoning

d.     Density zoning

507) The Town of Petersville has just decided to restrict density in one area of town that previously allowed a higher density. This is known as ______.

a.     Aesthetic zoning

b.     Density zoning

c.      Downzoning

d.     Reduction zoning

508) FAR, or floor-to-area ratio, includes ______.

a.     All of the habitable structures on a lot

b.     All structures, including habitable structures and parking structures, but not parking lots

c.      None of the habitable structures on a lot

d.     The area within parking lots or parking structures

509) Which of the following statements is true about zoning classifications?

a.     A property that’s zoned residential may be either single-family or multi-family.

b.     A residential property may only have one use.

c.      Condos are always commercial property.

d.     Multi-family housing is zoned commercial.

510) What is a buffer zone?

a.     A reduction in density

b.     Rezoning of various spots in a city, town, or village that have similar architectural styles

c.      Strips of land that are used to separate property dedicated to one use from property of another use

d.     Zoning targeted to a specific demographic make-up

511) What’s the definition of a group home?

a.     A facility where unrelated adults live

b.     A home that’s grouped closely to other dwellings for increased density

c.      An institution, such as a prison or mental health facility

d.     Any multi-family dwelling

512) One area of town has maximum building height requirements and setbacks for the front, side, and rear yards. These requirements are all indicative of ______.

a.     Bulk zoning

b.     Commercial zoning

c.      Density zoning

d.     Residential zoning

513) You’re on a planning board that’s discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response?

a.     “That applies to commercial areas only.”

b.     “That’s a great way to meet our objectives.”

c.      “That’s crazy. We’re trying to reduce density, not increase it.”

d.     “That will work for residential areas, but what about commercial?”

514) If downzoning occurs in one area, reducing property values in adjacent areas, what can the homeowners in those adjacent areas do?

a.     File a claim for inverse condemnation.

b.     Require a zoning change to their own property.

c.      Sell at a loss and file a claim.

d.     Sue their neighbors.

515) A town has just assigned a lower-density use zone to an area that previously allowed higher density. What’s one reason the town may have done this?

a.     To improve property values

b.     To increase density in surrounding areas

c.      To increase taxes

d.     To limit overgrowth

516) The Arbor Heights community passed a zoning ordinance that requires group homes designated for disabled citizens to be situated outside of city limits. This is a violation of the ______.

a.     City Charter Act

b.     Fair Housing Act

c.      Municipality Zoning Act

d.     Zoning Disability Act

517) Which zoning classification would be used solely for the development of a home?

a.     Industrial

b.     Mixed use

c.      Planned use

d.     Residential

518) A town passes a zoning ordinance preserving the architectural style of an area and requiring plantings in the parking strips. This is an example of ______.

a.     Aesthetic zoning

b.     Architectural zoning

c.      Bulk zoning

d.     Variance zoning

519) Which type of zoning classification is used for areas that are undeveloped or are used to raise animals or plants?

a.     Agricultural

b.     Commercial

c.      Industrial

d.     Residential

520) Cluster zoning would include single-family homes, townhomes, apartments, and condominiums on a single parcel, provided that the developer leaves a portion ________.

a.     Of each building for a community room

b.     Of the parcel for parking

c.      Of the parking lot for RV parking

d.     Open for a playground, a park, and a walking path

521) Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this?

a.     Aesthetic zoning

b.     Downzoning

c.      Incentive zoning

d.     Spot zoning

522) A new development is going up just outside city limits where the population is expected to grow significantly in the next decade. The development will consist of commercial properties in one quadrant near a main road. The other areas are designated residential and will include single-family residences and multi-family townhomes. A small number of the single-family homes will border a golf course that is at the center of the development. What type of zoning is this an example of?

a.     Conforming

b.     Exclusive-use

c.      Non-conforming

d.     Planned unit development

523) Which of the following is a type of zoning action?

a.     Aesthetic

b.     Bulk

c.      Moratorium

d.     Rural

524) Which of the following actions likely requires a variance?

a.     A change in architectural style

b.     A garage repair

c.      An addition which alters the setback

d.     A remodel involving a different internal layout

525) Which of the following must occur before zoning changes are made?

a.     Local development experts must be consulted.

b.     Public hearings must be held.

c.      The real estate commission must approve the changes.

d.     Voters in that jurisdiction must vote to approve the change.

526) Which of the following is true about zoning?

a.     Proposed zoning ordinances are examined for fairness before being enacted.

b.     While zoning may impact a community, it does not impact individual property owners.

c.      Zoning changes are enacted by local governments without public input.

d.     Zoning does not impact property value.

527) Which of the following is a common action of historic preservation commissions?

a.     Adopting ordinances to protect the historical character of the area

b.     Buying any properties that are listed for sale in the area

c.      Demolishing properties in the area

d.     Prohibit construction or renovations of any kind

528) Which of the following statements about zoning ordinances is true?

a.     Before zoning ordinances are changed, they must be examined for fairness and reasonableness.

b.     Zoning ordinance changes apply to specific properties in different ways.

c.      Zoning ordinance changes impact communities, but not individual property owners.

d.     Zoning ordinance changes impact individual property owners, but not communities.

529) April was able to establish a day care in a residential neighborhood, where the zoning wouldn’t normally be permitted. This required permission from the planning commission and ______.

a.     A special use permit

b.     A tax referendum

c.      A variance

d.     A zoning ordinance

530) Back in the 1930s, the house at 102 Barbour Street was the only one in sight. Since then, however, the town has grown considerably and the once-residential Barbour Street is an industrial zone, with the residence at 102 Barbour Street in the middle of it all. What type of zoning does the residence demonstrate?

a.     Conforming zoning

b.     Non-conforming zoning

c.      Planned unit development

d.     Spot zoning

531) Your client, William, wants to run a tax office out of his home. He lives in an area that is not zoned for that purpose. What must William obtain to operate his tax office legally?

a.     A home business waiver

b.     A petition from his neighbors

c.      A special use permit

d.     A variance

532) The purpose of ______ commissions is to preserve buildings, landmarks, and the character of certain areas.

a.     Historic preservation

b.     Human rights

c.      State real estate

d.     Wetlands

533) What’s the difference between a special use permit and a variance?

a.     A special use permit allows a deviation from the requirements of the zoning ordinance; a special use permit is the temporary use of another’s property.

b.     A variance allows a deviation from the requirements of the zoning ordinance; a special use permit allows a use not ordinarily allowed in the zone.

c.      A variance is temporary; a special use permit is permanent.

d.     A variance relates to building height only; a special use permit can relate to building height, use, or setback.

534) The developer of a new subdivision is placing residential properties closer together, allowing him to include large open spaces throughout the development to build bike and walking trails, as well as a community pool and recreation center. What type of zoning is this?

a.     Cluster

b.     Conforming

c.      Non-conforming

d.     Spot

535) Which of the following is true about a variance?

a.     It involves eminent domain.

b.     It’s a use that was in place when the zoning ordinance was enacted.

c.      It’s temporary.

d.     To obtain it, the owner must show hardship.

536) What describes both the type of the development and the regulatory process that allows the developer to meet the community’s goals for land use and density without being restricted by existing zoning requirements?

a.     Cumulative zoning

b.     Planned unit development

c.      Spot zoning

d.     Subdivision

537) Which of the following is the sunshine law based on?

a.     The First Amendment

b.     The Freedom of Information Act

c.      The Sarbanes-Oxley Act

d.     The SPEECH Act

538) Builders weren’t allowed to develop new properties in Cityville for six months. This is likely because the city had enacted a ______.

a.     Condemnation

b.     Moratorium

c.      New tax base

d.     Zoning ordinance

539) When would a sheriff’s deed be used?

a.     Property owned free and clear by the owner(s)

b.     Property that is being passed down in probate

c.      The court-ordered sale of a property

d.     To clear interest in property from the title

540) Which term describes an oath by a subscribing witness, such as a notary public, that the grantor’s signing of the deed is a voluntary act and enables a deed to be recorded?

a.     Acknowledgment

b.     Grantee

c.      Granting clause

d.     Habendum clause

541) Siblings Shasta and Ruby inherited their mother’s home when she died. Ruby had been taking care of their mom, so she was already living in the home and continued to do so. Shasta lived in another state and remained there. After some years, Ruby decided to sell the house. Shasta agreed to the sale, and even offered to give up any of his ownership so Ruby could enjoy all the profits of the sale. What’s the best deed to use in this situation?

a.     Executor’s deed

b.     Quitclaim deed

c.      Trustee’s deed

d.     Warranty deed

542) Which of the following is an instrument of conveyance?

a.     Deed

b.     Mortgage

c.      Promissory note

d.     Title insurance policy

543) Joe Bob is the grantor of a deed, and is in the final stages of transferring a deed to the new owner, Frank. What must Joe Bob do in order to satisfy delivery and acceptance of the deed to Frank?

a.     Deliver the deed to Frank, his agent or attorney, or the title company issuing the title

b.     Get Frank’s signature on the official acceptance letter notarized and recorded at the county clerk’s office.

c.      Send the deed via certified mail so that the shipment is officially tracked

d.     Submit delivery and acceptance paperwork to the Board of Submission and Acceptance

544) Select the statement that accurately reflects the type of deed used for the transfer.

a.     A bargain and sale deed conveys property in a foreclosure proceeding.

b.     A deed of trust conveys real estate to a trustee for the beneficiary named in the deed.

c.      A referee’s deed conveys property from one spouse to another in a divorce proceeding.

d.     A warranty deed conveys REO property from the lender.

545) Which kind of deed releases any rights of the grantor to the property to the grantee and clears any clouds on a title, but does not offer any warranties to the grantee?

a.     Executor’s deed

b.     Grant deed

c.      Quitclaim deed

d.     Sheriff’s deed

546) What type of deed are you likely to receive if you purchase a California property with cash at a foreclosure auction?

a.     Bargain and sale deed

b.     Executor’s deed

c.      Full covenant and warranty deed

d.     Trustee’s deed upon sale

547) Which one of the following covenant terms promises that the grantor will provide any additional assurances that the grantee reasonably requires and perform any acts necessary to correct any defect in the title being conveyed?

a.     Against encumbrance

b.     Further assurances

c.      Quiet enjoyment

d.     Warranty

548) Select the statement that correctly exemplifies the covenant term.

a.     The covenant against encumbrances is the grantor’s guarantee that he or she owns the property being conveyed.

b.     The covenant for further assurances assures the grantee that there are no undisclosed encumbrances on the property.

c.      The covenant of quiet enjoyment promises that the grantee won’t be disturbed by a title defect the grantor passes on.

d.     The covenant of warranty promises that the grantor has the capacity to convey title.

549) A ______ is a method of conveying real property from one party to another.

a.     Deed

b.     Power of attorney

c.      Promissory note

d.     Recordation

550) Jerry’s client Carla has successfully closed on the purchase of a home. The deed shows she’s taken sole ownership of the property. Which of these actions is necessary before the escrow agent can have the deed recorded?

a.     Carla must name a beneficiary.

b.     Carla must state her acceptance of the deed.

c.      The grantor’s signature must be acknowledged.

d.     The title company must issue a standard policy that validates the deed.

551) Which type of deed comes with two covenants of warranty implied in its use?

a.     Grant deed

b.     Quitclaim deed

c.      Sheriff’s deed

d.     Warranty deed

552) Which covenant term means that the grantor both has legal capacity to convey the title and also has the title to convey?

a.     Further assurances

b.     Quiet enjoyment

c.      Right to convey

d.     Warranty forever

553) Which type of deed conveys real property from a decedent’s estate to a buyer?

a.     Deed in trust

b.     Executor’s deed

c.      Quitclaim deed

d.     Referee’s deed

554) John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted’s property several years earlier. Which general warranty deed covenant does this represent?

a.     The covenant against encumbrances

b.     The covenant of further assurances

c.      The covenant of quiet enjoyment

d.     The covenant of seisin

555) Kevin and Regina sold their property to Vickey using a general warranty deed. Which one of these statements is true?

a.     Either Regina or Kevin can convey the property.

b.     Kevin and Regina are the grantees.

c.      Vickey is the grantee.

d.     Vickey is the grantor.

556) A property owner who wishes to convey property to a new owner will generally use a ______.

a.     Deed

b.     Lease

c.      Mortgage

d.     Title abstract

557) Ari owned acreage in a rural area. He sold a small portion of it to a neighbor in an informal transaction but made no record of the sale or change of ownership. A developer offered Ari several million dollars for the entire acreage, and Ari eagerly accepted the offer. What covenant is Ari in danger of violating?

a.     Against encumbrances

b.     Quiet enjoyment

c.      Seisin

d.     Warranty

558) Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who’s 16. Which of these must occur to make this transfer legal?

a.     Christian must agree to the transfer and sign the deed.

b.     Christian must provide monetary compensation to Meg.

c.      Meg must sign the deed and have her signature acknowledged.

d.     Meg must wait until Christian has reached the age of majority.

559) Which term refers to the person conveying title, often called the “party of the first part,” in a deed?

a.     Grantee

b.     Grantor

c.      Notary public

d.     Witness

560) Todd conveyed title to his out-of-state property to Brad using a general warranty deed. A few months later, Brad discovered that the legal description of the property on the deed was incorrect, and his property was only half the size he thought he’d purchased. He sued Todd based on Todd’s promises of ______ in the deed.

a.     Consideration and compensation

b.     Habendum and fair dealing

c.      Quiet enjoyment and further assurances

d.     Seisin and right to convey

561) What phrase is or words are required on a deed and are considered an “act of conveyance?”

a.     “Between ____ and ____.”

b.     “Forever and always”

c.      “Grant and convey”

d.     “Witnesseth and acknowledged”

562) Colleen and Judy purchased a dilapidated townhome in an estate sale. Due to their fix-up work and the current economy, the property value has skyrocketed. They decide to sell it to get their equity out of it. After they list it, a woman comes forward, saying she is an heir to the previous owner and lays claim to the property. Which general warranty deed covenant protects Colleen and Judy?

a.     The covenant against encumbrances

b.     The covenant of seisin

c.      The covenant of the right to convey

d.     The covenant of warranty

563) Which of the following terms describes the actions required to transfer a title by deed?

a.     Acknowledgment

b.     Delivery and acceptance

c.      Granting clause

d.     Habendum

564) In order to convey real property, which one of the following documents would you use?

a.     Deed

b.     Mortgage

c.      Promissory note

d.     Title insurance

565) Which term refers to the person receiving title, often called the “party of the second part,” in a deed?

a.     Grantee

b.     Grantor

c.      Notary public

d.     Witness

566) Cheng is selling his property to Jericho. What’s the best method Jericho can use to ensure his interest in the property?

a.     Ensure that Cheng signs the deed.

b.     Ensure that he signs the deed.

c.      Purchase title insurance.

d.     Record the deed in his name.

567) Which type of deed is sometimes called a general warranty deed and contains all six covenants?

a.     Bargain and sale deed

b.     Quitclaim deed

c.      Referee’s deed

d.     Warranty deed

568) Which of the following could be a valid deed?

a.     A napkin with both parties’ signatures and an oral agreement to sell the land

b.     An oral agreement between two trusted individuals

c.      An oral agreement between two trusted individuals and witnesses

d.     A written document containing all of the required elements and adhering to all document formatting requirements

569) Which address(es) must be included on the deed?

a.     The grantee’s

b.     The grantor’s and the county clerk’s

c.      The notary public’s and the county clerk’s

d.     The notary public’s and the grantee’s

570) When you’re working with clients in California, how will you explain the grant deed to them?

a.     It includes implied warranties from the grantor, and is commonly used in California.

b.     It includes six express covenants from the grantor, but is rarely used in California.

c.      It’s used in transactions where no consideration or consideration of “love and affection” is given in exchange for the property.

d.     It’s used to convey title when the property is used as security for a loan.

571) Which option must be included on a deed for it to be valid?

a.     County judge’s and sheriff’s signatures and approval

b.     List of all living neighboring property owners

c.      Name of next of kin for inheritance purposes

d.     Names of grantor/grantee

572) Kandy was so excited to be buying her first home, a condo in a San Diego beach neighborhood. Thanks to an inheritance, she was able to pay for the property in cash! She gazed adoringly at her deed, admiring each of its elements that proclaimed her the sole owner of 1256 Voltaire Street, Unit 15. Which of these is NOT on Kandy’s deed?

a.     A granting clause

b.     Kandy’s signature

c.      Names of the grantor and the grantee

d.     The property description

573) What term is defined as the addition of value to property through labor or the addition of new materials?

a.     Accession

b.     Accretion

c.      Alluvion

d.     Avulsion

574) Jerome has four grown children. When he dies, he leaves his home to all four children, making them tenants in common with equal shares. One child wants to live in the house, another wants to use it as investment property, and two others want to sell it and take the cash. When they can’t agree on a solution, they end up in court and the property is ______.

a.     Deeded by appointment

b.     Foreclosed

c.      Partitioned

d.     Transferred via intestate succession

575) Which term is defined as someone claiming property of another simply by using it for an extended period of time?

a.     Accession

b.     Adverse possession

c.      Dedication by deed

d.     Public grant

576) What takes precedence over a deceased person’s wishes to grant his property at death, even if those wishes are specified in the decedent’s will?

a.     Intestate succession

b.     Location, location, location

c.      Operation of law

d.     Public interest

577) When co-owners of a property decide to partition the property, what does it mean?

a.     One co-owner is foreclosing on another.

b.     They’re dividing the property into parcels and maintaining co-ownership of each parcel proportionally.

c.      They’re dividing the property proportionally so that each co-owner becomes sole owner of a portion.

d.     They’re selling additional interests in the property, in essence adding co-owners.

578) Trinity has been named executor of her uncle’s will. What does this mean?

a.     She receives all her uncle’s possessions and property.

b.     She’s responsible for carrying out the will’s provisions.

c.      She’s responsible for taking care of her uncle until his death.

d.     She’s responsible for the probate of her uncle’s will.

579) Which term is defined as land that washes away and decreases the property size?

a.     Accession

b.     Accretion

c.      Alluvion

d.     Avulsion

580) Who would inherit the property in a family with legally adopted children if both parents died without a will?

a.     The illegitimate children

b.     The IRS

c.      The legally adopted children

d.     The state

581) Which term is used to describe when an owner gives or donates land or an easement for public use?

a.     Accession

b.     Adverse possession

c.      Dedication by deed

d.     Public grant

582) Which term is defined as an increase in land by the permanent and gradual withdrawal of water?

a.     Alluvion

b.     Avulsion

c.      Dedication

d.     Reliction

583) Frank had been talking about getting a will for a while now, but he never got around to it before he passed away unexpectedly. His wife and two kids were very distraught and the family got together with his only living relative, a cousin, and friends at the funeral for the first time in years. Frank’s wife is now concerned about who will get the farm where she and her children live. According to the laws of intestacy, can you figure out who will get the land?

a.     The children

b.     The closest living relative, Frank’s cousin.

c.      The state

d.     The wife

584) Susan Duffield died testate at age 49. What can be said about Susan’s estate?

a.     Because of Susan’s age, any will is invalid.

b.     Because of the will, it will avoid probate.

c.      Because she died without a will, the estate becomes property of the state.

d.     It will be put through probate.

585) Marsten is the personal representative for his grandmother’s estate. After her death, he learns that he can’t distribute the estate’s property until after the will goes through probate. What does this mean?

a.     Marsten must apply through the courts to manage his grandmother’s estate.

b.     The court must determine the will’s validity and supervise distribution of the estate.

c.      The courts must contact all potential heirs to learn of their wishes regarding distribution of the estate.

d.     The courts must review Marsten’s ability and knowledge related to distribution of the estate.

586) Which term is defined as the act of transferring away ownership of a property?

a.     Alienation

b.     Avulsion

c.      Real transference

d.     Reliction

587) Which term describes the newly formed land mass built up by the deposits of sediments on a property that belongs to the owner?

a.     Alluvion

b.     Avulsion

c.      Erosion

d.     Reliction

588) What might Trina’s mother have bequeathed to Trina?

a.     Her interest in an oil drilling operation

b.     Her jewelry and fine china

c.      Her primary residence

d.     Her vacation property

589) According to the laws of descent, who will inherit the property when there are no surviving heirs?

a.     Friends of the family

b.     Private auction

c.      The neighboring property owner

d.     The state

590) Which term is defined as the build-up of land near water from the accumulation of sand, silt, or gravel deposits?

a.     Accession

b.     Accretion

c.      Accumulon

d.     Avulsion

591) What is it called when property is taken by the state after the owner dies without heirs?

a.     Accession

b.     Escheat

c.      Estoppel

d.     Forfeiture

592) If a property owner dies intestate and no heirs or creditors can be found, what becomes of the property?

a.     A lottery is held for ownership.

b.     The property is combined with an adjoining property.

c.      The property reverts to a former owner as recorded on the deed.

d.     The state claims the property through escheat.

593) June specified in her will how title to her home would transfer. At her death, alternate conveyance occurred. What likely happened?

a.     Fraud

b.     Intestate hereditary

c.      Operation of law

d.     Testate succession

594) What do you have to prove in order to claim a piece of property through adverse possession?

a.     Have a public grant land patent document

b.     Must be dedicated to you by the true owner

c.      Possession must be open, notorious, continuous, and uninterrupted without permission of the true owner

d.     Prove the land was acquired through the accumulation of sediments

595) Which term is defined as the state government granting power, license, or real property to a private individual or individuals using a land patent?

a.     Accession

b.     Adverse possession

c.      Dedication by deed

d.     Public grant

596) Roberta worked with an attorney to prepare her will. What kind of will is this?

a.     Descent

b.     Functional

c.      Holographic

d.     Statutory

597) The terms of a person’s will are subject to ______.

a.     Intestate succession

b.     Legal duress

c.      Nothing

d.     Operation of law

598) Jardin passed away suddenly, and when his family started looking through his documents, they found a handwritten will. Which of these statements about the will is true?

a.     A handwritten will, also called a holographic will, may be valid if it meets other terms for validity.

b.     A handwritten will, also called a statutory will, is valid if it’s been witnessed.

c.      A handwritten will is called a simple will.

d.     A handwritten will is not valid.

599) What is it called when a property owner acquires additional land through manmade or natural causes?

a.     Accession

b.     Alienation

c.      Dedication

d.     Reliction

600) Your aunt bequeathed you her property in her will, but you never received it. Instead, the property went to pay her tax bill. Is this legal?

a.     No, never

b.     Not if there were other heirs

c.      Yes, due to operation of law

d.     Yes, if the will wasn’t witnessed

601) Shana received a devise from her mother. What might this be?

a.     A written message

b.     Her mother’s car

c.      Her mother’s farm

d.     Her mother’s jewelry

602) Elmer died and left a will. Before his estate can be distributed according to his wishes, it must go through ______.

a.     A lawyer

b.     Devise

c.      Escheat

d.     Probate

603) Meredith died, leaving behind a will. Although her instructions to devise her property to her daughter were explicit, her husband inherited. Why might this be?

a.     Escheat

b.     Intestate

c.      Testate

d.     The operation of law

604) Wilma died without a will. How will her heirs be determined?

a.     A committee appointed by the court

b.     Intestate bequest

c.      Intestate succession

d.     The process of escheat

605) ______ determines who the heir or heirs will be if a person dies without a will.

a.     Court appointment

b.     Escheat

c.      Intestate bequest

d.     Intestate succession

606) When tenants in common can’t agree on how to manage the property and want to terminate their co-ownership without selling the property, how can this be accomplished?

a.     Foreclosure

b.     Law of succession

c.      Partition

d.     Process of escheat

607) In a contract, consideration is the giving of ______.

a.     Notice to attorneys that they may review the terms of the agreement

b.     Something of value in exchange for something of value

c.      Something of value in exchange for something without value

d.     Thoughtfulness and courtesy to all parties

608) Which of the following best explains how the statute of frauds protects consumers?

a.     It doesn’t allow people to own land unless they can afford it.

b.     It provides requirements that certain contracts have to meet to be legally enforceable.

c.      It puts a limit on how much interest financial institutions can charge.

d.     It states that all real property sales must involve lawyers.

609) Ken signed a contract to purchase Debra’s condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken’s birthday. What was the status of the contract when Ken and Debra entered into it?

a.     Executed

b.     Illegal

c.      Void

d.     Voidable

610) A legally competent party means that an individual has the capacity, legally and ______, to enter into a contract.

a.     Financially

b.     Mentally

c.      Morally

d.     Purposefully

611) Louellen is about to take out a mortgage loan from her credit union. The contract includes the following information: Louellen is offering her house as consideration, and the credit union is offering $350,000; and Louellen will pay the loan back over a certain number of months at a certain rate. Both Louellen’s signature and the credit union representative signed it. What, if anything, is this contract missing in order for it to be legally binding, according to the statute of frauds?

a.     Louellen’s credit history needs to be included.

b.     Nothing is missing.

c.      The condition and size of the house needs to be included.

d.     The credit union’s physical address needs to be included.

612) In contract law, a “legally competent” party has the ______ to enter into a contract.

a.     Financial resources

b.     Legal and mental capacity

c.      Legal background

d.     Motivation and means

613) Bill and Mindy, who are neighbors, get into a disagreement about late-night noise. The two come to an agreement: Bill promises to stop having loud parties and Mindy promises to keep her dogs inside after 10 p.m. Their promises represent the ______ in their agreement.

a.     Consideration

b.     Flaw

c.      Legal competency

d.     Undue influence

614) A real estate contract written for an illegal purpose is ______.

a.     Permissible and valid

b.     Void

c.      Voidable only by the buyer

d.     Voidable only by the seller

615) Which of the following elements is always required for a real estate contract to be valid?

a.     Attorney review

b.     Consideration

c.      Earnest money

d.     Profit

616) Which of the following is true about the statute of frauds?

a.     All types of written contracts, with the exception of email or other online communication, may be considered “in writing” and binding.

b.     Any form of written contract, including email communication, may be considered “in writing” and binding.

c.      Only contracts that are handwritten are considered to be “in writing” and binding.

d.     Only pre-printed contracts, the blanks of which have been filled in in ink, are considered to be “in writing” and binding.

617) What’s the best definition of legal purpose?

a.     Attorney consideration

b.     Mentally capable of entering into a contract

c.      Written for a lawful objective

d.     Written for an illegal purpose

618) Robert and Sarah enter into a contract for Sarah to purchase Robert’s home. Robert decides he doesn’t want to sell, and is elated when he finds out that Sarah’s only 17 years old. Can Sarah force Robert to sell?

a.     No, because Sarah can’t legally enter into a contract.

b.     No, she can purchase the house if Robert doesn’t object, but can’t do so if he objects.

c.      Yes, as long as she gets a legally competent party to co-sign the contract with her.

d.     Yes, Sarah can require that Robert fulfill the contract terms.

619) The statute of frauds states that if a contract transferring ownership of real property is not in writing, it’s ______.

a.     Enforceable

b.     Executory

c.      Unenforceable

d.     Voidable

620) What does the parol evidence rule say about contracts?

a.     All contracts, commitments, and agreements for the sale of real property must be in writing.

b.     A sales contract must contain the essential elements of a contract for it to be enforceable.

c.      In order for a real estate agreement to be enforceable, it must be in writing and signed by both parties.

d.     The terms agreed to in a written contract are the only terms relating to that contract.

621) According to the statute of frauds, which of the following agreements needs to be in writing to be legally enforceable?

a.     Condo owner Freya agreed to let her friend’s daughter stay in her spare room for four months.

b.     Geoffrey agreed to work on his uncle’s farm for a few days to pay off the $300 he owes him.

c.      Lara sold her book collection to her friend for $450.

d.     Pam agreed to rent her house to Miguel for three years.

622) Per the statute of frauds, which of the following agreements does NOT have to be written down in order to be legally binding?

a.     Sierra sells her car to her cousin for $2,500.

b.     Sloane agrees to pay the $400 in credit card debt that her sister owes.

c.      The Lees rent out their basement to some college students for three months.

d.     Tyrone and Alaya are getting married.

623) Which of these statements about alien residents and non-residents of California is true?

a.     Federal law grants equal property ownership rights to resident and non-resident aliens as citizens in California.

b.     Resident aliens may legally own property if their alien status is unknown.

c.      Resident aliens may own property, but non-resident aliens may not.

d.     Resident and non-resident aliens have the same property ownership rights as citizens in California.

624) Tom and Jim are neighbors. Jim wants to buy Tom’s rental property. In the contract they sign, Jim is identified only as “the neighbor.” Which statute or contract element does this violate?

a.     Fair housing

b.     Legal purpose

c.      Offer and acceptance

d.     The statute of frauds

625) Drew and Hank were camping at Hank’s riverfront cabin. Hank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he’d buy it from Hank for $80,000, which Hank agreed was a fair price. It’s two months later, and Hank is upset that Drew now says he won’t buy it. Why isn’t this contract enforceable?

a.     Drew didn’t have the financial resources to make the offer.

b.     Real estate contracts must be in writing.

c.      There was no offer and acceptance.

d.     This wasn’t a legal purpose.

626) Jolene signs a contract to buy Harvey’s home. Before closing, it’s discovered that Jolene is only 16 years old. Because she’s a minor, she’s not considered legally competent to enter into a contract. Which of the parties can void the contract?

a.     Harvey

b.     Jolene

c.      Nobody

d.     Only a judge

627) Which of these groups of people are considered legally able to enter into a contract in California?

a.     Convicts, incompetents, corporations

b.     Emancipated minors, aliens, LLCs

c.      Minors, aliens, convicts

d.     Minors, aliens, LLCs

628) The residents of Blair Avenue are a close-knit bunch. They’re all young couples with small children, and they don’t want this dynamic to change when two of the couples have to move. Those couples sign an agreement promising not to sell to anyone without kids or to anyone over the age of 50. The contract can’t be enforced because it’s missing ______.

a.     Consideration

b.     Legally competent parties

c.      Legal purpose

d.     Offer and acceptance

629) A valid contract must include which of the following elements?

a.     Counter-offer

b.     Electronic signature

c.      Fairness clause

d.     Legally competent parties

630) If a party to a contract lacks legal capacity but enters into a contract anyway, which party may void the contract?

a.     Both parties

b.     The broker

c.      The party lacking legal capacity

d.     The party possessing legal capacity

631) In a real estate transaction, which of the following is established when the parties enter into an agreement voluntarily with a full understanding of the contract terms?

a.     Consent

b.     Consideration

c.      Legal competency

d.     Legal purpose

632) Both the buyer and the seller have to sign the purchase and sale agreement in order to demonstrate that ______.

a.     An attorney has reviewed the contract

b.     Their agents have agreed to the terms and conditions

c.      The very first offer was accepted

d.     They understand the terms

633) An ______ minor is considered to be a legally competent party who is able to enter a contract.

a.     Alien

b.     Emaciated

c.      Emancipated

d.     Incompetent

634) When offer and acceptance has occurred, both parties enter into ______.

a.     A contingency

b.     A mutual agreement

c.      Consideration

d.     Understanding

635) A contract for an illegal purpose is ______.

a.     Fraud

b.     Valid

c.      Void

d.     Voidable

636) To meet the requirements of the statute of frauds, an agreement must clearly identify the contract’s subject matter, present the contract’s essential terms and conditions, and ______ to be enforceable.

a.     Achieve a result that’s fair to all parties

b.     Be agreed to verbally

c.      Be reviewed by an attorney

d.     Identify the contracting parties

637) Bobby has just found out that he was named as the executor of his grandfather’s will. In accordance with the terms of the contract, he may sell his grandfather’s property while serving as a ______.

a.     Lawyer

b.     Partner

c.      Personal representative

d.     Seller representative

638) Claudia and Yves enter into contract for her to buy his condo. The written contract must _____, identify the subject matter of the contract, and present the essential terms and conditions of the contract.

a.     Achieve a result that is fair to all parties

b.     Be handwritten

c.      Be signed by two or more attorneys

d.     Name the contracting parties

639) Carl and Sadie, who are neighbors, got into a disagreement about early-morning noise on the weekends. The two came to an agreement: Carl promised to not mow the lawn before 10 a.m., and Sadie promised to put bark collars on her dogs in the early morning hours. Their promises represent the ______ in their agreement.

a.     Consideration

b.     Flaw

c.      Legal competency

d.     Undue influence

640) In the eyes of the law, why do people under age 18 lack contractual ability?

a.     They have insufficient resources.

b.     They lack intelligence.

c.      They’re immature.

d.     They’re minors.

641) Another term used to describe an executor or executrix who was named to carry out the provisions of a will is a personal ______.

a.     Assistant

b.     Executor

c.      Lawyer

d.     Representative

642) What does the parol evidence rule state?

a.     All contracts, commitments, and agreements for the sale of real property must be in writing.

b.     An Agreement of Sale must contain the essential elements of a contract for it to be enforceable.

c.      For a real estate agreement to be enforceable, it must be in writing and signed by both parties.

d.     In most cases, a written agreement is the final and comprehensive expression of the parties’ agreement. It generally prohibits introducing oral or written evidence that contradicts that agreement.

643) Sylvia, who’s 15 years old, and her neighbor Marge, who’s 24, sign an agreement that Sylvia will babysit Marge’s toddler for the summer for $10 an hour. What type of contract is this?

a.     Enforceable

b.     Unilateral

c.      Valid

d.     Voidable

644) Jessica enters into a contract to acquire real property in return for some form of consideration. On the contract, Jessica is regarded as the ______.

a.     Agent

b.     Broker

c.      Buyer

d.     Seller

645) Doris and Kathleen, who are neighbors, enter into an agreement to not permit their real estate agents to sell their homes to families with children. This agreement lacks ______, so it’s void.

a.     A lawful objective

b.     A mutual agreement

c.      A purpose

d.     Two parties

646) Which of these is an example of good consideration?

a.     A payment of less than $10,000

b.     A payment of more than $10,000

c.      Earnest money paid with a cashier’s check or wire transfer

d.     Gifting a house to a family member

647) Which of the following states that, in certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract?

a.     The parol evidence rule

b.     The statute of frauds

c.      The statute of limitations

d.     The statute of oral evidence

648) Alex, a high school freshman, started a neighborhood lawn care business. Simone decides to hire Alex to mow her lawn every two weeks. Alex presents Simone with a written contract outlining the services to be provided and the fee Simone will pay. Which of the following is true in this situation?

a.     Because minors can’t enter into a contract, this contract is void.

b.     Because this contract binds Alex and Simone to an obligation that’s legal for a minor to perform (mowing lawns), the contract is valid and enforceable for both parties.

c.      If both parties are content to uphold their agreement, the fact that it’s not legally binding doesn’t matter.

d.     Minors can’t enter into contracts, so Alex’s parents are legally obligated to uphold the contractual obligations if Alex fails to fulfill them.

649) Which of these statements about alien residents and non-residents of California is true?

a.     Federal law grants equal property ownership rights to resident and non-resident aliens as citizens in California.

b.     Resident aliens may legally own property if their alien status is unknown.

c.      Resident aliens may own property, but non-resident aliens may not.

d.     Resident and non-resident aliens have the same property ownership rights as citizens in California.

650) An ______ minor is considered to be a legally competent party who is able to enter a contract.

a.     Alien

b.     Emaciated

c.      Emancipated

d.     Incompetent

651) Only one of these lists of people includes parties who are all legally capable of contracting in California. Which is it?

a.     Aliens, minors, incompetents, convicts

b.     Convicts, emancipated minors, aliens, incompetents

c.      Convicts, emancipated minors, incompetents

d.     Corporations, nonprofit associations, LLCs, individual proprietors

652) Jessica enters into a contract to acquire real property in return for some form of consideration. On the contract, Jessica is regarded as the ______.

a.     Agent

b.     Broker

c.      Buyer

d.     Seller

653) All of the following are true regarding implied agreements EXCEPT which one?

a.     An implied agreement is based on actions or behaviors.

b.     An implied agreement is based on a formal agreement.

c.      With an implied agreement, it’s possible that the other party didn’t intend to be bound.

d.     With an implied agreement, there’s an increased chance of confusion.

654) Real estate sales contracts must be valid, express, bilateral, ______, and executed or executory.

a.     Enforceable

b.     Oral

c.      Unenforceable

d.     Voidable

655) You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don’t actually exist (for now), what type of contract is this?

a.     Enforceable

b.     Unilateral

c.      Void

d.     Voidable

656) Your automatic check writer wrote a check for $51.50, but your printer ran out of toner, so you had to fill in the handwritten line. In a hurry, you accidentally wrote, “Fifty-one dollars and no/100 cents.” Which amount takes priority?

a.     Neither; the check is void

b.     The handwritten number

c.      The numerals

d.     The recipient must split the difference between the two amounts

657) Which of the following is a contract that exists based on an understanding or assumption, rather than on specifically defined terms?

a.     Express contract

b.     Implied contract

c.      Invalid contract

d.     Unilateral contract

658) Which of these sentences accurately lists rules for interpreting a contract?

a.     Pre-printed text takes precedence over typed and handwritten text.

b.     Typed text takes precedence over handwritten text.

c.      Typed text takes precedence over pre-printed text, and numbers (e.g. 2) take precedence over spelled-out numbers (e.g. three).

d.     Typed text takes precedence over pre-printed text, and spelled-out numbers (e.g. four) take precedence over numerals (e.g. 5).

659) Which of the following is a primary focus of the statute of frauds as it relates to real estate transactions?

a.     Anyone caught committing real estate fraud will be prosecuted.

b.     Fraudulent behavior won’t be tolerated in the real estate profession.

c.      Real estate purchase and sale contracts must be in writing to be enforceable.

d.     There’s a limitation on how long someone can sue for fraud.

660) You receive an offer in the mail that says you’re eligible to win a cash prize if you place some stickers on a form and return it to the sender. What type of contract is this?

a.     Implied contract

b.     Invalid contract

c.      Unenforceable contract

d.     Unilateral contract

661) Which of the following is true regarding express agreements?

a.     Express agreements are implied.

b.     Express agreements are invalid.

c.      Express agreements may be written or verbal.

d.     Express agreements must be lengthy.

662) Alex and Michael Helbig signed a contract to purchase their first home from sellers Joe and Bonnie Watson. Once closing occurred and all closing requirements wrapped up, the Helbigs were given the keys to their house. What type of contract do they have at this point ?

a.     Executed

b.     Executory

c.      Implied

d.     Voidable

663) You’re talking to a co-worker at lunch, and she mentions she has a box of baby clothes her kids have outgrown that she needs to get rid of. You have a baby on the way, so you offer to pay her $25, and she agrees to bring the box to work the next day and give it to you. Which of the following is true in this situation?

a.     This is an express contract because you defined in words the specific terms of the agreement and consideration to be exchanged.

b.     This is an implied contract because it is not written down and nobody signed anything.

c.      This is an invalid contract because it is not written down and nobody signed anything.

d.     This is a unilateral contract because only one party is providing anything of value.

664) Why do you think that handwritten changes take priority over typed changes?

a.     All typewriters are different.

b.     It’s less likely to be done inadvertently.

c.      They are made last.

d.     Typed changes are the same as pre-printed changes.

665) In which of the following types of contracts does one or more of the contract’s terms still need to be completed?

a.     Bilateral contract

b.     Executed contract

c.      Executory contract

d.     Unilateral contract

666) Three of these statements about interpreting contracts are true, and one is not. Which statement is FALSE?

a.     A handwritten insertion can be canceled out by typing over it.

b.     Handwritten insertions take precedence over typed and pre-printed insertions.

c.      If a contract shows a fee as $250 in one location and “three hundred fifty” in another, the amount of 350 will be assumed to be correct.

d.     If typed text is crossed out and replaced with a handwritten note, the handwritten note is what should be executed.

667) What is wrong with this statement: “Handwritten information on a contract is not legally binding. All insertions must be typed.”?

a.     Contracts are not legally binding.

b.     Insertions are not allowed on contracts. They must be pre-printed.

c.      Insertions do not have to be typed to be legally binding.

d.     There is no reason to write by hand on a contract.

668) Rex needs to handle some money he acquired during an “unsavory” business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business deal. What kind of contract do Rex and Ben have?

a.     Executed

b.     Executory

c.      Void

d.     Voidable

669) Which type of contract is the opposite of an express contract?

a.     Bilateral

b.     Executory

c.      Implied

d.     Voidable

670) In a purchase offer, is earnest money required in order to have a binding contract?

a.     No, because earnest money isn’t part of a sales contract.

b.     No, because the buyer’s consideration is the promise to buy.

c.      Yes, because it opens escrow.

d.     Yes, because it’s the buyer’s consideration.

671) Which of these situations represents a unilateral contract?

a.     Cain sells Trenton his bike.

b.     Maurice promises Shelton $100 if Shelton will sell his painting. Shelton agrees, but Maurice doesn’t pay Shelton.

c.      Nathan and Sue exchange vows at their wedding.

d.     Sherry promises to give Brent a ride home from work, and then doesn’t show up.

672) Which of the following best describes a bilateral contract?

a.     A contract for which one or more terms has yet to be completed

b.     A contract in which only one of the parties offers consideration

c.      A contract that involves an exchange of consideration between two parties

d.     A contract that is enforceable by law

673) Which of the following describes a contract that exists based not on words, but on the parties’ actions or behaviors?

a.     Executed

b.     Executory

c.      Express

d.     Implied

674) In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. Of what is this an example?

a.     A void contract

b.     Contract execution

c.      Legal purpose

d.     Partial performance

675) Kyle promised his grandmother he’d pay her $200 a month to live in the room above her garage. He lived there a few months without paying a dime and then disappeared one night after trashing the place. How long does Grandma have to decide if she can really bring herself to sue Kyle?

a.     Six months

b.     Two decades

c.      Two months

d.     Two years

676) Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal, and Kenneth kept the earnest deposit. This is an example of ______.

a.     Accepting liquidated damages

b.     Accepting partial performance

c.      Suing for damages

d.     Suing for specific performance

677) When a contract has been breached, the wronged party may attempt to sue for punitive damages, which are ______.

a.     An agreed-upon amount that the buyer will pay the seller if the buyer breaches the contract

b.     Compensation for actual loss based on the contract’s value

c.      Non-monetary damages

d.     Payments in excess of any compensatory damages

678) Which of the following scenarios is an example of novation?

a.     Cynthia has a contract with Jack to buy his house. She terminates the contract after the inspection and writes a similar contract on a new property with Jeff.

b.     Doug is buying Norm’s farm, but has a serious accident and no longer wants to own a farm, so his daughter Linda decides to buy the property. Norm agrees to the substitution of Linda for Doug in the purchase contract, effectively creating a new contract.

c.      Marcie contracts to buy Suzanna’s beauty salon. Marcie gets cold feet, though, and terminates the contract.

d.     Using a clause in the original purchase contract, Roxanne assigns her contractual right to purchase a property to her friend, Caroline.

679) Which of these sentences accurately describes the phrase “statute of limitations”?

a.     There are deadlines for certain types of legal action.

b.     There are limits to how many times someone may sue another person.

c.      There are limits to the monetary damages that may be awarded in a civil suit.

d.     There’s a limit to the number of statutes that may be enacted each year.

680) Which one of the following statements is true regarding a partially performed sales contract that otherwise contains all of the essential elements?

a.     The contract can’t close.

b.     The contract is unenforceable in court.

c.      The contract is void.

d.     The contract is voidable.

681) Anna and Cindy entered a contract to buy Jake’s home. However, at the last minute, Cindy had a change of heart and wanted out of the deal. Anna asked another friend, Sally, if she wanted to take Cindy’s place as a co-buyer of Jake’s home. Everyone agreed to the substitution of Sally for Cindy on the contract. Of what is this an example?

a.     Assignment

b.     Fraud

c.      Mutual mistake

d.     Novation

682) DeeAnna thought she purchased an investment property, but the seller refused to deliver the title to her. DeeAnna met all of her obligations per the written contract she and the seller signed. She decided to take the seller to court in an effort to force him to hand over the title. This is an example of ______.

a.     Accepting partial performance

b.     Rescinding the contract unilaterally

c.      Suing for damages

d.     Suing for specific performance

683) Which of these situations could be most appropriately addressed through reformation of the contract?

a.     Bobby the Buyer got a promotion with the same company, and a 10% raise in salary.

b.     Bobby the Buyer wasn’t approved for a mortgage loan and asks Sally if he can have his earnest money back.

c.      Sally the Seller and Bobby the Buyer request a new contract after Sally notices the property address is mistyped.

d.     Sally the Seller decides she cannot part with her house after all. Fortunately for her, but not so fortunately for him, Bobby

684) What phrase do many real estate contracts contain that reminds the parties to avoid unnecessary delays to the transaction, and to adhere to all contract dates?

a.     Haste makes waste

b.     Patience is a virtue

c.      Seek the advice of an attorney

d.     Time is of the essence

685) Sue Ellen has a contract to buy Roger’s house, which she has always admired, when Roger decides he’s ready to move to a senior living community. After Roger finds a suitable senior apartment and moves, Sue Ellen writes a check for the agreed-upon amount, and Roger transfers the deed to her. What is happening in this scenario?

a.     Assignment

b.     Breach

c.      Novation

d.     Performance

686) Which of these phrases is used to describe the act of correcting a contract that contains a mistake?

a.     Disclosing of a contract error

b.     Reformation of a contract

c.      Release of a contract

d.     Renewal of a contract

687) Mary agreed to buy her mother’s house when her mother planned to move to a senior living community. They signed a purchase agreement, but when Mary had to move because of work, she signed her rights in the contract over to her sister, Tina. Mary may still owe money if Tina can’t come up with the agreed-upon funds. What’s happening in this scenario?

a.     Assignment

b.     Breach

c.      Novation

d.     Performance

688) What is it called when one party to a contract transfers the contractual rights and obligations to another but remains liable for the contract terms?

a.     Assignment

b.     Execution

c.      Novation

d.     Termination

689) Eileen entered into a contract to buy Peter’s home. The contract specified that Peter must leave the refrigerator with the home, and he must replace the roof before closing. During the pre-closing walk-through, Eileen confirmed the house had a nice new roof, but also found that Peter took the refrigerator with him. Eileen decided she didn’t want the refrigerator that much anyway so she didn’t make a fuss. This is an example of ______ of the contract.

a.     Partial performance

b.     Performance

c.      Reinforcement

d.     Voiding

690) Sam entered into a contract to sell his home to Gina. After the inspection, Gina insisted that Sam replace the damaged roof. Sam refused, and the parties agreed to cancel the deal. This is an example of ______.

a.     Accepting liquidated damages

b.     Accepting partial performance

c.      Mutually rescinding the contract

d.     Unilaterally rescinding the contract

691) Jayne was tired of waiting for her subcontractor to get his part of the deal done. The agreed-upon deadlines came and went, and Jayne lost money waiting for the subcontractor to come through. She decided that if the subcontractor weren’t going to honor his commitments, neither was she, so Jayne consulted with her attorney and then terminated the contract. This is an example of ______.

a.     Accepting partial performance

b.     Mutually rescinding the contract

c.      Rescinding the contract unilaterally

d.     Suing for damages

692) Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.

a.     Accepting partial performance

b.     Mutually rescinding the contract

c.      Rescinding the contract unilaterally

d.     Suing for damages

693) Which of the following scenarios describes an example of unilateral rescission?

a.     A sales transaction falls through when Nora, the buyer, doesn’t qualify for financing.

b.     Bobby, the buyer, makes an offer on a house that doesn’t meet the appraisal contingency. He cancels the sale.

c.      Buyer Alice decides to join the Peace Corps. She and the seller mutually agree to cancel the sale, and the seller keeps Alice’s earnest money.

d.     Sally, the seller, sells her property to two different buyers. Both buyers sue Sally for specific performance.

694) Shannon and Rene are sisters who entered into a contract to buy an income property. The sisters got into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. If Jerry fails to live up to his obligations under the contract though, Shannon will be held responsible. Of what is this an example?

a.     Assignment

b.     Fraud

c.      Mutual mistake

d.     Novation

695) What language may be included in a contract after the assignor’s name to make it clear that the contract is assignable?

a.     “And/or assigns”

b.     “Buyer beware”

c.      “Spouse or partner”

d.     “Time is of the essence”

696) Seller Gina feels awful that Martha, who was going to buy her property, lost her job. Gina decides to ______ Martha from the purchase contract.

a.     Assign

b.     Reform

c.      Release

d.     Rescind

697) Zack enters into a contract to buy Olivia’s home. Per the terms of the contract, Zack must put down a $10,000 earnest money deposit and have the property inspected within five days. In reality, he puts down a $12,000 deposit and has the property inspected within two days. Of what is this an example?

a.     Buyer misrepresentation

b.     Partial performance of the contract

c.      Performance of the contract

d.     Voiding of the contract

698) What’s the key difference between assignment and novation of a contract?

a.     Assignment releases the original party from all obligations, while novation does not.

b.     Individual contracts must specifically allow novation, but not assignment.

c.      Novation is disallowed in many states, while assignment is not.

d.     Novation releases the original party from all obligations, while assignment does not.

699) When a buyer breaches the real estate sale contract, the seller may file a lawsuit for compensatory damages. Which of the following best describes compensatory damages?

a.     A specified monetary amount agreed upon by the buyer to pay the seller, if the buyer breaches the contract.

b.     A specified monetary amount the seller agrees to pay the buyer, if the seller breaches the contract.

c.      Compensation for actual loss based on the contract’s value.

d.     Payment in excess of the contract’s value.

700) Mary contracted to buy her mother’s house when her mother moves to a senior living community, but now Mary has to move because of work and no longer wants to buy the house. With their mother’s agreement, Mary’s sister, Tina, steps in, releasing Mary from her obligation. They write up a new contract, with the only change being that Tina is now the party to the contract rather than Mary. What’s happened here?

a.     Assignment

b.     Breach of contract

c.      Novation

d.     Performance

701) Betty hired a contractor to replace her gutters. Within days, the gutters leaked and flooded her basement. She complained to the contractor, who replaced the gutters again. The next time it rained, the gutters leaked and flooded Betty’s basement a second time. Frustrated, Betty decided to file a lawsuit against the contractor in an attempt to recover the money she lost. This is an example of ______.

a.     Accepting partial performance

b.     Rescinding the contract unilaterally

c.      Suing for damages and breach of contract

d.     Suing for specific performance

702) In contract law, when does partial performance occur?

a.     When a party acknowledges receipt of the contract

b.     When a party does some, but not all, of what the party has agreed to do

c.      When a party meets all terms of the contract

d.     When a party rejects all terms of the contract

703) Parker entered into a contract with seller Derrick to buy Derrick’s home. Before finalizing the sale, Parker had a change of heart and decided to renounce all worldly possessions. He no longer wanted to buy Derrick’s home. With Derrick’s approval, Parker is released and Parker’s brother, Tom, takes Parker’s place as the buyer in the purchase contract. Of what is this an example?

a.     Assignment

b.     Fraud

c.      Misrepresentation

d.     Novation

704) Martha made an offer to buy Drake’s home, and he accepted it. Under the terms of the agreement, Martha was supposed to make an earnest money deposit of $10,000, but she only put down $5,000. Drake accepted the lesser deposit, and the sale was ultimately finalized. This is an example of ______.

a.     Accepting partial performance

b.     Rescinding the contract unilaterally

c.      Suing for damages

d.     Suing for specific performance

705) Rescission can be ______ agreement to cancel a contract.

a.     A mutual

b.     An ill-advised

c.      An unlawful

d.     A tenuous

706) The owner of ABC Construction entered into a contract to build two homes for brothers Jack and John. The contract specified that the homes must be completed by April 1. ABC finished the homes on March 30. Of what is this an example?

a.     Non-performance

b.     Partial performance

c.      Performance

d.     Voiding

707) Francine’s landlord never returned her security deposit after she moved, even though it was in writing that she would get it back within three weeks. How long after the deadline for returning the deposit does Francine have to sue, according to California’s statute of limitations?

a.     10 years

b.     Four years

c.      One year

d.     Two years

708) What’s the key difference between assignment and novation of a contract?

a.     Assignment releases the original party from all obligations, while novation does not.

b.     Individual contracts must specifically allow novation, but not assignment.

c.      Novation is disallowed in many states, while assignment is not.

d.     Novation releases the original party from all obligations, while assignment does not.

709) In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. Of what is this an example?

a.     A void contract

b.     Contract execution

c.      Legal purpose

d.     Partial performance

710) What is the name of the process of substituting one party to an existing contract with a new party, releasing the original party from all contractual obligations and rights?

a.     Assignment

b.     Execution

c.      Novation

d.     Re-contracting

711) Select the correct definition for “reformation of a contract.”

a.     Redrafting a contract

b.     Releasing one party from a contract

c.      Renewing a contract

d.     Suing another party to a contract

712) Bob signed a contract to purchase Ingrid’s apartment building. Bob decided he didn’t want to be a landlord, and Ingrid decided she didn’t want to sell and move to Maui. They mutually agreed to cancel the contract, and Ingrid returned Bob’s earnest money. This is referred to as ______.

a.     Assignment

b.     Breach of contract

c.      Novation

d.     Rescission

713) This is a loss of money or anything of value, due to failure to perform.

a.     Covenant

b.     Forfeiture

c.      Listing agreement

d.     Options

714) This acts as the receipt for earnest money given by the buyer to secure an offer.

a.     Covenant

b.     Deposit receipt

c.      Listing agreement

d.     Options

715) This is a legal written agreement between a buyer and seller that states the purchase price and other terms of understanding by which real property will be transferred.

a.     Contract for sale

b.     Covenant

c.      Listing agreement

d.     Options

716) Which of these is a contract between a client and agent to sell real property?

a.     Contract for sale

b.     Covenant

c.      Deposit receipt

d.     Listing agreement

717) Which of the following means a legal section in a contract or law?

a.     Listing agreement

b.     Option

c.      Provision

d.     Tender

718) What is the deciding factor when determining whether the buyer or the seller takes the loss on a property that is taken by eminent domain?

a.     The amount of the earnest deposit

b.     The value of the property

c.      Whether or not title and possession have transferred

d.     Who has eminence

719) Which of these means, “A privilege sold by one party to another that offers the buyer the right, but not the obligation, to buy at an agreed-upon price during a certain period of time or on a specific date”?

a.     Commission

b.     Listing agreement

c.      Option

d.     Tender

720) Which of these means, “An agent’s compensation for performing the duties of agency; usually a percentage of a property’s selling price”?

a.     Commission

b.     Listing agreement

c.      Options

d.     Tender

721) This is the legal agreement between a buyer and a broker hired to represent the buyer’s interest.

a.     Buyer representation agreement

b.     Covenant

c.      Listing agreement

d.     Options

722) California’s Uniform Vendor and Purchaser Risk Act clarifies the rights granted to whom?

a.     The buyer and the seller

b.     The buyer only

c.      The buyer, seller, and their agents

d.     The seller only

723) Sally the Seller and Bobby the Buyer are about to sign the closing documents when a fire truck rushes by. The house is burning down! The documents are not signed. Which of these outcomes adheres to the rights provided by the Uniform Vendor and Purchaser Risk Act?

a.     Bobby does not have to pay the closing costs and will get his earnest money back.

b.     Bobby does not have to pay the closing costs, but Sally gets to keep the earnest money.

c.      Bobby must go through with the purchase and will seek reimbursement through insurance.

d.     Sally and Bobby must split the loss 50/50.

724) Which of these means “to formally offer”?

a.     Commission

b.     Conveyance

c.      Listing agreement

d.     Tender

725) Which of these scenarios describes a voluntary lien?

a.     Ruby hasn’t paid her property tax, so the state put a tax lien on her home.

b.     Sam hasn’t paid the general contractor for the new deck he built on Sam’s house, so the contractor put a mechanic’s lien on Sam’s property.

c.      Sharon purchased a condo and now the lender has a mortgage lien on the property.

d.     The court ordered Bob to pay his debt to Leo and placed a judgment lien on Bob’s property when he couldn’t pay.

726) What type of lien is defined as an involuntary lien placed on all of the property received by a deceased person’s heirs?

a.     Estate/inheritance lien

b.     Income tax lien

c.      Judgment lien

d.     Mortgage lien

727) What criteria must be met before a document is eligible for recording in California?

a.     May be on any size and type of paper

b.     Must be filed electronically

c.      Must be filed in person

d.     Must be in writing, signed, and acknowledged before a notary public

728) Which of the following defines the term ‘lis pendens’?

a.     A legal notice that a lawsuit is pending that affects the title of a property

b.     A legal term that means “it depends” and requires a certain minimum sales price of the property.

c.      A notice that notifies potential buyers of a pending lease

d.     A public listing and notice of foreclosure of a property.

729) April owes money to quite a few people after a round of court-ordered judgment liens were placed on her property. Can you determine who would get paid first?

a.     Alycea filed at the end of June and was awarded $50,000.

b.     Bob filed in May and was awarded $85,000.

c.      Frank filed in February and was awarded $10,000.

d.     Sarah filed in March and was awarded $15,000.

730) Why is it important to publicly record a deed?

a.     The title insurance policy schedule of exceptions will include anything that’s publicly recorded.

b.     Title insurance policies don’t cover publicly recorded events.

c.      Title insurance policies must be publicly recorded to be legal.

d.     Title representatives and attorneys who perform title searches look for documents that are publicly recorded.

731) Which of these statements is NOT true about a specific lien?

a.     It may allow the creditor to sell the property through a court sale (foreclosure) and be repaid from the proceeds of the sale.

b.     It prevents the debtor from transferring the property until the debt has been repaid.

c.      It’s a lien against a single property rather than a person.

d.     It’s always involuntary.

732) How is priority determined in cases where more than one judgment lien is filed against a property?

a.     The government has priority, followed by whoever is owed the most next.

b.     Whoever filed their claim first receives priority.

c.      Whoever is owed the most money has priority.

d.     Whoever paid to receive priority service at the county clerk’s office.

733) Conrad just closed on the house he’s buying to fix up. Why should he follow up to be sure the deed has been recorded?

a.     He can’t legally make any improvements to the property until the deed is recorded.

b.     He doesn’t legally own the house until that occurs.

c.      Recording provides actual notice that he owns the property.

d.     Recording provides constructive notice that he owns the property.

734) What makes an income tax lien different from a property tax lien?

a.     An income tax lien has priority over a property tax lien and will be paid first upon foreclosure.

b.     An income tax lien is a general lien and a property tax lien is a specific lien.

c.      An income tax lien is placed by the federal government and a property tax lien is placed by the state.

d.     An income tax lien is voluntary and a property tax lien is involuntary.

735) What type of notice results from publicly recording a title transfer?

a.     Actual notice

b.     Attorney notice

c.      Constructive notice

d.     Proper notice

736) Which of the following defines an income tax lien?

a.     Involuntary lien placed against a property owner’s property due to a court decree resulting from a lawsuit.

b.     Involuntary lien placed against a property owner’s property for due and unpaid taxes

c.      Involuntary lien placed on all property inherited by a deceased person’s heirs.

d.     Voluntary lien against a single property that uses the property as collateral for repayment of a loan.

737) In addition to being properly executed (signed), what are other requirements for recording a document in California?

a.     Acknowledged before a notary public

b.     At least two witnesses present at the time of filing

c.      Meet SEQRA standards

d.     Sealed and mailed in a registered envelope to the county clerk’s office

738) Joshua won his lawsuit against Savannah. The judge awarded him $30,000. Savannah was unable to pay, so the court placed a ______ on her home.

a.     Foreclosure action

b.     Judgment lien

c.      Lis pendens

d.     Mortgage lien

739) Which option is true if a deed is not recorded after closing?

a.     The buyer must pay a fine to the seller.

b.     The entire closing is void.

c.      The property’s legal ownership can be challenged.

d.     The title never changes hands from the seller to the buyer.

740) Which of these scenarios describes a voluntary specific lien?

a.     The court placed a lien on the property Marge inherited upon Homer’s death.

b.     The IRS placed a lien on Lisa’s property when she failed to pay her income taxes.

c.      When Jack and Jill refused to pay the roofing contractor, he placed a lien on their property.

d.     When Rob and Sue bought their house using a mortgage, the lender put a lien on the property.

741) Under which of the following circumstances would a mechanic’s lien be attached to a property?

a.     The court has determined that the owner must pay for damages from a civil court case.

b.     The owner fails to pay his homeowners association dues.

c.      The owner fails to pay his property taxes.

d.     The owner fails to pay the builder who added an extra bedroom to the house.

742) Which option describes a real property tax lien?

a.     General and involuntary

b.     General and voluntary

c.      Specific and involuntary

d.     Specific and voluntary

743) Daisy and her kids loved their new pool, but Daisy wasn’t so happy when she received notice that the general contractor who poured the concrete had placed a lien on her home. Daisy went through her records and discovered that she had never paid the general contractor. What’s true about this situation?

a.     Daisy can now place a lien on the general contractor’s property.

b.     The lien is illegal.

c.      This is a legal judgment lien.

d.     This is a legal mechanic’s lien.

744) What type of involuntary lien is placed on a person’s estate after their death if there are unpaid debts to creditors?

a.     Deceased person’s debt lien

b.     Estate/ inheritance tax lien

c.      Mechanic’s lien

d.     Real property tax lien

745) What type of individual’s property is affected by a general lien?

a.     All real property and personal property

b.     One specific property

c.      Only personal property, not real property

d.     Only real property and not personal property

746) Dorcas and Ralph were married for 15 years. Ralph, an accountant, always took care of the bills and other financial matters for the couple. Then Dorcas discovered that Ralph had failed to pay the property tax on their property for the last three years. Which of these is likely to happen?

a.     Dorcas and Ralph will be required to sell their home to the state for the amount of property tax owed.

b.     The state will place a condemnation order on their property so they can’t transfer their property until the debt is satisfied.

c.      The state will place a mortgage lien on their home for the amount of property tax owed.

d.     The state will place a tax lien on their property so it can’t be transferred without satisfying the debt.

747) What’s the definition of a judgment lien?

a.     An involuntary lien due to a court decree resulting from a lawsuit

b.     An involuntary lien placed on all of the property received by a deceased person’s heirs

c.      An involuntary lien placed on a person’s estate after his or her death if there are unpaid debts to creditors

d.     A voluntary lien against a single property that uses the property as collateral for repayment of a loan

748) When property changes hands, the deed is recorded and a fee is charged. What is the benefit to the grantee of having the deed recorded?

a.     It impacts who owns the property.

b.     It protects against foreclosure.

c.      It puts the public on notice regarding ownership.

d.     It’s required by law.

749) What’s the term for a notice given directly to and received by a person?

a.     Actual notice

b.     Constructive notice

c.      Proper notice

d.     UPS notice

750) Which one of the following is true about ownership or title to a property?

a.     Constructive notice to the public of real property ownership occurs when the deed is recorded.

b.     The last party to record has priority.

c.      The seller is responsible for paying for owner’s and lender’s title insurance.

d.     Title isn’t finalized until the deed has been recorded.

751) Christina purchased a house from Thomas. When did she officially gain ownership of the property?

a.     After the appraisal was completed

b.     Prior to closing after approving the Loan Estimate

c.      When actual notice of the deed was given to the mortgage company

d.     With the transfer of deed from the seller to the buyer

752) What’s the definition of a judgment lien?

a.     An involuntary lien due to a court decree resulting from a lawsuit

b.     An involuntary lien placed on all of the property received by a deceased person’s heirs

c.      An involuntary lien placed on a person’s estate after his or her death if there are unpaid debts to creditors

d.     A voluntary lien against a single property that uses the property as collateral for repayment of a loan

753) April owes money to quite a few people after a round of court-ordered judgment liens were placed on her property. Can you determine who would get paid first?

a.     Alycea filed at the end of June and was awarded $50,000.

b.     Bob filed in May and was awarded $85,000.

c.      Frank filed in February and was awarded $10,000.

d.     Sarah filed in March and was awarded $15,000.

754) Joshua won his lawsuit against Savannah. The judge awarded him $30,000. Savannah was unable to pay, so the court placed a ______ on her home.

a.     Foreclosure action

b.     Judgment lien

c.      Lis pendens

d.     Mortgage lien

755) How is priority determined in cases where more than one judgment lien is filed against a property?

a.     The government has priority, followed by whoever is owed the most next.

b.     Whoever filed their claim first receives priority.

c.      Whoever is owed the most money has priority.

d.     Whoever paid to receive priority service at the county clerk’s office.

756) How long after a notice of cessation or completion is filed can a contractor file a mechanics lien?

a.     Within 60 days

b.     Within 90 days

c.      Within six months

d.     Within two years

757) In California, which lien can be filed later than other liens and still have priority over them?

a.     Income tax lien

b.     Judgment lien

c.      Mechanic’s lien

d.     Real property tax lien

758) In California, what is filed by the trustee to notify borrowers that the foreclosure process will begin?

a.     Notice of Default

b.     Notice of Delinquency

c.      Notice of Foreclosure

d.     Notice of Sale

759) Which of the following options describes a subordination agreement?

a.     An agreement between a contractor and any subcontractors

b.     An agreement between a landowner and a contractor

c.      An agreement between the court and landowner to decrease property taxes

d.     An agreement between two lien holders to modify the order of lien priority

760) Frank has waited 30 days after notifying a client that the project he finished remains unpaid. The client has not filed a notice of completion or cessation with the county clerk. How long does Frank have left to file a mechanic’s lien?

a.     10 days

b.     30 days

c.      60 days

d.     90 days

761) How long does a homeowner have to pay off outstanding liens against his property?

a.     30 days

b.     One week before the foreclosure sale is held

c.      Until the foreclosure sale is held

d.     Up to 10 years

762) Karen’s house was recently foreclosed on to pay off a lien on her home. What happens to any extra money after the lien and expenses of the sale are paid?

a.     It goes to Karen.

b.     It’s given to a local government-approved charity.

c.      The bank receives the rest as compensation.

d.     The state government receives the extra funds.

763) Which action can be taken if you don’t pay a lien against your property?

a.     Accretion

b.     Condemnation

c.      Eminent domain

d.     Foreclosure

764) What does the right of redemption allow?

a.     It allows a property owner to freely give away her property to another and release it of any and all liens against it.

b.     It allows a property owner to pay back any debts or liens against their property until a foreclosure sale is held.

c.      It allows a property owner to sue a neighboring property owner over boundary disputes.

d.     It allows the government to satisfy liens against a property through a foreclosure sale.

765) What can a property owner do to stop contractors performing unauthorized work from filing mechanic’s liens later?

a.     File a lien release

b.     File a notice of completion

c.      Post and file a notice of nonresponsibility

d.     Require the contractor obtain a payment bond

766) Which option best defines an equitable lien?

a.     An income tax lien

b.     A real property tax lien

c.      Created by a court of common law; doesn’t give the right to possession of the property

d.     Created by law and gives right of possession

767) One of Jackie’s creditors sued her in civil court. As a result of the judgment against her, her house, car, and art collection were all subject to sale in order to pay the creditor. What type of lien is this?

a.     General

b.     Special assessment

c.      Vendor’s

d.     Voluntary

768) What’s it called when lien holders allow another lien holder’s claim to have priority over their own?

a.     Equitable lien

b.     Lis pendens

c.      Subordination agreement

d.     Voluntary lien

769) What would happen if you bought a house and later found out that there were unpaid liens against the property?

a.     Nothing. The former owner owes the money on the liens.

b.     The lien claimants would lose their liens against your property.

c.      The unpaid liens could trigger a foreclosure on your property.

d.     You would have to assume a loan to pay off the liens.

770) Homeowners Daryl and Stella, who are both in their 70s, paid off their mortgage during good times, but recent medical bills have overcome them and their creditors have a judgment lien against their property. They decide to sell their home and downsize to pay off their bills. Which of these is NOT true about the homestead exemption for Daryl and Stella?

a.     It protects $175,000 of their equity.

b.     The holder of the judgment lien will be paid before they receive their exemption.

c.      They’ll need to purchase another home within six months of the sale.

d.     They must first file a declaration of homestead.

771) How can a foreclosure be stopped or prevented?

a.     Auction

b.     Fleeing the state

c.      Paying all outstanding liens against the property

d.     Refinancing

772) In a foreclosure situation, which lien has highest priority of the options listed below?

a.     A judgment lien

b.     A mechanic’s lien

c.      An income tax lien

d.     A real property tax lien

773) Which process temporarily stalls foreclosure?

a.     Filing for Chapter 7 bankruptcy

b.     Fleeing the state

c.      Making a request for a break

d.     Paying off all debts

774) How are creditors or lien holders paid during a foreclosure process?

a.     Lien holders are given a referee’s deed to the property.

b.     Tax refunds are disbursed after supplying a foreclosure affidavit to the court.

c.      The property is portioned among the lien holders to have or to sell.

d.     The property is sold at auction and lien holders are paid from the proceeds of the sale.

775) You have just started a construction project on your property and have hired a contractor to do some of the work. The contractor then brings on several subcontractors to do some of the tasks. What can you do to protect yourself from subcontractor liens should the contractor not pay them?

a.     File a lien release.

b.     File a notice of completion.

c.      Nothing. There is no defense against unpaid subcontractors.

d.     Require the contractor obtain a payment bond.

776) Which term means property that is used as the owner’s primary residence?

a.     Estoppel

b.     Homestead

c.      Lis pendens

d.     Reliction

777) California homeowner Randy, who is 40 years old and lives alone, owes some creditors but hasn’t been able to pay them. They place a lien on his home. He owes $35,000 on his mortgage, and the property’s market value is about $250,000. What can happen in this situation?

a.     Randy doesn’t qualify as a family unit so he won’t receive protection from the homeowner exemption.

b.     Randy must file a declaration of homestead to receive equity protection since he owes less on his mortgage than the home is worth.

c.      The homeowner exemption will prevent the forced sale of his home.

d.     The homeowner exemption will protect some of his equity, but the courts may force the sale of his home.

778) What happens after a foreclosure if there isn’t enough money from the sale to pay off all of the lien holders against a property?

a.     All claims are void if there isn’t enough money after the foreclosure sale of the property.

b.     The former owner may owe a debt to lien holders who aren’t fully paid.

c.      The former owner’s wages will be garnished for the remainder of what’s owed.

d.     The lien holders must refile on the former owner’s next property.

779) What is the process used to sell a foreclosure home in California called?

a.     Default sale

b.     Fire sale

c.      Referee’s sale

d.     Trustee’s sale

780) What is the six-month rule for homestead exemptions?

a.     No liens may be filed against homesteads unless at least six months’ notice has been given to the homeowner.

b.     The property owner has six months to sell the property after a lien is filed.

c.      The property owner must live in the home for at least six months before they may qualify for a homestead exemption.

d.     The property owner must reinvest the homestead exemption amount within six months in another homestead to protect it from creditors.

781) Which option best defines a statutory lien?

a.     A judgment lien

b.     A mortgage

c.      Created by a court of common law; doesn’t give the right to possession of the property

d.     Created by law and gives right of possession

782) Who has the right to make the first bid during a trustee’s sale in California?

a.     Anyone

b.     The beneficiary (lender)

c.      The trustee

d.     The trustors (borrowers)

783) How can a foreclosure process be temporarily stalled?

a.     By filing for Chapter 7 bankruptcy

b.     By fleeing the state

c.      By paying off all debts

d.     By request

784) How long after a project begins must a contractor give the owner preliminary notice of their right to file a mechanic’s lien in California?

a.     Within 20 days

b.     Within 90 days

c.      Within one year

d.     Within six months

785) Which document is used to establish proof of ownership?

a.     Abstract of title

b.     Chain of title

c.      Deed

d.     Title insurance

786) Jeff has filed a quiet title suit against Roger. What’s the purpose of this suit?

a.     To clear up a cloud on title

b.     To clear up a property line dispute

c.      To exercise his right to quiet enjoyment of the property

d.     To prohibit the seller from releasing the buyer’s name

787) What is the purpose of the title search?

a.     To collect evidence that the title is a marketable title, meaning it’s clear and free of encumbrances

b.     To ensure the current owner has the title to give to the buyer

c.      To ensure the title is on the record at the local clerk recorder’s office

d.     To insure the owner against any financial loss due to a defect in the title

788) Anita is a new buyer. Luckily, ______ will help her before the sale and can reimburse her after the sale if a title issue arises.

a.     Her buyer’s agent

b.     Her title insurance

c.      Seller credits

d.     Seller disclosures

789) Which of these statements is NOT true about an extended title insurance policy?

a.     It covers some items that aren’t part of the public record, such as unrecorded liens.

b.     It’s typically purchased for the lender.

c.      It’s typically used when the property is paid for in cash.

d.     The buyer will most likely pay for this policy.

790) You’re working with a client, Donny, who’s found his dream home in the neighborhood where he grew up. Unfortunately, the title search finds some issues and the title company refuses to issue a policy. Donny still wants to go forward with the purchase, and since he’s paying cash, he doesn’t have to worry about obstacles from a lender. In California, what is one thing that has to happen in this situation?

a.     Donny must receive written notice that no title insurance will be provided.

b.     The escrow agent must record the refusal to provide title insurance with the county clerk and recorder.

c.      The seller must use a warranty deed to transfer ownership rather than a grant deed.

d.     You must refuse to continue representing Donny in order to protect your license.

791) What’s a quiet title action?

a.     A lien placed against a potential land owner for property purchased by another

b.     An action to locate and notify all who may have some claim on the title, and determine the validity of all claims

c.      A type of title insurance that reimburses the policyholder if the neighborhood is noisier than normal

d.     A way to anonymously purchase property without filing the title or transfer on record

792) What type of title insurance covers defects of an incorrect survey and boundary encroachments?

a.     Extended title insurance

b.     Homeowners insurance

c.      Standard title insurance

d.     Title survey and boundary insurance

793) In a typical transaction, which of these title defects is unlikely to cause a problem for the buyer?

a.     A faulty survey

b.     An unrecorded lien

c.      A past error in recording title transfer

d.     The seller’s existing mortgage

794) Which document is used to give a buyer an overview of the title history and information about what is or isn’t covered in an insurance policy?

a.     Abstract of title

b.     Guarantee of title

c.      Preliminary report

d.     Title insurance

795) Your buyer client is following your advice and has obtained title insurance. The policy is from ______ and shows the legal description of the property and the standard items it covers, such as encumbrances of record.

a.     American Land Title Association (ALTA)

b.     California Land Title Association (CLTA)

c.      General Land Title Association (GLTA)

d.     Standard Land Title Association (SLTA)

796) Which document establishes path and proof of ownership?

a.     Abstract of title

b.     Chain of title

c.      Deed

d.     Title insurance

797) Lisa purchased an older home with a large backyard that’s perfect for her pack of collies to romp in. Six months after she bought the property, a total stranger knocked on her door and told her he’s the true property owner. After investigating, it turns out the person who sold Lisa the property had forged the deed without the true owner’s knowledge. What’s true about Lisa’s situation?

a.     Her homeowner’s policy may protect her from loss.

b.     Her lender must initiate a quiet title action to resolve the issue.

c.      Her title insurance policy may protect her from loss.

d.     The county clerk where the documents were recorded is liable.

798) Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: ______.

a.     Buyer Trust Fund

b.     Litigation

c.      Seller guarantees

d.     Title insurance

799) As a licensee, you’re helping a couple buy a new home when you come across issues that could mean there’s a cloud on the title. What should you do?

a.     Encourage the couple to move forward with the purchase and not worry about the clouded title.

b.     File an affidavit with the court about the knowledge of the clouded title and tell the couple to move forward with the sale.

c.      Keep moving forward with the sale but recommend the couple purchase title insurance to insure against any potential title problems.

d.     Recommend the couple find another property to purchase, or ask the seller to settle the title through a quiet title action to clear any cloud before moving forward with the sale.

800) Marsha’s title insurance policy was issued on closing day, which was June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which one of these will NOT be addressed in the schedule of exceptions?

a.     Marsha’s second mortgage on the property, which she plans to get next January

b.     Marsha’s unrecorded lease on the property

c.      Smith and Martin Building and Rehab’s mechanic’s lien, which was filed on June 18

d.     The local cable company’s unrecorded easement through the property for underground wiring. Marsha disclosed this to the title company

801) What special concern do foreclosed properties often present?

a.     Buying the property at a discount may have tax implications.

b.     The homeowners may or may not have property insurance.

c.      The property sale may be subject to additional fees that will be passed to the new buyer.

d.     There could be hidden title issues.

802) What can buyers do to protect themselves from title issues when purchasing property?

a.     Ensure the seller’s name is on the deed.

b.     File a lis pendens claim at the court before buying the property.

c.      File a security agreement at the county clerk’s office.

d.     Purchase title insurance.

803) Which one of the following protects the owner against financial loss if the real estate title has defects?

a.     Abstract of title

b.     Chain of title

c.      Deed

d.     Title insurance

804) Paula is bidding on a property that’s being sold at a foreclosure auction. She’s excited about the great deal she’s getting on the property after she finds out she submitted the winning bid. What could cause Paula’s great deal to turn into a nightmare?

a.     The lender has the option to refuse her bid and revoke the deed transferring ownership to Paula.

b.     The previous owner may redeem the property by paying Paula at least 50% of the property’s market value.

c.      The title insurance company may charge her additional fees after closing to continue the title policy.

d.     The title to the property may have hidden issues that could cost her a lot of money to clear.

805) What’s a marketable title?

a.     A title that a relative has gifted

b.     A title that has been granted by public grant

c.      A title that is about to go on the market

d.     A title that is clear and free of encumbrances

806) Which document is used to provide a summary of the title history?

a.     Abstract of title

b.     Chain of title

c.      Deed

d.     Title insurance

807) Real estate licensees who want to uphold the Fair Housing Act should make a habit out of which of the following actions?

a.     Disclose their protected status to all clients.

b.     Present sellers with offers from people of the same class so they don’t ask the licensee to discriminate.

c.      Show buyers properties in neighborhoods where they are unlikely to experience discrimination.

d.     Tell potential clients in their initial meeting that they are committed to upholding fair housing laws.

808) Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals?

a.     Department of Civil Rights

b.     Department of Equal Opportunity

c.      Department of Housing and Community Development

d.     Department of Housing and Urban Development

809) Individuals who experience housing discrimination are provided the opportunity to file a complaint based on the provisions of which act?

a.     Americans with Disabilities Act of 1990

b.     Civil Rights of 1866

c.      Fair Housing Act of 1968

d.     Fair Housing Amendments Act of 1988

810) Which protected class refers to a group of people who share common characteristics, typically physical characteristics, such as skin color?

a.     Familial status

b.     National origin

c.      Race

d.     Religion

811) Which of these statements best represents what happens after a federal fair housing complaint is made?

a.     A fair housing specialist will review the complaint.

b.     An official housing discrimination complaint will be filed, and a fair housing specialist will be assigned to the case.

c.      FHEO will contact the alleged perpetrator to gather information.

d.     HUD will review the complaint to determine if it’s valid.

812) In case history regarding fair housing, which case involved an ordinance that prohibited blacks from living on a block where the majority of the residents were white?

a.     Brown vs. Board of Education

b.     Buchanan vs. Warley

c.      Jones vs. Mayer

d.     Plessy vs. Ferguson

813) The Office of Fair Housing and Equal Opportunity is a part of which federal department?

a.     CIA

b.     HHS

c.      HUD

d.     NHA

814) Which type of property is exempt from the Fair Housing Act?

a.     Condominium with no more than eight units

b.     Condominium with no more than four units

c.      Owner-occupied with no more than eight units

d.     Owner-occupied with no more than four units

815) Which act created the Office of Fair Housing and Equal Opportunity under the Department of Housing and Urban Development?

a.     Americans with Disabilities Act of 1990

b.     Equal Credit Opportunity Act of 1974

c.      Federal Fair Housing Act of 1968

d.     Housing and Community Development Act of 1974

816) If a private individual owner doesn’t own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?

a.     Housing designated for senior use

b.     “Mrs. Murphy” exemption

c.      Owner-occupied buildings with no more than six units

d.     Single-family housing sold or rented without the use of a broker

817) What protected class is involved when there is discrimination due to a person being lighter-skinned or darker-skinned?

a.     Color

b.     Familial status

c.      National origin

d.     Race

818) Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it’s due to his disability. He is protected under what federal law?

a.     Civil Rights Act of 1866

b.     Fair Housing Amendments Act of 1988

c.      Federal Fair Housing Act of 1968

d.     Housing and Community Development Act of 1974

819) Which U.S. Supreme Court decision consolidated five cases involving the constitutionality of state-sponsored segregation in public schools?

a.     Brown vs. Board of Education

b.     Buchanan vs. Warley

c.      Jones vs. Mayer

d.     Plessy vs. Ferguson

820) The Housing and Community Development Act of 1974 added which protected class to federal fair housing law?

a.     Color

b.     Disability

c.      Religion

d.     Sex

821) Contrary to federal fair housing laws, the state where Katrina lives includes age as a protected class. Which of these statements about this conflict is true?

a.     Katrina can follow either the federal or the state law as long as she is consistent.

b.     Katrina is permitted to follow whichever law is least restrictive.

c.      Katrina must follow federal law for any federally related transaction.

d.     Katrina must follow the more restrictive of federal or state law.

822) Prior to a certain act’s existence, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. What’s this act called?

a.     Civil Rights Act of 1866

b.     Fair Housing Amendments Act of 1988

c.      Federal Fair Housing Act of 1968

d.     Housing and Community Development Act of 1974

823) A mortgage lender has landed in hot water for fair housing discrimination. Which of these actions might have gotten the lender in trouble?

a.     Denying a loan based on income-to-credit ratio

b.     Denying a loan that was pre-approved after the mother stops working to care for her baby

c.      Imposing different interest rates based on credit scores

d.     Refusing to provide literature about loans to consumers with poor English language skills

824) If a landlord refuses to rent an apartment to two single women who live together, this is discrimination on the basis of what federally protected class?

a.     Familial status

b.     Lifestyle

c.      Same sex relationship

d.     Sex

825) Which agency enforces fair housing law?

a.     FFA

b.     FHEO

c.      NFHA

d.     NHA

826) Which of these actions is legal?

a.     A landlord offers an apartment to a woman only if she goes out with him.

b.     A landlord refuses to show or rent an apartment to someone who is not Christian or Jewish.

c.      A landlord requires a larger deposit for each child who will be living in the home.

d.     A man advertises for a roommate to share his two-bedroom apartment and specifies that he prefers female roommates.

827) A landlord with a strict “no pets” policy won’t rent to a woman who uses a service animal to assist with her epilepsy. Which of the following is a true statement about this situation?

a.     This is discrimination based on disability.

b.     This is discrimination based on familial status.

c.      This isn’t discriminatory because service animals are restricted to the vision-impaired.

d.     This isn’t discriminatory if the “no pets” policy is universally applied.

828) In what way did the Supreme Court case of Brown vs. Board of Education affect the way fair housing laws are implemented today?

a.     The court found that racially segregated school buses were unconstitutional.

b.     The court legalized racial segregation through the “separate but equal” doctrine.

c.      The court’s decision made segregated school boards illegal.

d.     The decision overturned the doctrine of “separate but equal.”

829) A family of four, with children ages six and nine, is denied the opportunity to view an available unit in housing intended for older persons. Which of the following statements is true?

a.     The federal Fair Housing Act allows an exemption for communities that are designed and operated for older persons.

b.     The federal Fair Housing Act allows an exemption for communities that don’t have playgrounds or play areas for children.

c.      This is a violation of the federal Fair Housing Act because it discriminates on the basis of age.

d.     This is a violation of the federal Fair Housing Act because it discriminates on the basis of familial status.

830) Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations?

a.     Office of Civil Rights

b.     Office of Equal Credit Opportunity

c.      Office of Fair Housing and Equal Opportunity

d.     Office of Housing and Community Development

831) Why did the Civil Rights Act of 1866 fail to have an immediate impact on practice?

a.     It was unconstitutional.

b.     Nobody understood the Civil Rights Act.

c.      The protected classes had to be approved.

d.     There was no agency put in place to enforce the laws.

832) Which act provides consumers with remedies if they become victims of discrimination in the sale, rental, or financing of housing?

a.     Civil Rights Act of 1866

b.     Equal Credit Opportunity Act of 1974

c.      Fair Housing Amendments Act of 1988

d.     Housing and Community Development Act of 1974

833) In what year was the Americans with Disabilities Act made law?

a.     1950

b.     1978

c.      1988

d.     1990

834) Jericho and Cindy, an unmarried couple, have three children, ages 3, 5, and 12. A seller’s broker refuses to show them a house in a neighborhood where residents tend to be older, and no one else has children. Which protected class status applies?

a.     Age status

b.     Familial status

c.      Marital status

d.     Partnership status

835) The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn’t attend church. Nora then told them that she didn’t know of any listings that met their needs, even though that wasn’t true. Nora is discriminating based on _______.

a.     Familial status

b.     National origin

c.      Religion

d.     Sex

836) Which decision stated that separate facilities for blacks and whites were constitutional as long as they were “equal”?

a.     Brown vs. Board of Education

b.     Buchanan vs. Warley

c.      Jones vs. Mayer

d.     Plessy vs. Ferguson

837) Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing?

a.     Civil Rights Act of 1866

b.     Civil Rights Act of 1968

c.      Equal Credit Opportunity Act of 1974

d.     Housing and Community Development Act of 1974

838) A landlord refuses to show or rent an apartment to someone who is not Christian or Jewish. What type of discrimination is this?

a.     Disability discrimination

b.     Familial status discrimination

c.      Racial discrimination

d.     Religious discrimination

839) Which fair housing case tested discrimination in a private sale?

a.     Brown vs. Board of Education

b.     Buchanan vs. Warley

c.      Jones vs. Mayer

d.     Plessy vs. Ferguson

840) A homeowner has converted two rooms in his home to a rental unit. What does the “Mrs. Murphy” exemption permit him to do?

a.     Advertise for a tenant of a specific race.

b.     Move out of the property and rent both portions of it, relying on the “Mrs. Murphy” exemption to permit renting only to single females.

c.      Refuse to rent to a female tenant.

d.     Use the services of a real estate professional to advertise for a male tenant.

841) Which of these is something that is NOT requested in the initial fair housing complaint form?

a.     A description of the alleged discrimination

b.     A notarized copy of the complaint description

c.      The applicable protected class of the complainant

d.     The physical location of the discrimination event

842) Which protected class is protected against discriminatory practices, such as against placing limitations on the number or age of children in the residence?

a.     Familial status

b.     Marital status

c.      National origin

d.     Partnership status

843) A fair housing specialist is reviewing fair housing complaints. Which of these contains an action that is prohibited?

a.     An appraiser inflates the value of a property because the person buying the property stole his girlfriend in high school.

b.     A pregnant woman was not given the opportunity to rent a room in a three-bedroom house because the owner doesn’t want to live with a baby.

c.      A real estate professional doesn’t respond to any requests to view a property.

d.     A transgender woman is evicted from a rental property because she makes the neighbors uncomfortable.

844) When state and federal laws differ, as they sometimes do with fair housing and/or human rights, which of these statements is true?

a.     State and local law override federal law.

b.     State lawmakers decide which law prevails.

c.      The conflicting law is invalidated, effectively removing the law’s requirements.

d.     The state law may not remove rights granted to citizens under the federal law.

845) Which of these situations does the Americans with Disabilities Act address?

a.     Marcus, a property manager, routinely dismisses rental applications from families with children under the age of 18.

b.     Meridian Apartments provides a gym and pool area for residents, but it’s not accessible to residents who use wheelchairs.

c.      Metro Agents hired an interpreter to assist Spanish-speaking clients with the real estate process.

d.     The Golden Gate senior housing center has no exercise or activity center for its residents.

846) Which act was the first to prohibit any exceptions for discrimination based on race or color?

a.     Civil Rights Act of 1866

b.     Fair Housing Amendments Act of 1988

c.      Federal Fair Housing Act of 1968

d.     Housing for Older Persons Act of 1995

847) Which of these statements accurately describes finance- and housing-related legislation?

a.     As a stipulation of the Housing and Community Development Act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days.

b.     The Americans with Disabilities Act added familial status and disability (both physical and mental) to the existing protected classes.

c.      The Equal Credit Opportunity Act of 1974 required lenders to provide consumers with equal access to credit and prohibited credit discrimination based on just the three protected classes of race, color, or national origin.

d.     The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin.

848) Which of these scenarios is legal?

a.     A homeowner makes a room available for rent in her residence, but only interviews female applicants.

b.     A property manager refuses to show a property to a blind person with a guide dog because the property does not allow pets.

c.      A selling agent does not respond to a request to view a listed property because the person’s accent in the voicemail is very thick.

d.     The sellers refuse to consider an offer from someone who looks like a man wearing women’s clothing, because they don’t think the neighbors would be happy if they sold their house to someone who might be transgender or gay.

849) Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager’s office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on _______.

a.     Color

b.     National origin

c.      Race

d.     Sex

850) As a stipulation of a specific act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days. What’s the name of this act?

a.     Americans with Disabilities Act of 1990

b.     Equal Credit Opportunity Act of 1974

c.      Fair Housing Amendments Act of 1988

d.     Federal Fair Housing Act of 1968

851) Which act states that communities and facilities that meet certain criteria for providing housing to older persons are legally exempt from familial status discrimination?

a.     Fair Housing Amendments Act of 1988

b.     Federal Fair Housing Act of 1968

c.      Housing and Community Development Act of 1974

d.     Housing for Older Persons Act of 1995

852) Which of these situations would be exempt from most provisions of the federal Fair Housing Act?

a.     A homeowner engages a real estate professional to rent out his basement apartment.

b.     An investor owns and rents out five duplexes.

c.      A non-profit owns 20 properties that it only rents to Caucasian families.

d.     The local Elks club owns a property that’s rented only to Elks club members.

853) What is the length of the statute of limitations to file a fair housing complaint with HUD?

a.     10 years

b.     Five years

c.      One year

d.     Seven years

854) How does the Office of Fair Housing and Equal Opportunity support real estate consumers?

a.     The FHEO conducts regular audits of licensee advertising activities for fair housing violations.

b.     The FHEO makes loans available to first time home buyers.

c.      The FHEO provides financing education for future homeowners.

d.     The FHEO provides support for protected classes through the fair housing complaint process.

855) Your client tells you to do something. It would violate fair housing laws, but it will earn you an amazing commission. What should you do?

a.     Explain that you cannot do it, because it’s a fair housing violation, and you could both get into trouble for doing what she’s asked.

b.     Immediately fire her as your client and report her as a violator of federal fair housing laws.

c.      Try to talk her out of it, but then go along with what she asks. If you don’t, someone else will, and then they’ll get to cash that giant check.

d.     You should do what she asks. As your client’s agent, you owe her the duties of loyalty and obedience above all.

856) To whom/which entity should a licensee who’s been threatened with violence after refusing to violate fair housing law report the threat?

a.     HUD

b.     Law enforcement officials

c.      The governor

d.     The National Fair Housing Alliance

857) Which of these might bring a charge of illegal steering against a licensee?

a.     Benny screens the properties he shows his clients based on the clients’ preferences.

b.     Johnny is working with a client who has a disability. At the client’s request, Johnny refrains from showing the client listings that aren’t ADA accessible.

c.      Norton encourages his clients to contact local agencies to learn more about a neighborhood’s schools, crime rates, and religious institutions.

d.     When working with single female clients, Cassandra is careful to promote properties in neighborhoods she considers safe.

858) Which of these is an example of blockbusting?

a.     A lender withholds mortgage loans in areas considered demographically risky.

b.     A licensee doesn’t tell her buyer client about a first-floor condo because she felt it wasn’t safe for the client.

c.      A licensee focuses on showing properties in areas that are demographically similar to her buyer clients’ ethnicity.

d.     A real estate licensee approaches a homeowner as soon as a demographic shift starts to occur in her neighborhood and convinces her that she needs to sell now, or she’ll never be able to sell.

859) What’s the term for a lender refusing to lend in a specific area, often based on the area’s minority make-up?

a.     Blockbusting

b.     Gerrymandering

c.      Redlining

d.     Steering

860) What’s the term for the illegal practice of nudging buyers away from or toward a specific area based on the presence or absence of protected class members?

a.     Blockbusting

b.     Gerrymandering

c.      Redlining

d.     Steering

861) Which one of these situations represents the illegal practice of redlining?

a.     Arlo, a licensee, distributed a flyer in several neighborhoods warning of impending commercial developments that would negatively impact property values.

b.     Based on the neighborhood’s demographics, Hunter, a mortgage broker, refused to underwrite mortgage applications from applicants who want to buy in specific neighborhoods.

c.      Eunice refused to allow her listing broker to show her house to families with children.

d.     Jaime was working with Korean clients, so he focused on showing them homes in Korean communities because he thought they would be more comfortable there.

862) How should you respond if your buyer says the following? “We’re looking for a three-bedroom, two-bathroom home. We have young children, so we want to make sure we’re in a good neighborhood—somewhere safe, where we’ll find a lot of good families and neighbor kids that we’d want our children to play with.”

a.     “I can screen neighborhoods based on good school districts for you. That usually means you’ll end up in the kind of neighborhood you want.”

b.     “If you provide me with specific kinds of people you want to avoid, I can screen the properties more closely.”

c.      “If you provide me with specific neighborhood names, I can certainly look for homes in those areas. You can learn about the different neighborhoods in the area at neighborhoodscout.com.”

d.     “Let’s keep this off the record. We just need to make sure it all looks legitimate from the outside.”

863) Which act attempted to eliminate discrimination caused by blockbusting, steering, and redlining?

a.     Civil Rights Act of 1866

b.     Fair Housing Act of 1968

c.      Housing Discrimination Act of 1974

d.     HUD Act of 1961

864) What discriminatory lending practice by lenders resulted in the destruction of whole neighborhoods, with perfectly good housing left abandoned?

a.     Blockbusting

b.     Gerrymandering

c.      Redlining

d.     Steering

865) Which of these is a recommended strategy for a real estate professional who wants to avoid being asked to violate fair housing laws?

a.     Let consumers know upfront that you adhere to fair housing laws.

b.     Only work with clients who are the same race as you.

c.      Quiz clients on their views about protected classes.

d.     Require your clients to complete training on fair housing laws.

866) Early in its history, the Federal Housing Administration officially supported keeping “incompatible” racial groups out of the newly developed white suburbs. What is this practice known as?

a.     Blockbusting

b.     Consolidating

c.      Redlining

d.     Steering

867) In 1934, when the Federal Housing Administration was created, it adopted the practice of crossing off cities and neighborhoods it considered risky and refused to insure loans for purchases in those areas. What is this action called?

a.     Blockbusting

b.     Gerrymandering

c.      Redlining

d.     Steering

868) How would you respond if your seller makes the following request? “We’ve lived here 10 years and love our neighbors. They’re really concerned about the changes happening to the blocks around us, so we want to be careful about who we sell this house to. You know what we mean. You’ll help us find the ‘right’ kind of buyer, won’t you?”

a.     “I can’t technically do that, but I could choose to advertise only in publications that target a white readership.”

b.     “I’m sorry that you feel that way. I am obligated to obey the requests of my clients, but I’m going to need you to write up your request and sign it, so there’s no way I can get in trouble for fair housing violations.”

c.      “It would be illegal to limit the search based on race or religion or anything like that, but I promise I’ll find you the most qualified buyer I can, and we’ll sell this house for the highest price possible.”

d.     “Let’s keep this off the record. As long as we can come up with other reasons to disqualify the buyers you don’t want, we’ll be okay. We just need to make sure it looks legitimate from the outside.”

869) Which of these sentences most accurately describes the purpose of the Unruh Civil Rights Act?

a.     The act grants protections to members of protected classes from discrimination by business establishments.

b.     The act protects everyone from discrimination by business establishments.

c.      The act protects everyone from discrimination in public housing accommodations.

d.     The act removes protections from some of the federally protected classes.

870) Which one of these classes is protected under California fair housing law?

a.     Convicts

b.     Drug addicts

c.      Smokers

d.     Source of income

871) What is the purpose of the fair lending notice?

a.     To disclose the demographic characteristics of approved mortgagors by the bank over the past five years.

b.     To explain that financial institutions have the right to refuse to provide loans on homes in neighborhoods with historically high rates of foreclosure.

c.      To notify mortgagors of their rights to equitable interest rates.

d.     To notify mortgagors that it is illegal for financial institutions to discriminate on the basis of a protected class or on the basis of the characteristics of the neighborhood.

872) The ______ Civil Rights Act protects consumers of businesses from discrimination.

a.     American

b.     California

c.      Unruh

d.     U.S.

873) The Unruh Civil Rights Act prohibits discrimination against protected classes by ______ establishments.

a.     All business

b.     All for-profit

c.      Only non-profit

d.     Only real estate

874) Which of these actions are exempt from California’s Fair Employment and Housing Act?

a.     A man posts a classified ad stating he is looking for a male roommate to share his two-bedroom, one-bath apartment.

b.     An apartment manager assigns minorities to one building.

c.      An apartment manager refuses to allow an assistance animal in a building with a “no pets” policy.

d.     A woman advertises her single-family residence for lease, and says, “No minorities allowed.”

875) Identify the action that is illegal under California’s FEHA.

a.     A lender refuses to make loans to someone with a recent bankruptcy.

b.     A local city council decides to re-zone a neighborhood from residential to commercial to prevent a housing development aimed at families who receive housing assistance.

c.      Jessup, an apartment manager, refuses to permit waterbeds in any building units.

d.     Sheila refuses to rent to tenants with poor credit history.

876) To make a complaint with the Department of Fair Employment and Housing, the complainant must first complete what form?

a.     Formal DFEH complaint form

b.     Pre-complaint inquiry

c.      Protected class disclosure form

d.     Request for temporary restraining order

877) Which of these actions is a violation of California’s Fair Employment and Housing Act?

a.     An apartment manager favors better-looking female applicants over equally qualified plain Janes.

b.     An apartment manager screens out a tenant whose source of income is illegal drugs.

c.      Kirby, a buyer’s agent, carefully shows Democratic clients only neighborhoods that match their demographics.

d.     While presenting offers to a seller client, an agent notes at the top of a summary sheet that the buyer is an “EXOTIC DANCER” and suggests that they look for someone with a more tasteful source of income.

878) Which act prohibits housing financial discrimination on the basis of protected class make-up or location of a property?

a.     The DFEH Act

b.     The Holden Act

c.      The HUD Act

d.     The Unruh Act

879) Which of these classes may not be protected outside of California?

a.     Disability status

b.     Gender expression

c.      Race

d.     Sex

880) The California Supreme Court has held that protections under the Unruh Act are ______.

a.     Applicable to anyone exhibiting characteristics of the protected groups named in the act

b.     Restricted to the protected groups named in the act

c.      Set to expire in 2016

d.     Unconstitutional

881) The ______ has held that protections under the Unruh Act are applicable to anyone exhibiting characteristics of the protected groups named in the act.

a.     California Department of Real Estate

b.     California Supreme Court

c.      FDCA

d.     FEMA

882) When a Department of Fair Employment and Housing complaint reaches litigation, the parties have the option to have the case heard before _____________________.

a.     A court-appointed mediator

b.     Civil court

c.      The Department of Fair Employment and Housing or in civil court

d.     The Housing and Urban Development Commission

883) Which of these statements about the Unruh Civil Rights Act is true?

a.     The act provides for a variety of remedies, including court-ordered damages up to five times the victim’s actual damages.

b.     The act provides for a variety of remedies, including court-ordered damages up to three times the victim’s actual damages.

c.      The act provides for a variety of remedies, including court-ordered damages up to two times the victim’s actual damages.

d.     The act specifies that victims of discrimination may not be reimbursed for attorney fees.

884) Which act provides similar protections for consumers of business services and products as those provided by the California Fair Employment and Housing Act?

a.     ADA

b.     Federal Fair Housing Act

c.      Foreign Investment Act

d.     Unruh Act

885) Which step of the DFEH complaint process takes place in civil court?

a.     Investigation

b.     Litigation

c.      Pursuit of resolution

d.     Remedies

886) Which of these statements is true?

a.     The Unruh Civil Rights Act does not include the seven federally protected classes.

b.     The Unruh Civil Rights Act extends protections to several classes in addition to the seven federally protected classes.

c.      The Unruh Civil Rights Act protects one class—source of income—in addition to the seven federally protected classes.

d.     The Unruh Civil Rights Act protects the seven federally protected classes and no other classes.

887) During which step of the DFEH complaint process does the DFEH explore options to resolve a complaint after a violation of the law has been found?

a.     Investigation

b.     Litigation

c.      Pursuit of resolution

d.     Remedies

888) The Unruh Civil Rights Act requires: “Full and equal accommodations, advantages, facilities, privileges or services in ______ business establishments.”

a.     All

b.     For-profit

c.      Non-profit

d.     Privately owned

889) Which of these statements accurately describes the formal DFEH complaint process?

a.     A formal complaint is only filed if a full investigation reveals a violation of the law.

b.     DFEH cases are litigated by private lawyers.

c.      The formal process begins with filing of a complaint and ends with remedies. In the middle, you have investigation, pursuit of resolution, and litigation.

d.     The process begins with mediation in an effort to avoid a costly investigation.

890) Which of these actions would be considered illegal under the Holden Act?

a.     Refusing to provide a mortgage loan to a customer who wishes to buy a home in a neighborhood with a high rate of foreclosures

b.     Refusing to provide a mortgage loan to a recently divorced woman who just filed bankruptcy

c.      Requiring a legal address for the property before approving a mortgage loan

d.     Running a credit report on a mortgage applicant who has darker skin

891) How does the Department of Fair Employment and Housing complaint process begin?

a.     A pre-complaint questionnaire is completed by the complainant’s lawyer.

b.     Complainants fill out a pre-complaint inquiry form and then are contacted by the DFEH to arrange a telephone interview to gather more information.

c.      Complainants fill out formal complaint forms on the DFEH website.

d.     Someone who has a complaint calls the DFEH to schedule an interview. If the interviewer deems the complaint to be valid, they give the complainant a questionnaire to fill out.

892) Identify the action that is illegal under California fair housing laws.

a.     A landlord gives a tenant notice to vacate after she notices the tenant, a man, has begun dressing as a woman.

b.     Brenda, a licensee, is learning Spanish to better converse with her Spanish-speaking clients.

c.      Manny, a landlord, refuses to rent to motorcycle riders.

d.     Tess, who owns a rental, refuses to allow waterbeds because of their weight.

893) Which term refers to the tenant’s right to live in a rental property without harassment or trespass by the landlord?

a.     The right of quiet enjoyment

b.     The right to live

c.      The right to peace

d.     The right to possession

894) Lorenzo just received a prestigious fellowship to study abroad for a year! However, he still has six months left on his one-year apartment lease. His landlord has given him permission to draw up a new agreement with his sister Maggie, whereby Maggie will live in the apartment, pay rent to Lorenzo, and then Lorenzo will pay the landlord. This is an example of ______.

a.     Assignment

b.     Assimilation

c.      Subleasing

d.     Transfer

895) Malcolm loves his apartment, even though he’s rarely there. His job in international development has him on the road for months at a time. He doesn’t have to worry about missing out on his lease renewal, though, because he has ______.

a.     A freehold estate

b.     An estate at will

c.      An estate for years

d.     A periodic estate

896) What type of leasehold is characterized by possession of a property without the express permission of the property owner, such as a situation in which a tenant continues to occupy an apartment after the lease has terminated?

a.     Estate at sufferance

b.     Estate at will

c.      Freehold estate

d.     Periodic estate

897) Selma and Richard have the temporary right to live at 123 Elm Street. They can come and go and use the property as they see fit, but they can’t do so indefinitely. They must vacate the property at the end of next year. What sort of interest do they have in 123 Elm Street?

a.     Fee simple estate

b.     Leasehold estate

c.      Life estate

d.     Reversionary estate

898) Randolph has a leasehold estate that automatically renews at the end of each lease period. What type of leasehold estate does Randolph hold?

a.     Estate at will

b.     Estate for months

c.      Periodic estate

d.     Renewable estate

899) An example of this type of leasehold estate is a month-to-month lease.

a.     Estate at sufferance

b.     Estate at will

c.      Estate for months

d.     Periodic estate

900) Eric’s residential tenant hasn’t paid rent for more than three months, so Eric went to court to start eviction proceedings. He’s now been granted the right to remove the tenant. This is a(n) ______ eviction.

a.     Actual

b.     Aggressive

c.      Constructive

d.     Sufferance

901) Dawn owns a bungalow three miles from the city center. She rents it to Bob and Jan Siegel. Dawn is a ______.

a.     Beneficiary

b.     Lessee

c.      Lessor

d.     Trustee

902) Cedric is opening a model railroad shop, but he knows that he’ll only run the store until his partner finishes law school. He signed a three-year lease, after which the lease will terminate. What kind of leasehold is this?

a.     Estate at sufferance

b.     Estate at will

c.      Estate for years

d.     Periodic estate

903) Lacey is new to California and has found a room to rent on a month-to-month basis until she finds a more permanent place to live. For her lease to be legally binding, it must meet the following minimum criteria:

a.     Put in writing and discussed orally

b.     Put in writing and notarized

c.      Put in writing and signed by a witness

d.     Put in writing or discussed orally

904) Which of these terms is used to describe when a new occupant lives in a rental unit and pays rent to the previous tenant, who is still under contract with the landlord?

a.     Assignment

b.     Covenant

c.      Estate at will

d.     Sublease

905) Which of these statements about leases in California is true?

a.     A lease must identify the parties to the lease and emergency contact information for the tenant.

b.     A lease must identify the parties to the lease and the rental property.

c.      By default, a residential lease in California has a term of one year.

d.     The amount of the rent payment may be decided after the parties have agreed to the lease.

906) Leases with a term of one year or more are required to be in writing according to the California statute of ______.

a.     Frauds

b.     Landlords and Tenants

c.      Leases

d.     Limits

907) What’s required for both assignments and subleasing in most cases?

a.     An escrow account

b.     A real estate license

c.      A security deposit

d.     Landlord approval

908) Landlords may protect themselves from having to pay for damages to the property caused by the tenant by collecting a security ______ from the tenant.

a.     Charge

b.     Deposit

c.      Guarantee

d.     Payment

909) Lorenzo just received a prestigious fellowship to study abroad for a year! However, he’d just signed a one-year lease on his apartment. With the landlord’s permission, he substituted his sister’s name on the lease, and Lorenzo’s sister will pay rent directly to the landlord. Lorenzo may still be liable for the rent if she misses any payments. This is an example of ______.

a.     Assignment

b.     Assimilation

c.      Subleasing

d.     Transfer

910) Shannon is moving to California in seven months to attend college and has already signed a nine-month lease agreement. Which of these statements about her lease agreement is true?

a.     Her lease does not need to be in writing because California allows oral lease agreements.

b.     Her lease does not need to be in writing because the lease term is only for nine months.

c.      Her lease needs to be put in writing because California requires that all leases be put in writing, regardless of the term.

d.     Her lease needs to be put in writing in because the entire agreement will cover a period of 16 months.

911) Which type of leasehold lasts for a defined period of time and automatically terminates when that period ends?

a.     Estate at sufferance

b.     Estate at will

c.      Estate for years

d.     Periodic estate

912) Jake, who was leasing a house, retained possession even after his right to possess had terminated. Jake has a(n) ______.

a.     Estate at sufferance

b.     Estate at will

c.      Estate for months

d.     Holdover tenancy

913) Which of these is NOT one of the five required ingredients of a lease in California?

a.     Amount of rent and due dates

b.     Length of the lease

c.      Names of the landlord and tenant

d.     Written signatures

914) As part of his lease agreement with his landlord, Alex mows the grass around his apartment building each week in return for a small reduction in rent. What is this an example of?

a.     Condition

b.     Covenant

c.      Enjoyment

d.     Promissory

915) Sonya’s lease expired, but she hasn’t yet moved out and she’s not paying rent. Walt has started eviction proceedings. Sonya is considered a(n) ______.

a.     Expired tenant

b.     Holdover tenant

c.      Illegal tenant

d.     Malingerer

916) Tyra owns a nail salon that’s located in a strip mall. Her rent every month includes $1,800 base rent and 10% of her gross sales. What kind of lease does Tyra have?

a.     Graduated

b.     Gross

c.      Net

d.     Percentage

917) How does the “break-even point” relate to percentage leases?

a.     Sales proceeds must exceed last year’s total before the percentage applies.

b.     The landlord charges a percentage of the cost for improvements to all tenants.

c.      The landlord doesn’t charge a percentage of sales until the tenant’s sales exceed a break-even point.

d.     The landlord must receive enough in rent plus the share of sales to break even on the debt service.

918) Martin is a tenant. His lease has a fixed rent but also requires that he pay for insurance and other expenses for the property. What type of lease does he have?

a.     Gross

b.     Ground

c.      Net

d.     Variable

919) Which clause allows a landlord to increase the lease payment during the lease term?

a.     Acceleration

b.     Escalation

c.      Mid-lease

d.     Upward

920) Gary leases a commercial building and pays all expenses related to the building, including taxes and insurance. Gary has a ______.

a.     Gross lease

b.     Net lease

c.      Percentage lease

d.     Sublease

921) How is the break-even point calculated for a percentage lease?

a.     Divide the annual expenses by the monthly base rent.

b.     Divide the monthly base rent by the percentage the landlord established.

c.      Multiply the established percentage by the base rent.

d.     Subtract the base rent from the monthly expenses.

922) Which type of lease is one in which the tenant pays the rent and some expenses related to the property (e.g., maintenance) separately?

a.     Graduated

b.     Gross

c.      Net

d.     Percentage

923) What’s an expense stop as used in leases?

a.     A lease that increases its rate when operating expenses exceed a certain threshold

b.     A limit to a landlord’s maintenance costs

c.      A way of computing capitalization rates for lease agreements

d.     A way to limit taxes on income-producing properties

924) Commercial lease escalation clauses typically do not take effect until after what period of time?

a.     Five years

b.     One week

c.      Six months

d.     The “base year,” or first year

925) Charlie, who owns and leases out a commercial building, pays taxes, maintenance, and insurance on the building. What type of lease agreement does Charlie have with his tenants?

a.     Gross

b.     Net

c.      Percentage

d.     Triple net

926) How does the term “break-even point” relate to percentage leases?

a.     Sales proceeds must exceed last year’s total before the percentage applies.

b.     The landlord doesn’t charge a percentage of sales until the tenant’s sales exceed a break-even point.

c.      The landlord must receive enough in rent plus the share of sales to break even on the debt service.

d.     The tenant has to break even on expenses before the percentage charge is applied.

927) A commercial landlord finds herself in trouble because the rent she is collecting is not keeping up with inflation due to the type of leases she signed with her tenants. She has the longest tenancies of commercial landlords she knows, which is probably because she signed with them ______ leases.

a.     Cheap

b.     Flat rate

c.      Indexed

d.     Low rate

928) Brittany has a small office in a professional building. She has a set monthly lease payment that has been calculated to include maintenance of the common areas in the building, such as the restroom and small kitchen, and all nets, utilities, and janitorial charges for her space. The payment also includes taxes and insurance. The landlord takes these payments and pays the individual expenses himself. What type of lease does Brittany have?

a.     Graduated lease

b.     Gross lease

c.      Net lease

d.     Percentage lease

929) Which of these types of tenants most often uses a percentage lease?

a.     Manufacturing

b.     Residential

c.      Retail

d.     Triple net

930) Headhunters Anonymous rents office space in a large office building owned by CEO Properties. CEO Properties pays all expenses for the property, including taxes, insurance, and routine maintenance. What type of commercial lease does Headhunters Anonymous have?

a.     Gross lease

b.     Net lease

c.      Office space lease

d.     Percentage lease

931) Raymond just started his clothing business in a high-traffic shopping center. This type of lease agreement will require Raymond to pay the landlord rent based upon the percentage of the periodic gross sales. This type of agreement is called a ______ lease agreement.

a.     Gross

b.     Ground

c.      Net

d.     Percentage

932) With a triple net lease, the tenant pays ______ separately from the base rent.

a.     Insurance, utilities, and maintenance

b.     Maintenance, insurance, and debt service

c.      Taxes, debt service, and lease payment

d.     Taxes, insurance, and maintenance

933) What type of a lease escalation clause is tied to a market index (typically the CPI)?

a.     A flat rate lease escalation clause

b.     An expense lease escalation clause

c.      An index lease escalation clause

d.     A profit margin lease escalation clause

934) Fiona signed a lease with her landlord for a commercial building. A percentage of Fiona’s sales will be paid to the landlord, in addition to her lease payment. Why would Fiona agree to this arrangement?

a.     Fiona is hoping to purchase the building at a later date.

b.     Fiona wants to demonstrate how viable her business is.

c.      Fiona wants to reduce her base rent.

d.     The landlord is her business partner.

935) You have a client who is leasing commercial space. The lease terms call for him to pay a portion of the landlord’s taxes, insurance, and maintenance. What type of lease does your client have?

a.     Itemized lease

b.     Percentage lease

c.      Sublease

d.     Triple net lease

936) Maxwell is a tenant. His lease has a fixed rent in which the landlord pays all taxes, insurance, and maintenance expenses. What type of lease does he have?

a.     Gross

b.     Ground

c.      Net

d.     Variable

937) One of the requirements of an enforceable lease is that both parties are bound to the terms of the lease. This is called ______.

a.     Mutuality of assent

b.     Mutuality of enforceability

c.      Mutuality of liability

d.     Mutuality of obligation

938) Which term describes the transfer of possession of rental property?

a.     Clairvoyance

b.     Contract

c.      Conveyance

d.     Covenant

939) Which of these terms refers to the mutual agreement between the landlord and the tenant?

a.     Lawful object

b.     Legal capacity

c.      Mutual assent

d.     Mutuality of obligation

940) This legal aspect of a lease establishes “privity of contract.”

a.     Contract

b.     Conveyance

c.      Covenant

d.     Statute of Frauds

941) Which of these statements about leases is true?

a.     A lease must be signed by a notary and recorded in public records to be enforceable.

b.     A lease must meet the essential requirements of any contract to be enforceable.

c.      A lease that is not signed is not enforceable.

d.     A tenant may waive the right to peaceful enjoyment if the lease includes an unlimited right-of-entry covenant.

942) Which terms describes a lease that has been agreed to by both parties?

a.     Accepted

b.     Delivered

c.      Effective

d.     Executed

943) Which of these two terms describe the dual legal nature of a lease?

a.     Clairvoyance and contract

b.     Concession and contract

c.      Conveyance and concession

d.     Conveyance and contract

944) Which of these statements about recording a lease is true?

a.     A lease must be recorded to be legally enforceable.

b.     A tenant who lives in a building that is being sold may want to have the lease filed as a public record.

c.      Landlords in California are obligated to record leases with public records.

d.     Leases may only be recorded with the consent of the landlord.

945) When a landlord grants possession of a property to a tenant, this is called an act of what?

a.     Clairvoyance

b.     Contract

c.      Conveyance

d.     Ownership

946) One of the requirements of an enforceable lease is that both parties are bound to the terms of the lease. This is called ______.

a.     Mutuality of assent

b.     Mutuality of enforceability

c.      Mutuality of liability

d.     Mutuality of obligation

947) Which of these contract-specific requirements for a lease prohibits minors from entering into a lease agreement?

a.     Lawful object

b.     Legal capacity

c.      Mutual assent

d.     Mutuality of obligation

948) This legal aspect of a lease establishes “privity of estate.”

a.     Clairvoyance

b.     Contract

c.      Conveyance

d.     Ownership

949) When presenting a CMA, if you take the time to explain the CMA process, help the prospective sellers understand what’s behind the numbers, and ultimately leave the decision of the list price up to them, what characteristic have you demonstrated?

a.     Documentation

b.     Effective communication

c.      Law-abiding

d.     Precision

950) You are working on a CMA for your new listing. The seller has indicated that he really wants to list his home for $400,000 or more. Which of the following would indicate that price may be too high?

a.     The closest comparable is a two-story while your client’s house is a ranch house.

b.     There are no comparables within the last six months.

c.      There were three expired listings priced between $400,000 and $425,000.

d.     Two properties recently sold for just under $400,000.

951) Which of the following statements is true about appraisals?

a.     “Appraisal” and “CMA” are interchangeable terms for a property valuation.

b.     Appraisals may only be performed by certified appraisers (with certain exceptions in some states).

c.      Either certified appraisers or managing brokers may perform appraisals.

d.     Real estate licensees may perform appraisals on foreclosed properties, but a certified appraiser must perform all other appraisals.

952) Clark works for Acme Bank and asks for your assistance. He wants you to look at a property that’s about to go into foreclosure and provide him with a report on its current marketability and an approximate market value. What’s Clark most likely asking you to provide?

a.     Appraisal

b.     BPO

c.      CMA

d.     Professional opinion

953) Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?

a.     Expired

b.     Foreclosed

c.      Pending

d.     Withdrawn

954) When pricing a property, which of the following is a reason a licensee would consider expired listings?

a.     To determine approximately how long it will take the home to sell

b.     To determine the price at which a property is most likely to sell

c.      To determine the price at which a property won’t sell

d.     To determine the property’s competition

955) Marcy’s offer on a home was accepted! Which party will be contacting her about arranging an appraisal?

a.     The closing attorney

b.     The lender

c.      The seller’s agent

d.     The title insurance representative

956) What does a CMA determine?

a.     Availability of funding

b.     Cost of replacement

c.      Cost per square foot

d.     Market price range

957) When a real estate professional goes beyond a broad brushstroke approach to a CMA and takes the time to research not only recent sales, but competition and expired listings, what trait are they exhibiting?

a.     Diligence

b.     Documentation

c.      Effective communication

d.     Empathy

958) Ellen has only been licensed for two weeks, but she’s already toured the home of potential clients, the Birds. What should she do to next to secure the listing?

a.     Call her mom and get a pep talk.

b.     Prepare a CMA.

c.      Print out two copies of her professional resume.

d.     Review her pre-licensing coursework for information about taking property photos.

959) When completing a CMA, what might be indicated if a comparable property had a quick sale?

a.     It’s a buyer’s market.

b.     The market for similar homes is good.

c.      The other agent was incompetent.

d.     The property was priced too high.

960) Real estate licensees turn to specific information sources when preparing CMAs for clients. Which of the following information sources is best for estimating the market value of a property?

a.     Comparable sales

b.     Construction costs

c.      Previous sales price

d.     Time to close

961) In which form of price determination does the real estate professional often just drive by the property and take photos, then complete paperwork for the lender?

a.     Appraisal

b.     Broker’s price opinion

c.      Comparative market analysis

d.     Competitive market analysis

962) Which type of analysis is a broad estimate of price in case the lender must take over the property and sell it to an investor or on the market?

a.     Appraisal

b.     Broker’s price opinion

c.      Comparative market analysis

d.     Credit analysis

963) Which of the following features is most likely to be the cause of an adjustment to a comparable when preparing a CMA?

a.     Busy street

b.     Color

c.      Demographics

d.     Interest rates

964) Which of the following provides an opinion of list price range by looking at recently sold properties, comparing current competing properties and properties that didn’t sell, and estimating buyer appeal regarding the style, location, and size?

a.     Appraisal

b.     Broker price opinion

c.      Collective market analysis

d.     Comparative market analysis

965) What’s the primary purpose of a CMA?

a.     To determine an appropriate listing price range

b.     To ensure that the sales price reflects the cost of replacement

c.      To provide the property value to the lender

d.     To set a price that an appraiser will approve

966) You need to perform a sales comparison for your clients. Comparable A’s adjusted sales price is $277,000. Comparable B’s adjusted sales price is $255,000. How might you use this data to determine a list price range for the clients’ home?

a.     Find the average of the adjusted sales prices of Comparable A and Comparable B.

b.     Give more weight to the list price on Comparable A, because it’s lower.

c.      Give more weight to the list price on Comparable B, because the subject property will likely sell more quickly at this higher price.

d.     Give more weight to the list price on the comparable that’s most similar to the property.

967) Steve is preparing a comparative market analysis for the Joneses and has selected three comparable properties. How many adjustments should Steve make to the Joneses’ property?

a.     One

b.     Three

c.      Two

d.     Zero

968) Steve won’t adjust the subject property. Only the comparable’s sales price is adjusted. If it is inferior, adjust upward. If it’s superior, adjust downward.

969) Question 4

970) Which of the following is typically used for purposes other than a prospective listing or sale?

a.     Appraisal

b.     AVM

c.      BPO

d.     CMA

971) Jan is a real estate licensee gathering information to help her seller determine a good listing price. How could expired listings help her in this process?

a.     They denote the property’s competition.

b.     They determine approximately how long it will take the property to sell.

c.      They help determine the price at which the property is most likely to sell.

d.     They illustrate the price at which the property won’t sell.

972) When licensees follow through on what prospects have asked, arrive for meetings on time, and come prepared, what trait are they exhibiting?

a.     Competence

b.     Documentation

c.      Effective communication

d.     Empathy

973) Comparative market analysis is most effective when a licensee limits the data collection time frame for sold properties. A CMA should look at properties that sold within ______.

a.     In the last two years

b.     No later than three to six months ago

c.      Within 18 to 24 months

d.     Within the last six to 12 months

974) Which type of analysis starts with a visit to the property, a search on the MLS, and a comparison of comparable sales, and hopefully ends in a listing for a real estate licensee?

a.     Appraisal

b.     Broker price opinion

c.      Comparative market analysis

d.     Credit analysis

975) Supply and demand determine competition within a market. Which of the following is a true statement?

a.     When there are fewer houses on the market, buyers will pay less.

b.     When there are fewer houses on the market, demand wanes, as well.

c.      When there are fewer houses on the market, neighborhood blight occurs.

d.     When there are fewer houses on the market, sellers can demand more for their properties.

976) When you’re putting together a listing presentation, which of these is a key point to address?

a.     Buyers won’t pay more for a home than the market dictates.

b.     Everything you talk about with the seller will change in six months.

c.      The house needs work before you can sell it for the right price.

d.     Your credentials are the best in the market.

977) After you’ve made a professional listing presentation and the seller has declined to use you as a listing agent, what’s the best practice?

a.     You should accept the outcome either way.

b.     You should ask the sellers for a second chance.

c.      You should call the competing salespersons to discuss the matter.

d.     You should pursue the sellers with questions about their decision, even if they tell you they don’t want to talk about it.

978) Getting the best price is always a factor for a seller, but the ______ at which it would actually sell must be another consideration.

a.     Guesstimate

b.     Highest possible price

c.      Market price

d.     Reduced price

979) If, after seeing your carefully prepared comparative market analysis, a seller doesn’t agree with the price range you prepared in your listing presentation, your best practice would be to ______.

a.     Decline the listing if the seller’s price and your price analysis are too far apart.

b.     List the property at the seller’s price and hope to reduce the price later.

c.      Offer to purchase the property at your suggested list price if it doesn’t sell at the seller’s price.

d.     Split the difference.

980) What happens when an appraiser determines a property’s value to be less than the pre-approved loan amount?

a.     Most buyers will have an appraisal contingency, so they can back out and receive a refund of their earnest money.

b.     Most sellers will have an appraisal contingency, so the seller can keep the buyer’s earnest money.

c.      The buyer must make up the difference between the appraisal and the purchase price.

d.     The seller must make up the difference between the appraisal and the purchase price.

981) Why is it so important to properly price a property when it first enters the market?

a.     If a property is overpriced from the beginning, the chances of the property selling are not impacted significantly.

b.     Overpricing a property will drive up the price of other properties as well, causing a false inflation.

c.      The first several months are crucial because they’re the best chance for the property to sell.

d.     The first several weeks are crucial because they’re the best chance for the property to sell.

982) What are some ways you can make sure you’re pricing a property at fair market value?

a.     Ask the sellers what the sales price should be.

b.     List to sell as fast as possible.

c.      Prepare a well-researched CMA.

d.     Price it at the price the house originally sold for to be fair.

983) An agent lists a home that receives an offer for full list price within one day in a buyers’ market. There is a chance the agent ______ the home.

a.     Appraised

b.     Inflated

c.      Overpriced

d.     Underpriced

984) What’s a CMA?

a.     Company marketing announcement

b.     Comparative market analysis

c.      Comparison marketing algorithm

d.     Comprehensive market appraisal

985) What’s the best advice when challenging an appraisal?

a.     Be specific and concise about why the value opinion is different in your mind.

b.     Blame it on the appraiser.

c.      Don’t bother asking the appraiser to explain why certain adjustments were made or not made.

d.     Suggest a minimum value for the appraiser to meet.

986) Many market conditions impact housing prices. Which of the following is a true statement?

a.     High unemployment rates mean there are more available buyers in the market.

b.     Inflation increases buying power.

c.      Low unemployment rates mean there are fewer available buyers in the market.

d.     Reduced consumer confidence makes new buyers wary of purchasing and homeowners hesitant to trade up.

987) A property has been listed on the market for four months with no offers. Finally, a buyer makes an offer that is 18% less than the list price. How was this property likely priced when it first hit the market?

a.     At appraisal value

b.     Fair market value

c.      Overpriced

d.     Underpriced

988) Demographics impact the housing market. Which of the following is a true statement?

a.     An increase in the number of retirees in a given population would negatively impact the demand for large, single-family homes.

b.     An increase in the number of retirees in a given population would positively impact the demand for large, single-family homes.

c.      An influx of higher wage earners to a given area would create a price decrease for lower-valued homes.

d.     An influx of higher wage earners to a given area would decrease the demand for higher-priced housing.

989) Why might a licensee want to make two visits to the property as part of a listing presentation?

a.     To find out how many licensees the seller will be interviewing, which will help determine how much effort to put into preparing a comparative market analysis

b.     To see if the sellers say the same thing both times

c.      To see the property at different times of day

d.     To use information from a tour to prepare the CMA

990) When market conditions indicate top-of-the-market pricing, is it always in your client’s best interest to price it there?

a.     No, because higher sales prices result in higher taxes.

b.     No, it still has to appraise.

c.      Yes, because it’s probably what will win the listing for you.

d.     Yes, because it will sell fast.

991) Which of the following is a potential consequence of overpricing a property?

a.     A competing broker can report you for unfairly pricing a property.

b.     It increases the odds that buyers will be interested because it must be worth the higher price point.

c.      The property will receive offers from serious buyers only, since it is listed at a higher price point.

d.     The property won’t appraise high enough and you could lose the contract if you do get an offer.

992) When pricing a home for the market, what should a licensee try to get sellers to do?

a.     Put themselves in the buyers’ shoes

b.     See how much it might be able to fetch on the market

c.      Set the price at one level, with the expectation of lowering it in 30 days

d.     Visit the neighbors and come up with a price

993) An agent has a seller who wants to list the property at $550,000. The market has taken a downturn, and the fair market value is estimated at $495,000. What is the best approach for this listing?

a.     Explain the benefits in the long run of entering the market at a fair price.

b.     List the home at $550,000 to keep the seller happy.

c.      Tell the seller it’s worth a shot to try it and see if you can get more.

d.     Tell the seller that you won’t work with her unless she lists the home at $495,000.

994) Which of the following statements is true about the listing presentation?

a.     It’s best to leave out financial data (such as a CMA or comparable property information) and listing agreements, so the seller doesn’t think you’re jumping the gun and already counting your commission.

b.     The less you say, the better. You don’t want to overwhelm your potential clients with numbers and decisions at this first presentation.

c.      The most important part of a listing presentation is to make the buyers like you as a person. Try not to talk numbers or about their house, but instead focus on charming them.

d.     You should go into the presentation fully prepared with a comparative market analysis, listing agreement, MLS listings of comparable properties, and your plan for marketing the sellers’ property.

995) If an appraisal is lower than the agreed-upon sales price, what steps can the seller take?

a.     A second appraisal can be ordered, although there should be good reason to question the first appraisal.

b.     A second appraisal can be ordered, but it’s always the buyer’s expense.

c.      A second appraisal can be ordered, but the seller must pay for it.

d.     A second appraisal can be ordered, which typically turns out to be higher.

996) Claire, a seller, accepted an offer on her home. However, it just appraised for less than the sales price. Which of the following is true?

a.     Claire must refund the buyers for the cost of the appraisal.

b.     Claire must take her house off the market.

c.      The appraiser must perform a second appraisal.

d.     The lender will only approve a loan based on the property’s appraised value.

997) A home enters the market priced above fair market value. Within the same time frame, three additional homes enter the market listed between 5% and 10% less than the first home, at a fair market price. What is likely to happen with the first home?

a.     Buyers will recognize the higher price point and immediately submit much lower offers.

b.     If a property is overpriced from the beginning, buyers will move on and likely make a purchasing decision before the price is corrected on the overpriced home.

c.      The backload of buyers on the market will wait to see if the price is adjusted on the first home.

d.     The chances are high there are one or two buyers in the backload of buyers who are willing to make an offer at the entry price.

998) Interest rates determine buying power. Which of the following is a true statement?

a.     When interest rates are high, buyers are often priced out of the market.

b.     When interest rates are high, buyers will be able to afford higher-priced homes.

c.      When interest rates climb, more buyers are encouraged to buy.

d.     When interest rates shift higher, buyers can still buy in the same price range.

999) When a property is overpriced, what happens?

a.     A backlog of buyers will return to it again and again.

b.     It can usually list again at a higher price.

c.      It increases buyer interest and demand.

d.     It may become stale on the market, resulting in low-ball offers.

1000)               An agent is working with seller clients who are very emotionally attached to their home. They want to list the property at $330,000, but the CMA indicates a price range of $255,000 to $275,000. What is the best course of action?

a.     Explain the importance of fair market value and offer to walk them through the process.

b.     List the home for $300,000 because it’s a good compromise.

c.      List the home to sell, so start with the lower end of the CMA.

d.     Start with listing for $330,000 and see if you get any interest.

1001)               What’s the best strategy for pricing a home?

a.     Always go with what the seller thinks it’s worth—the customer is always right.

b.     Prepare a detailed comparative market analysis and base the price on recent comparable sales.

c.      Price it higher than market value so buyers think it has more to offer and will schedule a showing.

d.     Price it lower than market value so that there are lots of offers and a bidding war.

1002)               At a listing appointment, licensee Chet asks Sam, the seller, if his property is his own home or an investment property. Why would Chet ask this?

a.     Chet can only represent sellers if they’re selling their own home; selling investment properties requires a different license.

b.     If the home is his own, he’s likely to be purchasing a new one, so Chet has a chance to land two transactions.

c.      Investment homes are easier to sell because they’re sold “as-is.”

d.     Investment home sellers tend to be more emotionally attached because the homes bring them more income.

1003)               A fire destroyed Meredith’s house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn’t fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?

a.     Its current market value

b.     The amount for which it was appraised

c.      The amount it would cost to completely replace her home

d.     The original sales price when it was first constructed

1004)               Which of these terms can be defined as what a buyer has paid for a property and what the seller has accepted?

a.     Appraisal

b.     Cost

c.      Price

d.     Value

1005)               Who typically performs an appraisal?

a.     Certified appraiser

b.     Inspector

c.      Real estate licensee

d.     Tax assessor

1006)               Which economic principle is related to supply and demand?

a.     Competition

b.     Conformity

c.      Contribution

d.     Substitution

1007)               A rundown home, overgrown with weeds and in desperate need of repairs, is driving down property values on the block. What economic principle is at work here?

a.     Anticipation

b.     Contribution

c.      Progression

d.     Regression

1008)               The economic principle that tells us that when supply goes up, price goes down is also called ______.

a.     Conformity

b.     Price dropping

c.      Regression

d.     Supply and demand

1009)               There are a lot more sellers than buyers in the current market. How does this demand influence value?

a.     Demand doesn’t influence value.

b.     Value is pushed downward.

c.      Value is pushed upward.

d.     Value remains the same.

1010)               The Hendersons were hoping to list their home for $400,000; however, four other comparable homes in the neighborhood just went up for sale, and they now must list their property at $380,000 to sell quickly. Which economic principle is at work here?

a.     Competition

b.     Conformity

c.      Progression

d.     Substitution

1011)               Boris is an appraiser working for the Smith family. They’ve hired him to perform an appraisal on their six-bedroom house. What two types of data will Boris gather?

a.     Digital and hand-written

b.     General and specific

c.      Old and recent

d.     Pertinent and unrelated

1012)               What acronym can be used to remember factors that influence real property value?

a.     CRUD

b.     DUST

c.      GIVEN

d.     OLD CAR

1013)               What type of value may consumers be interested in if they are looking for the potential rate of return?

a.     Assessed value

b.     Insured value

c.      Investment value

d.     Value in use

1014)               Appraiser Jamie is looking past how a property is being used to determine a higher value. What is Jamie determining?

a.     Cost to replace

b.     Highest and best use

c.      Loan value

d.     Value in use

1015)               What’s another term for a valuation that’s an unbiased opinion of value?

a.     Assessment

b.     Comparative market analysis

c.      Evaluation

d.     Formal appraisal

1016)               When appraisers look past how a property is being used to determine a more optimal function, what are they determining?

a.     Cost to replace

b.     Highest and best use

c.      Market value

d.     Value in use

1017)               Which of the following is the cost of replacing a building in the case of total loss?

a.     Insured value

b.     Investment value

c.      Mortgage value

d.     Value in use

1018)               Which of the following is defined as what it would take to recreate a property if it disappeared off the face of the earth today?

a.     Cost

b.     Insurance

c.      Price

d.     Value

1019)               A CMA or a BPO is an example of ______.

a.     A formal appraisal

b.     An assessment

c.      An informal estimate of market value

d.     An inspection

1020)               What is an appraisal?

a.     A determination of property defects and conditions

b.     An opinion of listing price as determined by a real estate professional

c.      An opinion or estimate of a property’s value as of a specific date

d.     A study on the feasibility of developing land

1021)               When prices go down because there are too many homes on the market and too few buyers, what economic principle is at work?

a.     Competition

b.     Conformity

c.      Progression

d.     Regression

1022)               Which factor influences property value and addresses questions such as, “What’s the market like?” and “Are there more buyers than sellers, or vice versa?”

a.     Demand

b.     Scarcity

c.      Transferability

d.     Utility

1023)               Marcus bought two adjoining pieces of land that were zoned for commercial use. When he realized that combining the two parcels would dramatically increase the land’s value, he jumped at the opportunity. What’s this an example of?

a.     Contribution

b.     Eminent domain

c.      Plottage

d.     Zoning

1024)               Building codes, zoning laws, and environmental legislation are examples of which force that influences property value?

a.     Economic

b.     Physical/environmental

c.      Political/governmental

d.     Social

1025)               Which economic principle pertains to how a change in a property affects its value as a whole?

a.     Anticipation

b.     Conformity

c.      Contribution

d.     Substitution

1026)               Appraiser John is determining how a property is being used to determine a more optimal function. What is he determining?

a.     Cost to replace

b.     Highest and best use

c.      Mortgage value

d.     Value in use

1027)               Which of the following terms means the price a property is worth to its owner as currently enjoyed?

a.     Appraisal

b.     Insured value

c.      Investment value

d.     Value in use

1028)               Kevin is having an appraisal performed on a piece of property he’s interested in buying. He’s especially interested in hearing about the estimated rate of return the property could pull. What type of value is he interested in?

a.     Assessed value

b.     Insured value

c.      Investment value

d.     Value in use

1029)               A property’s value is dropping because the neighboring property’s yard is filled with trash. What’s this an example of?

a.     Depreciation

b.     Progression

c.      Regression

d.     Substitution

1030)               Appraiser Jerry is looking past how a property is being used to determine a more optimal function. What is he determining?

a.     Cost to replace

b.     Highest and best use

c.      Market value

d.     Value in use

1031)               What’s the first step an appraiser will perform when conducting an appraisal?

a.     Estimate the value of the land.

b.     Gather and analyze data.

c.      Identify the data that’s needed.

d.     State the problem.

1032)               The Richards family farm is located on a 10-acre parcel of land, which is very rare in their area. However, the house is rundown and in need of many repairs. Most buyers in the area are looking for a move-in-ready home, which means they would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards’ property?

a.     Demand

b.     Scarcity

c.      Transferability

d.     Utility

1033)               Which of the following is a piece of general data an appraiser may gather?

a.     Improvements made to a property

b.     Kitchen upgrades

c.      Population size

d.     Property lot size

1034)               Your neighbors build a high-quality addition to their home, increasing its value compared to your own home’s value. Because of this, you notice a bump in your property value. Which economic principle is at work here?

a.     Conditional value

b.     Price bump

c.      Progression

d.     Regression

1035)               Which of the following can be defined as what a property is worth?

a.     Appraisal

b.     Cost

c.      Price

d.     Value

1036)               What’s one purpose of a BPO?

a.     To assist buyers in determining an offer amount or sellers in determining a listing price

b.     To assist insurers in determining the amount of liability insurance to place on a property

c.      To assist lenders in determining the marketability and potential sales price for distressed properties

d.     To ensure that the value of a property is sufficient as collateral for a mortgage loan

1037)               What’s the price at which a willing buyer and a willing seller would strike a deal given normal market conditions?

a.     Insured value

b.     Market value

c.      Valuation

d.     Value in use

1038)               Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?

a.     Contribution

b.     Impact on value

c.      Plottage

d.     Progression

1039)               What is the term for an increase in property value caused by the joining of two neighboring parcels of land?

a.     Anticipation

b.     Contribution

c.      Plottage

d.     Progression

1040)               Appraiser Victor is determining the insured value of a property. What is he evaluating?

a.     Items of great importance to a lender to replace or rebuild

b.     The cost to replace or rebuild a property

c.      The price at which the property can be loaned on or sold at a foreclosure sale

d.     The return on investment the property may provide

1041)               Trudy loved her new neighbors. The investor couple bought every available house on Trudy’s block and was working hard to renovate them and increase their value. Trudy decided that she’d sit back, relax, and let her property’s value go up, too, thanks to ______.

a.     Competition

b.     Progression

c.      Regression

d.     Substitution

1042)               What type of value is of interest to taxing authorities?

a.     Assessed value

b.     Insured value

c.      Investment value

d.     Value in use

1043)               Rico is an appraiser who is performing a valuation on a property. What’s another term for what Rico is doing?

a.     Analytical exercise

b.     CMA

c.      Formal appraisal

d.     Price opinion

1044)               Which economic principle states that the value of property today is impacted by the current value of the total expected future benefits?

a.     Anticipation

b.     Conformity

c.      Highest and best use

d.     Progression

1045)               Which of these is true about the assessed value of real estate?

a.     It is typical for the assessed value to increase by 5% or more per year.

b.     It’s the value used to calculate the property taxes, and it’s based on a percentage of the market value.

c.      Property taxes are based on real market value and not assessed value.

d.     The assessed value of a property will almost always be higher than real market value.

1046)               While market value is an opinion of a property’s worth on the fair market, which of the following best describes market price?

a.     How much a buyer has paid and a seller has accepted for the property.

b.     How much a lender would be willing to finance for the property.

c.      How much an appraiser estimates a property is worth on a given day.

d.     How much it would take to rebuild the property from scratch, including the cost of the land.

1047)               Identifying the purpose of the appraisal leads the appraiser to do what next?

a.     Determine highest and best use.

b.     Estimate value of land.

c.      Identify data needed.

d.     Use three approaches to estimate value.

1048)               Quality of amenities, climate, and topography are examples of which force that influences property value?

a.     Economic

b.     Physical/environmental

c.      Political/governmental

d.     Social

1049)               Parcels of land are valued at $50,000 each. However, when two of the parcels are joined, they are valued at $120,000. What economic principle is at work here?

a.     Anticipation

b.     Contribution

c.      Plottage

d.     Progression

1050)               Soren is an appraiser. As such, what guidelines must he follow?

a.     NAR Code of Ethics

b.     National Association of Appraisers (NAA) bylaws

c.      Real estate license law

d.     Uniform Standards of Professional Appraisal Practice (USPAP)

1051)               Which economic principle says that value is created and maintained when the characteristics of a property fit in with its surroundings?

a.     Anticipation

b.     Conformity

c.      Contribution

d.     Substitution

1052)               John’s home is up for sale. He originally bought it five years ago for $300,000. Its current value is $350,000. His real estate agent notified him that a buyer just made an offer on his home for $365,000, which is the price for which other similar homes in the neighborhood are selling, and John accepts. What does the price of $365,000 represent?

a.     The appraised value

b.     The assessed value

c.      The investment value

d.     The market value

1053)               If there is some kind of defect on a property’s title, what effect does this level of transferability have on the property’s value?

a.     The value falls.

b.     The value remains unchanged.

c.      The value rises.

d.     Transferability has no effect on value.

1054)               What well-known economic principle says that a property’s value is determined by what it would cost to purchase a similar property?

a.     Conforming value

b.     Regression

c.      Similar cost principle