California “Real Estate Practice Class” Questions with no Answers for Preview (ALL R.E. PRACTICE QUESTIONS)

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California: Real Estate Practice – Ch1 Quiz with no answers

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1 of 10 Broker Alice has hired several independent contractors in her firm. Which of the these activities does she have control over?

A.    What the licensees wear.

B.     What percent of commission the licensees can charge.

C.     How much time the licensees must spend in the office.

D.    Whether or not the licensees attend staff meetings.

2 of 10 Which of these statements is true?

A.    Salesperson Harry can solicit his own listings.

B.     Salesperson Julie can receive her commission from the cooperating broker in her latest transaction.

C.     Salespersons must perform all of their activities on behalf of their employing broker.

D.    Broker Tom has only limited responsibility for the actions of his licensees.

3 of 10 Which of the following would be an example of a licensee specializing in business type?

A.    Jim specializes in clients who want to buy restaurants.

B.     Alice knows everything about the exclusive east side neighborhoods.

C.     Tom specializes in options.

D.    Chris is a buyer’s agent.

4 of 10 Which of the following is NOT a condition of the safe harbor test?

A.    Person must be properly licensed.

B.     Gross income must be based on production.

C.     Clearly written contractor agreement must exist.

D.    Gross income must be based on hours worked.

5 of 10 Alice has decided that she will specialize in selling farm land. Which area of specialization would she fall into?

A.    Geography

B.     Type of property

C.     Business type

D.    Type of client

6 of 10 Which of the following statements is not true?

A.    A broker may require licensees to carry high levels of automobile insurance.

B.     It’s a good idea for brokers to carry workers’ compensation coverage.

C.     A broker is not responsible for the acts of independent contractors.

D.    Employee status versus independent contractor status is an IRS issue.

7 of 10 Which of the following is not a national real estate trade organization?

A.    NAR

B.     CAR

C.     NAREB

D.    AREAA

8 of 10 Which of the following circumstances would concern you about working for Broker John?

A.    John offers weekly training seminars.

B.     There are several successful agents at John’s office.

C.     John’s office has a selection of books, CDs and tapes for agent use.

D.    John expects his agents to spend 5 hours a week on unsupervised telephone duty.

9 of 10 A shopping center would be primarily categorized as what type of property?

A.    Residential

B.     Agricultural

C.     Investment

D.    Commercial

10 of 10 All of the following are true statements about goals except which one?

A.    Goals should be measurable.

B.     It’s easier to prioritize your tasks if your goals are in writing.

C.     Once you set a goal you should never change it.

D.    Goals must be realistic if you hope to accomplish them.

Ch1 bonus questions

1.      What economic factors affect the real estate market as well as other goods and services?

2.      How are properties affected by the local economy?

3.      Other than residential list three kinds of property in the real estate market.

4.      Jim has decided that he will learn all he can about the new subdivisions at the west end of town. Jim has decided to specialize in what area of real estate?

5.      From whom may a salesperson receive compensation for performed activities?

6.      What is the major difference between an employee and an independent contractor?

7.      What kinds of insurance do brokers normally require of their employees? 

8.      What should a licensee’s written employment agreement contain?

9.      Give an example of a specific short-term goal.

10.  What do you need to remember about making phone calls to potential clients?

11.  What is meant by the term “sphere of influence”? 

12.  What are members of NAR required to do? 

Ch2 – Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 Which Fair Housing Law added sex to the list of protected classes?

A.    Housing and Community Development Act

B.     Rehabilitation Act of 1973

C.     Jones v. Mayer

D.    Fair Housing Amendments Act

2 of 10 Which is not a true statement about the Americans with Disabilities Act?

A.    A broker might need to change the layout of the office to make the aisles wider for clients in wheelchairs.

B.     A duplex owner might need to remodel the kitchen in the rental unit to accommodate persons with disabilities.

C.     An apartment manager might be required to allow a tenant with a disability to widen a doorway.

D.    A shopping center might have to remodel their public restrooms.

3 of 10 How long must trust account records be kept?

A.    1 year

B.     2 years

C.     3 years

D.    5 years

4 of 10 If a person believes he or she has been discriminated against, how long does he or she have to file a HUD complaint?

A.    30 days

B.     90 days

C.     1 year

D.    2 years

5 of 10 Which of the following is not a source of information for professional ethics codes?

A.    State laws

B.     Licensing regulations

C.     Real estate associations

D.    Real estate schools

6 of 10 A broker induces an owner to sell by telling him that Hispanics are moving into the neighborhood. This broker is guilty of what prohibited activity?

A.    Redlining

B.     Panic selling

C.     Steering

D.    Misrepresentation

7 of 10 If a broker receives a deposit check with a purchase contract, which of these is he not allowed to do?

A.    Deposit it directly into escrow.

B.     Give it to the principal.

C.     Deposit into the brokerage business account.

D.    Hold it with the buyer’s permission until the contract is accepted.

8 of 10 Which California Fair Housing law provides protection from discrimination by business establishments?

A.    Rumford Fair Housing Act

B.     Unruh Civil Rights Act

C.     Holden Act

D.    Fair Employment and Housing Act

9 of 10 A person who believes he or she has been discriminated against has how long from the time of the alleged violation to file a suit in a state or federal court?

A.    6 months

B.     12 months

C.     18 months

D.    24 months

10 of 10 Which of these is not an exemption to fair housing law?

A.    Senior housing for residents 62 or older

B.     A religious organization providing housing to members only

C.     The sale of a single-family home by an owner who owns five residences

D.    Rental of a unit in an owner-occupied four-family flat

Bonus Ch2 questions

1. Why is it important for licensees to understand the Americans with Disabilities Act?

2. Alex Jones owns a duplex and lives in one unit. He refuses to rent the other unit to families with children. What would you say about Alex’s actions?

3. If a person feels like he or she has been discriminated against, how long does that person have to file a complaint?

4. Salesperson Sally tells her senior citizen buyers that the home they want to view is located in a neighborhood with several small children and loud teenagers. She tells them they would not be comfortable in this home and she shows them a list of homes in other neighborhoods she thinks would be more appropriate. What would you say about Sally’s behavior? 

California: Real Estate Practice – Ch3 – Quiz with no answers

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1 of 10 Which of the following types of agency is not allowed in California?

A.    Dual agency

B.     Buyer’s agency

C.     Single agency

D.    Designated agency

2 of 10 Which of the following is not a fiduciary duty an agent owes to his or her principal?

A.    Loyalty

B.     Confidentiality

C.     Accountability

D.    Blind obedience

3 of 10 When must a listing agent present the Disclosure Regarding Real Estate Agency Relationships to the seller?

A.    Prior to bringing an offer to purchase.

B.     Prior to accepting the listing.

C.     As soon as possible.

D.    Prior to conducting any showings.

4 of 10 Timeshare buyers have the right to rescind a transaction within what timeframe after signing the purchase contract?

A.    1 day

B.     3 days

C.     7 days

D.    Never

5 of 10 The principles of an agency relationship include all of these factors except which one?

A.    Mutual consent

B.     Authorization

C.     Compensation

D.    Fiduciary duties

6 of 10 Which booklet is not part of the Combined Hazards Book?

A.    The Residential Environmental Hazards Guide

B.     Protect Your Family From Lead In Your Home

C.     The Homeowners Guide to Earthquake Safety

D.    Consumer Guide to Disclosure for Buyers

7 of 10 Which disclosure form gives detailed information about the property’s condition?

A.    Real Estate Transfer Disclosure Statement

B.     Agency Disclosure

C.     Natural Hazard Disclosure Statement

D.    Mello-Roos Report

8 of 10 Which disclosure is required by the Real Estate Settlement Procedures Act?

A.    Good faith estimate

B.     Rights regarding discrimination

C.     Transfer of the loan collection

D.    All of the above

9 of 10 Agent Paul is bound to inform his client of all facts that might affect the client’s interests — both what Paul knows and what he “should have known.” Which of these situations would not be something Paul “should know”?

A.    There is a crack in the basement wall.

B.     The owner of the property is HIV positive.

C.     The air conditioner does not work.

D.    The casement windows have broken seals.

10 of 10 If an agent does not comply with the requirement of conducting a visual inspection of a property, how long after possession does the buyer have to file a suit?

A.    6 months

B.     12 months

C.     24 months

D.    36 months

Bonus ch3 questions –

1- When is an agency relationship created?
2- What exception exists to the duty of obedience when working with a client?
3- An agent’s fiduciary responsibilities to a client usually end when the transaction closes. This is not true of which duty?
4- Amanda calls broker Tim to schedule a showing of one of his listings. Amanda loves the home and wants to make an offer. What should Tim do next? 
5- When must a licensee provide an agency disclosure to a prospective client?
6- What is the Real Estate Transfer Disclosure Statement and who is responsible for providing it?
7- Agent Jim needs to do a visual inspection of his listing. What kinds of things should he be looking for? 
8- Why should agent Grace give her client a Combined Hazards Book? 
9- What required disclosure is a result of Megan’s Law?
10- Which disclosures are NOT required to be made when selling residential property?
11- What is a public report and when must it be provided? 
12- What does TRID require of lenders? 

California: Real Estate Practice – Ch4 – Quiz with no answers

answers will be revealed with proper subscription

1 of 10 All of the following are good newspaper sections to read for prospecting except which?

A.    Obituary column

B.     Classified rental ads

C.     Business section

D.    Special announcements

2 of 10 Developing a prospecting plan is similar to:

A.    Establishing goals.

B.     Developing an earnings statement.

C.     Setting a training schedule.

D.    Writing a meeting agenda.

3 of 10 Which of the following is not a legal notice that can provide a listing lead?

A.    Death notice

B.     Vacancy

C.     Divorce

D.    Tax delinquency

4 of 10 All of these are true of prospecting except:

A.    It can provide a steady stream of future clients.

B.     It helps to identify buyer and seller needs.

C.     It keeps your name in front of potential buyers and sellers.

D.    It guarantees sales.

5 of 10 Prospecting:

A.    Only needs to be done periodically.

B.     Is critical to your success in real estate.

C.     Is helpful but not necessary.

D.    Is best left to experienced brokers.

6 of 10 Which of the following is not a probable reason for a listing to expire without selling?

A.    No open houses

B.     Needs repair

C.     Not properly priced

D.    Not marketed correctly

7 of 10 How might probate information help in prospecting?

A.    Gives the names of lawyers who might require property assistance.

B.     Allows the agent to determine community market trends.

C.     Shows property addresses that should be excluded from prospecting.

D.    Provides the names of individuals who may want to sell inherited property.

8 of 10 Which of the following is a good direct mail technique?

A.    Self folding mailer.

B.     Use self-folding mailers.

C.     Print postage labels from your computer.

D.    Hand address the envelopes.

9 of 10 Which of the following statements is not true?

A.    Retired persons are a good source of neighborhood information.

B.     You can use a reverse telephone directory to get the names of residents.

C.     Knocking on doors never requires special permits.

D.    Visiting a neighborhood with a co-worker could make you feel more comfortable.

10 of 10 Which of these Internet pages might be of particular interest to sellers?

A.    Staging a home

B.     Inspection tips

C.     List of sold homes

D.    All of the above

Ch4 Bonus questions

1- What do you need to check if you want to conduct a door-to-door canvass in a neighborhood? 
2- Name one advantage and one disadvantage of telephone contacts. 
3- What is a good approach to use when contacting the owner of an expired listing? 
4- What are the major areas of newspaper leads? 
5- What kind of newspaper ad could you place to solicit a listing?
6- List four sections of an Internet website that might be of particular appeal to prospective buyers.
7- How can a builder help you generate leads? 
8- Why is it important to have a written prospecting plan? 
 

California: Real Estate Practice – Ch5 – Quiz with no answers

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1 of 10 What form can an agent use to show a seller what he or she will net on the sale of the property?

A.    Statement of Closing Costs

B.     Competitive Market Analysis

C.     Sale Price Disclosure

D.    Estimated Seller Proceeds

2 of 10 A competitive market analysis contains information about all of the following items except which?

A.    Currently listed homes

B.     Recently sold homes

C.     Recently remodeled homes

D.    Similar expired listings that didn’t sell

3 of 10 A listing presentation can be compared to:

A.    A training session

B.     An employment interview

C.     A practice closing

D.    A sure sale

4 of 10 All of the following are benefits of listing with an agent except which?

A.    Preparation of an appraisal of the property

B.     Help during escrow

C.     Qualification of buyers

D.    Help with required forms and disclosures

5 of 10 How many properties should be included for comparison in a competitive market analysis?

A.    Two properties in each category

B.     Five current listings — three recently sold and two expired

C.     A minimum of three properties in the recently sold category

D.    Twelve properties total

6 of 10 Which of the following is not a true statement?

A.    Buyers looking at FSBO homes are usually looking for a bargain.

B.     FSBO sellers believe they will save money if they sell themselves.

C.     FSBO sellers who list with an agent will pay their own advertising costs.

D.    Buyers of FSBO homes are usually the ones who save money.

7 of 10 A presentation manual:

A.    Should be professionally produced.

B.     Can be used in place of a verbal presentation.

C.     Is not necessary if the verbal presentation is strong.

D.    Lends good visual support to what the agent is saying.

8 of 10 Which of the following will give you comparative market data the fastest?

A.    Multiple listing service

B.     County records

C.     Company files

D.    Title companies

9 of 10 Which of the following items would not usually be included in a presentation manual for buyers?

A.    Documents showing your affiliations with real estate organizations.

B.     Services offered to buyers.

C.     Your plan for finding the buyer a home.

D.    A list of former client references

10 of 10 A competitive market analysis is an attempt to:

A.    Find things in the home a seller needs to repair.

B.     Establish a home’s fair market value.

C.     Discover why some homes haven’t sold.

D.    Convince a seller to list with you.

Ch5 Bonus questions

1- What is a competitive market analysis?
2- When looking at homes currently for sale, what is important for a prospective seller to know about asking price?
3- When preparing a competitive market analysis, what categories of homes should an agent research? 
4- What is a good method for estimating what a seller will net from the sale of the property? 
5- Your listing presentation manual should be made up of two sections that address what issues?
6- What is the main reason sellers choose to sell their property without an agent’s help?
7- Name three benefits of listing a home with an agent that you could share with sellers. 
8- What is an important issue for potential buyer clients to understand? 

Ch6 – Quiz with no answers

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1 of 10 The Lead-Based Paint Disclosure is required for homes built:

A.    Before 1978

B.     Before 1976

C.     After 1980

D.    After 1975

2 of 10 Which of these documents is for sellers only and not for buyers?

A.    Smoke Detector Statement of Compliance

B.     Real Estate Transfer Disclosure

C.     Residential Listing Agreement

D.    Seller’s Affidavit of Nonforeign Status and/or California Withholding Exemption

3 of 10 Which of the following forms is non-standard and should be prepared by a broker to give to sellers?

A.    Natural Hazards Disclosure

B.     Water Heater Compliance

C.     Estimated Seller’s Proceeds

D.    Defective Furnaces in California

4 of 10 Which is true of an exclusive-authorization-to-acquire-property agreement?

A.    The buyer must pay the broker a commission.

B.     The broker will owe fiduciary responsibilities to the seller as well as the buyer.

C.     It must specify a definite termination date.

D.    Commission is never involved.

5 of 10 All of the following are valid listing agreements. Which one is illegal in many states?

A.    Exclusive agency.

B.     Open.

C.     Exclusive-right-to-sell.

D.    Net.

6 of 10 In the listing agreement, a seller can choose to decline/disapprove all but which of the following items?

A.    Sign in yard

B.     Broker compensation to other brokers

C.     Posting to MLS

D.    Lockbox

7 of 10 When the broker and seller agree that the broker can receive commission for a specified number of days after the listing expires if selling to a “named” party on a list, it’s referred to by what term?

A.    Security clause

B.     Non-penalty clause

C.     Safety clause

D.    Effective period

8 of 10 Which kind of listing gives one broker the right to sell, but allows the owner to sell the property and not owe a commission to the broker?

A.    Non-exclusive agency

B.     Exclusive agency

C.     Exclusive-right-to-sell

D.    Net

9 of 10 An agent must give a copy of the listing agreement to the sellers:

A.    At the time the agent presents an offer.

B.     At the time the agreement is signed.

C.     When the seller pays commission.

D.    After the agent has had time to make copies at the office.

10 of 10 Which of the following statements is not true about a net listing?

A.    Sets a limit on the commission a broker can earn.

B.     Is generally viewed as unprofessional.

C.     Is illegal in many states.

D.    Allows a broker to have as a commission anything above the minimum the seller sets.

Ch6 Bonus questions

1- What is an important thing to remember about listing agreements? 
2- Describe an open listing. 
3- What is the major difference between an exclusive-authorization-and-right-to-sell listing and an exclusive-agency listing? 
4- What is the agreement that a broker can enter into with a buyer? 
5- What does the safety clause in the listing agreement do?
6- What does the security and insurance clause of the listing agreement address?
7- What does the paragraph in the listing agreement titled “Entire Contract” deal with? 
8- What does the Water Heater Statement of Compliance address? 
 

California: Real Estate Practice – Ch7 – Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 Which of the following actions by an agent would most probably upset the sellers?

A.  Conducting an agent open house.

B.  Sending a weekly activity report.

C.  Sharing all visitor comments two weeks before the listing ends.

D.  Placing a classified ad in the weekend paper.

2 of 10 All of these statements are true except which one?

A.  Virtual tours are a very expensive marketing tool to use.

B.  An agent should print off a copy of the listing on the company’s Internet site to send to the sellers.

C.  Participation in the MLS increases a licensee’s inventory.

D.  Property evaluations from other agents have valuable information for sellers.

3 of 10 All of these items are important to include on your weekly activity report except which?

A.  Number of calls that week

B.  Agent comments about the property

C.  Classified ads placed on the property

D.  Number of hits on the company website

4 of 10 If someone shows up at the sellers’ door unexpectedly to see the home, the sellers should:

A.  Tell them to call your office.

B.  Invite them in and show them around.

C.  Take their names and call your office.

D.  Ask them to leave.

5 of 10 You should try to attach a rider strip to your For Sale sign that has:

A.  Your home telephone number.

B.  Your GRI designation.

C.  Your cell phone number.

D.  Your fax number.

6 of 10 If there is no interest in the property on a given week, the agent should:

A.  Skip the activity report for that week.

B.  Share that information with the sellers.

C.  Tell the sellers you expect an offer to be coming soon.

D.  Tell the sellers it’s time to reevaluate the price.

7 of 10 Which of these forms is not filled out by the seller?

A.  Smoke Detector Compliance

B.  Modification of Terms

C.  Transfer Disclosure Statement

D.  Water Heater Compliance

8 of 10 Which of these marketing tools is not considered a traditional tool?

A.  Flier

B.  Classified ad

C.  Photos

D.  Video tour

9 of 10 Which of these is not a helpful homeowner tip?

A.  Display lots of family photos to impress potential buyers.

B.  De-clutter your garage and basement.

C.  Bake muffins or cinnamon rolls to create a “homey” feel.

D.  Make sure all light bulbs and lamps are working and are bright.

10 of 10 All of these activities are appropriate to do within the first few days of obtaining a listing except which?

A.  Give the sellers a copy of some homeowner’s tips.

B.  Discuss modifying the listing price.

C.  Explain your marketing plan to the sellers.

D.  Have the broker send a “thank you for listing” letter to the sellers.

Ch7 Bonus questions

1.  What is the primary criticism that sellers have about their agents?

2.  When you meet with your sellers after you obtain the listing, what is one of the first things you should share with them to get them involved in the process?

3.  What kinds of things should you include in a weekly activity report? 

4.  How can you prepare your sellers for receiving offers? 

5.  Name four traditional marketing tools that you should use with every listing you get. 

6.  What are some important tips for home tours? 

7.  In addition to agent and MLS home tours, what are some other ancillary tools you can use? 

8.  What should you keep in mind when developing your marketing plans?

California: Real Estate Practice – Ch8 – Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 Which of these statements is not true?

A.    Radio advertising is not as effective as other methods because listeners can be distracted by their activities and not hear the ads.

B.     Newsletters can be a very effective advertising forum for niche marketers.

C.     Advertising in the telephone directory is cost effective because the directories can reach every home in the marketing area.

D.    Magazine ads are significantly more expensive than newspaper ads.

2 of 10 Which of these is not an AIDA characteristic?

A.    Interest

B.     Attention

C.     Desire

D.    Activity

3 of 10 What kind of ad usually combines both institutional and product advertising?

A.    Classified

B.     Display

C.     Press release

D.    Television

4 of 10 An unlicensed person engages in advertising that conveys the clear impression that he is a licensed real estate broker or is an officer or employee of a corporation who knowingly advertises a false statement concerning any land or subdivision. In this scenario, which of the following is not true?

A.    The advertiser is subject to a fine.

B.     The advertiser can be sentenced to up to a year in prison.

C.     The person is breaking the law.

D.    The advertiser must prove he was grandfathered in as a licensee.

5 of 10 All of these would be effective at capturing a reader’s attention except which?

A.    Use as little white space as possible.

B.     Use a question as a headline.

C.     Use available color.

D.    Make the headline bold and all caps.

6 of 10 Which of these is not a tool to help evaluate advertising effectiveness?

A.    Telephone log

B.     Code in a print ad

C.     Advertising budget

D.    Designated telephone number

7 of 10 Which kind of advertising aims at increasing sales by informing the public of a company’s capabilities?

A.    Operational

B.     Institutional

C.     Product

D.    Classified

8 of 10 Which of these is a free form of advertising?

A.    Shopping guides

B.     Telephone directory

C.     Press release

D.    Blind ad

9 of 10 Which of these words or phrases might be considered discriminatory when used in advertising?

A.    No smoking

B.     Couples only

C.     Handicap accessible

D.    Kids welcome

10 of 10 The cost of doing direct mail advertising depends on all of these things except which?

A.    How you target your audience

B.     The frequency of the mailings

C.     The number of pieces you send

D.    The date of the mailing

Bonus ch8 questions

1.      Name and define the two forms of advertising.

2.      Explain the method used to write good advertising.

3.      What is important to remember about capturing the reader’s attention? 

4.      What do many firms do to avoid confusion with their advertising plan? 

California: Real Estate Practice – Ch9 – Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 All of these questions could help you determine a prospect’s capacity to make a purchase except which one?

A.    How much do you have in your savings account?

B.     Have you been pre-qualified or pre-approved by a lender yet?

C.     Do you need the equity from your current home for the new home purchase?

D.    Where do you and your spouse work?

2 of 10 Which of these is not a good technique to get the name of a caller who is reluctant to give you that information?

A.    Offer to mail the caller a set of fliers on interesting properties.

B.     Ask the caller if he or she would like to receive e-mails on newly listed properties.

C.     Offer to show the caller a newly-listed, not-yet-advertised property, even if one doesn’t exist.

D.    Offer to call the prospect when new listings that meet his or her criteria come on the market.

3 of 10 Sara just bought her first new home. She put 20% down and got a mortgage for the remainder. The difference between what Sara owes and what her home is worth is known as what?

A.    Principal

B.     Capital gain

C.     Replacement cost

D.    Equity

4 of 10 Which of the following would be the least desirable phone handling technique?

A.    Answer a question with a question when possible.

B.     Give as much detailed information about the property as you can.

C.     Ask the caller “when” not “if” he or she wants to see the property.

D.    Arrange to meet the prospect at your office.

5 of 10 Which of these statements is not true about qualifying buyers?

A.    You’ll know how much house they can afford.

B.     Lenders are in the best position to qualify buyers.

C.     Sellers are apt to choose qualified buyers over ones who have not been qualified.

D.    Collecting information and pre-qualifying buyers yourself is the easiest and best approach.

6 of 10 A buyer calls your office to inquire about a property he saw advertised. He sounds really excited about this property. Where is it that he likely found out the property was for sale?

A.    On the Internet

B.     In a classified ad

C.     From the For Sale sign

D.    From a direct mail flier

7 of 10 Most buyers who see a newspaper ad that interests them:

A.    Drive by the property.

B.     Call your office.

C.     Check out your Internet site.

D.    Visit your office.

8 of 10 Which of the following is not an advantage of home ownership?

A.    Increase in property value

B.     Increase in equity

C.     Repairs and maintenance

D.    Tax deductions

9 of 10 A reference list of alternative comparable properties is sometimes referred to as the:

A.    Cheat sheet.

B.     Telephone answering register.

C.     Switch sheet.

D.    Alternative list.

10 of 10 Prospects Jim and Linda arrive with agent Bill at the first showing. When Bill pulls in front of the home, Linda decides immediately that she doesn’t want to see the inside. What should Bill do?

A.    Tell Linda that the sellers will be very disappointed if they cancel the appointment.

B.     Launch into your list of the home’s special features and hope she changes her mind.

C.     Emphasize that this home is a great buy and it would be a shame for them to dismiss it without looking first.

D.    Call the sellers immediately and let them know you won’t be coming by.

Bonus ch9 questions –

1- What is the most important factor for a prospective homebuyer to consider in the decision to purchase?
2- What is floor time and why is it important?
3- When handling a telephone inquiry, why should you limit the amount of information you give out about the property? 
4- Agent Greg receives a call about one of his firm’s ads. He succeeds in setting up an appointment to meet with the caller. What approach can Greg use to discourage the person from calling other agents? 
 

California: Real Estate Practice – Ch10 – Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 All of the following are good approaches for handling objections except which?

A.    View an objection as the buyer’s request for more information.

B.     Use the “yes-but” technique to handle the objection.

C.     Ask the buyer more questions.

D.    Tell the buyer it’s not an issue.

2 of 10 Offering a buyer more than one option and having him or her choose is using what kind of closing technique?

A.    Bonus

B.     Alternative

C.     Ownership

D.    Standing-Room-Only

3 of 10 Which paragraph of the purchase agreement states that if the buyer defaults after acceptance, he or she may be liable for the broker’s commission?

A.    Terms and conditions of offer

B.     Final Verification of Condition

C.     Dispute resolution

D.    Liquidated damages

4 of 10 Which of these is not an important aspect of selling?

A.    Establishing buyer rapport

B.     Knowing your inventory

C.     Giving buyers your opinion of what works best for them

D.    Handling objections

5 of 10 What would be the least effective way to get to know your buyers’ needs?

A.    Ask closed-ended questions.

B.     Listen carefully to everything your prospects say and repeat some specifics back at appropriate times so that they know you have heard what they said.

C.     Watch actions and body language.

D.    Ask open-ended questions.

6 of 10 Which of these is an emotional reason that buyers buy property?

A.    Tax advantages

B.     Status

C.     Investment

D.    Schools

7 of 10 Which paragraph of the purchase agreement must be initialed by both buyers and sellers for it to apply?

A.    Final Verification of Condition

B.     Removal of contingencies

C.     Liquidated damages

D.    Buyer indemnity and seller protection

8 of 10 What does the paragraph on repairs state?

A.    The buyer must make all repairs.

B.     If checked, the seller can complete repairs after closing.

C.     The seller can do all repairs himself.

D.    All repairs must be in compliance with existing building codes.

9 of 10 All of these might be a buying signal except which?

A.    Taking room measurements.

B.     Asking about a possession date.

C.     Moving closer to the agent to get a better look.

D.    Walking through the home quickly.

10 of 10 Agent Jim tells his buyers that the seller will leave the riding lawn mower if the buyers make an offer now. What kind of closing technique is Jim using?

A.    Assumptive

B.     Alternative

C.     Bonus

D.    Ownership

Bonus ch10 questions

1- What are the five aspects that are involved in any selling approach?
2- When establishing rapport, what’s one of the best ways to get to know your buyers?
3- What signals do buyers use to indicate they may be willing to make a purchase? 
4- What’s a bonus closing and what’s important to keep in mind about this technique? 
5- Why is it important for the buyers to indicate whether or not they intend to occupy the property?
6- What’s important to know about the Liquidated Damages paragraph?
7- What happens if the parties do not initial the section of dispute resolution that deals with binding arbitration? 
8- Which section of the purchase agreement does not apply directly to the buyers and sellers? 
 

California: Real Estate Practice – Ch11 – Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 When you receive an offer on a listing for less than asking price, you should not:

A.    Study the other terms of the offer so that you can maximize the offer’s benefits and minimize the lower price.

B.     Set up a face-to-face meeting with the sellers as soon as possible.

C.     Prepare additional documentation to take to the presentation.

D.    Give the sellers the price over the phone so that they can think about it before you meet with them.

2 of 10 When presenting information about the buyers to the sellers, which piece of information might not be useful in helping the sellers make a decision?

A.    The buyers’ family is pressuring them to purchase this home.

B.     The buyers have been pre-qualified by a lender.

C.     The buyers are interested in another property.

D.    The buyers love the landscaping improvements the sellers have made.

3 of 10 Jake has received two offers on one of his listings. The home is listed at $210,000. One offer is for $208,000; the other is for $200,000. What should Jake do?

A.    Present the $208,000 offer today and wait for a response from the sellers before he presents the other offer.

B.     Present the $200,000 first and recommend rejection. Then present the $208,000 offer.

C.     Present the $208,000 offer and the $200,000 offer together at the same presentation meeting.

D.    Hold both offers because he heard that a full-price offer is on its way.

4 of 10 Once an offer has been accepted, the agent should do all of the following except which?

A.    Make sure all required disclosures have been done.

B.     Attend the final walkthrough.

C.     Be sure all requested inspections have been ordered.

D.    Meet with the buyers’ lender to ensure they’re getting a good deal.

5 of 10 Which of these is not a true statement?

A.    A purchase offer is a binding contract between the buyer, the seller and their agents.

B.     If a seller changes the terms of the offer to purchase, he has created a counteroffer.

C.     An offer or counteroffer can be withdrawn at any time before it has been accepted.

D.    Once the offer or counteroffer is accepted and the offeror has been notified, a legal contract is formed.

6 of 10 Who typically presents an offer to the sellers?

A.    Selling broker

B.     Listing agent

C.     Listing broker and selling broker

D.    Selling agent

7 of 10 Which of these is not a good thing to do when writing a counteroffer?

A.    Fill out a separate, numbered counteroffer form.

B.     Rewrite whole paragraphs to ensure clarity.

C.     Date and attach supporting documents.

D.    Exert pressure on the sellers to include something the other party wants.

8 of 10 Which of these statements about counteroffers is not true?

A.    A counteroffer represents a rejection of an offer.

B.     A counteroffer by a seller to a buyer turns the seller from offeree to offeror.

C.     A counteroffer can give the buyers an “out” if they want one.

D.    If the buyer rejects the first counteroffer, the seller can accept the first offer.

9 of 10 When you believe an offer is both fair and reasonable but it does not meet the sellers’ asking price, you should:

A.    Make no recommendations and let the sellers decide on their own.

B.     Recommend a counteroffer back to list price.

C.     Work toward acceptance.

D.    Recommend that the seller delay response to make the buyer nervous and then submit a counteroffer.

10 of 10 Most sellers object to offers based on:

A.    Closing issues

B.     Offering price

C.     Financing issues

D.    Contingencies

Bonus ch11 questions –

1- When preparing to present an offer to the sellers, what kinds of supporting information can be helpful?
2- What is important to remember about multiple offers?
3- When making your presentation, what topics should you cover? 
4- Why is it important to talk to the sellers about the buyers? 
5- What actions can the sellers take regarding the purchase offer?
6- What is important for the sellers to know about a counteroffer?
7- Ben and Blanche receive a $200,000 offer on their home, which is listed at $208,000. They were counting on a full-price offer and are very disappointed. What approach can their agent take to change the sellers’ perception of the offer? 
8- When does a purchase offer become a legal contract? 
 

California: Real Estate Practice – Ch12 – Quiz with no answers

Answers will be revealed with proper subscription

1 of 11 A growing equity mortgage:

A.    Is an adjustable rate loan.

B.     Allows quick repayment of the loan through accelerated payments.

C.     Includes a margin.

D.    Has a payment cap.

2 of 11 Which statement is true?

A.    A borrower cannot qualify for a conventional loan unless he or she can make a 20% down payment.

B.     Private mortgage insurance is available for FHA loans.

C.     A borrower can request the cancellation of PMI payments when the equity reaches 20% of the appraised value.

D.    A lender can continue to collect PMI payments until the homeowner’s equity reaches 25%.

3 of 11 Which loan covers the period of time between the end of one mortgage and the beginning of another?

A.    Construction

B.     Wraparound

C.     Open-end

D.    Bridge

4 of 11 Which of these is also called a contract for deed?

A.    Purchase money mortgage

B.     Lease purchase

C.     Second mortgage

D.    Installment land sales contract

5 of 11 Which of these statements is true about a CalVet loan?

A.    Loan terms are from 15 to 25 years.

B.     If the loan is VA guaranteed, no down payment is required.

C.     There is a 6-month pre-payment penalty for paying off the loan early.

D.    Interest rates are typically fixed rate.

6 of 11 Which of the following is not true about reverse annuity mortgages?

A.    The lender makes payments to the borrower.

B.     This mortgage type is popular among the elderly.

C.     The borrower pays a fixed rate of interest.

D.    The loan must be repaid before the borrower’s death.

7 of 11 In which of the following types of loans is the payment allocated only to interest?

A.    Straight

B.     Balloon

C.     Amortized

D.    Adjustable rate

8 of 11 A blanket mortgage:

A.    Covers more than one piece of property.

B.     Entails entering into two agreements simultaneously.

C.     Is subordinate to a first mortgage.

D.    Reduces the monthly payment for a borrower during the initial years.

9 of 11 Lenders can charge all of the following except which fee when a borrower gets a loan?

A.    Loan origination fee

B.     Points

C.     Survey fee

D.    Discount points

10 of 11 Mark gets a home loan and the lender will charge him 3 points at closing. If the loan is for $68,000, what will Mark be assessed in points?

A.    $680

B.     $1,360

C.     $2,040

11 of 11 Which of the following is a low loan-to-value ratio?

A.    Jake is getting a VA loan with no down payment.

B.     Sandy and Bill are putting 30% down on their home purchase.

C.     Alice is getting a conventional loan and making a 15% down payment.

D.    Tim and Gail have qualified for an FHA loan.

Bonus ch12 questions –

1- How much is the loan origination fee and what does it cover?
2- What kind of problem can result from a straight loan?
3- What kinds of limits are placed on the interest rate in an adjustable rate mortgage? 
4- Describe a reverse annuity mortgage. 
5- Define the term loan-to-value ratio.
6- When is a lender required to terminate a borrower’s private mortgage insurance?
7- What is the difference between an FHA loan and a VA loan? 
8- What is the major difference between a CalVet loan and other loans? 
9- Define a purchase money mortgage.
10- What’s the difference between a lease purchase and a lease option?
11- Greg and Joyce purchased a home from the builder who offered to pay $5,000 at closing as an incentive to get them to buy. What kind of mortgage might they get? 
12- What are grant programs typically used for? 
 

California: Real Estate Practice – Chapter 13 Quiz with no answers

Answers will be revealed with proper subscription

1 of 12 California law requires that a licensee acting as a loan broker keep the Mortgage Loan Disclosure Statement on file for how long?

A.    1 year

B.     2 years

C.     3 years

D.    4 years

2 of 12 Which of the following statements is not true about the Federal Reserve?

A.    Regulates reserve requirements for all institutions that offer checking accounts.

B.     Supervises the Truth in Lending Act.

C.     Supervises the Federal Housing Authority.

D.    Engages in open market operations.

3 of 12 All of the following are primary mortgage market lenders except which?

A.    Investment groups

B.     Credit unions

C.     Mortgage bankers

D.    Holding warehouse agencies

4 of 12 RESPA applies to:

A.    Second mortgage on a time-share

B.     First mortgage on a single-family home

C.     Primary mortgage on an office building

D.    Settlement charges on a shopping center

5 of 12 Regulation Z applies to:

A.    $35,000 farm loan

B.     $50,000 restaurant loan

C.     $75,000 condominium loan

D.    $85,000 warehouse loan

6 of 12 The maximum commission amount a mortgage loan broker can charge on a second mortgage loan of 3 years for $18,000 is what?

A.    $900.00

B.     $1,500.00

C.     $1,800.00

D.    $2,700.00

7 of 12 Who is FNMA?

A.    Fannie Mae

B.     Ginnie Mae

C.     Fannie Mac

D.    Freddie Mac

8 of 12 Fannie Mae does all of the following activities except which?

A.    Buys conventional, FHA and VA loans.

B.     Buys pools of mortgages in exchange for mortgage-backed securities.

C.     Guarantees payment of all interest and principal on mortgage-backed securities.

D.    Administers special assistance programs.

9 of 12 When a lender is evaluating a buyer’s ability to repay a loan, the lender looks at all of these items except which one?

A.    Educational history

B.     Past credit history

C.     Present employment status

D.    Liabilities

10 of 12 Which statement is not true?

A.    Mortgage brokers do not lend money.

B.     Mortgage bankers bring borrowers and lenders together.

C.     Mortgage bankers are a large source of residential loans in California.

D.    Mortgage bankers originate loans.

11 of 12 ECOA requires that a lender send a denial notice within:

A.    30 days

B.     60 days

C.     90 days

D.    120 days

12 of 12 The amount of debt, time and method of payment, interest rate and other loan terms are part of the:

A.    Mortgage

B.     Promissory note

C.     Contract for deed

D.    Purchase agreement

Bonus ch13 questions –

1- What is the role of the Fed?
2- Explain the difference between the primary and secondary mortgage markets.
3- Differentiate between mortgage brokers and mortgage bankers. 
4- What do Fannie Mae and Ginnie Mae do that Freddie Mac does not? 
5- If lenders intend to sell mortgages in the secondary market, what must they do?
6- List the steps of underwriting.
7- What makes up a mortgage? 
8- What actions does a lender take to sell a mortgage in the secondary market? 
9- What is the basic purpose of Truth in Lending – Regulation Z? 

10- What is the right to rescind and what is not covered by this rule? 

11- What are the penalties for violating Regulation Z? 

12-What does ECOA prohibit?
 

California: Real Estate Practice – Chapter 14 Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 Which item is not covered by CLTA, ALTA or ALTA-R insurance policies?

A.    Acts of minors

B.     Mining claims

C.     Forgeries

D.    Federal estate tax liens

2 of 10 Accepting referral fees:

A.    Is common business practice.

B.     Could be a violation of state licensing laws.

C.     Is permissible if being accepted on behalf of a third party

D.    Is permissible in amounts under $50.

3 of 10 Which of the following statements is NOT true regarding a broker acting as an escrow agent?

A.    A broker may advertise that he or she is an escrow agent.

B.     A broker cannot use the word “escrow” in a fictitious name.

C.     The broker must conduct the escrow personally and not delegate any escrow activities.

D.    Written escrow instructions must include a statement with the broker’s name, indicating he or she is a licensed real estate agent.

4 of 10 RESPA gives the buyer the right to review the completed closing disclosure how long before closing?

A.    Two calendar days

B.     One business week

C.     One calendar week

D.    Three days

5 of 10 RESPA applies to all of the following EXCEPT which?

A.    Condominium purchase

B.     Seller-financed loan

C.     Loan involving a second mortgage

D.    Federally-insured loan

6 of 10 Which of the following is not an item that a buyer usually pays at closing?

A.    Fee for clearing the title

B.     Mortgage recording fee

C.     Homeowner’s insurance

D.    ALTA policy

7 of 10 Which statement is not true about opening escrows?

A.    The escrow holder will need information about the broker’s commission.

B.     The escrow holder will use the purchase agreement as the basis for writing the escrow instructions.

C.     The buyer’s and seller’s agents will sign the escrow instructions.

D.    Once escrow instructions are signed, changes can only be made with the written agreement of all parties.

8 of 10 Proof of ownership of a property is called:

A.    Marketable title

B.     Abstract of title

C.     Evidence of title

D.    Title commitment

9 of 10 Who is responsible for ordering the preliminary title report?

A.    Buyer

B.     Escrow officer

C.     Seller

D.    Real estate salesperson

10 of 10 Which of these individuals could not act as an escrow agent without an escrow license?

A.    Attorney

B.     Banker

C.     Broker

D.    Real estate salesperson

Bonus ch14 questions –

1- What is escrow?
2- Who needs title insurance and why?
3- What is the difference between CLTA and ALTA policies? How does ALTA-R differ from ALTA? 
4- What items are not covered by any title insurance policy? 
5- What is the Closing Disclosure? 

6- What is the ultimate result of using the Closing Disclosure form? 

7- If an item is paid for in advance by the seller, how will it be handled on the settlement statement? 

8- What do you call those items that have been incurred by the seller but not paid, and how will they be handled on the settlement statement?
 

California: Real Estate Practice – Chapter 15 Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 Gail is a licensed real estate assistant. Which of the following activities would she not be authorized to perform?

A.    Discuss a contract with a buyer.

B.     Conduct an open house on her own.

C.     Write and sign commission checks to salespersons.

D.    Meet with an inspector at a listing.

2 of 10 Assistants who are asked to be available for tasks in the field rather than in the office are referred to as:

A.    Part-time workers

B.     Field staff

C.     On-call assistants

D.    Commission-only assistants

3 of 10 Which of these items on a resume accompanying an application for an assistant’s position should be kept brief?

A.    Interests

B.     Technical skills

C.     People skills

D.    Education

4 of 10 What is a good method for an assistant to keep track of the various types of files a real estate broker must have?

A.    An ABC filing system

B.     A master transaction file

C.     A hybrid filing system

D.    A cross-referencing system

5 of 10 Which of the following would not be a reason to choose to be an assistant?

A.    To gain self-confidence

B.     To learn more about the real estate business

C.     To have a stable, steady income

D.    To make more money than a real estate agent

6 of 10 A real estate assistant:

A.    Must have a real estate license.

B.     Needs a license to perform activities that are not strictly administrative in nature.

C.     Can perform some real estate activities without a license.

D.    Must have an assistant license.

7 of 10 Which statement is not true?

A.    Sending cards and newsletters is a good way to keep in contact with clients and prospects.

B.     An assistant should never be left with the task of taking photos of a new listing.

C.     An assistant can keep track of the progress of activities during escrow.

D.    In most situations, an assistant should not have the responsibility of in-person contact with clients.

8 of 10 Which statement is true about a real estate assistant?

A.    Does not need to be familiar with office policy.

B.     Must be a full-time employee.

C.     May be an independent contractor.

D.    Must start out as a part-time employee.

9 of 10 Janet is an unlicensed assistant. She can do all of the following except which?

A.    Prepare a listing contract.

B.     File a listing contract.

C.     Gather listing forms for her employer.

D.    Prepare color flyers on listings.

10 of 10 Assistants who are hired to work part time:

A.    Work 12-15 hours per week.

B.     Get salary plus benefits.

C.     Usually get a percentage of the commission in addition to a salary.

D.    Should get workmen’s compensation.

Bonus ch15 questions –

1- What is important to know about unlicensed real estate assistants?
2- What types of office administration tasks are important for a licensed assistant to perform?
3- In what three ways can an assistant aid an agent with appointments? 
4- Why is coordinating escrow so important and how can an assistant help? 
 

California: Real Estate Practice – Chapter 16 Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 ‎According to FIRPTA, what percent would a buyer who is buying the property as a personal residence need to withhold when purchasing a $‎200‎,‎000 ‎home from a foreigner?‎

A.    0%

B.     15%

C.     3.30%

D.    10%

2 of 10 How long must buyers and brokers keep the documentation on a foreign sale?

A.    2 years

B.     3 years

C.     4 years

D.    5 years

3 of 10 Homeowners can deduct all but which of the following from their income taxes?

A.    Mortgage interest

B.     Depreciation

C.     Prepayment penalties

D.    Property taxes

4 of 10 A totally disabled veteran could be eligible for a property tax exemption of up to what amount?

A.    $50,450

B.     $100,730

C.     $191,266

D.    $206,850

5 of 10 Mike bought his home last year for $150,000. His property taxes would be assessed at:

A.    $1,000

B.     $1,500

C.     $2,250

D.    $3,000

6 of 10 When a person acquires new property, which is true?

A.    The owner has 30 days to notify the county assessor.

B.     The seller must file a bill of sale with the county clerk.

C.     The owner has 45 days to pay the new property taxes.

D.    The owner has 45 days to file a change in ownership statement.

7 of 10 Bill and Brenda bought their home for $150,000 seven years ago and have lived in it ever since. They made $50,000 of improvements. They sold the home for $450,000 and paid $30,000 in selling expenses, including the broker’s commission. On what amount will they pay capital gains tax?

A.    $0

B.     $100,000

C.     $250,000

D.    $300,000

8 of 10 When is the first installment of property taxes due?

A.    First of February

B.     Tenth of April

C.     First of November

D.    Tenth of December

9 of 10 How can a seller lessen the tax impact of selling a home for enough profit that he or she will be boosted to a much higher tax bracket?

A.    There is nothing that can offset this problem.

B.     Do a tax-free exchange instead.

C.     Participate in a tax shelter program.

D.    Do an installment sale.

10 of 10 Which proposition limited the maximum amount of tax on real property?

A.    Proposition 13

B.     Proposition 58

C.     Proposition 60

D.    Proposition 90

Bonus ch16 questions –

1- When is real property reassessed?
2- What does Proposition 58 state?
3- For whom do property tax exemptions exist and for how much? 
4- Explain the documentary transfer tax. 
5- Under what circumstances can a loss on the sale of a personal residence be deducted from income taxes?
6- What items can an owner of an income-producing property deduct that an owner of a personal residence cannot?
7- What are the capital gains exclusions associated with the sale of a personal residence? 
8- What is important for a broker to remember about the Foreign Investment in Real Property Tax Act? 
 

California: Real Estate Practice – Chapter 17 Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 Which figure represents the amount of income available as a return to an investor?

A.    Net operating income

B.     Potential gross income

C.     Adjusted gross spendable income

D.    Effective gross income

2 of 10 Which lender typically deals in interim financing?

A.    Commercial bank

B.     Life insurance company

C.     Syndicate

D.    Real estate trust

3 of 10 Which of these lenders would be most likely to finance a large shopping mall?

A.    Commercial bank

B.     Seller

C.     Savings and loan association

D.    Life insurance company

4 of 10 Examining the economic soundness of a property means looking at all of the following except which?

A.    Zoning issues

B.     Community growth trends

C.     Refinancing

D.    Income projections of the property

5 of 10 When all members have unlimited liability for debts and obligations of the group, the organization is a:

A.    Limited Partnership

B.     Corporation

C.     General Partnership

D.    Syndicate

6 of 10 What is the foremost reason people invest in property?

A.    To save on taxes

B.     To make money

C.     To plan for retirement

D.    To have a second home to enjoy

7 of 10 Which of the following is a possible benefit of investing in real property?

A.    Capital outlay

B.     Financing

C.     Appreciation

D.    Property management

8 of 10 An association of two or more people who combine financial resources to achieve investment objectives is:

A.    Not allowed in California.

B.     A syndicate.

C.     Made up of wealthy individuals.

D.    A group of brokers.

9 of 10 Which statement is not true about a Real Estate Investment Trust?

A.    Sells ownership shares.

B.     Receives special tax considerations.

C.     Offers high yields to customers.

D.    Easy to qualify for.

10 of 10 Which of the following is not a possible benefit of investing in real property?

A.    Tax shelter

B.     Liquidity

C.     Income

D.    Stability

Bonus ch17 questions –

1- What are the three important considerations for a good property investment?

2- What are some tax benefits associated with investing?

3- How could refinancing be an investment benefit? 

4- How is property management seen as a risk to investing? 

5- How do life insurance companies get involved in the investment market?

6- How does a limited partnership differ from a general partnership?

7- What does the net operating income of a property represent? 

8- When studying the characteristics of an area in which an investment property is located, what factors should the investor look at carefully? 

 

California: Real Estate Practice – Chapter 18 Quiz with no answers

Answers will be revealed with proper subscription

1 of 10 What kind of lease contains a recapture clause?

A.    Percentage

B.     Net

C.     Gross

D.    Graduated

2 of 10 When can a landlord enter a tenant’s property to make repairs or show it?

A.    Only after receiving the tenant’s consent.

B.     During business hours and only after giving the tenant 24 hours notice.

C.     Anytime he or she chooses.

D.    Only with a court order.

3 of 10 The IREM designation reserved for individuals who meet a certain level of education and experience is:

A.    CPM

B.     ARM

C.     CPR

D.    AMO

4 of 10 When setting up a rent schedule, a property manager should analyze all but which of the following?

A.    Neighborhood amenities

B.     Community growth

C.     Area vacancy rates

D.    New home sales

5 of 10 California allows a property manager to charge a non-refundable fee for which?

A.    cleaning

B.     security

C.     background check

D.    breakage by children

6 of 10 How often can a tenant call his or her own professional to make repairs and then deduct the amount from the next month’s rent?

A.    Never

B.     Once every 3 months

C.     Once a year

D.    Twice in a 12-month period

7 of 10 Which document shows the assets and liabilities of a business?

A.    Bill of sale

B.     Balance sheet

C.     Profit and loss statement

D.    Purchase contract

8 of 10 A lease that has no time limit is an:

A.    Estate for years

B.     Estate at will

C.     Estate from period to period

D.    Estate at sufferance

9 of 10 Which of the following represents an intangible business asset?

A.    Equipment

B.     Inventory

C.     Goodwill

D.    Fixtures

10 of 10 When a tenant agrees to pay all taxes, insurance, maintenance and repairs, that tenant has what kind of lease?

A.    Gross

B.     Percentage

C.     Net

D.    Graduated

Bonus ch18 questions

1- What is goodwill as it relates to a business?

2- List the three Institute of Real Estate Management property management designations.

3- What are the three general responsibilities of a property manager?

4- Describe how a property manager can receive his or her fees.

5- What should a good management contract contain?

6- Which type of leasehold estate is commonly referred to as a periodic tenancy?

7- Define a gross lease.

8- Under what conditions may a landlord enter a tenant’s property?

Practice exam for California Real Estate Practice Class

Answers will be revealed with the 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 Which of the following newspaper information is not helpful in developing a Prospecting Plan?

A.  Birth and Death Announcements

B.  Code Violations and Tax Delinquencies

C.  Promotions and Job Transfers

D.  Editorials and Bid Proposals

2 of 50 Residential property includes all of the following EXCEPT which?

A.  Apartment

B.  Condominium

C.  Motel

D.  Vacation Home

3 of 50 Paul is filling out the Natural Hazard Disclosure Statement. Which of the following conditions is Paul not required to report on this form?

A.  Lead-based paint was used in the home.

B.  The property is in an area that could flood.

C.  The home sits on an earthquake fault zone.

D.  The property is in a state fire responsibility area.

4 of 50 Seller Kim tells her agent Greg that she would be willing to accept $185,000 on her $205,000 listed home. There are no offers on the property during the 6-month listing period and the listing expires. Several weeks later when showing another home to a buyer, Greg mentions that Kim would have accepted less for her home. Which is true?

A.  Greg is violating the duties he owes to his new buyer.

B.  Greg has put himself in a potential dual agency situation.

C.  Greg has violated the duty of confidentiality to Kim.

D.  Greg has no fiduciary responsibilities to Kim once the listing expired.

5 of 50 Jane has been working with some buyers for several weeks. She thinks they are really interested in one particular property, but when she approaches them about it, the buyer says, “The price is too high.” What would be a good response to that comment?

A.  “I think they’re asking a fair price.”

B.  “Well then, just offer less.”

C.  “What do you think would be a fair price?”

D.  “The comps say that this price is right on target.”

6 of 50 Broker Tami has a very low advertising budget. Which of these forms of advertising is she most likely to avoid?

A.  Internet

B.  Magazine ad

C.  Direct e-mail

D.  Newspaper ad

7 of 50 Glenna and Amanda just bought their first home. They will have a number of new expenses as a result of this purchase. Which of these expenses is not associated with owning a home?

A.  Real estate taxes

B.  Interest on the loan

C.  Personal property tax

D.  Homeowner’s insurance

8 of 50 Buyer Kirk submits an offer to seller Larry. Later that day, Kirk finds a home he likes better; so he withdraws his offer to Larry. Which is a true statement?

A.  Kirk doesn’t have the right to withdraw the offer so soon.

B.  Larry could sue Kirk.

C.  If Larry verbally accepted the offer, Kirk is bound by it.

D.  Kirk’s offer to Larry is legally cancelled.

9 of 50 Which of the following is a credit to the seller on the settlement statement?

A.  Unpaid items due from seller

B.  Sales price

C.  Loan balance

D.  Document preparation fees

10 of 50 There has been very little interest in the Bowers’ home this past week. What should agent Phil do?

A.  Wait until next week to send an activity report, hoping things will pick up.

B.  Suggest to the sellers that their listing price is too high.

C.  Make up some statistics to share with the Bowers.

D.  Send the weekly report as usual, emphasizing what your upcoming plans are for the week.

11 of 50 Jake and Janet are required to pay 4 points on the $80,000 loan they are getting. What will they have to pay the lender?

A.  $800

B.  $1,600

C.  $2,400

D.  $3,200

12 of 50 The manager of a large hotel refuses to rent a room to a blind person with a guide dog. What California Fair Housing law has the manager violated?

A.  Unruh Civil Rights Act

B.  Rumford Fair Housing Act

C.  Holden Act

D.  California Civil Rights Act

13 of 50 What is the most common reason that owners try to sell their homes themselves?

A.  To hand pick the buyer

B.  To have a quick sale

C.  To control the flow of prospects

D.  To save on commission

14 of 50 The title report on a property shows there is a lien on the property. Who is responsible for removing the lien to clear the title?

A.  Broker

B.  Title company

C.  Buyer

D.  Seller

15 of 50 Agent Will has had a listing with the Bryants for 6 weeks. They called Will’s office and told the secretary they are upset and need to speak with Will. Which of these actions might have caused their upset?

A.  Will’s weekly report indicates two showings and five inquiries for the week.

B.  Will placed an ad in the most recent Home Buyer’s Guide.

C.  The Bryants have not received any feedback from any showings in the past month.

D.  Will conducted an agent open house last week that was attended by 25 agents.

16 of 50 When doing research to recommend a reasonable listing price for a home, the most critical part of the research deals with analyzing:

A.  Asking prices for current homes

B.  Listing prices of homes that sold

C.  Listing prices of homes that expired unsold

D.  Selling prices of recently sold homes

17 of 50 Kathy is a personal assistant at Action Realty. She doesn’t need a license to perform many activities at the firm, but which of the following would require her to have a license?

A.  Forwarding calls from the public to one of the salespersons in the office.

B.  Giving information about a listing to prospective buyers.

C.  Maintaining the office filing system.

D.  Preparing flyers and promotional materials for the broker’s approval.

18 of 50 The listing type that assures a broker that he or she will receive compensation no matter who procures the buyer is what kind of agreement?

A.  Net listing

B.  Exclusive-authorization-and-right-to-sell agreement

C.  Open listing

D.  Exclusive agency

19 of 50 When doing a competitive market analysis, the recently sold properties you include should have sold within what timeframe?

A.  The past month

B.  Past three to six months

C.  Past seven months

D.  Last six to nine months

20 of 50 Seller Patsy wants to net $150,000 from the sale of her home. She tells Broker Al that he can list the property for whatever price he wants and anything he gets above the $150,000 he can keep as his commission. What is this agreement called?

A.  Exclusive agency

B.  Open listing

C.  Exclusive-authorization-and-right-to-sell agreement

D.  Net listing

21 of 50 Once signed, escrow instructions can be changed only by:

A.  The escrow agent

B.  The broker

C.  Amending the purchase agreement

D.  Mutual consent of both parties

22 of 50 What is one of the major objectives of professional property management?

A.  Maximize the return to the property management firm.

B.  Minimize expenses while maximizing profits for the owner.

C.  Help control area rent schedules.

D.  Maintain 100 percent occupancy.

23 of 50 Which of the following statements best describes what happens in a mortgage loan transaction?

A.  The lender gives a mortgage to the borrower and gets funds in exchange.

B.  The borrower gives the lender a note and a mortgage in exchange for the funds.

C.  The lender gives the borrower a mortgage and funds.

D.  The borrower gets a note in exchange for a mortgage.

24 of 50 Tim thinks his buyers are ready to make an offer. He asks, “Which one of the children gets the basement bedroom with the private entrance?” What kind of closing technique is Tim using?

A.  Bonus

B.  Alternative

C.  Ownership

D.  Standing-room-only

25 of 50 Mortgage lenders are required to disclose financing costs and annual percentage rate to the borrower under which law or regulation?

A.  Equal Credit Opportunity Act

B.  Truth in Lending

C.  Real Estate Settlement and Procedures Act

D.  Fair Housing laws

26 of 50 Veteran Bill has applied and been approved for a non-VA-guaranteed CalVet loan. Which of the following statements is not true?

A.  Bill will pay a 3% down payment.

B.  Bill is purchasing a 6-family apartment building.

C.  If Bill pays off the loan early, there will be no prepayment penalty.

D.  There is a loan protection plan included with the loan.

27 of 50 Tim and Sue have obtained a buydown loan on their newly built home. Which of the following statements is not true?

A.  They will have to make a very high down payment.

B.  Their interest rate will rise after the first few years.

C.  The builder paid a lump sum amount at closing to reduce the interest rate for a few years.

D.  The lender assumes Tim and Sue’s income will rise over the first few years of the loan.

28 of 50 Prospecting ends:

A.  At the time of a sale

B.  Two weeks after closing

C.  When you have 200 names in your contact database

D.  Never

29 of 50 What is one way the Federal Reserve System regulates the money supply?

A.  Printing money.

B.  Buying government bonds.

C.  Regulating reserves of institutions with savings accounts only.

D.  Purchasing loans from primary lenders.

30 of 50 After six months time, manager Tim wants to terminate the lease of one of his month-to-month tenants. What must Tim do?

A.  Give the tenant a 30-day notice.

B.  Change the locks on the tenant’s apartment.

C.  Give the tenant a 3-day notice to pay or quit.

D.  Give the tenant a 60-day notice.

31 of 50 Which of the following AIDA characteristics is the most critical in the ad?

A.  Capturing attention

B.  Arousing interest

C.  Creating desire

D.  Prompting action

32 of 50 Alice is an employee of Mid-State Realty Services. She would likely be required to do which of the following?

A.  List properties in her own name.

B.  Attend weekly staff meetings at the office.

C.  Accept commissions from referral agents.

D.  Pay for worker’s compensation.

33 of 50 Sal bought a personal residence for $150,000. He made $150,000 of improvements during the three years he lived in it before he sold it. He sold the home for $750,000 and paid $50,000 in selling expenses, including the broker’s commission. On what amount will he pay capital gains tax?

A.  $0

B.  $150,000

C.  $200,000

D.  $500,000

34 of 50 At a community meeting, Broker Amanda tells a group of families in an established neighborhood that several Indian families are planning to buy homes in their neighborhood. She tells them that this action could decrease their property values. Which statement is true?

A.  Amanda is guilty of blockbusting.

B.  This action is legal but very unprofessional.

C.  Amanda is guilty of redlining.

D.  This action is deliberate misrepresentation.

35 of 50 Agent John just listed a home in a mid-range priced neighborhood. Which of these ad headlines would probably be the least effective for this home?

A.  Large Back Yard

B.  Three Bedrooms

C.  $125,000

D.  Needs Paint

36 of 50 Agent Pam receives an offer on one of her listings for less than the asking price. The home has been listed for several months; so Pam does a CMA and determines that the offer is more than reasonable in today’s market. However, she believes the sellers will not be willing to accept the offering price. What would be a good approach for Pam to take?

A.  Pam should tell them to reject the offer so that the buyers will counter back with full price.

B.  She should advise them to let the offer expire with no action so the buyers will get nervous.

C.  Pam should recommend that they counteroffer with a price halfway between asking and offering price.

D.  She should persuade them to accept the offer.

37 of 50 Which of the following economic characteristics is true?

A.  Land is plentiful.

B.  Properties are very liquid and can move quickly.

C.  Real estate can respond quickly to changes in the market.

D.  Supply cannot be moved to a high demand area.

38 of 50 What is the primary role of Fannie Mae?

A.  To purchase conventional, FHA and VA loans

B.  To guarantee all FHA and VA loans

C.  To originate FHA and VA loans

D.  To insure conventional, FHA and VA loans

39 of 50 Prospects Mike and Marge arrive with agent Elaine at a showing. Elaine parks across the street from the home and Mike is disappointed by what he sees. He’s no longer interested in seeing the inside and Marge agrees. What should Elaine do?

A.  Tell Mike that the sellers will be upset if they cancel the appointment.

B.  Enumerate the home’s special features and hope they change their minds.

C.  Tell them that this home is an exceptional buy and encourage them to look anyway.

D.  Call the sellers immediately and let them know you won’t be coming by.

40 of 50 Which of the following Internet pages might not be of particular interest to buyers?

A.  Mortgage loan calculator

B.  Getting pre-qualified

C.  Your current listings

D.  Curb appeal information

41 of 50 What was the important ruling in Jones v. Mayer?

A.  Sex became a protected class.

B.  The definition of race was expanded to include ancestry.

C.  The definition of handicap was expanded to include use of guide or support animals for deaf and blind individuals.

D.  Discrimination on the basis of race is strictly prohibited, meaning no exceptions whatsoever.

42 of 50 Alex makes an offer to purchase one of Bill’s listings. Bill cannot contact the seller. In the meantime, Bill gets another offer on the property from another buyer at a higher price. What should Bill do?

A.  Present the higher-priced offer first.

B.  Decide which offer is best and present that one.

C.  Present Alex’s offer first since it came in first.

D.  Present both offers to the seller.

43 of 50 Which one of these statements would not be considered a measurable goal?

A.  I will make two new contacts every day this week.

B.  I will practice my listing presentations.

C.  I will get three new listings this month.

D.  I will complete a property management seminar within the next year.

44 of 50 Fair Housing laws are designed to:

A.  Give housing choices to the widest range of people.

B.  Restrict the housing market.

C.  Prohibit discrimination.

D.  Ensure fair real estate negotiations.

45 of 50 What is the Federal Housing Administrations primary role in the mortgage market?

A.  To insure loans made by approved lenders

B.  To guarantee loans made by lenders

C.  To lend money directly to borrowers

D.  To sell loans to other secondary mortgage marketers

46 of 50 Greg grew up in and lives in a rural area. He’s very comfortable selling that type of property and knows he can work well with clients in that area. What property type will be his specialty?

A.  Special-purpose

B.  Agricultural

C.  Commercial

D.  Recreational

47 of 50 Which of the following would not qualify as a 1031 exchange?

A.  An apartment building for a vacant lot

B.  A rental condominium for a recreational vehicle

C.  A farm for a storefront

D.  A warehouse for a rental home

48 of 50 Which of these lenders would be the least likely to lend money for an investor to purchase an apartment building?

A.  Savings bank

B.  Life insurance company

C.  Syndicate

D.  All of the above

49 of 50 Greg and Wanda Sandler purchased their home 35 years ago and it was paid off at the end of thirty years. In order to supplement their fixed income, the Sandlers receive monthly checks from their bank. Most likely, what did they get?

A.  Home equity loan

B.  Amortized loan

C.  Senior citizen loan

D.  Reverse annuity mortgage

50 of 50 Eric is acting as a disclosed dual agent in a transaction. Which statement is true?

A.  Eric can require that both the buyer and seller share equally in his commission.

B.  He must withdraw his representation of one of the parties.

C.  Eric may not represent the seller’s interests to the detriment of the buyer.

D.  Eric’s broker should appoint Eric as the designated agent in this transaction.

California: Real Estate Practice – Sample of Final Course Exam

Answers will be revealed with the correct subscription

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

( Ctrl and F ) on Windows computers

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to bring up the in-page search box

1- The amount that a seller takes away from a sale is termed:

      A) Net sale price

      B) Seller’s proceeds

      C) Gross sales price

      D) Profit margin

2- Which of the following best describes prospecting?

A.      Seeking buyers for your listings

B.      Seeking listings

C.      Seeking both buyers and sellers

D.     Seeking buyers for others agents’ listings

3- A property manager can refuse to rent to applicant Mike for any of the following reasons except which?

A.      Mike has changed jobs six times in the past six months.

B.      He is married with two children

C.      Mike has been late with his rent payments seven times in the past year

D.     He had a serious physical altercation with his downstairs neighbor

4. Which law extended discrimination to include handicap and familial status?

A.      Jones v. Mayer

B.      Housing and Community Development Act

C.      Civil Rights Act of 1968

D.     Fair Housing Amendment Act

5. Sharon and Steve have just taken a second mortgage on their home. Which is a true statement?

A.      The second mortgage has now become the primary loan.

B.      This mortgage is not negotiable

C.      They’re probably paying a higher interest rate on the second mortgage.

D.     The first and second mortgage will be rolled into one.

6- According to California real estate law, how often must a broker balance his or her trust accounts?

A.      Weekly

B.      Monthly

C.      Quarterly

D.     Annually

7- In the initial meetings with the prospects, the agent should do all of the following except which?

A.      Give the prospects a black copy of a purchase agreement to look over.

B.      Ask the buyers to sign a real estate transfer disclosure statement.

C.      Discuss alternative properties that may be interest.

D.     Have the prospects sign the disclosure about agency relationship

8- When considering making a loan to a borrower, which of the following factors would probably exert the least amount of influence on the lender?

A.      The borrower’s income

B.      The value of the property the borrower wants to purchase

C.      The borrower’s job stability

D.     The neighborhood in which the property is located

9- Which California Fair Housing Law Prohibits discrimination based on sexual orientation of source of income?

A.      Civil Rights Act of 1964

B.      Rumford Fair Housing Act

C.      Holden Act

D.     California Civil Rights Act

10- Which of the following prospecting techniques do you have to use carefully because it has tended to upset people in recent years?

A.      Facebook and Twitter advertising

B.      Direct mail

C.      Placing ads

D.     Telephone calls

11- Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice’s home, what kind of agreement is this?

A.      Exclusive agency

B.      Net listing

C.      Right-to-sell agreement

D.     Open listing

12- The second installment of property taxes comes due on: 

A.      1-Feb

B.      30-Apr

C.      1-Nov

D.     31-Dec

13- Seller Jim tells his agent Branda that he does not want his home marketed to families with children. Brenda refuses. Which statement is true?

A.      Brenda must follow all of Jim’s instructions.

B.      Brenda has violated the fiduciary duty of obedience to Jim.

C.      Brenda could be liable for a breach of the listing terms.

D.     Brenda has not violated any fiduciary duty.

14- Value includes which of the following aspects?

A.      Desire

B.      Ability to pay

C.      Usefulness

D.     All of the above

15- Karen and Al obtained a 30-year fixed-rate, fully amortized loan when they purchased their home. Which statement is true?

A.      Each of their payments is for the same amount

B.      They will owe a balloon payment at the end of the loan term.

C.      The same amount will go towards the principal every month.

D.     The interest payment is always smaller then the amount allocated to the principal.

16- Dave and Nadine have decided that they want to become property investors.  What is most likely their main motivation for investing?

A.      To plain for retirement

B.      To save on taxes

C.      To make money

D.     To have a second home to enjoy

17- The general law of agency applies to

A.      Brokers dealing with sellers

B.      Salespersons dealing with buyers

C.      Insurance agents dealing with customers

D.     All business transactions

18- In a transaction that involves the purchase of a business, what document functions in the same way as the deed in a personal real estate transaction?

A.      Mortgage

B.      Deed of Trust

C.      Warranty deed

D.     Bill of Sale

19- Which of the following is not an advantage of hosting an open house?

A.      Generates leads for new listings.

B.      Pleases the sellers by inv=creasing activity.

C.      Identifies buyers for other properties.

D.     Allows viewing access to strangers

20- Which of the following would not be an essential component when researching the purchase of an apartment building?

A.      Analyzing neighboring cities.

B.      Studying population trends in the area.

C.      Analyzing the income potential of the property.

D.     Understanding characteristics of the rental market.

21- Which form of advertising is considered the most cost-effective method for selling a home?

A.      Radio

B.      Newspaper

C.      Magazine

D.     Television

22- Jane sold her personal home for $148,000. Two months later she purchased and moved into a new home that cost $145,000. The adjusted cost basis of the first home was $140,000. For purposes of federal income tax, which statement is true?

A.      A basis of $148,000 and no taxable gain

B.      A basis of $145,000 and a taxable gain of $3,000

C.      A basis of $130,000 and a table gain of $18,000

D.     A basis of $140,000 and no taxable gain.

23- Jonestown Community Bank refuses to lend money to potential homeowners trying to purchase property in the predominantly Asian neighborhood on the west end of town. This practice is:

A.      Steering

B.      Blockbusting

C.      Panic-selling

D.     Redlining

24- When talking to his investment clients, Broker Adam often to tax shelters. This term typically refers to

A.      Mortgages

B.      Interest income

C.      Income taxes

D.     Property taxes

25- According to the law governing mortgage loan brokers, what is the maximum commission Broker Claire can charge for securing a $50,000 first mortgage for a period of 2 years?

A.      5%

B.      10%

C.      15%

D.     20%

26- Which is true about listings?

A.      A net listing is illegal in all states.

B.      An open listing is an exclusive contract.

C.      A seller can sell his or own home and owe home and owe no commission if he or she signs an exclusive agency listing.

D.     An exclusive listing must always be at least 30 days long.

27- Mr. and Mrs. Haley are purchasing beachfront property in an upscale development. The home comes equipped with all furnishings. The Haleys want to get a mortgage that will cover the purchase price plus all the furnishings. What kind of mortgage are they looking for?

A.      Package

B.      Blanket

C.      Wraparound

D.     Buydown

28- Abby applies for a federally-related loan to purchase a home. The lender must furnish a copy of the CFPB booklet to Abby no later than the third business day from which date?

A.    The date Abby receives the good faith estimate.

B.     The date escrow is opened.

C.     The date the lender receives her application.

D.    The date Abby makes the request to receive the booklet.

29- Which of the following is not a good direct mail technique?

A.    Use a self-folding mailer.

B.     Hand address the mailer.

C.     Use an attractive first-class stamp.

D.    Offer something valuable to the reader.

30- Being prepared to handle incoming phone calls means all of the following except which?

A.    Knowing your inventory

B.     Understanding the kind of responses your advertising generates

C.     Knowing the community

D.    Being able to anticipate the caller’s requirements

31- Patrick has a written independent contractor agreement with his broker Tami. Last year, about 25% of his income came from sales commissions. The other 75% came from an hourly wage paid by Tami. For income tax purposes, the IRS would probably classify Patrick as:

A.    An independent contractor

B.     A self-employed person

C.     An employee

D.    A real estate assistant

32- Broker Alice has a listing agreement with Jack. If Broker Tom procures a buyer for Jack, Tom will get the commission and Alice will not. What kind of listing agreement does Alice have with Jack?

A.    Exclusive agency

B.     Net

C.     Exclusive-authorization-and-right-to-sell

D.    Open

33- Which statement is true about a loan that has a negative amortization?
A.    At the end of the term, the loan balance will be negative.
B.     The borrower makes payments of interest only over the term of the loan.
C.     Payments will not be enough to retire the loan.
D.    All adjustable rate mortgages have negative amortization.
34- Sarah is an employee and Ken is an independent contractor at Kerns Realty. Which of the following statements is true?

A.    Ken is responsible for his own taxes, while the broker pays Sarah’s.

B.     Ken must obtain his own training. The broker will not provide any.

C.     Neither Sarah nor Ken can get employer-provided health insurance.

D.    Ken and Sarah both must be at the office from 9 a.m. to 5 p.m.

35- Who benefits from Private Mortgage Insurance?

A.    The borrower’s family in case of his or her death

B.     The lender in case of the borrower’s death

C.     The lender against delinquent payments

D.    The lender in case of the borrower’s default

36- Broker Eric secures a loan for buyer Paul. The fees that Eric charges Paul for making the loan could be any but which of the following amounts?

A.    $390

B.     5% of the principal

C.     Actual costs under $700

D.    Any of the above

37- When dealing with the sale of a business, which is not a true statement?

A.    A Bill of Sale gives title to the business equipment.

B.     Goodwill is an intangible asset that results from the reputation of the business.

C.     Tangible assets transferred in the sale include inventory, fixtures and equipment.

D.    The UCC is a body of law that standardizes a number of business practices.

38- When using the straight-line method of depreciation, each year of economic age is given a rate that

A.    Varies each year according to a table provided by the IRS

B.     Is equal for each year over the life of the property

C.     Is high during the first five years of the ownership period, then reduces gradually over the life of the property

D.    Varies according to the expired life of the improvements made to the property

39- When doing a competitive market analysis, an agent looks at all but which of the following factors?

A.    Prices of properties currently on the market

B.     Prices of sold properties

C.     Properties that were listed but did not sell

D.    Recently renovated properties

40- Which of the following phrases should Salesperson Brenda avoid when writing an advertisement for one of her listings?

A.    Kosher meals available

B.     Christian home

C.     Fourth-floor walk-up

D.    Walk to bus stop

41- Agricultural land includes all of the following EXCEPT which?

A.    Orchards

B.     Pastureland

C.     Parks

D.    Farms

42- Alice is planning her career and setting her goals. Which of the following would be considered an intermediate goal?

A.    I will complete the GRI certification in the next four years.

B.     I will do two practice listing presentations per week with an experienced agent for the next two months.

C.     I will open my own office within nine years.

D.    I will distribute 200 business cards every month for the next six months.

43- The Equal Credit Opportunity Act (ECOA) requires lenders to:

A.    Give credit to all potential borrowers.

B.     Give a discount to families with children.

C.     Consider child support payments in the decision.

D.    Specialize by geographic area.

44- Jim owns a gift shop in a commercial building. He pays rent for occupancy, plus maintenance and operating expenses. What kind of lease does Jim have?

A.    Net lease

B.     Percentage lease

C.     Gross lease

D.    Graduated lease

45- Kirk wants to get an FHA loan. Which of the following is Kirk himself not likely to do during the application process?

A.    Find a home that meets FHA requirements.

B.     Agree to pay mortgage insurance.

C.     Find a lender who is willing to do FHA loans.

D.    All of the above.

46- A life insurance company would most likely invest in all but which of the following properties?

A.    Shopping mall

B.     Apartment complex

C.     Industrial complex

D.    Local beauty salon

47- Which of the following duties is not a permitted activity for an unlicensed personal assistant?

A.    Negotiate agreements regarding commission structuring.

B.     Secure documents that are public information from the courthouse and other sources available to the public.

C.     Have keys made for company listings.

D.    Write advertisements and promotional materials with the approval of the licensee and supervising broker.

48- The public report that a developer must provide when offering subdivided lands for sale is provided by which agency?

A.    Department of Housing and Urban Development

B.     Department of Real Estate

C.     Recorder’s Office in the county where the land is located

D.    The county planning commission

49- Agent Dan tells his buyers that the seller will leave the washer and dryer if the buyers make an offer now. What kind of closing technique is Jim using?

A.    Standing-room only

B.     Alternative

C.     Ownership

D.    Bonus

50- Harry has some buyers that he believes are ready to make an offer. He says to them, “Would you prefer to take possession on September 1 or October 1?” What kind of closing technique is Harry using?

A.    Assumptive

B.     Alternative

C.     Ownership

D.    Standing-room-only

51- Which statement is true about a homeowner’s exemption?

A.    It must be filed every year.

B.     Certain homeowners may qualify for a $10,000 exemption.

C.     Once filed, it remains until terminated.

D.    None of the above.

52- Which statement is true about a listing contract?

A.    It must be in writing to be enforceable.

B.     It can be considered an employment contract.

C.     It creates an agency relationship.

D.    All of the above.

53- Greg sold an apartment building he owned for 20 years. He paid $100,000 for it, and made $300,000 worth of improvements. His depreciation was $2,500 per year. He sold the building for $1,000,000 and paid $60,000 in commission to the broker. What is Greg’s capital gain on the apartment?

A.    $450,000

B.     $540,000

C.     $590,000

D.    $600,000

54- Jim and Jane are buying a home for $120,000. They have $20,000 for a down payment and assumed the seller’s mortgage of $75,000. Jim and Jane financed the remaining $25,000 through the seller. What kind of a mortgage do they have?

A.    Buydown loan

B.     Balloon note

C.     Purchase-money mortgage

D.    Wraparound / wrap around loan

55- Greg is approved for a Cal-Vet loan. Who will pay the points?

A.    The seller

B.     The state

C.     Greg

D.    No one – there are no points.

56- Which is not a true statement about the Agency Disclosure?

A.    The listing agent must provide the disclosure to the seller prior to securing the listing agreement.

B.     The selling agent must provide the disclosure to the seller “as soon as practicable” prior to presenting a purchase offer.

C.     If the selling agent does not deal directly with the seller, the selling agent is not required to provide the disclosure.

D.    The selling agent must provide the disclosure to the buyer “as soon as practicable” prior to the execution of the buyer’s offer to purchase.

57- Under federal income tax law, the “basis” for a personal residence is which of the following:
A.    The purchase price, plus depreciation
B.     The purchase price, plus improvements
C.     The fair market value at the time of sale
D.    The appraised value prior to sale
58- Mortgage lenders are prohibited from discriminating in giving credit to prospective borrowers based on race, color, religion, national origin, sex, marital status, age or dependency on public assistance under which law or regulation?

A.    Equal Credit Opportunity Act

B.     Truth in Lending

C.     Real Estate Settlement and Procedures Act

D.    Community Reinvestment Act

59- Which of the following is a seller’s request that an agent cannot honor?

A.    Please remove your shoes before entering the home.

B.     Do not show to Mexicans.

C.     Always call before showing.

D.    Do not show the home between 10 a.m. and noon on Sundays.

60- Seller Tom has an agreement with Broker Bill, Broker Jim and Broker Joe. Whoever brings the buyer will get the commission. What kind of agreement is this?

A.    Exclusive agency

B.     Net listing

C.     Open listing

D.    Exclusive-authorization-and-right-to-sell agreement

61- Bill and Sue secured a mortgage loan that is tied to an index which fluctuates over the life of the loan. What kind of loan do they have?

A.    Amortized

B.     ARM

C.     Balloon

D.    Growing equity

62- When agent Hal shows a home he should never:

A.    Ask questions of the prospects’ children.

B.     Start in the room with the best features.

C.     Allow indoor pets to leave their designated area.

D.    Avoid negative comments while he’s inside the home.

63- Jenny’s home appraised for $550,000. Her asking price was $560,000 and the property sold for $575,000. What will the new owners pay in property taxes?

A.    $5,500 the first year, plus a maximum 2% increase in market value per year

B.     $5,600 every year, with no increase

C.     $5,750 the first year, plus a maximum 2% increase in market value per year

D.    $5,750, plus a maximum 1% increase in market value per year

64- Which of the following is not a form of personal advertising?

A.    Car signs

B.     Business cards

C.     Multiple Listing service

D.    Name tags

65- Which of the following items is usually not prorated at closing?

A.    Real estate taxes

B.     Title insurance

C.     Mortgage interest

D.    Homeowner’s insurance

66- When doing a listing presentation which of the following items would you not describe to the owners as being a benefit of listing with an agent?

A.    Availability of multiple listing service

B.     Amount of commission charges

C.     Broker-paid advertising and promotion

D.    Assistance with filling out disclosures

67- Hannah is a real estate assistant. Her broker has asked her to be available for tasks in the field rather than in the office. What would we call Hannah?

A.    On-call assistant

B.     Field staff

C.     Part-time worker

D.    Commission-only assistant

68- Greg and Joyce have an adjustable rate mortgage on their home. What is the key feature of this type of loan?

A.    The principal never amortizes.

B.     The term of the loan can be shortened.

C.     The interest rate can vary.

D.    The monthly payments increase overtime.

69- According to ECOA, lenders cannot discriminate against potential borrowers on the basis of all but which of the following?

A.    Marital status

B.     Age

C.     Income

D.    Religion

70- Which of these items would be a credit to the buyer on the settlement statement?

A.    sales price

B.     loan origination fee

C.     loan amount

D.    recording fee

71- When agent Jane meets with her sellers to offer suggestions, she most likely would not give them:

A.    Cleaning tips

B.     Advice to be home during showings

C.     Landscaping instructions

D.    Suggestions for improvements

72- According to RESPA, a buyer or seller cannot legally be charged at closing for which of the following items?

A.    Loan origination fee

B.     Referral fee to a homeowner’s insurance agent.

C.     Title insurance

D.    Attorney fees

73- Which of these is not a buying signal?

A.    Buyer Jim asks if he can visit the property for a second time.

B.     Buyer Amanda asks if she can measure the windows to see if her current drapes will fit.

C.     Jim and Amanda whisper and frown when they see the basement.

D.    Amanda smiles at Jim when she sees the whirlpool tub.

74- Which statement is not true about an agency relationship?

A.    It is based on authorization.

B.     It is determined by who pays the compensation.

C.     It is based on mutual consent.

D.    It can exist without compensation.

75- All but which of the following is NOT an AIDA feature?

A.    Action

B.     Desire

C.     Aspiration

D.    Interest

76- Mark believes he has been discriminated against during his home search. How long does he have to file a complaint with the Department of Housing and Urban Development?

A.    6 months

B.     12 months

C.     18 months

D.    24 months

77- Which of the following Internet pages might not be of particular interest to buyers?

A.    Mortgage loan calculator

B.     Information on current loan programs

C.     Definition of financing terms

D.    Curb appeal information

78- Nancy bought her home last year for $425,000. Her property taxes would be assessed at:

A.    $425

B.     $1,500

C.     $2,250

D.    $4,250

79- Tom and Mary want to purchase their first home. Which of the following would be the least likely place for them to obtain a loan?

A.    Insurance company

B.     Credit union

C.     Mortgage company

D.    Savings and loan association

80- Which of the following is an example of commingling?

A.    Broker John puts $500 into his trust account.

B.     Broker Alice holds an uncashed check until the offer is accepted.

C.     Broker Harry deposits $1000 into his brokerage business account.

D.    Broker Gina puts $150 into her trust account.

81- Jake has decided to specialize in working with clients who purchase schools. What property type will he be dealing with?

A.    Commercial

B.     Industrial

C.     Recreational

D.    Special-purpose

82- What is the minimum period of time over which the owner of an apartment building can depreciate the improvements?

A.    18 years

B.     27.5 years

C.     30 years

D.    32 years

83- Matt is computing the adjusted cost basis of his apartment building for income tax purposes. Which of the following items can Matt not add to the original cost when doing the computation?

A.    Cost of a new parking lot

B.     Installation of central air conditioning

C.     Mortgage payments on the property

D.    Addition of a tenant laundry facility

84- Four years ago, Sam purchased a vacant lot for $10,000. He just sold it for $13,000. During the time Sam owned the property he paid $350 per year in taxes, $150 per year on maintenance like grass cutting and $90 per year on miscellaneous expenses. How much did Sam gain or lose on the sale?

A.    Gained $640

B.     Gained $2360

C.     Lost $640

D.    Lost $2360

85- Which paragraph of the purchase agreement states that the balance of the purchase price will be deposited into escrow prior to closing?

A.    Finance Terms

B.     Offer

C.     Closing and Occupancy

D.    Allocation of Costs

86- Which of the following is not considered a benefit of investing in real estate?

A.    Having a monthly income.

B.     Reducing taxes.

C.     Realizing a quick profit.

D.    Hedging against inflation.

87- What information can you gather from the newspaper to help develop a Prospecting Plan?

A.    Death Notices and Building Permits

B.     Deeds and Property Inspections

C.     Land Titles and Home Warranties

D.    Service Ads and Display Ads

88- Sally and Dan must pay 2 points on their new $65,000 loan. What will they have to pay at closing for the points?

A.    $650

B.     $1,300

C.     $1,950

D.    $2,600

89- Who selects the escrow company?

A.    The buyer and seller

B.     The broker

C.     The seller’s agent

D.    The seller alone

90- Marsha has been keeping track of the effectiveness of her advertising campaigns. She is probably using all but which of the following tools?

A.    Code in a print ad

B.     Telephone log

C.     Designated telephone number

D.    Advertising budget

91- This paragraph of the purchase agreements informs the seller of the buyer’s right to inspect the property and can cancel or request maintenance based on findings.

A.    Repairs

B.     Buyer Indemnity

C.     Dispute Resolution

D.    Conditions Affecting Property

92- Which of the following situations is not exempt from the seller disclosure requirement?

A.    Greg Burns is selling his interest in his home to his wife Melanie as part of their divorce settlement.

B.     Jim Sharp is purchasing his father’s home.

C.     The court has ordered the transfer of Sally Green’s home to her friend Penny Jacobs as part of the settlement of Sally’s estate.

D.    All of the above

93- Jim has created a nice property flier for the James’ home. Jim should not use this flier as a:

A.    Handout at open houses

B.     Substitute for advertising

C.     Handout for other agents

D.    Mailer for telephone inquiries

94- Seller’s agent Pam was unaware of the fact that the heating system of a home she had listed was defective. She sold the property and several months later the buyer sued Pam for not disclosing the problem. Which statement is true ?

A.    The buyer was responsible for making the discovery, so Pam is therefore liable.

B.     Pam is not liable since it was summer and the heating problem was not obvious.

C.     The seller did not disclose the problem on a seller’s disclosure form so Pam  is off the hook.

D.    Pam is has no duty to investigate and may rely on the opinion of a heating professional or home inspector.

95- Who is liable for the withholding on the sale of a property owned by a foreigner?

A.    Buyer

B.     Seller

C.     Broker

D.    Escrow Officer

96- Which statement is not true about a listing contract?

A.    It must be in writing to be enforceable.

B.     It can be considered an employment contract.

C.     It is a unilateral contract.

D.    It creates an agency relationship.

97- Buyer Randy makes an offer to purchase one of Broker Tom’s listings on June 15. Randy gives Tom an earnest money check for $1,000 and asks Tom to hold it until June 30, regardless of the date the seller accepts the offer. What should Tom do?

A.    Deposit the check into his trust fund account on the next business day.

B.     Present the offer and tell the seller that the check needs to be held until June 30.

C.     Refuse to accept the offer and check.

D.    Give the check to the seller.

98- Grant moves into his new office space while he awaits the completion of the negotiations of the lease terms. During this interim period, grant makes monthly rent payments and the owner accepts them. How would Grant’s lease at this time be classified?

A.    Estate for years

B.     Estate from period to period

C.     Estate at will

D.    Estate at sufferance

99- All exclusive listing agreements must have

A.    Compensation defined

B.     Definite termination date

C.     A list of personal property included in the sale

D.    Escrow company named

100- What does the Real Estate Disclosure Law refer to?

A.    Disclosure of agency relationships

B.     Disclosure of financing terms

C.     Disclosure of property condition

D.    Disclosure of natural hazards

101- Which type of loan typically carries the most loan points?

A.    FHA

B.     VA

C.     Cal-Vet

D.    Conventional

102- What is the minimum period of time over which the owner of a commercial building can depreciate the improvements?

A.    20 years

B.     27.5 years

C.     30 years

D.    39 years

103- Kirk and Sandy obtained a wraparound mortgage. Which of these statements is true about the wraparound mortgage?

A.    Their first mortgage will get paid off immediately.

B.     The original loan becomes subordinate to the wraparound.

C.     They can make payments directly to the original lender.

D.    Their lender can profit from the difference in interest rates.

104- Lorna and Hal have obtained a growing equity mortgage for their new home. What does that mean?

A.    The loan will be distributed to them gradually.

B.     The interest rate will increase gradually over time.

C.     The loan term will extend gradually over time.

D.    Their loan payments will gradually increase.

105- Agent Alice has received an offer that she believes is not in the sellers’ best interest. What should Alice do?

A.    Make no recommendations and let the sellers decide on their own.

B.     Tell the sellers exactly how she feels and why she thinks the offer is not a good one.

C.     Recommend a counteroffer back to list price.

D.    Work toward acceptance.

106- If broker Tim advertises a property for sale that he doesn’t intend to sell so that he can attract potential buyers, Tim is practicing:

A.    Display advertising

B.     Ethical advertising

C.     Product advertising

D.    Bait-and-switch advertising

–00cceshop00—7.23 continue-cali practice

1) Single-family, multi-family (duplex, triplex, etc.), apartment buildings, condominiums, and cooperatives are part of what property category?
a. Industrial
b. Leisure
c. Residential
d. Retail
2) Title companies are a useful relationship to cultivate for many reasons. For example, what can they provide you with to help you in your business?
a. E & O insurance
b. Mailing lists
c. Properties to sell
d. Training
3) Gordon is busy preparing transactional paperwork for the property his client is selling. What activities accompany this duty?
a. Obtain signatures and provide copies to the parties.
b. Prepare a comparative market analysis.
c. Prepare marketing materials.
d. Write the MLS listing.
4) A title company, a title representative, and a mortgage broker are three ______ after you are licensed.
a. Entities you should avoid
b. Professional relationships you should establish
c. Professions you should study
d. Services you are prohibited from recommending

5) Because these types of properties have both specific physical and complex operational requirements, they are usually handled by more experienced real estate professionals.
a. Industrial
b. Leisure
c. Residential
d. Retail
6) Sophie has been working hard since she started as a real estate licensee, but the market is slow, and she has yet to complete a single transaction. What strategy could help her find more listings, even though the market is slow?
a. Being more flexible in the types of properties she handles
b. Learning to work with commercial real estate
c. Reaching out to her sphere
d. Signing up with a listing service
7) Hotels, motels, golf courses, resorts, and sporting arenas belong to which of these property categories?
a. Industrial
b. Leisure
c. Residential
d. Retail
8) Rhonda is considering what her niche should be. Which of the following would make the best niche for her to pursue?
a. She could focus on only residential properties.
b. She could focus on single-family properties that list between $300,000 and $500,000.
c. She could guarantee a sale at list price within 30 days.
d. She could start learning Spanish and serve Spanish-speaking clients.

9) At which point in the residential selling process does the real estate professional prepare a comparative market analysis?
a. Closing
b. Listing and marketing
c. Managing the transaction
d. Obtaining the listing
10) Marketing exclusively to which of the following niches may be illegal?
a. Catholic parishes
b. Commercial investors
c. Dentists
d. First-time buyers
11) Sheldon has worked hard to create a marketing plan tailored to his client’s property, to hold open houses and arrange showings, to help his client stage the property so that it appeals to buyers, and, finally, to negotiate a deal with a buyer and the buyer’s broker. His client has now accepted the offer. Has Sheldon completed what is needed for the commission check to be sent to his broker?
a. No. Sheldon is still in the marketing phase of the selling process.
b. No. Sheldon still needs to complete the listing activities of the selling process.
c. No, Sheldon still needs to complete the transactional activities of the selling process.
d. Yes!
12) The real estate cycle is affected primarily by __________________.
a. Availability and affordability
b. Immigration
c. Marriages and family size
d. Population growth

13) Shopping centers and malls belong to which of these property categories?
a. Industrial
b. Leisure
c. Residential
d. Retail
14) Licensee Bonita has just submitted an MLS listing with photos for her client. Which of the following steps will she need to complete next?
a. Expose the property to prospective buyers using a tailored marketing plan.
b. Meet with the client for a listing presentation.
c. Prepare the seller’s net sheet.
d. Verify the progression of the buyer’s loan.
15) What is the advantage to niche marketing?
a. Focuses your efforts and increases your chances of being noticed
b. Guarantees a minimum income
c. Reduces the real estate professional’s liability
d. Requires no marketing effort
16) Erica presented an offer to her seller client, and after a bit of negotiating with the buyer and buyer’s broker, the offer was accepted. Which one of these activities will Erica be taking care of at this point in the sales process?
a. Arrange a showing of the property.
b. Prepare a comparative market analysis.
c. Sign a listing agreement with her client.
d. Verify progression of the loan through the buyer’s broker.

17) 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. RetailWarehouses and manufacturing facilities are industrial properties.
18) At which point in the residential selling process does scheduling a photographer take place?
a. Listing and marketing
b. Managing the transaction
c. Obtaining the listing
d. Preparing for listing
19) Which of the following groups represents a niche?
a. Empty nesters
b. Home buyers
c. Homeowners
d. Urbanites

20) Which of the following is true about interviewing at a brokerage?
a. Being a new licensee is a distinct advantage.
b. Most brokers prefer not to hire new licensees.
c. Very few licensees are selected; it’s highly competitive.
d. You are interviewing the broker as much as the broker is interviewing you.
21) It’s your first week in real estate and you realize you made a terrible selection with your broker—she’s awful! What is your best course of action?
a. Quit the business
b. Sit tight; you can’t leave until two years have passed
c. Switch brokerages
d. Turn in a letter of resignation
22) Jill is trying to choose between two brokers. One no longer practices real estate, while the other is a very active broker. If training with her manager is a concern for her, which broker should she choose?
a. The active one, because she can learn on the job
b. The active one, because she’ll likely get more leads
c. The one who’s not practicing, because it’s best to learn from someone who’s not practicing
d. The one who’s not practicing, because she’ll likely get more time with the broker
23) One of the best ways to select a brokerage and managing broker with whom to work would be to ________.
a. Call the Better Business Bureau
b. Interview other new licensees
c. Interview several managing brokers
d. Request an income guarantee
24) What’s floor time?
a. Overtime
b. Time spent at an open house that is vacant, without chairs
c. Time spent evaluating carpeting and linoleum for possible upgrades
d. Time spent in the office instead of the field
25) As a new licensee, how should you select a broker to work with?
a. Broker interviews
b. Salary comparison
c. Volume of business
d. Working hours comparison
e. A broker who provides a variety of marketing materials is most likely ______.
f. A graphic design expert
g. A micromanager
h. Going to be difficult to work with
i. Invested in the success of affiliated licensees
26) Karen, a new licensee, is interviewing at a brokerage and asks to see its policies and procedures manual. Why might she do this?
a. To determine whether there are systems in place for her success
b. To find out if the brokerage has a policy of promoting from within
c. To look like she knows what she’s doing to the broker
d. To see if the brokerage pays overtime

27) Laura, a new licensee, just started working for broker Bill. Which of the following is a true statement?
a. Laura likely won’t get a salary for six weeks.
b. Laura may leave the brokerage and join another at any time.
c. Laura must stay with Bill for at least two years before she transfers brokerages.
d. Laura will be put on a three-month probation.
28) Will is looking at two brokerage offices. The commute to one is 45 minutes, and it’s in a neighborhood he intends to farm. The other brokerage is within walking distance of his house. Which office is best for Will’s business?
a. The closer one, because gas is expensive.
b. The closer one, because he can meet clients at the office easier.
c. The commuting one, because he will spend most of his time in the field.
d. The commuting one, because most business is conducted in the car.
29) Broker Bob and new licensee Lisa are meeting to determine whether they will work together. Which of the following is a true statement?
a. Bob is the only one with a decision to make.
b. Lisa should make sure the fit is right before agreeing to work with Bob.
c. Most brokers prefer new licensees.
d. New licensees should accept work with the first broker who offers.
30) Michelle always volunteers for floor time. Why might she do this?
a. She doesn’t like being in the office.
b. She needs the overtime pay.
c. She really likes flooring and interior design.
d. She’s hoping for leads.

31) Shaniqua’s appointment with a prospective broker was cut short because the broker said he had a client meeting. This broker is likely _____________.
a. A managing broker but not practicing
b. A practicing broker
c. Lying; brokers do not meet with clients
d. Politely blowing her off
32) Gary is a good broker to his new licensees. That is most likely because he ______.
a. Guarantees the success of his licensees
b. Has a robust training program
c. Offers comprehensive vision and dental insurance
d. Pays a competitive salary to his independent contractor licensees
33) One of the best ways to select a brokerage and managing broker with whom to work would be to ________.
a. Call the Better Business Bureau
b. Interview other new licensees
c. Interview several managing brokers
d. Request an income guarantee
34) Will is looking at two brokerage offices. The commute to one is 45 minutes, and it’s in a neighborhood he intends to farm. The other brokerage is within walking distance of his house. Which office is best for Will’s business?
a. The closer one, because gas is expensive.
b. The closer one, because he can meet clients at the office easier.
c. The commuting one, because he will spend most of his time in the field.
d. The commuting one, because most business is conducted in the car.

35) Which of the following factors helps the IRS determine whether a licensee is classified as an employee or an independent contractor?
a. Whether another broker supervises the licensee
b. Whether the brokerage offers regular guidance and instruction to the licensee
c. Whether the firm provides the licensee with a copy of the brokerage’s policies and procedures manual
d. Whether the licensee receives benefits from the brokerage firm
36) Lisette is an employee at ABC Brokerage. She’s not licensed and her role is to answer phones and process paperwork. She’s supervised by broker Bob. Which of the following statements is true?
a. Bob can control the number of hours that Lisette works each day.
b. Bob can define the results he wants Lisette to achieve, but he isn’t allowed to direct how she does her work.
c. Lisette is paid according to what she produces at work, not by the number of hours she works.
d. Lisette is responsible for paying her own work expenses.
37) Which of the following statements is true of independent contractor licensees?
a. Their brokerage firm pays certain expenses, such as gas and travel time.
b. They receive benefits, such as sick pay, from their brokerage firms.
c. They’re paid by the job.
d. They’re required to do work in a certain order.
38) Real estate licensees may be classified as ______ for tax purposes, even though they’re subject to supervision from a more experienced broker.
a. Employees
b. Employment agency employees
c. Independent contractors
d. Unlicensed assistants
39) Because of the employing party’s lack of control over the individual, which of these is not classified as an employee?
a. Common law employee
b. Hired worker
c. Independent contractor
d. Statutory employee
40) What form do independent contractors file with the IRS to deduct business expenses?
a. Schedule C
b. Schedule D
c. Schedule E
d. Schedule for Independent Contractor Expenses
41) What happens if an independent contractor earns $600 or more during the tax year?
a. Nothing, but the worker must still pay self-employment taxes.
b. The broker must withhold income taxes and FICA from the worker’s pay.
c. The independent contractor must change his worker classification to employee and have taxes taken out of his pay.
d. The worker’s brokerage firm must prepare and submit forms 1096 and 1099 to the IRS and distribute form 1099 to the worker.
42) The way in which independent contractors and employees are compensated and how their income is reported to the IRS differ. Which of the following statements describes how independent contractors are compensated and their income reported?
a. The worker does not receive a salary and must pay self-employment taxes.
b. The worker receives a salary and must pay self-employment taxes.
c. The worker receives a salary, and taxes are withheld from his pay.
d. The worker receives a salary, and the brokerage firm pays federal and state unemployment taxes on the worker’s behalf.
43) Which type of worker, though an independent contractor, is defined as an employee by statute for certain employment tax purposes? A food delivery driver who is paid on commission is an example.
a. Common law employee
b. Independent contractor
c. Statutory employee
d. Statutory non-employee
44) Which of the following is a reason that the federal and state government classify workers into taxing categories?
a. To determine whether the worker is exempt or non-exempt for purposes of the Fair Labor Standards Act
b. To ensure brokers withhold income taxes from their independent contractors
c. To ensure brokers withhold taxes for independent contractors
d. To ensure that both employees and independent contractors receive health insurance benefits
45) For tax purposes, employees are required to complete IRS form W-4. Which IRS form or forms are independent contractors required to complete?
a. W-2 form
b. W-3 form
c. W-4 form
d. W-9 form
46) What type of worker, defined under tax law as an independent contractor and not an employee, includes direct sellers and licensed real estate agents?
a. Common law employee
b. Employee
c. Statutory employee
d. Statutory non-employee

47) Which of the following statements applies to independent contractors?
a. Their broker sets their work hours.
b. Their broker supervises them.
c. Their work must be done in a specific location.
d. They’re paid by the hour, not by the job.

48) Andrew just received a compensation check from his brokerage firm. Since Andrew is an independent contractor, what determines how he’s paid?
a. Andrew’s date of hire
b. Andrew’s sales
c. The number of hours that Andrew worked
d. The number of sales agents at the brokerage

49) Which of the following is a reason you should avoid posting photos of yourself with expensive jewelry or belongings?
a. It allows strangers to connect with you through your personal social media accounts.
b. It can make your client’s home a target while you’re away.
c. It gives criminals a road map to your door.
d. It may attract thieves.
50) The “who, where, when” safety tip refers to telling someone who you are with, where you will be, and when you will be there. Why should you make sure clients you’re meeting know you have shared this information?
a. If clients know how busy you are, they won’t take up too much of your time.
b. This way, your clients know you’re very busy and have made time for the meeting anyway.
c. You’ll look prestigious to your clients.
d. You’re less likely to be attacked when clients know you would be missed and that you’ve shared their identifying information with others.
51) Chuck arrives at a vacant home for a showing. He thinks he sees a light on inside the home and distinctly remembers turning off all of the lights when he left yesterday. He decides to be safe and take a walk around the house and discovers a basement window propped open. What should he do?
a. Call the authorities to check it out.
b. Enter the home and wait for the client.
c. Leave immediately without telling anyone.
d. Wait for the client to arrive so that they can enter the house together.
52) When it’s second nature for you to consider the risks before doing anything—even marketing yourself—you’ve adopted a “_____________” mindset.
a. Economics first
b. Paranoid
c. Risky
d. Safety first
53) Showing which of the following can make your loved ones vulnerable?
a. Your Agent of the Month award
b. Your car keys
c. Your cell phone
d. Your family photos
54) You are meeting a new potential client at your listing. You’ve only talked to the prospect on the phone. You arrive first, and take a few minutes to review all of the egress points in the house. What is this an example of?
a. Fighting back
b. Installing a safety app
c. Situational awareness
d. Using an escape route
55) Which of the following is true about performing an Internet search on your name?
a. It can help you monitor your online reputation.
b. It can hurt your reputation.
c. It can’t help your personal marketing efforts.
d. It is a waste of time.
56) How can privacy tools available on most social networking sites protect your personal safety?
a. They can allow you to control what pictures and information other people see.
b. They can allow you to upload your photos faster.
c. They can help you to avoid posting provocative pictures of yourself.
d. They can make your online information completely private.

57) If you’re alone at an open house, what should you never post online?
a. A professional photo of yourself
b. Photos of the home’s selling features
c. That you have a great listing
d. That you’re alone at an open house
58) Which of the following are reasons you should insist clients enter a space first?
a. If you enter a space first, you could be cornered, locked in, or pushed from behind and disabled.
b. It is poor etiquette.
c. The person might see something you don’t want them to see.
d. The person might take one look at the property and try to leave.
59) Janice has encountered a creepy individual who claims to be interested in a home purchase, but continually sends inappropriate and threatening emails to her personal account, and also frequently leaves her voicemail messages on her cell phone. She could have avoided this situation if she had done what?
a. Scrapped the provocative photos
b. Set up separate personal and business accounts and only allowed strangers to contact her through her business account
c. Turned off location information
d. Used her phone’s privacy settings
60) If someone steals this, they could have access to your family, personal information, contacts, photos, email, and social media accounts. What is it?
a. Family photos
b. Your Agent of the Month award
c. Your car keys
d. Your cell phone
61) For safety reasons, which of the following should not appear in your personal marketing?
a. Your home address
b. Your office address
c. Your office email address
d. Your office phone number
62) When you meet a new client for the first time, you should always do what?
a. Meet them at a public place nearby.
b. Meet them at the brokerage office first.
c. Meet them at the listing first so that you can expedite the sale.
d. Meet them at your home.
63) It’s a bad idea to include information about your loved ones and pets in your personal marketing because it’s a safety risk to your loved ones. From a safety standpoint, there’s also another reason to avoid including this information in your personal marketing. What is it?
a. Names and birth dates of children and pets can be used as clues to your passwords.
b. Your business associates might not like it.
c. Your family and pets might make you look bad.
d. Your loved ones might not like it.
64) Telling someone that your co-workers know where you are and whom you are with is an example of _____________.
a. Fighting back
b. Getting out
c. Talking your way out
d. Wasting time

65) Janet is so happy to finally be on vacation. As she sits happily in her lounge chair on the beach, she decides to share her joy with her social media friends. From her phone, she posts, “Having such a great time just being alone. I can’t believe I have the whole week all to myself.” Since she’s turned off her location tracking information, she feels it’s okay to let the world know she’s on vacation. Is that a good idea?
a. No, Janet’s home could be robbed while she’s away.
b. Yes, her friends will be so envious!
c. Yes, it’s great social marketing to let everyone know she’s in a tropical paradise.
d. Yes, no one knows where she is.
66) In order to protect the confidentiality of client data, which of the following should you avoid?
a. Displaying photos of your family.
b. Ensuring that client paperwork is properly secured.
c. Leaving clients/customers unsupervised in the office.
d. Sharing personal information about your family.
67) Which of the following precautions can help keep you from being cornered, locked in, or pushed from behind and disabled?
a. Always carry a fully charged cell phone.
b. Always make sure to go first into a space.
c. Always make sure you follow a client into a space.
d. Always make sure your car is not blocked in.
68) Many lawsuits have been filed against companies that fail to protect the security of what?
a. Confidential client data
b. Personal belongings of employees
c. Public information
d. Your bowl of jelly beans
69) Why should you always meet new clients at the brokerage first?
a. To impress them with your work space.
b. To make sure they’re really interested in the listing.
c. To photocopy their ID and introduce them to others.
d. To show them other listings they might be interested in.
70) When meeting a new client for the first time, where would be an ideal place to meet?
a. At a home the client wants to see
b. At your brokerage
c. In your car
d. In your home office
71) Privacy tools are available on most social networking sites. How can they be used to protect your personal safety?
a. They can allow you to control what pictures and information other people see.
b. They can allow you to upload your photos faster.
c. They can help you to avoid posting provocative pictures of yourself.
d. They can make your online information completely private.
72) Which of the following is true about getting to safety?
a. Each person and each situation is different.
b. Once you are in danger, there is no chance for escape.
c. There is one approach that works for pretty much every situation.
d. You should never try to talk your way out of a dangerous situation.

73) When you’re planning your personal marketing materials, you should always consider ___________ a top priority.
a. Economics
b. Government control
c. Safety
d. the Internet
74) Practicing strategies for getting to safety is known as ______________________.
a. Avoiding all contact with people
b. Hoping for the worst
c. Imagining failure
d. Mental rehearsal
75) Having information about clients you’re meeting gives authorities something to work with in case something goes wrong. This is why you should do what?
a. Collect identifying information from the client/customer
b. Complete an agent itinerary form
c. Dress for safety
d. Insist that clients enter first
76) Janet is so happy to finally be on vacation. As she sits happily in her lounge chair on the beach, she decides to share her joy with her social media friends. From her phone, she posts, “Having such a great time just being alone. I can’t believe I have the whole week all to myself.” What feature on her phone might make this dangerous?
a. Photo editor
b. The ability to track her location through GPS
c. Web browser
d. Wireless connection
77) Personal ___________ is an area where many people do not consider their safety.
a. Checking
b. Choice
c. Marketing
d. Space
78) When presented with a dangerous situation, saying something like, “My office knows where I am and who I am with” is an example of _________.
a. Fighting back
b. Getting out
c. Talking your way out
d. Wasting time
79) How can you mentally prepare for getting to safety?
a. Avoid all contact with people.
b. Hope for the best.
c. Imagine failure.
d. Rehearse successful escape strategies.
80) It’s acceptable from a safety standpoint to include ______ in your personal marketing.
a. Your home address
b. Your home phone number
c. Your office address
d. Your personal cell phone number

81) What information should you avoid sharing so that would-be criminals cannot find out where you are or when you are away from home?
a. Location information
b. You list of contacts
c. Your privacy tools
d. Your profile photo
82) Why is it a good idea to turn off location sharing information when using social media?
a. Because other licensees may see where your listings are
b. Because potential criminals can use it to find out when you are home and where your home is located
c. So everyone knows what a glamorous life you lead
d. So your clients can always find you
83) You should always make sure this is secure (locked) when not in use.
a. Your Agent of the Month award
b. Your bowl of jelly beans
c. Your computer
d. Your family photos
84) Because each person and each situation is different, it’s important that you ______.
a. Do nothing
b. Ignore your intuition
c. Rely on others to decide the best way to proceed
d. Stay calm and assess the situation
85) You should be very cautious when approaching a vacant home. If you see anything suspicious, what should you do?
a. Call the authorities to check it out.
b. Enter the home and wait for the client.
c. Leave immediately without telling anyone.
d. Wait for the client to arrive so that you can enter the house together.
86) Which of the following photos should a licensee avoid posting on social media when advertising an open house?
a. A glamorous selfie
b. The front door, showing the address
c. The landscaping
d. The outdoor pool
87) When considering your personal marketing, what should one of your primary concerns be?
a. How envious everyone will be when they see that photo of you wearing your huge diamond ring and bracelet
b. How fabulous you look in that sundress on vacation
c. How to best use your personal assets to attract customers of the opposite sex
d. The overall intention of your marketing
88) When it comes to personal marketing, photos of you should be what?
a. Glammed up and ready to go
b. Professional, almost understated
c. Provocative
d. Revealing

89) It’s important that you present yourself both professionally and safely in your _____________.
a. Conversations with friends
b. Family life
c. Personal marketing plan
d. Private life
90) What should you do when working alone in the office?
a. Eat all of the donuts
b. Lock doors and windows
c. Move a lot of files around so it looks like you’ve been busy
d. Open the doors and windows to attract foot traffic
91) In order to avoid sharing where you are and when you are away from home, you should disable_______________.
a. Location information/location sharing in social media
b. Your list of contacts
c. Your privacy tools
d. Your profile photo
92) Which of the following represents a safety risk and should be avoided when meeting with clients?
a. Carrying a fully charged cell phone
b. Entering the room last
c. Wearing comfortable clothing
d. Wearing high-heeled shoes
93) Which of the following can be a valuable tool for protecting your personal safety, but can also be a risk?
a. Disclosing the names and ages of your children
b. Family photos
c. Leaving clients unattended in the office
d. Your cell phone
94) How can carrying a fully charged cell phone assist you with personal safety when showing a home?
a. It allows you to stay up-to-date with social media
b. It can allow you to call for assistance if your safety is threatened.
c. It helps ensure your car is not blocked in.
d. It makes you look important.
95) If this is not secure, then your clients’ data and your computer systems are also endangered.
a. Your Agent of the Month award
b. Your bowl of jelly beans
c. Your computer
d. Your family photos

96) Why are most new real estate licensees hesitant to market to their friends and family?
a. Their brokers don’t want them marketing to that audience.
b. They are afraid they’ll be asked to reduce their commissions.
c. They don’t want to seem pushy.
d. They want wealthier clients than their friends and family.
97) Deborah was initially thrilled when she signed a listing agreement with her client, Jeb, to sell his five-bedroom colonial in a beautiful neighborhood. Since then, however, it was becoming more and more difficult to get along with Jeb. She felt like she was doing her best to sell his house, but with every day that passed without an offer, he became more and more disagreeable. She wondered what she could do to resolve the situation. What advice would you give Deborah?
a. Might as well ask your broker to send back your license; you’re not cut out for this business.
b. Refer Jeb to a colleague who might be a better match and take the referral fee.
c. Tell Jeb what a jerk he is and that he’d better shape up if he really wants his house to get sold anytime soon.
d. Tough it out and do what it takes to make the client happy.
98) Which of the following is a true statement about working in real estate?
a. Everyone in the business is ethical.
b. It involves nights and weekends.
c. It’s a good hobby career.
d. You’ll probably mesh with all of your clients.
99) In real estate marketing terms, what’s a farm area?
a. An agricultural district
b. A targeted market
c. Vacant land
d. Your sphere of influence

100) What are the two places you should concentrate your marketing efforts before all others?
a. Billboards and bus benches
b. Craigslist and Facebook
c. Radio and TV advertising
d. Sphere and farm
101) How would you qualify a member of your sphere?
a. By asking if they know someone to whom they would refer real estate business
b. By income
c. By location
d. By running a credit check
102) You should try to have a face-to-face meeting with each person in your sphere at least how often?
a. Daily
b. Monthly
c. Quarterly
d. Weekly
103) Of the following marketing techniques, which is most essential for a new licensee?
a. Ability to smooth talk people
b. A love of leisure time
c. A strict 9-to-5 work ethic
d. Perseverance

104) Which of the following is most true about a career in real estate?
a. It requires a strong work ethic.
b. It’s all about schmoozing.
c. It takes minimal effort to succeed.
d. Most people succeed.
105) What’s one mistake that new real estate licensees frequently make regarding their “sphere”?
a. Asking for referrals
b. Connecting with people they don’t know
c. Not promoting their services to friends and family
d. Sending quarterly newsletters
106) What’s a popular myth about real estate?
a. Cyclical nature
b. Easy money
c. Hard work
d. Service counts
107) Rather than spend money on lead generation programs, new real estate licensees should focus on which of the following marketing techniques?
a. Billboards
b. Cold calling
c. Newspaper inserts
d. Sphere marketing
108) What’s the failure rate for new real estate licensees?
a. 24%
b. 56%
c. 71%
d. 87%
109) Calli is a new licensee. If she wants to succeed in real estate, she should ______.
a. Seek out a broker who does a lot of business.
b. Try to be all things to all people.
c. Work a regular work week (Monday through Friday, 9 a.m. to 5 p.m.).
d. Work hard and stick with it.
110) Which of the following describes marketing to one’s sphere?
a. Buying ad space on bus benches
b. Buying display advertising
c. Connecting with your own network of family and friends
d. Picking a geographic area in which to concentrate efforts
111) Stacey is a new licensee. In order to get the most out of her marketing efforts, what she should concentrate on?
a. Billboards and benches
b. Craigslist and Facebook
c. Her sphere and farm area
d. Radio and TV advertising
112) In order to succeed in real estate, you need to ______.
a. Be disciplined and diligent
b. Focus on making money, not building relationships
c. Never work for free
d. Understand that it’s a better hobby than a business
113) Your cousin wants to get into real estate. Now that you know the reality, you tell your cousin, ______.
a. “Buy advertising; it always works.”
b. “This is the easiest job you’ll ever have.”
c. “Where you work doesn’t really matter.”
d. “You should have six months’ living expenses set aside before beginning.”
114) Natalie has been concentrating her marketing efforts in her farm area, which is ______.
a. An agricultural district
b. A targeted market
c. Her sphere of influence
d. Vacant land
115) Natasha has been working her farm area and is starting to see results. If her efforts are most efficient and effective, how often is she likely sending out her newsletter to the contacts in her farm area?
a. Daily
b. Monthly
c. Quarterly
d. Weekly

116) Which of the following is true about careers related to your real estate experience?
a. Because real estate is so specialized, experience in the field doesn’t translate well to other professions.
b. It’s possible to transition to one of several related careers after becoming an experienced real estate professional.
c. Preparing comparative market analyses allows you to work as an appraiser.
d. Real estate counselors don’t need as much experience as a real estate licensee.
117) Which one of the following is a true statement about commissions when working within a real estate team?
a. Any split you receive will likely be less than if you were not in a team.
b. Commission splits are standard among all teams.
c. It takes longer to earn a commission in a team than if you go on your own.
d. Members of a team share commissions only among team members; the brokerage does not take a split.
e. Malcom decided to join a team within his first brokerage. He will likely _______.
f. Be required to forego his commission for the good of the team
g. Receive a commission check sooner than if he’d been on his own
h. Receive a team blazer
i. Work the full array of real estate tasks
118) Which of the following is true about careers related to real estate?
a. A real estate attorney must have a broker’s license.
b. A real estate license qualifies you for a law degree, with practice limited to real estate.
c. Complementary careers include real estate counseling, appraisal, and education.
d. Only brokers with a teaching certification can be real estate educators.
119) Barb is a real estate broker and has decided real estate sales are not for her. She likes valuing properties, though. What might be a natural career change for her?
a. Real estate appraiser
b. Real estate educator
c. Stager
d. Transaction coordinator
120) What is one advantage of joining a real estate team within a brokerage?
a. Doing so allows you to specialize.
b. Joining a team offers higher commission per transaction.
c. Team membership gives you broad experience.
d. The cooperative agreement includes free advertising.
121) Which one of the following is true about a real estate team?
a. Members compete with one another for business.
b. Only the team leader is responsible for supervision.
c. Team members are generalists.
d. There is usually one lead generator and several specialists, such as buyer agents.
122) You’ve been in real estate for a while, have your broker’s license, and have been serving as an associate broker for several years. If you have business acumen and like managing people, a natural next step in your career would be becoming a _______.
a. Real estate broker
b. Real estate counselor
c. Real estate educator
d. Sales associate

123) Which real estate career requires the ability to advise clients using your extensive real estate expertise and ability to evaluate the potential of a given property?
a. Real estate attorney
b. Real estate counselor
c. Real estate educator
d. Real estate investor
124) What is one disadvantage of joining a team?
a. It may take longer to earn a commission.
b. The risks are minimized.
c. The salary is lower.
d. You may not learn all aspects of real estate due to specialization.
125) Rob is a real estate broker who enjoys helping buyers locate loan programs that suit their financial situation. What’s an obvious alternate career path for Rob?
a. Mortgage broker
b. Real estate appraiser
c. Real estate educator
d. Real estate stager
126) If a new licensee is worried about making commission soon, what is one strategy that could help?
a. Buy display advertising.
b. Join a team.
c. Send a mailer.
d. Spend more than usual on marketing campaigns.

127) If an agent lists a home for his sister and it sells, can the agent accept his commission directly from his sister?
a. No, agents cannot accept commissions from immediate family.
b. No, the commission must go through the agent’s broker.
c. No, the commission must go through the escrow company first.
d. Yes, because she’s a close relative.
128) At what point must an agency disclosure be given?
a. As soon as the relationship becomes more than casual
b. At the first contact
c. At the first conversation
d. At the first in-person meeting
129) Jeremy, a buyer, refused to sign Calli’s agency disclosure form. Later, he decided to use Calli as his agent. How many disclosure forms must Calli retain in her files?
a. Four
b. One
c. Three
d. Two
130) What happens if a consumer who refused to sign an agency disclosure later decides to use that same licensee as their agent?
a. An amendment noting the change in agency status must be signed
b. A new agency disclosure must be signed
c. Nothing, as long as the consumer was presented with the form the first time
d. The old agency disclosure must be discarded
131) Jim from Greater SW Realty represents Andy as the buyer of a parcel of land. Roger, also from Greater SW Realty, has the listing for that land. Is this a dual agency situation?
a. No, because each party has their own representation.
b. No, because land is not subject to dual agency requirements.
c. Yes, because any time more than one party is involved in a transaction, it is dual agency.
d. Yes, because both Jim and Roger work for the same broker.
132) Brenda, a consumer, meets Charlie, a licensee. Which of the following actions could Brenda take that would meet the definition of “more than casual” relating to agency disclosure?
a. Asking for a copy of a flyer for her brother, who is looking to buy
b. Asking for advice in negotiating with another party
c. Inquiring about the availability of a property
d. Inquiring about the price of a property
133) Bradley provided his clients with a dual agency disclosure. He obtained his clients’ signatures and provided copies to his clients. What step did he miss?
a. He did not make sure his clients understood the form before signing it.
b. He did not offer to also mail his clients a certified copy.
c. He did not receive his broker’s permission.
d. No steps; if he obtained signatures, he has done his job.
134) Brad is a dual agent representing Gina and Dawn as buyer and seller, respectively. If Gina tells Brad that Dawn’s home was her childhood home and she is absolutely determined to live there, may Brad share this with Dawn?
a. No, because this is confidential information.
b. Yes, because Dawn may be willing to cut Gina a break because of the family connection to the property.
c. Yes, Dawn will think that is cute.
d. Yes, he must tell her because it is a material fact.

135) Gillian is a real estate licensee who attends a party at the home of a mortgage broker, Tim, with whom she has worked in the past. At the party, Tim offers Gillian tickets to a concert, saying that he can’t use them. She accepts gladly, and laughs when Tim says as he hands the tickets over, “And all I ask in return is that you send a customer or two my way!” Is Gillian guilty of a violation?
a. No, but Tim is.
b. No, there is no violation.
c. Not unless she neglects to disclose the exchange and the value of the tickets to her broker within three days.
d. Yes, Gillian is guilty because she has accepted what is essentially a referral fee from a mortgage broker.
136) Cheri, a licensee, refuses to negotiate for either party in her dual agency transaction. What might happen to Cheri?
a. Nothing; this is perfectly legal.
b. She can be cited for failure to perform.
c. She can be sanctioned for breach of contract.
d. She may lose her license; this is a flagrant violation of licensee duties.
137) For how long must a licensee retain a signed agency disclosure?
a. Forever
b. For one year after the agency relationship ends
c. For three years
d. Until the agency relationship ends
138) Harriet, an out-of-state licensee, is friends with Tonya, a licensee who works with Perfectly at Home. Harriet referred one of her buyer friends to Tonya, so Tonya plans to pay Harriet a referral fee. Which one of the following statements about this fee is true?
a. It’s illegal for Tonya to pay an out-of-state licensee a referral fee.
b. Referral fees have no disclosure requirements.
c. Tonya must pay the fee directly to Harriet since Harriet is an out-of-state licensee.
d. Tonya must pay the referral fee through her brokerage firm to Harriet’s brokerage firm.
139) Kamut met with Amy, a buyer, and showed her his new listing. If Amy is unrepresented, did Kamut err by not providing Amy with an agency disclosure?
a. No, because he is the listing agent
b. Only if Amy asked for advice or offered confidential information
c. Yes, because any time you meet with a buyer, you must provide agency disclosure
d. Yes, because he showed her property
140) With written permission, Robert, a licensee, represents two separate parties who each want to buy a new townhome. What do you know about Robert’s situation?
a. Robert is a dual agent
b. Robert is breaching his fiduciary duty
c. Robert is in violation of agency law
d. Robert must also be an attorney
141) Margie wrote an offer for Lisa on 645 Rudolph Street on Tuesday. Before hearing back, another client decides she would also like to write an offer on 645 Rudolph Street. May Margie write a competing offer?
a. No, this would breach her fiduciary duty to Lisa.
b. Yes, if both parties sign a dual agency disclosure.
c. Yes, if Lisa doesn’t find out about it.
d. Yes, if the new offer is lower than Lisa’s offer.
142) Risa is a licensee. She told Kim, her seller client, about Ranger’s willingness to pay more for her house—something Ranger did not want Kim to know. Did Risa violate her duties?
a. No, because a licensee’s duty to a seller is greater than that to a buyer
b. No, because licensees may share confidential information with their clients, no matter the source
c. Yes, because Ranger did not want the seller to know
d. Yes, if Ranger is also a client

143) Before entering into an agency relationship with a consumer, what must a licensee do?
a. Ask their broker’s permission
b. Discuss commission rates
c. Provide a lead-based paint pamphlet
d. Provide an agency disclosure form and obtain signatures
144) Which of the following situations would require agency disclosure?
a. A prospective buyer asks a licensee whether appliances are ENERGY STAR®
b. A prospective buyer asks a listing agent the price of the property
c. A prospective buyer asks an agent their license status
d. A prospective buyer asks an agent why the sellers are moving
145) Chuck represents Benny. April is buying Benny’s property, but Chuck does not represent her. Which duty does Chuck owe Benny that he does not owe to April?
a. Confidentiality
b. Disclosure of material facts
c. Good faith
d. Honesty
146) To whom does an agent owe the duty of disclosure of material facts?
a. All parties to a transaction
b. The buyer, if a client
c. The seller, if a client
d. The seller or buyer, if they are customers
147) Which of the following situations would qualify as “more than casual,” and therefore require an agency disclosure form to be signed?
a. When a ‘for sale by owner’ seller asks a licensee whether the licensee believes the house is overpriced
b. When a licensee shows a couple who is expecting their first child around an open house
c. When a listing agent shows an unrepresented buyer their own listing
d. When a listing agent shows a visitor around at an open house
148) Connie is a new licensee and has just entered into an agency relationship after obtaining a signed agency disclosure from her new client. What must Connie do now?
a. Give a copy to her client and retain the form for three years
b. Have the form notarized and provide a copy to her client
c. Record the document with the county
d. Shred the document, as it contains financial information
149) You work for XYZ Realty under the supervision of broker Luke. Your buddy in the next county gave you a referral fee. The check came to your office in your name. You deposit it. Is this okay?
a. No, because agents can only be paid directly if they’re paid in cash.
b. No, because all compensation must come through your broker.
c. Yes, if the check is endorsed by your broker, as well.
d. Yes, provided your broker knows about the check.

150) To whom must a licensee, representing a buyer, disclose agency status?
a. All parties in the transaction
b. Broker
c. Buyer
d. Seller
151) Bill is a seller who tells his neighbor, “I got lucky! My listing agent is buying my house from me.” What could be the danger to Bill?
a. Additional taxes may apply if the sale happened too quickly
b. Bill might have to pay extra commission
c. Bill’s agent might not have marketed the property well, hoping to get a reduced price
d. His neighbors won’t want a real estate licensee living next to them
152) Which of these is NOT an example of agency coupled with interest?
a. Carma agrees to list Tera’s property for free if Tera signs an agreement to purchase her new home through Carma.
b. Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller.
c. Jeanine agrees to charge no commission from her buyer’s purchase of a four-plex if the buyer agrees to pay Jeanine a 3% fee for each unit for which she finds a tenant after the sale.
d. Rhoda loans Carl the money to catch up his mortgage payments in return for a listing agreement to sell Carl’s home for a 4% commission.
153) Mark didn’t like the offered cooperative commission rate, so he wrote a higher commission rate into his buyer client’s offer. Did he do anything wrong?
a. No, as long as he had his client’s permission.
b. No, because commission rates are negotiable.
c. Yes, because he is interfering with the contractual relationship between the listing agent and seller.
d. Yes, because making a change to a contract is practicing law without a license.

154) 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.
155) 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.
156) Under what circumstances would undisclosed dual agency be most likely to occur?
a. When meeting a buyer at an open house
b. When meeting a seller at an open house
c. When representing a seller and assisting an unrepresented buyer
d. When representing the buyer and assisting a seller who is represented by another broker
157) Janice is a licensee with a buyer client who just found a great house. Which of the following is she NOT required to disclose to her client?
a. She co-owns the property.
b. She knows the house was damaged in a severe fire two years ago.
c. She lives two blocks away.
d. The owner is her brother-in-law.

158) Danielle is selling her home and has enlisted Camden as her agent. Shortly after signing the listing agreement, Camden informs Danielle that he’d like to purchase her home. What can Danielle do?
a. Danielle may cancel the listing agreement and seek representation from another agent.
b. Danielle must accept Camden’s offer.
c. Danielle must cancel the listing agreement.
d. She already signed the listing agreement with Camden. She must fulfill the contract.
159) Which of the following is a true statement about buying one’s own listing?
a. Even when it’s legal, some brokerages won’t allow their agents to do it.
b. If full disclosure is provided to the seller, it is fine to do.
c. It is always illegal.
d. It’s a great way to make money in real estate.
160) Sue believes she’s about to get into an undisclosed dual agency position. What should she do?
a. Inform all parties to the transaction
b. Inform the seller
c. Say nothing
d. Terminate her agency relationship
161) If a listing agent is interested in purchasing her own listing, what must that agent do?
a. Disclose to the seller that the agent is interested in purchasing the property.
b. Hold any other offers so the seller accepts the listing agent’s offer.
c. Price the property above fair market value so the seller gets a better deal.
d. Price the property below fair market value so the agent gets a better deal.

162) Which of these is an example of agency coupled with interest?
a. A listing agent agrees to accept a commission of 2.5% upon sale of the property.
b. A listing agent agrees to split the commission on the sale of a property with a cooperating agent who brings the buyer to the table.
c. An agent foregoes buyer agent commission, provided the purchasing developer gives the agent the listings on the developed lots.
d. An agent is interested a property the agent has listed.

163) You’ve been practicing real estate for a while and decide to purchase a property as an investment along with a business partner (who’s not a real estate broker). Since you’re a licensee, which of these actions must you take?
a. You must be represented by another broker in this transaction.
b. You must disclose your licensed status, any conflicts of interest, and any relevant facts that might affect the seller’s decision to accept your offer to the seller.
c. You must offer the full list price, regardless of any other factors affecting the property value.
d. You must sign an agency agreement to represent your business partner before you can make an offer to the seller.

164) Savvy’s buyer client made an offer on a property but is having second thoughts. Savvy tells her client that she’ll ask the seller’s agent for an extension on the inspection period “to gather more bids,” and use that time to look at other properties to avoid losing out on the current property. Savvy’s client found a property she liked better, so they made an offer. The offer was accepted, so Savvy contacted the first property’s agent to terminate that offer. Is this wrong?
a. No, she acted in her client’s best interest.
b. No, she fulfilled her duty of loyalty to her client.
c. Yes, she broke a contract.
d. Yes, she did not treat the other party honestly, or act in good faith.
165) In a real estate transaction, which two parties are owed the same duties?
a. Clients and cooperating agents
b. Clients and customers
c. Clients and other parties
d. Customers and other parties
166) In a real estate transaction in which you represent the seller, your duty to other parties is to ______.
a. Be honest in all matters that do not affect your client’s interests
b. Be polite and courteous
c. Maintain the confidentiality of all matters that other parties disclose to you
d. Treat them honestly and fairly
167) Jason is the seller’s agent. His seller has a leaky roof he’d rather keep secret from buyers. What should Jason do?
a. Fulfill his duty of loyalty. Revealing the roof leak may not be in his client’s best interest.
b. Fulfill his duty of obedience by keeping the roof secret, as his client instructed.
c. Inform the seller that the roof leak is a material fact that he is obligated to disclose to buyers.
d. Quit representing the seller.

168) When representing the seller, what duty do you owe a buyer?
a. Advise the buyer on negotiating a better price.
b. Pre-qualify the buyer before presenting their offer to your seller.
c. Present offers from the buyer to your seller.
d. Recommend the buyer obtain a property inspection.
169) Jerry is a licensee employed by Sal, a real estate broker. Jerry must adhere to the policies, procedures and lawful instruction of Sal. What duty is this an example of?
a. Accountability
b. Disclosure
c. Obedience
d. Reasonable skill and care
170) Zack represents a seller and receives an offer through another agent. The offer is higher than the listing price. The property is already listed at a very high price, and no other offers have been received. Is Zack obligated by his duties to the other party to disclose that the offer is too high?
a. No, but Zack should honor his duty to all parties by asking his client to decline the offer.
b. No, his fiduciary duty is to his own client. The buyer’s agent must be responsible for advising on a fair price for the property.
c. Yes, Zack must be honest and fair with all parties in the transaction.
d. Zack can request that both parties consent to dual agency so that he can negotiate an honest price that will be fair to all.
171) In which of these situations has the licensee compromised the duties of loyalty and disclosure?
a. Diana, the seller’s agent, presented an offer to the seller even though it was under list price.
b. Hillary, in working with the seller, told the buyer about a material defect the seller hadn’t disclosed.
c. Josie, in listing Rob’s property, failed to disclose to Rob that he represents the seller.
d. Nate didn’t tell his client about a conflict of interest related to the sale of his client’s property.

172) Which of the following is an example of an agent exercising the duties owed to customers and other parties?
a. Ari didn’t present the buyer’s offer to the seller, since it was a lowball offer.
b. Francine disclosed information about the flooding basement to the buyer and buyer’s agent.
c. Mark complied with the buyer’s agent’s instructions to change the available times for showings so the potential buyer could see the property.
d. With her client’s permission, Missy shared the entire inspection report with the seller’s agent.
173) You represent Ember as her listing agent. Ashley is the buyer, and Trinity represents her. What duties do you owe Trinity?
a. Honesty and fairness
b. The duty of confidentiality
c. The duty of loyalty
d. The same duties you owe Ember
174) Your seller client asks you not to mention to buyers that the basement leaked last year. Should you obey?
a. No, because obedience is not a required duty.
b. No, because the leak occurred last year.
c. No, because this is a material fact related to the property.
d. Yes, because obedience is a fiduciary duty.
175) Your seller client needs to sell as soon as possible. How should you respond if a prospective buyer asks you whether your seller is firm on price?
a. “I don’t know.”
b. “The seller believes the home is priced fairly. I suggest you write your highest and best offer.”
c. “The seller is highly motivated.”
d. “The seller would probably be willing to entertain any offer.”

176) Jack is a licensee employed by Steve, a real estate broker. Jack just heard that the brokerage is representing a well-known professional athlete looking for a new property. He tells a couple of his friends, who happen to be avid fans. Which duty did Jack break?
a. Accounting
b. Confidentiality
c. Disclosure
d. Reasonable skill and care
177) Which of the following duties are owed to customers and other parties to a real estate transaction?
a. Fairness and loyalty
b. Honesty and fairness
c. Honesty and obedience
d. Obedience and loyalty
178) Which of the following is an example of self-dealing?
a. A licensee lists his property with another firm and sells his home without informing buyers of his license status.
b. A licensee purchases a listing through his cousin but does not inform the seller.
c. A licensee purchases a property for personal profit.
d. A licensee sells a property for personal profit.
179) Which of the following is true of a material fact?
a. A material fact is known only to real estate licensees.
b. A material fact is only related to the condition of a property.
c. A material fact need not be disclosed to all parties.
d. A material fact would cause a reasonable person to not take an action that would otherwise be taken, or take an action that would otherwise not be taken.
180) Leo’s client is looking for a property with at least 2,500 finished square feet. Leo finds a 2,200-square-foot property with all the other features the client is looking for, and purposely doesn’t mention the square footage to his client. His client agrees to look at the property, falls in love with it, and wants to make an offer, but does not realize it doesn’t contain his desired square footage. Which of these statements accurately represents Leo’s level of misrepresentation in this situation?
a. Because Leo didn’t state the square footage, he’s not guilty of misrepresentation.
b. It’s the buyer’s responsibility to ensure that the property has the proper square footage, so Leo’s in the clear.
c. Leo accidentally omitted a material fact. This is considered unintentional misrepresentation.
d. Leo knew about the square footage and intentionally didn’t mention it. He’s guilty of intentional misrepresentation.
181) Which of the following is true about inadvertent misrepresentation?
a. A false statement was made.
b. No harm was done to anyone.
c. The person hearing the false statement did not rely upon it.
d. The
182) Which of the following is an example of puffery?
a. “I love this house, and I know it will appreciate better than the average house its size!”
b. “This apartment will definitely increase in value. You can’t lose!”
c. “This condo has the best view this side of the river!”
d. “This home is built to last. You won’t have maintenance issues for a decade, at least!”
183) In order for misrepresentation to occur, what must happen to the person who relied upon it?
a. He must be harmed.
b. He must believe the statement to be false.
c. He must not be harmed.
d. He must research all claims.
184) The main difference between puffery and misrepresentation is that _______.
a. Misrepresentation doesn’t exaggerate
b. Misrepresentation falsely represents material facts that a reasonable person would rely upon
c. Puffery doesn’t make wild claims
d. Puffery is used to help sell a property
185) What is misrepresentation?
a. An inadvertent misstatement of fact only
b. An intentional misstatement of fact only
c. An intentional or inadvertent misstatement of fact
d. A statement of opinion or exaggeration that’s generally understood to not be a statement of fact person making the false statement knew it was false.

186) What’s the difference between commingling and conversion?
a. Commingling involves client funds; conversion involves your own funds.
b. Commingling is mixing client funds with your own; conversion is using them.
c. Only commingling is illegal.
d. They’re essentially the same thing.
187) One element of intentional misrepresentation is that ______.
a. No one relied on the false statement
b. The false statement did not cause harm to the person who relied upon it
c. The person making the false statement knew it was false (or should have known)
d. The person relying on the false information knew it to be false
188) What is the difference between positive misrepresentation and inadvertent misrepresentation?
a. Positive involves a beneficial outcome; inadvertent results in a negative outcome.
b. Positive means intentional; inadvertent means it wasn’t intentional.
c. Positive means made by the seller’s side; inadvertent is misrepresentation by the buyer’s side.
d. Positive means the parties agreed to the facts; inadvertent means the parties disputed the facts.
189) What is puffery?
a. A home’s list price is inflated to make it appear more luxurious than it really is
b. An intentional or inadvertent misstatement of fact
c. A real estate licensee boasts about the price for which he can sell a home
d. A statement of opinion or exaggeration that’s generally understood not to be a statement of fact

190) What types of misrepresentation exist?
a. Blatant and hidden
b. Blatant and unintentional
c. Intentional and accidental
d. Positive and unintentional
191) Which of the following is true about positive misrepresentation?
a. A principal was harmed by the misstatement.
b. The misstatement ended in a positive outcome.
c. The misstatement wasn’t relied upon.
d. The person making the misstatement did not know it was false.
192) Which of the following is an example of a material fact?
a. The fact doesn’t influence the value of the property.
b. The fact would not have resulted in a different outcome.
c. The seller would have accepted an offer regardless of the fact.
d. The seller would not have accepted an offer had the fact been known.
193) A licensee stating that a property is “guaranteed to increase in value over the next five years” is an example of ______.
a. A fact
b. An aphorism
c. Misrepresentation
d. Puffery

194) Which of the following is true of the harm caused to a person relying on false information?
a. The harm can be physical or monetary.
b. The harm must be monetary.
c. The harm must be physical.
d. The monetary harm must exceed a specific dollar threshold.

195) As soon as potential buyers contact Amelia, she sets them up to receive weekly emails with listings that fit what they’re looking for. The thing is, they hardly ever get in touch with her after that. What’s the best thing Amelia could do to improve her likelihood of sealing the deal?
a. Call to make sure her emails aren’t going into their spam folders.
b. Have an in-person buyer presentation meeting.
c. Increase the number of emails to three times a week.
d. Send them a postcard, as well.
196) What type of buyer tends to know little about the home buying process, has limited funds, and may be borrowing down payment money from relatives?
197) First-time buyer
198) Retiree
199) Trade-down buyer
200) Trade-up buyer
201) Janelle is eager to have a place to call her own. She brings her mom and best friend to every showing and relies heavily on their opinions, since she doesn’t know much about the process. After years of apartment living, she’s looking for a place with some space and privacy. What type of buyer is Janelle?
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
202) A call from a buyer who saw your sign in the yard of a recent listing needs to be qualified. What problem situation is possible with these types of buyer calls?
a. Buyers who call after seeing your sign are probably not serious about buying.
b. Buyers who call after seeing your sign are unlikely to have a pre-approval letter.
c. Buyers who call after seeing your sign may already be working with a licensee at your firm.
d. Buyers who call after seeing your sign may have another home to sell before buying.
203) Which of the following is a true statement regarding working with buyers?
a. Assisting buyers is typically a very short-term prospect.
b. It’s important to work with all buyers, whether or not they’re currently ready to buy.
c. They will always buy from you if you put in effort for them.
d. You should pre-qualify buyers before deciding to work with them.
204) Prior to offering services to a potential buyer, why would an agent want to ask questions to pre-qualify a buyer?
a. To add the buyer to a contact database
b. To find out if the buyer is worth the agent’s time
c. To steer the buyer toward a specific lender
d. To take the buyer away from a competing agent
205) Owning a condo on a golf course is Tom’s goal, and Erma is happy to be along for the ride. The condo association takes care of maintenance, and Tom is steps away from the clubhouse at all times. What better way to spend their golden years? What type of buyers are Tom and Erma?
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
206) From a buyer’s perspective, what’s the primary benefit of signing a buyer agency agreement?
a. It ensures a higher level of service.
b. It ensures that the buyer will find the right property at the right price.
c. The buyer cannot purchase real estate without one.
d. The buyer is on the hook for the entire commission without one.

207) Where is the best place to hold a sit-down meeting with a new buyer client?
a. At the buyer’s home
b. At your office
c. Over the phone
d. Via a video conference
208) A prior client referred her sister to you because she wants to finally buy a house instead of renting. When you meet with the sister, she shares that she’s been looking for almost 18 months and “simply can’t find anything suitable.” What red flag does this indicate?
a. The buyer has unrealistic expectations and may never commit.
b. The buyer has used too many contingencies with her prior offers.
c. The buyer probably can’t get financing.
d. The housing inventory is too small to support the buyer population.
209) What’s an appropriate strategy when working with a new buyer who hasn’t been pre-qualified and isn’t working with a lender?
a. Ask the buyer a series of financial questions to determine the price range the buyer should be looking in.
b. Provide the buyer with contact information for three qualified lenders.
c. Recommend your favorite lender.
d. Refuse to work with a buyer until the buyer has been pre-qualified.
210) A buyer representation agreement establishes an agency relationship between which parties?
a. Buyer and broker
b. Buyer and salesperson
c. Seller and broker
d. Seller and salesperson
211) ________ have a fixed income, but they may have large down payments from selling prior homes. Accessible properties with little to no maintenance tend to be attractive to these buyers.
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
212) Licensee Janice has found a way to work with prospective buyers without ever leaving her desk: She sets them up with automated email messages for listings that meet their criteria, and answers any questions they have when they call. Is Janice doing anything wrong?
a. No, this is how agents work with buyers.
b. No, this is how all agents work.
c. Yes, because she should meet them in person before working for them.
d. Yes, because this constitutes the illegal practice of real estate.
213) What’s something you should definitely do when conducting a buyer presentation?
a. Ask probing financial questions.
b. Explain the transaction process.
c. Focus on your track record as a sales professional.
d. Obtain copies of the buyer’s last two pay stubs.
214) Judy is in her 70s and has just listed her two-story home on a quarter-acre lot. Although she loves her home, it’s getting harder to go upstairs and to manage all the yard work that her land requires. She’s going to make an offer on a small, one-story condo where she can walk to the market. What type of buyer is she?
a. First-time buyer
b. Investor
c. Retiree
d. Trade-up buyer

215) Butch and Meg listed their five-bedroom Colonial and are looking for a three-bedroom luxury townhome to buy. Now that their kids have grown and moved away, they don’t need such a big house, but definitely want to be close to parks, major travel routes, and the local casino (Meg loves the slots). What buyer category most fits Butch and Meg?
a. First-time homebuyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
216) Danny and Sandy just had their second child. They live in a two-bedroom home and would like for their girls to each have their own room, so they’re looking for a home with at least three bedrooms. What kind of buyers are they?
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
217) When preparing a buyer presentation, what should you keep in mind?
a. The buyer’s national origin
b. Ways to build trust
c. Your commission
d. Your well-rehearsed sales pitch
218) This type of buyer is new to the process and asks a lot of questions. The buyer may be moving out of a family home or apartment into a small, modest home.
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
219) Why might you opt out of working with a buyer unless you’re working under an agency agreement?
a. An agency agreement is required by law.
b. Having an agency agreement allows you to represent the buyer’s interests.
c. It commits the buyer to a two-year contract.
d. It would be dual agency.
220) What is a major benefit to a buyer for signing a buyer representation agreement?
a. It costs less
b. It guarantees the agent will get a commission
c. It makes the buyer look better
d. Representation
221) When working with new buyers, it’s important to qualify the buyers before devoting too much time to them. What type of qualifying is important?
a. Age
b. Ethnicity
c. Family status
d. Readiness
222) Claudius has some trust issues; he’s been to three different brokerages already and still refuses to sign an agency agreement. He says he wants to “keep my options open.” What should you tell him?
a. “I can’t represent you without a written agreement.”
b. “If you sign today, I’ll waive the administrative fee.”
c. “Signing the form is legally required.”
d. “You won’t be able to enter into a contract without buyer representation.”
223) Why might a licensee want a buyer to sign a buyer representation agreement?
a. It helps ensure buyer loyalty.
b. It provides the agent with bragging rights.
c. It’s required by law.
d. It will ensure that he’ll receive the standard commission rate.
224) When buyers contact you for the first time, why is it important to ask how they found you?
a. If they refuse to give you an answer, they are probably not serious buyers.
b. It can help you determine what additional questions to ask.
c. You want to make sure it isn’t a telemarketer just claiming to be a potential buyer.
d. You want to make sure your name isn’t appearing anywhere that you haven’t approved.
225) ______ rely on their knowledge from previous homebuying experiences. This experience helps them to identify what they’re looking for in a new property, which is often more space or a newer home with a good location and extra living space.
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
226) Why should you ask potential buyer clients if they need to sell their home before purchasing a new one?
a. If they don’t, they’re probably wasting your time.
b. Selling their home before purchasing a new one is more work for you and might not be worth your time.
c. Their current home might be a potential listing for you.
d. You won’t need to check their credit if they’ve qualified for a home in the past.
227) What is the primary purpose of making a buyer presentation before representing a client?
a. To build trust
b. To earn your commission
c. To establish credentials
d. To show properties
228) Maurice is meeting with a buyer who is also selling his current home. Which question should Maurice ask to pre-qualify the buyer?
a. Are you currently working with any other agents?
b. Have you ever been convicted of any felonies?
c. What is your income?
d. What is your tax bracket?
229) From a real estate licensee’s standpoint, what’s the purpose of qualifying buyers before working with them?
a. To determine their financial wherewithal
b. To determine their readiness to purchase and make sure they’re not already working with another agent
c. To learn if you have things in common with them
d. To pre-qualify them for a loan
230) What type of agreement is most commonly used as a buyer representation agreement?
a. Exclusive right-to-represent
b. Exclusive right-to-sell
c. Net listing
d. Open listing

231) What’s the purpose of a buyer presentation?
a. To build rapport with the buyer
b. To run the buyer’s numbers for financial purposes
c. To sell the buyer on a specific neighborhood
d. To sell the buyer on your credentials
232) This type of buyer lives on a fixed income and is looking for a smaller property that requires little to no maintenance. Accessibility is an appealing feature this buyer type.
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
233) Which of the following is a good tip to follow when identifying properties to show a buyer?
a. Identify properties above the buyer’s price range.
b. Identify properties sold within the last three to six months.
c. Identify properties that are no longer on the market.
d. Identify properties within the buyer’s price range.
234) Rose, a new licensee, is thrilled that a potential buyer client has agreed to have a sit-down meeting with her. Where should this meeting take place?
a. Anywhere, as long as it’s a public place
b. At a coffee shop
c. At Rose’s office
d. At the buyer’s home
235) “I get why YOU want a buyer representation agreement,” your buyer tells you. “But what’s in it for me?” You answer ____________.
a. “It is required by law.”
b. “Without it, I owe you no duties.”
c. “Without it, I won’t work very hard for you.”
d. “Without it, you are unrepresented.”
236) Mark is trying to set up a face-to-face meeting with potential buyers the Tomlins, but the Tomlins have refused. What should Mark do next?
a. Give their number to a colleague and hope for referral compensation.
b. Give up.
c. Politely insist on a meeting.
d. Wait a week and then call them again.
237) What is the very first thing that a licensee should do when beginning a buyer presentation?
a. Discuss any agency disclosure information.
b. Do a walk-through to understand the buyer’s style and preferences.
c. Have the buyers sign a representation agreement.
d. Present the buyer with a rate card.
238) Dawn is a real estate licensee working with Midge, a buyer. If Dawn were trying to explain the advantages of a buyer representation to Midge, what could she say?
a. “All buyers are required to sign buyer representation agreements.”
b. “Buyer representation agreements don’t obligate you in any way.”
c. “Without a written representation agreement, I don’t represent you.”
d. “You won’t owe as much commission if we work under an agreement.”

239) Using a buyer’s pre-approval or pre-qualification can help in ______ properties.
a. Identifying
b. Inspecting
c. Researching
d. Showing
240) If you’re working with potential buyers who are currently renting, why should you ask when their rental contract is up?
a. It’s illegal to buy a house if they are currently under a rental contract.
b. It will help you establish a purchase time frame.
c. Renters are rarely serious buyers.
d. You will need to talk to their landlord before you can begin searching for a home for them.
241) If buyer customers initially contact you because they saw your number on a yard sign, what could this mean?
a. The buyers are not serious about buying a home.
b. The buyers do not want to commit to becoming your clients.
c. This could end up being a dual agency situation.
d. You cannot answer any questions since you represent the seller.
242) Kramer is a buyer who just signed a buyer agency agreement. He likely did this so that ______.
a. He could avoid breaking the law
b. He could avoid paying commission
c. He would receive a higher level of service
d. He would receive more service while paying a bit more for that service
243) Bonnie always schedules an in-person meeting with prospective buyers before she begins sending them data on properties. Why might this be?
a. She needs their written permission to send them data.
b. She needs to define the buyers’ needs and wants.
c. She needs to have them sign an agency agreement before she can work with them.
d. She needs to see if she likes them enough to work with them.
244) Which of the following is an advantage of scheduling an in-person meeting with potential buyers?
a. Because they have invested time with you, they’ll be less likely to want to start all over with another broker.
b. You can ask them a series of questions to determine if they have the financial means to be worthwhile clients.
c. You can impress your boss by holding a steady stream of meetings at the office.
d. You have the opportunity to show them high-end properties that will result in a hefty commission for you.
245) Boy, have these last 18 years flown by. The Martins remember the day their son was born like it was yesterday. And here he is today, preparing to head off to college. Now that he’ll be out of the house soon, the Martins really don’t need a house this large. What type of buyer are the Martins?
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
246) Licensee Alex is doing a buyer presentation for the Reynolds family. She explains that she would be committed to helping them find a property that will best meet their needs. She will work around their second-shift schedules whenever possible, and always returns calls within the same business day unless she is with another client. Which quality does this demonstrate?
a. Confidentiality
b. Experience
c. Professionalism
d. Service mindset

247) Which of the following is a role of an agent who’s assisting the buyer, but representing the seller?
a. Advise the buyer on an appropriate price.
b. Negotiate for the buyer.
c. Present the buyer’s offer.
d. Select the buyer’s lender.
248) Why might some agents work for buyers without ever having met them?
a. It’s the most effective use of their time.
b. They believe they’ll be able to get the buyer to commit to an agency agreement later.
c. They don’t particularly like people.
d. They’re afraid to turn down any business.
249) What’s an advantage an in-person meeting has over another way of communicating with a potential buyer client?
a. It increases the likelihood that the buyer will purchase a more expensive property.
b. It puts pressure on clients to sign a buyer representation agreement.
c. Licensees can get a signed agreement faster that way.
d. Since they’ve had face time with the licensee, buyers are more likely to stay with that broker.
250) Buyers in this category want to purchase smaller homes, likely because their children have moved out or because their financial situation has changed. Many look for smaller properties that can offer the same quality of living as the property they’re moving from.
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
251) What type of buyer tends to look for properties with less space than their existing home, but that will still offer them a similar quality of living?
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
252) The Elliotts have lived in their current house for five years. Space got a little tight after their first child was born. Now that they’re expecting their second child, they’ve decided they really need a new house with more space in a good school district. What type of buyers are the Elliotts?
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
253) If your cousin Jack is contemplating his first home purchase and wants to use you as his agent, should you pre-qualify Jack before working with him?
a. No, because you can’t work with relatives.
b. No, it’s not necessary to pre-qualify relatives.
c. Yes, because he’s a relative, you can ask financial questions and pre-qualify him yourself.
d. Yes, you should determine whether Jack is ready to buy.
254) These types of buyers want to purchase larger or newer homes. They’re fairly knowledgeable because they’ve purchased before.
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer

255) Which of the following items can you expect to see on a buyer representation agreement?
a. Description of the property being sought and obligations of the seller to the buyer
b. Description of the property being sought, method and timing of the broker’s compensation, and obligations of the buyer and the buyer’s agent
c. Method and timing of the broker’s compensation and obligations of the seller to the buyer and agent
d. Obligations of the buyer, the seller, the buyer’s agent, and the seller’s agent

256) Rick is a licensee who’s meeting with a prospective new client, Kate. Kate is looking to purchase a home, and would like Rick to represent her throughout the process. Which agreement should Rick and Kate enter into?
a. Exclusive right-to-represent
b. Exclusive right-to-sell
c. Net listing

257) When working with potential buyers who say they just want a little information but won’t sign a buyer representation agreement, why should you recommend they become clients?
a. By law, buyers must be represented in order for the transaction to proceed.
b. If they won’t sign an agency agreement, there’s a higher chance they won’t be loyal to you.
c. It’s illegal to give potential buyers information without a signed buyer representation agreement.
d. When they sign a buyer representation agreement, you can then run their credit report to make sure they’re worth your time.Open listing
258) Buyers are typically in a power position in ______ markets.
a. Cold
b. Dynamic
c. Hot
d. Static
259) Your buyer client is making an offer on her first home Although she can afford the full listing price, you advise her to offer 10% below the list price. What’s a good reason for doing so?
a. The market is cold.
b. The market is heating up.
c. The market is hot.
d. The market is neutral.
260) Which of the following is an example of an escalator offer with a cap?
a. Buyer offers $750,000. Seller accepts.
b. Buyer offers $750,000. Seller counters at $775,000. Buyer accepts.
c. Buyer offers $750,000. Seller counters at $775,000. Buyer counters back at $765,000.
d. Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000 up to $775,000.
261) When a seller’s need is related to obtaining a specific price, what can a buyer offer to meet that need?
a. An escalation clause
b. A quick closing
c. Full price or more than full price
d. Waive appraisal
262) If a seller is concerned about an appraisal, what can a buyer do to address this need when structuring the offer?
a. Allow an escalation clause.
b. Offer a quick close.
c. Offer full price or more than full price.
d. Waive the appraisal.
263) Which of these dangers might buyer’s agents see from clients in a cold market?
a. Being outbid by another buyer
b. Being tempted to offer above their price range to win a bidding war
c. Waiting too long and missing the market
d. Waiving inspection
264) When a seller wants to expedite the closing process, what can a buyer offer to address this need?
a. An escalation clause
b. A quick closing
c. Full price or over full price
d. Waive appraisal
265) Dani is in love with the ranch-style home on Cardinal Avenue, says she simply must have it, and is willing to pay cash. The seller is concerned about an appraisal. Which of the following would be a good strategy for structuring her offer?
a. Include an escalation clause.
b. Offer a quick close.
c. Waive the appraisal.
d. Waive the inspection.

266) ______ tend to benefit most in a hot market.
a. Buyers
b. Clients
c. Customers
d. Sellers
267) Which of the following is an example of an escalator offer without a cap?
a. Buyer offers $750,000. Seller counters at $775,000. Buyer accepts.
b. Buyer offers $750,000. Seller counters at $775,000. Buyer counters back at $765,000.
c. Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000.
d. Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000 up to $775,000.
268) Which of the following is a way a buyer’s agent can find off-market listings?
a. Check out For Sale by Owner sites.
b. Contact sellers who are under contract to see if they’ll terminate their contract.
c. Search the MLS.
d. Visit real estate brokerage websites to see what properties they are advertising.
269) Jamie is looking to purchase a home. He is hesitant to ask for repairs and risk the seller accepting a different offer. In what type of market is this concern most valid?
a. Cold
b. Dynamic
c. Hot
d. Static
270) With certain types of off-market listings only the listing agent, the seller, and individuals the seller and listing agent have informed know the property is for sale. What’s another term these listings are also known as?
a. Illegal
b. MLS listings
c. Pocket listings
d. Sold properties
271) In what type of market could the buyer’s strategy be to offer 10% below list price?
a. Cold market
b. Hot market
c. Neutral market
d. Secondary market
272) Sellers are typically in a power position in ______ markets.
a. Cold
b. Dynamic
c. Hot
d. Static
273) The Hendersons are having a very difficult time finding a property that meets their needs. What is a way they can find off-market listings?
a. Ask a real estate agent to poll her sphere of influence.
b. Ask a real estate agent to search the MLS.
c. Search homebuying websites.
d. Visit real estate brokerages to see what properties they are advertising.

274) Your buyer clients really like the patio set and bedroom furniture in the house you’ve just shown them. Because the market is hot, what would you advise they do?
a. Ask for the one thing they like best as part of their offer but not the other.
b. Ask for those items and more as part of their offer.
c. Ask for those items as part of their offer.
d. Don’t include those items in their offer.
275) Your buyer clients are submitting an offer on a newly built home in a very trendy part of town. The seller requires that the home be sold for at least $450,000. What is a good strategy for structuring the offer in this case?
a. Offer a quick close.
b. Offer full price or more.
c. Waive the appraisal.
d. Waive the escalation clause.
276) When competing against other offers, what can a buyer do to make their offer more competitive?
a. Include inspection and appraisal contingencies
b. Include terms favorable to the buyer
c. Include terms favorable to the seller
d. Obtain a pre-qualification instead of a pre-approval

277) Bob and Dina are putting together an offer on the property. Which of these items would make their offer LESS competitive and possibly cause another buyer’s offer to be accepted?
a. Higher-than-full-price offer
b. Large earnest money payment
c. Seller grace period after closing
d. Seller pays a portion of the buyer’s closing costs
278) The National Association of REALTORS® Board of Directors enacted MLS Statement 8.0. What’s its more common name?
a. Clarity in Cooperation
b. Clear and Cooperative
c. Clear Cooperation policy
d. Cooperative Clarity
279) Your buyer clients are submitting an offer on a home where the seller is moving to another state and wants to expedite the closing process. What would be a good strategy for structuring an offer in this case?
a. Include an escalation clause.
b. Make a full price offer.
c. Offer a quick close.
d. Waive the appraisal.
280) How may licensees market office exclusive listings?
a. Announcements to other licensees affiliated with the same brokerage firm
b. A page on the firm’s website
c. Emails to a curated list
d. Private listing network
281) In what type of market is a buyer cautioned against asking for personal items?
a. Cold market
b. Hot market
c. Neutral market
d. Secondary market

282) Which of these actions could make a buyer’s offer more competitive?
a. Below-list-price offer
b. Full-price offer, with seller paying buyer closing costs
c. Higher-than-full-price offer
d. Include terms favorable to the buyer
283) What is the buyer benefit of including a cap on an escalator offer?
a. It could cause the buyer to lose out on a property by as little as $1.
b. It helps ensure the buyer stays within an affordable price range.
c. It helps the buyer avoid a default.
d. It tells the seller the maximum the buyer is willing to pay.
284) Larry is buying a new home and has assembled quite a list of repairs he’d like the seller to make to the property. The seller, fearing she might lose this buyer, agrees to every item on the list. In what type of market is this concern most valid?
a. Cold
b. Dynamic
c. Hot
d. Static
285) ______ tend to benefit most in a cold market.
a. Buyers
b. Clients
c. Customers
d. Sellers
286) In what type of market could a buyer’s strategy be to ask the seller to pay closing costs?
a. Cold market
b. Hot market
c. Neutral market
d. Secondary market

287) Which of the following statements accurately represents a major difference between a pre-approval letter and a pre-qualification letter?
a. Buyers receive a pre-approval letter only after the lender has verified at least some information the buyer provided.
b. Pre-approval letters mean that the buyer has received final approval for a loan after going through the entire loan process.
c. Pre-qualification letters are more difficult to get than pre-approval letters.
d. Unlike a pre-approval letter, a pre-qualification letter ensures that the lender has verified information the buyer provided.
288) What happens when an appraisal comes in lower than the agreed-upon sales price?
a. A new appraisal will always be ordered.
b. The buyer will be forced to terminate the contract immediately.
c. The parties may choose to negotiate the difference.
d. The seller must reduce the price to the appraised value.
289) Which of the following is true regarding loan pre-qualification and pre-approval?
a. Pre-approval is preferred over pre-qualification because it’s stronger proof that a buyer is qualified to purchase the property.
b. Pre-qualification and pre-approval don’t carry any weight with sellers.
c. Pre-qualification is a more thorough process than loan pre-approval because a buyer’s financial information is verified.
d. Pre-qualification is preferred over pre-approval because it’s faster.
290) Which of the following is an example of a cloud on a title?
a. An unbroken chain of ownership
b. A paid-off mortgage
c. A property with a city easement that prohibits the owners from installing a pool
d. A third party has staked a claim on a property
291) What’s one of the main purposes of a home inspection?
a. To create a maintenance plan for the new home owner
b. To discover cosmetic and structural issues
c. To discover cosmetic issues
d. To discover defects that could materially affect value
292) Closing issues do occur. Which is a common closing issue?
a. Either the buyer or seller fails to appear.
b. The buyer doesn’t bring a cashier’s check to closing and fails to wire funds.
c. The seller leaves valuable artwork behind.
d. The seller refuses to move out.
293) Susan has been pre-approved for her new home loan, and the closing process is well underway. She’s so excited that she tells you she’s going to use her credit card to purchase a complete set of living room and dining room furniture. What should you tell her?
a. It’s important to avoid spending money on non-essentials or adding to her debt load prior to closing on the loan.
b. She should use money from her savings account to make the purchase instead of using her credit card.
c. She should use store credit instead of her credit card to purchase the furniture since the interest rate is probably lower.
d. She should wait until after she closes on the home and then use a home equity line of credit to make her furniture purchases.
294) What are the hurdles that most often delay or prevent closings?
a. Buyer and seller disagreements, commissions, and contingency issues
b. Inspection issues, paperwork, and recording problems
c. Loans and appraisals, titles, and home inspections
d. Titles, commission, and lending problems
295) Your seller clients are angry because the buyer’s financing fell through. “The buyer was pre-qualified! How can this happen?” they ask. How do you answer?
a. Pre-qualification does not equal pre-approval.
b. The lender must have used the wrong formula.
c. We can sue.
d. You win some, you lose some.
296) Sean represented Jamie as a buyer’s agent. Jamie purchased a property that allowed cooperating agents to receive compensation of 2.5% of the sales price upon closing of the transaction. Sean hasn’t been paid and the transaction closed six months ago. What can Sean do?
a. Sean can ask the buyer to write a check for his commission.
b. Sean can ask the seller to write a check for his commission.
c. Sean can bring action against the broker who did not pay his commission.
d. Sean can’t do anything. The statute of limitations has passed.
297) Drake’s offer to purchase Kevin’s condo currently has a financing contingency, an inspection contingency, an appraisal contingency, and a sale of current home contingency. Kevin also got an offer from Lucy, which came in at $5,000 less than Drake’s offer but with only an appraisal contingency. What is true about Drake’s offer compared to Lucy’s?
a. It’s likely viewed as a less favorable offer.
b. It’s likely viewed as a lowball offer.
c. It’s likely viewed as a more favorable offer.
d. It will likely set off a bidding war.
298) Which of the following is a common hurdle parties might encounter on the way to closing?
a. A change in unemployment statistics in the area
b. Low appraisal
c. Revised income tax deductions
d. The bankruptcy of a major area employer
299) You’re working as a buyer’s agent for Neil and Sharon, who just found the home of their dreams. However, they’re concerned about the condition of the roof and the moisture in the basement, and don’t have endless funds to make repairs. When they ask you about adding contingencies to their offer, what do you tell them?
a. “In order to avoid lawsuits down the line, let’s add as many contingencies as possible to protect our interests.”
b. “Pick the three contingencies that mean the most to you, and let’s go with those.”
c. “Sellers don’t like contingencies. We want the strongest offer possible, so let’s remove all of them.”
d. “You definitely want to make it as easy as possible for the seller to choose your offer, but you have to protect your interests.”
300) The appraisal can be a sticky wicket on the way to closing. Which of the following is a true statement about appraisals and closings?
a. If an appraisal comes in higher than the agreed-upon sales price, the buyer must pay more for the property.
b. If an appraisal comes in lower than the agreed-upon sales price, the seller must lower the sales price.
c. If the appraisal comes in lower than the sales price, the buyer may be able to negotiate a lower price.
d. It is the buyer agent’s responsibility to share market comparables with the appraiser.
301) Your clients, the Manfreds, are first-time homebuyers. They barely scraped together their down payment and really want to minimize their cash outlay. They would prefer to avoid the home inspection and just have their parents look over the property, saving the $500 for other purposes. What should you tell them?
a. “Great idea!”
b. “I have to obey you; it is my fiduciary duty.”
c. “In that case, let’s remove the home inspection as a contingency.”
d. “I would not recommend that.”
302) What’s the purpose of the financing contingency?
a. To make sure the seller’s interests are protected
b. To obligate the seller to lower the price if interest rates rise
c. To protect the buyer in case the buyer cannot obtain financing
d. To provide for seller financing in case the buyer’s financing falls through

303) As a buyer’s agent, which of the following is a best practice to help avoid closing issues?
a. Call the sellers the morning of closing to remind them of their closing appointment.
b. Have a meeting with all parties involved in a closing a day before closing is scheduled.
c. Make copies of all the closing paperwork for the lender.
d. Review the closing statement in advance.
304) Your client wants to include multiple contingencies in his offer. But you know several buyers are interested in the property, and it’s going to be a competitive bidding situation. You say to your client, ______.
a. “Contingencies always kill a deal.”
b. “Great idea. This will help our offer stand out.”
c. “Let’s evaluate which contingencies matter most to you and consider omitting the rest.”
d. “To be competitive, you should remove all contingencies.”
305) Your client Katrina is ready to close on her new home, but when you checked yesterday, the seller still hadn’t dealt with the foundation issue that the inspector found. What is your responsibility at this point?
a. Ensure that Katrina knows that not all contingencies have been cleared.
b. Make the seller fix the foundation issue.
c. Report the seller and the seller’s agent to the real estate commission.
d. Threaten the seller’s agent with a lawsuit if the problem isn’t quickly fixed.
306) From a seller’s perspective, what represents the best offer?
a. A full-price offer contingent on a satisfactory pest inspection
b. A full-price offer that includes seller-paid repairs
c. A full-price offer without a contingency
d. An offer $5,000 over full price that is contingent on the buyers selling their current home
307) Why is it important to record closing documents?
a. Not important at all
b. To make them a matter of public record
c. To receive the property keys
d. To serve as the actual conveyance
308) What effect does a pre-approval letter have on an offer?
a. It assures the seller that the buyer’s financial information has been verified.
b. It has no effect.
c. It kills it.
d. It provides some assurance to the seller, but not as much as a pre-qualification letter would.
309) As a buyer’s agent, what is your responsibility regarding the funds the buyer must provide at closing?
a. You must deliver them.
b. You must make sure your buyer knows they’re required and the amount needed.
c. You must pick them up.
d. You must pick up and deliver them.
310) Margo has found her dream house. It’s listed at $370,000, and she plans to offer $365,000. She has a letter from her lender stating that she’s been pre-approved for a maximum $375,000 loan. Why should she ask her lender to re-write the pre-approval letter?
a. By law, the letter can only note that she’s been approved for the amount she’s offering.
b. By providing the letter with her maximum loan amount, Margo risks reducing her negotiating ability.
c. Pre-approval letters should only state that the buyer’s income, assets, and liabilities have been verified.
d. The lender must issue a separate letter for each offer the buyer intends to make.
311) Besides the appraisal, what’s a common hurdle as transactions approach closing?
a. The buyer changes his mind.
b. The buyer’s financing falls through.
c. The property burns down.
d. The seller dies.
312) What does the underwriting step of loan processing typically involve?
a. Property inspection
b. Title search
c. Verification of the borrower’s financial situation
d. Verification of the seller’s financial situation
313) What’s one purpose of the final walk-through?
a. To begin moving in the buyer’s belongings
b. To confirm the property is in the expected condition
c. To hand over the key to the buyer
d. To see if the buyer still wants the house
314) Part of your job as a buyer’s agent is to ______.
a. Clear any title cloud that has been discovered
b. Consult with the official entities that keep track of chain of ownership
c. Pay the preliminary title report fee
d. Review the preliminary title report
315) What is the schedule of exceptions?
a. A list of items title insurance won’t cover
b. An appraiser’s list of unrelated properties
c. An inspection repair list
d. An underwriting issue
316) The main difference between loan pre-qualification and loan pre-approval is that loan ______ doesn’t include lender verification of buyer-provided data.
a. Pre-approval
b. Pre-qualification
c. Research
d. Underwriting
317) Which of the following is true regarding the buyer’s check for closing?
a. It may be a personal check, cashier’s check, or wired funds.
b. It must be in the form of a cashier’s check or wired funds.
c. It must be mailed within five business days of the closing.
d. It must be signed by a notary public.
318) Your buyer clients had a home inspection done, and it turns out that the water heater is on its last legs and should be replaced immediately before it bursts. What advice do you provide to your buyers?
a. To ask the sellers to replace the water heater or issue a credit
b. To pay for the replacement immediately, even before closing
c. To schedule the replacement immediately after closing
d. To walk away, because if the water heater is bad, there are likely other issues

319) Which of the following is NOT something an underwriter will evaluate before granting a loan?
a. Census statistics on a neighborhood’s ethnic make-up
b. Credit
c. Monthly housing expenses
d. Monthly income

320) Your buyer client, Percy, wants to start searching for his dream house and knows he needs to obtain financing to accomplish that. What’s his first step?
a. Complete a loan application.
b. Obtain a pre-qualification letter.
c. Sign a purchase agreement.
d. Write an offer.

321) Which contingency protects the buyer in the event the buyer cannot get a loan?
a. Appraisal
b. Financing
c. Inspection
d. Interest rates

322) What’s a good strategy for an agent representing a seller as the closing date approaches?
a. Call the buyers daily to check on loan status.
b. Demand answers from title reps and lenders.
c. Use a closing task checklist.
d. Wait and see.

323) It’s January, and the pool at Roger’s listing has been prepped for winter for several weeks. The homeowner assures Roger that it’s in good working order. Roger has no reason to disbelieve the homeowner, so he tells prospective buyers that the pool is fine. The property sells, spring comes, and the new owners call to complain that the pump doesn’t work, and the pool drain appears to be clogged. What did Roger commit?
a. Fraud
b. Negligent misrepresentation
c. Puffery
d. Unintentional misrepresentation
324) What does the Federal Trade Commission consider to be an unfair ad?
a. Any ad or business practice that causes or is likely to cause injury
b. Any ad that is likely to mislead consumers acting reasonably under the circumstances
c. Any ad that makes a health claim
d. Any ad with a claim that’s difficult to evaluate
325) What does the FTC consider to be a deceptive ad?
a. Any ad likely to mislead consumers acting reasonably under the circumstances
b. Any ad or business practice that causes or is likely to cause injury
c. Any ad that makes a health claim
d. Any ad with a claim that’s clearly not true
326) The Lanham Act gives companies what right?
a. The right to a trial by jury
b. The right to make misleading advertising claims less than 10% of the time, which is known as the Lanham Percentage Right
c. The right to pursue clients by whatever means possible
d. The right to sue competitors using deceptive claims in ads
327) What should a licensed broker offering pre-paid rental listing services do at least four days before referring a listing to prospective tenants?
a. Confirm the property is still available
b. Offer the property family and friends first
c. Post it on Craigslist
d. Renew his PRLS license
328) Which of the following items would be considered a truth in advertising violation according to FTC guidelines?
a. An advertisement lists the square footage of the living area as 3,145 feet, which doesn’t include storage outbuildings.
b. An advertisement states “HVAC unit like new!” when in fact the unit is used but has had most of the parts replaced recently.
c. An MLS listing shows a property as available even though the parties closed on the transaction three weeks ago.
d. The licensee’s name in an ad is followed by the designation REALTOR®. The licensee is a member of NAR.
329) Which of the following scenarios is considered a violation of FTC advertising rules?
a. Marcy just listed the Brown property with the following description: “2,000 square feet of living space for a total of 2,800, including two outbuildings and an unfinished garage.”
b. Sarah just started her career as a solo agent and decided to try a new marketing campaign slogan: “Come let our team of hard-working agents find you the home of your dreams!”
c. Shelia just closed on the Martin property yesterday. She’s taken down all the signs and online listings for it.
d. Vickey just posted an MLS listing for the Kennedy property without her principal broker’s approval.
330) Marcus, a listing agent, told a potential buyer that his seller client’s property had no flooding issues, though the seller had mentioned water in the basement a few years back when there was a particularly heavy rainy season. Which of these statements is true?
a. Marcus committed intentional misrepresentation because he knew his statement was false.
b. Marcus committed unintentional misrepresentation.
c. Marcus didn’t commit misrepresentation, because the property current has no flooding issues.
d. Marcus is guilty of puffery.
331) Which federal act protects consumers from unwanted email solicitations?
a. Anti-Spam Act of 2000
b. CAN-SPAM Act of 2003
c. Do Not Email Implementation Act of 2003
d. Junk Email Prevention Act of 2005
332) Jerrold reviews the floor plan of the house he’s going to sell. It’s 3,800 square feet. In his advertising, he bumps that number up to 4,000 square feet to better justify its asking price. What has Jerrold done?
333) Active misstatement
334) Exaggeration
335) Intentional misrepresentation
336) Puffery
337) You’ve started creating your own advertising. Where can you look for reliable information?
a. Brokerage policy manual
b. Copy other peoples’ advertisements
c. Google it
d. Your broker friend’s website.
338) Even though the Federal Trade Commission is concerned with all ad claims, what sort of ads would most likely concern the commission?
a. Ads for products that don’t offer any specific value to consumers
b. Ads making exaggerated claims most reasonable consumers wouldn’t believe
c. Any ad that is demonstrably false
d. Any ad that makes a health or safety claim or any claim that’s difficult for the consumer to evaluate
339) What’s it called when a licensee tries to induce sales by predicting a decline in market value?
a. Assertive bargaining
b. False advertising
c. Harassment
d. Panic selling
340) Which of these is an example of puffery?
a. Kari’s ad boasts that the property is “just blocks from the proposed metro light rail station.”
b. Katherine’s ad for her newly renovated home states, “New from the studs up.” Her carpenter might tell you a different story.
c. Kevin’s MLS remarks note that the condo has the city’s “most beautiful twilight view of downtown and the bay.”
d. Kim notes that the property “overlooks a serene, peaceful green space.” It’s next to a cemetery.
341) Which of these is a TRUE statement regarding truth in advertising violation penalties?
a. A cease-and-desist order from the Federal Trade Commission related to deceptive advertising becomes effective 30 days after issuance.
b. The Federal Trade Commission determines the severity of the penalty based on the severity of the violation.
c. The Federal Trade Commission typically imposes jail time for truth in advertising violations.
d. The severity of the civil penalty for violating truth in advertising laws is based on the number of consumers affected by the deceptive ad.
342) Lot and Block Realty received a cease-and-desist order from the FTC due to misleading ads the firm was running. When does the order become effective?
a. 30 days after issuance
b. 90 days after issuance and for 120 days total
c. Immediately upon issuance
d. Retroactive from the first date of the prohibited activity
343) Krening Realty has been found guilty of running deceptive ads. Which of these statements about the potential penalty is NOT true?
a. If Krening violates the cease-and-desist order, the firm may face penalties of more than $50,000 per violation.
b. Krening may be required to run corrective advertising.
c. Krening’s broker may face jail time.
d. The firm may face civil penalties ranging from the thousands to millions of dollars, depending on the infraction.
344) Which option is of the most concern to licensees and advertising when it comes to the Federal Trade Commission?
a. Excessive advertising costs
b. Location of ads
c. Misleading ads
d. Paper waste
345) Which of the following is required on any first-point-of-contact advertising?
a. License number
b. Personal contact information
c. Personal photo
d. Sales volume
346) What does the Federal Trade Commission regulate?
a. Advertising
b. Commission disbursements
c. Federal real estate transactions
d. Listing trades
347) Gregory has been bombarded with emails from a local real estate licensee. He keeps opting out of these emails, but they just keep coming. What federal law is the licensee possibly violating?
a. Anti-Spam Act of 2000
b. CAN-SPAM Act of 2003
c. Do Not Spam Act of 2003
d. Junk Email Prevention Act of 2005
348) Where is required information included on your website?
a. On a page marked required information only
b. On every page
c. On the contact page only
d. On the home page only
349) Which organization would you call to file a deceptive ad complaint?
a. The Better Business Bureau
b. The Department of Justice
c. The Federal Bureau of Investigation
d. The local police department
350) Nicholas is a new licensee in an area where there are a lot of condominiums and dwellings geared toward tourism and seasonal residents. He tries to drum up business by sending faxes to dozens of condo complexes. Which federal act might he be violating?
a. Anti-Telemarketer Act of 2000
b. CAN-SPAM Act of 2003
c. Do Not Call Implementation Act of 2003
d. Junk Fax Prevention Act of 2005
351) Which federal act makes phone solicitation to numbers on the Do Not Call Registry illegal unless a prior relationship or permission exists?
a. Anti-Telemarketer Act of 2000
b. CAN-SPAM Act of 2003
c. Do Not Call Implementation Act of 2003
d. Junk Fax Prevention Act of 2005
352) Which federal act makes it illegal to send unsolicited commercial solicitations via fax without the recipient’s permission or an established relationship?
a. Anti-Telemarketer Act of 2000
b. CAN-SPAM Act of 2003
c. Do Not Call Implementation Act of 2003
d. Junk Fax Prevention Act of 2005
353) Ken, a licensee, has published an ad claiming that he can sell homes for 25% more than any of his competitors. The Federal Trade Commission determined this to be a deceptive ad. What might the FTC require Ken to do as a penalty for his deception?
a. Discontinue publishing any ads for one full year.
b. Live up to the claims in his ad within the next six months or go to prison.
c. Pay each client 25% of the sale price for every house he sells.
d. Take out new ads correcting the misinformation in his original ad.

354) What types of advertising fall under California Department of Real Estate’s rules and regulations?
a. Advertising by any means
b. Only print advertising
c. Only radio advertising
d. Only TV advertising
355) Which of the following is an example of deceptive advertising?
a. Including the broker’s name in an advertisement
b. Including the listing price in an advertisement
c. Intentionally misidentifying a property’s square footage
d. Promptly removing an ad after a transaction closes
356) Your seller client has listed a beautiful piece of land on the water. You know this property would be a great investment if it were subdivided and developed, but you don’t mention the potential investment value to the seller because you want the property for yourself. You also don’t market it or present any offers. After several months, you buy the property at a deep discount. What does this make you guilty of?
a. Active misstatement
b. Negligent misrepresentation
c. Passive fraud
d. Puffing
357) Evan has his home and cell number on the Do Not Call Registry. He received an unwanted solicitation call from a new real estate licensee in the city. He told the licensee his number is on the Do Not Call Registry and that he does not wish to do business with the licensee. A few days later, he got another unwanted call from the licensee. What federal act is the licensee possibly violating?
a. Anti-Telemarketer Act of 2000
b. CAN-SPAM Act of 2003
c. Do Not Call Implementation Act of 2003
d. Junk Fax Prevention Act of 2005
358) What’s it called when you contact the public with unsolicited offers via a multitude of types of communication and in high frequency, even with buyer permission?
a. Fraud
b. Harassment
c. Misrepresentation
d. Panic selling

359) Which of these scenarios is basically the same as fraud?
a. Frank noted that his listing is in a city-approved urban renewal district.
b. Jeannie’s ad read “all new fixtures,” when most of the fixtures were just cleaned up and re-installed.
c. Margo’s listing read, “This is the most beautiful home you’ll find in this price range!”
d. Terrance’s ad mistakenly noted a property’s square footage as 2,575 instead of 2,775.
360) The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______.
a. Letters of apology to all affected consumers
b. New ads to correct previous misinformation
c. Notification to consumers about deceptive ad claims
d. Specific disclosures to consumers
361) Which of the following must a California real estate licensee include on all first point of contact promotional materials, whether electronic, or in print?
a. Broker address
b. Broker phone number
c. License number
d. Number of years in business
362) Aside from your name, what else must be included on every page of your website, according to the DRE’s rules?
a. City and state where the brokerage is located and jurisdiction
b. License number and responsible broker’s identity
c. Personal contact number
d. Personal photo
363) Under what circumstances may you withhold a listing from the MLS?
a. If it’s a hot market
b. If the seller gives written permission
c. If you believe you can find a buyer soon
d. If you intend to purchase the property yourself
364) Which of the following is a true statement about the MLS and sellers?
a. For most sellers, listing on the MLS is not cost effective.
b. It’s rare for sellers to decline advertising their property on the MLS.
c. Most sellers dislike advertising their property on an MLS.
d. Sellers are required to list their properties on the MLS if they’re working with a real estate licensee.
365) You’re posting a listing on the MLS. Which of the following are you allowed to do according to most MLS guidelines?
a. Post the listing without a photo
b. Self-promote
c. State that a property is “one block” from downtown, if it is
d. Withhold the listing for two weeks prior to posting it on the MLS
366) What does MLS stand for?
a. Market listing service
b. Maximum listing service
c. Membership listing service
d. Multiple listing service
367) Which of the following is acceptable to include in an MLS listing?
a. Children home alone from 2 to 4 p.m. No calls during that time.
b. House includes an alarm system.
c. Owner works the night shift.
d. Valuable artwork located throughout.
368) Licensee Jared states in an MLS record that his listing is in one neighborhood, when it’s actually a few miles away. Why is this a potential violation?
a. It’s not an MLS violation.
b. Licensees are supposed to use the map rather than rely on written neighborhood information.
c. Neighborhood information is not appropriate to include.
d. This is most likely fraud or misrepresentation.
369) Among other things, what should a listing in the MLS always include?
a. A relatively vague description, so people want to come and see the details
b. At least one photo
c. The seller’s bottom-line sales price
d. The seller’s contact information
370) Which should be included in an MLS policy for your firm?
a. An ad that can be tailored to each listing agent promoting her services
b. A policy to promote all listings in-house for two weeks prior to posting on the MLS
c. Tips on how long to delay posting price changes to see if other offers may come in
d. When and if listing data should be submitted to you for approval
371) Your client, Brenda, doesn’t want to be on the MLS because of privacy concerns. You tell her that one advantage to the MLS for her is ______.
a. It makes a private sale easier
b. No one will see the list price on the MLS
c. The MLS makes it easier to sell her property quickly
d. You won’t have to work as hard
372) Which of the following is a recommended way for listing brokers to use the MLS?
a. To advertise their listings
b. To enhance their reputations
c. To promote themselves and their firms
d. To steal their competitor’s listings
373) Which of the following statements is true about the MLS?
a. Expired and withdrawn listings may not be included on the MLS.
b. It’s free to members of the National Association of REALTORS®.
c. Listing fees vary by listing price.
d. Self-promotion isn’t allowed.
374) What is the MLS?
a. A database of real estate information
b. A list of buyers and their contact information
c. A server that records incoming data in a mirror image
d. Photo editing software for real estate licensees

375) Which of the following actions would be an MLS violation?
a. Emphasizing that the property is adjacent to the public library
b. Hiring a professional photographer to make a run-down property look as good as possible
c. Lowering the price after getting the seller’s permission to do so
d. Publishing the broker’s website and email address in the public remarks
376) The MLS offers several advantages to sellers. What’s one of these advantages?
a. Increased market exposure
b. Increased privacy
c. Increased security
d. Lower brokerage fees
377) Which of these photos would be a potential MLS violation?
a. A view of the master bedroom, including the bed, dresser, and jewelry armoire
b. Multiple exterior photos, taken in different seasons
c. Photos taken after a professional cleaning service and stager spruced it up
d. The recently updated bathrooms and kitchen
378) Which of the following is true about MLS usage?
a. An MLS listing is private.
b. Membership is free for brokers.
c. MLS has zero liability concerns.
d. Terms of cooperation and compensation, if any, must be listed.

379) What advantages does an MLS provide to a broker?
a. An easy way to find buyers
b. Contains information from all over the world
c. Greater access to listings
d. Self-promotion

380) Which of the following is true about the security of your clients’ information?
a. Client data can be compromised if the brokerage’s computer system is compromised.
b. Data security is one-size-fits-all.
c. Poor record retention ensures data security.
d. There is nothing a licensee can do to safeguard client data.
381) Which of the following is true about online rental scams?
a. Once they occur, there is nothing you can do.
b. They are a legitimate way to make extra money from your listings.
c. They are also known as “phishing.”
d. You can reduce the risk by monitoring Internet activity on your listings.
382) Haley has just discovered that one of her listings has been used in an online rental scam. What can she do?
a. Contact the FBI and ask for it to be removed.
b. Contact the rental site where the property is advertised and ask for it to be removed.
c. Create a Google alert to remove it.
d. Create an “if this, then that” recipe to remove it.
383) How does data encryption protect your and your clients’ personal information?
a. It allows regular updates to processes without your approval.
b. It ensures that you do not access unsecure sites.
c. It prevents hackers from accessing your computer.
d. It turns information into indecipherable code.
384) What’s the term for the online rental scams that con artists create by stealing information about properties from online real estate listings?
a. Partitioning
b. Scraping
c. Scrounging
d. Slicing
385) When information is stolen from online real estate listings, what is it known as?
a. Partitioning
b. Scraping
c. Scrounging
d. Slicing
386) Stealing listing photos and information and using them to fraudulently rent out a property is known as what?
a. A Groupon
b. An online rental scam
c. A recipe
d. Phishing
387) Why should you avoid describing a property as “secluded” when marketing through a social network?
a. Everyone defines secluded differently, so it isn’t specific enough.
b. Most homebuyers are interested in being part of a community.
c. Property descriptions should focus more on the home, not its surroundings.
d. Thieves may see this as an opportunity to enter the house unseen.
388) As a security precaution, which of the following is something you should do?
a. Limit the amount of personal information you post.
b. Post addresses to open houses on social media sites.
c. Post photos of yourself with expensive jewelry or belongings.
d. Post that you’re alone at an open house.
389) Everything in your office is potentially at risk from thieves and other criminals. Because of this, what should you never do?
a. Invite clients to the office.
b. Leave clients unattended in the office.
c. Lock your computer.
d. Use a computer.
390) If online security is a concern, which of the following websites would be the safest?
a. http://amazon.com
b. https://www.google.com
c. http://www.facebook.com
d. http://www.msnbc.com
391) What’s the purpose of a firewall?
a. It backs up your files to an external hard drive.
b. It encrypts your email.
c. It prevents hackers from infecting your system with viruses, worms, and malware.
d. It stores logins and passwords.
392) UETA supports the use of electronic documents and leaves the decision whether to use an electronic medium for agreements up to the _______.
a. Broker
b. Customers
c. Parties
d. Seller client
393) What’s the biggest security issue with using social networking sites to market your listings?
a. Criminals may use social networking sites to identify properties that are vacant or have high-end possessions.
b. It may not be effective since you’re casting a wide net rather than targeting potential buyers.
c. People may misinterpret your listing information and hold you responsible for their misunderstanding.
d. People you don’t know will have your name and contact information.
394) Which of the following describes the process of making a copy of a website for the purpose of obtaining money or data from unsuspecting users?
a. Backing up files to an external hard drive
b. Cloning
c. Encrypting your email
d. Storing logins and passwords
395) Which of the following statements is true about advertising rules and technology-based media?
a. Advertising rules apply online, just as they do in other media.
b. Licensees shouldn’t advertise online.
c. Only brokers can advertise online.
d. Only certain types of properties can be advertised online.
396) What are the three areas of technology where licensees are most exposed to litigation risks?
a. Presentation software, emails, and word processing software
b. The MLS, emails, and voicemails
c. Websites, emails, and spreadsheets
d. Websites, social networking, and emails
397) Which of the following should be avoided because it can attract thieves?
a. Giving referrals
b. Posting friend requests
c. Posting photos of your clients’ expensive belongings
d. Turning off location information
398) Technology poses risks for everyone, but real estate licensees need to be especially careful. Which of the following is true about risks related to computer systems?
a. Client data can be exposed when a brokerage’s computer system is compromised.
b. Client data can’t easily be compromised through a brokerage computer.
c. Laptops that aren’t attached to the brokerage server are not at any risk.
d. Licensees can do little to reduce risks related to brokerage computer systems.
399) Social media sites are great for marketing, but which of the following would you want to avoid accepting from people you don’t know?
a. Compliments
b. Flowers
c. Friend requests
d. Referrals
400) When a website has an S in the “http” portion of the URL, such as: “https://www.google.com,” what does it mean?
a. It is a phishing website.
b. It is a secure website.
c. It is a single sign on website.
d. It uses more than one “http.”
401) What can brokerages do to ensure licensees use technology properly?
a. Forbid new technology from being used for marketing and communication.
b. Have a solid policies and procedures manual in place.
c. Review all communications sent between licensees and consumers.
d. Track internet and phone usage.
402) In online rental scams, con artists fraudulently rent out a property they don’t own and collect the funds. Where do they get the information about the property?
a. A fence
b. Google alerts
c. Online real estate listings
d. Property owners
403) The Uniform Electronic Transaction Act (UETA) makes it legal and binding for contracts to be ______.
a. Completed verbally
b. Filed without signatures
c. Signed electronically
d. Written by a broker
404) What’s a password vault?
a. A security tool that stores logins and passwords
b. Malware hackers use to steal passwords
c. Software that encrypts your email
d. Software that prevents hackers from infecting your system with viruses, worms, and malware
405) What should brokerages do with regard to using social networking sites to market real estate?
a. Allow verbiage, but no pictures, in social network marketing.
b. Ban their use until real estate-specific social networking is created.
c. Create policies and procedures that address proper social networking use.
d. Discourage sal
406) California has established a tax lien date when a tax lien attaches to a property. Which of these statements accurately describes the tax lien date?
a. The date is January 1 following the fiscal year for which the property tax is delinquent.
b. The date is July 1 following the fiscal year for which the property tax is delinquent.
c. The date is June 30 for the fiscal year for which the property tax is delinquent.
d. The date is when the property tax bill first becomes delinquent.
407) What’s required in order for a homeowner to receive a $7,000 exemption on property tax?
a. The property may not be secured by a mortgage lien.
b. The property owner may not own other real property in the state.
c. The property owner must be a veteran.
d. The property owner must reside in the home.
408) A tax lien remains in effect until the tax debt is ____________ by either being paid or the property being sold.
a. Assumed
b. Forgiven
c. Satisfied
d. Sold
409) Which of these California properties does NOT qualify for exemption from property tax?
a. A public elementary school
b. A public university
c. A rental property in a low-income neighborhood
d. A synagogue built in 1975
410) A tax ____ is a legal claim to property as a means of satisfying a delinquent property tax debt.
a. Assessment
b. Bill
c. Lien
d. Valuation
411) ______ taxes are a reliable source of income for the state because they are difficult to conceal, their value tends to remain relatively steady, and people tend to pay them.
a. Alcohol
b. Income
c. Property
d. Sales
412) Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax?
a. $336,000
b. $387,000
c. $420,000
d. $432,000
413) Prop 13 allows a property’s base value to increase by a maximum of ______ % annually, as an inflation factor.
a. 2
b. 3
c. 5
d. 8
414) A property can’t be redeemed after the last day before it’s ______ to satisfy the debt.
a. devalued
b. given to the government
c. seized
d. sold
415) For which of these situations will a California property be assessed property taxes for multiple base year values?
a. Buffy and Bill have an older home in the mountains, and recently decided to have a contractor bring it up to code with seismic retrofits.
b. Elderly Martha now uses a wheelchair to get around, so she had some modifications made to her home to accommodate it.
c. Samantha needed more room for her growing cat family, so she had a contractor build an addition to the home she’s owned for the past 10 years.
d. Will bought an older house, immediately tore it down, and constructed a new one.
416) You’ve assisted the Juarez family with the purchase of a beautiful home in an established neighborhood. The sellers had owned the home since 1980. What’s true about the amount of property tax the Juarezes will pay for their new home?
a. It will be reassessed because of the transfer, and the Juarezes will be taxed at 1% of the home’s current market value.
b. It will be reassessed because of the transfer, and the Juarezes will be taxed no more than 2% of the home’s current market value.
c. It will be the same as the tax the seller paid annually, according to Proposition 13 limits.
d. It will no longer be covered under Proposition 13 property tax limits due to the transfer, so the Juarezes may be assessed as much as 35% of the home’s current market value.
417) Which of these statements about property tax in California is NOT true?
a. A change in ownership will cause the base value of the property to be reassessed using the year of transfer.
b. An improvement to a property that hasn’t changed ownership, such as adding a swimming pool, will result in multiple base value years.
c. Certain improvements to property, such as a seismic retrofit, won’t affect its base value.
d. If the property is sold, the base value will change but can increase by no more than 2%.
418) If a property is owned by a charitable organization, a hospital, or a ________, it’s not taxable.
a. Church
b. Farmer
c. Fraternal organization
d. Labor union
419) Under the Morgan Bill, taxpayers were given a means to resolve questions and file __________.
a. appeals
b. complaints
c. construction permits
d. taxes
420) Which of these California properties will receive a new base year value?
a. Jack and Jane have owned their home since they got married and have maintained it in beautiful condition, though they’ve never made any additions.
b. Natalie has owned her home since 2006. She likes it just the way it is, and hasn’t made any changes.
c. Ron has owned an acre of unimproved desert land since 1982. He plans to use it for his retirement, though he hasn’t yet made any improvements to it.
d. Steve is selling his condo so he can travel the world with his new wife, unencumbered by worldly possessions.
421) When property taxes go unpaid, a ___________ is placed against the property.
a. Hold
b. Lien
c. Lock
d. Note
422) San Diego homeowner Carl hasn’t paid his property taxes for three years in a row. The county has a tax lien attached to his property. Can the county foreclose on Carl?
a. No, a property tax lien doesn’t give the lien holder the power of sale.
b. No, California law prohibits foreclosure for a tax lien.
c. Yes, but only if his taxes remain unpaid for five years.
d. Yes, they can foreclose immediately.
423) The Morgan Bill provided taxpayers access to explanations of their _______.
a. debts
b. property lines
c. responsibilities
d. rights
424) A county courthouse is exempt from property taxes because it is ______-owned.
a. Government
b. Previously
c. Privately
d. Publicly
425) Angie, a California homeowner, neglected to pay her property tax bill on time. Which of these statements is NOT true?
a. If she doesn’t pay the debt in full, the county will place a lien on her property.
b. She’ll be required to pay a redemption fee to completely satisfy the debt.
c. She now owes the amount of the tax bill plus additional penalties until she settles the debt.
d. The county may foreclose on her property within 180 days of the delinquency.
426) If a lien is released because the tax debt has been satisfied prior to further action being taken, the property owner will receive a certificate of _____________.
a. Achievement
b. Disposition
c. Redemption
d. Transfer
427) _______ values can change significantly from year to year, which is the reason for so many assessment and reassessment rules.
a. loan
b. neighborhood
c. property
d. tax
428) Tax ______ are a means of getting the property owner to pay their delinquent tax debt.
a. Attorneys
b. Laws
c. Liens
d. Statements

429) San Diego homeowner Carl hasn’t paid his property taxes for three years in a row. The county has a tax lien attached to his property. Can the county foreclose on Carl?
a. No, a property tax lien doesn’t give the lien holder the power of sale.
b. No, California law prohibits foreclosure for a tax lien.
c. Yes, but only if his taxes remain unpaid for five years.
d. Yes, they can foreclose immediately.
430) The Morgan Bill provided taxpayers access to explanations of their _______.
a. debts
b. property lines
c. responsibilities
d. rights
431) A county courthouse is exempt from property taxes because it is ______-owned.
a. Government
b. Previously
c. Privately
d. Publicly
432) Angie, a California homeowner, neglected to pay her property tax bill on time. Which of these statements is NOT true?
a. If she doesn’t pay the debt in full, the county will place a lien on her property.
b. She’ll be required to pay a redemption fee to completely satisfy the debt.
c. She now owes the amount of the tax bill plus additional penalties until she settles the debt.
d. The county may foreclose on her property within 180 days of the delinquency.
433) Tax ______ are a means of getting the property owner to pay their delinquent tax debt.
a. Attorneys
b. Laws
c. Liens
d. Statements
434) Sellers of single to four-family dwellings must disclose _________.
a. average utilities
b. Mello-Roos
c. pet damage
d. unpaid taxes
435) A homebuyer in California learns the home is subject to a Mello-Roos assessment. What does this mean?
a. The buyer will pay an additional transfer tax at closing.
b. The property is located in a community that has a homeowners association.
c. The property is located in a community that has funded improvements with a voter-approved bond.
d. The property tax is not restricted by the normal base value limits.
436) Mello-Roos was enacted in 1982 to provide for non-specific _____________ improvements.
a. General
b. Power
c. Sewer
d. Street
437) Which statute was enacted in 1885 and had provisions for the addition of sewers and finishing of street surfaces?
a. Mello-Roos
b. Street Improvement Act
c. The Improvement Bond Act
d. Vrooman Street Act
438) What’s NOT true about the Mello-Roos Community Facilities Act?
a. A Community Facilities District must be designated.
b. It allows communities to fund general improvements.
c. It uses a voter-approved bond to fund services and facilities for the community.
d. Property owners pay this assessment as a separate ad valorem tax.
439) This statute allows a public agency to issue bonds for the improvement of subdivision street surfaces.
a. Mello-Roos
b. Street Improvement Act of 1911
c. The Improvement Bond Act of 1915
d. Vrooman Street Act
440) Which of these acts can issue bonds that carry up to 6% interest?
a. Mello-Roos
b. Street Improvement Act of 1911
c. The Improvement Bond Act of 1915
d. Vrooman Street Act
441) To whom should you refer your clients for specific advice about income taxes?
a. Church leaders
b. County attorney
c. Managing broker
d. Tax professional
442) Select the statement that accurately depicts property ownership income tax implications.
a. During the ownership stage, both investors and homeowners may be able to deduct mortgage interest paid.
b. First-time home buyers can deduct closing costs paid.
c. Homeowners can deduct depreciation during the ownership stage; investors can’t.
d. When homeowners sell their property, they’ll need to calculate the depreciable basis on the property.
443) Capital gains fall into which stage of the property ownership life cycle?
a. Acquisition
b. Capital gains are not part of the property ownership life cycle.
c. Ownership
d. Reversion
444) You’re working with a couple who are in the market for their first home. They’re full of questions, and today they’re asking about how homeownership will affect their tax burden. Of course, you answer by providing information that’s within the scope of your license. Which of these taxes would you mention to your clients as relevant to homeownership?
a. Capital gains credit for purchase of a property priced below market value
b. Deduction of most closing costs on income tax for the year of purchase
c. First-time homebuyer income tax credit based on purchase price of property
d. Possible income tax deductions for prepaid interest on a loan
445) In what year was the California estate tax enacted by popular vote?
a. 1971
b. 1982
c. 1988
d. 1992
446) Each year, investors are permitted to ______ a specific amount for tax purposes.
a. Add
b. Deduct
c. Depreciate
d. Subtract
447) Your seller client has accepted an offer on his home, and you’re on your way to closing! Which of these is NOT a tax aspect that you’ll explain to your client (in basic terms) related to the transfer of property?
a. “If you make a profit on the sale of this property, you’ll have to pay a capital gains tax when you file your income taxes.”
b. “Property taxes are prorated so you’ll only pay for the time you owned the property.”
c. “When you’re buying your next home, the transfer will trigger a reassessment for property tax purposes.”
d. “Your title will reveal any tax liens, so the title company will review it to ensure that isn’t an encumbrance.”
448) To depreciate real property, the business owner must own the property and use it for ______ or income-producing activity.
a. A rental
b. A residence
c. Business
d. Charitable works
449) When you’re representing a client in a real estate transaction, what’s your responsibility regarding tax advice?
a. You must be able to advise your clients on the best way to minimize their tax liability related to a purchase or sale.
b. You must not address tax aspects of a transaction in any way, since this would be working outside your area of expertise.
c. You’re obligated to answer all questions the clients have regarding property taxes and general tax advice.
d. You should tell clients the typical ways that taxes will apply and encourage them to seek advice from a tax professional.
450) The income from property taxes benefits the _______________ by paying for emergency services, education, and roads.
a. Community
b. Elderly
c. Local budget
d. State government
451) Property is no longer ______ after the taxpayer has retired the property from service.
a. Appreciable
b. Depreciable
c. Taxable
d. Useful
452) A _______ home is a pre-fabricated structure built away from the site where it will be placed as a home.
a. micro
b. mobile
c. non-traditional
d. retirement
453) Who will be responsible for paying use tax if a boat is purchased from a seller who doesn’t hold a seller’s permit?
a. The Board of Equalization
b. The buyer
c. There is no use tax on boat sales
d. The seller
454) A mobile home attached to a foundation is considered an _____________ to the real property.
a. Addition
b. Asset
c. Attachment
d. Improvement
455) In central California, Documentary Transfer Taxes are paid by the ___________.
a. Buyer
b. Buyer and seller
c. County clerk
d. Seller
456) When is the Documentary Transfer Tax collected?
a. 30 days after closing
b. As soon as the documents are filed
c. At closing
d. On the first tax bill after the property has been sold
457) Use tax is owed to the state for the ____ of personal property
a. purchase
b. rent
c. sale
d. use
458) Mobile home taxes are calculated based on the value of the __________.
a. land it sits on
b. mobile home community
c. neighborhood
d. structure
459) The documentary transfer tax is _____ cents for every $500.
a. 25
b. 48
c. 55
d. 65
460) Sometimes, the __________ of the property can have the burden of being responsible for paying sales tax.
a. Broker
b. Buyer
c. Licensee
d. Seller
461) Once a mobile home is attached to a foundation, it is _______________ into real property.
a. Grandfathered
b. Leveled
c. Transformed
d. Written
462) If a seller removes a building from the land prior to sale of the property, the seller may be responsible for paying _______ on that building
a. closing costs
b. interest
c. rent
d. sales tax
463) Sales tax is paid to the state by retailers even if their ________ didn’t pay sales tax.
a. accountant
b. customers
c. neighbor
d. parents
464) Mobile homes are subject to _________ tax after they are sold.
a. property
b. sales
c. temporary
d. use
465) What’s true about the documentary transfer tax in California?
a. Most real estate transactions in California don’t incur a documentary transfer tax.
b. The county documentary transfer tax rate for the entire state is set at 55 cents per $500 of sales price, and some cities add an additional transfer tax.
c. The documentary transfer tax is collected by the state, although cities may add an additional tax.
d. The documentary transfer tax, when used, is always paid by the buyer since the new deed is recorded on the buyer’s behalf.
466) Sales tax applies to nearly everything in California. One major exception is ________.
a. Alcohol
b. Car sales
c. Food
d. Tobacco
467) Use tax applies for merchandise that will be used, consumed, ____________, or given away.
a. Broken down for parts
b. Destroyed
c. Re-sold
d. Stored
468) Two large local brokerage firms agreed to lower their commission rates to the same amount—approximately 1% less than any other firm in town. After extensive marketing of their new lower rate, these two firms began to see a big increase in the number of listings they received, costing their competitors substantial amounts of money. What about this situation makes it a per se antitrust violation?
a. The agreement between the two firms
b. The dollar amount the competitors lost
c. The marketing efforts the two firms used
d. The size of the two brokerage firms
469) What’s an antitrust violation’s central element?
a. Conspiracy
b. Fraud
c. Greed
d. Profit
470) Which of these is a central element of an antitrust violation?
a. A contract
b. Customer relationships
c. High stakes
d. Interstate dealings
471) Two real estate firms in one small town, Vineyard Realty and Homestead Homes, agreed to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this?
a. The Clayton Act of 1914
b. The Federal Trade Commission Act of 1914
c. The Restraint of Trade Act of 1894
d. The Sherman Antitrust Act of 1890
472) Which act created an agency to investigate antitrust practices?
473) Attorney General Act
474) Clayton Act
475) Federal Trade Commission Act
476) Sherman Antitrust Act
477) Five competing brokerage firms in the same area agreed to cooperate in setting a standard commission rate for the area. This makes them guilty of a per se antitrust violation. What is a per se antitrust violation?
a. Boycotting
b. Collusion among the parties
c. No intent needs to be proven
d. Price fixing
478) The _____ is the name of California’s antitrust law.
a. Cartwright Act
b. Clayton Act
c. Federal Trade Commission Act
d. Sherman Act
479) Which agency prohibits unfair acts, practices, or methods of competition, and enforces federal antitrust and consumer protection laws nationally?
a. Attorney general’s office
b. Consumer Reports
c. Federal Trade Commission
d. National Bar Association

480) Which of these has examples of antitrust violations common to real estate?
a. Fraud, concealment, and misrepresentation
b. Profiteering, racketeering, and domineering
c. Puffery, hyperbole, and exaggeration
d. Tie-in arrangements, market allocation agreements, and group boycotting
481) Which of these statements most accurately represents existing federal antitrust legislation?
a. The Clayton Act supports the Sherman Antitrust Act’s purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly.
b. The Federal Trade Commission Act established the Sherman and Clayton acts to prevent collusive activities that limit competition.
c. The Federal Trade Commission Act prevents one large firm from acquiring another similar firm that would result in a restraint of trade.
d. The Sherman Antitrust Act was passed to supplement the Clayton Act in an effort to prevent mergers that create monopolies.
482) Which of the following is true of developing a market niche based on any legal category (e.g., farming or prospecting a specific area)?
a. It’s an example of a tie-in arrangement and is an antitrust violation.
b. It’s an example of group boycotting and is an antitrust violation.
c. It’s an example of market allocation and is an antitrust violation.
d. It’s permissible.
483) Business is booming for Johnstone Realty, a new brokerage firm in town. The other firms in the area are unhappy about the cooperating split Johnstone offers, and they all agree to not show Johnstone’s listings to their buyer clients. What is this an example of?
a. Blockbusting
b. Group boycotting
c. Market allocation
d. Steering
484) Acme Realty offers flat fee, menu-based services. Berringer Realty and Hawthorne Real Estate Group decide to not show any of Acme’s listings and to prohibit showings from Acme buyers to drive Acme out of business. What is this an example of?
a. A tie-in arrangement
b. Group boycotting
c. Market allocation
d. Price fixing
485) Which of the following is true of a brokerage having a pricing policy for its associated licensees?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of market allocation and an antitrust violation.
c. It’s an example of price fixing and an antitrust violation.
d. It’s permissible.
486) Which of the following is an example of illegal market allocation?
a. Acme Realty and Hawthorne Realty Group agree to divide the city in half, each working its own half.
b. Acme Realty and Hawthorne Realty Group each discuss with their licensees where the most lucrative deals can be found.
c. Acme Realty and Hawthorne Realty Group each try to win the million-dollar listings.
d. Acme Realty maps out a plan to dominate the eastern part of the city.
487) Where can an agent report an antitrust violation?
a. Citizens Complaint Center of the DOJ’s Antitrust Division
b. The Department of Housing and Urban Development
c. The Department of State
d. The Federal Bureau of Investigation
488) Which of the following is true of refusing to buy services from a vendor because of shoddy business practices or pricing?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of group boycotting and an antitrust violation.
c. It’s an example of price fixing and an antitrust violation.
d. It’s permissible.
489) Which type of antitrust violation occurs when real estate firms agree to divide their market so they don’t compete with one another?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangements
490) According to the U.S. Department of Justice, which type of antitrust violation is an agreement between competitors to eliminate discounts to all customers or certain types of customers?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
491) Americo Realty and Heart of the Home Real Estate both charge the same commission rates. For this to be price fixing, what must occur?
a. An agreement between competing firms to standardize commission rates
b. An agreement between individual licensees in a single firm to fix commission rates
c. An offer of a cooperating brokerage commission
d. A public announcement of commission rates charged
492) Which of the following is true about discussing or implying a standard commission for the industry?
a. It’s an example of a tie-in arrangement and is an antitrust violation.
b. It’s an example of market allocation and is an antitrust violation.
c. It’s an example of price fixing and is an antitrust violation.
d. It’s permissible.
493) In addition to fines, individuals who violate antitrust laws may face imprisonment for up to what length of time?
a. 10 years
b. 30 days
c. One year
d. Two years
494) Which of the following statements could indicate a price fixing violation?
a. “I base my price on my services.”
b. “My price is non-negotiable.”
c. “This is the price my brokerage requires me to charge.”
d. “This is the standard price for a full-service listing.”
495) Deb, a licensee, is unhappy with the marketing materials a local company produced. While having coffee with Irving, a licensee with another firm, she tells him about her troubles and recommends he not do business with this company. Irving agrees and even volunteers to spread the word among his colleagues. What’s this an example of?
a. A tie-in arrangement
b. Group boycotting
c. Market allocation
d. Price fixing
496) When working with a developer who’s purchasing undeveloped land for a new subdivision, ABC Realty stipulates in the contract that in order to purchase the undeveloped land, the developer must purchase grading services from Bulldozers-R-Us. Which antitrust violation is this?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
497) Which of the following is true of agreeing with a competitor to segment the market between you?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of group boycotting and an antitrust violation.
c. It’s an example of market allocation and an antitrust violation.
d. It’s permissible.
498) Which of the following is true about tie-in arrangements?
a. They involve market allocation.
b. They involve price fixing.
c. They’re an antitrust violation.
d. They’re a type of mortgage fraud.
499) Which typociation meeting when, in a small group breakout, her group begins discussing how to deal with the new kid in town: a real estate firm that ervice?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
500) A consumer is moving to a new area and uses social media to try to line up a real estate professional to help him find a new home. He asks how much he’ll need to pay his licensee. One firm he contacts tells him that all licensees in the area charge at least 2%. What antitrust violation does this imply?
a. A tie-in arrangement
b. Group boycotting
c. Market allocation
d. Price fixing
501) Which of the following is an example of an illegal tie-in arrangement?
a. ABC Realty requires that all buyers who work with their company be qualified by ABC Mortgage company, an affiliated business.
b. MNQ Realty offers the services of an affiliated business, with full disclosure of its business relationship.
c. TUV Realty offers a variety of financing providers to potential clients.
d. XYZ Realty requires all buyers who work with their company to obtain financing through XYZ Mortgage company.
502) Marcy is found guilty of price fixing. It’s safe to assume that she must have done what?
a. Agreed with a competitor to charge a specific amount
b. Charged a fixed commission price her broker asked her to use
c. Charged a separate co-op fee for different brokerages
d. Deviated from the standard commission rate
503) In certain cases, antitrust violators may be subject to court-ordered supervision. How long can this supervision last?
a. 10 years
b. One month
c. One week
d. One year
504) Which of the following is the best example of a tie-in arrangement?
a. A business offers add-on services for its best customers.
b. A business requires its clients to also purchase service.
c. Competing businesses agree to similar pricing strategies.
d. Competing companies agree to not do business with a third.
505) Which of the following is true of discussing the business model of competitor A with competitor B in order to determine a joint course of action against competitor A?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of group boycotting and an antitrust violation.
c. It’s an example of price fixing and an antitrust violation.
d. It’s permissible
506) A new real estate professional is getting to know licensees at his new firm, Tremont Homes. One licensee tells him there’s an unwritten agreement with a neighboring firm that Tremont serves the mid-town area, and everyone who has prospective clients in that area refer their leads to Tremont. What’s this an example of?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangements
507) Three brokers meet and agree that all of their listing contracts will have one-year terms. Of which type of antitrust violation is this an example?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
508) Question 3
509) How does California inform consumers that commissions are not set by law?
a. Commissions are set by law
b. Through a commission disclosure statement
c. Through language on the agency disclosure form
d. Through specific language on listing agreements
510) Licensee Audrey was convicted of an antitrust violation. What is the maximum prison sentence she can serve?
a. 10 years
b. Five years
c. No prison time
d. Two years
511) An agent is trying to build up business for a friend’s mortgage company. She offers to charge a lower commission rate to clients who use her friend’s mortgage company for their financing. What’s this an example of?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
512) Penalties for antitrust violation may include ______.
a. Additional education requirements
b. Community service
c. Fines and/or prison sentences
d. Fines only
513) According to the Department of Justice, an agreement between competitors to establish or adhere to uniform price discounts is a type of which antitrust violation?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
514) A couple of licensees you know from different firms are tired of competing with one another for the same listings. You overhear them saying, “You take the north side of town and I’ll take the south, so we aren’t stepping on each other’s toes.” You stop their conversation to tell them they’re committing an antitrust violation. Which one is it?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangementsble.
515) Which of the following is an example of price fixing?
a. A brokerage requires all licensees to offer a fair cooperative brokerage fee.
b. Three brokerages agree to purchase office supplies together to obtain a bulk discount.
c. Twelve brokerages discuss compensation of associated independent contractor licensees.
d. Two brokerages determine a standard commission rate.
516) What’s market allocation?
a. Agreeing with a competing firm on how to split a market
b. Deciding to own the market with aggressive marketing strategies
c. Deciding which clients you will work with, and which you won’t
d. Partnering with a branch office to dominate a market
517) Four brokerage firms operate in the same small city as Jackson’s firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not?
a. No. The similarities between commission rates may be suspect, but the similarity between commission splits doesn’t matter.
b. Not necessarily. The fact that the firms’ commission rates and splits are similar doesn’t necessarily mean they agreed to fix those values.
c. Yes. The fact that the firm’s commission rates and splits are so similar is a restraint of trade.
d. Yes. The firms’ internal commission splits can be the same, but they can’t all charge the same commission rate.
518) As part of its penalty for violating antitrust law, Homes4Cheap, Inc. has been ordered to undergo court-ordered supervision. How long can this supervision last?
a. 10 years
b. One month
c. One week
d. One year
519) Which of these situations represents an illegal tie-in arrangement?
a. Grayson tells his seller client, Geneva, that he’ll reduce the listing commission if Geneva uses MBS Title Services to close her transaction.
b. Martha gives her buyer clients a list of home inspectors and encourages them to call several who are both on and not on the list to find one who meets their needs.
c. Monica agrees to rebate a portion of the commission earned when her buyer client buys a house if the client also lists her current home with Monica.
d. Trina tells her buyer, Martin, that she won’t perform any brokerage services for him unless he signs an agency agreement.
520) Which of the following statements could indicate a price fixing violation?
a. “My contract length is non-negotiable.”
b. “My listing agreements are generally 90-day contracts.”
c. “The MLS requires us to have at least 90-day listings.”
d. “With today’s market conditions, we could expect the house to take two months to sell. Let’s set a term of four months for our listing contract.”
521) Any agreement between competing firms that restricts trade or discourages competition is a violation of antitrust law. An agreement between competitors to do which of the following is also an antitrust violation?
a. Increase choices for consumers
b. Increase the number of competitors in the field
c. Join a professional association
d. Restrict choices for consumers
522) Unhappy with some of the fees a local mortgage company charges her clients, Renee decides to not do business with that company and convinces buyer brokers who show her listings to not do business with this company, either. What is this an example of?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement

523) Rachel is subject to court-ordered supervision due to an antitrust violation. This oversight may continue for as long as ______.
a. 10 years
b. Five years
c. She remains in the state where the violation occurred
d. She’s lice
524) Which of the following is true of the practice of basing the length of a listing term on how long it takes in your market to sell similar properties?
a. It’s an example of a tie-in arrangement and an antitrust violation.
b. It’s an example of market allocation and an antitrust violation.
c. It’s an example of price fixing and an antitrust violation.
d. It’s permissible

525) Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement

526) Which type of antitrust violation occurs when the providing of one service is made dependent on the customer or client obtaining another recommended service?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
527) Shakira is attending an association meeting when, in a small group breakout, her group begins discussing how to deal with the new kid in town: a real estate firm that charges a flat $500 to list properties, then lets the sellers fend for themselves. Why should Shakira leave the discussion?
a. She needs to get to work developing this model for herself.
b. The group seems bent on creating a tie-in arrangement.
c. This conversation seems to be turning into a discussion of market allocation.
d. This conversation sounds like it might become an antitrust violation.
528) Avoiding antitrust violations is critical. Which one of the following actions will help you avoid price fixing allegations?
a. Consult with competitors to determine competitive pricing.
b. Engage in discussions about fees with agents from other companies.
c. Establish fees independently or as a company.
d. Promote “industry rates” in conversations with consumers.
529) Jarvis, a designated broker, discusses antitrust scenarios at staff meetings and makes certain his firm makes independent decisions about co-op fees. This is a great way for Jarvis to do what?
a. Avoid antitrust violations
b. Eliminate the competition
c. Get in trouble with the DOJ
d. Inadvertently violate antitrust law
530) A Department of Justice deputy district attorney general said that the National Association of REALTORS®’ action of obstructing Internet-based brokers who offered alternative services and lower costs to consumers had this result, making it an antitrust violation.
a. Increased competition
b. Increased consumer fees
c. Reduced competition
d. Reduced consumer fees
531) One of the actions that landed the Consolidated Multiple Listing service of South Carolina in court was that it gave Columbia brokers the ability to exclude rivals from outside of Columbia. What type of antitrust violation does this exemplify?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
532) In the 1950 case involving the District of Columbia’s Washington Board of REALTORS® in which the National Association of REALTORS® became involved, the board required that brokers should maintain the standard rates of commission adopted by the board, and no business should be solicited at lower rates. No member may charge less than this rate when involved in the sale, exchange, lease, or management of real property in the District of Columbia. What were the parties guilty of?
a. Fair housing law
b. Group boycotting
c. License law
d. Price fixing
533) The 1970 case against Prince George’s County Board of REALTORS® found that the board was suggesting commission rates and publishing schedules of commission rates. What type of antitrust violation was this?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
534) The MLS in your area prohibits limited service agents from listing properties for sale. This is ______.
a. An antitrust violation
b. A risk management technique to prevent antitrust violations
c. Common to all MLS systems
d. Fine as long as it prohibits all discount agents
535) The Kentucky Real Estate Commission’s action of prohibiting brokers from offering rebates and other inducements to consumers was deemed to be this type of violation, in which guilt is established in light of existing circumstances.
a. Fair housing
b. Per se
c. Rule of reason
d. Tying
536) Avoiding antitrust violations is critical. Which one of the following actions will help you avoid price fixing allegations?
a. Consult with competitors to determine competitive pricing.
b. Engage in discussions about fees with agents from other companies.
c. Establish fees independently or as a company.
d. Promote “industry rates” in conversations with consumers.
537) One of the actions that landed the Consolidated Multiple Listing service of South Carolina in court was that it gave Columbia brokers the ability to exclude rivals from outside of Columbia. What type of antitrust violation does this exemplify?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
538) One of the actions that landed the Consolidated Multiple Listing service of South Carolina in court was prohibiting members from offering home sellers the opportunity to avoid paying a broker’s commission if the seller located a buyer on their own. What type of antitrust violation does this exemplify?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
539) The 1970 case against Prince George’s County Board of REALTORS® involved a consent decree. What is this?
a. A compromise where the party agrees to stop certain illegal actions without admitting guilt
b. A decision issued by the court ordering the defendant to stop performing certain illegal actions
c. A guilty plea
d. An innocent plea
540) The 1970 case against Prince George’s County Board of REALTORS® found that the board was refusing to work with members who didn’t follow certain suggestions. What is this an example of?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement
541) The 1950 case involving the District of Columbia’s Washington Board of Realtors and the National Association of REALTORS® determined that real estate boards that set schedules of fixed or mandatory real estate commissions or fees violated this law.
a. Fair housing laws
b. Licensing laws
c. The Federal Trade Commission Act
d. The Sherman Antitrust Act
542) The 1950 case involving the District of Columbia’s Washington Board of REALTORS® and the National Association of REALTORS® determined that “trade” involves which transactions?
a. Both interstate and intrastate
b. Interstate only
c. Intrastate only
d. Only transactions outside Washington, D.C.
543) Which of the following is true about for sale signs?
a. They must be located at least 20 feet away from the mailbox.
b. They must be visible from the sidewalk.
c. They must be visible from the street.
d. They require the seller’s written permission to post.
544) Identifying properties being sold by owners and persuading them to list with a licensee describes the ______ approach to finding listings.
a. Cold calling
b. Expired listings
c. Farming
d. Owner sales
545) When finding listings, which statement describes the owner sales approach?
a. Choosing a neighborhood and concentrating real estate activities there
b. Contacting homeowners whose listing contracts have ended without a sale
c. Contacting prospective clients through previous clients, co-workers, networks, etc.
d. Identifying properties being sold by owners and persuading them to list with a licensee
546) What is an open listing agreement?
a. One in which anyone can find the buyer, but the listing agent still gets paid
b. One in which only the person who finds the buyer gets paid
c. One in which the price is negotiable within a specified range
d. One in which there’s no end date
547) Why should sellers remove family photos and other personal items prior to showings?
a. Because family photos are old fashioned.
b. So that buyers can picture their own items in the home.
c. So that no one steals important photos.
d. To protect themselves from visitors with criminal intent.
548) You receive a full-price offer within one day for a new listing. Your seller is concerned the home was under priced. How should you respond?
a. Advise the seller to reject the offer and hold out for something better if that’s how he feels.
b. Ask the buyer to justify her offer in writing, explaining why she was so quick to buy.
c. Make sure your seller is informed. Review the information that shows the home was accurately priced.
d. Tell the seller it is what it is and it’s too late now to change things.
549) When finding listings, which statement describes the expired listings approach?
a. Choosing a neighborhood and concentrating real estate activities there
b. Contacting homeowners whose listing contracts have ended without a sale
c. Contacting prospective clients through previous clients, co-workers, networks, etc.
d. Identifying properties being sold by owners and persuading them to list with a licensee
550) Which of the following actions should be taken when holding an open house?
a. Limit advertising.
b. Only be present to open and close the house.
c. Schedule the open house for a day and time when the owner can be present.
d. Schedule the open house soon after the property hits the market.
551) When using the farming approach, affinity is a key factor when identifying a neighborhood. Which statement best describes affinity?
a. An area that is not currently farmed by another licensee
b. An area that the licensee likes
c. An area with a fair amount of listings—not too many, not too few
d. An area with a variety or home styles, sizes, features, price points, amenities, buyers, etc.
552) Bernie represented Oscar in the sale of Oscar’s home. They signed an exclusive right-to sell-listing agreement. If Oscar were able to find his own buyer, would he owe Bernie a commission?
a. No, because he found his own buyer.
b. No, because Oscar retained his exclusive right to sell.
c. Yes, because “exclusive right to sell” means Bernie gets paid no matter who finds the buyer.
d. Yes, because Oscar is not a real estate licensee.
553) What’s the purpose of advising sellers to remove personal effects from their homes prior to showings?
a. To give the impression that they need money so that buyers will make their offers higher
b. To increase the likelihood that they’ll be out of the house by the time the transaction closes
c. To make it easier for prospective buyers to visualize themselves in the home
d. To remove objects that may be tempting to thieves
554) You have a seller who is refusing a very good offer on a property that’s been on the market for a while. How can you help your client?
a. Give up and move on to the next client. Sometimes clients are impossible to work with.
b. Tell the client it’s his house and his choice, but you think he should accept.
c. Try and help the seller see the big picture and the value of an offer on the table.
d. Try to work with the buyer to get a much higher offer, since this might make the client happier.
555) When finding listings, which statement describes the cold call approach?
a. Contacting homeowners to determine whether they or anyone they know is interested in selling
b. Contacting homeowners whose listing contracts have ended without a sale
c. Contacting prospective clients through previous clients, co-workers, networks, etc.
d. Identifying properties being sold by owners and persuading them to list with a licensee
556) Camille is working with a seller who has asked her to lower her commission rate. What’s the best way for her to explain why she won’t do it?
a. Explain that her broker won’t allow her to change the rate.
b. Explain that her fee is based on the services she provides.
c. Explain that her rate is in line with the industry standard.
d. Explain that her rate is the standard rate for the area market.
557) Which of the following best describes a net listing?
a. The seller and agent agree to split the profit from the proceeds of the sale.
b. The seller reserves the right to sell the property and not have to pay a commission.
c. The seller specifies a desired price for the property and agrees to pay the broker any amount received that’s more than that price.
d. The seller works with many agents, and only the agent who procures the buyer is owed a commission.
558) Seller Jeremiah has no cash on hand, but the buyers have outlined some repairs they want made in order to close on the purchase. Which of the following is his best option if he wants this transaction to close?
a. Do the repairs himself, even if he’s not qualified.
b. Offer a seller credit to cover the cost of the repairs.
c. Reduce the sales price by twice the amount estimated for the repairs.
d. Tell the buyers he can’t make the repairs and hope they’ll agree to buy the house anyway.
559) Which items should sellers put into storage to help de-personalize their home?
a. Expensive artwork
b. Prescription medications
c. Refrigerator magnets and children’s artwork
d. Window coverings
560) Contacting homeowners whose listing contracts have ended without a sale describes the ______ approach to finding listings.
a. Expired listings
b. Farming
c. Owner sales
d. Referral
561) Matt’s sellers have a valuable artwork collection displayed in their home that perfectly showcases various rooms. What advice should Matt provide to his sellers when preparing to sell the home?
a. Install a video camera system to be sure the artwork isn’t stolen.
b. Leave the artwork on display.
c. Note in the contract that the artwork isn’t part of the personal property that will stay with the property.
d. Remove the artwork and replace with suitable, less-expensive pieces as necessary.
562) James, a seller, signed a listing agreement that allowed him to contract with multiple agents but only pay a commission to the agent who located a buyer. This type of listing agreement is called ______.
a. Exclusive agency
b. Exclusive right to sell
c. Open
d. Seller’s choice
563) Ariana’s seller clients have photos of the entire family on display in the grand stairway of their home. Ariana advises her clients to remove the photos. Which step in the preparation phase is Ariana addressing?
a. Accessorize
b. Declutter
c. De-personalize
d. Repair
564) Tiffany just obtained a list of all of the homeowners in an area. She checks the numbers to make sure they’re not on the Do Not Call Registry, then starts making calls to see if they or anyone they know is interested in selling their home. What method is this?
a. Cold calling
b. Farming
c. Owner sales
d. Referral
565) Your seller client pushes back when you share that your commission rate is 7%. He thinks that’s way too much. Which of the following is the best response?
a. “I base my commission on my services. These are the services I will provide for you. Which would you like to forego?”
b. “If you’re already disagreeing with my methods, it’s clear that we’re not a good fit. I’ll be happy to refer you to one of my colleagues.”
c. “With all due respect, I’m the real estate expert. As such, my rate is non-negotiable.”
d. “You’re right. I’ll adjust the commission rate.”
566) Your seller client is very attached to her home and has not agreed with any price ranges you’ve presented. She insists on pricing the home at 15% above the current market, claiming the home has a certain air about it that is priceless (but 15% higher is a start). How should you advise this seller?
a. Advise your client she wait until the market comes up to meet her expectations to sell.
b. Be honest and realistic about expectations, but do as the seller wishes regarding the price.
c. Be kind but firm. Advise the seller that the home’s value is dictated by the market, not her perception.
d. Tell her if she can’t be realistic, she needs to find a new agent because you’re done arguing.
567) Which of the following is a common issue licensees can expect from sellers?
a. Donating the property to charity
b. Haggling over commission
c. Insisting on putting the listing into the MLS personally
d. Tiered bonuses
568) You’re representing a seller. Which of the following is one of your duties?
a. Assisting the seller with hiding defects, such as water intrusion and mold
b. Getting the seller an acceptable price and terms
c. Making sure the seller profits on the sale of the property
d. Purchasing the property in the event that it does not sell
569) Emily received Gerty’s name from a previous client whose home she sold. This is an example of ______.
a. A referral
b. Branching
c. Cold calling
d. Farming
570) Contacting homeowners to determine whether they or anyone they know is interested in selling describes the ______ approach to finding listings.
a. Cold calling
b. Farming
c. Owner sales
d. Referral
571) Contacting prospective clients through previous clients, co-workers, and networks describes the ______ approach to finding listings.
a. Branching
b. Cold calling
c. Farming
d. Referral
572) Which of the following scenarios best describes a net listing?
a. Carmel is selling her condo for $280,000 and is offering 6% commission to the listing broker.
b. Jason is listing his duplex for $400,000 but reserves the right to find his own buyer and not have to pay a listing commission.
c. Maeve wants to get at least $350,000 when she sells her property and tells her listing agent, Stan, that he can keep anything above that amount.
d. Ralph is selling his townhome for $225,000 and is paying a brokerage fee of $25,000.
573) When working with a seller, you signed a listing agreement that ensured you’d receive a commission, provided the property sold during the listing term. What type of listing agreement did you sign?
a. Exclusive agency
b. Exclusive right to collect commission
c. Exclusive right to sell
d. Net listing
574) Tamara has identified a neighborhood where she’ll concentrate her real estate activities. She starts by sending postcards to all residents, then walks door to door to introduce herself. Over time, she sends more communications, participates in neighborhood events, and eventually becomes the “go to” real estate professional for the neighborhood. What approach has she used?
a. Branching
b. Cold calling
c. Farming
d. Owner sales
575) Janice wanted to sell her townhome, and her neighbor was considering buying it. She wanted to put it on the market while she waited to find out if her neighbor was going to buy. In order to receive the best possible representation but avoid paying a commission if her neighbor buys the property, which type of listing agreement would best suit Janice’s needs?
a. Exclusive agency
b. Exclusive right to sell
c. Net
d. Open
576) When using the farming approach to find listings, what factors are important when identifying an area?
a. Average home price, population density, turnover
b. Diversity, affinity, amenities
c. Turnover, affinity, diversity
d. Turnover, density, affordability
577) Choosing a neighborhood and concentrating real estate activities there is an example of the ______ approach to finding listings.
a. Branching
b. Cold calling
c. Farming
d. Owner sales
578) Which of the following is true about net listings?
a. The listing agent is guaranteed at least some commission.
b. They don’t include compensation for the buyer’s agent.
c. They often involve a conflict of interest.
d. They’re legal in all 50 states.
579) Jane is working with her first seller client. She’s excited to begin marketing the property and to hold an open house. Which of the following is something she should do?
a. Limit advertising.
b. Only be present to open and close the house.
c. Schedule the open house for a day and time when the owner can be present.
d. Schedule the open house soon after the property listing hits the market.
580) What’s the best way for a licensee to prevent the potential issue with sellers of believing that a property has sold too quickly or took too long to sell?
a. Advise the seller to file a complaint with the local association of REALTORS® if they’re unhappy with the service received
b. Educate sellers about why a list price has been recommended, and the effect of current market conditions on the length of time a property takes to sell.
c. Explain that real estate is a complicated game with many factors affecting the length of time a property takes to sell.
d. Keep a record of the number of hours spent on marketing each property, and show that to the seller.
581) What’s the best way to explain to sellers why you won’t lower your commission rate?
a. “My broker won’t allow me to lower my rate.”
b. “My fee is based on the services I provide.”
c. “This is the industry standard.”
d. “This is the standard rate for this market.”
582) Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers?
a. Broadcast clause
b. Marketing clause
c. Multiple listing clause
d. Provisionary clause
583) Michael scours the local newspaper, looking for homes for sale without real estate professional representation. This isn’t because he wants to buy the house, but because he wants to represent the seller. What approach is this?
a. Cold calling
b. Expired listings
c. Farming
d. Owner sales
584) Which of the following is true about lockboxes?
a. They must be hidden from plain sight.
b. They must be visible from the sidewalk.
c. They must be visible from the street.
d. They require a seller’s written permission to post.
585) When finding listings, which statement describes the referral approach?
a. Choosing a neighborhood and concentrating real estate activities there
b. Contacting homeowners whose listing contracts has ended without a sale
c. Contacting prospective clients through previous clients, co-workers, networks, etc.
d. Identifying properties being sold by owners and persuading them to list with a licensee
586) Mardee represented condo owner Carol, and they signed an exclusive agency listing agreement. If Carol found her own buyer, would she owe Mardee a commission?
a. No, because Carol is not a real estate licensee.
b. No, because Carol procured the buyer.
c. Yes, because they have an exclusive agency listing agreement.
d. Yes, but she only owes the listing commission.
587) Which of the following describes how a real estate licensee should advise a client to prepare a property for the market?
a. Mask, hide, and paint over
b. Purchase new furniture and artwork
c. Put expensive artwork and figures on display
d. Repair, declutter, and de-personalize
588) De-personalizing a home allows buyers to _______.
a. Identify furniture they want to purchase from the sellers
b. Imagine themselves in the home
c. Move in more quickly
d. Spot the high-value items
589) What strategy can a licensee use when a seller client is presented with reasonable offers, but refuses to budge on price or terms?
a. Advise prospective buyers that their offers won’t be considered unless they meet the seller’s stiff requirements.
b. Help the seller remember the goal of a closed transaction.
c. Stop presenting offers received until the seller agrees to consider negotiating.
d. Threaten to cancel the listing agreement.
590) Why should you know when the seller can vacate the property?
a. If a buyer wants to close before the seller can vacate, the seller may need to rent it back from the buyer.
b. You’ll need to know when you can have the property staged.
c. You’ll want the house empty for showings.
d. You’ll want to schedule the closing during the seller’s occupancy.
591) Martin has a new listing. He wants to post a for sale sign in his seller’s yard. What must he obtain before doing so?
a. A flier box
b. A permit
c. A separate phone number
d. The seller’s written permission
592) Gary is preparing to place a lockbox on the property that his brokerage has recently listed. Which of the following is true?
a. He must get the seller’s permission to place the lockbox.
b. Lockboxes aren’t a good idea.
c. The lockbox can’t remain on the property for longer than 60 days.
d. The lockbox must be visible from the street.
593) Anya, a real estate licensee, asks her sellers why they want to sell their property. Is this an appropriate question?
a. No, because it’s none of her business—she’s there to sell a house, no matter the reason.
b. No, because she is breaching her duty of confidentiality.
c. Yes, because she needs to include this information in the property’s marketing materials.
d. Yes, because she needs to know their motivations to do her job properly.
594) Which of the following factors should be considered when determining an acceptable sales price?
a. Seller’s loan payoff amount
b. What personal property will be left in the property
c. What type of financing the seller will accept from the buyer
d. When the seller can vacate the property
595) Why should you have a conversation about financing for the property with the seller before you sign the listing agreement?
a. Financing information must be documented on the listing agreement.
b. It’s important to understand the financing that sellers will have available when they purchase their next property.
c. Some sellers can’t accept, or won’t qualify to accept, certain types of financing—such as FHA or VA loans—so you should know that up front.
d. You should only worry about financing if you’re a dual agent also representing a buyer.
596) When using the farming approach, turnover is a key factor when identifying a neighborhood. Which statement best describes turnover?
a. An area that is not currently farmed by another licensee
b. An area that the licensee likes
c. An area with a fair amount of listings—not too many, not too few
d. An area with a variety of home styles, sizes, features, price points, amenities, buyers, etc.
597) A buyer has assembled quite a list of repairs he’d like the seller to make. The seller, fearing she might lose this buyer, agrees to every item on the list. In what type of market is this concern most valid?
a. Cold
b. Dynamic
c. Hot
d. Static
598) In a hot market, when all other sellers are listing at or above market rate, what pricing strategy will likely induce a bidding war?
a. Pricing far above market value
b. Pricing in line with comparable properties
c. Pricing just above market value
d. Pricing just below market value
599) Which of the following is an example of an escalator offer?
a. Buyer offers $650,000. Seller accepts.
b. Buyer offers $650,000. Seller counters at $675,000. Buyer accepts.
c. Buyer offers $650,000. Seller counters at $675,000. Buyer counters back at $665,000.
d. Buyer offers $650,000 with clause that buyer will beat all competing offers by $3,000 up to $675,000.
600) Dan just listed a property two days ago and already has offers pouring in. It’s a hot market and properties are moving quickly. Which of these options is the best strategy?
a. Have buyers submit their “highest and best” offers and then help his seller decide which offer is most appealing.
b. Leave it on the market for a few more days to allow time for even more offers to come in.
c. Reject all offers and put the home back on the market for a higher price.
d. Submit only prime offers to his seller client.
601) Which of the following is a legitimate reason to counter an offer?
a. A $50 curtain
b. A cracked tile
c. A free-standing fire pit
d. Price
602) What happens to an initial offer from the buyer after a seller counters?
a. It becomes the back-up offer.
b. It’s accepted by the seller until the buyer accepts the counter.
c. It’s no longer in play.
d. Sellers cannot counter a buyer’s initial offer.
603) Norm has a listing. He can’t post it to the MLS and he can’t advertise it to the broad public. He can talk to colleagues at his brokerage firm about it, but it’s going to take a lot of work to sell this property without having all of his marketing tools at his disposal. What type of listing does he likely have?
a. Net listing
b. Office exclusive
c. Open listing
d. Secret listing
604) In what type of market is pricing a home below market value an especially good strategy, as buyers are scarce and unlikely to consider at or above-market homes?
a. Cold market
b. Hot market
c. Neutral market
d. Warm market
605) A buyer, hoping to beat out all other offers, included a clause in the offer that reads, “Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance.” What type of offer is this?
a. Bad
b. Dynamic
c. Elevator
d. Escalator
606) A listing that’s not posted on the MLS and is kept off-market is commonly known as a(n) ______.
a. Exclusive agency listing
b. Open listing
c. Pocket listing
d. Secret listing
607) In what type of market are buyers typically in a power position?
a. Cold
b. Dynamic
c. Hot
d. Static
608) How do agents commonly market an office exclusive?
a. Inform colleagues at their firm about the listing
b. Market the listing on the MLS
c. Place ads in local newspapers
d. Place advertisements on social media
609) What is a pocket listing?
a. A listing in which the buyer and seller are represented by the same real estate licensee
b. A listing only advertised on the MLS
c. A listing widely advertised through the MLS, social media, and other means
d. An off-market listing, not posted on the MLS
610) Which of the following are common with cold markets?
a. Bidding wars
b. Multiple offers
c. No or low offers
d. Offer terms unfavorable to buyers
611) A buyer is reluctant to ask for repairs and risks the seller accepting a different offer. In what type of market is this concern most valid?
a. Cold
b. Dynamic
c. Hot
d. Static
612) Seller repairs, lengthy closing dates, and seller-paid closing costs are terms buyers may ask for in a ____________ market.
a. Cold
b. Dynamic
c. Hot
d. Static
613) Whoa—this market is hot, hot, HOT! You’ve had five offers come in since you listed your seller client’s home yesterday. Of the options listed, which is the best strategy?
a. Accept a middle-of-the-road offer, but on the condition that no home inspection repairs will be performed.
b. Have all buyers submit their “highest and best” offer, then help the seller decide which offer is most appealing.
c. Leave it on the market for another three days to allow time for even more offers to come in.
d. Reject the offers and put the home back on the market for the amount of the highest offer.
614) If a seller asks a buyer to waive the inspection contingency, how could the transaction process transpire and still protect the buyer?
a. Buyer has inspection, buyer makes offer, seller accepts offer
b. Buyer makes offer, inspection performed, seller accepts offer
c. Buyer makes offer, seller accepts offer, closing occurs, inspection performed
d. Buyer makes offer, seller accepts offer, inspection performed
615) In a neutral market, what pricing strategy may generate interest in the property, possibly prompting multiple offers?
a. Pricing above market value
b. Pricing at market value
c. Pricing below market value
d. Pricing in line with comparable properties
616) Waiving inspection, waiving appraisal, and offering the seller possession after closing are all terms buyers may offer a seller to make their offer more appealing in a _________ market.
a. Cold
b. Dynamic
c. Hot
d. Static
617) Which of these offers would be the most appealing to a seller?
a. A full-price offer waiving inspection, conventional financing with 20% down, closing in 45 days
b. An all-cash offer $15,000 below list price and closing in two weeks
c. An offer $10,000 over list price, contingent upon appraisal and inspection, conventional financing with 20% down, closing in 30 days
d. The best offer is the one a seller determines is best for his unique needs and motivations.
618) What’s an effective pricing strategy when listing a home in a cold market?
a. Price the home above market value.
b. Price the home above market value and decrease the price after a month if it doesn’t sell.
c. Price the home at exact market value.
d. Price the home below market value.
619) Which party tends to benefit in a hot market?
a. Buyer
b. Client
c. Customer
d. Seller
620) Which party tends to benefit in a cold market?
a. Buyer
b. Client
c. Customer
d. Seller
621) Kurt is pricing a home for a client in a cold market. It’s a great property, and he knows it would sell for above market value if the market were better. All things considered, what’s the best pricing strategy for the home?
a. Price the home above market value.
b. Price the home above market value and decrease the price after a month if it doesn’t sell.
c. Price the home at its exact market value.
d. Price the home below market value.
622) In what type of market are sellers typically in a power position?
a. Cold
b. Dynamic
c. Hot
d. Static
623) In a hot market, what pricing strategy may incite bidding wars?
a. Pricing at or just below market value
b. Pricing far above market value
c. Pricing in line with comparable properties
d. Pricing just above market value
624) Which of the following is a danger of office exclusives?
a. Higher commission rates
b. Increased market exposure
c. Lower listing prices
d. Reduced market exposure
625) What should an agent do if a seller client requests an office exclusive?
a. Advertise the listing on the MLS
b. Fully inform the seller about the dangers of reduced market exposure
c. Negotiate a higher commission, as there is a greater burden on the agent to find a buyer
d. Prepare advertising for social media and local newspapers
626) When a seller counters the buyers’ original offer, what options do buyers have?
a. They can accept, counter, or reject the offer.
b. They can accept the offer and counter back.
c. They can only accept or reject the counter-offer.
d. They can only accept the counter-offer.
627) Which of these standard forms is used to document an agreement between a seller and a listing broker to cease marketing a property?
a. Cancellation of Listing
b. Modification of Terms
c. Seller Instruction to Exclude from the MLS
d. Termination of Buyer Agency
628) Which of the following requires that contracts transferring ownership of real property be in writing to be enforceable?
a. Code of ethics
b. Fair Housing Act
c. Statute of frauds
d. Statute of limitations
629) Which of these statements accurately describes the purpose of a Buyer Non-agency Agreement?
a. Establishes a non-exclusive listing agreement between a seller and a broker.
b. Establishes an open listing agreement between a seller and a broker.
c. Protects the listing broker from implied agency by notifying the buyer that the listing broker is not the buyer’s agent.
d. Protects the listing broker from implied agency by notifying the seller that the listing broker is not the seller’s agent.
630) If two parties enter into a contractual agreement with each other to perform an illegal act, which of the following statements is true of the contract?
a. It is voidable, because Jesse is not mentally competent to sign a contract.
b. It is voidable, because Jesse probably signed it under duress.
c. It is voidable, because the consideration, as a percentage rather than a dollar amount, is not clearly stated.
d. It is void because it is not for a lawful purpose.
631) Consent is not present when _______.
a. The contract is for an unlawful purpose
b. The contract is not in writing
c. The contract is signed by a minor
d. The contract is signed under duress or undue influence
632) If a minor enters into a contract with an adult, which of the following is true?
a. The adult may legally hold the minor to the contract, but the minor cannot legally hold the adult to the contract.
b. The contract is valid, and both the minor and the adult may legally hold the other party to the contract.
c. The contract is void, and neither the minor nor the adult may legally hold the other party to the contract.
d. The minor may legally hold the adult to the contract, but the adult cannot legally hold the minor to the contract.
633) Which of the following individuals would be a competent party to a contract?
a. Byron, a 17-year-old MENSA member
b. Claudia, a 37-year-old in-patient receiving treatment for schizophrenia
c. Graciella, a 28-year-old unemployed parolee
d. Norman, a 40-year-old heroin addict
634) Which of the following is an essential element of a valid real estate contract?
a. Duress
b. Legal purpose
c. Misrepresentation
d. Mutual mistake

635) Which of these descriptions matches the purpose of a Modification of Terms form?
a. Used to modify the terms of a listing agreement, such as price and expiration date
b. Used to modify the terms of a sales offer, such as price and contingencies
c. Used to modify the terms of broker compensation for a purchase agreement
d. Used to prepare a counter-offer to the terms in a sales contract
636) Which element of a valid contract is established by getting the signatures of all parties?
a. Competent parties
b. Consideration
c. Lawful objective
d. Offer and acceptance
637) Which of these sentence most accurately reflects what the seller needs to understand about MLS listings when completing a listing agreement?
a. California sellers must complete a seller instruction form that specifies which MLS data to include in Internet listings.
b. Listing a property in the MLS has the potential to negatively impact the sales price.
c. Listing property in the MLS is required under California law.
d. Using the MLS exposes the property to other agents and their buyer clients, and opting out has the potential to reduce the number of offers.
638) What does the REO stand for in “C.A.R. REO advisory listing form”?
a. Ransom E. Olds
b. Real estate owned
c. REO Speedwagon
d. Rome State Airport
639) Amy is working with seller clients who have suggested they would like the property to go to another African-American family. Which section of the listing agreement would help Amy convey why she cannot market the property this way?
a. Anti-discrimination disclosure
b. Equal housing opportunity
c. Fair housing rules
d. Illegal practices
640) Who may unilaterally cancel a listing agreement?
a. No one
b. The broker
c. The listing agent
d. The seller
641) You have a seller client who hasn’t had any offers and wants to extend the listing period. Which C.A.R. form would come in handy now?
a. Additional Agent Acknowledgement (AAA)
b. Expiration Date Extension (EDE)
c. Modification of Terms (MT)
d. Notice to Buyer to Perform (NBP)
642) Carter, a licensee, never posts his clients’ property on the MLS. This gives him the opportunity to find the buyer himself, potentially doubling his commission. What disadvantage might apply to Carter’s clients?
a. Their properties may be over-exposed.
b. Their properties may not sell for top dollar.
c. They may receive too many offers if Carters’ network is too wide.
d. They will pay more commission overall.
643) What does the successor and/or assigns section of the Residential Listing Agreement state?
a. It prohibits the licensee from assigning the listing agreement to the licensee’s broker.
b. It prohibits the seller from assigning the listing agreement to another licensee.
c. It prohibits the seller from assigning the listing agreement to anyone else.
d. It states that the listing agreement is binding on the seller’s heirs.
644) In the listing agreement, how is the responsibility for marketing and showing the property described?
a. Both seller and broker are responsible.
b. The listing agreement does not account for responsibility in this area.
c. The responsibility lies solely with the listing agent and brokerage.
d. The seller is solely responsible.
645) Caryn is a listing agent for Bret and has just provided him with an offer on his property. Bret informs Caryn that the home is in foreclosure. What do we know about this situation?
a. Bret is within his rights to withhold this information.
b. Bret should have disclosed this to Caryn per the listing agreement.
c. Caryn cannot disclose this situation to the buyer.
d. This situation is not covered by the listing agreement.
646) Andy has decided to drop the price on his townhome. His listing agreement states the list price as $650,000. How can he account for the price drop?
a. Ask his agent to change it on the MLS
b. Complete a Modification of Terms form before changing it on the MLS
c. He cannot change it, but may accept a lower offer
d. Once the listing term expires, he may relist it at the new price
647) Which of these advance fee agreements is legal in California?
a. A broker and a property owner agree to an advance fee for loan modification that will save the money in the long run.
b. A broker and seller agree to an advance fee for marketing a multi-million dollar property that is not approved by the Department of Real Estate.
c. A broker and seller agree to an advance fee for marketing a time-share property and the agreement was approved by the Department of Real Estate.
d. A broker tells a new buyer client the types of wine she prefers just before winking suggestively.
648) What does the SSIA stand for in C.A.R. Form SSIA?
a. Shoe Service Institute of America
b. Short sale ill advised
c. Short sale information and advisory
d. Short sale inspection advisory
649) Which of these statements best describes one of the purposes of including a section about the entire agreement in the Residential Listing Agreement?
a. Both parties are required to read the entire agreement.
b. Each term must be valid, or the entire agreement will be voided.
c. Every term in the listing agreement must be initialed to be valid.
d. Everything the parties are contracting to is in the listing agreement.
650) Which of these is a likely reason for a listing agent to use a Modification of Terms form?
a. A buyer has made an offer below list price and the seller is willing to take that offer.
b. The seller wants to move up the expiration date because the property sold right away.
c. The seller wants to raise the list price after receiving no offers.
d. The seller wishes to lower the list price to encourage more offers.
651) One of Amy’s clients has a property that received eight offers before the deadline. Assuming Amy received no special instructions on presenting offers, how many of the offers must she present to the seller?
a. As many of the offers that were at list price or higher
b. Eight
c. None
d. The top three
652) Which of the following situations entitles Gary to commission with a 30-day protection clause?
a. Buyers viewed the property 15 days after the listing expired and made an offer that was accepted.
b. Buyers who viewed the property while it was listed with Gary made an accepted offer 10 days after the listing expired.
c. Gary told his overseas cousin about the property, and his cousin returned to the U.S. 35 days after the listing expired to make an offer.
d. The seller told a group of colleagues about the house 20 days after the listing expired, and one eventually came to see the house, which led to a contract.
653) Jeremy signed a listing agreement with a broker, Ralph. Jeremy was then run over by a cement truck and died. What happens to his agreement with Ralph?
a. It becomes void.
b. It continues and is binding on Jeremy’s heirs.
c. It gets assigned to Jeremy’s attorney.
d. It is terminated.
654) Which of the following advance fees is legal?
a. Bart, a licensee, receives an advance fee directly from his principal after having the advance fee agreement approved by California DRE.
b. Homer, a licensee, receives an advance fee from his client, Edna Krabapple. He does not report this to his broker.
c. Lisa, a licensee, receives approval for her advance fee agreement from California DRE and is paid through her broker.
d. Marge, a licensee, uses an advance fee agreement obtained through a stationery form and does not submit it to California DRE for approval, but is paid through her broker.
655) Which of these statements about seller initials on listing agreements is true?
a. Seller initials must be notarized to be enforceable.
b. Sellers only need to initial those pages that contain handwritten insertions.
c. Sellers should initial each page to indicate their understanding of the terms on that page.
d. Sellers should not initial listing agreements; that is the role of the broker.
656) Which of these statements accurately describes what a seller is agreeing to in the seller representations portion of a listing agreement?
a. Sellers must disclose all material facts about the property.
b. Sellers must disclose financial issues that may affect the sale, such as delinquency in payments, bankruptcy, or receipt of a notice of default.
c. Sellers must own the property with a clear title.
d. Sellers will represent the brokerage and need to behave with professionalism.
657) Marty, a licensee, has a listing agreement with Becca, the seller. Whenever anyone tries to show Becca’s property, Becca says it’s not convenient. What is true about this situation?
a. Becca is in violation of the listing agreement.
b. Becca is within her rights, but isn’t being very fair to Marty.
c. Marty must terminate the listing agreement.
d. Marty will have to procure the buyer.
658) Which of the following distressed property types is covered by the Residential Listing Agreement?
a. Chapter 114
b. REO
c. Short sale
d. Short sale and REO
659) Why is it so necessary to obtain signatures on a listing agreement?
a. Any real estate contract must be in writing to be enforceable.
b. Every blank needs to be filled in on a form contract.
c. Signatures are required to list the property on the MLS.
d. Your broker may be fined for approving a listing agreement that is not signed.
660) Which of the following is a true statement regarding a licensee’s role in preparing a real estate contract?
a. A licensee has legal authority to draft any real estate contract or addendum.
b. A licensee may not alter an existing form.
c. A licensee must use standardized language when writing an addendum.
d. A licensee’s role is limited to filling in the blanks.
661) Amy is explaining the broker and seller’s duties section of a listing agreement to a new client. Which of these would be an accurate statement to make?
a. The extent of the broker’s duties depends on the type of listing agreement.
b. The seller agrees to set a list price that’s within the range recommended by the broker.
c. The seller and broker will take turns showing the property to potential buyers.
d. The seller and the broker agree to exercise reasonable effort and cooperation in the sale of the property.
662) California law requires a notice about compensation to the broker in the listing agreement. What does that notice need to communicate?
a. Net listings are illegal.
b. Net listings are required by law.
c. The amount or rate of the commission is fixed by law.
d. The amount or rate of the commission is not fixed by law.
663) Which of these agreements needs to be signed before all of the others?
a. Agency disclosure
b. Keysafe/lockbox authorization
c. Listing agreement
d. Seller’s instructions to the broker
664) Which of the following statements accurately describes the information needed to complete the property to be acquired section of a buyer representation agreement?
a. The characteristics of the property the buyers would like to purchase, such as price range.
b. The legal description for the property the buyer has made an offer to purchase.
c. The loan amount for which the buyer is pre-approved.
d. The neighborhoods the buyer would like to exclude from the search based on ethnic make-up.
665) A buyer representation agreement that states the buyer will only work with one agent is ______ buyer representation agreement.
a. An enforceable
b. An exclusive
c. An illegal
d. A non-exclusive
666) One of the buyer representation forms published by C.A.R. is the BRNN. What do the two Ns stand for?
a. Non-exclusive, non-binding
b. Non-exclusive, not for compensation
c. Non-inclusive, not for compensation
d. Not for pay, not for fools
667) One of the buyer representation agreements published by C.A.R. is the BRNE. What does the ‘NE’ stand for?
a. Nebraska
b. No errors
c. Non-exclusive
d. Non-exempt
668) Which type of a buyer representation agreement allows a buyer to enter into agreements with multiple brokers and pay only the broker who found the property that was ultimately purchased by the buyer?
a. Exclusive listing agreement
b. Non-exclusive buyer representation agreement
c. Non-exclusive, not for compensation buyer representation agreement
d. Open listing agreement
669) The two advisories listed in the other terms and conditions section of a C.A.R. buyer representation agreement are the buyer’s inspection advisory and the _______________________.
a. Market condition advisory
b. REO advisory
c. Statewide broker’s advisory
d. Statewide buyer and seller advisory
670) Imagine you’re preparing an exclusive buyer representation agreement with a client and need to explain the options available for agency relationship. Which of these is accurate?
a. Because our brokerage lists properties as well as assists buyers, dual agency is required.
b. If we find a property you like that is listed by my broker, I may need to act as a dual agent.
c. Under an exclusive agency agreement, I will never represent anyone but you.
d. With the exclusive agency agreement, you are my exclusive client, but I may not be your exclusive broker.
671) When explaining the buyer representation agreement to a client, you will mention which advisories found in the other terms and conditions section?
a. The agency advisory and the statewide buyer and seller advisory
b. The agency disclosure and buyer’s inspection advisory
c. The buyer’s inspection advisory and the keysafe/lockbox advisory
d. The buyer’s inspection advisory and the statewide buyer and seller advisory
672) Which of these real estate contracts would not include a section on broker compensation?
a. Exclusive listing agreement
b. Non-exclusive buyer representation agreement
c. Non-exclusive, not for compensation buyer representation agreement
d. Open listing agreement
673) Which type of buyer representation agreement published by C.A.R. does not include a broker compensation section?
a. BRE
b. BRNBC
c. BRNE
d. BRNN
674) Which of the following is true regarding the BRNN?
a. It informs the consumer of the benefits of dual agency.
b. It requires the buyer to compensate the licensee in the event the licensee procures a property for the buyer.
c. It safeguards the licensee from claims of undisclosed dual agency.
d. It safeguards the licensee’s compensation.
675) What makes a non-exclusive buyer representation agreement different from an exclusive buyer representation agreement?
a. An exclusive agreement is used when the buyer has already made an offer on a single property.
b. A non-exclusive agreement allows the broker to present a listing to multiple buyers.
c. A non-exclusive agreement allows the buyer to work with other brokers, any one of whom may end up representing the buyer in the transaction.
d. A non-exclusive agreement is used when the buyer is willing to consider the purchase of multiple properties.
676) When working with flippers, it is recommended you have systems in place that ______.