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RE PRINC MC
RE Princ Unit MC
585
Real Estate & Planning
Professional
06/23/2017
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Term
California’s economy is so large that it actually competes with:
 Definition
countries.
Term
The most populous state in the country is:
 Definition
California
Term
A large, densely populated metropolitan area consisting of a number of major urban areas and smaller surrounding cities is called a:
 Definition
megalopolis.
Term
An economic system in which most of the economy’s resources are privately owned and managed is called:
 Definition
capitalism.
Term
The increase in market value of real estate defines:
 Definition
appreciation.
Term
A decrease in purchasing power of the dollar describes:
 Definition
inflation.
Term
The real estate housing market is influenced by:
 Definition
all of the above.
Term
The best housing market would be created by all of the following, except:
 Definition
a low affordability index.
Term
The price that is middle value of a sample of sales, with one-half of the sales below and one-half of the sales above is called:
 Definition
median home price.
Term
In California, to work as a real estate salesperson or broker you must have:
 Definition
a real estate license issued by the California Bureau of Real Estate.
Term
Five homes in the same neighborhood sold within the last three months for $425,000, $450,000, $400,000, $395,000, and $405,000. What is the median price for these sales?
 Definition
$405,000
Term
The number of households that will be able to afford a median-priced home in California is indicated by the:
 Definition
affordability index.
Term
California has been the number one agricultural producing state in the country for more than 50 years. Of the following, which is not one of California's main commercially grown products?
 Definition
Potatoes
Term
California's oil wells are known as "_____ gold."
 Definition
black
Term
Because people come to California from other states and from around the world, it is considered:
 Definition
ethnically diverse.
Term
According to the U.S. Census, approximately what percentage of the U.S. population lives in California?
 Definition
12.00000%
Term
What is the name for a large, densely populated metropolitan area consisting of a number of major urban areas and smaller surrounding cities?
 Definition
Megalopolis
Term
Which county is the most populous county in the United States?
 Definition
Los Angeles County, California
Term
Which state is the most populous in the country?
 Definition
California
Term
What is the name of the economic system in which most of the economy's resources are privately owned and managed?
 Definition
Capitalism
Term
In order to work as a real estate salesperson or broker in California, a person must have:
 Definition
a real estate license issued by the California Bureau of Real Estate.
Term
California's inventory of _____ units is not enough to meet the demand because our population increases faster than our supply of housing.
 Definition
housing
Term
C.A.R. stands for:
 Definition
California Association of REALTORS®.
Term
Which of the following does not help to create a strong housing market?
 Definition
Low affordability index
Term
Which of the following is not considered one of California's top industries?
 Definition
Textiles
Term
A megalopolis is a:
 Definition
large, densely populated metropolitan area consisting of a number of major urban areas and smaller surrounding cities.
Term
Forty percent of people in California speak languages other than English at home. Which language is the second-most common language spoken?
 Definition
Spanish
Term
Which statement regarding California is incorrect?
 Definition
California's basic climate is called continental.
Term
What are the two types of real estate licenses?
 Definition
Salesperson license and broker license.
Term
The _____ rate is the percentage of the people classified as unemployed as compared to the total labor force.
 Definition
unemployment
Term
The price that is midway between the least expensive and most expensive home sold in an area during a given period of time is called the _____ home price.
 Definition
median
Term
What is the name of the economic system in which most of the economy's resources are privately owned and managed?
 Definition
Capitalism
Term
What is the name for a large, densely populated metropolitan area consisting of a number of major urban areas and smaller surrounding cities?
 Definition
Megalopolis
Term
Because people come to California from other states and from around the world, it is considered:
 Definition
ethnically diverse
Term
In a technical sense, the term “property” refers to:
 Definition
rights or interests in the thing owned.
Term
Why do disputes arise regarding ownership of personal property?
 Definition
Personal property can become real property.
Term
Which of the following is considered real property?
 Definition
Airspace above the land
Term
Which of the following is considered personal property?
 Definition
Leases
Term
A running stream is considered:
 Definition
real property.
Term
Which of the following statements concerning riparian rights is not correct?
 Definition
Riparian property owners own the water and may use as much as they want.
Term
Which of the following is considered personal property?
 Definition
An existing mortgage
Term
Which of the following is considered appurtenant to land?
 Definition
All of the above
Term
Of the following, which is not one of five general tests of a fixture?
 Definition
Time of attachment
Term
Which of the following is considered real property?
 Definition
Bearing wall in a single-family residence
Term
“Of indefinite duration” is a phrase that describes an:
 Definition
estate of inheritance.
Term
John conveys a portion of his fee estate to Fred that is for a term less than his own, John’s own interest would be:
 Definition
reversion.
Term
Which of the following is a non-freehold estate?
 Definition
Tenancy for years
Term
David left his son 2/3 interest and left his son’s wife 1/3 interest in real property jointly and without the right of survivorship. They will take title as:
 Definition
tenancy in common.
Term
Ownership in severalty would most likely involve:
 Definition
sole ownership.
Term
Baker, Cook, and Turner own equal interests in a parcel of land as tenants in common. Without the consent of the others, Turner leased the entire parcel to Hunter for agricultural purposes. Such a lease would be:
 Definition
valid, but Hunter takes the property subject to Baker and Cooks right to share in the enjoyment and possession of the property.
Term
The words “time, title, interest, and possession” are most closely related to:
 Definition
survivorship.
Term
How are a joint tenancy interest and a community property interest alike?
 Definition
Ownership interests are equal
Term
Chris, Bell, and Lyn took title to a property as joint tenants. Chris sold her share to Pat, and then Bell died. Who owns the property now?
 Definition
Lyn owns 2/3 and Pat owns 1/3 as tenants in common.
Term
A contract to sell community real property made by one spouse only is:
 Definition
unenforceable
Term
Naturally occurring plant growth, such as grasses, trees, and shrubs and are considered:
 Definition
part of the real property.
Term
Anything used with land for its benefit is known as a(n):
 Definition
appurtenance.
Term
Which of the following is considered real property?
 Definition
Airspace
Term
The holder of a life estate may not:
 Definition
will the property.
Term
An undivided interest is defined as the:
 Definition
interest a co-owner has in property which carries with it a right to possession of the whole property along with the co-owners.
Term
Two brothers, Alex and Chris, wanted to buy a house together, but wanted to make sure that if one brother died, the other would automatically become sole owner of the house. How should they take the title?
 Definition
Joint tenancy
Term
Two friends contributed equal amounts to purchase a vacation home. There was no mention of the ownership interest of each person or how title was to be taken. Under these circumstances, each person would hold a(n):
 Definition
divided 1/2 interest as ownership in severalty.
Term
Ownership in severalty would most likely involve:
 Definition
sole ownership.
Term
Which statement is correct regarding recording a grant deed?
 Definition
A deed must be acknowledged to be recorded.
Term
A leasehold is also known as a(n):
 Definition
less-than-freehold estate.
Term
Of the following, which is not a right included in the bundle of rights?
 Definition
Right to tax
Term
Another name for an estate of inheritance is:
 Definition
fee simple.
Term
An owner builds an expensive oak bookcase and places it in his den, affixing it permanently to wall for stability. When the home is sold, if no special arrangements are made:
 Definition
it has become a fixture and belongs to the buyer.
Term
The property rights that someone has in something are known collectively as:
 Definition
the bundle of rights.
Term
Whenever an interest in real property is transferred voluntarily or involuntarily, why should the new owner record the transfer instrument?
 Definition
Recording the transfer instrument protects his or her legal interests.
Term
Emblements are:
 Definition
personal property
Term
What is the commonality of the terms, measuring life, pur autre vie, and life tenant?
 Definition
They are associated with life estates.
Term
A renter holds a:
 Definition
less-than-freehold estate.
Term
Annual crops produced by human labor, such as fruits, nuts, vegetables, and grains are:
 Definition
fructus industriales.
Term
Which of the following is not real property?
 Definition
Gas and oil
Term
Which type of ownership is not concurrent ownership?
 Definition
Ownership in severalty
Term
Which of the following is the best definition of encumbrance?
 Definition
Anything that affects or limits the fee simple title to or value of property
Term
The form of encumbrance that makes specific property the security for the payment of a debt or discharge of an obligation is called a:
 Definition
lien.
Term
A recorded abstract of judgment is classified as a(n)_______________lien.
 Definition
involuntary
Term
Recording a lis pendens:
 Definition
clouds the title and affects marketability.
Term
The owner of an apartment building does not declare the income from the rental units. The IRS filed a government tax lien, which would be a
 Definition
general lien.
Term
The personal, revocable, unassignable permission to use the property of another without a possessory interest in it is called a(n):
 Definition
license.
Term
Roger, who owns a ranch, gave Sam who owns no property, a non-revocable right to cross his ranch to fish in the stream. Sam has a(n):
 Definition
easement in gross.
Term
Private restrictions on land can be created by deed:
 Definition
or written agreement.
Term
Alienation of title to real property most nearly means to:
 Definition
convey or transfer title and possession.
Term
To be binding on a buyer and a seller, a deed to transfer real property must be:
 Definition
delivered and accepted.
Term
A grant deed is considered executed when it is:
 Definition
signed by the grantor.
Term
Effective delivery of a deed depends on:
 Definition
the intention of the grantor
Term
Dana sold a property to Kim, who did not record the deed but did occupy the premises. Dana then sold the same property to Lee, who did not inspect the property but did record the deed. After the second sale, who would have legal title to the property?
 Definition
The title would remain with Kim.
Term
An owner of a parcel of real property gave his neighbor a deed conveying an easement for ingress and egress. The easement was not specifically located in the deed. Under the circumstances, the neighbor’s right to use the easement is:
 Definition
enforceable because the location of the easement does not need to be specified.
Term
Which of the following actions is a quiet title action?
 Definition
Court action to remove a cloud on title
Term
What is the court proceeding that clears a cloud on the title of real property.
 Definition
Quiet title action
Term
Which statement is correct regarding encumbrances?
 Definition
Financial encumbrances affect the title.
Term
In order for a grant deed to be effective:
 Definition
the deed must be delivered to and accepted by the grantee.
Term
Regarding liens, which statement is incorrect?
 Definition
All encumbrances are liens.
Term
A(n) __________ is a person who makes a will.
 Definition
testator.
Term
The difference between an easement and a license to use property is:
 Definition
a license may be canceled.
Term
What type of easement is created when a parcel is completely land locked and has no access?
 Definition
Easement by necessity
Term
What is created when a garage, driveway, or fence extends beyond the land of its owner and covers the land of an adjoining property?
 Definition
An encroachmen
Term
As part of the mechanic's lien process, what notice must be given to the owner within 20 days of first furnishing labor or materials for a job by anyone eligible to file a mechanic's lien.
 Definition
Preliminary notice
Term
When someone dies, without leaving a will, he or she is known to have died:
 Definition
intestate.
Term
All of the following are financial encumbrances with the exception of a(n):
 Definition
easement.
Term
Real property can be transferred by __________ grant, which is the transfer of title by the government to a private individual.
 Definition
public
Term
An encumbrance is a non-possessory interest in real property that is held by someone who is not the:
 Definition
owner.
Term
A court action to divide a property held by co-owners is called:
 Definition
partition action.
Term
Encumbrances fall into two categories:
 Definition
financial and non-financial encumbrances.
Term
A forced sale of property in order to satisfy a judgment for money or foreclosure of a mortgage is a(n):
 Definition
sheriff's sale.
Term
How is constructive notice of a sale given?
 Definition
By recording a deed or by taking possession of the premises
Term
California recognizes three types of wills. Which will is written entirely in the handwriting of the testator (maker) and is dated and signed by the testator?
 Definition
Holographic will
Term
A(n) _____ is a court order forcing a person to do or not to do an act, such as violating a private restriction.
 Definition
injunction
Term
Why is it important to determine the starting date for a mechanic's lien?
 Definition
Mechanic's liens have priority as of the date work began or materials were first furnished for the job.
Term
All of the following are non-financial encumbrances except:
 Definition
a lien.
Term
When a promise is given by both parties with the expectation of performance by the other party, it is known as a(n) ¬¬¬¬¬_____ contract
 Definition
bilateral
Term
A contract signed under duress is:
 Definition
voidable.
Term
A minor cannot hire a real estate broker using a listing agreement because a minor:
 Definition
is legally incapable.
Term
All of the following are necessary for a valid contract, except:
 Definition
sufficient writing.
Term
All of the following are necessary for a valid contract except
 Definition
payment of money.
Term
The following are necessary elements to create a valid contract, except:
 Definition
performance.
Term
The essential element needed to create a binding employment contract for the sale of any right, title, or interest in real property is a(n):
 Definition
written instrument.
Term
A written contract takes precedence over oral agreements. This principle is expressed by the:
 Definition
parol evidence rule.
Term
The relinquishment or refusal to accept a right is known as:
 Definition
waiver.
Term
The substitution of an obligation or contract with a new one is called:
 Definition
novation.
Term
A bilateral contract is:
 Definition
A contract in which a party promises to perform without expectation of performance by the other party.
Term
Of the following, who would not be considered a legally competent party?
 Definition
Alice, a 17-year old who is engaged to be married
Term
Tom listed his home with broker Barbara. The listing agreement was a standard preprinted form into which Barbara typed the listing information. She typed 90 days as the term of the listing. However, at the listing meeting, Tom changed the term of the listing agreement from 90 to 60 days which he wrote in the contract, initialed the change, and signed the contract. After 60 days, Tom told Barbara he was going to list with another broker, but Barbara told him that he had 30 days remaining on his existing listing agreement. Who is correct, broker Barbara or seller Tom?
 Definition
Tom - handwritten clauses and insertions take precedence over any type- written content, attached addenda, and preprinted material.
Term
What is the commonality of unilateral rescission, performance, and breach?
 Definition
They are methods of discharging contracts.
Term
How long is the statute of limitations for a contract to purchase a condominium?
 Definition
4 years
Term
What is the time limit under the statute of limitations to bring an action on most real estate contracts?
 Definition
4 years
Term
Which of the following is not a remedy for breach of contract?
 Definition
Lateral Rescission
Term
A contract in which a party promises to perform without expectation of performance by the other party is called a(n):
 Definition
unilateral contract.
Term
Which of the following takes precedence in a contract?
 Definition
Handwritten clauses and insertions
Term
Which of the following is not one of the four requirements needed for a contract to be legally binding and enforceable?
 Definition
Written agreement
Term
The forgiveness of a debt or obligation, or giving up an interest or a right, qualifies as valuable consideration. It is called:
 Definition
forbearance.
Term
A(n) _____ could not enter into a contract.
 Definition
6 year old child
Term
A valid contract between buyer and seller exists when the:
 Definition
buyer is notified of the seller's acceptance.
Term
When force is used to get agreement in accepting a contract, it is called:
 Definition
duress.
Term
In California, the __________ requires that certain contracts be in writing to prevent fraud in the sale of land or an interest in land.
 Definition
statute of frauds
Term
A contract in which all the parties have performed completely is called a(n):
 Definition
executed contract.
Term
What is the most common way to discharge a contract?
 Definition
Full performance
Term
A person who has been harmed by another person's breach of contract has all of the following remedies, except:
 Definition
attaching the breaching party's bank account.
Term
A contract in which the parties declare the terms and put their intentions in words, either oral or written is known as a(n):
 Definition
express contract.
Term
Which contract is binding and enforceable has all the basic elements required by law?
 Definition
Valid contract
Term
What is the commonality of full performance, release, assignment, novation, and breach?
 Definition
Ways to discharge a contract
Term
A minor is:
 Definition
someone under 18 years of age.
Term
The Statute of Frauds requires that leases for longer than _____ must be in writing.
 Definition
one year
Term
Terry and Ben made an offer to buy a duplex. The seller did not accept their offer, but did make a counteroffer. Meanwhile, Terry and Ben found a triplex they liked better and decided to make an offer on it, which was accepted. Which of the following is true?
 Definition
Terry and Ben were released from their original offer by the seller's counteroffer.
Term
Which of the following could not enter into a contract?
 Definition
6 year old child
Term
Under California law, any person seeking relief for a breach of contract must do so within the time limits of the:
 Definition
Statute of Limitations
Term
Every agency relationship has a principal, an agent, and a third party. In a real estate transaction the agent is the:
 Definition
broker.
Term
An enforceable listing contract for the sale of real property must be:
 Definition
in writing.
Term
The usual listing contract authorizes a broker to:
 Definition
find a purchaser and receive an offer to purchase accompanied by a deposit.
Term
Seller Sam signed a listing contract with broker Baker. If Baker brings the seller a full price offer:
 Definition
Sam does not have to accept the offer.
Term
An agency relationship may be terminated by all of the following, except:
 Definition
the principal’s refusal of an offer to purchase that was presented in the name of a third party
Term
Broker Davis signed an exclusive right-to-sell listing to sell John’s $365,000 house. Davis diligently advertised the sale of the house. One week before the listing was to expire, the house was sold through John’s own efforts to a friend. Under current rules and regulations, Davis is most likely to receive:
 Definition
the commission stated in the listing agreement.
Term
In an exclusive listing, as a matter of law, a listing between the broker and seller:
 Definition
must have a definite termination date.
Term
Wes hired Horn to sell a property through a 90-day exclusive agency listing. Thirty (30) days later the house had not sold, so Wes sent Horn a certified letter ending the agency listing which Horn accepted. A few days later, another broker sold the house through an open listing. Under such circumstances:
 Definition
only the open agent is owed a commission.
Term
Seller Janet signs a memorandum for an open listing with a broker authorizing the sale of her house for $165,000. The broker expends considerable time and money advertising and showing the house and obtains several offers. However, Janet rejects the offers and instead sells the house to a friend. The broker:
 Definition
is not entitled to a commission because of the open listing.
Term
To be entitled to a commission, a broker must show that he or she was the procuring cause of the sale under all of the following types of listing agreements, except a(n) ____________ listing.
 Definition
exclusive right-to-sell
Term
An agent receives an offer. The agent gives the offer to the seller, who asks to consider it for 24 hours. At 6 p.m. the same day, the agent receives two more offers. The agent believes the seller will not accept any of the three offers. The agent should:
 Definition
convey the two new offers at the same time.
Term
A listing broker received a bona fide offer and a personal check as a deposit. The prospective buyer asked the listing broker to hold the check uncashed until the end of the week. The listing broker must:
 Definition
inform the seller.
Term
A listing broker is relieved of the obligation to present an offer to purchase real property to his or her principal when the:
 Definition
broker is acting on written instructions from the principal or the offer is patently frivolous.
Term
If a listing broker acts as an agent, the broker owes to the seller a fiduciary duty. What does the broker owe to the buyer?
 Definition
A duty of fair and honest dealing
Term
A broker is most likely to earn a commission when the broker:
 Definition
communicates the seller’s acceptance to the buyer
Term
The term, __________, refers to a broker who produces a buyer "ready, willing, and able" to purchase the property for the sale price and on the terms specified by the seller, regardless of whether the sale is completed
 Definition
procuring cause
Term
Every agency relationship has a principal, an agent, and a third party. In a real estate transaction the agent is the:
 Definition
broker
Term
An agent receives an offer. The agent gives the offer to the seller, who asks to consider it for 24 hours. At 6 p.m. the same day, the agent receives two more offers. The agent believes the seller will not accept any of the three offers. The agent should
 Definition
convey the two new offers at the same time.
Term
Which of the following is not true regarding dual agency?
 Definition
Dual agency is a violation of real estate law
Term
Seller Jordan signs a memorandum for an open listing with a broker authorizing the sale of her house for $65,000. The broker expends considerable time and money advertising and showing the house and obtains several offers. However, Jordan rejects the offers and instead sells the house to a friend. The broker
 Definition
is not entitled to a commission because of the open listing.
Term
Which of the following is true of a listing agreement?
 Definition
It allows a broker to complete a specific task
Term
Which of the following is not a listing agreement typically used in California?
 Definition
Exclusive net agency listing
Term
An agency relationship may be terminated by all of the following, except
 Definition
the principal's refusal of an offer to purchase that was presented in the name of a third party.
Term
Which of the following is a way to create an agency relationship?
 Definition
Estoppel
Term
A licensed broker obtained an exclusive right-to-sell listing from an owner. During the listing period, the broker found a buyer who made an offer on the property that was accepted by the seller. Neither the offer nor the escrow instructions mentioned: (a) the broker as the agent, or (b) terms for payment of a commission. Under these circumstances the broker
 Definition
is legally entitled to a commission.
Term
An agent must supply a written Agency Disclosure:
 Definition
to a seller before listing a property or to a buyer before writing an offer.
Term
In an exclusive listing, as a matter of law, a listing between the broker and seller:
 Definition
must have a definite termination date.
Term
In a real estate transaction the customer is considered the
 Definition
third party.
Term
Statements not known to be false at the time they are made are called _____ misrepresentations.
 Definition
innocent
Term
A person who authorizes another to act in his or her place in regard to relations with third persons is the:
 Definition
principal
Term
An agent who represents both the buyer and the seller in a transaction is known as a:
 Definition
dual agent.
Term
Which of the following is not a way to create an agency?
 Definition
Act of law
Term
An enforceable listing contract for the sale of real property must be:
 Definition
in writing.
Term
A broker receives a commission in a(n) __________ listing regardless of who sells the property.
 Definition
exclusive right-to-sell
Term
What must occur before a broker decides to exercise an option during an option listing?
 Definition
The seller must agree to it in writing
Term
A listing broker is relieved of the obligation to present an offer to purchase real property to his or her principal when the:
 Definition
broker is acting on written instructions from the principal or the offer is patently frivolous
Term
The statute of frauds requires that contracts for the sale of real estate must:
 Definition
be in writing.
Term
What is the status of a contract during the period of time after a real estate sales contract is signed by both parties but before title actually passes? The contract is:
 Definition
executory.
Term
Buyer Baker presented an offer to Seller Sam for the purchase of a 10-year-old home in a quiet neighborhood. Seller Sam made a counteroffer to buyer Baker. Under these circumstances, buyer Baker:
 Definition
has no obligation under his original offer.
Term
Seller Chris listed a vacant lot with a broker at $111,400. Prospective buyer Jordan submitted an offer of $111,000 that was to expire in three days. The next day, Chris made a counteroffer of $111,200. When Jordan did not respond within the three-day period, Chris signed an acceptance of Jordan’s $111,000 original offer and instructed the broker to deliver it to Jordan. Jordan told the broker that he had decided not to purchase the property, but Chris insisted they had a deal. Based on these circumstances, there is:
 Definition
no contract.
Term
Which of the following statements is correct regarding an option contract to purchase real estate?
 Definition
The optionee is not obligated to purchase the property.
Term
As used in real estate law, the term tenancy is best described as:
 Definition
the interest of a person holding property by any right or title
Term
If an owner grants possession of real property to another person for less than the owner’s interest, it is known as a:
 Definition
lease
Term
The maximum amount of security deposit a landlord may demand from a prospective tenant depends upon the:
 Definition
term of the lease and whether the unit is furnished or unfurnished.
Term
An unlawful detainer proceeding is most often taken by a:
 Definition
lessor
Term
A tenant may abandon a leased property and refuse to pay further rent if the landlord carries out a constructive eviction. Which of the following is considered to be a constructive eviction?
 Definition
After multiple requests by the tenant, the landlord failed to make needed major repairs and to maintain the property in the agreed-upon manner.
Term
When purchasing property, the amount of the buyer’s earnest money deposit is determined by
 Definition
agreement between buyer and seller.
Term
A prospective buyer made an offer and gave the seller’s broker a $500 check as a deposit for the sale of a residence. Before the offer was given to the seller, the buyer contacted the broker and withdrew the offer. What should the broker do with the $500 check?
 Definition
Return it immediately
Term
Mary’s broker presented a full-price offer to purchase to Susan’s home with a 45-day closing. Susan accepted the offer but changed the closing date from 45 days to 90 days because she needed more time. In this situation, buyer Mary is:
 Definition
not bound by the original offer she sent to Susan.
Term
Pat gives an option to James to purchase Pat’s ranch. This option most clearly constitutes a(n):
 Definition
contract to keep an offer open.
Term
If real property is subleased, the interest held by the sublessor is known as a(n):
 Definition
sandwich lease
Term
Mary's broker presented a full-price offer to purchase to Susan's home with a 45-day closing. Susan accepted the offer but changed the closing date from 45 days to 90 days because she needed more time. In this situation, buyer Mary is:
 Definition
not bound by the original offer she sent to Susan.
Term
If a buyer wants early possession of the property before escrow closes, which document should be used?
 Definition
Interim Occupancy Agreement
Term
Which of the following statements is correct regarding an option contract to purchase real estate?
 Definition
The optionee is not obligated to purchase the property.
Term
The primary document used to make an offer on real estate is called a(n):
 Definition
purchase agreement.
Term
Unlawful acts by a landlord (lessor) to evict a tenant include all of the following except:
 Definition
using the eviction process to remove the tenant.
Term
A(n) __________ commands a tenant to vacate the a property within five days.
 Definition
writ of possession
Term
A tenant failed to pay rent, so the owner gave the tenant a 3-Day Notice to Pay Rent or Quit. This notice:
 Definition
gives the tenant 3 days to pay the rent or cure the breach of the rental agreement.
Term
The statute of frauds requires that contracts for the sale of real estate must:
 Definition
be in writing.
Term
The offeror in a purchase agreement is usually the:
 Definition
buyer.
Term
When a buyer reserves the right to buy a property at an agreed upon price, within a stated period of time, without being obligated to do so, it is known as a(n):
 Definition
option.
Term
A prospective buyer made an offer and gave the seller's broker a $500 check as a deposit for the sale of a residence. Before the offer was given to the seller, the buyer contacted the broker and withdrew the offer. What should the broker do with the $500 check?
 Definition
Return it immediately
Term
When purchasing property, the amount of the buyer's earnest money deposit is determined by:
 Definition
agreement between buyer and seller.
Term
Legally, when is rent due if there is no specific agreement?
 Definition
End of the month
Term
What is a lawsuit that removes an unlawful holdover tenant?
 Definition
An unlawful detainer action
Term
In a listing, the seller agrees to pay a commission if the broker:
 Definition
uses due diligence to procure a buyer.
Term
Which of the following is true regarding a buyer representation agreement?
 Definition
It is a single agency agreement.
Term
Real estate contracts must:
 Definition
be in writing, be signed by the parties, and have the elements of a valid contract.
Term
Seller Chris listed a vacant lot with a broker at $111,400. Prospective buyer Jordan submitted an offer of $111,000 that was to expire in three days. The next day, Chris made a counteroffer of $111,200. When Jordan did not respond within the three-day period, Chris signed an acceptance of Jordan's $111,000 original offer and instructed the broker to deliver it to Jordan. Jordan told the broker that he had decided not to purchase the property, but Chris insisted they had a deal. Based on these circumstances, there is:
 Definition
no contract.
Term
When agreed upon in advance, what is the compensation to the seller if the buyer does not keep his agreement to purchase?
 Definition
Liquidated damages
Term
A listing is a contract by which a principle, or seller, employs a broker to:
 Definition
sell real estate
Term
Which of the following is not necessary for a lease to be valid?
 Definition
Signature of the tenant
Term
The phrase “as is” in real estate refers to _________conditions.
 Definition
observable
Term
A private seller advertises a single-family home for sale “as is”. Since the seller is not using the services of a real estate broker, the seller:
 Definition
must give a Real Estate Transfer Disclosure Statement to prospective buyers.
Term
All listing brokers must conduct a reasonably competent and diligent visual inspection of the property. Which items must be visually inspected?
 Definition
Condominium unit
Term
A Real Estate Transfer Disclosure Statement is required in the ______of one-to- four residential units.
 Definition
sale
Term
During negotiations for the purchase of a house, the seller never informed the buyer that the house was served by a septic tank with a failed drain field. Escrow closed and the buyer moved in. What recourse does the buyer have?
 Definition
Rescind the contract with the seller based on fraud.
Term
Regarding environmental hazards on the property, what is the seller required to do?
 Definition
The seller should do all of the above.
Term
Seller Sam listed his newer ranch-style home built in 2002 with broker Bob.
 Definition
do none of the above.
Term
Broker Logan took a listing on a home. When filling out the NHD, which of the following would Logan not include?
 Definition
Mold hazard
Term
When a condominium is sold, the seller must, upon request, provide to the buyer:
 Definition
all of the above
Term
A broker took a listing on a property where a person died from AIDS. Does the broker have to disclose this information?
 Definition
No, the broker does not have to voluntarily disclose this information.
Term
Which state law protects buyers from fraud, misrepresentation, or deceit in the marketing of subdivided lots, and undivided interests in new subdivisions?
 Definition
Subdivided Lands Law
Term
The Interstate Land Sales Full Disclosure Act regulates land sales of:
 Definition
25 or more lots.
Term
In the sale of real property, a copy of the structural pest control certification report, if requested, must be given to the:
 Definition
buyer.
Term
A pest-control company discovered no evidence of termite in a house offered for sale. But it did discover conditions that are likely to lead to infestation. The cost of correcting such conditions is:
 Definition
paid by the buyer only if he or she wishes to have these conditions corrected.
Term
All homes with a fossil fuel burning fireplace or an attached garage must:
 Definition
install carbon monoxide detectors.
Term
The document used by a seller to describe the condition of his property to a buyer is the:
 Definition
Transfer Disclosure Statement.
Term
Which items must listing brokers visually inspect when conducting a reasonably competent and diligent visual inspection of the property?
 Definition
Condominium unit
Term
The National Association of REALTORS® defines a _____ property as "a property that has been psychologically impacted by an event which occurred, or was suspected to have occurred, on the property, such event being one that has no physical impact of any kind."
 Definition
stigmatized
Term
A broker must inform both buyer and seller, in writing, of the sale price on a property within _____ month(s) of close of escrow.
 Definition
one
Term
A document disclosing all important facts about a property, its marketing, and the financing of the subdivision is called a(n) _____ report.
 Definition
public
Term
What must occur in order to comply with laws regarding braced water heaters?
 Definition
The seller must provide certification of having the water heater(s) braced, anchored, or strapped in place.
Term
The Interstate Land Sales Full Disclosure Act regulates land sales of:
 Definition
25 or more lots.
Term
Anyone who is found guilty of violating the Subdivided Lands Law is punishable by a maximum fine of _____
 Definition
$1,000
Term
If a repair is required as a result of infestation found during a structural pest control inspection, who usually pays for the repair?
 Definition
The seller
Term
The state law that protects buyers from fraud, misrepresentation, or deceit in the marketing of subdivided lots, and undivided interests in new subdivisions is called the:
 Definition
Subdivided Lands Law.
Term
Federal law requires that a buyer of real property must withhold and send to the Internal Revenue Service (IRS) _____ of the gross sales price if the seller of the real property is a foreign person
 Definition
15.00000%
Term
If a broker takes a listing on a property where a person died from AIDS, the broker:
 Definition
does not have to disclose this information.
Term
Susan is trying to sell her house without using a real estate broker and advertises her home for sale "as is". Since Susan is not using a real estate broker, she:
 Definition
must give a Real Estate Transfer Disclosure Statement to prospective buyers.
Term
The Mello-Roos Disclosure requires notice concerning:
 Definition
special taxes for public facilities and services.
Term
In which of the following documents would a seller most likely reveal the existence of air traffic noise above property that is being sold?
 Definition
Real estate transfer disclosure statement
Term
The Subdivided Lands Law protects buyer from all of the following, except:
 Definition
stigmatized property.
Term
Which of the following is true regarding a pest control inspection?
 Definition
The law does not require a structural pest control inspection to be performed prior to transfer.
Term
Disclosures included on the Natural Hazard Disclosure Statement include all of the following except:
 Definition
High Population Zone.
Term
Which disclosure shows that a broker discussed market conditions with a buyer?
 Definition
Market Conditions Advisory
Term
What did the Carbon Monoxide Poisoning Prevention Act of 2010 require?
 Definition
CO detectors must be installed in all dwelling units with a fossil fuel burning heater, appliance, or fireplace; or that have an attached garage.
Term
Which of the following is a "red flag?"
 Definition
Cracks in the cement leading to and around a swimming pool
Term
The state law that protects buyers from fraud, misrepresentation, or deceit in the marketing of subdivided lots, and undivided interests in new subdivisions is called the:
 Definition
Subdivided Lands Law.
Term
Escrow instructions must be:
 Definition
executed.
Term
The reason for using an escrow when a deed of trust is conveyed is to:
 Definition
ensure that the conditions and instructions of the agreement are satisfied.
Term
Which of the following best describes completed escrow?
 Definition
All escrow instructions have been carried out.
Term
Which of the following statements concerning escrow is correct?
 Definition
In order for the escrow to be able to close, the buyer may be required to pay more than the amount stated in the escrow instructions.
Term
Which of the following statements regarding escrow procedures is correct?
 Definition
When the escrow requirements have been met, the escrow agency changes from being agent of both parties to an agent of each party.
Term
An escrow agent is authorized to:
 Definition
call for funding of the buyer’s loan.
Term
If an escrow holder receives pest control reports from two different companies, the escrow officer should:
 Definition
contact the brokers to ask for instructions from the buyer and seller.
Term
Which of the following items would most likely appear as a credit in the seller’s closing statement?
 Definition
Prepaid taxes
Term
If a buyer assumes an existing loan when purchasing a single-family residence, the settlement statement at close of escrow would show the assumption of the loan as:
 Definition
a debit to the seller.
Term
How would a loan for the purchase of a residence appear on the buyer’s closing statement?
 Definition
Credit to buyer
Term
Which of the following is regarded as a recurring cost in a closing statement?
 Definition
Impound accounts
Term
A buyer who wishes to insure title to real property when it is purchased should secure a(n):
 Definition
title insurance policy.
Term
Which of the following title insurance policies protects against all risks?
 Definition
No policy insures against all risks.
Term
When buying a home, a purchaser was given a grant deed and a standard policy of title insurance. Which of the following is warranted by the seller but is not covered by the standard policy of title insurance?
 Definition
The grantor has placed no undisclosed liens against the property.
Term
Which of the following is not covered by title insurance?
 Definition
A zoning ordinance, regulation, or plan
Term
Which system of land description employs meridians and baselines?
 Definition
Public Land Survey system
Term
County governments levy taxes through:
 Definition
all of the above.
Term
An example of an ad valorem tax would be:
 Definition
property tax.
Term
How do special property tax assessments differ from annual property tax assessments?
 Definition
Special assessments provide for local improvements.
Term
After a property is declared tax-defaulted for failure to pay property taxes, the occupant of the property:
 Definition
may continue to reside on the property unhindered.
Term
A new roof, swimming pool, or other cosmetic addition to property is known as:
 Definition
capital improvements.
Term
Which of the following is the escrow holder?
 Definition
Escrow officer
Term
A special assessment would be imposed to pay for which of the following?
 Definition
Neighborhood street lights
Term
Lenders require escrow holders to verify the presence of:
 Definition
fire insurance.
Term
Landmarks, such as trees and fences are known as:
 Definition
monuments
Term
Which of the following may license an escrow company?
 Definition
Real Estate Commission
Term
Of the following, which is not used as a legal description when conveying real property?
 Definition
Geodetic Survey System.
Term
An extended coverage title insurance policy covers all of the following, except:
 Definition
unpaid credit card payments.
Term
The escrow holder is the agent of which of the following?
 Definition
Buyer and seller
Term
The terms "range lines" and "township lines" are associated with which legal description?
 Definition
Public Land Survey System
Term
Who licenses an escrow company?
 Definition
Commissioner of Business Oversight
Term
For property tax purposes, how much is the California homeowner's exemption?
 Definition
$7,000
Term
Who must sign escrow instructions?
 Definition
Buyer and seller
Term
For income tax purposes, which expense is deductible to a homeowner for a primary residence?
 Definition
Property taxes
Term
Which of the following is not a title insurance policy?
 Definition
Preliminary report
Term
Documentary transfer tax is usually based on _____ per $1,000 of the purchase price.
 Definition
$1.10
Term
Which of the following became the measure for assessing property in California?
 Definition
Proposition 13
Term
A lot, block, and tract system can be called all of the following, except a:
 Definition
landmarks and unique identifier system.
Term
For income tax purposes, which expense is deductible to a homeowner for a primary residence?
 Definition
Property taxes
Term
The buyer's and seller's agreement is indicated in the:
 Definition
escrow instructions.
Term
A unilateral change in escrow instructions may be made by:
 Definition
neither the buyer nor the seller.
Term
An escrow may be directed by real estate brokers:
 Definition
only as a part of their normal business operations if they represent the principals.
Term
A promissory note:
 Definition
is evidence of a debt.
Term
All of the following are negotiable instruments except a(n):
 Definition
Trust deed securing a promissory note
Term
Which of the following statements is correct regarding effective interest rate and nominal interest rate?
 Definition
The effective interest rate is the rate actually paid by the borrower; the nominal interest rate is the rate named in the note.
Term
If the payments on a loan financing a real estate purchase are insufficient to service the debt, the result will be:
 Definition
negative amortization
Term
Which of the following will necessarily involve a balloon payment?
 Definition
Partially amortized loan
Term
When compared to a 25-year amortized loan, a 30-year amortized loan has:
 Definition
lower monthly payments of principal and interest
Term
Which of the following statements best defines a mortgage loan?
 Definition
A loan secured by a mortgage on real estate
Term
In a deed of trust, the power of sale in the event of default is given from the:
 Definition
trustor to the trustee.
Term
A power of sale or trustee’s sale foreclosure of a deed of trust:
 Definition
prohibits a deficiency judgment.
Term
Mortgages and trust deeds are different in all of the following respects, except:
 Definition
security.
Term
In the case of a contract of sale, the best analogy for the financial relationship of the parties is:
 Definition
beneficiary-trustor.
Term
Adding an acceleration clause to a note would:
 Definition
not make the note less negotiable.
Term
Foreclosure of a deed of trust may be accomplished either by court action or by power of sale. Foreclosure by court action:
 Definition
usually establishes a right-of-redemption period.
Term
When real property subject to a mortgage is foreclosed judicially, the mortgagor may remain in possession of the property for what maximum amount of time after the foreclosure of the sale?
 Definition
one year
Term
A broker sells a property and negotiates a first loan from a bank and a second loan from a seller. The broker would record a Request for Notice of Default for the protection of the __________ loan.
 Definition
beneficiary of the second
Term
Buyer Taylor purchases a home from seller Sanders and agrees to assume an existing conventional loan. The lender agrees to the assumption and signs a substitution of liability. Under these circumstances:
 Definition
Sanders is relieved from all liability
Term
The main purpose of the FHA was to:
 Definition
promote homeownership by insuring home loans.
Term
For an FHA insured loan, the interest rate is:
 Definition
determined by agreement between the borrower and lender.
Term
Rose, a prospective home buyer, asked Steve at ABC Real Estate Brokerage Company to help her get FHA financing. The broker would most likely contact:
 Definition
an approved mortgagee.
Term
One of the special features of VA financing is that:
 Definition
there is no down payment if the selling price does not exceed the CRV.
Term
Which of the following statements is not correct regarding land contracts?
 Definition
The seller is known as the vendee.
Term
A deed of trust and note are given to a seller to finance the purchase of vacant land. The buyer intends to place a short-term construction loan on the land. Such a deed of trust is most likely to include a(n) __________clause.
 Definition
subordination
Term
Which of the following is true regarding a hard-money second deed of trust?
 Definition
Through this type of deed, equity in real property is the collateral for a cash loan.
Term
Mike borrowed money from Robert. As security for the loan, Mike gave Robert a trust deed covering six separate parcels of previously unencumbered real property that Mike owned. Such a trust deed would be regarded as a(n) _______ trust deed.
 Definition
blanket
Term
Which of the following terms are most nearly identical?
 Definition
Construction loan/interim loan
Term
Which of the following is not one of the functions of the FHA?
 Definition
Making discounted loans to qualified borrowers
Term
What is the clause in a loan document describing certain events that would cause the entire loan to be due?
 Definition
Acceleration clause
Term
How is priority determined when recording a trust deed?
 Definition
By a timestamp on the county recorder's document
Term
The cost of borrowing money is:
 Definition
interest.
Term
A home equity loan:
 Definition
gives the borrower the entire loan balance at one time.
Term
Financing for new construction contains all of the following, except:
 Definition
one loan that finances the construction and completion phase
Term
A loan which wraps an existing loan with a new loan allowing the borrower to make one payment is called a(n):
 Definition
all-inclusive trust deed (AITD).
Term
A loan that has no security for payment of the debt is a(n):
 Definition
unsecured mortgage.
Term
Which of the following is not a characteristic of a promissory note?
 Definition
It requires a mortgage for validity
Term
The evidence of a debt that is recorded after a first trust deed is a(n):
 Definition
junior trust deed
Term
In the loan business, a beneficiary is:
 Definition
the lender under a deed of trust.
Term
When borrowing under a Cal-Vet loan, the buyer:
 Definition
receives title after completely paying off the loan.
Term
Mutual mortgage insurance on F.H.A. loans:
 Definition
protects the lender in the event of default.
Term
A foreclosure's reinstatement period is until _____ business days before the date of the trustee's sale.
 Definition
5
Term
A borrower was making payments on a loan that had a balloon payment at the end of the term. What kind of loan did he probably have?
 Definition
Partially amortized loan
Term
If a buyer needs funds to close a transaction while his or her present home is unsold, a __________ loan can be used
 Definition
swing
Term
Under which government financing program are approved applicants required to apply for life insurance?
 Definition
CalVet
Term
A nontraditional mortgage is a mortgage that is:
 Definition
a loan other than a fixed, 30-year, fully amortized loan.
Term
What is the principal in a loan?
 Definition
The amount borrowed
Term
When is a blanket loan typically used?
 Definition
For housing tracts or construction loans
Term
Which of the following is a feature of a home equity line of credit (HELOC)?
 Definition
The borrower can take any amount up to the credit limit
Term
The most effective method for the Federal Reserve to create a “tight” money market is to:
 Definition
sell government bonds and raise the discount rate.
Term
What federal agency insures deposits in all federally chartered banks and savings institutions?
 Definition
FDIC
Term
The process of gradually relaxing regulatory restraints is called:
 Definition
deregulation.
Term
The type of lenders having the greatest percentage of its assets invested in residential real estate mortgages are:
 Definition
thrifts.
Term
Which of the following lenders frequently uses a warehouse line to make loans to borrowers?
 Definition
Mortgage companies
Term
In the field of real estate financing, the term “secondary mortgage market” usually refers to:
 Definition
the resale or transfer of existing trust deed loans.
Term
The original purpose of Fannie Mae was:
 Definition
buying and selling FHA and VA loans in the secondary market.
Term
What shows the borrower’s payment history, balance of outstanding debt, credit history, number of credit inquiries, and types of credit held?
 Definition
Credit report
Term
The underlying security for the mortgage loan is the:
 Definition
property.
Term
If only the annual percentage rate (APR) is disclosed in an advertisement for property, which additional disclosures must be made?
 Definition
No other disclosures are required
Term
For a real estate loan, which of the following fees may not be included in the finance charge according to the federal Truth in Lending Act?
 Definition
Appraisal fees
Term
Which of the following statements violates the federal Truth in Lending Act?
 Definition
3-bedroom, 2 bath, large lot, with 10% down; total price $225,000
Term
The Federal Real Estate Settlement Procedure Act of 1974 (RESPA) pertains to:
 Definition
residential properties with 1-to-4 units.
Term
The Housing Financial Discrimination Act of 1977 prohibits the discriminatory practice known as:
 Definition
redlining.
Term
The maximum commission that can be charged by a licensee for negotiating a second trust deed of $7,500 for a period of five (5) years is:
 Definition
15%.
Term
__________ occurred when people moved money from savings and loans into investments paying a higher rate of interest.
 Definition
Disintermediation
Term
The use of property's location to deny financing is known as:
 Definition
redlining
Term
Which institutional lender commonly makes short-term construction loans?
 Definition
Commercial banks
Term
_____ is a federal law that requires disclosure to borrowers of closing costs and procedures by means of a pamphlet and forms approved by the United States Department of Housing and Urban Development (HUD).
 Definition
RESPA
Term
The secondary mortgage market is for buying and selling existing mortgages from the primary mortgage market or from each other. Which of the following is not a major participant in the secondary mortgage market?
 Definition
Carlie Mac
Term
Since the security for a mortgage loan is the property, a lender will want to ensure fair market value for the property by
 Definition
requiring an appraisal.
Term
Which of the following is not one of the credit reporting agencies used by lenders to research a borrower's credit record?
 Definition
TransAmerica
Term
What regulation implements the Federal Truth in Lending Act?
 Definition
Regulation Z
Term
Which of the following activities is not commonly performed by a mortgage broker?
 Definition
Mortgage brokers underwrite loans and fund them at closing.
Term
All consumers are given an equal chance to obtain credit through the:
 Definition
Equal Credit Opportunity Act.
Term
Which Act established the Consumer Financial Protection Bureau and authorized it to regulate consumer financial products and enforce several consumer protection laws?
 Definition
Dodd-Frank Act
Term
The Seller Financing Disclosure Statement only applies to a(n):
 Definition
arranger of credit.
Term
An economic situation in which the supply of money is limited and the demand for money is high, as evidenced by high interest rates is:
 Definition
tight money.
Term
Which of the following statements is true regarding the mortgage market?
 Definition
The primary mortgage market is where lenders make mortgages to borrowers
Term
The __________ market is the market that does not originate loans.
 Definition
secondary mortgage
Term
_____ is the process of evaluating a borrower's risk factors before the lender will make a loan.
 Definition
Underwriting
Term
The broker negotiating the loan must keep a signed copy of the Mortgage Loan Disclosure Statement for how many years?
 Definition
Three
Term
The Real Estate Settlement Procedures Act (RESPA) applies to which of the following?
 Definition
A loan secured by a first trust deed securing real estate upon which there is one-to-four family residential dwelling
Term
The Truth-In-Lending Act (Regulation Z) requires
 Definition
creditors to disclose credit terms so consumers can make comparisons.
Term
All of the following are risk factors that the lender assesses during the underwriting process, except the borrower's
 Definition
highest level of education completed.
Term
Which economic stimulation tool of the Federal Reserve involves purchasing and selling government securities?
 Definition
Open market operations
Term
The “present and future anticipated enjoyment or profit from the ownership of property” is one definition of:
 Definition
value.
Term
Market value of improved real property is least affectedby:
 Definition
the original cost of materials.
Term
What four elements that must be present for a property to have market value?
 Definition
Demand, scarcity, transferability, and utility.
Term
The ultimate test of functional utilityis:
 Definition
marketability.
Term
The term unearned increment most nearly means:
 Definition
an increase in value due to population increase.
Term
The commonality of blighted areas, inflation, and the business climate is that they are _______________ forces the influence value.
 Definition
social
Term
Which of the following appraisal approaches is based primarily on the principle of substitution?
 Definition
Income capitalization approach
Term
In a well-planned residential community, which of the following contributes most to the maintenance of value?
 Definition
Conformity to proper land-use objectives
Term
More than anything else, what determines the value of a property?
 Definition
Highest and best use
Term
In the sales comparison approach to appraisal, what is the most important as well as the most difficult step?
 Definition
Adjustment of data to reflect differences between subject and comparable properties
Term
The sales comparison approach to appraisal would be least reliable:
 Definition
in an inactive market.
Term
An appraiser is using the sales comparison approach. A comparable property has an amenity that is not present in the subject property. The appraiser would therefore:
 Definition
subtract the value of the amenity from the comparable property’svalue.
Term
Functional obsolescence would not include:
 Definition
a proximity to nuisances
Term
The major cause of loss of value of real property is usually due to:
 Definition
obsolescence.
Term
A building that is an improper improvement to its site is an example of:
 Definition
incurable functionalobsolescence.
Term
A 12-year-old building that has been maintained in excellent condition is given an age of 6 years by an appraiser. This would be known as its:
 Definition
effective age.
Term
When comparing the economic and physical life of abuilding,the economiclifeisusually:
 Definition
shorter.
Term
Economic rent isbest defined as therent:
 Definition
received for comparable spacein the competitive open market.
Term
The capitalization approach is based primarily on the appraisal concepts of:
 Definition
anticipation
Term
The effective annual gross income of a property is the difference between the annual gross income and:
 Definition
vacancy factor and rent collectionlosses.
Term
When calculating the NOI, which of the following is not deducted from gross income?
 Definition
Mortgage interest
Term
To calculate accurately a gross rent multiplier, the appraiser needs _________from comparable properties.
 Definition
annual rent and the sellingprice
Term
Usually, an appraiser estimates the value of a property by using all three major approaches. To obtain a final estimate of value, the appraiser _________the three indications of value.
 Definition
reconciles
Term
When is the appraisal reportvalid?
 Definition
The date the appraiser signs the appraisal report.
Term
A person with a trainee license:
 Definition
must work under the supervision of a certified appraiser licensee.
Term
The actual sales price of the property is called the:
 Definition
market price.
Term
All of the following are forces that influence value, except:
 Definition
ethics based on religion.
Term
Which of the below is not one of the four levels of real estate appraiser licensing in California?
 Definition
Certified Trainee License
Term
Which of the following causes real estate prices to go up?
 Definition
Demand is greater than supply.
Term
The income approach bases a property's value on its ability to:
 Definition
produce income.
Term
Which is not one of the steps in the appraisal process?
 Definition
Determining the stage of the neighborhood life cycle
Term
Appreciation means:
 Definition
an increase in value.
Term
One of the methods not used to estimate the cost of a building is the:
 Definition
fractal geometry method.
Term
The sales comparison approach is one of the most commonly used appraisal approaches and is best for:
 Definition
single-family homes.
Term
The effective age of a property is determined by the:
 Definition
condition and usefulness of the property.
Term
A higher value house among less expensive homes will lose value. This illustrates the principle of:
 Definition
regression.
Term
Which type of property uses a depth table to estimate property value?
 Definition
Commercial building
Term
An appraisal is usually prepared for:
 Definition
a specific property's value on a given date.
Term
What is the commonality of demand, utility, scarcity, and transferability?
 Definition
They are the four elements that create market value.
Term
Which of the following is not one of the four changes in the neighborhood life cycle?
 Definition
Stagnation
Term
The principle of _____ may be illustrated by a higher value house among less expensive homes losing its value.
 Definition
regression
Term
Using the cost approach, an appraiser uses all of the following information except the:
 Definition
capitalization rate.
Term
When using the cost approach, improvements and land are valued:
 Definition
separately, by more than one approach.
Term
Demand must be coupled with _____ to be effective.
 Definition
ability to purchase
Term
Under normal market conditions, if an apartment were vacant and available for rent, the amount for which it would be expected to rent is called:
 Definition
economic rent.
Term
Carter is using a gross rent multiplier to get a rough estimate of the value of a duplex he wants to buy. If the gross annual income is $36,000, expenses are $12,000, and the gross rent multiplier is 8, what is the estimated value of the duplex?
 Definition
$288,000
Term
What is the power of the government to take private property for public use?
 Definition
Eminent domain
Term
A grandfather clause:
 Definition
permits continuation of a nonconforming use.
Term
A builder is allowed to make a change in construction that does not conform to the local building code. This is an example of:
 Definition
a variance.
Term
The intersection of the land with the water at the mean high-water line describes:
 Definition
a shoreline.
Term
The division of land into 5 or more lots for the purpose of sale, lease, or financing is called a:
 Definition
subdivision.
Term
The law giving the city or county authority to control the orderly and proper development of the community is called the:
 Definition
Subdivision Map Act.
Term
Under the Subdivided Lands Law, property can be subdivided into a minimum of����������interest(s).
 Definition
five
Term
Waters that seep from the ground, arising from an indeterminable source, are known as ���������� water.
 Definition
percolating
Term
The purpose of a percolation test is to determine the:
 Definition
capacity of the soil to absorb water.
Term
Which of the following statements is incorrect?
 Definition
State building inspectors enforce the construction regulations.
Term
The main purpose of the Uniform Building Code is to:
 Definition
provide for the health, safety, and property rights of the public.
Term
The restrictions for a subdivision state that the minimum lot size is 10,000 square feet. Local zoning ordinances state that the minimum is 13,000 square feet. In this case, if the developer is subdividing one acre, which would prevail?
 Definition
Zoning ordinances
Term
If a local building code is more stringent than a state code or the UBC
 Definition
the stricter code prevails.
Term
The R-value is a rating that measures:
 Definition
how well insulation resists heat.
Term
The soil that is used to fill in holes or support a foundation is called:
 Definition
backfill.
Term
For FHA loans, the minimum crawlspace is ���������� inches.
 Definition
18
Term
Which of the following is not part of the foundation?
 Definition
Ridge board
Term
A freestanding small booth, such as a jewelry stand or a newsstand is known as a:
 Definition
kiosk.
Term
Drawing that shows front and side exterior views of a building as it will be when finished is called:
 Definition
an elevation sheet.
Term
The words, gambrel, hip, gable, and flat refer to:
 Definition
types of roofs.
Term
Subdivisions laws were created to protect:
 Definition
consumers.
Term
Under the Subdivided Lands Law:
 Definition
the Real Estate Commissioner regulates conditions surrounding the sale or lease of subdivided real property.
Term
A duplex would be zoned:
 Definition
R2.
Term
All of the following are common facilities in a common interest development (CID), except:
 Definition
private dwellings.
Term
Eminent domain gives government the power to take private property by paying:
 Definition
just compensation or fair market value.
Term
In California, the minimum construction and occupancy requirements for dwellings are outlined in the:
 Definition
State Housing Law
Term
Which term refers to the incline of a roof?
 Definition
Pitch
Term
Many homebuyers express common concerns about the energy efficiency of their homes. Of the following, which is a measurement of the efficiency of energy; used to determine the effectiveness of appliances?
 Definition
EER
Term
The Takings Clause of the Fifth Amendment to the Federal Constitution deals with:
 Definition
the power of eminent domain.
Term
Which of the following characteristics is not typical of a condominium?
 Definition
Each owner of a unit does not pay property taxes
Term
For long-term physical development, every city and county must adopt a comprehensive:
 Definition
General Plan.
Term
What type of subdivision is typically associated with a tract of single-family homes on individual lots?
 Definition
A standard subdivision
Term
An exception granted to existing zoning regulations is known as a(n):
 Definition
variance.
Term
The Subdivision Map Act is primarily concerned with:
 Definition
the physical aspects of a development.
Term
What measures how well insulation resists heat loss?
 Definition
R-value
Term
The State Housing Law is designed to:
 Definition
set minimum construction and occupancy standards.
Term
Most cities and counties have ordinances that create land use districts or zones. Usually every district is zoned for different types of uses, known as:
 Definition
permitted uses and conditional uses.
Term
The ability to pass laws for the general good of citizens is known as:
 Definition
police power.
Term
A planned development involves land that is:
 Definition
not subject to conventional zoning requirements.
Term
The type of subdivision that consists of a tract of single-family homes on individual lots is known as a:
 Definition
standard subdivision.
Term
The term potable means:
 Definition
Water suitable for drinking.
Term
Which statement is correct regarding a real estate brokerage business?
 Definition
A real estate broker may open a real estate brokerage in his or her name.
Term
All of the following businesses can get a California real estate broker license, except a(n):
 Definition
partnership.
Term
Which of the following business entities would be subject to double taxation?
 Definition
Corporation
Term
The amount a broker has left after all commissions have been paid is called the:
 Definition
company dollar.
Term
Which of the following statements is incorrect?
 Definition
For federal income tax purposes, the salesperson is considered an employee.
Term
Which of the following statements is correct regarding the basic tests used to determine statutory nonemployee status?
 Definition
All of the statements are correct.
Term
Which statement is incorrect regarding the broker/salesperson employment agreement?
 Definition
The employment agreement must be on a form approved by the Commissioner.
Term
Even though sales associates are considered self-employed for federal and state income tax purposes, a broker must provide Workers’ Compensation insurance for:
 Definition
both (a) and (b).
Term
When a salesperson transfers his or her license to another broker, the listings obtained by the salesperson:
 Definition
will remain with the original broker.
Term
Ben just took a listing on a three-bedroom fixer-upper home located in an area with very good schools. Although it is a mixed neighborhood, it is primarily Malaysian. He’s eager to sell the home and wrote the following ads. Which of the ads best follows acceptable advertising guidelines?
 Definition
“Nice fixer, located by parks and good schools with three-bedrooms for the family.”
Term
A commercial e-mail message is an e-mail sent to:
 Definition
offer the real estate agent’s services to an unknown person.
Term
Which of the following items must be included in a commercial e-mail message?
 Definition
All of the above
Term
Under the do-not-call rules, when may a real estate licensee make cold calls?
 Definition
Only between 8:00 a.m. and 9:00 p.m.
Term
Which of the following statements regarding advertising is correct?
 Definition
All of the statements are correct.
Term
Real estate ads should not have words that state or imply a preference with regard to race, color, religion, handicap, sex, familial status, or national origin. Of the following phrases, which would be unacceptable?
 Definition
No Scientologists or Hare Krishnas
Term
Which of the following statements is incorrect regarding real estate signs?
 Definition
A homeowners’ association can prohibit private owners from displaying real estate signs on their own property.
Term
Which of the following would not be considered trust funds?
 Definition
Commission
Term
A broker may keep up to __________ of personal funds in the trust fund account to pay for bank charges or service fees related to the trust account.
 Definition
$200
Term
The illegal practice of telling people that property values in a neighborhood will decline because of a specific event, such as the purchase of homes by minorities is called:
 Definition
blockbusting.
Term
The California law that prohibits discrimination in the sale, rental or financing of practically all types of housing is called the:
 Definition
California Fair Employment and Housing Act.
Term
All of the following are activities of a brokerage, except:
 Definition
making real estate investments.
Term
How does the IRS determine whether someone is an independent contractor?
 Definition
Control and direction of the work performed
Term
Who regulates real estate advertising?
 Definition
State and federal agencies
Term
Commingling is strictly prohibited by real estate law and occurs when:
 Definition
trust funds are mixed with personal funds.
Term
Causing panic selling by telling people that value in a neighborhood will decline because of a specific event, such as the purchase of homes by minorities is illegal and is called:
 Definition
blockbusting.
Term
A licensed broker must keep real estate records for:
 Definition
3 years.
Term
In a real estate brokerage, the negotiator is the:
 Definition
agent.
Term
The reason a listing must remain with the broker when the listing agent moves to a new broker is the seller's contract is with the:
 Definition
broker.
Term
Section 54-55.1 of the California Civil Code prohibits discrimination in the rental, leasing, or sale of housing accommodations to all of the following except the:
 Definition
elderly.
Term
The time allowed for the deposit of trust funds is
 Definition
three business days following the receipt of the fund.
Term
Which of the following statements is correct regarding real estate advertising?
 Definition
A broker must disclose its license status in all advertising.
Term
Which of the following is not an operation of real estate brokerage?
 Definition
Paying non-licensees for assisting in the sale of real property
Term
Real estate salespeople are paid:
 Definition
by the broker.
Term
It is imperative to choose a brokerage that:
 Definition
implements a high standard of ethics.
Term
Real estate ads should not state or imply a preference or limitation with regard to all of the following, except:
 Definition
credit history.
Term
Broker Bill wanted to keep some money in his trust account to cover any bank charges or unexpected fees. What is the maximum amount he can keep in his trust account without being in violation of the law?
 Definition
$200
Term
It is imperative to choose a brokerage that:
 Definition
implements a high standard of ethics.
Term
When an agent receives funds on behalf of someone else, he or she is known as a(n):
 Definition
fiduciary.
Term
A real estate brokerage can be set up in all of the following ways, except a(n):
 Definition
township
Term
Salesperson Sally listed seller Sam's home. According to the Do-Not-Call Rules, when can Sally call Sam?
 Definition
Anytime.
Term
The compensation earned by a licensee depends on his or her:
 Definition
employment status.
Term
A real estate licensee can sell:
 Definition
any mobilehome with a deed.
Term
Which of the following documents is used to transfer ownership of a mobilehome?
 Definition
Certificate of Title
Term
Timeshare properties are primarily designed for buyers looking for:
 Definition
vacation property.
Term
In a security transaction in personal property, the document used to perfect the security interest is called the:
 Definition
financing statement.
Term
In the sale of business opportunity, the Notice to Creditors of Bulk Transfer must be recorded at least how many days before the auction is to commence?
 Definition
12 business days
Term
Which government agency issues liquor licenses to businesses?
 Definition
Department of Alcoholic Beverage Control (ABC)
Term
Which of the following provides an investor with the best hedge against inflation?
 Definition
An income property that will maintain its value
Term
When considering investment opportunities in real estate, a real estate investor would probably devote least attention to:
 Definition
liquidity of any capital invested.
Term
Value that increases with the passage of time iscalled:
 Definition
appreciation.
Term
Which of the followingis the best example of leverage?
 Definition
Investing primarily borrowed funds
Term
An appreciation in value of a mortgaged home generally accrues to the benefit of the:
 Definition
trustor.
Term
All of the following would be considered boot, except:
 Definition
vacant land in the outskirts of a large city.
Term
In a probate sale, the amount of a commission to be paid a real estate agent is set by the:
 Definition
court.
Term
As more cities and counties regulate development and restrict growth to preserve greenbelts and avoid suburban sprawl,developers are encouraged to develop vacant parcels in existing urban and suburban areas. This is called:
 Definition
infill development.
Term
A property manager should:
 Definition
all of the above
Term
Manufactured housing is another term for
 Definition
mobile homes.
Term
Another name for goodwill is:
 Definition
reputation.
Term
The instrument used to secure the financing when personal property is sold is the:
 Definition
security agreement.
Term
For federal income tax purposes, what deduction can an owner of a fourplex claim that a homeowner cannot?
 Definition
Depreciation
Term
The laws in some communities that limit or prohibit rent increases are referred to as:
 Definition
rent control.
Term
Investing in real estate allows a buyer to invest a small down payment and finance the rest with a lender's capital. This is known as:
 Definition
leverage
Term
When a business is sold a tax clearance receipt should be obtained from the:
 Definition
Board of Equalization.
Term
In the sale of a business, an agent must deal with all of the following, except:
 Definition
a grant deed.
Term
A tract of land where two or more mobile home lots are rented or leased to accommodate manufactured homes is called:
 Definition
a mobile home park.
Term
Which of the following is an example of agricultural property?
 Definition
Land used for grazing livestock
Term
Bulk transfers apply to which of the following?
 Definition
Business inventory
Term
Which benefit of investing in real estate refers to an increase in property value with the passage of time?
 Definition
Appreciation
Term
All of the following are necessary core competencies for property managers, except knowledge of:
 Definition
labor laws.
Term
__________ is the legal process that validates or invalidates a will.
 Definition
Probate
Term
An application for a liquor license is filed with:
 Definition
A.B.C.
Term
Which of the following is not true regarding a timeshare?
 Definition
It is a permanent housing alternative.
Term
All of the following are true regarding a business opportunity, except:
 Definition
it excludes goodwill.
Term
The Uniform Commercial Code regulates which of the following?
 Definition
Sale of a business
Term
What is the name for the development of vacant lots and parcels in existing urban and suburban areas?
 Definition
Infill development
Term
Regarding "For Sale" signs in a mobile home park:
 Definition
all of the choices are correct.
Term
Broker Larwin held an open listing to sell a house that provided for Larwin to receive a 6% commission. Larwin orally agreed to split the commission with Broker Porter if Porter found the buyer. Porter did so, but at close of escrow Larwin kept the entire commission. Under these circumstances, Porter:
 Definition
has recourse by means of a civil suit.
Term
CalBRE regards a salesperson’s relationship with a broker as a(n):
 Definition
employee.
Term
Someone places an advertisement for real estate services without listing a real estate license number. In fact, the person does not have a real estate license. Such an individual could be liable for prosecution by the:
 Definition
local district attorney.
Term
Which of the following must have a current and valid California real estate license?
 Definition
A mortgage loan broker
Term
A broker must have a written contract with which of the following employees?
 Definition
Brokers acting as salespeople who do not have their own office
Term
If a real estate licensee is listed as an obligor by the California Department of Child Support Services, can he or she renew his or her real estate license?
 Definition
Yes, the licensee may be issued a 150-day temporary license.
Term
A licensed salesperson gave notice of leaving the real estate brokerage office to the salesperson’s employing broker. What, if anything, must the broker do with the salesperson’s license?
 Definition
The broker returns the license to the salesperson and notifies the Real Estate Commissioner.
Term
In the course of his or her duties, a real estate salesperson might prepare or sign documents or legal instruments that may have a material effect on the rights or obligations of those entering the transaction. The supervising broker must review, initial, and date these documents or instruments within five days or before the close of escrow. However, the broker may delegate these duties to a salesperson to review items prepared by other salespeople provided that the delegated salesperson has:
 Definition
at least two years full-time experience as a real estate salesperson within the past five years.
Term
A broker holding an unrestricted license negotiated the sale of real estate. The broker defrauded the buyer during the sales transaction. The defrauded buyer brought a civil suit against the broker on grounds of fraud and was awarded a final judgment. The Real Estate Commissioner:
 Definition
may hold a hearing but may not suspend or revoke the license until the hearing is concluded.
Term
A broker assured a client that a loan could be found at 5% even though there were no such loans available. When it came time to sign the agreement, the rate offered was 7%. The buyer felt he had to accept the loan because he had already given notice at his apartment complex.
 Definition
The broker acted illegally.
Term
By law, a broker must keep a copy of the deposit receipt for at least three years from:
 Definition
the closing of the transaction.
Term
Davis did not have a real estate license but negotiated a contract with Taylor to buy Taylor’s 20-acre lot for $5,000/acre. Taylor accepted Davis’ offer. During negotiations, Davis himself was offered $20,000/acre by a third party for the same 20 acres. Davis did not disclose this fact to Taylor and went ahead with the purchase. Davis later sold the 20 acres to the third party for $20,000/acre. Taylor subsequently learned that Davis resold the lot. Under these circumstances, an attorney will probably advise that:
 Definition
Taylor has no recourse against Davis.
Term
A licensed real estate salesperson regularly accepted a fee for every client she referred to a lender who signed up for a new mortgage loan. When her employing broker discovered this arrangement, the broker took two steps: (1) The broker fired the salesperson. (2) The broker explicitly warned the rest of the office not to engage in such practices. Who, if anyone, is liable for disciplinary action?
 Definition
Both the salesperson and broker can be disciplined.
Term
If an employing broker discharges a salesperson for violating a provision of the Real Estate Law, the broker:
 Definition
must notify the Commissioner immediately by mailing a certified written statement of the facts.
Term
Broker Kim, who is not a member of any trade organization, has been trying out a new advertising slogan: “A new breed of Realtor.” This practice is:
 Definition
grounds for revocation or suspension of her real estate license.
Term
What must a newly licensed salesperson include on his or her business cards?
 Definition
Eight digit license identification number
Term
Broker Pat has a property listed for nine months without success. He believes the property is 10% overpriced, and he knows that major structural repairs are required. Pat writes and pays for the following advertisement to run in a local newspaper: “Charming 2 BDRM Victorian. Move in right away! Wait `til you see the price! Ready for you! Call Pat at 555-1212.” What, if anything, is wrong with the advertisement?
 Definition
It was unlawful because Pat knew structural work was required and the ad did not state this.
Term
A complaint that involves simple disputes or minor issues between consumers and licensees is usually handled by:
 Definition
involving the Advocacy Program.
Term
A broker who holds a valid listing on a property places the following classified advertisement in the local newspaper: “FOR SALE: 3 bedroom, 2 bath home, swimming pool. $129,000. Phone 555-1234.” What needs to be included in the ad?
 Definition
Broker or “bro”
Term
After close of escrow, the actual selling price of the property must be disclosed to both buyer and seller within:
 Definition
1 month.
Term
An investigation of a licensee's actions is typically initiated by:
 Definition
receipt of a verified written complaint.
Term
Who enforces the provisions of the Real Estate Law?
 Definition
The Real Estate Commissioner
Term
When engaging in acts for which a license is required, what must a real estate licensee disclose on all solicitation materials, such as business cards?
 Definition
His or her eight digit license identification number
Term
Who many times can a person retake a real estate license examination?
 Definition
An unlimited amount
Term
The Real Estate Law is that law that governs:
 Definition
the licensing and conduct of real estate licensees
Term
What type of license is issued when a license has been suspended, revoked or denied after a hearing?
 Definition
Restricted license
Term
Which fund assures the payment of otherwise non-collectable court judgments against licensees who have committed fraud, misrepresentation, deceit, or conversion of trust funds in a transaction?
 Definition
Consumer Recovery Account
Term
The Bureau of Real Estate issues real estate licenses for a ___________-year period.
 Definition
four
Term
As of January 1, 2011 a Mortgage Loan Originator License Endorsement must be obtained before a real estate licensee can solicit or originate a loan application, or negotiate or offer to negotiate any residential mortgage loans in accordance with the:
 Definition
SAFE Act.
Term
The Real Estate Law is upheld and enforced by:
 Definition
the Real Estate Commissioner at special hearings.
Term
To qualify for the real estate salesperson license a person must complete:
 Definition
Real Estate Principles and Real Estate Practice.
Term
An employing broker who discharges a salesperson for violating the Real Estate Law must provide:
 Definition
a certified written statement of the facts to the Commissioner.
Term
What is the grace period for the renewal of a salesperson's or broker's license?
 Definition
Two years
Term
The Commissioner can issue citations and fines to both licensees and unlicensed persons for minor violations of the Real Estate Law. The Commissioner may assess an administrative fine not to exceed __________ per citation
 Definition
$2,500
Term
A prospective real estate licensee must __________ before getting a license.
 Definition
fulfill education requirements and pass an examination
Term
If an agent misappropriates his or her principal's money, he or she is guilty of:
 Definition
conversion.
Term
Which of the following activities violates Section 10177 of the Business and Professions Code?
 Definition
Salesperson Smith only had 1 sale in the previous 6 months and did not have enough money to pay for his NAR membership. Since he still had a full box of business cards, he continued to use them even though the card indicated a REALTOR membership.
Term
Complaints involving minor disputes between consumers and licensees is handled by the
 Definition
Advocacy Program.
Term
When applying for the actual real estate license, what must a prospective licensee do after passing the examination?
 Definition
Submit one set of classifiable fingerprints
Term
Which of the following is not a job of the Real Estate Commissioner?
 Definition
Settling commission disputes
Term
A prospective real estate licensee must __________ before getting a license.
 Definition
fulfill education requirements and pass an examination
Term
The Bureau of Real Estate does not issue:
 Definition
licenses to partnerships.
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