CA Real Estate - Master Exam #1 PDF

Name: Score: 150 Multiple choice questions Term 1 of 150 Following proper action by the local authorities, the zoning on a vacant lot wa...

Name: Score: 150 Multiple choice questions Term 1 of 150 Following proper action by the local authorities, the zoning on a vacant lot was changed from "commercial" to "residential." Such an action is called: Retroactive zoning Down zoning Spot zoning Blended zoning Term 2 of 150 Definitions of market value are least concerned with: Material cost Value in exchange Objective value An open market Term 3 of 150 A tenant in good standing under a valid five-year lease which makes no mention of assignment or sub-leasing, may legally do which of the following: May sublease the property to another, but only with the consent of the lessor May assign, but cannot sublease to another May sublease to another, but can assign only with the consent of the lessor May sublease or assign the leasehold to anyone, since the lease made no mention of any restrictions on such action Term 4 of 150 Another name for an estate of inheritance is: Fee simple defeasible Estate at sufferance Estate in fee Probate estate Term 5 of 150 Which of the following defines a "mortgage loan"? An instrument that is used only in the exchange of real property A financial obligation which is unsecured but is used to buy a building A promissory note that is unpaid A loan collateralized with real estate Term 6 of 150 Mike Coogan, a new real estate salesperson, made strong efforts to obtain listings in a non- integrated community. He found success by insinuating to property owners that should minorities move into the area, the value of their homes would decrease. Which of the following terms best describes the activities of Salesperson Coogan: Steering Panic peddling Blockbusting Both "B" and "C" Term 7 of 150 Which of the following is not essential to the creation of an agency relationship: Agreement to pay a consideration Agreement of the parties to the agency Competency on the part of the principal A fiduciary relationship Term 8 of 150 On March 5, a prospective buyer gave a broker his personal check for $1,000 payable to the seller along with an offer to buy the property. He told the broker that the check should not be cashed until March 30. Which of the following is correct? The broker should refuse to accept the check as a deposit The broker should not hold the check until March 30th, but should cash it immediately The broker must deliver the check to the seller or to escrow within one business day The broker may hold the check, but must tell the seller that it is being held uncashed before the seller accepts the offer Term 9 of 150 In financing for new construction, the lender will usually release the final payment to the builder when the: Owner has accepted the property Lien period has expired Work has been completed Notice of completion has been recorded Term 10 of 150 Agent John has given seller Henry an offer that includes the phrase "All kitchen appliances are to be left with the house and become the personal property of the buyer." Henry accepts all of the other terms of the offer, but objects to leaving the appliances. John crosses out that item and initials it on the contract on behalf of the buyers. He does this despite the fact that the buyers are on vacation and cannot be consulted about this. Such action would most accurately be classified as: Beneficial conduct, in the best interest of the buyers Acceptable conduct Unethical conduct Unlawful conduct Term 11 of 150 If a licensee placed the following ad in a newspaper, which of the following would describe the ad? "Three bedroom, two-bath, pool and spa, large lot -- $167,000. 555-1234." This is false advertising This is misleading advertising This violates Regulation Z This is blind advertising Term 12 of 150 Richards agreed to list his property for sale with Broker Jackson. In using a standard listing form, Richards completed Paragraph 10 with the following words: "Delete provisions in Paragraph 3c above which says, Agency is hereby authorized to accept on my behalf a deposit toward the purchase price in any amount." If Broker Jackson produced a buyer: He cannot accept a deposit from the buyer He must get oral permission from Richards before accepting a deposit If he accepts a deposit, he holds it as agent of the buyer until the offer is accepted by the seller If he accepts a deposit from the buyer and the buyer rescinds the offer prior to acceptance by the seller, he is entitled to one-half of the deposit Term 13 of 150 To qualify a real property sales contract for recordation, it must: Be signed by the buyer and acknowledged Be signed by seller and acknowledged Contain a granting clause Be signed by both buyer and seller and be acknowledged Term 14 of 150 The listing agent for a residential property can legally complete the entire Real Property Transfer Disclosure Statement: Under no circumstances When authorized in writing by the seller When the seller lives in another state and has not seen the property When the buyer gives the agent a written waiver Term 15 of 150 Mr. O'Riley paid an owner $10 for an option containing this clause: "Option to be for 60 days from June 1, 1967. Upon exercise of option, holder is to purchase within 30 days thereafter for all cash consideration." On July 10, Mr. O'Riley sold and assigned his option for $1,000. On July 28, the new holder notified the owner that he would purchase on August 15. The owner claimed the option was void. The option was: Void, because the holder sold it Void, because date of purchase was not within the option period Valid, even though Mr. O'Riley sold it, but August 15 was too late for date of sale Valid, and assignee could purchase on August 15 Term 16 of 150 When a pest control company discovers no evidence of infestation of termites, but discovers conditions which may lead to such infestation, the cost of correcting such conditions is paid by: The seller in all cases The buyer in all cases The seller and the buyer, each paying one-half of the cost The buyer only if he chooses to have the condition corrected Term 17 of 150 A developer can use the Street Improvement Act of 1911 as amended to raise funds for all of the following purposes, except: To purchase land for subdivision To provide for drainage To construct sewers To develop off-site improvements Term 18 of 150 The main purpose of a deed is to: Provide evidence of the terms of a real property transaction Evidence the change in title or transfer of an interest in real property Identify the parties involved in a real property transfer Provide a written instrument that can be recorded Term 19 of 150 A deed: When recorded, gives actual notice of its contents If recorded, will not give the grantee the usual protection of the recording laws if it is a quitclaim deed Can only be recorded in one county Does not have to be recorded to transfer title Term 20 of 150 When is a broker relieved of the obligation to present an offer to purchase real property to the principal: When the offer contains more than 3 contingency clauses When the offer is for the purchase of nonresidential property When the offer is patently frivolous or the broker is acting on written instructions of the principal When the broker notifies the seller in writing of his decision not to present the offer Term 21 of 150 Four months ago, a seller accepted a proper offer to purchase his real property. The contract was in writing. Later, the seller refused to complete the transaction, since he felt the value of the property would increase in the near future. Under these circumstances, the Statute of Limitations could affect the rights of the buyer to prevail in a civil action, due to a breach of a written contract, within: 90 days 1 year 2 years 4 years Term 22 of 150 If a condominium owner lives in his condominium and pays all of the following, which of the following would be deductible for federal income tax purposes? The cost of repairing the condominium unit Any assessments that he pays for the upkeep of recreational facilities Any interest that he pays on a mortgage for his share of the common areas All of the above Term 23 of 150 Easements are terminated by all of the following, except: Prescription by the owner of the servient tenement Merger of the dominant and servient tenement Revocation by the owner of the servient tenement Release by the owner of the dominant tenement Term 24 of 150 A buyer bought a new house for the appraised value, paying a 20% cash down payment and financing the balance with a loan bearing an 11% per annum interest rate. If the buyer paid $7,040 in interest the first year, what was the appraised value of the property: $80,000 $76,000 $64,000 None of the above Term 25 of 150 Jones conveyed his ranch to Brown using a land contract. The ranch was serviced by a mutual water company, and Jones was a stockholder in the company. The stock which Jones owned was appurtenant to the land. Does Brown have to enter into a separate contract for the stock of the mutual water company: Yes, since stock is always personal property and therefore not included in land contracts No, because land in California cannot be sold without water rights Yes, because real property is not always accompanied by water rights No, because the stock was appurtenant to the land and therefore part of the real property and part of the land contract Term 26 of 150 For more than one hundred years, the Garza family has owned and operated a gold mine on federal land. The only access to their mining claim is across an adjoining parcel. That parcel is sold to a new owner, who fences off the parcel and padlocks the gate across the access road. The Garzas would be best advised to: Do nothing, for the new owner is within his rights to prevent their use Grant a quitclaim deed to the new owners File a quiet title suit against the new owner to protect their rights Continue to use the road, even though this might be viewed as trespass Term 27 of 150 Which of the following would be defined as a fixture in the law: Something that is made part of a chattel real Something referred to by actions but not referred to in the sales contract Something incorporated into the land Something used in an extraordinary way with the land Term 28 of 150 If there has not been an agreement to the contrary, all of the following would qualify as a negotiable instrument, except: An installment note A personal check A mortgage securing a promissory note A bank draft Term 29 of 150 Mr. and Mrs. Winters hired the Superb Construction Company to install a swimming pool on their residential premises. In the event the construction company was unpaid and it was necessary for them to file a lien for payment of the contract, the encumbrance created would be: A specific lien A general lien A voluntary lien None of the above Term 30 of 150 According to the California Bureau of Real Estate regulations, it is commingling when a broker: Leaves funds owed to him as commissions in his trust fund account for three weeks Deposits $200 of his own money into the trust account to cover bank fees on that account Deposits into the trust fund account a renter's check for the security deposit on an income property the broker owns Deposits funds received from two different individual buyers into the same trust account Term 31 of 150 The right or power to sell a property in the event of a default under the terms of the trust deed is given by: Trustee to the trustor Buyer to the beneficiary Buyer to the seller Trustor to the trustee Term 32 of 150 In which of the following situations would a parcel of property be reassessed? After the tax rate has been set and the revenues that are projected are not enough to cover the needs that are projected Every two years Only when the buildings have been destroyed and rebuilt Every time the property is sold Term 33 of 150 Most likely, the United States Attorney General would act to enforce the Federal Open Housing Law whenever: State statutes are not enforced by the state officials A conspiracy exists to practice resistance to the Federal Open Housing law A complaint is filed with the Secretary of Housing and Urban Development Subject matter of a complaint filed by an aggrieved party indicates a violation by an owner of more than four units Term 34 of 150 Owner Armstrong gave Broker Weeks an exclusive authorization to sell Armstrong's ranch. As part of the agreement, Broker Weeks agreed to advertise the ranch in a catalog that Weeks publishes and distributes to other real estate brokers. For this added service, Armstrong paid Broker Weeks $1,000 for this advertising service at the time Owner Armstrong signed the listing. Under current real estate law, this payment: Must be deposited into a trust account under an agreement which may provide for forfeiture by Owner Armstrong if the owner breaches the listing agreement May be cashed or deposited by Broker Weeks, but records must reflect disposition of such funds Must be retained by Broker Weeks in a trust fund account so that it may be refunded to Owner Armstrong if the property is not sold by the broker during the listing term Must be deposited into a trust account and disbursed only to pay advertising expenditures incurred by Broker Weeks in advertising the ranch property Term 35 of 150 Community apartment projects and condominiums come within the subdivision provisions of the California Real Estate Law when they contain how many units: One or more Five or more Three or more Two or more Term 36 of 150 Of the following, which would most nearly refer to loss in value due to economic obsolescence: An architectural design which is declining in popularity A change in nearby zoning Poor management of the property An increased demand for larger units Term 37 of 150 Georgene Creason is selling time-shares in her Wildacre subdivision. She mailed advertisements to 10,000 people, offering them the chance to win a prize, but did not reveal that in order to be eligible, the person must visit Wildacre and listen to a sales presentation. All of the prize winners had become owners in Wildacre. Is there anything wrong with this situation: Yes; property owners must be excluded from the list of eligible participants Yes; anyone offering prizes or gifts must reveal any required attendance at a sales presentation when offering the prize or gift No; prizes may be offered as part of any undisclosed sales presentation No, as long as all of the winners are also owners of property in the subdivision Term 38 of 150 A deposit receipt said, "Seller to take back a second trust deed securing a note for $11,400, payable $240.00 or more per month, including interest at 7% per annum from March 15, 1979." If the first payment date on the second trust deed note is April 15, 1979, how much of the regular payment will go to the reduction of principal: $90.25 $149.75 $154.50 $173.50 Term 39 of 150 An appraiser, in arriving at an estimate of value secured under each of the three approaches in appraising: Averages the estimates Assigns weights to the estimates and then averages them Chooses the approach the appraiser judges as best and uses that approach alone Explains why or why not the other approaches were not used, then chooses the one the appraiser believes to be the most appropriate approach Term 40 of 150 Lawson bought a parcel of raw land in 1963 and subdivided it into four separate lots. Twenty-five years later, he sold each lot for $10,000. The adjusted basis for each lot was $2,000. Lawson's long-term capital gain on these transactions is: $8,000 $32,000 $40,000 Cannot be determined from the information given Term 41 of 150 Baylor made an offer on the purchase of a vacant residence and gave a cash deposit with the offer. The offer was presented through Broker Harris. The offer was accepted by the seller. Prior to the close of the transaction, Baylor requested permission from Harris to enter the house for the purpose of painting and making minor repairs. Which of the following is true: If Baylor signs a rental agreement, Harris may give permission Baylor is an equity owner and doesn't need to obtain permission from anyone Harris should obtain written approval of Baylor's request from the owner In order for Baylor to do this, there must be a written agreement signed by the buyer and seller setting forth the limits of the repairs to be made Term 42 of 150 The law permits a real estate licensee to act as an agent in the sale of some mobile homes. All of the following acts are grounds for discipline by the Real Estate Commissioner against a real estate salesperson's license, except: Selling, as agent, a mobile home which is greater than 8 feet in width and 40 feet in length Failing to provide for the delivery of a properly-endorsed certificate of ownership from the seller to the buyer Advertising a used mobile home for sale as "new" Submitting a check to the Department of Housing and Community Development for any fee in connection with the title transfer if the check is thereafter refused payment by the bank Term 43 of 150 When an existing contract is replaced by an entirely new contract, it is an act of: Reversion Rescission Novation Reformation Term 44 of 150 A "GPAM" mortgage loan provides for: Deferment of certain payments on the principal during the early period of the loan Adjustment of its interest rate as market interest rates change Renegotiation of the interest rate on the note A long-term loan consisting of a series of short-term notes Term 45 of 150 A carpenter installed hardwood floors in a new house, and when he was not paid for his work, filed a mechanic's lien. The priority for his claim is: The date the claim was recorded The date the installation of the floors was completed The date he started work on the floors The date construction of the new house was begun Term 46 of 150 The mortgage insurance on an FHA loan: Protects the borrower from a fire loss Protects the lender in the event of the trustor's death Protects the lender in the event of default Is paid for by the lender Term 47 of 150 The appraisal of an income-producing property is made as of a "given date" to indicate: The true age of the property as of the given date The market conditions influencing the value of the property at that point in time The date when the appraiser actually inspected the property The amount of owner's equity as of the given date Term 48 of 150 David gave a grant deed to John transferring title to a house. The title is subject to a condition stating that title will be forfeited if alcoholic beverages are ever sold on the property. John would have which of the following types of estates: A fee simple absolute A fee simple defeasible An estate in forfeiture A less than freehold estate Term 49 of 150 A change in a zoning ordinance could be initiated by: A subdivider/developer A local government agency The owner of a property All of the above Term 50 of 150 Where there are local minimum housing requirements, builders must: Comply with local housing codes Comply with federal housing specifications Comply with the more stringent of the two laws in "A" and "B" Observe the law in neither "A" nor "B." Term 51 of 150 An easement in gross: Benefits dominant land Burdens servient land Cannot be owned separately from an interest in land Burdens dominant land Term 52 of 150 A formal declaration, not an oath, that a statement is true or that the declarer will tell the truth is: An affidavit An acknowledgment Verification An affirmation Term 53 of 150 When renting residential property, the amount of a security deposit which a lessor may legally charge from a lessee is determined in part by which of the following: The number of square feet in the building Whether the unit is furnished or not The number of children or pets The number of adults who will reside in the unit Term 54 of 150 A real estate broker who specializes in selling residential property in a given area may refuse to accept a listing on a property in that area for which of the following reasons: Because of the minority status of any of the residents in that area Because of the minority status of the owner of the residence Because the owner's required price is substantially above the market price in the area of the residences For any of the above reasons Term 55 of 150 A broker who is hired by an owner to sell his property must reveal all significant and material information to the principal. Which of the following would be considered material information and must be revealed: The new lender will require the buyer to maintain an impound account The agent's knowledge that a better offer to purchase is imminent The prospective buyer is of oriental descent None of the above Term 56 of 150 When real property is held by husband and wife as community property, an agreement to sell that property which has been signed by only one spouse would be considered to be: Illegal Unenforceable Binding A violation of the Statute of Frauds Term 57 of 150 If a ranch is 36 miles square, how many townships would it contain: 1 6 36 105 Term 58 of 150 Which of the following would be considered an example of economic obsolescence? A leaking roof No parking at the site An over-supply of like properties Poor design of rooms Term 59 of 150 Which of the following persons would usually be in the weakest position against loss of property due to a claim of title by an outside person: The holder of a recorded deed who rents the property The holder of a certificate of title to property issued by a title company The holder of an unrecorded deed who occupies the property The holder of an unrecorded quitclaim deed who does not occupy the property Term 60 of 150 When a broker receives trust funds and places them in a trust account, which of the following statements is most nearly correct about interest earned on those funds: Trust funds can never be placed in an interest-bearing account The interest earned can be divided between the broker and the owner of the funds in any manner agreeable to both The service charges on the account will always be deducted from any interest earned The broker may not receive directly or indirectly any interest on trust funds Term 61 of 150 The exercise of police power whereby land is divided into districts according to the use to which the land may be put is known as: Eminent domain Condemnation Zoning Districting Term 62 of 150 The hardest and yet the most important part of the market data method of appraising is: Adjusting for the differences between the comparable properties and the subject property Analyzing the volume of sales data Collecting a sufficient volume of sales data Establishing the unit of comparison Term 63 of 150 When the Federal Reserve Board increases the reserve requirements, it will: Result in more construction starts Encourage conservative investors Decrease loan activity Reduce deflationary pressures Term 64 of 150 An easement could be created for what length of time: Perpetuity The lifetime of a person A term of years Any of the above Term 65 of 150 If five people own property as joint tenants: They need not own equal interest in the property There is still only one title to the whole property And one of the owners dies, his heirs become tenants in common with the surviving co- owners Each co-owner has a separate legal title to his undivided interest Term 66 of 150 A builder needs a long-term loan of $3,000,000 to develop a new shopping center. Which of the following would usually be the best source of such funds: Mutual funds Credit unions Life insurance companies National banks Term 67 of 150 An "open-end" provision in a mortgage would benefit the borrower the most if he: Prepaid the loan Allowed a subsequent buyer to assume the loan Had a loan subordinated to a construction loan Borrowed additional money Term 68 of 150 When a title company issues a California standard policy of title insurance, the policyholder is insured against loss which occurs because of: Unrecorded liens and encumbrances The rights of parties in possession Forgery in the chain of recorded title A defect in the chain of title, already known by the insured prior to the issuance of the policy Term 69 of 150 Broker Green obtained a listing from Brown to sell his home. Brown told Green the sewers were in and connected and signed a listing to that effect. Green was of the opinion that there were no sewers installed in that street, so he checked with the city and found he was correct. Green showed the house to Jones, who did not ask about sewers, and Green made the sale without any comment. Later, Jones found that the sewers were not in. Which of the following is true: Green had a right to rely on the listing, even though he knew it to be incorrect Green had a duty to tell Jones, even though he did not ask Jones was to blame because he could have checked with the city, "caveat emptor" There is no provision in the law to cover the situation Term 70 of 150 Ames, Barnes, and Crandal are owners of a vacant lot, holding title to the parcel of real property as joint tenants. When Ames dies, and is survived by Barnes and Crandal, it would be correct to say: The joint tenancy is thereby totally terminated Barnes and Crandal receive Ames' interest by succession Barnes and Crandal receive Ames' interest by survivorship as tenants in common Ames' interest terminates Term 71 of 150 It would be perfectly ethical for an appraiser to do which of the following: Pay a commission or fee to another party for obtaining the appraisal assignment Appraise a property in which the appraiser's employment is made contingent upon reporting a minimum value Base the appraiser's compensation on a percentage of the value estimate arrived at by the appraiser Appraise a property in which the appraiser has an interest, provided the appraiser first discloses the interest Term 72 of 150 In May, 1996, Mr. Sanders leased a unit in his apartment house to a tenant for a two-year term. The tenant prepaid the last two months' rent at the time he entered into the lease agreement. For federal income tax purposes, that amount will be considered as income for Mr. Sanders: In May, 1996 In May, 1998 Will be prorated throughout the term of the lease When it is actually earned Term 73 of 150 A prospective buyer would be entitled to damages from a real estate broker in the event the broker: Makes a misrepresentation based on information received from the employing seller Acts in excess of the authority given the broker by the seller Executes a contract in the name of the seller after being properly authorized by a power of attorney Turns the buyer's deposit over to the seller, and thereafter the contract fails without the agent's fault Term 74 of 150 All of the following are essentials of each and every contract, except: Lawful object Mutual consent Capable parties A proper writing Term 75 of 150 McHugh purchased a home for $80,000, paying 21.25% down and financing the balance on a 30- year amortized loan with interest at 10.25% per annum. The lender will require monthly impounds for taxes ($800 per year) and casualty insurance ($978 for a three-year policy). Assuming that the first monthly payment on the principal is $119, the total amount McHugh will have to pay the first month would be approximately: $932 $751 $597 $213 Term 76 of 150 The land that is benefitted by an easement is called the: Defeasible fee Subjective property Dominant tenement Servient tenement Term 77 of 150 Private restrictions on real property can be written either as a condition or as a covenant. Which of the following is most correct concerning such restrictions: When recorded, they become public restrictions Violations of such restrictions are subject to criminal prosecution Violation of a condition can result in penalties which are more severe, and can result in loss of title All of the above are true Term 78 of 150 Salesperson Kingston presented to Broker Wright Buyer Kingsford's offer to purchase Seller Brightwood's real estate, accompanied by an earnest money deposit in the form of a personal note in the amount of $1,000. Broker Wright should inform Salesperson Kingston that: Without Seller Brightwood's express permission, Salesperson Kingston should not have accepted the note Buyer Kingsford must be told that the note will have to be redeemed within five days by cash Buyer Kingsford should be told that this offer cannot be presented to Seller Brightwood Seller Brightwood should be informed prior to acceptance that the deposit is a promissory note Term 79 of 150 A final estimate of the value of any single-family residence is: Obtained by adding the estimates from three methods and dividing by 3 Influenced most by the income capitalization approach Limited by the replacement cost of the building, plus the value of the land Never affected by the zoning of surrounding properties Term 80 of 150 To arrive at a capitalization rate in the appraisal of an income-producing property, no provision should be made for which of the following: Depreciation Federal taxes Return of the investment None of the above Term 81 of 150 The real estate financing instrument which transfers equitable title to real property, but retains legal title in the seller, is called: A security agreement A mortgage A real property conditional installment sales contract A trust deed Term 82 of 150 The term used by lenders, "mortgage yield" best describes: An increase in the value of a property which has a mortgage The effective interest return obtained from a first trust deed by an investor All of the money received by a lender after deducting closing costs and loan fees What the lender receives when a mortgage is paid off Term 83 of 150 When real property is sold, a copy of the structural pest control report must be given, if requested, to: The buyer The lender The broker The escrow company Term 84 of 150 Of the following factors, that which would not contribute to obsolescence is: Wear and tear from use Out-of-date equipment Change of locational demand Misplacement of improvement Term 85 of 150 When lenders use the term "debt-income ratio," they are referring to: A requirement of the federal government A loan qualifying tool A formula used in appraising the property Part of the closing costs Term 86 of 150 Which of the following statements is most nearly true concerning the activities of mortgage companies: They are organized under federal laws and thus are not subject to state regulations They never service the loans they create They prefer negotiating loans which are salable in the secondary market They are not active in the field of government-insured loans Term 87 of 150 When a blanket mortgage is placed upon a property and a "release schedule" is put into the mortgage showing the amount of the loan that must be paid off for each of the lots, those individual amounts would likely be proportionately larger for the first lots that are sold. The reason for this practice is: To increase the security value of the remaining lots To compensate for the loss of security as the lots under the blanket encumbrance are removed To compensate for the loss of security due to the best lots being sold first All of the above Term 88 of 150 An acceleration clause is inserted in a note that is otherwise negotiable. The addition of this clause: Causes the note to lose its negotiability Is required for negotiability Does not reduce the negotiability of the note Has no effect on negotiability, but is of no benefit Term 89 of 150 Anderson sold a farm to Barnes on May 1, 1985. The real property taxes for the 1985-1986 tax year: Attach to the purchase price Anderson received Become a personal obligation of Barnes Would normally be pro-rated by the escrow agent Are a lien on the farm Term 90 of 150 A fee simple absolute estate would best be defined as: An estate based on a condition subsequent An estate without encumbrances which can be easily transferred The highest interest a person can have in real property An estate which is less-than-freehold Term 91 of 150 An appraiser is using the market data approach comparing the prices of comparable properties to the subject property. If the comparable properties have a feature that is not present in the subject property, the value of that feature will be: Identified in the report but given no consequences Ignored since no two properties are alike Subtracted from the sales price of the comparables Added to the sales price of the subject Term 92 of 150 Among the choices available to an investor, stocks and bonds, when compared with real property, are usually thought to be: More difficult to sell More difficult to determine the current value Less inclined to change in value More liquid in the marketplace Term 93 of 150 Once a judgment has been obtained against real property, a plaintiff would obtain which of the following in order to cause the property to be sold: An attachment A lis pendens A writ of execution An estoppel Term 94 of 150 When the term "beneficiary statement" is used by those in real estate finance, it identifies a statement made: By the lender, as to the current balance due to pay off a real estate loan Designating the one who will receive the property in the event of the borrower's death By the insurer, stating the amount that will be paid to the policyholder if the improvements are destroyed By the property owner, listing the beneficial features of an assumable loan Term 95 of 150 When appraising real property, the appraiser attempts to estimate value. The value arrived at by the appraiser is: Based upon the replacement cost Based upon an analysis of facts as of a given and specified date Derived from income data covering at least the preceding six months Projected from original cost less depreciation and adjusted for inflation Term 96 of 150 Which of the following is always required in joint tenancy ownership of real property: The clause, "With right of survivorship" Equal shares of interest in the property by each of the joint tenants A husband and wife relationship All of the above Term 97 of 150 Authorization to sell a parcel of real property in the event of a default is given by: Trustor to beneficiary Trustor to trustee Beneficiary to trustee Beneficiary to trustor Term 98 of 150 When examining a properly-prepared closing statement, the broker would discover that a mortgage assumed by the buyer would appear as: A debit to the buyer A debit to the seller A credit to the seller None of the above Term 99 of 150 Installment notes often include an "or more" clause. Such a clause would: Allow an accelerated payoff Indicate that the note has several makers Provide for a loan moratorium in the event of a disaster Make it possible to borrow additional money on the same note and trust deed Term 100 of 150 A developer ordered several truckloads of soil to be used in a new housing project for backfill. His most probable intended use would be: As topsoil for landscaping and beautification purposes To fill in the septic tank To fill in excavations or around foundation walls To supplement the results of the percolation test Term 101 of 150 Rental schedules for various units of space are realistically established on what basis: Capitalization of income Cost of construction Market comparison Published surveys which report average housing costs Term 102 of 150 Personal property can never: Become real property Be hypothecated Be alienated None of the above Term 103 of 150 One advantage of an installment sale for federal income tax purposes, is that: The gain from a sale will be recognized in the year of the sale No taxes are due for the year of the sale Successive payments on the gain for the sale will be at the same tax rate The gain realized will be taxed in the year it was received Term 104 of 150 Under California law, the Real Estate Commissioner has authority to do which of the following: Impose fines on any real estate licensee who is convicted of fraudulent activities Revoke an unrestricted license without a hearing Promulgate rules and regulations to enforce the California real estate laws Do all of the above Term 105 of 150 Which of the following does not buy loans in the secondary mortgage market? Federal Home Loan Mortgage Corporation Government National Mortgage Association Federal National Mortgage Association Federal Housing Administration Term 106 of 150 In order to operate a competitive, yet profitable business, a real estate broker needs to be concerned with "desk cost." Which of the following most nearly represents the correct way to calculate desk cost: Add the total of all the furniture for each salesperson Calculate the gross annual profit for the firm, less the expenses, divided by the number of salespersons Divide the total cost of rent, utilities, and advertising by the number of salespersons Divide the total operating expenses of the firm, including salaries, rent, insurance, etc., by the number of salespersons Term 107 of 150 When owners of real property hold title as tenants in common: The one who lives the longest always winds up as the sole owner The individual owners give up their right to will their interest in the property Each of the co-owners' interest may be conveyed separately All co-owners must own an equal interest in the property Term 108 of 150 Land that is subject to an easement is said to be: Appurtenant thereto Encroached upon Encumbered Restricted Term 109 of 150 Broker Davis has had a house listed for sale for nine months without selling it. He knows that the building needs major structural repairs, and he has listed it at 10% above its fair market value. He runs an advertisement in a newspaper that says, "Three bedroom, Victorian. You won't believe the price! Move right in. Davis - 234-5678." This advertisement is bad because: It is unethical to advertise a property that is over-priced If someone buys the house on the basis of the advertisement, the publisher could be held liable Since Davis knows that the property needs major repairs, it is deceptive and misleading It doesn't tell the asking price as required by Regulation Z Term 110 of 150 The purpose of the Truth-in-Lending Act is to: Regulate usurious charges for credit Establish a maximum annual percentage rate Assure a meaningful disclosure of credit terms Limit the cost of credit to the consumer Term 111 of 150 Legally and technically, property is defined as: Freehold estates Things which buyers and sellers own Rights or interests which a person has in the thing owned Only personal property Term 112 of 150 When the general level of prices decreases: It has no affect on the value of money The value of commodities increases The value of money increases The value of money decreases Term 113 of 150 Who pays the points on a Cal-Vet loan: Buyer Seller State of California No one Term 114 of 150 A straight note, same term and interest rate, would: Involve more interest than an installment note Involve less interest than an installment note including interest Involve less interest than a joint and several installment note that is payable plus interest Involve the same amount of interest as an installment note plus interest Term 115 of 150 The basic protection of a lender on a purchase-money second trust deed would be: Equity of the borrower Credit rating of the borrower Amount of second trust deed The borrower's ability to repay Term 116 of 150 Capitalization: Establishes the value of an asset by dividing the annual net income by the desirable rate of return Is the effective interest return received by an investor on a first trust deed Balances the assets and liabilities of an entity on a balance sheet Results in net worth Term 117 of 150 In order to earn $200 per month, the amount a person would have to invest at 8% would be: $12,000 $18,000 $24,000 $30,000 Term 118 of 150 Under federal income tax regulations, an individual may not deduct a loss on the sale of residential property unless: The loss exceeds 20% of the individual's adjusted gross income The property was also used for business purposes and showed a profit for the 3-year period immediately preceding the sale The individual shows an additional capital gain which would be offset by the sale The property was bought as an investment and was rented or leased out as such Term 119 of 150 The requisites of a grant deed when compared to a land contract of sale may differ with respect to: Interest conveyed Signatures of the principal parties Designation of purchase price All of the above Term 120 of 150 Broker Farr is showing property that he has listed to Olson. Broker Farr knows that there are massive plumbing repairs to be made. Broker Farr: Doesn't have to tell the buyer, unless the buyer asks Has to tell the buyer, because he must disclose all material facts Does not have to tell the buyer if the property is sold "as is" None of the above Term 121 of 150 An instrument which usually transfers possession of real property, but does not transfer ownership is: A mortgage A sublease A security agreement An easement Term 122 of 150 A person who held a life estate leased the property for five years and then died one month after signing the lease. The new owners ordered the lessee to move out. The lease was: Valid for the five years Valid only as long as the lessor was alive Invalid from the beginning Invalid unless deceased's executor confirmed it. Term 123 of 150 Of the following, which best defines a fee simple estate: Title in the owner without limitations An estate for years A life estate The most interest that one can hold in land Term 124 of 150 A person sold his home and took back a note secured by a purchase money deed of trust. He selected a real estate broker from the telephone book and asked him to service this loan. If the broker takes on this duty, state law requires him to: Convey a broker's loan statement Be a real property securities dealer Have a written authorization from the holder of the note Be a loan correspondent or a mortgage broker Term 125 of 150 A real estate salesman went into a neighborhood to obtain listings of residential property. He made representations that because of the entry into the neighborhood of minority groups, property values would be reduced by a decline in the quality of schools and an increase in the crime rate. These practices by the salesman are: Permissible if the representations are true Grounds for disciplinary action Unethical, but beyond the jurisdiction of the Real Estate Commissioner Justified if his activities do not decrease property values for neighboring properties Term 126 of 150 Of the following types of deeds, which one would contain no warranties, expressed or implied: A wild deed A quitclaim deed A bargain and sale deed A grant deed Term 127 of 150 A major transportation route has a single line of store buildings along one side. This is known as: A neighborhood shopping center A line commercial zone A clustered development A strip commercial development Term 128 of 150 Of the following, which is considered a violation of fair housing laws in regards to periodic tenancy: A landlord requiring that each and every tenant have a good credit rating and the assurance of a steady source of income The requirement of a landlord that all tenants furnish references from their previous landlord The requirement of a landlord of a co-signer exclusively for tenants who are single A landlord that requires all tenants pay first, second and last month's rent in advance Term 129 of 150 In arriving at an estimate of value, an appraiser would be most interested in the date: The purchase contract was signed The deed was recorded The sale went into escrow The escrow was closed Term 130 of 150 An estate is granted to "A" for the life of "X." "A" dies while "X" is still living. The estate: Ceases to exist Reverts to the original grantor Vests in "X" for his life Vests in the heirs or devisees of "A." Term 131 of 150 Upon discovering that a salesperson in his office was receiving a referral fee from a local lender for every real estate loan the salesperson referred to the lender, the broker of record in that office took only two actions: He discharged the salesperson, and he warned all other salespersons in the office never to accept such fees. Based only on the foregoing, which of the following is most nearly correct: The salesperson appears to be guilty of co-mingling While the canons of business ethics may have been bent, no cause for action by the Commissioner exists Since the broker was apparently unaware of the practice, only the salesperson can be disciplined Both broker and salesperson may be subject to disciplinary action by the Commissioner Term 132 of 150 The two requirements which governmental units must observe in the exercise of the power of eminent domain are: The proposed use must be both practical and public The inconvenience to the owner must not be greater than the benefit to the public, and the government must justify the taking The proposed use must be practical, and just compensation must be paid to the owner The proposed use must be public, and just compensation must be paid to the owner Term 133 of 150 Which of the following statements is true concerning escrow procedures: A broker can hold an escrow for compensation for other parties when he has no interest in the transaction When the escrow requirements have been met, the escrow agency changes from a dual agency to a separate agency When the escrow holder is in possession of a binding contract between the buyer and seller, it is said to be a "complete escrow" The escrow officer acts as an arbitrator of arguments between the buyer and seller Term 134 of 150 The Uniform Commercial Code, Division 6, which pertains to bulk sale transfer of business goods, exists primarily for the protection of: Buyers Sellers Creditors Silent partners Term 135 of 150 Ms. Swan listed a vacant lot with Broker Benton for $11,400. Prospective buyer Gardner submitted an offer at a purchase price of $11,000 with the offer to expire in thirty days. The next day, Ms. Swan made a counteroffer with the sales price to be $11,200, which Gardner would not accept. Three days later, Swan delivered to Benton a signed acceptance of Gardner's $11,000 offer. When Benton told Gardner of Ms. Swan's acceptance, Gardner decided not to buy the property. Based on these actions, there is: A voidable contract A void contract An enforceable contract No contract Term 136 of 150 Harris and Davis, single people, owned a parcel of real property as joint tenants. Harris encumbered his interest for $10,000, borrowing the amount to pay medical bills without the knowledge or consent of Davis. Shortly thereafter, Harris died, with the debt still unpaid. Which of the following would be true: Davis and the lender would be tenants in common, each owning one-half interest in the property Davis would own all of the property free and clear of the encumbrance Davis would own all of the property, but would be subject to the $10,000 loan Davis and the beneficiary would own the property as joint tenants, each with a one-half interest Term 137 of 150 In using the capitalization process, which of the following cannot be deducted to determine the net income? A management fee Maintenance expense Mortgage interest Vacancies Term 138 of 150 Adams sold his house to Brooks, who did not record the deed, but took up residency there. Adams then sold the same property to Carr, who reviewed the county recorder's records, but did not examine the property. Adams gave Carr a deed, which Carr recorded. Which of the following would be true concerning title to the property: Carr and Brooks are co-owners of the property Carr now owns the property, because he recorded his deed first Carr has recourse against Brooks for failure to record Brooks maintains title Term 139 of 150 Which of the following is not a true statement about easements: An easement in gross is a right in another's land created for the benefit of adjacent land An easement is a non-possessory interest An owner cannot have an easement in his own land Because of an easement, one may be restricted in the use of his own land Term 140 of 150 A family rents a vacation home from September 1, 2002 to January 1, 2003. Their tenancy would properly be classified as: Month-to-month A periodic tenancy A fee simple estate An estate for years Term 141 of 150 Tyson owns a store building which he leased to Crown for seven years. Crown's estate in the store building is: Personal property Estate for years A chattel real All of the above Term 142 of 150 Which of the following would be considered real property? A maturing grape crop which is under a sales contract and to be harvested later Trade fixtures that a tenant has installed but which are removable without damage A built-in refrigerator in a mobile home that is not attached to a permanent foundation A bearing wall in a single-family house Term 143 of 150 When comparing condominiums and rented apartments, which of the following would be true: The person who occupies each unit would have an estate in real property The occupier has a fee estate The local tax assessor must assess each unit of the subdivision separately None of the above Term 144 of 150 By means of the Federal Fair Housing Law, Congress established a national policy of fair housing throughout the United States. This policy applies to which of the following: Single-family residences that are individually owned and that are offered for sale through a real estate broker Single-family residences owned by private individuals who own more than three such residences All type family dwellings of six units where the owner occupies one of the units All of the above Term 145 of 150 When a valid grant deed is prepared, title passes when it is: Acknowledged Delivered Signed Recorded Term 146 of 150 Compliance with the agency relationship law enacted as a part of the civil code would be required in which of the following transactions: A single-family residence offered for sale by owner A foreclosure sale by a trustee under provisions of a deed of trust A transfer of the husband's interest to his wife in a divorce proceeding A lease for a period of longer than one year Term 147 of 150 To alienate title to property, one: Encumbers the title Clouds the title Records a homestead Conveys title Term 148 of 150 Which of the following would not be legally proper for a licensee to do? Tell a prospective buyer that the listed farm is the nicest in the county Refuse to give his principal a serious verbal offer to purchase Show a property only on sunny days Keep the client's secret that the roof leaks Term 149 of 150 The first step in the appraisal process is to: Define the appraisal problem Determine the appraisal fee Plan the appraisal Organize the data program Term 150 of 150 Where a buyer withdraws his offer to purchase real property prior to acceptance by the seller, the: Seller is entitled to one-half of the earnest money deposit Broker may sue buyer for specific performance Buyer is entitled to the refund of the earnest money deposit Seller may sue the buyer for specific performance and will probably win the suit Privacy Terms English (USA)