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66 Cards in this Set
- Front
- Back
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When financing a home with a long-term loan, if equal payments are made, the amount of the principal will:
A. Decrease while the interest payment decreases B. Increase while the interest payment decreases C. Remain the same along with the interest D. Increase at a constant rate for the life of the loan |
B. Increase while the interest payment decreases
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An agency relationship may be terminated by:
A. Lis pendis B. Completion C. Estoppel D. Tour de force |
B. Completion
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When title is transferred, the grantee in the deed may have the title insured by a:
A. Title insurance policy B. Hazard insurance C. Homeowners insurance D. Chain of title |
A. Title insurance policy
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What is the best way to create an agency relationship?
A. By actions B. By opinion C. By Experience D. By written agreement |
D. By written agreement
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When an owner refuses to pay the broker an earned commission, the broker may properly seek relief by:
A. Filing a complaint with the Department of Real Estate B. Filing a vendor’s lien C. Court action D. All of the above |
C. Court action
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The maximum commission a broker may charge for the sale of residential property is:
A. Set by the Real Estate Code of Ethnics B. Six percent of the sales price C. Determined by the number of monthly sales D. Determined by the broker’s contract with his principal |
D. Determined by the broker’s contract with his principal
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Brokers Andrew and Benson both have an open listing on a property. Broker Andrew showed the property to a prospective buyer and carried on negotiations, but the buyer decided not to buy. Two weeks later, Broker Benson contacted the same buyer and arranged a sale of the property. The seller would be obligated to pay a commission as follows:
A. Full amount to Benson only B. Full amount to Andrew only C. Half to Benson and Half to Andrew D. Full amount to both Brokers |
A. Full amount to Benson only
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Under which of the following listings, a commission must be paid by owner even though he sells entirely through his own efforts:
A. Exclusive right to sell listing B. Exclusive agency listing C. Open listing D. Net listing |
A. Exclusive right to sell listing
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A broker’s ads in a local newspaper says that if a buyer or seller will bring this ads to his office and either list or buy a property through him, he will give that person $50. Which of the following is true?
A. The broker is not allow to give referrals B. Illegal under the real estate law C. Commission are paid only to license individuals D. The broker can give $50 to the buyer or seller |
D. The broker can give $50 to the buyer or seller
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The basis of the market data approach appraisal is found in:
A. Principle of substitution B. Principle of progression C. Principle of stability D. Principle of conformity |
D. Principle of conformity
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A joint tenant can dispose an interest held in real property by all of the following ways, except:
A. Will B. Sell C. Lease D. Transfer |
A. Will
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Each owner in a tenancy in common:
A. Has the right in possession of all the properties B. Cannot divide the property C. Has no right in possession of all the properties D. Only one may have possession of the entire property |
A. Has the right in possession of all the properties
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A trust deed can have a provision that allows future loans on the property to have priority. This would be called:
A. A subordination clause B. Acceleration clause C. Or more clause D. Prepayment penalty clause |
A. A subordination clause
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Of the following, which is the best definition of a balloon payment?
A. Late interest payments of a 30 year loan due at the end B. An additional payment to avoid prepayment penalties C. Principal payments D. The require payment of the entire balance due |
D. The require payment of the entire balance due
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A Chicano prospective purchaser asks to be shown homes but does not specify that he wants to see homes located in a neighborhood where there are no Chicanos. How should a licensee decide what properties to show him?
A. The licensee may select homes for showing as he would for any other prospect B. The licensee could assume that the prospective buyer is not interested in that neighborhood C. The licensee may decided not to provide service to the buyer D. Show him homes only in a Chicano neighborhood |
A. The licensee may select homes for showing as he would for any other prospect
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The decline of mortgage interest rates would occur when:
A. The Fed increases the reserve requirements B. The Fed decreases the reserve requirements C. Inflation increases D. The mortgage money supply increases |
D. The mortgage money supply increases
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If the owner of a property thinks that his property has been over-assessed by the county assessor, he would contact the:
A. Assessment Appeals Board B. The controller C. Tax collector D. Department of appraisals |
A. Assessment Appeals Board
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Lee made an offer to purchase Wilson’s property. As part of the offer, Lee agreed to take title “subject to” an existing VA loan which Wilson obtained when they purchased the property in approximate amount of $39,000. If Wilson sells to Lee under these conditions, which of the following is true concerning liability for a loss suffered by the government after a foreclosure on the VA loan?
A. Lee will be primarily liable B. Wilson will be primarily liable C. Both Lee and Wilson are liable D. Neither is liable |
B. Wilson will be primarily liable
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A broker used the following clause in his exclusive listing contract, “In consideration of execution of the foregoing, the undersigned broker agrees to use diligence in procuring a purchaser.” This clause:
A. Is important to the creation of a bilateral contract B. Necessary for the creation of unilateral contract C. Is superfluous to the contract D. Requires the broker to advertise the property with the multiple listing services |
A. Is important to the creation of a bilateral contract
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When a lender makes a loan regulated by the Real Estate Settlement Procedures Act, the loan applicant must be provided with which of the following:
A. Bill of sale B. Purchase agreement C. Interest rate disclosure form D. A good faith estimate |
D. A good faith estimate
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Broker Walter entered into an oral listing agreement with the seller of real property without a subsequent written verification. The payment of a commission to Broker Walter under these circumstances would be:
A. Illegal under the Real Estate Law B. No commission C. Receive a commission through court D. Permissible if the seller elects to |
D. Permissible if the seller elects to
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Mr. Smith bought a property for $72,000 with $20,000 cash down payment and $52,000 loan. The loan did not require interest and did not require any payments for one year. One year later, he sold the property for double its purchased price. Each dollar of his original cash investment is now equal to:
A. $4.60 B. $7.30 C. $2.30 D. $6.90 |
A. $4.60
$72,000 x 2 = $144,000 $144,000 - $52,000 = $92,000 $92,000 / $20,000 = $4.60 |
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If a 32-unit apartment building shows an annual net income of $117,800 and the appropriate capitalization rate is 8%, what is the approximate value of the property:
A. $9,424,000 B. $1,472,500 C. $1,178,000 D. $1,170,790 |
B. $117,800 / 8% = $1,472,500
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Which of the following does not directly affect the level and movement of mortgage interest rates?
A. Demand for funds B. Inflation C. Rate of unemployment D. Supply of money |
C. Rate of unemployment
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To an appraiser, a definition of value is:
A. A relationship between desirous persons and things desired B. The ability of one commodity to command other commodities in exchange C. The present worth of future benefits arising out of ownership of a property |
D. Any of the above
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Concerning the second installment of real property taxes in California, the due date and delinquent date are respectively:
A. November 1st and December 10th B. February 1st and April 10th C. November 1st and April 10th D. December 10th and April 10th |
B. February 1st and April 10th
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A lessee rents a building from May 1 to July 1. His tenancy is:
A. Estate for years B. Month to month C. Periodic tenancy D. Monthly lease |
A. Estate for years
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Which of the following can be appurtenant to land?
A. Stock in a mutual water company B. Attachment C. Easement in gross D. All of the above |
D. All of the above
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111. A trustee defaults on his loan and refuses to reinstate the deed of trust. The most expedient thing for the beneficiary to do is to institute a:
A. Judicial foreclosure B. Lien sale C. Trustee sale D. HUD sale |
C. Trustee sale
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When an appraiser is appraising a property, he usually considers all of the following, except:
A. The assessed value B. Property description C. Final value D. Neighborhood data |
A. The assessed value
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Listing a home at an inflated price requiring minority prospects to pay that price, but accepting a lower price from other prospects:
A. Could cause the listing salesperson and broker to be liable for money damages in a Fair Housing suit B. Violation of the Fair Housing Laws C. Is illegal under FHA and VA financing loans only D. Is not illegal if the buyer agrees to the price |
A. Could cause the listing salesperson and broker to be liable for money damages in a Fair
Housing suit |
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Mr. Gonzalez took out a loan for improvements to his real property that was fully amortized. If the loan provides that there are equal monthly payments, the amount credited to the principal will:
A. Decrease while the interest payment decreases B. Increase while the interest payment decreases C. Will remain the same along with the interest D. Increase at a constant rate for the life of the loan |
B. Increase while the interest payment decreases
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Which of the following phrases will best describe the nature of a broker’s duty to keep his principal informed?
A. Fiduciary obligation B. Ethnical conduct C. Good Business practice D. Responsibility |
A. Fiduciary obligation
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When a deed shows the racial identity of a client, it can be re-written only by authorization from:
A. The laws created in 1978 B. Title companies C. Offensive and discrimination department D. Court order |
D. Court order
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When gross income is changed into value in one operation, which of the following describes this occurrence?
A. Comparison cost B. Cost C. Value D. Rent multiplier |
D. Rent multiplier
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During the winter time, an appraiser finds that the inside of an exterior wall of a building is about the same temperature as the other interior walls. The appraiser would come to the conclusion that:
A. The heating system is faulty B. The furnace has a good EER rating C. The wall insulation is adequate D. Heating pipes are leaking |
C. The wall insulation is adequate
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A sublease is considered to be:
A. A transfer of less than the entire leasehold B. A transfer of the entire leasehold C. An assignment D. Estate for years |
A. A transfer of less than the entire leasehold
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Which of the following best describes the actions of an agent under single agency?
A. A single-agency broker is client-oriented B. A single-agency represents the buyer and seller C. One transaction is needed and no escrow instructions are needed D. Buyer and seller represent themselves |
A. A single-agency broker is client-oriented
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An owner of an apartment complex deducted $6,000 from the gross income for depreciation on his federal income tax return. The basis of the property is therefore:
A. Increased by $6,000 B. Reduced by $6,000 C. Remains the same D. Adjusted only when the property is sold |
B. Reduced by $6,000
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A real estate licensee refers transactions to a specific escrow company, because the escrow company pays him a referral fee for each of such referral. Regarding this arrangement, which of the following is correct?
A. This arrangement is prohibited under real estate law B. If the amount does not exceed $50, it is permissible C. If all parties are informed, it is permissible D. If the fee doesn’t increase the amount charged in the good faith estimate |
A. This arrangement is prohibited under real estate law
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A broker receives rental income from several apartment units which he owns. He plans soon to accept an offer accompanied by a deposit to sell one of the units. Under these circumstances, he should:
A. As owner, place neither the rental income nor the sale deposit in a trust account B. Deposit the rent in the brokers trust account C. Deposit the rent in the brokers trust account if doesn’t exceed $200 D. Deposit both the rent and deposit in the trust account |
A. As owner, place neither the rental income nor the sale deposit in a trust account
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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?
A. Steering B. Panic peddling C. Blockbusting D. Both “B” and “C” |
D. Both “B” and “C”
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A listing (authorization to sell) generally:
A. Authorizes the broker to find a buyer for the property B. Is a bilateral executed contract C. Allows the broker to collect a commission during the term of the listing D. Becomes a legal contract when buyer signs it |
A. Authorizes the broker to find a buyer for the property
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When a salesperson takes a listing, the listing is the property of:
A. The multiple listing services B. The salesperson only C. The broker who employs the salesperson D. Both broker and salesperson |
C. The broker who employs the salesperson
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When the Environmental Review Board or the Department of Real Estate issues a
“negative declaration,” it means that the subdivision: A. Has not been approve by the department of Environment Protection Plan B. Has been approve by the Environment Protection Agencies but subject to inspections C. Has warnings about possible environment safety in the public report D. Will have an insignificant effect upon the environment and the developer will not have to pay for a full environmental report |
D. Will have an insignificant effect upon the environment and the developer will not have to pay for a full environmental report
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When a legal description begins with the phrase, “Beginning at a point on the northerly edge of O Street, 100 feet east of the NE corner of the intersection of O and Seventh Street.” Which of the following methods of land description is being used?
A. Metes and Bounds B. Township C. Track map system D. U.S. Government survey |
A. Metes and Bounds
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When an agent is accused of “puffing,” the agent might have been guilty of which of the following?
A. Advising the real estate agent to elevate the price on the property to help the buyer with financing costs B. Exaggerating the features of the property and/or neighborhood when showing the property to prospective buyers C. Charging the seller higher cost in different neighborhoods D. Convincing the buyer to make a lower offer |
B. Exaggerating the features of the property and/or neighborhood when showing the property to prospective buyers
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Of the following, which best characterizes the term “single agency”?
A. The agent represents both the buyer and seller B. The broker can only keep his principal informed about any information about the property C. The agent represents one client in dealing with a third person D. The agent has the right to represent as many principals in a single agency |
C. The agent represents one client in dealing with a third person
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Mr. Brown hired an agent to purchase a home. The offer has a contingency; the offer was contingent upon the sale of Brown’s home. The offer made a counter offer accepting the Brown’s offer with the right to continue marketing the home for better offers and granting to Brown a right of first refusal to remove his contingency if a better offer comes in. Brown accepted the offer and immediately listed their home for sale. Shortly thereafter the seller notified Brown that a better offer has been presented without any contingencies. What should the agent advise Brown to do?
A. Advise Brown of the advantages and disadvantages of removing the contingencies and buying the home before the sale of their existing home B. The agent may offer his advice the decision is on the buyer C. Advise the buyer to remove the contingency immediately D. Advise the buyers to rent the property first so they can purchase the home without selling their existing home first |
A. Advise Brown of the advantages and disadvantages of removing the contingencies and buying the home before the sale of their existing home
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Under the Business and Professions Code, it is required to keep copy of a deposit receipt for a minimum of three years from:
A. Acceptance of the offer B. The date closing of the transaction C. Recording of the deed D. The date the deed was notarized |
B. The date closing of the transaction
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A real estate broker was charging 1/8 percentage interest rate higher to borrowers that
English wasn’t their first language. This action by the broker is: A. Legal because the broker had to work harder explaining the concept in a different language. B. A violation of the Housing Finance Discrimination Act of 1977 C. A violation of the Department of Real Estate D. A violation of the mortgage guidelines |
B. A violation of the Housing Finance Discrimination Act of 1977
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If a tenant enters into a 2 year lease and if the lease contains no clause of assignment of subleasing. The tenant may:
A. Assign a sublease to another tenant B. Sublease to another tenant C. Cannot sublease D. Assign the lease only but not sublease |
B. Sublease to another tenant
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A tenant of an apartment complex working on heating ducts. The tenant sees the ducts contain asbestos insulation. Does the tenant have a legal obligation to warn anyone?
A. Let owner know by certify mail B. The tenant has no legal obligation to warn people C. Let the repairman know D. Report it to the Department of Real Estate |
B. The tenant has no legal obligation to warn people
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All of the following statements about covenants and conditions are false, except:
A. The violation of the covenant results in the loss of title B.Covenants and conditions must be for the benefit of the general public C. A violation of a condition can result in the loss of title D. All covenants and conditions are for the benefit of the public is general |
C. A violation of a condition can result in the loss of title
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Which of the following is true regarding the depreciation of land under federal income tax law?
A. Land is depreciated every year B. Owner may deduct depreciation of land over time C. Land is depreciated by comparables D. Land cannot be depreciated |
D. Land cannot be depreciated
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An appraiser is using the replacement cost method and may use the unit cost per square foot or cost per cubic foot in the computations. On a unit cost comparison basis:
A, A small house would cost less per unit than a large house B. A small house would cost more per unit than a large house C. The small house and large house would cost the same D. A large house would cost more per unit than a small house |
B. A small house would cost more per unit than a large house
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Two buildings are leased on a long term basis, one for post office and the other for a hardware store. Using the capitalization approach to appraise the properties, the post office would demand:
A. Higher capitalization rate B. A lower capitalization rate C. Same capitalization rate D. None of the above |
B. A lower capitalization rate
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The Alquist Priolo Earthquake Special Studies Act is applicable to:
A. All cities in California B. All counties in California C. Only on designated earthquake fault lines D. All regions in northern CA |
B. All counties in California
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A loan secured by real property usually consists of:
A. Mortgage loan statement B. FHA or VA insurance C. Hazard insurance D. Promissory note and a trust deed |
D. Promissory note and a trust deed
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Mortgage loan correspondents may obtain a license by:
A. Department of Corporations B. Department of Real Estate C. No license is required D. Both A and B |
D. Both A and B
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A real estate broker who owned a large real estate firm operating under ABC Realty Co, listed a property for a total of $40,000. The broker and many of his salespersons were all principals in an investment company operating under the name of Realty Investment Company. The investment company decided to purchase the property so the broker presented an all cash offer but did not disclose the buyer's relationship. Under this circumstance:
A. The broker's offer would be valid if he discloses the buyers relationship to the Escrow company B. The broker's offer is a legal contract even thought was all cash C. The broker's action was improper because he did not reveal the true identity of the purchaser D. The broker's action was proper since he was able to sell the property |
C. The broker's action was improper because he did not reveal the true identity of the purchaser
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When someone has power of attorney may do all of the following, except:
A. Sign the name of his principal B. Deed the property to another person C. Charge commission for himself D. Deed the property to himself |
D. Deed the property to himself
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Purchasing a home with a lower down payment and longer repayment terms will generally:
A. Increase the total financing cost B. Decrease the financing cost C. No affect on financing cost D. Affects the amortization process |
A. Increase the total financing costs
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A lender under a trust deed is known as:
A. Trustor B. Trustee C. Benficiary D. Mortgagor |
C. Beneficiary
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When a residential neighborhood is composed mostly of owner occupied residential properties, it tends to:
A. Lower property values B. Elevate property values C. Conformity of values D. Stabilize value |
D. Stabilize Value
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In which of the programs will the borrower have to pay commission on?
A. VA loan B. Fannie Mae C. FHA or PMI D. Freddie Mae |
C. FHA and PMI
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