G Practice Exam 7 Of 17 Real Estate Exam Prep California 2010

Front 1

A real estate agent who is placed in a position of trust, loyalty, and confidence is a(n):
A) fiduciary.
B) dual agent.
C) principal.
D) independent contractor.

Back 1

The correct answer is "A - fiduciary. " Moreover, these are responsibilities defined by law, not just custom.

Front 2

If a contract for sale provides that the owner is selling his home in an "as-is" condition, then:
A) Caveat emptor applies.
B) Hidden and latent defects must still be disclosed to the purchaser.
C) The owner is generally immune from liability.
D) The broker must assist the buyer in making a thorough inspection.

Back 2

he correct answer is "B - Hidden and latent defects must still be disclosed to the purchaser. " By definition, "hidden and latent" are defects not obvious to the untrained observer. They must be disclosed so that potential buyers know exactly what "as is" constitutes for this particular property.

Front 3

If a salesperson acts as an independent contractor, then:
A) He is responsible to his broker as to how his work is performed.
B) He controls his own working hours.
C) All of his listings belong to him.
D) His broker must withhold income tax from his commission checks.

Back 3

The correct answer is "B - He controls his own working hours. " Whether a licensee is considered an employee or independent contractor can have an enormous impact on a licensee's work style and cash flow. Independent contractors have almost unlimited latitude in determining how and when they work--as long as the results of that work are satisfactory to the broker. Additionally, taxes are not withheld from commission checks. That means, however, that the licensee is responsible for paying estimated taxes (penalties for late payments can be substantial) as well as higher "Social Security" taxes in the form of a self-employment tax.

Front 4

A broker whose negligence in preparing a sales contract allows the purchaser (customer) to void the agreement breaches her duty to her client (principal) of:
A) personal performance.
B) honesty.
C) accuracy.
D) due care.

Back 4

The correct answer is "D - due care. " "Due care" refers to the licensee's obligation to ensure that all steps in the transaction process are followed with professionalism and accuracy. Errors that a broker or salesperson could reasonably have been expected to avoid and that damage a client (such as the loss of a sale) may be legally actionable.

Front 5

The unauthorized withdrawal of any portion of an earnest money deposit from a broker's trust account before the sale is consummated or otherwise terminated, regardless of the intended use, is considered:
A) constructive fraud.
B) commingling.
C) negligent misrepresentation.
D) unlawful agency.

Back 5

The correct answer is "B - commingling. " Among the choices, commingling is the only option that pertains to trust accounts. It usually means combining trust funds with general business or the licensee's personal checking accounts. It is illegal and one of the most serious violations of real estate law.

Front 6

According to the law of agency, a fiduciary relationship exists between the:
A) broker and his attorney.
B) listing salesperson, selling salesperson, the brokers involved, and the seller.
C) buyer and the seller.
D) listing salesperson and the buyer.

Back 6

The correct answer is "B - listing salesperson, selling salesperson, the brokers involved, and the seller. " The fiduciary relationship extends to all parties in a real estate firm representing a client.

Front 7

An agent was showing a property to a prospective buyer. The buyer sees a "FSBO" sign, and requests to see the property. What should the agent do next?
A) Refuse to show the property, since it was a "For Sale By Owner."
B) Stop and ask to show the property.
C) Obtain written permission from the seller, then show the home.
D) Ask his broker to show the property.

Back 7

The correct answer is "C - Obtain written permission from the seller, then show the home. " Salespeople should almost always obtain permission before showing any property. In the case of a FSBO, even in an open house situation, a licensee should first obtain written permission since he is representing the buyer and is rightfully entitled to a commission if the sale goes through.

Front 8

Salesperson Andrews receives an offer to purchase, which is accompanied by a $2,000 earnest money deposit in the form of a personal note. Which is true in this case?
A) Andrews has breached his agent's duty to the seller.
B) The offer should indicate that the deposit is in the form of a note.
C) Andrews should return the note and ask the purchaser to give him a check for the same amount.
D) The resulting contract will be voidable at the seller's option.

Back 8

The correct answer is "B - The offer should indicate that the deposit is in the form of a note. " Although cash (in the form of a check) is the more accepted form of earnest money, a personal note or any other "valuable consideration" acceptable to the owner is allowable.

Front 9

In a typical Exclusive Right To Sell Listing Agreement, there is a clause stating that if the listing period expires and a buyer that was shown the property during the term of the listing becomes the purchaser, the broker is entitled to compensation. If the property is listed by another broker this clause is inoperative. This clause is known as the:
A) broker protection clause.
B) the buyer.
C) automatic extension clause.
D) time is of the essence clause.

Back 9

The correct answer is "A - broker protection clause. " This practice recognizes that a broker's first function is to "bring buyers and sellers together" and allows for the possibility of a bonafide commission to the broker for bringing in a qualified buyer--during the listing period--who later becomes the purchaser. Stay away from any answer that implies that any "extension" is "automatic." If you see this answer appear in a question on your Exam, eliminate it!

Front 10

The Civil Rights Act (1866) permits discrimination in housing based on race under which of the following circumstances?
A) When the person does not own more than three houses.
B) When the person refrains from discriminatory advertising.
C) When the person does not use a broker.
D) Never.

Back 10

The correct answer is "D - Never. " Although there are some fine lines of distinction, the basic rule to keep in mind is that discrimination in the sale or rental of housing based on race is never allowed.

Front 11

Blockbusting is best described as an attempt:
A) to panic a neighborhood into thinking property values will decline due to unwanted person(s) moving in.
B) to form guerrilla bands to use violent action to integrate neighborhoods.
C) by banks to refuse loans to homeowners in certain segments of the city.
D) by insurance companies to refuse to issue homeowner's policies to certain residents of the city.

Back 11

The correct answer is "A - to panic a neighborhood into thinking property values will decline due to unwanted person(s) moving in. " Using race, ethnicity or any other personal characteristic of an individual or a group to influence the buying or selling of real estate is illegal and carries stiff penalties that can be pursued by local, state and federal authorities as well as affected individuals.

Front 12

Redlining deals with the conduct of:
A) realtors.
B) lawyers.
C) lending institutions.
D) homeowners' associations.

Back 12

The correct answer is "C - lending institutions. " Redlining refers to the now illegal practice of lenders to refuse to write loans on properties in certain neighborhoods.

Front 13

If a person believes that he or she is a victim of illegal discrimination in housing, he or she should:
A) Consult NASA.
B) Have the owner arrested under federal law.
C) File a complaint with HUD within 1 year.
D) Call the mayor.

Back 13

The correct answer is "C - File a complaint with HUD within 1 year. " Although there are multiple agencies with various responsibilities for enforcing civil rights legislation, HUD, the department of Housing and Urban Development, is the governing body when it comes to real estate.

Front 14

When a listing on a residential property is signed, which type of agency relationship is usually created?
A) special agency
B) general agency
C) the right of the broker to bind the principal to offers
D) the right of the broker to put a sign in the yard

Back 14

The correct answer is "A - special agency " Special agency is usually created because it means the broker is representing only one person (the seller) on one property (his home) for only one transaction (the sale of that one property). Buyer's agency and dual agency obviously don't fit this description since they involve multiple parties and/or properties.

Front 15

An agency could be terminated by all EXCEPT:
A) when the house burns down.
B) when the owner cancels the listing in order to contact the potential buyer and sell to him or her directly.
C) when the performance of the seller is lacking.
D) when the performance of the broker is suspect.

Back 15

The correct answer is "B - when the owner cancels the listing in order to contact the potential buyer and sell to him or her directly. " Sellers are free to terminate contracts at any time and, more or less, for any good faith reason, such as changing their minds about selling. However, contracts may not be cancelled simply to avoid paying a commission.

Front 16

What type of listing does an owner agree to that: allows the listing broker to sell his/her property; pays the listing broker should a different broker sell it; and does not allow the seller the right to sell the property himself/herself without paying a fee?
A) exclusive right to sell
B) exclusive agency
C) open listing
D) ostensible agency

Back 16

The correct answer is "A - exclusive right to sell " Remember, "exclusive right to sell" entitles the broker and his or her salespeople to a commission regardless of who finds the buyer. "Exclusive agency," on the other hand, means the owner does not owe a commission if he or she finds the buyer.

Front 17

The closing date is approaching on the sale of the property for which a salesperson has procured the buyer. Although the sellers have both signed the sales contract, the salesperson learns that a third cousin of one of the sellers may have a small, weak title claim to this property. In this situation, the salesperson should:
A) Ignore the existence of the third cousin, because if the cousin does not assert a title claim before the closing, the buyer can expect no future problems from the cousin.
B) Advise the seller to contact an attorney to seek a quitclaim deed from the third cousin.
C) Advise the buyer to contact an attorney in preparation to sue for specific performance.
D) Inform both the buyers and the sellers that the closing cannot take place.

Back 17

The correct answer is "B - Advise the seller to contact an attorney to seek a quitclaim deed from the third cousin. " A quitclaim deed is typically used to resolve small issues and formally release title claims by third parties.

Front 18

An actual agency relationship that arises by the actions of the parties rather than by expressed written agreement is called:
A) special agency.
B) general agency.
C) ostensible/implied agency.
D) universal agency.

Back 18

The correct answer is "C - ostensible/implied agency. " This is an "acts like a duck, walks like a duck, is a duck" interpretation of the law. While ostensible agency is recognized in some states, it's not in others and written agreements should always be sought.

Front 19

The owner of an apartment building has just signed a management contract with a real estate firm. In this situation, has an agency been formed?
A) Yes, because an agency is formed whenever one party delegates to another the right to act on their behalf in certain business transactions.
B) Yes, because the agreement between a property owner and a real estate firm creates a universal agency.
C) No, because an agency is formed only with a listing agreement between a seller and a real estate broker.
D) No, because an agency with a broker is formed only in situations of buying and selling, not managing real estate.

Back 19

The correct answer is "A - Yes, because an agency is formed whenever one party delegates to another the right to act on their behalf in certain business transactions. " Whenever a real estate firm acts on behalf of another on any kind of transactional or relationship basis, agency is formed with all of the duties and responsibilities it implies.

Front 20

Agent Smith is working for Buyer Murphy under a buyer agency agreement. Murphy inquires about the list price ($100,000) of a property and asks Smith if the property is overpriced. Smith's answer should be:
A) The list price of the property is $100,000 and you will have to decide what to offer.
B) Most properties are listed at a fair price.
C) I will discuss it with the seller's agent and get back to you as soon as possible.
D) I think we need to look at the comparable sales (MLS data) and the other properties that are for sale in the neighborhood, and then we can determine together a suitable offering price for this property.

Back 20

The correct answer is "D - I think we need to look at the comparable sales (MLS data) and the other properties that are for sale in the neighborhood, and then we can determine together a suitable offering price for this property. " Licensees have a responsibility to provide their clients with the best possible information. That means, using facts and evidence rather than guesses to the greatest extent possible. In this case, since the buyer is Agent Smith's client, Smith should work with his client to help him get the property at the best possible price.

Front 21

An actual agency that arises by deduction or inferences from other facts and circumstances, including the words and conduct of the parties, best describes which of the following?
A) special agency
B) implied agency/ostensible
C) general agency
D) universal agency

Back 21

The correct answer is "B - implied agency/ostensible " As noted previously, implied agency is formed by words and deeds rather than written contract. While sometimes valid, it is not as strong as a written agreement.

Front 22

Buildings that were erected before the enactment of a zoning ordinance and do not comply with the zoning limitations are called:
A) nonconforming use.
B) outlawed classifications.
C) depreciated improvements.
D) dilapidated structures.

Back 22

The correct answer is "A - nonconforming use. " "Nonconforming use," also known as "grandfathering," is a doctrine that recognizes the unfairness that would result by forcing buildings erected under one set of guidelines to be torn down because they do not conform to a new set.

Front 23

Which of the following would not be a part of the development cost of a lot?
A) installing curbs
B) installing storm sewers
C) constructing a building
D) installing street

Back 23

The correct answer is "C - constructing a building " Subdivisions typically consist of two parts: the "improved building lot" and the structures themselves. The improved lot consists of all the things typically associated with a neighborhood that make it ready to accept a completed home.

Front 24

In appraising a property, which of the following is likely to be affected more by changes in the national economy than in the local city economy?
A) a dental office building
B) an apartment building with its 16 units
C) the catering company located near a residential area
D) an automobile plant employing 5000 workers

Back 24

The correct answer is "D - an automobile plant employing 5000 workers " Unlike a dental office, apartment building or catering company, the buyers for an automobile plant's "products and services" come from all over the country, not just the local community.

Front 25

In doing a neighborhood analysis of a client's property in Tuxedo Estates, an appraiser notes that the subdivision is exclusive, very large, and the residents are wealthy. If the client's property is at the center of Tuxedo Estates, which of the following is true?
A) It is more likely to lose value than houses on the perimeter of the subdivision if adjacent neighborhoods begin to decline.
B) It is less likely to lose value than houses on the perimeter of the subdivision if adjacent neighborhoods begin to decline.
C) The proximity of public transportation is likely to be an important factor in the valuation of the property.
D) The property will lose value, because houses in the center of a subdivision decline in value more rapidly than those on the perimeter.

Back 25

The correct answer is "B - It is less likely to lose value than houses on the perimeter of the subdivision if adjacent neighborhoods begin to decline. " The farther removed from a negative influence a property is, the less likely it is to be affected. If that influence is a one-time event, such as a highway, it's possible it will have little or no impact on the interior lots. However, if it's more pervasive, such as the general decline of a substantial surrounding urban area, there could be a "domino effect," with all properties ultimately feeling the impact.

Front 26

The sales comparison approach to value is based on the premise that many people buy a real property:
A) on an emotional impulse.
B) after determining its future income as value.
C) after determining the cost of reproducing the property.
D) after comparing it to others with similar features.

Back 26

The correct answer is "D - after comparing it to others with similar features. " While methods of valuation are more varied for commercial property, sales comparison is the primary method by which residential properties are evaluated, appraised and purchased.

Front 27

Which of the following is NOT a step in the appraisal process?
A) definition of the problem, neighborhood analysis
B) development of a list of possible sources of financing for a purchaser
C) classification, analysis, and interpretation of data
D) accumulation of necessary data

Back 27

The correct answer is "B - development of a list of possible sources of financing for a purchaser " The purpose of appraising is to place as objective a value on a property as possible, not find buyers, financing or otherwise become actively engaged in the sales process.

Front 28

Which of the following is true of economic (EXTERNAL) obsolescence?
A) It is generally curable because the owner of the subject property can generally invest less money to fix it than he/she gains in property value by fixing it.
B) It is generally incurable because it results from factors that the owner of the subject property cannot control.
C) It can be caused by a deteriorating foundation under the subject property.
D) It can be caused by a poor floor plan in the subject property.

Back 28

The correct answer is "B - It is generally incurable because it results from factors that the owner of the subject property cannot control. " Because it has to do with factors outside the owner's control--such as zoning or regulatory changes--economic obsolescence is almost always incurable.

Front 29

Functional obsolescence of a house may result from:
A) construction of a super highway two blocks away.
B) a lack of bathroom fixtures (no bathtub) or non-insulated walls.
C) a property needing paint and a new roof.
D) zoning restrictions.

Back 29

The correct answer is "B - a lack of bathroom fixtures (no bathtub) or non-insulated walls. " Functional obsolescence can result from out-of-date features, such as a coal-burning furnace or a stable instead of a garage. Usually found in older homes, these features are often correctable and the combination of bygone charm and updated features makes for a desirable home. However, it can also result from poor design at the start, and major remodeling is the only way to resolve the issues.

Front 30

An appraiser is hired to estimate the value of a parcel of vacant land. Which of the following is the most logical thing for the appraiser to determine first?
A) the listed price of the land
B) the highest and best use of the land
C) what the present owner paid for the land
D) prices of properties comparable to the land

Back 30

The correct answer is "B - the highest and best use of the land " The "highest and best use" concept is an evaluation of factors, such as zoning, access, location and other features, that determine what use of the land would deliver the highest return to the owners. Vacant land that can only be held for future appreciation represents one end of the spectrum, while a premium site suitable for a high-rise in mid-town Manhattan represents the other.

Front 31

Given the net income of a property, the appraiser can determine an opinion of the value for that property by:
A) multiplying by the rate of depreciation.
B) multiplying by the rate of economic appreciation.
C) dividing by the percent of capital gains.
D) dividing by the rate of capitalization.

Back 31

The correct answer is "D - dividing by the rate of capitalization. " For example, a property that returned $100,000 a year, dividing by an 8% return, would have a value of $1.25 million.

Front 32

The Truth-in Lending Act (Regulation Z) requires that:
A) Lenders declare interest rates charged to ensure they do not exceed the maximum charges for credit.
B) Lenders disclose information about costs of credit so that borrowers can better compare terms available.
C) Lenders disclose to the FHA race and sex of applicants and recipients of loans to monitor compliance with nondiscriminatory requirements in lending.
D) borrowers who provide false information to lending institutions be denied loans.

Back 32

The correct answer is "B - Lenders disclose information about costs of credit so that borrowers can better compare terms available. " The disclosures required by Truth in Lending include the interest rate plus any and all associated fees, such as points, recording fees, origination fees and so forth. In addition to being itemized, these costs are also often lumped together and expressed as an annual percentage rate or APR.

Front 33

A promissory note is:
A) the lender's security for a loan made to finance the purchase of a property.
B) one guaranteed or insured by a government agency.
C) the lender's evidence of a debt (loan).
D) automatically secured by a mortgage when signed by the property owner.

Back 33

The correct answer is "C - the lender's evidence of a debt (loan). " By signing a promissory note, the borrower is acknowledging the debt and agreeing to pay it back as agreed. Thus it serves as the lender's proof of the loan and its terms.

Front 34

Nelson (grantor/mortgagor) sells his home to Randall (grantee)"subject to" an existing first mortgage loan he obtained five years ago. After nine months, Randall can no longer continue to make the monthly payments. Under these circumstances:
A) The purchaser (grantee)has no liability to the lender.
B) The purchaser is solely liable to the lender.
C) The purchaser is primarily liable to the lender and the seller is secondarily liable.
D) The seller is primarily liable and the purchaser is secondarily liable.

Back 34

The correct answer is "A - The purchaser (grantee)has no liability to the lender. " A grantee taking title to a real property "subject to" a mortgage is not personally liable to the mortgagee for payment of the mortgage note. In the event that the grantor/mortgagor defaults in paying the note, however, the grantee could lose the property, and thus his or her equity, in a foreclosure sale.

Front 35

In order to determine exactly what portion of a mortgage loan the VA will guarantee on behalf of a qualified veteran, he must apply for a:
A) certificate of reasonable value.
B) release of liability.
C) statement of entitlement.
D) certificate of eligibility.

Back 35

The correct answer is "D - certificate of eligibility. " There are strict requirements for obtaining a VA loan and the first step is obtaining a certificate of eligibility. It can be obtained from VA centers, online or from many lenders.

Front 36

An FHA 203 loan was applied for by a buyer. What was the purpose in seeking this type of loan?
A) low interest rates with accelerated payments
B) faster equity build-up
C) small down payment
D) shorter period of amortization

Back 36

The correct answer is "C - small down payment " FHA loans, which are actually government guarantees of payment to lenders rather than actual loans, are intended to help low and middle income families enter the housing market by providing low down-payment options.

Front 37

A veteran has paid her VA guaranteed mortgage, initiated in 1986, in full and has sold the originally mortgaged property. The veteran now holds no interest in any real property, mortgaged or otherwise. Can the veteran obtain another VA-guaranteed mortgage at this time?
A) Yes, because a veteran can receive only two VA-guaranteed mortgages in his/her lifetime, receiving the second one only after the first one has been paid in full.
B) Yes, because a veteran's entitlement is fully restored if that veteran has paid off all prior VA mortgages.
C) No, because a veteran can use her VA entitlement only once, regardless of whether the veteran ever sells the mortgaged loan.
D) No, because a veteran can use her VA entitlement only once, regardless of whether the veteran ever amortizes that mortgage loan.

Back 37

The correct answer is "B - Yes, because a veteran's entitlement is fully restored if that veteran has paid off all prior VA mortgages. " Other than qualifying military service, the only stipulation for acquiring a VA loan is that any previous loans be fully paid off.

Front 38

If the current conventional interest rate is 15 3/4%, how many points would have to be charged on a 15% VA loan to offset the difference for the lender?
A) 2
B) 4
C) 6
D) 8

Back 38

The correct answer is "C - 6 " In banking math, eight discount points increase the percentage yield from one point spread to the next. Thus six discount points would increase the percentage yield 3/4 of a point.

Front 39

A tenant leases a lakeside cabin. When the tenant arrives at the cabin and finds the roof leaks and the plumbing does not work, the tenant leaves. Under which of the following justifications could the tenant refuse to pay rent on this cabin?
A) constructive eviction
B) unlawful detainer
C) tenancy in common
D) zoning variances

Back 39

The correct answer is "A - constructive eviction " Constructive eviction occurs when a rental property is not habitable, thus forcing the tenant to live elsewhere and effectively "evicting" him or her. In order to claim constructive eviction the tenant must notify the landlord in writing and give him reasonable time to correct the defect(s) in order to lawfully withhold rent.

Front 40

When a trust deed is used to pledge real property as security for a loan, the lender is the:
A) beneficiary.
B) trustor.
C) trustee.
D) mortgagee.

Back 40

The correct answer is "A - beneficiary. " The beneficiary, because he will "benefit" by receiving the property to satisfy the loan in the event the borrower defaults.

Front 41

Which phrase best describes a broker's duty to keep a principal fully informed?
A) Code of ethics.
B) Professional standards.
C) Fiduciary obligation.
D) Standards and practices.

Back 41

The correct answer is "C - Fiduciary obligation. " Fiduciary obligation or responsibility means operating from a position of trust and sharing information fully and completely is one of its hallmarks.

Front 42

Jason owns a property in Bel Air and enters into an exclusive right-to-sell contract with Beverly, a licensed broker. As part of the agreement, Beverly agrees to advertise the home in a special properties catalog at a cost of $250, which Jason agrees to pay. How must Beverly handle Jason's check?
A) Place it into her business account until it comes time to pay for the ad.
B) Send it immediately to the publication where the ad will appear.
C) Place it in her trust account and draw against it only to pay actual advertising expenses.
D) As an "incidental" sum, it requires no special treatment, but must be accounted for.

Back 42

The correct answer is "C - Place it in her trust account and draw against it only to pay actual advertising expenses. " Any money given by a client to a salesperson or broker must be deposited into the broker's trust account.

Front 43

Which of the following are legal activities for California licensees?
A) Negotiating in California for the sale of a property located in Nevada.
B) Selling a business.
C) Negotiating the sale of a note and receiving compensation.
D) All of the above.

Back 43

The correct answer is "D - All of the above. " In certain situations, California offers licensees more leeway than some other states. For example, licensees can negotiate the sale of out-of-state properties, as long as the negotiations take place in California. Also, though not real estate transactions in the strictest sense of the word, selling notes or business is also permissible.

Front 44

Which of the following applies to sale of new subdivided land to residents of California under the Subdivided Lands Act?
A) All subdivisions, regardless of location, are subject to the Act's regulations.
B) Only subdivisions located within California are subject to the regulations.
C) Only unimproved property is subject to the regulations.
D) Only out-of-state recreational property is subject to the California Subdivided Lands Act.

Back 44

The correct answer is "A - All subdivisions, regardless of location, are subject to the Act's regulations. " The Subdivision Map Act regulates the division of property, requiring a subdivision's design and improvements to be consistent with the local general plan. The Map Act spells out the subdivider's duties as well as the requirements that a city or county must follow when reviewing and approving a proposed subdivision. The Subdivided Lands Act is a consumer protection law that regulates the sale of subdivisions and ensures public disclosures.

Front 45

Beth is a real estate developer and wants to purchase an undeveloped 10-acre parcel. However, the price is $100,000 and she won't have the cash-flow to support the purchase for another six months. Accordingly, she contacts an investor named Richard who agrees to purchase the property for $100,000, and sell it back to Beth for $115,000 in six months. Is this kind of agreement legal?
A) Yes, but not enforceable.
B) No it's constitutes misrepresentation, since Beth is the intended buyer.
C) Yes, it's both legal and ethical.
D) Yes, it's legal but considered an unethical practice.

Back 45

The correct answer is "C - Yes, it's both legal and ethical. " The purpose of this transaction is for a lawful purpose (addressing a cash flow issue). Since there is no intent to defraud or misrepresent it's perfectly acceptable.

Front 46

Max purchased a new mobile home and had it placed on a lot he'd purchased in a mobile home park. He now wishes to sell the home and sell or lease the lot and asked real estate broker Toni Robertson to handle the listing. Is this a listing Toni may accept?
A) No, mobile homes are considered personal property, not real property.
B) Yes, but only if she also has a license to sell mobile homes and lots.
C) She may list the lot, but not the mobile home.
D) Yes, she may sell both the home and the lot.

Back 46

The correct answer is "D - Yes, she may sell both the home and the lot. " Licensees may sell mobile homes like any other property, so long as they are affixed to a foundation and have been registered with the Department of Housing and Community Development which ensures the unit is a "fit and habitable" dwelling.

Front 47

In construction plans for a new home, in what section would the following terms appear: footing, pier, mudsill and floor joists?
A) Flooring plans.
B) Foundation plans.
C) Framing plans.
D) Elevation plans.

Back 47

The correct answer is "B - Foundation plans. " From the bottom up: footings are 8" - 10" slabs of concrete that support foundation walls; piers or caissons are round concrete structures sunk 3 or 4 feet into bedrock to support foundations or cantilevered decks, rooms or other structures; mudsills are the bottom member of a wall system that rests on the foundation and floor joists form the support for the interior flooring.

Front 48

Broker Callie O'Donnell received an offer on a house she was listing and presented it to the owners, who requested 24 hours to consider it. Later that day, a salesperson in Callie's office received another, but much lower offer on the same property. Callie is certain that the second offer will be rejected. What action should she take?
A) She must present the second offer as well.
B) She should tell the owners about the second offer, but doesn't need to present it formally.
C) She should wait until the owners decide about the first offer before presenting the second.
D) Since the second offer came in after the first and is also lower, she does not need to present it.

Back 48

The correct answer is "A - She must present the second offer as well. " Licensees are obligated to present all offers as soon as possible, no matter how likely it may be that they will be rejected. Licensees may advise and counsel clients on real estate matters, but they may never make a decision on their behalf.

Front 49

Which of the following statements is NOT TRUE about properties with riparian rights?
A) A owner may sell a portion of the property and transfer the riparian rights even if the parcel is not adjacent to the watercourse.
B) An owner may sell a part of the land, but not include the riparian rights if that parcel is not adjacent to the watercourse.
C) Riparian may be lost through non-use.
D) An owner may sell a parcel of the property adjacent to the watercourse and include riparian rights.

Back 49

The correct answer is "C - Riparian may be lost through non-use. " California's riparian rights practices are based on English common law (with a few variations left over from the days when gold miners invented their own rules). Basically, they hold that riparian rights can be sold separate from a property and that they are not lost through non-use or claims of a "senior" right.

Front 50

Thomas Bainbridge owns a "fee simple" parcel of land. Which of the following actions would convert his ownership to a status of less than "freehold estate?"
A) Selling the mineral rights to a third party.
B) Converting the parcel to that of a life estate.
C) Negotiating a sale-leaseback arrangement with a third party.
D) Leasing the land for agricultural use.

Back 50

The correct answer is "C - Negotiating a sale-leaseback arrangement with a third party. " Fee simple means that a property is owned outright. A freehold estate is one in which a person's interest in a property is for an indeterminate period of time... while life estate means that person's interest is for his or her natural life. Leasing the property or selling mineral rights does nothing to alter these forms of ownership. However, a sale-leaseback, usually for the purpose of creating cash flow, transfers ownership to another party while the original owner continues to occupy and/or use the land.