Ca Real Estate Principles

Front 1

1. If a licensee is guilty of conversion, he or she is someone who is:

Back 1

Misappropriating the funds of client

Front 2

2. 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 (due to a decline in the quality of schools,
coupled with an increase in the crime rate). These practices by the salesman are:

Back 2

Grounds for disciplinary action

Front 3

3. What is a REALTOR®?

Back 3

A real estate licensee who is a member of the National Association of
REALTORS®.

Front 4

4. The initial term of all California real estate licenses is:

Back 4

Four years

Front 5

5. The majority of California laws relating to real property are created by which of the
following?

Back 5

The Business and Professions Code

Front 6

6. Which of the following has a meaning most completely opposite of Commingle?

Back 6

Segregate

Front 7

7. Of the following, which is not a penalty that the Real Estate Commissioner is authorized to
issue against an offending licensee?

Back 7

Serving jail time

Front 8

8. Unlawful Conduct as set forth in the Commission’s Regulations is best described as:

Back 8

Specific acts and omissions which do violate existing law and are grounds for
disciplinary action

Front 9

9. Which of the following is not considered unethical conduct?

Back 9

Failing to respond to reasonable inquiries of a principal as to the extent of efforts to
market property listed with the licensee

Front 10

10. What is the fine for a corporation, which receives an illegal commission?

Back 10

$50,000

Front 11

11. The power of the state to enact laws in order to promote the order, safety, health and
general welfare of the public.

Back 11

Police Power

Front 12

12. Making statement that exaggerates a property’s benefits is called

Back 12

Puffing

Front 13

13. All broker candidates must be at least what age?

Back 13

18

Front 14

14. Acting for more than one party in a transaction without knowledge or consent of all parties
thereto is best described as

Back 14

Divided Agency

Front 15

15. To become truly successful in the real estate business, one should:

Back 15

Attain as high a level of academic education as possible
Take as many courses in real estate as one can find
Continually educate oneself throughout one’s career

Front 16

16. How many classes are required of a broker candidate before he or she is eligible to sit
for the state exam?

Back 16

8

Front 17

17. A broker persuades a Caucasian family to list their home for sale by telling them that non
white people are moving into the area and that this may reduce property values. Such
persuasion is considered all of the following, except:

Back 17

Legal but unethical

Front 18

18. What is the experience requirement for becoming a real estate broker?

Back 18

Candidate must be a real estate agent for 2 years
Candidate must have a 4-year degree
Candidate must be a member of the California Bar Association.
Any of the above.

Front 19

19. Commingling of funds is:

Back 19

Mixing the broker’s funds with funds of the principal

Front 20

20. Who appoints the Real Estate Commissioner?

Back 20

Governor
State Legislators

Front 21

21. Representing more than one party in a transaction without the knowledge or consent of
all other parties is best described as:

Back 21

Divided Agency

Front 22

22. Unlawful Conduct as set forth in the Commission’s Regulations is best described as:

Back 22

Specific acts and omissions, which violate existing law and are
grounds for disciplinary action

Front 23

23. Commingling of funds is:

Back 23

Mixing broker’s funds with those of the principal

Front 24

Rights of possession, use, enjoyment, encumbrance and transfer are all
characteristics of:

Back 24

Bundle of Rights

Front 25

What are the two types of freehold estates?

Back 25

Fee Simple and Life Estate

Front 26

Property is considered:

Back 26

Anything that can be owned
Real
Personal

Front 27

An example of real property is:

Back 27

The airspace immediately above the property

Front 28

Which one of the following examples is not considered a fixture?

Back 28

Space heater

Front 29

Trade fixtures are considered:

Back 29

Personal property

Front 30

All of the following are descriptions of land EXCEPT:

Back 30

Encroachment

Front 31

The concept under the bundle of rights that allows a land owner to use his or her
property as collateral to secure a loan is:

Back 31

Encumber

Front 32

What does an estate refer to?

Back 32

Ownership

Front 33

Which of the following conditions are characteristics of a Fee Simple Absolute Estate?

Back 33

Provides the owner with the most bundle of rights
Holds no limitations or conditions
Can be conveyed by a will

Front 34

In reference to a life estate, a measuring life is:

Back 34

the life duration of the person on whose life the estate is based

Front 35

All of the following characteristics are correct regarding a leasehold estate EXCEPT:

Back 35

The owner of a leasehold estate possesses more bundles of rights than a
free hold estate.

Front 36

Which of the following are considered the lowest form of estate?

Back 36

Estate at Sufferance

Front 37

All of the following are characteristics of a lease EXCEPT:

Back 37

Tenants are required to sign all written contracts.

Front 38

An example of real property is

Back 38

The airspace immediately above the property

Front 39

Which of the following is NOT considered a water right for a property owner?

Back 39

Emblement

Front 40

Another term for personal property is:

Back 40

Chattel

Front 41

Property can change from real to personal and back to real property.

Back 41

True

Front 42

Which one of the following examples is not considered a fixture?

Back 42

Space heater

Front 43

Which one of the following is NOT considered a test of a fixture?

Back 43

Emblement

Front 44

Trade fixtures are considered

Back 44

Personal property
Real property
Both A and B

Front 45

All of the following are descriptions of land EXCEPT

Back 45

Encroachment

Front 46

Metes and bounds land descriptions are most commonly used when

Back 46

land is irregularly shaped and would be difficult to describe with any other
system.

Front 47

A plot of land containing 36 square miles most likely describes

Back 47

1 township
6 townships
36 sections

Front 48

What concept carried over from Spanish law into modern day property
ownership?

Back 48

Community property

Front 49

By law, all documents affecting the title to real property must be

Back 49

Acknowledged

Front 50

Which of the following may own property in severalty?

Back 50

Corporations
Trusts
Individuals

Front 51

Which of the following is NOT considered an encumbrance on real property?

Back 51

Homestead

Front 52

What is the maximum homestead exemption a person 65 years of age or older can
declare on their residence?

Back 52

$150,000

Front 53

A certificate of title will tell what about a property?

Back 53

Vesting
Encumbrances

Front 54

A standard title insurance policy will guard against all of the following except

Back 54

Water Rights

Front 55

What concept carried over from Spanish law into modern day property ownership?

Back 55

Community property

Front 56

By law, all documents affecting the title to real property must be (A):

Back 56

Acknowledged

Front 57

Which of the following officials is NOT considered a public official who may take an
acknowledgment?

Back 57

County Treasurer

Front 58

Which of the following may own property in severalty?

Back 58

Corporations
Trusts
Individuals

Front 59

Which of the following is not a type of concurrent ownership?

Back 59

Co-ownership

Front 60

Which of the following is a characteristic of Tenancy in Common?

Back 60

Equal right of possession

Front 61

Parties in a joint tenancy may dispose of their property in which of the following ways?

Back 61

Right of survivorship
Sale

Front 62

Which one of the following is not one of the four unities of a Joint Tenancy?

Back 62

Unity of Survivorship

Front 63

Which of the following is true regarding community property?

Back 63

Community property may be purchased with only one spouse’s consent.

Front 64

Which of the following is correct regarding community property?

Back 64

With no will in place, the surviving spouse inherits all of the deceased
spouse’s
interest.

Front 65

Which of the following is NOT considered an encumbrance on real property?

Back 65

Homestead

Front 66

Which of the following is considered a money-restricted encumbrance?

Back 66

Judgment

Front 67

Which of the following steps is not necessary to initiate a valid mechanics lien?

Back 67

Adverse Possession

Front 68

In a foreclosure situation, which of the following determines the order of lien
payment?

Back 68

The date each lien was recorded (from the first recorded to the most recent
recorded) ,with the exception of mechanics liens, which are always paid first.

Front 69

The continuous, notorious use of another persons land for a period of five or more
years is an example of what kind of easement?

Back 69

Prescription

Front 70

All of the following are examples of encroachments EXCEPT Easements

Back 70

Buildings
B. Easements
Fences and walls
Hedges, trees or other vegetation crossing boundary lines

Front 71

What is the maximum homestead exemption a person 65 years of age or older
can declare on their residence?

Back 71

$150,000

Front 72

A certificate of title will reveal what about a property?

Back 72

A-Vesting
B.- Encumbrances
C. Neither A nor B

Front 73

A standard title insurance policy will guard against all of the following

Back 73

Federal tax liens
Forgery
Fraud
EXCEPT Water rights

Front 74

The American Land Title Association (A.T.L.A.) provides an extended title insurance
policy which guards against which of the following?

Back 74

Water rights
Mining claims
Unrecorded liens
All of the above

Front 75

Failure to perform a contract is also known as:

Back 75

A breach

Front 76

How long is the Statute of Limitations for an action based on a written real estate
contract?

Back 76

Four years

Front 77

A well-drafted real estate purchase contract will include which of the following
provisions?:

Back 77

The buyer’s possession of the property
The financing terms
Proration of property expenses

Front 78

According to the Statute of Frauds, all contracts for the sale of real estate must be :

Back 78

Made in writing

Front 79

Which of the following parties is bound by an option to purchase?

Back 79

Seller only

Front 80

A contract that has not been performed is called a (n)

Back 80

Executory contract

Front 81

Which of the following are basic elements of a valid contract?

Back 81

Sufficient consideration
Lawful purpose
Competent parties

Front 82

Personal Property - 90 Days

Back 82

An individual has 90 days to recover personal property, especially property left at a
hotel, motel or boarding house

Front 83

Injury – One Year

Back 83

An individual has one year to file an action for libel, slander, injury or death caused by
the neglect of another

Front 84

Oral Contracts - Two Years

Back 84

An individual has two years to settle a dispute resulting
from an oral contract.

Front 85

An option to purchase a specific vacant lot:

Back 85

Can be assigned if purchased for cash

Front 86

A broker must maintain listing agreement copies for:

Back 86

Three years

Front 87

To be entitled to a commission, a broker must show that they were the procuring
cause of the sale or lease of a property under all of the following types of listings
EXCEPT:

Back 87

Exclusive agency

Front 88

In her capacity as an agent, a real estate licensee is liable to third parties for:

Back 88

Her own torts

Front 89

An exclusive right to sell listing:

Back 89

Must contain a termination date
Must be in writing if the broker wants to be successful in suing for a
commission
Must be kept by the broker for at least three years

Front 90

A voidable contract is a contract that:

Back 90

Is valid and enforceable on its face, but may be rejected by one of the parties

Front 91

Under the Statute of Frauds, all contracts for the sale of real estate must be in
writing. The principal reason for this statute is to:

Back 91

Prevent fraudulent proof of a fictitious oral contract

Front 92

The broker who most qualifies for a commission is the one who:

Back 92

Communicated the acceptance to the buyer

Front 93

An offer to fully perform a purchase contract is known as:

Back 93

A tender

Front 94

A remedy in court compelling a vendor to execute a deed in pursuance of a valid
written contract is known as:)

Back 94

Specific performance

Front 95

Failure to perform a contract is also known as:

Back 95

A breach

Front 96

How long is the Statute of Limitations for an action based on a written real estate
contract?

Back 96

Four years

Front 97

A well-drafted real estate purchase contract will include which of the following
provisions?

Back 97

The buyer’s possession of the property
The financing terms
Proration of property expenses

Front 98

According to the Statute of Frauds, all contracts for the sale of real estate must be :

Back 98

Made in writing

Front 99

Which of the following parties is bound by an option to purchase?

Back 99

Seller only

Front 100

A contract that has not been performed is called a(n)

Back 100

Executory contract

Front 101

Which of the following are basic elements of a valid contract?

Back 101

Sufficient consideration
Lawful purpose
Competent parties

Front 102

Due diligence is the promise a broker makes to whom?

Back 102

The principal

Front 103

All of the following are types of listing agreements EXCEPT

Back 103

Private listing

Front 104

A broker may be accused of fraud or misrepresentation when which of the following
occurs?

Back 104

Silence regarding known defects or problems with the property.
Knowingly passing on false information regarding the property
Recklessly making assumptions, and then passing them on as fact

Front 105

What term best describes an agent’s responsibility to the client?

Back 105

Fiduciary

Front 106

A broker who takes an option on his or her own listing is conducting the transaction:

Back 106

At arms length

Front 107

An agent who represents both the buyer and the seller has what type of agency?

Back 107

Dual Agency

Front 108

The listing agent must fully disclose all facts to

Back 108

Both the buyer and seller

Front 109

Ostensible agency is most closely related to

Back 109

Estoppel

Front 110

Which of the following is NOT a way to create an agency?

Back 110

Contract

Front 111

Agents can place their listings on what service to allow all its members to see the available listing?

Back 111

Multiple Listing Service

Front 112

Brokers who show clients properties found on the Multiple Listing Service are referred to as:

Back 112

Cooperating Brokers

Front 113

When a broker accepts a deposit from a buyer without permission from the seller, the broker
is acting as

Back 113

The buyer’s agent

Front 114

Which of the following is not one of the types of misrepresentation?

Back 114

Blatant

Front 115

Puffing is a form of

Back 115

Misrepresentation

Front 116

Which of the following duties is NOT considered a duty owed to the principal by the agent?

Back 116

Flexibility

Front 117

What percentage of the state license fee is contributed to the California Recovery Account?

Back 117

5%

Front 118

Is a broker who takes an option on his or her own listing eligible to make a commission on the
transaction?

Back 118

Yes, provided the agent fully discloses his intentions or interest in the property to the
sellers

Front 119

Which of the following would cancel an agency?

Back 119

Full performance
Destruction of the property
Death of the principal or agent

Front 120

If an agent cancels an agency agreement, causing damages for the principal, is the agent responsible for
these damages?

Back 120

Yes, regardless of the dollar amount of damage

Front 121

When is an agent’s commission earned?

Back 121

When the agent finds a ready, willing and able buyer who meets all of the seller’s
terms

Front 122

The promise of a principal not to interfere with an agent’s prospective economic advantage
in finding a ready, willing and able buyer by having separate negotiations with the third party
behind the agent’s back best is described as which of the following?

Back 122

Duty of care

Front 123

When is a seller required by law to deliver the Real Estate Transfer Disclosure Statement to
a buyer?

Back 123

Before a purchase contract or offer is made

Front 124

Commission rates are determined by

Back 124

Brokers