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149 Cards in this Set
- Front
- Back
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Real Estate Law is Contained in the: (a) Penal Code (b) Uniform Commercial Code (c) Bus/Professions Code (d) Civil Code |
(c) Bus/Professions Code |
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Under Article 3, §10176d, of the California Real Estate Law, a broker could not be disciplined for which of the following: (a) Any dishonest dealings (b) Acting for more than one party in a transaction with knowledge and consent of all parties thereto (c) Making any false promises likely to be of influence (d) Making a misrepresentation |
(b) Acting for more than one party in a transaction with knowledge and consent of all parties thereto |
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A real estate licensee may be held responsible to the Real Estate Commissioner for all of the following except: (a) Failure to inform all principals if he is acting as agent for more than 1 party (b) Failure to disclose secret profit (c) Failure to put a final termination date on an exclusive listing (d) Failure to disclose to the buyer that the seller must sell because of financial instability |
(d) Failure to disclose to the buyer that the seller must sell because of financial instability |
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When a broker deposits funds into his trust account, he is required to keep a record of all funds collected by clients. This record must contain all of the following except: (a) Date funds received (b) Check number and date of deposit (c) Daily balance of trust account (d) Record itemizing broker's funds and client's funds in account |
(d) Record itemizing broker's funds and client's funds in account |
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A licensed real estate broker shall maintain a record of moneys collected. If money is placed into a trust account, records must be retained for a period of: (a) One year (b) Three years (c) Two years (d) Five years |
(b) Three years |
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If the offer to purchase was not prepared by the seller's agent, the buyer must receive the disclosure statement (a) Within five days (b) As soon as practicable (c) Not later than the next business day after the selling agent receives the offer to purchase (d) Within seven days |
(c) Not later than the next business day after the selling agent receives the offer to purchase |
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The adoption or approval of an act performed on behalf of a person without previous authorization after the acts have been performed is: (a) Reputation (b) Acknowledgment (c) Ratification (d) None of these |
(c) Ratification |
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To avoid liability in the visual inspection of property, the agent must use the legal standard of care, best described as: (a) One that a diligent person would ascertain by attention and observation (b) One that a reasonably competent person would exercise in the course and scope of his/her employment as a real estate licensee (c) Any of these are correct (d) One that a reasonably prudent real estate licensee would exercise based upon his standard of knowledge, degree of education and experience |
(d) One that a reasonably prudent real estate licensee would exercise based upon his standard of knowledge, degree of education and experience |
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The agent is required to disclose to the prospective buyer: (a) Only those facts which have been revealed by the agent's principal, especially where the seller does not warrant the property condition (b) Only those facts of which the agent has personal knowledge (c) All facts that a visual inspection reveals which would materially affect the property's value and desirability (d) Both (a) and (b) |
(c) All facts that a visual inspection reveals which would materially affect the property's value and desirability |
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A power of attorney is the document used by principal to authorize an agent to: (a) Act as an attorney at Law (b) Sell, exchange, convey, quit-claim, release, surrender, mortgage, encumber, lease or otherwise dispose of real property (c) Change the form of title of any interest in real property (d) Either (b) or (c) |
(d) Either (b) or (c) |
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At times a seller would be exempt from providing a real estate disclosure statement. Which of the following would be exempt pursuant to the new disclosure laws? (a) Transactions resulting from a probate sale (b) Transfers from one co-owner to other co-owners (c) Transfers made to a spouse or a direct blood relative (d) Any of these are correct |
(d) Any of these are correct |
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Which of the following is not a basic form of company formation found in the real estate business: (a) Co-ops (b) Individual proprietorship (c) Partnership (d) Corporations |
(a) Co-ops |
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The advantage of an individual proprietorship is: (a) Ease of obtaining operating Capitol (b) Unlimited legal liability (c) Business decisions can be quickly made (d) None of these |
(c) Business decisions can be quickly made |
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Disadvantages to the partnership type of ownership include: (a) Pooling of financing (b) Pooling of knowledge and experience (c) Personal assets of each are subject to interests of creditors (d) Sharing of financial liabilities |
(c) Personal assets of each are subject to interests of creditors |
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Disadvantages to the partnership type of ownership include: (a) Pooling of financing (b) Pooling of knowledge and experience (c) Personal assets of each are subject to interests of creditors (d) Sharing of financial liabilities |
(c) Personal assets of each are subject to interests of creditors |
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Among the major advantages of the corporation type of office ownership are: (a) Retention of valuable firm members (b) Ease of obtaining credit (c) Tax advantage (d) None of these |
(c) Tax advantage |
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An increasing number of franchises are being sold today. When talking about the franchiser, we are referring to: (a) All of these (b) The parent company (c) The trademark of the franchise (d) The person who is buying the franchise |
(b) The parent company |
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"Prospecting" as applied to the real estate business can be interpreted as: (a) Civil rights (b) Cooperating with other licensees (c) Compensation (d) Open houses |
(d) Open houses |
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The selling function in real estate is divided into phases. Which of the following represents these phases? (a) All of the below (b) Prospecting for future buyers (c) Closing transaction by bringing seller and buyer together (d) Securing listing |
(a) All of the below |
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The selling function in real estate is divided into phases. Which of the following represents these phases? (a) All of the below (b) Prospecting for future buyers (c) Closing transaction by bringing seller and buyer together (d) Securing listing |
(a) All of the below |
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Before showing a property, a salesperson would be more successful of he had complete understanding of: (a) All of these are correct (b) Financing (c) Size of the rooms (d) Zoning laws |
(a) All of these are correct |
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All-exclusive real estate listings must have a definite termination date. (a) True (b) False |
(a) true |
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A signed listing, whether open or exclusive, when correctly designated is: (a) An agreement in which a commission could be paid (b) All of these (c) A contract of Employment (d) An authorization to sell |
(b) All of these |
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All real estate contracts must: (a) Be acknowledged (b) Be in writing (c) Be notarized (d) None of the above |
(b) Be in writing |
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In preparing a listing information disclosure statement, the agent is advised to: (a) Do all of the following (b) Point out any red flags and conditions affecting the property (c) Recommend any further professional inspections (d) Ask seller is any problems exist |
(a) Do all of the following |
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In an exclusive right-to-sell listing, the seller agrees: (a) That should he sell the property himself during the period of the listing, he is not responsible for payment of a commission to the broker (b) That he may lease or rent it during the period of the listing without obligation to the broker (c) That should he sell the property himself during the period of the listing, he will be responsible for the payment of a commission to the broker (d) That during the period of the listing he may withdraw it from the market without obligation to the broker |
(c) That should he sell the property himself during the period of the listing, he will be responsible for the payment of a commission to the broker |
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In an exclusive right-to-sell listing, the seller agrees: (a) That should he sell the property himself during the period of the listing, he is not responsible for payment of a commission to the broker (b) That he may lease or rent it during the period of the listing without obligation to the broker (c) That should he sell the property himself during the period of the listing, he will be responsible for the payment of a commission to the broker (d) That during the period of the listing he may withdraw it from the market without obligation to the broker |
(c) That should he sell the property himself during the period of the listing, he will be responsible for the payment of a commission to the broker |
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Item line number 5(c) of an Exclusive Authorization and Right to Sell contract protects the broker's commission and is called the: (a) Procuring clause (b) Safety clause (c) Warranty clause (d) Liability clause |
(b) Safety clause |
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Item line number eighteen (18) of an Exclusive Authorization and Right to Sell contract deals with: (a) Cooperation with other licensees (b) Civil rights (c) Arbitration of Disputes (d) Compensation |
(c) Arbitration of Disputes |
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Broker A takes a listing which he files with Multiple Listing Service. Multiple Listing Service members presenting offers on the listed property are considered: (a) Sub-agents of the Multiple Listing Board (b) Non-exclusive agents of the seller (c) Agents only of the buyer and must work through listing broker (d) Exclusive agents of the seller |
(c) Agents only of the buyer and must work through listing broker |
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Which of the following is not a method of review when the licensee is faced with a partial acceptance of an offer: (a) Conditions and contingencies (b) Time is of the essence (c) Sale price (d) Ratification |
(d) Ratification |
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From the time both parties have signed the deposit receipt until the close of escrow, which of the following will not take place? (a) Seller will provide the buyer with a deed (b) A policy of title insurance will be issued (c) Seller will provide buyer with a deed of reconveyance (d) The buyer will sign a note secured by a deed of trust for any money he may have to borrow in order to affect the purchase of the property |
(c) Seller will provide buyer with a deed of reconveyance |
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"This offer is subject to a structural pest control inspection report acceptance to both buyer and seller." This condition included in a deposit receipt actually does what to the seller and buyer? (a) Gives the buyer very little knowledge of the structure (b) Gives only the buyer a way of backing out (c) Gives both buyer and seller a way of backing out (d) All of the above |
(c) Gives both buyer and seller a way of backing out |
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A deposit receipt should include all of the following, except: (a) Arrangements for financing (b) Conditions for return of deposit in the event the offer is not accepted (c) Penalty for withdrawal of offer (d) All of these are correct |
(c) Penalty for withdrawal of offer |
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A description of real property must be: (a) Sufficient to identify the property (b) A street address (c) A block and lot number (d) An assessors parcel number |
(a) Sufficient to identify the property |
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The Statute of Frauds requires the deposit receipt to be accepted within three days. (a) True (b) False |
(b) False |
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When writing a deposit receipt the broker must clearly and adequately state certain items. In the case of a "Termite Report" which of the following is not correct? (a) Government insured or guaranteed loans require termite reports (b) FHA loans require a termite clearance (c) A termite report is required by law (d) All of the above |
(c) A termite report is required by law |
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If a different purchase price is later negotiated, the licensee should: (a) Erase the old price and insert the new price on the deposit receipt (b) Complete a new deposit receipt (c) None of these are correct (d) Use an addendum or separate form |
(d) Use an addendum or separate form |
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Paragraph 25 in a CAR Real Estate purchase contract and receipt for contract contains: (a) A standard clause (b) Time is of essence (c) The way title is to be taken (d) The amount of time the offer is to be presented |
(b) Time is of essence |
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When escrow opens and there is a conflict between the original contract and the escrow instructions, which of the following prevails? (a) The escrow instructions usually have control (b) Both contracts usually have control (c) The original contract usually has control (d) None of the above |
(a) The escrow instructions usually have control |
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When escrow opens and there is a conflict between the original contract and the escrow instructions, which of the following prevails? (a) The escrow instructions usually have control (b) Both contracts usually have control (c) The original contract usually has control (d) None of the above |
(a) The escrow instructions usually have control |
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A completed escrow is one in which: (a) All the terms of the escrow instructions have been met (b) All parties have signed the escrow instructions (c) All parties to the escrow are present (d) The instructions have all been drawn |
(a) All the terms of the escrow instructions have been met |
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The termination of an escrow usually occurs when which of the following takes place? (a) Cancellation by mutual consent (b) Escrow is a completed escrow (c) When an event takes place that makes it impossible for one of the parties to perform (d) Any of these |
(d) Any of these are correct |
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After confirming the recording of transaction documents with the title company, the escrow officer proceeds to close the escrow by preparing a _____________ for both buyer and seller. (a) Settlement statement (b) Statement of expenses (c) Beneficial statement (d) Statement of costs |
(a) Settlement statement |
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Banks, savings and loans, insurance companies, and title companies are but a few agencies exempt from being licensed as escrow companies. According to regulations in §17000 to 17614 of the California Financial Code, escrow companies must be licensed by: (a) Department of Real Estate Commissioner (b) California Corporation Commissioner (c) California Corporate Commissioner (d) California Corporation of escrows |
(b) California Corporation Commissioner |
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After acceptance of an offer, the escrow may ask for which of the following to be furnished by the seller? (a) Bill of sale if personal property is involved (b) Insurance policies on the property (c) Latest gas meter readings (d) All of these |
(d) All of these |
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Title insurance is an important factor when buying real estate. An extended coverage policy is available for an additional fee and insures items not contained in a standard policy of title. The most commonly used extended form policy is the: (a) CLTA Policy (b) Standard Form Policy (c) ATLA Policy (d) ALTA Policy |
(d) ALTA Policy |
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A policy of Title Insurance (according to our text) is: (a) One based on examination of applicable public records (b) A contract of indemnity (c) An insured statement of the condition of a property title (d) All of these |
(d) All of these |
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Which of the following would require a physical inspection of the property? (a) Standard policy (b) ALTA Policy (c) CLTA (d) All of the above |
(b) ALTA Policy |
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The "Standard Coverage" type of title policy insures against: (a) Acts of minor whose disability is undisclosed (b) The priority and validity of liens upon the subject estate of interest (c) Forged instruments (d) All of these |
(d) All of these |
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Mortgages and trust deeds differ with respect to: (a) Statute of limitations and remedy (b) Remedy and redemption only (c) Parties and title only (d) Parties, title, statute of limitations, remedy and redemption |
(d) Parties, title, statute of limitations, remedy and redemption |
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An acceleration clause in a trust deed means: (a) The interest rate decreases after the loan to be paid upon the happening of a certain stipulated event (b) The lender may require the loan to be paid upon the happening of a certain stipulated event (c) The loan may be paid off as rapidly as possible (d) The interest rate is increased after the first year |
(b) The lender may require the loan to be paid upon the happening of a certain stipulated event |
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The device that is often used by subdividers who are developing residential property and want to release certain lots when the purchaser's total payments have reached a pre-determined amount, is called: (a) A full release clause (b) An assumption (c) A deed of trust (d) A partial release clause |
(d) A partial release clause |
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Regulation Z issued under the Truth-in-Lending Law, requires: (a) Various states to set limits on interest and regulates trade practices (b) Requires that the consumer be fully advised of all of the details of his credit purchase (c) Requires any advertising, in whatever form, to fully advise the consumer of his credit purchase (d) Both (b) and (c) |
(d) Both (b) and (c) |
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A subordination clause in a Note provides that: (a) The loan cannot be paid off during the first three years (b) There will be no-prepayment penalty if the loan is paid off before maturity (c) If properly done will give an existing or future loan priority over the loan in question (d) None of these |
(c) If properly done will give an existing or future loan priority over the loan in question |
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A subordination clause in a Note provides that: (a) The loan cannot be paid off during the first three years (b) There will be no-prepayment penalty if the loan is paid off before maturity (c) If properly done will give an existing or future loan priority over the loan in question (d) None of these |
(c) If properly done will give an existing or future loan priority over the loan in question |
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Information concerning the Federal Truth-in-Lending Law can be obtained from the: (a) Federal Reserve Board of Governors (b) Office of Consumer Affairs (c) Federal Trade Commission (d) United State Department of Justice |
(c) Federal Trade Commission |
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Information concerning the Federal Truth-in-Lending Law can be obtained from the: (a) Federal Reserve Board of Governors (b) Office of Consumer Affairs (c) Federal Trade Commission (d) United State Department of Justice |
(c) Federal Trade Commission |
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Which of the following are the two most important disclosures required under Regulation Z: (a) Annual percentage rate and down payment (b) Finance charges and annual percentage rates (c) Down payment and finance charges (d) Monthly payment and finance charges |
(b) Finance charges and annual percentage rates |
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Of the following, which would be considered an institutional lender? (a) Bank Trust Department (b) Savings & Loan Institutions (c) Mortgage Investment Company (d) Endowed University |
(b) Savings & Loan Institutions |
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The down payment currently required on a home purchase under VA financing is: (a) 10 3/4 percent (b) 12 1/2 percent (c) 14 percent (d) None of these |
(d) None of these |
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Funds for developing shopping centers, hotels and large industrial properties primarily come from: (a) Commercial Banks (b) Insurance Companies (c) Savings & Loan Companies (d) Pension funds |
(b) Insurance Companies |
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The California Constitution requires that all property be taxed in proportion to its value. Value is based on: (a) The appraisal established by the local assessor (b) The actual replacement cost of the property less the cost of land (c) The actual replacement cost of the property plus the cost of the land (d) The highest price that a property will bring if exposed for sale in the open market allowing a reasonable time to find a purchaser who buys with knowledge of all the uses to which it is adapted |
(d) The highest price that a property will bring if exposed for sale in the open market allowing a reasonable time to find a purchaser who buys with knowledge of all the uses to which it is adapted |
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Veteran's tax exemption is based upon: (a) Assessed value (b) Liquidation value (c) Insured value (d) Full property value |
(d) Full property value |
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According to our text, in California, almost three quarters of all the land is exempt from taxation. Property exempt from taxation would include: (a) Properties owned by local, state or federal governments (b) Properties owned by religious, charitable and educational institutions (c) Both (a) and (b) (d) None of the above |
(c) Both (a) and (b) |
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On June 8 of each year, the tax collector publishes a delinquent list of properties on which taxes have not been paid during the previous fiscal year. The property is automatically "sold" to the state on: (a) 30 days (b) June 30 (c) 60 days (d) 90 days |
(b) June 30 |
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The federal estate tax is basically a tax payable when property is transferred at death. It is an excise tax on the right to transfer property at death and is measured by: (a) Tax value (b) Loan value (c) Exchange value (d) Property value |
(d) Property value |
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A mobilehome which has been installed on a foundation system is: (a) Tax free (b) Considered a recreational vehicle (c) Is taxable as personal property (d) Is taxable as real property |
(d) Is taxable as real property |
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A document transfer tax applies to transfer of all real property located in the county: where the value of the consideration exceeds: (a) Where the value of the consideration exceeds $100.00 (b) Where the value of the consideration exceeds $500.00 (c) Where the value of the consideration exceeds $1,000.00 (d) When the consideration (exclusive of the value of any liens and not removed upon consummation of the sale) exceeds $100.00 |
(d) When the consideration (exclusive of value of any lien and not removed upon consummation of the sale) exceeds $100.00 |
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The gift tax is an excise tax imposed on the exercise of the donor's right to transfer property as a gift. It is not a tax on property as such. (a) True (b) False |
(a) True |
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Proposition 6 repealed the inheritance and gift tax laws, but also enacted the California estate tax. (a) True (b) False |
(a) True |
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The laws are clear cut as to whether or not a real estate salesperson and/or broker is subject to UI, ETT, DI and state personal income tax withholdings. You can assume that you do not have these taxes deducted from your earnings once you have obtained a real estate license. (a) True (b) False |
(b) False |
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The laws are clear cut as to whether or not a real estate salesperson and/or broker is subject to UI, ETT, DI and state personal income tax withholdings. You can assume that you do not have these taxes deducted from your earnings once you have obtained a real estate license. (a) True (b) False |
(b) False |
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"Useful life" is the period over which the asset is expected to be of service to the taxpayer. (a) True (b) False |
(a) True |
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At-Risk Rules have been extended to apply to the holding of real property. The rules place no upper limit on the amount of deductible losses from certain activities are often described as "tax shelters". (a) True (b) False |
(b) False |
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For income tax purposes, which of the following types of property can be depreciated? (a) Vacant land (b) A peach-tree orchard (c) An owner occupied farm (d) Owner-occupied family residence |
(b) A peach-tree orchard |
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Gross income constitutes which of the following? (a) Effective gross income (b) Income minus vacancy factors (c) Income minus rental losses (d) All income not expressly exempt from tax |
(d) All income not expressly exempt from tax |
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Mr. Carter was able to purchase an apartment building for $725,000. The property had been appraised at $750,000 and the tax assessor had placed a value of $700,000 on it. If he paid $100,000 down and financed the balance his cost basis for income tax purposes would be: (a) $700,000 (b) $625,000 (c) $725,000 (d) $700,000 |
(c) $725,000 |
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An adjusted cost basis is the original basis or cost increased or reduced by: (a) Real estate taxes assessed on property at the time of purchase (if purchased prior to 1954) (b) All of these (c) Settlement fee, cost of purchase commissions and legal and recording fees (d) Depreciation deductions |
(b) All of these |
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For income tax purposes, the cost basis of a property is interpreted as: (a) The original acquisition cost plus any capital (b) The depreciated cost at time of sale (c) The purchase price or cost to the taxpayer, improvement (d) None of these |
(c) The purchase price or cost to the taxpayer, improvement |
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Which property may not be depreciated? (a) Machinery (b) Bare land (c) Equipment (d) Buildings |
(b) Bare land |
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In order to be eligible for capital gains benefits, the asset sold or exchanged must be a capital asset or must be an asset afforded the same treatment as a capital asset. According to our text, a capital asset is any property (whether or not connected with a trade of business except): (a) Stock-in-trade (b) A copyright (c) Depreciable property used in a trade or business (d) All of the above |
(d) All of the above |
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Which of the following is based on the theory that depreciation occurs annually in proportion to its estimated economic life, and is also the most used method of computing depreciation? (a) Salvage Value Method (b) Straight-Line Method (c) Sum-of-the-year's-digits Method (d) Declining Balance |
(b) Straight-Line Method |
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Clients will frequently ask the broker about the worth, fair price, fair rental or fair basis for trade of certain property. The broker should be aware of the factors that influence value. Which of the following statements is incorrect? (a) The location of the property is not a determining factor as long as the homes in the area are well kept and aesthetically appealing (b) Local ordinances, such as building codes and restrictions and zoning ordinances, affect the utility of a property (c) The type of soil, it's size, shape and slope all affect the value of property (d) Economic trends affect the value of property |
(a) The location of the property is not a determining factor as long as the homes in the area are well kept and aesthetically appealing |
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Clients will frequently ask the broker about the worth, fair price, fair rental or fair basis for trade of certain property. The broker should be aware of the factors that influence value. Which of the following statements is incorrect? (a) The location of the property is not a determining factor as long as the homes in the area are well kept and aesthetically appealing (b) Local ordinances, such as building codes and restrictions and zoning ordinances, affect the utility of a property (c) The type of soil, it's size, shape and slope all affect the value of property (d) Economic trends affect the value of property |
(a) The location of the property is not a determining factor as long as the homes in the area are well kept and aesthetically appealing |
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It is generally accepted that there are three ways to approach a value estimate. Which of the following is not an accepted approach? (a) Market comparison approach (b) Income capitalization (c) Valuation approach (d) Cost approach |
(c) Valuation approach |
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An appraisal is considered to be: (a) An educated guess (b) An average of the three approaches to value (c) An absolute value (d) An estimate and opinion of the value of the property |
(d) An estimate and opinion of the value of the property |
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By "market comparison approach" to appraising, we mean: (a) Finding an estimate of the money it would take to duplicate property (b) Finding the present worth of future income of property (c) Finding recent comparable sales in the area (d) Finding replacement cost less depreciation |
(c) Finding recent comparable sales in the area |
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The appraising approach which is simply an estimate of the amount of money that would be necessary to duplicate property, is commonly called: (a) Cost approach (b) Market data approach (c) Capitalization approach (d) Any of the above |
(a) Cost approach |
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Although many think of value as being only monetary, there are other types of value that are frequently overlooked. Which of the following is not a type of value? (a) Rental value (b) Cash value (c) Salvage Value (d) None of the above |
(d) None of the above |
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Mr. Jones bought an income property for $700,550. His accountant figured that his net income for the year was $84,066. By using the capitalization method of appraising, what was the capitalization rate? (a) (6%) six percent (b) (15%) fifteen percent (c) (12%) twelve percent (d) (18%) eighteen percent |
(c) (12%) twelve percent |
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Actually, depreciation is a loss in value from any cause. A building that has depreciated due to wear and tear, negligent care or damaged by termites is best described as: (a) Functional obsolescence (b) Social obsolescence (c) Physical deterioration (d) Economic obsolescence |
(c) Physical deterioration |
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In estimating the value of property, the method by far the most logical and simplest is the: (a) Reproduction (b) Market Data Approach (c) Income capitalization (d) Cost |
(b) Market Data Approach |
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Appraisal reports vary in form, length and purpose. However, all reports should contain basically the same information. Which of the following would not be found in standard reports: (a) The date and estimate of value (b) Original cost of the property (c) A description of the property (d) The purpose of the appraisal and the scope |
(b) Original cost of the property |
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To obtain the designation of Certified Property Manager (CPM), one must: (a) Pass two written examinations or pass exams in designated lecture courses (b) Pass certain education requirements (c) Be a member of a local Real Estate Board or NAR (d) All of these choices |
(d) All of these choices |
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Managers play an important role in property management and leases. Which of the following would generally not be classified as a type of property manager? (a) Real estate licensee (b) Individual building manager (c) Owner operator manager (d) Resident manager |
(c) Owner operator manager |
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Individual property managers who manage individual buildings for the owner are usually compensated on a basis of: (a) Percentage of the net return to the owner (b) Salary (c) Value of property being managed (d) Percentage of gross rents collected |
(b) Salary |
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The term "resident manager" is synonymous with: (a) Property manager (b) Building superintendent (c) Rental agent (d) None of these |
(b) Building superintendent |
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The landlord-tenant relationship is created by: (a) The exclusive leading agreement (b) The lease or acceptance of rent (c) The management agreement (d) All of the above |
(b) The lease or acceptance of rent |
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Basically, there are four types of leases, and they are distinguished by the length of their duration. Of the following, which is not in this category? (a) Tenancy at will (b) Periodic tenancy (c) Tenancy at suffering (d) Leasehold tenancy |
(d) Leasehold tenancy |
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That type of tenancy that is deemed to be renewed at the time of payment and continues for successive lengths of time unless terminated by notice best describes: (a) Periodic tenancy (b) Tenancy at will (c) Tenancy for years (d) Tenancy at sufferance |
(a) Periodic tenancy |
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That type of tenancy that is deemed to be renewed at the time of payment and continues for successive lengths of time unless terminated by notice best describes: (a) Periodic tenancy (b) Tenancy at will (c) Tenancy for years (d) Tenancy at sufferance |
(a) Periodic tenancy |
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A person signed a lease agreement for three years. He signed it on December 20, 1981, and three years passed. It is now December 26, 1984, and the lessee is still in possession of the property. He has paid rent, which was accepted by the owner, for one month. What type of lease does he now not hold: (a) Tenant at Will (b) Periodic Tenant (c) Tenant at Sufferance (d) Either (a) or (b) |
(c) Tenant at Sufferance |
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A person signed a lease agreement for three years. He signed it on December 20, 1981, and three years passed. It is now December 26, 1984, and the lessee is still in possession of the property. He has paid rent, which was accepted by the owner, for one month. What type of lease does he now not hold: (a) Tenant at Will (b) Periodic Tenant (c) Tenant at Sufferance (d) Either (a) or (b) |
(c) Tenant at Sufferance |
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Under the net lease, the lessee pays: (a) All the taxes, insurance and other general expenses (b) Only the utilities (c) Only the maintenance and operating expenses (d) A fixed rate of rent |
(a) All the taxes, insurance and other general expenses |
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That type of lease where a person can obtain the type of dwelling he wants, get his investment back and maintenance and repair costs are deductible, best describes which of the following? (a) Ground Lease (b) Sale-Leaseback (c) Percentage Lease (d) Net Lease |
(b) Sale-Leaseback |
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When the purchase of the property is done mostly with borrowed funds it is called: (a) Appreciation (b) Leverage (c) Refinance (d) Equity build-up |
(b) Leverage |
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Investors desiring an absolute minimum risk would put their money in: (a) Coins (b) Insured bank account or a U.S. Treasury Note (c) Resorts (d) All of the above |
(b) Insured bank account or a U.S. Treasury Note |
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That term that refers to the ease with which an investment may be quickly converted into cash is known as: (a) Quick turn over (b) Liquidity (c) Equity build-up (d) Quick Money |
(b) Liquidity |
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Which of the following would be considered an excellent hedge against inflation: (a) Government bonds (b) Real Estate Investments (c) U.S. Treasury Bills (d) Appreciation |
(b) Real Estate Investments |
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One of the reasons most investors now place more importance on cash flow and appreciation rather than on extensive tax shelters is because of the: (a) Capital gains (b) Passive loss limitations rules (c) Depreciation on residential properties (d) All of the above |
(b) Passive loss limitations rules |
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Profit is perhaps the strongest motive for investment but other factors certainly play an important role. Which of the following would be perceived as an important benefit by most investors (according to our text): (a) Pride of ownership (b) Desire for security (c) Comfort of security (d) All of the above |
(d) All of the above |
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The difference between the market value of a property and the amount of any loans outstanding against it is referred to as: (a) Worth of the property (b) Assumption value (c) Equity build up (d) Appreciation |
(c) Equity build up |
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That term which refers to increasing real estate ownership and assets by regularly trading up properties is: (a) Refinancing (b) Pyramiding (c) Trading up (d) Refinancing |
(b) Pyramiding |
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There are various factors that affect both the investor and the investment itself. Among these would be risk, inflation, appreciation and tax considerations. (a) True (b) False |
(a) True |
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Gross scheduled income is all rents collected plus vending machines, washer dryers and any other income from the property. By taking operating expenses, insurance, utilities, management, and gardening from this gross schedule, one would have: (a) Net operating expenses (b) Net operating income (c) Gross spendable income (d) Net spendable income |
(b) Net operating income |
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According to our text, people enter into a real estate exchange for all of the following reasons, except: (a) Tax advantages by way of tax-free exchange and trading up (b) To take property off the open market (c) Owner has no cash and wants to use his equity in present property in order to aquire another (d) Change of location and climate |
(b) To take property off the open market |
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Section 1031 of the IRS Code deals with tax-free exchanges. Pursuant to this section, the tax is: (a) Exempt by IRS (b) Transferred to the new owner (c) Paid in advance to IRS (d) Deferred until a time in the future when the owner disposes of the property in a transaction |
(d) Deferred until a time in the future when the owner disposes of the property in a transaction |
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Section 1031 of the IRS Code deals with tax-free exchanges. Pursuant to this section, the tax is: (a) Exempt by IRS (b) Transferred to the new owner (c) Paid in advance to IRS (d) Deferred until a time in the future when the owner disposes of the property in a transaction |
(d) Deferred until a time in the future when the owner disposes of the property in a transaction |
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The Internal Revenue Service states that in order to qualify as a tax-free exchange, the property exchanged must: (a) Be of greater value (b) Be like for like (c) Include boot (d) Be of lesser value |
(b) Be like for like |
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Cash or any property given or received in addition to the property that may be exchanged tax-free is referred to as: (a) Capital (b) Equity (c) Exchange base (d) Boot |
(d) Boot |
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The Exchange Agreement Form is to the exchange as the ___________ is to the usual sale of real property. (a) Listing agreement (b) Exclusive Listing (c) Purchase Contract (d) Deposit Receipt |
(d) Deposit Receipt |
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There is a distinct difference between exchanging a property and trading a property. Exchanging is best described as: (a) Generally limited to residential property (b) Where the broker is active as a principal on the transaction (c) The transferring of one property for another (d) To make it easier for a prospective client to purchase a house |
(c) The transferring of one property for another |
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The plan whereby the prospective purchaser agrees to buy a particular home, provided he can sell his old house with certain conditions, is referred to as: (a) The guaranteed trade-in-plan (b) The assumption plan (c) The conditional trade-in-plan (d) An exchange |
(c) The conditional trade-in-plan |
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The plan that guarantees the buyer that it will either sell his old home within a certain period of time or buy it from him for a certain price, is referred to as: (a) The FHA trade-in-plan (b) The assumption plan (c) An exchange (d) The guaranteed trade-in-plan |
(d) The guaranteed trade-in-plan |
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When a house is being exchanged, an FHA Mortgage Insurance Commitment, with escrow provision may be obtained on the trade-in-house by a borrower who will not be the occupant, providing: (a) The non-occupant borrower places at least 10-percent of the mortgage proceeds in an escrow fund held by the lender (b) He sells the house within twenty-four months to a buyer who is acceptable to FHA (c) The property, location and borrower are acceptable to FHA (d) It is the income property |
(c) The property, location and borrower are acceptable to FHA |
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One of the common problems of the trade-in program for the average real estate firm is: (a) The availability of necessary working capital to purchase property (b) Cooperation of either agents (c) Training personnel (d) Finding good property |
(a) The availability of necessary working capital to purchase property |
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One of the common problems of the trade-in program for the average real estate firm is: (a) The availability of necessary working capital to purchase property (b) Cooperation of either agents (c) Training personnel (d) Finding good property |
(a) The availability of necessary working capital to purchase property |
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According to our text, the term "goodwill" as applied to a business means: (a) The business that has been built up over a considerable time (b) Willing effort (c) The expectation of continued patronage (d) Cheerful customers |
(c) The expectation of continued patronage |
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According to our text, the term "goodwill" as applied to a business means: (a) The business that has been built up over a considerable time (b) Willing effort (c) The expectation of continued patronage (d) Cheerful customers |
(c) The expectation of continued patronage |
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Some of the factors that a licensee and the prospective purchaser of a business opportunity would want to consider are: (a) Two-five years tax statement (b) Lease review (c) Zoning and parking (d) All of the above |
(d) All of the above |
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When a broker and the purchaser together prepare a deposit receipt, there should be certain contingencies in the receipt to protect the buyer as well as the agent. Which of the following would probably not be a contingency according to our text? (a) Length of lease (b) Securing necessary permits to operate the business (c) Inspection and approval of the business records (d) Amount of rent to be paid |
(d) Amount of rent to be paid |
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A broker dealing in business opportunities must be familiar with certain laws and regulations. Which of the following would not pertain to a business opportunity broker? (a) The Alcoholic Beverage Control Act (b) The Uniform Commercial Code (c) The Rumford Act (d) The Bulk Transfer Act of the UCC |
(c) The Rumford Act |
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A broker dealing in business opportunities must be familiar with certain laws and regulations. Which of the following would not pertain to a business opportunity broker? (a) The Alcoholic Beverage Control Act (b) The Uniform Commercial Code (c) The Rumford Act (d) The Bulk Transfer Act of the UCC |
(c) The Rumford Act |
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The creation of a security interest in personal property is regulated under provisions of the: (a) Alcoholic Beverage Control Act (b) Uniform Commercial Code (c) The California Sales and Tax Provisions (d) The Subdivision Act |
(b) Uniform Commercial Code |
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There are three basic methods used when borrowing money and giving personal property as security. Which of the following ways would generally be used in the sale of a business opportunity? (a) Borrower gives actual possession of the property to the lender (b) Give the lender title to the property but retain possession (c) Retain both title and possessions but give the lender a security interest (d) All of these are permitted by law |
(d) All of these are permitted by law |
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A financing statement is effective from the date of filing, and protects the lender who files it with the: (a) Secretary of State (b) HUD (c) Department of Real Estate (d) Corporations Commissioner |
(a) Secretary of State |
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Under a bulk sale (Division 6 of the UCC), recordation of a sale must be made in the office of the recorder in the county where the sale is located at least how many days before the sale? (a) Ten (b) Sixty (c) Twelve (d) Thirty |
(c) Twelve |
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Sales of tangible personal property at retail require the retailer to: (a) Not sell below wholesale price (b) Collect sales tax (c) Employ union employee (d) None of the above |
(b) Collect sales tax |
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An On-Sale Alcoholic Beverage License permits: (a) The sale of beverages not consumed on the premises (b) Corporate ownership of an ABC permit exclusively (c) The sale of case-lots of beer and wine only (d) The sale of beverages which maybe be consumed on the premises |
(d) The sale of beverages which may be consumed on the premises |
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In California, jurisdiction over probate sales is in the: (a) Department of Real Estate (b) State Judicial System (c) Federal Judicial System (d) None of the above |
(c) Federal Judicial System |
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Property sold through the Probate Court is sold: (a) In its "as-is" condition (b) With allowances for any necessary work needed (c) With the Court ordering a termite inspection (d) Without personal inspection and at your own risk |
(a) In its "as-is" condition |
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A representative of an estate, with court permission, may grant a real estate broker an exclusive right to sell listing for not more than 90 days. If the representative is the trust department of a bank, which of the following would be true? (a) The bank would grant a 30-day listing (b) The bank would grant a 60-day listing (c) No listing is usually granted to any broker (d) The bank would grant a 120-day listing |
(c) No listing is usually granted to any broker |
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Mobile homes must be built in conformance with standards prescribed by the: (a) Real Estate Commissioner (b) Department of Housing and Urban Development (HUD) (c) Federal Housing Association (d) Local Planning Department |
(b) Department of Housing and Urban Development (HUD) |
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In a probate sale, after a bid has been selected and accepted by the representative of the court, and the representative must file a sale statement and petition the court for confirmation within how many days after the date of sale and acceptance of the bid? (a) 5 days (b) 15 days (c) 10 days (d) 20 days |
(c) 10 days |
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A bid of $12,000 was made at a probate sale. What would be the amount of the next acceptable bid? (a) $12,500 (b) $13,100 (c) $12,700 (d) $13,500 |
(b) $13,100 |
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Individual who acquires or transfers interest in a mobile home must notify HCD within how many days: (a) 10 (b) 20 (c) 15 (d) 5 |
(b) 20 |
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Which of the following is generally considered a possible advantage in condominium housing? (a) Parking and storage facilities (b) Security and safety features (c) Aspects of privacy (d) Assessment fees |
(b) Security and safety features |
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The law requires that the prospective purchaser of a condominium be given certain information concerning the condominium project before any written offer to purchase is made or before any moneys are accepted. What is the proper name of this information that must be given by the real estate licensee to all prospective purchaser's: (a) CC&R's (b) Preliminary report (c) Commissioner's public report (d) Environmental impact report. |
(c) Commissioner's public report |
