EXAM 1

A title was recorded for a parcel of real property vested in the name of Johan Wilson, a single woman. After her marriage to William Roberts, she executed a deed to the property only in the name of Johan Roberts, a married woman. The discrepancy in the grantor’s name is:

Which contract would be the most difficult for a buyer to obtain financing?

When a broker runs an advertisement, the broker must disclose:

Following in-house sales are true, except:

The Federal Housing Administration (FHA) was created primarily:

Which of the following loans on a home would probably be made without

A person who wishes to purchase a home using the Cal-Vet program would send his application to:

The item that would appear on the debit side of a buyer’s closing statement would be:

When dealing with the public, a broker may not:

Which of the following is the reason that a real estate agent must keep his principal informed of material facts concerning a pending real estate transaction?

A buyer relied upon the fraudulent statement of the seller’s agent and was damaged. The seller was unaware of the agent’s false statement, and he tried to enforce the agreement. The buyer:

Lenders know that the lower the loan-to-value ratio, the higher the:

An offer to purchase a real estate could be terminated in all of the following ways, except:

In which of the following contract will apply if one of the parties agrees not to revoke an offer for a certain period of time:

For Federal Income Tax purpose, the capital expenditures for improvements are:

A property sold for $150,000 in a county which had established a documentary transfer tax rate of $.55 for each $500. Of the purchase price of $150,000, only $125,000 was subjected to tax. Which of the following is nearest to the tax amount that would have to be paid?

Leland uses an 8% capitalization rate for a 40-unit apartment building that generates $174,000 net income. Which of the following is the most appropriate value of this property?

A broker is negotiating a 25-year commercial lease at a straight annual rental of $30,000. The broker is to receive a compensation for negotiating this lease as follows: 7% of the annual rental for the first year, 5% of the annual rental for the next four years, 3% of the annual rental for each of the next fifteen years; and 1% of the annual rental for every year thereafter during the term of the lease. By the end of the 19th year, the broker will have received a total commission of most nearly:

A salesman was to receive a 45% share of a 6% gross commission. He received $8,100. The property was sold for:

Two brokers agreed to split a 4 ½ % commission on a 50-50 basis on the sale of a property for $162,500. The listing salesperson agreed to a 50-50 split with his employing broker. What would be the commission amount for the listing salesperson?

Buyer Parker paid $4.40 per square foot to purchase a 20,000 square foot lot. If the parcel is in rectangular shape and 200 feet deep, the approximate cost per front foot would be:

A deed:

Of the following types of deeds, which one would contain no warranties and expressed or implied:

An easement could be created for what length of time:

Land that is subject to an easement is said to be:

The provision of the Subdivision Map Act is enforced by the:

Walker hired a construction company to install a swimming pool on their residential premises. In the event of the construction company was unpaid and it was necessary for them to file a lien for the payment of construction, the encumbrance created would be:

If no notice of non completion is recorded on an improvement project, anyone can record a mechanics lien within;

When comparing condominiums and rented apartments, which of the following is true?

In order to operate a competitive, yet profitable business, a real estate broker needs to be concerned with “desk cost.” Which of the following most nearly represents the correct way to calculate the desk cost?

Local government laws for the regulation and control of land-use include which of the following?

Broker Hudson had a house listed for sale for nine months without selling it. He knows that the building needs major structural repairs, and he has listed at 10% above its fair market value. He runs an advertisement in a newspaper that says, “Three bedrooms and Victorian Style. You won’t believe the price! Move right in. Hudson – XXX- XXXX.” This advertisement is bad because:

A high price, high quality home surrounded by lower price, lower quality properties will suffer loss in value due to:

Which of the following is acceptable response for the agent to seller who has indicated their home is not to be shown to sales of prospects who are members of the ethnic minority group?

Which of the following statements is most nearly true concerning the activities of mortgage companies?

The mortgage insurance on a FHA loan:

A real estate salesman went into a neighborhood to obtain listings of residential property. He made a presentation that the property value would be reduced by a decline in the quality of schools, and an increase in the crime rate because of the entry of minority groups into the neighborhood. His action was:

The purpose of the Truth-in-Lending Act is to:

Half a mile by half a mile represents how many acres?

George Carson is selling time-shares in his Wildacre subdivision. He mailed advertisements to 10,000 people offering them the chance to win a prize, but did not reveal that the person must visit Wildacre and listen to a sales presentation in order to be eligible. All of the prize winners became the owners of Wildacre. Is there anything wrong with this situation:

The appraisal of an income-producing property is made with an as of “given date” to indicate:

Morrison receives a net income of $675 per month at an annual return rate of 7 ½%. Morrison’s Investment amounted to:

Which of the following is least correct about in-house sales?

The hardest and yet the most important part in the market data method of appraising is:

Harrison and David, single people, owned a parcel of real property as joint tenants. Harrison encumbered his interest for $10,000 and borrowing the amount to pay medical bills without the acknowledgement or consent from David. Shortly thereafter, Harrison died with the debt still unpaid. Which of the following would be true?

When the governmental body takes a private real property necessary for public use, the certain legal processes must be followed. Taking a real property such as above is exercising the right of:

A title company could make a title search by searching the records of the:

When making a loan, amortization tables are used in order to determine the:

Broker Smith took a listing on commercial acreage and also received the right to purchase the property within 30 days. On the 28th day of the listing, the broker decided to buy the property. Before buying the property, he must:

A real estate broker presented an offer to seller which met the terms of the listing. The offer was from a financially qualified black person. Later, his salesperson presented the seller an offer that was at a lower price from white prospect. The seller did not accept either offer, but instead, sold the property to a neighbor through the same salesperson. The neighbor wanted to buy the property to prevent minority person moving into the neighborhood. Which of the following parties has not violated the Civil Rights Act of 1968?

Which of the following State Agencies is empowered to prevent acts of discrimination in housing accommodations in California because of race, color, sex, national origin, or ancestry?

Broker Gutierrez had a listing to sell a seller Smith’s house. Broker Gutierrez received an offer on the house and presented it to seller Smith who hesitated in accepting the offer. The broker promised Smith to find another suitable residence before close of escrow. On the basis of that, the seller accepted the offer. If broker Gutierrez failed to perform in finding another suitable residence during the time period, which of the following is most nearly correct?

Broker Knot advertised in the newspaper that anyone who buys a property listed with the broker would receive a free microwave oven valued at $500. Such action is:

If a broker is an agent for a seller, he owes to the buyer:

If two parties want to create an enforceable broker-principal relationship concerning a right, title, or interest in real property, the most essential element to do so would be:

Which of the following rights of ownership in real property do individuals normally not have?

If a real estate licensee misrepresents a property to a buyer while he is acting as an agent, he may subject himself to:

Broker Hays took a 90-day exclusive agency listing to sell a property that was owned by Wilson. After 30 days, Hays had not sold the property, so Wilson sent him a certified mail letter canceling the listing. One week later, Wilson listed the property with several brokers using open listings. Two weeks later, one of the brokers who had an open listing on the property completed a sale to new owner. In this situation, Wilson most likely:

A broker obtained a 6% listing commission fee on a selling price of $108,000. The seller incurred additional closing costs of $1,450. Based on the preceding information, the seller’s total cost of sale would amount to:

When depreciation is taken on real property:

Under the Subdivision Map Act, the subdivision reports must be filed with the:

A voidable contract remains binding upon the parties until the contract is:

Which of the following is the legal method that City uses to implement its general plan?

If roof slopes on all four sides, it is called a

An appraiser’s narrative appraisal report of a single-family residence probably would contain no reference to:

Which of the following notices could be important to the filing of a mechanic’s lien?

If a real estate licensee was trying to persuade people to list or to sell their property by telling them that members of another ethnic group were moving into their neighborhood and it would be their advantages to list or to sell. This would be an example of all of the following, except:

Which of the following is the most difficult for the mortgage lender to evaluate?

Interest rates on trust deed loans are primarily determined by which of the following:

The word “time is of the essence” can be found in which of the following contract?

When an air conditioning unit has a higher energy efficiency ratio (EER), it means that:

Carter bought 10 acres of vacant land for $20,000 per acre; making a cash down payment of $20,000 and executing a straight note and a blanket deed of trust for the balance. As a part of the note, the lender agreed that when Carter makes an additional payment of $20,000 on the principal, the trustee would issue a partial reconveyance for one acre. Carter has paid a total of $40,000 on the note and now owned two acres free and clear. The percentage of his equity in the encumbered property:

A contractor was building a new home. Before completion, he received several offers to rent the property. Just right before the completion, the city announced that it was taking 10 feet off the front of the property to widen the street to facilitate the traffic. Thereafter, offers to rent were for approximately 10% less. This would be an example of which of the following types of depreciation:

Which of the following is considered real property?

A mortgage loan may be insured by:

The rights granted by an owner of real property to a telephone company for the purpose of erecting poles to support telephone wires over the property creates:

Which of the following is not a lien?

A broker receives an offer from a buyer for a specific property. The deposit was in the form of a personal promissory note for $2,000 payable to seller in 60 days plus 10% interest. Which of the following is true?

Jose is an unlicensed employee of a licensed real estate broker. The broker pays him to distribute door hanger fliers to homes in the immediate neighborhood and to make telephone solicitations for potential buyers and sellers. This activity by Jose is:

A real estate broker sent all of his title business to a Title Company. In appreciation of the business, the title company paid the broker $10 for each transaction. According to the Real Estate Settlement Procedures Act, “RESPA,” this practice is:

Who is more likely to earn a sale commission? The broker who:

A broker was able to make a sale to an interested buyer based on false information which seller provided to the broker. The broker acted in good faith and in a reasonable manner in relying on the false information. Thereafter, the buyer rescinded the contract because of the fraud. Given these circumstances, the broker is normally entitled to:

When financing a home with a long-term loan, if equal payments are made, the amount of the principal will:

An agency relationship may be terminated by:

When title is transferred, the grantee in the deed may have the title insured by

What is the best way to create an agency relationship?

When an owner refuses to pay the broker an earned commission, the broker may properly seek relief by:

The maximum commission a broker may charge for the sale of residential property is:

Brokers, Andrew and Benson, both have an open listing on a property. Broker Andrew showed the property to a prospective buyer and carried on negotiations, but the buyer decided not to buy. Two weeks later, Broker Benson contacted the same buyer and arranged a sale of the property. The seller would be obligated to pay a commission as follows:

Under which of the following listings, a commission must be paid by owner even though he sells entirely through his own efforts:

A broker’s ads in a local newspaper says that if a buyer or seller will bring this ads to his office and either list or buy a property through him, he will give that person $50. Which of the following is true?

The basis of the market data approach appraisal is found in:

A joint tenant can dispose an interest held in real property by all of the following ways, except:

Each owner in a tenancy in common:

A trust deed can have a provision that allows future loans on the property to have priority. This would be called:

Of the following, which is the best definition of a balloon payment?

Chicano prospective purchaser asks to be shown homes but does not specify that he wants to see homes located in a neighborhood where there are no Chicanos. How should a licensee decide what properties to show him?

The decline of mortgage interest rates would occur when:

If the owner of a property thinks that his property has been over-assessed by the county assessor, he would contact the:

Lee made an offer to purchase Wilson’s property. As part of the offer, Lee agreed to take title “subject to” an existing VA loan which Wilson obtained when they purchased the property in approximate amount of $39,000. If Wilson sells to Lee under these conditions, which of the following is true concerning liability for a loss suffered by the government after a foreclosure on the VA loan?

A broker used the following clause in his exclusive listing contract, “In consideration of execution of the foregoing, the undersigned broker agrees to use diligence in procuring a purchaser.” This clause:

When a lender makes a loan regulated by the Real Estate Settlement Procedures Act, the loan applicant must be provided with which of the following:

Broker Walter entered into an oral listing agreement with the seller of real property without a subsequent written verification. The payment of a commission to Broker Walter under these circumstances would be:

Mr. Smith bought a property for $72,000 with $20,000 cash down payment and $52,000 loan. The loan did not require interest and did not require any payments for one year. One year later, he sold the property for double its purchased price. Each dollar of his original cash investment is now equal to:

If a 32-unit apartment building shows an annual net income of $117,800 and the appropriate capitalization rate is 8%, what is the approximate value of the property:

1Which of the following does not directly affect the level and movement of mortgage interest rates?

To an appraiser, a definition of value is:

Concerning the second installment of real property taxes in California, the due date and delinquent date are respectively:

A lessee rents a building from May 1 to July 1. His tenancy is:

Which of the following can be appurtenant to land?

A trustee defaults on his loan and refuses to reinstate the deed of trust. The most expedient thing for the beneficiary to do is to institute a:

When an appraiser is appraising a property, he usually considers all of the following, except:

Listing a home at an inflated price requiring minority prospects to pay that price, but accepting a lower price from other prospects:

Mr. Gonzalez took out a loan for improvements to his real property that was fully amortized. If the loan provides that there are equal monthly payments, the amount credited to the principal will:

Which of the following phrases will best describe the nature of a broker’s duty to keep his principal informed?

When a deed shows the racial identity of a client, it can be re-written only by authorization from:

When gross income is changed into value in one operation, which of the following describes this occurrence?

During the winter time, an appraiser finds that the inside of an exterior wall of a building is about the same temperature as the other interior walls. The appraiser would come to the conclusion that:

A sublease is considered to be:

Which of the following best describes the actions of an agent under single agency?

An owner of an apartment complex deducted $6,000 from the gross income for depreciation on his federal income tax return. The basis of the property is therefore:

A real estate licensee refers transactions to a specific escrow company, because the escrow company pays him a referral fee for each of such referral. Regarding this arrangement, which of the following is correct?

A broker receives rental income from several apartment units which he owns. He plans soon to accept an offer accompanied by a deposit to sell one of the units. Under these circumstances, he should:

A new real estate salesperson made strong efforts to obtain listings in a non-integrated community. He found success by insinuating to property owners that should minorities move into the area, the value of their homes would decrease. Which of the following terms best describes the activities of salesperson?

A listing (authorization to sell) generally:

When a salesperson takes a listing, the listing is the property of:

When the Environmental Review Board or the Department of Real Estate issues a “negative declaration,” it means that the subdivision:

When a legal description begins with the phrase, “Beginning at a point on the northerly edge of O Street, 100 feet east of the NE corner of the intersection of O and Seventh Street.” Which of the following methods of land description is being used?

When an agent is accused of “puffing,” the agent might have been guilty of which of the following?

Of the following, which best characterizes the term “single agency”?

Mr. Brown hired an agent to purchase a home. The offer has a contingency; the offer was contingent upon the sale of Brown’s home. The offer made a counter offer accepting the Brown’s offer with the right to continue marketing the home for better offers and granting to Brown a right of first refusal to remove his contingency if a better offer comes in. Brown accepted the offer and immediately listed their home for sale. Shortly thereafter, the seller notified Brown that a better offer has been presented without any contingencies. What should the agent advise Brown to do?

Under the Business and Professions Code, it is required to keep copy of a deposit receipt for a minimum of three years from:

A real estate broker was charging 1/8 percentage interest rate higher to borrowers that English wasn’t their first language. This action by the broker is:

If a tenant enters into a 2 year lease and if the lease contains no clause of assignment of subleasing, the tenant may:

A tenant of an apartment complex working on heating ducts. The tenant sees the ducts contain asbestos insulation. Does the tenant have a legal obligation to warn anyone?

All of the following statements about covenants and conditions are false, except:

Which of the following is true regarding the depreciation of land under federal income tax law?

The term estoppel best describes:

An appraiser is using the replacement cost method and may use the unit cost per square foot or cost per cubic foot in the computations. On a unit cost comparison basis:

Two buildings are leased on a long term basis, one for a post office and the other for a hardware store. Using the capitalization approach to appraise the properties, the post office would demand:

The Alqust-Priolo Earthquake Special Studies Act is applicable to:

A loan secured by real property usually consists of:

Mortgage loan correspondents may obtain a license by:

A real estate broker who owned a large real estate firm operating under ABC Realty Co. Listed a property for total of $40,000. The broker and many of his salespersons were all principals in an investment company operating under the name of Realty Investment Company. The investment company decided to purchase the property so the broker presented an all cash offer but did not disclose the buyer’s relationship. Under this circumstances:

When someone has power of attorney may do all of the following, except:

Purchasing a home with a lower down payment and longer repayment terms will generally:

A lender under a trust deed is known as:

When a lender in a trust deed takes a deed in lieu of foreclosure, who is liable for the second financing?

When a residential neighborhood is composed mostly of owner occupied residential properties, it tends to:

In which of the programs will the borrower have to pay commission on?