Real Estate Law and Mortgage Exam Questions, Exams of Laboratory Practices and Management

Download Real Estate Law and Mortgage Exam Questions and more Exams Laboratory Practices and Management in PDF only on Docsity! California Real Estate Principles Practice Exam 1 Questions and Answers. 1 of 50 - Which form of payment is most common for a property manager? A. A percentage of income. B. A salary. C. A flat fee. D. All of the above - Correct answer A. A percentage of income. 2 of 50 - Which of the following is exempt from the Natural Hazards Disclosure? A. A special flood area. B. A geological hazard. C. A wild land high fire severity area. D. A seismic hazard zone. - Correct answer B. A geological hazard. 3 of 50 - Shekel and Shaken have sold their home, made an offer on Derek and Keisha’s home, and the offer was accepted. All the details of the sale have been worked out, agreed upon and signatures obtained. Now, Shekel and Shaken must obtain a loan for the property. What is the best term to describe their position in the transaction's timeline? A. In Contract B. Chain of Title C. Abstract and Opinion D. Both B and C - Correct answer A. In Contract 4 of 50 - Ted and Lisa are selling their home and have signed a listing agreement. Client or customer? Steven visits Ted and Lisa's open house, and he is interested in purchasing their home. What happens next? Is Steven a client or customer? A. Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven that Ted and Lisa are customers. B. Ted and Lisa are clients, as is Steven. The listing agent must disclose to Steven that Ted and Lisa are also clients. C. Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven that he/she represents Ted and Lisa and explain customer relationships D. Ted and Lisa are clients, and Steven is a customer. The listing agent must disclose to Steven that he/she represents Ted and Lisa and explain customer relationships. - Correct answer D. Ted and Lisa are clients, and Steven is a customer. The listing agent must disclose to Steven that he/she represents Ted and Lisa and explain customer relationships. 5 of 50 - In early common law, transfers of land were only made when: A. The transfer of land from husband to wife, upon the husband's death. B. The transfer of land from father to child, upon the father's death. P a g e 1 | 12 C. The transfer of land from father to son, upon the father's death. D. Both A and B - Correct answer C. The transfer of land from father to son, upon the father's death. 6 of 50 - What are the parts of a mortgage loan? What purpose does each part serve? A. A Pledge and Collateral. A Pledge is a promise to pay; and Collateral allows a lender the right to foreclose if the borrower does not pay. B. A Promissory Note, a Deed of Trust, and Collateral. A Promissory Note is an I.O.U. to pay; a Deed of Trust secures the interest in a borrower's real property; and Collateral allows a lender the right to foreclose if the borrower does not pay. C. A Pledge and Collateral. A Pledge allows a lender the right to foreclose if the borrower does not pay; and Collateral is a promise to pay. D. None of the Above. - Correct answer A. A Pledge and Collateral. A Pledge is a promise to pay; and Collateral allows a lender the right to foreclose if the borrower does not pay. 7 of 50 - Jack is leasing a home from Justin for a year. He has decided to lease until he gets a good feel for the area and knows where he wants to buy. In this relationship, who has the reversionary right and who has the possessory right? A. Jack has the possessory right and Justin the reversionary right. B. Jack has the reversionary right and Justin the possessory right. C. Jack and Justin both have the possessory right. D. Jack and Justin both share the reversionary right. - Correct answer A. Jack has the possessory right and Justin the reversionary right. 8 of 50 - Which of the following is not a characteristic of the California mortgage market? A. California has a large amount of the country's biggest commercial and savings banks. B. California has a high population; therefore more people means more homes are needed. C. Mortgages are used instead of Deeds of Trust, which allows borrowers greater flexibility and protection. D. California has a very active secondary mortgage market. - Correct answer C. Mortgages are used instead of Deeds of Trust, which allows borrowers greater flexibility and protection. 9 of 50 - Bob leased an apartment for three years from the Steiner’s. He was never late on his rent in those three years, kept the apartment immaculate, and never caused a moment of trouble. He has recently purchased his first home and moved out of the apartment. As expected, Bob gave the Steiner’s sixty days' notice he would be moving and left the apartment in perfect condition. It has been 45 days since he moved out and he's been watching for his security deposit refund to purchase a new sofa. When should he expect his security deposit refunded? A. If there had been no damage or cleaning required, which seemed highly likely in Bob's case, the landlord should have refunded his security deposit within 21 days of Bob's vacating the property. B. If there had been no damage or cleaning required, which seemed highly unlikely in Bob's case, the landlord should have refunded his security deposit within 30 days of Bob's vasa - P a g e 2 | 12 A. Cemetery Authorities B. Licensed Personal Property Brokers C. Off-Site Property Managers D. Short-Term Vacation Rental Agents - Correct answer C. Off-Site Property Managers 19 of 50 - Mobile homes manufactured ___________ are required to have tags guaranteeing proper construction. Who issues this tag? A. Before June 15, 1976; HUD B. After June 1, 1976; HUD C. After June 15, 1976; HUD D. After June 1, 1976; California BRE - Correct answer C. After June 15, 1976; HUD 20 of 50 - Which of the following is not a goal of a real estate appraiser? A. To determine the market value of a property. B. To determine the insurance value of a property. C. To determine the marketability of a property. D. To determine the tax value of a property. - Correct answer C. To determine the marketability of a property. 21 of 50 - Adobe has listed his condo with Maria's broker and she is his listing agent. The listing agreement is signed and the day to begin showing his property is nearing. Adobe decides the day before the open house to raise his asking price by $20,000. Maria disagrees with the decision but goes along with Adobe’s wishes. How must Maria take care of this contractual change in price? A. Maria must change the listing price on a price change or extension form. B. Maria may make the change on the original contract due to the fact the condo has not been professionally shown by licensees. C. The listing price change does not need to be changed on the contract. The price that will be paid for the condo does not have to be the listing price; therefore, it is just a guide, not set in stone. D. None of the Above. - Correct answer A. Maria must change the listing price on a price change or extension form. 22 of 50 - Thad and Pierre made an appointment to view a condo for lease advertised in the newspaper. Thad phoned the landlord and set up a viewing for two hours later in the day. The couple thought the condo was perfect and informed the landlord they wanted to start the application process to lease the condo. The landlord then explained the condo had just been leased. The next Sunday in the classifieds, the condo was again advertised for lease. A friend of the couple phoned the landlord, pretending to be interested in the property. When asked if it had been leased, the landlord replied "No". What is going on in this situation? A. Probably nothing at all. The condo was probably leased in the two hours between the couple's phone call and their viewing. Chances are the lease fell through for various reasons. P a g e 5 | 12 B. It seems the landlord did not like the idea of leasing his condo to a same sex couple. This is not permissible - Correct answer B. It seems the landlord did not like the idea of leasing his condo to a same sex couple. This is not permissible. A landlord must live by federal and state fair housing laws. 23 of 50 - Missy, a licensee, desperately wants to be appointed the next California Real Estate Commissioner. For the three years she has held her California real estate license, she has been ranked in the top five in new home sales in her office. Missy has never had her license suspended or revoked, and prides herself on being ethical in every transaction and interaction. Does Missy have a chance? A. Yes, she has a chance to be appointed to the post of California Real Estate Commissioner. The only requirements are to hold a California real estate license and be actively involved in the profession. B. No, not at this point in her career. In order to be appointed to the post by the governor, she must have a minimum of five years' experience as a real estate broker. C. No, not at this point in her career. In order to be appointed to the post by the governor, she must have a minimum of ten years' experience as a real e - Correct answer B. No, not at this point in her career. In order to be appointed to the post by the governor, she must have a minimum of five years' experience as a real estate broker. 24 of 50 - A developer wants to build a sprawling two-story office complex. The developer's and architect's vision is something low, modern, and new. They are planning the complex in an urban area of town, replacing ten blocks of old high-rise buildings. Unfortunately, the zoning commission's vision does not coincide with either the developer's or the architect's. Which type of zoning regulation applies? A. Directive Zoning B. Aesthetic Zoning C. Bulk Zoning D. None of the above - Correct answer A. Directive Zoning 25 of 50 - Is a broker allowed (permitted) to accept lender funds unless that broker owns the loan? Which requirement under the California Business and Professions Code addresses the question? A. Yes, it is permissible for a broker to accept those funds. They will eventually be used for a loan or to buy a specific note. The requirement is outlined in Article 5. B. Yes, it is permissible for a broker to accept those funds. They will eventually be used for a loan or to buy a specific note. The requirement is outlined in Article 6. C. No, it is not permissible for a broker to accept those funds. The requirement is outlined in Article 17. D. No, it is not permissible for a broker to accept those funds. The requirement is outlined in Article 5. - Correct answer D. No, it is not permissible for a broker to accept those funds. The requirement is outlined in Article 5. 26 of 50 - Brian and Leslie have made an offer on Rudy and Judith's home. The first offer was rejected by the sellers. Brian and Leslie made another offer; Rudy and Judith rejected P a g e 6 | 12 that offer. Never quitters, Brian and Leslie decided to try one last time and present their last and best offer. Rudy and Judith decide the prospective buyers are close, and make a counteroffer. What's the situation after a counteroffer is made by the sellers? A. The sellers cannot make a counteroffer to the buyer. They can either accept the buyer's offer or reject it. B. Once the counteroffer is made by the seller, the buyer's original offer becomes invalid. If the buyers accepts the offer the seller has made, the same process takes place as with a regular offer. C. The process will basically start completely from scratch. If the buyers reject the seller's counteroffer, the sellers can go back to the buyer's previous offer and accept. D. - Correct answer B. Once the counteroffer is made by the seller, the buyer's original offer becomes invalid. If the buyers accepts the offer the seller has made, the same process takes place as with a regular offer. 27 of 50 - Anthony is adding a new deck to his home. He has obtained all the necessary building permits to construct his new deck. Anthony's neighbor, Steve, informed him he has to have a California State Contractor's License to even work on his own property. Anthony says that Steve is wrong. Who is right in this situation? A. Anthony is correct, anyone who does the business of a contractor must be licensed. B. Steve is correct, any major work conducted on real property must be done by a licensed state contractor. C. Anthony is correct. Anyone who does the business of a contractor must be licensed. Unless, the property owner is planning to sell the finished real estate project, he does not need a license to work on his own property. D. None of the Above. - Correct answer C. Anthony is correct. Anyone who does the business of a contractor must be licensed. Unless, the property owner is planning to sell the finished real estate project, he does not need a license to work on his own property. 28 of 50 - What is the mill rate of .017? A. 0.0017 B. 1.07 C. 1.7 D. 17 - Correct answer D. 17 29 of 50 - Marcus wants to have the deed to his new home recorded to protect his ownership rights. In order to record the deed, it must be notarized. Marcus must go before a notary public and verify the signing of the deed. The notary then signs the deed. The verification of Marcus' signature in the signing of the deed is known as: A. Autograph B. Attestation C. Recording D. Caveat Emptor - Correct answer B. Attestation P a g e 7 | 12 38 of 50 - Although 16-year-old Tameka's goal is to be a licensed real estate salesperson in the State of California, she is currently living in Canada. Her long-term goal is to be a successful salesperson, manager, and to own a brokerage. She has been studying the Real Estate Principles Course for next week's exam. However, if she passes, she cannot apply for her 4 year salesperson's license. Why? A. Tameka cannot apply for a 4-year salesperson because she has not completed three college-level real estate courses. B. Tameka is only sixteen and a licensee must be eighteen years old. C. Tameka cannot provide proof of legal presence in the United States. D. Both A and B - Correct answer D. Both A and B 39 of 50 - Shiva ram and Karan are buying a home in a new subdivision. Due to all of the subdivisions in the area, a new elementary school is being built. Additionally, a new area park is planned. Shiva ram and Karan have been informed the taxes on their new home are substantially higher than their previous property. Why? A. The Mello-Roost Community Facilities Act of 1982 B. The Street Improvement Act of 1911 C. Proposition 13 D. Proposition 60 - Correct answer A. The Mello-Roost Community Facilities Act of 1982 40 of 50 - When an appraiser assumes that no one is being forced to sell at a reduced price because of an impending divorce or similar situation; and that both buyer and seller are well- informed customers, he is more than likely hired to determine: A. Market Value B. Insurance Value C. Salvage Value D. All of the above - Correct answer A. Market Value 41 of 50 - When is it permissible for a broker to possess an out-of-state trust account? A. It is only permitted if the FDIC insures the account, and the account is used only for specific first loans. B. It is never permitted; all trust accounts must be maintained with a bank or recognized depository located in California. C. It is always permissible to hold an out-of-state trust account. D. None of the Above. - Correct answer A. It is only permitted if the FDIC insures the account, and the account is used only for specific first loans. 42 of 50 - What is the major difference between an Estate for Years and an Estate from Period to Period? A. The major difference is: in an Estate for Year, the tenant must give notice to vacate whereas in an Estate from Period to Period, there is no need to give any notice. B. The major difference is: in an Estate from Period to Period, the tenant must give notice to vacate whereas in an Estate for Years, there is no need to give any notice. P a g e 10 | 12 C. The major difference is: in an Estate for Years, it is used exclusively for commercial leases. D. There are no major differences between the two. - Correct answer B. The major difference is: in an Estate from Period to Period, the tenant must give notice to vacate whereas in an Estate for Years, there is no need to give any notice. 43 of 50 - Which of the following is not a requirement for an FHA loan? A. The mortgaged real estate must be appraised by an approved FHA appraiser. B. Prepayment penalties are optional. C. Points can be charged by the lender and paid by either buyer or seller, or both. D. A buyer may pay more than the appraised value, if he pays the difference in cash. - Correct answer B. Prepayment penalties are optional. 44 of 50 - This step of the general plan, sometimes known as the master plan, should encompass all aspects of the projected growth, including the social, economic, and physical features. Due to this step, while considered long-range, the plan must allow for short-range flexibility. Which step is described? A. Resource Analysis B. Plan Implementation C. Formulation of Community Goals D. Adaptation of Zoning Ordinances - Correct answer C. Formulation of Community Goals 45 of 50 - Zoning ordinances have changed in the area adjacent to a residential neighborhood. The residents are incensed a retail shopping area is being developed one block from their subdivision. They are concerned about the traffic, noise, and what this will do to their property values. The new zoning ordinances must ensure: A. The power be exercised in a reasonable manner. B. The provisions be clear and specific. C. Freedom from discrimination. D. All of the Above - Correct answer D. All of the Above 46 of 50 - Which of the following statements referring to general taxes is true? A. General taxes are Ad Valorem taxes. B. General Taxes are used for the general operation of the governmental agency authorized to impose the taxes. C. Real property tax (general taxes) are based on the assessed valuation of the property. D. All of the Above - Correct answer D. All of the Above 47 of 50 - Katie and Rich own a rental home they have put up FSBO. They've noticed the same woman has accompanied several potential buyers viewing the home. Katie and Rich discover she is a broker that has been "showing" the home on the sly without their permission. Instead of fighting this aggressive salesperson, the couple just go along. In which manner was agency created? P a g e 11 | 12 A. Ostensible Agency B. Ratification C. Implied Agency D. Written or Expressed - Correct answer A. Ostensible Agency 48 of 50 - The Western Acres neighborhood is a highly desirable area in which homes very seldom go on the market. The Western Acres properties placed on the market sell very quickly and usually for or above asking price. Which principal of real estate applies to the homes in Western Acres? A. Highest and Best Use B. The Law of Supply and Demand C. Anticipation D. Competition - Correct answer B. The Law of Supply and Demand 49 of 50 - Wallace and Melissa live in a small rural community of just over 15,000. They want to purchase a home and start a small home-based business. At the current time, they have a very limited income and need their own home. Where is the best place for Wallace and Melissa to turn for a home loan? A. Rural Economic and Community Development (RECD) B. VA C. FHA D. Cal-Vet - Correct answer A. Rural Economic and Community Development (RECD) 50 of 50 - Calvin is buying his first home. He has been saving and saving for years. The home he is buying has a price of $300,000 and Calvin has a down payment of $75,000. Calvin's loan is considered: A. Highly Secured B. Low Risk C. Simple Interest D. Highly Leveraged - Correct answer B. Low Risk P a g e 12 | 12