Real Estate Licensing, Ownership, and Transactions in California, Exams of Nursing

Download Real Estate Licensing, Ownership, and Transactions in California and more Exams Nursing in PDF only on Docsity! California Real Estate Principles - Questions and Answers 2024 (1) 1. The Real Estate Law is found in the a. Licensing Code b. Business and Professions Code c. Health and Safety Code d. Corporations Code ✔ Business and Professions Code (1) 2. The Real Estate Commissioner reports to the a. California Bureau of Real Estate b. governor c. Real Estate Advisory Commission d. legislature ✔ governor (1) 3. Salesperson Sam owns 25% of the outstanding shares of Rollo Realty, Inc., and broker Barbara Rollo owns the remaining shares. This division of ownership is? a. acceptable b. mandated c. discouraged d. prohibited ✔ acceptable (1) 4. Salesperson Sam is part owner of Rollo Realty, Inc. In the broker's absence, Sam frequently reviews the work of sales associates. This is? a. acceptable b. mandated c. discouraged d. prohibited ✔ prohibited (1) 5. A real estate business that is a partnership can have more than one office location, provided a. a broker partner obtains an additional license for each location b. all partners are real estate licensees c. there is a designated broker-officer d. there is at least one partner at each location ✔ a broker partner obtains an additional license for each location (1) 6. The sale or transfer of goods ordinarily held for sale in the course of business is governed in California by the? a. Business Opportunity Code b. Commercial Transfer Law c. Uniform Commercial Code d. Real Estate Law ✔ Uniform Commercial Code (1) 7. Todd, an officer of Ajax Corporation and not a real estate licensee, successfully negotiated the purchase of the Smith Widget Plant on behalf of Ajax. Todd received a commission on the sale in addition to his normal salary. Todd a. did not need a real estate license for the deal b. should have had a real estate license c. is exempt from licensing requirements d. None of these ✔ should have had a real estate license (1) 8. If a real estate license is NOT renewed before it expires, the licensee? a. is allowed to complete transactions in progress b. is allowed to finish transactions that are substantially complete c. must cease all real estate activities d. may act under authority of another agent's license for a period not to exceed 60 days ✔ must cease all real estate activities (1) 9. A real estate licensee can offer a mobile home for sale that is? a. in a manufacturing plant, ready for delivery b. transportable under an exemption from the vehicle code c. presold d. in a location where it can legally remain for one year ✔ in a location where it can legally remain for one year (1) 10. The Browns desperately want to move to Pine Bend, and they like the Smith House, which is listed by broker Bob. The Browns tell Bob they will make it worth his while if he can persuade the Smith's to accept the Brown offer on their house, and the Browns send an expensive food basket to Bob as a sign of their good faith. Bob neglects to mention this to the Smiths. This practice is a. acceptable b. mandated c. discouraged b. mandated c. discouraged d. prohibited ✔ prohibited (1) 20. Rudy opens his brokerage office and immediately places an ad in the local newspaper: List Your House with Me and I Will Pay You $500 at closing. This practice is a. acceptable b. mandated c. discouraged d. prohibited ✔ acceptable (2) 1. During the days of the Spanish rule, all land was owned by the a. missions b. government c. crown d. conquistadors ✔ crown (2) 2. The Treaty of Guadalupe Hidalgo ended a. the gold rush b. Spanish rule c. the war with Mexico d. the missions ✔ the war with Mexico (2) 3. Real Estate Law, which relies on court decisions as well as legislation, is based on a. Spanish civil law b. French civil law c. the right of appropriation d. English common law ✔ English common law (2) 4. Land disputes over the Spanish and Mexican land grants were settled by a. the Board of Land Commissioners b. the State of California c. the Spanish legal code d. taking all land for public use ✔ the Board of Land Commissioners (2) 5. In California, the term real estate is synonymous with a. land b. fixtures c. real property d. personal property ✔ real property (2) 6. Real property is NOT a. land b. real estate c. appurtenances to land d. movable ✔ movable (2) 7. The sale of the real property generally is governed by the laws of a. the state where the real property is located b. the state where the owner of the real property resides c. any of the states d. the federal government ✔ the state where the real property is located (2) 8. The sale of personal property generally is governed by the laws of a. the state where the personal property is located b. the state where the owner of the property resides c. any of the states d. the federal government ✔ the state where the owner of the property resides (2) 9. In California, the Uniform Commercial Code governs sales transactions involving a. real estate b. bulk sales of goods c. fixtures to real estate d. riparian rights ✔ bulk sales of goods (2) 10. For real estate to be conveyed, there must be an accurate a. fence line b. description c. soil chemical analysis d. water test ✔ description (2) 11. A subdivision map is a. rarely accurate b. good only to describe the entire subdivision c. never required d. a good reference for a legal description ✔ a good reference for a legal description (2) 12. The most useful method of describing a subdivision parcel is probably the a. lot and block system b. rectangular survey system c. metes and bounds system d. U.S. government survey system ✔ lot and block system (2) 13. The rectangular survey system is also called the a. U.S. government survey system b. province and township system c. subdivision system d. California system ✔ U.S. government survey system (2) 14. California has how many principal baselines a. 1 b. 2 c. 3 d. 4 ✔ 3 (2) 15. A township consists of how many sections a. 12 b. 18 c. 4 d. 36 ✔ 36 (2) 16. A section is a. 640 acres d. no interest ✔ an estate in reversion (3) 8. When Aunt Winifred died, she left a life estate in Whiteacre to her nephew George. When George dies, Whiteacre will go to George's daughter Elizabeth. Elizabeth is a a. reversioner b. remainderman c. holder of a life estate d. joint tenant with right of survivorship ✔ remainderman (3) 9. If Greenacre is deeded by Lou to Mary for the life of Nancy, Nancy has a a. a life estate b. an estate in remainder c. an estate in reversion d. no interest ✔ no interest (3) 10. The owner of a life estate can a. sell only the life estate b. never will the life estate c. sell the fee simple estate d. sell both the life estate and the fee simple estate ✔ sell only the life estate (3) 11. Joint tenants have unity of a. interest but no possession b. title but no interest c. possession and title only d. time, title, interest, and possession ✔ time, title, interest, and possession (3) 12. Barbara and Mark own Blackacre as joint tenants. Barbara's will specifies that on her death her interest in Blackacre is to go to her sister Jacquie. When Barbara dies a. Jacquie will be a tenant in common of Blackacre with Mark b. Jacquie will be a joint tenant of Blackacre with Mark c. Mark will be sole owner of Blackacre d. the probate court will have to sell Blackacre and distribute the proceeds to Mark and Jacquie ✔ Mark will be sole owner of Blackacre (3) 13. Three joint tenants share interest in a property. If one joint tenant's share is sold using the proper legal formalities, the new owner will then be a a. joint tenant with the other joint tenant's b. tenant in common with the other joint tenants c. tenant at sufferance d. remainderman ✔ tenant in common with the other joint tenants (3) 14. Community property is a. all property acquired by a spouse or registered domestic partner b. all property acquired by the husband during marriage c. the only form of ownership during marriage d. all property acquired by a spouse or registered domestic partner that is not separate property ✔ all property acquired by a spouse or registered domestic partner that is not separate property (3) 15. One of the forms of concurrent ownership is a. ownership in severalty b. tenancy in partnership c. sole proprietorship d. separate ownership ✔ tenancy in partnership (3) 16. A partner has a. an absolute right to use partnership property b. the right to assign partnership property c. the right to convey partnership property by will d. the right to possession of partnership property for partnership purposes ✔ the right to possession of partnership property for partnership purposes (3) 17. Absolute control, as well as absolute liability, belongs to a a. sole proprietor b. corporate shareholder c. limited partner d. trustee ✔ sole proprietor (3) 18. When doing business in California, a corporation chartered in California is a a. domestic corporation b. foreign corporation c. real estate investment trust d. general partnership ✔ domestic corporation (3) 19. Title to a spouse's marital property can be transferred upon death by use of a(n) a. oral will b. tenancy in common c. living trust d. letter of intent ✔ living trust (3) 20. A limited partner is a. responsible for partnership activities b. a general partner in some instances c. not liable for partnership debts beyond the amount invested d. required to take part in partnership business ✔ not liable for partnership debts beyond the amount invested (4) 1. A person who dies without a will dies a. testate b. intestate c. with an executor d. in eminent domain ✔ intestate (4) 2. The testator names a(n) a. executor or executrix b. testator c. devisor d. administrator ✔ executor or executrix (4) 3. Someone who receives real property by will is called a a. devise b. devisee c. testator d. codicil ✔ devisee (4) 15. In the event of default, real property may be sold without court action if the mortgage or other lien contains a a. trust deed b. power of sale c. tax deed d. right of entry ✔ power of sale (4) 16. The court order following a judgment for money is a a. certificate of sale b. special limitation c. writ of execution d. trustee in bankruptcy ✔ writ of execution (4) 17. The power of the state to take private property for public use is called a. eminent domain b. equitable estoppel c. a public grant d. abandonment ✔ eminent domain (4) 18. To be effective, a deed must be a. made on a printed form b. signed by the grantor c. delivered to the grantee by the grantor personally d. all of these ✔ signed by the grantor (4) 19. The transfer of title from grantor to grantee, and from that grantee to a subsequent grantee, and so on, is called a. a cloud on the title b. the chain of title c. delivery and acceptance d. an acknowledgment ✔ the chain of title (4) 20. Legal title conveyed by a deed of trust may be regained by a a. warranty deed b. trust deed c. reconveyance deed d. sheriff's deed ✔ reconveyance deed What power of the state allows it to license real estate agents? ✔ police power A fictitious name is any name than that of a? ✔ real estate licensee What is DBA? ✔ doing business as A form which is unique to the entity that created it is called? ✔ proprietary Wording that is dictated by law is called? ✔ statutory language A mobile home dealer license is obtained from the? ✔ Department of Housing and Community Development (HCD) A mortgage loan originator (MLO) must register annually on the? ✔ Nationwide Mortgage Licensing System & Registry (NMLS) The benefit derived from the business's favorable relationship with its customers is called? ✔ goodwill A stock transfer requires a ? license, as set out in the ? Code ✔ Corporations What year did California become a state? ✔ 1850 Real Property is often described as a bundle of rights. What are the 5 major rights? (PUEED) ✔ possession, use, enjoyment, exclude, dispose Real property is composed of what 4 elements? (lAAF) ✔ land, fixtures, anything incidental or appurtenant to the land, anything immovable on the land Underground water that is not confined to a defined stream is? ✔ percolating water The upper limit of percolating water below the earth's surface, at a depth of a few feet or hundreds of feet is called? ✔ water table (groundwater level) What is considered to "run with the land"? ✔ appurtenances Cultivated crops are called? ✔ emblements The listing agreement between seller and buyer should identify the items the seller wants to ? ✔ remove What are the 5 tests to determine if a specific thing is a fixture? (MARIA) ✔ method, adaptability, relationship, intent, agreement An item attached for use in a trade or business is called a? ✔ trade fixture Can a court of another state decide an issue involving California real estate? Yes/No ✔ No What are the 3 types of legal description of land? ✔ metes and bounds, lot and block, section and township What direction in the section and township method of describing land runs east-west? ✔ base line What direction in the section and township method of describing land runs north-south? ✔ meridian How many square miles is a township? ✔ 36 How many square miles in a section? ✔ 1 How many acres are in a section? ✔ 640 Townships run north-south in groups called? ✔ tiers Townships run east-west in groups called? ✔ ranges A partner's right in property owned by the partnership can be community property? Yes/No ✔ No All partners are liable for debts of the partnership. Yes/No ✔ Yes The owners of a corporation are called? ✔ shareholders A nonprofit corporation is owned by? ✔ members Corporations created in the state where they are chartered are called? ✔ domestic corporations Corporations created outside the state where they are chartered are called? ✔ foreign corporations The type of corporation where all shareholders must be individuals with fewer than 100 shareholders is called an? ✔ S corporation Limited partners can take part in management of the partnership. Yes/No ✔ no, and if the do they become a general partner Taxes and fees are higher for an LLC than for a partnership. Yes/No ✔ Yes Using a trust to hold title is a way to keep the true owner's identity hidden. Yes/No ✔ Yes A trust created by the terms of a will to care for the decedent's children until they reach adulthood is called a? ✔ testamentary trust The type of trust which hold various forms of real estate or mortgages for the benefit of 100+ investors who own shares of the trust is called a? ✔ (REIT) real estate investment trust The legal determination of property ownership of a person who dies without having a will is called? ✔ intestate succession A document made by an owner of property who is legally competent to do so, to pass title to the property to another after death is called a? ✔ will A person who makes a will is called a? ✔ testator A person who dies leaving a will, is said to die? ✔ testate The transfer of real property by will is called? ✔ devise The person receiving property by will is called a? ✔ devisee The transfer of personal property by will is referred to as? ✔ the bequest of a legacy The recipient of personal property by will is called a? ✔ legatee A document used to amend a will is called a? ✔ codicil Every word of a holographic will must be in the testator's handwriting? ✔ Yes How many witnesses must be present for a witnessed will? ✔ 2 The court appointed person named to act of behalf of the decedent? ✔ administrator The decedent's representative named in a will? ✔ executor The process by which rainfall wears away the surface of the soil is called? ✔ errosion Want are the 3 ways to acquire property by using it without the owner's permission? ✔ adverse possession, prescription and abandonment What are the 5 steps to acquire property by adverse possession? (ONCHA) ✔ open, notorious, continuous, hostile and adverse If you buy real estate at an execution sale, you will receive a? ✔ sheriff's deed What are the 7 requirements for a valid deed? ✔ (1) in writing (2) description of parties (3) grantor legally capable (4) adequate description of PIQ (5) granting clause (6) signed by grantor (7) delivered and accepted Is it a legal requirement that a deed be dated? ✔ No, but advised Are love and affection the only consideration needed for a valid deed? ✔ Yes A document is executed when it is ? ✔ signed The only form of deed that conveys after acquired title is a ? ✔ grant deed In order for a deed to be recorded it must be ? ✔ acknowledged A person who dies without a will dies? ✔ intestate The testator names a(an)? ✔ executor or executrix Someone who receives real property by will is called a ? ✔ devisee (5) 1. A cloud on the title is ? a. not important b. easily remedied c. no impediment to a property sale d. a possible impediment to a property sale ✔ a possible impediment to a property sale (5) 2. A mechanics lien may be filed by a a. laborer b. tenant c. advertiser d. customer ✔ laborer (5) 15. Marilyn's 40-acre tract, purchased from Alan, is landlocked, which means she a. has to enter it by helicopter b. has an easement in gross over any land she chooses c. has an easement by implication of law over any land she chooses d. can get an easement by necessity over Alan's adjoining land. ✔ can get an easement by necessity over Alan's adjoining parcel (5) 16. Al sold Blackacre to Betty, giving her an easement over Whiteacre. Years later, Al bought Blackacre back from Betty. What effect did his purchase have on the easement a. The easement stayed with Betty b. The easement is owned by Al c. The purchase terminated the easement d. The purchase had no effect on the easement ✔ the purchase terminated the easement (5) 17. The maximum homestead exemption may be claimed by any homeowner who is a. a member of a family unit b. older than 65 years of age c. married d. single ✔ older than 65 years of age (5) 18. A family unit is a. defined by law b. limited in size c. limited to the relatives of one's spouse d. at least 3 people ✔ defined by law (5) 19. The homestead exemption for a single person is at Least a. $175,000 b. $100,000 c. $75,000 d. $50,000 ✔ $75,000 (5) 20. The homestead exemption for a homeowner who is a member of a family unit is at least a. $175,000 b. $150,000 c. $125,000 d. $100,000 ✔ $100,000 (6) 1. Generally an agent works for the a. principal b. third person c. subagent d. California Bureau of Real Estate ✔ principal (6) 2. A minor a. may be a licensed real estate agent b. is anyone younger than 21 years of age c. may be a licensed real estate salesperson d. is anyone younger than 18 years of age ✔ Is anyone younger than 18 years of age (6) 3. Someone appointed to carry out a particular transaction is a a. general agent b. special agent c. secret agent d. subagent ✔ special agent (6) 4. An independent contractor is distinguished by a. responsibility for Social Security and other payments b. no flexibility in setting work hours c. little control over work methods d. no legal obligation to employer ✔ responsibility for Social Security and other payments (6) 5. The California Real Estate Law treats a real estate salesperson as a(n) a. independent contractor of the broker b. employee of the broker c. sole proprietor d. partner of the broker ✔ employee of the broker (6) 6. A salesperson is a broker's a. principal b. agent c. subagent d. third person ✔ agent (6) 7. An agency agreement to perform an act that requires a writing a. must itself be in writing b. may be oral or written c. cannot be an express agreement d. violates the statute of frauds ✔ must itself be in writing (6) 8. To be enforceable, all real estate sales contracts a. may be oral or written b. must be in writing c. must comply with the equal equities rule d. must be completed within 90 days of origination ✔ must be in writing (6) 9. As a contract, a real estate agency agreement a. can have any objective b. needs only to be made by parties with the capacity to contract c. does not need to be supported by consideration d. must meet the requirements for a valid contract ✔ must meet the requirements for a valid contract (6) 10. Real estate commission rate a. are established by the California Bureau of Real Estate b. should be no lower than 2% c. should be no higher than 10% d. are not fixed by law ✔ are not fixed by law (6) 11. All real estate agency agreements must a. expire in 90 days b. be in writing c. be signed before a buyer is solicited d. be approved by the California Bureau of Real Estate ✔ be in writing (7) 3. Mary persuaded her elderly Aunt Agnes to buy a grossly overpriced condominium. Mary knew the price was to high, but she received a commission on the sale from the seller. Aunt Agnes may complain of a. actual fraud and undue influence b. negligent misrepresentation c. constructive fraud d. commercial frustration ✔ actual fraud and undue influence (7) 4. The contract Haji Ababe accepted states a purchase price "as appraised on May 12, 2014, by Mike Morton, MAI". Based on this provision, the contract is a. void b. voidable c. unenforceable d. enforceable ✔ enforceable (7) 5. Can broker Bob enforce an oral listing agreement for his neighbor's home a. Yes b. No c. Possibly d. Only if he did not have a contract form handy ✔ No (7) 6. When both parties agree to cancel a contract, they effect a a. rescission b. release c. novation d. reformation ✔ rescission (7) 7. Todd Miller made an offer for the Brown residence, and the Browns accepted the offer. On reconsidering, Todd decides to back out of the deal. The Browns agree to let hi do so. Todd and the Browns then sign a(n) a. novation of the purchase contract b. agreement rescinding the purchase contract c. assignment of the purchase contract d. agreement reforming the purchase contract ✔ agreement rescinding the purchase contract (7) 9. Lonnie and Karen have a contract to buy the Santos house. Following a four-day rainstorm, the Santos house was pushed off its foundation by a mud slide and is now resting halfway over a ravine. The contract probably is a. discharged because performance is impossible b. still in effect c. discharged because performance is impossible d. renegotiable at the discretion of the seller ✔ discharged because performance is impossible (7) 10. If Jane's performance of her sales contract becomes economically impractical, she should a. cancel the contract unilaterally b. ask that the contract be terminated c. claim the purchase is a mistake d. tear up the contract ✔ ask that the contract be terminated (7) 11. Failure to perform a contract is a a. rescission b. breach c. novation d. reformation ✔ breach (7) 12. Fred signed a contract to sell his farm to George. Fred had second thoughts and refused to sell, but the sale went through anyway. How a. George threatened Fred b. George received a court order for specific performance of the contract c. Once signed, a contract cannot be terminated d. Fred increased the purchase price ✔ George received a court order for specific performance of the contract (7) 13. The time period in which a lawsuit can be brought is set by the a. equal dignities rule b. statute of frauds c. statute of limitations d. probate court ✔ statute of limitations (7) 14. The statute of limitations for an action based on a real estate contract is a. unlimited b. 2 years c. 4 years d. 20 years ✔ 4 years (7) 15. The rule for preprinted contracts is a. handwriting takes precedent only over printing b. printing takes precedence over typing c. handwriting takes precedence over both typing and printing d. typing takes precedence over handwriting ✔ handwriting takes precedence over both typing and printing (7) 16. A property description including the words "250 acres, more or less" is a. fatally defective b. not definite enough c. sufficient if reasonably close to the exact acreage d. incomplete without a metes and bounds description ✔ sufficient if reasonably close to the exact acreage (7) 17. A well-drafted real estate purchase contract will include provisions for a. the buyer's possession of the property b. the financing terms c. prorations of property taxes d. all of these ✔ buyer's possession of the property, financing terms, prorations of property taxes (7) 18. Unless the seller provides the necessary documentation, part of the proceeds of a sale of real property must be withheld for federal tax purposes as provided by a. FHA b. Fannie Mae c. FIRPTA d. IRS ✔ FIRPTA (7) 19. Liquidated damages paid on default by the buyer of a single family residence who intended to occupy the dwelling cannot exceed what percentage of the purchase price a. 1 b. 3 c. 7 d. holder ✔ mortgagee (8) 9. The highest bidder at a judicial foreclosure receives a a. deed b. contract c. title d. certificate of sale ✔ certificate of sale (8) 10. In a deed of trust, the borrower is the a. trustor b. trustee c. beneficiary d. holder ✔ trustor (8) 11. In a deed of trust, the lender is the a. trustor b. trustee c. beneficiary d. holder ✔ beneficiary (8) 12. The first step in bringing about a trustee's sale is to prepare a a. declaration of default b. notice of levy c. request for notice d. notice of default ✔ declaration of default (8) 13. There is no right of redemption following a a. strict foreclosure b. trustee's sale c. judicial foreclosure d. mortgage foreclosure ✔ trustee's sale (8) 14. An ARM is a a. graduated payment mortgage b. growing equity mortgage c. mortgage in which the interest rate changes periodically based on an index d. reverse annuity mortgage ✔ mortgage in which the interest rate changes periodically based on a index (8) 15. MOST adjustable rate mortgages are a. assumable b. not assumable c. held by the sellers d. not allowed for federal institutions ✔ assumable (8) 16. Interest rate and payment can change every three to five years in a a. graduated payment mortgage b. renegotiable-rate mortgage c. growing equity mortgage d. reverse annuity mortgage ✔ renegotiable-rate mortgage (8) 17. The TILA-RESPA law applies to a. HELOCs b. construction-only loans c. loans made by a person who makes five or fewer mortgages in a calendar year d. reverse mortgages ✔ construction-only loans (8) 18. RESPA covers the a. listing agreement b. broker's commission c. Closing Disclosure form d. loan application form ✔ closing disclosure form (8) 19. David Yoo bought Whiteacre and is making the former owner's original loan payments. If David defaults, the seller will be obligated on the loan. Which statement is TRUE a. David bought the loan b. David bought the property subject to the loan c. David is subject to a due-on-sale clause d. David does not have title to Whiteacre ✔ David bought the property subject to the loan (8) 20. A lender that discriminates against a loan applicant because of race has violated the a. Equal Dignities Rule b. Truth in Lending Act c. Equal Credit Opportunity Act d. Lender's Law ✔ Equal Credit Opportunity Act (9) 1. A California veteran might have a home loan insured by a. FHA b. VA c. CalVet d. Fannie Mae ✔ FHA (9) 2. FHA appraisal value is used to set the upper limit of the a. purchase price b. loan amount c. construction cost d. seller contribution ✔ loan amount (9) 3. In addition to a monthly charge, FHA mortgage insurance includes a one time payment on a purchase loan that is a. 1.75% of the loan b. variable c. negotiable d. determined by lender ✔ 1.75% of the loan (9) 4. For an existing structure, the maximum FHA mortgage loan term is a. 15 years and 32 days b. 25 years c. 30 years d. 40 years ✔ 30 years (9) 5. One discount point will increase a lender's effective yield by approximately a. 1/4 % ✔ land contract (9) 17. In a sale leaseback a. land is never sold b. buildings are always sold c. both land and buildings can be sold d. only a leasehold interest is sold ✔ both land and buildings can be sold (9) 18. The secondary mortgage market does NOT deal in a. primary mortgage market instruments b. junior liens c. issuing loans d. mortgage backed securities ✔ issuing loans (9) 19. Which is NOT a part of the primary mortgage market a. FHA b. VA c. CalVet d. Fannie Mar ✔ Fannie Mae (9) 20. Ginnie Mae securities are NOT backed by a. FHA insured loans b. VA guaranteed loans c. Farmer Mac guaranteed loans d. CalVet loans ✔ CalVet loans (10) 1. To create an escrow, there must be a. a binding contract b. unconditional delivery c. real property d. all of these ✔ a binding contract (10) 2. Escrow instructions can be a. changed by oral agreement b. only unilateral c. changed only by written agreement of both parties d. all of these ✔ changed only by written agreement of both parties (10) 3. The escrow holder acts in the capacity of a. mediator b. agent of both parties c. advisor on the transaction d. surety ✔ agent of both parties (10) 4. Which must be licensed as escrow agents to perform such services a. Attorneys b. Title Insurance Companies c. Banks d. Escrow Companies ✔ Escrow Companies (10) 5. In Southern California, escrows are MOST often held by a. savings and loan associations b. escrow companies c. title insurance companies d. attorneys ✔ escrow companies (10) 6. By law a licensed escrow agent must a. pay a referral fee to a real estate agent b. disclose information concerning the transaction to outside parties c. be a corporation d. have a real estate brokers license ✔ be a corporation (10) 7. A real estate broker can serve as an escrow a. through associates b. with other brokers c. when he or she represents one of the parties to the transaction d. under a fictitious business name ✔ when he or she represents one of the parties to the transaction (10) 8. The legal action that may be brought by an escrow holder is a. quiet title b. interpleader c. adverse possession d. injunction ✔ interpleader (10) 9. Providing a copy of any buyer broker agreement is the responsibility of the a. buyer b. seller c. escrow agent d. real estate agent ✔ buyer (10) 10. Providing tenant information is the responsibility of the a. buyer b. seller c. escrow agent d. real estate agent ✔ seller (10) 11. Prorations at closing on amounts other than interest payments usually are based on a. a 30 day month b. a 31 day month c. the actual calendar number of days d. the number of days indicated by the buyer ✔ 30 day month (10) 12. If closing is on May 19, what amount will be charged to the buyers on a total property tax of $4,320 paid by the sellers for the current tax year? Remember to use the standard number of days in the month. a. $492 b. $504 c. $1,584 d. $1,728 ✔ $504 (10) 13. Closing is on June 15, and rent of $2,400 has been prepaid for the current month. What amount will the seller be debited at closing if the buyer receives credit for the day of closing? a. $1,280 (11) 5. When all past due property taxes are paid, the county tax collector issues a a. receipt for unpaid taxes b. letter of credit c. certificate of redemption d. release of equity ✔ certificate of redemption (11) 6. The buyer of property at an auction by the tax collector receives a a. certificate of sale b. release of equity c. quitclaim deed d. tax deed ✔ tax deed (11) 7. A benefit assessment also may be called a a. tax credit b. special assessment c. community assessment d. documentary transfer tax ✔ special assessment (11) 8. The use of property assessments was expanded by the a. Senior Citizens' Tax Act b. Mello-Roos Community Facilities Act c. State Board of Equalization d. Housing Economic Recovery Act ✔ Mello-Roos Community Facilities Act (11) 9. A deed may show on its face that which of the following was paid a. Release of equity b. Gift tax c. Deed tax d. Documentary transfer tax ✔ Documentary transfer tax (11) 10. Sales and use tax are the responsibility of the a. Internal Revenue Service b. Franchise Tax Board c. State Board of Equalization d. Department of Housing and Community Development ✔ State Board of Equalization (11) 11. In California there is a state sales tax on a. food b. buildings to be removed from land by the buyer as part of a transaction c. fixtures sold as part of a business d. inventory sold as part of a business ✔ fixtures sold as part of a business (11) 12. The State of California collects a. federal income tax b. gift tax c. state income tax d. inheritance tax ✔ state income tax (11) 13. A gift is made a. by a donor to a beneficiary b. when an individual voluntarily transfers property for anything less than its fair market value c. any time property is transferred between parent and child d. when like kind property is exchanged ✔ when an individual voluntarily transfers property for anything less than its fair market value (11) 14. Gift tax is payable when the total value of the gift to an individual in one year is more than a. $8,000 b. $14,000 c. $15,000 d. $28,000 ✔ $14,000 (11) 15. Sam gave his friend Joe $15,000 for his tuition at Old Ivy, sending the money directly to the school. Must a gift tax return be filed a. Yes, because this is a gift b. No, because this gift has an exemption c. Yes, so that the exemption can be claimed d. No, because this is not considered a gift ✔ No, because this is not considered a gift (11) 16. Mario died in 2014, leaving only his separate property estate valued at $500,000. Must an estate tax return be filed a. Yes b. No c. Only if Mario was a widower d. Only if the estate is probated ✔ yes (11) 17. The rate of federal income tax paid depends on the taxpayer's a. tax bracket b. state income tax paid c. location d. source of income ✔ tax bracket (11) 18. Property that can be depreciated for income tax purposes is called a. recovery property b. tax basis c. boot d. like kind property ✔ recovery property (11) 19. With respect to investment property, an investor can make use of a. the residence replacement rule b. exclusion from taxation c. property tax postponement d. mortgage interest deductions from property income ✔ mortgage interest deductions from property income (11) 20. For 2013, all of the following were deductions from a homeowner's gross income for purposes of federal income taxation EXCEPT a. mortgage interest on a loan of $75,000 b. PMI on a loan that originated in 2013 c. mortgage interest on combined first and second home loans totaling $935,000 d. depreciation based on a 39 year schedule ✔ depreciation based on a 39 year schedule (12) 1. An apartment in San Francisco can be leased for a term of no more than a. 150 years a. Marital status b. National ancestry c. Whether the prospective tenant is on welfare d. Tenant's income ✔ tenant's income (12) 13. On May 15, Jacquie Jones notified her landlord that she would be vacating her retail store location on June 30. Jacquie has a month to month periodic tenancy. Until what date will she incur rent a. June 15 b. June 30 c. July 15 d. July 30 ✔ June 30 (12) 14. A landlord must follow the legal requirements for an eviction a. from leased premises b. but can shorten the notice required if the tenant agrees c. unless the tenant can be physically removed d. unless the housing is government subsidized ✔ from leased premises (12) 15. A landlord may begin eviction proceedings with a(n) a. notice of termination b. notice of abandonment c. notice to pay or quit d. order of eviction ✔ notice to pay or quit (12) 16. The sheriff or marshal can forcibly remove a tenant by a a. judgment of eviction b. writ of possession c. notice of eviction d. notice to pay or quit ✔ writ of possession (12) 17. Harry's Haberdashery has a percentage lease based on 5% of gross income of up to $25,000 per month and 2.5% of gross income above that amount. The minimum Harry must pay is $1,000 per month. For a month in which Harry has a gross income of $47,000, what will be his rent payment a. $1,800 b. $4,675 c. $2,800 d. $3,675 ✔ $1,800 (12) 18. The owner of 417 Main, an office building, receives a guaranteed monthly income from her tenants and pays no expenses. She has a a. gross lease b. trust lease c. percentage lease d. net lease ✔ net lease (12) 19. A property manager a. must be a real estate broker b. is the property owner's agent c. is the tenant's agent d. is not an agent ✔ is the property owner's agent (12) 20. James moved out of his apartment at the end of the lease term. The landlord will be allowed to increase the rent for a new tenant to reflect the current market value because the local rent control ordinance a. provides for vacancy control b. provides for vacancy decontrol c. is based on an index d. is favorable to the tenant ✔ provides for vacancy decontrol (13) 1. A house is appraised at $423,000, even though it cost $435,000 to build 3 years earlier. Which factor could NOT have contributed to the loss in value a. Regression b. Gentrification c. Functional obsolescence d. Supply and demand ✔ gentrification (13) 2. Ed Wilson owns a vacant lot and employs an appraiser to determine the property's a. growth b. reproduction cost c. replacement cost d. highest and best use ✔ highest and best use (13) 3. Since the Peterson factory closed, houses in Sunny Acres are taking longer to sell, and prices have gone down. This is a result of a. highest and best use b. supply and demand c. contribution d. conformity ✔ supply and demand (13) 4. A house that benefits from the desirability of its neighboring properties is an example of the principle of a. balance b. contribution c. progression d. regression ✔ progression (13) 5. Charlie Addison has a deluxe five bedroom house in a neighborhood of modest 3 bedroom houses. How the value of Charlie's house will be affected is an example of a. substitution b. scarcity c. progression d. regression ✔ regression (13) 6. An improvement to a house may or may not create a corresponding increase in the house's market value. This is an example of a. balance b. progression c. contribution d.regression ✔ contribution (13) 7. The Miejas are looking forward to eventually retiring on the profit they will make from selling their house. Their attitude is an example of a. progression b. growth a. $736,940 b. $525,350 c. $529,300 d. $568,800 ✔ $529,300 (13) 19. The step in which the appraiser arrives at a final opinion of value is called a. equilibrium b. reconciliation c. substitution d. equalization ✔ reconciliation (13) 20. The most comprehensive method of conveying the result of an appraisal is the a. self contained report b. form report c. restricted use report d. summary report ✔ self contained report (14) 1. In contracting for any work on someone else's property, a contractor's license is NOT needed a. by an attorney b. by a real estate broker c. by a real estate salesperson d. if the work costs less than $500 ✔ if the work costs less than $500 (14) 2. A contractor's license can be suspended or revoked for a. abandoning a project b. violating building laws c. breaching a construction contract d. all of these ✔ abandoning a project, violating building laws, breaching a construction contract (14) 3. A type of roof with two steeply pitched planes is called a a. gambrel roof b. flat roof c. gable roof d. salt box roof ✔ gable roof (14) 4. A Dutch colonial house is distinguished by a a. hip roof b. shed roof c. gable roof d. gambrel roof ✔ gambrel roof (14) 5. Ornate exterior woodwork is usually found on a a. Colonial American house b. Queen Anne Victorian house c. contemporary house d. California ranch house ✔ Queen Anne Victorian house (14) 6. An architectural style in which homes share a common wall is called a. Colonial American b. Victorian c. Spanish d. a town house ✔ town house (14) 7. The location of a house on its site is called its a. view b. architecture c. orientation d. floor plan ✔ orientation (14) 8. The sun's arc in the sky is highest in a. summer b. fall c. winter d. spring ✔ summer (14) 9. A good floor plan has a. the kitchen near the garage b. bedrooms near living areas c. one bathroom for every three bedrooms d. no closets in the bedrooms, to conserve space ✔ kitchen near the garage (14) 10. Earthquake protection is provided by a. anchor bolts b. cross-bracing c. plywood sheathing d. all of these ✔ anchor bolts, cross-bracing, plywood sheathing (14) 11. A two story platform house is built a. with studs that extend from the first floor to the ceiling of the second floor b. one story at a time c. with posts within the house that support beams d. with no interior supporting walls ✔ one story at a time (14) 12. The vertical supports in a wood frame house are called a. studs b. plates c. joists d. beams ✔ studs (14) 13. A post and beam frame house is built a. with studs that extend from the first floor to the ceiling of the second story b. one story at a time c. with posts within the house that support beams d. with interior supporting walls ✔ posts within the house that support beams (14) 14. A brick or stone exterior finish is called a. glazing b. paneling c. veneer d. tile ✔ veneer (14) 15. The main roof supports are the d. all of these ✔ sale, lease, financing (15) 7. The subdivided lands law applies to subdivisions of land into a. 2 or more parcels b. 5 or more parcels c. 12 or more parcels d. 25 or more parcels ✔ 5 or more parcels (15) 8. An out of state subdivider of California land a. must procure a public report b. need not procure a public report c. can decide whether to procure a public report d. needs a public report only to finance a California subdivision ✔ must procure a public report (15) 9. A standard subdivision includes a. single family residences and condominiums b. no common interests c. only residential property d. no irregular shaped parcels ✔ no common interests (15) 10. A subdivision consisting of individually owned lots as well as areas owned in common is a a. planned development b. community apartment project c. condominium project d. stock cooperative ✔ planned development (15) 11. A subdivision consisting of individual ownership of airspace and areas owned in common is a a. planned development b. community apartment project c. condominium project d. stock cooperative project ✔ condominium project (15) 12. A corporation holds title to property and shareholders having a right of occupancy to part of the property own the corporation in a a. planned development b. community apartment project c. condominium project d. stock cooperative project ✔ stock cooperative project (15) 13. The subdivision public report is issued by the a. advisory agency b. planning commission c. Real Estate Commissioner d. California Bureau of Real Estate ✔ Real Estate Commissioner (15) 14. A final subdivision public report has an initial term of a. one year b. two years c. four years d. five years ✔ five years (15) 15. The Subdivision Map Act allows a. the state to have a say in how property is subdivided b. local jurisdictions to determine whether a subdivision is desirable c. developers to dictate how subdivision will take place d. neighboring landowners to petition to have land subdivided ✔ local jurisdictions to determine whether a subdivision is desirable (15) 16. A proposed subdivision is covered by the a. Subdivision Map Act b. Subdivided Lands Law c. Contractors' License Law d. Contractors' State License Board ✔ Subdivided Lands Law (15) 17. Disclosure of the fact that property is located in a special studies zone must be made by the a. city council or board of supervisors b. property buyer c. real estate agent who represents the seller d. seller, in addition to the real estate agent ✔ real estate agent who represents the seller (15) 18. Discrimination in housing is prohibited by a. federal law b. state law c. both state and federal laws d. neither state nor federal law ✔ both state and federal law (15) 19. A homeowner whose property is exempt from the requirements of the Federal Fair Housing Act will still be subject to the a. 1866 Civil Rights Act b. Housing Financial Discrimination Act c. Subdivision Map Act d. Subdivided Lands Law ✔ 1866 Civil Rights Act (15) 20. The broadest prohibition against all forms of discrimination in the sale of residential real estate is found in a. the Federal Housing Act b. Jones vs Mayer c. California law d. the Civil Rights Act of 1968 ✔ California law