Practice Exam Sales License (2)

A  4523

B  4524

C  4522

D  4525

A  The risk that the property has a bad location

B  The risk that the required return on investor capital will not be met

C  The risk that an investor cannot secure financing at an affordable rate

D  The risk that is directly related to leverage

A  You are interviewing the broker as much as the broker is interviewing you.

B  Very few licensees are selected; it’s highly competitive.

C  Being a new licensee is a distinct advantage.

D  Most brokers prefer not to hire new licensees.

A  An escalation clause

B  Full price or over full price

C  Waive appraisal

D  A quick closing

A  Client

B  Customer

C  Seller

D  Buyer

A  “All buyers are required to sign buyer representation agreements.”

B  “Without a written representation agreement, I don’t represent you.”

C  “Buyer representation agreements don’t obligate you in any way.”

D  “You won’t owe as much commission if we work under an agreement.”

A  Robert is a dual agent

B  Robert must also be an attorney

C  Robert is in violation of agency law

D  Robert is breaching his fiduciary duty

A  The seller repairs holes in the walls and documents that they were completed six days before close.

B  The seller hires a contractor to repair holes in the wall and informs the buyer that the contractor never provided a receipt.

C  The seller forgets to repair holes in the wall and places a plant in front of them before the buyer arrives for final verification of property.

D  The seller hires a contractor to repair holes in the wall starting the day the buyer is scheduled to verify final condition.

A  One in which only the person who finds the buyer gets paid

B  One in which there’s no end date

C  One in which the price is negotiable within a specified range

D  One in which anyone can find the buyer, but the listing agent still gets paid

A  Exclusive right to sell

B  Exclusive right to collect commission

C  Exclusive agency

D  Net listing

A  Criminal attorneys

B  Home inspectors

C  Game wardens

D  Divorce attorneys

A  Buy display advertising

B  Spend more than usual on marketing campaigns

C  Send a mailer

D  Join a team

A  Personal contact number

B  Personal photo

C  City and state where the brokerage is located and jurisdiction

D  License number and responsible broker’s identity

A  Marketing clause

B  Multiple listing clause

C  Provisionary clause

D  Broadcast clause

A  The seller wishes to lower the list price to encourage more offers.

B  A buyer has made an offer below list price and the seller is willing to take that offer.

C  The seller wants to raise the list price after receiving no offers.

D  The seller wants to move up the expiration date because the property sold right away.

A  Retail

B  Healthcare

C  Leisure

D  Manufacturing

A  Lenders and their shareholders don’t like to keep properties on their books longer than necessary.

B  There are special government financing programs for purchasing REOs.

C  There are no agent commissions to pay for REO transactions.

D  Federal regulations require that REOs be sold below market value.

A  The asset is worth more because of capital improvements.

B  The owner/investor is making less income from the property than previously.

C  Investors can take a business deduction for annual depreciation.

D  The asset is worth less because the economy took a downturn.

A  Litigation

B  Condemnation

C  Arbitration

D  A second round of mediation

A  They require no down payment.

B  They’re always in demand.

C  Because they’re rare, and therefore valuable.

D  They need somewhere to live.

A  Monthly

B  Yearly

C  Quarterly

D  Weekly

A  Including the brokerage name and main phone number, in addition to a licensee’s own name and phone number on an advertisement

B  Preparing a written agreement that accurately states a purchase price

C  Preparing a written agreement that falsely states a purchase price

D  Making a reasonable effort to ensure all parties to a written agreement have a copy of the agreement

A  The seller must reduce the price to the appraised value.

B  The parties may choose to negotiate the difference.

C  The buyer will be forced to terminate the contract immediately.

D  A new appraisal will always be ordered.

A  Laws related to the sale of securities

B  It does not contain laws

C  Laws related to real property contracts, such as contract of sale or land installment contracts

D  Laws related to theft and other crimes

A  $24,000

B  $36,000

C  $48,000

D  $3,000

A  Are relatively liquid

B  Are larger properties

C  Are relatively rare, so tenants compete for available units

D  Require a larger down payment, so there is less to finance

A  The commuting one, because most business is conducted in the car.

B  The commuting one, because he will spend most of his time in the field.

C  The closer one, because gas is expensive.

D  The closer one, because he can meet clients at the office easier.

A  They were hoping for window air conditioning.

B  Older units are bigger and more unsightly.

C  Central air conditioning isn’t a sustainable technology.

D  The unit may need to be replaced.

A  Vacant units

B  The difference between usable square footage and rentable square footage

C  Stairwells and lobbies

D  Bathrooms and hallways

A  With material defects

B  Under warranty

C  By default

D  As-is

A  Michael is allowed to tell any prospective buyers and their agents that Felicity will not sell to Hispanics.

B  Michael may follow Felicity’s instructions and show the house to anyone except Hispanics.

C  Michael is allowed to prepare an advertisement which states, “Home for sale, $140,000. No Hispanics.”

D  Michael may inform Felicity of fair housing laws.

A  The Central Intelligence Agency

B  The California Department of Real Estate Commissioner

C  The Internal Revenue Service

D  The Federal Bureau of Investigation

A  Inspections, Reports, and Certificates

B  Government Requirements and Retrofit

C  Escrow and Title

D  Other Costs

A  30

B  21

C  10

D  Three

A  Yes, because she should meet them in person before working for them.

B  No, this is how agents work with buyers.

C  No, this is how all agents work.

D  Yes, because this constitutes the illegal practice of real estate.

A  That 70% of their income will go toward expenses

B  That 70% of renters will leave in the first two years

C  They must receive 70% return on their investment

D  The purchase price shouldn’t be more than 70% of the repaired value

A  In the firm’s safe or safety deposit box until closing

B  In the firm’s general business account, with a ledger entry for the client’s name, labeled “trust fund”

C  In a trust fund account or neutral escrow

D  In an interest-bearing account

A  Terminate her agency relationship

B  Inform all parties to the transaction

C  Say nothing

D  Inform the seller

A  Financial

B  Business

C  Capital

D  Leverage

A  Seller Instruction to Exclude from the MLS

B  Modification of Terms

C  Cancellation of Listing

D  Termination of Buyer Agency

A  Advertise the listing on the MLS

B  Prepare advertising for social media and local newspapers

C  Negotiate a higher commission, as there is a greater burden on the agent to find a buyer

D  Fully inform the seller about the dangers of reduced market exposure

A  Closer to parking

B  Rooms open to interior of the building

C  More amenities

D  Nothing

A  A landlord refuses to rent to a couple that have been on the waiting list for four months, because when they were called and given notice of their approval, the tenants refused to pay the security deposit.

B  A landlord refuses to rent to a tenant who has poor credit and unstable employment history.

C  An owner refuses to sell a house to an unmarried couple on the basis of his religious beliefs that having a sexual relationship outside of marriage is sinful.

D  An owner refuses to sell a house to a same-sex couple that offered less than the asking price.

A  Laura must stay with Bill for at least two years before she transfers brokerages.

B  Laura likely won’t get a salary for six weeks.

C  Laura will be put on a three-month probation.

D  Laura may leave the brokerage and join another at any time.

A  Seek out a broker who does a lot of business.

B  Work a regular work week (Monday through Friday, 9 a.m. to 5 p.m.).

C  Try to be all things to all people.

D  Work hard and stick with it.

A  Monica should tell all prospective buyers that the seller has HIV.

B  Monica should not be the listing agent for her friend.

C  Monica cannot tell others about Brian’s HIV status.

D  Monica should purchase Brian’s property.

A  Net operating income

B  An operating statement

C  Effective gross income

D  Potential gross income

A  Hot

B  Static

C  Cold

D  Dynamic

A  Escrow can’t disburse the money without your signature

B  Escrow is FDIC insured.

C  My company will cover any losses

D  Escrow is bonded

A  2019

B  2029

C  2048

D  2039

A  Thursday, August 1

B  Saturday, August 3

C  Friday, August 2

D  Wednesday, July 31

A  They want wealthier clients than their friends and family.

B  Their brokers don’t want them marketing to that audience.

C  They are afraid they’ll be asked to reduce their commissions.

D  They don’t want to seem pushy.

A  Hold on to the offer until after your buyer sees the property.

B  Present the offer to the seller and tell him you have another potential buyer who wants to see the property next week.

C  Present the offer to the seller right away and don’t mention the other potential buyer.

D  Tell the buyer’s agent that the sellers aren’t reviewing offers until next week.

A  Foreign Investment in Real Estate Property Tax Act (FIRPTA)

B  Foreign Investor Real Estate Investment Tax (FIRE-IT)

C  Tax Withholding for Foreign Holding Act (TWFHA)

D  Foreign Real Estate Tax Withholding Act (FRETWA)

A  Move in more quickly

B  Spot the high-value items

C  Imagine themselves in the home

D  Identify furniture they want to purchase from the sellers

A  Destroying all documents carrying a client signature in a manner approved by DRE

B  Giving a copy of the agreement to her client after it’s signed

C  Sending a copy of the agreement to DRE

D  Maintaining the documents in the brokerage files for at least five years from the closing date

A  Documents that must be submitted to the DRE

B  Records that must be provided to clients upon request

C  Records that must be held for at least three years

D  Documents that must be stored electronically

A  Carpeted halls and stairways

B  Sufficient cooling and heating

C  Access to restrooms

D  Improved acoustics

A  To get referrals to other investors

B  To get the client better deals on settlement costs

C  To get the client better deals on title insurance

D  To get leads on available properties

A  Yes, but only if his taxes remain unpaid for five years.

B  Yes, they can foreclose immediately.

C  No, California law prohibits foreclosure for a tax lien.

D  No, a property tax lien doesn’t give the lien holder the power of sale.

A  Ask Jerry to verbally disclose material defects to potential buyers

B  Ask Jerry to repair the issues that she found

C  Show the issues that she noted to a home inspector, if the buyer uses one

D  Use the proper disclosure forms

A  10

B  20

C  11

D  Nine

A  Handyman companies

B  Home decorator conventions

C  “Subject to court approval” listings in the MLS

D  Door-to-door in low-income neighborhoods

A  “Property taxes are prorated so you’ll only pay for the time you owned the property.”

B  “When you’re buying your next home, the transfer will trigger a reassessment for property tax purposes.”

C  “Your title will reveal any tax liens, so the title company will review it to ensure that isn’t an encumbrance.”

D  “If you make a profit on the sale of this property, you’ll have to pay a capital gains tax when you file your income taxes.”

A  Request an income guarantee

B  Call the Better Business Bureau

C  Interview other new licensees

D  Interview several managing brokers

A  It’s important to avoid spending money on non-essentials or adding to her debt load prior to closing on the loan.

B  She should use money from her savings account to make the purchase instead of using her credit card.

C  She should wait until after she closes on the home and then use a home equity line of credit to make her furniture purchases.

D  She should use store credit instead of her credit card to purchase the furniture since the interest rate is probably lower.

A  Accept a middle-of-the-road offer, but on the condition that no home inspection repairs will be performed.

B  Reject the offers and put the home back on the market for the amount of the highest offer.

C  Have all buyers submit their “highest and best” offer, then help the seller decide which offer is most appealing.

D  Leave it on the market for another three days to allow time for even more offers to come in.

A  Fair housing laws

B  The Sherman Antitrust Act

C  Licensing laws

D  The Federal Trade Commission Act

A  Static

B  Dynamic

C  Environmental

D  Capital

A  Trade-down buyer

B  First-time buyer

C  Trade-up buyer

D  Retiree

A  A relatively vague description, so people want to come and see the details

B  The seller’s contact information

C  The seller’s bottom-line sales price

D  At least one photo

A  A comparison of before-tax cash flow to cash invested

B  Making money hand over fist

C  Trading international currency

D  Net income after taxes are deducted

A  Listing the property on the MLS

B  Giving the letter to at least 20 neighbors

C  Providing the letter in multiple languages for non-English speakers

D  Ensuring that the letter was given to neighbors on both sides of the street

A  Five years

B  One year

C  10 years

D  Three years

A  Mortgage

B  Debit

C  Balance

D  Credit

A  Buyer

B  Owner

C  Property manager

D  Broker

A  It is void because it is not for a lawful purpose.

B  It is voidable, because Jesse probably signed it under duress.

C  It is voidable, because Jesse is not mentally competent to sign a contract.

D  It is voidable, because the consideration, as a percentage rather than a dollar amount, is not clearly stated.

A  Their current home might be a potential listing for you.

B  If they don’t, they’re probably wasting your time.

C  Selling their home before purchasing a new one is more work for you and might not be worth your time.

D  You won’t need to check their credit if they’ve qualified for a home in the past.

A  No, Yolanda can take legal action against the buyers at any time while she still owns the property.

B  No, Yolanda can take legal action at any time within two years after taking possession of the property.

C  Yes, the buyer can only take legal action within six months of taking possession of the property.

D  Yes, Yolanda should have canceled the contract within three days of receiving seller disclosures.

A  Accounting

B  Reasonable skill and care

C  Disclosure

D  Confidentiality

A  FDIC

B  WNBA

C  NAIC

D  AARP

A  Frozen

B  Disbursed

C  Eliminated

D  Reallocated

A  You should ask the buyers who walked away whether you can provide a copy.

B  You should provide an inspection report to all prospects, along with seller disclosures.

C  You should disclose any adverse material facts, but you don’t have to provide the report.

D  You should provide an inspection report, but only if specifically asked.

A  Are you currently working with any other agents?

B  What is your income?

C  What is your tax bracket?

D  Have you ever been convicted of any felonies?

A  Non-trust funds

B  Commission

C  Trust funds

D  Revenue

A  “My listing agreements are generally 90-day contracts.”

B  “With today’s market conditions, we could expect the house to take two months to sell. Let’s set a term of four months for our listing contract.”

C  “The MLS requires us to have at least 90-day listings.”

D  “My contract length is non-negotiable.”

A  Real Estate Seller Prohibition Act

B  Real Estate Standard Protection Act

C  Real Estate Settlement Procedures Act

D  Real Estate Society Protection Act

A  Leverage

B  Financial

C  Business

D  Capital

A  Add

B  Depreciate

C  Deduct

D  Subtract

A  1945

B  1978

C  1900

D  1960

A  This conversation seems to be turning into a discussion of market allocation

B  She needs to get to work developing this model for herself

C  The group seems bent on creating a tie-in arrangement

D  This conversation sounds like it might become an antitrust violation

A  Conversion

B  Commingling

C  Earned interest

D  Documentation

A  No, the commission must go through the agent’s broker.

B  No, agents cannot accept commissions from immediate family.

C  No, the commission must go through the escrow company first.

D  Yes, because she’s a close relative.

A  Carma agrees to list Tera’s property for free if Tera signs an agreement to purchase her new home through Carma.

B  Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller.

C  Jeanine agrees to charge no commission from her buyer’s purchase of a four-plex if the buyer agrees to pay Jeanine a 3% fee for each unit for which she finds a tenant after the sale.

D  Rhoda loans Carl the money to catch up his mortgage payments in return for a listing agreement to sell Carl’s home for a 4% commission.

A  Unintentional misrepresentation

B  Fraud

C  Negligent misrepresentation

D  Puffery

A  Fair housing

B  Tying

C  Per se

D  Rule of reason

A  The day after closing on the property to ensure proper transfer of title

B  Weeks prior to closing

C  The day prior to closing

D  At the closing

A  The listing agreement does not account for responsibility in this area.

B  Both seller and broker are responsible.

C  The responsibility lies solely with the listing agent and brokerage.

D  The seller is solely responsible.

A  Multiple listing service

B  Membership listing service

C  Market listing service

D  Maximum listing service

A  Fairness and loyalty

B  Honesty and fairness

C  Honesty and obedience

D  Obedience and loyalty