Practice Exam Sales License (2)

A  4522

B  4523

C  4525

D  4524

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

B  The risk that the property has a bad location

C  The risk that is directly related to leverage

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

A  Most brokers prefer not to hire new licensees.

B  Being a new licensee is a distinct advantage.

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

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

A  An escalation clause

B  Waive appraisal

C  A quick closing

D  Full price or over full price

A  Customer

B  Client

C  Seller

D  Buyer

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

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

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

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

A  Robert must also be an attorney

B  Robert is breaching his fiduciary duty

C  Robert is a dual agent

D  Robert is in violation of agency law

A  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.

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

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

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 the price is negotiable within a specified range

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

D  One in which there’s no end date

A  Exclusive right to sell

B  Exclusive right to collect commission

C  Net listing

D  Exclusive agency

A  Game wardens

B  Divorce attorneys

C  Home inspectors

D  Criminal attorneys

A  Send a mailer

B  Buy display advertising

C  Spend more than usual on marketing campaigns

D  Join a team

A  License number and responsible broker’s identity

B  Personal contact number

C  Personal photo

D  City and state where the brokerage is located and jurisdiction

A  Multiple listing clause

B  Marketing 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  Leisure

B  Manufacturing

C  Retail

D  Healthcare

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

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

C  There are special government financing programs for purchasing REOs.

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

A  Investors can take a business deduction for annual depreciation.

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

C  The asset is worth more because of capital improvements.

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

A  A second round of mediation

B  Litigation

C  Arbitration

D  Condemnation

A  They require no down payment.

B  They’re always in demand.

C  They need somewhere to live.

D  Because they’re rare, and therefore valuable.

A  Monthly

B  Yearly

C  Weekly

D  Quarterly

A  Preparing a written agreement that accurately states a purchase price

B  Preparing a written agreement that falsely states a purchase price

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

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

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

B  A new appraisal will always be ordered.

C  The parties may choose to negotiate the difference.

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

A  Laws related to theft and other crimes

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

C  Laws related to the sale of securities

D  It does not contain laws

A  $48,000

B  $36,000

C  $24,000

D  $3,000

A  Are relatively rare, so tenants compete for available units

B  Are relatively liquid

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

D  Are larger properties

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 he can meet clients at the office easier.

D  The closer one, because gas is expensive.

A  They were hoping for window air conditioning.

B  Older units are bigger and more unsightly.

C  The unit may need to be replaced.

D  Central air conditioning isn’t a sustainable technology.

A  The difference between usable square footage and rentable square footage

B  Bathrooms and hallways

C  Stairwells and lobbies

D  Vacant units

A  By default

B  As-is

C  With material defects

D  Under warranty

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

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

C  Michael may inform Felicity of fair housing laws.

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

A  The California Department of Real Estate Commissioner

B  The Federal Bureau of Investigation

C  The Central Intelligence Agency

D  The Internal Revenue Service

A  Other Costs

B  Escrow and Title

C  Government Requirements and Retrofit

D  Inspections, Reports, and Certificates

A  30

B  21

C  Three

D  10

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

B  No, this is how all agents work.

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

D  No, this is how agents work with buyers.

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

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

C  They must receive 70% return on their investment

D  That 70% of their income will go toward expenses

A  In a trust fund account or neutral escrow

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

C  In an interest-bearing account

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

A  Say nothing

B  Inform all parties to the transaction

C  Terminate her agency relationship

D  Inform the seller

A  Leverage

B  Financial

C  Business

D  Capital

A  Termination of Buyer Agency

B  Modification of Terms

C  Seller Instruction to Exclude from the MLS

D  Cancellation of Listing

A  Advertise the listing on the MLS

B  Prepare advertising for social media and local newspapers

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

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

A  Nothing

B  More amenities

C  Rooms open to interior of the building

D  Closer to parking

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

B  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.

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

D  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.

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

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

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

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

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

B  Work hard and stick with it.

C  Try to be all things to all people.

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

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

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

C  Monica should purchase Brian’s property.

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

A  An operating statement

B  Potential gross income

C  Net operating income

D  Effective gross income

A  Cold

B  Static

C  Hot

D  Dynamic

A  Escrow is bonded

B  Escrow can’t disburse the money without your signature

C  My company will cover any losses

D  Escrow is FDIC insured.

A  2048

B  2029

C  2019

D  2039

A  Saturday, August 3

B  Friday, August 2

C  Thursday, August 1

D  Wednesday, July 31

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

B  They want wealthier clients than their friends and family.

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

D  They don’t want to seem pushy.

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

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

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

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

A  Foreign Real Estate Tax Withholding Act (FRETWA)

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

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

D  Tax Withholding for Foreign Holding Act (TWFHA)

A  Imagine themselves in the home

B  Move in more quickly

C  Identify furniture they want to purchase from the sellers

D  Spot the high-value items

A  Sending a copy of the agreement to DRE

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

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

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

A  Records that must be provided to clients upon request

B  Documents that must be submitted to the DRE

C  Documents that must be stored electronically

D  Records that must be held for at least three years

A  Sufficient cooling and heating

B  Carpeted halls and stairways

C  Access to restrooms

D  Improved acoustics

A  To get referrals to other investors

B  To get the client better deals on title insurance

C  To get leads on available properties

D  To get the client better deals on settlement costs

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

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

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

D  Yes, they can foreclose immediately.

A  Ask Jerry to verbally disclose material defects to potential buyers

B  Ask Jerry to repair the issues that she found

C  Use the proper disclosure forms

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

A  Nine

B  10

C  20

D  11

A  Handyman companies

B  Door-to-door in low-income neighborhoods

C  Home decorator conventions

D  “Subject to court approval” listings in the MLS

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

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

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

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  Interview several managing brokers

B  Call the Better Business Bureau

C  Request an income guarantee

D  Interview other new licensees

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

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

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

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

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

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

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

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

A  Licensing laws

B  Fair housing laws

C  The Federal Trade Commission Act

D  The Sherman Antitrust Act

A  Environmental

B  Capital

C  Static

D  Dynamic

A  First-time buyer

B  Trade-down buyer

C  Trade-up buyer

D  Retiree

A  The seller’s contact information

B  At least one photo

C  The seller’s bottom-line sales price

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

A  Making money hand over fist

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

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  10 years

B  Five years

C  One year

D  Three years

A  Debit

B  Balance

C  Mortgage

D  Credit

A  Broker

B  Buyer

C  Property manager

D  Owner

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

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

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

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

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

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

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

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

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

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

A  Accounting

B  Confidentiality

C  Disclosure

D  Reasonable skill and care

A  NAIC

B  FDIC

C  WNBA

D  AARP

A  Frozen

B  Disbursed

C  Eliminated

D  Reallocated

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

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

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

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

A  What is your income?

B  What is your tax bracket?

C  Are you currently working with any other agents?

D  Have you ever been convicted of any felonies?

A  Non-trust funds

B  Trust funds

C  Revenue

D  Commission

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

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

C  “My contract length is non-negotiable.”

D  “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.”

A  Real Estate Settlement Procedures Act

B  Real Estate Seller Prohibition Act

C  Real Estate Society Protection Act

D  Real Estate Standard Protection Act

A  Capital

B  Leverage

C  Business

D  Financial

A  Add

B  Deduct

C  Depreciate

D  Subtract

A  1900

B  1945

C  1978

D  1960

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

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

C  This conversation sounds like it might become an antitrust violation

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

A  Conversion

B  Earned interest

C  Documentation

D  Commingling

A  Yes, because she’s a close relative.

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

C  No, agents cannot accept commissions from immediate family.

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

A  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.

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

A  Negligent misrepresentation

B  Unintentional misrepresentation

C  Fraud

D  Puffery

A  Rule of reason

B  Tying

C  Fair housing

D  Per se

A  The day prior to closing

B  At the closing

C  Weeks prior to closing

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

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

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

C  Both seller and broker are responsible.

D  The seller is solely responsible.

A  Market listing service

B  Multiple listing service

C  Membership listing service

D  Maximum listing service

A  Fairness and loyalty

B  Honesty and fairness

C  Obedience and loyalty

D  Honesty and obedience