Practice Exam Sales License (2)

A  4525

B  4523

C  4524

D  4522

A  The risk that is directly related to leverage

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

C  The risk that the property has a bad location

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

A  Being a new licensee is a distinct advantage.

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

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

D  Most brokers prefer not to hire new licensees.

A  Waive appraisal

B  Full price or over full price

C  A quick closing

D  An escalation clause

A  Customer

B  Buyer

C  Seller

D  Client

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

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

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

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

A  Robert is a dual agent

B  Robert is breaching his fiduciary duty

C  Robert must also be an attorney

D  Robert is in violation of agency law

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 starting the day the buyer is scheduled to verify final condition.

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 and informs the buyer that the contractor never provided a receipt.

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

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

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

D  One in which there’s no end date

A  Exclusive agency

B  Exclusive right to collect commission

C  Exclusive right to sell

D  Net listing

A  Criminal attorneys

B  Game wardens

C  Home inspectors

D  Divorce attorneys

A  Join a team

B  Buy display advertising

C  Send a mailer

D  Spend more than usual on marketing campaigns

A  Personal contact number

B  License number and responsible broker’s identity

C  City and state where the brokerage is located and jurisdiction

D  Personal photo

A  Multiple listing clause

B  Marketing clause

C  Provisionary clause

D  Broadcast clause

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

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

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

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

A  Healthcare

B  Retail

C  Manufacturing

D  Leisure

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

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

C  There are special government financing programs for purchasing REOs.

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

A  Investors can take a business deduction for annual depreciation.

B  The asset is worth more because of capital improvements.

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

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

A  A second round of mediation

B  Arbitration

C  Condemnation

D  Litigation

A  They require no down payment.

B  They need somewhere to live.

C  They’re always in demand.

D  Because they’re rare, and therefore valuable.

A  Weekly

B  Quarterly

C  Yearly

D  Monthly

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

B  Preparing a written agreement that accurately states a purchase price

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

D  Preparing a written agreement that falsely states a purchase price

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

B  A new appraisal will always be ordered.

C  The parties may choose to negotiate the difference.

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

A  It does not contain laws

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  Laws related to theft and other crimes

A  $36,000

B  $24,000

C  $48,000

D  $3,000

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

B  Are relatively liquid

C  Are relatively rare, so tenants compete for available units

D  Are larger properties

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

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

C  The closer one, because gas is expensive.

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

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  Vacant units

D  Stairwells and lobbies

A  By default

B  As-is

C  Under warranty

D  With material defects

A  Michael may inform Felicity of fair housing laws.

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

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

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

A  The Central Intelligence Agency

B  The Federal Bureau of Investigation

C  The Internal Revenue Service

D  The California Department of Real Estate Commissioner

A  Other Costs

B  Inspections, Reports, and Certificates

C  Government Requirements and Retrofit

D  Escrow and Title

A  Three

B  10

C  30

D  21

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

B  That 70% of their income will go toward expenses

C  They must receive 70% return on their investment

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

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

B  In a trust fund account or neutral escrow

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  Terminate her agency relationship

B  Say nothing

C  Inform the seller

D  Inform all parties to the transaction

A  Leverage

B  Financial

C  Capital

D  Business

A  Cancellation of Listing

B  Modification of Terms

C  Termination of Buyer Agency

D  Seller Instruction to Exclude from the MLS

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

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

C  Prepare advertising for social media and local newspapers

D  Advertise the listing on the MLS

A  Rooms open to interior of the building

B  Nothing

C  More amenities

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 may leave the brokerage and join another at any time.

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

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

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

A  Work hard and stick with it.

B  Try to be all things to all people.

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

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

A  Monica should purchase Brian’s property.

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

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

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

A  An operating statement

B  Effective gross income

C  Net operating income

D  Potential gross income

A  Static

B  Hot

C  Cold

D  Dynamic

A  Escrow is FDIC insured.

B  My company will cover any losses

C  Escrow is bonded

D  Escrow can’t disburse the money without your signature

A  2019

B  2039

C  2048

D  2029

A  Saturday, August 3

B  Thursday, August 1

C  Friday, August 2

D  Wednesday, July 31

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

B  They don’t want to seem pushy.

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

D  They want wealthier clients than their friends and family.

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

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

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

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

A  Foreign Real Estate Tax Withholding Act (FRETWA)

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

C  Tax Withholding for Foreign Holding Act (TWFHA)

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

A  Identify furniture they want to purchase from the sellers

B  Move in more quickly

C  Spot the high-value items

D  Imagine themselves in the home

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 stored electronically

C  Documents that must be submitted to the DRE

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 leads on available properties

C  To get the client better deals on settlement costs

D  To get the client better deals on title insurance

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

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

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

D  Yes, they can foreclose immediately.

A  Ask Jerry to repair the issues that she found

B  Use the proper disclosure forms

C  Ask Jerry to verbally disclose material defects to potential buyers

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

A  20

B  Nine

C  11

D  10

A  Door-to-door in low-income neighborhoods

B  “Subject to court approval” listings in the MLS

C  Home decorator conventions

D  Handyman companies

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

B  “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.”

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

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

A  Request an income guarantee

B  Interview other new licensees

C  Interview several managing brokers

D  Call the Better Business Bureau

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

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

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

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

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

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

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  The Sherman Antitrust Act

B  The Federal Trade Commission Act

C  Licensing laws

D  Fair housing laws

A  Capital

B  Environmental

C  Dynamic

D  Static

A  Retiree

B  Trade-down buyer

C  First-time buyer

D  Trade-up buyer

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  Net income after taxes are deducted

C  Trading international currency

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

A  Giving the letter to at least 20 neighbors

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

C  Listing the property on the MLS

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

A  10 years

B  Five years

C  One year

D  Three years

A  Balance

B  Credit

C  Mortgage

D  Debit

A  Owner

B  Property manager

C  Buyer

D  Broker

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 the consideration, as a percentage rather than a dollar amount, is not clearly stated.

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

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

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

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

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

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

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

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

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

A  Confidentiality

B  Accounting

C  Reasonable skill and care

D  Disclosure

A  AARP

B  FDIC

C  NAIC

D  WNBA

A  Frozen

B  Reallocated

C  Eliminated

D  Disbursed

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

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

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

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

A  What is your income?

B  Have you ever been convicted of any felonies?

C  What is your tax bracket?

D  Are you currently working with any other agents?

A  Commission

B  Non-trust funds

C  Trust funds

D  Revenue

A  “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.”

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

C  “My contract length is non-negotiable.”

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

A  Real Estate Seller Prohibition Act

B  Real Estate Settlement Procedures Act

C  Real Estate Standard Protection Act

D  Real Estate Society Protection Act

A  Financial

B  Business

C  Capital

D  Leverage

A  Deduct

B  Subtract

C  Add

D  Depreciate

A  1900

B  1945

C  1978

D  1960

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

B  This conversation sounds like it might become an antitrust violation

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

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

A  Conversion

B  Earned interest

C  Documentation

D  Commingling

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

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

C  Yes, because she’s a close relative.

D  No, agents cannot accept commissions from immediate family.

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  Puffery

B  Negligent misrepresentation

C  Unintentional misrepresentation

D  Fraud

A  Tying

B  Fair housing

C  Rule of reason

D  Per se

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

B  The day prior to closing

C  Weeks prior to closing

D  At the closing

A  Both seller and broker are responsible.

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

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

D  The seller is solely responsible.

A  Membership listing service

B  Market listing service

C  Multiple listing service

D  Maximum listing service

A  Fairness and loyalty

B  Honesty and obedience

C  Honesty and fairness

D  Obedience and loyalty