Practice Exam Sales License (2)

A  4525

B  4524

C  4522

D  4523

A  The risk that is directly related to leverage

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

C  The risk that the property has a bad location

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  A quick closing

C  Full price or over full price

D  Waive appraisal

A  Customer

B  Client

C  Buyer

D  Seller

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

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

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

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

A  Robert is a dual agent

B  Robert is breaching his fiduciary duty

C  Robert is in violation of agency law

D  Robert must also be an attorney

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 anyone can find the buyer, but the listing agent still gets paid

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

C  One in which there’s no end date

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

A  Net listing

B  Exclusive right to sell

C  Exclusive agency

D  Exclusive right to collect commission

A  Home inspectors

B  Game wardens

C  Divorce attorneys

D  Criminal attorneys

A  Buy display advertising

B  Join a team

C  Spend more than usual on marketing campaigns

D  Send a mailer

A  Personal photo

B  Personal contact number

C  License number and responsible broker’s identity

D  City and state where the brokerage is located and jurisdiction

A  Provisionary clause

B  Broadcast clause

C  Marketing clause

D  Multiple listing clause

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

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

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

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

A  Leisure

B  Manufacturing

C  Retail

D  Healthcare

A  There are special government financing programs for purchasing REOs.

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

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

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

A  The asset is worth more because of capital improvements.

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

C  Investors can take a business deduction for annual depreciation.

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

A  A second round of mediation

B  Condemnation

C  Arbitration

D  Litigation

A  Because they’re rare, and therefore valuable.

B  They’re always in demand.

C  They require no down payment.

D  They need somewhere to live.

A  Weekly

B  Yearly

C  Monthly

D  Quarterly

A  Preparing a written agreement that falsely states a purchase price

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

C  Preparing a written agreement that accurately states a purchase price

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 buyer will be forced to terminate the contract immediately.

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

C  A new appraisal will always be ordered.

D  The parties may choose to negotiate the difference.

A  Laws related to theft and other crimes

B  Laws related to the sale of securities

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

D  It does not contain laws

A  $48,000

B  $24,000

C  $36,000

D  $3,000

A  Are relatively rare, so tenants compete for available units

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

C  Are relatively liquid

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

D  The closer one, because gas is expensive.

A  The unit may need to be replaced.

B  Older units are bigger and more unsightly.

C  They were hoping for window air conditioning.

D  Central air conditioning isn’t a sustainable technology.

A  Vacant units

B  Stairwells and lobbies

C  The difference between usable square footage and rentable square footage

D  Bathrooms and hallways

A  As-is

B  With material defects

C  Under warranty

D  By default

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

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

C  Michael may inform Felicity of fair housing laws.

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

A  The Internal Revenue Service

B  The Federal Bureau of Investigation

C  The California Department of Real Estate Commissioner

D  The Central Intelligence Agency

A  Government Requirements and Retrofit

B  Other Costs

C  Inspections, Reports, and Certificates

D  Escrow and Title

A  Three

B  10

C  30

D  21

A  No, this is how all agents work.

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

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

D  No, this is how agents work with buyers.

A  That 70% of their income will go toward expenses

B  They must receive 70% return on their investment

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

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

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

B  In an interest-bearing account

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

D  In a trust fund account or neutral escrow

A  Inform all parties to the transaction

B  Say nothing

C  Inform the seller

D  Terminate her agency relationship

A  Business

B  Capital

C  Financial

D  Leverage

A  Cancellation of Listing

B  Seller Instruction to Exclude from the MLS

C  Modification of Terms

D  Termination of Buyer Agency

A  Prepare advertising for social media and local newspapers

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

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

D  Advertise the listing on the MLS

A  More amenities

B  Nothing

C  Rooms open to interior of the building

D  Closer to parking

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

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

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

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

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

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

A  Try to be all things to all people.

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

C  Work hard and stick with it.

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

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

B  Monica should purchase Brian’s property.

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

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

A  An operating statement

B  Net operating income

C  Potential gross income

D  Effective gross income

A  Static

B  Cold

C  Dynamic

D  Hot

A  Escrow can’t disburse the money without your signature

B  Escrow is FDIC insured.

C  Escrow is bonded

D  My company will cover any losses

A  2019

B  2048

C  2029

D  2039

A  Friday, August 2

B  Thursday, August 1

C  Wednesday, July 31

D  Saturday, August 3

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

B  They don’t want to seem pushy.

C  They want wealthier clients than their friends and family.

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

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

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

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

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  Identify furniture they want to purchase from the sellers

B  Spot the high-value items

C  Imagine themselves in the home

D  Move in more quickly

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

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

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

D  Sending a copy of the agreement to DRE

A  Records that must be held for at least three years

B  Records that must be provided to clients upon request

C  Documents that must be submitted to the DRE

D  Documents that must be stored electronically

A  Access to restrooms

B  Improved acoustics

C  Carpeted halls and stairways

D  Sufficient cooling and heating

A  To get the client better deals on settlement costs

B  To get the client better deals on title insurance

C  To get referrals to other investors

D  To get leads on available properties

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

B  Yes, they can foreclose immediately.

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

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

A  Ask Jerry to repair the issues that she found

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

C  Use the proper disclosure forms

D  Ask Jerry to verbally disclose material defects to potential buyers

A  20

B  10

C  11

D  Nine

A  Handyman companies

B  Door-to-door in low-income neighborhoods

C  “Subject to court approval” listings in the MLS

D  Home decorator conventions

A  “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.”

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

A  Interview several managing brokers

B  Call the Better Business Bureau

C  Request an income guarantee

D  Interview other new licensees

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

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

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  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  Licensing laws

B  The Federal Trade Commission Act

C  The Sherman Antitrust Act

D  Fair housing laws

A  Dynamic

B  Capital

C  Static

D  Environmental

A  Trade-down buyer

B  Trade-up buyer

C  First-time buyer

D  Retiree

A  At least one photo

B  The seller’s bottom-line sales price

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

D  The seller’s contact information

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

B  Making money hand over fist

C  Net income after taxes are deducted

D  Trading international currency

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  One year

B  10 years

C  Three years

D  Five years

A  Balance

B  Debit

C  Credit

D  Mortgage

A  Property manager

B  Broker

C  Buyer

D  Owner

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

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

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

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

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

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

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

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

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

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

A  Accounting

B  Confidentiality

C  Disclosure

D  Reasonable skill and care

A  WNBA

B  AARP

C  FDIC

D  NAIC

A  Frozen

B  Eliminated

C  Reallocated

D  Disbursed

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

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

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

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

A  Have you ever been convicted of any felonies?

B  What is your income?

C  Are you currently working with any other agents?

D  What is your tax bracket?

A  Trust funds

B  Revenue

C  Commission

D  Non-trust funds

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

C  “My contract length is non-negotiable.”

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

A  Real Estate Standard Protection Act

B  Real Estate Seller Prohibition Act

C  Real Estate Society Protection Act

D  Real Estate Settlement Procedures Act

A  Leverage

B  Business

C  Capital

D  Financial

A  Depreciate

B  Add

C  Subtract

D  Deduct

A  1945

B  1978

C  1960

D  1900

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

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

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

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, the commission must go through the escrow company first.

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  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.

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  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.

A  Fraud

B  Negligent misrepresentation

C  Unintentional misrepresentation

D  Puffery

A  Per se

B  Rule of reason

C  Fair housing

D  Tying

A  At the closing

B  Weeks prior to closing

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

D  The day prior to closing

A  The seller is solely responsible.

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

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

D  Both seller and broker are responsible.

A  Maximum listing service

B  Membership listing service

C  Market listing service

D  Multiple listing service

A  Obedience and loyalty

B  Fairness and loyalty

C  Honesty and obedience

D  Honesty and fairness