Practice Exam Sales License (2)

A  4522

B  4524

C  4523

D  4525

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

B  The risk that is directly related to leverage

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

D  The risk that the property has a bad location

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  A quick closing

B  Waive appraisal

C  Full price or over full price

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

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 in violation of agency law

C  Robert is breaching his fiduciary duty

D  Robert is a dual agent

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

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

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 there’s no end date

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

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

A  Net listing

B  Exclusive right to sell

C  Exclusive right to collect commission

D  Exclusive agency

A  Divorce attorneys

B  Criminal attorneys

C  Game wardens

D  Home inspectors

A  Send a mailer

B  Spend more than usual on marketing campaigns

C  Buy display advertising

D  Join a team

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  Multiple listing clause

B  Broadcast clause

C  Marketing clause

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

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

A  Retail

B  Leisure

C  Manufacturing

D  Healthcare

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

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

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

D  There are special government financing programs for purchasing REOs.

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

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

C  Investors can take a business deduction for annual depreciation.

D  The asset is worth more because of capital improvements.

A  Condemnation

B  Arbitration

C  A second round of mediation

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  Monthly

B  Quarterly

C  Weekly

D  Yearly

A  Preparing a written agreement that accurately states a purchase price

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

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

B  A new appraisal will always be ordered.

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

D  The parties may choose to negotiate the difference.

A  Laws related to the sale of securities

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

C  It does not contain laws

D  Laws related to theft and other crimes

A  $3,000

B  $24,000

C  $48,000

D  $36,000

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

B  Are relatively rare, so tenants compete for available units

C  Are larger properties

D  Are relatively liquid

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

B  The closer one, because gas is expensive.

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

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

A  The unit may need to be replaced.

B  Central air conditioning isn’t a sustainable technology.

C  They were hoping for window air conditioning.

D  Older units are bigger and more unsightly.

A  The difference between usable square footage and rentable square footage

B  Stairwells and lobbies

C  Vacant units

D  Bathrooms and hallways

A  As-is

B  With material defects

C  By default

D  Under warranty

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

B  Michael may inform Felicity of fair housing laws.

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

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

D  No, this is how all agents work.

A  That 70% of their income will go toward expenses

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

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

D  They must receive 70% return on their investment

A  In an interest-bearing account

B  In a trust fund account or neutral escrow

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

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

A  Say nothing

B  Terminate her agency relationship

C  Inform all parties to the transaction

D  Inform the seller

A  Leverage

B  Business

C  Financial

D  Capital

A  Cancellation of Listing

B  Seller Instruction to Exclude from the MLS

C  Modification of Terms

D  Termination of Buyer Agency

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  Advertise the listing on the MLS

D  Prepare advertising for social media and local newspapers

A  Closer to parking

B  More amenities

C  Rooms open to interior of the building

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

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

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

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 may leave the brokerage and join another at any time.

A  Try to be all things to all people.

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

C  Work hard and stick with it.

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

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

B  Monica should purchase Brian’s property.

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

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

A  Net operating income

B  Effective gross income

C  An operating statement

D  Potential gross income

A  Static

B  Hot

C  Dynamic

D  Cold

A  Escrow is FDIC insured.

B  Escrow can’t disburse the money without your signature

C  My company will cover any losses

D  Escrow is bonded

A  2029

B  2019

C  2048

D  2039

A  Thursday, August 1

B  Saturday, August 3

C  Wednesday, July 31

D  Friday, August 2

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

B  They want wealthier clients than their friends and family.

C  They don’t want to seem pushy.

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

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

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

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

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

A  Foreign Real Estate Tax Withholding Act (FRETWA)

B  Tax Withholding for Foreign Holding Act (TWFHA)

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

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

A  Imagine themselves in the home

B  Move in more quickly

C  Spot the high-value items

D  Identify furniture they want to purchase from the sellers

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  Documents that must be stored electronically

B  Records that must be held for at least three years

C  Records that must be provided to clients upon request

D  Documents that must be submitted to the DRE

A  Improved acoustics

B  Access to restrooms

C  Carpeted halls and stairways

D  Sufficient cooling and heating

A  To get leads on available properties

B  To get the client better deals on settlement costs

C  To get referrals to other investors

D  To get the client better deals on title insurance

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

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

C  Yes, they can foreclose immediately.

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

A  Use the proper disclosure forms

B  Ask Jerry to repair the issues that she found

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  10

B  20

C  11

D  Nine

A  “Subject to court approval” listings in the MLS

B  Door-to-door in low-income neighborhoods

C  Home decorator conventions

D  Handyman companies

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 other new licensees

B  Request an income guarantee

C  Call the Better Business Bureau

D  Interview several managing brokers

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

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

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

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

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

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

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

A  The Federal Trade Commission Act

B  Fair housing laws

C  The Sherman Antitrust Act

D  Licensing laws

A  Dynamic

B  Capital

C  Static

D  Environmental

A  Retiree

B  Trade-down buyer

C  First-time buyer

D  Trade-up buyer

A  The seller’s contact information

B  The seller’s bottom-line sales price

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

D  At least one photo

A  Net income after taxes are deducted

B  Making money hand over fist

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

D  Trading international currency

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

B  Giving the letter to at least 20 neighbors

C  Listing the property on the MLS

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

A  10 years

B  One year

C  Five years

D  Three years

A  Debit

B  Credit

C  Mortgage

D  Balance

A  Broker

B  Property manager

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

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

A  Reasonable skill and care

B  Disclosure

C  Confidentiality

D  Accounting

A  AARP

B  WNBA

C  FDIC

D  NAIC

A  Reallocated

B  Disbursed

C  Eliminated

D  Frozen

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  Revenue

B  Non-trust funds

C  Trust funds

D  Commission

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 Society Protection Act

B  Real Estate Settlement Procedures Act

C  Real Estate Standard Protection Act

D  Real Estate Seller Prohibition Act

A  Capital

B  Leverage

C  Business

D  Financial

A  Deduct

B  Subtract

C  Add

D  Depreciate

A  1960

B  1945

C  1900

D  1978

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

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  She needs to get to work developing this model for herself

A  Commingling

B  Documentation

C  Earned interest

D  Conversion

A  No, agents cannot accept commissions from immediate family.

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

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

D  Yes, because she’s a close relative.

A  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.

B  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.

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

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  Puffery

C  Negligent misrepresentation

D  Fraud

A  Tying

B  Per se

C  Rule of reason

D  Fair housing

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

B  At the closing

C  Weeks prior to closing

D  The day prior to closing

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

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

C  The seller is solely responsible.

D  Both seller and broker are responsible.

A  Membership listing service

B  Multiple listing service

C  Market listing service

D  Maximum listing service

A  Fairness and loyalty

B  Honesty and obedience

C  Honesty and fairness

D  Obedience and loyalty