Comprehensive Practice Exam

A  A purpose

B  A lawful objective

C  Two parties

D  A mutual agreement

A  Implication of law

B  Prescription

C  Express grant

D  Condemnation

A  $104,250

B  $36,000

C  $50,000

D  $200,000

A  Donate them to the state’s Consumer Recovery Account.

B  Transfer them to the brokerage’s operating account.

C  Move them into a separate trust account that holds excess funds.

D  These are still trust funds and must be handled as such. Brokers can either leave them in the trust account or move them into a separate account set up to hold excess funds. They must also keep a separate ledger for unexplained overages.

E  Set them aside to use for any future shortages in the trust account.

A  $854.17

B  $816.45

C  $10,250.16

D  $920.50

A  Simone

B  Carrie

C  Carl

D  George

A  Rebecca can’t work with Stacey without an agency agreement.

B  Stacey is Rebecca’s client.

C  Rebecca is acting in an agency capacity for Stacey.

D  Stacey is Rebecca’s customer.

A  Disclosure

B  Obedience

C  Confidentiality

D  Reasonable skill and care

A  5%

B  2%

C  50%

D  70%

A  Conservator

B  Listing agent

C  Buyer’s agent

D  Escrow officer

A  $120,540

B  $198,540

C  $152,439

D  $147,000

A  Non-federally related transactions must be appraised by government employees.

B  Real estate licensees who perform appraisals must have a federal security clearance.

C  Federally related appraisals must be conducted by an appraiser who’s either licensed or certified by the state.

D  Federally related transactions need not be appraised.

A  Loyalty

B  Disclosure

C  Reasonable skill and care

D  Accounting

A  The clause in a purchase agreement that describes money held in escrow, such as the buyer’s earnest money.

B  A fee the agent charges a client for services the agent expects to provide but haven’t yet been provided.

C  The fee paid to the escrow officer who conducts the closing.

D  A clause in a listing agreement that stipulates the amount of commission the broker is owed if the property sells.

A  Single agent

B  Limited agent

C  General agent

D  Universal agent

A  Regression

B  Conforming value

C  Substitution

D  Similar cost principle

A  A dual agent

B  A buyer’s agent

C  A seller’s agent

D  A sub-agent

A  Competition

B  Substitution

C  Contribution

D  Conformity

A  No steps; if he obtained signatures, he has done his job.

B  He did not offer to also mail his clients a certified copy.

C  He did not make sure his clients understood the form before signing it.

D  He did not receive his broker’s permission.

A  No, Danielle does not provide the agency disclosure to her client. He only provides it to the landlord involved in the transaction.

B  Yes, agency disclosure is required on leases exceeding one year.

C  No, agency disclosure is only required on leases shorter than one year.

D  No, agency disclosure is only required on sales of residential properties with one to four units.

A  Non-judicial foreclosure is standard.

B  There are three parties involved: a lender, a borrower, and a party who holds title to the property.

C  In the case of foreclosure, the borrower has a statutory right of redemption.

D  The borrower is required to maintain the property and pay property taxes and insurance.

A  A contract for which one or more terms has yet to be completed

B  A contract that is enforceable by law

C  A contract in which only one of the parties offers consideration

D  A contract that involves an exchange of consideration between two parties

A  The agent must send the client a notice of release form.

B  The listing is cancelled.

C  The client may owe a commission anyway.

D  The agent must sue.

A  Performance

B  Breach

C  Assignment

D  Novation

A  Price

B  Value

C  Appraisal

D  Cost

A  California Land Title Association (CLTA)

B  General Land Title Association (GLTA)

C  American Land Title Association (ALTA)

D  Standard Land Title Association (SLTA)

A  2029

B  2048

C  2039

D  2019

A  Accepting partial performance

B  Rescinding the contract unilaterally

C  Suing for damages

D  Suing for specific performance

A  The title insurance company may charge her additional fees after closing to continue the title policy.

B  The previous owner may redeem the property by paying Paula at least 50% of the property’s market value.

C  The title to the property may have hidden issues that could cost her a lot of money to clear.

D  The lender has the option to refuse her bid and revoke the deed transferring ownership to Paula.

A  Because out-of-date electrical wiring can cause a wide a variety of problems.

B  Because the buyer will be required to update the wiring if it’s more than 10 years old.

C  Buyers shouldn’t ask about the wiring.

D  Because the seller will be required to update the wiring if it’s more than 10 years old.

A  Three

B  One

C  Two

D  Four

A  Real estate educator

B  Stager

C  Real estate appraiser

D  Transaction coordinator

A  Misrepresentation

B  Blockbusting

C  Redlining

D  Steering

A  Credit analysis

B  Broker’s price opinion

C  Comparative market analysis

D  Appraisal

A  This isn’t a breach of confidentiality because the information shared doesn’t negatively impact the client.

B  This is a breach of confidentiality because confidentiality survives forever.

C  This isn’t a breach of confidentiality because Reuben is no longer Monica’s client.

D  This is a breach of confidentiality because the information impacts Reuben’s negotiating ability with the seller.

A  Prepare an agency agreement or continue to assist Carly with the purchase.

B  Continue to assist Carly and have her sign an estoppel certificate.

C  Prepare an estoppel certificate and a listing agreement.

D  Leigh Ann’s only option is to get a signed listing agreement.

A  Buyer Trust Fund

B  Title insurance

C  Seller guarantees

D  Litigation

A  The agency agreement is terminated because the agent filed for bankruptcy.

B  Bankruptcy has no impact on agency agreements.

C  The agency agreement only terminates if the broker or the principal declares bankruptcy.

D  Marcus can choose whether or not to continue the listing agreement with Ron.

A  Broker

B  Salesperson

C  Associate broker

D  Office manager

A  An executory contract

B  An offer

C  A voidable contract

D  An implied contract

A  Evan performed all required fiduciary duties and tasks in listing Von’s house, even though it didn’t sell before the listing expired.

B  Roberto listed a property for Terrence. After two failed offers, the property made it to a successful closing.

C  Marty listed Todd’s condo. With Marty’s efforts they got almost to closing only to have the buyer’s financing fall through.

D  Greg listed a property that failed to sell during the term of the listing agreement. Aside from that, he performed all the tasks promised to the seller.

A  Public grant

B  Adverse possession

C  Accession

D  Dedication by deed

A  Yes, since it singles out gays and lesbians, which may discourage heterosexuals from applying.

B  No, because gays and lesbians aren’t protected classes.

C  No, because gays and lesbians are a protected class, and it’s okay to aim advertising at, but not away from, protected classes.

D  Yes, since it mentions the locality of the school.

A  Unemployment increasing, prices falling, and foreclosures on the rise

B  High but stabilized unemployment and a high number of foreclosures

C  Properties selling for more than they’re worth, many buyers in the market, and lots of new construction

D  Increases in hiring, employment, and public confidence, and lots of buyers in the market

A  Standard title insurance

B  Homeowners insurance

C  Extended title insurance

D  Title survey and boundary insurance

A  Partitioning

B  Slicing

C  Scraping

D  Scrounging

A  Inform the seller

B  Terminate her agency relationship

C  Say nothing

D  Inform all parties to the transaction

A  The buyer’s attorney

B  The buyer’s real estate agent

C  The seller’s real estate agent

D  The escrow agent

A  Sales associate

B  Real estate educator

C  Real estate broker

D  Real estate counselor

A  Calculating area

B  Measuring elevations

C  Measuring distance

D  Determining land acquisition costs

A  Forest fire hazard area

B  Earthquake fault zone

C  Seismic hazard area

D  High fire hazard area

A  Kevin and Regina are the grantees.

B  Vickey is the grantor.

C  Either Regina or Kevin can convey the property.

D  Vickey is the grantee.

A  Tailleur represents the buyer.

B  Christine’s mother, Freida, owns the house you listed.

C  Freida is paying your commission.

D  Christine listed the property with you.

A  Parcel

B  Partition

C  Bifurcation

D  Severalty

A  Do Not Call Implementation Act of 2003

B  Anti-Telemarketer Act of 2000

C  CAN-SPAM Act of 2003

D  Junk Fax Prevention Act of 2005

A  Yes, agency disclosure is required on sales of residential properties with one to four units.

B  No, agency disclosure is only required on leases exceeding one year.

C  No, agency disclosure is not required on sales of residential properties with one to four units.

D  No, Damian does not provide the agency disclosure to his client. He only provides it to others involved in the transaction.

A  $55,000

B  $45,000

C  $40,000

D  $50,000

A  No, but Ted should have a word with the managers of the golf course

B  No, this issue is not a problem if the windows are closed

C  Yes, Ted and his agent need to disclose specific environmental hazards

D  No, providing the booklet absolves him of a responsibility to disclose specific hazards

A  Unconstitutional

B  Restricted to the protected groups named in the act

C  Applicable to anyone exhibiting characteristics of the protected groups named in the act

D  Set to expire in 2016

A  No, he should have his client complete any forms.

B  Yes, real estate licensees may draft contracts and fill in blanks on existing contracts.

C  Yes, licensees can use standard forms provided by the brokerage or approved by an attorney.

D  No, because he’s not an attorney, he shouldn’t prepare contracts.

A  Estimate by her broker

B  Assessment by the seller’s agent

C  Quote by the lender

D  Appraisal by an appraiser

A  Agree to refinance only with the current lender.

B  Pay any charges and assessments against the property.

C  Give the lender first right of refusal.

D  Move all checking and savings account to the lender’s institution.

A  The salary is lower.

B  It may take longer to earn a commission.

C  You may not learn all aspects of real estate due to specialization.

D  The risks are minimized.

A  Yes, Jillian is required to provide Anthony with an agency disclosure form.

B  No, agency disclosure is only required for residential transactions.

C  It depends on how many units are for lease.

D  No, agency disclosure is only required on sales of commercial properties.

A  Non-exclusive buyer representation agreement

B  Non-exclusive, not for compensation buyer representation agreement

C  Exclusive listing agreement

D  Open listing agreement

A  Rectangular

B  Metes and bounds

C  Benchmark

D  Lot and block

A  Real estate, plus all of the interests, benefits, and rights included in ownership

B  Land, plus all things permanently attached to it, naturally or artificially

C  Everything that’s not real property

D  The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

A  In the Natural Hazards Disclosure Statement

B  In the Residential Environmental Hazards booklet

C  In the Real Estate Transfer Disclosure Form

D  In the Homeowner’s Guide to Earthquake Safety

A  $1,246.10

B  $1,110.64

C  $1,780.75

D  $1,578.57

A  Physical depreciation

B  External depreciation

C  Economic and material

D  Functional obsolescence

A  May, who is updating her bathroom to prepare her house for market

B  Diedre, who is remodeling her kitchen because extended family is coming to live with her

C  Ray, who is replacing his neighbor’s garage door for $550

D  Thomas, who is putting in a covered porch for Susan at a cost of $1,250

A  Call the police.

B  Demand the homeowner build another bedroom.

C  Ignore the discrepancy.

D  Investigate this discrepancy.

A  The applicant must have a certificate of eligibility.

B  The applicant must have a certificate of reasonable value.

C  Those who aren’t service members or former service members don’t qualify.

D  Every veteran qualifies.

A  Value properties listing for sale or rent in California

B  Act as chief executive officer of the California DRE

C  Advise the governor on personal real estate dealings

D  Preside over real estate cases in court

A  A private investigator

B  The state attorney general

C  An arbitrator

D  California DRE

A  The duty of accounting

B  The duty of confidentiality

C  The duty of disclosure

D  The duty of obedience

A  $306,384

B  $635,513

C  $345,103

D  $383.822

A  Eminent domain

B  Foreclosure

C  Condemnation

D  Inverse condemnation

A  Bilateral

B  Voidable

C  Executed

D  Unilateral

A  Accounting

B  Reasonable skill and care

C  Obedience

D  Loyalty

A  Look for the point of beginning.

B  Ask neighbors where the property boundaries are.

C  Look up the latitude and longitude coordinates of the property on Google Maps.

D  Reference a previous property deed.

A  83%

B  82%

C  97%

D  81%

A  When the buyer’s target is a second home.

B  If the buyer is a first-time buyer.

C  In none of these circumstances.

D  If the buyer is elderly.

A  Unemployment increasing, prices falling, and foreclosures on the rise

B  High but stabilized unemployment and a high number of foreclosures

C  Properties selling at inflated prices, many buyers in the market, and lots of new construction

D  Increases in hiring, employment, and public confidence, and lots of buyers in the market

A  Performs a CMA for an acquaintance and provides advice on setting a listing price based on other comparable properties in the area

B  Contacts a mortgage broker to find out what first-time homebuyer programs are available

C  Speaks to a local civic club about the homebuying process

D  Gives her neighbor a tour of another neighborhood home that’s on the market

A  Balloon payment

B  Graduated mortgage

C  Pledged-account

D  Fixed-rate

A  On the home page only

B  On every page

C  On a page marked required information only

D  On the contact page only

A  Place a for sale sign in a front yard

B  Calculate a commission check

C  Assemble closing documents

D  Host an open house

A  Exclusive

B  Exclusive, no compensation

C  Non-exclusive, no compensation

D  Non-exclusive

A  Loan availability

B  High employment wages

C  Low interest rates

D  Conversion of properties

A  Lead warning statement

B  Lead abatement discount

C  Denial of responsibility for lead-based hazards

D  Notice of local lead renovators

A  Point this out to your buyer client, and suggest she have an inspector look into this if she’s interested in the property

B  Report the sellers’ agent to the local board and file an ethics complaint

C  Report the sellers to the local board and file an ethics complaint against them

D  Point this out to your buyer; inform her that the sellers are clearly hiding water damage, and tell your client that if the sellers are lying about this you cannot guess what else they’re lying about

A  Partial performance

B  Voiding

C  Non-performance

D  Performance

A  A loan that requires a larger-than-usual, one-time payment at the end of the term

B  A loan that meets certain criteria that are accepted by Fannie Mae and Freddie Mac

C  A loan to buy a high-priced or luxury home

D  A loan that fails to meet the criteria set forth by Fannie Mae and Freddie Mac

A  No down payment, no mortgage insurance, and no prepayment penalty

B  Lower interest rates than are available on the open market

C  Reduced homeowner’s insurance requirements

D  A VA guarantee of the property condition

A  The cost of the electrical system upgrades they did after purchase

B  The price that they paid for the property, minus any land costs

C  The loan origination and lender fees that they paid at closing

D  The cost of the title insurance for the property

A  Deed in lieu of foreclosure

B  Arbitration

C  Judicial foreclosure

D  Non-judicial foreclosure

A  The neighborhood kids like to ride their bikes in Dora’s driveway.

B  Dora keeps sunflowers planted in the back yard because the local birds can eat the seeds.

C  The pink geraniums in the window boxes are fake.

D  Dora doesn’t use the back door because the steps leading to the yard are rotted.

A  He knows he’ll have to fire most of his associated licensees in order to hide his own activities from the DRE audit.

B  He needs to put back some funds he borrowed from the trust account before the DRE sees that they’re missing.

C  He is afraid the DRE will think he’s been embezzling funds, when he’s only been moving the funds to get the most bang for his clients’ bucks.

D  He’s likely to face serious disciplinary action when the audit uncovers his inappropriate handling of trust funds.

A  It’s a lien against a single property rather than a person.

B  It prevents the debtor from transferring the property until the debt has been repaid.

C  It may allow the creditor to sell the property through a court sale (foreclosure) and be repaid from the proceeds of the sale.

D  It’s always involuntary.

A  Economic obsolescence

B  Functional obsolescence

C  External depreciation

D  Physical depreciation

A  It defines the duties an agent owes a client.

B  It precisely locates the property and its boundaries.

C  It details the terms for a lease.

D  It outlines all of the terms of a real estate purchase.

A  When a party acknowledges receipt of the contract

B  When a party rejects all terms of the contract

C  When a party meets all terms of the contract

D  When a party does some, but not all, of what the party has agreed to do

A  Exclusive right to sell

B  Exclusive right to collect commission

C  Exclusive agency

D  Net listing

A  Send a mailer

B  Spend more than usual on marketing campaigns

C  Buy display advertising

D  Join a team

A  The state attorney general

B  California DRE

C  A private investigator

D  James’ broker

A  Sellers are required to list their properties on the MLS if they’re working with a real estate licensee.

B  Most sellers dislike advertising their property on an MLS.

C  For most sellers, listing on the MLS is not cost effective.

D  It’s rare for sellers to decline advertising their property on the MLS.

A  Natural Hazards Disclosure statement

B  Seller Property Questionnaire

C  Real Estate Transfer Disclosure Statement

D  Agent Visual Inspection Disclosure

A  If its total cost is more than $25,000

B  If it is larger than 500 square feet

C  If it is smaller than 500 square feet

D  If it is attached to the main house by a hallway or stairway

A  110

B  200

C  220

D  100

A  Eminent domain

B  Sovereignty

C  Condemnation

D  Police power

A  The broker

B  The party lacking legal capacity

C  The party possessing legal capacity

D  Both parties

A  $500,000

B  $1,108,292.4

C  $608,292.4

D  $750,000

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

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

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

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

A  It’s a permanent right that runs with the land.

B  It’s an encumbrance on the dominant property.

C  It does not involve an adjoining property.

D  It’s a temporary agreement between two parties.

A  Substitution

B  Anticipation

C  Conformity

D  Contribution

A  Four

B  12

C  10

D  Six

A  No, but this issue can be added as a Supplemental Disclosure

B  Yes, but only if a complaint has been made to the police so that an official report can be attached

C  No, there is no requirement that nuisance neighbors be disclosed

D  Yes, they can record such issues in the seller’s information section of the TDS

A  Total debt

B  Payment debt

C  Loan-to-value ratio

D  Housing ratio

A  Loan Estimate

B  TIL Statement

C  Freddie Mac borrower disclosure

D  Closing Disclosure

A  The IRS

B  The illegitimate children

C  The state

D  The legally adopted children

A  Substitutions

B  Alternatives

C  Conformables

D  Comparables

A  Clues to possible physical defects, such as moisture stains, uneven floors, or cracks in the walls

B  Opportunities to improve the way the home is staged for showings

C  Design and remodeling ideas

D  Evidence of proper house cleaning

A  The dollar amount the competitors lost

B  The marketing efforts the two firms used

C  The agreement between the two firms

D  The size of the two brokerage firms

A  Documents related to real estate activities that require a license

B  Only trust account records

C  Documents that are handled by the brokerage but not provided to an escrow agent

D  Specific records the DRE has listed as being related to client funds

A  First-time buyers

B  Dentists

C  Commercial investors

D  Catholic parishes

A  Aesthetic zoning

B  Bulk zoning

C  Variance zoning

D  Architectural zoning

A  The courts must contact all potential heirs to learn of their wishes regarding distribution of the estate.

B  Marsten must apply through the courts to manage his grandmother’s estate.

C  The court must determine the will’s validity and supervise distribution of the estate.

D  The courts must review Marsten’s ability and knowledge related to distribution of the estate.

A  A charge of not fulfilling his fiduciary duties to his client by not conducting a complete marketing plan

B  A charge of agreeing to discriminate by limiting access to the property

C  A charge of misrepresenting the property for sale

D  A charge of unfair practice because his mother did not get one of the “Choose Your Neighbor” letters

A  Redemption

B  Achievement

C  Transfer

D  Disposition

A  Because they’re minors.

B  Because they’re immature.

C  Because they lack intelligence.

D  Because they have insufficient resources.

A  Density zoning

B  Bulk zoning

C  Commercial zoning

D  Residential zoning

A  The Improvement Bond Act of 1915

B  Vrooman Street Act

C  Mello-Roos

D  Street Improvement Act of 1911

A  A variance

B  A tax referendum

C  A zoning ordinance

D  A special use permit

A  Farm Credit Administration Rural Loan Program

B  USDA Rural Development Single Family Housing Program

C  Farmer Mac Direct Loan Program

D  Small Town America Residential Loan Program

A  The property can’t be sold until the site is removed from the NPL.

B  A portion of the sale price must go to the EPA to fund clean-up of the site.

C  She must disclose the existence of an environmental hazard in the area.

D  She must disclose potential health threats to anyone in the area when showing the property.

A  It is always illegal.

B  It’s a great way to make money in real estate.

C  Even when it’s legal, some brokerages won’t allow their agents to do it.

D  If full disclosure is provided to the seller, it is fine to do.

A  No, but their agent should note it on the AVID form.

B  Yes, but they will need to use the TDS Supplementary Disclosures form.

C  Yes, they can record such issues in the seller’s information section of the TDS

D  No, there is no requirement that unpermitted work be disclosed

A  Easement

B  Encroachment

C  Eviction

D  Estate

A  Department of Finance

B  California Department of Real Estate

C  Nationwide Mortgage Licensing System and Registry (NMLS&R)

D    

E  Department of Licensing

A  Townships and sections

B  Compass headings and directions

C  Principal meridians and base lines

D  Plat references

A  Subprime

B  Troublesome

C  Average

D  Low-risk

A  Unilateral contract

B  Bilateral contract

C  Executed contract

D  Executory contract

A  Community Reinvestment Act

B  Home Mortgage Disclosure Act

C  Consumer Credit Protection Act

D  Equal Credit Opportunity Act

A  You should tell clients the typical ways that taxes will apply and encourage them to seek advice from a tax professional.

B  You must not address tax aspects of a transaction in any way, since this would be working outside your area of expertise.

C  You’re obligated to answer all questions the clients have regarding property taxes and general tax advice.

D  You must be able to advise your clients on the best way to minimize their tax liability related to a purchase or sale.

A  Borrower

B  Loan

C  Property

D  Lender

A  Special purpose landfills

B  Unregulated waste disposal areas

C  Brownfields

D  Development of golf courses and parks

A  Fair housing rules

B  Illegal practices

C  Anti-discrimination disclosure

D  Equal housing opportunity

A  330

B  $300,000

C  $330,000

D  300

A  It may not be effective since you’re casting a wide net rather than targeting potential buyers.

B  Criminals may use social networking sites to identify properties that are vacant or have high-end possessions.

C  People may misinterpret your listing information and hold you responsible for their misunderstanding.

D  People you don’t know will have your name and contact information.