CALIFORNIA REAL ESTATE LICENCE FINAL EXAM, Exams of Nursing

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CALIFORNIA REAL ESTATE LICENCE FINAL EXAM AND 2

PRACTICE TEST EXAM | EACH CONTAINS 150 ACCURATE

QUESTIONS AND ANSWERS WITH RATIONALES | VERIFIED

FOR GUARANTEED PASS | GRADED A | LATEST UPDATE |

Which of the following is exempt from the Natural Hazards Disclosure? A special flood area. A geological hazard. A wild land high fire severity area. A seismic hazard zone.

B. A geological hazard.

In California, there is a requirement to report annual and quarterly loan activities to the California BRE, IF, within the past 12 months, a broker has negotiated any combination of 10 or more loans to a subdivision OR a total of more than $1,000,000.00 in loans. This mandate is known as: Threshold Reporting. "Big Lending" Reporting. The Mortgage Loan Broker Law. Regulation Z.

A. Threshold Reporting.

Any false or misleading advertising, whether on the Internet or via any other medium, can result in which of the following type of penalties? Civil. Administrative. Criminal. Any of the above.

D. Any of the above.

Both the federal and California governments have the right to take private property for a necessary use, IF they pay the owner "just compensation" for doing so. In addition to the payment of just compensation, if the government takes a property in this way, which of the following rules apply? The property must be for the public good or use. The owner must have due process in court. The property must be taken to be used for the public good or use, and the owner must have due process in court. No other regulations apply; this is a government-given right of the government to take a property, and the owner only need to be paid the appropriate compensation to fulfill the requirements.

C. The property must be taken to be used for the public good or use, and the owner must have due process in court.

Throughout California, there are agencies within the city/county government whose employees include professionally trained planners. These agencies are known as: Planning commissions. Planning departments. Planning boards of supervisors. Building Officials Conference of America commissions.

B. Planning departments.

Shakeel and Shaheen have sold their home, made an offer on Derek and Kamisha's home, and the offer was accepted. All the details of the sale have been worked out, agreed upon and signatures obtained. Now, Shakeel and Shaheen must obtain a loan for the property. What is the best term to describe their position in the transaction's timeline? In Contract Chain of Title Abstract and Opinion Both B and C

A. In Contract

The account that holds all the money collected from license and exam fees, and is used for the operating expenses of the CalBRE, is known as: The Real Estate Education Fund. The Real Estate General Fund. The Real Estate Recovery Fund. The Real Estate Operations Fund.

B. The Real Estate General Fund.

What are the types of legal life estates? Dower, a husband's interest in his wife's property; Curtesy, a wife's interest in the husband's property; and Homestead, protection against unsecured debts for the party that did not sign the loan. Dower, a wife's interest in the husband's property; Curtesy, a husband's interest in a wife's property; and Homestead, protection against secured debts for the party who did not sign for the loan. Dower, a wife's interest in the husband's property; Curtesy, a husband's interest in a wife's property; and Homestead, protection against unsecured debts for the party who did not sign for the loan. Marital rights, both a husband's and a wife's interest in the spouse's property; and Homestead, protection against unsecured debts for the party who did not sign for the loan.

C. Dower, a wife's interest in the husband's property; Curtesy, a husband's interest in a wife's property; and Homestead, protection against unsecured debts for the party who did not sign for the loan.

Which of the following is NOT a type of water rights? Riparian rights, which relate to rivers. Littoral rights, which relate to seashores and beaches. Alluvial plain, which relate to delta areas along rivers. Doctrine of Prior Appropriation, which relate to irrigation and "first in time equals first in rights" theory.

C. Alluvial plain, which relate to delta areas along rivers.

Lillian is buying Julia's home in Malibu. Julia, after selling her home to Lillian, is buying Anne Marie's condo in San Francisco. In these transactions, who is the grantor and who is the grantee? Lillian is the grantor and Julia is the grantee. Julia is the grantor and Anne Marie is the grantor. Lillian is the grantee and Julia is the grantor. Julia is the grantee and Anne Marie is the grantor. Lillian is the grantor and Julia is the grantee. Julia is the grantor and Anne Marie is the grantee. None of the Above.

B. Lillian is the grantee and Julia is the grantor. Julia is the grantee and Anne Marie is the grantor.

Shivaram and Kiran are buying a home in a new subdivision. Due to all of the subdivisions in the area, a new elementary school is being built. Additionally, a new area park is planned. Shivaram and Kiran have been informed the taxes on their new home are substantially higher than their previous property. Why The Mello-Roos Community Facilities Act of 1982 The Street Improvement Act of 1911 Proposition 13 Proposition 60

A. The Mello-Roos Community Facilities Act of 1982

Regarding a broker's commission, the California Business and Professions Code requires that in the sale of residential property (of not more than four units) the listing contain the following provision before the compensation clause: "Notice: The amount or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between the seller and broker." This clause must be printed: In not less than 8-point boldface type. In not less than 10-point boldface type. In not less than 11-point boldface type. In not less than 12-point boldface type.

B. In not less than 10-point boldface type.

Which of the following does not belong in listing agreement provisions? Placement of the "For Sale" sign on the property. Equal Housing Opportunity Clause. California Statute of Frauds. Arbitration.

C. California Statute of Frauds.

When new college graduate Sami Hensen goes to visit her Great-Aunt Gertrude, she is surprised when the older relative tells her she is soon leaving on a cruise with friends. Sami cannot imagine how her great-aunt can afford such luxury, while living in a nice house in a peaceful neighborhood, and wonders if her aunt's mental capacities are failing her. At her gentle inquiry about the costs, her Great-Aunt Gertrude laughs away her concern, telling her that she has been receiving monthly checks out of the equity she has in the home. Now Sami really thinks her old aunt is off her rocker! If Great-Aunt Gertrude is correct, which of the following statements is true of this situation? Gertrude has a Package Mortgage, which is commonly used in situations of people who are "house rich, cash poor." This type of loan is common for senior citizens. Gertrude has a Wraparound Mortgage, which provides for extra cash-in-hand. Gertrude has a fully-amortized loan, so she receives a monthly dividend. Gertrude has a Reverse Annuity Mortgage, which is a loan that must be repaid upon the owner's death, if she moves elsewhere, or upon the sale of the property.

D. Gertrude has a Reverse Annuity Mortgage, which is a loan that must be repaid upon the owner's death, if she moves elsewhere, or upon the sale of the property.

Patrice and Cornell are completing a sales contract with Mary, their agent. The sales contract used at Mary's brokerage is preprinted. Mary, as a senior agent, has the authority to waive one of the brokerage's fees. The fee is explained and preprinted on the contract. Mary simply crosses it out, writes "waived" and both parties initial. Which overrules the other? The preprinted or handwritten portions of the contract? The preprinted portions of a contract always take precedence over handwritten. It depends on the portion of the contract and the language involved. Handwritten portions of real estate contracts always supersede preprinted forms. None of the Above.

C. Handwritten portions of real estate contracts always supersede preprinted forms.

Is it permissible for a broker to accept lender funds unless that broker owns the loan? Which requirement under the California Business and Professions Code addresses the question? Yes, it is permissible for a broker to accept those funds. They will eventually be used for a loan or to buy a specific note. The requirement is outlined in Article 5. Yes, it is permissible for a broker to accept those funds. They will eventually be used for a loan or to buy a specific note. The requirement is outlined in Article 6. No, it is not permissible for a broker to accept those funds. The requirement is outlined in Article

No, it is not permissible for a broker to accept those funds. The requirement is outlined in Article

D. No, it is not permissible for a broker to accept those funds. The requirement is outlined in Article 5.

What is the form of all California licensing examinations? True or False Tests Essay Tests Multiple-Choice Tests All of the Above

C. Multiple-Choice Tests

A Point of Beginning refers to: A description starting at a designated place on a parcel using the Metes and Bounds System. A fixed object used to establish real estate boundaries using the Metes and Bounds System. Lines on either side of a principal meridian using the Rectangular Survey System. Lines running east and west parallel to a major base line using the Government Survey System.

A. A description starting at a designated place on a parcel using the Metes and Bounds System.

Which of the following listing agreements is illegal in most states? Open Listing Exclusive Agency Listing Net Listing Agency Coupled with Interest

C. Net Listing

Barney Dinesh has served two years of active duty for the United States Army in the Middle East. He is still on active duty, though he is now stationed stateside in California. He and his new wife, Alma, have found a home they both love, and their agent tells them about the Cal-Vet loan, saying that he believes Barney would qualify for this. What are the main requirements for such a loan, and does Barney (from the information given here) seem to qualify for the Cal-Vet program? The Cal-Vet loan requires that the veteran have served a minimum of 120 days' active duty; provide an affidavit if on active duty (or an honorable discharge if not active); and a $500. deposit. Provided Barney can procure this affidavit, and the deposit money, it appears that he would qualify. The Cal-Vet loan program requires that the veteran have served a minimum of 120 days' active duty; provide Statement of Service if on active duty (or an honorable discharge if he is no longer active); and be willing to buy a California home or farm. Based on the information provided herein, Barney should qualify for the program.

The Cal-Vet loan program requires that the veteran have served a minimum of 90 days' active dut

C. The Cal-Vet loan program requires that the veteran have served a minimum of 90 days' active duty; provide Statement of Service if on active duty (or an honorable discharge if he is no longer active); and be willing to buy a California home or farm. Barney would appear to qualify, based on the given information.

Karen and Jay need a larger home. They have two large dogs and a baby on the way. One day in the real estate section, they see their dream home. The couple view the home that very day, make an offer, and it's accepted. There's only one problem: They haven't even put their home on the market. Which type of loan gives Karen and Jay their best option of paying two mortgages until their current home sells? A Participation Mortgage A Bridge Loan A Sale-Leaseback A Contract for Deed

B. A Bridge Loan

Which of the following is a type of functional obsolescence? Outmoded plumbing fixtures or inadequate closet space. Installing siding on a building which also needs major interior repairs. A residence when an industrial plant is built next to it. Any of the above.

A. Outmoded plumbing fixtures or inadequate closet space.

Newlyweds Andrew and Kimmie Briggs enjoy sparring over the details of life. They squabble good-naturedly over a game of Scrabble, the pronunciation of French words, and now, over the type of home loan they're getting on their first home. They know it's FHA, but neither is sure WHAT the FHA has to do with the loan. An FHA loan means: The money is loaned by the Federal Housing Administration. The money is insured by the Federal Housing Administration. The money is guaranteed by the Federal Housing Administration. The Federal Housing Administration builds homes and loans money.

B. The money is insured by the Federal Housing Administration.

Carol is studying for the California real estate license examination. She knows she has to know all areas covered in the examination extremely well to pass. Which portion of the examination, approximately, makes up the largest portion of the test? Practice of Real Estate and Mandated Disclosures Contracts Transfer of Property Financing

A. Practice of Real Estate and Mandated Disclosures

The right of the state to enact and enforce laws for the order, safety, health, morals, and general welfare of the public is known as: Eminent domain. Conversion. Subversion. Police power.

D. Police power.

Which of the following is not a characteristic of the California mortgage market? California has a large amount of the country's biggest commercial and savings banks. California has a high population, therefore more people means more homes are needed. Deeds of Trust are used instead of mortgages, which allows borrowers greater flexibility and protection. California has a very active secondary mortgage market.

C. Deeds of Trust are used instead of mortgages, which allows borrowers greater flexibility and protection.

John and Thom are purchasing their dream home. Due to the expiration of escrow instructions, the escrow has been terminated. Have they lost the contract on the house of their dreams? Yes, once the escrow is terminated all contracts associated are also terminated. No, the termination of an escrow does not terminate the associated contract. No, if the escrow is terminated the contract can remain valid; however, if the escrow is cancelled, the contract is cancelled. Both B and C

B. No, the termination of an escrow does not terminate the associated contract.

Alison Skateland, a real estate broker in Yuba City, California, has recently become interested in the sale of business opportunities — particularly restaurants and bakeries. The authority to conduct such business is covered under her real estate license, but Alison does need to know the proper way to handle such transactions. Which of the following is not an accurate statement about the handling of business opportunities? If real property is involved in the sale, the broker (Alison, in this case) usually treats the sale of the business and sale of the land/building as two separate and concurrent transactions with two concurrent and contingent escrows. The sale of business opportunities may involve the sale of only personal property. Alison, in dealing with the sale of business opportunities, must remember to inform the purchaser of the various governmental agencies that the purchaser should contact for required permits, licenses, and clearances. These agencies include the IRS, State Board of Equalization, State Department of Benefit Payments, State Department of Industrial Relations, and various other county and municipal agencies. The sale of a business opportunity includes the busines

A. If real property is involved in the sale, the broker (Alison, in this case) usually treats the sale of the business and sale of the land/building as two separate and concurrent transactions with two concurrent and contingent escrows

Credit union president Bill Bradley has just refused a loan for 25-year-old LaDawna Kingston, an African-American woman and, in his opinion, the very definition of a "religious zealot." Bill refused the loan based on her credit rating and lack of job stability. When LaDawna learns of his refusal, she tells him she's calling an attorney, because she's been discriminated against. Which of the following statements is true in this situation? Bill could be in big trouble, since it is illegal for a real estate licensee to discriminate against a person seeking a loan based on racial, religious, or economic reasons. Bill could be in big trouble, since it is illegal for a real estate licensee to discriminate against a person who is of any "protected class," even if that person does not meet the financial loan qualifications that every applicant must face. Bill could face serious penalties if LaDawna files suit against him. It is illegal for a real estate licensee to decline financing to a person of another race, even though that person does not meet the financial loan qualifications set forth for every applicant. As long as Bill refused the financing based solely on economic reasons (lack of job

D. As long as Bill refused the financing based solely on economic reasons (lack of job stability, poor credit rating, income, or net worth), he has acted lawfully and will not face any disciplinary action.

Napa resident Maria Gonzales, a newly-licensed real estate broker, has just negotiated her first trust deed loan for her client, Isaac Mahrsan. The loan's term is 5 years, and it is Isaac's first loan. Under Article 7 of the Mortgage Broker Law in California, Maria knows that certain regulations have been set forth regarding her commission in such a transaction. What is the maximum commission for loans subject to Article 7, for first loans? Maria's maximum commission on this loan is 5 percent of the principal, which applies to loans of 5 years or less. Maria's maximum commission on this loan is 5 percent of the principal, which applies to loans of 10 years or less. Maria's maximum commission on this loan is 5 percent of the principal of a loan, which applies to loans of 3 years or more. Maria's maximum commission on this loan is 10 percent of the principal of a loan, which applies to loans of 3 years or more.

D. Maria's maximum commission on this loan is 10 percent of the principal of a loan, which applies to loans of 3 years or more.

Which of the following is NOT considered one of the basic types of Common Interest Developments? Condominiums. Cooperatives.

Mobile home parks. Planned developments.

C. Mobile home parks.

A house sold for $265,000.00, and the total commission received by the broker was $22,525.00. What was the rate of commission? 6.7% 7.5% 8% 8.5%

D. 8.5%

Tameka's goal is to be a licensed real estate salesperson in the State of California. Tameka is 16 years old, and her long-term goal is to be a successful salesperson, manager, and own a brokerage. She has been studying for next week's exam, but has not attended any accredited real estate courses. However, if she passes, she cannot apply for her license. Why? Tameka cannot apply for her license because she has not completed a college-level real estate course in Real Estate Principles, or completed any accredited real estate courses. Tameka is only sixteen and a licensee must be eighteen years old. If Tameka had taken any classes to prepare for the examination they would have to be offered by an institution of higher learning accredited by the Western Association of Schools and Colleges or a similar regional accrediting agency recognized by the United States Department of Education, or by an equivalent course of study offered by a private vocational school approved by the CalBRE. All of the Above

D. All of the Above

A contract in which the vendor (seller) agrees to convey the title to the real property after the vendee (buyer) has met certain named conditions, and which does not require conveyance within one year, is ordinarily used in the case of a buyer who can only make a small down payment and monthly installments. This type of contract, because it holds disadvantages for both the seller and the buyer, is no longer a popular financing instrument in California. This is known as a(n): Mortgage. Installment land contract, also known as an installment sales contract. Open-end mortgage. Secondary mortgage market loan, such as Fannie Mae, Ginnie Mae, or Freddie Mac.

C. Open-end mortgage.

Which of the following listing agreements is illegal in most states? Open Listing Exclusive Agency Listing Net Listing Agency Coupled with Interest

C

In early common law, transfers of land were only made when: The transfer of land from husband to wife, upon the husband's death, would take place. The transfers of land were not made, with the exception of a transfer made by descent from a father to his son, upon the father's death. The transfer of land from father to son, upon the father's death, would take place. Both A and B

D

Calvin is buying his first home. He has been saving and saving for years. The home he is buying has a price of $300,000 and Calvin has a down payment of $75,000. Calvin's loan is considered: Highly Secured Low Risk Simple Interest Highly Leveraged

B

How is a property management firm usually paid? A percentage of the rents collected. A salary. A flat fee. None of the above.

A

Zoning ordinances have changed in the area adjacent to a residential neighborhood. The residents are incensed a retail shopping area is being developed one block from their subdivision. They are concerned about the traffic, noise, and what this will do to their property values. The new zoning ordinances must ensure: The power be exercised in a reasonable manner. The provisions be clear and specific. Freedom from discrimination. All of the Above

D

Jack is leasing a home from Justin for a year. He has decided to lease until he gets a good feel for the area and knows where he wants to buy. In this relationship, who has the reversionary right and who has the possessory right? Jack has the possessory right and Justin the reversionary right. Jack has the reversionary right and Justin the possessory right. Jack and Justin both have the possessory right. Jack and Justin both share the reversionary right.

A

Lois is selling her needlework shop to Simon. Simon is also purchasing the name of the business from Lois, all of the fixtures, and the inventory. Lois is essentially handing over the entire business, from top to bottom to Simon, who is planning to continue what she had started. What are the essential elements of this business opportunity sale? A Bill of Sale Financial Statements Goodwill Both A and B

D

Brian and Leslie have made an offer on Rudy and Judith's home. The first offer was rejected by the sellers. Brian and Leslie made another offer; Rudy and Judith rejected that offer. Never quitters, Brian and Leslie decided to try one last time and present their last and best offer. Rudy and Judith decide the prospective buyers are close, and make a counteroffer. What's the situation after a counteroffer is made by the sellers? The sellers cannot make a counteroffer to the buyer. They can either accept the buyers' offer or reject it. Once the counteroffer is made by the seller, the buyers' original offer becomes invalid. If the buyers accept the offer, the sellers have made, the same process takes place as with a regular offer. The process will basically start completely from scratch. If the buyers reject the sellers' counteroffer, the sellers can go back to the buyers's previous offer and accept. None of the Above.

B

In 1980, an important piece of environmental legislation was passed. This legislation established a fund called the Superfund, to clean up uncontrolled hazardous waste sites and to respond to spills, and it also created a process for identifying potential responsible parties (PRPs) and ordering them to take responsibility for the cleanup action. What was the name of this law? The Hazardous Waste Act, or HWA. The Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA. The California Environmental Protection Agency Act, or CEPAA. The Uniform Commercial Code Act, or UCCA.

B

Which of the following is not a goal of a real estate appraiser? To determine the market value of a property. To determine the insurance value of a property. To determine the marketability of a property. To determine the tax value of a property.

C

Anthony is adding a new deck to his home. He has obtained all the necessary building permits to construct his new deck. Anthony's neighbor, Steve, informed him he has to have a California State Contractor's License to even work on his own property. Anthony says that Steve is wrong. Who is right in this situation? Anthony is wrong. Anyone who works on any property in California, even if it his own property, must have a California State Contractor's License. Steve is correct. Any major work conducted on real property must be done by a licensed state contractor. Anthony is correct. Anyone who does the business of a contractor must be licensed. Unless the property owner is planning to sell the finished real estate project, he doesn't not need a license to work on his own property. None of the Above.

C

Which type of leasehold estate has a definite beginning and ending date? An estate for years. An estate from period to period. An estate at sufferance. An estate at will.

A

In California, which of the following is considered the same as cash when provided in business transactions? A check. A promissory note. A post-dated check. None of the above.

D

Johnson Bailey and Kailey Clark's corporation, Bailey-Clark Financial, is branching out into the field of escrow handling. They know the corporation must be licensed by the State of California. There are a total of 5 officers, trustees, and other employees who will have access to the money or negotiable securities in the possession of the corporate license, and have furnished a bond of indemnification against loss. Has the corporation fulfilled all necessary licensing requirements to work in escrow handling? No, they must also make sure that all monies deposited in escrow be placed in a trust account that is exempt from execution or attachment. No, they must also be able to show that the company is financially solvent. No, they must also meet the requirements in Answers A and B. In addition, the corporation must furnish a surety bond in the amount of $25,000.00, or more, based upon yearly average trust fund obligations. Yes, the corporation has filled all necessary obligations to be licensed.

C

Which of the following is not an exemption to the federal fair housing laws concerning age and family status? In a government-designated retirement housing. n a retirement community if 50% of the dwellings have one person who is 55 years of age or older, provided there are amenities for elderly residents. In residential dwellings of four units or less, and single family houses. None of the Above.

B

On Kyle Thomason's $400,000.00 loan, the lender charges a 2-point service charge. In this situation, how much will Kyle have to pay for this service charge at closing, and how would such a charge appear on the statement? $800.00, as a debit to the buyer. $8,000.00 as a credit to the buyer. $8,000.00 as a debit to the buyer. $80,000.00 debit to the buyer.

C

By California statute, a joint tenancy may be created in which of the following ways? By transfer from a sole owner to himself or herself and others as joint tenants. By transfer from tenants in common to themselves or to themselves, or any of them, and others as joint tenants. By transfer from joint tenants to themselves, or any of them, and others as joint tenants. Any of the above.

D

Jeff Kase and his wife, Caren, have spent two months looking at apartments in Los Angeles. But every apartment they've seen has been too expensive, or too tiny, or too rodent-infested. When Jeff is driving home from work one day, he sees a "For Rent" sign in front of an apartment complex in a nice neighborhood. He uses his cell to call the number on the sign, and the landlord happens to live upstairs, and can show Jeff the apartment immediately. The good news is, Jeff loves it and the landlord says he can hold it with a deposit until Jeff's wife can see it. The bad news is that Caren is out of town until the next evening, so that's the earliest she can see it. The landlord tells Jeff that, unfortunately, the lease agreements for all his properties specify that lease deposits are "nonrefundable." Which of the following statements is true of this situation? It is the choice of the property owner/landlord regarding whether a lease deposit is refundable or not; so this is within the landlord's authority. It is illegal for rental security deposits in California to be labeled as "nonrefundable," under any circumstances. The regulations vary regarding furnished and unfurnished apartments in Cal

B

Timothy has been hired by the estate of Tyler Wilbanks, who is recently deceased. Timothy has Power of Attorney and will be handling all the real estate affairs of the deceased estate. Which type of agent is Timothy? Special Agent Single Agent Universal Agent Agency Coupled with Interest

C

The MAIN purpose of the California Department of Real Estate is to: Explain the laws to REALTORS. Protect the public. Protect the real estate licensees. All of the above.

B

Along a non-navigable stream, does an owner own the land, the water, both, neither? What is this right? The owner owns the land to the center of the stream and the government owns the water. It is a Riparian Right. The owner owns to the water's edge. It is a Riparian Right. The owner owns to the average high water mark. It is a Littoral Right. The owner owns the land and the water to the center of the stream. It is a Riparian Right.

A

Real estate syndication is accomplished through three phases. Which of the following answers correctly names these steps in their proper chronological order? (1) Origination; (2) Operation; (3) Liquidation. (1) Outlay; (2) Operation; (3) Completion. (1) Outline; (2) Origination; (3) Completion. (1) Origination; (2) Investment; (3) Liquidation.

A

California property taxes are now levied using: A system based solely on location. A system that is based on the date of acquisition. A special assessment system. None of the above.

B

In a general warranty deed, the implied promise that "if there is a defect, I promise to take care of any problems" is referred to as: A Covenant of Seisin

A Covenant of a Warranty Forever A Covenant of Further Assurance A Covenant Against Encumbrances

C

What percentage of the California Real Estate General Fund is set aside to go into the Real Estate Education and Research Fund? 5% 8% 10% 12%

B

What is the mill rate of .017?

17

D

When an appraiser assumes that no one is being forced to sell at a reduced price because of an impending divorce or similar situation, and that both buyer and seller are well-informed customers, he is more than likely hired to determine: Market Value Insurance Value Salvage Value All of the Above

A

Which of the following statements concerning real and personal property is true? Annexation changes real property to personal property; severance changes personal property to real property. A trade fixture is personal property, and can be removed by the tenant any time before the end of the lease term. Annexation changes personal property to real property; severance changes real property to personal property. Both B and C

D

When Chloe Armstrong pays off the 30-year conventional loan on her Oceanside home in less than 20 years, she is thrilled. However, she is not nearly as happy when she reads the fine print on the contract, which permits her lender to charge her EXTRA interest just for paying off the loan early. This is known as:

Subrogation. A prepayment penalty. A subordination clause. An acceleration clause.

B

Mr. Manning has owned a restaurant for forty years. He is in the process of selling his business to a group of investors who plan on revamping the restaurant and turning it into a destination. In the negotiation of the sale, Mr. Manning has stipulated he is willing to accept their offer on two conditions: There may never be any alcohol served on the property, and there can never be dancing of any kind. Mr. Manning is insistent on these conditions due to his religious beliefs. If either of these activities ever takes place, Mr. Manning would have the right to take back the property. Which type of estate applies? Fee Simple Absolute Pur Autre Vie Estate in Reversion Fee Simple Defeasible

D

Chip is a veteran who fought in Desert Storm. He has just retired from the military. He has been told he qualifies for a property tax exemption based on his military service during wartime. Which exemption applies to Chip? Calfornia Homeowner's Exemption The Mello-Roos Community Facilities Act California Military Exemption The Street Improvement Act

A

Which of the following statements is most accurate? In California, escrow is only used in real estate transactions. Escrow is known as a small and short-lived trust arrangement. The Escrow Act is found in the California Business and Professions Code. All of the above.

D.

Which of these private properties might be exempt from the governmental use of Eminent Domain? A home with a chronological age of 30 years or greater. A property worth in excess of $1 million. A home with a chronological age of 50 years or greater. No private property is exempt from this government power.

D

In California, any apartment building with this many units must have an onsite manager, who is also known as a residential manager. What is the number of units to which this statement refers? Ten or more. Twelve or more. Sixteen or more. Twenty or more.

C

San Bernardino seller Craig Watkins has just signed a contract to sell his home of 13 years to buyer Ivedale Bosch, who has recently moved to California from Montana. The contract has met all the necessary requirements, and all inspections and other mandates have gone along as expected and as agreed to until one week before closing, when Craig decides to back out. However, he understands that he could face legal action by Ivy; so he offers to sell her another house he owns and has rented out for the past few years, in lieu of the San Bernardino one promised. The second home is worth $15,000 more than the originally contracted one, and has an extra bedroom. However, Ivy isn't interested, because she wants to be close to her elderly mother, who lives in a San Bernardino retirement complex. Craig refuses to complete the sale on the original home. Which of the following statements is true of this situation? Ivy may sue Craig for specific performance, because no two properties are exactly the same and he hasn't fulfilled his end of the contractual agreement. Craig has the right to refuse to sell to Ivy within up to 3 business days prior to the closing date for the sale. No penalties are to be

A

The type of company that sells securities specializing in real estate ventures, and requires a minimum of 100 investors, is known as: A real estate syndicate. A real estate investment syndicate. A real estate investment trust. An equity trust.

C

Agent Green is faced with an ethical dilemma. He was present when two brokers were having an unethical discussion that could be considered collusion. He doesn't know if he should act as if it never happened, or report the incident to his broker. What steps should he employ when making this decision? Concentrate on the pertinent facts of the case. Think about who stands to gain and lose by his decision. Explore different solutions to the problem. All of the Above

D

The law that regulates the division of 2 or more lots for the purpose of selling, leasing, or financing said lots, either at that time or in the future, is the: Subdivision Map Act. Subdivided Property Act. Interstate Land Sales Disclosure Act All of the above.

A

Which of the following statements is accurate regarding escrow services in California? In Northern California, the escrow services are usually performed by independent escrow companies or financial institutions. In Southern California, the escrow services are usually performed by title insurance companies that have extensive escrow departments and many branch offices. In Southern California, the escrow service fees are usually split 50-50 between the buyer and the seller. In Northern California, the escrow service fees are usually paid by the seller.

C

The legal phrase that describes the right to recover money or other personal property through a judicial proceeding, including the right to recover something under a contract, such as money owed on a note, as well as the right to recover damages for a tort or private wrong, is known as: Choses in action Chattels Chattels real Contract action

A

The Western Acres neighborhood is a highly desirable area in which homes very seldom go on the market. The Western Acres properties placed on the market sell very quickly and usually for or above asking price. Which principle of real estate applies to the homes in Western Acres? Highest and Best Use The Law of Supply and Demand Anticipation Competition

B

A full summary of all consecutive grants, conveyances, wills, records, and judicial proceedings affecting title to a specific parcel of real estate, together with a statement of all recorded liens and encumbrances affecting the property and their present status, but NOT revealing encroachments and forgeries, is known as a(n): Chain of deed. Disintermediation.

Abstract and opinion. Quitclaim deed.

C

La Mesa real estate broker Michael Hagans plans to begin listing or selling mobile homes. He must comply with all but one of the following statements. Which of these is NOT a requirement for Michael to list or sell mobile homes? He must only sell new mobile homes. He must only sell used mobile homes if they've been licensed by the California Department of Housing and Community Development. The mobile home must be capable of being transported over a road, with a hitch attached to the unit (or stored underneath it) and the axles attached to the frame. It is Michael's responsibility to ensure the proper completion and delivery of the title to the buyer of the mobile home.

A

Escrow cannot be terminated in which of the following ways? By the completion of escrow. Because of the death of one of the principals. By mutual agreement. By a court or interpleader action.

B

Which of the following statements is NOT accurate regarding Cal-Vet loans? The required down payment is 10%-12% of the sales price or appraisal value, whichever is higher. Monthly payments on a Cal-Vet loan include all of the following items (but nothing additional): principal and interest; 1/12 of the annual property taxes; hazard insurance; disability; and life insurance premiums. CalVet requires a structural pest control report and a roof inspection on properties it finances. The loan is made directly from the state to the veteran.

D

Ken has just passed his licensing examination. However, he has been notified the DRE will not issue a full-term license. Ken is behind on child support payments and therefore has not complied with a court order to provide these payments. Will Ken ever be able to obtain his license? Ken will not be eligible for a license until he has been current on all child support payments for a minimum of 150 days. Ken may be issued a 150-day temporary license while he is on the list of child support obligors. Only one 150-day temporary license may be issued. His full-term license may be issued if a release is obtained from the district attorney's office during the 150-day temporary period. Ken must clear his name and pay his support on time for a minimum of six months to be eligible

to receive a full-term license. None of the Above.

B

Lancaster salesperson Jamie Dafe has begun to branch out into mortgage brokering. She continues to show homes to clients, but hasn't been actively seeking out new listings. Instead, she acts as a loan broker by buying, selling, or exchanging loans. Which of the following statements applies to Jamie's current situation? Jamie may not act as a loan broker unless she is properly licensed as one, under the Mortgage Loan Broker Law, set forth under the California Business and Professions Code, Article 8 Jamie may act as a loan broker without receiving any special license, other than her active California real estate broker's license, as long as she follows the stipulations set forth under the Mortgage Loan Broker Law, under Article 7 of the California Business and Professions Code. In California, a licensed real estate broker MAY assist the buyer in filling out the loan application for a financial institution, but may NOT arrange for financing for the buyer, or broker loans herself. In Jamie's situation, she is acting out of the realm of her real estate broker's license, and can face monetary damages and/or prison time for violating the California Financial Code AND the California Business an

A

Tracy and Darnell are buying a home. They have a 15% down payment and have qualified for a thirty year fixed rate mortgage. Will Tracy and Darnell have to pay PMI? Yes, private mortgage insurance is required for all loans with less than 25% down payment. No, private mortgage insurance is only required for all loans with less than 15% down payment. No, this is Tracy and Darnell's second mortgage for the purchase of a new home. Private mortgage insurance is only for first-time buyers with less than a 20% down payment. Yes, private mortgage insurance is required for all loans with less than 20% down payment.

D

Which of the following is NOT one of California's sets of base lines and meridians? The Humboldt Base Line and Meridian. The Mt. Diablo Base Line and Meridian. The San Bernardino Base Line and Meridian. The Los Angeles Base Line and Meridian.

D

Two years after Elicia Jolie moves into her first home, a cozy two-bedroom near Lake Tahoe, she decides to buy all new kitchen appliances. Her brother, Jake Jolie, is the owner of JJ's Appliances and More, and he gets her some great deals on beautiful stainless-steel floor models. The appliances themselves are free-standing and movable, with the exception of the built-in microwave over her new stove. She has new cabinets built around the appliances to accent the new look. When it comes time for Elicia to move, which of the following will be considered her personal property, which she may move with her?

All the appliances, the cabinets, and the microwave. Only the unattached appliances that are free-standing. Only the unattached appliances that are freestanding, plus the microwave. None of the appliances, the microwave, or the cabinets.

B

Ted and Lisa are selling their home and have signed a listing agreement. Client or customer? Steven visits Ted and Lisa's open house, and he is interested in purchasing their home. What happens next? Is Steven a client or customer? Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven that Ted and Lisa are customers. Ted and Lisa are clients, as is Steven. The listing agent must disclose to Steven that Ted and Lisa are also clients. Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven that he/she represents Ted and Lisa and explain customer relationships. Ted and Lisa are clients, and Steven is a customer. The listing agent must disclose to Steven that he/she represents Ted and Lisa and explain customer relationships.

D

Each of the following actions, except for one, is considered subversion. Which of these answers is not a form of subversion? Reproducing exam material without authorization. Bringing a calculator into the examination room. Using paid examinees for the purpose of reconstructing an examination. Buying exam material.

B

Which are the four elements required for a valid contract? Legally Competent Parties; Offer and Acceptance; Consideration; and Legality of Object Legally Competent Parties; Offer and Acceptance; Consideration; and Terms Legally Competent Parties; Offer and Acceptance; Assignment; and Legality of Object Legally Competent Parties; Offer and Acceptance; Contingency; and Legality of Object

A

Kathy Bates has just moved into a condominium complex of 60 units. The complex has a swimming pool, and a management company takes care of the upkeep of the outside of the property. The monthly cost for pool maintenance, grass cutting, tree trimming, private street maintenance, and the newly-updated clubhouse is currently $400.00 a month. Each year, the cost of such services increases, as do the costs for necessary repairs as the buildings get older. This year, new roofs are in order for all of the buildings. The condominium association, which is made up of the owners of the property, decides that, in order to cover the increase in costs, and to replace the roofs on the property, they must pass a(n): Ad valorem tax.

Special assessment. General real estate tax. None of the above.

B

In order to equalize business in their area, ABC Realty and RMH Realty have an unwritten agreement. They have agreed to split up their area, with ABC taking everything north of the highway and RMH everything south. Under this agreement, the real estate agents licensed to each respective brokerage will not be competing and all will profit. Is this a violation? If it is a violation, what is it called and what is it violating? Division of markets is not a violation. It is merely cooperation between brokerages. Division of markets is a violation of the Sherman Antitrust Act. Big rigging is a violation of the Clayton Antitrust Act. Division of markets is a violation of the Clayton Antitrust Act.

B

One appraisal principle of value is based on the concept that the more a property or its components are in harmony with the surrounding properties or components, the greater the contributory value. In other words, the more the properties are alike, the more they retain value. This is known as: Substitution. Regression and progression. Conformity. Competition.

C

For income-generating properties, a value based on the present value of the rights to future income is called the: Economic Life. Cost Approach. Sales Comparison Approach. Income Capitalization Approach

A

California real estate lenders are divided into 3 major categories. Which of the following is NOT one of these categories? Government-backed programs. Depository institutions. Non-institutional lenders. Institutional lenders.

B

Which is not a form of syndication? The Corporate Form The General Partnership The Limited Liability An Equity Trust

D

Which of following are not considered trust funds? Real Estate Commissions General Operating Funds Rents and Deposits from Broker-Owned Real Estate All of the Above

D

Bob leased an apartment for three years from the Steiners. He was never late on his rent in those three years, kept the apartment immaculate, and never caused a moment of trouble. He has recently purchased his first home and moved out of the apartment. As expected, Bob gave the Steiners sixty days' notice he would be moving and left the apartment in perfect condition. It has been 45 days since he moved out and he's been watching for his security deposit refund to purchase a new sofa. When should he expect his security deposit refunded? If there had been no damage or cleaning required, which seemed highly unlikely in Bob's case, the landlord should have refunded his security deposit within 21 days of Bob's vacating the property. If there had been no damage or cleaning required, which seemed highly unlikely in Bob's case, the landlord should have refunded his security deposit within 30 days of Bob's vacating the property. If there had been no damage or cleaning required, which seemed highly unlikely in Bob's case, the landlord should have refunded his security deposit within 14 days of Bob's vacating the property. None of the Above.

A

Broker Burns is negotiating a first trust deed loan for buyers. The buyers have signed a contract for a fifteen year loan. What is the maximum commission for Broker Burns? Five percent of the principal of the loan. Ten percent of the principal of the loan. Fifteen percent of the principal of the loan. Two percent of the principal of the loan.

B

Under WHICH of the following circumstances could a homeowner take his microwave with him when he moves? If it is unattached, because it would still be considered the current homeowner's personal

property. If it is so dictated in the contract and all parties agree to this in writing. Under any circumstance. Either A or B.

A

When Christopher cuts down a tree in his backyard and sells it as firewood, the firewood then becomes personal property. This process is known as: Annexation. Severance. Choses in action. Emblementation.

A

The regulations regarding both advertising and doing real estate business over the Internet have been set forth in: The Code of Federal Regulations The Commission's Regulations. ARELLO regulations. The Federal Fair Housing Administration.

B

A subdivision has a homeowner association rule that states there can be no above ground pools in the subdivision. The Curtis family has an above ground pool in their backyard. Four years later, the new association president threatens to take the family to court for violating the subdivision regulations. Why doesn't the new president have a case? Laches Statute of Limitations Options Bylaws

B

Broker A receives two offers on Seller B's house, which is listed for sale at $250,000. The first offer is for all cash at $200,000. The second offer is for 20% down with 80% financing for the full price. What should the broker do with respect to both offers? - CORRECT ANSWER Present both offers to the seller as soon as possible.

The two primary documents dealing with payment of a loan are the mortgage or deed of trust and a - CORRECT ANSWER promissory note.

The term that best describes a continuous urban corridor joining at least two cities is - CORRECT ANSWER megalopolis.

The term real property can also be described as - CORRECT ANSWER the bundle of rights.

The rights of a landowner to a river bordering her property are known as - CORRECT ANSWER riparian rights.

In the case of a transfer of ownership of a piece of real estate, a fixture is normally - CORRECT ANSWER assumed to be included in the transfer.

A tenant who operates a jewelry store wants to take his jewelry cases with him at the expiration of the lease. What is the best solution? - CORRECT ANSWER He may take the cases if removal will not cause substantial damage.

A legal description of property is not adequate unless - CORRECT ANSWER land boundaries are defined.

The lot and block system of property description is not also known as the - CORRECT ANSWER rectangular survey system.

What best describes the interests of the holder of a life estate? - CORRECT ANSWER possession, use, and ownership

How many acres does a section of land contain? - CORRECT ANSWER 640

The requirement that multiple owners take title to property at the same time is a characteristic of

• CORRECT ANSWER joint tenancy.

The type of ownership that provides the most complete bundle of rights is - CORRECT ANSWER fee simple absolute.