California Real Estate Practice - Questions and Answers 2024., Exams of Real Estate Management

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California Real Estate Practice - Questions

and Answers 2024.

(1) 1. The real estate marketplace could BEST be described as being A. homogeneous B. stratified C. perfect D. uninfluenced by emotion - Correct Answer-B. stratified (based on price) (1) 2. Most real estate agents are primarily engaged in which area of activity A. residential property B. raw land and lots C. commercial property D. development - Correct Answer-A. residential property (1) 3. The IRS will treat real estate salespeople as independent contractors if 3 criteria are met. Which is not a criteria A. The salesperson's reimbursement is solely based on sales, not hours worked B. The salesperson represents himself as an independent contractor when dealing with third parties C. There is a written contract stating that the salesperson will be treated as an independent contractor for tax purposes D. The salesperson is licensed as a real estate agent - Correct Answer-B. The salesperson represents himself as an independent contractor when dealing with third parties ( merely representing oneself as an independent contractor would be a violation of disclosure requirements and is not considered to be an IRS criteria) (1) 4. A broker ordinarily would be liable to salespeople for

A. unemployment compensation B. workers' compensation C. Social Security contributions D. none of these - Correct Answer-B. workers' compensation (for work related injuries) (1) 5. In choosing a broker, a new licensee should be LEAST interested in an office that A. has a high percentage of successful people B. has a good library of books, tapes, and videos for training C. offers 100% commission D. is a member of a local multiple listing service - Correct Answer-C. offers 100% commission (new licensees should remember training is more important than commission split) (1) 6. The BEST way to learn is to A. listen to what others say B. read instructional material C. watch what others do D. use the ideas you observe or read about - Correct Answer-D. use the ideas you observe or read about (by using ideas, they become yours) (1) 7. Which of the following statements is true about role-playing A. Role-playing situations are limited only by our own imagination B. Role-playing can be verbalized or nonverbalized C. Role-playing exercises can involve more than one person D. All of these - Correct Answer-D. All of these (1) 8. Which statement is an example of a specific goal A. I will work harder next week

B. I will improve my listing presentation C. I will make 10 calls tomorrow on for-sale-by-owner ads and schedule three property showings by Sunday D. I will learn by observing successful agents - Correct Answer-C. I will make 10 calls tomorrow on for-sale-by-owner ads and schedule 3 property showings by Sunday ( exact goals are measurable ) (1) 9. All of the following will aid you in goal achievement EXCEPT A. that goals should be attainable B. that goals should be based on what you really want C. that goals should be kept to yourself because they are personal D. that goals should be exact so that you can measure their attainment - Correct Answer- C. that goals should be kept to yourself because they are personal (goals should be shared so you are accountable for making them. when no one knows the goals, it is easier to abandon them) (1) 10. Proper daily planning means that you should endeavor to A. reduce "D" Time activities B. increase "A" Time activities C. place more emphasis on probabilities than on possibilities D. accomplish all of these - Correct Answer-D. accomplish all of these (2) 1. Three brokers agreed that they would not let a fourth broker show any of their listings. This action would be regarded as A. a group boycott B. price-fixing C. market allocations D. a tie-in agreement - Correct Answer-A. a group boycott (2) 2. Ethics' relationship to law is that

A. if an act is illegal it is also unethical B. ethics tend to precede the law C. ethics and the law both set minimum standards for behavior D. what is ethical is legal - Correct Answer-B. ethics tend to precede the law (2) 3. Which of the following phrases would be considered nondiscriminatory in an advertisement for a rental A. Christian family B. Prefer working married couple C. Just two blocks to St. Michael's D. None of these - Correct Answer-D. None of these (2) 4. A broker with a disabled employee widened the doorway to the restroom to accommodate a wheelchair. This work was performed to comply with A. Civil Rights Act of 1866 B. Americans with Disabilities Act C. Rumford Act D. Fair Housing Amendment Act of 1988 - Correct Answer-B. Americans with Disabilities Act (2) 5. The Civil Rights Act of 1866 specifically covers what type of discrimination A. Sex B. Marital status C. Age D. Race - Correct Answer-D. race (2) 6. A broker showed African American prospective buyers homes in African American and racially mixed neighborhoods. He would show African American prospects homes in

predominantly Caucasian areas only if the prospects specifically requested to see homes in those areas. The broker's action would be described as A. illegal B. unethical C. steering D. all of these - Correct Answer-D. all of these (2) 7. A broker refused to show a young Hispanic family of five a condominium about which they had inquired. The broker's action would be proper if A. the broker considered the unit too small for the family B. there were no other children in the development C. the development has an age exemption because all occupants are 55 years of age or older D. 70% of the units are occupied by elderly - Correct Answer-C. the development has an age exemption because all occupants are 55 years of age or older (2) 8. A landlord can properly refuse to accept an applicant because the applicant A. has a guide dog and the apartment is on the fourth floor B. is a single but obviously pregnant woman C. appears to be gay and the landlord is afraid of catching AIDS D. None of these - Correct Answer-D. None of these (2) 9. The state act that specifically prohibits discrimination in business establishments is the A. Unruh Act B. Rumford Act C. Holden Act D. Civil Rights Act of 1968 - Correct Answer-A. Unruh Act

(2) 10. Which of the following actions dealing in trust funds would be a violation of the law A. Giving trust funds received to a principal B. Placing depository trust funds directly into escrow C. Placing trust funds in a trust account D. Placing trust funds in the personal care of a bonded employee - Correct Answer-D. Placing trust funds in the personal care of a bonded employee (3) 1. Which of the following statements regarding an agent's duty in a real estate transaction is TRUE A. An agent has a fiduciary duty to the principal B. An agent must disclose any known detrimental information to a buyer, even when the agent represents the seller C. Any material facts the agent becomes aware of must be disclosed to the principal D. All of these - Correct Answer-D. All of these (3) 2. Which of the following statements regarding agency disclosure is TRUE A. An agent need not provide a seller of a commercial building with an agency disclosure B. The listing agent cannot elect to be only a buyer's agent C. Both of these are true D. Neither of these is true - Correct Answer-B. The listing agent cannot elect to be only a buyer's agent (3) 3. Which of the following statements regarding agency disclosure is TRUE A. The confirmation of agency must be in writing B. The three steps of the disclosure process are disclose, elect, confirm C. The selling agent must confirm the agency before the buyer makes an offer D. All of these are true - Correct Answer-D. All of these are true (3) 4. Which seller(s) must provide a Real Estate Transfer Disclosure Statement

A. The seller of a lot B. The seller of a 4 - unit apartment building C. The seller of a 16 - unit apartment building D. All of these - Correct Answer-B. The seller of a 4 - unit apartment building (3) 5. Under Easton, an agent's duty of inspection and disclosure covers A. all types of property B. accessible and inaccessible areas C. a visual inspection and known or should be known defects D. none of these - Correct Answer-C. a visual inspection and known or should be known defects (3) 6. Which statement regarding earthquake safety disclosure is TRUE A. It applies to 1 - 4 unit residential properties B. It applies only to homes built before 1930 C. The buyer can waive her right to a hazard report D. Delivery of a copy of The Homeowner's Guide to Earthquake Safety is evidenced by an affidavit from the agent - Correct Answer-A. It applies to 1 - 4 unit residential properties (3) 7. The buyers sign that they have received a booklet relating to A. environmental hazards B. floods, tornados, and earthquake C. foreclosure rights D. rescission rights - Correct Answer-A. environmental hazards (3) 8. Brownfields is a term related to A. insect infestation

B. soil contamination C. undeveloped acreage D. seller financing - Correct Answer-B. soil contamination (3) 9. The purpose of the Subdivided Lands Law is to A. prohibit premature subdivisions B. set minimal physical standards C. protect purchasers from fraud D. allow for a uniform growth pattern - Correct Answer-C. protect purchasers from fraud (3) 10. A right of rescission is provided by law for purchase agreements involving all EXCEPT A. 1 - 4 unit residential properties B. time-shares C. undivided interest subdivision D. both b and c - Correct Answer-A. 1 - 4 unit residential properties (4) 1. The CAN-SPAM Act puts controls on unsolicited a. fax messages b. misleading e-mails c. residential phone calls d. real estate assistants - Correct Answer-B. misleading e-mails (4) 2. You may legally pay a referral fee to an unlicensed person who a. shows listings to prospective buyers b. assists in sales negotiations c. introduces a prospective buyer to the broker

d. tells buyers about the beneficial property features - Correct Answer-C. introduces a prospective buyer to the broker (4) 3. Direct mail solicitation for listings is more effective if you A. use window envelopes B. use a mailing machine and bulk rate C. use mailing labels D. indicate you will be contacting them - Correct Answer-D. indicate you will be contacting them (4) 4. Under do-not-call regulations, which call would be improper A. Calling for survey purposes B. A call to a business phone C. A call within 3 months of an inquiry D. A call on a For Sale by Owner ad to solicit a sale listing - Correct Answer-D. A call on a For Sale by Owner ad to solicit a sale listing (4) 5. Which classified ad category is likely to provide listing leads A. Homes for rent B. Leases/options to purchase C. Mobile homes for rent D. All of these - Correct Answer-D. All of these (4) 6. Legal notices provide good leads for listings. Which is NOT a legal notice A. Eviction B. Foreclosure C. Probate D. Vacancy - Correct Answer-D. Vacancy

(4) 7. Which would be an indication that an owner might be interested in selling an income property A. A high vacancy rate B. Tenant evictions C. Code violations D. All of these - Correct Answer-D. All of these (4) 8. Endless chain refers to A. the long term effects of advertising B. obtaining additional prospects from every lead C. the fact that your buyer will eventually become a seller D. the fact that most buyers are sellers and sellers are buyers - Correct Answer-B. obtaining additional prospects from every lead (4) 9. The term "farming" as used in real estate refers to A. determining what your market area will be B. operation by season, such as a listing season, open house season, selling season, and so forth C. specialization in a particular field of real estate activity D. working or prospecting a geographic area or special interest area for buyers and sellers

• Correct Answer-D. working or prospecting a geographic area or special interest area for buyers and sellers (4) 10. An example of a nongeographic farm would be specialization in A. mobile homes B. income property C. lots D. any of these - Correct Answer-D. any of these

(5) 1. A CMA is BEST described as A. a formal appraisal B. the cooperative marketing approach of multiple listings C. a reflection of the reality of the marketplace D. the comparative mortgage analysis performed by agents in advising buyers as to lender and loan type - Correct Answer-C. a reflection of the reality of the marketplace (5) 2. In making your recommendation of the list price for a single family home, the MOST important portion of the analysis deals with A. list prices of the homes on the market now B. list prices of homes where the listings have expired C. prices of comparable properties that sold D. possible rental income - Correct Answer-C. prices of comparable properties that sold (5) 3. You should realize that for data to be used on a CMA, A. the older the data, the less reliable they are B. sales sales prices that seem unusually high or low are often the result of market imperfections C. both of these are true D. both of these are false - Correct Answer-C. both of these are true (5) 4. Owners must be made to realize that A. the higher they price their home over fair market value, the longer it will take to sell B. the higher they price their home over fair market value, the lower the likelihood of a sale during the listing period C. both of these are true D. both of these are false - Correct Answer-C. both of these are true

(5) 5. A recommended list price below the CMA indicates as the likely sale range is in an owner's best interest when A. a seller's market exists B. the seller must get the highest net C. the seller must sell quickly D. the seller is not strongly motivated to sell - Correct Answer-C. the seller must sell quickly (5) 6. What a seller receives in hand from a sale is the A. gross sale price B. net sale price C. net profit D. seller's net proceeds - Correct Answer-D. seller's net proceeds (5) 7. The principle reason owners try to sell their homes without an agent is A. to have a quick sale B. to save the commission C. to be able to pick the buyer D. none of these - Correct Answer-B. to save the commission (5) 8. Your listing presentation material should A. be organized to follow your listing presentation B. not be used in lieu of a verbal presentation C. b helpful in selling an owner on the concept of listing in general and listing with your firm in particular D. be all of these - Correct Answer-D. all of these (5) 9. Which statement is the BEST approach to take when selling the benefits of listing with a small office

A. "We try harder because of the competition" B. "All we need to find is one buyer, and even we can do that" C. "We need the business more than the large firms do" D. "We specialize in a small number of select properties" - Correct Answer-D. "We specialize in a small number of select properties" (5) 10. Which would be the MOST effective statement to make during a listing presentation A. Last year we sold 26% of the listings we took during the listing period B. Our office has six full-time and nine part-time salespeople C. Last year our average sale was at 86% of the list price D. Our average time to sell was 32 days last year compared with a MLS average time to sell of 54 days - Correct Answer-D. Our average time to sell was 32 days last year compared with MLS average time to sell of 54 days (6) 1. A valid exclusive listing requires A. a lawful purpose B. mutual consent C. consideration D. all of the above - Correct Answer-D. all of the above (6) 2. An agent sold a property where the owner had verbally agreed to pay a commission. The agent would be legally entitled to a commission from the owner for the sale if the agent had A. relied on the verbal promise B. made a written memorandum of the agreement signed by the agent C. obtained a valid buyer listing agreement D. none of the above - Correct Answer-D. none of the above

(6) 3. Which listing would you be LEAST likely to advertise A. Nonresidential property B. An open listing C. An exclusive-agency listing D. An exclusive-right-to-sell listing - Correct Answer-B. An open listing (6) 4. A listing under which the owner can sell the listed property without payment of a commission but the agent is nevertheless an exclusive agent is a(n) A. open listing B. exclusive-right-to-sell listing C. exclusive-agency listing D. net listing - Correct Answer-C. exclusive-agency listing (6) 5. An agent who did not obtain a purchase offer but who initiated an uninterrupted chain of events that led to a sale would be considered the A. agent of record B. procuring cause C. exclusive agent D. cooperating broker - Correct Answer-A. agent of record (6) 6. An exclusive-right-to-sell listing likely includes A. an agency relationship disclosure B. an attorney fee provision C. an arbitration agreement D. all of the above - Correct Answer-D. all of the above (6) 7. All of the following statements regarding an exclusive-right-to-sell listing are true EXCEPT

A. escrow does have to close for an agent to be entitled to a commission B. it must have a termination date for the agent to be able to collect a commission C. the agent must give the owner a copy of the listing when the owner signs D. the agent is precluded from working with other agents to sell the property - Correct Answer-D. the agent is precluded from working with other agents to sell the property (6) 8. The type of listing that has the greatest likelihood of resulting in a sale would be a(n) A. open listing B. exclusive-agency listing C. exclusive-right-to-sell listing D. reduced-fee listing - Correct Answer-C. exclusive-right-to-sell listing (6) 9. An owner tells you that Agent Jones told her she could get far more for her home than your CMA indicates. What is your BEST response A. "Many unethical agents will promise the moon to get listings and then fail to perform" B. "I am willing to take the listing at that price, but if we don't attract buyers we will reevaluate the price" C. "I don't believe it. No agent who knows the market would set a price that high" D. "I think my comparative market analysis covers all recent comparables and clearly shows the market value. May I please look at the comparative market analysis that Agent Jones prepared for you?" - Correct Answer-D. "I think my comparative analysis covers all recent comparables and clearly shows the market value. May I please look at the comparative market analysis that Agent Jones prepared for you?" (6) 10. By taking a listing at a low fee that will result in a less than normal fee for any cooperating broker, you are benefiting A. your office B. a selling office C. the owner D. none of the above - Correct Answer-D. none of the above

(7) 1. The reason that an expired listing was not extended with the original listing office MOST likely is dissatisfaction with A. the commission percentage B. communications C. price D. the length of listing - Correct Answer-B. communications (7) 2. Agent advice to owners on showing their home would NOT include A. instructions to be present so they can volunteer information B. cleaning instructions C. landscaping instructions D. repair instructions - Correct Answer-A. instructions to be present so they can volunteer information (7) 3. When there has been little, if any, interest in a property, the listing salesperson should A. convey this information B. tell the owner the property is priced 10% too high C. wait until there is something good to report D. tell the owner you are expecting an offer - Correct Answer-A. convey this information (7) 4. The Equator Platform is a system for A. locating property B. loan approval C. short-sale approval D. a title search - Correct Answer-C. short-sale approval (7) 5. You want owners to give you neighborhood information

A. to keep the owners busy B. to give your listing a competitive advantage C. to use it to get more listings D. for none of these - Correct Answer-B. to give your listing a competitive advantage (7) 6. An owner should understand that reducing a list price to the CMA value A. increases the likelihood of a sale B. does not mean that an owner is giving up anything C. results in both of these D. results in neither of these - Correct Answer-C. results in both of these (7) 7. If possible, you should place a rider strip on your listing signs that shows A. your fax number B. all your professional designations C. a desirable feature D. all of these - Correct Answer-C. a desirable feature (7) 8. A property brief should NOT be used as a A. handout at open house B. a substitute for Internet advertising C. handout at caravans D. mailing piece to answer inquiries - Correct Answer-B. a substitute for Internet advertising (7) 9. A broker open house is of greatest value when the property A. is in a large market with hundreds of listings B. is overpriced

C. has a very limited use D. has been reduced in price - Correct Answer-A. is in a large market with hundreds of listings (7) 10. Advantages of open houses include A. pleasing owners because they indicate activity B. locating buyers for other property C. obtaining leads for listings D. all of these - Correct Answer-D. all of these (8) 1. The AIDA approach does NOT include A. attention B. demand C. interest D. action - Correct Answer-B. demand (8) 2. Personal advertising includes A. name tags B. blog websites C. car signs D. all of these - Correct Answer-D. all of these (8) 3. What does the term logo refer to A. Your firm name B. An identifying design or symbol C. Length of gross opportunity, which refers to the time span of attention generated by an ad D. - Correct Answer-B. An identifying design or symbol

(8) 4. Blind ads are ads that fail to include A. a price B. the address of property C. broker identification D. property specifics - Correct Answer-C. broker identification (8) 5. The MOST cost-effective advertising medium for selling a home likely would be A. television B. the internet C. classified newspaper ads D. billboards - Correct Answer-B. the internet (8) 6. Classified ads are different from most other forms of real estate advertising because they are A. actually sought ought by the reader B. infective for expensive homes C. less reader-selective than other printed ads D. unemotional - Correct Answer-A. actually sought ought by the reader (8) 7. Real estate professionals know that ads that tell about the problems of a property are A. a waste of advertising dollars B. likely to give a firm a bad name C. unlikely to attract any calls D. none of these - Correct Answer-D. none of these. Ads that tell about the problems of the property are often very effective, attracting bargain hunters, flippers, and do it yourself buyers.

(8) 8. An advertiser with an extremely low advertising budget would most likely avoid A. press releases B. For Sale signs C. billboards D. the internet - Correct Answer-C. billboards (8) 9. Which statement is FALSE about display ads? A. Readers' eyes tend to move from upper left to lower right B. One large picture is generally more effective than several smaller ones C. Short words are easier to read than long words D. Capital letters are easier to read than lowercase letters - Correct Answer-D. Capital letters are easier to read than lowercase letters (8) 10. In preparing display ads, a good advertiser should A. eliminate as much white space in the ad as possible for maximum effect B. use different logos in different ads to avoid repetition C. use no more than two typefaces in an ad D. avoid using a serif typeface in the text - Correct Answer-C. use no more than two typefaces in an ad (9) 1. Callers from a For Sale sign are likely to be A. satisfied with the area B. looking for a more expensive home C. satisfied with the general exterior appearance D. both a and co - Correct Answer-D. both a and c (9) 2. If we compare callers from classified ads with those from For Sale signs, in general,

A. callers from signs are more likely to end up buying homes that cost less than the home they called about B. looking for a more expensive home C. satisfied with the general exterior appearance D. both a and c - Correct Answer-D. both a and c (9) 3. Real estate professionals should A. limit showing to their own listings B. show overpriced property first to make the one house seem a bargain C. avoid driving through nearby minority areas D. do none of these - Correct Answer-D. do none of these (9) 4. In showing property, you should A. never show a prospect more than three homes in one day B. show prospects a really nice home they can't afford in order to keep up their interest C. never change your showing plans once you start D. do none of these - Correct Answer-D. do none of these (9) 5. The qualifying process includes discovering A. the buyers' motivation B. the buyers' needs and interests C. a down payment they can make and the amount they can finance D. all of these - Correct Answer-D. all of these (9) 6. The front end loan qualifying ratio is the ratio of A. gross housing cost (PITI) to gross income B. gross income to net income

C. net housing cost to net income D. none of these - Correct Answer-A. gross housing cost (PITI) to gross income (9) 7. The back end qualifying ratio refers to the ratio of A. gross housing cost to gross income B. total housing expense plus long term debt to gross income C. gross income to net income plus housing cost D. none of these - Correct Answer-B. total housing expense plus long term debt to gross income (9) 8. A good policy for a professional real estate salesperson would be to A. meet new prospects at the nicest property you think will interest them B. avoid discussing financial matters until an offer is received C. ask open ended questions of prospective buyers D. limit appointments to the showing of no more than two properties - Correct Answer-C. ask open ended questions of prospective buyers (9) 9. For personal safety concerns, you should A. meet prospects at your office B. avoid ostentatious jewelry or accessories C. leave front door unlocked at showing D. do all of these - Correct Answer-D. do all of these (9) 10. If another agent is showing a home when you arrive for a showing, what should you do A. Bring your prospects in and let them know you are competing with other buyers for the house B. Cross the house off your showing list until you are sure it has not been sold C. Wait inconspicuously until the other agent completes his or her showing and leaves

D. Tell your clients that you are certain that the other prospects are buyers so they had better act fast - Correct Answer-C. Wait inconspicuously until the other agent completes his or her showing and leaves (10) 1. A good salesperson A. uses technical terms whenever possible to impress buyers B. speaks fast so she can reach the closing C. approaches every customer in the same way D. does none of these - Correct Answer-D. does none of these. He never uses technical terms to impress buyers, speaks fast so he can reach the closing, or approaches every customer the same way. (10) 2. A salesperson appeals to buying motives. Which of the following is a buying motive A. Love of family B. Comfort and convenience C. Security D. All of these - Correct Answer-D. All of these (10) 3. Disadvantages of home ownership include A. increase in expenses B. risk C. lack of liquidity D. All of these - Correct Answer-D. All of these (10) 4. Buying signals might include a buyer's A. whispering with a spouse B. pacing off a room C. seeming reluctant to leave a property D. doing all of these - Correct Answer-D. doing all of these

(10) 5. A prospective buyers says, "The price is too high." The BEST response is A. "I think the price is fair." B. "Why don't you offer less?" C. "The comparable sales don't bear that out." D. "Why do you feel that the price is too high?" - Correct Answer-D. "Why do you feel that the price is too high?" (10) 6. A professional salesperson knows that A. telling is more effective than asking B. appealing to emotions should be avoided C. in dealing with a cautious buyer, you should be assertive and push for a decision D. none of these apply - Correct Answer-D. none of these apply (10) 7. When you ask prospective buyers if they prefer June 1, July 1, or August 1 for possession, what type of closing technique are you using A. inducement B. positive choice C. fear of loss D. narrative close - Correct Answer-B. positive choice (10) 8. The paragraph in the purchase contract in which the buyer indicates an intention to occupy the property (applies to 1 - 4 unit residential properties) is important because it relates to A. liquidated damages B. vesting of title C. smoke detectors D. home protection plan - Correct Answer-A. liquidated damages

(10) 9. Who can modify an accepted offer to purchase A. The selling broker B. The listing broker C. The listing broker and the seller D. The buyer and the seller by mutual agreement - Correct Answer-D. The buyer and the seller by mutual agreement (10) 10. In making a property inspection, the inspector hired by the buyer negligently damaged the air-conditioning unit. Who is responsible for the damage based on the California Residential Purchase Agreement and Joint Escrow Instructions A. The seller B. The buyer C. The buyer's agent D. The seller's agent - Correct Answer-B. The buyer (11) 1. For listing agents, selling real estate involves three separate sales. Which is NOT one of them A. Obtaining the listing B. Advertising for buyers C. Selling the buyer as to an offer D. Selling the seller on acceptance - Correct Answer-B. Advertising for buyers (11) 2. You receive two offers on a property you have listed. One is from your own firm and the other, which was received an hour earlier, is from another firm. You should A. present the offers in the order received B. present the highest price offer first and, if not accepted, present the next offer C. present the offers at the same time D. always present your firm's offer before offers from other firms - Correct Answer-C. present the offers at the same time