California Real Estate Salesperson Exam: Practice Questions and Answers, Exams of Real Estate Management

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CALIFORNIA REAL ESTATE SALESPERSON FINAL

EXAM AND PRACTICE EXAM NEWEST 2024-

ACTUAL EXAM COMPLETE 300 QUESTIONS AND

CORRECT DETAILED ANSWERS. GRADED A

(GIM) A variation of the GMRM which is used for commercial properties, but uses annual income figures. – ANS Gross Income multiplier (GRM) A number derived from comparable rental property in an area, which then used to estimate the value of a piece of real estate. The GMRM is only used for one to four unit residential properties. COMPARE: Gross Income Multiplier, which is a variation used for commercial properties that uses annual income. - ANSGross Rent Multiplier (PMI) Insurance offered by private companies to insure a lender against default on a loan by a borrower. - ANSPrivate Mortgage Insurance (RTC) An agency formed to manage the disposition of bankrupt savings and loans.

• ANSResolution Trust Corporation

1. (noun) Real property transferred in a will. 2. (verb) To transfer real property by will. - ANSDevise

1. A contract. 2. A promise. 3. A guarantee (express or implied) in a document such as a deed or lease. - ANSCovenant
2. A contract. 2. A promise. 3. A guarantee (express or implied) in a document such as a deed or lease. 4. A restrictive covenant. (Typical covenants compel or prevent certain actions by the property owner or uses for the property.) - ANSCovenant
3. A court's binding determination of the rights and duties of the parties in a lawsuit. 2. A court order requiring one party to pay the other damages. - ANSJudgment
4. A government's valuation of property for tax purposes. 2. A special assessment.

• ANSAssessment

1. A person who grants another person (an agent) authority to represent him or her in dealings with third parties. 2. One of the parties to a transaction (such as a buyer or seller), as opposed to those who are involved as agents or employees (such as a broker or escrow agent). 3. With regard to a loan, the amount originally borrowed, as opposed to the interest. - ANSPrinciple

A contract clause that gives a mortgage recorded at a later date the right to take priority over an earlier recorded mortgage. - ANSSubordination Clause A contract clause that gives the lender the right to declare all outstanding payments immediately due upon a default by the borrower. - ANSAcceleration Clause A contract in which a seller promises to convey title to real property to a buyer in exchange for the purchase price. Also called a purchase and sale agreement, a purchase contract, or an earnest money agreement. - ANSPurchase Agreement A contract in which something remains to be done by one or both parties is best described as a/an: - ANSExecutory contract A contract that has been put into words, either spoken or written. - ANSExpress Contract A contract that has not been put into words, but is implied by the actions of the parties. - ANSImplied Contract

A contract that has not been put into words, but is implied by the actions of the parties. - ANSImplied Contract A contract that one of the parties can disaffirm, without liability, because of a lack of legal capacity or a negative factor such as fraud or duress. - ANSVoidable Contract A counteroffer represents a change. It is a response to an offer to enter into a contract, changing some of the terms of the original offer. A counteroffer is a rejection of the original offer (not a form of acceptance), and does not create a binding contract unless the new counteroffer is accepted by the original offeror (the counterofferee). - ANSCounteroffer A couple is divorcing. The husband is ordered to convey his interest to the wife. When must she receive the Transfer Disclosure Statement? - ANSIt is not requried. A deed in which the grantor warrants the title against any and all defects that might have arisen before or during his or her period of ownership. Also called Standard Warranty Deed or Simple Warranty Deed. - ANSGeneral Warranty Deed

A fibrous material that was once very common in many building materials because of its insulating and heat-resistant value. (Now banned in most places for most uses, and subject to strict EPA regulations.) - ANSAsbestos A final lump-sum payment at the end of a loan term to pay off the entire remaining balance of principal and interest not covered by payments during the loan term. - ANSBalloon Payment A financial domain in which various entities-including banks and other financial institutions-produce and issue new securities, such as stocks, bonds, and mortgage loans. - ANSPrimary Market A financing instrument that evidences a promise to pay a specific amount of money to a specific person within a specific time frame. A written, legally binding promise to repay a debt. - ANSPromissory Note A fixed-rate mortgage set up like a 30-year conventional loan, but payments increase regularly like an ARM. Also Rapidly Amortizing Mortgage. - ANSGrowth Equity (GEM) Mortgage A gradual addition to dry land by the forces of nature, as when the tide deposits water-borne sediment on shoreline property. - ANSAccretion

A judicial proceeding in which the validity of a will is established and the executor is authorized to distribute the estate property; or, when there is no valid will, a judicial proceeding in which an administrator is appointed to distribute the estate to heirs according to the laws of intestate succession. - ANSProbate A judicial proceeding in which the validity of a will is established and the executor is authorized to distribute the estate property; or, when there is no valid will, a judicial proceeding in which an administrator is appointed to distribute the estate to heirs according to the laws of intestate succession. - ANSProbate A Latin phrase meaning 'according to value'; used to refer to taxes assessed on the value of property. - ANSAd Valorem A law that requires certain types of contracts to be in writing and signed in order to be enforceable. - ANSStatute of Frauds A legal remedy in which a court orders someone who has breached a contract to perform as agreed, rather than simply paying money damages. - ANSSpecific Performane

A listing agreement is a contract between: - ANSThe seller and the broker. A listing agreement that entitles the broker to a commission if anyone including the seller finds a buyer for the property during the listing term. - ANSExclusive Right to Sell A listing agreement that entitles the broker to a commission if anyone including the seller finds a buyer for the property during the listing term. - ANSExclusive Right to Sell A listing agreement that entitles the broker to a commission if anyone other than the seller finds a buyer for the property during the listing term. - ANSExclusive Agency A listing of a borrower's credit history, including amount of debt, record of repayment, job info, address info, etc. - ANSCredit Report A loan containing a clause that allows the mortgagor to borrow additional money without rewriting the mortgage. - ANSOpen-End Mortgage

A loan when buyer and another investor (or seller, lender, etc.) enter into a partnership, with buyer paying an equity share in a deal in lieu of interest. - ANSShared Equity Loan A man who makes a will. - ANSTestator A method in which numerical values are assigned to different aspects of a borrower's loan application and used by lenders to gauge creditworthiness and assess credit risk. - ANSCredit Scoring A method of determining the approximate market value of a home by comparing the subject property to other homes that have sold, are presently for sale, or did not sell in a given area. - ANSCompetitive Market Analysis A month after taking a listing, the listing agent decides that he wants to make an offer to purchase the listing. What special agency disclosure is required? A) That the seller is no longer represented and should seek representation B) No additional disclosure is required C) That the agent will continue to represent the seller D) That the agent will now be a dual agent - ANSA) That the seller is no longer represented and should seek representation

A non-exclusive listing, given by a seller to as many brokers as he or she chooses. If the property is sold, a broker is only entitled to a commission if he or she is the procuring cause of the sale. - ANSOpen Listing A note that calls for payments of interest only during the term of the note, with a balloon payment at the end of the loan term to pay off the principal amount. - ANSStraight Note A parcel of land that separates two other parcels (i.e. a parcel between a residential and commercial strip of land) is called: A) Assessed property B) Bill of sale C) A buffer zone D) A fully capitalized property - ANSC) A buffer zone A party in a transaction to whom an agent does not have a fiduciary duty or relationship, but to whom an agent must still be fair and honest. - ANSCustomer A person appointed in a will to carry out the provisions of the will. - ANSExecutor / Executrix

A person licensed to represent another in a real estate transaction; or a person authorized to represent another (the principal) in dealings with third parties. - ANSAgent A person who borrows money and gives a mortgage to the lender as security. - ANSMortgagor A person working with a fair housing organization, who pretends to be interested in buying or renting property from someone suspected of unlawful discrimination.

• ANSTester A physical characteristic of real property that says there is a limited supply of real estate; the perceived supply of a good or service relative to the demand for the item. - ANSScarcity A physical object intruding onto neighboring property, often due to a mistake regarding the boundary. - ANSEncroachment A principal dies. The agent is not aware that the principal has passed away and continues to act on behalf of the principal several days past the principal's death. Which statement is true? A) The agency relationship has been renounced by the agent

A provision in a contract, deed, law, regulation, guideline, etc. that makes the parties' rights and obligations depend on the occurrence (or nonoccurrence) of a specified event. - ANSContingency Clause A real estate firm has an in-house title company, mortgage broker and home inspection company under one business entity. This is allowable only if: - ANSControl business arrangements are clearly disclosed to the consumer and the consumer is aware that other providers are available. A real estate installment agreement where buyer makes payment to seller in exchange for right to occupy and use property, but no deed or title is transferred until all, or a specified portion of, payments have been made. Also called installment land contract, installment sales contract, land sales contract, real estate contract, and other names. - ANSLand Installment Contract A real estate investment business with at least 100 investors, organized as a trust.

• ANSReal Estate Investment Trust (REIT) A recipient of real property under a will. - ANSDevisee A recipient of real property under a will. - ANSDevisee

A recorded notice stating that there is a lawsuit pending that may affect title to the defendant's real estate. - ANSLis Pendens A relationship of trust and confidence, in which one party owes the other (or both parties owe each other) loyalty and a higher standard of good faith than they owe to third parties. For example, an agent is a fiduciary in relation to the principal; husband and wife are fiduciaries in relation to each other. Can be referred to as a client. - ANSFiduciary Relationship A relationship of trust created when one person (the principal) gives another person (the agent) the right to represent the principal in dealings with third parties. - ANSAgency A restriction on real property use, imposed by a former owner; promise to do or not do an act relating to real property; usually owner's promise to not use property in a particular way. May or may not run with land. Also called: Restrictive Covenant - ANSDeed restriction A right that goes along with ownership of real property; usually transferred with the property, but may be sold separately. - ANSAppurtenance

realizing it has been placed in a listing. Which of the following statements is true?

• ANSThe broker is entitled to a commission. A seller who lives in a small town has posters made up advertising his house for sale. He posts the posters on many telephone poles around the neighborhood. As part of the poster, he advertises that he will pay 3% to any broker who brings him a buyer. This type of listing is: - ANSOpen listing A seller's agent may do all of the following except: - ANSSay, "Leave it to me. I can get you the house at the price you want." A situation in the housing market when a large number of buyers are looking for housing in an area of limited availability. - ANSSeller's Market A situation in the housing market when there are many homes available for sale, but few buyers. - ANSBuyer's Market A special kind of easement by implication that occurs when the dominant tenement would be completely useless without an easement, even if it is not a long-standing, apparent use. - ANSEasement by Necessity

A specific lien claimed by someone who performed work on the property (construction, repairs, or improvements) and has not been paid. This term is often used in a general sense, referring to materialmen's liens as well as actual mechanics' liens. - ANSMechanic's Lien A standard appraisal report form used by lenders and appraisers because it has been developed and approved by secondary mortgage market players Fannie Mae and Freddie Mac. - ANSURAR A system of ownership and fee simple title to designated areas of air space plus a percentage of ownership of common elements in the property is termed: A) Cooperative B) Chattel C) Condemnation D) Condominium - ANSD) Condominium A tangible or intangible feature that enhances and adds value to real estate. - ANSAmenity