CA Real Estate Exam 2024 Practice Questions Flashcards

CA Real Estate Exam 2024 Practice Questions Flashcards Escrow agent Emily will use what legal instrument to transfer real property from the seller to the buyer on closing day?Title certificateDeedBill of saleSettlement statement Deed Describing the property would be acceptable in advertising, however, describing the type of buyer desired would be

considered:Descriptive advertisingDiscriminatoryTarget

marketingEffective advertising DiscriminatoryIn advertising, describing the property would be acceptable. Describing the type of buyer would be considered discriminatory and a violation of Fair Housing laws.If an agent is accused of puffing, what does that mean?FraudLiesMisrepresentationExaggeration ExaggerationFor example, "This home has the most gorgeous view of any home anywhere." Exaggerated opinion, but not a misrepresentation of a material fact.Which of the following loan types would have the highest down-payment?Rural development loanConventional loanVA loanFHA loan Conventional loanConventional loans require the borrower to pay a higher down-payment than government loans.Rural development and VA loans require no down-payment. FHA loans require 3-5% down, while conventional loans can be 10-20% or more.All parties entering into a real estate contract must be doing so on their own free will and not under duress. Which of the following is not a requirement to enter into a real estate contract?Parties must be US citizensParties must have proper authorityParties must be mentally competentParties must be of legal age Parties must be US citizens What is the general purpose for cities to require building permits?Permit fees are income for the cityControl the amount of building allowedTo supersede deed restrictionsTo require a minimum level of construction standards To require a minimum level of construction standardsConstruction standards are placed to maintain the safety and well-being of the public.A valid contract must contain valuable consideration which

means:No personal property itemsCash onlySomething

clearly offered for something else in exchangeNone of the above Something clearly offered for something else in exchangeA valid contract must contain a two-party exchange of valuable consideration and performance.LeAnn entered into a contract that called for $1000 in monetary damages if the contract was breached. The

$1000 in the contract is referred to as:Retainer feeBreach

fineLiquidated damagesLis penden Liquidated damages How many square feet does one acre contain?43,56045,63046,35040,560

43,560

Agent Amanda just closed on a home that sold for $525,000. Her commission rate was 5% with a 50/50 co-broker with the selling broker, and a 60% split with her broker. How much did Amanda receive?$13,125$7,875$7,578$15,750 $7,875$525,000 x 5% (0.05) = $26,250$26,250 split 50/50 = $13,125$13,125 x 60% (0.6) = $7,875

A listing agreement in writing creates which form of agency?Negligent agencyImplied agencyExpress agencyOstensible agency Express agencyA written listing agreement creates an expressed agency. The agency relationship is expressed in writing.Disclosure law specifics vary by state, however, in which type of transaction would the seller's property disclosure generally not be required?Residential arm's length transactionTriplex purchaseResidential foreclosureMobile home purchase Residential foreclosureA foreclosure sale is exempt from the seller's disclosure requirements due to the seller being the lender with little to no knowledge of the property's specifics.Broker Ben has E&O Insurance and is selling an investment property that he owns. He has made a few false statements and misrepresentations, but he really needs to sell the property fast. What would happen if someone were to sue him for his false statement?E&O Insurance will not cover negligence of a broker selling property he ownsThe E&O Insurance will defend him, but charge him double premiumThe E&O Insurance only covers agents in commercial transactionsThe E&O Insurance would cover him E&O Insurance will not cover negligence of a broker selling property he ownsErrors and Omissions Insurance does not cover intentional acts and will not cover negligence of a broker selling property he owns.Discount points are a way lenders are able to charge prepaid interest in order to lower the interest rate over the life of the loan. What is the cost of the discount points based on?The down-payment requiredThe appraised property valueThe loan amountThe sales price The loan amountDiscount points charged on all loan types are figured as a percentage of the loan amount. One discount point is equal to 1% of the loan amount.After the offer and acceptance, when the terms of a contract are in the process of being completed, and prior to closing, the contract is said to

be:ExecutoryAmendedRescindedLis penden

ExecutoryWhen the terms of a contract are in the process of being completed.How many acres are in a lot that measures 250 x

325?1.661.521.861.89

1.86250 x 325 = 81,250 ft81,250 / 43,560 sq ft in an acre = 1.86 acres Steve tells listing agent Shelly his basement leaks but, only when it rains hard for long period of time, so no need to mention it to buyers. He insists it's really no big deal. Which of the following is true?Shelly must be obedient and not mention itShelly should trust her clientShelly cannot withhold known material factsShelly should only mention it if the buyer asks Shelly cannot withhold known material factsNot disclosing a material fact would be illegal and the agent does not have to obey the seller in this situation.While working on an appraisal report, appraiser Jake finds that the comparable property is superior to the subject property with more amenities. How will Jake make adjustments to arrive at a value of the subject property?Subtract value from comparableAdd value to subjectSubtract value from subjectAdd value to comparable Subtract value from comparableThe idea is that the price a comparable home sold for with more features needs to be adjusted down to find the probable price the subject preparty will sell for without those features.

Tenancy in severalty is best described as:Two property

ownersOne property ownerMore than two property ownersProperty owned by a corporation One property ownerSevering all other owners, when a single person is the sole owner of a property.

Part of agent Connie's listing packet includes a form for the seller to complete that covers the components of the home for sale and the seller's knowledge of the condition of such

items. This form is referred to as:Home inspection

reportSeller's condition reportListing amendmentSeller's disclosure Seller's disclosureThe seller's disclosure form lets the seller convey knowledge they have regarding their property to a potential buyer. This is where a seller can list any updates made or repairs needed to the best of their knowledge.A contract between two parties both giving a promise for a

promise is called a:Unilateral contractBilateral

contractSpecial agreementCollusion Bilateral contract Marvin owns an easement to use the driveway of his

neighbor Bob. Marvin's property is considered the:Servient

estateLife estateDominant estateFreehold estate Dominant estateThe property that benefits from an easement to another parcel.What type of ownership would allow two or more owners to have various unequal percentages of ownership?Joint tenancy with rights of survivorshipJoint tenancyTenancy in commonTenancy in severalty Tenancy in commonTenancy in common grants owners to have an equal, undivided interest in a property, but also allows owners to have varying percentages of unequal ownership as well.Paul owns an older residential property in an area now zoned for commercial use. Paul decides to renovate the home into a laundry mat. The change in the properties functionality for Paul's financial gain is an example

of:Highest and best useSubstitutionAssemblageConformity

Highest and best useThe transition of the residential property to an income producing business is an example of the property being put to its highest and best use.Which of the following best describes the economic characteristics of land?Demand, utility, scarcity, transferability, situsScarcity, situs, immobility, utility, demandSitus, transferability, demand, immobilityIndestructibility, demand, non-homogenous, situs Demand, utility, scarcity, transferability, situsThere are five economic characteristics of land and the lack of any of these characteristics reduces the land's utility and value.Donnie leaves his home to his third wife Trish with the clause that after her passing the home goes to his first son Logan. What type of interest does Logan have in the property?Life tenant estateLife estateRemainder manLeasehold Remainder manA remainder man is a third party interest in a property that will revert to them at the time a life tenant passes away.Buyer Sam purchased a run down residential home in a neighborhood with many nice well kept properties. Sam intends to renovate the home and resell it for a profit.Considering the nicer homes in the neighborhood help raise his property value, what appraisal principle is Sam leveraging?RegressionProgressionAssemblageSubstitution ProgressionIt is the appraisal principle that a dilapidated property will gain value when the surrounding properties are well kept. Nicer homes surrounding a property that is run down will only raise the subject property's value.When agent Andy took a listing he promised the seller that he would advertise the property in a magazine until it was sold. Andy did not do the advertising that he promised.

Andy is guilty of:Objective fraudConstructive fraudActual

fraudComprehensive fraud Actual fraudActual fraud is an act intended to deceive another, such as making a false statement, making a promise without intending to perform it.What duty requires an agent to place the client's best interest above all others?HonestyLoyaltyRespectObedience Loyalty

Mary and Mark are buying their first home, which as built just 3 years ago. After touring the property which seems to be in good repair, they waive their right to a home inspection. After closing and moving in, they find that some of the duct work in the crawl space has fallen and is no longer attached causing the air to be released under the home. They are upset that the seller did not mention this issue and when asked, the seller states they had no idea that had happened. Is the seller at fault for not disclosing this issue to the buyers?Yes, the seller should disclose all issuesNo, the seller had no knowledge of the issueYes, the seller must provide a home inspection reportYes, the seller should pay for the repairs No, the seller had no knowledge of the issueA seller's disclosure is not a warranty that the home is free of issues.The seller can only disclose what they are aware of. The buyer has the responsibility of doing their due diligence in order to discover any unknown issues outside of those disclosed.When someone passed away with a valid will in place, it is

referred to as:TestateIntestateEscheatAppurtenant

Testate Melissa went on a listing appointment and the sellers were asking legal questions. Questions she felt certain she knew the answers to, what should Melissa do?Suggest they seek legal counselAnswer the questionsTell them she will find out and get back to themTell them she doesn't know for sure Suggest they seek legal counselAn agent can never give legal advice without a license to do so, nor deter customers or clients from seeking legal counsel.Only showing homes in a certain part of town to people of a

certain nationality is called:Panic

sellingRedliningBlockbustingSteering SteeringSteering is a violation of Fair Housing laws.In order for a contract to convey ownership in a property

transaction, the contract must include:Surface rightsA legal

descriptionRights of survivorshipThe full bundle of rights A legal descriptionThe contract must include a legal description that describes the property so that its geographic location is identifiable.Which of the following is not one of the four land use controls?Police powerIntestateEscheatEminent domain

IntestateThe four public land use controls in real estate are:

police power, escheat, eminent domain, and taxation.Intestate is a person who died without making a will.FHA loans require that borrowers provide protection to the lender in case of loan default. What must the borrower pay for to provide this protection to the lender?Credit life insuranceHomeowner's insuranceMortgage insurance premiumTitle insurance

Mortgage insurance premiumUFMIP: one-time fee paid at

the end of closing or can be added to the loan amount.

(upfront)MIP: amount is based on the loan term,

loan-to-loan ratio, and the initial loan amount. (annually) John signs a six-month lease on an apartment beginning January 1st and ending June 30th. His lease does not automatically renew and no notice is required on his part to vacate on the expiration date. What type of lease did John sign?Estate at willEstate from period to periodEstate for monthsEstate for years Estate for yearsAn estate for years is a lease for a fixed period of time, rather than month-to-month, that does not automatically renew and requires no notice to terminate at the end of the term.Some loans are structured where the lender places a portion of each payment the borrower makes into a special account to pay the property taxes at the end of each year.What is the account called?Escrow accountMortgage