Real Estate Exam 3e Flashcards

Real Estate Exam 3e Flashcards

Question: Lehigh gave Cambell an option for the purchase

of Lehigh's ranch. In law, such an option is regarded as:A:

An offer to enter into a contract;B: An involuntary lien on

the real property;C: An agreement identical with the

vendee/vendor relationship under a land contract;D: A

contract to keep the offer open.

Correct Answer is : DAn option is a contract to keep the

offer open - the seller is offering to sell if the buyer chooses to buy. It is not a lien, and it is different from a land contract, in that under a land contract, both parties are bound; in an option, only the optionor is bound - the optionee is not.

Question: All of the following statements are correct

concerning the transfer of title to personal property, except:A: Title to personal property can be transferred by

the delivery of possession;B: The condition of the title to

personal property can usually be determined by a study of public records with about the same accuracy as title to real

property;C: Personal property is usually considered to be

situated in the domicile of the owner regardless of where the property actually is, and is covered by the law which

covers the owner's domicile;D: A written instrument can be

used along with the transfer of personal property but, in many cases, such an instrument is not necessary to the validity of the transfer.

Correct Answer is : BGenerally, title to personal property is

transferred by a bill of sale or transfer of possession. (e.g., A purchase from a vending machine is a transfer of ownership by a change of possession.) Usually, there is no document placed in the public records.

Question: The fiduciary obligation to protect a client's

confidential information continues:A: For three years after escrow closes;B: For the term of the listing agreement;C:

Only when escrow is open;D: After the term of the listing

agreement.

Correct Answer is : DThe agent must respect the

confidential nature of the information even after the listing expires or escrow closes.

Question: Broker Hammerman, while exempt from some

provisions of the escrow law, is still prohibited from doing certain acts when acting as an escrow agent for a principal.With one exception, doing any of the following acts would probably be grounds for disciplinary action by the Commissioner. Which of the following acts would not violate real estate law:A: Refusing to give a copy of the escrow instructions to a person who signs them at the time

of signing;B: Upon the close of escrow, failing to furnish

each principal in the transaction with a written statement

summarizing the funds handled by escrow;C: Encouraging

a buyer to alter escrow instructions, although such alterations have been initialed by all persons who signed

the original instructions;D: Recommending an amended

escrow instruction which contains a blank to be filled in after signing.

Correct Answer is : CNo violation would occur if the broker

encouraged alterations to the instructions which had been approved by all parties thereto.

Question: The owner of a hardware store who owned the

real property where it was located, sold the real property and leased it back for a long term. For income tax purposes, the seller may:A: Continue to depreciate the building;B: Deduct 100 percent of future rents;C: Keep the

fee simple title to the property;D: None of the above.

Correct Answer is : BA business tenant can fully deduct

any rent that he pays as a business expense.

Question: Which of the following statements is false

regarding townships:A: All townships contain the same land area;B: Townships have a standard number of sections;C:

Standard townships contain 36 square miles;D: Townships

are contained between range lines and township lines.

Correct Answer is : ASome townships are not standard

townships and do not have the same land area. Examples of these would be townships located on the coast or along a boundary line separating base and meridian areas.

Question: A parcel of vacant land measuring 110 yards by

220 yards would contain how many acres:A: 2-1/2;B: 5;C:

10;D: 40.

Correct Answer is : B(1) 110 x 3 = 330 (2) 220 x 3 = 660 (3)

330 x 660 = 217,800 square feet (4) 217,800 divided by

43,560 = 5

Question: An acre is divided into four equal lots. If the lots

are parallel to each other, rectangular, and 240 feet deep, the width of each lot would most nearly be:A: 280 feet;B: 181.5 feet;C: 87.8 feet;D: 45.4 feet.

Correct Answer is : D(1) 43,560 divided by 4 = 10,890 (2)

10,890 divided by 240 = 45.375

Question: A prospective purchaser is interested in buying a

lot in the mountains from a subdivider who does not have a real estate license. The buyer wishes to know about sewer assessments, liens, utilities to his lot, blanket encumbrances, and maintenance of streets. The source that would provide all of this information is the:A: County engineer;B: Real Estate Commissioner;C: County planning

director;D: Subdivider.

Correct Answer is : BThe Real Estate Commissioner's

public report would be the best source for information of this type.

Question: Which of the following is the best example of the

practice known as "puffing":A: A licensee implies that he is well connected, and knows many influential people in the

area;B: A licensee exaggerates certain features or benefits

of a property;C: A licensee misrepresents material facts

concerning a property;D: A licensee communicates his

opinions about a property as material facts.

Correct Answer is : BPuffing involves exaggeration about

the features or benefits of a property.

Question: When, in a given transaction, the licensee acts a

selling agent of the listing broker, the licensee's primary duty is:A: To the seller;B: To the buyer;C: Restricted by the

language of the required power of attorney;D: To protect

the best interests of all parties to the transaction.

Correct Answer is : AWhen acting as a selling agent of the

listing broker, the licensee's duty is to the listing broker's principal, the seller.

Question: Changes in which of the following would have an

impact on real estate in the future:A: The real estate industry;B: Land use controls;C: The popularity of

consumerism issues;D: All of the above.

Correct Answer is : DChanges in any of the areas listed will

have an impact on the real estate industry for years to come.

Question: Which of the following is most correct concerning

delinquent taxes and redemption rights:A: The important effect of a "sale to the state" by the tax collector is to start

the redemption period running, but the delinquent owner's

possession remains undisturbed;B: The homeowner is

required to make monthly installment payments to liquidate the delinquent property taxes and accrued penalties which

are owed;C: In the event the delinquent owner transfers or

otherwise alienates the property, the redemption period is

automatically terminated;D: The property is automatically

deeded to the state if the property is not redeemed within one year.

Correct Answer is : AThe important effect of a "sale to the

state" by the tax collector is that it starts the redemption period running; however, the delinquent owner's

possession remains undisturbed for five years.

Question: A man bought two 60 foot lots for $18,000 net

each and divided them into three lots of equal frontage which he sold for a price of $15,000 each. His percentage of gross profit was most nearly:A: 15%;B: 20%;C: 25%;D: 40%.

Correct Answer is : C(1) $18,000 x 2 = $36,000 (2) $15,000

x 3 = $45,000 (3) $45,000 - $36,000 = $9,000 (4) $9,000 divided by $36,000 = 25%

Question: Generally, as the employment rate and the GNP

(Gross National Product) both rise:A: The level of personal

income rises;B: New residential developments will increase

in number;C: Sales of existing homes will remain level or

increase;D: All of the above will probably occur.

Correct Answer is : DSuch increases in the economic

indicators generally signal a healthy economy, and each of the trends listed will occur.

Question: If a person buys a property in a California land

project and then changes his mind, he can obtain a refund of his money without a specific reason within how long:A: 3 calendar days;B: 5 calendar days;C: 10 calendar days;D: 14 calendar days.

Correct Answer is : DA land project is a special type of

California subdivision in which the buyer has a 14-day rescission period.

Question: To whom must a subdivider give a copy of the

Commissioner's public report?A: Anyone who intends to

purchase one or more lots;B: Any person, at any time,

upon request;C: Only purchasers of lots just before they

sign the purchase contract;D: Only their sales people.

Correct Answer is : BThe subdivision laws require the

subdivider to give a copy of the public report to anyone requesting a copy at any time.

Question: The Real Estate Commissioner has primary

regulatory authority over subdivision matters involving:A:

Alignment of streets within a tract;B: Design and

improvements for drainage;C: Financial arrangements to

assure completion of community facilities;D: All of the

above.

Correct Answer is : CThe Real Estate Commissioner has

authority over subdivision matters to prevent fraud. One of the requirements is that the developer must show that he has the financial capability to install community facilities as he has promised to do.

Question: When the term "warehousing" is used in

connection with real property financing, the term would normally describe:A: A jumbo loan on a self-storage

facility;B: The underwriting of stock issues with loans

against industrial property;C: Loans regulated by Division 7

of the California Real Estate Law;D: A mortgage banker

collecting loans prior to sale.

Correct Answer is : D"Warehousing" is the term used to

describe the activity of collecting loans prior to resale of those loans to a large institutional investor.

Question: Which of the following is an acceptable

termination date for an enforceable exclusive listing of residential real property:A: 90 days from completion of