Real Estate Law Flashcards

Real Estate Law Flashcards Why do brokers use trust fund accounting? In order to separate trust fund money from the broker's money; Jones, who does not have a real estate license, is the owner and president of an investment firm. He advertises and sells properties for his clients. Since these transactions involve real estate, who will prosecute him for violating the

real estate law:

The District Attorney; The real estate commissioner would not permit which of the

following mortgage loan advertisements:

"Call our toll free number 1-800-FOR A LOAN"; When budgeting for a real estate office, the phrase

"company dollar" means:

The money left over after all commissions are subtracted from gross income; Funds can be withdrawn from a broker's trust fund account

by which of the following authorized persons:

Any person employed by the broker; Broker Brown took a listing on a 10-unit apartment house and wrote up a financial analysis showing a 12 percent yield on the investment. In the analysis, Brown did not allow for a vacancy factor, maintenance expenses, or reserves for replacement of furniture and equipment.Brown showed this analysis to Jones, who bought the property. Which of the following describes the above as a

possible violation of the Real Estate Law:

Misrepresentation; If a listing to sell a mobile home expires and is not extended or renewed, how long does the broker have to remove all yard signs and stop all advertising of the mobile

home:

He has 48 hours from the termination; A licensed real estate broker may legally negotiate the sale

of:

Any registered mobile home; Broker Davis has had a house listed for sale for nine months without selling it. He knows that the building needs major structural repairs, and he has listed it at 10% above its fair market value. He runs an advertisement in a newspaper that says, "Three bedroom, Victorian. You won't believe the price! Move right in. Davis - 234-5678." This

advertisement is bad because:

Since Davis knows that the property needs major repairs, it is deceptive and misleading; Brown, who doesn't have a real estate license, offered to buy ten acres of land from Sorenson for a price of $500 per acre. Sorenson accepted the offer. When Brown was negotiating with Sorenson, Brown had an offer from a third party to buy this property for $2,000 per acre, but Brown did not tell Sorenson about this offer. Later, Sorenson learns about the sale and consults an attorney concerning

his possible actions against Brown. Sorenson will most

likely be advised by the attorney that:

Sorenson has no cause for action against Brown; Broker Knorr advertised in the newspaper that anyone who bought a property listed with the broker would receive a

free microwave oven valued at $500. Such action is:

Legal, provided full disclosure is made to all interested parties; When a broker hires a salesperson under a valid independent contractor agreement, which of the following is

most correct:

Broker may be held liable for the salesperson's conduct in a real estate transaction;

Broker Jones, who is not a member of any trade

organization, has been using a new advertising slogan: "A

new breed of realtor." Concerning this practice:

It is grounds for revocation or suspension of his real estate license; When a real estate licensee advertises properties on the internet (world wide web), which of the following best

describes the licensee's responsibilities:

The licensee must exercise proper supervision over any non-licensee who responds to inquiries.A broker's ad in a local newspaper says that if a buyer or seller will bring this ad to his office and either list or buy a property through him, that he will give that person $50.Which of the following is correct?The broker can give $50 to the buyer or seller.A real estate licensee submits a license renewal application, but his name is on a list of obligors who have not complied with a court-ordered payment of child support.

Which of the following is most nearly correct:

A temporary renewal will be issued, but the licensee must pay the delinquent amount within 150 days; One of the following actions, taken in relation to advertising the sale of real property, is considered prima facie evidence by the Real Estate Commissioner in California as being misleading or deceptive advertising. Which one is so

regarded:

Implying a specific yield on a note which is different from the interest specified in such note; A licensed real estate salesperson placed a "blind ad" in a

local newspaper. A "blind ad" does not properly:

identify the broker; When a real estate licensee fails to renew a license before

it expires, the licensee:

Has two years from the expiration to renew by paying a late fee, but will not be required to take the state exam again.When a licensee negotiates a loan secured by real property, the licensee must deliver a mortgage loan

disclosure statement to the borrower:

When it is signed by the borrower; When a real estate licensee negotiates the sale of a mobile home in California, written notice of the transfer must be provided to the Department of Housing and Community

Development within:

10 calendar days.Ethical practices of a real estate licensee most nearly

means:

The licensee's honesty and fairness in dealing with the public, clients, associates and customers; Which of the following represents a gross

misrepresentation by an agent:

All of the above.Which of the following is authorized to manage property for

the general public:

A licensed real estate broker; A real estate salesperson's license has been suspended because money was paid out of the Recovery Account to a person who had a judgment against the salesperson. His

license will not be reinstated until he:

Pays the Recovery Account for the money it paid plus interest; Any advance fee contract used in connection with a real estate or business opportunity listing must include all of the

following except:

A guarantee that the sale, lease or exchange will be completed; According to the Department of Real Estate regulations, it

is commingling when a broker:

Deposits into the trust fund account a renter's check for the security deposit on an income property the broker owns;

If a licensee placed the following ad in a newspaper, which of the following would describe the ad? "Three bed-room, two-bath, pool and spa, large lot - $167,000. 555-1234." This is blind advertising In order to operate a competitive, yet profitable business, a real estate broker needs to be concerned with "desk cost." Which of the following most nearly represents the correct

way to calculate desk cost:

Divide the total operating expenses of the firm, including salaries, rent, insurance, etc., by the number of salespersons.A broker's unlicensed assistant prepares a newspaper ad.According to the Business and Professions Code, which of

the following is most correct:

The broker is required to read the entire advertisement prior to publication; If a seller's agent in a real property sale transaction pays

part of his commission to the buyer of property, the agent:

Must inform the seller that he is doing so; Under California law, the Real Estate Commissioner has

authority to do which of the following:

Promulgate rules and regulations to enforce the California real estate laws; Broker advertises the sale of "Mega Bucks Trust Deeds" in a newspaper. In the advertisement he offers a specific yield which he arrives at by looking at his yield for the past year.Which of the following is true concerning this

advertisement:

It is legal if he also gives the actual interest rate specified in the note and the discount from the outstanding principal balance; Upon discovering that a salesperson in his office was receiving a referral fee from a local lender for every real estate loan the salesperson referred to the lender, the

broker of record in that office took only two actions: He

discharged the salesperson, and he warned all other salespersons in the office never to accept such fees. Based only on the foregoing, which of the following is most nearly

correct:

Both broker and salesperson may be subject to disciplinary action by the Commissioner.Jesse, an unlicensed employee of a real estate broker, hands out door-hanger flyers and makes telephone solicitations, seeking buyers and sellers. Under the real

estate law, his activities are:

Unlawful for both Jesse and the employing broker.