Question 1

What parties are required, by law, to sign the Agency Disclosure Statement:

Accepted Answer

The Agency Disclosure Statement requires that the buyer and seller be informed about agency of who can represent them as early as practical in the transaction. Each party should then finally elect who they want to act as their agent. The selling and listing agent must also be assigned before the close of escrow.

Question 2

An appraiser is preparing the income approach to an appraisal of income property. In his selection of a capitalization rate, he must recognize that the higher the rate used, the greater the implied ______________?

Accepted Answer

The capitalization rate indicates the return that the owner expects on the purchase price. The greater risk involved in the investment, the greater the capitalization rate.

Question 3

In appraising a home, one of the factors which would affect the appraised value is:

Accepted Answer

In appraising by the "cost" method, square footage is very important. In appraising by the "comparison" method, the comparison used should be of the same approximate size (square footage).

Question 4

A cloud on the title to real property would likely be created from __________.

Accepted Answer

A cloud indicates a doubt or questionable encumbrance exists. Since the mortgage appears to still exist, it is a cloud of the title.

Question 5

When a new first trust deed and second trust deed are created at the time of sale on a property and a "Request for Notification of Default" is recorded at the close of escrow, it is done for the protection of the:

Accepted Answer

The beneficiary lender on the second trust deed wants to know of any pending foreclosure in order to protect their interest. This is done with the "request notice of default".

Question 6

What is the economic life of an improvement?

Accepted Answer

The economic life of an improvement is the period of time in which it is economically productive.

Question 7

A bank gave $550 to a licensed real estate salesperson for referring the salesperson's prospective buyer to the bank for a new loan. When the salesperson's broker became aware of the $500 referral fee, the broker immediately fired the salesperson, notified the Real Estate Commissioner and warned all of his other salespeople never to accept such a fee. In this situation:

Accepted Answer

A lender cannot give "kick backs" to real estate licensees for referring customer and clients. The real estate commissioner doesn't have any jurisdiction over banks, but he can discipline any licensee receiving any illegal "kick back" from a lender. The broker does not have to be disciplined because he notified the real estate commission immediately and used reasonable supervision of his employed licensees.

Question 8

A planning commission's purpose is to:

Accepted Answer

Part of their job is also to set zoning assignment, but the main purpose of the commission is to draw blueprints of the total community.

Question 9

Mr) Jackson owns a home that is situated at the bottom of a hillside. In the winter time during heaving rainstorms his home is subject to damage by flooding so he dug a trench along the back of his property to divert water. This action would be:

Accepted Answer

Surface waters are those waters not flowing in a defined channel. You cannot divert these to another's property if they will be a detriment to that individual's property.

Question 10

The value of real estate is created, maintained, and destroyed by the interplay of three great forces. Not included in these three are:

Accepted Answer

Private restrictions placed by one grantor and affecting only one grantee would not be considered an overall great force.

Question 11

A licensed real estate broker is accused of violating the Unruh act for refusing to rent property to any other than those persons of the Caucasian race. If he is found guilty, he:

Accepted Answer

A violation of the Unruh Act may result in a penalty of $25,000 plus any actual damages.

Question 12

Pertaining to the Civil Rights Act of 1968 which was based on an act of congress in 1866, should a person be discriminated against when buying a piece of real property in California which of the following would they not be able to personally do?

Accepted Answer

Only the Real Estate Commissioner can institute an action to have a licensees license suspended or revoked, and then only after a formal hearing has been given the license. "a", "b", and "d" can be accomplished by direct action of the injured party.

Question 13

A subdivider is occasionally given a preliminary public report by the Commissioner. Which of the following invalidate that preliminary report?

Accepted Answer

The preliminary report would be invalidated by any of the ways listed.

Question 14

If five people own property as joint tenants:

Accepted Answer

When the vesting is joint tenancy, each co-owner has a separate interest in a single title.

Question 15

In California the most common form of ownership in a Real Estate Syndicate is:

Accepted Answer

A real estate syndicate can take the form of any of the listed choices; however, the most frequently used structure is the limited partnership.

Question 16

A broker's trust fund records must show the trust fund balance on a _______ basis.

Accepted Answer

Not only must the trust fund records be balanced daily, but after notice, the records must be made available to the Department of Real Estate for audit without further notice.

Question 17

An attachment is classified as:

Accepted Answer

An attachment is a process by which some real or personal property of a debtor is seized and held in the custody of the law, as security for the satisfaction of a judgment that a creditor hopes to secure as the result of a lawsuit. The attachment creates a lien against the property and it may not be sold free of the attachment without satisfaction or the release of the attachment, or the posting of a bond.

Question 18

Mr) Smith bought a single-family residence and used an FHA loan to complete the purchase. Later he sold theproperty to Mr. Brown for all cash. The following instrument would NOT appear on the public record with thistransaction:

Accepted Answer

Reconveyance deeds would be issued only on the payoff of an existing trust deed loan. There would be no reconveyance to Brown in this situation since he was in no way involved with a loan.

Question 19

The only unity required for the existence of a tenancy in common is:

Accepted Answer

Equal right of possession is necessary in a tenancy in common; equal interest in not necessary. Unity of time or taking title at the same time is also not necessary and neither is unity of title, or being shown on the same document.

Question 20

When selling under a power of sale in a trust deed, the trustee must wait three months after recording the Notice of Default before:

Accepted Answer

A notice of sale can be published in a newspaper of general circulation only after the prescribed 3 months waiting period in the foreclosure action. The 3 months waiting period commences with the recording of the "notice of default".

Quiz 1: California