Broker Study Questions Flashcards
An exception in a deed is the
withholding of rights in the property from the grantee. An exception, such as retaining mineral rights, would transfer ownership of the property to the grantee, but retain the mineral rights for the grantor. The granting clause demonstrates the intent to transfer the property.
A standard policy of title insurance insure against:
Forgery ; A standard policy covers Recorded matters, Forgery and Capacity, but never any unrecorded matters.
An interest in real property may be acquired by either prescription or by adverse possession. The interest resulting from prescription is:
the right to use another’s land. Prescription (easement by prescription) only conveys the right to use another’s land.
Appraisers speak of “the highest and best use.”
A starting point for an appraisal and Greatest net return are related to this expression. The principle of highest and best use is based on the reasonable use of real property at the time of the appraisal, which is most likely to produce the greatest net return to the land and/or the building over a given period of time.
Unlike a joint tenancy, the tenancy in common requires only one unity, which is the unity of
possession
A wife recorded a declaration of homestead on the community property without the husband’s signature. Which of the following exemptions would the community receive?
$100,000 The law permits the wife to declare a homestead exemption on 1) her separate property 2) the husband’s separate property and 3) the community property - all without the signature or consent of her husband. The “head of the household” exemption is $100,000; for disabled or persons 65 or over, the exemption is $175,000; and for all others $75,000. [Code of Civil Procedure 704]
When title to real property, which is encumbered by a deed of trust, is transferred as the result of a sale, it is always necessary to:
have the grantor deliver a deed.
The difference between the way an appraiser looks at depreciation and the way an accountant looks at depreciation is
an accountant is interested in book depreciation and an appraiser is interested in actual depreciation.
A receipt for a Final Public Report must be kept by the subdivider for
3 years.
Which of the following would affect the owner’s ordinary income tax liability of an owner-occupied residence?
Uninsured loss resulting from collapse of a fence caused by high winds.This is not income-producing property; therefore, depreciation (a) and expenses (b) & (d) cannot be deducted on a tax return. Deductions for a principal residence include property taxes, mortgage interest, premiums for PMI, and points paid on the purchase of the home. Choice (c) is correct because the tax code does allow a person to claim tax deductions for household damage caused by thefts, vandalism, fires, floods, hurricanes and others kinds of casualties. There are some restrictions. Relief is available only for uninsured home losses. They must be reduced by any settlements received from the home owner’s or renter’s insurance. Nor is there any write-off for the first $100 of each theft or casualty loss. The major limitation is that total home losses generally are allowable only to the extent they exceed 10% of adjusted gross income.
Interim loan =
Construction Loan
A Real Estate Syndicate usuallly takes the form of
a limited partnership.
Privity would most likely exist in:
Contractional relationships
The written instrument used to create land restrictions for the benefit of lot owners in a new subdivision is:
declaration of restrictions.
As relating to real estate, a patent is:
a sovereign grant.
The Federal National Mortgage Association was created under Title III of the National Housing Act for the purpose of:
buying Title II loans to keep the market sound.
Edna is a farmer and needs to raise additional working capital and wishes to encumber her growing crops. If the lending institution is agreeable to this, Edna would be asked to sign a:
financing statement.
Another name for a chattel real is
lease.
A father needed money to send his son to college. He borrowed enough money from the bank to pay off his existing loan and have enough for his son’s college. Later, he sold his home subject to the first trust deed and took a second trust deed as part of the purchase price. In the event of default on both trust deeds, which of the following is true?
The bank could obtain a deficiency judgment against the father.
Recording a deed gives:
public notice.
In order to meet the SAFE Act license requirements in California through the Department of Real Estate (DRE), individuals must first:
be issued a California real estate license.
The dictate that a sign should not be placed on a property without the owners consent is found in
NAR Professional Code of Ethics.
How is a private restriction enforced?
Injunction
Speculative value would be approximately the same as:
market value.
The seller under a land contract, not recorded, may
not encumber the property in excess of the amount due on the contract.
How is title perfected when property is acquired by adverse possession?
By quiet title action
For violations of the real estate law, procedure for disciplinary action is set in the
California Code of Regulations
The income remaining after cost of labor and management have been paid is called
theory of surplus productivity
Bulk transfer is found in the
Uniform Commercial Code
Provisions are made in the Real Estate Law whereby a real estate broker may seek reimbursement directly from his principal for expenses incurred by the broker in conjunction with his employment under
Negotiating a loan in which a Broker’s Loan Statement is required
In real estate financing, reference is sometimes made to take out loans. This refers to
long term loan taken out after construction
Economic obsolescence is said to be extraneous, caused by environmental or economic changes. Of the following, which is a correct statement concerning economic obsolescence?
Value loss due to proximity to a major highway causing noise and traffic hazards will create economic obsolescence
All fees charged and collected from the licensing of persons or from the regulation of transactions are placed in the
Real Estate Fund
Any real estate licensee is subject to discipline by the Commissioner. Which of the following would be grounds for discipline
Providing for the termination date of an exclusive listing to be 5 days after the close of escrow
Deciduous
is not a type of soil or a soil condition.
Assume you are a buyer and want to be protected against unrecorded encumbrances in the purchase of real property. You would
obtain a extended coverage policy
An appurtenance is
stock in a mutual water company.
A buyer must bring a lawsuit for breach of written contract against a seller within:
4 years.
Which of the following are synonymous?
Construction loan and interim loan
When the state has given permission to a non-riparian rights owner of a farm to use a nearby lake, the owner has received this right by
appropriation. When the State of California gives permission to use nearby water supplies, they appropriate the right to the property owners that have requested the right to use the water.
An agreement to sell community property, signed by the husband alone, is
voidable
A hostess at an open house who never tells the clients the prices, because all the information is contained in the data sheet she hands each client.
Must have a Real Estate License
Tenants, Bob and Lisa Jones, allowed the children from the neighboring back lot to enter a gate in their backyard and travel through to the front yard in order to catch their school bus every weekday. By doing this, what have they created?
An easement. An easement is a right-of-way and can be granted by a tenant as long as it does not conflict the terms of the lease.
If an income property is valued at $250,000 using a 6% capitalization rate, how much would an investor pay for the property if he demanded a 10% capitalization rate?
$150,000, $250,000 x 6% = $15,000 annual net income. $15,000 divided by 10% = $150,000. Remember, as capitalization rate goes up, the value goes down.
“Depth tables” are used by
appraisers
Equivalent to a board foot?
6” x 12” x 2” Any combination of 144 cubic inches = a board foot.
Leasehold estates are “chattels real.” They are also a less-than-freehold estate.
Statement of Fact
Division 6 of the Uniform Commercial Code pertaining to bulk transfers of goods is for the protection of
creditors.
When a tenant voluntarily gives up a lease before the expiration of its term, it is know as surrender. A lease is a combination of both a conveyance and a contract.
Statement of fact
A borrower on a new loan is required to advance $412.00 for an impound account. He would do so for the benefit of
the trustor and the beneficiary
The maximum length of time for which a valid lease may be written is
99 years on urban property.
The type of wood-destroying insect that causes the greatest amount of damage to real property is the:
Subterranean termite.
A due-on-sale clause in a promissory note would most likely not be enforced bya lender under:
a deflationary trend which creates more homes for sale than buyers.
A lender receiving a mortgage or deed of trust as security for a promissory note would be given the best protection by the
value of the property.
An individual has been appointed by a life insurance company to solicity loans on real property which will be secured by first trust deeds on the properties. He will receive a commission for each such loan consummated. Under these circumstances, it will be required that he:
Possess both an active real estate broker’s license and secure a mortgage loan originator endorsement.
A lender’s fee required of a buyer to obtain an FHA loan is called an
Application Fee
The economic life of an income property is
shorter than its physical life
An appraiser, in determining the value of real property, would give consideration to:
(1) The desire of a person for the desired thing, (2) The relationship of the value of the property in exchange for other property, and (3) Effective demand, as evidenced by purchasing power, and relative scarcity
An attorney-in-fact under a general power of attorney cannot
deal with his principals property for his own benefit.
When using a purchase money deed of trust, the trustor:
signs the promissory note and deed of trust and gives it to the beneficiary.
The penalty for a broker who arranges a real estate loan and fails to submit a Mortgage Loan Activity Notification to the DRE in a timely manner must pay:
$50 a day for the first 30 days the report is not filed and $100 per day thereafter
Whether an item is a fixture is important when land is bought or sold or when a lease expires. It is a fact that:
an item is permanently attached to real property does not in all cases indicate that the item is a fixture.
All of the following would affect a contractor or a sub-contractor in filing a mechanic’s lien:
Notice of Completion, Notice of non-responsibility, and Notice of cessation.
A Commercial acre is:
an acre of ground less dedicated streets, alleys, etc.
One of the main reasons that condominium projects are to grow in demand in the future is:
land value
When tenants in common do not agree on matters pertaining to the property, the remedy would be
a partition action.
The California State Housing Act, which contains minimum code requirements, is found in the
Health and Safety Code
The Real Estate Commissioner’s Subdivision Final Public Report expires
five years from the date of the issuance of the report.
A husband and wife have been searching for a new home. One day when the husband was at work, his wife learns that a new listing has appeared on the MLS. Her agent calls her and urges her to come see it ASAP. She goes to view the property, without her husband, loves the house but cannot reach her husband at work to sign an offer on the home. If the seller accepts the offer, the contract is
Valid.
In absence of a will, the separate property of the decedent is divided:
1/3 to surviving spouse and 2/3 to the children
The term “functional utility” most nearly means the :
desirability and usefulness of the property are such that it would be easily marketable at the asked price.
In respect to deeds, a recorded deed is:
presumed delivered and accepted.
The Real Estate Commissioner approves this form used by the Real Estate broker:
Mortgage Loan Disclosure Statement
The National organization of African-American Real estate brokers is know as
The National Association of Real Estate Brokers.
Economic Obsolescence is
the type of depreciation that is the most difficult to calculate.
Recording a deed presumes Delivery
Statement of Fact
When the escrow requirements have been met, the escrow agency changes from a dual agency to a separate agency.
Statement of fact.
Broker Jones appraised two similar commercial properties. Both were leased on a long term basis. One was a hardware store and the other was a post office. Compared to the hardware store, the cap rate on the post office was lower or higher?
Lower
For violations of the real estae law, procedure for disciplinary action is set in the
California Code of Regulations
A borrower on a new loan is required to advance $412 for an escrow acct. He would do this for the benefit of
the mortgagee only
According to the Department of Real Estate, An Employee best describes the relationship of a salesperson to the broker.
Statement of Fact
Slanted boards that support the roof boards and shingles are called
Rafters
Economic Obsolescence is the type of depreciation that is most difficult to cure.
Statement of Fact
Value per front foot would increase due to a commercial property whose depth is extended beyond that of neighboring lots.
Statement of Fact
A licensee listed a property, promising the owner she would advertise the home. The owner relied on the promise of the real estate agent and listed the home because of it. If the agent failed to advertise the property. The agent has committed:
Actual Fraud
A telephone company places poles and strings wire across privately owned land. This would be an example of an
encumbrance
A solemn declaration by a person whose religious beliefs forbid the taking of an oath is an affirmation.
Statement of Fact
TILA as modified by the Mortgage Disclosure Improvement Act, requires waiting period prior to consummation of a transaction. The waiting period is
7 business days from the mailing or delivery of the TIL Statement to the consumer.
Mr. Furney is delinquent on his 2006-07 real property taxes. The “sale to the state” took place on his property at the time prescribed by the law. Mr. Furney took steps in 2008 to pay his delinquent taxes. The proper procedure for Fr. Furney to redeem his property is to
Make the payment, then receive and record a comptroller’s receipt because the redemption period still applies.
“CRV” is a common phrase used in the financing of real estate. The CRV is issued by the
Veterans Administration
Wills play a very important part in the transfer of title to real property. These are all parties to a will:
Testator, Executor, and Devisee
Title is perfected when property is acquired by adverse possession
Quiet title action
Financing statements are to be filed with the
Secretary of State
