C1U1 The Business of Real Estate (pg 33)

Question 1

The Real Estate Law is found in:

a. the Licensing Code.
b. the Business & Professions Code.
c. the Health and Safety Code.
d. the Corporations Code.

Answer 1

b. the Business & Professions Code.

Question 2

The Real Estate Commissioner reports to:
a. the California Bureau of Real Estate.
b. the governor.
the Department of Housing & Urban Development.
d. the legislature.

Answer 2

b. the governor.

Question 3

A salesperson owns 25% of the outstanding share of Rollo Realty, Inc., and the broker owns the remaining shares. This division of ownership is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 3

a. acceptable.

Question 4

A salesperson is part owner of Rollo Realty, Inc. In the broker’s absence the salesperson frequently review the work of sales associates. This is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 4

d. prohibited.

Question 5

A real estate business that is a partnership can have more than one office location, provided:

a. a broker partner obtains an additional license for each location.
b. all partners are real estate licensees.
c. the is a designated broker-officer.
d. there is at least one partner at each location.

Answer 5

a. a broker partner obtains an additional license for each location.

Question 6

The sale or transfer of goods ordinarily held for sale in the course of business is governed in California by:

a. the Business Opportunity Code.
b. the Commercial Transfer Law.
c. the Uniform Commercial Code.
d. the Real Estate Law.

Answer 6

c. the Uniform Commercial Code.

Question 7

An officer of Ajax Corporation, who is not a real estate licensee, successfully negotiated the purchase of the Smith Widget Plant on behalf of Ajax. The officer received a commission on the sale in addition to his normal salary. The officer of Ajax Corporation:

a. did not need a real estate license for the deal.
b. should have had a real estate license.
c. is exempt from licensing requirements.
d. None of these

Answer 7

b. should have had a real estate license.

Question 8

If a real estate license is NOT renewed before it expires, the licensee:

a. is allowed to complete transactions in progress.
b. is allowed to finish transactions that are substantially complete.
c. must cease all real estate activities.
d. may act under authority of another agent’s license for a period not to exceed 60 days.

Answer 8

c. must cease all real estate activities.

Question 9

A real estate licensee can offer a mobilehome for sale that is:

a. in a manufacturing plant, ready for delivery.
b. transportable under an exemption from the Vehicle Code.
c. presold.
d. in a location where it can legally remain for one year.

Answer 9

d. in a location where it can legally remain for one year.

Question 10

A couple desperately wants to move to Pine Bend, and they like the seller’s house, which is listed with a broker. The couple tells the broker they will “make it worth his while” if he can persuade the sellers to accept their offer, and they send an expensive food basket to the broker as a sign of their good faith. The broker neglects to mention this to the sellers. This practice is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 10

d. prohibited.

Question 11

A broker routinely places earnest money deposits in his personal account overnight for overnight safekeeping. This practice is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 11

d. prohibited.

Question 12

A broker has an exclusive listing agreement with a property owner. The listing will terminate “when the parties agree.” This practice is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 12

d. prohibited.

Question 13

When a broker exercised his option to buy Whiteacre, he presented the owner of Whiteacre a written statement of his expected profit in the transaction. The seller agreed in writing to proceed with the sale. This conduct is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 13

b. mandated.

Question 14

The broker-officer of XYZ Realty, Inc., does not like the overly aggressive sales tactics of XYZ’s salespeople but has not reprimanded them because business is so good. The broker’s conduct is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 14

c. discouraged.

Question 15

A broker wants to help out his neighbor’s son, who recently acquired a B.A. in history from Back East University. The broker hires the graduate to show property to perspective buyers. Because the new employee has no real estate license, the broker handles all of the negotiating. This practice is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 15

d. prohibited.

Question 16

A salesperson is selling the Greenacre Estate. An offer has been accepted, and the closing will take place in two weeks. While the owners are out of town, the buyer asks if the closing can be put off for one day. The salesperson agrees on behalf of the owners, for she is sure they will not object. The salesperson’s conduct is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 16

d. prohibited.

Question 17

A house is for sale following a murder in the house six months earlier. A salesperson, showing an out-of-town prospect through the house, decides to keep information about the murder to himself. The salesperson’s conduct is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 17

d. prohibited.

Question 18

A broker is so busy that he never has the time to return the phone calls of his principals. He prefers to spend his time in the field making sales and acquiring new listings. This practice is:

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 18

c. discouraged.

Question 19

After attending a get-rich-quick real estate seminar, an attendee wants to buy a house “cheap.” She tells a broker that she will offer $50,000, with seller financing and no down payment, on the Monroe Street house, which has an asking price of $125,000. The broker presents the offer with one of his own for $85,000, telling the owners that unexpected market conditions make their asking price unrealistic. His conduct is:

a. acceptable.
b. mandated
c. discouraged.
d. prohibited.

Answer 19

d. prohibited.

Question 20

A new broker opens a brokerage office and immediately places an ad in the local newspaper: List Your House with Me and I Will Pay You $500 at Closing. This practice is

a. acceptable.
b. mandated.
c. discouraged.
d. prohibited.

Answer 20

a. acceptable.